Employment Agreement - New Frontier Media Inc. and Ken Boenish
EMPLOYMENT AGREEMENT
COLORADO SATELLITE BROADCASTING, INC. a Colorado corporation and subsidiary of
New Frontier Media, Inc. located at 5435 Airport Boulevard, Suite 100, Boulder,
Colorado 80301 (hereinafter referred to as the "Employer" or "CSB"), and Ken
Boenish, (hereinafter referred to as the "Employee"), in consideration of the
mutual promises made herein, agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
Section 1.01. The Employer and Employee have agreed to enter in this contract
for employment dated February 22, 1999, as follows:
Section 2.02. The Employer hereby extends and the Employee hereby accepts
employment with Employer for a period of three (3) years through and including
February 22, 2002, except for those provisions in Section 7.02 (c).
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
Section 2.01. Employer is in the business of broadcasting adult entertainment
via satellite uplink.
Section 2.02. Employee shall be employed as Vice President of Western Region
Affiliate Sales. After six (6) continuous months of employment with Employer,
Employee shall become Senior Vice President of Affiliate Sales. The Employee
agrees to perform all services, acts, or things necessary or advisable to
fulfill his duties.
Section 2.03. Employee will generally develop and manage implementation of
affiliate sales and marketing strategies to build distribution and solidify New
Frontier Media, Inc. networks positioning within the marketplace. The Executive
as Senior Vice President of Sales will perform specific duties as are determined
from time to time by the Board of Directors of the Company, including, without
limitation the following:
(a) Oversee operations within the sales department, specifically:
i) Track MSO subscriber growth.
ii) Establish and oversee, comprehensive budget for sales
department.
iii) Forecast short, mid, and long-term growth.
iv) Set subscriber goals for all sales associates.
(b) Secure master distribution agreements with major MSOs and DTH operators.
(c) Develop presentations and proposals for sales team.
(d) Work closely with the marketing department to create new and compelling
marketing materials that will support the sales effort.
(e) Interface with other department heads within the company in order to more
effectively grow revenue.
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(f) Direct non-technical broadband business development and distribution.
(g) Represent the company within cable organizations and functions to increase
product exposure in the industry.
(h) Travel with Vice President of Sales and Regional Directors and others to
meetings at large MSO division offices and key market systems.
(i) CEO and Board of Directors may assign other duties.
(j) The Executive agrees to devote his entire working time, attention and energy
to the performance of the business of the Company and of any of its subsidiaries
or affiliates by which he may be employed; and Executive shall not, directly or
indirectly, alone or as a member of any partnership, or as an officer, director
or employee of any other corporation, partnership or other organization, be
actively engaged in or concerned with any other duties or pursuits which
interfere with the performance of his duties hereunder, or which, even if
non-interfering, may be inimical to or contrary to the best interests of the
Company. Executive acknowledges that the Company intends to promote him to the
position of Senior Vice President of Sales within the next six months from the
date of this Agreement if certain performance criteria are met. In the
performance of his duties, Executive shall comply with the policies of and be
subject to the reasonable direction of the President and the Board of Directors
of the Company.
(k) Performance standards: The Employee must meet the sales levels and quotas as
determined by the corporate officers and/or the Board of Directors from time to
time.
Section 2.04. Employee agrees that to the best of his ability and experience he
will at all times loyally and conscientiously perform all of the duties and
obligations required of him either expressly or implicitly by the terms of the
agreement.
Section 2.05. This agreement shall not be interpreted to prohibit Employee from
making passive personal investments or conducting private business affairs if
his activities do not materially interfere with the services under this
agreement. However, Employee shall not, directly or indirectly, acquire, hold,
or retain any interest in any business competing with or similar in nature to
the business of Employer.
Section 2.06. During the term of this Agreement Employee shall not, directly or
indirectly either as an employee, employer, consultant, agent, principal,
partner, corporate officer, director or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of Employer.
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Section 2.07. (a) The parties acknowledge and agree that during the term of this
Agreement and in the course of the discharge of his duties hereunder, Employee
shall have access to and become acquainted with information concerning the
operation of Employer, including without limitation, financial, personnel,
sales, planning, customers, customer lists, and other information that is owned
by Employer and regularly used in the operation of Employer's business and that
this information constitutes Employer's trade secrets and confidential
information.
(b) Employee agrees that he shall not disclose any such trade secrets, directly
or indirectly, to any other person or use them in any way, either during the
term of the agreement or any other time thereafter, except as is required in
the course of his employment with Employer.
(c) Employee further agrees that all files, records, documents, equipment, and
similar items relating to Employer's business, whether prepared by Employee
or others, are and shall remain exclusively the property of Employer and
that they shall be removed from the premises of Employer only with the
express prior consent of Employer's President.
(d) Employee acknowledges, consents, and agrees that he is prohibited from
competing with Employers' interests in anyway during the course of this
Agreement.
Section 2.08. Employer reserves the right to terminate the contract at any time
for cause. Termination for cause may occur if the Employee fails to meet his
obligations under the contract. The Employer will give the Employee 14 day
notice of the nature of the breech under the contract and 14 days to cure.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
Section 3.01. Employer shall provide Employee with the compensation, incentive,
benefits, and business expense reimbursement specified elsewhere in this
agreement.
Section 3.02. In the discretion of the Employer, Employer shall provide Employee
with an office, office equipment and supplies and other facilities and services,
suitable to Employee's position and adequate for the performance of his duties.
Section 3.03. Employer shall indemnify employee for all losses sustained by
Employee in direct consequence of the proper and authorized discharge of his
duties on Employer's behalf.
Section 3.04. CSB is committed to Equal Employment Opportunity with the
observance of the Civil Rights Act (Title VII) of 1964, as amended; the Federal
Equal Pay Act of 1963, as amended; the Age of Discrimination in Employment Act
of 1967, as amended; the Americans With Disabilities Act of 1990, as amended;
and with all pertinent Executive Orders and regulations regarding Equal
Employment Opportunity. Colorado Satellite Broadcasting Inc. will consider all
qualified individuals for employment and promotional opportunities regarding
race, religion, color, sex, national origin, age, height, weight, marital
status, or disability. This commitment includes the areas of employment,
training, placement, transfer, promotion, layoff, and recall, compensation and
benefits.
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Section 3.05. Corrective action: Employees with questions or concerns about any
type of discrimination are encouraged to bring these issues to the attention to
their immediate supervisor, the General Manager, or the President without fear
of reprisal. Anyone found to be engaging in any type of unlawful discrimination
will be subject to disciplinary action, up to and including employment
termination.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Section 4.01. As compensation for the services to be rendered by Employee
hereunder, Employer shall pay Employee compensation as of the date of this
agreement determined as follows:
(a) An annual salary of $100,000, payable bi-weekly, which will increase to
$115,000 annually (also paid bi-weekly) upon the promotion to Senior Vice
President of Affiliate sales. After the completion of six (6) consecutive months
of employment with Employer, Executiveis salary will increase to $130,000 (also
paid bi-weekly). Salary shall be subject to review and any adjustments will be
made in accordance with Company polices in effect from time to time; and
(b) A quarterly commission shall be paid to the Employee for all new addressable
subscribers ("Subs") added as new business via properly executed contract.
Employee shall be paid a one time payment of $.06 per Sub for subscriber added
to CSB in the quarter following the first actual CSB broadcast by the new
affiliate to its subscribers. This will be a one time payment for addressable
subscribers to which any CSB channel is available. That is, and notwithstanding
any other language in this agreement, subscriptions shall not be counted
cumulatively, and only one payment shall be made for each addressable subscriber
added to CSB Network(s). An additional payment of $.03 per addressable
subscriber shall be paid on all new subscribers above the annual Sales Goal. A
committee consisting of the C.E.O., the Executive Vice President and the C.F.O.
will set the Sales Goal for the calendar year 1999 by June 15, 1999 with the
assistance of the Senior Vice President of Sales. The sales goal for each
subsequent year will be set by January 31 of that calendar year
(c) Moving expenses shall be reimbursed per actual dollar amount expended for
such move determined by receipts that the Employee agrees to provide to the
Employer for this purpose but in no case shall exceed an aggregate reimbursed
amount of more than $15,000.
(d) Employer shall cause to be issued to Employee on the date of this Agreement
150,000 incentive stock options at $3.00 per share to purchase NOOF common
stock. 75,000 shall be vested and exercisable on February 22, 2000 the remaining
75,000 shall be vested and exercisable on February 22, 2001.
(e) Employee may further participate in any other voluntary stock option, 401k
or other retirement or investing plan that Employer may offer from time to time.
Section 4.02. Employer shall have the right to deduct or withhold from the
compensation due to Employee hereunder any and all sums required for federal
income and social security taxes and all state or local taxes now applicable or
that may be enacted and become applicable in the future.
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ARTICLE 5. EMPLOYEE BENEFITS
Section 5.01. Employee shall be entitled to 3 weeks of annual vacation time each
year to be taken in accordance with the Employee Manual in effect from time to
time. Employee may be absent from his employment for vacation only at such times
as Employer shall determine from time to time. Employer agrees that Employee may
exercise one (1) week of vacation time in June 1999. In the event that Employee
is unable for any reason to take the total amount of vacation time authorized
herein during any year, he may NOT accrue that time and add it to vacation time
for the following year. However, this vacation accrual policy will be controlled
by the Human Resources Manual and any additional benefit supplied by that manual
will apply to this contract.
Section 5.02. Employee shall be entitled to all other fringe benefits available
to all other corporate employees of identical status as Employee as determined
by Employer from time to time during the term of this Agreement.
ARTICLE 6. BUSINESS EXPENSES
Section 6.01. (a) Employer shall promptly reimburse Employee for all reasonable
business expenses incurred by Employee in promoting the business of Employer,
including expenditures for entertainment, gifts and travel.
(b) Each such expenditure shall be reimbursable pursuant to company policy only
if Employee furnishes to Employer adequate records and other documentary
evidence required by federal and State statutes and regulations issued by the
appropriate taxing authorities for the substantiation of that expenditure as an
income tax deduction.
Section 6.02. In the event that any expenses paid for employee or any
reimbursement of expenses paid to Employee shall, on audit or other examination
of Employer's income tax returns, be determined as not allowable deductions from
Employer's gross income and in the further event that any such determination is
acceded to by the Employer or made final by the appropriate federal or state
taxing authority or a final judgment of a court of competent jurisdiction, and
no appeal is taken from the judgment or the applicable period for filing notice
of appeal has expired, Employee shall repay to Employer the amount of the
disallowed expenses.
ARTICLE 7. TERMINATION OF EMPLOYMENT
Section 7.01. This agreement may not be terminated by the employee for any
reason other than legal "cause" which is defined as criminal acts on the part of
the Employer that have been adjudicated to be criminal acts by final judgment of
a court of competent jurisdiction, and/or a material breach of the terms of this
Agreement on the part of the Employer. Employer will have at its sole discretion
30 days to cure any material breach of this agreement from the date it becomes
aware of any alleged breach via notice from the Employee pursuant to paragraph
8.01. Only upon the expiration of 30 days in which Employer may cure any alleged
material breach of this agreement will the Employee be allowed to terminate the
agreement pursuant to this paragraph 7.01.
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Section 7.02. (a) The Executiveis employment hereunder may be terminated at any
time upon written notice by the Company, upon the occurrence of any of the
following events:
(i) the death of Executive;
(ii) the determination that there is cause (as hereinafter defined) for
such termination upon ten (10) dayis prior written notice to Executive.
(b) For purposes hereof, icausei shall mean but not be limited to (i)
Executiveis conviction (which, through lapse of time or otherwise, is not
subject to appeal) of any crime or offense involving money or other property of
the Company or its subsidiaries or which constitutes a felony in the
jurisdiction involved; (ii) Executiveis performance of any act or his failure to
act, for which if he were prosecuted and convicted, a crime or offense involving
money or property of the Company or its subsidiaries, or which would constitute
a felony of the jurisdiction involved would have occurred, (iii) Executiveis
breach of any of the representations, warranties or covenants set forth in this
Agreement, or (iv) Executiveis failure or refusal to perform his duties required
by this Agreement, and as defined by the Corporate Officers and/or the Board of
Directors, provided that Executive shall have first received written notice from
the Company stating with specificity the nature of such failure and refusal and
affording Executive an opportunity to correct the acts or omissions complained
of. Whether or not icausei shall exist in each case shall be determined by the
Board of Directors of the Company in its sole discretion.
(c) In the event that the Executiveis employment is terminated by Employer as
hereinabove provided, Executive will be entitled to only his accrued salary and
nothing more as of the date of termination under this paragraph 7.02.
ARTICLE 8. GENERAL PROVISIONS
Section 8.01. Any notices to be given by either party to the other shall be in
writing and may be transmitted by personal delivery of by overnight air freight
prepaid with delivery confirmation requested. Next day notices shall be
addressed to the Employer at 5435 Airport Boulevard, Suite 100, Boulder,
Colorado 80301 and to the Employee at 4463 Pali Way, Boulder, CO 80301. Each
party may change that address by written notice in accordance with this section.
Notices delivered personally shall be deemed communicated as of the date of
actual receipt; next day notices shall be deemed communicated as of the date of
delivery.
Section 8.02. This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the employment of
Employee by Employer, and contains all of the covenants and agreements between
the parties with respect to that employment in any manner whatsoever. Each party
to this agreement acknowledges that no representation, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, which are not embodied herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding.
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Section 8.03. Any modifications of this agreement will be effective only if it
is in writing signed by the party to be charged.
Section 8.04. The failure of either party to insist on strict compliance with
any of the terms, covenants, or condition of this agreement by the other party
shall not be deemed a waiver of that term, covenant, or condition, nor shall any
waiver or relinquishment of that right or power at any one time or times be
deemed a waiver or relinquishment or that right or power for all or any other
times.
Section 8.05. If any provision in this agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provision
shall nevertheless continue in full force without being impaired or invalidated
in any way.
Section 8.06. This agreement shall be governed by and construed in accordance
with the laws of Colorado. The parties hereby agree that any dispute arising
under or related to this agreement shall be brought or filed exclusively in
Boulder County, Colorado, where Employee submits to the jurisdiction of the 20th
Judicial District of Colorado without objection.
This seven (7) page Agreement executed on this 22nd day of February, 1999, at
Boulder, Colorado.
EMPLOYER:
COLORADO SATELLITE BROADCASTING
By: /s/ Karyn Miller
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Karyn Miller
Chief Financial Officer
EMPLOYEE:
/s/ Ken Boenish
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Ken Boenish