Employment Agreement - Interactive Telecom Network Inc. and Bradley A. Weber
REVISED EMPLOYMENT AGREEMENT
This Revised Employment Agreement ("Revised Agreement") is entered into by
and between Bradley A. Weber ("Weber") and Interactive Telecom Network, Inc.
("ITN"). For the purposes of Section II of this Revised Agreement, the term ITN
shall include New Frontier Media, Inc. ("NFM") and any NFM subsidiary.
I. RECITALS
WHEREAS, Weber and ITN entered into an Employment Agreement ("Agreement")
dated October 27, 1999;
Weber and ITN agree to modify their respective rights and obligations under
the Agreement; and
Weber and ITN have agreed that the terms of this Revised Agreement shall
supersede and replace the terms of the Agreement previously entered into by
Weber and ITN.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, Weber and ITN and NFM agree that Weber shall be
employed as an employee by ITN in accordance with the following terms and
conditions:
II. TERMS AND CONDITIONS OF EMPLOYMENT
A. Employment During the Period August 1, 2001 through December 31, 2001
1. Weber shall receive a salary, to be paid in equal installments on a
bi-weekly basis, at the annual rate of Two Hundred Thousand Dollars ($200,000) a
year. Weber shall not be entitled to any kind of bonus, but Weber shall continue
to receive medical insurance, 401k plan matching contributions, and a car
allowance on the same basis as received by Weber under the Agreement.
2. Weber shall make himself available to work for ITN on a full time basis
(up to 40 hours per week, Monday through Friday, excluding ITN designated
holidays), and shall perform such services, commensurate with Weber's
experience, and similar or substantially similar to those previously performed
by Weber for ITN, as may be required by ITN, which services may include, but not
be limited to, assisting ITN in any investigation, or the prosecution or defense
of any lawsuit, or in any other matter.
3. Unless ITN requires Weber to perform services at ITN's offices, Weber
shall work at his home or other location of Weber's choice away from ITN's
offices. ITN shall give Weber at least four (4) hours advance notice before
Weber is required to work at ITN's offices.
4. Weber shall not accrue any additional paid vacation days. Prior to
December 31, 2001, Weber shall use all paid vacation days (which presently total
20) that accrued prior to the execution of the Revised Agreement, which days
Weber may use at any time upon 10 days' advanced notice.
B. Employment During the Period January 1, 2002 through March 31, 2003
1. Weber shall receive a salary, to be paid in equal installments on a
bi-weekly basis, at the annual rate of One Hundred Seventy Thousand Dollars
($170,000) a year. Weber shall not be entitled to any kind of bonus, 401k plan
matching contributions, or auto allowance. However, Weber shall continue to
receive medical insurance as provided by policies and programs of ITN to the
extent applicable to executives of ITN occupying peer positions to that formerly
occupied by Weber.
2. Subject to the provisions of paragraph B.3 below, Weber shall make
himself available to work for ITN for up to ten (10) hours a week, (Monday
through Friday, excluding ITN designated holidays)
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and shall perform such services, commensurate with Weber's experience, and
similar or substantially similar to those previously performed by Weber for ITN,
as may be required by ITN. ITN shall give Weber at least 48 hours advance notice
before Weber is required to work for ITN. Weber shall cooperate with and assist
ITN in any company investigation, in the prosecution or defense of any lawsuit,
and in any other matter. The time spent by Weber cooperating with or assisting
ITN shall be credited toward Weber's weekly service requirement.
3. For any week that Weber does not work at least ten (10) hours, the
unused hours shall accrue and ITN may require that Weber, during any other week,
work such accrued hours in addition to the regular ten (10) hours for that week,
provided that ITN may not require Weber to work more than twenty (20) hours in
any week without Weber's consent.
4. ITN may not require that the first ten (10) hours of work by Weber in
any week be performed over the course of more than any three (3) days during
that week, and ITN may not require that any hours worked in excess of the
regular ten (10) hours for that week be performed over the course of more than
any three (3) days during that week. While ITN shall make reasonable efforts to
schedule Weber so that the three (3) days during which Weber performs the first
ten (10) hours of work coincide with the three (3) days during which Weber
performs additional hours of work, ITN shall not be required to make those days
coincide.
5. Weber shall not accrue any paid vacation days. However, Weber shall be
entitled to designate up to four (4) weeks on an annual basis during which he
will be unavailable to render services. For any such week, Weber shall not be
required to perform work for ITN and no unused hours shall accrue. Weber shall
give at least ten (10) days advance notice prior to designating any such week of
unavailability.
6. Weber may engage in activities other than work for ITN provided that
such activities do not materially interfere with his services to ITN or create
any conflict of interest, provided, however, that Weber may engage in audio text
work.
C. Stock Options
1. Weber, prior to the execution of the Revised Agreement, received options
for the purchase of a total of 25,000 shares of stock in NFM exercisable at
$5.00 per share. Currently, 12,500 of such options have vested. In addition, in
the event that Weber is an employee on January 7, 2002, the remaining 12,500
options shall vest. Weber shall have the right to exercise his vested options at
any time up to and including ninety (90) calendar days following the termination
of his status as employee of the Company.
2. Weber, prior to the execution of the Revised Agreement, received options
for the purchase of a total of 200,000 shares of stock in NFM exercisable at
$2.00 per share. Under the stock option plan, options to purchase the first
100,000 shares are to vest in December, 2001, and options to purchase the
remaining 100,000 shares are to vest in December, 2002. Pursuant to the Revised
Agreement, Weber shall retain the options scheduled to vest in December, 2001,
but Weber shall, and hereby does, relinquish, and shall have no further rights
to, the options scheduled to vest in December, 2002. The 100,000 retained
options are comprised of 20,700 qualifying options and 79,300 non-qualifying.
Weber shall have the right, at any time up to and including ninety (90) calendar
days following the termination of his status as an employee, to exercise the
20,700 qualifying options, and Weber shall have until June 30, 2003, to exercise
the 79,300 non-qualifying options.
D. Sale of Shares
Weber agrees that prior to March 31, 2003, he shall not sell or offer for
sale more than 25,000 shares of NFM stock in any week or 100,000 shares in any
three-month period of time. Notwithstanding the foregoing, this restriction
shall have no further effect in the event that either Mark Kreloff or Michael
Weiner shall sell or offer for sale at any time during the pendency of the
Revised Agreement
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shares of NFM stock in excess of 25,000 shares in any week or 100,000 shares in
any three-month period. In addition, this restriction shall not apply with
respect to a NFM sale, merger transaction, or tender offer for the shares of
NFM, which sale, merger, or tender offer has been approved by NFM's board of
directors.
E. Termination of Employment
Weber's employment with ITN, and ITN's obligation to compensate Weber as
provided above, shall cease on March 31, 2003 except as provided below:
1. The Revised Agreement shall terminate automatically upon the death of
Weber any time prior to March 31, 2003.
2. ITN may terminate Weber's employment if ITN determines in good faith
that Weber has become disabled. For the purposes of this paragraph, the term
"disabled" shall mean that Weber has been unable to work for one hundred eighty
(180) consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by ITN or its insurers and acceptable to Weber or Weber's legal
representative, which acceptability shall not be unreasonably withheld.
3. ITN may terminate Weber's employment for cause. For the purposes of
this paragraph, the term "cause" shall mean (a) the conviction of Weber for
committing an act of fraud, embezzlement, theft or other act constituting a
felony or the entry of a guilty or nolo contendere plea of Weber to such act or
felony; or (b) a material act of dishonesty or breach of trust by Weber, during
the term of the Agreement or the Revised Agreement, resulting or tending to
result directly or indirectly in material personal gain or enrichment at the
expense of ITN.
F. Business Expenses
During the term of Weber's employment with ITN, ITN shall reimburse Weber
for employment-related expenses reasonably incurred by Weber while performing
services at the direction of ITN, including, but not limited to, telephone and
parking expense. Immediately upon execution of the Revised Agreement, Weber
shall relinquish his parking pass and return it to ITN. Weber may keep his cell
phone at his expense and may keep his laptop computer.
G. Termination and Release of Rights Under October 27, 1999 Agreement
The Revised Agreement shall replace and supersede the Agreement, and all
rights and obligations under the Agreement are hereby terminated and
extinguished. Weber and ITN hereby release each other from any and all claims,
rights and liabilities arising out of the Agreement which either may have
against the other, provided that ITN shall remain obligated to pay Weber for any
reasonable outstanding expenses.
H. Indemnity
ITN shall indemnify and defend Weber against all claims relating to the
performance of his duties hereunder and under the Agreement to the fullest
extent permitted by ITN's Articles of Incorporation and Bylaws, the relevant
provisions of which shall not be amended in their application to Weber to be any
less favorable to him than as at present, except as required by applicable law.
The foregoing shall not limit in any way rights, if any, to indemnity which
Weber may have under applicable law.
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I. Enforcement
1. Any party claiming that the other party has breached the Revised
Agreement shall give the other party 21 days written notice thereof and
opportunity to cure the claimed breach.
2. Any legal action arising out of the Revised Agreement shall be brought
in the County of Los Angeles, State of California, and shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts executed and performed within the State of California.
3. In any legal action arising out of the Revised Agreement, the
prevailing party shall be entitled to an award of reasonable attorney's fees and
costs.
INTERACTIVE TELECOM NETWORK, INC.:
By: /s/ MICHAEL WEINER /s/ BRADLEY A. WEBER
----------------------- -----------------------
Michael Weiner Bradley A. Weber
Date: 8/10/01 Date: 8/10/01
NEW FRONTIER MEDIA, INC.:
By: /s/ MICHAEL WEINER
-------------------------
Michael Weiner
Date: 8/10/01
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