Nevada
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000-51770
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87-0733770
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(State of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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CMG HOLDINGS, INC.
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Date: February 11, 2014
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/s/ JEFFREY DEVLIN
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Name: Jeffrey Devlin
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Its: Director
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(a)
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Transportation Allowance: As further compensation, the Company shall pay the Employee a transportation allowance in the amount of $1,000 per month. This allowance will be reported on the employees W-2 as taxable income.
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(b)
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Relocation Costs: The Company will pay for Employee’s relocation costs, up to $15,000 after the Board determines the location of the principal office of the Company and shall pay Employee’s reasonable costs for residing in a hotel for up to 30 days.
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(a)
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Term. The term of this Agreement commence on February 1, 2014 and expire (unless sooner terminated as otherwise provided in this Agreement) on December 31, 2016 (which date, including any earlier date shall be the “Expiration Date”). At the Expiration Date hereof, Company and Employee shall determine whether the employment term shall be renewed and its terms and conditions. After the Expiration Date, or termination, the Employee shall continue to be subject to the provisions of Section 6 and the other provisions of this Agreement related thereto.
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(b)
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Termination by Employee. The Employee may elect to terminate this Agreement and his employment, by giving not less than thirty (30) day’s written notice to the Company. The Company in turn may honor the notice period, or at its option, may waive some or all of the notice, and release Employee prior to the end of the notice period. Upon Employee’s release by Company hereunder, all of Employee’s compensation and benefits set forth in Section 4 hereof shall forthwith cease at the end of the thirty (30) business day notice period.
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(c)
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Termination by Company. The Employee’s employment with the Company may be terminated by the Company at any time for or without cause provided, however, that, notwithstanding anything contained herein to the contrary, in the event Employee is terminated by Company without cause then and in that event Employee shall continue to receive Employee’s compensation, benefits and any accrued bonus, as set forth in Section 4 hereof for the remaining term of this Agreement or until Employee has obtained comparable employment or other arrangement for compensation that is not involved in experiential or event driven advertising in competition with the Company (as defined in Section 6 hereof) and does not violate any of Employee’s covenants set forth in said Section 6. The Employee has the affirmative duty to notify the Company of any such compensation arrangement.
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(d)
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Death or Disability. This Agreement and Employee’s employment shall terminate forthwith in the event of the death of the Employee, or, at the option of the Company, upon written notice to Employee, that Employee has failed or for any reason (as verified by two licensed physicians) is unable to render and perform the services reasonably required of Employee under this Agreement for a continuous period of 90 successive days, or for shorter periods aggregating 90 days or more during any period of 12 successive months. Notwithstanding anything contained herein to the contrary, in the event of death of the Employee during the Term or in the event of termination of this Agreement by Company because of incapacity of Employee, Employee or the personal representative of Employee, as the case may be, shall be entitled to receive the compensation specified in Section 4 hereof through the end of the Term of this Agreement immediately following the month in which death or termination by incapacity occurs along with any benefits referenced in Section 4 hereof in which Employee had a vested right under the terms and conditions pursuant to which such benefits were granted.
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(e)
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Termination for Cause. The Company shall have the right to terminate the employment of the Employee under this Agreement, as well as any and all compensation to which the Employee would otherwise be entitled hereunder (except for compensation to which the Employee is entitled through the date of such termination and any benefits referred to in Section 4 hereof in which the Employee has a vested right under the terms and conditions pursuant to which such benefits were granted) only in the manner set forth in this Section 5 and if, and only if, the Employee shall have committed any of the following acts (any such act being hereinafter referred to as “Act of Cause” or “for cause”):
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(f)
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Milestone-Based Termination.
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The Company shall have the right to terminate the employment of the Employee under this Agreement, as well as any and all compensation to which the Employee would otherwise be entitled hereunder (except for compensation to which the Employee is entitled through the date of such termination and any benefits referred to in Section 4 hereof in which the Employee has a vested right under the terms and conditions pursuant to which such benefits were granted) if the Company shall not reach at least 75% of any milestone set forth in Section 4.5 above. Such termination shall be effected in the same manner as a termination for an Act of Cause and shall have the same effect, provided, however, that Employee shall receive severance pay equal to 60 days of salary from the date a notice of termination is sent to Employee.
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(a)
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Definitions.
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(i)
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Customer and Prospective Customer. For purposes of this Agreement, the term “customer” means any customer of the Company, or any referral source of business for the Company. Similarly, the term “prospective customer,” as used in this Agreement, means any prospective customer of the Company, or any prospective referral source of business for the Company. To the extent that covenants in this Agreement apply to post-termination conduct, the term “customer” means any individual, corporation, partnership, limited liability company, trust or other entity (a “Person”) who purchased goods or services from the Company, or who was a referral source for such a purchase, during the year preceding the termination of the Employee’s employment, or at any time after termination within the 180 day scope of the covenant; and, also to the extent that these covenants apply to post-termination conduct, the term “prospective customer” means any Person from whom the Company solicited business, either directly or as a referral source, during the year preceding the termination of Employee’s employment with the Company. Notwithstanding the foregoing, persons who were known by Employee prior to his employment with the Company are not included within the definitions of customer or prospective customer.
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(b)
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Covenant not to Compete. The Employee agrees that while employed by the Company, and for 180 days following the termination of such employment, not to engage, either directly or indirectly, in experiential or event driven advertising, other than as an employee of the Company. Engaging in experiential or event driven advertising includes being employed by, having an active ownership or other financial interest in, contracting with, working for, providing services to or for, lending assistance to or for, or consulting with or for the benefit of, any Person that produces, sells, markets, represents or services any products in that business.
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(c)
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Covenants Relating to Customers and Prospective Customers. The Employee agrees that while employed by the Company, and for 180 days following termination of such employment, whether voluntary or involuntary, with or without cause, that the Employee shall not, do any of the following that would affect adversely the Company’s Business:
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(i)
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solicit (directly or indirectly) any customers or prospective customers of the Company to do business with any Person other than the Company;
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(ii)
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solicit (directly or indirectly) any customers of the Company to cease doing business with the Company;
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(iii)
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contract (directly or indirectly) with any customers or prospective customers, including service agreements, consultation arrangements, and employment, to the detriment of the Company;
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(iv)
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enter (directly or indirectly) into any experiential or event driven advertising business arrangement which has the effect of diminishing the Business of the Company with any customer, or adversely affecting its prospective business relationship with any prospective customer;
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(v)
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solicit (directly or indirectly) experiential or event driven advertising business, for the benefit of the Employee or a third party, from any customers or prospective customer of the Company of a type or kind that the Employee knows, or reasonably should have known, that the Company has performed in the past or would have the capability to perform in the future in connection with the Company’s experiential or event driven advertising Business, even if the Company does not conduct the business in question on a regular basis; or
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(vi)
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solicit (directly or indirectly) any customer or prospective customer of the Company for any other business purposes that would disadvantage the Company in any way.
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(d)
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Covenant not to Solicit Employees. The Employee agrees that while employed by the Company in any capacity, and for 180 days following termination of such employment, whether voluntary or involuntary, with or without cause, and in connection with the Company’s Business, the Employee will not solicit or attempt to persuade any employees of the Company to terminate his or her employment with the Company and accept other employment with a similar business. This covenant specifically prohibits solicitation of employees, in the event of termination of the Employee’s employment, to work with or for the Employee or any other person in a business competing with the Company’s experiential or event driven advertising business during the one 180 day period of the covenant. The Employee acknowledges that this covenant is appropriate in view of the specialized training provided by the Company to its employees, and the fact that the covenant is limited to solicitation of employees to terminate their employment with the Company and work for competitors or similar businesses in connection with the Company’s Business.
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(e)
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Covenant of Duty of Loyalty. The Employee agrees that during the time that the Employee is working for the Company, the Employee will owe the Company a duty of loyalty, and that as part of this duty of loyalty, the Employee shall not engage in business activity representing competition with the Company’s Business, or plan any post-employment competitive business activity. Similarly, the Employee, while employed by the Company, shall not appropriate for the use of the Employee or any Person (other than the Company) any experiential or event driven advertising business opportunity for the Company, or plan such appropriation, or otherwise engage in conduct amounting to a conflict of interest of the Company’s Business.
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(a)
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Assignment by the Company. The Company shall have the right to assign this Agreement to any affiliate, successor or assign, including the Company’s rights with respect to the Employee’s covenant not to engage in the Business granted pursuant to Section 6 (and such rights shall be enforced by such affiliate, successor or assign for the unexpired portion of the 180 days period provided in Section 6); provided, that CMG and XA remain liable to pay compensation due hereunder. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its Business and/or substantially all of its assets provided however that notwithstanding the foregoing, should substantially all of the assets or shares of the Company be sold then the Company may not assign this Agreement to such acquiring entity.
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(b)
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Assignment by the Employee. The Employee may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company. This Agreement shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die, any amounts payable to him under the terms of this Agreement shall be paid in accordance with the terms of this Agreement to his designee or, if there be no such designee, to his estate.
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(c)
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Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed, in the case of the Employee, to the address set forth on the first page of this Agreement, with notice to: Robert N. Chan, Ferber Chan Essner & Coller, LLP, 530 Fifth Avenue, New York, NY 10036, email: chan@ferberchan.com, and, in the case of the Company, to the attention of the Company in care of: Glenn Laken, by e-mail to glennbrlaken@gmail.com, with notice to Darren L. Ofsink, Ofsink, LLC, 900 Third Avenue, 5th Floor, New York, New York 10022, fax: 646-224-9844, or such other place as either party shall notify the other party herewith, except that notices of change of address shall be effective only upon receipt.
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(d)
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Amendment; Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Employee and such officer as may be specifically designated by the Chairman of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.
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(e)
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Invalid Provisions. Should any portion of this Agreement be adjudged or held to be invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding the remainder of this Agreement and the parties hereby agree that the portion so held invalid, unenforceable or void shall, if possible, be deemed amended or reduced in scope, or otherwise be stricken from this Agreement to the extent required for the purposes of validity and enforcement thereof.
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(f)
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Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
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(g)
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Governing Law. This Agreement shall be governed by and construed under the laws of the State of New York without giving effect to principles of conflicts of laws that would result in the application of the law of any other jurisdiction. Any legal action or proceeding arising out of or relating to this Agreement or Employee’s employment with the Company shall be instituted in the courts of the State of New York sitting in New York County or in the United States of America for the Southern District of New York, and the parties hereto irrevocably submit to the jurisdiction of each such court in any action or proceeding. In any such proceeding the prevailing party shall be entitled to recover his or its legal fees and expenses.
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(h)
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Captions and Gender. The use of captions and section headings herein is for purposes of convenience only and shall not effect the interpretation or substance of any provisions contained herein. Similarly, the use of the masculine gender with respect to pronouns in this Agreement is for purposes of convenience and includes either sex who may be a signatory.
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(i)
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Definition of “Including”. For purposes of this Agreement, the word “including” (and with correlative meaning, “include” or “includes”) means including, without limiting the generality of any description preceding such term.
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(j)
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Guaranty. CMG hereby guaranties payment of all obligations of the Company under this Agreement.
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