Exhibit 10.7
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated and effective as of
September 24, 2014 (the “Effective Date”), by and between PROFESSIONAL DIVERSITY
NETWORK, INC., a Delaware corporation (the “Company”), and DAVID MECKLENBURGER
(“Executive”).
 
RECITALS:
 
A.            Executive currently is employed as the Chief Financial Officer and
Secretary of the Company, which is engaged in the business of developing and
operating online networks dedicated to serving diverse professionals in the
United States and designing, developing and hosting online job boards for
clients.
 
B.            The Company and Executive previously entered into a letter
agreement, dated July 17, 2013 (the “Prior Employment Agreement”).
 
C.            The Company and Executive now wish to replace the Prior Employment
Agreement with this Employment Agreement, which shall set forth the terms and
conditions of Executive’s continued employment with the Company.
 
NOW, THEREFORE, in consideration of the covenants, representations and
warranties contained herein, the parties hereto agree as follows:
 
1.             Employment. The Company hereby employs Executive, and Executive
hereby accepts such employment and agrees to serve the Company, upon the terms
and conditions set forth in this Agreement.
 
2.             Employment Period. Subject to the provisions of Section 15 below,
the initial term of Executive’s employment pursuant to this Agreement shall
commence on the Effective Date and continue until the three (3) year anniversary
of the Effective Date (the “Initial Employment Period”); provided, however, that
the term of this Agreement shall automatically be extended for additional one
(1) year terms beyond the Initial Employment Period unless and until either the
Company or Executive provides ninety (90) days advance written notice to the
other of its desire to terminate this Agreement as of the end of the then
effective Employment Period.  The Initial Employment Period and each one-year
period of continuing employment of Executive by the Company thereafter is
referred to herein as the “Employment Period.”
 
3.             Duties and Responsibilities. Executive shall serve as Chief
Financial Officer and Secretary of the Company and shall have such normal and
customary duties and responsibilities commensurate with his position, subject to
the general supervision of the Chief Executive Officer of the Company. Executive
shall devote his best efforts and sufficient business time and attention to the
business and affairs of the Company and shall diligently, faithfully and
competently perform his duties and responsibilities hereunder; provided however
that the foregoing shall not preclude Executive from engaging in other business
endeavors and from spending time and attention with respect thereto and other
endeavors, whether business, charitable, philanthropic or otherwise.  A list of
permitted activities in which Executive is currently engaged is attached as
Exhibit A hereto.  Executive recognizes that his primary responsibility to the
Company.
 
 
 

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4.             Compensation and Related Matters.
 
(a)           Base Salary. The Company shall pay Executive an annual base salary
(“Base Salary”) of Two Hundred Thousand Dollars ($200,000), payable in
substantially equal monthly or more frequent installments in accordance with the
Company’s normal and customary payroll practices. Executive’s Base Salary shall
be increased on each anniversary of the Effective Date by the greater of (i)
three percent (3%) multiplied by Executive’s then-current Base Salary, or (ii)
the annual percentage increase in Consumer Price Index over the one-year period
prior to the applicable anniversary of the Effective Date, as measured by the
Bureau of Labor Statistics, multiplied by Executive’s then-current Base
Salary. The Company’s Board of Directors (the “Board”) may review and further
adjust Executive’s Base Salary from time to time in its sole and absolute
discretion, provided that during the Employment Period the Company may not
decrease Executive’s Base Salary below the amount set forth in this section. Any
such increased Base Salary shall be and become the “Base Salary” for purposes of
this Agreement.  Executive acknowledges and agrees that the Base Salary provided
herein is an increase over Executive’s current Base Salary and that Executive
would not be eligible for this pay raise without first executing this Agreement
and that this Agreement is supported by good and valid consideration.
 
(b)           Expense Reimbursement. The Company shall pay or reimburse
Executive for all reasonable business expenses properly incurred by Executive in
the ordinary course of performing his duties and responsibilities hereunder,
subject to the Company’s normal and customary practices and policies as are in
effect from time to time with respect to travel, entertainment and other
business expenses (including the Company’s reasonable requirements with respect
to prior approval, reporting and documentation of such expenses).
 
(c)           Benefits. The Company will provide or offer for Executive’s
participation such benefits as are generally provided or offered by the Company
to its other senior executive officers, including, without limitation,
health/major medical insurance, life insurance, disability insurance and welfare
benefits, sick days and other fringe benefits (collectively, “Benefits”), if and
to the extent that Executive is eligible to participate in accordance with the
terms of the applicable Benefit plan or program generally and subject to any
required contributions.
 
(d)           Bonus. Executive shall be eligible for an annual bonus according
to the terms and conditions of a bonus plan that is based upon the financial
results achieved by the Company for the fiscal year or such other performance
goals established by the Board (or the Compensation Committee), in its sole
discretion.
 
(e)           Withholding. All Base Salary, bonus and other compensation
described in this Agreement shall be subject to withholding for federal, state
or local taxes, amounts withheld under applicable benefit policies or programs,
and any other amounts that may be required to be withheld by law, judicial order
or otherwise.
 

 
5.           Executive Work Product and Inventions. Executive agrees that
Inventions (as defined below) shall be deemed “work made for hire” and shall be
the property of the Company. Executive shall promptly disclose to the Company
all such Inventions and hereby irrevocably assigns to Company all such
Inventions and all such worldwide right, title and interest therein. Executive
hereby waives and agrees not to assert any moral rights or similar rights under
the
 
 
 

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laws of any jurisdiction with respect to any Inventions. Executive further
agrees to execute or cause to be executed any and all assignment documents or
other documents that may be necessary to perfect the ownership rights of the
Company in such Inventions or to secure the Company’s statutory protection
(including, without limitation, patent, trademark, trade secret or copyright
protection) throughout the world for any and all such Inventions. For purposes
hereof, “Invention” means all work product, including, without limitation, any
and all creative works, discoveries, ideas, inventions, designs, devices,
models, prototypes, processes, works, know-how, documentation, files,
information, manuals, materials, input materials and output materials, software
programs or packages (together with any related documentation, source code or
codes, object codes, upgrades, revisions, modifications and any related
materials) and other information and materials, and the media upon which they
are located (including cards, tapes, discs and other storage facilities), which
are conceived, created, developed, reduced to practice, fixed in a tangible
medium of expression or otherwise made by Executive solely or jointly with
others in connection with or arising from Executive’s employment hereunder
(whether or not during regular business hours).
 
6.           Confidential Information.
 
(a)           Executive covenants and agrees that, except to the extent the use
or disclosure of any Confidential Information is required to carry out
Executive’s assigned duties with the Company, during Executive’s employment with
the Company and thereafter: (a)  Executive shall keep strictly confidential and
not disclose to any person not employed by the Company any Confidential
Information; and (b) Executive shall not use for Executive or for any other
person or entity any Confidential Information.  However, this provision shall
not preclude Executive from: (i) the use or disclosure of information known
generally to the public (other than information known generally to the public as
a result of Executive’s violation of this Section), or (ii) any disclosure
required by law or court order so long as Executive provides the Company
immediate written notice of any potential disclosure under this subsection and
cooperates with the Company to prevent or limit such disclosure to the extent
lawful.  “Confidential Information” means all confidential, proprietary or
business information related to the Company’s business that is furnished to,
obtained by, or created by Executive during Executive’s employment with the
Company and which could be used to harm or compete against the
Company.  Confidential Information includes, by way of illustration, such
information relating to: (A)  the Company’s customers and suppliers, including
customer lists, supplier lists, contact information, contractual terms, prices,
and billing histories; (B) the Company’s finances, including financial
statements, balance sheets, sales data, forecasts, profit margins and cost
analyses; (C) the Company’s plans and projections for new and developing
business opportunities and for maintaining existing business; and (D) the
Company’s operating methods, business processes and techniques, services,
products, prices, costs, service performance, and operating results.
 
All property, documents, data, and Confidential Information prepared or
collected by Executive as part of Executive’s employment with the Company, in
whatever form, are and shall remain the property of the Company. Executive
agrees that Employee shall return upon the Company’s request at any time (and,
in any event, before Executive’s employment with the Company ends) all
documents, data, Confidential Information, and other property belonging to the
Company in Executive’s possession or control, regardless of how stored or
maintained and including all originals, copies and compilations.
 
 
 

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7.             Non-compete.
 
(a)           During the Restricted Period (as defined below), Executive shall
not: (i) engage in Competitive Activity (as defined below) within the Prohibited
Territory (as defined below); or (ii) assist any entity or person to engage in
Competitive Activity within the Prohibited Territory, whether as an owner,
franchisee, franchisor, investor, consultant, agent or otherwise.
 
(b)           The “Restricted Period” means: (i) the period that Executive is
employed by the Company; and (ii) a period of 18 months following Executive’s
last day of employment with the Company and its affiliates (the “Separation
Date”).  Notwithstanding the foregoing, in the event that Executive’s employment
is terminated by the Company (other than for “Cause”) (as hereinafter defined)
or Executive terminates her employment for “Good Reason” (as hereinafter
defined), the Restricted Period shall not extend beyond the period for which
Severance Pay is calculated pursuant to Section 15(f)(i) hereof.  In addition,
nothing herein restricts Executive from continuing the non-Company work she
engaged in during the course of this Agreement, provided that such work is not a
Competitive Activity.
 
(c)           “Competitive Activity” means competing against the Company by:
(i) engaging in work for a competitor of the Company that is the same as or
substantially similar to the work Executive performed on behalf of the Company
at any time during the 12 months prior to the Separation Date; (ii) engaging in
an aspect of the business of the Company that Executive was involved with on
behalf the Company at any time during the 12 months prior to the Separation
Date; and/or (iii) engaging in an aspect of the business of the Company about
which Executive received Confidential Information in the course of employment
with the Company at any time during the 12 months prior to the Separation
Date.  Notwithstanding the preceding, owning less than 5% of the outstanding
shares in a public company shall not constitute by itself Competitive Activity
or assisting others to engage in Competitive Activity.
 
(d)           “Prohibited Territory” means: (i) Executive’s assigned territory
or geographic area of responsibility for the Company at any time during the 12
months prior to the Separation Date; (ii) each city in which Executive performed
services for the Company at any time during the 12 months prior to the
Separation Date; (iii) each state in which Executive performed services for the
Company at any time during the 12 months prior to the Separation Date; and (iv)
the United States. Executive’s initial assigned territory for the Company will
be: New York, California and Illinois.
 
8.             Non-Interference.
 
(a)           During the Restricted Period, Executive shall not: (i) solicit,
encourage, or cause any Restricted Customer (as defined below) to purchase any
services or products from anyone other than the Company that are competitive
with or a substitute for the services or products offered by the Company;
(ii) sell or provide any services or products to any Restricted Customer that
are competitive with or a substitute for the Company’s services or products;
(iii) solicit, encourage, or cause any Restricted Customer not to do business
with or to reduce any part of its business with the Company; (iv) solicit,
encourage, or cause any supplier of goods or services to the Company not to do
business with or to reduce any part of its business with the Company; (v) make
any disparaging remarks about the Company or its business, services, affiliates,
officers, managers, directors or employees, whether in writing, verbally, or on
any online forum; or (vi) assist anyone else to engage in the conduct prohibited
by this Section.
 
 
 

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(b)           “Restricted Customer” means: (i) any Company customer with whom
Executive had business contact or communications at any time during the 12
months prior to the Separation Date; (ii) any Company customer for whom
Executive supervised or assisted with the Company’s dealings at any time during
the 12 months prior to the Separation Date; (iii) any Company customer about
whom Executive received Confidential Information in the course of employment
with the Company at any time during the 12 months prior to the Separation Date;
(iv) any prospective Company customer for whom Executive assisted with a
proposal at any time during the 12 months prior to the Separation Date; and/or
(v) any prospective Company customer for whom Executive supervised the Company’s
dealings at any time during the 12 months prior to the Separation Date.
 
9.             Non-Raiding.  During the Restricted Period, Executive shall not,
directly or indirectly: (a) hire as an employee or engage as an independent
contractor any person employed by the Company with whom Executive worked while
employed by the Company or about whose abilities Executive became aware while
employed by the Company (each, a “Restricted Employee”); or (b) solicit any
Restricted Employee to leave the Company (other than by the use of non-targeted
general solicitation in media).
 
10.         Reasonableness.  Executive has carefully read and considered the
provisions of this Agreement and, having done so, agrees that the restrictions
set forth herein are fair, reasonable, and necessary to protect the Company’s
legitimate business interests, including its goodwill with its customers,
suppliers and employees and its confidential and trade secret.  In addition,
Executive acknowledges and agrees that the foregoing restrictions do not
unreasonably restrict Executive with respect to earning a living should
Executive’s employment with the Company end.  As such, Executive agrees not to
contest the general validity or enforceability of this Agreement in any
forum.  The post-employment covenants in this Agreement shall survive
Executive’s last day of employment with the Company and its affiliates and shall
be in addition to any restrictions imposed upon Executive by statute, at common
law, or other written agreements.  Executive agrees that the Company may share
the terms of this Agreement with any business with which Executive becomes
associated while any of the post-employment restrictions in this Agreement
remain in effect.
 
11.           Remedies.  Executive acknowledges and agrees that Executive’s
breach of this Agreement would result in irreparable damage and continuing
injury to the Company.  Therefore, in the event of any breach or threatened
breach of this Agreement, the Company shall be entitled to an injunction
enjoining Executive from committing any violation or threatened violation of
this Agreement, without limiting the Company’s other remedies.  The Company
shall be required to post a bond of no more than $500 to obtain such an
injunction.
 
12.           Protections for Certain Affiliates.  For purposes of the
restrictions in Sections 5 (Executive Work Product and Inventions) 6
(Confidential Information), 7 (Non-Compete), 8 (Non-Interference), 9
(Non-Raiding) 10 (Reasonableness) 11 (Remedies) and 15(g) (Return of Property),
the “Company” shall mean: (a) Professional Diversity Network, Inc.; (b) any
parent, subsidiary, affiliate or successor (each, an “Affiliate”) of
Professional Diversity Network, Inc. for or with whom Executive performed any
services or had any work responsibilities at any time during the 12 months prior
to the Separation Date; and (c) any Affiliate of Professional Diversity Network,
Inc. whose Confidential Information was disclosed to Executive at any time
during the 12 months prior to the Separation Date.
 
 
 

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13.           Prior Employer’s Information.  While employed by the Company and
its affiliates, Executive shall not: (a) breach any obligation of
confidentiality that Executive may owe to a third party; or (b) disclose or use
any trade secrets belonging to a third party.  In order to ensure compliance
with the foregoing, Executive agrees not to refer to, use or disclose in the
course of employment with the Company any information, documents or data
belonging to a competitor or former employer that are not readily available to
the public. Executive shall immediately notify the Company’s human resources
department if Executive receives any communication from a third party regarding
Executive’s confidentiality or similar obligations to them.  The terms in this
section shall be in addition to, and not limit, Executive’s obligations to the
Company and its affiliates under other agreements and policies related to this
issue.
 
14.           Notice to Future Employers. Executive agrees that during the
Restricted Period, Executive will notify the Company in writing of any
subsequent occupation whether as owner, employee, officer, director, agent,
consultant, independent contractor, or the like, and his duties and
responsibilities in that position. Further, Executive agrees that during said
period, he will inform each new employer, prior to accepting employment, of the
existence of this Agreement and the terms of the restrictive covenants and
confidentiality restrictions contained herein. Executive acknowledges that
during said period the Company shall have the right to contact, independently,
any potential or actual future employer of Executive to notify it of Executive’s
obligations under this Agreement and provide such employer with a copy of this
Agreement. The Company shall also be entitled, at its election, to notify any
such actual or potential employer of the Company’s understanding of the
requirements of this Agreement and what steps, if any, the Company intends to
take to ensure compliance with or enforcement of this Agreement. Failure of the
Company to avail itself of the benefits of this subsection shall not in any way
affect its right to obtain enforcement of any provision of this Agreement.
 
15.           Termination.
 
(a)           Termination by the Company for Cause. The Company shall have the
right to terminate Executive’s employment hereunder for Cause, which shall be
communicated by a “Notice of Termination” (as defined below), effective upon
either (i) 30 days advice written notice, or (ii) payment to Executive of
Executive’s then-current Base Salary for such 30 day period.  Notwithstanding
anything to the contrary contained herein, if Executive’s employment is
terminated other than pursuant to this Section 15(a), after which the Company
determines that Executive’s acts or omissions would have constituted grounds to
terminate Executive for Cause, then Executive shall be deemed to have been
terminated for Cause pursuant to this Section 15(a); provided that, such
determination shall be made following the procedure contemplated by the Notice
of Termination procedures set forth below.  In the event of such termination,
then the Company shall pay to Executive her then current Base Salary and
Benefits accrued, and any expenses for which Executive is entitled to be
reimbursed, up to and including the effective date of such termination.
Executive shall not be entitled to any other salary, bonus, benefits or other
compensation as a result of termination pursuant to this Section 15(a). For
purposes hereof, “Cause” means the occurrence of any one of the following on the
part of Executive: (i) conviction of or a plea of nolo contendre to a felony or
act of moral turpitude which affects or reflects on the Company or any Affiliate
in a material and negative manner; (ii) attempted or actual theft, fraud or
embezzlement of money or tangible or intangible assets or property of the
Company or any Affiliate; (iii) gross negligence or willful misconduct in
respect of Executive’s performance of his duties and responsibilities to the
Company or any Affiliate; or (vi) breach of any material term, covenant,
representation or warranty contained in this Agreement, which such breach (if
susceptible to cure) remains uncured or is repeated following fifteen (15) days’
written notice from the Company to Executive thereof.
 
 
 

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For purposes of this Agreement, a “Notice of Termination” shall mean delivery to
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board (excluding the
Executive) at a meeting of the Board called and held for the purpose (after
reasonable notice to Executive and reasonable opportunity for Executive,
together with Executive’s counsel, to be heard before the Board prior to such
vote), finding that in the good faith opinion of the Board Executive was guilty
of conduct set forth in this Section 15(a) and specifying the particulars
thereof in reasonable detail.  For purposes of clarity, the Notice of
Termination may occur after Executive’s employment has been terminated in the
event the Company determines that Executive’s acts or omissions would have
constituted grounds to terminate Executive for Cause, as contemplated above.
 
(b)           Termination as a Result of Executive’s Disability or Death. The
Company shall have the right to terminate Executive’s employment hereunder in
the event of Executive’s Disability or death, effective immediately. In the
event of such termination, then the Company shall pay to Executive (or his legal
representative) Executive’s then current Base Salary and Benefits accrued, and
any expenses for which Executive is entitled to be reimbursed, up to and
including the effective date of such termination. Executive shall not be
entitled to any other salary, bonus, benefits or other compensation as a result
of termination pursuant to this Section 15(b). For purposes hereof, “Disability”
means the inability of Executive to substantially perform his duties and
responsibilities to the Company by reason of a physical or mental disability or
infirmity (i) for a continuous period of ninety (90) days or for at least 180
days in any consecutive twelve (12) month period or (ii) at such earlier time as
Executive submits or the Company receives satisfactory medical evidence that
Executive has a physical or mental disability or infirmity which will likely
prevent him from returning to the performance of his work duties for ninety (90)
days or longer. In the event of any dispute regarding the determination of
Executive’s Disability, such determination shall be made by a physician selected
by the Company and reasonably acceptable to Executive, at the Company’s sole
expense; provided, however, that Executive’s Disability shall be conclusively
presumed if such determination is made by an insurer providing disability
insurance coverage to Executive or the Company in respect of Executive.
 
(c)           Termination by the Company Without Cause. The Company may
terminate Executive’s employment hereunder for any reason (or for no reason)
whatsoever, effective upon 30 days advance written notice or payment to
Executive of Executive’s then-current Base Salary for such 30 day period. In the
event of such termination by the Company (i.e., other than by reason of death,
Disability or for Cause), then the Company shall pay to Executive his then
current Base Salary (but not in such a manner that any payment for Base Salary
during the notice period would result in a duplicative payment) and Benefits
accrued, Severance Pay (as defined in and subject to Section 15(f) below) and
any expenses for which Executive is entitled to be reimbursed, up to and
including the effective date of such termination.
 
 
 

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(d)
 
(i)           Executive may voluntarily terminate his employment hereunder at
any time upon not less than ninety (90) days’ prior written notice to the
Company; provided, however, that any time during said 90-day period, the Company
may request Executive to vacate his office and cease to perform employment
services for or on behalf of the Company except those assigned by the Board
which are to be conducted from Executive’s home. If Executive so terminates his
employment, then the Company shall pay to Executive his then current Base
Salary, Benefits accrued, and any expenses for which Executive is entitled to be
reimbursed, up to and including the effective date of such termination.
Executive shall not be entitled to any other salary, bonus, benefits or other
compensation as a result of termination pursuant to this Section 15(d).
 
(ii)           Executive may resign his employment hereunder upon written notice
of his “Resignation For Good Reason.” For purposes of this Agreement,
Executive’s “Resignation For Good Reason” means Executive’s termination of
Executive’s employment with Company as a result of: (A) the Company materially
reducing Executive’s Base Salary without Executive’s consent; (B) the Company’s
material breach of this Agreement; or (C) the relocation of Executive’s
principal place of employment to any place that is more than 30 miles from
Executive’s current principal place of employment, other than reasonable Company
travel.  Executive must provide the Company written notice of a potential
Resignation For Good Reason within 90 days after the condition(s) justifying
such resignation arise.  Upon receiving such notice, the Company shall have 30
days to cure the condition(s) justifying Executive’s Resignation For Good
Reason.  If such condition(s) are not cured within such period, the Resignation
For Good Reason shall be effective on the 31st day.
 
(e)           Removal From Positions. Any termination of Executive’s employment
with the Company shall automatically effectuate Executive’s removal from any and
all officer and other positions that Executive then holds with the Company or
any of its Affiliates as of the effective termination date.
 
(f)           Severance Pay. If the Company terminates Executive’s employment
pursuant to Section 15(c) or Executive terminates his employment pursuant to
Section 15(d)(ii) above, subject to the terms and conditions in this Agreement
and the Release Agreement (as defined below), and provided that Executive
executes (and does not revoke, if applicable) a release and waiver agreement by
which Executive releases the Company and its Affiliates from claims relating to
or arising from Executive’s employment with or separation from the Company and
its Affiliates (the “Release Agreement”) in substantially the form and substance
attached as Exhibit B hereto, but subject to such modifications as the Company
may determine are necessary or prudent to promote the enforceability and
effectiveness of such Release Agreement, and at a time acceptable to the
Company, and further provided that Executive has been and remains in compliance
with her obligations as set forth in this Agreement and the Release Agreement,
the Company shall:
 
 
 

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(i)           Pay Executive an amount (the “Severance Pay”) equal to the product
of Executive’s monthly salary at Executive’s then-current rate (excluding any
benefits or other amounts) and the greater of (x) six (6) months, or (y) the
number of remaining whole months from the effective date of Executive’s
termination through the last day of the Initial Employment Period.  The
Severance Pay shall be paid to Executive in a single cash lump sum payment
within 15 days following the 60th day following the effective date of
Executive’s termination.  In addition, Executive shall receive any portion of
the bonus attributable to any completed fiscal year which has accrued but has
not yet been paid, payable at the same time and in the same manner as the
Severance Pay.  Executive shall also be entitled to payment of a pro rata bonus
for the fiscal year in which Executive incurs a termination without Cause or
Resignation For Good Reason, based on the Company’s actual performance during
the applicable performance period and payable within 2 ½ months following the
conclusion of the performance period.
 
(ii)           Provided Executive timely elects continued coverage for Executive
and Executive’s spouse and dependents who are then covered under the Company’s
group health plan under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”), pay to Executive a single cash lump sum payment
within 15 days following the 60th day following the effective date of
Executive’s termination an amount equal to the employer portion of the costs of
continued health coverage for Executive, such spouse and dependents at their
then-current level under the Company’s health plan for the six-month period
following the effective date of Executive’s termination.  Executive and
Executive’s spouse and dependents in the Company’s post termination
participation in the Company’s health plan shall be in the sole discretion of
Executive and at such participants’ sole expense in accordance with COBRA.
 
In the event of Executive’s death during but prior to the payment of any amounts
described under this Section 15(f), the Company will pay such unpaid amounts to
Executive’s estate in accordance with the provisions of this Agreement and the
Release Agreement.
 
(g)           Return of Property. Immediately upon the Company’s request or on
the termination date of Executive’s employment, whichever occurs first,
Executive shall return to the Company all Confidential Information and any other
property of the Company, its Affiliates, or any third parties which is in
Executive’s possession or control by virtue of his employment with the Company.
Property to be returned to the Company shall include without limitation, all
documents and things (whether in tangible or electronic format and whether such
documents or things contain any Confidential Information) in Executive’s
possession or control, further including without limitation, all computer
programs, files and diskettes, and all written or printed files, manuals,
contracts, memoranda, forms, notes, records and charts, and any and all copies
of, or extracts from, any of the foregoing.
 
16.           Assignment. The parties acknowledge and agree that the covenants,
terms and provisions contained in this Agreement constitute a personal
employment contract and the rights and obligations of the parties hereunder
cannot be transferred, sold, assigned, pledged or hypothecated, excepting that
the Company may assign this Agreement in connection with a sale of the business,
merger, consolidation, share exchange, sale of substantially all of the
Company’s assets, or other reorganization, whether or not the Company is the
continuing entity, provided that the assignee is the successor to the business
and all or substantially all of the assets of the Company.
 
 
 

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17.           Severability. If any one or more of the provisions or parts of a
provision contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect (a) any other
provision or part of a provision of this Agreement nor (b) this Agreement’s
validity, legality and enforceability in any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein and such provision or part shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.
 
18.           Governing Law; Venue. This Agreement shall be covered by,
construed, applied and reinforced in accordance with the internal laws of the
State of New York, without regard to conflicts of law provisions. The parties
agree that any action or proceeding to enforce or arising out of this Agreement
shall be commenced in the state courts, or in the United States District Court,
in New York, New York. The parties consent to such jurisdiction, agree that
venue will be proper in such courts and waive any objections based upon Forum
Non Conveniens. The choice of forum set forth in this section shall not be
deemed to preclude the enforcement of any action under this Agreement in any
other jurisdiction.
 
19.           Continuing Obligation. The covenants, obligations, duties and
liabilities of Executive pursuant to this Agreement (including, and without
limitation, the covenants set forth in Sections 5 through 9 of this Agreement)
are continuing, absolute and unconditional and shall remain in full force and
effect as provided herein.
 
20.           Indemnification. The Company shall include Executive in the
coverage provided by its executive director and officer (D&O) indemnity
insurance policy. In addition, the Company shall indemnify Executive to the
fullest extent permitted by Delaware law, consistent with the Company’s
Certificate of Incorporation and By-laws.
 
21.           Attorneys’ Fees. If any party brings any suit, action or claim to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to seek reasonable attorneys’ fees and litigation expenses in addition to court
costs.
 
22.           Waiver. The waiver by the Company or Executive of any breach of
any term or condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition hereof.
 
23.           Notices. Any notice, request, consent or communication under this
Agreement shall be effective only if it is in writing and shall be deemed to
have been given when personally delivered or three (3) days after being
deposited in the United States mail, certified or registered, postage prepaid,
return receipt requested and addressed to the party at its or his last known
address. The address of any party may be changed by notice in writing to the
other party duly served in accordance with this Section.
 
 
 

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24.           Section 409A. The intent of the parties is that payments and
benefits under this Agreement be exempt from, and to the extent not exempt from,
comply with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to
the maximum extent permitted, this Agreement shall be interpreted in accordance
with such intent. To the extent that any provision hereof is modified in order
to comply with Code Section 409A, such modification shall be made in good faith
and shall, to the maximum extent reasonably possible, maintain the original
intent and economic benefit to Executive and the Company of the applicable
provision without violating the provisions of Code Section 409A. In no event
whatsoever shall the Company be liable for any additional tax, interest or
penalty that may be imposed on Executive by Code Section 409A or damages for
failing to comply with Code Section 409A. Without limiting the generality of the
foregoing, the Company and the Executive agree as follows:
 
(a)           Reimbursements payable to Executive hereunder shall be paid in no
event later than the end of the calendar year following the year in which the
reimbursable expense is incurred. In addition, such reimbursements shall be made
in a manner that complies with all the requirements of Treasury Regulation
Section 1.409A-3(i)(1)(iv). In no event shall reimbursements and payments
provided under the Agreement be subject to liquidation or exchange in a manner
which violates Treasury Regulation Section 1.409A-3(i)(1)(iv).
 
(b)           A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”
 
(c)           Notwithstanding any other payment schedule provided herein to the
contrary, if Executive is deemed on the date of termination to be a “specified
employee” within the meaning of that term under Code Section 409A(a)(2)(B), then
each of the following shall apply:
 
(i)           With regard to any payment that is considered “nonqualified
deferred compensation” under Code Section 409A payable on account of a
“separation from service,” such payment shall be made on the date which is the
earlier of (A) the expiration of the six (6)-month period measured from the date
of such “separation from service” of Executive, and (B) the date of Executive’s
death (the “Delay Period”) to the extent required under Code Section 409A. Upon
the expiration of the Delay Period, all payments delayed pursuant to this
Section (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid to Executive in a lump
sum, and all remaining payments due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein;
and
 
(ii)           To the extent that benefits to be provided during the Delay
Period are considered “nonqualified deferred compensation” under Code Section
409A provided on account of a “separation from service,” and such benefits are
not otherwise exempt from Code Section 409A, Executive shall pay the cost of
such benefits during the Delay Period, and the Company shall reimburse
Executive, to the extent that such costs would otherwise have been paid by the
Company or to the extent that such benefits would otherwise have been provided
by the Company at no cost to Executive, the Company’s share of the cost of such
benefits upon expiration of the Delay Period, and any remaining benefits shall
be reimbursed or provided by the Company in accordance with the procedures
specified herein.
 
 
 

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(d)           To the extent that severance payments or benefits pursuant to this
Agreement are conditioned upon the execution and delivery by Executive of a
release of claims, Executive shall forfeit all rights to such payments and
benefits unless such release is signed and delivered (and no longer subject to
revocation, if applicable) within sixty (60) days following the date of
Executive’s termination of employment. If the foregoing release is timely
executed and delivered and no longer subject to revocation as provided in the
preceding sentence, then the following shall apply:
 
(i)           To the extent that any such cash payment or continuing benefit to
be provided is not “nonqualified deferred compensation” for purposes of Code
Section 409A, then such payment or benefit shall commence upon the first
scheduled payment date immediately following the date that the release is
executed, delivered and no longer subject to revocation (the “Release Effective
Date”). The first such cash payment shall include payment of all amounts that
otherwise would have been due prior to the Release Effective Date under the
terms of this Agreement applied as though such payments commenced immediately
upon Executive’s termination of employment, and any payments made thereafter
shall continue as provided herein. The delayed benefits shall in any event
expire at the time such benefits would have expired had such benefits commenced
immediately following Executive’s termination of employment.
 
(ii)           Subject to Section 24(c)(i), to the extent that any such cash
payment or continuing benefit to be provided is “nonqualified deferred
compensation” for purposes of Code Section 409A, then such payments or benefits
shall be made or commence upon the sixtieth (60th) day following Executive’s
termination of employment. The first such cash payment shall include payment of
all amounts that otherwise would have been due prior thereto under the terms of
this Agreement had such payments commenced immediately upon Executive’s
termination of employment, and any payments made thereafter shall continue as
provided herein. The delayed benefits shall in any event expire at the time such
benefits would have expired had such benefits commenced immediately following
Executive’s termination of employment.
 
The Company may provide, in its sole discretion, that Executive may continue to
participate in any benefits delayed pursuant to this Section 24(d) during the
period of such delay, provided that Executive shall bear the full cost of such
benefits during such delay period. Upon the date such benefits would otherwise
commence pursuant to this Section 22(d), the Company may reimburse Executive the
Company’s share of the cost of such benefits, to the extent that such costs
would otherwise have been paid by the Company or to the extent that such
benefits would otherwise have been provided by the Company at no cost to
Executive, in each case, had such benefits commenced immediately upon
Executive’s termination of employment. Any remaining benefits shall be
reimbursed or provided by the Company in accordance with the schedule and
procedures specified herein.
 
 
 

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(e)           For purposes of Code Section 409A, Executive’s right to receive
any installment payments pursuant to this Agreement shall be treated as a right
to receive a series of separate and distinct payments. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days,
the actual date of payment within the specified period shall be within the sole
discretion of the Company.
 
(f)           Notwithstanding any other provision of this Agreement to the
contrary, in no event shall any payment under this Agreement that constitutes
“nonqualified deferred compensation” for purposes of Code Section 409A be
subject to offset by any other amount unless otherwise permitted by Code Section
409A.
 
25.           Miscellaneous. This Agreement may be executed in two or more
counterparts (including via facsimile), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
 
26.           Entire Agreement.  This Agreement contains the entire agreement of
the parties with respect to the subject matter herein and supersedes any prior
written or oral agreements or understandings between the parties with respect to
the subject matter herein, including any employment agreements or offer letters.
 
[Signature page follows]
 
 
 

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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Employment Agreement the date first hereinabove set forth.
 

 
THE COMPANY
       
PROFESSIONAL DIVERSITY
 
NETWORK, INC.
       
By:
/s/ James Kirsch     
Name:
James Kirsch     
Its:
Chief Executive Officer                                   
EXECUTIVE
          /s/ David Mecklenburger  
David Mecklenburger

   
 
 

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EXHIBIT A
 
Permitted Activities

  
 
 

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EXHIBIT B
 
Form of Release Agreement
 
RELEASE BY EXECUTIVE
 
In exchange for the payments and benefits payable pursuant to the Separation
Agreement and General Release between me and Professional Diversity Network,
Inc., dated ________, (the “Agreement”), I, __________, hereby generally and
completely release Professional Diversity Network, Inc. its parent and
subsidiary entities (collectively the “Company”), and its or their directors,
officers, employees, shareholders, partners, agents, attorneys, predecessors,
successors, insurers, affiliates, and assigns (collectively “Released Parties”),
from any and all claims, liabilities and obligations, both known and unknown,
that arise out of or are in any way related to events, acts, conduct, or
omissions occurring prior to my signing this general release (the “Release”).
This Release includes, but is not limited to: (1) all claims arising out of or
in any way related to my employment with the Company or the termination of that
employment; (2) all claims related to my compensation or benefits from the
Company, including wages, salary, bonuses, commissions, vacation pay, expense
reimbursements (to the extent permitted by applicable law), severance pay,
fringe benefits, stock, stock options, or any other ownership interests in the
Company; (3) all claims for breach of contract, wrongful termination, and breach
of the implied covenant of good faith and fair dealing; (4) all tort claims,
including without limitation claims for fraud, defamation, emotional distress,
and discharge in violation of public policy; and (5) all federal, state, and
local statutory claims, including without limitation claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), the federal Worker Adjustment and Retraining
Notification Act (as amended) and similar laws in other jurisdictions, the
Employee Retirement Income Security Act of 1974 (as amended), the Family and
Medical Leave Act of 1993, the Sarbanes-Oxley Act, New York state wage and hour
laws and all wage orders; New York Labor Law; New York Executive Law Section 296
et seq.; the New York City Administrative Code; the common law of the state of
New York; and any similar laws in other jurisdictions; provided, however, that
this Release does not waive, release or otherwise discharge any claim or cause
of action arising after the date I sign this Release.

This Release includes a release of claims of discrimination or retaliation on
the basis of workers’ compensation status, but does not include workers’
compensation claims. Excluded from this Release are any claims which by law
cannot be waived in a private agreement between employer and employee, including
but not limited to the right to file a charge with or participate in an
investigation conducted by the Equal Employment Opportunity Commission (“EEOC”)
or any state or local fair employment practices agency. I waive, however, any
right to any monetary recovery or other relief should the EEOC or any other
agency pursue a claim on my behalf.

I acknowledge and represent that I have not suffered any age or other
discrimination, harassment, retaliation, or wrongful treatment by any Released
Party. I also acknowledge and represent that I have not been denied any rights
including, but not limited to, rights to a leave or reinstatement from a leave
under the Family and Medical Leave Act of 1993, the Uniformed Services
Employment and Reemployment Rights Act of 1994, or any similar law of any
jurisdiction.
 
 
 

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I agree that I am voluntarily executing this Release. I acknowledge that I am
knowingly and voluntarily waiving and releasing any rights I may have under the
ADEA, as amended by the Older Workers Benefit Protection Act of 1990, and that
the consideration given for this Release is in addition to anything of value to
which I was already entitled. I further acknowledge that I have been advised by
this writing, as required by the ADEA, that: (a) my waiver and release specified
in this paragraph does not apply to any rights or claims that may arise after
the date I sign this Release; (b) I have been advised to consult with an
attorney prior to signing this Release; (c) I have at least twenty-one (21) days
from the date that I receive this Release (although I may choose to sign it any
time on or after the Separation Date) to consider the release; (d) I have seven
(7) calendar days after I sign this Release to revoke it (“Revocation Period”)
by sending my revocation to _________ in writing at ______________; fax _______;
and (e) this Release will not be effective until I have signed it and returned
it to ________ and the Revocation Period has expired.

I UNDERSTAND THAT THIS RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
 
 

     
Name
 
Date

 
 
 
 
 

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