Exhibit 10.4

 

W MARKETING INC.
EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into this 22nd day of
June 2017, to be effective as of the Effective Date as defined below between W
Marketing Inc., a New York corporation (the “Company”), and Jeffrey S. Spellman
(“Employee”) (each of the Company and Employee are referred to herein as a
“Party”, and collectively referred to herein as the “Parties”).

 

W I T N E S S E T H:

 

        WHEREAS, the Company desires to obtain the services of the Employee, and
the Employee desires to be employed by the Company upon the terms and conditions
hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises, the agreements herein
contained and other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the Parties hereto agree as of the Effective Date
as follows:

 

ARTICLE I.

EMPLOYMENT; TERM; DUTIES

 

1.1.       Employment. Pursuant to the terms and conditions hereinafter set
forth, the Company hereby employs Employee, and Employee hereby accepts such
employment for a period beginning on the Effective Date and ending on the one
(1) year anniversary of the Effective Date (the “Initial Term”); provided that
this Agreement shall automatically extend for additional one (1) year periods
after the Initial Term (each an “Automatic Renewal Term” and the Initial Term
together with all Automatic Renewal Terms, if any, the “Term”) in the event that
neither Party provides the other written notice of their intent not to
automatically extend the term of this Agreement at least thirty (30) days prior
to the end of the Initial Term or any Automatic Renewal Term, as applicable
(each a “Non-Renewal Notice”).

 

1.2.       Duties and Responsibilities. Employee shall devote his full-time (40
hours per work week), attention, and energies to the business of the Company and
will diligently and to the best of his ability perform all duties incident to
his employment hereunder, shall perform such administrative, managerial and
executive duties for the Company (i) as are prescribed by applicable job
specifications for the Employee, (ii) as are customarily vested in and
incidental to such position, and (iii) as may be assigned to him from time to
time by the Chief Executive Officer of the Company (“CEO”) or the Board of
Directors of the Company (the “Board”).

 

1.3.       Covenants of Employee.

 

1.3.1       Best Efforts. Employee shall devote his best efforts to the business
and affairs of the Company. Employee shall perform his duties, responsibilities
and functions to the Company hereunder to the best of his abilities in a
diligent, trustworthy, professional and efficient manner and shall comply, in
all material respects, with all rules and regulations of the Company (and
special instructions of the CEO or the Board, if any) and all other rules,
regulations, guides, handbooks, procedures and policies applicable to the
Company and its business in connection with his duties hereunder, including all
United States federal and state securities laws applicable to the Company.

 

1.3.2       Records. Employee shall use his best efforts and skills to
truthfully, accurately, and promptly prepare, maintain, and preserve all records
and reports that the Company may, from time to time, request or require, fully
account for all money, records, equipment, materials, or other property
belonging to the Company of which he may have custody, and promptly pay and
deliver the same whenever he may be directed to do so by the Board.

 

1.4.       Location of Employee’s Principal Office. During the Term, the
Employee’s principal office shall be at the Company’s existing location or
another location reasonably provided by the Company, unless mutually agreed
otherwise by the Employee and the Company.

 

1.5.       Effective Date. The “Effective Date” of this Agreement shall be June
23, 2017.

 

 

 

   

 

ARTICLE II.

COMPENSATION AND OTHER BENEFITS

 

2.1.       Base Salary. So long as this Agreement remains in effect, for all
services rendered by Employee hereunder and all covenants and conditions
undertaken by the Parties pursuant to this Agreement, the Company shall pay, and
Employee shall accept, as compensation, a base salary of $50,000.00 per year
(“Base Salary”).

 

2.2.       Payment of Base Salary. The Base Salary shall be payable bi-weekly in
accordance with the normal payroll practices of the Company, in effect from time
to time, but in any event no less frequently than on a monthly basis. For so
long as Employee is employed hereunder at any point in the work year, the Base
Salary may be increased as determined by the CEO or the Board in their sole and
absolute discretion. Such increase in salary, if any, shall be documented in the
Company’s records, but shall not require the Parties enter into a new or amended
form of this Agreement.

 

2.3.       Commissions.

 

2.3.1       In addition to the Base Salary, and subject to the remaining terms
and conditions of this agreement and this Agreement, the Employee shall earn a
commission of 4% of all Net Profit originated through the Employee’s personal
direct sales efforts as determined in the reasonable discretion of the Company
(the “Commissions”).

 

2.3.2       Payment of Commissions shall be made and payable within the month
following when the products relating thereto are shipped. Reports of all the
prior month’s sales orders shipped will be provided to Employee no later than
the 15th day (or if the 15th day is not a business day, the next business day
thereafter) of the following month for Employee’s review. Unless the Employee
objects to the reports within three (3) business days, after which the parties
shall work in good faith to address any objections raised by the Employee, the
Commissions for the prior month’s shipped sales will be paid in the 2nd biweekly
pay period of the following month and such Commissions will be paid via a
separate check or direct deposit in addition to the regular base salary check or
direct deposit due to Employee, unless otherwise agreed between the Company and
Employee. “Net Profit” shall mean Net Sales less (i) costs of goods sold and
(ii) royalties. “Net Sales” means gross sales generated by the Company, less (i)
returns, (ii) discounts, (iii) adjustments, and (iv) allowances. For the sake of
clarity all Commissions payable or due pursuant to this shall cease being
payable and shall cease being due upon the termination of this Agreement,
provided that any commissions due to the Employee for Net Profit generated by
the Company through the date of termination, the payment of which has been
received by the Company, but not yet paid by the Company to Employee, shall be
paid by the Company to Employee promptly upon such termination.

 

2.4.       Business Expenses. So long as this Agreement is in effect, the
Company shall reimburse Employee for all reasonable, out-of-pocket business
expenses incurred in the performance of his duties hereunder subject to the
Company’s reimbursement policies in effect from time to time and subject to
Employee receiving written pre-approval for any expenses exceeding $50.

 

2.5.       Equity Compensation. At the end of each calendar quarter during the
Term, beginning on September 30, 2017 (each a “Stock Issuance Date”), the
Employee shall earn a quarterly bonus of $1,000, which shall be payable in
shares of the Company’s common stock (the “Shares”). Unless registered in the
sole discretion of the Company, the Shares shall be issued as restricted
securities under the Securities Act of 1933, as amended (the “Securities Act”).
The Shares shall be issued within ten (10) days of each Stock Issuance Date and
the number of Shares due shall be based on the closing sales price of the
Company’s common stock on the Stock Issuance Date, or if the applicable Stock
Issuance Date is not a day where the Company’s common stock trades, the last
trading day prior to the applicable Stock Issuance Date. Employee shall be
deemed to have made the Representations to the Company (as defined in ARTICLE
IV), each time that Shares are issued to the Employee.

 

 

 

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Jeffrey S. Spellman
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2.6.       Vacation/Sick Days/Birthday Pay.

 

2.6.1       Employee will be entitled to earn paid time-off (“PTO”) per year,
pursuant to the below schedule. Unused PTO Days and PTO Hours shall roll-over
from year to year, on December 31 of each year, but shall expire on December
31st of the second year after they were originally accrued, if unused by such
date. The use of PTO must be pre-approved by the Company. Employee will accrue
paid time-off hours (“PTO Hours”)(with each eight (8) accrued hours equal to one
full paid time-off day (each a “PTO Day”)), pursuant to the following schedule:

 

Full Years of
Continuous
Employment
With the Company PTO Hours Earned
Every Two Calendar
Weeks Maximum Number of
PT Days Accrued Per
Calendar Year 1-2 1.54 5 3-4 3.08 10 5-7 4.62 15 8+ 6.15 20

 

As of June 15, 2017, Employee has accrued one (1) PTO Day for calendar 2017. The
Employee shall be deemed, solely for the purposes of accruing PTO under this
Section 2.6.1, to have been under continuous employment with the Company since
October 1, 2013.

 

2.6.2       Employee is entitled to up to nine (9) personal/sick days off per
calendar year (a total of up to 72 hours)(“Personal Days”). Personal Days accrue
at the rate of 1.385 hours per calendar week, with each eight (8) hours accrued
equal to one Personal Day. As of June 15, 2017, Employee had accrued 4.69
Personal Days for the 2017 calendar year. Unused Personal Days shall roll-over
from year to year, on December 31 of each year, but shall expire on December
31st of the second year after they were originally accrued, if unused by such
date.

 

2.6.3       Employee is entitled to take off one (1) day (eight (8) hours) per
year on his birthday (“Birthday Time”). As of June 15, 2017, Employee has
accrued sixteen (16) hours of Birthday Time. Birthday Time rolls over on
December 31 of each year, but shall expire on December 31st of the second year
after they were originally accrued, if unused by such date.

 

2.7.       Other Benefits. During the Term, the Company agrees to provide the
Employee the same level of health insurance benefits as has been provided to
Employee by W Marketing Inc. during the three months prior to the Effective Date
(“Health Insurance”). The Company shall pay 50% of the cost of the Health
Insurance for Employee and Employee shall pay the other 50% of the cost and can
add coverage for his family at his cost.

 

2.8.       Withholding. The Company may deduct from any compensation payable to
Employee (including payments made pursuant to this ARTICLE II or in connection
with the termination of employment pursuant to ARTICLE III of this Agreement)
amounts sufficient to cover Employee’s share of applicable federal, state and/or
local income tax withholding, social security payments, state disability and
other insurance premiums and payments.

 

 

 

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Jeffrey S. Spellman
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ARTICLE III.

TERMINATION OF EMPLOYMENT

 

3.1.       Termination of Employment. Employee’s employment pursuant to this
Agreement shall terminate on the earliest to occur of the following:

 

3.1.1       upon the death of Employee;

 

3.1.2       upon the delivery to Employee of written notice of termination by
the Company if Employee shall suffer a physical or mental disability which
renders Employee, in the reasonable judgment of the Board, unable to perform his
duties and obligations under this Agreement for either 90 consecutive days or
180 days in any 12-month period;

 

3.1.3       upon the expiration of the Initial Term, unless a notice of
termination pursuant to Section 0 is not given by either Party, in which case
upon the expiration of the first Automatic Renewal Term that such a notice of
termination is given with respect to either Party (if any);

 

3.1.4       upon delivery to the Company of written notice of termination by
Employee for any reason other than for Good Reason;

 

3.1.5       upon delivery to Employee of written notice of termination by the
Company for Cause;

 

3.1.6       upon delivery of written notice of termination from Employee to the
Company for Good Reason, provided, however, prior to any such termination by
Employee pursuant to this Section 3.1.6, Employee shall have advised the Company
in writing within fifteen (15) days of the occurrence of any circumstances that
would constitute Good Reason, and the Company has not cured such circumstances
within 15 days following receipt of Employee’s written notice, with the
exception of only five (5) days written notice in the event the Company reduces
Employee’s salary without Employee’s consent or fails to pay Employee any
compensation due him; or

 

3.1.7       upon delivery to Employee of written notice of termination by the
Company without Cause.

 

3.2.       Certain Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:

 

3.2.1       “Cause” shall mean, in the context of a basis for termination by the
Company of Employee’s employment with the Company, that:

 

(i)       Employee materially breaches any obligation, duty, covenant or
agreement under this Agreement, which breach is not cured or corrected within
thirty (30) days of written notice thereof from the Company (except for breaches
of 0 of this Agreement, which cannot be cured and for which the Company need not
give any opportunity to cure); or

 

(ii)       Employee commits any act of misappropriation of funds or
embezzlement; or

 

(iii)       Employee commits any act of fraud; or

 

(iv)       Employee is indicted of, or pleads guilty or nolo contendere with
respect to, theft, fraud, a crime involving moral turpitude, or a felony under
federal or applicable state law.

 

3.2.2        “Good Reason” shall mean, in the context of a basis for termination
by Employee of his employment with the Company (a) there has been a material
breach by the Company of a material term of this Agreement or Employee
reasonably believes that the Company is violating any law which would have a
material adverse effect on the Company’s operations and such violation continues
uncured following thirty (30) days after such breach and after notice thereof
has been provided to the Company by the Employee, or (b) Employee’s compensation
as set forth hereunder is reduced without Employee’s consent, or the Company
fails to pay to Employee any compensation due to him hereunder upon five (5)
days written notice from Employee informing the Company of such failure.

 

3.2.3       “Termination Date” shall mean the date on which Employee’s
employment with the Company hereunder is terminated.

 

 

 

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Jeffrey S. Spellman
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3.3.       Effect of Termination. In the event that Employee’s employment
hereunder is terminated in accordance with the provisions of this Agreement,
Employee shall be entitled to the following:

 

3.4.       

3.4.1       If Employee’s employment is terminated pursuant to Section 3.1.1
(death), Section 3.1.2 (disability), Section 3.1.3 (the end of the Initial Term
if either Party has timely delivered a Non-Renewal Notice as provided in Section
1.1 or the end of any Automatic Renewal Term pursuant to which either Party has
timely delivered a Non-Renewal Notice as provided in Section 1.1), Section 3.1.4
(without Good Reason by the Employee), or Section 3.1.5 (by the Company for
Cause), Employee shall be entitled to salary accrued through the Termination
Date and no other benefits other than as required under the terms of employee
benefit plans in which Employee was participating as of the Termination Date and
all Commissions due pursuant to the terms of this Agreement shall cease and the
Company shall have no obligations to pay such Commissions, except for those
accrued and unpaid as of the Termination Date.

 

3.4.2       If Employee’s employment is terminated by Employee pursuant to
Section 3.1.6 (Good Reason), or pursuant to Section 3.1.7 (without Cause by the
Company), Employee shall be entitled to continue to receive the Base Salary at
the rate in effect upon the Termination Date of employment for one month,
payable in accordance with the Company’s normal payroll practices and policies,
as if Employee’s employment had not terminated (as applicable, the “Severance
Period”). Additionally, all Commissions due pursuant to the terms of this
Agreement shall cease and the Company shall have no obligations to pay such
Commissions, except for those accrued and unpaid as of the Termination Date and
through the Severance Period. Employee shall be entitled to no other
post-employment benefits except as provided for under this Section 3.4.2.

 

3.4.3       As a condition to Employee’s right to receive any benefits pursuant
to Section 3.4.2 of this Agreement, (A) Employee must execute and deliver to the
Company a written release in form and substance reasonably satisfactory to the
Company, of any and all claims against the Company and all directors and
officers of the Company with respect to all matters arising out of Employee’s
employment hereunder, or the termination thereof (other than claims for
entitlements under the terms of this Agreement or plans or programs of the
Company in which Employee has accrued a benefit); and (B) Employee must not
breach any of his covenants and agreements under ARTICLE V of this Agreement,
which shall continue following the Termination Date.

 

3.4.4       In the event of termination of Employee’s employment pursuant to
Section 3.1.5 (by the Company for Cause), and subject to applicable law and
regulations, the Company shall be entitled to offset against any payments due
Employee the loss and damage, if any, which shall have been suffered by the
Company as a result of the acts or omissions of Employee giving rise to
termination. The foregoing shall not be construed to limit any cause of action,
claim or other rights, which the Company may have against Employee in connection
with such acts or omissions.

 

3.4.5       Upon termination of Employee’s employment hereunder, or on demand by
the Company during the term of this Agreement, Employee will immediately deliver
to the Company, and will not keep in his possession, recreate or deliver to
anyone else, any and all Company property, as well as all devices and equipment
belonging to the Company (including computers, handheld electronic devices,
telephone equipment, and other electronic devices), Company credit cards,
records, data, notes, notebooks, reports, files, proposals, lists,
correspondence, specifications, drawings blueprints, sketches, materials,
photographs, charts, all documents and property, and reproductions of any of the
aforementioned items that were developed by Employee pursuant to his employment
with the Company, obtained by Employee in connection with his employment with
the Company, or otherwise belonging to the Company, its successors or assigns,
including, without limitation, those records maintained pursuant to this
Agreement.

 

ARTICLE IV.
EMPLOYEE REPRESENTATIONS

 

4.1.       Employee acknowledges and confirms the following (collectively, the
“Representations”), each of which shall be deemed automatically re-acknowledged
and re-confirmed on each Stock Issuance Date:

 

4.1.1       Employee is a “sophisticated investor”,

 

 

 

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Jeffrey S. Spellman
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4.1.2       Employee is aware of, has received and had an opportunity to review
(A) the (i) Company’s Annual Report on Form 10-K for the most recent year ended
December 31; and (ii) the Company’s Quarterly Reports on Form 10-Q and current
reports on Form 8-K (which filings can be accessed by going to
https://www.sec.gov/search/search.htm, typing “Probility Media” in the “Company
name” field, and clicking the “Search” button), from January 1st of the most
recent completed calendar year, to the later of (A) the date of this Agreement;
and (B) the applicable Stock Issuance Date, in each case (i) through (ii),
including the audited and unaudited financial statements, description of
business, risk factors, results of operations, certain transactions and related
business disclosures described therein (collectively the “Disclosure Documents”)
and an independent investigation made by him of the Company; (B) has, prior to
the later of (a) the date of this Agreement; and (b) the applicable Stock
Issuance Date, been given an opportunity to review material contracts and
documents of the Company and has had an opportunity to ask questions of and
receive answers from the Company’s officers and directors and has no pending
questions as of the date of this Agreement; and (C) is not relying on any oral
representation of the Company or any other person, nor any written
representation or assurance from the Company; in connection with Employee’s
acceptance of the Shares and investment decision in connection therewith.
Employee acknowledges that due to his receipt of and review of the information
described above, he has received similar information as would be included in a
Registration Statement filed under the Securities Act;

 

4.1.3       Employee has such knowledge and experience in financial and business
matters such that the Employee is capable of evaluating the merits and risks of
an investment in the Shares and of making an informed investment decision, and
does not require a representative in evaluating the merits and risks of an
investment in the Shares;

 

4.1.4       Employee has had an opportunity to ask questions of and receive
satisfactory answers from the Company, or any person or persons acting on behalf
of the Company, concerning the terms and conditions of the Shares and the
Company, and all such questions have been answered to the full satisfaction of
such Employee;

 

4.1.5       Employee recognizes that an investment in the Company is a
speculative venture and that the total amount of consideration applicable to the
Shares is placed at the risk of the business and may be completely lost. The
ownership of the Shares as an investment involves special risks;

 

4.1.6       Employee realizes that, if not previously registered by the Company,
the Shares will not be able to be readily sold as they will be restricted
securities and therefore the Shares must not be accepted unless such Employee
has liquid assets sufficient to assure that such acquisition will cause no undue
financial difficulties and such Employee can provide for his current needs and
possible personal contingencies;

 

4.1.7       Employee confirms and represents that he is able (i) to bear the
economic risk of his investment, (ii) to hold the Shares for an indefinite
period of time, and (iii) to afford a complete loss of his investment. Employee
also represents that he has (i) adequate means of providing for his current
needs and possible personal contingencies, and (ii) has no need for liquidity in
this particular investment;

 

4.1.8       Employee confirms and acknowledges that the Company is under no
obligation to register or seek an exemption under any federal and/or state
securities acts for any sale or transfer of the Shares by Employee, and Employee
is solely responsible for determining the status, in his hands, of the Shares
acquired in connection herewith and the availability, if required, of exemptions
from registration for purposes of sale or transfer of the Shares;

 

4.1.9       Employee confirms and acknowledges that no federal or state agency
has made any finding or determination as to the fairness of the Shares for
investment or any recommendation or endorsement of the Shares. The Shares have
not been registered under the Securities Act or the securities laws of any State
and are being offered and sold in reliance on exemptions from the registration
requirements of the Securities Act and such state laws; and

 

 

 

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Jeffrey S. Spellman
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4.1.10       The Shares, unless registered by the Company, will bear the
following restrictive legend:

 

‘‘THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT EITHER: i)
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, OR ii) SUBMISSION TO THE CORPORATION OF AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND THE TRANSFER THEREOF ARE
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS.’’

 

ARTICLE V.

INVENTIONS; CONFIDENTIAL/TRADE SECRET INFORMATION

AND RESTRICTIVE COVENANTS

 

5.1.       Inventions. All processes, technologies and inventions relating to
the business of the Company (collectively, “Inventions”), including new
contributions, improvements, ideas, discoveries, trademarks and trade names,
conceived, developed, invented, made or found by Employee, alone or with others,
during his employment by the Company, whether or not patentable and whether or
not conceived, developed, invented, made or found on the Company’s time or with
the use of the Company’s facilities or materials, shall be the property of the
Company and shall be promptly and fully disclosed by Employee to the Company.
Employee shall perform all necessary acts (including, without limitation,
executing and delivering any confirmatory assignments, documents or instruments
requested by the Company) to assign or otherwise to vest title to any such
Inventions in the Company and to enable the Company, at its sole expense, to
secure and maintain domestic and/or foreign patents or any other rights for such
Inventions.

 

5.2.       Confidential/Trade Secret Information/Non-Disclosure.

 

5.2.1       Confidential/Trade Secret Information Defined. During the course of
Employee’s employment, Employee will have access to various Confidential/Trade
Secret Information of the Company and information developed for the Company. For
purposes of this Agreement, the term “Confidential/Trade Secret Information” is
information that is not generally known to the public and, as a result, is of
economic benefit to the Company in the conduct of its business, and the business
of the Company’s subsidiaries. Employee and the Company agree that the term
“Confidential/Trade Secret Information” includes but is not limited to all
information developed or obtained by the Company, including its affiliates, and
predecessors, and comprising the following items, whether or not such items have
been reduced to tangible form (e.g., physical writing, computer hard drive,
disk, tape, e-mail, etc.): all methods, techniques, processes, ideas, research
and development, product designs, engineering designs, plans, models, production
plans, business plans, add-on features, trade names, service marks, slogans,
forms, pricing structures, menus, business forms, marketing programs and plans,
layouts and designs, financial structures, operational methods and tactics, cost
information, the identity of and/or contractual arrangements with suppliers
and/or vendors, accounting procedures, and any document, record or other
information of the Company relating to the above. Confidential/Trade Secret
Information includes not only information directly belonging to the Company
which existed before the date of this Agreement, but also information developed
by Employee for the Company, including its subsidiaries, affiliates and
predecessors, during the term of Employee’s employment with the Company and
prior thereto. Confidential/Trade Secret Information does not include any
information which (a) was in the lawful and unrestricted possession of Employee
prior to its disclosure to Employee by the Company, its subsidiaries, affiliates
or predecessors, except for information relating to the Company, or owned
thereby, which shall be included in Confidential/Trade Secret Information
regardless of whether supplied prior to or after the date of this Agreement, (b)
is or becomes generally available to the public by lawful acts other than those
of Employee after receiving it, or (c) has been received lawfully and in good
faith by Employee from a third party who is not and has never been an executive
of the Company, its subsidiaries, affiliates or predecessors, and who did not
derive it from the Company, its subsidiaries, affiliates or predecessors.

 

5.2.2       Restriction on Use of Confidential/Trade Secret Information.
Employee agrees that his use of Confidential/Trade Secret Information is subject
to the following restrictions for an indefinite period of time so long as the
Confidential/Trade Secret Information has not become generally known to the
public:

 

(i)       Non-Disclosure. Employee agrees that he will not publish or disclose,
or allow to be published or disclosed, Confidential/Trade Secret Information to
any person without the prior written authorization of the Company unless
pursuant to or in connection with Employee’s job duties to the Company under
this Agreement; and

 

 

 

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Jeffrey S. Spellman
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(ii)       Non-Removal/Surrender. Employee agrees that he will not remove any
Confidential/Trade Secret Information from the offices of the Company or the
premises of any facility in which the Company is performing services, except
pursuant to his duties under this Agreement. Employee further agrees that he
shall surrender to the Company all documents and materials in his possession or
control which contain Confidential/Trade Secret Information and which are the
property of the Company upon the termination of his employment with the Company,
and that he shall not thereafter retain any copies of any such materials.

 

5.2.3       Prohibition Against Unfair Competition/ Non-Solicitation of
Customers. Employee agrees that at no time during or after his employment with
the Company will he engage in competition with the Company while making any use
of the Confidential/Trade Secret Information, or otherwise exploit or make use
of the Confidential/Trade Secret Information. Employee agrees that during the
Term and the twelve-month period following the Termination Date, he will not
directly or indirectly accept or solicit, in any capacity, the business of any
customer of the Company with whom Employee worked or otherwise had access to the
Confidential/Trade Secret Information pertaining to the Company’s business with
such customer during the last year of Employee’s employment with the Company, or
solicit, directly or indirectly, or encourage any of the Company’s customers or
suppliers to terminate their business relationship with the Company, or
otherwise interfere with such business relationships.

 

5.3.       Non-Solicitation of Employees. Employee agrees that during the Term
and during the twelve-month period following the Termination Date, he shall not,
directly or indirectly, solicit or otherwise encourage any employees of the
Company to leave the employ of the Company, or solicit, directly or indirectly,
any of the Company’s employees for employment.

 

5.4.       Non-Solicitation During Employment. During his employment with the
Company, Employee shall not: (a) interfere with the Company’s business
relationship with its customers or suppliers, (b) solicit, directly or
indirectly, or otherwise encourage any of the Company’s customers or suppliers
to terminate their business relationship with the Company, or (c) solicit,
directly or indirectly, or otherwise encourage any employees of the Company to
leave the employ of the Company, or solicit any of the Company’s employees for
employment.

 

5.5.       Conflict of Interest. During Employee’s employment with the Company,
Employee must not engage in any work, paid or unpaid, that creates an actual
conflict of interest with the Company. If the Company or the Employee has any
question as to the actual or apparent potential for a conflict of interest,
either shall raise the issue formally to the other, and if appropriate and
necessary the issue shall be put to the CEO of the Company for consideration and
approval or non-approval, which approval or non-approval the Employee agrees
shall be binding on the Employee.

 

5.6.       Breach of Provisions. If Employee materially breaches any of the
provisions of this ARTICLE V, or in the event that any such breach is threatened
by Employee, in addition to and without limiting or waiving any other remedies
available to the Company at law or in equity, the Company shall be entitled to
immediate injunctive relief in any New York State court, having the capacity to
grant such relief, to restrain any such breach or threatened breach and to
enforce the provisions of this ARTICLE V.

 

5.7.       Reasonable Restrictions. The Parties acknowledge that the foregoing
restrictions, as well as the duration and the territorial scope thereof as set
forth in this ARTICLE V, are under all of the circumstances reasonable and
necessary for the protection of the Company and its business.

 

5.8.       Specific Performance. Employee acknowledges and agrees that the
Company’s remedies at law for a breach or threatened breach of any of the
provisions of Section 5.1 Section 5.2, Section 5.3 or Section 5.4 hereof would
be inadequate and, in recognition of this fact, Employee agrees that, in the
event of such a breach or threatened breach, in addition to any remedies at law,
the Company, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available.

 

 

 

 

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Jeffrey S. Spellman
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ARTICLE VI.

ARBITRATION

 

6.1.       Scope. To the fullest extent permitted by law, Employee and the
Company agree to the binding arbitration of any and all controversies, claims or
disputes between them arising out of or in any way related to this Agreement,
the employment relationship between the Company and Employee and any disputes
upon termination of employment, including but not limited to breach of contract,
tort, discrimination, harassment, wrongful termination, demotion, discipline,
failure to accommodate, family and medical leave, compensation or benefits
claims, constitutional claims; and any claims for violation of any local, state
or federal law, statute, regulation or ordinance or common law. For the purpose
of this agreement to arbitrate, references to “Company” include all subsidiaries
or related entities and their respective executives, supervisors, officers,
directors, agents, pension or benefit plans, pension or benefit plan sponsors,
fiduciaries, administrators, affiliates and all successors and assigns of any of
them, and this agreement to arbitrate shall apply to them to the extent
Employee’s claims arise out of or relate to their actions on behalf of the
Company.

 

6.2.       Arbitration Procedure. To commence any such arbitration proceeding,
the Party commencing the arbitration must provide the other Party with written
notice of any and all claims forming the basis of such right in sufficient
detail to inform the other Party of the substance of such claims. In no event
shall this notice for arbitration be made after the date when institution of
legal or equitable proceedings based on such claims would be barred by the
applicable statute of limitations. The arbitration will be conducted in Long
Island, New York by a single neutral arbitrator and in accordance with the
then-current rules for resolution of employment disputes of the American
Arbitration Association (“AAA”). The Arbitrator is to be selected by the mutual
agreement of the Parties. If the Parties cannot agree, the Superior Court will
select the arbitrator. The Parties are entitled to representation by an attorney
or other representative of their choosing. The arbitrator shall have the power
to enter any award that could be entered by a judge of the trial court of the
State of New York, and only such power, and shall follow the law. The award
shall be binding and the Parties agree to abide by and perform any award
rendered by the arbitrator. The arbitrator shall issue the award in writing and
therein state the essential findings and conclusions on which the award is
based. Judgment on the award may be entered in any court having jurisdiction
thereof. The losing Party in the arbitration hearing shall bear the costs of the
arbitration filing and hearing fees and the cost of the arbitrator.

 

ARTICLE VII.

MISCELLANEOUS

 

7.1.       Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective legal representatives,
heirs, successors and assigns. Employee may not assign any of his rights or
obligations under this Agreement. The Company may assign its rights and
obligations under this Agreement to any successor entity.

 

7.2.       Notices. Any notice provided for herein shall be in writing and shall
be deemed to have been given or made (a) when personally delivered or (b) when
sent by telecopier and confirmed within 48 hours by letter mailed or delivered
to the Party to be notified at its or his address set forth herein; or three (3)
days after being sent by registered or certified mail, return receipt requested
(or by equivalent currier with delivery documentation such as FEDEX or UPS) to
the address of the other Party set forth or to such other address as may be
specified by notice given in accordance with this Section 7.2: 

 

If to the Company:

W Marketing Inc.

1517 San Jacinto

Houston, Texas 77002

Telephone: (713) 652-3937

Attention: Secretary

 

 

If to the Employee:

Jeffrey S. Spellman

(Address and contact information on file) 

 

7.3.       Severability. If any provision of this Agreement, or portion thereof,
shall be held invalid or unenforceable by a court of competent jurisdiction,
such invalidity or unenforceability shall attach only to such provision or
portion thereof, and shall not in any manner affect or render invalid or
unenforceable any other provision of this Agreement or portion thereof, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
or portion thereof were not contained herein. In addition, any such invalid or
unenforceable provision or portion thereof shall be deemed, without further
action on the part of the Parties hereto, modified, amended or limited to the
extent necessary to render the same valid and enforceable.

 

 

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Jeffrey S. Spellman
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7.4.       Waiver. No waiver by a Party of a breach or default hereunder by the
other Party shall be considered valid, unless expressed in a writing signed by
such first Party, and no such waiver shall be deemed a waiver of any subsequent
breach or default of the same or any other nature.

 

7.5.       Entire Agreement. This Agreement, including the Exhibits hereto, sets
forth the entire agreement between the Parties with respect to the subject
matter hereof, and supersedes any and all prior agreements between the Company
and Employee, whether written or oral, relating to any or all matters covered by
and contained or otherwise dealt with in this Agreement. This Agreement does not
constitute a commitment of the Company with regard to Employee’s employment,
express or implied, other than to the extent expressly provided for herein.

 

7.6.       Amendment. No modification, change or amendment of this Agreement or
any of its provisions shall be valid, unless in a writing signed by the Parties
and approved by the Board.

 

7.7.       Authority. The Parties each represent and warrant that it/he has the
power, authority and right to enter into this Agreement and to carry out and
perform the terms, covenants and conditions hereof.

 

7.8.       Attorneys’ Fees. If either Party hereto commences an arbitration or
other action against the other Party to enforce any of the terms hereof or
because of the breach by such other Party of any of the terms hereof, each party
shall be responsible for its own attorneys’ fees as well as any costs and
expenses.

 

7.9.       Construction. When used in this Agreement, unless a contrary
intention appears: (i) a term has the meaning assigned to it; (ii) “or” is not
exclusive; (iii) “including” means including without limitation; (iv) words in
the singular include the plural and words in the plural include the singular,
and words importing the masculine gender include the feminine and neuter
genders; (v) any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; (vi) the words
“hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision hereof; (vii) references contained herein to Article, Section,
Schedule and Exhibit, as applicable, are references to Articles, Sections,
Schedules and Exhibits in this Agreement unless otherwise specified; (viii)
references to “writing” include printing, typing, lithography and other means of
reproducing words in a visible form, including, but not limited to email; (ix)
references to “dollars”, “Dollars” or “$” in this Agreement shall mean United
States dollars; (x) reference to a particular statute, regulation or Law means
such statute, regulation or Law as amended or otherwise modified from time to
time; (xi) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein); (xii) unless otherwise stated in this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
mean “to but excluding”; (xiii) references to “days” shall mean calendar days;
and (xiv) the paragraph headings contained in this Agreement are for convenience
only, and shall in no manner be construed as part of this Agreement.

 

7.10.       Governing Law. This Agreement, and all of the rights and obligations
of the Parties in connection with the employment relationship established
hereby, shall be governed by and construed in accordance with the substantive
laws of the State of New York without giving effect to principles relating to
conflicts of law.

 

7.11.       Survival. The termination of Employee’s employment with the Company
pursuant to the provisions of this Agreement shall not affect Employee’s
obligations to the Company hereunder which by the nature thereof are intended to
survive any such termination, including, without limitation, Employee’s
obligations under 0 of this Agreement.

 

7.12.       Legal Counsel. Employee acknowledges and warrants that (A) he has
been advised that Employee’s interests may be different from the Company’s
interests, (B) he has been afforded a reasonable opportunity to review this
Agreement, to understand its terms and to discuss it with an attorney and/or
financial advisor of his choice and (C) he knowingly and voluntarily entered
into this Agreement. The Company and Employee shall each bear their own costs
and expenses in connection with the negotiation and execution of this Agreement.

 

 

 

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Jeffrey S. Spellman
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7.13.       Counterparts, Effect of Facsimile, Emailed and Photocopied
Signatures. This Agreement and any signed agreement or instrument entered into
in connection with this Agreement, and any amendments hereto or thereto, may be
executed in one or more counterparts, all of which shall constitute one and the
same instrument. Any such counterpart, to the extent delivered by means of a
facsimile machine or by .pdf, .tif, .gif, .peg or similar attachment to
electronic mail (any such delivery, an “Electronic Delivery”) shall be treated
in all manners and respects as an original executed counterpart and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any Party, each
other Party shall re execute the original form of this Agreement and deliver
such form to all other Parties. No Party shall raise the use of Electronic
Delivery to deliver a signature or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of Electronic
Delivery as a defense to the formation of a contract, and each such Party
forever waives any such defense, except to the extent such defense relates to
lack of authenticity.

 

 

 

[Remainder of page left intentionally blank. Signature page follows.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Jeffrey S. Spellman
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This Agreement contains provisions requiring binding arbitration of disputes. By
signing this Agreement, Employee acknowledges that he (i) has read and
understood the entire Agreement; (ii) has received a copy of it (iii) has had
the opportunity to ask questions and consult counsel or other advisors about its
terms; and (iv) agrees to be bound by it.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and year first above written.

 

 

“COMPANY”

 

W MARKETING INC.

a New York corporation

 

By: /s/ Scott Forde                             

Name: Scott Forde

Title: President

 

 

 

“EMPLOYEE”

 

/s/ Jeffrey S. Spellman

Jeffrey S. Spellman

 

 

 

 

 

 

 

 

 

 

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Jeffrey S. Spellman
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