Exhibit 10.04


 


AMENDED
AND RESTATED


EMPLOYMENT
AGREEMENT


 


THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”),
dated as of this 29 day of September, 2008 (the “Effective Date”) by and
between IRA BAHR, an individual (the “Executive”), and NEW FRONTIER MEDIA, INC.,
a Colorado corporation with offices at 7007 Winchester Circle, Suite 200,
Boulder, CO 80301, as well as its affiliates and subsidiaries whether now in
existence or formed in the future. (“NFM”), recites and provides as follows:


 


WHEREAS,
Executive is and has been previously employed by NFM pursuant to one or more
employment agreements that are superseded and replaced by this Agreement in
their entirety;


 


WHEREAS,
NFM desires to retain the services of Executive, and Executive desires to be
employed by NFM, all on the terms and subject to the conditions set forth
herein;


 


NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
herein contained, NFM and Executive agree as follows:











1.             TERM. 
The Term of this Agreement shall begin
as of the Effective Date and shall continue until midnight on March 31,
2011, or such date as the Agreement is terminated
by either party as hereinafter provided (the “Term”).


 


2.             TERMS OF EMPLOYMENT.


 


A.            POSITION AND DUTIES.


 


(i)            During the Term, Executive shall have
the title of Chief Operating Officer and shall perform such executive duties as
are commensurate with such title.


 


(ii)           Executive’s services shall be
performed at NFM’s headquarters in Boulder, Colorado.  However, Executive may also be required by
his job responsibilities to travel on NFM business, and Executive agrees to do
so.


 


(iii)          During the Term, Executive agrees to
devote his full-time and attention to the business and affairs of NFM.  Executive’s employment under this Agreement
shall be Executive’s exclusive employment during the Term of this Agreement.  Service on any other company’s board of
directors by Executive requires the written consent of the Compensation
Committee of the Board of Directors of NFM (“Compensation Committee”).


 


B.            COMPENSATION.


 


(i)            Base Salary.  During the Term, Executive shall receive a
base salary (“Base Salary”), which shall be paid in equal installments on a bi-weekly
basis, at the rate of Four Hundred Fifty Thousand Dollars ($450,000.00)  per annum, which Base Salary may be reviewed and adjusted,
but in no event decreased, annually.  The
term “Base Salary” as used throughout this Agreement shall mean the base salary
paid to 





Executive as so
increased during the Term.  Any increase
in Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement.  The Executive’s Base Salary shall be subject to all
applicable federal, state and local withholding taxes and required withholdings under any NFM benefits plans
Executive participates in.


 


(ii)           Bonus Based
On Objective Criteria: In addition to Executive’s Base Salary, Executive
shall be entitled to annual bonuses for each fiscal year during the Term in
amounts to be determined based on performance criteria set by the Compensation
Committee at its sole discretion.  The
performance criteria for each fiscal year of this Agreement shall be set by the
Compensation Committee within sixty (60) days of the commencement of such
fiscal year of this Agreement and shall be set in accordance with the following
process: After the Compensation Committee receives a budget for such fiscal
year, the Compensation Committee shall provide to Executive proposed
performance criteria for Executive’s comments. 
Following receipt of the proposed performance criteria, Executive shall
have two (2) weeks to provide to the Compensation Committee Executive’s
comments concerning the proposed performance criteria.  The Compensation Committee shall consider
Executive’s comments and shall thereafter provide to Executive the final
performance criteria as set by the Compensation Committee for such fiscal
year.  The bonus based on objective
criteria shall be in an amount up to, but no greater than, an amount equal to one-quarter
of Executive’s Base Salary for the fiscal year then ending.


 


(iii)          Discretionary Bonus: In
addition to Executive’s Base Salary and any bonus based on objective criteria,
the Compensation Committee may, in its sole discretion, award to Executive
additional annual bonus(es).  Any 












 


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discretionary
bonus shall be set by the Compensation Committee in an amount up to, but no
greater than, an amount equal to three-quarters of the Executive’s then current
Base Salary for the fiscal year then ending.


 


 (iv)         All
bonuses payable to Executive pursuant to subsections (ii) and (iii),
above, shall be paid within two and one-half (2 1/2) months of the end of the
fiscal year for which it is awarded.  No
discretionary bonus shall be payable to Executive in connection with a fiscal
year if Executive’s employment is terminated for “Cause” (as defined below)
prior to the end of the applicable fiscal year. 
Discretionary bonuses following termination prior to the end of the
applicable fiscal year for reasons other than Cause may be paid depending upon
the exercise of Compensation Committee discretion pursuant to Section 2(B) above.  No bonus based on objective criteria shall be
payable to Executive if Executive’s employment is terminated for Cause prior to
the achievement of the performance criteria set by the Compensation Committee.  In the event of a termination for reasons
other than Cause in the last quarter of a fiscal year, bonuses based on
objective criteria shall be prorated based upon the number of months worked in
the fiscal year if Executive has achieved, or is on track to achieve, the
applicable criteria.  The foregoing shall
not apply to bonuses payable as a result of a “Change in Control Termination”
(as defined below), which shall be paid pursuant to Section 3(F).


 


(v)           Stock Options.  Executive shall be eligible to receive stock
options under the terms and conditions of any applicable Stock Option Plan
approved by shareholders of NFM, on the terms and conditions set forth in such
a plan.  Stock Options shall be granted
at the discretion of the Board of Directors based upon the recommendations of
the Compensation Committee.


 


(vi)          Expenses.  During the Term, Executive shall be entitled
to receive reimbursement for all employment-related expenses incurred by
Executive in accordance with the policies, practices and procedures of NFM as
in effect generally from time to time after the Effective Date with respect to
other employees at Executive’s level within NFM.


 


(vii)         Vacation.  Executive acknowledges that NFM has no policy
concerning vacation time or sick leave applicable to its executive level
employees and, by executing this Agreement, Executive acknowledges and agrees
that he shall not accrue any such vacation or sick leave benefits during the Term.  Executive is authorized to take paid time off
provided he meets his professional and productivity obligations to NFM as
determined by the Chief Executive Officer of NFM Executive is to coordinate
time off with the Chief Executive Officer or his designee.


 





(viii)        Car Allowance.  During the Term, the Executive shall be
entitled to an $850 a month car allowance in accordance with NFM’s car
allowance policy, in lieu of expenses associated with the operation of his
automobile.


 


(ix)           Other Benefits.  During the Term, Executive shall be entitled
to such health insurance and other benefits, in accordance with the policies,
programs and practices of NFM which are in effect from time to time after the
Effective Date with respect to other employees at Executive’s level within NFM.


 


(x)            Relationship
Subsequent to this Agreement.  On or
before the end of the Term, NFM and Executive shall address the subject of a
new or extended employment agreement to take effect upon the expiration of this
Agreement.  If the parties do not execute
a new written agreement upon the expiration of this Agreement, but the parties
are negotiating a new agreement in good-faith, Executive shall continue to be
paid the Base Salary then in effect in regular bi-weekly installments until a
new agreement is executed.


 


3.             TERMINATION OF EMPLOYMENT.


 


A.            DEATH. 
If the Executive dies while employed by NFM,
the Executive’s employment shall terminate on the date of death and NFM shall
pay to the Executive’s executor, legal representative, administrator or
designated beneficiary, as applicable, any amounts earned, accrued and owing but not yet paid under Section 2
above and any benefits accrued and due
under any applicable benefit plans and programs of NFM, which amounts shall be
paid within the time frames specified by Colorado state wage law.  Otherwise, NFM shall have no further
liability or obligation under this Agreement to the Executive’s executors,
legal representatives, administrators, heirs or assigns or any other person
claiming under or through the Executive.


 


B.            DISABILITY.  If the
Executive incurs a Disability (as defined below) during the Term, the Executive’s
employment shall terminate on the date of Disability.  If the Executive’s employment terminates on
account of his Disability, the Executive shall be entitled to receive any
amounts earned, accrued and owing but
not yet paid under Section 2 above and any benefits accrued and due under any applicable benefit plans and
programs of NFM, which amounts shall be paid within the time frames specified
by Colorado state wage law.  For purposes
of this Agreement, the term “Disability” shall have the same meaning as under NFM
long-term disability plan, or if there is no such plan, if the Executive by
virtue of ill health or other disability is unable to perform substantially and
continuously the duties assigned to him (as determined by the Board at its sole
discretion) for more than 90 consecutive or non-consecutive days out of any 6
consecutive month period.












 


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C.            CAUSE.  NFM may
terminate the Executive’s employment at any time for Cause (as defined below)
upon written notice to the Executive (subject to the Executive’s opportunity to
cure described below), in which event all payments under this Agreement shall
cease, except for any amounts earned,
accrued and owing but not yet paid under Section 2 above and any benefits accrued and due under any applicable
benefit plans and programs of NFM, which amounts shall be paid within the time
frames specified by Colorado state wage law. 
For purposes of this Agreement, “Cause” shall mean any of the grounds
for termination of the Executive’s employment listed below:


 


(i)            The
Executive’s conviction of, or plea of guilty or nolo contendere to, (a) a
felony, (b) a crime involving moral turpitude, or (c) a criminal act which adversely affects the
business or reputation of NFM or its subsidiaries;


 


(ii)           The Executive’s engagement
in willful misconduct or willful or gross neglect in the performance of his
duties hereunder, or commission of an act of fraud, embezzlement, theft, dishonesty,
breach of trust or misappropriation of funds against NFM or its subsidiaries;


 


(iii)          Material breach of this Agreement by
the Executive;


 


(iv)          Material violation by Executive of the
“Prohibition of Harassment and Discrimination” set forth in the Employee
Handbook (Rev 6/25/2008); or


 


(v)           The Executive’s persistent and
continuing failure to perform the Executive’s reasonable duties hereunder.


 


If
there is an event or condition under Section 3(C)(iii), (iv) or (v) above,
the Executive shall have ten (10) days from the date NFM provides notice
to the Executive of the event or condition constituting Cause to cure such
event or condition (to the extent the event or condition is curable), and if
the Executive does so fully cure such event or condition, such event or
condition shall not constitute Cause hereunder.


 


D.            WITHOUT CAUSE. In the event that NFM at any time
prior to the occurrence of a Change in Control: terminates Executive’s employment without Cause; or materially
breaches this Agreement; or materially diminishes
Executive’s title, position
or responsibilities; or reduces Executive’s Base Salary,  this Section 3(D) shall apply:


 


(i)            Executive shall be under no obligation to render any additional services
to NFM and shall be allowed to seek other employment, subject to the
Restrictive Covenants set forth herein.


 


(ii)           Unless the
Executive complies with the provisions of Section 3(D)(iii) below,
upon termination pursuant to this 





Section 3(D), Executive shall be entitled to receive only any amounts earned, accrued and owing but not yet paid under Section 2
above and any benefits accrued and due
under any applicable benefit plans and programs of NFM, which amounts shall be
paid within the time frames specified by Colorado state wage law.  No other payments or benefits shall be due
under this Agreement to the Executive.


 


(iii)          Notwithstanding
the provisions of Section 3(D)(ii), upon termination pursuant to Section 3(D),
if the Executive executes and does not revoke a written release, in a form
reasonably acceptable to both parties,  of any and all
claims against NFM and all related parties with respect to all matters arising
out of the Employee Retirement Income Security Act of 1974, the Family and
Medical Leave Act of 1993, the WARN Act, or claims of discrimination under the
Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination
in Employment Act of 1967, as amended and the Americans with Disabilities Act
of 1990 (other than claims for any entitlements
under the terms of this Agreement or under any plans or programs of the Company
under which the Executive has accrued and is due a benefit and to all
indemnification and similar rights under the Company’s Articles of Incorporation,
Bylaws or otherwise) (the “Release”),
the Executive shall be entitled to receive the following:


 


(a)           The immediate and full payment of all amounts earned, accrued and owing but not yet paid under Section 2, above,
and any benefits accrued and due under
any applicable benefit plans and programs of NFM, and


 


(b)           An amount equal to Executive’s then
current Base Salary for the remaining duration of the Term  or to
an amount equivalent to the then current annual Base Salary multiplied by 11⁄2,
whichever is greater, which shall be payable in accordance with NFM’s normal
payroll practices in regular bi-weekly installments, and


 


(c)           Any applicable bonus payments
pursuant to Section 2(B);


 


(d)           The immediate vesting of all
outstanding options awarded to Executive prior to the Date of Termination; and


 


(e)           Payment of premiums on behalf of
Executive and his dependents to allow Executive and his dependents to receive
COBRA coverage for health, dental and vision benefits then being provided for
Executive and his dependents at the time Executive’s employment is terminated, for
eighteen (18) months, which benefit shall be provided subject to the applicable
terms and conditions governing such COBRA coverage; provided, however that if Executive commences employment with another













 


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employer and is eligible
to receive medical or other welfare benefits under another employer-provider
plan, the medical and other welfare benefits to be provided by NFM as described
herein shall terminate.


 


E.             CHANGE IN CONTROL.  For purposes of this Agreement, a “Change in
Control” of NFM shall be deemed to have occurred as of the first day that any
one or more of the following conditions shall have occurred:


 


(i)            Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Act”)), becomes the “beneficial
owner” (as defined in Rule 13-d under the Act) directly or indirectly, of
securities representing more than fifty percent (50%) of the (a) total
outstanding shares of common stock of NFM, or (b) the total combined
voting power represented by NFM’s then outstanding voting securities other than
by virtue of a merger, consolidation, or similar transaction.  However, if any one person, or more than one
person acting as a group, owns 50% or more of the total fair market value or
total voting power represented by NFM’s then outstanding voting securities, the
increase in beneficial ownership by such person or group or persons will not be
considered a Change in Control.


 


(ii)           A
change in the composition of the Board of Directors of NFM (“Board”), as a
result of which less than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors
who either (a) are directors of New Frontier as of the date hereof, or (b) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors of NFM).


 


(iii)          NFM is
a party to a merger, consolidation or consummates a similar transaction with
any other business entity after which at least 50% of the total voting power of
the resulting entity is not held by the shareholders of NFM prior to the
merger, or NFM adopts, and the stockholders approve, if necessary, a plan of
complete liquidation or dissolution of NFM, a complete dissolution or
liquidation of NFM occurs or NFM sells or disposes of substantially all of its
assets to an unrelated party (as contemplated by Section 1.409A-3(i)(5)(vii)(3) of
the Treasury Regulations promulgated under the Code (as defined below)).


 


F.             CHANGE OF CONDITIONS OF EMPLOYMENT.  At any time
following the occurrence of a Change in Control, if NFM terminates Executive’s employment without Cause or
Executive terminates his employment due to NFM: materially breaching this
Agreement; or materially diminishing Executive’s title, position or responsibilities; or reducing
Executive’s Base Salary; or relocating NFM’s executive offices outside
of the 





Boulder, Colorado
area, Executive shall receive the
following within thirty (30) days of the Date of Termination (the
aforementioned shall collectively be referred to as a “Change in Control
Termination”):


 


(i)            Payment of all amounts earned,
accrued and owing but not yet paid under Section 2, above, and any benefits accrued and due under any applicable
benefit plans and programs of NFM, and


 


(ii)           A one time, lump sum payment of
Executive’s then current Base Salary for the remaining duration of the Term
or to an amount equivalent to the then current Base Salary multiplied by 11⁄2,  whichever is greater, and


 


(iii)          A one time, lump sum payment of an
amount equivalent to one year’s bonus as measured by the average bonuses
awarded to Executive during the immediately preceding two (2) full bonus
years; and;


 


(iv)          The immediate vesting of all
outstanding options awarded to Executive prior to the Date of Termination; and


 


(v)           Payment of
premiums on behalf of Executive and his dependents to allow Executive and his
dependents to receive COBRA coverage for health, dental and vision benefits
then being provided for Executive and his dependents at the time Executive’s
employment is terminated, for eighteen (18) months, which benefit shall be
provided subject to the applicable terms and conditions governing such COBRA
coverage.


 


G.            RESIGNATION (NOT A CHANGE
IN CONTROL TERMINATION).  At any time during the Term, Executive
may voluntarily terminate his employment for any reason.  In such event, after the effective date of
such termination, no payments shall be due under this Agreement, except that
Executive shall be entitled to any amounts earned, accrued and owing but not yet paid under Section 2 above and any benefits accrued and due under any applicable
benefit plans and programs of the Company, which amounts shall be paid within
the time frames specified by Colorado state wage law.


 


H.            NOTICE OF TERMINATION. Any termination under
this Agreement shall be communicated by a written notice to the other party,
and may be sent via first class mail, facsimile transmission, email or personal
delivery (the “Notice of Termination”).


 


I.              DATE OF TERMINATION. “Date of
Termination” shall mean: (i) the date of transmission of the Notice of
Termination by facsimile, email or personal delivery, or (ii) three
calendar days after the date of mailing by first class mail, or (iii) date
of death or disability (if applicable).












 


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J.             EXCESS PARACHUTE PAYMENTS.  In the event of a Change in Control
Termination, unless otherwise agreed by both parties acting reasonably, a
nationally recognized accounting firm (“Accounting Firm”) suitable to both
parties shall be timely engaged to render an opinion on whether the Executive
is expected to pay an excise tax on “excess parachute payments” (as defined in Section 280G(b) of
the Internal Revenue Code of 1986, as amended), as a result of payments due
under section 5(B) of this Agreement. 
Within 10 days following Company’s receipt of a written opinion of the
Accounting Firm, the Company shall, based solely upon the Accounting Firm’s
determination of which option shall result in a higher net total net
consideration to the Executive, either: (i) reduce the amounts and or
benefits payable to the Executive under Section 3(D)(iii)(a)(b)(c)(d) and
(e) to an amount that is $1 less than the amount that would constitute an
excess parachute payment and pay such reduced amount to Executive, or (ii) pay
the full amount due under Section 3(D)(iii)(a)(b)(c)(d) and (e) to
the Executive.  Payments by the Company
to the Executive pursuant to this paragraph shall be made without setoff, counterclaim
or other withholding.  The parties agree
that the written opinion of the Accounting Firm shall be final in all
respects.  The fees and expenses of the
Accounting Firm shall be paid by the Company.


 


K.            APPLICATION OF SECTION 409A OF THE INTERNAL REVENUE
CODE.  Notwithstanding
anything contained herein (including in Sections 3(D) or 3(F)) to the
contrary, if Executive is a “specified employee” within the meaning of Section 1.409A-l(i) of
the Treasury Regulations promulgated under the Internal Revenue Code of 1986,
as amended (the “Code”), as of the Date of Termination, then payments to
Executive hereunder shall not be made before the date that is six months after
the Date of Termination (or if earlier, the date of death of Executive);
provided, however, that during such six-month period, NFM shall make any and
all payments contemplated hereunder to the extent such payments do not exceed
two times the lesser of (i) Executive’s annualized compensation, based
upon the annual rate of compensation for the calendar year preceding the year
in which the Date of Termination occurs, or (ii) the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(l7)
of the Code for the year in which the Date of Termination occurs; and provided
further that any amounts deferred hereunder shall be paid in a lump-sum amount
at the expiration of such six-month period.


 


4.             RESTRICTIVE COVENANTS


 


For good and valuable
consideration, including but not limited to the increase in Base Salary effectuated
by this Agreement, and the continued employment of Executive by NFM, Executive
agrees to be bound to the following restrictive covenants:








A.            COVENANT AGAINST COMPETITION. Executive
agrees that he holds an executive level position with NFM, and Executive
further agrees that by virtue of his position he has had access and will
continue to have access to NFM’s Confidential Information and Trade Secrets (as
those terms are defined below), and Executive further agrees that NFM has a
legitimate business interest in preventing Executive from putting to a
competitive use the information and relationships which pertain to NFM that
Executive acquired in the course of his employment, and in protecting its
customer base.  Accordingly, Executive
agrees to the following:


 


(i)            The Executive acknowledges and
agrees that the principal business of NFM is the sale, promotion and
electronic distribution of adult themed programming and events, whether such
adult themed programming and events are sold, promoted, or electronically
distributed by means now known or hereafter discovered including but not
limited to the Internet, satellite systems, cable systems, hotels, IPTV, mobile
and/or stand alone systems (the “Business”).


 


(ii)           In addition, the Executive
acknowledges and agrees that: NFM is one of the limited number of companies who
have developed the Business; the Executive’s work for NFM has given and will
continue to give him access to the Confidential Information and Trade Secrets of
the Company; the value of all goodwill resulting from the operation of the
Business of NFM and its subsidiaries and other affiliates should properly
belong to NFM; the covenants and agreements of the Executive in this Section
are necessary to preserve the value of such goodwill for the benefit of NFM; the
proprietary technologies developed by NFM and its predecessors offer NFM a
distinct competitive advantage, and NFM would not have entered into this
Agreement but for the covenants and agreements set forth in this Section.  Accordingly, the Executive covenants and
agrees that:


 


(a)           By and in consideration of the salary
and benefits to be provided by NFM hereunder, including the severance
arrangements set forth herein, and in consideration of the Executive’s executive
position and exposure to the Confidential Information and Trade Secrets of NFM,
the Executive covenants and agrees that commencing on the date hereof and
ending on the date upon which the Executive’s employment terminates (the “Restricted Period”), he shall not
anywhere in the Restricted Territory, directly or indirectly: engage in any
element of the Business or otherwise compete with NFM; render any services to
any person, corporation, partnership or other entity (other than NFM or its
affiliates) primarily engaged in any element of the Business; or become
interested in any such person, corporation, partnership or other entity (other
than NFM or its affiliates) as a partner, shareholder, principal, agent,
employee, consultant or in any other 












 


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relationship
or capacity; provided, however, that, notwithstanding the foregoing, the
Executive may invest in securities of any entity, solely for investment
purposes and without participating in the business thereof, if (A) such
securities are traded on any national securities exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System, (B) the
Executive is not a controlling person of, or a member of a group which
controls, such entity and (C) the Executive does not, directly or
indirectly, own five percent (5%) or more of any class of securities of such
entity.


 


For
purposes of this Agreement, “Restricted
Territory” means any state, county, or locality in the United States in
which NFM conducts Business and any other country, jurisdiction or territory in
which NFM has generated material revenue during the last six (6) months of
Executive’s employment.


 


For purposes of this
Agreement, “Trade Secret” means all non-public information whether tangible or
intangible related to the products, services or business of NFM that (A) derives
economic value, actual or potential, from not being generally known to or
readily ascertainable by other persons who can obtain economic value from its
disclosure or use; or (B) is the subject of efforts by NFM that are
reasonable under the circumstances to maintain its secrecy, which might include:
(i) marking any information reduced to tangible form clearly and
conspicuously with a legend identifying its confidential or trade secret nature;
(ii) identifying any oral communication as confidential or secret
immediately before, during, or after such oral communication; or (iii) otherwise
treating such information as confidential or secret.  Assuming the criteria in clauses (A) or (B) of
this paragraph are met, Trade Secrets includes information, without regard to
form, including, but not limited to, technical and nontechnical data, formulas,
patterns, designs, compilations, computer programs and software, devices,
inventions, methods, techniques, drawings, processes, financial data, financial
plans, product plans, lists of actual or potential customers and suppliers
which are not commonly known by or available to the public, research,
development, and existing and future products.


 


(b)           Notwithstanding anything to
the contrary in Section 4(A)(ii)(a) above, in the event of a Change in Control Termination, such Restricted Period
shall terminate and Executive shall therefore be free to seek employment
elsewhere without regard to whether any prospective employer is a competitor of
NFM.


 


B.            NON-SOLICITATION.  During
the Restricted Period, Executive shall not, directly or indirectly, (i) solicit
or encourage to leave the employment or other service of NFM any employee or
independent contractor thereof; or (ii) hire (on behalf of Executive or
any other person or entity) any employee or
independent contractor who has left the 





employment or other service of NFM within the one-year period which follows
the termination of such employer’s or independent contractor’s employment or
other service with NFM.  For purposes of
the preceding sentence, the term “independent contractor” shall refer to
independent contractors of NFM whose services relate directly to the conduct of
the Business.  During the Restricted Period,
the Executive will not, whether for his own account or for the account of any
other person, firm, corporation or other business organization, intentionally
interfere with NFM’ relationship with, or endeavor to entice away from NFM any
person who during the Term is or was a customer, client, supplier, licensee or
other business relation of NFM.


 


C.            CONFIDENTIALITY OBLIGATIONS


 


(i)            CONFIDENTIAL INFORMATION.  As used in this Agreement, “Confidential
Information” includes, without limitation, design information, manufacturing
information, business, financial, and technical information, sales and
processing information, product information, customer lists, vendor information,
vendor lists, pricing information, corporation and personal business
opportunities, software, computer disks or files, or any other electronic
information of any kind, Rolodex cards or other lists of names, addresses or
telephone numbers, financial information, current projects, projects in
development and future projects, forecasts, plans, contracts, releases, and
other documents, materials, writings or information, including those which are
prepared, developed or created by Executive, or which come into the possession
of Executive by any means or manner, and which relate directly or indirectly to
NFM (all of the above collectively referred to as “Confidential Information”).  Confidential Information includes information
developed by Executive in the course of Executive’s services for NFM, as well
as other Confidential Information to which Executive may have access in
connection with Executive’s services. 
Confidential Information also includes the confidential information of
other individuals or entities with which NFM has a business relationship.  Confidential Information shall not include
any information (a) which is in the public domain or which enters the
public domain through no act of omission of Executive or (b) which was in
the possession of Executive prior to the commencement of his employment with NFM.


 


(ii)           DUTY OF CONFIDENTIALITY.  At all times during his employment and
thereafter, Executive will maintain in strictest confidence and will not,
directly or indirectly, disclose or use (or allow others working with or
related to Executive to disclose or use) any Confidential Information belonging
to NFM, whether in oral, written, electronic or permanent form, except solely
to the extent necessary to perform services on behalf of NFM.  Upon termination of this Agreement, or at the
request of NFM 












 


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prior to its termination,
Executive shall deliver forthwith to NFM all Confidential Information (and all
copies thereof) in Executive’s possession or control belonging to NFM and all
tangible items embodying or containing Confidential Information.


 


(iii)         DOCUMENTS, RECORDS, ETC.  All documents, records, data, equipment and
other physical property, whether or not pertaining to Confidential Information,
which are furnished to Executive by NFM or are produced by Executive in
connection with Executive’s services will be and remain the sole property of NFM.  Executive will return to NFM forthwith all
such materials and property upon the termination of this Agreement or sooner if
requested by NFM.


 


D.            ASSIGNMENT OF RIGHTS.  Executive shall make full and prompt
disclosure to NFM of any and all designs, intellectual property, software,
inventions, discoveries, or improvements (individually and collectively, “Inventions”)
made by Executive as a result or product of his employment relationship with NFM.  Executive hereby assigns to NFM without
additional compensation the entire worldwide right, title and interest in and
to such Inventions, and related intellectual property rights and without
limitation all copyrights, copyright renewals or reversions, trademarks, trade
names, trade dress rights, industrial design, industrial model, inventions,
priority rights, patent rights, patent applications, patents, design patents
and any other rights or protections in connection therewith or related thereto,
for exploitation in any form or medium, of any kind or nature whatsoever,
whether now known or hereafter devised. 
To the extent that any work created by Executive can be a work for hire
pursuant to U.S. Copyright Law, the parties deem such work a work for hire and
Executive should be considered the author thereof.  Executive shall, at the request of NFM,
without additional compensation from time to time execute, acknowledge and
deliver to NFM such instruments and documents as NFM may require to perfect,
transfer and vest in NFM the entire right, title and interest in and to such
inventions.  In the event that Executive
does not timely perform such obligations, Executive hereby makes NFM and its
officers his attorney in fact and gives them the power of attorney to perform
such obligations and to execute such documents on Executive’s behalf.  Executive shall cooperate with NFM upon NFM’s
request and at NFM’s cost but without additional compensation in the
preparation and prosecution of patent, trademark, industrial design and model,
and copyright applications worldwide for protection of rights to any
Inventions.


 


E.             LEGAL AND EQUITABLE REMEDIES.  Because the
Executive’s services are personal and unique and 





the Executive has had and will continue to have access to and has become
and will continue to become acquainted with the Confidential Information and
Trade Secrets of NFM, and because
any breach by the Executive of any of the confidentiality covenants and
restrictive covenants contained in Section 4 would result in irreparable
injury and damage for which money damages would not provide an adequate remedy,
NFM shall have the right to enforce the restrictions set forth in Section 4
by injunction, specific performance or other equitable relief, without bond and
without prejudice to any other rights and remedies that NFM may have for a
breach, or threatened breach, of the obligations described in Section 4.  The Executive agrees that in any action in
which NFM seeks injunction, specific performance or other equitable relief, the
Executive will not assert or contend that any of the provisions of Section 4
are unreasonable or otherwise unenforceable.


 


F.             SCOPE/BLUE PENCIL PROVISIONS.  Executive agrees that the duration, scope and
geographic area of the restrictions stated in this Section are reasonable
and necessary given the nature of NFM’s Business.  However, in the event that a court or
arbitrator of competent jurisdiction shall hold that the duration, scope,
geographic area or other restrictions stated herein are unreasonable and
unenforceable under circumstances then existing, the parties agree that the
maximum duration, scope, area or other restrictions reasonable under such
circumstances shall be substituted for the stated duration, scope, area or
other restrictions.


 


G.            INDEPENDENT AGREEMENT.  The covenants made in this Section 4
shall be construed as an agreement independent of any other provisions of this
Agreement, and shall survive the termination of this Agreement.  Moreover, the existence of any claim or cause
of action of Executive against NFM, whether or not predicated upon the terms of
this Agreement, shall not constitute a defense to the enforcement of these
covenants.  Notwithstanding anything to
the contrary in this paragraph, Executive shall be released from his
obligations under Section 4(A) of this Agreement if NFM is in
material breach of its obligations set forth in Section 2(B) of this
Agreement, provided such material breach remains uncured for more than thirty
(30) days after written notice of said breach from Executive to NFM.


 


5.             ARBITRATION.  To the maximum extent permitted by law, all
disputes, controversies, claims, or demands of any kind or nature arising
between the parties in connection with this Agreement, whether at law or in
equity or based upon common law or any federal or state 












 


7
























statute, rule, or
regulation, that cannot be resolved between the parties through NFM’s internal
complaint resolution procedures, shall be submitted to binding arbitration by
the American Arbitration Association; provided, however, that this arbitration
requirement shall not apply to any action by either party to obtain injunctive
relief to prevent any violation by the other party of the terms of this
Agreement, which injunctive action may be brought in any court of competent
jurisdiction. The filing of a claim for injunctive relief shall not allow
either party to raise any other claim outside arbitration.


 


Any arbitration commenced
hereunder shall be initiated in Boulder, Colorado and shall be governed by the
AAA National Rules for the Resolution of Employment Disputes.  The arbitration shall occur before a single
arbitrator that shall be mutually agreed upon by the parties hereto.  If the parties cannot agree on a single
arbitrator, then an arbitrator shall be selected in accordance with the rules of
AAA.  The arbitration must be filed
within six months of the act or omission which gives rise to the claim.  Each party shall be entitled to take any
discovery as is permitted by the applicable rules and the arbitrator. In
determining the extent of discovery, the arbitrator shall exercise discretion,
but shall consider the expense of the desired discovery and the importance of
the discovery to a just adjudication.


 


The findings,
conclusions, and award rendered in any arbitration shall be binding upon the
parties and shall finally determine all questions of fact relating to the
dispute. Judgment upon the arbitration award may be entered in the appropriate
court, state or federal, having jurisdiction, and each party expressly waives
any right to appeal any such judgment rendered by the court.   Any party may apply to a court of competent
jurisdiction for entry of judgment on the arbitration award.


 


The costs of the
arbitration shall be advanced equally by the parties, however the prevailing
party in any arbitration or other legal action brought to enforce or defend the
terms of this Agreement shall be entitled, in addition to any other remedies
available to such party, to an award of reasonable attorney’s fees and costs.  Any party may apply to a court of competent
jurisdiction for entry of judgment on the arbitration award.


 


The parties agree that
failure to comply with the provisions of this paragraph shall constitute grounds
for the dismissal of any suit, action, or proceeding instituted in any federal,
state, or local court or before any administrative tribunal with respect to any
dispute which arises during the period of this 





Agreement and
which is subject to this arbitration agreement. The arbitration provisions of
this Agreement are specifically enforceable by each party to the Agreement and
shall survive the termination or expiration of the Agreement.


 


THE EXECUTIVE UNDERSTANDS THAT
THIS AGREEMENT TO ARBITRATE ALL ARBITRABLE DISPUTES MEANS THE EXECUTIVE IS
AGREEING TO WAIVE TO THE MAXIMUM EXTENT PERMITTED BY LAW ANY RIGHT THE
EXECUTIVE MAY HAVE TO ASK FOR A JURY OR COURT TRIAL IN ANY DISPUTE WITH
THE COMPANY.


 


6.             NO CONFLICTING OBLIGATIONS OF EXECUTIVE.  Executive represents and
warrants that he is not subject to any duties or restrictions under any prior
agreement with any previous employer or other person or entity, and that he has
no rights or obligations which may conflict with the interests of NFM or with
the performance of Executive’s duties and obligations under this
Agreement.  Executive agrees to notify NFM
immediately if any such conflicts occur in the future.


 


7.             SUCCESSORS.


 


A.            This Agreement is personal to
Executive and shall not be assignable by Executive.


 


B.            This Agreement shall inure to the
benefit of NFM and its successors and assigns. 
Upon written notice to Executive, NFM may assign this Agreement to any
successor or affiliated entity, subsidiary, sibling, or parent company.


 


8.             LAW CHANGES.  To the extent that any payment under this
Agreement is deemed to be deferred compensation subject to the requirements of
section 409A of the Code, this Agreement shall be administered so that such
payments will be made in accordance with the requirements of section 409A of
the Code.


 


9.             INDEMNIFICATION.  NFM
agrees to defend and indemnify Executive against all criminal and civil claims
for acts within the scope of his duties to the maximum extent allowed by law,
but excluding acts of gross negligence and willful misconduct.  Additionally, NFM shall pay all attorneys’
fees and costs related to any actual or threatened legal action against
Executive as such fees and costs arise.  NFM
agrees to maintain D&O insurance that covers Executive for all acts within
the scope of his duties, but excluding acts of gross negligence and willful
misconduct.












 


8
























10.          MISCELLANEOUS


 


A.            Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without
reference to the principles of conflict of laws.


 


B.            Captions/Headings.  The captions and headings of this Agreement
are not part of the provisions hereof and shall have no force or effect.


 


C.            Entire Agreement.  This Agreement contains the full and complete
understanding between the parties hereto and supersedes all prior
understandings, whether written or oral pertaining to the subject matter
hereof.


 


D.            Modifications of Agreement.  This Agreement may not be amended or modified
otherwise than by written agreement executed by Executive and by the designated
representative of the Board. 
Notwithstanding anything to the contrary, NFM hereby reserves the right
to unilaterally amend this Agreement as necessary to avoid the imposition of
liability under or as a consequence of the application of the provisions of Section 409A
of the Code.


 


E.             Notices.  All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, or by facsimile, or by email, or by hand delivery to such address as
either party shall have furnished to the other in writing in accordance
herewith:


 


New Frontier Media, Inc.


7007 Winchester Circle, Suite 200


Boulder, CO 80301


Attn:  General Counsel


 





Executive:


Ira Bahr


 


F.             Severability.  If any
provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without
the invalid or unenforceable provision or application and shall not invalidate
or render unenforceable such provision or application in any other
jurisdiction.  If any provision is held
void, invalid or unenforceable with respect to particular circumstances, it
shall nevertheless remain in full force and effect in all other circumstances.


 


G.            Withholdings.  NFM shall withhold from any amounts payable
under this Agreement such amounts as are required to be withheld pursuant to
any applicable law or regulation, including without limitation amounts required
to be withheld for Federal, State and local taxes, as well as garnishments and
other required withholdings.


 


H.            Remedies Cumulative; No
Waiver.  No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in
equity.  The failure of either
party to insist upon strict compliance with any provision of this Agreement, or
the failure to assert any right either party may have hereunder, shall not be
deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.


 


I.              Counterparts.  This
Agreement may be executed in any number of counterparts (including facsimile
counterparts), each of which shall be an original, but all of which together
shall constitute one instrument.












 


IN WITNESS WHEREOF,
Executive has hereunto set Executive’s hand, and NFM has caused these presents
to be executed in its name on its behalf, all as of the day and year first
above written.


 


 




	
  NEW FRONTIER MEDIA,
  INC.

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Weiner

  	
   

  	
  By:

  	
  /s/ Ira Bahr

  
	
  Name: Michael Weiner

  	
   

  	
  Name: Ira Bahr

  
	
  Title: Chief Executive
  Officer

  	
   

  	
   

  
					






 


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