Exhibit 10.5


 


EMPLOYMENT
AGREEMENT


 


Employment
Agreement made as of January 1, 2004, by and
between 24/7
Real Media, Inc., a Delaware corporation, with its principal place
of business at 1250 Broadway, New York, New York 10001 (the “Company”), and
Jonathan K. Hsu (“Executive”).


 


W
I T N E S S E T H:


 


WHEREAS,
the Company desires to employ Executive as its Executive Vice President and
Chief Financial Officer, and Executive is willing to serve in such capacity;
and


 


WHEREAS,
the Company and Executive desire to set forth the terms and conditions of such
employment.


 


NOW,
THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and Executive agree as follows:


 


1.             EMPLOYMENT.


 


(a)           The
Company hereby agrees to employ Executive, and Executive agrees to be employed
by the Company, on the terms and conditions herein contained as its Executive
Vice President and Chief Financial Officer, or in such other executive
managerial position or positions with the Company or its subsidiaries or
affiliates as shall hereafter be designated by the Chief Executive Officer (the
“CEO”) of the Company.  Executive shall
report directly to the CEO or such other person as the CEO may designate and
shall have such duties, authority and responsibilities commensurate with
Executive’s position for similarly sized companies in the industry.


 


(b)           Executive
shall devote all of his business time, energy, skill and efforts to the
performance of his duties hereunder and shall faithfully and diligently serve
the Company.  The foregoing shall not
prevent Executive from participating in not-for-profit activities or from
managing his passive personal investments or from providing incidental
assistance to family members on matters of family business or, subject to the
approval of the Company, from serving on the boards of directors of other
entities, provided that these activities do not materially interfere with
Executive’s obligations hereunder;


 


(c)           Upon
the request of the Board, Executive shall also serve as a director or officer
of subsidiaries in positions commensurate with his position with the Company
without additional compensation.  If any
compensation is paid Executive by such subsidiaries, they shall be a credit
against amounts due hereunder.


 

















 


2.             TERM OF
EMPLOYMENT.


 


(a)           Except
for earlier termination as provided in Section 7 hereof or as extended in
this Section 2, Executive’s employment under this Agreement (the
“Employment Term”) shall commence on January 1, 2004 (the “Commencement
Date”) and continue until terminated by either party pursuant to Section 7
hereof.


 


(b)           Notwithstanding
anything else herein, the provisions of Sections 8  and 9 hereof shall survive and remain in effect notwithstanding
the termination of the Employment Term or a breach by the Company or Executive
of this Agreement or any of its terms.


 


3.             COMPENSATION.  As compensation for his services under this
Agreement, the Company shall pay Executive a base salary (the “Base Salary”) as
set forth on Exhibit A hereto.  Payment
of the Base Salary shall be made in equal installments twice a month.


 


4.             BENEFITS AND
FRINGES.


 


(a)           During
the Employment Term, Executive shall be entitled to such benefits and fringes,
if any, as are generally provided from time to time by the Company to its
executive officers, including pension, retirement, savings, welfare (including
life and health insurance) and other employee benefit plans and arrangements.


 


(b)           Except
as otherwise specifically provided herein, the Executive shall be responsible
for the tax consequences of all benefits and fringes.


 


5.             EXPENSES.  The Company shall reimburse Executive in
accordance with its expense reimbursement policy as in effect from time to time
for all reasonable expenses incurred by Executive in connection with the
performance of his duties under this Agreement upon the presentation by
Executive of an itemized account of such expenses and appropriate receipts and
otherwise in compliance with such rules relating thereto as the Company may,
from time to time, adopt.


 


6.             VACATION.  During the Employment Term, Executive shall
be entitled to four weeks of paid
vacation per calendar year.


 


7.             TERMINATION.


 


(a)           Executive’s
employment under this Agreement and the Employment Term shall terminate upon
any of the following events:


 


(i)            Automatically
on the date of Executive’s death;


 


(ii)           Upon
written notice given by the Company to Executive if Executive is unable to
substantially perform his material duties hereunder for one hundred eighty
(180) continuous days during any period of three hundred sixty (360)
consecutive days by reason of physical or mental incapacity;


 

















 


(iii)          Upon
written notice by the Company to Executive for Cause.  Cause shall mean (a) Executive being convicted of (or pleading
nolo contendere to) a felony (other than a traffic violation) or a crime
involving fraud, misappropriation, or embezzlement; (b) refusal of the
Executive to attempt to properly perform his obligations under this Agreement,
or follow any direction of the CEO consistent with this Agreement, which in
either case is not remedied within ten (10) business days after receipt by
Executive of written notice from the Company specifying the details thereof,
provided the refusal to follow a direction shall not be Cause if Executive in
good faith reasonably believes that such direction is not legal, ethical or
moral and promptly notifies the CEO in writing of such belief; (c) Executive’s
gross negligence with regard to his duties or willful misconduct with regard to
the business, assets or employees of the Company that is materially injurious
to the financial condition or business reputation of the Company; or (d) any
other breach by Executive of a material provision of this Agreement that
remains uncured for twenty (20) business days after written notice thereof is
given to Executive or such longer period as may reasonably be required to
remedy the default, provided that the Executive endeavors in good faith to
remedy the default;


 


(iv)          Upon
30 days written notice by the
Company without Cause; or


 


(v)           Upon
not less than 30 days’ written
notice by the Executive.


 


(b)           Upon
termination of the Employment Term, Executive shall be paid any unpaid salary
and accrued vacation through his date of termination and reimbursement for any
expenses incurred in connection with the official business of the Company prior
to his date of termination which he would be otherwise entitled to
reimbursement for in accordance with the Company’s policies on the
reimbursement of business expenses and any benefits or amounts under any
benefit or equity plan in accordance with the terms of said plan and any fringe
benefits due for the period prior to such termination.


 


(c)   If
Executive’s termination is pursuant to subsection (a)(i) above,
Executive’s Beneficiary (as defined in the next sentence) shall continue to
receive payments of Executive’s Base Salary, at the same time such amounts
would have been paid if Executive was still an employee of the Company for a
period of six (6)  months following
Executive’s death.  For purposes of this
provision, Executive’s Beneficiary shall be Executive’s spouse; if Executive is
not married on his date of death, Executive’s children, per stirpes; and
otherwise, Executive’s estate.


 


(d)           If
Executive’s termination is pursuant to subsection (a)(ii) above, Executive
shall be entitled to receive an amount equal to six months’ of Executive’s Base
salary, in one lump sum payment, less any amounts actually received by him
pursuant to long-term disability coverage, if any, provided for by the Company
for the matching pay period.  After such
six months, Executive shall only be entitled to any amounts due him under the
long-term disability coverage, if any.


 


(e)           If
Executive’s termination is pursuant to subsection (a)(iv) above, Executive
shall receive:


 


(i) for six months following the termination of Executive’s
employment,  at the same time as it
would have been paid if he were an employee of the Company, his Base Salary;


 

















 


(ii) continued medical and dental coverage for a period of six months
following termination of Executive’s employment; and,


 


(iii) 
a prorated portion of his Target EBITA and Revenue bonus for the year of
termination, reduced by amounts already paid, plus a lump-sum payment equal to
50% the total target EBITA and Revenue bonus for the full-year in which
termination occurs.


 


(f)            All
amounts payable pursuant to this Section 7 shall be subject to required
withholding.  The Company shall have no
other obligations to Executive as a result of his termination.


 


8.             CONFIDENTIAL
INFORMATION AND NON-COMPETITION. 
Executive has entered into a Non-Competition and Non-Disclosure and
Developments agreement of even date herewith, which agreement is attached
hereto and made a part hereof as though fully set forth herein.


 


9.             INDEMNIFICATION.  During the Employment Term and thereafter,
the Company shall defendExecutive to the
fullest extent permitted by law against any claims, demands, suits or actions,
and indemnify Executive to the fullest extent
permitted by law against any judgments, fines, amounts paid in settlement and
reasonable expenses (including attorneys’ fees), and advance amounts necessary
to pay the foregoing at the earliest time and to the fullest extent permitted
by law, in connection with any claim, action or proceeding (whether civil or
criminal) against Executive (other than a claim brought by the Company) as a
result of Executive serving as an officer, director or employee of the Company
or in any capacity at the request of the Company , in or with regard to any
other entity, employee benefit plan or enterprise.  This duty to defend and indemnify  shall be in addition to, and not in lieu
of, any other defense and indemnification rights. Executive shall be entitled
to pursuant to the Company’s Certificate of Incorporation or By-laws or
otherwise.  Following Executive’s
termination of employment, the Company shall continue to cover Executive under
the Company’s directors and officers insurance for the period during which
Executive may be subject to potential liability for any claim, action or
proceeding (whether civil or criminal) as a result of his service as an officer
or director of the Company or in any capacity at the request of the Company, at
the highest level then maintained for any then current or former officer or
director.


 


10.           EXECUTIVE
REPRESENTATION.  Executive
represents and warrants that he is not limited under any contractual or other
provision from entering into this Agreement and performing his obligations
hereunder.


 


11.           ENTIRE
AGREEMENT; MODIFICATION. 
This Agreement constitutes the full and complete understanding of the
parties hereto and will supersede all prior agreements and understandings, oral
or written, with respect to the subject matter hereof.  Each party to this Agreement acknowledges
that no representations, inducements, promises or agreements, oral or
otherwise, have been made by either party, or anyone acting on behalf of either
party, which are not embodied herein and that no other agreement, statement or
promise not contained in this Agreement shall be valid or binding.  This Agreement may not be modified or
amended except by an instrument in writing signed by the party against whom or
which enforcement may be sought.


 

















 


12.           SEVERABILITY.  Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction.


 


13.           WAIVER OF
BREACH.  The waiver by any
party of a breach of any provisions of this Agreement, which waiver must be in
writing to be effective, shall not operate as or be construed as a waiver of
any subsequent breach.


 


14.           NOTICES.  All notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered by hand, or one (1)
day after sending by United States Postal Service express mail or other
“overnight mail service,” or three (3) days after sending by certified or
registered mail, postage prepaid, return receipt requested.  Notice shall be sent as follows:  if to Executive, to his home address as
listed in the Company’s records; and if to the Company, at its office as set
forth at the head of this Agreement. 
Either party may change the notice address by notice given as aforesaid.


 


15.           ASSIGNABILITY;
BINDING EFFECT.  This
Agreement shall be binding upon and inure to the benefit of Executive and
Executive’s legal representatives, heirs and distributees, and shall be binding
upon and inure to the benefit of the Company, its successors and assigns.  This Agreement may not be assigned by
Executive.  This Agreement may not be
assigned by the Company except in connection with a merger or a sale by the
Company of all or substantially all of its assets, and then only provided that
the assignee specifically assumes in writing all of the Company’s obligations
hereunder.


 


16.           ARBITRATION.  Any dispute or controversy arising under or
in connection with this Agreement, other than injunctive relief under
Section 8 (provided that Executive may bring an arbitration to recover
legal fees in connection with such injunctive activities under the last
sentence of this Section 16) shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in New York, New York, in accordance
with the rules of the American Arbitration Association then in effect, and
judgment may be entered on the arbitrators’ award in any court having
jurisdiction.  The decision of the
arbitrator shall be final and binding on the parties.  The parties shall equally divide all costs of the American
Arbitration Association and the arbitrator, except that the arbitrator shall
direct the Company to reimburse Executive’s portion of the cost on the same
basis as set forth in the next sentence with regard to legal fees.  Each party shall bear its own legal fees in
any dispute except that, in the event the Executive prevails on any material
issue, the arbitrator shall award the Executive his legal fees attributable to
all matters other than frivolous positions taken by the Executive (as
determined by the arbitrator).


 


17.           GOVERNING
LAW.  All issues pertaining
to the validity, construction, execution and performance of this Agreement
shall be construed and governed in accordance with the laws of the State of New
York, without giving effect to the conflict or choice of law provisions
thereof.


 


18.           HEADINGS.  The headings in this Agreement are intended
solely for convenience or reference and shall be given no effect in the
construction or interpretation of this Agreement.


 

















 


19.           COUNTERPARTS.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.


 


IN
WITNESS WHEREOF, the Company has caused this Agreement
to be duly executed and Executive has hereunto set his hand as of the date
first set forth above.


 


	
   

  	
  24/7 REAL MEDIA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ DAVID J. MOORE

  	
   

  
	
   

  	
   

  	
  David J. Moore

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/
  JONATHAN K. HSU

  	
   

  
	
   

  	
   

  	
  Jonathan K. Hsu

  



 

















 


EXHIBIT A


 


BASE
SALARY


The Company shall pay Executive a base salary at a rate of $200,000.00
per annum (the “Base Salary”). Annual increases in Base Salary shall be at
least 3.0%, effective the first day of each calendar year.


 


REVENUE BONUS


Executive has a target revenue bonus compensation of $50,000.00
(“Target Revenue Bonus”) during FY2004. 
The quarterly revenue bonus (“Quarterly Revenue Bonus”) will be
determined by the following formula:


 


	
  Actual Company

  Quarterly Revenue

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  X

  	
   

  	
  Target Revenue Bonus

  	
   

  	
  =

  	
   

  	
  Quarterly Revenue Bonus

  
	
  Annual Company

  Revenue Goal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


For FY2004, the Annual Company Revenue Goal equals $62,966,234.  The Quarterly Revenue Bonus shall be paid
quarterly, within 45 days after the end of each quarter.


 


EBITA BONUS


Executive has a target revenue bonus compensation of $50,000.00
(“Target EBITA Bonus”) during FY2004. 
The annual EBITA bonus (“Annual EBITA Bonus”) will be determined by the
following formula:


 


 


	
  Actual Company

  Annual EBITA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  X

  	
   

  	
  Target EBITA Bonus

  	
   

  	
  =

  	
   

  	
  Annual EBITA Bonus

  
	
  Annual Company

  EBITA Goal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


For FY2004, the Annual Company EBITA Goal equals $1,297,501.  EBITA Percentage is defined as Actual
Company Annual EBITA divided by Annual Company EBITA Goal.  If the EBITA Percentage is above 120%,
Executive will be paid Target EBITA Bonus multiplied by 120%.  No bonus will be paid if the EBITA
Percentage is less than 80%.  The Annual
EBITA Bonus shall be paid annually, upon completion of the annual company
audit.