Document:

Ex 10.1 Consulting Agreement

EXHIBIT 10.1

CONSULTING SERVICES AGREEMENT

This Consulting Services Agreement (“Agreement”) is entered into as of January 1, 2013 (the “Effective Date”), between ION Geophysical Corporation, a Delaware corporation having offices at 2105 CityWest Boulevard, Suite 400, Houston, Texas 77042-2839 (the “Company”), and The Peebler Group LLC (“Consultant”).  The Company and Consultant are sometimes referred to in this Agreement as a “Party” and collectively as the “Parties.”

The Parties desire for Consultant to provide consulting services to the Company pursuant to the terms and conditions of this Agreement.  The Parties acknowledge that the consulting arrangement described in this Agreement is the consulting arrangement referred to in Section 6(c) of the Employment Agreement dated effective on March 31, 2003, between the Company and Robert P. Peebler, as amended.

The Parties agree as follows:

1.    Services.

(a)    The Company hereby engages Consultant to perform strategic consulting services for the Company’s Board of Directors and Chief Executive Officer (“CEO”) and advisory services on strategic projects to be agreed between Consultant and the CEO (collectively, the “Services”), during the Term.

(b)    The Company enters into this Agreement based on Consultant’s demonstrated ability to perform the Services.  Consequently, other than requesting and discussing the Services and providing related information as requested from time to time by Consultant, the Company will not provide Consultant with any training or instructions with respect to the Services.

(c)    In the performance of Services under this Agreement, Consultant agrees that it and its employees will comply with all applicable laws, statutes and regulations relating to providing the Services, including but not limited to, the Foreign Corrupt Practices Act (“FCPA”), environmental laws, employment laws, safety regulations, securities laws and regulations, antitrust laws, intellectual property laws and any other applicable laws, statutes or regulations and to conduct itself and themselves in keeping with high ethical standards.  Consultant further agrees that it and its employees will comply with all applicable safety and security regulations and policies while on the Company’s premises and all other policies of the Company and will use its and their best efforts to preserve the business of the Company and the good will of all employees, customers, suppliers and other persons having business relations with the Company. In accordance with the FCPA, neither Consultant nor any of its employees shall make any payment prohibited by the FCPA to any party for the purpose of securing business.

(d)    Consultant shall not utilize the services of any individual, company or other entity (other than Robert P. Peebler) as a subcontractor or an independent contractor to assist in performing the Services unless Consultant obtains the prior written permission of the Company to utilize the services of such subcontractor or independent contractor in connection with the Services.

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2.    Term.  The term of this Agreement shall commence on the Effective Date, and shall remain in effect until December 31, 2017 (the “Term”), unless earlier terminated in accordance with Section 16.

3.    Payment to Consultant.

(a)    In consideration for the Services provided by Consultant during the Term, including the obligations of Consultant under Section 5 hereof, the Company shall pay Consultant as follows:

(i)    For the first year of the Term, Consultant shall receive a fee equal to $275,000 per year, payable monthly.  

(ii)    For each succeeding year of the Term after the first year, Consultant shall receive a fee equal to $150,000 per year, payable monthly. The Parties acknowledge and agree that, if the frequency and extent of the Services under this Agreement during any such succeeding year materially exceeds the current expectations of the Company and Consultant, CEO and Consultant shall discuss an appropriate increase of fee for each such exceeding year not to exceed an annual fee of $275,000; provided that any such increase for any year shall only take effect upon the written agreement of CEO and Consultant. 

(b)    During the Term, the Company shall provide Consultant with use of an office and access to administrative support services, including IT systems services, in its headquarters located in Houston, Texas, when necessary for the Services.  Except as stated in the foregoing sentence, Consultant is responsible for payment of expenses related to its own office located outside of the Company’s office, including rent, utilities, telephone, office supplies and similar costs and expenses.  The Company will reimburse Consultant for reasonable and necessary out-of-pocket expenses incurred by Consultant at the request of the Company in performance of the Services, in accordance with the Company’s general expense reimbursement policies.  Such costs shall be incurred consistent with the Company’s reimbursement policies applicable to its employees.  Reasonable transportation expenses incurred by Consultant at the request of the Company will be reimbursed to Consultant.  Consultant shall submit to the Company a statement setting forth the related expenses, together with receipts or other supporting evidence as may be reasonably requested by the Company.

(c)    Consultant shall maintain during the Term of this Agreement, and retain not less than three (3) years after the expiration or termination thereof, complete and accurate records of all of Consultant’s costs that are chargeable to the Company under this Agreement.  The Company shall have the right, on advance notice and at reasonable times, to inspect and audit those records by authorized representatives of its own or any public accounting firm selected by it.

4.    Confidentiality of the Company’s Business.

(a)    Consultant acknowledges that the business of the Company and its affiliates is highly competitive and that the Company’s books, records and documents, information concerning the Company’s strategies, plans, business, products, equipment, services and processes, procurement 

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procedures and pricing techniques, the names of and other information (such as credit and financial data) concerning the Company’s customers and business affiliates, the terms of this Agreement, and any other confidential and/or proprietary information and/or trade secrets that have been developed or used by or on behalf of the Company or its affiliates or will be developed and that cannot be obtained readily by third parties from outside sources (collectively, “Confidential Information”), all comprise confidential business information and trade secrets of the Company that are valuable, special and unique proprietary assets of the Company and that Consultant shall have access to in performing the Services under this Agreement.  Consultant further acknowledges that protection of the Company’s Confidential Information against unauthorized disclosure and use is of critical importance to the Company in maintaining its competitive position.  Accordingly, Consultant hereby agrees that it will not, at any time during or after the term of this Agreement, make any unauthorized disclosure of any Confidential Information of the Company or its affiliates, or make any use thereof, except solely for the benefit of, and on behalf of, the Company or its affiliates in the performance of the Services pursuant to this Agreement. Consultant will safeguard the Confidential Information from unauthorized disclosure.  Consultant also agrees to preserve and protect the confidentiality of third party Confidential Information to the same extent, and on the same basis, as the Company's Confidential Information.  Consultant’s obligation under this Section 4 will not extend to information which is or becomes part of the public domain through no action or omission of Consultant.

(b)    If Consultant is requested or required (by oral question, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, Consultant will promptly notify the Company of such request or requirement so that the Company may, at its cost, seek an appropriate protective order or waiver in compliance with the provisions of this Agreement.  If, in the absence of a protective order or the receipt of a waiver hereunder, Consultant is, in the opinion of Consultant’s counsel, compelled to disclose the Confidential Information, Consultant may disclose only such of the Confidential Information to the party compelling disclosure as is required by law.  Consultant shall not be liable for the disclosure of Confidential Information pursuant to the preceding sentence unless such disclosure was caused by Consultant and not otherwise permitted by this Agreement.  

(c)    All written Confidential Information (including that portion of the Confidential Information that may be found in analyses, compilations, studies or other documents prepared by or for Consultant) will be returned to the Company promptly upon the Company’s request, and no copies shall be retained by Consultant.  Oral Confidential Information and written Confidential Information not so requested or returned will be held by Consultant and kept subject to the terms of this Agreement or destroyed.

5.    Protection of the Company’s Business Interest.

(a)    Consultant agrees that, during the Term and for one year thereafter (such applicable period being referred to herein as the “Non-Compete Period”), Consultant shall not, without the prior written consent of the Company, directly or indirectly, anywhere in the world, engage, invest, own any interest, or participate in, consult with, render services to, or be employed by any business, person, firm or entity that is in competition with the “Business” (as defined in Section 5(c)) of the 

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Company or any of its subsidiaries or affiliates, except for the account of the Company and its subsidiaries and affiliates; provided, however, that during the Non-Compete Period Consultant may acquire, solely as a passive investment, not more than two percent (2%) of the outstanding shares or other units of any security of any entity subject to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. Consultant acknowledges that this covenant not to compete is being provided as an inducement to the Company to enter into this Agreement. Whenever possible, each provision of this covenant not to compete shall be interpreted in such a manner as to be effective and valid under applicable law but if any provision of this covenant not to compete shall be prohibited by or invalid under applicable law, such provision of this covenant not to compete shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this covenant not to compete. If any provision of this covenant not to compete shall, for any reason, be judged by any court of competent jurisdiction or duly appointed arbitrator to be invalid or unenforceable, such judgment shall not affect, impair or invalidate the remainder of this covenant not to compete but shall be confined in its operation to the provision of this covenant not to compete directly involved in the controversy in which such judgment shall have been rendered. In the event that the provisions of this covenant not to compete should ever be deemed to exceed the time or geographic limitations permitted by applicable laws, then such provision shall be reformed by the court or arbitrator to the maximum time or geographic limitations permitted by applicable law.

(b)    Consultant agrees that, during the Term and for one year thereafter, Consultant shall not, either on its own account or for any other person, firm, partnership, corporation, or other entity (i) solicit or induce any employee of the Company or any of its subsidiaries or affiliates to leave such employment or (ii) hire or participate in the hiring of any such employee of the Company or any of its subsidiaries or affiliates. 

(c)    As used in this Agreement, “Business” means the business of (i) design, manufacture, marketing or sale of equipment for seismic acquisition, (ii) seismic processing (iii) seismic navigation software or (iv) planning, performing or licensing multi-client seismic surveys.

(d)    In the event that Consultant breaches or violates any of the terms and conditions of Section 5(a) during the Non-Compete Period, then in addition to the other rights and remedies available to the Company hereunder, the Company’s obligations to pay to Consultant any remaining amounts otherwise due and owing under this Agreement shall cease and terminate.

6.    Intellectual Property Rights.

(a)    All information, data, documents and materials provided by the Company to Consultant, or acquired or learned by Consultant from the Company’s files, documents, employees or representatives in connection with the Services, shall remain the sole and exclusive property of the Company. Consultant shall obtain no rights whatsoever, whether under applicable patent, copyright, trade secret laws or otherwise, in such information, data, documents or materials unless specifically provided in writing by the Company.

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(b)    All information, drawings, plans, specifications, designs, reports, computations, calculations, presentations, working papers and other documents prepared by or on behalf of Consultant in furtherance of or in connection with the Services (collectively, the “Work Product”) will be and shall remain the sole and exclusive property of the Company and shall be delivered to the Company upon its request.  The Company shall have full and unlimited right to use all of the same without any claim or right thereto by Consultant for any additional compensation for such use.  Consultant further agrees that the Work Product and all other information developed or secured by Consultant during performance of the Services shall be kept strictly confidential and shall not be sold, traded, published or otherwise disclosed to anyone in any manner whatsoever, including by means of photocopying or reproduction, without the Company’s prior written consent.  Consultant shall obtain no rights whatsoever, whether under applicable patent, copyright, trade secret laws or otherwise, in such Work Product and information unless specifically provided in writing by the Company.  Consultant agrees to assign and hereby assigns to the Company all title, patents, patent rights, copyrights, mask work rights, trade secret rights and all other intellectual and industrial property rights of any sort anywhere in the world in connection with such Work Product.  All works of authorship by Consultant under this Agreement will be “works made for hire” to the extent allowed by law.
            
7.    Equitable Relief.  Money damages would not be a sufficient remedy for any breach of Sections 4, 5 or 6 of this Agreement by either Party, and the Party not in breach of this Agreement shall be entitled to seek specific performance and injunctive relief as remedies upon proof of any such breach.  Such remedies shall not be deemed to be the exclusive remedies for a breach of this Agreement but shall be in addition to all other remedies available at law or in equity to a Party.

8.    Insurance.  During the Term, Consultant shall be solely responsible for maintaining, at its own cost and expense, any insurance covering it, its employees, it or their activities and it or their business in Consultant’s sole discretion.

9.    Independent Contractor.

(a)    The Services performed by Consultant shall be as an independent contractor and not as an employee.  Accordingly, with respect to this Agreement, Consultant is not entitled to the benefits provided by the Company to its employees, including, but not limited to, group insurance and participation in the Company’s employee benefit and pension plans.

(b)    In the event Consultant for any reason were to become eligible to participate in a Company-sponsored benefit program with respect to this Agreement, Consultant hereby waives any such right to participate in the program.  This waiver of any right to participate in Company-sponsored employee benefit programs represents a material component of the terms of payment agreed to by the Parties.  Further, Consultant is not an agent, partner, or joint venturer of the Company.  Consultant shall not represent himself to third persons to be other than an independent consultant of the Company, nor shall Consultant permit himself to offer or agree to incur or assume any obligations or commitments in the name of the Company or for the Company without the prior written consent and authorization of the Company.

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10.    Taxes.  Consultant shall be responsible for payment of all taxes arising out of Consultant’s activities under this Agreement, including by way of illustration but not limitation, federal and state income tax, Social Security tax, unemployment insurance taxes, and any other taxes or business license fees as required.  The Company will neither pay unemployment taxes on, nor withhold employment taxes from, any compensation it pays Consultant.  Rather, the Company will report the amounts it pays Consultant on IRS Form 1099, to the extent required to do so under applicable Internal Revenue Code provisions.  Notwithstanding the foregoing, the Company shall have the right to withhold any and all taxes from payments due to Consultant under this Agreement to the extent that such withholding may be required by any governmental body claiming jurisdiction over any payment made to or earned by Consultant hereunder, and payment by the Company to the respective governmental office of the amount of money so withheld will relieve the Company from any further obligation to Consultant with respect to the amount so withheld.

11.    Notices.  All notices under this Agreement shall be in writing and sent by hand delivery, telecopy or certified mail to the addresses set forth at the beginning of this Agreement or such other address for notice as either Party may designate from time to time.
    
12.    Waiver.  Failure of either Party  at any time to require performance by the other Party  of any provision hereof shall in no way affect the right of the Party hereafter to enforce the same.  Nor shall any waiver by the either Party of any breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or as a waiver of this provision itself.

13.    Applicable Law; Dispute Resolution.  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, excluding applicable conflict-of-law rules or principles.  The Parties agree that any legal suit, action or proceeding arising out of or relating to this Agreement shall be resolved by the courts of the State of Texas and of the United States of America located in the City of Houston.  Both Parties irrevocably and unconditionally consent to submit to the exclusive jurisdiction of such courts for any legal suit, action or proceeding arising out of or relating to this Agreement (and agree not to commence any such legal suit, action or proceeding except in such courts).  Notwithstanding the foregoing, this Section shall not limit either Party’s right to obtain any provisional or equitable remedy, including, without limitation, injunctive relief, from any court of competent jurisdiction, as may be necessary in the sole judgment of such Party to protect its rights hereunder.

14.    Severability.  The terms in this Agreement shall be enforceable to the fullest extent permitted by law.  If any such term or covenant or the application thereof to any person or circumstance shall be construed to be invalid or unenforceable, then such term shall be construed in a manner as to permit its enforceability to the fullest extent permitted by law.  The remaining provisions of this Agreement shall remain in full force and effect.

15.    Successors and Assignment.  This Agreement automatically shall be binding upon and shall inure to the benefit of any person, corporation or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of the Company by purchase, merger, consolidation or by any other means whatsoever, whether direct or indirect.  This Agreement shall not be assigned by Consultant unless such assignment is first approved in writing by the Company.

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16.    Termination.

(a)    The Consultant may terminate this Agreement effective immediately upon written notice to the Company if the Company commits a payment breach of this Agreement and such breach is not cured within ten (10) business days after the Company receives written notice from Consultant of the breach.  The Consultant may also terminate this Agreement for any reason at any time on or after the second anniversary of the Effective Date, by giving the Company at least thirty (30) days prior written notice.

(b)    The Company may terminate this Agreement effective immediately upon written notice to Consultant in the event Consultant breaches this Agreement and such breach is not cured within ten (10) business days after Consultant receives written notice from the Company of the breach.

(c)    Termination of this Agreement shall not relieve any Party from any obligation accruing or accrued to the date of such termination, nor deprive a Party not in default of any remedy otherwise available to it.
 
(d)    If either Party terminates this Agreement early under this Section 16, the provisions and obligations of Sections 4, 5 and 6 of this Agreement shall continue in full force and effect for the time periods stated therein.
  
The obligations of the Parties set forth in Sections 4, 5, 6, 8, 9, 10, and 16 shall survive the expiration or termination of this Agreement.

17.    Other Agreements/Modifications.  This Agreement supersedes all other preceding agreements or understandings between the Parties regarding the Services and constitutes the entire agreement of the Parties regarding the performance of the Services.  Nothing in this Agreement shall affect, lessen or negate any of the existing rights or obligations of Consultant (or Mr. Peebler) or the Company under any previous nondisclosure agreement, proprietary information agreement or any other agreement entered into by Consultant (or Mr. Peebler) with or for the benefit of the Company in conjunction with Mr. Peebler’s previous employment with the Company.  This Agreement may not be amended, modified, superseded, canceled, renewed, or extended without a written instrument executed by both Parties.

18.    Representations.  Consultant represents that neither Consultant nor Mr. Peebler is a party to any restrictive agreement limiting Consultant’s activities in providing the Services.  Consultant further represents that at the time of the execution of this Agreement, neither Consultant nor Mr. Peebler knows of any written or oral contract or of any other impediment that would inhibit or prohibit this consulting arrangement with the Company.

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

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THE PEEBLER GROUP LLC                ION GEOPHYSICAL CORPORATION

By: /s/ Robert P. Peebler        By: /s/ R. Brian Hanson    
Name: Robert P. Peebler        Name: R. Brian Hanson
	
		
	 
	 

8ex101122812.htm

EXHIBIT 10.1

 

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this 4th day of January, 2013 between Raymond Schaaf (“Executive”) and indiePub Entertainment, Inc. (the “Company”).

 

1.  Term of Employment  The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company (recognizing that Executive shall commute from time to time as his duties may require), upon the terms set forth in this Agreement, for the period commencing on the date hereof (the “Commencement Date”) and ending on the three year anniversary of the Commencement Date, unless sooner terminated in accordance with the provisions of Section 4 or extended as hereinafter provided (such period, as it may be extended or terminated, is the “Agreement Term”).  Beginning on the three year anniversary of the Commencement Date, and on each anniversary of the Commencement Date thereafter, the Agreement Term shall extend for an additional one year period from the then current expiration date of the Agreement Term unless at least 180 days prior to the anniversary date (the “Notice Date”) either Executive or the Company provides written notice to the other party electing not to extend the Agreement Term.  Notwithstanding the foregoing, in the third year of this Agreement, Executive shall advise the Company in writing not later than the Notice Date whether or not he intends to continue his employment with the Company.

 

2.  Title; Capacity.  The Company will employ Executive, and Executive agrees to work for the Company, as its President and Chief Executive Officer to perform the duties and responsibilities inherent in such position and such other duties and responsibilities as the Company shall from time to time assign to Executive.  Executive shall report to the Company’s Board of Directors (the “Board”) and shall be subject to the supervision of, and shall have such authority as is delegated by the Board, which authority shall be sufficient to perform Executive’s duties hereunder.  Executive shall devote Executive’s full business time and reasonable best efforts in the performance of the foregoing services, provided that Executive may accept other board memberships or serve in a like capacity in other charitable organizations that are not in conflict with Executive’s primary responsibilities and obligations to the Company, subject to Board approval with such approval not to be unreasonably withheld, except those identified in Schedule A, as may be amended by the parties from time to time.  Effective on the Commencement Date, Executive shall be appointed to the Board of Directors of the Company to serve until the next Annual Meeting of Shareholders.

 

3.  Compensation and Benefits.

 

(a)  Salary.  As of the Commencement Date, the Company shall pay Executive a base salary of $300,000 per year, payable in accordance with the Company’s customary payroll practices (the “Base Salary”).  The Base Salary thereafter shall be subject to annual review and adjustment as determined by the Company in its discretion on the anniversary of the Commencement Date each year of the Agreement Term.

 

  

  

  

(b)  Discretionary Bonus.  The Board may award Executive an annual bonus, in the sole discretion of the Board (the “Bonus”).  The amount of the Bonus will be up to a maximum of 100% of Executive’s Base Salary.  The Bonus, if any, shall be in addition to Executive’s Base Salary, and shall be determined by mutually agreeable targets established by the Board and Executive, with ultimate discretion with the Board,  based on such factors as the Company’s budget set for the fiscal year, and the Executive and the Company’s performance during the fiscal year.  Except for the fiscal year ending December 31, 2012, the targets will be determined within 30 days of the start of each fiscal year.  Executive must be employed by the Company or one of its affiliates on the date such Bonus, if any, is paid; provided, however, Executive shall not be required to be employed by the Company on the date such Bonus, if any, is paid if Executive would have otherwise been employed on such date but for (a) his death or his having a “disability” as defined in Section 4(d) hereof; (b) the expiration of the Agreement Term (in which case such Bonus shall be paid pursuant to Section 5(a)(ii) below); or (c) his termination without Cause by the Company or his Voluntary Resignation with Good Reason (in which case such Bonus shall be paid pursuant to Section 5(b) below). Except as otherwise provided herein, the first half of such bonus shall be paid on the later of March 15 of the following year and ten (10) days after management has presented to the Board financial statements for the fiscal year ended; the second half of such bonus shall be paid upon the completion of the Company’s annual audit of financial statements. In calendar year 2012, Employee shall be eligible for 100% of the Bonus (the “2012 Bonus”) based upon, among other things, the financial performance of the Company from January 1, 2012 through December 31, 2012, and the targets for the 2012 Bonus shall be established with respect to the budget determined by the Company’s Board of Directors.  Notwithstanding the foregoing, in no event shall the 2012 Bonus be less than $75,000 (the “Minimum 2012 Bonus”), and the Minimum 2012 Bonus shall be paid by January 15, 2013.  To the extent that the actual 2012 Bonus exceeds the Minimum 2012 Bonus, such balance shall be paid upon completion of the Company's annual audit of financial statements.  If at the time the Company is required to pay the Minimum 2012 Bonus, the Company’s Board of Directors, in its reasonable discretion, determines that the Company does not have cash on hand sufficient for payment of the 2012 Minimum Bonus, Executive may elect to: (i) accept payment of the Minimum 2012 Bonus in shares of common stock of the Company; or (ii) defer the payment of cash to a date to be mutually agreed upon by Executive and  the Company’s Board of Directors.

 

(c)  Equity Compensation.  The Company shall grant to Executive 1,375,000 shares of restricted common stock of the Company (the “Restricted Shares”).  Provided Executive is employed by the Company or would have been employed but for Executive having a “disability” as defined in Section 4(d) hereof, and, except as otherwise provided in this Agreement, the Restricted Shares shall vest annually over the course of three years, with one third (1/3) of the shares vesting on January 1, 2013, one third (1/3) of the shares vesting on January 1, 2014, and one third (1/3) of the shares vesting on January 1, 2015.  Notwithstanding the foregoing, in the event that Executive's employment is terminated for any reason prior to the end of the  third year, as of the date of such termination, a pro-rata portion of the Restricted Shares shall be deemed vested and exercisable.  Such portion shall be calculated by multiplying the total number of months of Executive's employment with the Company by 1/36.

 

  

  

  

(d)  Fringe Benefits.  Executive shall be entitled to participate in all bonus and benefit programs that the Company establishes and makes available to its executive employees, if any, to the extent that Executive’s position, tenure, salary, age, health and other qualifications make Executive eligible to participate, including, but not limited to, health care plans (including coverage for Executive’s immediate family), life insurance plans, disability insurance, retirement plans, and all other benefit plans from time to time in effect.  Executive shall also be entitled to take four weeks of fully paid vacation in accordance with Company policy.

 

(e)  Reimbursement of Certain Expenses.  Executive shall be reimbursed for such reasonable and necessary business expenses incurred by Executive while Executive is employed by the Company, which are directly related to the furtherance of the Company’s business.  The Executive must submit any request for reimbursement no later than ninety (90) days following the date that such business expense is incurred in accordance with the Company’s reimbursement policy regarding same and business expenses must be substantiated by appropriate receipts and documentation.  The Company may request additional documentation or a further explanation to substantiate any business expense submitted for reimbursement, and retains the discretion to approve or deny a request for reimbursement.  If a business expense reimbursement is not exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), any reimbursement in one calendar year shall not affect the amount that may be reimbursed in any other calendar year and a reimbursement (or right thereto) may not be exchanged or liquidated for another benefit or payment.  Any business expense reimbursements subject to Section 409A of the Code shall be made no later than the end of the calendar year following the calendar year in which such business expense is incurred by the Executive.

 

4.  Termination of Employment Period.  The Employment Period shall terminate upon the occurrence of any of the following:

 

(a)  Termination of the Agreement Term.  At the expiration of the Agreement Term, but only if appropriate notice is given in accordance with Section 1.

 

(b)  Termination for Cause.  At the election of the Company, for Cause upon written notice by the Company to Executive.  For the purposes of this Section, “Cause” for termination shall be deemed to exist upon the occurrence of any of the following:

 

(i)  a good faith finding by the Company that Executive has engaged in dishonesty, gross negligence or misconduct that materially injures the Company;

 

(ii)  Executive’s conviction or entry of nolo contendere to any felony or a crime involving moral turpitude, fraud or embezzlement of Company property; or

 

(iii)  Executive’s material breach of his duties under this Agreement, which, if curable, has not been cured by Executive within thirty (30) days after he shall have received written notice from the Company stating the nature of such breach.

 

  

  

  

(c)  Voluntary Termination by the Company.  At the election of the Company, without Cause, at any time upon 30 days prior written notice by the Company to Executive or by Executive.

 

(d)  Death or Disability.  Thirty days after the death or determination of disability of Executive.  As used in this Agreement, the determination of “disability” shall occur when Executive, due to a physical or mental disability, for a period of 90 consecutive days, or 180 days in the aggregate whether or not consecutive, during any 360-day period, is unable to perform the services contemplated under this Agreement.  A determination of disability shall be made by a physician satisfactory to both Executive and the Company, provided that if Executive and the Company do not agree on a physician, Executive and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties.  Notwithstanding the foregoing, if and only to the extent that Executive’s disability is a trigger for the payment of deferred compensation, as defined in Section 409A of the Code, “disability” shall have the meaning set forth in Section 409A(a)(2)(C) of the Code.

 

(e)  Voluntary Resignation by Executive.  At the election of Executive without Good Reason upon not less than 30 days prior written notice by him to the Company, or immediately upon Good Reason.  For purposes of this Agreement, "Good Reason" shall mean, unless otherwise consented to in writing by the Executive;

 

(i)  a material reduction in Annual Salary or in benefits of the Executive, or the failure of the Company timely to make any payment due to the Executive, provided that such deferral or failure to pay continues unremedied for more than thirty (30) days;

 

(ii)  any action by the Company that results in a material diminution in the Executive’s title, authority, duties, reporting relationship or responsibilities or assignment of responsibilities which are materially inconsistent with those set forth in Section 2 hereof; provided, however, that Executive’s dismissal from or failure to be nominated or elected to the Company’s Board of Directors shall not be deemed to be a material diminution for purposes of this Section 4(e)(ii); or

 

(iii)  a failure of the Company to have any successor entity assume the Company’s obligations under this Agreement.

 

Notwithstanding the foregoing, an event shall not be deemed to constitute "Good Reason" if, (i) Executive does not report the conditions which the Executive believes to be Good Reason to the Company within 45 days of such conditions occurring and (ii) within 30 days after the Executive provides notice of Good Reason to the Company, the Company has fully corrected such Good Reason and made the Executive whole for any such losses; unless the same or similar events or conditions occur again, in which case no further opportunity to cure will be afforded Company and Good Reason will exist as if all applicable notice requirements had been met in their entirety.

 

  

  

  

5.  Effect of Termination.

 

(a)  Termination for Cause, at the Election of Executive, at Death, or for Disability or Upon Expiration of the Agreement Term.  

 

(i)  In the event that Executive’s employment is terminated for Cause, upon Executive’s death, at the election of Executive without Good Reason, or for Executive’s disability except as set forth in Section 5(a)(ii) below, the Company shall have no further obligations under this Agreement other than to pay to Executive salary, accrued vacation, and vested stock through the last day of Executive’s actual employment by the Company.

 

(ii)  In the event that Executive’s employment is terminated upon the expiration of the Agreement Term, or by death or disability, Executive shall be entitled to the payments required under Section 5(a)(i) above plus prorated earned but unpaid annual bonus.

 

(b)  Voluntary Termination by the Company without Cause or Resignation by Executive for Good Reason.  In the event that the Company terminates Executive’s employment without Cause or Executive resigns his employment with Good Reason without respect to Change in Control, beginning immediately after the date of such termination, the Company shall pay Executive, in addition to the amounts provided for in Section 5(a) above, severance in an amount equivalent to one (1) year of annual base salary, prorated earned but unpaid annual bonus and one (1) year of benefits then in effect as of the date of termination.  Such severance payments and benefits shall be provided pursuant to the Company’s then current payroll practices.  Notwithstanding the foregoing, if any of the benefits or payments set forth herein are subject to Section 409A of the Code, no benefits triggered by a termination of employment will be paid hereunder until the Executive incurs a “separation from service” as defined in Section 409A(a)(2)(A)(i) of the Code.

 

(c)  Voluntary Termination by the Company without Cause or Resignation by Executive for Good Reason Following A Change in Control.  If the Company or its successor terminates Executive without Cause, or Executive voluntarily terminates employment for Good Reason, within six (6) months following a Change in Control, the Company shall pay Executive, in addition to the amounts provided for in Section 5(a) above, severance in a lump sum in an amount equivalent to eighteen (18) months of annual Base Salary then in effect as if the date of termination.  In addition, the vesting of all of Executive’s equity awards shall be accelerated and become immediately exercisable, and Executive shall have eighteen (18) months to exercise the vested shares (if applicable).  The payment of the severance and acceleration of stock options is conditioned upon Executive’s delivery and non-revocation of a release of claims as against the Company, and the payment of base salary shall be made within fourteen (14) days after the effective date of such release.  As used in this Agreement, “Change of Control” means a merger or consolidation involving the Company and a party not affiliated with MMB Holdings LLC, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or the surviving entity  of such surviving entity outstanding immediately after such merger or consolidation, or the sale or disposition by the Company of all or substantially all of the Company’s assets.

 

(d)  Notwithstanding any other provision with respect to the timing of payments under Section 5 if, at the time of the Executive’s termination, the Executive is deemed to be a “specified employee” of the Company within the meaning of Section 409A(a)(2)(B)(i) of the Code, then only to the extent necessary to comply with the requirements of Section 409A of the Code, any payments to which the Executive may become entitled under Section 5 which are subject to Section 409A of the Code (and not otherwise exempt from its application) will be withheld until the first business day of the thirteenth month following the date of termination, at which time the Executive shall be paid an aggregate amount equal to one year of payments otherwise due to the Executive under the terms of Section 5 as applicable.  After the first business day of the thirteenth month following the date of termination and continuing each month thereafter, the Executive shall be paid the regular payments otherwise due to the Executive in accordance with the terms of Section 5, as thereafter applicable. 

 

6.  Nondisclosure and Nonsolicitation.

 

(a)  Proprietary Information.

 

(i)  Executive agrees that all information and know-how, whether or not in writing, of a private, secret or confidential nature concerning the Company’s business or financial affairs (collectively, “Proprietary Information”) is and shall be the exclusive property of the Company.  By way of illustration, but not limitation, Proprietary Information may include inventions, products, processes, methods, techniques, formulas, designs, drawings, slogans, tests, logos, ideas, practices, projects, developments, plans, research data, financial data, personnel data, computer programs and codes, and customer and supplier lists.  Executive will not disclose any Proprietary Information to others outside the Company except in the performance of Executive’s duties or use the same for any unauthorized purposes without written approval by the Board, either during or after Executive’s employment, unless and until such Proprietary Information has become public knowledge or generally known within the industry without fault by Executive, or unless otherwise required by law.

 

(ii)  Executive agrees that all files, letters, memoranda, reports, records, data, sketches, drawings, laboratory notebooks, program listings, or other written, photographic, electronic or other material containing Proprietary Information, whether created by Executive or others, which shall come into Executive’s custody or possession, shall be and are the exclusive property of the Company to be used by Executive only in the performance of Executive’s duties for the Company.

 

  

  

  

(iii)  Executive agrees that Executive’s obligation not to disclose or use information, know-how and records of the types set forth in paragraphs (i) and (ii) above, also extends to such types of information, know-how, records and tangible property of subsidiaries and joint ventures of the Company, clients or customers of the Company or suppliers to the Company or other third parties who may have disclosed or entrusted the same to the Company or to Executive in the course of the Company’s business.

 

(b)  Prior Contracts and Inventions; Information Belonging to Third Parties.  Executive represents that there are no contracts to assign Inventions between any other person or entity and Executive.  Executive further represents that (i) Executive is not obligated under any consulting, employment or other agreement which would affect the Company's rights or my duties under this Agreement, (ii) there is no action, investigation, or proceeding pending or threatened, or any basis therefore known to Executive involving Executive’s prior employment or any consultancy or the use of any information or techniques alleged to be proprietary to any former employer, and (iii) the performance of Executive’s duties as an employee of the Company will not breach, or constitute a default under any agreement to which Executive is bound, including, without limitation, any agreement limiting the use or disclosure of proprietary information acquired in confidence prior to engagement by the Company.  Executive will not, in connection with Executive’s employment by the Company, use or disclose to the Company any confidential, trade secret or other proprietary information of any previous employer or other person to which Executive is not lawfully entitled.

 

(c)  Nonsolicitation.

 

(i)  During the Employment Period and until the conclusion of the period of twelve months after the termination of Executive’s employment with the Company for any reason, Executive will not, directly or indirectly, recruit, solicit or induce, or attempt to recruit, solicit or induce any employee or employees of the Company to terminate their employment with, or otherwise cease their relationship with, the Company.

 

(ii)  During the Employment Period and until the conclusion of the period of twelve months after the termination of Executive’s employment with the Company for any reason, Executive will not, directly or indirectly, solicit, divert or take away, or attempt to solicit, divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company.

 

(d)  If any restriction set forth in this Section 6 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

 

  

  

  

(e)  The restrictions contained in this Section 6 are necessary for the protection of the business and goodwill of the Company and are in exchange for payments made to Executive for Executive’s ownership interest in the Company and are considered by Executive to be reasonable for such purpose.  Executive agrees that any breach of this Section will cause the Company substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other remedies which may be available, the Company shall have the right to seek specific performance and injunctive relief.   The Company shall be entitled to recover its reasonable attorneys’ fees in the event it prevails in such an action.

 

7.  Entire Agreement - Prior Agreements.  This Agreement constitutes the entire agreement between the parties and supersedes the Consulting Agreement, dated August 2011, entered into between the Company and Executive, and any other prior agreements and understandings, whether written or oral relating to the subject matter of this Agreement.

 

8.  Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the Company and Executive.

 

9.  Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of California without regard to principles of conflicts of laws thereunder.  Each party hereby consents to and submits to the jurisdiction of the federal and state courts located in California and, except as provided in any existing or future agreement between the parties regarding arbitration, any action or suit under this Agreement shall be brought in the federal or state court with appropriate jurisdiction over the subject matter established or sitting in such city, and each party hereby agrees not to raise in connection therewith, and hereby waives, any defenses based upon the venue, the inconvenience of the forum, the lack of personal jurisdiction, the sufficiency of service of process or the like in any such action or suit brought in accordance with this Section.

 

10.  Notices.  Any notice or other communication required or permitted by this Agreement to be given to a party shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, or mailed by U.S. registered or certified mail (return receipt requested), or sent via facsimile (with receipt of confirmation of complete transmission) to the party at the party’s last known address or facsimile number or at such other address or facsimile number as the party may have previously specified by like notice. If by mail, delivery shall be deemed effective 3 business days after mailing in accordance with this Section.

 

11.  Jury Waiver.  Executive and the Company hereby waive trial by jury with respect to any claims arising under or relating to this Agreement or Executive’s employment at the Company.

 

12.  Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation into which the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of Executive are personal and shall not be assigned by Executive.  In the event of a Change in Control, the successor company shall be required to make the bonus payments to which Executive is entitled under Section 2 hereof not later than March 15 of the applicable year.

 

  

  

  

13.  Miscellaneous.

 

(a)  No Waiver.  No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

 

(b)  Severability.  In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

 

(c)  Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

14.  Tax Consequences.  Notwithstanding any other provision of this Agreement to the contrary, the Company makes no guarantee of any tax consequences to the Executive including, without limitation, under Section 409A of the Code, and has advised Executive to seek independent advice prior to the execution of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above.

 

 

	 	 	 
	 	 	 	 
	
 

	 /s/ Raymond Schaaf	 
	 	RAYMOND SCHAAF
	 	 	 
	 	 	 	 

 

	 	
INDIEPUB ENTERTAINMENT, INC.

 

	 
	 	 	 	 
	
 

	
By: 

	/s/ Jay Wolf	 
	 	 	Name:  Jay Wolf 	 
	 	 	Its:       Chairman of the Board 	 
	 	 	 	 

 

  

  

  

SCHEDULE A

 

 

	
  

	
1.

	
Membership of the Board of Directors of DisplayMORE

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