COACTIVE MARKETING GROUP INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10_1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT
                              --------------------


                  EMPLOYMENT AGREEMENT (this "Agreement"), dated as of July 20,
2005 by and between COACTIVE MARKETING GROUP, INC., a Delaware corporation with
its principal place of business at 75 Ninth Avenue, New York, New York 10011
("Employer"), and DONALD A. BERNARD, an individual residing at 85 Tintern Lane,
Scarsdale, New York 10583 ("Employee").

                              W I T N E S S E T H :
                              - - - - - - - - - -

         WHEREAS, Employer and Employee are parties to that certain Employment
Agreement, dated September 29, 1995, as amended by a First Amendment to
Employment Agreement dated as of May 2, 1997, a Second Amendment to Employment
Agreement dated as of November 14, 2001, and a Third Amendment to Employment
Agreement dated as of June 17, 2003, pursuant to which Employee serves as
Executive Vice President and Chief Financial Officer of Employer (as amended,
the "Existing Agreement");

         WHEREAS, Employee's current term of employment under the Existing
Agreement ends on March 31, 2006; and

         WHEREAS, Employer desires to continue to employ Employee, and Employee
desires to continue in the employ of Employer, commencing April 1, 2006, on the
terms and conditions set forth below;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:

         1.       Term of Employment; Termination of Existing Agreement. Until
April 1, 2006, Employee's employment with Employer shall continue to be subject
to the terms and provisions of the Existing Agreement, which shall remain in
full force and effect until such date. Effective April 1, 2006, provided that
Employee's employment with Employer has not been previously terminated pursuant
to the Existing Agreement (i) Employer shall employ Employee, and Employee shall
accept such employment, on the terms and conditions set forth in this Agreement,
and (ii) the Existing Agreement shall terminate and be of no further force or
effect. The term of Employee's employment under this Agreement shall be for a
three-year term ending on March 31, 2009 and shall not be subject to renewal or
extension.

         2.       Position, Employment Duties and Responsibilities. Employee
shall be employed as a Vice President with such duties and responsibilities as
shall be assigned to him from time to time by the Board of Directors. Effective
April 1, 2006, Employee shall resign from his positions (x) as a director and
the Chief Financial Officer and Executive Vice President of Employer, and (y) as
a manager and officer of each of Employer's subsidiaries. Throughout the term of
Employee's employment under this Agreement, Employee shall not be required to
devote more than 10 working days in any calendar month to the performance of his
duties hereunder.
<PAGE>

         3.       Working Facilities. Employee will work out of Employer's
office located in New York, New York or at such other location as shall be
mutually agreed to by Employer and Employee.

         4.       Compensation and Benefits.

                  4.1      Salary. For all of the services rendered by Employee
to Employer, Employer shall pay to Employee an annual salary of one hundred
thousand dollars ($100,000), payable in reasonable periodic installments in
accordance with Employer's regular payroll practices in effect from time to
time.

                  4.2      No Bonus. Employee shall not be eligible to
participate in or receive awards or bonuses under Employer's currently existing
or hereafter adopted bonus or compensation plans, including without limitation,
Employer's 2002 Management Bonus Plan and Employer's 2002 Long-Term Incentive
Plan.

                  4.3      Employee Benefits. Employee shall be entitled to
participate in and be provided with health insurance, life insurance and other
benefit plans and programs readily offered to and or made available to
Employer's employees; provided that to the extent he has not already done so, no
later than April 1, 2006, Employee will elect Medicare Part B coverage so as to
reduce Employer's costs in providing medical benefits to Employee.

                  4.4      Car Allowance. Employee shall be entitled to receive
a car allowance in the amount of five hundred dollars ($500.00) per month.

                  4.5      Travel, Entertainment and Other Business Expenses.
During the period of employment pursuant to this Agreement, Employee will be
reimbursed for reasonable expenses incurred for the benefit of Employer in
accordance with the general policy of Employer. Those reimbursable expenses
shall include properly documented, authorized or otherwise reasonably required,
travel, entertainment and other business expenses incurred by Employee, other
than those expenses related to or in connection with routine commutation to and
from Employee's home.

                  4.6      Deductions. All references herein to compensation to
be paid to Employee are to the gross amounts thereof which are due hereunder.
Employer shall have the right to deduct therefrom all taxes which may be
required to be deducted or withheld under any provision of the law (including,
without limitation, social security taxes, income tax withholding and any other
deduction required by law) now in effect or which may become effective at any
time during the term of this Agreement.

         5.       Nondisclosure and Non-Compete.

                  5.1      Definitions. The following words and expressions used
in this Agreement shall have the respective meanings hereby assigned to them as
follows:

                           (a)      "Affiliate" shall mean any partnership,
firm, corporation, association, trust, unincorporated organization or other
entity, that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, Employer.

                                       2
<PAGE>

                           (b)      "Business Associate(s)" shall mean and refer
to any and all individuals, partnerships, corporations, associations or other
business enterprises in any form which have had in the past, have currently,
shall have or be attempting to develop during the Restriction Period a business
relationship with Employer or any of its Affiliates as a customer or supplier.

                           (c)      "Customer(s)" shall mean and refer to any
and all of the past or current customers of Employer or any of its Affiliates
and shall also include those prospective customers who are actively being
marketed by Employer or any of its Affiliates during the term of this Agreement.

                           (d)      "Competitor" shall mean and refer to any
individual, partnership, corporation, association or other business enterprise
in any form, other than Employer and its Affiliates, which at any time during
the Restriction Period, either directly or indirectly, (i) engages in the
business of promotion marketing and sells to Customers in the Restriction Area
or (ii) engages in any other business directly competitive with Employer or any
of its Affiliates and sells to Customers in the Restriction Area.

                           (e)      "Confidential Information" shall mean and
refer to all information of Employer and its Affiliates which is not generally
known or available to the public or a Competitor (whether or not in written or
tangible form), the knowledge of which could benefit a Competitor, including
without limitation, all of the following types of information:

                           (i)      identities of, and information pertaining
                                    to, Customers, Personnel and Business
                                    Associates;

                           (ii)     research, projections, financial
                                    information, cost and pricing information,
                                    invoices and internal accounting statistics;

                           (iii)    product or service development plans and
                                    marketing strategies;

                           (iv)     purchasing methods; and

                           (v)      trade secrets, or other knowledge or
                                    processes of or developed by Employer or any
                                    of its Affiliates.

                           (f)      "Confidential Materials" shall mean and
refer to any and all documents, materials, programs, recordings or any other
tangible media (including, without limitation, copies or reproductions of any of
the foregoing) in which Confidential Information may be contained.

                           (g)      "Personnel" shall mean and refer to any and
all employees, contractors, agents, brokers, consultants or other individuals
rendering services to Employer or any of its Affiliates for compensation in any
form, whether employed by or independent of Employer or any of its Affiliates.

                                       3
<PAGE>

                           (h)      "Restriction Area" shall mean and refer to
the United States.

                           (i)      "Restriction Period" shall mean and refer to
the period of time, commencing on Employee's date of employment and expiring
twenty four (24) months after, for any reason whatsoever, (i) the employment
relationship between Employee and Employer or any of its Affiliates terminates
or (ii) Employee ceases to perform services for Employer or any of its
Affiliates, whichever occurs later.

                  5.2      Covenant Not to Compete.

                           (a)      During the Restriction Period, Employee
shall not directly or indirectly, own, manage, invest or acquire any economic
stake or interest in, or otherwise engage or participate in any manner
whatsoever in any Competitor (whether as a proprietor, partner, shareholder,
investor, manager, director, officer, employee, venturer, representative, agent,
broker, independent contractor, consultant, or other participant). Employee,
however, shall not be prohibited from owning a passive investment of less than
two percent (2%) of the outstanding shares of capital stock or bonds of a
corporation, which stock or bonds are listed on a national securities exchange
or are publicly traded in the over-the-counter market.

                           (b)      The parties recognize the possibility that
there might be some limited ways, which the parties do not now contemplate,
through which Employee might be able to participate in a Competitor, and which
pose no risk of harm to the interests of Employer or its Affiliates. If, prior
to beginning any such relationship with a Competitor, Employee makes a full
disclosure to Employer of the nature of Employee's proposed participation,
Employer agrees to evaluate whether it or its Affiliates will suffer any risk of
harm to it or their respective interests, and will notify Employee if it has any
objection to Employee's proposed participation; provided, however, that
Employer's failure to notify Employee shall not be deemed to be an approval of
Employee's proposed participation. Employer's determination in this regard shall
be final and not subject to review. If Employee fails to make the prior
disclosure required by this Section 5.2(b), it shall be conclusively presumed
and Employee shall be deemed to have admitted that his participation in a
Competitor during the Restriction Period will cause harm to the interests of
Employer or its Affiliates.

                  5.3      Covenant Not to Interfere.

                           (a)      During the Restriction Period, Employee
shall not, directly or indirectly, solicit, induce or influence, or attempt to
induce or influence, any Customer to terminate a relationship which has been
formed or is being formed with Employer or any of its Affiliates, or to reduce
the extent of, discourage the development of, or otherwise harm its relationship
with Employer or any of its Affiliates, including, without limitation, to
commence or increase its relationship with any Competitor.

                           (b)      During the Restriction Period, Employee
shall not, directly or indirectly, recruit, solicit, induce or influence, any
Personnel of Employer or any of its Affiliates to discontinue, reduce the extent
of, discourage the development of, or otherwise harm their relationship or
commitment to Employer or its Affiliates, including, without limitation, by
employing, seeking to employ or inducing or influencing a Competitor to employ

                                       4
<PAGE>

or seek to employ any Personnel of Employer or any of its Affiliates, or
inducing an employee of Employer or any of its Affiliates to leave employment by
Employer or its Affiliate, as the case may be.

                           (c)      During the Restriction Period, Employee
shall not, directly or indirectly, solicit, induce or influence, or attempt to
induce or influence, any Business Associate to discontinue, reduce the extent
of, discourage the development of, or otherwise harm its relationship with
Employer or any of its Affiliates, including, without limitation, by inducing a
Business Associate to commence, increase the extent of, develop or otherwise
enhance its relationship with any Competitor, or to refuse to do business with
Employer or any of its Affiliates.

                  5.4      Confidential Information.

                           (a)      Duty to Maintain Confidentiality. Employee
shall maintain in strict confidence and duly safeguard to the best of his
ability any and all Confidential Information. Employee covenants that Employee
will become familiar with and abide by all policies and rules issued by Employer
now or in the future dealing with Confidential Information.

                           (b)      Covenant Not to Disclose, Use or Exploit.
Employee shall not, directly or indirectly, disclose to anyone or use or
otherwise exploit for the benefit of anyone, other than Employer and its
Affiliates, any Confidential Information.

                           (c)      Confidential Materials. All Confidential
Materials are and shall remain the exclusive property of Employer. No
Confidential Materials may be copied or otherwise reproduced, removed from the
premises of Employer, or entrusted to any person or entity (other than the
Personnel entitled to such materials by authorization of Employer) without prior
written permission from Employer.

                  5.5      Employer's Property. Any and all writings,
improvements, processes, procedures and/or techniques which Employee may make,
conceive, discover or develop, either solely or jointly with any other person or
persons, at any time during the term of this Agreement, whether during working
hours or at any other time and whether at request or upon the suggestion of
Employer or any Affiliate thereof, which relate to or are useful in connection
with any business now or hereafter carried on or contemplated by Employer or any
Affiliate thereof, including developments or expansions of its present fields of
operations, shall be the sole and exclusive property of Employer. Employee shall
make full disclosure to Employer of all such writings, improvements, processes,
procedures and techniques, and shall do everything necessary or desirable to
vest the absolute title thereto in Employer. Employee shall not be entitled to
any additional or special compensation or reimbursement regarding any and all
such writings, improvements, processes, procedures and techniques.

         6.       Termination.

                  6.1      Discharge for Cause. Employer may discharge Employee
at any time for cause, consisting of (i) Employee's criminal conduct
constituting a felony offense, (ii) alcohol or drug abuse which impairs
Employee's performance of his duties hereunder, (iii) incompetence, (iv)

                                       5
<PAGE>

Employee's willful misconduct in the discharge of his duties and
responsibilities to Employer or (v) Employee's willful violation of any express
direction or any reasonable rule or regulation established by Employer's Board
of Directors from time to time regarding the conduct of its business. In the
event that Employer wishes to discharge Employee for incompetence,
insubordination, willful misconduct, any willful violation of any express
direction or any reasonable rule or regulation established by Employer's Board
of Directors from time to time regarding the conduct of its business, or any
violation of Employee of the terms and conditions of this Agreement, Employer
shall notify Employee, orally or in writing, of Employer's intention to
discharge Employee and of the time (which shall be at least 48 hours after such
notice) and place when Employee may have a hearing before Employer's Board of
Directors. Following such hearing, the Board of Directors shall advise Employee
of its determination and, if Employee is to be terminated, of the date of
Employee's termination. In the event of any termination pursuant to this Section
6.1, Employer shall have no further obligations or liabilities hereunder after
the date of such discharge.

                  6.2      Death or Disability. This Agreement shall terminate
upon Employee's death, and Employer may terminate Employee's employment upon
Employee's Disability (as defined below). If Employee shall die during the term
of this Agreement or his employment shall terminate as a result of his
Disability, Employee or his estate, legatees or distributes, as applicable,
shall be entitled to receive his base salary following such termination of
employment for a period of up to the lesser of 12 months and the remaining term
of this Agreement.

                  6.3      For purposes of this Agreement, "Disability" shall
mean failure by reason of sickness, accident or physical or mental disability to
perform in all material respects the duties and responsibilities of employment
with Employer for a period of six (6) months in any period of twelve (12)
consecutive months; provided, however, that if Employee shall dispute the fact
that he is subject to Disability, the dispute shall be promptly referred to
final and binding arbitration in accordance with the then-current rules of the
American Arbitration Association by a physician jointly agreed upon by Employer
and Employee. The expense of the physician shall be borne jointly by Employer
and Employee.

         7.       Consequences Upon Termination.

                  7.1      Payment of Compensation Owed. Upon the termination of
Employee's employment and this Agreement for any reason whatsoever, Employer
shall promptly pay to Employee all compensation owed to Employee up until the
date of termination, provided, however, that in the event Employer terminates
Employee without cause (as set forth in Section 6.1), and not as a result of
Employee's Disability, Employer shall continue to be obligated to pay Employee
his salary and benefits under Sections 4.1, 4.3 and 4.4 for the remainder of the
term of this Agreement.

                  7.2      Return of Property. Upon the termination of
Employee's employment and this Agreement for any reason whatsoever, Employee
shall promptly return to Employer all Confidential Materials in his possession
or within Employee's control, all keys, credit cards, business card files and
other property belonging to Employer.

                                       6
<PAGE>

                  7.3      Performance of Services. After the termination of
Employee's employment and for the remaining duration of the Restriction Period,
Employee shall notify Employer of the name and address of all persons for whom
Employee performs services for compensation and the nature of such services,
whether performed by Employee as a proprietor, partner, shareholder, investor,
manager, director, officer, employee, venturer, representative, agent, broker,
independent contractor, consultant or otherwise.

         8.       Remedies.

                  8.1      Equitable Relief. The parties acknowledge that the
provisions and restrictions of this Agreement, including without limitation the
restrictions contained in Article 5 hereof, are reasonable and necessary for the
protection of the legitimate interests of Employer and Employee. The parties
further acknowledge that the provisions and restrictions of this Agreement are
unique, and that any breach or threatened breach of any of these provisions or
restrictions by Employee will provide Employer with no adequate remedy at law,
and the result will be irreparable harm to Employer. Therefore, the parties
agree that upon a breach or threatened breach of the provisions or restrictions
hereof by Employee, Employer shall be entitled, in addition to any other
remedies which may be available to it, to institute and maintain proceedings at
law or in equity, to recover damages, obtain specific performance or a temporary
or permanent injunction, without the necessity of establishing the likelihood of
irreparable injury or proving damages and without being required to post bond or
other security.

                  8.2      Modification of Restrictions; Full Restriction
Period. If the Restriction Period, the Restriction Area or the scope of activity
restricted in Article 5 should be adjudged unreasonable in any proceeding, then
the Restriction Period shall be reduced by such number of months, the
Restriction Area shall be reduced by the elimination of such portion thereof or
the scope of the restricted activity shall be modified, or any or all of the
foregoing, so that such restrictions may be enforced in such area and for such
time as is adjudged to be reasonable. If Employee violates any of the
restrictions contained in Article 5, the Restriction Period shall not run in
favor of Employee from the time of commencement of any such violation until such
time as such violation shall be cured by Employee to the satisfaction of
Employer.

                  8.3      Arbitration. Except for the provisions of Sections
8.1 and 8.2 above, any controversy, dispute, or difference arising out of or
relative to this Agreement or the breach thereof shall first be submitted to
settlement by arbitration in New York, New York in accordance with the rules
which are then in effect of the American Arbitration Association, provided that
persons eligible to be selected as arbitrators shall be limited to
attorneys-at-law. A demand for arbitration under this provision shall be made in
writing to the other party within sixty (60) days of the date the party
demanding arbitration knew or should have known of the event giving rise to the
claim, but in no event more than two (2) years after the event giving rise to
the claim, or the claim shall be forever barred. The parties agree that judgment
upon any award rendered may be entered in any court having jurisdiction thereof
as an enforceable judgment or decree.

         9.       Consideration for Restrictive Covenants. Employee acknowledges
that the execution of this Agreement and compliance with it by Employer shall

                                       7
<PAGE>

constitute fair and adequate consideration for Employee's compliance with the
restrictive covenants contained in the respective sections of this Agreement.

         10.      Release.

                  10.1     In exchange for the consideration provided for
herein, Employee for himself and for his heirs, executors, administrators and
assigns (hereinafter referred to collectively as "Releasors"), forever releases
and discharges Employer, and any of its subsidiaries, divisions, affiliates or
related business entities, successors and assigns and any of its past or present
shareholders, directors, officers, attorneys, agents, trustees, administrators,
employees or assigns (whether acting as agents for Employer or in their
individual capacities) (hereinafter referred to collectively as "Releasees"),
from any and all claims, demands, causes of action, fees and liabilities of any
kind whatsoever, whether known or unknown, which Releasors ever had, now have or
may have against Releasees by reason of any actual or alleged act, omission,
transaction, practice, conduct, occurrence or other matter up to and including
the date hereof, that relates to his employment by Employer or entering into
this Agreement, including but not limited to: (i) any claim of discrimination or
retaliation in employment (whether based on federal, state or local law,
statutory or decisional); and (ii) any claim arising under the Federal Age
Discrimination in Employment Act of 1997, as amended, and the applicable rules
and regulations thereunder.

                  10.2     Employee acknowledges that: (i) he has carefully read
this Agreement in its entirety; (ii) he has had an opportunity to consider fully
the terms of this Agreement; (iii) he fully understands the significance of all
the terms and conditions of this Agreement; (iv) he has discussed it with his
independent legal counsel, or has had a reasonable opportunity to do so; (v) he
has had answered to his satisfaction any questions he has asked with regard to
the meaning and significance of any of the provisions of this Agreement; (vi) he
has been given 21 days from the date he received a copy of this Agreement to
execute it; and (vii) he is signing this Agreement voluntarily and of his own
free will and assents to all the terms and conditions contained herein.

                  10.3     Employee has the right to revoke his consent to this
Agreement for seven days following his execution of this Agreement by sending
written notice to Employer addressed to Zev M. Bomrind, Esq., Kronish Lieb
Weiner & Hellman LLP, 1114 Avenue of the Americas, New York, New York 10036. In
order for Employee's revocation to be effective, it must be mailed to the above
addressee within the seven-day period. This Agreement shall become effective on
the eighth day following the execution of this Agreement, provided that Employee
has not timely revoked his consent to this Agreement.

         11.      Miscellaneous.

                  11.1     Governing Law. This Agreement, its interpretation,
performance and enforcement, and the rights and remedies of the parties hereto,
shall be governed and construed by the laws of the State of New York applicable
to contracts to be performed wholly within New York, without regard to
principles of conflicts of laws and without the aid of any canon, custom or rule
of law requiring construction against the drafter.

                                       8
<PAGE>

                  11.2     Waiver. A waiver by any party of any condition or the
breach of any term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
not be deemed or construed as a further or continuing waiver of any such
condition or the breach of any other term, covenant, representation, or warranty
set forth in this Agreement.

                  11.3     Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior agreements and contemporaneous understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.

                  11.4     Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the addresses set forth in the first paragraph of this
Agreement (and in the case of Employer, Attn: John Benfield), or at such other
address for a party as shall be specified in a notice given in accordance with
this Section 11.4.

                  11.5     Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.

                  11.6     Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

                  11.7     Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.

                  11.8     Amendment or Termination. No agreement shall be
effective to change, modify, waive, release, amend, terminate, discharge or
effect an abandonment of this Agreement, in whole or in part, unless such
agreement is in writing, refers expressly to this Agreement and is signed by the
party against whom enforcement of the change, modification, waiver, release,
amendment, termination, discharge or effectuation of the abandonment is sought.

                                       9
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.

                                          COACTIVE MARKETING GROUP, INC.


                                          By:
                                              ----------------------------------
                                          Name:  John Benfield
                                          Title: President



                                          -----------------------------------
                                          Donald A. Bernard

                                       10
</TEXT>
</DOCUMENT>
