Exhibit 10.21
SEVERANCE AGREEMENT
In exchange for the promises and covenants contained herein, NETRADIO
CORPORATION (the "Company") and XXX XXXXXXXX (the "Employee") hereby agree as
follows:
1. DEFINITIONS. We intend all words used in this Severance Agreement (the
"Agreement") to have their plain meanings in ordinary English. Specific terms
we use in this Agreement have the following meanings:
A. The EMPLOYEE, as used herein, shall include the undersigned
Employee and anyone who has obtained any legal rights or claims through
the undersigned Employee.
B. The COMPANY, as used herein, shall at all times mean NetRadio
Corporation, its parent company, its subsidiaries, successors and
assigns, its affiliated and predecessor companies, their successors and
assigns, their affiliated and predecessor companies and the present or
former directors, officers, employees, representatives and agents
(including, without limitation, its accountants and attorneys) of any of
them, whether in their individual or official capacities, and the
current and former trustees or administrators of any pension or other
benefit plan applicable to the employees or former employees of the
Company, in their official or individual capacities.
C. EMPLOYEE'S CLAIMS, as used herein, means all of the rights the
Employee has now to any relief of any kind from the Company whether or
not the Employee now knows about those rights, arising out of his
employment with the Company, and his employment termination, including,
but not limited to, claims for breach of contract; fraud or
misrepresentation; the Age Discrimination in Employment Act; the
Minnesota Human Rights Act; the Americans with Disabilities Act; Title
VII of the Civil Rights Act of 1964, as amended; or other federal, state
or local civil rights based on age or other protected class status;
defamation; intentional or negligent infliction of emotional distress;
breach of covenant of good faith and fair dealing; promissory estoppel;
negligence; wrongful termination of employment; and any other claims for
unlawful employment practices. However, this release shall not affect
any claims which could be made under any employee welfare benefit plan
or any pension or retirement plan through the Company.
2. THE COMPANY'S OBLIGATIONS AND SEVERANCE AGREEMENTS. In consideration
for the Employee's promises contained herein, specifically including, but not
limited to, the release of all claims by the Employee and the Employee's
promises to refrain from disclosing confidential information and trade
secrets of the Company, the Company agrees as follows:
X. XXXXXXXXX PAYMENT. The Company agrees to pay to the Employee an
aggregate severance payment of $125,000 (the "Severance Payment") in
full satisfaction of all wage, commission, salary, bonus, royalty or
other compensation claim Employee had,
has or may have against the Company. This Severance Payment will be payable
as follows:
i) bi-weekly, installment payments on the Company's regularly
scheduled paydays in accordance with the Company's pay
practices with the first such installment being made on the
first pay period following today's date;
ii) a payment of $50,000 on October 24, 1999;
iii) continuing bi-weekly installments on the Company's regularly
scheduled paydays in accordance with the Company's pay
practices; and
iv) a final installment equal to $13,461.60 payable on April 14,
2000.
Notwithstanding the foregoing, the Severance Payment shall be
accelerated and due and payable in full within ten (10) business days
following the occurrence of (i) successful consummation of an initial
public offering of the Company's common stock or (ii) a "Change in
Control" (as hereinafter defined). For purposes of this Agreement,
"Change in Control" shall mean (i) the sale of all or substantially all
of the assets of the Company, (ii) the acquisition by any means of more
than fifty percent (50%) of the issued and outstanding voting stock of
the Company by any entity, person or group of persons acting in concert,
or (iii) the merger of the Company with, or the consolidation of the
Company into, another corporation or entity.
The Severance Payment shall be subject to federal and state withholding
taxes and FICA.
B. ADDITIONAL TERMS.
i) The employee's effective date of termination shall be the date
this Agreement is executed by all of the parties hereto.
ii) The Company agrees to amend Employee's stock option agreements
dated June 1, 1998, numbered 5 and dated June 1, 1998,
numbered 8, respectively, to reflect that all 150,000 options
granted thereunder are vested and exercisable as of August 24,
1999 (subject to Section 5 hereof) for a period of ninety (90)
days thereafter as provided in said agreements. In return,
Employee agrees to execute a "lock up" agreement in the form
attached as Exhibit A with respect to 100,000 of such options
and any stock granted pursuant thereto.
iii) Unless modifications are required by the Company's
underwriters, the Company will not change the Employee's
"friends of the Company" selections in connection with the
Company's proposed public offering.
iv) The Company will pay Employee the sum of $5,000 for legal fees
incurred in connection with this transaction. The Company will
issue the Employee a 1099 with respect to such payment and the
Employee will be
solely responsible for paying any and all income, FICA or
other taxes related thereto.
C. MEDICAL INSURANCE BENEFITS. The Company, pursuant to federal and
state law, will provide, for a period of eighteen (18) months following
the effective date of the Employee's termination (the "COBRA Period"), a
continuation of the group medical insurance coverage previously provided
to Employee by the Company. Through April 14, 2000, the Company will pay
that portion of the premium for group medical insurance that it paid
during the Employee's employment. After April 14, 2000, the Employee
will be required to pay for such benefits for the remainder of the COBRA
Period, should the Employee elect to continue COBRA coverage.
D. RESPONDING TO REFERENCE REQUESTS. The Company shall respond to
reference requests regarding the Employee's employment with the Company
by providing the dates the Employee worked for the Company and the
position in which he worked and the recommendation letter attached
hereto as Exhibit B. Employee agrees that he will direct all reference
requests to Xxxxxx XxXxxxx, c/x Xxxxxxx Corporation, 0000 00xx Xxxxxx
Xxxxx, Xxx Xxxx, Xxxxxxxxx 00000.
E. CONFIDENTIALITY. The Company agrees that it will keep the terms
and conditions of this Agreement strictly confidential, provided,
however, that the Company may disclose the terms and conditions of this
Agreement to its officers and directors, its human resources department,
outside human resources consultants used by the Company, legal,
accounting and financial advisors, and any other third party who has a
bona fide and compelling need to know this information. Further, the
Company is permitted to disclose the terms of this Agreement as required
pursuant to any state or federal law, or as necessary to defend claims
made against the Company.
F. NO DISPARAGEMENT. Employee agrees that he shall not disparage or
defame NetRadio Corporation in any respect, or make any derogatory
comments concerning his employment relationship with the Company, and
the Company agrees that it shall not disparage or defame Employee in any
respect, or make any derogatory comments concerning his employment
relationship with the Company. These provisions include the Company's
officers, directors, agents and employees.
G. REMEDIES. The Company acknowledges that a breach of the promises
set forth in Sections 2.D., 2.E. and 2.F. may cause the Employee
irreparable harm for which there is no adequate remedy at law, and the
Company therefore consents to the issuance of any injunction in favor of
the Employee enjoining the breach of any of those promises by any court
of competent jurisdiction. The Company further agrees that the remedies
provided for herein are in addition to, and are not to be construed as
replacements for, or a limitation of, rights and remedies otherwise
available to the Employee.
H. REGISTRATION STATEMENT. The employee acknowledges that he has
participated in drafting the Company's Form S-1 Registration Statement
and Amendments No. 1, 2 and 3 under the Securities Act of 1933 (the
"Registration Statement") and has met with the Company's underwriters in
connection with the Company's planned initial public
offering, and as of the date of the employee's last day of work for the
Company, the employee represents and warrants to the Company that, to the
Employee's knowledge, the Registration Statement did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
3. EMPLOYEE OBLIGATIONS. As material inducement to the Company in entering
into this Agreement and providing the consideration described in Section 2,
the Employee hereby agrees as follows:
A. RELEASE. Employee agrees to release all Employee's Claims. The
Employee acknowledges that the money and promises received and to be
received by the Employee are in exchange for the release of the
Employee's Claims.
B. COVENANT NOT TO XXX. Employee agrees that he will not take any
action whatsoever to vindicate any rights he may have had if he had not
released the Employee's Claims. Further, the Employee agrees to pay the
Company's attorneys fees if the Employee breaches the covenant not to
xxx contained in this Section 3.B (excluding, however, any litigation
Employee may commence to enforce the terms of this Agreement.
C. COMPANY PROPERTY. The Employee will return all property belonging
to the Company to the Company immediately upon the execution of this
Agreement, whether such property is currently on or off the premises of
the Company, including, without limitation, any and all computer
hardware and computer software.
D. CONFIDENTIALITY. At all times hereafter in perpetuity, the
Employee will not use or make available or divulge to any person, firm,
corporation or other entity any information of or regarding the Company,
including without limitation, trade secrets, customer lists, business
policies, financial information, technical information, methods of
operation, marketing programs, customer price lists or any other
confidential or secret information concerning the business and affairs
of the Company or any of its affiliates.
E. CONFIDENTIALITY OF AGREEMENT. The Employee agrees that he will
keep the terms and conditions of this Agreement strictly confidential,
provided, however, that the Employee may disclose the terms and
conditions of this Agreement to his spouse, his attorney, his financial
advisor, and as required pursuant to any state or federal law. The
Employee agrees that in the event that Employee discloses any of the
terms of this Agreement, including the fact of payment, other than as
set forth above, he shall be liable to the Company as set forth in
Section 3.G. of this Agreement and for any and all injuries or damages
sustained by the Company, including costs, disbursements and attorneys'
fees incurred by the Company as a direct result of the Employee's
disclosure.
F. COOPERATION WITH RESPECT TO CLAIMS AGAINST COMPANY. The Employee
agrees to make reasonable efforts to assist the Company in its defense
of any claims by current or former employees of the Company. Such
assistance shall include, but not be limited to, providing information
regarding claims, executing affidavits, and testifying on behalf of the
Company if issued a subpoena. The Company shall reimburse the Employee
for any
out of pocket expenses such as mileage and lost wages incurred pursuant to
this Section 3.F.
G. REMEDIES. The Employee acknowledges that any breach of any of the
promises set forth in Sections 3.C, 3.D., 3.E. and 3.F. will cause the
Company irreparable harm for which there is no adequate remedy at law,
and the Employee therefore consents to the issuance of any injunction in
favor of the Company enjoining the breach of any of those promises by
any court of competent jurisdiction. If any promise made by the Employee
in this Section 3 should be held to be unenforceable because of its
scope or duration, or the area or subject matter covered thereby, the
Employee agrees that the court making such determination shall have the
power to reduce or modify the scope, duration, subject matter or area of
that promise to the extent that allows the maximum scope, duration,
subject matter or area permitted by applicable law. The Employee further
agrees that the remedies provided for herein are in addition to, and are
not to be construed as replacements for, or a limitation of, rights and
remedies otherwise available to the Company.
4. EMPLOYEE'S UNDERSTANDINGS. The Employee acknowledges and represents that:
A. The Employee understands that he has the right to consult with an
attorney regarding the meaning and effect of this Agreement.
B. The Employee also understands that he has a period of twenty-one
(21) calendar days from the date on which he receives an unsigned copy
of this Agreement in which to consider whether or not to sign this
Agreement, and that, having been advised of that entitlement, he may
elect to sign this Agreement at any time prior to the expiration of that
time period.
C. The Employee understands that he may rescind (that is, cancel)
within seven (7) calendar days of signing the Agreement the provisions
of Section 3.A. of this Agreement with respect to claims arising under
the Age Discrimination in Employment Act (the "ADEA Rescission Period")
and that he may rescind within fifteen (15) calendar days of signing the
Agreement the provisions of Section 3.A. of this Agreement with respect
to claims arising under the Minnesota Human Rights Act (the "MHRA
Rescission Period") (collectively, the "Rescission Periods"). To be
effective, rescission must be in writing, delivered to Xxxxxx XxXxxxx,
c/o Navarre Corporation, 0000 00xx Xxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxx
00000, within the applicable rescission period, or sent to the Company,
at such address, by certified mail, return receipt requested, postmarked
within the applicable rescission period.
5. CANCELLATION OF AGREEMENT BY COMPANY. If the Employee exercises his
right of rescission under Section 4.C. of this Agreement, the Company will
have the right, exercisable by written notice delivered to the Employee, to
terminate this Agreement in its entirety, in which event the Company will
have no obligation whatsoever to the Employee hereunder. If the Employee
exercises his right of rescission under Section 4.C. of this Agreement, and
the Company does not exercise its right to terminate this Agreement
hereunder, the remaining
provisions of this Agreement (including specifically the remaining provisions
of Section 3 of this Agreement) shall remain valid and continue in full force
and effect.
6. PERFORMANCE BY EMPLOYEE. Nothing contained herein shall operate as a
waiver or an election of remedies by the Company should the Employee fail to
perform any duty or obligation imposed upon him hereunder. Notwithstanding
anything contained herein to the contrary, this Agreement and the duties and
obligations of the Employee hereunder shall continue in full force and effect
irrespective of any violation of any term or provision of this Agreement by
the Employee.
7. EMPLOYEE ACKNOWLEDGEMENTS. The Employee acknowledges and represents
that: (a) he has read this Agreement and understands its consequences; (b) he
has received adequate opportunity to read and consider this Agreement; (c) he
has determined to execute this Agreement of his own free will and
acknowledges that he has not relied upon any statements or explanations made
by the Company regarding this Agreement; and (d) the promises of the Company
made in this Agreement constitute fair and adequate consideration for the
promises, releases and agreements made by the Employee in this Agreement.
8. SUCCESSORS AND ASSIGNS. The Employee may not assign this Agreement
without the express written consent of the Company. The Company shall assign
this Agreement to any successor to all or substantially all of the business
of the Company by purchase, merger, consolidation or otherwise, this
Agreement shall be binding upon and inure to the benefit of any successor of
the Company, and any such successor shall assume all of the Company's
obligations hereunder.
9. ENTIRE AGREEMENT. This Agreement, including any exhibits attached
hereto or documents expressly referred to herein, contains the entire
agreement between the Company and the Employee and supersedes and cancels any
and all other agreements, whether oral or in writing, between the Company and
the Employee with respect to the matters referred to herein.
10. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota.
11. EFFECTIVE DATE. This Agreement was originally offered to Employee on or
August 24, 1999. The Employee shall have until the close of business on
September 14, 1999, to accept this Agreement. If the Employee desires to
accept this Agreement, the Employee shall execute the Agreement and return
the same to the Company at the address set forth in Section 4.C. hereof. If
the Employee does not so accept this Agreement, this Agreement, and the offer
contained herein, shall be null and void as of the close of business on
September 14, 1999.
12. COUNTERPARTS. This Agreement may be executed in counterparts with an
executed counterpart to be delivered to the other party. Each such executed
counterpart shall be deemed an original but shall constitute one and the same
instrument.
NETRADIO CORPORATION
By: ___________________________ ______________________________
Xxxxxx X. Xxxxxxxx XXX XXXXXXXX
Its Chief Executive Officer
Dated as of ___________________, 1999 Dated as of _____________, 1999
Exhibit A to
Xxx Xxxxxxxx Xxxxxxxxx Agreement
Lock-Up Agreement
Exhibit B to
Xxx Xxxxxxxx Severance Agreement
Letter of Recommendation
