EXHIBIT 10.14
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of the 3/rd/ day of
December, 1998, by and between digital broadcast network corporation, a Missouri
corporation having its principle offices at 000 Xxxxxxx Xxxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000 (hereinafter, the "Company"), and XXXXXXX XXXXXXXXX an individual
residing at 0000 Xxx Xxxxxxx Xx., Xxxxx, Xxxxxxxxxx 00000 (hereinafter,
"Employee").
WITNESSETH:
WHEREAS, Company is in the business of developing and implementing systems
that provide high-speed network bandwidth and services in connection therewith
to connect media-rich providers ("Company's Business"); and
WHEREAS, Company wishes to hire Employee as its Chief Executive Officer,
and Company desires to obtain Employee's knowledge and expertise concerning the
management, implementation of corporate policies, budgets and raising operating
capital; and
WHEREAS, Employee wishes to become employed as Company's Chief Executive.
NOW, THEREFORE, in consideration of the sum of one dollar ($1.00), the
foregoing and of the covenants and agreements hereinafter set forth, and other
good and valuable consideration the receipt and sufficiency of which hereby are
acknowledged, the Parties hereby agree as follows:
Section 1. Employment, Duties and Acceptance. During the Employment Term (as
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defined in Section 2 of this Agreement), Company hereby agrees to employ
Employee as its Chief Executive Officer, to perform the duties set forth on the
attached Exhibit "A". During the Employment Term, and excluding any periods of
vacation and sick leave to which Employee is entitled, Employee agrees to devote
his full business time and attention to the business and affairs of Company and,
to the extent necessary to discharge the responsibilities assigned to Employee
hereunder, to perform faithfully, efficiently, diligently and competently such
responsibilities. In addition to the duties enumerated in this Agreement,
Employee shall perform such other duties as are reasonably commensurate with his
position and title, including, without limitation, exercising his best business
judgment, safeguarding and saving from waste the assets of Company, and
establishing, maintaining and implementing the business plans, budgets and
policies of Company, as modified or amended from time to time by the Board of
Directors. During the Employment Term it shall not be a violation of this
Agreement for Employee (a) to serve on civic or charitable boards or committees
that do not violate Company's conflict of interest policy then in effect and (b)
to manage his personal investments, in each case so long as such activities do
not materially interfere with the performance of Employee' responsibilities as
an employee. Company shall to the extent practicable (i) provide Employee with
the personnel and other resources reasonably required by him to perform his
assigned functions, and (ii) indemnify Employee to the full extent permitted by
law for any costs, expenses, claims, damages or liabilities he may incur in
connection with the performance of his duties hereunder for Company.
Section 2. Employment Term. The term of Employee's employment hereunder (the
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"Employment Term") shall continue for a period of three (3) years from January
4, 1999 the start date of employment, unless otherwise terminated in accordance
with the terms and conditions of this Agreement.
Section 3. Compensation, Expenses and Benefits. Company shall pay Employee
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based on the compensation arrangement set forth on Exhibit "B". Employee agrees
that the Company's Board of Directors (excluding Employee if Employee is also a
director) may change the initial compensation arrangement with or without prior
notice to Employee.
Section 4. Ownership of Papers and Intellectual Property Rights.
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(a) Papers and Property. Employee acknowledges Company's
exclusive right to ownership, possession and title to all papers, documents,
tapes, drawings, notebooks, formulas, customer lists, software, hardware,
trademarks, trade names, service marks, processes, data, intellectual property,
or other records, information, or products prepared by Employee during
employment with Company or provided by Company, or which otherwise come into
Employee's possession by reason of employment with Company. Employee agrees not
to make or permit to be made, except in pursuit of Employee's duties hereunder,
any copies of such items. Employee further agrees to deliver to the Company upon
request all such items in Employee's possession and without request to
immediately deliver such items upon the termination, voluntarily or
involuntarily, of Employee's employment.
(b) Inventions. The term "Inventions" means all ideas,
inventions, and discoveries, whether patentable, copyrightable, or not, relating
to any present or prospective business of the Company, including but not limited
to software, algorithms, designs, devices, processes, methods, formulae,
techniques, software, data storage systems, networks, servers, and any
improvements to the foregoing.
(i) Report. Employee agrees to promptly disclose all
Inventions made or conceived by the Employee, whether or not during the hours of
his employment or with the use of Company facilities, materials, or personnel,
either solely or jointly with others, during the term of his employment by the
Company. Employee shall inform the Company promptly and fully of such Inventions
by a written report, setting forth in detail the structures, procedures, and
methodology employed and the results achieved. A report shall also be submitted
by the Employee upon completion of any study or research project undertaken on
the Company's behalf, whether or not in the Employee's opinion a given study or
project has resulted in an Invention.
(ii) Assignment and Patent. Employee hereby assigns and
agrees to assign to the Company all of his rights to such Inventions and to all
proprietary rights therein, based thereon or related thereto, including, but not
limited to, applications for United States and foreign letters patent and
resulting letters patent. At the Company's request and expense, the Employee
shall execute such documents and provide such assistance as may be deemed
necessary by the Company of apply for, defend or enforce any United States and
foreign letters patent based on or
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related to such Inventions. Employee agrees to execute all documents reasonably
requested by Company to assist the Company in perfecting or protecting any or
all of its rights in the Inventions.
(iii) Copyright. Employee acknowledges that all
copyrightable Inventions are "works made for hire" and consequently that the
Company owns all copyrights thereto, including, but not limited to, 17 U.S.C.
Sections 101 and 210. The Company shall have the sole and exclusive right to
register the copyright(s), or its assignees, in all such work in its name as the
owner and author of such work and shall have the exclusive rights conveyed under
17 U.S.C. Sections 106 and 106A, including, but not limited to, the right to
make all uses of the works in which attribution or integrity rights may be
implicated. Additionally, without in any way limiting the foregoing, Employee
hereby assigns, transfers and conveys to Company, its successors, heirs and
assigns, any and all right, title or interest that Employee may now have, or may
acquire in the future, to his work for the Company including, but not limited
to, all ownership, patent (United States and foreign letters patent), trade
secret, trade names and trademarks, copyright moral, attribution and/or
integrity rights. Employee hereby expressly and forever waives any and all
rights that Employee may have arising under 17 U.S.C. Section 106A, and any
rights arising under any federal or state laws that convey rights which are
similar in nature to those conveyed under 17 U.S.C. Section 106A.
Notwithstanding any provision of the Copyright Act, any and all copyrightable
works, prepared either in whole or in part by Employee under this agreement,
are, shall be, or shall become, owned by the Company.
Section 5. Termination of Employment.
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(a) Termination by Employee. During the first full year of
employment hereunder, Employee may only terminate this Employment Agreement for
"Good Reason". After the first full year of employment hereunder, Employee may,
with or without cause, terminate this Agreement upon thirty (30) days written
notice ("Required Notice") to Company. In the event Employee gives the Required
Notice, and the Company's Board of Directors (excluding Employee if Employee is
a director) wishes to accelerate termination of Employee's employment, Company
may elect to so accelerate, at the Company's Board of Directors (excluding
Employee if Employee is a director) sole discretion, and terminate Employee
immediately. Employee shall be entitled to compensation hereunder up until and
including his last date of employment; thereafter, Employee shall be entitled to
no further compensation from Company, under this Agreement or otherwise. For
purposes of this Section 5.(a) "Good Reason" shall have the following meaning:
1. Material breach of any of the terms and conditions of
this Agreement;
2. Dissolution of the Company.
(b) Termination by Company. The Company's Board of Directors
(excluding Employee if Employee is a director) may only terminate Employee's
employment for Good Cause. For purposes of this Agreement, "Good Cause" shall be
defined to include the following:
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1. Death of Employee.
2. Disability of Employee. For purposes of this Agreement,
the term "Disability" refers to a condition resulting from injury
or illness to Employee who is found to be Disabled as that term
is defined in any disability income insurance policies maintained
by Company. In the event that Company does not maintain any
disability income insurance policies, the term "Disability" shall
mean the earlier of (i) when Employee is physically and mentally
unable to substantially perform his required duties as an
employee of the Company, and said condition continues for thirty
(30) consecutive days in any ninety (90) day period or sixty (60)
consecutive days in any one hundred and eighty (180) day period;
or (ii) when a physician selected by Company and reasonably
acceptable to Employee or his legal representative (such
agreement as to acceptability not to be withheld unreasonably)
certifies to the existence of a Disability. Employee will submit
to such medical or psychiatric examinations and tests, as such
physician deems necessary to make any such Disability
determination.
3. Commitment of an intentional act of dishonesty,
conviction of a felony, fraud or deceit in the performance of
Employee's duties hereunder.
4. Material breach of any of the terms and conditions of
this Agreement.
5. Neglect or failure in any way to perform the duties
contemplated herein.
If the Company and/Employee proposes to terminate the employment relationship
for Good Cause or Good Reason as defined above, the Company and/or Employee, as
the case may be, shall give notice to the other party with sufficient
particularity that the other party will have an opportunity to correct the
situation to the reasonable satisfaction of the other party within the period of
time specified in the notice, which period shall not be less than fourteen (14)
days. If such correction is not so made, the Company and/or Employee as the case
may be, may terminate Employee's employment hereunder by giving written notice
to Employee and/or Company that the employment relationship is severed. Upon
termination the Company shall be released from any and all further obligations
under this Agreement, except for accrued salary and benefits owed to Employee
through the termination date. Employee obligations under paragraph 6 shall
continue under the terms and conditions of this Agreement.
Section 6. Confidentiality and Noncompetition.
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In order for Company to reasonably protect its interests against the
competitive use of any of Company's confidential information or business
relationships, Employee agrees to the following covenants.
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(a) Covenant Not to Compete. During the Period (as such term is
defined in Subsection (e) of this Section), Employee shall not, within the
continental United States, directly or indirectly, acting alone or with others,
voluntarily or involuntarily, own, operate, engage in, be interested in, control
through stock ownership or otherwise, or become employed by, work for, advise,
be connected with, consult with or represent in any capacity or in any manner
whatsoever in any role, an individual, firm, corporation, partnership,
association or other entity other than the Company who or which is engaged in a
business competitive with the Company or with the Company's Business. Provided,
however, the foregoing restriction shall not be construed to prevent Employee
from owning stock in a corporation engaged in a business competitive with the
Company or with Company's Business if (1) such stock is owned for investment
purposes only; (2) Employee does not, directly or indirectly, participate in the
management or operation of said corporation; and (3) such stock is publicly
traded and tradable on the New York Stock Exchange, NASDAQ, or another
established stock exchange.
(b) Confidentiality. For purposes of this Agreement,
"Confidential Information" shall mean any communication disclosed to Employee or
known by Employee as a consequence of or through his past, present or
prospective employment or business relationship with Company, not generally
known and available in Company's industry, which constitutes Company's
proprietary and non-public method(s) of doing business, including, but not
limited to, any information related to trade secrets, pricing formulas, know-
how, test data, customer lists, vendor lists, training and operating manuals,
software, and reporting systems. Company and Employee acknowledge that during
Employee's period of employment by Company, Company did and will furnish
Employee with Confidential Information. Employee agrees both during his
employment with the Company, whether under this Agreement or otherwise, and at
all times thereafter, that Employee, his officers, directors, partners,
employees, affiliates, agents, representatives, or assigns (collectively
"representatives") shall keep all Confidential Information in the strictest
confidence and shall not discuss, publish, communicate, transmit, reproduce, or
otherwise disclose such Confidential Information, in any manner whatsoever, in
whole or in part, without the prior written consent of Company, unless and until
such time as the Confidential Information becomes generally known in Company's
industry other than through breach of this Agreement. Employee may disclose
Confidential Information as is reasonably necessary and in the scope of
Employee's duties as the Chief Executive Officer of the Company. Any written
consent by Company to Employee's disclosure of Confidential Information, if
given, shall in no way operate as a waiver of Employee's obligation to maintain
the confidential nature of the material disclosed or to protect and preserve
that Confidential Information from disclosures so that it will receive
confidential treatment thereafter. Employee agrees to reimburse Company for any
damages sustained and costs and expenses, including attorneys' fees, incurred in
connection with an unauthorized disclosure of Confidential Information by
Employee, his representatives, or other any person or persons to whom Employee
or his representatives previously had disclosed Confidential Information.
(c) Non-Solicitation of Customers and Employees. During the
Period,
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Employee shall not, either directly or indirectly, approach or solicit customers
of the Company with a view towards diverting or attempting to divert from the
Company any business which the Company has enjoyed, to Employee or to any other
individual, firm, corporation, partnership, association or other entity other
than the Company who or which is competitive with the Company or engaged in a
business competitive with the Company's Business. During the Period, Employee
shall not, directly or indirectly, solicit any person or persons employed by or
otherwise associated with Company for the purpose of terminating said employee's
or person's employment relationship or association with Company.
(d) Reasonableness of Covenants. Employee acknowledges and
agrees that the covenants and agreements contained in this Section are
reasonable, and Employee agrees he shall not raise any issue of their
reasonableness in any proceeding to enforce such covenants and agreements.
Employee agrees that any violation or breach by Employee and/or his
representatives of this Agreement would cause immediate and irreparable harm to
Company, the exact amount of which will be impossible to ascertain, and for that
reason further agrees that Company shall be entitled, as a matter of right, to
an injunction out of any court of competent jurisdiction, restraining any
further violation or breach of this Agreement by Employee and/or his
representatives, either directly or indirectly, such right to an injunction
being cumulative and in addition to whatever remedies Company may have under
applicable law and/or this Agreement. Employee further agrees to reimburse
Company for all costs and expenses, including attorneys' fees, incurred by
Company in attempting to enforce the terms of this Agreement against Employee,
his representatives, or any other party.
(e) Period. For purposes of this Section 6, the "Period" shall
be defined to be the longer of (1) the period during which Employee is employed
by the Company, whether under this Agreement or otherwise, or (2) a period
commencing on the date of this Agreement and ending three (3) years thereafter;
provided however the Period for the application of Section 6.(a) shall not
extend longer than six (6) months after termination of Employee's employment.
Section 7. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or any breach thereof, including any claim that this Agreement,
or any part hereof, is invalid, illegal or otherwise voidable or void, shall be
submitted to arbitration in accordance with the Commercial Rules of Arbitration
of the American Arbitration Association and judgment upon the award may be
entered in any court having jurisdiction thereof; provided, however, that this
clause shall not be construed to limit or to preclude Company from bringing any
action in any court of competent jurisdiction for injunctive or other
provisional relief against Employee for a violation of Section 6 of this
Agreement. All arbitration proceedings, including testimony and evidence at
hearings or otherwise submitted to the arbitrator(s), will be kept confidential.
The parties expressly agree that the Missouri Rules of Evidence shall be
applicable to such testimony evidence. The arbitration shall be held in St.
Louis, Missouri. The judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
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Section 8. Investment Representations. With respect to the shares issued to
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Employee pursuant to paragraph G of Exhibit "A", attached hereto (the
"Securities"), Employee warrants and represents the following:
(A) The Securities are being received solely for investment and
Employee does not intend to, and will not, divide his participation with others
or to resell, hypothecate, transfer, assign or otherwise dispose of the State of
Missouri or otherwise within the United States unless the Securities are
registered under the Securities Act of 1933 (the "1933 Act") and/or the Missouri
Uniform Securities Act (the "Missouri Act"), or unless an exemption from
registration thereunder is available.
(B) The statutory exemptions of paragraphs (9) and (10), or
both, subsection 409.402(b), of the Missouri Act and under Sections 3(b) and
4(2) of the 1933 Act are being relied upon by the Employee and such exemptions
would not be available if, notwithstanding Employee's representations, Employee
has in mind merely acquiring the Securities for resale or intends to make a sale
or other disposition thereof upon the occurrence or non-occurrence of some
predetermined event.
(C) The investment is not a liquid investment and in particular
Employee represents that he is capable of holding the Securities for an
indefinite period of time.
(D) No commission or remuneration has been (or will be) paid, to
the knowledge of Employee, to anyone in connection with the purchase of the
Securities by Employee.
(E) There are no assurances that the Company will, if
profitable, make distributions to its shareholders.
(F) The certificates representing the Securities will have
endorsed thereon certain legends including the following:
The securities represented by this certificate have not been registered under
the Securities Act of 1933 and/or the Missouri Uniform Securities Act, and have
been sold to, and acquired by, the holder in a transaction exempt from the
registration provisions thereof. These securities may not be sold, transferred,
assigned, pledged, hypothecated, or otherwise disposed of in jurisdictions (or
in transactions) subject to the Securities Act of 1933 unless they have been
registered under that Act, or in Missouri (or to Missouri residents) in
transactions subject to the Missouri Uniform Securities Act unless they have
been registered under that Act, unless counsel for the company shall have given
an opinion that registration under any of said Acts is required, nor may they be
offered or sold in any other state without compliance with the laws of that
state.
Section 9. Miscellaneous.
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(a) Conflict and Binding Effect. In case of any conflict or
ambiguity in connection with or between this Agreement and any policy manuals,
including but not limited to any employee manuals, employment applications,
management instructions or promises, etc., this Agreement shall control. This
Agreement shall inure to the benefit of and be binding upon the Parties hereto,
their successors and assigns. Company may assign this Agreement. Provided,
however, Employee's rights under this Agreement shall not be assignable, nor
shall Employee's
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obligations be delegable.
(b) Governing Law and Jurisdiction. This Agreement shall be
construed and enforced in accordance with the laws of the State of Missouri, and
the Parties hereby irrevocably and unequivocally consent to the jurisdiction of
the court sitting in the County of St. Louis, State of Missouri, and waive any
defense of an inconvenient forum to the maintenance of any action or proceeding
brought in such court in connection with this Agreement, any objection to venue
with respect to any such action, and any right of jurisdiction on account of the
place of residence or domicile of any party to such action.
(c) Severability. If any provision or part thereof of this
Agreement is declared invalid, illegal or unenforceable in any respect, the
validity, legality or enforceability of the remaining provisions of this
Agreement, and any other application thereof, shall not in any way be affected
or impaired, and the Agreement shall be construed in all respects as if such
invalid, illegal or unenforceable provisions are omitted.
(d) Survival and Enforceability. All representations and
promises contained herein or made in writing by the parties in connection with
this Agreement, and this Agreement, shall survive the execution and delivery of
this Agreement, including but not limited to the representations and promises
set forth in Section 6 of this Agreement. The Parties expressly agree that the
terms and provisions of this Agreement are unique and that the parties hereto
shall be entitled to specifically enforce the same.
(e) Notices - Computation of Time. Any notice or other
communication required or which may be given to any party hereunder shall be in
writing and shall be delivered personally, sent by facsimile transmission, or
sent by certified, registered or express mail, postage prepaid, and shall be
deemed given when so delivered personally, sent by facsimile transmission, or if
mailed, two days after the date of mailing, to the address of such party set
forth on the first page hereof, or to such other address as the parties may
indicate in writing.
(f) Miscellaneous. This writing contains the agreement of the
parties with respect to the employment contemplated herein. No amendments or
variations of the terms or conditions of this Agreement shall be valid unless in
writing and signed by the parties hereto. The headings contained in this
Agreement are for convenience only and shall in no manner be construed as part
of the Agreement. The waiver by either Party of a breach or violation of any
provisions of this Agreement shall not operate as or be construed to be a waiver
of any subsequent breach hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed effective as of the day and year first above written.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES
"Company" "Employee":
DIGITAL BROADCAST
NETWORK CORPORATION:
\S\ Xxxxxxx X. Xxxxxxx \S\ Xxxxxxx Xxxxxxxxx
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Xxxxxxx X. Xxxxxxx XXXXXXX XXXXXXXXX
President
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EXHIBIT "A" TO EMPLOYMENT AGREEMENT
DUTIES
During Employee's employment, Employee shall perform such duties as the
Company's Board of Directors (excluding Employee if Employee is a director) may
assign from time to time, including but not limited to the duties set forth in
this Exhibit "A". In his capacity as Chief Executive Officer, Employee shall be
responsible for managing the operations of the Company, including but not
limited to, raising, at a minimum, Thirty Million Dollars ($30,000,000) of cash
or cash equivalents for equity in the form of common stock unless as otherwise
approved by the Company's Board of Directors (excluding Employee if Employee is
a director) ("Capital") on behalf of the Company for continued operations,
arranging and maintaining strategic business alliances and such other duties
incidental to the position of the Chief Executive Officer as may be assigned by
the Board of Directors of the Company (excluding Employee if Employee is a
director) of the Company from time to time. Employee acknowledges that his
performance of his duties as Chief Executive Officer, whether under this
Agreement or otherwise, shall be supervised by the Board of Directors, as may be
provided in the By-laws or other governing instrument of the Company, as same
may be amended from time to time.
Employee acknowledges that he is being hired by the Company on a full-time
basis, and that the Company shall expect him to devote his full business time to
the business affairs of the Company and the performance of his duties hereunder.
The parties expressly agree that Employee's failure to devote his full business
time to the business affairs of the Company and the performance of his duties
hereunder shall be considered a material breach of this Agreement, for purposes
of termination of Employee's employment under Section 5 of this Agreement.
"Company" "Employee":
DIGITAL BROADCAST
NETWORK CORPORATION:
\S\ Xxxxxxx X. Xxxxxxx \S\ Xxxxxxx Xxxxxxxxx
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Xxxxxxx X. Xxxxxxx XXXXXXX XXXXXXXXX
President
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EXHIBIT "B" TO EMPLOYMENT AGREEMENT
COMPENSATION
A. Salary. The parties agree that Employee shall be entitled to a salary equal
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to One Hundred Seventy-Five Thousand Dollars ($175,000) per year, payable in
equal, bimonthly installments.
B. Benefits. Employee shall be entitled to participate in any health
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insurance, life insurance, or defined contribution or defined benefit plans that
the Company may offer to its employees, if any, on the same basis and under the
same terms as similarly situated employees, or that the Company may from time to
time offer to its executive officers.
C. Travel; Expenses. Company shall pay or reimburse Employee for all
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reasonable travel and other expenses actually incurred by Employee in the
performance of Employee's duties hereunder, upon presentation of expense
statements or vouchers or such other reasonable supporting information as is
generally required by Company in accordance with its expense account policies.
Company shall provide a monthly living allowance to Employee in the amount of
$2,500.00 for car, room and board, food and all other non-direct business
related expenses.
D. Bonuses. The Company's Board of Directors (excluding Employee if Employee
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is a director) may, from time to time and in its sole discretion, declare and
pay bonuses to some or all of its employees. Such bonuses may be payable in
cash, stock, stock options, or other property as the Company's Board of
Directors (excluding Employee if Employee is a director), in its sole
discretion, deems advisable and in such amounts as the Company, in its sole
discretion, deems advisable. The Company shall establish and maintain Management
Performance Objectives ("MPOs") for Employee for each year of Employee's
employment. Such MPOs shall be maintained in Employee's personnel file, and a
copy of such MPOs shall be transmitted to Employee. In the event Employee meets
or exceeds said MPOs for any given year, Employee shall become eligible for any
discretionary bonus or bonuses declared by the Company for that year.
"Company" "Employee":
DIGITAL BROADCAST
NETWORK CORPORATION:
\S\ Xxxxxxx X. Xxxxxxx \S\ Xxxxxxx Xxxxxxxxx
------------------------------------ -----------------------------------
Xxxxxxx X. Xxxxxxx XXXXXXX XXXXXXXXX
President
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EXHIBIT "C" TO EMPLOYMENT AGREEMENT
STOCK PURCHASE RIGHTS
In consideration of Employee's employment hereunder and in reliance upon
Employee's ability to raise Thirty Million Dollars ($30,000,000) of Capital, as
that term is defined in Exhibit "A" to this Employment Agreement on behalf of
the Company for continued operations, Employee shall be issued Fifty Thousand
(50,000) shares of class A common stock in the Company subject to the terms of
this Employment Agreement ("Shares"). Upon the execution of the Employment
Agreement, Employee shall purchase Fifty Thousand (50,000) Shares of stock of
the Company at a purchase price of Ten Dollars ($10.00) per share payable in
cash. Forty Thousand of the Shares shall be subject to the Company's right to
repurchase said Shares from Employee upon the happening of any of the events
described below;
a. The Company shall have the right to purchase 20,000 Shares, for a cash
purchase price equal to Ten Dollars ($10.00) per share, in the event that the
Company's recorded value assigned to its common stock and additional paid in
capital, as determined by GAAP as interpreted by the Company's independent
public accountants, as a result of the raising of Capital as defined in Exhibit
"A" during Employee's employment hereunder, is not greater than Twenty Seven
Million Five Hundred Thousand Dollars ($27,500,000.00) (reduced by any stock
redemptions approved by the Company's Board of Directors, excluding Employee if
Employee is a director) by April 1, 1999. The Company's option described in this
paragraph shall continue indefinitely until such time as the Company's recorded
value assigned to its common stock and additional paid in capital is greater
than Twenty Seven Million Five Hundred Thousand Dollars ($27,500,000.).
b. The Company shall have the right to purchase 20,000 Shares, for a cash
purchase price equal to Ten Dollars ($10.00) per share, in the event that the
Company's recorded value assigned to its common stock and additional paid in
capital, as determined by GAAP as interpreted by the Company's independent
public accountants, as a result of the raising of Capital as defined in Exhibit
"A" during Employee's employment hereunder, is not greater than Forty Two
Million Five Hundred Thousand Dollars ($42,500,000.00) (reduced by any stock
redemptions approved by the Company's Board of Directors, excluding Employee if
Employee is a director) by July 1, 1999; said date to be reasonably extended in
light of any approved changes to the Company's business plans by the Board of
Directors (excluding Employee if Employee is a director). The Company's option
described in this paragraph shall continue indefinitely until such time as the
Company's recorded value assigned to its common stock and additional paid in
capital is greater than Forty Two Million Five Hundred Thousand Dollars
($42,500,000.).
c. The Company's options described in this Exhibit "C" above shall: (I)
so long as Employee is employed by Company continue in accordance with
paragraphs (a) and (b) above; and (II) if Employee is no longer employed by
Company, continue for a period of 5 years from the date Employee's employment
terminates regardless of the amount of Capital raised following termination. The
Company (by and through its Board of Directors, excluding Employee if Employee
is a director) and Employee shall in good faith discuss or consider whether
other
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reasonable financing alternatives shall be applied towards the Capital raising
requirements described above; provided however this provision does not require
or bind the Company to agree or authorize such alternate financing arrangements
and/or apply it towards the Capital raising requirements unless approved by the
its Board of Directors, excluding Employee if Employee is a director.
The closing for the purchase of the Shares pursuant to the options above shall
occur within 5 days after the Company provides written notice to Employee. At
said closing, the Company shall deliver in cash the purchase price for the
Shares and the Employee shall execute and deliver the certificate(s) evidencing
the Shares transferred hereunder, such certificate(s) to have stock powers
executed in blank by Employee attached thereto, and such other documents as may
be reasonably requested by the Company to effectuate the transaction
contemplated herein. By executing this Agreement and this Exhibit "C", Employee
specifically authorizes the Company, by and through this Agreement, to act as
its attorney in fact to endorse any and all shares of stock of the Company owned
by Employee on behalf of Employee that are transferred to the Company pursuant
to the Company's option described above. If an equivalent amount of Capital is
raised through other methods other than the issuance of the Company's common
stock, then such equivalent amount shall be considered above if first approved
by the Company's Board of Directors (excluding Employee if Employee is a
director).
All of the Shares shall be subject to a shareholders' Agreement the form of
which is attached hereto as Schedule C-1.
Employee represents and warrants to the Company as follows:
(a) The Shares are being acquired for Employee's own account, for
investment and not with a view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities Act
or the Missouri Law or other applicable state securities laws.
(b) Employee understands that the Shares have not been registered under
the Securities Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act pursuant
to Section 4(2) thereof, that the Company has no present intention of
registering the Shares, that the Shares must be held by Employee indefinitely,
and that Employee must therefore bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from registration. Employee further understands that
the Shares have not been qualified or registered under the Missouri Law or other
applicable state securities laws by reason of their issuance in a transaction
exempt from the qualification or registration requirements of such laws, which
exemption depends upon, among other things, the bona fide nature of Employee's
investment intent expressed above.
(c) During the negotiation of the transactions contemplated herein,
Employee and his representatives and legal counsel have been afforded full and
free access to corporate books, financial statements, records, contracts,
documents, and other information concerning the Company and to its offices and
facilities, have been afforded an opportunity to ask such
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questions of the Company's officers, employees, agents, accountants and
representatives concerning the Company's business, operations, financial
condition, assets, liabilities and other relevant matters as they have deemed
necessary or desirable, and have been given all such information as has been
requested, in order to evaluate the merits and risks of the prospective
investments contemplated herein.
(d) Employee and his representatives have been solely responsible for
Employee's own "due diligence" investigation of the Company and its management
and business, for his own analysis of the merits and risks of this investment,
and for his own analysis of the fairness and desirability of the terms of the
investment. Employee has such knowledge and experience in financial and business
matters that Employee is capable of evaluating the merits and risks of the
purchase of the Shares pursuant to the terms of this Agreement and of protecting
Employee's interests in connection therewith.
(e) Employee (i) is an "Accredited Investor" as that term is defined in
Rule 501 of Regulation D promulgated under the Securities Act or has knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of Employee's prospective investment in the Shares; (ii)
has the ability to bear the economic risks of Employee's prospective investment,
including a complete loss of Employee's investment in the Shares; (iii) has been
furnished with and has had access to such information as Employee has considered
necessary to make a determination as to the purchase of the Shares together with
such additional information as is necessary to verify the accuracy of the
information supplied; (iv) has had all question which have been asked by
Employee satisfactorily answered by the Company; and (v) has not been offered
the Shares by any form of advertisement, article, notice, or other communication
published in any newspaper, magazine, or similar media or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any such media.
(f) Employee has the full right, power and authority to enter into and
perform its obligations under this Agreement and the Shareholders' Agreement.
(g) No consent, approval or authorization of or designation, declaration
or filing with any governmental authority on the part of Employee is required in
connection with the valid execution and delivery of this Agreement and the
Shareholders' Agreement.
Each certificate representing the Shares may be endorsed with the following
legends:
(a) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE
TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH
ACT OR THE
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COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
Any other legends required by Missouri law or other applicable state
securities laws. The Company need not register a transfer of any Shares and may
also instruct its transfer agent not to register the transfer of the Shares,
unless the conditions specified in the foregoing legends are satisfied.
"Company" "Employee":
DIGITAL BROADCAST
NETWORK CORPORATION:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx Xxxxxxxxx
----------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx Xxxxxxx Xxxxxxxxx
President
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