EXHIBIT 10.34
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of September 11, 2001
is entered into by and between iNTELEFILM CORPORATION, a Minnesota corporation
(the "Company"); and WebADTV, Inc. a Minnesota corporation (the "Subsidiary");
and ▇▇▇▇ ▇. ▇▇▇▇ ("Employee").
In consideration of the mutual covenants contained herein, the parties
hereby agree as follows:
1. Employment, Term and Duties.
1.1 Employment. Upon the terms and subject to the conditions
contained herein, Company and Subsidiary hereby employ Employee as the Chairman,
President and Chief Executive Officer of the Company and Subsidiary and Employee
hereby accepts such employment commencing on the Effective Date. On the
Effective Date, Employee shall be elected to the Company's and Subsidiary's
Boards of Directors and shall remain on the Company and Subsidiary's Boards of
Directors throughout the Employment Term as defined in Section 1.2.
1.2 Employment Term. The employment term shall commence on the
Effective Date and shall continue thereafter for a period of Three (3)Years,
subject to earlier termination or additional extension as provided herein. The
term Year shall be defined as any period commencing on the Effective Date and
ending on each anniversary of such Effective Date. The period during which this
Agreement is in effect is herein referred to as the "Employment Term".
Termination of this Agreement and Employee's services under this Agreement shall
terminate all obligations of the parties hereunder, except that (i) Employee
shall be entitled to Employee's then accrued rights pursuant to this Agreement,
including the severance rights under Sections 5.3 and 5.4, if applicable and
(ii) Employee shall continue to be bound by the provisions of Article 4 hereof.
1.3 Effective Date/Public Announcement. The effective date
("Effective Date") of this Agreement shall be the earlier of (i) the date the
Company completes a bridge financing transaction in the amount of not less than
$1,500,000 (the "Bridge Financing") or (ii) the date that Employee waives such
condition in writing. In the event the Bridge Financing has not been completed
by October 15, 2001, Employee may elect to terminate this Agreement by giving
written notice to the Company and, in the event of such termination, Employee
shall not be entitled to the stock options described in Section 2.3 which shall
also terminate and no part thereof shall be exercisable if such termination
occurs. On the date hereof, Employee will be elected as the non-executive
Chairman of the Board of Directors of the Company and the Subsidiary but shall
not be an employee until the Effective Date.
1.4 Duties and Responsibilities.
(a) In General. Employee shall render all services usually and
customarily rendered by and reasonably required of executives similarly employed
in a like position in the television commercial production and digital asset
management services industries, including but not limited to, overseeing and
administering all aspects of the Company's operating subsidiaries and the
Subsidiary. Employee shall render all such services in
accordance with such written policies of Company and Subsidiary as may be in
effect from time to time, subject at all times to the reasonable directives,
direction and control of the board of directors.
(b) Exclusivity. During the Employment Term, Employee shall devote
his best efforts and work time to advance the interests of the Company and
Subsidiary, and Employee's services shall be rendered exclusively to Company and
Subsidiary hereunder, except for services required to be provided by Employee to
Provell, Inc. pursuant to the separation agreement dated February 26, 2001
between Employee and Provell, Inc. (formerly Damark International, Inc. provided
such services do not interfere with Employee's duties to the Company and
Subsidiary). During the Employment Term and for a period of six (6) months
following employment in accordance with Article 4 herein, Employee shall not (i)
compete with Company and Subsidiary in the conduct of its business, or (ii)
engage or participate, directly or indirectly, in any business or businesses
substantially similar to the business as conducted by Company and Subsidiary as
of the date of this Agreement or as may thereafter be conducted by Company and
Subsidiary at any time during the Employment Term, nor shall Employee become
financially interested in or associated with, directly or indirectly, any other
person or entity engaged in television commercial production and digital asset
management services.
1.5 Location of Services. Employee shall render the services
hereunder primarily at Company and Subsidiary's offices currently located at
Crosstown Corporate Center, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Employee also acknowledges and agrees that he may, from time to
time, be required to travel as the Company and Subsidiary may reasonably
determine. However, Employee shall not be transferred to a primary location
outside of Minnesota without his prior consent.
2. Compensation, Benefits and Expenses.
2.1 Base Salary. During the Employment Term, Company and Subsidiary
shall jointly pay, and Employee shall be entitled to receive from Company and
Subsidiary, an annual gross base salary equal to $200,000 ("Salary"), payable
two times a month, on the 15th and the last day of the month. Company and
Subsidiary shall make all deductions, withholdings and/or payments that are
required by law from the gross sums payable to Employee pursuant to the
provisions of this Article.
2.2 Additional Compensation. As additional compensation (the
"Additional Compensation"), Employee shall be entitled to receive a cash
bonus(es) at the discretion of the board of directors based upon performance
benchmarks to be mutually agreed upon using EBITDA of up to 50% of his annual
gross base salary. In the event the Employee's employment is terminated during
the Year, Employee shall be paid his Additional Compensation for the year in
which the termination occurred, if applicable, within 60 days following the end
of the year during which termination occurred and shall be based on a pro-rata
share of the number of months worked in the Year.
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2.3 Stock Options.
(a) Option Grants. The Company will grant Employee an option to
purchase 1,000,000 shares of its common stock, as provided in the attached
Exhibit A. Subsidiary will grant to Employee an option to purchase 9,742,000
shares of its common stock (subject to adjustment for the Bridge Financing as
provided therein) in accordance with the terms of Exhibit B attached hereto and
incorporated herein by reference.
(b) Vesting of Option. The Options referenced in Section 2.3(a)
above shall vest in accordance with the respective Stock Option Agreements
attached hereto as Exhibits A and B.
2.4 Vacation. Employee shall be entitled to a paid vacation as set
forth in the employee handbook. Vacations will be taken with due consideration
to the services required of Employee and the requirements of the Company.
2.5 Travel Expenses. Company and Subsidiary shall reimburse Employee
for reasonable and approved airfare travel expenses incurred and paid by him in
traveling on behalf of Company and Subsidiary; but in no event shall the Company
or Subsidiary be required to reimburse Employee for airfare expenses greater
than coach class.
2.6 Business Expenses. Company and/or Subsidiary shall reimburse
Employee for all approved ordinary and necessary business expenses incurred and
paid by him in the course of the performance of his duties pursuant to this
Agreement, and subject to Company's and Subsidiary's requirements with respect
to the manner of reporting such expenses.
2.7 Employee Benefits. Employee shall be eligible to participate in
the benefit plans available to executive officers of Company and/or Subsidiary,
which shall be made available by the Company and Subsidiary or one of its
affiliates.
2.8 Board Membership. Employee shall be entitled to board membership
on the board of directors of iNTELEFILM Corporation and WebADTV, Inc.
3. Representations and Warranties of Employee.
3.1 Representations and Warranties. Employee represents and warrants
that Employee has the full right, power, authority, and capacity, and is free,
without restriction, to enter into and perform this Agreement and Employee shall
materially perform each and all of the material terms and obligations of this
Agreement to be performed by Employee; that by entering into this Agreement and
performing the services to be performed by Employee hereunder, Employee will not
knowingly violate or interfere with the rights of any other person or entity,
and that Employee is not subject to any contract, understanding or obligation
including but not limited to non-compete and termination agreements which will
or might prevent, interfere with or impair the full performance by Employee of
these obligations under this Agreement.
4. Confidentiality and Non-Solicitation.
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4.1 Covenant Not to Disclose. Other than as required to perform his
duties in accordance with this Agreement and for purposes of furthering the
business of Company or Subsidiary, Employee shall not use or cause to be used
any customer lists, trade secrets or any other confidential business information
obtained by him as a result of his employment or relationship to Company,
Subsidiary or any affiliate of Company or Subsidiary. Employee acknowledges the
interest of Company and Subsidiary in maintaining the confidentiality of
information related to its business and, other than as required to perform his
duties, shall not at any time during the Employment Term or thereafter, directly
or indirectly, use or cause to be used, reveal or cause to be revealed to any
person or entity the trade secrets, customer lists or other confidential
business information obtained by him as a result of his employment or
relationship with Company and/or Subsidiary or any affiliate of Company and/or
Subsidiary, except when authorized in writing to do so by the Board of Directors
of Company and/or Subsidiary; provided, however, that the parties acknowledge
that it is not the intent of this Section 4.1 to include within its subject
matter (i) information that the Employee is required by law or the legal process
to divulge, or (ii) information which is in the public domain.
4.2 Covenant to Deliver Records And Company Property. During
Employee's employment by Company and Subsidiary, Employee will hold as Company's
and Subsidiary's property all memoranda, books, papers, letters, price lists,
contracts, agreements and the like, and all copies thereof, in any way relating
to the business operations of Company and Subsidiary regardless of how
maintained or created, whether made by Employee or coming into Employee's
possession. Upon termination of Employee's employment or on demand at any time
prior thereto, Employee shall deliver the same to Company and Subsidiary without
retaining any copies thereof. Employee will also return all Company and/or
Subsidiary property then in his possession, including but not limited to, credit
cards, pass words, equipment and keys.
4.3 Non-solicitation and Non-Competition.
(a) Employee agrees that he will not, during the Employment Term
and for six (6) months thereafter (the "Post-Termination Period"), directly or
indirectly through the actions of any other person or entity, whether for his
own benefit or the benefit of any third party, solicit, divert, or take away, or
attempt to solicit, divert or take away, any individual who either renders
services of a non clerical nature (including, but not limited to, producers,
directors and sales representatives), or advise, induce or attempt to advise to
induce any such individual to either terminate or curtail his/her employment or
service relationship with Company and/or Subsidiary or to enter into an
employment or service relationship with any person or entity that is a
competitor of Company and/or Subsidiary.
(b) Employee agrees that he will not, during the Employment Term
and at any time thereafter, directly or indirectly through the actions of any
person or entity, whether for his own benefit or for that of another person or
entity, take any action, or advise or assist any person or entity to take any
action, that would impair the goodwill of the business of the Company and/or
Subsidiary, including, but not limited to, actions that would interfere with or
damage the Company's and/or Subsidiary's business relationships with its
employees, lenders, creditors, clients and others with whom it does business.
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(c) Employee will not, during the Employment Term or the
Post-Termination Period, undertake the planning or organization of a business
that is or is intended to be competitive with the business of the Company and/or
Subsidiary or otherwise directly or indirectly compete with the Company and/or
Subsidiary or render services or assistance to any person or entity that is
competing or intends to compete with the Company and/or Subsidiary.
4.4 Injunctive Relief. Employee agrees that a monetary remedy for a
breach of this Article 4 of this Agreement will be inadequate, and will be
impracticable and extremely difficult to prove, and further agrees that such a
breach would cause the Company and/or Subsidiary irreparable injury and damages.
Therefore, without in any way limiting Company's and/or Subsidiary's other
rights and remedies, the Company and/or Subsidiary shall be entitled to
temporary and permanent injunctive relief without the necessity of proving
actual damages. Employee agrees that the Company is entitled to such relief,
including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting a bond or making any undertaking
in connection therewith. Any such requirement of a bond or undertaking is hereby
waived by Employee, and Employee acknowledges that in the absence of such a
waiver of a bond or undertaking which might otherwise be required by the court.
5. Termination.
5.1 Right to Terminate. The Company or Subsidiary may terminate
Employee's employment at anytime upon 90 days written notice to Employee.
Employee may terminate Employee' employment at anytime upon 120 days written
notice to the Company and Subsidiary and Company and Subsidiary shall have the
option to accelerate the notice upon accepting Employee's resignation.
5.2 Severance upon Termination for Cause or Without Good Reason. In
the event the Company or Subsidiary terminates Employee's employment for "Cause"
as defined below or Employee voluntarily terminates his employment with the
Company or Subsidiary without "Good Reason" as defined below, Employee shall be
paid through the notice period as modified, in accordance with Section 5.1
above, if applicable and Employee shall be entitled to his then accrued rights
under the Agreement.
5.3 Severance upon Termination without Cause or for Good Reason
prior to Change of Control. In the event, prior to a "Change of Control" as
defined below, the Company or Subsidiary terminates Employee's employment
without Cause or Employee terminates Employee's employment for Good Reason
whether such termination occurs during the Employment Term or thereafter,
Employee shall be entitled to the following severance on condition that Employee
signs and does not rescind a Settlement Agreement and Release substantially in
the form of Exhibit C, attached to this Agreement:
(a) Base Salary. The Company and Subsidiary shall pay the
Employee the Employee's Base Salary for one (1) year or the balance of the
Employment Term from the date of termination (the "Termination Date"), as if
such termination had not occurred, whichever is longer (the "Severance Period")
and in accordance with the Company's and Subsidiary's normal salary payment
practices. In the event a Change of Control occurs during the Severance Period,
the amount payable under this Section 5.3(a) during the remaining portion
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of the Severance Period shall be paid in a lump sum within five days following
the date on which the Change of Control occurred.
(b) Disability, Life Insurance and Medical/Dental Coverage; No
Pay for Vacation or Sick Leave During Severance Period. The Company and
Subsidiary, shall continue the disability, life insurance and medical/dental
coverage provided to the Employee on the same basis provided to executive
officers of the Company and Subsidiary but no less favorable than as provided
immediately prior to the Termination Date. Such coverage shall be provided
through the earlier of the Severance Period or the date on which the Employee
obtains comparable coverage provided by a new employer. If and to the extent
additional benefits are available, the Employee has the right to continue health
and life insurance benefits under COBRA laws in effect on the Termination Date.
The Employee shall not be deemed to have and shall not be paid for any accrued
and unused vacation or sick leave during the Severance Period.
(c) Stock Options. The Employee's rights and the Company's and
Subsidiary's obligations with respect to stock options described in Section 2.3
shall become immediately vested and shall be exercisable during the balance of
the term of such options.
(d) Withholding. Notwithstanding anything to the contrary herein,
the Company and Subsidiary shall withhold from all severance benefits payable
hereunder the sum of federal, state and local taxes and other amounts which the
Company and Subsidiary is required by law.
(e) Reimbursement of Business Expenses. The Company and
Subsidiary will reimburse the Employee for all business expenses incurred prior
to the Termination Date at the time and in the manner consistent with Company
and Subsidiary policy.
5.4 Severance upon Termination without Cause or for Good Reason after a
Change of Control. In the event the Company or Subsidiary terminates Employee's
employment without Cause or Employee terminates Employee's employment for Good
Reason following a Change of Control whether such termination occurs during the
Employment Term or thereafter, Employee shall be entitled to the severance set
forth in Section 5.3 above except that the amounts payable under Section 5.3(a)
shall be paid in a lump sum within five days after the Termination Date.
5.5 Definitions.
(a) Cause. For purposes of this Agreement, termination by the
Company for "Cause" shall consist of any one or more of the following:
(i) The intentional conduct, errors, or omissions by the Employee
that have the possible likelihood or effect of causing substantial financial
harm or damage to the reputation of the Company and/or Subsidiary; (ii) the
intentional violation by the Employee of any law, statute, ordinance, regulation
or a Company and/or Subsidiary policy which applies to the conduct of the
business of the Company and/or Subsidiary that has the possible likelihood or
effect of causing substantial harm or damage to reputation of the Company or
Subsidiary; (iii) any act of Employee involving the embezzlement of funds or
other misappropriation of the assets of the Company and/or Subsidiary, moral
turpitude, any
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conviction in a court of law or pleading of guilty or no contest by Employee to
a felony or any criminal activity involving dishonesty or fraud; (iv) the
dishonesty, disloyalty, misfeasance or malfeasance of the Employee having the
possible or actual effect of causing a material loss of or damage to the
properties, business, name or reputation of the Company and/or Subsidiary; (v)
the failure or refusal by the Employee to perform clear and substantial duties
as established by the board of directors of the Company and/or Subsidiary; (vi)
the breach by the Employee of the restrictive covenants in Section 4 against
competition, usurpation of corporate opportunities or disclosure of confidential
information; (vii) the illegal use by the Employee of any controlled substance,
or violation of Company and/or Subsidiary policy on drugs and alcohol, while on
the job or on Company/Subsidiary-controlled premises regardless of whether such
use may be reasonably expected to have a material, perceptible or visible
detrimental affect on his performance of duties hereunder; (viii) the material
failure by the Employee to execute the duties of President, Chief Executive
Officer and Chairman as set forth in Section 1.3 after reasonably detailed
notice of such failure and a reasonable period of time to cure such failure, if
a cure is feasible; (ix) the failure by the Employee to meet the standards set
forth in Section 1.3 after reasonably detailed notice of such failure and a
reasonable period of time to cure such failure, if a cure is feasible; (x) the
dishonesty or other breach of the duty of loyalty by the Employee affecting the
Company and/or Subsidiary or any customer, vendor, or another employee of the
Company and/or Subsidiary; (xi) the Employee commits any other act of misconduct
which would permit discharge of the Employee under disciplinary guidelines
contained in the employee handbook; and (xii) the violation of the Company's
and/or Subsidiary's policy on sexual harassment.
(b) Good Reason. "Good Reason" means termination by the Employee in
the event that (i) the Employee is not at all times duly elected to the
positions of the Chairman, President and Chief Executive Officer of the Company
and/or Subsidiary (with such changes as the Employee may agree to in writing) or
a member of the Company's and/or Subsidiary's Board of Directors; (ii) there is
any material reduction in the scope of the Employee's authority and
responsibility; (iii) there is a reduction in the Employee's then Salary, a
material reduction in the amount of Annual Bonus for which the Employee is
eligible except where such reduction is reasonably attributed to the result of a
decline in Employee's performance, an amendment to any stock options or any
employee retirement plan applicable to the Employee which is materially adverse
to the Employee, or a material reduction in the other benefits to which the
Employee is entitled to which Employee has not agreed in writing; (iv) the
Company and/or Subsidiary requires the Employee's principal place of employment
to be anywhere other than the Company's and/or Subsidiary's principal executive
offices wherever they then be located within the Minneapolis/St. ▇▇▇▇
metropolitan area, or there is a relocation of the Company's and Subsidiary's
principal executive offices outside of Minneapolis/St. ▇▇▇▇, Minnesota
metropolitan area; (v) the Company and/or Subsidiary otherwise substantially
fail to perform their obligations under this Agreement; (vi) a Change of Control
has occurred and either (x) the Employee dies or becomes permanently disabled
(as determined by reference to the Company's long-term disability plan) prior to
the first anniversary of the Change of Control or (y) the Employee elects to
terminate employment with the Company regardless of the reason therefore by
giving the Company written notice thereof within the 60-day period immediately
following the first anniversary of the Change of Control, regardless of the
reason therefore, or (vii) the Company fails to obtain the agreement of a
successor referred by Section 7.11 hereof
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prior to the effectiveness of any succession (unless the opinion described in
Section 7.11 hereof is rendered to the Employee).
(c) Change of Control. A Change of Control shall mean:
(i) the acquisition by any person or group deemed a person
under Sections 3(a)(9) and 13(d)(3) of the Exchange Act (other than
Optionee, the Company and/or Subsidiary as determined immediately prior
to that date) of beneficial ownership, directly or indirectly (with
beneficial ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of a majority of the total
combined voting power of all classes of Stock of the Company and/or of
all classes of the capital stock of Subsidiary, having the right under
ordinary circumstances to vote at an election of the Board, if such
person or group deemed a person prior to such acquisition was not a
beneficial owner of at least five percent (5%) of such total combined
voting power of the Company and/or Subsidiary;
(ii) the date of approval by the stockholders of the Company
and/or Subsidiary of an agreement providing for the merger or
consolidation of the Company and/or Subsidiary with another corporation
or other entity where (x) the respective stockholders of the Company
and/or Subsidiary immediately prior to such merger or consolidation
would not beneficially own with respect to their Stock and/or
Subsidiary Stock following such merger or consolidation shares
entitling such stockholders to a majority of all votes (without
consolidation of the rights of any class of stock to elect directors by
a separate class vote) to which all stockholders of the surviving
corporation would be entitled in the election of directors, or (y)
where the members of the board, immediately prior to such merger or
consolidation, would not, immediately after such merger or
consolidation, constitute a majority of the board of directors of the
surviving corporation; provided that, in the event a Change of Control
under this clause (ii) occurs with respect to the Subsidiary but not
the Company and Employee continues in the employment of the Company
after such Change of Control, a Change of Control shall not be deemed
to have occurred; or
(iii) the sale of all or substantially all of the assets of
the Company (excluding the sale of the production companies) and/or
Subsidiary.
6. Results and Proceeds. Employee acknowledges that the relationship
between the parties hereto is exclusively that of employer and Employee, and
that Company's and Subsidiary's obligations to Employee are exclusively
contractual in nature. All work performed by Employee shall be done on a "work
for hire" basis. Company and Subsidiary shall be the sole owner of all results
and proceeds of Employee's services hereunder, including but not limited to, all
ideas, concepts, formats, suggestions, developments, arrangements, designs,
packages, programs, promotions and other intellectual properties which Employee
may create during the Employment Term, free and clear of any claims by Employee
(or anyone claiming under Employee) of any kind or character whatsoever other
than Employee's right to compensation hereunder. Employee shall, at the request
of Company and Subsidiary, promptly execute such assignments, certificates or
other instruments as Company and Subsidiary may from time to time deem necessary
or desirable to evidence, establish, maintain, perfect, protect, enforce or
defend
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its right, title and interest in or to any such properties or product including
but not limited to trade marks, trade names, copyrights and patents.
7. Miscellaneous.
7.1 Notices. Any notice or other communications required or
permitted to be given to the parties hereto shall be deemed to have been given
when received, addressed as follows (or at such other address as the party
addressed may have substituted by notice pursuant to this section 7.1):
(a) If to Company and Subsidiary:
iNTELEFILM CORPORATION
Crosstown Corporate Center
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
iNTELEFILM Corporation
Crosstown Corporate Center
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Employee
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
With copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, P.A.
5500 ▇▇▇▇▇ Fargo Center
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other addresses as may be set forth in a written notice given by
either party to the other party in the manner described in this section.
7.2 Heading. The captions set forth in this Agreement are for
convenience only and shall not be considered as part of this Agreement or as in
any way limiting or amplifying the terms and provisions hereof.
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7.3 Severability. In case this Agreement, or any one or more of the
provisions hereof, shall be held to be invalid, illegal or unenforceable within
any governmental jurisdiction or subdivision thereof, this Agreement or any such
provision or provisions shall not as a result thereof be deemed to be invalid,
illegal or unenforceable in any other governmental jurisdiction or subdivision
thereof. In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
other respect, such invalidity, illegality or unenforceable provision shall be
deemed as though it had never been contained herein and there shall be deemed
substituted, such other provision as will most nearly accomplish the intent of
the parties to the extent permitted by applicable law.
7.4 Entire Agreement. This Agreement contains the entire agreement
of the parties hereto with respect to the subject matter hereof. Any amendment
to this Agreement shall not be effective unless it is in writing and signed by
both parties.
7.5 Non-Assignability. The obligations of Employee hereunder are
personal and may not be assigned or transferred in any manner whatsoever. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs, administrators and executors.
7.6 Third Party Beneficiaries. This Agreement is not for the benefit
of any third party who is not referred to herein and shall not be deemed to give
any right or remedy to any such third party.
7.7 No Waiver. The failure of Company at any time to require
Employee's performance of any provision hereof shall not affect its right
thereafter to enforce the same, nor shall the waiver by Company of any breach of
any provision hereof be construed to be a waiver of any succeeding breach of any
such provision, or as a waiver of the provision itself.
7.8 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
7.9 Arbitration. In the event of a dispute between the Company and
the Employee hereunder, including any dispute relating to the terms and
conditions of the Stock Options described in Section 2.3, it is the intention of
the parties that the dispute shall be resolved as expeditiously as possible,
consistent with fairness to both sides. Accordingly, any claim or dispute
relating to the entitlement of the Employee to benefits hereunder or the amount
thereof, shall be resolved by binding private arbitration before three
arbitrators. Either party may request arbitration by written notice to the other
party. Within 30 days of receipt of such notice by the opposing party, each
party shall appoint a disinterested arbitrator and the two arbitrators selected
thereby shall appoint a third neutral arbitrator. In the event the two
arbitrators cannot agree upon the third arbitrator within 10 days after their
appointment, then the neutral arbitrator shall be appointed by the Chief Judge
of Hennepin County (Minnesota) District Court. Any arbitration proceeding
conducted hereunder shall be in the City of Minneapolis and shall follow the
procedures set forth in the Rules of Commercial Arbitration of the American
Arbitration Association, and both sides shall cooperate in as expeditious a
resolution of the proceeding as is reasonable under the circumstances. The
arbitration panel shall have the power to enter any
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relief it deems fair and just on any claim, including interim and final
equitable relief, along with any procedural order that is reasonable under the
circumstances. Any award rendered by any arbitration panel, or a majority
thereof, may be filed and a judgment obtained in any court having jurisdiction
over the parties unless the relief granted in the award is delivered within 10
days of the award.
7.10 Successors. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company, to expressly
assume and agree to perform its obligations under this Agreement in the same
manner and to the same extent that the Company would be required to perform them
if no succession had taken place unless, in the opinion of legal counsel
mutually acceptable to the Company and the Employee, such obligations have been
assumed by the successor as a matter of law. The Employee's rights under this
Agreement shall inure to the benefit of, and shall be enforceable by, the
Employee's legal representative or other successors in interest, but shall not
otherwise be assignable or transferable.
7.11 No Obligation to Mitigate Damages. In the event the Employee
becomes eligible to receive compensation or benefits subsequent to the
termination of the Employee's employment under this Agreement, the Employee
shall have no obligation to seek other employment in an effort to mitigate
damages. To the extent the Employee shall accept other employment after the
Employee's termination of employment, the compensation and benefits received
from such employment shall not reduce the compensation and benefits otherwise
due under this Agreement, except as provided in Section 5.3(c) above.
7.12 Expenses of Prosecution/Defense of Claim. During the pendency
of a dispute between the Company or Subsidiary and the Employee relating to the
Employee's employment or the terms or performance of this Agreement, or the
terms or provisions of Stock Options described in Section 2.3, the Company or
Subsidiary shall promptly pay the Employee's reasonable expenses of
representation upon delivery of periodic ▇▇▇▇▇▇▇▇ for same, provided that (i)
Employee (or a person claiming on the Employee's behalf) shall promptly repay
all amounts paid hereunder at the conclusion of the dispute if the resolution
thereof includes a finding that the Employee did not act in good faith in the
matter in dispute or in the dispute proceeding itself, (ii) no claim for
expenses of representation shall be submitted by the Employee or any person
acting on the Employee's behalf unless made in writing to the Board of Directors
within one year of the performance of the services for which such claim is made;
and (iii) the Company, Subsidiary and the Employee agree that in all events the
prevailing party in any proceeding which resolves such dispute shall be awarded
its reasonable attorney's fees, costs and expenses therein, less amounts
previously paid or reimbursed by the non-prevailing party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as the day and year first above written.
INTELEFILM CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Its: Chairman Emeritus
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WEBADTV, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Its: Chairman Emeritus
-------------------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT C
FORM OF CONFIDENTIAL
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release ("Agreement") is entered into by
and between ______________, a Minnesota Corporation ("Company"), and
____________ ("Employee").
RECITALS
Employee has been employed by the Company pursuant to a written
employment agreement (the "Employment Agreement") which provides for certain
severance benefits (the "Severance Benefits"). The purpose of this Agreement is
to set forth the terms and conditions under which Employee and the Company agree
to end their employment relationship.
AGREEMENT
In consideration of the mutual promises and covenants hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. Separation. Employee's position as an employee of the Company shall hereby
end effective as of the close of business on the Termination Date as defined in
the Employment Agreement which is _______________.
2. Final Wages. Employee shall receive a final payroll earnings check, which
fully compensates Employee through the Termination Date, and which includes full
payment of Employee's accrued but unused Paid Time Off (PTO). It is agreed that
such payment shall be made by Company to Employee in accordance with the
Company's normal payroll procedures. The Company shall deduct from the foregoing
customary withholdings, including FICA and Federal and State income tax.
Employee acknowledges and agrees that Employee is not entitled to or owed any
additional compensation from the Company, except as may be specified herein.
3. Company Sponsored Benefit Plans. Commencing at the end of the Severance
Period as defined in the Employment Agreement, Employee may elect to continue to
participate in the group health and dental insurance and life insurance
programs, as allowed by law and the terms of those benefit plans. A
COBRA/continuation notice more specifically advising Employee of Employee's
rights will be timely forwarded to Employee. Employee's participation and
interest in any Company-sponsored 401(k) plan shall be governed by the terms of
such plans. Employee's disability insurance, if any, will be cancelled as of the
end of the Severance Period. The parties agree that the extension of benefits
provided for by this Agreement is not intended to and does not create a retiree
health plan covering any other employees.
4. Separation Payment. Employee's Severance Benefits are not being made pursuant
to the terms of any plan or program maintained by the Company. Employee
understands that this separation compensation is effective and will be paid only
if Employee signs this Agreement
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within 21 days after initially receiving it and does not rescind within the
fifteen (15) day period described in paragraph 11. Accordingly, payment will not
be made until the 15-day period has expired without Employee's rescission.
5. Consideration. Employee specifically acknowledges and agrees that the
separation payments and benefits set forth in the Employment Agreement
constitutes full and adequate consideration for this Agreement and that, if
Employee does not sign this Agreement, rescinds pursuant to paragraph 11, or
breaches any of Employee's obligations contained in this Agreement at any time,
the Company shall have no obligation to provide this consideration.
6. Release. In exchange for the consideration stated and acknowledged herein,
Employee, including anyone who has or obtains any legal rights or claims through
or from Employee, hereby unconditionally releases and discharges the Company,
its affiliates and related entities, predecessors, successors, any Company
pension, welfare or other employee benefit plan, and all of the foregoing
entities' owners, officers, directors, shareholders, partners, employees,
agents, consultants, representatives, attorneys, trustees, administrators, and
any entity affiliated with any of the foregoing, from any and all past or
present claims, demands, obligations, actions, causes of action, damages, costs,
debts, liabilities, expenses and compensation of any nature, whether for
compensatory or punitive damages, and whether based in tort, contract, or other
theory of recovery (collectively the "Claims" and individually a "Claim"),
including but not limited to any Claims arising under the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Americans with Disabilities Act, the Family and Medical Leave Act,
the Employee Retirement Income Security Act of 1974 (ERISA), each as may have
been amended, or any state or local discrimination law including the Minnesota
Human Rights Act, and those based on wrongful discharge, breach of an implied or
express contract, promissory estoppel, emotional distress, defamation,
misrepresentation, fraud, public policy, common law, good faith and fair
dealing, negligence, invasion of privacy, or any other Claim that Employee now
has or that may hereafter arise out of the relationship between the parties to
date, including the termination of Employee's employment, whether known or
unknown, foreseen or unforeseen, at the time of executing this Agreement;
provided, however, Employee is not waiving and the Company acknowledges and
agrees that Employee retains any and all rights of indemnification in favor of
Employee by the Company, its affiliates and related entities for Employee's
service as an officer, director employee thereof, whether by law or contract.
Employee states and represents that Employee has not and agrees to not institute
any lawsuit against or otherwise ▇▇▇ the Company or any of those named in this
paragraph based on any Claim relating in any way to Employee's relationship with
the Company up to the time of executing this Agreement. In the event that any
such Claim or action has been or is asserted by Employee or anyone acting
directly or indirectly on Employee's behalf, Employee agrees that this release
shall act as a total and complete bar to any recovery or relief by Employee. The
foregoing release shall not apply to and shall not affect the parties' right to
enforce, or challenge the enforceability of, the terms of this Agreement, to
seek remedy for breach of this Agreement, nor to subsequently assert any Claim
arising from acts occurring after the effective date of this release, including
enforcement of the severance provisions of the Employment Agreement.
7. Return of Property. Employee agrees to return promptly all files, documents,
manuals or property of any kind in Employee's possession or control relating to,
or constituting the property of, the Company, its affiliates or customers
including, but not limited to, all office
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keys, keys to Company vehicles, credit cards, security cards, office equipment,
cellular phones, computer hardware, software products, agreements or Company
products or prototypes. Employee acknowledges that this obligation is continuing
and agrees to promptly return to the Company any subsequently discovered
property as described above. Employee further agrees to make Employee's personal
computer available to Company upon its reasonable request for review of
information, data, records and files stored therein, and to allow Company to
retrieve or destroy, at Company's discretion, any and all such information,
data, records or files constituting the property of Company. Employee agrees to
repay to the Company the amount, if any, of any permanent or temporary
compensation advances paid to Employee and the balance, if any, owing by
Employee on any credit cards for which the Company is a guarantor.
8. Non-Disparagement. Employee agrees not to make any negative or disparaging
remarks or comments about the Company, its affiliated or related companies, or
any of the foregoing entities' directors, officers, employees or products and
Company agrees not to make any negative or disparaging remarks or comments about
Employee. Notwithstanding the foregoing, each of the parties is entitled to
accurately describe their past relationships and the events leading up to and
surrounding the execution of this Agreement to potential employers, partners or
affiliates of Employee or potential partners or affiliates of Company.
9. Cooperation. Employee agrees to be reasonably available for consultation with
and assistance to Company representatives with respect to matters and issues
within Employee's job responsibilities or knowledge during Employee's employment
by the Company; provided that such consultation and assistance shall not require
travel by Employee and shall not interfere with any other employment, consulting
or business arrangements of Employee.
10. Consideration of Agreement. Employee may consider this Agreement prior to
signing for up to 21 days from the date Employee receives it. Employee
understands, however, that Employee is free to sign and return this Agreement at
any time within the 21-day period. The parties agree that any changes in this
Agreement made prior to signing whether material or not do not restart the
21-day period for consideration.
11. Rescission. Employee may rescind and revoke this Agreement for any reason
within fifteen (15) calendar days after signing it. To be effective, the
rescission or revocation must be in writing and hand-delivered or mailed to the
Company at _______________________________, Attn: _______________, within the
15-day period. If mailed, the rescission or revocation must be (a) postmarked
within the 15-day period, (b) properly addressed as set forth in the preceding
sentence, and (c) sent by Certified Mail, Return Receipt Requested. If delivered
by hand, it must be given to the _______________ within the 15-day period. This
revocation period shall include, and not be in addition to, the seven (7) day
revocation period under the Age Discrimination in Employment Act. Should
Employee choose to rescind this Agreement, all terms hereof are canceled and
thereby ineffective.
12. Non-Admission. The Company, and all those named in paragraph 6 above,
expressly deny any and all liability to Employee and the parties agree that
nothing in this Agreement is intended to be, nor shall be deemed to be, an
admission of liability or wrongdoing, an admission of the existence of any facts
upon which liability or wrongdoing could be based, or a waiver of any defense to
any such liability or wrongdoing.
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13. Merger. Except as set forth in paragraph 15 below, this Agreement, the
Employment Agreement and any employee benefit plans in which Employee is a
participant supersede all prior oral and written agreements and communications
between the parties regarding the subject matter hereof.
14. Confidentiality. Employee agrees to keep the terms and conditions of this
Agreement confidential and not disclose them to any person other than Employee's
immediate family, taxing authorities, attorneys, or accountants as necessary or
as required by law. Employee understands and agrees that any disclosure in
violation of this confidentiality agreement made by or through Employee, or
those listed in the preceding sentence, constitutes a material breach of this
Agreement. Employee agrees to not introduce this Agreement in any litigation or
proceeding involving the Company, except any action to enforce, or challenge the
enforceability of, the terms of this Agreement.
15. Mutual Non-Disclosure Agreement. Employee acknowledges that Employee
voluntarily entered into a Mutual Non-Disclosure Agreement with the Company
dated August 2, 2001, which contains certain understandings and covenants.
Employee acknowledges and agrees that (i) the understandings and covenants
contained in that agreement are part of this Agreement by incorporation and
remain in full force and effect, (ii) such understandings and covenants are
supported by separate consideration, and (iii) Employee is fully bound to the
continuing obligations under that agreement for the periods specified therein.
16. Breach. If Employee breaches any of Employee's obligations contained in this
Agreement, all amounts paid to Employee hereunder or yet to be paid pursuant
hereto, shall, at the election of the Company and as consistent with applicable
law, be either not paid and forfeited, or if previously paid, returned to the
Company. This provision shall not prevent the Company from pursuing its other
remedies and seeking damages for breach of this Agreement.
17. Severability. In case any one or more of the provisions of this Agreement
should be determined invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained in
this Agreement will not in any way be affected or impaired thereby, except by
application of the provision of paragraph 20 below.
18. Assignment. No assignment of this Agreement shall be made by Employee, and
any such purported assignment shall be null and void.
19. Governing Law. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of Minnesota, without regard to
conflicts of laws provisions.
20. Savings Clause. Employee agrees that the scope and terms of this Agreement
are reasonable and that it is Employee's intent and desire that this Agreement
be enforced to the fullest extent permissible under the laws and public policies
applied in the jurisdiction in which enforcement is sought. If any particular
provision of this Agreement shall be adjudicated to be invalid or unenforceable,
the parties specifically authorize the tribunal making such determination to
edit the invalid or unenforceable provision to allow this Agreement, and the
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provisions thereof, to be valid and enforceable to the fullest extent allowed by
law and/or public policy.
21. Voluntary and Knowing Action. Employee acknowledges that Employee has been
advised in writing hereby to consult an attorney regarding the terms of this
Agreement; that Employee has had the opportunity to be represented by Employee's
own attorney; that Employee has read and understands the terms of this
Agreement; and that Employee is voluntarily and without duress entering into
this Agreement with full knowledge of its implications.
IN WITNESS WHEREOF, the parties have caused this Separation Agreement
and Release to be executed on the date set forth below.
iNTELEFILM CORPORATION
By:
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WebADTV, Inc.
By:
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▇▇▇▇ ▇. ▇▇▇▇
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