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EXHIBIT 10.54
RESIGNATION AND GENERAL RELEASE AGREEMENT
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This Resignation and General Release Agreement ("Agreement"), effective
as of this 18th day of February 1999, by and between Xxxxxx Xxxxx, Xx., an
individual ("Xxxxx"), and NTN Communications, Inc., a corporation ("Company"),
is a resignation agreement which includes a general release of claims.
In consideration of the covenants undertaken and the releases contained
in this Agreement, Xxxxx and Company agree as follows:
1. Xxxxx resigns in all capacities as an officer, director and employee
of Company and each of its subsidiaries and affiliates, such resignations to be
effective as of January 19, 1999.
2. Company and Xxxxx agree to the following actions immediately
following the complete execution of this Agreement in full and complete
discharge of any and all of Company's obligations to Xxxxx, except those
described in Paragraph 11, including, without limitation, all obligations under
Xxxxx'x Employment Agreement dated July 1, 1998 (the "Employment Agreement"),
and the Stock Option Agreement dated February 2, 1998:
a. Future Salary. Company will pay Xxxxx $262,500, equal to his salary
for 12 months, less $56,650 for the life insurance overpayment as described in
paragraph 2d below, for a net payment of $205,850, in exchange for Xxxxx'x
agreement not to compete with Company for one year, pursuant to paragraph 22
below.
b. Bonus. Company will pay Xxxxx his full bonus of $128,500 through
December 1998 in cash.
c. Option to Purchase Stock. At Xxxxx'x option, to be exercised within
15 days from the date hereof, Xxxxx shall have the right to purchase shares of
common stock of Company at a purchase price of $.85 per share up to an amount
equal to the aggregate amount of payments made to Xxxxx pursuant to paragraphs
2a and 2b hereof. In the event Xxxxx exercises this option, Company agrees to
use its best efforts to register the stock so purchased by Xxxxx within 90 days
of the issuance of the stock to Xxxxx. All of the securities of Company (all
common stock and options) presently owned by Xxxxx are set forth in the
Ownership of Securities attached as Exhibit A hereto.
d. Life Insurance. Company will allow Xxxxx to keep the $1 million
whole life insurance policy, and will pay Xxxxx $2,000 as the equivalent of a
one-year premium for term life insurance for Xxxxx; nevertheless, Company will
deduct an insurance gross-up payment made for Xxxxx'x benefit of $56,650 from
the future salary payment described in paragraph 2a above.
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e. Director Fees. Company will pay Xxxxx in stock, as previously
agreed, for his director fees through January 1999. This stock will be in the
same monthly amounts as Company distributes to all of its directors; however,
fees for the months of September 1998 through January 1999 shall be paid in
stock at a price of $.625 per share. Company will use its best efforts to
register this stock within 90 days of the effective date of this Agreement.
Xxxxx must resign as an Company director, concurrent with the execution of this
Agreement;
f. Stock Options. Company will grant to Xxxxx the fully vested right
and option to purchase 125,000 shares of Company common stock at the price of
$1.00 per share, exercisable at any time prior to twelve months after the
January 19, 1999 termination of Xxxxx'x employment. This grant shall be in lieu
of and shall supersede any and all rights Xxxxx may have had under the February
2, 1998 Stock Option Agreement, which shall be null and void.
g. Attorneys' Fees. Company will pay Xxxxx or directly pay to Xxxxx'x
attorney $12,500 in partial reimbursement for his actual attorneys' fees
incurred in his negotiation with Company and in documenting the settlement.
3. Xxxxx shall return to Company and shall not take or copy in any form
or manner lists of customers, prices, engineering plans, and similar
confidential and proprietary materials or information. Xxxxx represents to
Company that all documents pertaining to Company, inclusive of existing and past
subsidiaries, but exclusive of personal items, in his possession whether located
on Company premises, at Xxxxx'x home or elsewhere, have been returned to Company
and that he has retained no copies in any form. This representation applies to
all forms of written materials, including but not limited to schematics,
diagrams, formulations, tapes, descriptions of inventions and products, operator
manuals, maintenance manuals, training manuals, software manuals, software code,
technical memoranda, research bulletin, financial information, marketing plans,
identities of customers and vendors, contract terms and information obtained in
confidence from customers and vendors. Xxxxx hereby reaffirms his obligation, as
set forth in his employment agreement, confidentiality and work for hire
agreement and any other legal documents that he signed either before or during
his employment with Company not to disclose any confidential or trade secret
information to any third party and not to use the information for any purpose
whatsoever except as expressly authorized in writing by an authorized
representative of Company, and except as necessary or appropriate in fulfilling
his responsibilities as a member of the Board of Directors of the Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and Xxxxx relating to any alleged
violation of Company policies or procedures or any state or federal law or
regulation, this Agreement does not constitute an adjudication or finding on the
merits and it is not, and shall not be construed as, an admission by Company of
any violation of its policies, procedures, state
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or federal laws or regulations. Moreover, neither this Agreement nor anything in
this Agreement shall be construed to be or shall be admissible in any proceeding
as evidence of or an admission of liability by either party for any purpose.
This Agreement may be introduced, however, in any proceeding to enforce the
Agreement. Such introduction shall be pursuant to an order protecting its
confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
Xxxxx on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to xxx and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held as against said Releasees,
arising out of or in any way connected with his employment or other
relationships with Company or his resignation from employment or any other
transactions, occurrences, acts or omissions or any loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of said Releasees, or any of them, committed or
omitted prior to the date of this Agreement including, without limiting the
generality of the foregoing, any claim under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, or any claim for
severance pay, bonus, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, workers' compensation
or disability.
6. Except as to Company's rights under this Agreement, Company for
itself, its officers, directors, shareholders, employees, agents, attorneys,
joint venturers, successors and assigns, hereby discharges and releases Xxxxx
and his employees, agents, joint venturers, successors and assigns from any and
all claims, damages, actions, judgments, obligations, attorneys' fees,
indemnities, subrogation, duties, demands, controversies and liabilities of
every nature, at law or in equity, known or unknown, matured or unmatured,
foreseeable or unforeseeable which Company now has, ever had, or may have,
against Xxxxx by reason of any matter whatsoever occurring or existing up to the
date of this Release. Company hereby covenants with Xxxxx that it will forever
refrain from instituting, pursuing, or in any way aiding any claim or demand
arising out of, in any way related to, or hereafter to arise out of, any matters
hereinbefore referred to and that this Release may be pleaded as a full and
complete defense to any claim, demand, action or other proceeding which may be
brought by, or on behalf of, Company against Xxxxx.
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7. It is the intention of the parties in executing this instrument that
the same shall be effective as a bar to each and every claim, demand and cause
of action hereinabove specified. In furtherance of this intention, Company and
Xxxxx hereby expressly waive any and all rights and benefits conferred upon them
by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly
consent that this Agreement shall be given full force and effect according to
each and all of its express terms and provisions, including those related to
unknown and unsuspected claims, demands and causes of action, if any, as well as
those relating to any other claims, demands and causes of action hereinabove
specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASES, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Xxxxx and Company acknowledge that they may hereafter discover claims
or facts in addition to or different from those which they now know or believe
to exist with respect to the subject matter of this Agreement and which, if
known or suspected at the time of executing this Agreement, may have materially
affected this settlement. Nevertheless, Company and Xxxxx hereby waive any
right, claim or cause of action that might arise as a result of such different
or additional claims or facts. Company and Xxxxx acknowledge that they
understand the significance and consequences of such release and such specific
waiver of SECTION 1542.
8. Xxxxx acknowledges that by reason of his position with Company he
has been given access to lists of customers, prices, engineering plans, and
similar confidential or proprietary materials or information respecting
Company's business affairs. Xxxxx represents that he has held all such
information confidential and will continue to do so, and that he will not use
such confidential information for any business (which term herein includes a
partnership, firm, corporation or any other entity) without the prior written
consent of Company.
9. Each party agrees that the terms and conditions of this Agreement
shall remain confidential as between the parties and neither party shall
disclose them to any other person except for its attorneys and tax advisors or
except as otherwise required by law or in the event of any required public
disclosure of such matters by Company. Without limiting the generality of the
foregoing, neither party will respond to or in any way participate in or
contribute to any public discussion, notice or other publicity concerning, or in
any way relating to, execution of this Agreement or the events (including any
negotiations) which led to its execution. Without limiting the generality of the
foregoing, each party specifically agrees that it shall not disclose information
regarding this Agreement to any current or former employee of the Company or any
prospective employer of Xxxxx. Each party hereby agrees that disclosure by it of
any of
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the terms and conditions of the Agreement in violation of the foregoing shall
constitute and be treated as a material breach of this Agreement.
10. Xxxxx and Company warrant and represent that they have not
heretofore assigned or transferred to any person not a party to this Agreement
any released matter or any part or portion thereof and Company and Xxxxx shall
defend, indemnify and hold each other harmless from and against any claim
(including the payment of attorneys' fees and costs actually incurred whether or
not litigation is commenced) based on or in connection with or arising out of
any such assignment or transfer made, purported or claimed.
11. Xxxxx and Company acknowledge that any employment or contractual
relationship between them terminated on January 19, 1999, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement, including the Indemnity Agreement between Xxxxx and the Company and
the Stock Option Agreements pursuant to which the stock options described in
Exhibit A were granted, as amended.
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes. Xxxxx
shall be exclusively liable (except for payroll taxes actually withheld by the
Company) for the payment of all federal and state taxes which may be due as the
result of the consideration received as set forth herein and Xxxxx hereby
represents that Xxxxx shall make payments on such taxes at the time and in the
amount required of Xxxxx. In addition, Xxxxx hereby agrees fully to defend,
indemnify and hold harmless Releasees and each of them from payment of taxes,
interest and/or penalties that are required of them (other than those payroll
taxes which are the Company's obligation to pay) by any government agency at any
time as the result of payment of the consideration set forth herein.
13. This instrument constitutes and contains the entire agreement and
understanding concerning Xxxxx'x employment, resignation from the same and the
other subject matters addressed herein between the parties, and supersede and
replace all prior negotiations and all agreements proposed or otherwise, whether
written or oral, concerning the subject matters hereof. These are integrated
documents. This Agreement may be modified only by a writing signed by the
parties.
14. If any provision of this Agreement or the application thereof is
held invalid, the invalidity shall not affect other provisions or applications
of the Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
15. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
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16. This Agreement may be executed in counterparts.
17. Company agrees to continue to indemnify Xxxxx to the extent set
forth in the existing Bylaws of Company and the Indemnity Agreement between
Company and Xxxxx. In the event of a conflict between the Indemnity Agreement
and the Bylaws, the provisions providing Xxxxx with the greatest rights and
remedies with respect to indemnification shall control.
18. Any dispute or controversy between Xxxxx, on the one hand, and
Company (or any Releasee), on the other hand, in any way arising out of, related
to, or connected with this Agreement or the subject matter thereof, otherwise in
any way arising out of, related to, or connected with Xxxxx'x employment with
Company, shall be resolved through final and binding arbitration in San Diego,
California, pursuant to California Civil Procedure Code xx.xx. 1282-1284.2. The
arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes promulgated by the American Arbitration Association. In the
event of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
19. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
20. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
21. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and assigns.
22. In consideration of the payment of $205,850 pursuant to paragraph
2(a) above, Xxxxx agrees that for a period of 12 months from the date hereof
Xxxxx shall not, directly or indirectly, without the prior written consent of
Company:
a. solicit, entice, persuade or induce any employee,
consultant, agent or independent consultant of Company, or of any of the
subsidiaries or affiliates of Company to terminate his or her employment with
Company, or such subsidiary or
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affiliate, to become employed by any person, firm or corporation other than
Company, or such subsidiary or affiliate or approach any such employee,
consultant, agent or independent contractor for any of the foregoing purposes,
or authorize or assist in the taking of any such actions by any third party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in (other than as an officer whose function primarily
relates to financial matters), consult with or render services for any person or
entity or any of the subsidiaries or affiliates of Company engaged in any
business in the fields of electronically simulated sports games or interactive
television, which in the judgment of Company is, or as a result of Xxxxx'x
engagement or participation would become, directly competitive with any aspect
of the business of Company. Notwithstanding anything in this Section 22b to the
contrary, nothing in this Agreement shall limit Xxxxx'x right to become the Vice
President of International Finance for American Online, Inc., or to hold and
make passive investments not in excess of 2 1/2% of the outstanding Common Stock
of any publicly traded entity.
23. This Agreement embodies the entire agreement of the parties and
supersedes any other prior oral or written agreements, arrangements or
understandings between Xxxxx and Company. This Agreement may not be changed or
terminated orally but only by an agreement in writing signed by the parties
hereto.
24. The waiver by Company of a breach of any provision of this
Agreement by Xxxxx shall not operate or be construed as a waiver of any
subsequent breach by him. The waiver by Xxxxx of a breach of any provision of
this Agreement by Company shall not operate or be construed as a waiver of any
subsequent breach by Company.
25. In any construction to be made of this Agreement, the same shall
not be construed against any party on the basis that the party was the drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
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EXECUTED as of this 18th day of February 1999 in San Diego County,
California.
/s/ Xxxxxx Xxxxx, Xx.
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Xxxxxx Xxxxx, Xx.
NTN COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: CEO
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