EXHIBIT 10.39
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of 4 October, 2001 is entered
into by and between iNTELEFILM CORPORATION, a Minnesota corporation (the
"Company") and XXXXXXXXXXX X. XXXX ("Employee").
In consideration of the mutual covenants herein, the parties hereby
agree as follows:
1. Employment, Term and Duties. Upon the terms and subject to the
conditions contained herein, Company hereby employs Employee
to assist as necessary and as needed or required in the
negotiations for the sale of Chelsea and Curious Pictures and
management of the ABC/Disney litigation currently pending in
the United States District Court for Minnesota for a period of
three years commencing on the Effective Date and ending upon
the third anniversary of the Effective Date (the "Employment
Term").
2. Location of Services. Employee shall render the duties
hereunder at a location of his choosing outside the present
offices of Company. Xx. Xxxx will vacate his present offices
on or before October 31, 2001.
3. Office Space Allowance. Employee shall receive an office
administrative allowance of $25,000 per year during the
Employment Term. Such allowance shall be paid in equal monthly
installments throughout the Employment Term. Payment of such
office administrative allowance shall accelerate upon the sale
or merger of the Company. For purposes of this article, sale
or merger is not defined as a merger between iNTELEFILM and
WebADTV.
4. Furniture. Employee shall be entitled to keep his present
office furniture consisting of: desk, two side chairs, two
office computers, two black sofas, a Xxxxxx Xxxxxx conference
table, personal file cabinets, three art posters, and a
tapestry.
5. Base Salary. During the Employment Term and subject to the
termination provisions contained herein, Company shall pay and
Employee shall be entitled to receive from Company, an annual
gross base salary equal to $175,000 ("Salary") payable two
times a month, on the 15th and last day of the month. Company
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. Payment of such
base salary shall accelerate upon the sale or merger of the
Company. For purposes of this article, sale or merger is not
defined as a merger between iNTELEFILM and WebADTV.
6. Bonus. By authority of the Board of Directors resolution dated
December 3, 1998, Employee shall be entitled to receive 27.5%
of the judgment pool which
consists of 10% of the realized final judgment after payment
of attorney fees and taxes if any, after such judgment can not
be appealed in any court of law. Employee's entitlement to
such 27.5% is not subject to board or Chief Executive Officer
discretion and such amount is all that Employee or companies
which he owns or controls is entitled to.
7. Forgiveness of Debt Owed by Employee to Company. Employee owes
debt to Company in the form of promissory notes principal and
interest as set forth in the schedule attached as Exhibit B
for 175,000 shares of stock previously acquired upon the
exercise of stock options. The Company agrees to forgive this
debt over time, the timing of such forgiveness to be at the
discretion of Employee. The terms of the notes herein
referenced shall be modified to be non-interest bearing from
the Effective Date. Employee is responsible for any and all
payments of income taxes and/or withholding resulting from
such modification of the notes and forgiveness.
8. Warrants and Stock Options. Employee shall be entitled to
continue to vest in all warrants and stock options currently
designated to Employee in accordance with and under the terms
of the stock option agreements to which they comport. Vesting
of such stock options shall accelerate upon the sale or merger
of the Company. For purposes of this article, sale or merger
is not defined as a merger between iNTELEFILM and WebADTV.
9. Travel and Business Expenses. Company shall reimburse Employee
for all reasonable business expenses incurred during travel on
behalf of the Company. All such travel shall be approved in
advance by the Company's Chief Executive Officer.
10. Employee Benefits. Employee shall be entitled to receive
health care insurance benefits, automobile expenses, club dues
and miscellaneous expenses of $25,000 per annum for the
Employment Term. Such amount to be payable in equal monthly
installments for the Employment Term.
11. Board Membership. Employee shall not be entitled to board
membership on the board of the Company or any of its
subsidiaries. Employee shall tender his resignation from the
board of directors and as an officer of the Company and its
subsidiaries substantially in the form attached as Exhibit A
simultaneously with the execution of this Employment
Agreement.
12. Severance Agreement. Employee shall release Company from any
and all obligations stemming from that certain severance
agreement dated April 1, 1999 executed by iNTELEFILM Corp. for
the benefit of Employee. Employee agrees that the terms and
conditions of this Employment Agreement supersede and replace
in their entirety the terms of the herein referenced severance
agreement.
12. Representations and Warranties of Employee. 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 which will or might
prevent, interfere with or impair the full performance by
Employee of these obligations under this Agreement.
13. Confidentiality and Non-Solicitation.
13.1 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, Employee shall
not use or cause to be used any customer lists, trade secrets
or any other confidential business information obtained by
hisr as a result of his employment or relationship to Company
or any affiliate of Company. Employee acknowledges the
interest of Company 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 or any
affiliate of Company, except when authorized in writing to do
so by the Board of Directors of Company; provided, however,
that the parties acknowledge that it is not the intent of this
Section 13.1 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.
13.2 Covenant to Deliver Records. During Employee's employment
by Company, Employee will hold as Company'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, 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
without retaining any copies thereof.
13.3 Non-solicitation and Non-Competition.
(a) Employee agrees that he will not, during the
Employment Term and for one (1) year 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 or to enter into an
employment or service relationship with any person or
entity that is a competitor of Company.
(b) Employee agrees that he will not, during the
Employment Term and for one (1) year thereafter (the
"Post-Termination Period"), directly or indirectly
through the actions of any person or entity, whether
for her own benefit or for that of another person or
entity, 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 or to enter into an
employment or service relationship with any person or
entity that is a competitor of Company.
(c) Employee agrees that he will not, during the
Employment Term and thereafter, directly or
indirectly through the actions of any person or
entity, whether for her 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, including, but not limited to, actions that
would interfere with or damage the Company's business
relationships with its employees, lenders, creditors,
clients and others with whom it does business.
(d) 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 or
otherwise directly or indirectly compete with the
Company or render services or assistance to any
person or entity that is competing or intends to
compete with the Company.
13.4 Injunctive Relief. Employee agrees that a monetary remedy
for a breach of this Article 13 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 irreparable injury and damages. Therefore, without
in any way limiting Company's other rights and remedies, the
Company 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.
14. Termination.
(a) Death or Disability. The Company may immediately terminate
this Agreement in the event of the death of Employee or if
Employee becomes disabled, which is defined as Employee not
being able to substantially perform all of her obligations
hereunder for a period of three (3) consecutive months or
three (3) months in the aggregate during any consecutive six
(6) month period. Such termination shall terminate any and all
obligations of Company to Employee under this Agreement other
than Employee's theretofore accrued rights hereunder. In the
event of a disagreement concerning Employee's disability, the
matter shall be resolved by a majority decision of three (3)
practicing physicians, one selected by Employee, one selected
by Company, and one selected by both such physicians.
(b) Cause. The Company may immediately terminate Employee's
employment hereunder at any time for cause, which shall mean
(i) termination by reason of fraud or embezzlement or
indictment of Employee of any felony or crime involving moral
turpitude or larceny; (ii) the commission by Employee of an
act of dishonesty constituting a crime; (iii) intentional
dereliction in the performance of Employee's duties or
responsibilities; (iv) the failure to carry out the directives
of the Board of Directors of the Company or the Vice President
relating to the conduct of the Company's business; (v) breach
of any material duty by Employee within the course of
Employee's employment hereunder; (vi) breach by Employee of
this Agreement; or (vii) knowingly imparting confidential
information relating to the business of the Company or its
personnel.
In the event Employee is terminated for cause, he will not be
entitled to any other compensation other than his then accrued
rights.
15. Miscellaneous.
15.1 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 15.1):
(a) If to Company:
iNTELEFILM CORPORATION
Crosstown Corporate Center
0000 Xxx Xxxxx Xxx Xxxx Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
With copy to:
Xxxxxx Xxxxxx, Esq.
iNTELEFILM, Corporation
Crosstown Corporate Center
0000 Xxx Xxxxx Xxx Xxxx Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
(b) If to Employee
Xxxxxxxxxxx X. Xxxx
0000 Xxxxx Xxxx
Xxxxxx, XX 00000
With copy to:
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.
15.2 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.
15.3 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.
15.4 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.
15.5 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.
15.6 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.
15.7 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.
15.8 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.
16. Outside Counsel. The parties hereto acknowledge that: (i) they
have been represented by independent counsel in connection
with this Employment Agreement; (ii) they have executed this
Agreement with the advise of such counsel; (iii) this
Employment Agreement is the result of negotiations between the
parties hereto and the advice and assistance of their
respective legal counsel. The fact that this Employment
Agreement was prepared by either parties' counsel shall be
deemed as a matter of convenience and shall have no importance
or significance. Any uncertainty or ambiguity in this
Employment Agreement shall not be construed against the
drafter simply because it prepared this Employment Agreement
in its final form.
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 XXXXXXXXXXX X. XXXX
By: /s/ Xxxx X. Xxxx /s/ Xxxxxxxxxx X. Xxxx
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Its: Chairman
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