EXHIBIT 10.21
SEVERANCE AGREEMENT WITH E. XXXXXXX XXXXXX
This agreement (the "Agreement) by and between ALL-COMM MEDIA
CORPORATION, a Nevada Corporation, having an address at 000 0xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and E. XXXXXXX XXXXXX, having
an address at X.X. Xxx 0000, Xxxxxx Xxx Xxx, Xxxxxxxxxx, 00000 (the
"Executive"), dated as of March 31, 1997, supersedes and rescinds the Employment
Agreement, dated as of September 20, 1995, by and between the Company and the
Executive (the "Employment Agreement").
THIS AGREEMENT INCLUDES A GENERAL RELEASE OF ALL CLAIMS.
WHEREAS, the Company and the Executive entered into the Employment
Agreement which, among other things, sets forth the terms and conditions of the
Executive's employment and the rights and obligations of both parties.
WHEREAS, circumstances have changed since the signing of the Employment
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. VOLUNTARY RESIGNATION
By executing this Agreement, the Executive resigns from his position as
Executive Vice President of the Company, effective April 18, 1997 (the
"Termination Date"). In addition, the Executive resigns, effective immediately,
as a director of the Company and as a director and/or officer of each subsidiary
of the Company for which the Executive currently serves as a director and/or
officer.
2. CONSIDERATION
As severance for the termination of the Employment Agreement, the Company
shall pay to the Executive $350,000, in cash, less $64,261 previously advanced
by the Company to the Executive; $35,739.00 of which shall be paid upon
execution of this Agreement and the remaining $250,000 shall be paid in eighteen
(18) equal monthly payments commencing May 14, 1997 and continuing on the 14th
day of each month thereafter until paid. In the event that any monthly payment
is more than ten (10) days late, the entire unpaid balance shall accelerate and
be due and payable and such unpaid balance shall from then on until paid bear
interest at the simple annual rate of 10%. In addition upon execution of this
Agreement, the Company shall pay the Executive the sum of $38,423.00 in cash,
representing his unpaid salary through the Termination Date. The Company shall
withhold any deductions required by federal or California state law from the
$38,423.00 payment. In addition, upon execution of this Agreement, the Company
shall pay the Executive the sum of $13,366.00 for paid vacation time not taken
by the Executive. The Company shall withhold any deductions required by federal
or California state law from the $13,366.00 payment. In addition, upon
execution of this Agreement, the Company shall pay the Executive the sum of
$154.00 in cash as reimbursement for his reimbursable business expenses through
the Termination Date. The Executive shall receive medical benefits for himself
and his immediate family, pursuant to the Executive's rights under COBRA, at the
Company's expense, for a period of one (1) year after the Termination Date. The
obligation to pay the $250,000 in installment payments shall be evidenced by a
promissory note ("Promissory Note") in the form set out in Exhibit "A" hereto.
3. STOCK OPTIONS
The Company and the Executive acknowledge that the only rights, options
or warrants to purchase shares of capital stock of the Company that the
Executive owns, of record and beneficially are: (i) an option (the "First
Option") to acquire 150,000 shares of common stock of the Company at an exercise
price of $2.00 per share pursuant to a Non-qualified Stock Option Agreement
dated as of December 1, 1995 (the "First Option Agreement), and (ii) an option
to acquire 300,000 shares of common stock of the Company; of which 150,000
shares are at an exercise price of $2.50 per share and 150,000 shares of which
are at an exercise price of $3.00 per share pursuant to
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a Non-qualified Stock Option Agreement, dated as of September 26, 1996 (the
"Second Option" and together with the First Option, the "Options"). The Company
hereby agrees that the First Option shall automatically be amended to provide
that the provisions terminating the First Option ninety (90) days after
termination of the Executive's relationship to the Company as an employee of, or
consultant to, the Company, or any of its subsidiaries or affiliates shall be
deleted, and the only time limiting the exercise of the First Option shall be
seven (7) years from the date of the First Option Agreement. The Company
confirms that the Option Cancellation Agreement, dated as of November 20, 1996
between the Company, the Executive, and E. Xxxxxxx Xxxxxx, is of no force and
effect, in as much as the offering contemplated by such Option Cancellation
Agreement was not consummated. The Company agrees to file forthwith after the
Termination Date a Registration Statement on Form S-8 or Form S-3 governing the
resale of the shares of common stock (the "Underlying Shares") issuable upon
exercise of the First Option and the Second Option from time to time and to have
such Registration Statement declared effective by the Securities and Exchange
Commission no later than ninety (90) days after the Termination Date at the
Company's expense. Failure by the Company to have such a Registration Statement
declared effective within the time prescribed shall cause the Lock-Up
Restrictions (as defined below) to immediately, upon the expiration of such
prescribed time period to be of no further force and effect as such restrictions
apply to the Executive. In the event that a Registration statement on Form S-8
with respect to the Registration of the Underlying shares is not declared
effective by the Securities and Exchange Commission within Ninety (90) days of
the Termination Date the Executive shall be entitled to exercise the First and
Second options by tendering a two year non-interest bearing promissory note and
shall be entitled to include any or all of the Options or Underlying shares
owned by the Executive on any Registration Statement registering shares of the
Company's common stock, and with respect to which the Options and Underlying
Shares are eligible to be included, filed by the Company in the future at the
Company's expense. The Executive shall be entitled to make one demand to the
Company to register all Options and Underlying Shares owned by the Executive
provided that any such demand for registration shall only be made commencing
nine (9) months after the Termination Date. Provided that the S-8 registration
is filed and becomes effective within the specified Ninety (90) day period, the
Executive agrees that he will not for a period of twelve (12) months after the
Termination Date, directly or indirectly, sell, offer, offer to sell, contract
to sell, make a short sale of, loan, grant any option for the sale of, transfer,
or otherwise dispose of more than 40,000.00 of the Underlying Shares, or any
other securities convertible into or exercisable or exchangeable for common
stock which may be acquired by the Executive ("Securities") during any 90 day
period, directly or indirectly, other than (i) as a gift, or to trusts for the
benefit of family members of the Executive, provided that the transferee thereof
agrees in writing to be bound by this Agreement, or by will or the laws of
descent and distribution, provided that prior to such transfer of the Securities
the transferee agrees in writing to be bound by this Agreement, or (ii) with the
prior written consent of the Company. This does not include shares of the
Company's common stock owned by the Executive on the Termination Date. (Any
transaction covered by the foregoing restriction is referred to as a "Transfer"
and the foregoing Restriction is referred to as the "Lock-up Restriction"). This
Agreement shall not apply to or restrict a Transfer of Any Securities from the
Executive to a third party in an non-public transaction, provided that the
Transfer otherwise complies with applicable securities laws, that such third
party agrees in writing to be bound by all of the provisions of this Agreement,
and that such third party receives the approval of the Company's Board of
Directors for such transfer, which approval will not be unreasonably withheld.
The Company agrees to maintain the effectiveness of any such Registration
Statement, including by filing any amendment or supplement thereto as may be
required by the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, for so long as the Executive shall own any Options or
underlying shares. The Company agrees to use its best efforts to have the
resale of such Options and/or Underlying Shares qualified under any applicable
"Blue Sky" laws.
The exercise of any option is not subject to approval by the option
committee or any other person or group of persons. The Executive may elect to
exercise any Option by tendering shares of the Company's common stock at market
price to pay for the exercise of Options.
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4. RETURN OF MATERIALS
The Executive shall immediately. return to the Company all confidential,
technical, financial, and business information, including lists of customers,
files, prices, memoranda and records, credit cards, cardkey passes, door and
file keys, computer access codes, computer equipment, computer programs,
software information systems, and all other physical or personal property which
the Executive received or prepared or helped prepare in connection with his
employment, except that the Executive is hereby transferred ownership to the
Micron Desktop Computer furnished to the Executive by the Company, without
charge or cost to the Executive.
5. CONFIDENTIALITY - RESTRICTIVE COVENANT
During the period the Executive is receiving severance pursuant to this
Agreement and at all times thereafter, the Executive will keep confidential and
shall not disclose to any third party or use on his own behalf or on behalf of
any third party in any manner or for any reason, without the Company's prior
written consent, any trade secrets or confidential Company information not
generally available to the public, as defined in the Uniform Trade Secrets Act.
6. DENIAL OF ANY VIOLATIONS
This Agreement and General Release shall not in any way be construed as
an admission by the Company that it has acted wrongfully with respect to the
Executive or any other person, or that the Executive has any rights whatsoever
against the Company, and the Company specifically disclaims any liability to or
wrongful acts against the Executive or any other person, on the part of itself,
its employees or its agents.
7. MUTUAL GENERAL RELEASE AND DISCHARGE
Except for the rights and obligations created by this Agreement, the
Company and the Executive, for themselves and their respective trustees
directors, officers, agents, attorneys, insurers, employees, stockholders,
representatives, assigns, successors, past and present, and each of them, and
any persons or entities acting by, through, under or in concert with each or any
of them (the "Releasing Parties"), hereby and forever release and discharge each
other, and their respective trustees, directors, officers, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, successors, past
and present, and each of them, and any persons or entities acting by, through,
under or in concert with each or any of them, from any and all causes of action,
accountings, obligations, indebtedness, damages, losses, claims, suits, costs,
liabilities, expenses, attorneys fees, allegations and demands, whether known or
unknown, now existing or that might arise hereafter, based on, or arising out
of, any circumstances whatsoever.
The Releasing Parties acknowledge that they have been advised by legal
counsel, or are otherwise familiar, with the provisions of California Civil Code
Section 1542 which provides as follows:
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
release, which if known by him must have materially affected his
settlement with the debtor.
The Releasing Parties, being aware of said code section, hereby expressly
waive any rights they might have thereunder, as well as under any other statutes
or common law principles of similar effect.
8. RESCISSION
The Executive and the Company acknowledge that the contractual
relationship between them arising out of the Employment Agreement as well as the
obligations and rights arising under the Employment Agreement is and are
rescinded and is and are null and void and will have no future effect and that
Executive and the Company will have no future employment or contractual
obligation, except as to those which arise out of this Agreement.
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9. INDEMNIFICATION; INSURANCE
The Company shall indemnify, defend, and hold harmless the Executive
against all liability, demands, claims, costs, losses. damages, administrative
proceedings and/or orders, recoveries, assessments, settlements, and expenses
(including interest, penalties, attorneys fees, accounting fees, expert witness
fees, costs and expenses of any sort) incurred by the Executive, known or
unknown, contingent or otherwise, directly or indirectly, arising out of
Employee's activities as an officer, director, shareholder, employee and/or
agent of the Company, or any of its affiliates or subsidiaries, to the fullest
extent permitted by Nevada Corporation Law, and the Company's Articles of
Incorporation and By-laws.
To the extent the Company maintains or acquires, any insurance policies
(including directors and officers insurance, sexual harassment insurance and
commercial general liability insurance) specifically insuring officers and
director's of the Company against claims, the Executive shall be entitled to
coverage thereunder as an insured.
10. FURTHER AGREEMENTS
(a) The Executive hereby agrees to fully cooperate with the Company
(including making himself available to give testimony) in connection with any
present or future dispute or litigation in which the Company is a party. The
Executive understands that he should not communicate with any person or entity
with whom the Company has a dispute or litigation with respect to facts or
circumstances surrounding such dispute or litigation. The Executive shall
deliver to the Company at least five (5) business days prior written notice if
he is called to give testimony in connection with any such dispute or
litigation. As compensation for the rendering of any services by the Executive
called for in this paragraph, the Company shall pay employee the sum of $500.00
per all or any part of each half day (4 hours) so spent together with expenses.
(b) The Company and the Executive acknowledge and agree that the
Executive, subject to Paragraph 5 hereof, shall be free to publicly cite and
discuss his prior affiliation with, the responsibility and services performed
for, and the activities of the Company in any reasonable manner and at such
times as the Executive reasonably believes will be helpful to him in furthering
his personal and professional obligations.
(c) From and after the date of this Agreement the Executive shall not
make any statements or remarks, directly or indirectly, to any persons, whether
or not such persona are involved, in the business of the Company or its
subsidiaries, of a disparaging nature with respect to the Company, its
directors, officers, employees, agents or customers or their respective
affiliates or the Company's business or operations. From and after the date of
this Agreement the Company shall not, and the Company shall cause its officers,
directors and employees not to make any statements or remarks of a disparaging
nature with respect to the Executive.
(d) The Company shall issue no press releases or make any public
statements using the Executive's name without the prior written consent of the
Executive.
(e) The Company agrees to reimburse the Executive the sum $3,500.00 as
and for attorneys fees which be paid upon execution of this Agreement.
(f) The Company shall continue lease payments, insurance coverage, and
providing maintenance for Executive's automobile, or any substantially
equivalent replacement automobile, for one (1) year after the Termination Date.
(g) The Company shall pay its American Express xxxx for which the
Executive has given a personal guaranty.
11. COMPLETE AGREEMENT
This instrument, including exhibits, constitutes and contains the entire
agreement and understanding concerning the Executive's employment, voluntary
resignation, general release of all claims and other subject matters addressed
herein between the Company and the Executive, and it supersedes and replaces all
prior
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negotiations and all agreements proposed or otherwise, whether written or oral,
including the Employment Agreement, concerning the subject matter hereof.
12. SEVERABILITY OF INVALID PROVISIONS
The provisions or this Agreement are severable, and if a court or an
arbitrator of competent jurisdiction holds any provision of this Agreement to be
illegal or unenforceable or invalid in whole or in part for any reason, the
validity and enforceability of the remaining provisions, or portions of them,
will not be affected and they shall remain in full force and effect. This
Agreement shall survive the termination of any arrangements contained herein.
13. CHOICE OF LAW
This Agreement and the rights and obligations of the Company and the
Executive, shall be construed and enforced in accordance with the laws of the
State of California without regard to the principles of conflict of laws.
14. CHOICE OF FORUM
Any dispute that arises under, or out of , or relates to this Agreement
(whether contract or tort) shall be resolved exclusively in the Xxxxxx Municipal
Court or the Los Angeles County Superior Court, according to the subject matter
jurisdiction of the dispute. The Company and the Executive stipulate that this
Agreement shall be deemed to have been entered into in Culver City, California.
15. CONSTRUCTION OF AGREEMENT
The Company and the Executive and their attorneys have participated fully
in the review and revision of this Agreement. Any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
apply in interpreting this agreement.
16. COUNTERPART EXECUTION - EFFECT
This Agreement may be executed in counterparts, and each counterpart,
when executed, shall have the efficacy of a signed original.
17. LITIGATION - COSTS AND EXPENSES
In any litigation, arbitration, or other proceeding by which one party
either seeks to enforce its rights under this Agreement (whether in contract or
tort) or seeks a declaration of rights or obligations under this Agreement, or
raises a factual or legal issue arising out of the Agreement, the prevailing
party shall be awarded reasonable attorneys fees, together with any costs of
suit and expenses, incurred in order to litigate or resolve or appeal the
dispute and/or to enforce the final judgment, whether or not the matter is
dismissed (voluntarily or involuntarily), settled, or proceeds to judgment or
verdict.
18. MODIFICATION
This Agreement may be supplemented, amended, or modified only by the
mutual agreement of the Company and the Executive. No supplement, amendment, or
modification of this Agreement shall be binding unless it is in writing and
signed by both the Company and the Executive.
19. TIME
Time is of the Essence in respect to all provisions of this Agreement
that specify a time for performance; provided however, that the foregoing shall
not be construed to limit or deprive a party of the benefits of any grace or use
period allowed in this Agreement.
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20. WAIVER
No waiver of a breach, failure of any condition, or right or remedy
contained in or granted by the provisions of this Agreement shall be effective
unless it is in writing and signed by the party waiving the breach, failure,
right or remedy. No waiver or any breach, failure, right or remedy shall be
deemed a waiver of any other breach, failure, right or remedy, whether or not
similar, nor shall any waiver constitute a continuing waiver unless the writing
so specifies.
21. FULL UNDERSTANDING AND VOLUNTARY ACCEPTANCE
The Company and the Executive represent and agree that it/he fully
understands its/his right to discuss all aspects of this Agreement including the
general release with its/his private attorney, that it/he has availed itself/
himself, to this right, that it/he has carefully read and fully understands all
of the provisions of this Agreement, and that it/he is voluntarily entering into
this Agreement.
22. HEADINGS - NOT BINDING
The use of headings in this Agreement is only for ease of reference and
the headings have no affect and are not to be considered part or a term of this
agreement.
23. NECESSARY ACTS, FURTHER ASSURANCES
The Company and the Executive shall execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Agreement.
24. RATIFICATION AND ENTRY IN MINUTES
The Board of Directors of the Company shall ratify the Agreement and
cause the Agreement and Promissory note to be entered into the minutes of the
Company.
/s/ E. Xxxxxxx Xxxxxx
---------------------------------------------------
E. XXXXXXX XXXXXX (the Executive)
ALL-COMM MEDIA CORPORATION (the Company)
BY: /s/ Xxxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxxxx Title: Chairman & CEO
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PROMISSORY NOTE
EXHIBIT "A"
-----------
$250,000.00 Culver City, California. April 18, 1997
For value received, ALL-COMM MEDIA CORPORATION, a corporation organized
under the laws of the State of Nevada (the "Maker"), promises to pay to E.
XXXXXXX XXXXXX, or order, at X.X. Xxx 0000, Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000, or
at such other place the holder hereof may hereafter designate, the principal
amount of Two Hundred Fifty Thousand Dollars ($250,000.00), without interest,
payable in installments of Thirteen Thousand Eight Hundred Eighty Eight Dollars
and Eighty Eight Cents ($13,888.88), or more, on the fourteenth (14th) of each
month for Eighteen (18) months beginning May 14, 1997 and continuing until April
l4, 1998 on which day the unpaid balance shall be due and payable.
The Maker of this Note waives diligence, presentment, protest and demand
and notice of protest, notice of demand, notice of dishonor, and notice of non
payment of this Note. The obligations of the Maker under this note shall be
absolute and the Maker waives any and all rights to offset, deduct or withhold
any payments or charges under this Note for any reason whatsoever.
Should any installment payment be more than ten (10) days late, the entire
balance of this Note shall be immediately due at the option of the holder of
this note, and upon such default, the entire unpaid balance of this Note shall
immediately bear simple annual interest at the rate of ten (10%) percent. Time
is of the essence of this Note.
Principal and interest shall be payable in lawful money of the United
States.
This Note, and the rights and obligations of the interested parties hereto,
shall be construed and enforced in accordance with the laws of the State of
California, without regard to the principles of conflict of laws.
Any dispute that arises out of this Note shall be exclusively resolved in
the appropriate California state court (Municipal or Superior) located Los
Angeles County, California.
In any litigation, arbitration, or other proceeding by which one interested
party to this Note seeks to enforce its/his rights under this Note (whether in
contract or tort) or seeks a declaration of rights or obligations under this
Note, or raises a factual or legal issue arising out of this Note, the
prevailing party shall be awarded reasonable attorneys fees, together with any
costs of suit or expenses incurred in order to resolve or litigate or appeal the
dispute, and/or to enforce the final judgment, whether or not the matter is
dismissed (voluntarily or involuntarily), settled, or proceeds to judgment or
verdict.
ALL-COMM MEDIA CORPORATION
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chairman & CEO
Address: 000 0xx Xxx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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