Contract
Exhibit
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (the
“Agreement”), dated as of December 31, 2005, by and between MEDIALINK WORLDWIDE
INCORPORATED, a Delaware corporation with offices at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the “Corporation”), and XXXXXXXX XXXXXXXXX, an individual
residing at 00 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the
“Executive”).
W
I T N E S S E T H:
WHEREAS,
the
Corporation desires to continue the services of Executive upon the terms and
conditions hereinafter set forth; and
WHEREAS,
Executive desires to render services to the Corporation upon the terms and
conditions hereinafter set forth.
NOW,
THEREFORE,
the
parties mutually agree as follows:
Section
1. Employment.
The
Corporation hereby employs Executive and Executive on the Effective Date (as
hereinafter defined) accepts such
employment, as an executive of the Corporation, subject to the terms and
conditions set forth in this Agreement.
Section
2. Duties.
Executive shall be employed as Chairman, President and Chief Executive Officer
of the Corporation and may be elected to such other offices of the Corporation
as the Board of Directors of the Corporation (the “Board”) shall determine. For
so long as Executive shall be employed by the Corporation, he shall be nominated
to the Board. Executive shall perform such duties that are consistent with
his
position as Chairman, President and Chief Executive as may be assigned to him
from time to time by the Board. If requested by the Corporation, Executive
shall
serve on any committee of the Board without additional compensation. During
the
Term, Executive shall devote all of his available business time to the
performance of his duties hereunder unless otherwise authorized by the Board.
Executive’s duties shall be performed in the New York Metropolitan area which
shall include Long Island, New York City, Westchester County, northern New
Jersey and southwestern Connecticut (“New York Metropolitan Area”). The
Corporation cannot require Executive to relocate beyond the New York
Metropolitan Area.
Section
3. Term
of Employment.
The
term of Executive’s employment shall continue as of the date hereof (the
“Effective Date”) and shall be automatically renewed each December 31
unless either party gives the other party written notice of termination at
least
one-hundred and eighty (180) days prior to the end of the calendar year or
unless earlier terminated in accordance with the provisions hereof (the
“Term”).
Section
4. Compensation
of Executive.
4.1. Compensation.
The
Corporation shall pay to Executive as annual compensation for his services
hereunder a base salary (“Salary”) in an amount equal to Four Hundred and
Twenty-Seven Thousand and 00/100 ($427,000.00) Dollars. The Salary shall be
reviewed every January 1st for merit increases, but shall, in any event, be
increased each January 1st by at least the percentage increase, if any, in
the
Consumer Price Index, as defined herein, for the most recent calendar month
for
which the Consumer Price Index has been published over the Consumer Price Index
for the same calendar month in the immediately preceding year. As used herein,
the “Consumer Price Index” shall mean the Consumer Price Index for All Urban
Consumers, New York - Northeastern New Jersey area (1982-84=100) issued by
the
Bureau of Labor Statistics of the United States Department of Labor; provided
that in the event the Consumer Price Index shall hereafter be converted to
a
different standard reference base or otherwise revised, the determination of
the
salary increase shall be made with the use of such conversion factor, formula
or
table for converting the Consumer Price Index as may be published by the Bureau
of Labor Statistics. The Salary shall be payable bi-weekly less such deductions
as shall be required to be withheld by applicable law and regulations. Executive
shall participate in the Corporation’s Bonus Plan. Such Bonus shall be
determined by the Corporation’s Compensation Committee. Notwithstanding the
foregoing, the minimum annual Bonus shall be 30% of Executive’s Salary;
provided, however, that Executive shall only be entitled to receive such Bonus
in the event the Corporation attains the annual goals set by the Compensation
Committee. The goals set by the Compensation Committee shall be consistent
with
the goals set by the Compensation Committee in prior years and shall be
communicated to Executive in writing.
4.2. Deferral
of Compensation.
Notwithstanding anything to the contrary provided in this Agreement, Executive
may elect, at his sole option and discretion, to defer the payment of any
portion of his Salary or bonus (the “Deferral Option”). The following provisions
shall apply with respect to the Deferral Option:
(a) If
Executive wishes to defer a portion of his compensation for any calendar year
during the Term, Executive shall give written notice thereof to the Corporation
not later than fifteen (15) days prior to the commencement of such year (the
“Deferral Notice”). If pursuant to a Deferral Notice, Executive exercises the
Deferral Option for any year during the Term, the deferred amount will not
be
paid to Executive in accordance with the provisions of Section 4.1, but, as
of the date on which such payment would otherwise have been made under
Section 4.1, the amount thereof will be deemed contributed to and to be and
become a part of the Deferred Compensation Account, as hereinafter defined,
and
all of the relevant provisions of this Section 4.2 shall apply with respect
thereto.
(b) The
Corporation shall establish a “Deferred Compensation Account” for the benefit of
Executive. During the Term, the Corporation shall deposit Executive’s deferred
compensation in the Deferred Compensation Account, which shall be in the form
of
a money market account, certificate of deposit or similar instrument, stocks,
whether common, preferred or otherwise, bonds and other securities or mutual
funds (collectively, “Investment Funds”), pursuant to the Deferral Notice and as
directed by Executive.
(c) All
interest, dividends, gains, losses and other additions or returns thereon shall
be credited to Executive’s Deferred Compensation Account. In the event a
separate Investment Fund is not maintained for the accrued amount in the
Deferred Compensation Account, then interest on such amount shall be credited
at
the end of each calendar quarter at a rate equal to the prime rate, as
determined from time to time.
(d) The
amount of the Deferred Compensation Account shall be paid to Executive upon
his
reaching the earlier of age of sixty-five (65) or the Corporation’s normal
retirement age, if any, if Executive’s employment with the Corporation has
terminated. Upon such event, five (5%) percent of the then value of the Deferred
Compensation Account shall be paid to Executive each quarter until Executive
has
received all of the value of such Account. In the event of a Change of Control,
as hereinafter defined, the entire value of the Deferred Compensation Account
shall be immediately paid to Executive.
(e) Executive’s
exercise of, or failure to exercise, his rights under this Section 4.2 for
any
calendar year, shall not affect Executive’s right to exercise his rights with
respect to any other calendar year.
(f) It
is the
intention of the parties that all Deferred Compensation hereunder shall
constitute an unfunded arrangement for purposes of Title I of the Employee
Retirement Income Security Act of 1974 and all rights created pursuant to this
Agreement with respect to the Deferred Compensation shall be an unsecured
contractual right of Executive, his estate and his beneficiaries against the
Corporation. Executive acknowledges that any assets the Corporation invests
are
intended to provide the Corporation with a source of funds to assist it in
meeting its liabilities under this Agreement and that the assets in the separate
funds are subject to the claims of the Corporation’s general creditors under
Federal and state law in the event of insolvency.
4.3. Expenses.
The
Corporation shall pay or reimburse Executive for all reasonable and necessary
business, travel or other expenses incurred by him in the course of his duties
with the prior consent of the Corporation, upon proper documentation thereof.
4.4. Benefits.
During
the Term, Executive shall be entitled to participate in such pension, profit
sharing, group insurance, stock option, hospitalization, and group health
benefit plans and all other plans and benefits as the Corporation provides
to
its Executives. Executive shall be entitled to four weeks of paid vacation
per
year. In addition, the Corporation shall provide Executive an automobile
allowance of Seven Hundred ($700) Dollars per month during the Term.
4.5. Relocation.
In the
event Executive is asked to relocate outside the New York Metropolitan Area,
as
such term is defined in Section 2, the Corporation will negotiate an appropriate
relocation package for Executive. Nothing contained herein shall require
Executive to agree to such relocation.
4.6. Discretionary
Payments.
Nothing
herein shall preclude the Corporation from paying Executive such additional
bonuses or other compensation, as the Board, in its discretion, may authorize
from time to time.
4.7. Stock
Options.
Upon
the death or Disability, as hereinafter defined, of Executive or in the event
Executive is terminated without cause or as a result of a Change in Control,
as
hereinafter defined, all stock options granted to Executive, under the
Corporation’s Amended and Restated Stock Option Plan, including non-vested
options, shall automatically become vested and immediately
exercisable.
Section
5. Termination.
5.1. Termination
of Employment.
This
Agreement shall terminate on December 31 of the year in which notice is given
by
either party pursuant to Section 3, or upon the death, Disability, termination
of employment of Executive For Cause, as hereinafter defined, termination of
the
employment of Executive without cause or because Executive wrongfully leaves
his
employment hereunder (i.e., a voluntary termination by Executive other than
a
termination by Executive pursuant to Section 3 or Section 5.6
hereof).
5.2. Termination
For Cause.
In the
event of a termination For Cause or because Executive wrongfully leaves his
employment hereunder, the Corporation shall pay Executive all accrued and unpaid
Salary and vacation through the date of termination.
5.3. Termination
Without Cause.
In the
event of a termination without cause or in the event the Corporation gives
Executive written notice of termination pursuant to Section 3, then for the
balance of the calendar year in which such notice or termination without cause
occurs, Executive shall be entitled to continue to participate in the
hospitalization, group health benefit and disability plans of the Corporation
on
the same terms and conditions as immediately prior to his termination and shall
continue to receive his Salary. The termination of employment due to the failure
of Executive to relocate shall be deemed a termination without cause. Upon
a
termination without cause, the provisions of Section 8 of this Agreement shall
also apply. In the event the Corporation terminates the employment of Executive
hereunder without cause, Executive shall be entitled to receive the amounts
provided in this Section 5.3 regardless of whether Executive obtains, or
attempts to obtain, subsequent employment and regardless of whether Executive
receives benefits pursuant to Section 8.
5.4. Termination
Upon Death.
In the
event of a termination upon the death of Executive, the Corporation shall pay
to
any person designated by Executive in writing or, if no such person is
designated, to his estate, the Salary which would otherwise be payable to
Executive for eighteen (18) months from the date of death. In addition, the
Corporation shall pay for eighteen (18) months from the date of death, on behalf
of Executive’s surviving dependents, the COBRA insurance premiums of such
dependents. No provisions of this Agreement shall limit any of Executive’s
rights under any insurance, pensions or other benefit programs of the
Corporation for which Executive shall be eligible at the time of such
death.
5.5. Termination
Upon Disability.
In the
event of a termination upon the Disability of Executive, the Corporation shall
pay to Executive or any person designated by Executive an amount equal to the
Disability Payment, as herein defined, for eighteen (18) months from the date
of
Disability. The Disability Payment shall be an amount equal to the Salary which
would otherwise be payable to Executive, less any monies received by Executive
or any person designated by Executive pursuant to disability income policies
maintained by the Corporation on behalf of Executive. Upon termination upon
Disability, the provisions of Section 9 shall apply. In addition, the
Corporation shall pay for eighteen (18) months from the date of Disability,
the
COBRA insurance premiums of Executive and his dependents.
5.6. Voluntary
Termination of Employment Agreement Prior to the Expiration of the
Term.
In the
event (i) there is a change of a majority of the members of the Board in
any three (3) month period; or (ii) the Board imposes two or more changes
in the senior management team of the Corporation over the objection of the
remaining senior managers; or (iii) the Board makes a change in the then
core business of the Corporation over the objection of the senior management
team; or (iv) the Corporation effects a substantial acquisition,
disposition or business combination over the objection of senior management;
or
(v) the Corporation materially breaches any of the material terms of this
Agreement, including, without limitation, a reduction of Executive’s Salary,
then Executive shall have the right to voluntarily terminate this Agreement
by
giving written notice (“Notice”) to the Board of his desire to terminate his
employment. Upon receipt of such Notice, the Board shall appoint one of its
members to meet with Executive and attempt to reach a resolution of such
differences. If such differences are not resolved to Executive’s satisfaction
within thirty (30) days of such Notice (“Irreconcilable Differences”), then
Executive may send a further notice (the “Termination Notice”) to the Board
terminating his employment. In such event, Executive’s voluntary termination
pursuant to this Section 5.6 shall be treated as a “termination without cause”
under Section 5.3, and the provisions of Section 5.3 and Section 8 of this
Agreement shall apply.
5.7. Definition
of “For Cause”.
As used
herein, the term “For Cause” shall mean (i) Executive’s indictment, plea or
conviction in a court of law of any crime or offense involving willful
misappropriation of money or other property or any other crime involving moral
turpitude which constitutes a felony, whether or not involving the Corporation;
(ii) disobedience of a material directive, other than a directive to
relocate to an office of the Corporation more than thirty (30) miles from the
office where Executive is employed pursuant to this Agreement, from the Board
consistent with Executive’s duties hereunder, if such disobedience is not cured
within 20 days after written notice thereof; (iii) Executive’s habitual
drunkenness or habitual use of illegal substances, in either case continuing
after warning; (iv) failure to cooperate with governmental or regulatory
investigation, concerning the Corporation or Executive; (v) failure to honestly
provide the certification as required under Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and regulations promulgated thereunder; or (vi) a material
breach of his responsibilities under this Agreement, if
such
material breach is not cured within 20 days after written notice
thereof.
With
respect to (i) above, in the event of Executive’s indictment, Executive shall
receive his Salary for the balance of the calendar year in which such indictment
occurs, unless convicted or he enters a plea of guilty. Any notice required
to
be given by the Corporation pursuant to any clause of the definition of For
Cause shall specify the nature of the conduct allegedly constituting For Cause
and the manner in which the Corporation requires such conduct to be cured.
In
addition, in the event the Corporation terminates Executive’s employment For
Cause, it must provide Executive with a written notice specifying the reasons
constituting For Cause.
Section
6. Disability.
6.1. Definition.
In the
event Executive is mentally or physically incapable or unable to perform his
regular and customary duties of employment with the Corporation for a period
of
ninety (90) days in any one hundred twenty (120) day period during the Term,
Executive shall be deemed to be suffering from a “Disability”.
6.2. Payment
During Disability.
In the
event Executive is unable to perform his duties hereunder by reason of a
disability, which disability does not constitute a Disability, the Corporation
shall continue to pay Executive his Salary and benefits during the continuance
of such disability.
Section
7. Vacations
and Personal Days.
Executive shall be entitled to vacation and personal days in accordance with
Corporation policy. Executive’s Salary shall be paid in full during his vacation
and personal days. Executive shall take his vacation at such time or times
as
Executive and the Corporation shall determine is mutually
convenient.
Section
8. Severance
Payment.
8.1. In
the
event the Corporation gives Executive written notice of termination pursuant
to
Section 3 or Executive’s employment is terminated without cause or voluntarily
(in accordance with Section 5.6) by Executive, Executive shall be offered the
opportunity to execute a separation and release agreement prepared by, and
satisfactory to the Corporation. Contingent upon Executive signing and adhering
to such separation and release agreement, Executive shall receive a severance
payment (the “Severance Payment”) equal to the sum of (i) 300% of the Salary in
effect as of Executive’s last day of employment plus (ii) 155% of the amount
that Executive earned as a Bonus pursuant to Section 4.1 hereof for the
fiscal year immediately preceding the termination.
8.2. The
Severance Payment shall be payable over the four year period commencing on
the
date Executive ceases to receive payments pursuant to Section 5.3 hereof
(hereinafter referred to as the “Severance Period”). The Severance Payment shall
be payable semi-monthly less such deductions as shall be required to be withheld
by applicable laws and regulations during the Severance Period as
follows:
(a) Thirty-One
(31%) of the Severance Payment shall be payable in equal installments over
the
first 12 months (“Year One”) of the Severance Period;
(b) Twenty-Six
(26%) of the Severance Payment shall be payable in equal installments over
the
next 12 months (“Year Two”) of the Severance Period;
(c) Twenty-Three
(23%) of the Severance Payment shall be payable in equal installments over
the
next 12 months (“Year Three”) of the Severance Period; and
(d) Twenty
(20%) of the Severance Payment shall be payable in equal installments over
the
final 12 months (“Year Four”) of the Severance Period;
8.3. In
the
event Executive receives the Severance Payment in accordance with this Section
8, Executive shall nevertheless be entitled to receive the payments and benefits
set forth in Section 5.3 in accordance with the terms thereof and the Severance
Payment shall not affect his right to such payments and benefits.
Section
9. Disability
Plan.
In the
event Executive’s employment is terminated due to Disability, Executive shall be
entitled to disability payments pursuant to the disability plan contained in
this Section 9. Such disability payments shall be for a term of four (4)
years commencing from the January 1 following the termination of employment
due
to Executive’s Disability. Executive shall be compensated during such period at
a rate equal to the Disability Rate, as hereinafter defined. Executive shall
remain subject to the same terms and conditions contained in Section 12 hereof,
except that the Restricted Period shall mean a period equal to the four (4)
year
disability term plus an additional one (1) year. As used herein, the term
“Disability Rate” shall mean the following: (a) for the first twelve (12) months
of his disability period, the Disability Rate shall be a rate equal to (i)
90%
of the Salary in effect as of Executive’s last day of employment (the “Last
Salary”) and (ii) one-half of the amount that Executive earned as a Bonus
pursuant to Section 4.1 hereof for the fiscal year immediately preceding
the termination (the “Last One-Half Bonus”), and (b) for each twelve (12) months
thereafter, the Disability Rate shall be determined by multiplying the Last
Salary and the Last One-Half Bonus by the Applicable Percentage set forth in
the
schedule below as follows:
|
Applicable
Percentage
|
|
|
Second
Period
|
80%
|
|
Third
Period
|
70%
|
|
Fourth
Period
|
60%
|
The
Disability Rate shall be payable semi-monthly less such deductions as shall
be
required to be withheld by applicable laws and regulations.
Notwithstanding
anything to the contrary contained herein, the Disability Rate during the
disability period shall be reduced by any monies received by Executive pursuant
to disability income policies maintained by the Corporation on behalf of
Executive.
Section
10. Change
in Control.
10.1. Payment
on Change in Control.
(a) In
the
event of a Change in Control, as hereinafter defined, of the Corporation at
any
time during the Term, followed by Executive’s employment hereunder being
terminated for any reason whatsoever by the Corporation, its successor or
Executive, including voluntary termination by Executive within twenty-four
(24)
months of a Change in Control, the Corporation and/or its successor shall be
obligated to furnish Executive with an office consistent with the office
provided to Executive immediately prior to such termination at a comparable
location for a period of one (1) year and to pay to Executive a lump sum in
an
amount equal to three (3) times: (i) the Salary to be paid to Executive pursuant
to Section 4 hereof for the calendar year in which such termination occurs,
plus
(ii) the bonus declared payable to Executive for the immediately preceding
calendar year pursuant to Sections 4.1 and 4.6 hereof, and (iii) the amount
credited to Deferred Compensation for the immediately preceding calendar year.
The payment of the above amount shall be made as soon as practicable after
Executive’s termination of employment, but in no event more than thirty (30)
days after termination and shall be in addition to any other payments to which
Executive may be entitled pursuant to Sections 4.7, 5 and 6 hereof. In addition,
the Corporation shall: (i) continue to allow Executive to participate in the
hospitalization, group health benefit and disability plans of the Corporation
for 12 months from the date of Executive’s termination of employment on the same
terms and conditions as immediately prior to Executive’s termination (or provide
the equivalent thereof if such plans do not allow such participation); (ii)
continue to pay to Executive the automobile allowance provided in Section 4.4
hereof until the end of the automobile lease then in effect (but not for more
than three (3) years);and (iii) provide appropriate outplacement services the
cost of which shall not exceed $15,000 as selected by Executive for up to 12
months from the date of Executive’s termination of employment.
(b) In
the
event it shall be determined that any payment or distribution to or for the
benefit of Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this paragraph of Section
10.1
(a “Payment”)) is subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”) in connection with a
Change in Control of the Corporation or any interest or penalties are incurred
by Executive with respect to such excise tax (such excise tax, together with
any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then Executive shall be entitled to receive an additional payment
(a “Gross-Up Payment”) from the Corporation in an amount such that after payment
by Executive of all taxes including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and any Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
10.2. Change
in Control Defined.
A
“Change in Control” shall be deemed to occur upon the earliest to occur after
the date of this Agreement of any of the following events:
(a) Acquisition
of Stock by Third Party.
Any
Person (as hereinafter defined) is or becomes the Beneficial Owner (as
hereinafter defined), directly or indirectly, of securities of the Corporation
representing thirty-three (33%) percent or more of the combined voting power
of
the Corporation’s then outstanding securities and such Person has initiated in
the past or thereafter initiates actions or demonstrates an intent to influence
or control the business, affairs or management of the Corporation or to cause
the Corporation to enter into a transaction or a series of transactions with
such Person or a third party without the prior consent or request of the
Board;
(b) Change
in Board of Directors.
During
any period of 12 months, individuals who at the beginning of such period
constitute the Board, and any new director whose election by the Board or
nomination for election by the Corporation’s stockholders was approved by a vote
of at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least
a majority of the Board;
(c) Corporate
Transactions.
The
effective date of a merger or consolidation of the Corporation with any other
entity, other than a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior to such merger
or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 51%
of
the combined voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation and with the power
to
elect at least a majority of the Board or other governing body of such surviving
entity;
(d) Liquidation.
The
approval by the shareholders of the Corporation of a complete liquidation of
the
Corporation or an agreement for the sale or disposition by the Corporation
of
all or substantially all of the Corporation’s assets; and
(e) Other
Events.
There
occurs any other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the Exchange
Act, whether or not the Corporation is then subject to such reporting
requirement.
(f) Certain
Definitions.
For
purposes of this Section 10, the following terms shall have the following
meanings:
a. “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
b. “Person”
shall have the meaning as set forth in Section 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude (i) the Corporation, (ii)
any
trustee or other fiduciary holding securities under an employee benefit plan
of
the Corporation, and (iii) any corporation owned, directly or indirectly, by
the
shareholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
c. “Beneficial
Owner” shall have the meaning given to such term in Rule 13d-3 under the
Exchange Act: provided, however, that Beneficial Owner shall exclude any Person
otherwise becoming a Beneficial Owner by reason of the shareholders of the
Corporation approving a merger of the Corporation with another
entity.
10.3. Coordination
with Section 8.
Notwithstanding anything to the contrary contained herein, the parties agree
that in the event there is a Change in Control and Executive receives payments
as provided in Section 10.1 hereof, then Executive shall not receive the
Severance Payment pursuant to the provisions of Section 8 hereof.
Section
11. Disclosure
of Confidential Information.
11.1. Principal
Business.
Executive hereby acknowledges that the principal business of the Corporation
is
providing video and audio production and satellite and other distribution
services to television and radio stations and Internet sites for corporations
and other organizations seeking to communicate their news to the public;
corporation communications consultation and production primarily employing
audio
and video capabilities; distribution of public relations text, audio and video
to news media and the general public via satellite, streaming media, cassette,
wire or other means; distribution of press releases by the Internet, mail and
facsimile; the maintenance of databases of media contacts for and on behalf
of
clients; providing closed-captioned text and associated streaming video clips;
electronic tracking of watermark embedded materials that are distributed or
broadcast for the purpose of reporting such broadcast or distribution; and
such
other businesses as the Corporation may conduct from time to time (the
“Business”). Executive acknowledges that he has and will be acquiring
confidential information concerning the Corporation and the Business and that,
among other things, his knowledge of the Business will be enhanced through
his
employment by the Corporation. Executive acknowledges that such information
is
of great value to the Corporation, is the sole property of the Corporation,
and
has been and will be acquired by him in confidence. In consideration of the
obligations undertaken by the Corporation herein, Executive will not, at any
time, during or after the Term, reveal, divulge or make known to any person,
any
information which is treated as confidential by the Corporation and not
otherwise in the public domain or previously known to him. Executive agrees
that
all materials or copies thereof containing confidential information of the
Corporation in Executive’s custody or possession will not, at any time, be
removed from the Corporation’s premises without prior written consent of an
executive officer of the Corporation (except as reasonably necessary in the
discharge of Executive’s duties hereunder) and shall be delivered to the
Corporation upon the earlier of (i) a request by the Corporation or (ii) the
termination of Executive’s employment with the Corporation. After such delivery,
Executive shall not retain any such materials or copies thereof.
11.2. Developments.
(a) Executive
agrees to make full and prompt disclosure to the Corporation of all inventions,
improvements, discoveries, methods, developments, computer software (and
programs and code) and works of authorship, whether or not patentable or
copyrightable, which were or are created, made, conceived or reduced to practice
by Executive or under Executive’s direction or jointly with others during
Executive’s employment by the Corporation or during Executive’s provision of
services as a consultant to the Corporation, whether or not during normal
working hours or on the premises of the Corporation (all of which are
collectively referred to in this Agreement as “Developments”).
(b) Executive
also agrees to assign and, by executing this Agreement, Executive does hereby
assign, to the Corporation (or to any person or entity designated by the
Corporation) all of Executive’s rights, titles and interests, if any, in and to
all Developments and all related patents, patent applications, copyrights and
copyright applications. However, this Section 11(c) shall not apply to
Developments (i) which do not relate to the present or planned business or
research and development of the Corporation and (ii) which are made and
conceived by Executive: (A) at a time other than during normal working
hours, (B) not on the Corporation’s premises and (C) not using the
Corporation’s tools, devices, equipment or proprietary information. Executive
understands that to the extent that the terms of this Agreement shall be
construed in accordance with the laws of any state which precludes a requirement
in an employee’s agreement to assign certain classes of inventions made by an
employee, this Section shall be interpreted not to apply to any invention which
a court rules and/or the Corporation agrees falls within such class or classes.
Executive also agrees to waive all claims to moral and/or equitable rights
in
any Developments.
(c) Executive
agrees to cooperate fully with the Corporation, both during and after
Executive’s employment with the Corporation, with respect to the procurement,
maintenance and enforcement of copyrights, patents and other intellectual
property rights (both in the United States and foreign countries) relating
to
Developments. Executive agrees that he will sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights, and powers of attorney,
which the Corporation may deem necessary or desirable in order to protect its
rights and interests in any Development. Executive further agrees that if the
Corporation is unable, after reasonable effort, to secure Executive’s signature
on any such papers, any executive officer of the Corporation shall be entitled
to execute any such papers as Executive’s agent and attorney-in-fact, and
Executive hereby irrevocably designates and appoints each executive officer
of
the Corporation as Executive’s agent and attorney-in-fact to execute any such
papers on Executive’s behalf, and to take any and all actions as the Corporation
may deem necessary or desirable, in order to protect its rights and interests
in
any Development, under the conditions described in this sentence.
11.3. Survival.
The
provisions of this Section 11 shall survive Executive’s employment
hereunder for (i) a period of five (5) years commencing on the date this
Agreement is terminated or (ii) a period of two (2) years from the end of the
Severance Period, as the case may be.
Section
12. Restrictive
Covenant.
12.1. Covenant
Not To Compete.
(a) Executive
recognizes that the services to be performed by him hereunder are special,
unique and extraordinary. The parties confirm that it is reasonably necessary
for the protection of the Corporation that Executive agrees, and, accordingly,
Executive does hereby agree, that he will not, directly or indirectly, in the
Territory, as hereinafter defined, at any time during the Restricted Period,
as
hereinafter defined:
d. engage
in
the Business for his account or render any services which constitute engaging
in
the Business, in any capacity to any entity; or become interested in any entity
engaged in the Business either on his own behalf or as an officer, director,
stockholder, partner, principal, consultant, associate, employee, owner, agent,
creditor, independent contractor, or co-venturer of any third party or in any
other relationship or capacity; or
e. employ
or
engage, or cause to authorize, directly or indirectly, to be employed or
engaged, for or on behalf of himself or any third party, any employee,
representative or agent of the Corporation; or
f. solicit,
directly or indirectly, on behalf of himself or any third party, any client
or
vendor of the Corporation and its affiliates; or
g. have
an
interest as an owner, lender, independent contractor, co-venturer, partner,
participant, associate or in any other capacity, render services to or
participate in the affairs of, any business which is competitive with, or
substantially similar to, the Business of the Corporation and its affiliates
as
presently conducted and as may be conducted by the Corporation during the
Restricted Period.
(b) If
any of
the restrictions contained in this Section 12 shall be deemed to be
unenforceable by reason of the extent, duration or geographical scope thereof,
or otherwise, then after such restrictions have been reduced so as to be
enforceable, in its reduced form this Section shall then be enforceable in
the
manner contemplated hereby.
(c) This
Section 12 shall not be construed to prevent Executive from owning, directly
or
indirectly, in the aggregate, an amount not exceeding two percent (2%) of the
issued and outstanding voting securities of any class of any corporation whose
voting capital stock is traded on a national securities exchange or in the
over-the-counter market.
(d) Notwithstanding
anything to the contrary set forth in this Section 12 (i) Executive
shall not be prohibited from rendering services for news organizations, or
public relations departments or public relations agencies; (ii) Executive
may act as a news reporter or manager for an entity whose primary function
is journalism; (iii) Executive may act as a member of the internal
public relations staff of any corporation or entity who performs services for
only that corporation or its affiliates, including parent corporations,
subsidiaries, and joint ventures; and/or (iv) Executive may act as an
account executive or manager at a public relations agency directly serving
that
agency’s clients. Notwithstanding the prior sentence, however, Executive may
not, render services, directly or indirectly, (i) for any organization,
department, or affiliate of such news organizations, corporate public relations
departments, or public relations agencies, whose primary purpose is to provide
the production and distribution of video or audio news releases that are
competitive with, or substantially similar to, the Business, and (ii) for
any organization, department, or affiliate of such news organizations, corporate
public relations departments, or public relations agencies, whose primary
purpose is to provide the research and analysis of public relations and public
affairs campaigns as determined through press clipping review, either on paper,
video or audio tape or electronic database searches that are competitive with
or
substantially similar to the Business.
12.2. Restricted
Period.
The
term “Restricted Period”, as used in this Section 12 shall mean: (i) the Term
plus one (1) year; (ii) in the event Executive receives the Severance Payment
pursuant to Section 8, then the Restricted Period shall continue until the
end
of the four (4) year term of the Severance Period; and (iii) in the event that
Executive ceased to be employed by the Corporation within twenty- four (24)
months after a Change in Control, then the Restricted Period shall terminate
upon the date such employment ceased if the transaction or event which triggered
the Change in Control was not approved in advance by the Board which Board
was
comprised of a majority of Continuing Directors (as such term is hereafter
defined) or, if such transaction was approved in advance by such Continuing
Directors, then the Restricted Period shall continue for two (2) years after
such employment ceased. “Continuing Directors” as used in this Section 12 shall
mean the persons who constitute the Board on the date hereof (together with
their successors whose nominations were approved by a majority of such
persons).
12.3. Territory.
Executive acknowledges that the Corporation markets its business worldwide
and
therefore the term “Territory” as used herein shall mean the entire
world.
12.4. Survival.
The
provisions of this Section 12 shall survive the termination of Executive’s
employment hereunder and until the end of the Restricted Period as provided
in
Section 12.2 hereof.
Section
13. Rights
and Remedies Upon Breach of Sections 11 or 12.
13.1. Return
of Benefits.
If
Executive breaches
any of
the provisions of Sections 11 or 12 (the “Restrictive Covenants”), the
Corporation shall have the right and remedy to require Executive to account
for
and pay over to the Corporation all compensation, profits, monies, accruals,
increments or other benefits (collectively, “Benefits”) derived or received by
him as the result of any transactions constituting a breach of the Restrictive
Covenants, and Executive shall account for and pay over such Benefits to the
Corporation. In addition, if Executive breaches any
of
the Restrictive Covenants, (i) Executive’s unvested stock options shall
immediately lapse and (ii) the Corporation shall have the right to purchase
from Executive Executive’s vested stock options for the book value of the shares
of Common Stock underlying such vested options less the exercise price of such
vested options. The Corporation may set off any amounts due to the Corporation
under this Section 13.1 against any amounts owed to Executive by the
Corporation.
13.2. Injunctive
Relief.
Executive acknowledges that the services to be rendered under the provisions
of
this Agreement are of a special, unique and extraordinary character and that
it
would be difficult or impossible to replace such services. Accordingly,
Executive agrees that any breach or threatened breach by him of Sections 11
or 12 of this Agreement shall entitle the Corporation, in addition to all other
legal remedies available to it, to apply to any court of competent jurisdiction
to enjoin such breach or threatened breach without posting a bond or showing
special damages. The parties understand and intend that each restriction agreed
to by Executive hereinabove shall be construed as separable and divisible from
every other restriction, that the unenforceability of any restriction shall
not
limit the enforceability, in whole or in part, of any other restriction, and
that one or more of all of such restrictions may be enforced in whole or in
part
as the circumstances warrant. In the event that any restriction in this
Agreement is more restrictive than permitted by law in the jurisdiction in
which
the Corporation seeks enforcement thereof, such restriction shall be limited
to
the extent permitted by law.
Section
14. Disclosure
of Conflicts of Interest; Abstention from Speculation in Securities of the
Corporation or Clients.
14.1. Conflicts
of Interest; Speculation in Securities.
(a) In
order
to avoid actual or apparent conflicts of interest, Executive shall take all
necessary actions to disclose to the Corporation any direct or indirect
ownership or financial interest (i) in any company, person or entity which
is a
service provider to the Corporation or (ii) an actual or intended client of
the
Corporation.
(b) While
Executive is employed by the Corporation, Executive shall abstain from any
direct or indirect acquisition of securities of (i) the Corporation, except
on
the open market and except as offered by the Corporation to Executive as
incentives, bonuses or options, or (ii) the Corporation’s clients or customers,
except as may be specifically approved in writing by the Corporation upon
Executive’s prior written request; and from divulging or appropriating to
Executive’s own use or to that of others any secret, confidential or proprietary
information or knowledge regarding the Corporation, its clients or customers
for
the purpose of speculation in the securities of any of them.
14.2. General
Requirements.
Executive shall observe such lawful policies of the Corporation as may from
time-to-time apply.
14.3. Xxxxxxx
Xxxxxxx.
Considering that the Corporation is a publicly-traded corporation, Executive
hereby agrees that Executive shall comply with the Corporation’s existing
policies regarding xxxxxxx xxxxxxx as set forth in the Corporation’s Employee
handbook as well as any and all federal and state securities laws, including
but
not limited to those that relate to non-disclosure of information, xxxxxxx
xxxxxxx and individual reporting requirements and shall specifically abstain
from discussing the non-public aspects of the Corporation’s business affairs
with any individual or group of individuals (e.g., Internet chat rooms) who
does
not have a business need to know such information for the benefit of the
Corporation.
Section
15. Impact
of Restatement of Financial Statements upon Previous Awards.
If any
of the Corporation’s financial statements are required to be restated, resulting
from errors, omissions, or fraud, the Corporation may (in its sole discretion,
but acting in good faith) recover all or a portion of any performance bonus
paid
to Executive with respect to any fiscal year of the Corporation the financial
results of which are negatively affected by such restatement. The amount to
be
recovered from Executive shall be the amount by which the affected bonus
exceeded the amount that would have been payable to such participant had the
financial statements been initially filed as restated, or any greater or lesser
amount (including, but not limited to, the entire award) that the Corporation
shall determine. The Compensation Committee shall determine whether the
Corporation shall effect any such recovery (i) by seeking repayment from
Executive; (ii) by reducing (subject to applicable law and the terms and
conditions of the applicable agreement, plan, program or arrangement) the amount
that would otherwise be payable to Executive; (iii) by withholding payment
of
future increases in compensation (including the payment of any discretionary
bonus amount) or grants of compensatory awards that would otherwise have been
made in accordance with the Corporation’s otherwise applicable compensation
practices; or (iv) by any combination of the foregoing.
Section
16. Miscellaneous.
16.1. Assignment.
Executive may not assign or delegate any of his rights or duties under this
Agreement.
16.2. Expenses
of Negotiating this Agreement.
The
Corporation shall pay or reimburse Executive for all reasonable out-of-pocket
attorney’s fees incurred or paid by Executive in connection with the negotiation
of this Agreement up to a maximum of $5,000.
16.3. Resignations.
In the
event Executive’s employment is terminated for any reason whatsoever, Executive
shall immediately resign as a director and officer of the Corporation, its
subsidiaries and affiliates.
16.4. Entire
Agreement.
This
Agreement constitutes and embodies the full and complete understanding and
agreement of the parties with respect to Executive’s employment by the
Corporation, supersedes all prior understandings and agreements, including
employment agreements, non-compete agreements and confidentiality agreements,
if
any, whether oral or written, between Executive and the Corporation and shall
not be amended, modified or changed except by an instrument in writing executed
by the party to be charged. The invalidity or partial invalidity of one or
more
provisions of this Agreement shall not invalidate any other provision of this
Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time.
16.5. Binding
Effect.
This
Agreement shall inure to the benefit of, be binding upon and enforceable
against, the parties hereto and their respective successors and permitted
assigns.
16.6. Captions.
The
captions contained in this Agreement are for convenience of reference only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
16.7. Notices.
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, postage prepaid, or
overnight delivery to the party at the address set forth above or to such other
address as either party may hereafter give notice of in accordance with the
provisions hereof.
16.8. Governing
Law.
This
Agreement shall be governed by and interpreted under the laws of the State
of
New York applicable to contracts made and to be performed therein without giving
effect to the principles of conflict of laws thereof. Except in respect of
any
action commenced by a third party in another jurisdiction, the parties hereto
agree that any legal suit, action, or proceeding against them arising out of
or
relating to this Agreement shall be brought exclusively in the United States
Federal Courts or New York County Supreme Court, in the State of New York.
The
parties hereto hereby accept the jurisdictions of such courts for the purpose
of
any such action or proceeding and agree that venue for any action or proceeding
brought in the State of New York shall lie in the Southern District of New
York
or Supreme Court, New York County, as the case may be. Each of the parties
hereto hereby irrevocably consents to the service of process in any action
or
proceeding in such courts by the mailing thereof by United States registered
or
certified mail postage prepaid at its address set forth herein.
16.9. 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 instrument.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date set forth
above.
MEDIALINK
WORLDWIDE INCORPORATED
By:_____________________________________
Xxxxxxx
Xxxxxxxx, Chief Financial Officer
________________________________________
XXXXXXXX
XXXXXXXXX
