Exhibit 10.3
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 1, 1999,
by and between MEDIALINK WORLDWIDE INCORPORATED, a Delaware corporation with
offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Corporation"), and
XXXXX XXXXX, an individual residing at 00 Xxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx
X00XX (xxx "Employee").
W I T N E S S E T H:
WHEREAS, the Corporation desires to continue the services of the
Employee upon the terms and conditions hereinafter set forth; and
WHEREAS, the Employee desires to render services to the Corporation
upon the terms and conditions hereinafter set forth.
NOW, WHEREFORE, the parties mutually agree as follows:
Section 1. Employment. The Corporation hereby continues to employ the
Employee and the Employee accepts such continued employment, as an executive of
the Corporation, subject to the terms and conditions set forth in this
Agreement.
Section 2. Relocation. Subject to the mutual agreement of Employee and
the Corporation regarding the terms of Employee's proposed relocation, including
compensation, and further subject to the Employee's receipt of a work visa and
other required immigration documents, if any, the Employee shall relocate to New
York City on or about September 1, 1999. Notwithstanding the foregoing, prior to
the relocation of Employee, the Employee shall, subject to the approval of
either the Chief Executive Officer or Board of Directors of the Corporation,
prepare a plan of succession to ensure an orderly transition upon his departure
from London.
Section 3. Duties. The Employee is presently President-International
of the Corporation. The title, responsibilities and duties of the Employee shall
change upon the Employee's relocation to New York City.
Such new role must be mutually agreed upon prior to the relocation of the
Employee. The Employee shall properly perform such duties as may be assigned to
him from time to time by the Corporation's Chief Executive Officer or the Board
of Directors of the Corporation as the case may be. During the term of this
Agreement, the Employee shall devote all of his available business time to the
performance of his duties hereunder.
Section 4. Term of Employment. The term of the Employee's employment
shall commence on January 1, 1999 and shall continue until July 31, 2000 or
until terminated pursuant to Section 6 hereof. It is the intent of the parties
hereto that upon the expiration of the term, the Employee will serve as a
consultant to the Corporation on such terms and conditions as shall be mutually
agreed upon in good faith negotiations between the Employee and the Corporation.
Section 5. Compensation of Employee.
5.1 Compensation. The Corporation shall pay to the Employee as
annual compensation for his services hereunder a salary ("Salary") in an amount
equal to One Hundred Three Thousand ((pounds)103,000) pounds Sterling. The
Salary shall be payable monthly less such deductions as shall be required to be
withheld by applicable law and regulations. The Employee's Salary shall be
reviewed annually during the term and in no event shall be decreased during the
term.
5.2 Bonus.
(a) The Employee shall be ed to receive an annual bonus (the
"Bonus") in accordance with the provisions of this Section 5.2. The Bonus shall
be an amount equal to ten (10%) percent multiplied by the positive difference,
if any, between (i) the Operating Income (as defined herein) of Medialink
International (as defined herein) for the applicable year and (ii) the Cost of
Capital (as defined herein) of Medialink International for the applicable year.
By way of illustration, in the event the Operating Income for the year ending
December 31, 1999 is (pounds)775,000 and the Capital Base is (pounds)4,050,000,
the Bonus shall equal (pounds)41,050 or 10% x [(i) (pounds)775,000 - (ii)
(pounds)4,050,000 x 9%].
(b) The term "Medialink International" as used herein shall mean
the international division of Medialink which presently consists of Medialink
UK, Eyecatchers, London Bureau and
Medialink On-Line, and which shall include such other international entities
that the Corporation or its affiliates may acquire from time to time.
(c) The term "Operating Income" as used herein shall mean the
annual operating income of Medialink International as determined by the
Corporation's internal accounting department in accordance with past practice
and as reported to the Corporation's Board of Directors.
(d) The term "Capital Base" of Medialink International as used
herein shall mean the (x) gross weighted average purchase price of all existing
and future entities comprising Medialink International including the costs of
such transactions plus (y) any balances due from Medialink International to the
Medialink Untied States operation ("Medialink US") less any balances due from
Medialink US to Medialink International, all as reflected in the Corporation's
financial statements as determined by the Corporation's internal accounting
department in accordance with past practice. The Corporation and the Employee
hereby acknowledge that the Capital Base for the year ended December 31, 1998,
as adjusted was Four Million Three Hundred Fifty-Seven Thousand Seven Hundred
Sixty-Nine ((pounds)4,357,769) pounds Sterling.
(e) The term "Cost of Capital" as used herein shall mean the
Capital Base multiplied by nine (9%) percent.
(f) The Bonus shall be paid in cash. Notwithstanding anything to
the contrary set forth herein, the Employee shall not be entitled to receive the
Bonus in the event either (i) of the termination of this Agreement For Cause (as
hereinafter defined), or (ii) the Employee wrongfully fails to provide the
services contemplated hereby, in either case at any time prior to the payment of
the Bonus. The Employee shall be entitled to receive the Bonus in accordance
with the terms and provisions of this Agreement in the event of either (i) the
death or Disability (as hereinafter defined) of the Employee, or (ii) the
Corporation's termination of this Agreement which is not a termination For
Cause.
5.3 Expenses. The Corporation shall pay or reimburse the Employee for
all reasonable and necessary business, travel or other expenses incurred by him
with the prior consent of the Corporation, upon proper documentation thereof,
which may be incurred by him in connection with the rendition of
the services contemplated hereunder. The Corporation shall also contribute Fifty
((pounds)50) pounds Sterling per month to the Employee's television and cable
expenses. The Corporation shall also pay the Employee's Carlton Club dues up to
a maximum of One Thousand ((pounds)1,000) pounds Sterling per year and the
Employee's BAFTA Subscription up to a maximum of Two Hundred Fifty ((pounds)250)
pounds Sterling per year.
5.4 Benefits. During the term of this Agreement, the Employee shall be
entitled to participate in such option and disability plans which the
Corporation provides to its employees. The Corporation shall, in lieu of having
the Employee participate directly in the Corporation's pension plan, make
pension payments directly to the Employee's existing pension plan in an amount
equal to the payments the Corporation would have made if the Employee was
participating directly in the Corporation's pension plan. The Employee shall not
be entitled to participate in the Corporation's hospitalization or group health
benefit plans. The Corporation agrees to use its best efforts to keep its
registration statement on Form S-8 in full force and effect. The Corporation
shall contribute One Hundred Fifty ((pounds)150) pounds Sterling per month to
the Employee's health insurance premiums.
Section 6. Termination.
6.1 Termination of Employment. This Agreement shall terminate
upon the death, Disability, as hereinafter defined, termination of employment of
the Employee For Cause, as hereinafter defined, termination of the employment of
Employee without cause or because Employee wrongfully leaves his employment
hereunder.
6.2 Termination For Cause. In the event of a termination For
Cause or because Employee wrongfully leaves his employment hereunder, the
Corporation shall pay Employee all accrued and unpaid Salary through the date of
termination.
6.3 Termination Without Cause. In the event of a termination
without cause, the Employee shall be entitled to continue to participate in the
disability plans of the Corporation on the same terms and conditions as
immediately prior to his termination and shall receive his Salary, both for a
period equal to the earlier of (i) the date the Employee commences employment
elsewhere; (ii) six (6) months; or (iii) the date the term would have expired
pursuant to Section 4 of this Agreement had the Employee not been terminated.
6.4 Termination Upon Death. In the event of a termination upon
the death of Employee, the Corporation shall pay to the Employee, any person
designated by the Employee in writing or if no such person is designated, to his
estate, as the case may be, the Salary which would otherwise be payable to the
Employee for a period of six (6) months from the date of such death.
6.5 Termination Upon Disability. In the event of a termination
upon the Disability of Employee, the Corporation shall pay to the Employee or
any person designated by the Employee, (i) during the first month immediately
after the termination of employment due to such Disability, the Salary which
would otherwise by payable to the Employee and (ii) during the second and third
months immediately after the termination of employment due to such Disability,
the difference between the Salary which would otherwise be payable to the
Employee and the disability insurance payments received by Employee for such
period.
6.6 Definition of "For Cause". As used herein, the term "For
Cause" shall mean (i) Employee'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 felony,
whether or not involving the Corporation, or (ii) disobedience of a directive
from the Chief Executive Officer or Board of Directors of the Corporation
consistent with Employee's duties hereunder or (iii) breach of his
responsibilities under this Agreement.
Section 7. Disability.
7.1 Definition. In the event the Employee is mentally or
physically incapable or unable to perform his regular and customary duties of
employment with the Corporation for a period of seventy-five (75) days in any
one hundred twenty (120) day period during the term, the Employee shall be
deemed to be suffering from a "Disability".
7.2 Payment During Disability. In the event the Employee 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 the Employee his Salary and benefits during the continuance of such
disability.
Section 8. Vacations and Personal Days. The Employee shall be
entitled to vacation and personal days in accordance with Corporation policy.
The Employee's Salary shall be paid in full during his vacation and personal
days. The Employee shall take his vacation at such time or times as the Employee
and the Corporation shall determine is mutually convenient.
Section 9. Disclosure of Confidential Information.
(a) The Employee hereby acknowledges that the principal business
of the Corporation is the production of video and audio public relations
materials for distribution to news media and the distribution by satellite or
other means to television and radio stations and news media services;
distribution of public relations text, audio and video to news media and the
general public via satellite, cassette, wire or other means; distribution of
press releases by mail and facsimile; the maintenance of databases of media
contacts for and on behalf of clients; analysis and written appraisal of public
relations and public affairs campaigns as determined through press clipping
review, either on paper, video or audio tape or electronic database searches;
media research and such other businesses as the Corporation may conduct from
time to time (the "Business"). Employee acknowledges that he 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. Employee 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, Employee will not, at any
time, during or after the term of this Agreement, 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.
(b) The provisions of this Section 9 shall survive Employee's
employment hereunder.
Section 10. Covenant Not To Compete.
(a) Employee 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 Employee agrees, and, accordingly, Employee 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:
(i) 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
(ii) 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
(iii) solicit, directly or indirectly, on behalf of himself
or any third party, any client or vendor of the Corporation and its affiliates;
or
(iv) 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 10 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 10 shall not be construed to prevent Employee
from owning, directly and 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 10, (i) the Employee shall not be prohibited from rendering services for
news organizations, corporate public relations departments or public relations
agencies; (ii) the Employee may act as a news reporter or manager for an entity
whose primary function is journalism; (iii) the Employee 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) the Employee may act
as an account executive or manager at a public relations agency directly serving
that agency's clients. Notwithstanding the prior sentence, however, the Employee
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; (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 production and distribution of Satellite Media Tours
or Teleconferences; (iii) 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
photographs for public relations purposes; and (iv) 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.
(e) The term "Restricted Period", as used in this Section 10,
shall mean the earlier of (i) the term of this Agreement plus one (1) year; (ii)
one (1) year after the Employee is terminated without cause or (iii) two (2)
years after the Employee is terminated For Cause. Employee acknowledges that the
Corporation markets its Business worldwide and therefore, the term "Territory"
as used herein shall mean the entire world.
(f) The provisions of this Section 10 shall survive the
termination of Employee's employment hereunder and until the end of the
Restricted Period as provided in Section 10 (e) hereof.
Section 11. Rights and Remedies Upon Breach of Sections 9 or 10.
11.1. Return of Benefits. If the Employee breaches, or threatens to
commit a breach of, any of the provisions of Sections 9 or 10 (the "Restrictive
Covenants"), the Corporation shall have the right and remedy to require the
Employee 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 the Employee shall
account for and pay over such Benefits to the Corporation. In addition, if the
Employee breaches or threatens to commit a breach of any of the Restrictive
Covenants, (i) the Employee's unvested stock options shall immediately lapse and
(ii) the Corporation shall have the right to purchase from the Employee the
Employee'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 11.1 against any amounts owed to the Employee by the Corporation.
11.2 Injunctive Relief. Employee 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, Employee agrees that any breach or threatened breach
by him of Sections 9 or 10 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 Employee 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 12. Securities Law Compliances.
12.1 Representations of Employee. The Employee represents and
warrants as follows:
(a) no event, act or omission has occurred prior to the effective
date of this Agreement (including without limitation any criminal conviction or
failure on Employee's part to contest any criminal proceeding, or any judicial
or administrative decree or order by which Employee is bound or event affecting
any business as to which Employee was a director, officer, employee or service
provider) which would in any manner (i) require disclosure pursuant to the
provisions of Regulation S-K promulgated under the Securities Act of 1933
regarding disclosures of "Involvement in certain legal proceedings"; or (ii)
limit Employee's ability to serve as an employee of the publicly held company;
or (iii) occasion the concern of any Federal or State regulatory body (including
without limitation the Securities and Exchange Commission or any body with which
the securities of the Corporation may be listed) regarding Employee's capacity,
qualification, character or fitness, or (iv) result in the refusal or inaction
of any provider of directors' and officers' liability insurance and/or errors
and omissions insurance and/or fidelity insurance to include Employee within its
coverage; and
(b) in amplification of 12.1(a) above, except as disclosed in
writing to the Corporation, Employee has not been in any manner involved in any
civil, criminal, judicial or regulatory proceeding involving any insurance or
reinsurance broker, agent, consultant or intermediary, and/or any entity with
responsibility of any nature or kind for the auditing of the foregoing or for
the monitoring or investment of the assets of the foregoing.
12.2 Disclosure of Conflicts of Interest; Abstention from Speculation
in Securities of the Corporation or Clients.
(a) In order to avoid actual or apparent conflicts of interest,
Employee shall take all necessary actions to disclose to the Corporation any
direct or indirect ownership or financial interest in any company, person or
entity which is a service provider to the Corporation, an actual or intended
client of the Corporation, an insurer or reinsurer of the Corporation or which
is engaged in by the Corporation.
(b) While the Employee is employed by the Corporation, Employee
shall abstain from any direct or indirect acquisition of securities of (i) the
Corporation, except as offered by the Corporation to the Employee 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 the Employee's prior
written request; and from divulging or appropriating to Employee'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.
12.3 General Requirements. The Employee shall observe such business
ethics, premises security and similar requirements of the Corporation as may
from time-to-time apply.
12.4 Xxxxxxx Xxxxxxx. Considering that the Corporation is a
publicly-traded corporation, the Employee hereby agrees that the Employee shall
comply with 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 Corporation's business affairs with any individual who does not
have a business need to know such information for the benefit of the
Corporation.
Section 13. Miscellaneous.
13.1 Assignment. The Employee may not assign or delegate any of his
rights or duties under this Agreement.
13.2 Entire Agreement. This Agreement constitutes and embodies the
full and complete understanding and agreement of the parties with respect to the
Employee's employment by the Corporation, supersedes all prior understandings
and agreements, if any, whether oral or written, between the Employee 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.
13.3 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.
13.4 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.
13.5 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.
13.6 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.
13.7 Counterparts. This Agreement may be executed in counterparts, all
of which shall together constitute one and the same instrument. All documents
and signatures required hereunder may be delivered or exchanged by telecopy and
telecopied signatures shall be effective as originals thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
MEDIALINK WORLDWIDE INCORPORATED
By: /s/ J. Xxxxxx XxXxxxxxx
J. XXXXXX XXXXXXXXX
/s/ Xxxxx Xxxxx
XXXXX XXXXX
