TERMINATION AGREEMENT
THIS AGREEMENT is made and entered into this 26th day of July, 1999, by and
between NETRADIO CORPORATION, a Minnesota corporation (the "Company"), and
XXXXXXX X. XXXXXX, THE Company's Chief Technical Officer (the "Executive").
WHEREAS, the Company is engaged in the business of developing, marketing,
and selling products on the internet; and
WHEREAS, the Company and the Executive mutually desire to enter into a
Termination Agreement outlining specific terms and conditions in the case that
certain events trigger either the Executive's termination or diminishment in
position;
NOW THEREFORE, in consideration of the above recitals and the mutual
promises herein contained, the parties hereto agree as follows:
1. TERMINATION. This Agreement and the obligation to pay the Executive under
paragraph 2 of the Agreement will only be triggered if (i) there is Change
in Control (as defined below) and (ii) within one (1) year after such
Change in Control any one of the following events occurs:
(a) Executive's employment with the company is terminated by the Company;
or
(b) There is any adverse change in Executive's status or position as an
executive officer of the Company, including without limitation, any
adverse change in Executive's status or position as a result of a
material diminution in Executive's assignment to Executive of any
duties or responsibilities which, in Executive's reasonable judgment,
are inconsistent with the Executive's status or position; or
(c) The Company substantially reduces the Executive's base salary that
was in effect immediately before the Change in Control or otherwise
changes the eligibility requirements or performance criteria for any
benefit other than salary, which adversely effects Executive.
2. PAYMENTS DUE. If any of the events described in paragraph 1 above is
triggered, the Company shall pay Executive a cash bonus ("Severance
Payment") in an amount equal to six months of the Executive's salary,
provided, however, that in now event shall the amount due and payable
hereunder constitute a "Parachute Payment" within the meaning of the
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended. In the
event that any portion of the Severance Payment would be deemed a Parachute
Payment, the amount of the Severance Payment shall be reduced only to the
extent necessary to eliminate any such treatment or characterization.
3. DEFINITIONS. For purposes of this Agreement the following definitions
apply:
a) "AVERAGE ANNUAL COMPENSATION" shall mean the average of all taxable
compensation and fringe benefits paid to or on behalf of the Executive
by Company, based on the two (2) most recent calendar years.
b) "CHANGE IN CONTROL" shall mean:
(i) the sale of all or substantially all of the assets of the
Company.
(ii) The acquisition by any means of more than fifty percent
(50%) of the issued and outstanding voting stock of the
Company by any entity, person, or group of persons acting
in concert; provided, however, this subparagraph (ii) does
not apply to any offering by the Company to the public that
has been approved by the Company's Board of Directors,
(iii) The commencement by any entity, person or group (other than
the Company or a subsidiary of the Company) of a tender
offer or an exchange offer for fifty percent (50%) or more
of the outstanding voting stock of the Company; or
(iv) The election to the Board of Directors of the Company
without the recommendation or approval of the incumbent
Board of Directors of the Company the lesser of (i) three
director or (ii) directors constituting a majority of the
number of directors of the Company then in office.
4. MODIFICATIONS - WAIVER. No termination or modification of any
provisions of this Termination Agreement or waiver of any right provided
in it shall be effective for any purpose unless specifically set forth
in a writing signed by the party to be bound thereby. No waiver of any
right or remedy in respect of any occurrence or event on one occasion
shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.
5. ENTIRE AGREEMENT. This Termination Agreement contains the entire agreement
of the parties with respect to the subject matter hereof and supersedes all
other agreements, oral or written, with respect to the subject matter
contained in the Agreement.
6. CONTROLLING LAW. All questions concerning the validity and operation of
the Termination Agreement and the performance of the obligations imposed
upon the parties hereunder shall be governed by the laws of the State of
Minnesota.
IN WITNESS WHEREOF, the parties have executed this Termination Agreement
as of the date first set forth above.
NETRADIO CORPORATION,
A Minnesota Corporation
BY____________________________
ITS___________________________
______________________________
Xxxxxxx X. Xxxxxx
Chief Technical Officer
