Exhibit 10.16
PERSONAL SERVICES AGREEMENT
This PERSONAL SERVICES AGREEMENT is made as of November 17, 1999 and shall
be effective as of the date of the consummation of VStream, Inc.'s Series D
Preferred Stock Financing (the "Effective Date"), by and between VStream, Inc.,
a Delaware corporation (the "Company") having its principal place of business at
0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, and Xxx XxXxxx
("Executive").
WHEREAS, the Company desires to employ Executive pursuant to the terms and
conditions and for the consideration set forth in this Agreement and Executive
desires to enter the employ of the Company pursuant to such terms and conditions
and for such consideration;
WHEREAS, the provisions of this Agreement are a condition of Executive
being employed by Company, of Executive's having access to confidential business
and technological information, and of Executive's being eligible to receive
certain benefits of the Company. This Agreement is entered into, and is
reasonably necessary, to protect confidential information and customer
relationships to which Executive may have access, and to protect the goodwill
and other business interests of the Company; and
WHEREAS, the provisions of this Agreement are also a condition to
Executive's agreement to provide personal services to Company.
NOW THEREFORE, in consideration of the mutual promises and covenants agreed
to herein, the receipt and sufficiency of which are hereby acknowledged, Company
and Executive agree as follows:
1. Position, Term, Duties, Responsibilities
----------------------------------------
(a) Position. Executive shall be employed by the Company in the capacity
--------
of Chief Operating Officer to act in accordance with the terms and
conditions hereinafter set forth.
(b) Duties. The Executive shall, during the term of his employment
------
hereunder, devote his full normal working time, energies and attention to
the duties of his employment, as they may be established from time to time
by the Board of Directors of the Company (the "Board") consistent with the
position and office occupied by Executive. Executive shall comply with the
provisions of this Agreement and all reasonable rules, regulations and
administrative directions now or hereafter established by the Company.
(c) Term. This Agreement shall be for a term beginning on the Effective
----
Date and terminating the earlier of (i) two years from the Effective Date
(the "Expiration Date"), or (ii) the date on which Executive's employment
is terminated pursuant to Section 3 of this Agreement (the "Term");
provided that the term shall be automatically extended indefinitely
thereafter until either party shall have given notice to the contrary
(the "Term Termination Notice"), in which event the Term shall expire on the six
month anniversary of such Term Termination Notice.
(d) Other Activities. During Executive's employment with the Company,
----------------
Executive shall devote his entire business time, attention and energies to the
performance of his duties and functions under this Agreement; provided, however
that nothing in this Agreement shall prevent Executive from: (i) serving as a
director of any entity that is not a Competitive Business (as defined in Section
5); (ii) managing his personal investments and affairs and the personal
investments and affairs of any of his family members; (iii) acquiring any
interest in any entity, whether or not part of a control group, that is directly
or indirectly owned or controlled, in whole or in part, by Executive and/or one
or more members of his family, or a partnership, trust or other entity held by
or for the benefit of Executive and/or one or more members of his family and/or
(iv) performing any services for any entity, whether or not part of a control
group, that is directly or indirectly owned or controlled, in whole or in part,
by Executive and/or one or more members of his family, or a partnership, trust
or other entity held by or for the benefit of Executive and/or one or more
members of his family; provided, however, that any service shall be
insubstantial and shall not include any active involvement in the management of
such entity and provided further that such entities do not constitute a
Competitive Business (as defined in Section 5).
2. Compensation, Bonuses and Benefits
----------------------------------
(a) Base Salary. During Executive's employment with the Company, the
-----------
Company shall pay Executive a base annual salary, (the "Base Salary") which at
the time of the execution of this Agreement is Two Hundred and Fifteen Thousand
Dollars ($215,000). The Base Salary shall be payable in accordance with the
Company's normal payroll schedule, less all applicable tax withholdings for
state and federal income taxes, FICA and other deductions as required by law
and/or authorized by the Executive. The Executive's Base Salary shall be
reviewed no less frequently than annually to determine whether or not the same
should be increased in light of the duties and responsibilities of the Executive
and the performance thereof, as determined by review of comparably situated
companies and, if it is determined that an increase is merited, such increase
shall be promptly put into effect and the base salary of the Executive as so
increased shall constitute the base salary of the Executive for purposes of this
Section 2.
(b) Incentive Compensation Program. During Executive's employment with the
------------------------------
Company, Executive shall be eligible for a discretionary performance-based bonus
based upon the actual performance of the Company in relation to target
milestones agreed upon by the Compensation Committee of the Board, or the Board.
The Compensation Committee or the Board will set such milestones on or before
December 31st of each year of the Term. Any bonus payable as a performance bonus
shall be in the amount, and paid at the time and in the manner, as determined by
the Compensation Committee or the Board.
(c) Initial Stock Options. At the Effective Date, the Company shall grant
---------------------
Executive stock options in 200,000 shares of the Company's $.001 par value
common
2
stock pursuant to the Company's 1997 Stock Option/Stock Issuance Plan (the "1997
Plan") with the purchase price, expiration date, type of option, vesting and
other terms all as described on Exhibit A attached hereto. Subsequent grants may
be awarded based on your performance and contributions to the business. Any
stock options are subject to the approval of the Board.
(d) Benefits. Executive shall also be entitled to participate in such
--------
employee benefit plans which the Company provides or may establish from time to
time for the benefit of employees, subject to the terms of each such plan and
subject to the right of the Company and the Board to modify, revise or eliminate
such benefit plans from time to time in their sole discretion. Executive shall
pay for the portion of the cost of such benefits as is from time-to-time
established by Company as the portion of such cost to be paid by senior
executives of Company.
(e) Costs and Expenses. Executive shall be entitled to reimbursement for
------------------
all ordinary reasonable out-of-pocket business expenses which are reasonably
incurred by him in the furtherance of the Company's business, in accordance with
the policies adopted from time to time by the Company or the Board. Executive
will comply with the Company's travel policies as established from time to time
by the Company or the Board.
(f) Vacation. During the Term, Executive shall be entitled to four weeks of
--------
paid vacation per year so long as the absence of Executive does not interfere in
any material respect with the performance by Executive of Executive's duties
hereunder. Executive will use his best efforts to schedule vacation periods to
minimize disruption of the Company's business.
3. Termination.
-----------
(a) Mutual Agreement. This Agreement may be terminated at any time by the
----------------
mutual agreement of the Company and Executive, expressed in writing.
(b) Voluntary. Executive may terminate this Agreement with or without the
---------
consent of the Company by giving written notice of his intent to terminate with
the effective date of termination at least one hundred (100) days after the
effective date of the notice of termination. After such notice the Company may
accelerate the date of termination without being in breach hereof.
(c) Without Cause. The Company may terminate this Agreement at any time
-------------
without Cause upon twenty (20) days prior notice.
(d) Disability or Death. The Company may terminate this Agreement upon the
-------------------
death or disability of Executive. For purposes of this Agreement, Executive
shall be considered disabled if he is unable to perform his duties under this
Agreement as a result of injury, illness or other disability for a period of one
hundred eighty (180) consecutive days, or one hundred eighty (180) days in a
three hundred sixty-five (365) day period, and the Board reasonably determines
that Executive has been unable to perform his
3
duties for the one hundred eighty (180) day period as a result of injury,
illness or other disability.
(e) For Cause by the Company. The Company may terminate this Agreement for
------------------------
"Cause", as defined below, immediately upon written notice to Executive. "Cause"
shall mean:
(i) If Executive materially violates any term of this Agreement and
such action or failure is not substantially remedied or reasonable steps to
effect such substantial remedy are not commenced within twenty (20) days of
written notice from the Company to Executive.
(ii) Dishonesty which is not the result of an inadvertent or innocent
mistake of Executive with respect to the Company or any of its
subsidiaries;
(iii) Willful misfeasance or nonfeasance of duty by Executive intended
to injure or having the effect of injuring in some material fashion the
reputation, business or business relationships of the Company or any of its
subsidiaries or any of their respective officers, directors or employees;
(iv) Conviction of Executive upon a charge of any crime involving
moral turpitude or a crime other than a vehicle offense which could reflect
in some material fashion unfavorably upon the Company or any of its
subsidiaries; or
(v) Willful or prolonged absence from work by the Executive (other
than by reason of disability due to physical or mental illness) or failure,
neglect or refusal by the Executive to perform his duties and
responsibilities without the same being corrected upon twenty (20) days
prior written notice.
(f) For Good Reason by the Executive. If (i) there is a material reduction
--------------------------------
or change of Executive's reporting relationship, job duties, responsibilities or
requirements that is inconsistent with the position or positions listed in
Section 1(a) and the Executive's prior reporting relationship, duties,
responsibilities or requirements; (ii) there is a reduction in Executive's
salary then in effect, other than a reduction comparable to reductions generally
applicable to similarly situated employees of the Company; (iii) the Company
requires Executive to relocate to a facility or location more than 50 miles from
the Company's current location; or (iv) the Company materially breaches this
Agreement, Executive may at his option terminate his employment and such
termination shall be considered to be a termination of Executive's employment by
the Company for reasons other than Cause. Such termination is a termination by
Executive for Good Reason.
(g) Termination of Executive Upon Change of Control. In the event
-----------------------------------------------
Executive's employment is terminated prior to the Expiration Date by a Change of
Control of the Company, as defined below, Company shall: (i) pay to Executive,
in a lump sum within ten (10) days after the date Executive's employment is
terminated, the amount of Executive's then current Base Salary pursuant to
Section 2(a) above through the
4
termination date of this Agreement or for a period of eighteen (18) months,
whichever is longer, beginning in the month next following such termination;
(ii) pay to Executive the portion of the incentive compensation for the year of
such termination which is (A) determined by objective measurement standards
under Section 2(b), and (B) would have been paid to Executive had Executive been
continuously employed under this Agreement through the Expiration Date. Payment
of such portions of incentive compensation, if any, shall be made to Executive
within 10 business days after the date, if any, on which senior executives of
Company receive payment of their incentive compensation under such incentive
compensation program; and (iii) the Initial Stock Options shall irrevocably vest
immediately prior to the consummation of a Change of Control (as defined below)
and, if such event results in a successor firm, Executive shall receive, in lieu
of the shares so vested, the cash, stock and other securities or property in the
successor firm to which he would have been entitled if he had exercised the
Initial Stock Options immediately prior to the Change of Control or, at the
Company's election, the Initial Stock Options shall be converted into an
equivalent number of like securities, fully vested as aforesaid, preserving the
post-tax economics of the Initial Stock Options, including the substantive terms
thereof. The term of the Initial Stock Options shall be ten years from the date
of grant. The Initial Stock Options shall not be transferable except by will or
by reason of the laws of descent and distribution. Thereafter Executive shall
not be entitled to receive, and the Company shall not be obligated to provide
Executive with any additional salary, payments or benefits of any kind other
than those specifically set forth in this Section 3(g).
As used herein, "Change of Control" shall mean the occurrence of one or
more of the following:
(i) a person or entity other than an Affiliate becomes an Acquiring
Person;
(ii) a complete liquidation or dissolution of the Company other than
a liquidation or dissolution occurring after any of the following
transactions: the merger or consolidation of the Company with an Affiliate,
the transfer of fifty percent (50%) or more of the Voting Stock of the
Company to an Affiliate or Affiliates or the sale or other transfer of all
or substantially all of the assets of the Company to an Affiliate or
Affiliates;
(iii) the sale of all or substantially all of the Company's assets to
a single purchaser or group of affiliate purchasers, other than any
Affiliate or Affiliates; or
(iv) the Company engages in a merger or consolidation with another
entity other than an Affiliate and immediately after that merger or
consolidation, the persons or entities which were shareholders of the
Company immediately prior to that merger or consolidation hold, directly or
indirectly, less than fifty percent (50%) of the Voting Stock of the
surviving entity.
5
"Affiliate" shall mean any corporation, partnership, trust or other entity
of which the Company and/or any of its Affiliates directly or indirectly owns a
majority of the outstanding shares of any class of equity security of such
corporation, partnership, trust or other entity and any corporation,
partnership, trust or other entity which directly or indirectly owns a majority
of the outstanding shares of any class of equity security of the Company or any
of its Affiliates.
"Voting Stock" shall mean, with respect to a corporation. the capital stock
of any class or classes of that corporation having general voting power under
ordinary circumstances, in the absence of contingencies, to elect directors of
such corporation and, with respect to any other entity, the securities of that
entity having such general voting power to elect the members of the managing
body of that entity.
4. Payments at Termination.
-----------------------
(a) Upon (i) termination of this Agreement by the Company under Section
3(c) titled "Without Cause" or (ii) termination of this Agreement by Executive
under Section 3(f) titled "For Good Reason by the Executive," Executive shall
receive monthly payments equal to his Base Salary prior to termination
("Applicable Base Salary") through the termination date of this Agreement or for
a period of eighteen (18) months, whichever is longer, beginning in the month
next following such termination. In either case Executive shall receive all
accrued compensation and unreimbursed expenses to the date of termination as
provided herein. The monthly payments provided for in this Section 4(a) shall be
paid in accordance with the Company's normal payroll schedule, less applicable
tax withholdings for state and federal taxes and other deductions required by
law and shall not be reduced by compensation the Executive may receive from
other sources. In either such case of termination, all unexercised options
granted pursuant to the Company's stock option plan (the "Plan") shall vest and
become exercisable on the day of termination. For any such non-statutory stock
option or incentive stock option, the period for exercise of the option shall
continue for the shorter of the maximum length of time the option is exercisable
under the Plan as though the service of Executive had not terminated, and three
(3) years after the date of termination of service, provided, however, that if
the existence of this sentence would cause any incentive stock option not to
qualify as an incentive stock option pursuant to Section 422 of the Internal
Revenue Code of 1986, as amended, ("Section 422") at any time prior to ninety
(90) days after termination of employment as provided in Section 422, this
sentence shall be null and void as to such incentive stock option.
(b) If the Company terminates this Agreement due to disability, under
Section 3(d) titled "Disability or Death," Executive or his estate shall receive
the disability payments provided for by the Company's disability insurance
policy.
(c) If Executive terminates this Agreement without cause under Section
3(b), titled "Voluntary", or if this Agreement is terminated under Section 3(a),
titled "Mutual Agreement," or if this Agreement is terminated by the Company
under Section 3(e) titled "For Cause by the Company," Executive shall not be
entitled to any further payments
6
except unreimbursed expenses to the date of termination as provided herein and
any accrued compensation and as provided in Section 4(d).
(d) In each of the foregoing cases, termination is the date of actual
termination, not the date notice of termination is given. Other than payments
owing under a provision providing for payments at a different time, all payments
for accrued unpaid monthly compensation shall be made within ten (10) days after
the end of the month following the month in which termination occurred and all
payments for reimbursement shall be made within forty-five (45) days after the
end of the month following the month in which termination occurred.
(e) Unless specified otherwise in any bonus plan or bonus agreement, if
termination occurs during a bonus period pursuant to Section 3(c). titled
"Without Cause" or Section 3(f) titled "For Good Reason by the Executive," or
Section 3(d) titled "Disability or Death," and based upon the results of the
full bonus period the bonus would have been earned, any bonus which would have
been earned shall be based upon the number of calendar days in such bonus period
which have elapsed at the date of termination. Unless specified otherwise in any
such bonus plan or bonus agreement, if Executive is terminated "For Cause by the
Company" (Section 4(e)), or Executive terminates without Cause (Section 4(c).)
or Executive after termination violates a confidentiality, covenant not to
compete, or "no hire" or "no raid" agreement with the Company, its parent (if
any) or a direct or indirect Company subsidiary or affiliate, then the Company
shall have no obligation to pay any earned or unearned bonus or the payments
provided for in the first sentence of Section 4(a) hereof.
(f) The foregoing rights in this Section 4 are Executive's exclusive rights
to payment from the Company in the event of termination of this Agreement except
for amounts which the Company is required to pay under applicable statute or
regulation, payments under insurance policies, and payments owing under other
written agreement(s) (if any) between the Company and Executive.
(g) Employment at Will After Termination of Agreement. If, upon the
-------------------------------------------------
termination of this Agreement pursuant to Section 3, the parties to this
Agreement agree that Executive shall remain employed by the Company, then
Executive's employment with the Company will continue in accordance with, and
subject to, the terms and conditions of this Agreement, except that Executive's
continued employment will not be for any specific term but will be at-will and
either the Company or Executive may terminate the employment relationship at any
time for any reason whatsoever. If the Company then terminates the employment of
Executive pursuant to Section 3(c) or Executive terminates the relationship for
Good Reason pursuant to Section 3(f), Executive shall be entitled to his salary
and bonus through the date of termination. If the Company terminates the
employment of Executive for Cause pursuant to Section 3(e) or Executive
voluntarily terminates his employment pursuant to Section 3(b), Executive shall
be entitled to his salary through the date of termination and no bonus payments.
7
5. Non-Competition.
---------------
(a) Executive covenants and agrees with the Company that so long as he
is employed by the Company and for a period of the longer of (i) twelve (12)
months after termination of Executive's employment for any reason or (ii) during
which any payments are made to Executive or for his benefit following
termination of his employment pursuant to Section 4 of this Agreement, Executive
will not engage or participate, directly or indirectly, as principal, agent,
employee, employer, consultant, advisor, sole proprietor, stockholder, partner,
independent contractor, trustee, joint venturer or in any other individual or
representative capacity whatever, in the conduct or management of, or own any
stock or other proprietary interest in, or debt of, any business organization,
person, firm, partnership, association, corporation, enterprise or other entity
that shall be engaged in any business (whether in operation or in the planning,
research or development stage) that is a Competitive Business anywhere in the
Restricted Territory, unless Executive shall obtain the prior written consent of
the Board, given in its sole discretion, which consent shall make express
reference to this Agreement. Notwithstanding the foregoing, Executive may make
passive investments in any company whose stock is listed on a national
securities exchange or traded in the over-the-counter market so long as he does
not come to own, directly or indirectly, more than five percent (5%) of the
equity securities of such company. For purposes of this Agreement, a business
shall be considered a "Competitive Business" if it involves or relates to (i)
any business in which the Company is actively engaged on the date of termination
or any business in which during the twelve (12) months immediately preceding the
date of termination the Company actively contemplated engaging (as evidenced by
inclusion in a written business plan or proposal) or (ii) any business in which
an Affiliate is actively engaged on the date of termination or any business in
which during the twelve (12) months immediately preceding the date of
termination an Affiliate actively contemplated engaging (as evidenced by
inclusion in a written business plan or proposal). The term "Restricted
Territory" shall mean each and every county, province, state, city or other
political subdivision of the United States.
(b) During the time of Executive's employment and for the longer of (i)
twelve (12) months after termination of Executive's employment for any reason or
(ii) during which any payments are made to Executive or for his benefit
following termination of his employment pursuant to Section 4 of this Agreement,
without the express, prior written consent of an executive officer of the
Company, Executive shall not engage in any of the following conduct:
(i) Hire, attempt to hire or assist any other person or entity in
hiring or attempting to hire any current employee of the Company or any
person who was a Company employee within the three (3) month period prior
to the termination of Executive's employment; provided, however that this
prohibition on solicitation of the Company's employees shall not apply to
the person acting as the Executive's current executive assistant as of the
date of termination of Executive's employment; and provided further that
Executive agrees that Executive will provide the Company with thirty (30)
days prior written notice of Executive's
8
intent to solicit and/or hire such executive assistant upon Executive's
termination of employment.
(ii) Solicit, divert, or take away, in competition with the Company,
the business or patronage of any current Company customer. Notwithstanding
the foregoing, this restriction shall not apply to any person or entity who
is no longer a customer at the time of any such solicitation by Executive.
(c) Executive agrees that if he acts in violation of Sections 5 or 7 of
this Agreement, the number of days that such violation exists will be added to
any period of limitations on the specific activities.
(d) The covenants contained in paragraph (a) shall be construed as a series
of separate covenants, one for each county, province, state, city or other
political subdivision of the Restricted Territory. Except for geographic
coverage, each such separate covenant shall be deemed identical in terms to the
covenant contained in paragraph (a). If, in any judicial proceeding, a court
refuses to enforce any of such separate covenants (or any part thereof), then
such unenforceable covenant (or such part) shall be eliminated from this
Agreement to the extent necessary to permit the remaining separate covenants (or
portions thereof) to be enforced. In the event that the provisions of this
Section 5 are deemed to exceed the time, geographic or scope limitations
permitted by applicable law, then such provisions shall be reformed to the
maximum time, geographic or scope limitations, as the case may be, permitted by
applicable laws.
(e) Without limitation of any of the provisions of this Section 5, any
payments to be made to Executive or for his benefit following termination of his
employment with the Company pursuant to Section 4 of this Agreement shall be
deemed to secure his agreements set forth in this Section 5 and such payments
may be terminated by the Company if Executive fails to observe the agreements
set forth in this Section 5 and fails to cure such failure within ten (10) days
of receipt of written notice of such failure.
(f) Executive (i) acknowledges that his skills and experience are such that
he can anticipate finding employment at a senior level in his profession, and
(ii) represents and agrees that the restrictions imposed by this Section 5 on
engaging in competitive business activities are necessary for the protection of
the legitimate interests and competitive position of the Company and do not
impose undue hardships on him.
6. Termination Obligations of Executive
------------------------------------
(a) Return of the Company's Property. Executive hereby acknowledges and
--------------------------------
agrees that all personal property, including, without limitation, all books,
manuals, records, reports, notes, contracts, lists, files, disks and other media
with Company information, blueprints, and other documents, or materials, or
copies thereof, and equipment furnished to or prepared by Executive in the
course of or incident to Executive's employment, belong to the Company and shall
be promptly returned to the Company upon termination of Executive's employment.
9
(b) Cooperation in Pending Work. For two (2) months after termination of
---------------------------
Executive's employment, Executive agrees to fully cooperate with the Company in
all matters relating to the winding up of pending work on behalf of the Company
and the orderly transfer of work to other employees of the Company following any
termination of Executive's employment. For two (2) years after termination of
Executive's employment, Executive shall also cooperate in the resolution of any
dispute, including litigation of any action, involving the Company that relates
in any way to Executive's activities while employed by the Company. In the
event, however, Executive's services to the Company under this Section 6(b)
exceed forty (40) hours, the Company shall pay Executive for his services at a
rate equivalent to his Base Salary at the time of termination of employment and
shall pay Executive's out-of-pocket expenses incurred in connection with his
services. Executive shall not be entitled to compensation under this Section
6(b) if Executive is terminated for "Cause" as defined in Section 3(e) of this
Agreement. Such activities and all such activities shall be scheduled for
mutually convenient times.
7. Confidentiality.
---------------
(a) Confidential Information. Executive acknowledges that he has had and
------------------------
will have access to certain information related to the business, operations,
future plans and customers of the Company, the disclosure or use of which could
cause the Company substantial losses and damages. Accordingly, Executive
covenants that during the term of his employment with the Company and thereafter
he will keep confidential all information and documents furnished to him by or
on behalf of the Company and not use the same to his advantage, except to the
extent such information or documents are lawfully obtained from other sources on
a non-confidential (as to the Company) basis or are in public domain through no
fault on his part or is consented to in writing by the Company.
(b) Innovations, Patents, and Copyrights. Executive agrees to promptly
------------------------------------
disclose, in writing, all Innovations to the Company. Executive further agrees
to provide all assistance requested by the Company, at its expense, in the
preservation of its interests in any Innovations, and hereby assigns and agrees
to assign to the Company all rights, title and interest in and to all worldwide
patents, patent applications, copyrights, trade secrets and other intellectual
property rights or "Moral Rights" in any Innovation. Furthermore, during the
term of this Agreement, the Company may, with Executive's written permission
(such permission not to be unreasonably withheld), use Executive's name and
image as appropriate in the conduct of its business.
"Innovations" shall mean all developments, improvements, designs, original
works of authorship, formulas, processes, software programs, databases, and
trade secrets, whether or not patentable, copyrightable or protectable as trade
secrets, that Executive by himself or jointly with others, creates, modifies,
develops, or implements during the period of Executive's employment which relate
in any way to the Company's business. The term Innovations shall not include
Innovations developed entirely on Executive's own time without using the
Company's equipment, supplies, facilities or Confidential Information, and which
neither relate to the Company's business, nor result from any work performed by
or for the Company.
10
8. Right to Injunctive Relief. Executive agrees and acknowledges that a
--------------------------
violation of the covenants contained in Sections 5, 6 and 7 of this Agreement
will cause irreparable damage to the Company, and that it is and may be
impossible to estimate or determine the damage that will be suffered by the
Company in the event of a breach by Executive of any such covenant. Therefore,
Executive further agrees that in the event of any violation or threatened
violation of such covenants, the Company shall be entitled as a matter of course
to an injunction out of any court of competent jurisdiction restraining such
violation or threatened violation by Executive. Such right to an injunction to
be cumulative and in addition to whatever other remedies the Company may have.
9. Alternative Dispute Resolution. The Company and Executive mutually
------------------------------
agree that any controversy or claim arising out of or relating to this Agreement
or the breach thereof, or any other dispute between the parties relating in any
way to Executive's employment with the Company or the termination of that
relationship, including disputes arising under the common law and/or any federal
or state statutes, laws or regulations, shall be submitted to mediation before a
mutually agreeable mediator, which cost is to be borne equally by the parties.
In the event mediation is unsuccessful in resolving the claim or controversy,
such claim or controversy shall be resolved exclusively by binding arbitration.
The claims covered by this Agreement ("Arbitrable Claims") include, but are not
limited to, claims for wages or other compensation due; claims for breach of any
contract (including this Agreement) or covenant (express or implied); tort
claims; claims for discrimination (including, but not limited to, race, sex,
religion, national origin, age, marital status, medical condition, or
disability); claims for benefits (except where an employee benefit or pension
plan specifies that its claims procedure shall culminate in an arbitration
procedure different from this one), and claims for violation of any federal,
state, or other law, statute, regulation, or ordinance, except claims excluded
in the following paragraph. The parties hereby waive any rights they may have to
trial by jury in regard to Arbitrable Claims.
Claims Executive or the Company may have regarding Workers' Compensation or
unemployment compensation benefits and the noncompetition provisions of this
Agreement are not covered by the arbitration and mediation provisions of this
Agreement. Claims Executive or the Company may have for violation of the
proprietary information provisions of this Agreement as well as the terms and
provisions of Exhibit A of this Agreement are not covered by the arbitration and
mediation provisions of this Section 9 of this Agreement.
Arbitration under this Agreement shall be the exclusive remedy for all
Arbitrable Claims. The Company and Executive agree that arbitration shall be
held in or near either Boulder or Denver, Colorado and shall be in accordance
with the then-current Employment Dispute Resolution Rules of the American
Arbitration Association, before an arbitrator licensed to practice law in
Colorado. The arbitrator shall have authority to award or grant both legal,
equitable, and declaratory relief. Such arbitration shall be final and binding
on the parties. The Federal Arbitration Act shall govern the interpretation and
enforcement of this Section 9 pertaining to Alternative Dispute Resolution.
This Agreement to mediate and arbitrate survives termination of Executive's
employment.
11
10. Use of Executive's Likeness. For so long as Executive is employed by
---------------------------
the Company or an Affiliate, Executive authorizes the Company or an Affiliate to
use, reuse and to reasonably grant others the right to use and reuse without
additional compensation, Executive's name, photograph, likeness (including
caricature), voice and biographical information and any reproduction or
simulation thereof in any media now known or hereafter developed, for valid
business purposes of the Company or an Affiliate.
11. Exclusion of Property of Others. Executive will not bring to the
-------------------------------
Company or use in the performance of his duties any documents or materials of a
former employer that are not generally available to the public or that have not
been legally transferred to the Company.
12. Executive's Authorization to Deduct Amounts Owed. Upon Executive's
------------------------------------------------
separation from employment, Company is authorized to deduct from Executive's
final wages or other monies due Executive any debts or amounts owed to Company
by Executive.
13. Integration. This Agreement and any exhibits attached hereto shall
-----------
constitute the entire Agreement relating to the employment of Executive. This
Agreement shall be governed by the laws of Colorado, excluding laws on choice of
law. Any litigation regarding this Agreement shall only be brought and heard in
the federal or state courts located in Denver, Colorado and no transfer of venue
outside such area shall be permitted.
14. Unenforceability. If any paragraph or subparagraph of this Agreement or
----------------
any part thereof shall be unenforceable under any applicable laws,
notwithstanding such unenforceability the remainder of this Agreement shall
remain in full force and effect.
15. Binding. This Agreement shall inure to the benefit of and be binding
-------
upon, the Company and its affiliates and subsidiaries.
16. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the laws of the State of Colorado.
17. Attorneys' Fees. In the event of any legal or arbitration action or
---------------
proceeding to enforce or interpret the provisions hereof, the prevailing party
shall be entitled to reasonable attorneys' fees and costs, whether or not the
proceeding results in a final judgment.
18. Survival. Terms which by their terms or sense are to survive
--------
termination hereof shall so survrve.
19. Notice. All notices or other communications required or permitted
------
hereunder shall be made in writing and shall be deemed to have been duly given
if delivered by hand, overnight delivery or mailed, postage prepaid, by
certified or registered mail, return receipt requested, and addressed to the
Company:
VStream, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Board of Directors
12
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to Executive at:
Xxx XxXxxx
0000 Xxxxxx Xxxx
Xxxxxxxxx XX 00000
Telephone: (000) 000-0000
Executive and the Company shall be obligated to notify the other party of any
change in address. Notice of change of address shall be effective only when made
in accordance with this Section.
20. Executive Acknowledgment. The parties acknowledge (a) that they have
------------------------
consulted with or have had the opportunity to consult with independent counsel
of their own choice concerning this Agreement, and (b) that they have read and
understand the Agreement, are fully aware of its legal effect, and have entered
into it freely based on their own judgment and not on any representations or
promises other than those contained in this Agreement. Executive expressly
acknowledges that his counsel is associated with a member of the Compensation
Committee of the Board, and Executive expressly represents that he will not
assert any claims against the Company, the Compensation Committee or the Board,
alleging in any manner that he was inadequately represented by counsel or that
his counsel had a conflict of interest that prevented such counsel from properly
advising or representing Executive in all matters associated with the
negotiation of this Agreement. Executive expressly waives, holds harmless and
covenants not to xxx the Company, the Compensation Committee and the Board from
any and all claims, demands, causes of action, judgments and damages arising out
of, relating to or alleged to have resulted from any real or perceived
inadequate representation or conflict of interest involving his counsel.
IN WITNESS WHEREOF, the parties have executed this Personal Services
Agreement as of the Effective Date.
VSTREAM, INC.
By:/s/ Xxxx X. Xxxxxxxxx
---------------------
Title: CEO
------------------
EXECUTIVE
/s/ Xxx XxXxxx
------------------------
13
