EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT 10.3
THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective February
11, 2008, by and between Wireless Ronin Technologies, Inc., a corporation duly organized and
existing under the laws of the State of Minnesota, with a place of business at 0000 Xxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx 00000 (hereinafter referred to as the “Company”), and Xxxxxxxxx
Xxxxxxx, a resident of the state of Minnesota (hereinafter referred to as “Executive”).
BACKGROUND OF AGREEMENT
| • | The Company desires to employ Executive as its Executive Vice President of Engineering and Product Development, and Executive desires to accept such employment. |
| • | This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. |
In consideration of the foregoing, the Company and Executive agree as follows:
EMPLOYMENT
Subject to the terms of Articles 3 and 6, the Company agrees to employ Executive as its
executive vice president responsible for the Company’s software engineering department, systems
engineering department, product management department and network operations center, pursuant to
the terms of this Agreement, and Executive agrees to such employment. Executive’s title shall be
Executive Vice President of Engineering and Product Development. Executive’s primary place of
employment shall be the Company’s executive offices currently located in Minnetonka, Minnesota.
Executive shall generally have the authority, responsibilities, and such duties as are
customarily performed by an executive vice president of a similar size public company, specifically
including, without limitation, the following responsibilities: (a) managing the Company’s software
development efforts and the software engineering department; (b) managing the Company’s systems
engineering function and department, including systems engineering efforts both internally and in
support of the Company’s digital signage systems developed and deployed for customers; (c) managing
the product management function of the Company, including both developing new products and refining
and extending existing products; and (d) managing the Company’s network operations center.
Consistent with the foregoing, the Company may from time to time assign to Executive such other
duties relating to operations and management of the Company as it determines are consistent with
Executive’s experience and management level.
Executive shall carry out Executive’s duties in a professional and diligent manner and conduct
all interaction with others respectfully. Executive shall report to and be subject to direction
by, the Company’s chief executive officer and other officers as the Board shall specify, and shall
generally be subject to direction and advice of the Board.
BEST EFFORTS OF EXECUTIVE
Executive shall use Executive’s best energies and abilities in the performance of Executive’s
duties, services and responsibilities for the Company.
During the term of Executive’s employment, Executive shall devote substantially all of
Executive’s business time and attention to the business of the Company and its subsidiaries and
affiliates and shall not engage in any substantial activity inconsistent with the foregoing,
whether or not such activity shall be engaged in for pecuniary gain, unless approved by the Board;
provided, however, that, to the extent such activities do not violate, or substantially interfere
with Executive’s performance of the duties, services and responsibilities under this Agreement,
Executive may engage in such activities.
TERM AND NATURE OF EMPLOYMENT
Executive’s employment hereunder shall be for an initial term commencing February 27, 2008 and
ending on February 27, 2009. Neither the Company nor Executive shall be obligated to extend the
term of Executive’s employment.
The term of Executive’s employment shall automatically be extended for successive one (1) year
periods commencing on February 27, 2009 unless the Company or Executive elects not to extend
employment, by giving written notice to the other not less than thirty (30) days prior to the end
of the initial term or any extension period. ALL PARTIES: NOTE AUTOMATIC RENEWAL
The terms and conditions of this Agreement may be amended from time to time with the consent
of the Company and Executive. All such amendments shall be effective when memorialized by a
written agreement between the Company and Executive, following approval by the Company’s
Compensation Committee (the “Committee”).
COMPENSATION AND BENEFITS
During the initial term of employment hereunder, Executive shall be paid a base annual salary
of One Hundred Ninety Five Thousand Dollars ($195,000) per year (“Base Salary”), payable in
accordance with the Company’s established pay periods, reduced by all deductions and withholdings
required by law and as otherwise specified by Executive. The Company agrees to review Executive’s
performance and compensation annually. Executive’s Base Salary may be increased (but not
decreased) in the sole discretion of the Board. Base Salary shall not be reduced after any such
increase except in connection with Company compensation reductions applied to all other senior
executives of the Company. In the event Executive’s employment shall for any reason terminate
during the Term, Executive’s final monthly Base Salary payment shall be made on a pro-rated basis
as of the last day of the month in which such employment terminated.
During the term of employment, in addition to payments of Base Salary set forth above,
Executive may be eligible to participate in any performance-based cash bonus or equity award plan
for senior executives of the Company, based upon achievement of individual and/or Company goals
established by the Board or Committee. The extent of Executive’s participation in bonus plans
shall be within the discretion of the Company’s Board or Compensation Committee. For 2008
Executive will have a bonus target of $35,000, subject to performance criteria established by the
Company’s Compensation Committee and/or Board.
Executive will be entitled to receive a stock option for the purchase of 25,000 shares of
common stock pursuant to the Company’s 2006 Equity Incentive Plan and on terms and conditions of
options awarded to other executive-level employees. Executive will receive the stock option
effective on the date of Executive’s first day of employment with the Company and the strike price
of that stock option will be the closing price of the Company’s common stock on the day of
Executive’s first day of employment with the Company. During the term of employment, Executive
shall be entitled to participate in employee benefit plans, policies, programs and arrangements, as
the same may be provided and amended from time to time, that are provided generally to similarly
situated executive employees of the Company, to the extent Executive meets the eligibility
requirements for participation therein.
The Company shall reimburse Executive for all reasonable business and travel expenses incurred
by Executive in carrying out Executive’s duties, services, and responsibilities under this
Agreement. Executive shall comply with generally applicable policies, practices and procedures of
the Company with respect to reimbursement for, and submission of expense reports, receipts or
similar documentation of, such expenses.
Executive will receive a signing bonus of $25,000 (the “Signing Bonus”) within two weeks of
beginning employment with the Company, subject to the terms and conditions stated in this section.
The Company will pay Executive the Signing Bonus through its payroll system and this payment will
be subject to taxes and withholding as generally applied to other payments of compensation to
Executive. Executive will return the portion of the Signing Bonus to the Company specified below
if, for any reason except Executive’s (i) death, (ii) permanent Disability, (iii) Good Reason as
defined in Article 6 below or termination without Cause by the Company (including failure by the
Company to extend Executive’s employment pursuant to Section 3.02 above), Executive’s employment
with the Company terminates before Executive has served to the end of the periods specified below
as an employee of the Company.
| Executive’s Employment | Amount of Signing | |||
| Ends On or Before | Bonus to Return to the Company | |||
Six months of employment |
$ | 25,000 | ||
After six months but before 12 months |
$ | 16,750 | ||
After 12 months but before 18 months |
$ | 8,250 | ||
After 18 months |
$ | 0 | ||
Executive grants the Company the right to offset the appropriate amount above from any amount
due to Executive by the Company at or after the time of termination, including Executive’s final
paycheck or any Severance amount due to Executive under Article 7 below.
VACATION AND LEAVE OF ABSENCE
Vacation and leaves of absence shall be in accordance with the Company’s policies for
executive-level employees. Such policies shall be subject to change from time to time. As of the
date of this Agreement and for the 12-month period commencing on the date of Executive’s
commencement of employment, Executive shall annually be entitled to twenty-two (22) business days
of paid time off (“PTO”), in addition to the Company’s normal paid holidays. Unused PTO shall be
carried over from year to year in accordance with the Company’s then current policy. Upon
termination or expiration of Executive’s employment, Executive shall be entitled to compensation
for any accrued, unused PTO time, as of the date of termination.
TERMINATION
The Company may terminate Executive’s employment upon written notice thereof. In the event of
a termination of Executive without Cause, including a termination by Executive for Good Reason,
Executive shall be entitled to receive: (i) the Severance Payment provided in Section 7.01 and
(ii) the bonus described in Section 7.03. For the purposes of this Agreement, an election by the
Company not to extend this Agreement pursuant to Section 3.01 shall be deemed a termination without
Cause.
Executive’s employment will terminate as of the date of the death or Disability of the
Executive. In the event of such termination, there shall be payable to Executive or Executive’s
estate or beneficiaries Base Salary earned through the date of death together with a pro-rata
portion of any bonus due Executive pursuant to any bonus plan or arrangement established or
mutually agreed-upon prior to termination, to the extent earned or performed based upon the
requirements or criteria of such plan or arrangement, as the Board shall in good faith determine.
Such pro-rated bonus shall be payable at the time and in the manner payable to other executives of
the Company who participate in such plan or arrangement. For purposes of this Agreement
“Disability” shall mean a determination by the Board of the Company of the inability of Executive
to perform substantially all of Executive’s duties and responsibilities under this Agreement due to
illness, injury, accident or condition of either a physical or psychological nature, and such
inability
continues for an aggregate of ninety (90) days during any period of three hundred and
sixty-five (365) consecutive calendar days. Such determination shall be made in good faith by the
Board, the decision of which shall be conclusive and binding.
Any other provision of this Agreement notwithstanding, the Company may terminate Executive’s
employment upon written notice specifying a termination date based on any of the following events
that constitute Cause:
Any conviction or nolo contendere plea by Executive to a felony, gross
misdemeanor or misdemeanor involving moral turpitude, or any public or private conduct
or behavior by Executive that has or can reasonably be expected to have a detrimental
effect on the Company and the image of its management;
Any act of material misconduct, willful or gross negligence, or breach of duty
with respect to the Company, including, but not limited to, embezzlement, fraud,
dishonesty, nonpayment of an obligation owed to the Company, or willful breach of
fiduciary duty to the Company which results in a material loss, damage, or injury to
the Company;
Any material breach of any material provision of this Agreement or of the
Company’s announced or written rules, codes or polices; provided, however, that such
breach shall not constitute Cause if Executive cures or remedies such breach within
thirty (30) days after written notice to Executive, without material harm or loss to
the Company, unless such breach is part of a pattern of chronic breaches of the same,
which may be evidenced by reports or warning letters given by the Company to
Executive, in which case such breach is not deemed curable.
Any act of insubordination by Executive; provided, however, an act of
insubordination by Executive shall not constitute Cause if Executive cures or remedies
such insubordination within thirty (30) days after written notice to Executive,
without material harm or loss to the Company, unless such insubordination is a part of
a pattern of chronic insubordination, which may be evidenced by reports or warning
letters given by the Company to Executive, in which case such insubordination is
deemed not curable.
Any unauthorized disclosure of any Company trade secret or confidential
information, or conduct constituting unfair competition with respect to the Company,
including inducing a party to breach a contract with the Company; or
A willful violation of federal or state securities laws.
Executive may terminate Executive’s employment upon sixty (60) days prior written notice to
the Company for “Good Reason.” For purposes of this Agreement, “Good Reason” means any of the
following actions taken by the Company without Cause:
the Company or any of its subsidiaries materially reduces Executive’s Base Salary
or base rate of annual compensation, or otherwise materially changes benefits provided
to Executive under compensation and benefit plans, arrangements, policies and
procedures to be as a whole materially less favorable to Executive, other than
reductions in Base Salary permitted under Section 4.01;
without Executive’s express written consent, the Company or any of its subsidiaries
requires Executive to change the location of Executive’s job or office, to a location
more than fifty (50) miles from the location of Executive’s job or office immediately
prior to such required change;
a successor company fails or refuses to assume the Company’s obligations under
this Agreement; or
the Company or any successor company breaches any of the material provisions of
this Agreement;
If Executive intends to terminate this Agreement for Good Reason, Executive must give not less than
sixty (60) days written notice to the Company of the facts or events giving rise to Good Reason,
and must give such notice within ninety (90) days following the facts or event alleged to give rise
to Good Reason. The failure to give such notice shall be deemed a waiver of the right to terminate
this Agreement for Good Reason based on such fact or event.
During the term of Executive’s employment and for 24 months after the date of Executive’s
termination of employment, (i) Executive shall not, directly or indirectly, make or publish any
disparaging statements (whether written or oral) regarding the Company or any of its affiliated
companies or businesses, or the affiliates, directors, officers, agents, principal shareholders or
customers of any of them and (ii) neither the Company or any of its directors, or officers shall
directly or indirectly, make or publish any disparaging statements (whether written or oral)
regarding Executive. Information which the Company or Executive is required to make or disclose
regarding the other to comply with laws or regulations, or makes in a pleading on the advice of
litigation counsel, shall not constitute a disparaging statement.
Upon any termination of Executive’s employment with the Company, Executive shall be deemed to
have resigned from all other positions Executive then holds as an officer, employee or director or
other independent contactor of the Company or any of its subsidiaries or affiliates, unless
otherwise agreed by the Company and Executive.
6.07 Executive may voluntarily terminate Executive’s employment with the Company upon either
written or oral notice provided to the Company not less than two weeks prior to such termination.
Upon such termination, Executive shall be entitled to compensation for any accrued but unpaid Base
Salary, accrued but unused PTO time, as of the date of termination and any earned but unpaid Bonus
specified in Section 4.02 to the extent payable to other executive managers of the Company in
accordance with the Company’s policy regarding such bonuses.
SEVERANCE PAYMENTS
The Company, its successors or assigns, will pay Executive as severance pay (the “Severance
Payment”) amount equal to twelve (12) months of the Executive’s monthly Base Salary for full-time
employment at the time of Executive’s termination if (i) there has been a Change of Control of the
Company (as defined in Section 7.02), and (ii) Executive is an active and full-time employee at the
time of the Change of Control, and (iii) within twelve (12) months following the date of the Change
of Control, Executive’s employment is involuntarily terminated for any reason (including Good
Reason (as definition Section 6.04)), other than for Cause or death or disability. If Executive’s
employment is terminated by the Company without Cause, or by Executive for Good Reason, other than
in connection with a Change of Control, the Severance Payment shall be limited and equal to twelve
(12) months of Executive’s Base Salary.
Nothing in this Section 7.01 shall limit the authority of the Committee or Board to terminate
Executive’s employment in accordance with Section 6.03. Payment of the Severance Payment pursuant
to Section 7.01, less customary withholdings, shall be made in one lump sum within thirty (30) days
of the Executive’s termination or resignation or, at the Company’s election, in equal installments
over the non-competition period specified in Section 9.01. No Severance shall be payable if
Executive’s employment is terminated due to death or Disability.
For the purposes of this Agreement, “Change of Control” shall mean any one of the following:
an acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) of 50%
or more of either: (1) the then outstanding Stock; or (2) the combined voting power
of the Company’s outstanding voting securities immediately after the merger or
acquisition entitled to vote generally in the election of directors; provided,
however, that the following acquisition shall not constitute a Change of Control:
(i) any acquisition directly from the Company; (ii) any acquisition by the Company
or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any
employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any
acquisition by any corporation with respect to which, following such acquisition,
more than 50% of the Stock or combined voting power of Stock and other voting
securities of the Company is beneficially owned by substantially all of the
individuals and entities who were beneficial owners of Stock and other voting
securities of the Company immediately prior to the acquisition in substantially
similar proportions immediately before and after such acquisition; or
individuals who, as of the date of this Agreement, constitute the Board (the “Incumbent
Board”), cease to constitute a majority of the Board. Individuals nominated or whose
nominations are approved by the Incumbent Board and subsequently elected shall be
deemed for this purpose to be members of the Incumbent Board; or
approval by the shareholders of the Company of a reorganization, merger, consolidation,
liquidation, dissolution, sale or statutory exchange of Stock which changes the
beneficial ownership of Stock and other voting securities so that after the corporate
change the immediately previous owners of 50% of Stock and other voting securities do
not own 50% of the Company’s Stock and other voting securities either legally or
beneficially; or
the sale, transfer or other disposition of all substantially all of the Company’s
assets; or
a merger of the Company with another entity after which the pre-merger
shareholders of the Company own less than 50% of the stock of the surviving
corporation.
A “Change of Control” shall not be deemed to occur with respect to Executive if the
acquisition of a 50% or greater interest is by a group that includes the Executive, nor shall it be
deemed to occur if at least 50% of the Stock and other voting securities owned before the
occurrence are beneficially owned subsequent to the occurrence by a group that includes the
Executive.
In addition to the Severance Payment, the Company, upon a Change of Control, will pay
Executive a bonus (“Severance Bonus”) in a lump sum within thirty (30) days following a termination
of employment pursuant to 7.01, an amount equal to two (2) times Executive’s bonus earned for the
prior fiscal year or, upon a termination of Executive’s employment without cause other than in
connection with a Change of Control, a Severance Bonus equal to one and one-half (1.5) times
Executive’s bonus earned for the prior fiscal year. The Severance Bonus payable pursuant to this
Section 7.03 shall not, however, exceed Executive’s target bonus as set forth in any bonus plan or
arrangement in which Executive participates at the time of termination of Executive’s employment.
The Severance Payment or Severance Bonus shall be reduced by the amount of cash severance benefits
to which Executive may be entitled pursuant to any other cash severance plan, agreement, policy or
program of the Company or any of its subsidiaries; provided, however, that if the amount of
cash severance benefits payable under such other severance plan, agreement, policy or program is
greater than the amount payable pursuant to this Agreement, Executive will be entitled to receive
the amounts payable under such other plan, agreement, policy or program which exceeds the Severance
Payment or Severance Bonus payable pursuant to this Section. Without limiting other payments which
would not constitute “cash severance-type benefits” hereunder, any cash settlement of stock
options, accelerated vesting of stock options and retirement, pension and other similar benefits
shall not constitute “cash severance-benefits” for purposes of this Section 7.03.
If Executive becomes entitled to the Severance Payment pursuant to Section 7.01, Executive
shall be entitled to receive, if Executive is eligible to and elects to continue medical coverage
from the Company as provided by law (commonly referred to as the COBRA continuation period), as
part of Executive’s severance benefit, continued medical coverage under the Company’s medical plan.
The
Company will pay the Company’s portion of contribution to monthly medical insurance premiums
paid at the time of termination of employee’s employment for such COBRA coverage for Executive and
Executive’s eligible dependents for a period ending on the earlier of one year following
termination, or until Executive is eligible to be covered by another plan providing medical
benefits to Executive. To be eligible to receive such benefit, Executive must be eligible for
COBRA coverage, elect COBRA during the COBRA election period, and comply with all requirements to
obtain such coverage, to be eligible for coverage and for this benefit.
Notwithstanding any other provision of this Agreement, the Company and Executive intend that
any payments, benefits or other provisions applicable to this Agreement comply with the payout and
other limitations and restrictions imposed under Section 409A of the Code (“Section 409A”), as
clarified or modified by guidance from the U.S. Department of Treasury or the Internal Revenue
Service — in each case if and to the extent Section 409A is otherwise applicable to this Agreement
and such compliance is necessary to avoid the penalties otherwise imposed under Section 409A. In
this connection, the Company and Executive agree that the payments, benefits and other provisions
applicable to this Agreement, and the terms of any deferral and other rights regarding this
Agreement, shall be deemed modified if and to the extent necessary to comply with the payout and
other limitations and restrictions imposed under Section 409A, as clarified or supplemented by
guidance from the U.S. Department of Treasury or the Internal Revenue Service — in each case if
and to the extent Section 409A is otherwise applicable to this Agreement and such compliance is
necessary to avoid the penalties otherwise imposed under Section 409A.
The Company may withhold from any amounts payable under this Agreement all federal, state,
city or other taxes required by applicable law to be withheld by the Company.
The provisions of this Article 7 will be deemed to survive the termination of this Agreement
for the purposes of satisfying the obligations of the Company and Executive hereunder.
Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code to or for the benefit of Executive, whether paid or payable pursuant
to this Agreement (including, without limitation, the accelerated vesting of equity awards held by
Executive), would be subject to the excise tax imposed by Section 4999 of the Code, then Executive
shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that,
after payment by Executive of all taxes, including, without limitation, any income taxes and excise
tax imposed on the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the excise tax imposed upon the payments. The Company’s obligation to make Gross-Up Payments under
this Section 7.08 shall not be conditioned upon the Executive’s termination of employment.
Unless otherwise agreed by the Company and Executive, all determinations required to be
made under this Section 7.08, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by an accounting firm that does not have
a material relationship with either of the parties that is selected by mutual
agreement (the “Accounting Firm”). The Accounting Firm shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days
of the receipt of notice from the Executive that there has been a Payment or such
earlier time as is requested by the Company. All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15
days of the receipt of the Accounting Firm’s determination. Absent manifest error,
any determination by the Accounting Firm shall be binding upon the Company and the
Executive.
The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable, but no
later than ten business days after the Executive is informed in writing of such claim.
The Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which the Executive
gives such notice to the Company (or such shorter period ending on, the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that the Company desires
to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with
such contest, and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties) imposed
as a result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 7.08, the Company shall
control all proceedings taken in connection with such contest, and, at its sole
discretion, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the applicable taxing authority in respect of such
claim and may, at its sole discretion, either pay the tax claimed to the
appropriate taxing authority on behalf of the Executive and direct the Executive to
xxx for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that, if the Company pays such
claim and directs the Executive to xxx for a refund, the Company shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties) imposed with respect to such payment
or with respect to any imputed income in connection with such payment; and
provided, further, that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues with
respect to which the Gross-Up Payment would be payable hereunder, and the Executive
shall be entitled to settle or contest, as the case may be, any other issue raised
by the Internal Revenue Service or any other taxing authority.
If, after the receipt by the Executive of a Gross-Up Payment or payment by the
Company of an amount on the Executive’s behalf pursuant to this Section 7.08, the
Executive becomes entitled to receive any refund with respect to the Excise Tax to
which such Gross-Up Payment relates or with respect to such claim, the Executive shall
promptly pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after payment by the Company
of an amount on the Executive’s behalf pursuant to this Section 7.08, a determination
is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination, then
the amount of such payment shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
Notwithstanding any other provision of this Section 7.08, the Company may, in its sole
discretion, withhold and pay over to the Internal Revenue Service or any other
applicable taxing authority, for the benefit of the Executive, all or any portion of
any Gross-Up Payment, and the Executive hereby consents to such withholding and
payment.
NONDISCLOSURE AND INVENTIONS
Except as permitted or directed by the Company or as may be required in the proper discharge
of Executive’s employment hereunder, Executive shall not, during Executive’s employment or at any
time thereafter, divulge, furnish or make accessible to anyone or use in any way any Confidential
Information of the Company. “Confidential Information” means any information or compilation of
information that the Executive learns or develops during the course of Executive’s employment that
is not generally known by persons outside the Company (whether or not conceived, originated,
discovered, or developed in whole or in part by Executive). Confidential Information includes but
is not limited to, the following types of information and other information of a similar nature
(whether or not reduced to writing), all of which Executive agrees constitutes the valuable trade
secrets of the Company: research, designs, development, know how, computer programs and processes,
marketing plans and techniques, existing and contemplated products and services, customer and
product names and related information, prices sales, inventory, personnel, computer programs and
related documentation, technical and strategic plans, and finances. Confidential Information also
includes any information of the foregoing nature that the Company treats as proprietary or
designates as Confidential Information, whether or not owned or developed by the Company.
“Confidential Information” does not include information that (a) is or becomes generally available
to the public through no fault of Executive, (b) was known to Executive prior to its disclosure by
the Company, as demonstrated by files in existence at the time of the disclosure, (c) becomes known
to Executive, without restriction, from a source other than the Company, without breach of this
Agreement by Executive and otherwise not in violation of the Company’s rights, or (d) is explicitly
approved for release by written authorization of the Company.
Executive acknowledges that all inventions, innovations, improvements, developments, methods,
designs, trade secrets, analyses, drawings, reports and all similar related information (whether or
not patentable) which relate to the Company’s or any of its subsidiaries’ actual or anticipated
business, research and development or existing products or services and which are conceived,
developed or made by Executive while employed by the Company or any of its subsidiaries (“Work
Product”) belong to the Company or such subsidiary. Executive shall promptly disclose such Work
Product to the Board of Directors of the Company and, at the Company’s expense, perform all actions
reasonably requested by the Board (whether during or after employment by the Company) to establish
and confirm such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments). For purposes of this Agreement, any Work Product or other
discoveries relating to the business of the Company or any subsidiaries on which Executive files or
claims a copyright or files a patent application, within one year after termination of employment
with the Company, shall be presumed to cover and be Work Product conceived or developed by
Executive in whole or in part during the term of Executive’s employment with the Company, subject
to proof to the contrary by good faith, written and duly corroborated records establishing that
such Work Product was conceived and made following termination of employment.
Notwithstanding the foregoing, the Company advises Executive, and Executive understands and
agrees, that the foregoing does not apply to inventions or other discoveries for which no
equipment, supplies, facility or trade secret information of the Company was used and that was
developed entirely on Executive’s own time, and (a) that does not relate (i) directly to the
Company’s business, or (ii) to the Company’s actual or demonstrably anticipated business research
or development, or (b) that does not result from any work performed by Executive for the Company.
In the event of a breach or threatened breach by Executive of the provisions of this Article
8, the Company shall be entitled to an injunction restraining Executive from directly or indirectly
disclosing, disseminating, lecturing upon, publishing or using such confidential, trade secret or
proprietary information (whether in whole or in part) and restraining Executive from rendering any
services or participating with any person, firm, corporation, association or other entity to whom
such knowledge or information (whether in whole or in part) has been disclosed, without the posting
of a bond or other security. Nothing herein shall be construed as prohibiting the Company from
pursuing any other equitable or legal remedies available to it for such breach or threatened
breach, including the recovery of damages from Executive.
Executive agrees that all notes, data, reference materials, documents, business plans,
business and financial records, computer programs, and other materials that in any way incorporate,
embody, or reflect any of the Confidential Information, whether prepared by Executive or others,
are the exclusive property of the Company, and Executive agrees to forthwith deliver to the Company
all such materials, including all copies or memorializations thereof, in Executive’s possession or
control, whenever requested to do so by the Company, and in any event, upon termination of
Executive’s employment with the Company.
The Executive understands and agrees that any violation of this Article 8 while employed by
the Company may result in immediate disciplinary action by the Company, including termination of
employment for Cause.
The provisions of this Article 8 shall survive termination of this Agreement indefinitely.
NON-COMPETITION, NON-INTERFERENCE AND NON-SOLICITATION
In further consideration of the compensation to be paid to Executive hereunder, including
amounts payable to Executive as a Severance Payment, Executive acknowledges that in the course of
Executive’s employment with the Company Executive will become familiar with the Company’s trade
secrets and other Confidential Information concerning the Company and that Executive’s services
will be of a special, unique and extraordinary value to the Company, and therefore, Executive
agrees that, during the period of Executive’s employment, and for a period of one year following
the end of Executive’s employment term specified in Section 3.01 or any extension thereof,
Executive shall not directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business competing with the
business of the Company, its subsidiaries or affiliates, as defined below and as such businesses
exist or are in the process during the period of Executive’s employment on the date of termination
or the expiration of the period Executive’s employment, within any geographical area in which the
Company or its subsidiaries or affiliates engage or have defined plans to engage in such
businesses. Nothing herein shall prevent Executive from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly traded, so long as
Executive has no participation in the business of such corporation. For the purposes of this
Agreement, “business” or “business of the Company” means, with respect to and including the Company
and its subsidiaries or affiliates, the design, development, marketing and sale of digital signage
products and solutions.
Executive agrees that during the term of Executive’s employment and for a period of one (1)
year after the termination of Executive’s employment Executive will not directly or indirectly (i)
in any way interfere or attempt to interfere with the Company’s relationships with any of its
current or potential customers, vendors, investors, business partners, or (ii) employ or attempt to
employ any of the Company’s employees on behalf of any other entity, whether or not such entity
competes with the Company.
Executive agrees that breach by Executive of the provisions of this Article 9 will cause the
Company irreparable harm that is not fully remedied by monetary damages. In the event of a breach
or threatened breach by Executive of the provisions of this Article 9, the Company shall be
entitled to an injunction restraining Executive from directly or indirectly competing or recruiting
as prohibited herein, without posting a bond or other security. Nothing herein shall be construed
as prohibiting the Company
from pursuing any other equitable or legal remedies available to it for such breach or
threatened breach, including the recovery of damages from Executive.
Executive understands and agrees that any violation of this Article 9 while employed by the
Company may result in immediate disciplinary action by the Company, including termination of
employment for Cause.
The obligations contained in this Article 9 shall survive the termination of this Agreement as
described in this Article 9.
MISCELLANEOUS
Governing Law. This Agreement shall be governed and construed according to the laws
of the State of Minnesota without regard to conflicts of law provisions. The Company and Executive
agree that if any action is brought pursuant to this Agreement that is not otherwise resolved by
arbitration pursuant to Section 10.06, such dispute shall be resolved only in the District Court of
Hennepin County, Minnesota, or the United States District Court for Minnesota, and each party
hereto unconditionally (a) submits for itself in any proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of
the Hennepin County, Minnesota District Courts or the United States Federal District Court for
Minnesota, and agrees that all claims in respect to any such proceeding shall be heard and
determined in Hennepin County, Minnesota, Minnesota District Court or, to the extent permitted by
law, in such federal court, (b) consents that any such proceeding may and shall be brought in such
courts and waives any objection that it may now or thereafter have to the venue or jurisdiction of
any such proceeding in any such court or that such proceeding was brought in an inconvenient court
and agrees not to plead or claim the same; waives all right to trial by jury in any proceeding
(whether based on contract, tort or otherwise) arising out of or relating to this Agreement, or its
performance under or the enforcement of this Agreement; (d) agrees that service of process in any
such proceeding may be effected by mailing a copy of such process by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such party at its address as
provided in Section 10.08; and (e) agrees that nothing in this Agreement shall affect the right to
effect service of process in any other manner permitted by the laws of the State of Minnesota.
Successors. This Agreement is personal to Executive and Executive may not assign or
transfer any part of Executive’s rights or duties hereunder, or any compensation due to Executive
hereunder, to any other person or entity. This Agreement may be assigned by the Company. The
Company shall require any successor or assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, of all or substantially all the business or assets of the Company,
expressly and unconditionally to assume and agree to perform the Company’s obligations under this
Agreement, in the same manner and to the same extent that the Company would be required to perform
if no such succession or assignment had taken place. In such event, the term “Company,” as used in
this Agreement, shall mean the Company as defined above and any successor or assignee to the
business or assets which by reason hereof becomes bound by the terms and provisions of this
Agreement.
Waiver. The waiver by the Company of the breach or nonperformance of any provision of
this Agreement by Executive will not operate or be construed as a waiver of any future breach or
nonperformance under any such provision or any other provision of this Agreement or any similar
agreement with any other Executive.
Entire Agreement; Modification. This Agreement supersedes, revokes and replaces any
and all prior oral or written understandings, if any, between the parties relating to the subject
matter of this Agreement. The parties agree that this Agreement: (a) is the entire understanding
and agreement between the parties; and (b) is the complete and exclusive statement of the terms and
conditions thereof, and there are no other written or oral agreements in regard to the subject
matter of this Agreement. Except for
modifications described in Section 3.01 and Section 4.01, this Agreement shall not be changed
or modified except by a written document signed by the parties hereto.
Severability and Blue Penciling. To the extent that any provision of this Agreement
shall be determined to be invalid or unenforceable as written, the validity and enforceability of
the remainder of such provision and of this Agreement shall be unaffected. If any particular
provision of this Agreement shall be adjudicated to be invalid or unenforceable, the Company and
Executive specifically authorize the tribunal making such determination to edit the invalid or
unenforceable provision to allow this Agreement, and the provisions thereof, to be valid and
enforceable to the fullest extent allowed by law or public policy.
Arbitration. Any dispute, claim or controversy arising under this Agreement shall, at
the request of any party hereto be resolved by binding arbitration in Hennepin County, Minnesota by
a single arbitrator selected by the Company and Executive, with arbitration governed by The United
States Arbitration Act (Title 9, U.S. Code); provided, however, that a dispute, claim or
controversy shall be subject to adjudication by a court in any proceeding against the Company or
Executive involving third parties (in addition to the Company or Executive). Such arbitrator shall
be a disinterested person who is either an attorney, retired judge or labor relations arbitrator.
In the event the Company and Executive are unable to agree upon such arbitrator, the arbitrator
shall, upon petition by either the Company or Executive, be designated by a judge of the Hennepin
County District Court. The arbitrator shall have the authority to make awards of damages as would
any court in Minnesota having jurisdiction over a dispute between employer and Executive, except
that the arbitrator may not make an award of exemplary damages or consequential damages. In
addition, the Company and Executive agree that all other matters arising out of Executive’s
employment relationship with the Company shall be arbitrable, unless otherwise restricted by law.
In any arbitration proceeding, each party shall pay the fees and expenses of its
or Executive’s own legal counsel.
The arbitrator, in the arbitrator’s discretion, shall award legal fees and
expenses and costs of the arbitration, including the
arbitrator’s fee, to
a party who substantially prevails in its claims in such proceeding.
a party who substantially prevails in its claims in such proceeding.
Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as
the case may be, of Sections 8 or 9 of this
Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive
and/or such other legal and equitable remedies as may be appropriate.
Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive
and/or such other legal and equitable remedies as may be appropriate.
Legal Fees. If any contest or dispute shall arise between the Company and Executive
regarding any provision of this Agreement, and such dispute results in court proceedings or
arbitration, a party that prevails with respect to a claim brought and pursued in connection with
such dispute, shall be entitled to recover its legal fees and expenses reasonably incurred in
connection with such dispute. Such reimbursement shall be made as soon as practicable following
the resolution of the dispute (whether or not appealed) to the extent a party receives documented
evidence of such fees and expenses.
Notices. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given when personally
delivered or may send by certified mail, return receipt requested, postage prepaid, addressed to
Executive at Executive’s residence address appearing on the records of the Company and to the
Company at its then current executive offices to the attention of the Board. All notices and
communications shall be deemed to have been received on the date of delivery thereof or on the
third business day after the mailing thereof, except that notice of change of address shall be
effective only upon actual receipt. No objection to the method of delivery may be made if the
written notice or other communication is actually received.
Survival. The provisions of this Article 10 shall survive the termination of this
Agreement, indefinitely.
IN WITNESS WHEREOF the following parties have executed the above instrument the day and year
first above written.
| WIRELESS RONIN TECHNOLOGY, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Xxxxxxx X. Xxxx | ||||
| President and Chief Executive Officer | ||||
| EXECUTIVE |
||||
| By: | /s/ Xxxxxxxxx Xxxxxxx | |||
| Xxxxxxxxx Xxxxxxx | ||||
