EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, (this "Agreement") is made and entered into as of this 1st day
of August, 1998, by and between NETRADIO CORPORATION, a Minnesota corporation
(the "Company"), and XXX X. XXXXXXXX, a resident of the State of Minnesota
("Executive").
WITNESSETH
WHEREAS, Executive desires to become employed by the Company, and the Company
considers Executive to be a valuable employee and desires to employ Executive
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants
and obligations of this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT. Subject to all of the terms and conditions of this Agreement,
the Company hereby employs Executive and Executive hereby accepts
employment with the Company, as its Senior Vice President, Sales and
Marketing.
2. DUTIES. The services of Executive are exclusive to the Company. Executive
will make the best use of his energy, knowledge and training in, performing
his duties as Senior Vice President, Sales and Marketing of the Company
within the general guidelines established by the Board of Directors of the
Company as the same may, from time to time, be modified by the Company's
Board of Directors. Executive will report to the CEO and have all the
duties normally subscribed to the Executive Vice President, Sales and
Marketing. Executive will perform his duties in a competent and
professional manner, consistent with that expected of an Executive of the
Company. Notwithstanding anything in this Agreement to the contrary, the
duties of Executive under this Agreement do not require Executive to
relocate his principal office or residence from the Minneapolis/St. Xxxx,
Minnesota metropolitan area without prior written consent of Executive.
3. TERM. Subject only to earlier termination in accordance with Section 5 of
this Agreement, Executive's term of employment shall commence on August 1,
1998 and continue for a period of two years. (the "Term").
4. COMPENSATION. As compensation for all of Executive's services under this
Agreement, the Company agrees to pay Executive and Executive agrees to
accept the following:
(a) BASE SALARY. The base salary shall be $100,000 per annum (the "Base
Salary"), payable in accordance with the Company's standard payroll
practices. Concurrent with an initial public offering, base salary
shall be $130,000 per annum, payable in accordance with the company's
standard payroll practices.
(b) BONUS. Upon receipt of outside financing, Executive shall receive a
one-time bonus of $10,000.
(c) PERFORMANCE BONUS. As additional compensation to Executive, Executive
shall be eligible to receive an annual bonus of up to 40% of his Base
Salary if the Company achieves mutually agreed upon management
objectives of meeting or exceeding the revenue and traffic goals
outlined in the business plan. This bonus will be paid no more than
45 days after the completion of the fiscal year-end audit. (See
attachment.)
(d) EMPLOYEE STOCK OPTION AGREEMENT. Employee has entered into a NetRadio
Performance Stock Option Agreement, the provisions of which are hereby
incorporated into this Employment Agreement.
(e) BENEFITS.
(i) EXPENSES. The Company shall reimburse Executive for any and all
ordinary, necessary and reasonable business expenses that
Executive incurs in connection with the performance of his duties
under this Agreement, including entertainment, telephone, travel
and miscellaneous expenses, provided that Executive provides the
Company with documentation for such expenses in a form sufficient
to sustain the Company's deduction for such expenses under
Section 162 of the Internal Revenue Code of 1986, as amended.
(ii) MEDICAL AND DISABILITY INSURANCE. Subject to Executive taking
and passing the physical examination, if required by the
Company's insurance carrier, the Company shall provide Executive
with the same health insurance, short-term disability and
long-term disability insurance coverage provided to other
officers of the Company.
(iii) VACATION. Executive shall be entitled to vacation in
accordance with Company policy, which may be taken at any time
subject to the Company's business needs.
(iv) BENEFIT CHANGES. No reference in this Agreement to any policy
or any employee benefit plan established or maintained by the
Company shall preclude the Company from changing any such
policies or amending or terminating any such benefit plans if
a substantially similar benefit is provided to Executive by
the Company.
(v) OTHER PLANS. Nothing contained herein is intended to or shall be
deemed to be granted to Executive in lieu of any rights or
privileges which executive may be entitled to as an employee of
Company under any other policies or benefit plans that are
currently in effect or that may hereafter be
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adopted. Executive shall be entitled to participate in any
other employee benefit plans of the Company generally
applicable to officers of the Company occupying similar
positions as Executive, including, but not limited to, any
profit sharing, pension, stock option, stock appreciation
rights, stock ownership, health, medical, dental, vacation,
insurance or other employee benefit plans.
5. TERMINATION. This Agreement may not be terminated prior to the end of the
Term except as follows:
(a) BY THE COMPANY FOR COMPANY CAUSE. The company may terminate this
Agreement for Company Cause upon Executive's material breach of this
Agreement. Except as to subparagraph (iv) below, the Company shall
give Executive thirty (30) days' advance written notice of such
termination, which notice shall be via registered mail, return receipt
requested, and which shall describe in detail the acts or omissions
which the Company believes constitute such breach and Executive shall
have the opportunity to cure such default within said thirty (30) day
period. Actions constituting "Company Cause" shall be defined as:
(i) Any material breach by Executive of his obligations under this
Agreement;
(ii) Dereliction of his or her duties as an executive, misconduct of
Executive which is manifestly injurious to Company, or habitual
failure or inability of Executive to perform his duties under
this Agreement; and
(iii) Any fraud, theft or embezzlement by Executive of the Company's
assets, or any other unlawful or criminal act which is
punishable as a felony.
(b) DEATH. This Agreement shall terminate upon Executive's death.
(c) DISABILITY. This Agreement shall terminate upon Executive's
Disability. As used herein, the term "Disability" shall have such
meaning as set forth in the Company's disability policy in effect at
the date hereof and shall include both permanent and temporary
disability, short term and long term disability, and total and partial
disability. If there is no policy in effect at the date of
Executive's potential disability, Disability shall mean Executive
becoming substantially incapable of performing his duties hereunder
for a period of 3 months or more.
(d) BY EXECUTIVE FOR EXECUTIVE CAUSE. Executive may terminate this
Agreement upon thirty (30) days' written notice to the Company upon
the occurrence, without Executive's express written consent, of any
one or more of the following events, provided that Executive shall not
have the right to terminate this Agreement if the Company is able to
cure such event within thirty (30) days following delivery of such
notice:
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(i) The Company is in material breach of this Agreement;
(ii) Any attempted termination by the Company of this Agreement or the
employment of Executive by Company which is not expressly
authorized by this Agreement or any breach of this Agreement by
the Company which is not remedied by the Company within thirty
(30) days after the Company's receipt of notice thereof from
Executive;
(iii) The Company's requiring Executive to be based anywhere other
than the Minneapolis/St. Xxxx, Minnesota metropolitan
statistical area, except for required travel on the Company's
business to an extent substantially consistent with the
business travel obligations which Executive has typically
undertaken on behalf of the Company prior to the date of this
Agreement.
6. PAYMENTS UPON TERMINATION.
(a) DEATH. In the event that this Agreement is terminated due to
Executive's death, Executive shall be paid (i) his Base Salary through
the end of the month in which his death occurred, (ii) his accrued but
unpaid vacation pay for the year in which his death occurred, pro
rated to the date of his death, and (iii) any unpaid expense
reimbursement.
(b) DISABILITY. In the event that this Agreement is terminated due to
Executives Disability, Executive shall be paid (i) his Base Salary
through the end of the month in which the Disability occurs (ii) his
accrued but unpaid vacation pay for the year in which such Disability
occurred, pro rated to the date of such Disability, and (iii) any
unpaid expense reimbursement.
(c) TERMINATION BY COMPANY FOR COMPANY CAUSE. If Executive is terminated
pursuant to Section 5(a) hereof, the Company shall pay to Executive
(i) his Base Salary through the date written notice is properly mailed
to Executive pursuant to Section 5(a) hereof and (ii) any unpaid
expense reimbursement.
(d) TERMINATION WITHOUT COMPANY CAUSE. In addition to any other rights
granted Executive hereunder, if the Company should terminate this
Agreement other than in accordance with Section 5(a), 5(b) or 5(c)
hereof, or if the Executive terminates this Agreement pursuant to
Section 5(d) hereof, the Company shall pay to Executive an additional
amount equal to his Base Salary for the remaining term of this
Agreement. In addition, the Company shall pay the Executive's health
and disability insurance premiums for the remaining term of this
Agreement.
7. OWNERSHIP OF PROPERTIES; CONFIDENTIALITY; EXCLUSIVITY; INVESTMENTS.
(a) OWNERSHIP OF PROPERTIES. The Company, as employer, shall own, and
Executive hereby transfers and assigns to the Company, all rights in
and to any material
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and/or ideas written, suggested or submitted by Executive during
the Term and all other results and proceeds of his services under
this Agreement (the "Properties"). Without limiting the generality
of the foregoing, these rights shall include all radio, musical,
computer, software, copyright, patent, publication and/or other
rights in and to the Properties, including the sole and exclusive
right to duplicate, record, publish and/or market the same with or
without dialogue, music and other sounds synchronously recorded,
and to perform, exhibit, distribute, reproduce, transmit, broadcast
or otherwise communicate the same, or other versions or adaptations
thereof, and to manufacture, publish, or vend printed and/or
recorded versions or adaptations thereof, either publicly or
privately and for profit or otherwise. The Company and its
licensees and assigns shall have the right to adapt, change,
revise, delete from, add to and/or rearrange the Properties or any
part thereof written or submitted by Executive and to combine the
same with other works to any extent, and to change or substitute
the title thereof and in this connection Executive hereby waives
any so-called "moral rights" of authors. Executive agrees to
execute and deliver to the Company such releases, assignments or
other instruments as the Company may require from time to time to
evidence its ownership of the results and proceeds of Executive's
services hereunder.
The requirements of this Section 7(a) do not apply to Properties for
which no equipment, facility or confidential information of the
Company was used and which were developed entirely on Executive's own
time, and which (i) do not relate directly to the Company's business
or to the Company's actual research or development, or (ii) do not
result from any work Executive performed for the Company. Except as
previously disclosed to the Company in writing, Executive does not
have and will not assert any claims to or rights under any Properties
as having been made, conceived, authored or acquired by Executive
prior to his executions of this Agreement.
(b) CONFIDENTIALITY. Executive acknowledges that his services will,
throughout the Term bring Executive in close contact with many
confidential affairs of the Company and its affiliates, including
information about costs, profits, financial data, markets, trade
secrets, sales, products, computer programs, key personnel, pricing
policies, customer lists, development projects, operational
methods, technical processes, plans for future development,
business affairs, and methods and other information not readily
available to the public. Executive further acknowledges that the
businesses of the Company and its affiliates are international in
scope, that their products are marketed throughout the world, that
the Company and its affiliates compete in nearly all of their
business activities with other organizations which are or could be
located in nearly any part of the world and that the nature of
Executive's services, position and expertise are such that he is
capable of competing with the Company and it affiliates from nearly
any location in the world. In recognition of the foregoing
Executive covenants and agrees:
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(i) that Executive will keep secret all material confidential
matters of the Company and its affiliates which are not
otherwise in the public domain and will not disclose them to
anyone outside of the Company or its affiliates, either during
or after the Term except with the Company's written consent
and except for such disclosure as is necessary in the
performance of Executive's duties during the Term; and
(ii) that Executive will deliver promptly to the Company on
termination of his employment with the Company or at any other
time the Company may so request, at the Company's expense, all
confidential memoranda, notes, records, reports and other
documents (and all copies thereof) relating to the Company's
and its affiliates' business, which Executive obtained while
employed by, or otherwise serving or acting on behalf of, the
Company or which the employee may then possess or have under
his control.
(c) INVESTMENTS. Notwithstanding anything contained herein to the
contrary, during the Term Executive may acquire and/or retain, solely
as an investment, and take customary actions to maintain and preserve
Executive's ownership of:
(i) securities of any corporation which are registered under
Sections 12(b) or 12(g) of the Securities Exchange Act of 1934
and which are publicly traded, so long as Executive is not
part of any control group of such corporation; and
(ii) any securities of a partnership, trust, corporation, limited
liability company or other entity so long as (i) Executive
remains a passive investor in that entity and does not become
part of any control group thereof (except in a passive
capacity) and (ii) such entity is not, directly or indirectly,
in competition with the Company or its affiliates, regardless
of whether Executive is a passive investor or part of any
control group thereof.
8. REMEDIES. The parties hereto recognize and agree that, because the
material breach of this Agreement or any part hereof would result in
damages difficult to ascertain, upon any allegations of material breach of
this Agreement, either party hereto shall be entitled:
(a) PROCEEDINGS. To institute proceedings in a court located in the State
of Minnesota to enjoin the breach, termination, or threatened
termination of this Agreement. Such injunctive remedy shall be in
addition to and not in lieu of any right to recover money for any such
breach.
(b) COSTS AND EXPENSES. The successful party in any action brought
concerning the breach or termination of this Agreement shall be
entitled to recover all costs and expenses, including attorney's fees
incurred or associated with the enforcement of any covenant of this
Agreement.
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9. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. This Agreement is binding on and inures to
the benefit of the Company's successors and assigns, provided,
however, that this Agreement may not be assigned by any of the partied
hereto without the prior written consent of each of the parties
hereto. This agreement shall be binding upon and inure to the benefit
of any successor of the Company, and any such successor shall
absolutely and unconditionally assume all of the Company's obligations
hereunder. Upon the written request of Executive, the Company shall
seek to have any successor, by agreement in form and substance
satisfactory to Executive, assent to the fulfillment by the Company of
its obligations under this Agreement. Failure to attain such assent
at least thirty 30) business days prior to the time a person or entity
becomes a successor in interest to the Company shall be considered
Employee Cause for termination of this Agreement in accordance with
Section 5(d) hereof. Executive may not assign this Agreement for any
purpose whatsoever.
(b) COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be deemed to be an original but all
of which together shall constitute one and the same instrument.
(c) CONSTRUCTION. Wherever possible, each provision of this Agreement
will be interpreted so that it is valid under the applicable law. If
any provision of this Agreement is to any extent invalid under the
applicable law, that provision will still be effective to the extent
it remains valid. The remainder of this Agreement also will continue
to be valid, and the entire Agreement will continue to be valid in
other jurisdictions.
(d) WAIVERS. No failure or delay by either the Company or Executive in
exercising any right or remedy under this Agreement will waive any
provision of this Agreement, nor will any single or partial exercise
by either the Company or Executive of any right or remedy under this
Agreement preclude either of them from otherwise or further exercising
these right or remedies, or any other rights or remedies granted by
any law or any related document.
(e) CAPTIONS. The headings in this Agreement are for convenience of
reference only and do not affect the interpretation of this Agreement.
(f) MODIFICATION/ENTIRE AGREEMENT. Subject to Section 9(d) above, this
Agreement may not be altered, modified or amended except by an
instrument in writing signed by all of the parties hereto. No person,
whether or not an officer, agent, employee or representative of any
party, has made or has any authority to make for or on behalf of that
party any agreement, representation, warranty, statement, promise,
arrangement or understanding not expressly set forth in this Agreement
or in any other document executed by the parties concurrently herewith
("Parol Agreements"). This Agreement and all other documents executed
by the parties
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concurrently herewith, constitute the entire agreement between the
parties and supersede all express or implied, prior or concurrent,
parol agreements and prior written agreements with respect to the
subject matter hereof. The parties acknowledge that in entering
into this Agreement, they have not relied and will not in any way
rely upon any parol agreements.
(g) GOVERNING LAW. The laws of the State of Minnesota shall govern the
validity construction and performance of this Agreement. Any
legal proceeding related to this Agreement shall be brought in an
appropriate Minnesota court, and each of the parties hereto
consents to the exclusive jurisdiction of the courts of the State
of Minnesota for this purpose.
(h) NOTICES. All notices and other communications required to
permitted under this Agreement shall be in writing and sent by
registered first class mail, postage prepaid, and shall be deemed
received five (5) days after mailing to the addresses stated below:
If to the Company:
Net Radio Corporation
Riverplace Exposition Hall
Suite 149
00 Xxxx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000
Attention: Chairman of the Board of Directors
With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Winthrop & Weinstine, P.A.
0000 Xxxx Xxxxxxxx Xxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
If to Executive:
Xxx Xxxxxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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With a copy to:
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--------------------
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(I) SURVIVAL. Notwithstanding the termination of this Agreement or
Executive's employment with the Company, the terms of this Agreement
concerning confidentiality rights and remedies of the parties shall
survive such termination and shall govern in perpetuity all rights,
disputes, claims, or causes of action arising out of or in any way
related to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE COMPANY: EXECUTIVE:
NET RADIO CORPORATION
By: /s/ Xxxx X. Xxxxxxx /s/ Xxx X. Xxxxxxxx
---------------------------- -------------------------------
Its President XXX X. XXXXXXXX
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