Exhibit 2.3
RESIGNATION AND GENERAL RELEASE AGREEMENT
-----------------------------------------
This Resignation and General Release Agreement ("Agreement"), effective as
of this 31st day of December 1996, by and between Xxxxxx X. Xxxxx, an individual
("Xxxxx"), and NTN Communications, Inc., a corporation ("Company"), is a
resignation agreement which includes a general release of claims.
In consideration of the covenants undertaken and the releases contained in
this Agreement, Xxxxx and Company agree as follows:
1. Xxxxx resigns effective seven days following the complete execution of
this Agreement in all capacities as an officer and as an employee of Company and
each of its subsidiaries and affiliates, such resignations to be effective as of
December 31, 1996. Company hereby agrees to retain Xxxxx as a consultant
commencing on January 1, 1997 and ending on December 31, 1999 in accordance with
the terms and conditions of the Consulting Agreement attached hereto as Exhibit
A.
2. Company and Xxxxx agree to the following actions (no payments hereunder
shall be made or other actions taken until seven days following the complete
execution of this Agreement) in full and complete discharge of any and all of
Company's obligations to Xxxxx, including, without limitation, all obligations
under Xxxxx'x Employment Agreement dated January 1, 1990, as amended on June 19,
1992 (the "Employment Agreement"), the Performance Associated Senior Executive
Retirement Plan and the Deferred Compensation Plan:
a. Company shall pay to Xxxxx as xxxxxxxxx payments $14,204.24 per
month for the 12 months ending December 31, 1997, $16,121.81 per month for the
12 months ending December 31, 1998, and $18,298.26 per month for the 12 months
ending December 31, 1999, less appropriate withholding taxes, as required. If
any severance payment is not paid by Company for more than 90 consecutive days,
then the severance payments set forth in this paragraph 2(a) shall be
accelerated and become immediately due and payable.
b. Company shall pay to Xxxxx an amount of $134,475.39, payable
$7,470.86per month for 18 months, all less appropriate withholdings, in payment
of accrued vacation to which Xxxxx is entitled under the Employment Agreement.
c. Company shall pay to Xxxxx cash in the amount of $138,729, less
appropriate withholdings, representing deferred compensation to which Xxxxx is
entitled.
d. Until December 31, 1999, Company shall continue to include Xxxxx
under Company's medical insurance program, without cost to Xxxxx.
1.
e. Until December 31, 1999, Company shall use its best efforts to
provide (without extraordinary charges and provided that X. Xxxxx meets standard
insurance company requirements) provide Xxxxx life insurance, payable to Xxxxx'x
beneficiary, in the amount of $1,000,000, and in the event of accidental death
or dismemberment, in the amount of $2,000,000, without cost to Xxxxx.
x. Xxxxx presently owns warrants to purchase 200,000 shares of Common
Stock of Company and incentive or non qualified options to purchase 458,000
shares of Common Stock of Company. Xxxxx shall return to Company for
cancellation the following options:
No. of Shares Exercise Price Expiration Date
------------- -------------- ---------------
30,000 $7.250 8/11/98
20,000 $3.500 11/04/06
120,000 $7.250 8/11/98
50,000 $5.750 4/1/99
25,000 $6.375 7/05/01
x. Xxxxx is presently indebted to Company in the principal amount of
$445,383.97. Such indebtedness is represented by a promissory note (the "Note")
which provides that if Xxxxx is terminated by Company for any reason other than
for "cause" at any time within the three year term of the Note the balance of
the Note and any interest accrued thereon will be cancelled. Xxxxx and Company
agree that the Note shall be cancelled and shall be of no further force and
effect. Company shall return such cancelled Note to Xxxxx. Company shall
execute and deliver to Xxxxx the Release attached as Exhibit B hereto. Company
may withhold from all amounts due to Xxxxx herein all payroll taxes, if required
by law, relating to the cancellation of the Note.
3. Xxxxx shall return to Company and shall not take or copy in any form or
manner lists of customers, prices, engineering plans, and similar confidential
and proprietary materials or information. Xxxxx represents to Company that all
documents pertaining to NTN, inclusive of existing and past subsidiaries, but
exclusive of personal items, in his possession whether located on Company
premises, at Xxxxx'x home or elsewhere, have been returned to Company and that
he has retained no copies in any form. This representation applies to all forms
of written materials, including but not limited to schematics, diagrams,
formulations, tapes, descriptions of inventions and products, operator manuals,
maintenance manuals, training manuals, software manuals, software code,
technical memoranda, research bulletin, financial information, marketing plans,
identities of customers and vendors, contract terms and information obtained in
confidence from customers and vendors. Xxxxx hereby reaffirms his obligation,
as set forth in his employment agreement, secrecy agreement, confidentiality and
work for hire agreement and any other legal documents that he signed either
before or during his employment with Company not to disclose any confidential or
trade secret information to any third party and not to use the information for
any purpose
2.
whatsoever except as expressly authorized in writing by an authorized
representative of Company.
4. Company expressly denies any violation of any of its policies,
procedures, state or federal laws or regulations. Accordingly, while this
Agreement resolves all issues between Company and Xxxxx relating to any alleged
violation of Company policies or procedures or any state or federal law or
regulation, this Agreement does not constitute an adjudication or finding on the
merits and it is not, and shall not be construed as, an admission by Company of
any violation of its policies, procedures, state or federal laws or regulations.
Moreover, neither this Agreement nor anything in this Agreement shall be
construed to be or shall be admissible in any proceeding as evidence of or an
admission by Company of any violation of its policies, procedures, state or
federal laws or regulations. This Agreement may be introduced, however, in any
proceeding to enforce the Agreement. Such introduction shall be pursuant to an
order protecting its confidentiality.
5. Except for those obligations created by or arising out of this
Agreement for which receipt or satisfaction has not been acknowledged herein,
Xxxxx on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants not
to xxx and fully releases and discharges Company, its directors, officers,
agents, attorneys, insurers, employees, stockholders, representatives, assigns
and successors, past and present, and each of them, hereinafter together and
collectively referred to as "Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as
against said Releasees, arising out of or in any way connected with his
employment or other relationships with Company or his resignation from
employment or any other transactions, occurrences, acts or omissions or any
loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Releasees, or any
of them, committed or omitted prior to the date of this Agreement including,
without limiting the generality of the foregoing, any claim under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the
California Fair Employment and Housing Act, the California Family Rights Act, or
any claim for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disabiliy.
6. It is the intention of Company in executing this instrument that the
same shall be effective as a bar to each and every claim, demand and cause of
action hereinabove specified. In furtherance of this intention, Xxxxx hereby
expressly waives any and all rights and benefits conferred upon him by the
provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those
3.
related to unknown and unsuspected claims, demands and causes of action, if any,
as well as those relating to any other claims, demands and causes of action
hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASES, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
Xxxxx acknowledges that he may hereafter discover claims or facts in
addition to or different from those which Xxxxx now knows or believes to exist
with respect to the subject matter of this Agreement and which, if known or
suspected at the time of executing this Agreement, may have materially affected
this Settlement. Nevertheless, Xxxxx hereby waives any right, claim or cause of
action that might arise as a result of such different or additional claims or
facts. Xxxxx acknowledges that he understands the significance and consequences
of such release and such specific waiver of SECTION 1542.
7. Xxxxx expressly acknowledges and agrees that, by entering into this
Agreement he is waiving any and all rights or claims that he may have arising
under the Age Discrimination in Employment Act of 1967, as amended, which have
arisen on or before the date of execution of this Agreement. Xxxxx further
expressly acknowledges and agrees that:
a. He was orally advised by Company and is hereby advised in writing
by this Agreement to consult with an attorney before signing this Agreement;
b. He was given a copy of this Agreement and informed that he has
twenty-one (21) days within which to consider the Agreement; and
c. He was informed that he has seven (7) days following the date of
execution of the Agreement in which to revoke the Agreement.
8. Xxxxx acknowledges that by reason of his position with Company he has
been given access to lists of customers, prices, engineering plans, and similar
confidential or proprietary materials or information respecting Company's
business affairs. Xxxxx represents that he has held all such information
confidential and will continue to do so, and that he will not use such
information and relationships for any business (which term herein includes a
partnership, firm, corporation or any other entity) without the prior written
consent of Company.
9. Xxxxx agrees that the terms and conditions of this Agreement shall
remain confidential as between the parties and he shall not disclose them to any
other person except for his attorneys and tax advisors or except as otherwise
required by law or in the event of public disclosure of such matters by Company.
Without limiting the generality of the
4.
foregoing, Xxxxx will not respond to or in any way participate in or contribute
to any public discussion, notice or other publicity concerning, or in any way
relating to, execution of this Agreement or the events (including any
negotiations) which led to its execution. Without limiting the generality of the
foregoing, Xxxxx specifically agrees that he shall not disclose information
regarding this Agreement to any current or former employee of Releasees. Xxxxx
hereby agrees that disclosure by him of any of the terms and conditions of the
Agreement in violation of the foregoing shall constitute and be treated as a
material breach of this Agreement.
10. Xxxxx warrants and represents that Xxxxx has not heretofore assigned
or transferred to any person not a party to this Agreement any released matter
or any part or portion thereof and Xxxxx shall defend, indemnify and hold
harmless Company from and against any claim (including the payment of attorneys'
fees and costs actually incurred whether or not litigation is commenced) based
on or in connection with or arising out of any such assignment or transfer made,
purported or claimed.
11. Xxxxx and Company acknowledge that any employment or contractual
relationship between them terminated on December 31, 1996, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement.
12. All payments hereunder shall be reduced by federal and state income
tax withholding, if required, and other applicable withholding taxes. Xxxxx
shall be exclusively liable for the payment of all federal and state taxes which
may be due as the result of the consideration received from the settlement of
disputed claims as set forth herein and Xxxxx hereby represents that Xxxxx shall
make payments on such taxes at the time and in the amount required of Xxxxx. In
addition, Xxxxx hereby agrees fully to defend, indemnify and hold harmless
Releasees and each of them from payment of taxes, interest and/or penalties that
are required of them by any government agency at any time as the result of
payment of the consideration set forth herein.
13. This instrument constitutes and contains the entire agreement and
understanding concerning Xxxxx'x employment, resignation from the same and the
other subject matters addressed herein between the parties, and supersedes and
replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters hereof. This is an
integrated document. This Agreement may be modified only by a writing signed by
the parties.
14. Either Xxxxx or Company may revoke this Agreement in its entirety
during the seven days following execution of the Agreement by Xxxxx. Any
revocation of the Agreement must be in writing and hand delivered during the
revocation period. This Agreement will become effective and enforceable seven
days following execution by Xxxxx, unless it is revoked during the seven-day
period.
15. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can
5.
be given effect without the invalid provisions or applications and to this end
the provisions of this Agreement are declared to be severable.
16. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
17. This Agreement may be executed in counterparts.
18. Company agrees to continue to indemnify Xxxxx to the extent set forth
in the existing Bylaws of Company and the Indemnity Agreement between Company
and Xxxxx dated April 7, 1988.
19. Any dispute or controversy between Xxxxx, on the one hand, and Company
(or any Releasee), on the other hand, in any way arising out of, related to, or
connected with this Agreement or the subject matter thereof, otherwise in any
way arising out of, related to, or connected with Xxxxx'x employment with
Company, shall be resolved through final and binding arbitration in San Diego,
California, pursuant to California Civil Procedure Code (S)(S) 1282-1284.2. The
arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes promulgated by the American Arbitration Association. In the
event of such arbitration, the prevailing party shall be entitled to recover all
reasonable costs and expenses incurred by such party in connection therewith,
including attorneys' fees. The nonprevailing party shall also be solely
responsible for all costs of the arbitration, including, but not limited to, the
arbitrator's fees, court reporter fees, and any and all other administrative
costs of the arbitration, and promptly shall reimburse the prevailing party for
any portion of such costs previously paid by the prevailing party. Any dispute
as to the reasonableness of costs and expenses shall be determined by the
arbitrator.
20. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
21. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
22. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns.
6.
23. In consideration of the payment of $23,104.16, Xxxxx agrees that for a
period of 36 months from the date hereof Xxxxx shall not, directly or
indirectly, without the prior written consent of Company:
a. solicit, entice, persuade or induce any employee, consultant,
agent or independent contractor of Company, or of any of the subsidiaries or
affiliates of Company to terminate his or her employment with Company, or such
subsidiary or affiliate, to become employed by any person, firm or corporation
other than Company, or such subsidiary or affiliate or approach any such
employee, consultant, agent or independent contractor for any of the foregoing
purposes, or authorize or assist in the taking of any such actions by any third
party; or
b. directly or indirectly own, manage, control, invest, or
participate in any way in, consult with or render services for any person or
entity (other than Company), or any of the subsidiaries or affiliates of Company
engaged in any business in competition with the businesses presently conducted
by Company, or any of the subsidiaries or affiliates of Company.
Notwithstanding anything in this Section 23b to the contrary, nothing in this
Agreement shall limit Xxxxx'x right to hold and make passive investments not in
excess of the outstanding Common Stock of any publicly traded entity.
24. This Agreement embodies the entire agreement of the parties and
supersedes any other prior oral or written agreements, arrangements or
understandings between Xxxxx and Company. This Agreement may not be changed or
terminated orally but only by an agreement in writing signed by the parties
hereto.
25. The waiver by Company of a breach of any provision of this Agreement
by Xxxxx shall not operate or be construed as a waiver of any subsequent breach
by him. The waiver by Xxxxx of a breach of any provision of this Agreement by
Company shall not operate or be construed as a waiver of any subsequent breach
by Company.
26. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
7.
EXECUTED as of this 31st day of December 1996 in San Diego County,
California.
________________________________
Xxxxxx X. Xxxxx
Approved as to form:
By: ____________________________
Attorney for Xxxxxx X. Xxxxx
EXECUTED as of this 31st day of December 1996 in San Diego, California.
NTN COMMUNICATIONS, INC.
By: ____________________________
Approved as to form:
XXXX & XXXXX PROFESSIONAL CORPORATION
By: _________________________________
Attorney for NTN Communications, Inc.
8.
ENDORSEMENT
-----------
I, Xxxxxx X. Xxxxx, hereby acknowledge that I was given or took 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
EXECUTED as of this 31st day of December 1996, in San Diego County,
California.
_____________________________
Xxxxxx X. Xxxxx
9.
Dear NTN Communications, Inc.
This is to advise you that effective December 31, 1996, I hereby resign my
position as an officer and employee of NTN Communications, Inc. and as an
officer, director and employee of any subsidiaries or affiliates of NTN
Communications, Inc.
Very truly yours,
________________________________
Xxxxxx X. Xxxxx
10.
