EXHIBIT 10.5
TERMINATION AGREEMENT
THIS AGREEMENT is made and entered into this 25th day of February, 1999, by and
between NETRADIO NETWORK, a Minnesota corporation (the "Company"), and
XXXXX X. XXXXXX, the Company's Vice President-Consumer Marketing (the
"Executive").
WHEREAS, the Company is engaged in the business of developing, marketing,
and selling products on the internet; and
WHEREAS, the Company and Executive mutually desire to enter into a
Termination Agreement outlining specific terms and conditions in the case that
certain events trigger either the Executive's termination or diminishment in
position;
NOW THEREFORE, in consideration of the above recitals and the mutual
promises herein contained, the parties hereto agree as follows:
1. TERMINATION. This Agreement and the obligation to pay the Executive under
paragraph 2 of this Agreement will only be triggered if (i) there is Change
in Control (as defined below) and (ii) within one (1) year after such
Change in Control any one of the following events occurs:
(a) Executive's employment with the company is terminated by the Company;
or
(b) There is any adverse change in Executive's status or position as an
executive officer of the Company, including without limitation, any
adverse change in Executive's status or position as a result of a
material diminution in Executive's duties, responsibilities, or
authority immediately prior to the Change in Control or the assignment
to Executive of any duties or responsibilities which, in Executive's
reasonable judgment, are inconsistent with the Executive's status or
position; or
(c) The Company substantially reduces the Executive's base salary that
was in effect immediately before the Change in Control or otherwise
changes the eligibility requirements or performance criteria for any
benefit other than salary, which adversely effects Executive.
2. PAYMENTS DUE. If any of the events described in paragraph 1 above is
triggered, the Company shall pay Executive a cash bonus ("Severance
Payment") in an amount equal to six months of the the Executive's salary,
provided, however, that in no event shall the amount due and payable
hereunder constitute a "Parachute Payment" within the meaninig of the
Section 280G(b)(2) of the Internal Revenue Code of 1986, as
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amended. In the event that any portion of the Severance Payment would
be deemed a Parachute Payment, the amount of the Severance Payment shall
be reduced only to the extent necessary to eliminate any such treatment
or characterization.
3. DEFINITIONS. For purposes of this Agreement the following definitions
apply:
(a) "AVERAGE ANNUAL COMPENSATION" shall mean the average of all taxable
compensation and fringe benefits paid to or on behalf of the Executive
by Company, based on the two (2) most recent calendar years.
(b) "CHANGE IN CONTROL" shall mean:
(i) the sale of all or substantially all of the assets of the
Company,
(ii) the acquisition by any means of more than fifty percent (50%)
of the issued and outstanding voting stock of the Company by any
entity, person, or group of persons acting in concert; provided,
however, this subparagraph (ii) does not apply to any offering by
the Company to the public that has been approved by the Company's
Board of Directors,
(iv) the commencement by an entity, person or group (other than the
Company or a subsidiary of the Company) of a tender offer or an
exchange offer for fifty percent (50%) or more of the outstanding
voting stock of the Company; or
(v) the election to the Board of Directors of the Company without
the recommendation or approval of the incumbent Board of Directors
of the Company the lesser of (i) three director or (ii) directors
constituting a majority of the number of directors of the Company
then in office.
4. MODIFICATIONS - WAIVER. No termination or modification of any provision
of this Termination Agreement or waiver of any right provided in it
shall be effective for any purpose unless specifically set forth in a
writing signed by the party to be bound thereby. No waiver of any right
or remedy in respect of any occurrence or event on one occasion shall be
deemed a waiver of such right or remedy in respect of such occurrence or
event on any other occasion.
5. ENTIRE AGREEMENT. This Termination Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all other agreements, oral or written, with respect to the
subject matter contained in this Agreement.
6. CONTROLLING LAW. All questions concerning the validity and operation of
this Termination Agreement and the performance of the obligations imposed
upon the parties hereunder shall be governed by the laws of the State of
Minnesota.
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IN WITNESS WHEREOF, the parties have executed this Termination Agreement
as of the date first set forth above.
NETRADIO NETWORK,
a Minnesota corporation
BY: /s/ Xxxxxx X. Xxxxxxxx
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Its: CEO
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/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice President-
Consumer Marketing
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