EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of October, 1996, by
and between NAVARRE CORPORATION, a Minnesota corporation (the "Company"), and
XXXX X. XXXXXXX, a resident of the State of Minnesota ("Executive").
W I T N E S S E T H:
WHEREAS, Executive has a unique knowledge of the Company's business, and has
special expertise in the management and future planning of its affairs, and has
been a key Executive of the Company, helping to develop the image of the
business; and
WHEREAS, the Company believes that Executive's continued involvement in the
management and affairs of the business are essential to its management and
planning in the future; and
WHEREAS, a previous employment agreement expired as of September 30, 1996 and it
is the desire of the parties to extend the terms thereof.
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 President and Chief
Executive Officer.
2. DUTIES.
(a) PRESIDENT/CHIEF EXECUTIVE OFFICER. The services of Executive
are exclusive to the Company. Executive will devote
substantially all of his business hours to, and make the best
use of his energy, knowledge and training in, performing his
duties as President and Chief Executive Officer 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 Board of Directors of the Company and have
all the duties normally subscribed to the Chief Executive
Officer. Notwithstanding anything in this Agreement to the
contrary, the duties of Executive under this Agreement do not
(i) require Executive to relocate his principal office or
residence from the Minneapolis/St. Xxxx, Minnesota
metropolitan area without the prior written consent of
Executive, or (ii) prevent Executive from owning, directly or
indirectly, securities of, or otherwise participating in the
ownership of, any publicly-owned business, trade, industry or
venture. Executive will perform
his duties in a competent and professional manner, consistent
with that expected of a chief executive officer of the
Company.
(b) DIRECTOR. During the term of this Agreement, Executive shall
also serve as Chairman of the Board of Directors of the
Company and shall perform all duties incident to services as a
director of the Company.
(c) CONSULTANT. If Executive should make an election as described
in Section 5(d) hereof, the Company agrees to retain Executive
and Executive agrees to serve in a position of consultant and
advisor to the Company (with or without retention of his
position as President or Chief Executive Officer or as a
director, at the election of the Company), for a period
commencing upon such election and ending on October 31, 2001.
During the period of consulting and advising, Executive shall
render consulting and advisory services in connection with
business activities similar to those carried on by the Company
during the period of his employment by the Company. Executive
shall perform such consulting and advisory services and attend
meetings, as and when reasonably requested by the Company in
advance, provided that Executive shall not be required to
devote thereto in the aggregate more than thirty (30) days per
year. Executive shall have discretion in choosing the times
and places of performance of his services to the Company
compatible with his other activities. Compensation to
Executive under this Section 2 (c) shall continue to be due
from the Company as if Executive continued to be employed by
the Company pursuant to Section 2 (a) and (b) hereof.
3. TERM. Subject only to earlier termination in accordance with Section 5
of this Agreement, Executive's term of employment shall commence on the
date hereof and continue for a period of five (5) years (the "Initial
Term"). Upon the expiration of the Initial Term, this Agreement shall
be automatically renewed for successive additional one (1)-year terms
unless this Agreement is terminated in writing by either party hereto
at least ninety (90) days prior to the expiration of the Initial Term
or any subsequent renewal term. The Initial Term and any subsequent
renewal terms shall be referred to collectively herein as the
"Employment Period."
4. COMPENSATION. As compensation for all of Executive's services under
this Agreement, the Company agrees to pay Executive during the
Employment Period and on retirement, and Executive agrees to accept the
following:
(a) BASE SALARY. A base salary of $285,000 per annum (the "Base
Salary"), payable in accordance with the Company's standard
payroll practices. On each anniversary of this Agreement, the
Base Salary shall be adjusted by the Company's Board of
Directors based upon the level of performance by Executive,
provided that in no event shall the Base Salary for any fiscal
year hereunder be less than the sum provided above for the
first full fiscal year. If conditions require and Executive
agrees, temporary cuts in pay can be effected.
(b) PERFORMANCE BONUS. As additional compensation for Executive,
Executive shall be eligible to receive a bonus determined by
the Board of Directors with a maximum bonus (the "Bonus")
equal to 80% of the Base Salary of Executive. If no Bonus is
otherwise declared by the Board of Directors, Executive will
be entitled to receive a bonus equal to 80% of Executive's
Base Salary. Executive's Bonus shall be paid semi-annually not
later than 45 days after March 31st and September 30th of each
year.
(c) LOAN. At the expiration of the Employment Period and/or the
termination of this Agreement for any reason whatsoever, any
and all sums owed by Executive to Company as of such date
shall be deemed paid and satisfied in full including, without
limitation, the outstanding loan owed by Executive to the
Company in the approximate amount of $200,000.
(d) 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.
These expenses include all dues and assessments to
Executive's social, athletic, golf or country club.
(ii) MEDICAL AND DISABILITY INSURANCE. Subject to
Executive taking and passing the physical examination
required by the Company's insurance carrier, the
Company shall provide Executive with full medical and
disability insurance coverage provided to other
officers of the Company.
(iii) LIFE INSURANCE. Subject to the same physical
examination and cost provisions, the Company shall
provide Executive with a $2,000,000 term life
insurance policy insuring Executive's life during the
term of Executive's employment with the Company and
shall pay all premiums thereon. Such policy shall be
owned by the Executive and shall be payable to such
beneficiary or beneficiaries as Executive directs by
written instrument delivered to the Company or the
insurer under the life insurance policy.
(iv) VACATION. Executive shall be entitled to a paid
vacation period of four (4) weeks each year, which
may be taken at any time subject to the Company's
business needs.
(v) AUTOMOBILE EXPENSES. The Company will pay or
reimburse the Executive for all reasonable costs of
licensing, sales taxes, property taxes, maintenance,
repair, oil, gasoline and insurance for his
automobile.
(vi) 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.
(vii) 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 the Company under any
other policies or benefit plans that are currently in
effect or that may hereafter be adopted. Executive
shall be entitled to participate in any other
employee benefit plans of the Company generally
applicable to officers of the Company, its divisions
or subsidiaries, 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 Employment Period 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 (iii)
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. Notwithstanding the
foregoing, Executive shall not be deemed to have been
terminated for Company Cause unless and until there shall have
been delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of not less than seventy-five
(75%) of the entire membership of the Board of Directors
(certified by the Secretary of the Board of Directors) at a
meeting of the Board of Directors called and held for the
purpose (after reasonable notice to Executive and an
opportunity for Executive, together with Executive's counsel,
to appear before the Board), finding that in the good faith
opinion of the Board of Directors, Executive was guilty of
conduct described in this Section 5(a), and specifying the
particulars thereof in detail. The Company shall not be
allowed to terminate this Agreement pursuant to this Section
5(a) if Executive is able to cure such breach within thirty
(30) days following delivery of such notice. However, in no
event shall a breach of the provisions of Sections 5(a)(iii)
or 7 be subject to cure. Acts or omissions which constitute a
material breach of this Agreement constituting "Company Cause"
shall be limited strictly to the following:
(i) Any material breach by Executive of his obligations
under this Agreement;
(ii) Gross 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. Subject to the provisions of Section 6, this Agreement
shall terminate upon Executive's death.
(c) DISABILITY. Subject to the provisions of Section 6, 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 six (6) months or more.
(d) BY EXECUTIVE FOR EXECUTIVE CAUSE. Executive shall have the
right, at his election, to terminate this Agreement or to
change his position to that of consultant and advisor as
described in Section 2(c) herein, 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:
(i) The Company is in material breach of this Agreement;
(ii) Executive is required to report to or accept
assignments from persons other than the Board of
Directors of the Company or he is removed without his
written consent as the President and Chief Executive
Officer of the Company and such removal is not
pursuant to Section 5(a) hereof;
(iii) The Board of Directors should fail to elect Executive
as President and Chief Executive Officer, or if
Executive should have a policy dispute with the Board
of Directors;
(iv) The Shareholders should fail to elect Executive as a
director;
(v) An 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 as of the date of this Agreement (or any
status or position to which Executive may be promoted
after the date hereof) or the assignment to Executive
of any duties or responsibilities which, in
Executive's reasonable judgment, are
inconsistent with Executive's status or position, or
any removal of Executive from or any failure to
reappoint or reelect Executive to such positions
(except in connection with the termination of
Executive's employment in accordance with Section
5(a) hereof);
(vi) A reduction by the Company of Executive's Base Salary
as the same may be increased time to time, or a
change in the eligibility requirements or performance
criteria for any benefit other than salary, which
adversely effects Executive;
(vii) Without replacement by a plan providing benefits to
Executive equal to or greater than those
discontinued, the failure by the Company to continue
in effect, within its maximum stated term, any
employee benefit plan in which Executive is
participating immediately prior to the date of this
Agreement or the taking of any action by the Company
that would adversely effect Executive's participation
or materially reduce Executive's benefits under any
such plan;
(viii) The taking of any action by the Company that would
materially adversely effect the physical conditions
existing immediately prior to this Agreement in or
under which Executive performs his employment duties;
(ix) 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; or
(x) Any purported 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.
(e) RETIREMENT. At such time as Executive reaches the age of 60
and remains as an employee of the Company, Executive may
retire and, subject to the provisions of Section 6 below, this
Agreement shall terminate.
6. PAYMENTS UPON TERMINATION.
(a) DEATH. Upon Executive's death during the Employment Period,
the heirs or legal representatives of Executive shall be
entitled to receive as a lump sum payment payable within sixty
(60) calendar days of his death, 2.99 times the average of the
aggregate base and incentive compensation paid to Executive
over the preceding five years, provided, however, that in no
event shall the amount due and payable
hereunder constitute a "Parachute Payment" within the meaning
of Section 280G(b)(2) of the Internal Revenue Code of 1986, as
amended.
(b) DISABILITY. In the event that this Agreement is terminated due
to Executive's Disability, Executive shall be paid (i) his
Base Salary for a period of one year following the date of
such Disability or until Executive begins receiving benefits
under the Company's disability benefits plan, whichever occurs
first, (ii) all bonuses to which Executive would have been
entitled for the fiscal year in which such Disability
occurred, prorated to the date of Disability, (iii) his
accrued but unpaid vacation pay for the year in which such
Disability occurred, pro rated to the date of such Disability,
and (iv) any unpaid expense reimbursement.
(c) TERMINATION BY COMPANY FOR COMPANY CAUSE OR BY EXECUTIVE
WITHOUT EXECUTIVE CAUSE. If Executive is terminated pursuant
to Section 5(a) hereof, or Executive terminates this Agreement
other than in accordance with Section 5(d) 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) all Bonus payments owing to
Executive for the fiscal year prior to the year such written
notice is received by Executive (to the extent that any such
payments were unpaid on the date of termination), and for the
current year.
(d) TERMINATION WITHOUT COMPANY CAUSE OR BY EXECUTIVE FOR
EXECUTIVE 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) hereof,
or if Executive should terminate this Agreement pursuant to
Section 5(d) hereof, the Company shall pay to Executive (i)
his Base Salary through the end of the term of this Agreement
or two years, whichever is more, in exchange for a properly
executed non-compete agreement between Executive and the
Company, (ii) any payments owing to Executive pursuant to
Section 4(b) hereof for the fiscal year prior to the year of
termination (to the extent any such payments were unpaid on
the date of termination, as well as for the current year),
(iii) a sum equivalent to any accrued but unpaid vacation for
the year in which he is terminated, and (iv) any unpaid
expense reimbursement. Furthermore, for the remainder of the
term of this Agreement, or one year whichever is more, the
Company shall maintain in full force and effect for the
continued benefit of Executive and his dependents all (i)
pension plans, (ii) medical and disability policies, (iii)
stock option plans, and (iv) life insurance plans in which
Executive participated immediately prior to his termination
(or if such participation is barred, shall arrange for
individual policies of insurance providing benefits
substantially similar, on an after-tax basis, to those which
Executive otherwise would have been entitled hereunder) for
the remainder of the term of this Agreement.
(e) CHANGE OF CONTROL AND OWNERSHIP. In the event that (i)
Executive's employment with the Company is terminated by the
Company other than in accordance with Sections 5(a), (b), or
(c) hereof during the Employment Period and (ii) such
termination occurs after a Change in Control (as defined
hereinbelow), Company shall pay Executive a cash bonus
("Severance Payment") in an amount equal to Executive's
Average Annual Compensation (as defined hereinbelow),
multiplied by a factor of 2.99, provided, however, that in no
event shall the amount due and payable hereunder constitute a
"Parachute Payment" within the meaning of Section 280G(b)(2)
of the Internal Revenue Code of 1986, as 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.
For purposes of this Agreement, "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, (iii) the merger of the Company with, or the
consolidation of the Company into, another corporation or
entity, or (iv) 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 directors or (ii) directors constituting a majority of
the number of directors of the Company then in office.
For purposes of this Agreement, "Average Annual Compensation"
shall mean the average of all taxable compensation and fringe
benefits paid to or on behalf of Executive by Company, based
on the five (5) most recent calendar years. Amounts payable
pursuant to this Section 6(e) shall be in addition to, and not
in lieu of, all other compensation, rights and benefits
accruing or afforded to Executive pursuant to this Agreement.
(f) RETIREMENT. Upon Executive's retirement pursuant to Section
5(e) above, Executive and his heirs or legal representatives
shall be entitled to receive the following: (i) average annual
compensation for a period of three (3) years in exchange for a
properly executed non-compete agreement between Executive and
the Company, (ii) any payments owing to Executive pursuant to
Section 4(b) hereof through the date of retirement (to the
extent any such payments were unpaid on the date of
retirement, as well as for the current year), (iii) a sum
equivalent to any accrued but unpaid vacation for the year in
which he retires, and (iv) any unpaid expense reimbursement.
Furthermore, for a period of five (5) years after retirement,
the Company shall maintain in full force and effect for the
continued benefit of Executive and his dependents all (i)
pension plans, (ii) medical and disability policies, (iii)
stock option plans and (iv) life insurance plans in which
Executive participated immediately prior to his termination
(or if such participation is barred, shall arrange for
individual policies of insurance providing benefits
substantially similar, on an after-tax basis, to those which
Executive otherwise would have been entitled hereunder) for
the remainder of the 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 and/or ideas written, suggested
or submitted by Executive during the Employment Period 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 motion
picture, television, radio, dramatic, musical, publication and
other rights in and to the Properties, including the sole and
exclusive right to photograph and record 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 and/or
motion picture, dramatic or other versions or adaptations
thereof, theatrically, non-theatrically and/or by means of
television, radio, the legitimate stage and/or any other means
now known or hereafter devised 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' provided, however, that nothing in this Section
7(a) shall be deemed in any manner to restrict or qualify
Executive's ownership or right to exploit Executive's personal
memoirs.
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 employment by the Company.
(b) CONFIDENTIALITY. Executive acknowledges that his services
will, throughout the Employment Period, 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 its affiliates
from nearly any location in the world. In recognition of the
foregoing Executive covenants and agrees:
(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 Employment Period, except with the
Company's written consent and except for such
disclosure as is necessary in the performance of
Executive's duties during the Employment Period; 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 Executive may then
possess or have under his control.
(c) EXCLUSIVITY. Executive agrees that during his employment with
the Company, he will not alone, or in any capacity with
another entity or person, (i) engage in any commercial
activity that competes with the Company's business, as it is
conducted during the Employment Period, within any state of
the United States, (ii) in any way interfere or attempt to
interfere with the Company's relationships with any of its
current or potential customers, or (iii) attempt to employ any
of the Company's then employees on behalf of any other
entities competing with the Company. Executive further
acknowledges that all services of Executive shall be exclusive
to the Company, and that Executive's performances and services
hereunder are of a special, unique, unusual, extraordinary and
intellectual character which gives them peculiar value, the
loss of which cannot be reasonably or adequately compensated
in an action at law for damages and that a breach by Executive
of the terms hereof (including without limitation this Section
7) will cause the Company irreparable injury. Executive agrees
that the Company is entitled to injunctive and other equitable
relief to prevent a breach or threatened breach of this
Agreement, which shall be in addition to any other rights or
remedies to which the Company may be entitled. For purposes of
this Section 7(c), the term "Company" shall include the
Company, its successors, assigns and affiliates.
(d) INVESTMENTS. Notwithstanding anything contained herein to the
contrary, during the Employment Period 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 allegation 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 damages 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.
(c) ADDITIONAL COSTS. Additionally, if there shall be any breach
of this Agreement by the Company, and Executive shall
institute any action (or counterclaim) in connection
therewith, Executive shall be entitled, if successful in such
action or if the Company sues and if Executive is successful
in that action, to recover as damages the discounted value (at
a rate of 6%) of all amounts unpaid under this Agreement, or
Executive may, at his election, recover as damages each
monthly payment of Base Salary and additional compensation at
such time as it becomes payable or would have become payable
under the terms of this Agreement, and the Company agrees not
only to pay such sums, but, in addition thereto, interest
thereon at the prime rate then in effect, until such payment
is made. In any such action, the fact that Executive did or
did not seek or engage in any other employment or in other
activities shall not affect, reduce or mitigate the amount of
recovery allowable to Executive. Executive's rights hereunder,
upon his death, accrue to his legal representatives or to his
designated beneficiary.
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 parties 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 Executive Cause for termination of
this Agreement in accordance with Section 5(d) hereof.
(b) OFFSETS. In no event shall any amount payable to Executive
pursuant to this Agreement be reduced for purposes of
offsetting, either directly or indirectly, any indebtedness or
liability of Executive to Company.
(c) 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.
(d) 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.
(e) 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
rights or remedies, or any other rights or remedies granted by
any law or any related document.
(f) CAPTIONS. The headings in this Agreement are for convenience
of reference only and do not affect the interpretation of this
Agreement.
(g) MODIFICATION/ENTIRE AGREEMENT. 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
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 including, but not
limited to, that certain
Employment Agreement, dated September 1, 1993, and Amendment
to Employment Agreement, dated December 1, 1993. The parties
acknowledge that in entering into this Agreement, they have
not relied and will not in any way rely upon any Parol
Agreements.
(h) 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 hereby consents to the exclusive jurisdiction
of the courts of the State of Minnesota for this purpose.
(i) NOTICES. All notices and other communications required or
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:
Navarre Corporation
0000 00xx Xxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxx 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, Xxxxxxxxx 00000
If to Executive:
Xxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(j) SURVIVAL. Notwithstanding the termination of this Agreement or
Executive's employment with the Company, the terms of this
Agreement concerning 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.
NAVARRE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its Executive Vice President
------------------------------
/s/ Xxxx X. Xxxxxxx
--------------------------------------
XXXX X. XXXXXXX
(Signature to Employment Agreement)
