Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), dated as of August
28, 2001, by and between MEDIALINK WORLDWIDE INCORPORATED, a Delaware
corporation with offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Corporation"), and J. XXXXXX XXXXXXXXX, an individual residing at 00 Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Corporation desires to continue the services of the
Employee upon the terms and conditions hereinafter set forth; and
WHEREAS, the Employee desires to render services to the Corporation
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
Section 1. Employment. The Corporation hereby employs the Employee and
the Employee on the Effective Date accepts such employment, as an executive of
the Corporation, subject to the terms and conditions set forth in this
Agreement.
Section 2. Duties. The Employee shall be employed as Executive Vice
President of the Corporation and may be elected to such other offices of the
Corporation as the Board of Directors shall determine. For so long as the
Employee shall be employed by the Corporation, he shall be nominated to the
Board of Directors of the Corporation. The Employee shall properly perform such
duties as may be assigned to him from time to time by the Corporation's Chief
Executive Officer or the Board of Directors of the Corporation, as the case may
be. If requested by the Corporation, the Employee shall serve on any committee
of the Board of Directors without additional compensation. During the term of
this Agreement, the Employee shall devote all of his available business time to
the performance of his duties hereunder unless otherwise authorized by the Board
of Directors. The Employee's duties shall be performed in the New York
Metropolitan area which shall include Westchester County, northern New Jersey or
southwestern Connecticut ("New York Metropolitan Area"). The Corporation cannot
require the Employee to relocate beyond the New York Metropolitan Area.
Section 3. Term of Employment. The term of the Employee's employment
shall continue as of the date hereof (the "Effective Date") and shall be
automatically renewed each December 31 unless either party gives the other party
written notice of termination within one-hundred and eighty (180) days prior to
the end of the calendar year (the "Term").
Section 4. Compensation of Employee.
2
4.1. Compensation. The Corporation shall pay to the Employee
as annual compensation for his services hereunder a base salary ("Salary") in an
amount equal to Two Hundred and Eighty Thousand ($280,000) Dollars. The Salary
shall be reviewed every June 1st for merit increases and shall in all events be
increased each June 1st by the percentage increase, if any, in the Consumer
Price Index, as defined herein, for the most recent calendar month for which the
Consumer Price Index has been published over the Consumer Price Index for the
same calendar month in the immediately preceding year. As used herein, the
"Consumer Price Index" shall mean the Consumer Price Index for All Urban
Consumers, New York - Northeastern New Jersey area (1982-84=100) issued by the
Bureau of Labor Statistics of the United States Department of Labor; provided
that in the event the Consumer Price Index shall hereafter be converted to a
different standard reference base or otherwise revised, the determination of the
salary increase shall be made with the use of such conversion factor, formula or
table for converting the Consumer Price Index as may be published by the Bureau
of Labor Statistics. The Salary shall be payable bi- weekly less such deductions
as shall be required to be withheld by applicable law and regulations. The
Employee shall be eligible to participate in the Corporation's Bonus Plan. Such
Bonus shall be determined by the Corporation's Compensation Committee.
Notwithstanding the foregoing, the minimum annual Bonus potential shall be 25%
of the Employee's Salary; provided, however, that Employee shall only be
entitled to receive such Bonus in the event the Company attains the annual goals
set by the Compensation Committee. The goals set by the Compensation Committee
shall be consistent with the goals set by the Compensation Committee in prior
years.
4.2. Deferral of Compensation. Notwithstanding anything to the
contrary provided in this Agreement, the Employee may elect, at his sole option
and discretion, to defer the payment of any portion of his Salary or bonus (the
"Deferral Option"). The following provisions shall apply with respect to the
Deferral Option:
3
(a) If the Employee wishes to defer a portion of his
compensation for any calendar year during the Term, the Employee shall give
written notice thereof to the Corporation not later than fifteen (15) days prior
to the commencement of such year (the "Deferral Notice"). If pursuant to a
Deferral Notice, the Employee exercises the Deferral Option for any year during
the Term, the deferred amount will not be paid to the Employee in accordance
with the provisions of Section 4.1, but, as of the date on which such payment
would otherwise have been made under Section 4.1, the amount thereof will be
deemed contributed to and to be and become a part of the Deferred Compensation
Account, as hereinafter defined, and all of the relevant provisions of this
Section 4.2 shall apply with respect thereto.
(b) The Corporation shall establish a "Deferred
Compensation Account" for the benefit of the Employee. During the Term, the
Corporation shall deposit the Employee's deferred compensation in the Deferred
Compensation Account, which shall be in the form of a money market account,
certificate of deposit or similar instrument, stocks, whether common, preferred
or otherwise, bonds and other securities or mutual funds (collectively,
"Investment Funds"), pursuant to the Deferral Notice and as directed by the
Employee.
4
(c) All interest, dividends, gains, losses and other
additions or returns thereon shall be credited to the Employee's Deferred
Compensation Account. In the event a separate Investment Fund is not maintained
for the accrued amount in the Deferred Compensation Account, then interest shall
be credited at a rate equal to the prime rate, from time to time at the end of
each quarter, to such extent.
(d) The amount of the Deferred Compensation Account
shall be paid to the Employee upon his reaching the earlier of age of sixty-five
(65) or the Corporation's normal retirement age, if any, if the Employee has
terminated his employment with the Corporation. Upon such event, five (5%)
percent of the then value of the Deferred Compensation Account shall be paid to
the Employee each quarter until the Employee has received all of the value of
such Account. In the event of a Change of Control, as hereinafter defined, the
proceeds of the Deferred Compensation Account shall be immediately paid to the
Employee.
(e) The Employee's exercise of, or failure to
exercise, his rights under this Section 4.2 for any calendar year, shall not
affect the Employee's right to exercise his rights with respect to any other
calendar year.
(f) It is the intention of the parties that all
Deferred Compensation hereunder shall constitute an unfunded arrangement for
purposes of Title I of the Employee Retirement Income Security Act of 1974 and
all rights created pursuant to this Agreement with respect to the Deferred
Compensation shall be an unsecured contractual right of the Employee, his estate
and his beneficiaries against the Corporation. The Employee acknowledges that
any assets the Corporation invests are intended to provide the Corporation with
a source of funds to assist it in meeting its liabilities under this
Agreement and that the assets in the separate funds are subject to the claims of
the Corporation's general creditors under Federal and state law in the event of
insolvency.
5
4.3. Expenses. The Corporation shall pay or reimburse the
Employee for all reasonable and necessary business, travel or other expenses
incurred by him in the course of his duties with the prior consent of the
Corporation, upon proper documentation thereof. The Corporation's obligation to
pay or reimburse out-of-pocket expenses actually incurred by the Employee during
the Consulting Term, as hereinafter defined, is conditioned on the Corporation's
prior approval of such expenses.
4.4. Benefits. During the term of this Agreement, the Employee
shall be entitled to participate in such pension, profit sharing, group
insurance, option plans, hospitalization, group health benefit plans and all
other benefits and plans as the Corporation provides to its employees. In
addition, the Corporation shall provide the Employee an automobile allowance of
Six Hundred ($600) Dollars per month during the Term. The Corporation shall pay
all premiums on and otherwise continue during the Term to maintain a
split-dollar life insurance policy on the life of the Employee in an amount at
least equal to Two Million ($2,000,000) Dollars. Benefits under such policy
shall be payable to the Employee's estate or a beneficiary designated by him,
provided that the Employee shall collaterally assign the policy to the
Corporation to the extent of the premiums paid by the Corporation. The Employee
shall cooperate in obtaining such policy including submitting to a physical
examination if required by the insurer. Notwithstanding the foregoing, the
Corporation shall not be obligated to continue to maintain the policy in the
event the Employee is uninsurable or can only be insured with the payment of a
special premium or upon the termination of the Employee's employment for any
reason.
6
4.5. Relocation. In the event the Employee is asked to
relocate outside the New York Metropolitan Area, as such term is defined in
Section 2, the Corporation will negotiate an appropriate relocation package for
the Employee. Nothing contained herein shall require the Employee to agree to
such relocation.
4.6. Discretionary Payments. Nothing herein shall preclude the
Corporation from paying the Employee such additional bonuses or other
compensation, as the Board of Directors, in its discretion, may authorize from
time to time.
4.7. Stock Options. Upon the death or Disability, as
hereinafter defined, of the Employee or in the event the Employee is terminated
without cause or as a result of a Change in Control, as hereinafter defined, all
stock options granted to the Employee, under the Corporation's Amended and
Restated Stock Option Plan, including non-vested options, shall automatically
become vested and immediately exercisable.
7
Section 5. Termination.
5.1. Termination of Employment. This Agreement shall terminate
upon the death, Disability, termination of employment of the Employee For Cause,
as hereinafter defined, termination of the employment of Employee without cause
or because Employee wrongfully leaves his employment hereunder.
5.2. Termination For Cause. In the event of a termination For
Cause or because Employee wrongfully leaves his employment hereunder, the
Corporation shall pay Employee all accrued and unpaid Salary and vacation
through the date of termination.
5.3. Termination Without Cause. In the event of a termination
without cause or in the event either party gives the other party written notice
of termination pursuant to Section 3, the Employee shall be entitled to continue
to participate in the hospitalization, group health benefit and disability plans
of the Corporation on the same terms and conditions as immediately prior to his
termination and shall continue to receive his Salary for the balance of the
Term. In the event the Employee does not elect to be engaged by the Corporation
as a consultant in accordance with the provisions of Section 8 of this
Agreement, the Employee shall be entitled to receive his Salary for a period of
twelve (12) months from the date of termination of employment, notwithstanding
that the balance of the Term may be less than twelve (12) months. The
termination of employment due to the failure of the Employee to relocate shall
be deemed a termination without cause. Upon termination without cause, the
provisions of Section 8 of this Agreement shall apply. In the event the
Corporation terminates the employment of Employee hereunder without cause,
Employee shall be entitled to receive the amounts provided in this Section 5.3
regardless of whether Employee obtains, or attempts to obtain, subsequent
employment.
8
5.4. Termination Upon Death. In the event of a termination
upon the death of Employee, the Corporation shall pay to any person designated
by the Employee in writing or, if no such person is designated, to his estate,
the Salary which would otherwise be payable to the Employee for the balance of
the remaining term of this Agreement from the date of such death. In addition,
the Corporation shall pay for eighteen (18) months from the date of death, on
behalf of the Employee's surviving dependents, the COBRA insurance premiums of
such dependents. No provisions of this Agreement shall limit any of the
Employee's rights under any insurance, pensions or other benefit programs of the
Corporation for which the Employee shall be eligible at the time of such death.
5.5. Termination Upon Disability. In the event of a
termination upon the Disability of Employee, the Corporation shall pay to the
Employee or any person designated by the Employee an amount equal to Disability
Payment, as herein defined, for the balance of the Term. The Disability Payment
shall be an amount equal to the Salary which would otherwise be payable to
Employee, less any monies received by Employee or any person designated by the
Employee pursuant to disability income policies maintained by the Corporation on
behalf of the Employee. Upon termination upon Disability, the provisions of
Section 9 shall apply. In addition, the Corporation shall pay for eighteen (18)
months from the date of Disability, the COBRA insurance premiums of the Employee
and his dependents.
9
5.6. Voluntary Termination of Employment Agreement Prior to
the Expiration of the Term. In the event (i) there is a change of a majority of
the members of the Board of Directors in any three (3) month period; or (ii) the
Board imposes two or more changes in the senior management team of the
Corporation over the objection of the remaining senior managers; or (iii) the
Board makes a change in the then core business of the Corporation over the
objection of the senior management team; or (iv) the Corporation effects a
substantial acquisition, disposition or business combination over the objection
of senior management; or (v) the Corporation materially breaches any of the
material terms of this Agreement, including, without limitation, a reduction of
the Employee's Salary, then the Employee shall have the right to voluntarily
terminate this Agreement by giving written notice ("Notice") to the Board of
Directors of the Corporation of his desire to terminate his employment. Upon
receipt of such Notice, the Board shall appoint one of its members to meet with
the Employee and attempt to reach a resolution of such differences. If such
differences are not resolved to Employee's satisfaction within thirty (30) days
of such Notice ("Irreconcilable Differences"), then the Employee may send a
further notice (the "Termination Notice") to the Board of the Corporation
terminating his employment. In such event, the provisions of Section 8 of this
Agreement shall apply.
10
5.7. Definition of "For Cause". As used herein, the term "For
Cause" shall mean (i) Employee's indictment, plea or conviction in a court of
law of any crime or offense involving willful misappropriation of money or other
property or any other crime involving moral turpitude which constitutes a
felony, whether or not involving the Corporation; (ii) disobedience of a
material directive, other than a directive to relocate to an office of the
Corporation more than fifty (50) miles from the office where Employee is
employed pursuant to this Agreement, from the Chief Executive Officer or Board
of Directors of the Corporation consistent with Employee's duties hereunder;
(iii) Employee's habitual drunkenness or habitual use of illegal substances; or
(iv) breach of his responsibilities under this Agreement. With respect to (i)
above, in the event of Employee's indictment, the Employee shall receive his
Salary for the balance of the Term unless convicted or he enters a plea of
guilty.
Section 6. Disability.
6.1. Definition. In the event the Employee is mentally or
physically incapable or unable to perform his regular and customary duties of
employment with the Corporation for a period of ninety (90) days in any one
hundred twenty (120) day period during the Term, the Employee shall be deemed to
be suffering from a "Disability".
6.2. Payment During Disability. In the event the Employee is
unable to perform his duties hereunder by reason of a disability, which
disability does not constitute a Disability, the Corporation shall continue to
pay the Employee his Salary and benefits during the continuance of such
disability.
11
Section 7. Vacations and Personal Days. The Employee shall be entitled
to vacation and personal days in accordance with Corporation policy. The
Employee's Salary shall be paid in full during his vacation and personal days.
The Employee shall take his vacation at such time or times as the Employee and
the Corporation shall determine is mutually convenient.
Section 8. Consulting Agreement. In the event this Agreement expires in
accordance with its terms or the Employee's employment is terminated Without
Cause or voluntarily by the Employee, the Employee may, at his sole option,
nevertheless elect to be engaged by the Corporation as a consultant on such
terms and conditions as shall be mutually satisfactory to the Corporation and
the Employee, provided that such consulting agreement shall provide (i) for a
term of four (4) years commencing from the expiration of employment, (ii) that
the Employee shall be compensated during the consulting period at a rate equal
to the Consulting Rate, as hereinafter defined, and (iii) substantially the same
terms and conditions as Section 12 hereof, except that the Restricted Period
shall mean a period equal to the four (4) year consulting term. As used herein,
the term "Consulting Rate" shall mean the following: (a) for the first twelve
(12) months of his consultancy, the Consulting Rate shall be a rate equal to (i)
90% of the Salary in effect as of the Employee's last day of employment (the
"Last Salary") plus (ii) one-half of the Employee's Bonus pursuant to Section
4.1 hereof for the prior fiscal year (the "Last One-Half Bonus"), and (b) for
each twelve (12) months thereafter, the Consulting Rate shall be determined by
multiplying the Last Salary and the Last One-Half Bonus by the Applicable
Percentage set forth in the schedule below as follows:
12
Applicable Percentage
---------------------
Second Period 80%
Third Period 70%
Fourth Period 60%
The Consulting Rate shall be payable semi-monthly less such
deductions as shall be required to be withheld by applicable laws and
regulations.
Section 9. Disability Plan. In the event the Employee's employment is
terminated due to Disability, the Employee shall be entitled to disability
payments pursuant to the disability plan contained in this Section 9. Such
disability payments shall be for a term of four (4) years commencing from the
termination of employment due to the Employee's Disability. The Employee shall
be compensated during the disability period at a rate equal to the Disability
Rate, as hereinafter defined. The Employee shall remain subject to the same
terms and conditions contained in Section 12 hereof, except that the Restricted
Period shall mean a period equal to the four (4) year disability term plus an
additional one (1) year. As used herein, the term "Disability Rate" shall mean
the following: (a) for the first twelve (12) months of his disability period,
the Disability Rate shall be a rate equal to (i) 90% of the Salary in effect as
of the Employee's last day of employment (the "Last Salary") and (ii) one-half
of the Employee's Bonus pursuant to Section 4.1 hereof for the prior fiscal year
(the "Last One-Half Bonus"), and (b) for each twelve (12) months thereafter, the
Disability Rate shall be determined by multiplying the Last Salary and the Last
One-Half Bonus by the Applicable Percentage set forth in the schedule below as
follows:
13
Applicable Percentage
---------------------
Second Period 80%
Third Period 70%
Fourth Period 60%
The Disability Rate shall be payable bi-weekly less such deductions as
shall be required to be withheld by applicable laws and regulations.
Notwithstanding anything to the contrary contained herein, the
Disability Rate during the disability period shall be reduced by any monies
received by Employee pursuant to disability income policies maintained by the
Corporation on behalf of the Employee.
14
Section 10. Change in Control.
10.1. Payment on Change in Control. In the event of Change in
Control, as hereinafter defined, of the Corporation at any time during the term
of the Employee's employment hereunder which is prior to the engagement of
Employee as a consultant as provided in Section 8 hereof, followed by the
Employee's employment hereunder being terminated for any reason whatsoever,
including voluntary termination of the Employee within twenty-four (24) months
of a Change in Control, by the Employee or the Corporation or its successor, the
Corporation and/or its successor shall be obligated to furnish the Employee with
an office consistent with the office provided to the Employee immediately prior
to such termination at a comparable location for a period of one (1) year and to
pay to the Employee a lump sum in an amount equal to three (3) times: (i) the
Salary to be paid to the Employee pursuant to Section 4 hereof for the calendar
year in which such termination occurs, plus (ii) the bonus declared payable to
the Employee for the immediately preceding calendar year, and (iii) the amount
credited to Deferred Compensation for the immediately preceding calendar year.
The payment of the above amount shall be made as soon as practicable after
Employee's termination of employment, but in no event more than thirty (30) days
after termination and shall be in addition to any other payments to which the
Employee may be entitled pursuant to Sections 4.7, 5 and 6 hereof. In addition,
the Corporation shall: (i) continue to allow Employee to participate in the
hospitalization, group health benefit and disability plans of the Corporation
for 12 months from the date of Employee's termination of employment on the same
terms and conditions as immediately prior to Employee's termination (or provide
the equivalent thereof if such plans do not allow such participation), (ii)
continue to pay to Employee the automobile allowance provided in Section 4.4
hereof until the end of the automobile lease then in effect (but not for more
than three (3) years) and (iii) provide appropriate outplacement services the
cost of which shall not exceed $15,000 as selected by the Employee for up to 12
months from the date of Employee's termination of employment. In the event it
shall be determined that any payment or distribution to or for the benefit of
the Employee (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard to
any additional payments required under this paragraph of Section 10.1 (a
"Payment")) is subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") in connection with a Change in
Control of the Corporation or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Employee shall be entitled to receive an additional
payment (a "Gross-Up Payment") from the Corporation in an amount such that after
payment by the Employee of all taxes including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and any
Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
15
10.2. Change in Control Defined. A "Change in Control" shall
be deemed to occur upon the earliest to occur after the date of this Agreement
of any of the following events:
(i) Acquisition of Stock by Third Party. Any
Person (as hereinafter defined) is or
becomes the Beneficial Owner (as hereinafter
defined), directly or indirectly, of
securities of the Company representing
thirty-three percent (33%) or more of the
combined voting power of the Corporation's
then outstanding securities and such Person
has initiated in the past or thereafter
initiates actions or demonstrates an intent
to influence or control the business,
affairs or management of the Corporation or
to cause the Corporation to enter into a
transaction or series of transactions with
such Person or a third party without the
prior consent or request of the Board of
Directors;
16
(ii) Change in Board of Directors. During any
period of 12 months, individuals who at the
beginning of such period constitute the
Board, and any new director whose election
by the Board or nomination for election by
the Corporation's stockholders was approved
by a vote of at least a majority of the
directors then still in office who either
were directors at the beginning of the
period or whose election or nomination for
election was previously so approved, cease
for any reason to constitute at least a
majority of the Board;
17
(iii) Corporate Transactions. The effective date
of a merger or consolidation of the
Corporation with any other entity, other
than a merger or consolidation which would
result in the voting securities of the
Corporation outstanding immediately prior to
such merger or consolidation continuing to
represent (either by remaining outstanding
or by being converted into voting securities
of the surviving entity) more than 51% of
the combined voting power of the voting
securities of the surviving entity
outstanding immediately after such merger or
consolidation and with the power to elect at
least a majority of the board of directors
or other governing body of such surviving
entity;
(iv) Liquidation. The approval by the
shareholders of the Corporation of a
complete liquidation of the Corporation or
an agreement for the sale or disposition by
the Corporation of all or substantially all
of the Corporation's assets; and
18
(v) Other Events. There occurs any other event
of a nature that would be required to be
reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a
response to any similar item on any similar
schedule or form) promulgated under the
Exchange Act, whether or not the Corporation
is then subject to such reporting
requirement.
(vi) Certain Definitions. For purposes of this
Section 10, the following terms shall have
the following meanings:
(a) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(b) "Person" shall have the meaning as set forth in
Section 13(d) and 14(d) of the Exchange Act; provided,
however, that Person shall exclude (i) the Corporation, (ii)
any trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation, and (iii) any
corporation owned, directly or indirectly, by the shareholders
of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation.
19
(c) "Beneficial Owner" shall have the meaning given
to such term in Rule 13d-3 under the Exchange Act: provided,
however, that Beneficial Owner shall exclude any Person
otherwise becoming a Beneficial Owner by reason of the
shareholders of the Corporation approving a merger of the
Corporation with another entity.
10.3. Coordination with Section 8. Notwithstanding anything to
the contrary contained herein, the parties agree that in the event there is a
Change in Control and Employee receives payments as provided in Section 10.1
hereof, then Employee shall not have an option to elect to be engaged by the
Corporation as a consultant pursuant to the provisions of Section 8 hereof.
20
Section 11. Disclosure of Confidential Information.
(a) The Employee hereby acknowledges that the
principal business of the Corporation is providing video and audio production
and satellite and other distribution services to television and radio stations
and Internet sites for corporations and other organizations seeking to
communicate their news to the public; corporation consultation and production;
distribution of public relations text, audio and video to news media and the
general public via satellite, streaming media, cassette, wire or other means;
distribution of press releases by the Internet, mail and facsimile; the
maintenance of databases of media contacts for and on behalf of clients;
analysis and written appraisal of public relations and public affairs campaigns
as determined through press clipping review, either on paper, video or audio
tape or electronic database searches and such other businesses as the
Corporation may conduct from time to time (the "Business"). Employee
acknowledges that he has and will be acquiring confidential information
concerning the Corporation and the Business and that, among other things, his
knowledge of the Business will be enhanced through his employment by the
Corporation. Employee acknowledges that such information is of great value to
the Corporation, is the sole property of the Corporation, and has been and will
be acquired by him in confidence. In consideration of the obligations undertaken
by the Corporation herein, Employee will not, at any time, during or after the
term of this Agreement, reveal, divulge or make known to any person, any
information which is treated as confidential by the Corporation and not
otherwise in the public domain or previously known to him. Employee agrees that
all materials or copies thereof containing confidential information of the
Corporation in Employee's custody or possession will not, at any time, be
removed from the Corporation's premises without prior written consent of an
executive officer of the Corporation (except as reasonably necessary in the
discharge of Employee's duties hereunder) and shall be delivered to the
Corporation upon the earlier of (i) a request by the Corporation or (ii) the
termination of Employee's employment with the Corporation. After such delivery,
Employee shall not retain any such materials or copies thereof.
21
(b) Employee agrees to make full and prompt
disclosure to the corporation of all inventions, improvements, discoveries,
methods, developments, computer software (and programs and code) and works of
authorship, whether not patentable or copyrightable, which were or are created,
made, conceived or reduced to practice Employee or under Employee's direction or
jointly with others during Employee's employment by the Corporation or during
Employee's provision of services as an independent contractor to the
Corporation, whether or not during normal working hours or on the premises of
the Corporation (all of which are collectively referred to in this Agreement as
"Developments").
(c) Employee also agrees to assign and, by executing
this Agreement, Employee does hereby assign, to the Corporation (or to any
person or entity designated by the Corporation) all of the Employee's rights,
titles and interests, if any, in and to all Developments and all related
patents, patent applications, copyrights and copyright applications. However,
this Section 11(c) shall not apply to Developments which (i) do not relate to
the present or planned business or research and development of the Corporation
and (ii) are made and conceived by the Employee: (A) at a time other than during
normal working hours, (B) not on the Corporation's premises and (C) not using
the Corporation's tools, devices, equipment or proprietary information. Employee
understands that to the extent that the terms of this Agreement shall be
construed in accordance with the laws of any state which precludes a requirement
in an employee's agreement to assign certain classes of inventions made by an
employee, this Section 11(c) shall be interpreted not to apply to any invention
which a court rules and/or the Corporation agrees falls within such class or
classes. Employee also agrees to waive all claims to moral and/or equitable
rights in any Developments.
22
(d) Employee agrees to cooperate fully with the
Corporation, both during and after Employee's employment with the Corporation,
with respect to the procurement, maintenance and enforcement of copyrights,
patents and other intellectual property rights (both in the United States and
foreign countries) relating to Developments. Employee agrees that he will sign
all papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignments of priority
rights, and powers of attorney, which the Corporation may deem necessary or
desirable in order to protect its rights and interests in any Development.
Employee further agrees that if the Corporation is unable, after reasonable
effort, to secure Employee's signature on any such papers, any executive officer
of the Corporation shall be entitled to execute any such papers as Employee's
agent and attorney-in-fact, and Employee hereby irrevocably designates and
appoints each executive officer of the Corporation as Employee's agent and
attorney-in-fact to execute any such papers on Employee's behalf, and to take
any and all actions as the Corporation may deem necessary or desirable, in order
to protect its rights and interests in any Development, under the conditions
described in this sentence.
23
(e) The provisions of this Section 11 shall survive
Employee's employment hereunder for (i) a period of five (5) years commencing on
the date this Agreement is terminated or (ii) three (3) years from the
termination of the Employee's engagement as a consultant pursuant to Section 8
hereof, as the case may be.
Section 12. Covenant Not To Compete.
(a) Employee recognizes that the services to be
performed by him hereunder are special, unique and extraordinary. The parties
confirm that it is reasonably necessary for the protection of the Corporation
that Employee agrees, and, accordingly, Employee does hereby agree, that he will
not, directly or indirectly, in the Territory, as hereinafter defined, at any
time during the Restricted Period, as hereinafter defined:
(i) engage in the Business for his
account or render any services
which constitute engaging in the
Business, in any capacity to any
entity; or become interested in any
entity engaged in the Business
either on his own behalf or as an
officer, director, stockholder,
partner, principal, consultant,
associate, employee, owner, agent,
creditor, independent contractor,
or co-venturer of any third party
or in any other relationship or
capacity; or
24
(ii) employ or engage, or cause to
authorize, directly or indirectly,
to be employed or engaged, for or
on behalf of himself or any third
party, any employee, representative
or agent of the Corporation; or
(iii) solicit, directly or indirectly, on
behalf of himself or any third
party, any client or vendor of the
Corporation and its affiliates; or
(iv) have an interest as an owner,
lender, independent contractor,
co-venturer, partner, participant,
associate or in any other capacity,
render services to or participate
in the affairs of, any business
which is competitive with, or
substantially similar to, the
Business of the Corporation and its
affiliates as presently conducted
and as may be conducted by the
Corporation during the Restricted
Period.
(b) If any of the restrictions contained in this
Section 12 shall be deemed to be unenforceable by reason of the extent, duration
or geographical scope thereof, or otherwise, then after such restrictions have
been reduced so as to be enforceable, in its reduced form this Section shall
then be enforceable in the manner contemplated hereby.
25
(c) This Section 12 shall not be construed to prevent
Employee from owning, directly and indirectly, in the aggregate, an amount not
exceeding two percent (2%) of the issued and outstanding voting securities of
any class of any corporation whose voting capital stock is traded on a national
securities exchange or in the over-the-counter market.
(d) Notwithstanding anything to the contrary set
forth in this Section 12 (i) the Employee shall not be prohibited from rendering
services for news organizations, or public relations departments or public
relations agencies; the Employee may act as a news reporter or manager for an
entity whose primary function is journalism; (iii) the Employee may act as a
member of the internal public relations staff of any corporation or entity who
performs services for only that corporation or its affiliates, including parent
corporations, subsidiaries, and joint ventures; and/or (iv) the Employee may act
as an account executive or manager at a public relations agency directly serving
that agency's clients. Notwithstanding the prior sentence, however, the Employee
may not, render services, directly or indirectly, (i) for any organization,
department, or affiliate of such news organizations, corporate public relations
departments, or public relations agencies, whose primary purpose is to provide
the production and distribution of video or audio news releases that are
competitive with, or substantially similar to, the Business, and (ii) for any
organization, department, or affiliate of such news organizations, corporate
public relations departments, or public relations agencies, whose primary
purpose is to provide the research and analysis of public relations and public
affairs campaigns as determined through press clipping review, either on paper,
video or audio tape or electronic database searches that are competitive with or
substantially similar to the Business.
26
(e) The term "Restricted Period," as used in this
Section 12 shall mean: (i) the Term of this Agreement plus two (2) years; (ii)
in the event of a termination without cause, one (1) year from the date of
termination; (iii) in the event an Employee elects to be a consultant to the
Corporation pursuant to Section 8, then the Restricted Period shall continue
during the four (4) year term of the consulting agreement; (iv) in the event
that the Employee ceased to be employed by the Corporation within twenty-four
(24) months after a Change in Control, then the Restricted Period shall
terminate upon the date such employment ceased if the transaction or event which
triggered the Change in Control was not approved in advance by the Board of
Directors which Board of Directors was comprised of a majority of Continuing
Directors (as such term is hereafter defined) or, if such transaction was
approved in advance by such Continuing Directors, then the Restricted Period
shall continue for two (2) years after such employment ceased. "Continuing
Directors" as used in this Section 12 shall mean the persons who constitute the
Board of Directors of the Corporation on the date hereof (together with their
successors whose nominations were approved by a majority of such persons).
Employee acknowledges that the Corporation markets its business worldwide and
therefore the term "Territory" as used herein shall mean the entire world.
27
(f) The provisions of this Section 12 shall survive
the termination of Employee's employment hereunder and until the end of the
Restricted Period as provided in Section 12 (e) hereof.
Section 13. Rights and Remedies Upon Breach of Sections 11 or 12.
13.1. Return of Benefits. If the Employee breaches, or
threatens to commit a breach of, any of the provisions of Sections 11 or 12 (the
"Restrictive Covenants"), the Corporation shall have the right and remedy to
require the Employee to account for and pay over to the Corporation all
compensation, profits, monies, accruals, increments or other benefits
(collectively, "Benefits") derived or received by him as the result of any
transactions constituting a breach of the Restrictive Covenants, and the
Employee shall account for and pay over such Benefits to the Corporation. In
addition, if the Employee breaches or threatens to commit a breach of any of the
Restrictive Covenants, (i) the Employee's unvested stock options shall
immediately lapse and (ii) the Corporation shall have the right to purchase from
the Employee the Employee's vested stock options for the book value of the
shares of Common Stock underlying such vested options less the exercise price of
such vested options. The Corporation may set off any amounts due to the
Corporation under this Section 13.1 against any amounts owed to the Employee by
the Corporation.
28
13.2. Injunctive Relief. Employee acknowledges that the
services to be rendered under the provisions of this Agreement are of a special,
unique and extraordinary character and that it would be difficult or impossible
to replace such services. Accordingly, Employee agrees that any breach or
threatened breach by him of Sections 11 or 12 of this Agreement shall entitle
the Corporation, in addition to all other legal remedies available to it, to
apply to any court of competent jurisdiction to enjoin such breach or threatened
breach without posting a bond or showing special damages. The parties understand
and intend that each restriction agreed to by Employee hereinabove shall be
construed as separable and divisible from every other restriction, that the
unenforceability of any restriction shall not limit the enforceability, in whole
or in part, of any other restriction, and that one or more of all of such
restrictions may be enforced in whole or in part as the circumstances warrant.
In the event that any restriction in this Agreement is more restrictive than
permitted by law in the jurisdiction in which the Corporation seeks enforcement
thereof, such restriction shall be limited to the extent permitted by law.
Section 14. Disclosure of Conflicts of Interest; Abstention from
Speculation in Securities of the CORPORATION or Clients.
14.1. Conflicts of Interest; Speculation in Securities.
29
(a) In order to avoid actual or apparent conflicts of
interest, the Employee shall take all necessary actions to disclose to the
Corporation any direct or indirect ownership or financial interest (i) in any
company, person or entity which is a service provider to the Corporation or (ii)
an actual or intended client of the Corporation.
(b) While the Employee is employed by the
Corporation, the Employee shall abstain from any direct or indirect acquisition
of securities of (i) the Corporation, except as offered by the Corporation to
the Employee as incentives, bonuses or options, or (ii) the Corporation's
clients or customers, except as may be specifically approved in writing by the
Corporation upon the Employee's prior written request; and from divulging or
appropriating to the Employee's own use or to that of others any secret,
confidential or proprietary information or knowledge regarding the Corporation,
its clients or customers for the purpose of speculation in the securities of any
of them.
14.2. General Requirements. The Employee shall observe such
lawful policies of the Corporation as may from time-to-time apply.
14.3. Xxxxxxx Xxxxxxx. Considering that the Corporation is a
publicly-traded corporation, the Employee hereby agrees that the Employee shall
comply with the Corporation's existing policies on xxxxxxx xxxxxxx as set forth
in the Corporation's Employee Handbook as well as any and all federal and state
securities laws, including but not limited to those that relate to
non-disclosure of information, xxxxxxx xxxxxxx and individual reporting
requirements and shall specifically abstain from discussing the non-public
aspects of the Corporation's business affairs with any individual or group of
individuals (e.g., Internet chat rooms) who does not have a business need to
know such information for the benefit of the Corporation.
30
Section 15. Miscellaneous.
15.1. Assignment. The Employee may not assign or delegate any
of his rights or duties under this Agreement.
15.2. Expenses of Negotiating this Agreement. The Corporation
shall pay or reimburse Employee for all reasonable out-of-pocket attorney's fees
incurred or paid by Employee in connection with the negotiation of this
Agreement up to a maximum of $5,000.
15.3. Resignations. In the event Employee's employment is
terminated for any reason whatsoever, Employee shall immediately resign as a
director of the Corporation, its subsidiaries and affiliates.
15.4. Entire Agreement. This Agreement constitutes and
embodies the full and complete understanding and agreement of the parties with
respect to the Employee's employment by the Corporation, supersedes all prior
understandings and agreements, including employment agreements, non-compete
agreements and confidentiality agreements, if any, whether oral or written,
between the Employee and the Corporation and shall not be amended, modified or
changed except by an instrument in writing executed by the party to be charged.
The invalidity or partial invalidity of one or more provisions of this Agreement
shall not invalidate any other provision of this Agreement. No waiver by either
party of any provision or condition to be performed shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time.
31
15.5. Binding Effect. This Agreement shall inure to the
benefit of, be binding upon and enforceable against, the parties hereto and
their respective successors and permitted assigns.
15.6. Captions. The captions contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.7. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered or sent by
certified mail, postage prepaid, or overnight delivery to the party at the
address set forth above or to such other address as either party may hereafter
give notice of in accordance with the provisions hereof.
15.8. Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of New York applicable to contracts made
and to be performed therein without giving effect to the principles of conflict
of laws thereof. In the event of any dispute, controversy or claim arising out
of any provision of this Agreement (excluding, however, any dispute, controversy
or claim arising out of Section 12), then the parties hereby agree to submit
such dispute, controversy or claim to arbitration and that the determination in
such arbitration shall be final and binding. Arbitration shall be effected by a
panel of three arbitrators in accordance with the commercial arbitration rules
then in force of the American Arbitration Association, which shall administer
the arbitration and act as appointing authority. In the event of any conflict
between the rules and the provisions of this Section 15.8, the provisions of
this Section 15.8 shall govern. Any such arbitration, including the rendering of
an arbitration award, shall take place in New York, New York. The arbitrators
shall interpret this Agreement in accordance with the substantive laws of the
State of New York. The arbitrators shall have no power to add to, subtract from,
or otherwise modify the terms of this Agreement or to grant injunctive relief of
nature. Any judgment upon the award of the arbitrators may be entered in any
court having jurisdiction thereof. The arbitrators shall have the discretion to
award to the successful party to such arbitration any or all costs of such
arbitration, including reasonable attorney's fees in connection with such
arbitration.
32
15.9. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
33
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
MEDIALINK WORLDWIDE INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Chairman, President and Chief
Executive Officer
/s/ J. Xxxxxx XxXxxxxxx
---------------------------------------
J. XXXXXX XxXXXXXXX
34
