EMPLOYMENT AGREEMENT
Exhibit 10.13
This Employment Agreement (“Agreement”) dated as of October 1, 2005, is between INPLAY
TECHNOLOGIES, INC., a Nevada corporation (“InPlay”), and XXXXXX X. XXXXXX
(“Executive”).
RECITALS
A. Executive currently serves as Chief Executive Officer, President, and Chief Financial
Officer of InPlay. InPlay desires to assure itself of the continued availability of Executive.
B. Executive and InPlay are parties to an Employment and Separation Agreement, dated November
20, 1998, as amended by Xxxxxxxx # 0 to the Employment and Separation Agreement dated January 1,
2000, Xxxxxxxx # 0 to the Employment and Separation Agreement dated March 24, 2004, Xxxxxxxx # 0
to the Employment and Separation Agreement dated April 30, 2005, Xxxxxxxx # 0 to the Employment and
Separation Agreement dated June 29, 2004, Xxxxxxxx # 0 to the Employment and Separation Agreement
dated July 28, 2005, and Xxxxxxxx # 0 to the Employment and Separation Agreement dated August 31,
2005 (together, the “Original Employment Agreement”). The parties desire that this Agreement
supersede the Original Employment Agreement in its entirety.
AGREEMENT
In consideration of the mutual covenants, premises, terms, and conditions of the parties set
forth herein, and the performance of each, InPlay and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT; COMPENSATION
1.1 Employment. InPlay hereby employs Executive, and Executive hereby accepts such
employment, to serve as the Chief Executive Officer, President, and Chief Financial Officer of
InPlay and in such other capacities and for such other duties and services as shall from time to
time be mutually agreed upon by InPlay and Executive. This Agreement supersedes and replaces the
Original Employment Agreement, and the Original Employment Agreement is terminated in all respects.
1.2 Best Efforts of Executive. Executive shall devote the required business time, attention,
and efforts to the performance of Executive’s duties under this Agreement, and shall serve InPlay
faithfully and diligently while employed by InPlay.
1.3 Compensation.
(a) Base Salary. InPlay shall pay to Executive, as full compensation for the services
rendered by Executive, during Executive’s employment under this Agreement, a salary at a rate of
$270,600 per annum to be paid in equal semi-monthly installments, or in such other
periodic installments upon which InPlay and Executive shall mutually agree. On at least an
annual basis, the Board of Directors of InPlay (the “Board”), or the Compensation Committee
of the Board (the “Committee”), shall review Executive’s performance and may in its sole
discretion increase, but without Executive’s consent, may not decrease such base salary.
(b) Incentive Bonuses. So long as Executive is employed at the time such bonus is payable,
InPlay shall pay to Executive the higher of the bonus that would be payable under Section 1.3(b)(i)
or the bonus that would be payable under Section 1.3(b)(ii). By the later to occur of forty-five
(45) days after the fiscal year end or the completion of the audit by InPlay’s independent public
accountants, InPlay shall compute, the bonus that would be payable under Section 1.3(b)(i) and the
bonus that would be payable under Section 1.3(b)(ii) and shall pay to Executive the higher of the
two bonuses.
(i) The first bonus alternative shall be an amount equal to five percent (5%) of an amount
equal to net income of InPlay before income taxes, goodwill amortization, and non-cash charges
(e.g., option compensation, stock for services, acquisition valuation adjustments and goodwill
impairment).
(ii) The second bonus alternative for any fiscal year shall be in an amount of up to one
hundred percent (100%) of Executive’s base salary in effect for such fiscal year. The amount, if
any, of each annual bonus shall be based on the extent to which Executive achieves performance
standards or objectives set by the Board or the Committee.
(c) Incentive and Benefit Plans. Executive will be entitled to participate in those incentive
and benefit plans generally provided for Company’s executives in the same or a similar tier of
management, in accordance with the terms of such benefit plans. Additionally, Executive shall be
entitled to participate in any other benefit plans made available generally to employees of Company
from time to time, including but not limited to, any savings plan, life insurance plan and health
insurance plan, subject to any restrictions specified in, or amendments made to, such plans.
Executive shall also be eligible to participate in any InPlay equity incentive programs, all of
which shall be solely in the discretion of the Committee.
(d) Reimbursement for Expenses. InPlay shall reimburse Executive for reasonable out of pocket
expenses that Executive shall incur in connection with his services for InPlay contemplated by this
Agreement, on presentation by Executive of appropriate vouchers and receipts for such expenses to
such person or persons as may be designated by the Audit Committee of InPlay from time to time.
Reimbursements shall be made by InPlay pursuant to its established policies and procedures
regarding reimbursement, which may be effective from time to time.
(e) Auto Lease or Allowance. InPlay shall provide to Executive an amount not to exceed $833
per month for a lease payment or allowance for owned vehicle . InPlay shall pay all expenses to
maintain the vehicle, plus cost for tags, license, property taxes, fuel, and insurance. Executive
shall maintain a travel log recording mileage used for business purposes, and upon request by the
Audit Committee of InPlay, Executive shall submit such log to such person or persons as are
designated by the Audit Committee. The personal use portion of the
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mileage shall be considered a taxable benefit to Executive and InPlay shall have the right to
withhold such taxes from Executive’s paycheck.
(f) Vacation. Executive shall be entitled to six weeks (30 business days) vacation time
annually. All unused vacation time that has been accrued prior to June 1, 2005 shall remain
accrued and, if unused, can be the basis for cash compensation upon the termination of Executive’s
employment. Beginning on June 1, 2005, Executive may accumulate his unused vacation time up to a
maximum of three weeks, but all vacation time accruing after May 31, 2005 may only be used for
vacations and will not be the basis for any cash compensation from InPlay.
(g) Group Insurance Plans. InPlay shall pay the entire premium amount for the Executive, his
spouse, and dependent children with full coverage hospitalization, surgical, medical, major
medical, dental, disability, life, and eye insurance as provided to other InPlay employees. InPlay
shall pay for an individual life insurance policy for $1 million and reimburse a long term
disability insurance policy, upon request, to cover salary above the long term disability coverage
included in the standard company insurance coverage for Executive.
1.4 Term of Employment; Termination.
(a) Initial Term. Executive shall be employed by InPlay for the duties set forth in Sections
1.1 and 1.2 for a two-year term, commencing as of October 1,
2005 and ending on September 30, 2007
(the “Initial Term”), unless sooner terminated in accordance with the provisions of this Agreement.
(b) Renewal Term; Employment Period Defined. On each successive day after the commencement of
the Initial Term, without further action on the part of InPlay or Executive, this Agreement shall
automatically be renewed for a new two-year term dated effective and beginning upon each such
successive day (a “Renewal Term”); provided, however, that InPlay may notify Executive, or
Executive may notify InPlay, at any time, that there shall be no renewal of this Agreement, and in
the event of such notice, the Agreement shall immediately cease to renew and shall terminate
naturally at the end of the then current Renewal Term. No severance or other post-termination
compensation will be due or payable in the event of a termination resulting from non-renewal. The
period of time commencing as of the date hereof and ending on the effective date of the termination
of employment of Executive under this or any successor Agreement shall be referred to as the
“Employment Period.”
(c) Termination Under Certain Circumstances. Notwithstanding anything to the contrary herein
contained, Executive’s employment under this Agreement may be terminated pursuant to the provisions
of Article III.
ARTICLE II
COMPETITION AND CONFIDENTIAL INFORMATION
2.1 Use of Confidential Information. Executive agrees that, in addition to any other
limitation contained in this Agreement, regardless of the circumstances of the termination of
employment, he shall not communicate to any person, firm, corporation, or other entity, any
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information relating to customer lists, prices, advertising, nor any confidential knowledge or
secrets that Executive may from time to time acquire with respect to the business of InPlay or any
of its affiliates or subsidiaries.
2.2 Trade Secrets. Executive shall not at any time or in any manner, either directly or
indirectly, knowingly divulge disclose or communicate to any person, firm, corporation, or other
entity in any manner whatsoever, any trade secret information concerning any material matters
affecting or relating to the business of InPlay, including without limitation, any of its
customers, the prices it obtains or has obtained from the sale of, or at which it sells or has
sold, its products or any other information concerning the business of InPlay, its manner of
operations, its plans, processes, or other data without regard to whether all of the above-stated
matters will be deemed confidential, material, or important, InPlay and Executive specifically and
expressly stipulating that as between them, such matters are important, material, and confidential,
and gravely affect the effective and successful conduct of InPlay’s business and InPlay’s goodwill,
and that any breach of the terms of this Section shall be a material breach of this Agreement.
2.3 Invention Assignment. Executive agrees that all inventions, developments, and
improvements (whether patentable or not) made or conceived by Executive, solely or jointly with
others, during his employment with InPlay, and which pertain to the products, processes, or
business of InPlay, or which result from or are suggested by or otherwise arise out of Executive’s
work, are the sole property of InPlay. Executive shall keep complete records of such inventions,
developments, and improvements and will promptly and fully disclose and assign them to InPlay.
2.4 Execute Assignments. Executive agrees that at InPlay’s expense he shall execute such
assignments, patent applications, and other papers and do such things as may be necessary to enable
InPlay to perfect its title to and obtain patents on such inventions, developments, and
improvements, both in the United States of America and in all foreign countries.
2.5 List. Attached hereto, if applicable, is a list and brief description of all inventions,
developments, and improvements made or conceived by Executive prior to his employment with InPlay
on which no patent application has as yet been filed. Should any question arise as to whether an
invention, development, or improvement was made or conceived during employment by InPlay, all such
items not on this list shall be presumed to belong to InPlay. If no items are listed state “None”:
NONE.
2.6 Nondisclosure of Confidential Information During Employment and After Termination.
Executive agrees that for and during the entire term of this Employment Agreement, any information,
data, figures, sales figures, projections, estates, customer lists, tax records, personnel history,
accounting procedures, promotions, and the like, shall be considered and kept as the private and
privileged records of InPlay and will not be divulged to any person, firm, corporation or other
entity except on the direct authorization of the InPlay. Further, upon termination of this
Agreement for any reason, Executive agrees that he will continue to treat as private and privileged
any information, data, figures, projections, estimates, customer lists, tax records, personnel
history, accounting procedures, and the like, and shall not release any such information to any
person, firm, corporation, or other entity, either by statement, deposition or as a witness, except
upon direct written authority of InPlay, or in response to a court order,
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provided that: (1) Executive provides InPlay with written notice of such order within 24
hours of receiving notice of such order; and (2) Executive limits disclosure made in response to
such order to the minimum amount to satisfy said order. InPlay shall be entitled to an injunction
by any competent court to enjoin and restrain the unauthorized disclosure of such information.
2.7 Surrender of Records on Termination of Employment. Executive agrees that on termination
of his employment for any reason whatsoever, Executive shall surrender to InPlay in good condition
any record or records kept by Executive containing the names, addresses, and other information with
regard to customers or potential customers of InPlay served by Executive.
2.8 Restriction on Use or Disclosure of Customer List and Other Information. For a period of
twenty-four (24) months immediately following termination of Executive’s employment under this
Agreement, Executive shall neither call on nor solicit, either for Executive or any other person,
firm, corporation, or other entity, any of the customers of InPlay of whom Executive called, with
whom Executive became acquainted, or of whom Executive learned during Executive’s employment under
this Agreement, nor shall Executive make known to any person, firm, corporation, or other entity,
either directly or indirectly, the names and addresses of any such customers or any information
relating in any manner to InPlay’s trade or business relationship with such customers. The
foregoing, however, shall not preclude Executive from accepting employment with such persons or
entities after termination of Executive’s employment under this Agreement, provided such employment
will not result in a violation of this Article II.
2.9 Noncompetition with InPlay. During the term of Executive’s employment, and for a period
of twelve (12) months following termination of Executive’s employment with InPlay, or in the
alternative, in the event any reviewing court finds twelve (12) months to be overbroad and
unenforceable, for a period of nine (9) months following termination of Executive’s employment with
InPlay, or in the alternative, in the event any reviewing court finds nine (9) months to be
overbroad and unenforceable, for a period of six (6) months following termination of Executive’s
employment with InPlay, or in the alternative, in the event any reviewing court finds six (6)
months to be overbroad and unenforceable, for a period of three (3) months following termination of
Executive’s employment with InPlay, regardless of the reason therefore, Executive shall not,
(whether directly or indirectly, as owner, principal, agent, stockholder, director, officer,
manager, employee, partner, participant, or in any other capacity) engage in or become financially
interested in any competitive business conducted within the United States. As used herein, a
“competitive business” shall mean (a) any business that develops, patents, licenses, or distributes
technology utilizing a magnetic based design for electronic switches; or (b) a business operating
in any other specific business segment InPlay enters into during the term of this agreement.
2.10 Non-solicitation of Employees. During the term of Executive’s employment, and for a
period of twelve (12) months following termination of Executive’s employment with InPlay, or in the
alternative, in the event any reviewing court finds twelve (12) months to be overbroad and
unenforceable, for a period of nine (9) months following termination of Executive’s employment with
InPlay, or in the alternative, in the event any reviewing court finds nine (9) months to be
overbroad and unenforceable, for a period of six (6) months following termination of Executive’s
employment with InPlay, or in the alternative, in the event any
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reviewing court finds six (6) months to be overbroad and unenforceable, for a period of three
(3) months following termination of Executive’s employment with InPlay, regardless of the reason
therefore, Executive shall not directly or indirectly, for himself, or on behalf of, or in
conjunction with, any other person, company, partnership, corporation, or other entity, seek to
hire or hire any of InPlay’s personnel or employees for the purpose of having such employee engage
in services that are the same, similar, or related to the services that such employee provided for
InPlay.
2.11 Equitable Relief. In the event a violation of any of the restrictions contained in this
Article II is established, InPlay shall be entitled to preliminary and permanent injunctive relief
as well as damages and an equitable accounting of all earnings, profits, and other benefits arising
from such violation, which right shall be cumulative and in addition to any other rights or
remedies to which InPlay may be entitled. In the event of a violation of any provision of Article
II of this Agreement, the period for which those provisions would remain in effect shall be
extended for a period of time equal to that period beginning when such violation commenced and
ending when the activities constituting such violation shall have been finally terminated in good
faith.
2.12 Restrictions Separable. If the scope of any provision of this Article II is found by a
court to be too broad to permit enforcement to its full extent, then such provision shall be
enforced to the maximum extent permitted by law. The parties agree that the scope of any provision
of this Article II may be modified by a judge in any proceeding to enforce this Agreement, so that
such provision can be enforced to the maximum extent permitted by law. Each and every restriction
set forth in this Article II is independent and severable from the others, and no such restriction
shall be rendered unenforceable by virtue of the fact that, for any reason, any other or others of
them may be unenforceable in whole or in part.
2.13 Survival. InPlay and Executive acknowledge and agree that the obligations and rights set
forth in this Article II shall survive the termination of this Agreement and Executive’s employment
by either InPlay or Executive under Article III of this Agreement.
ARTICLE III
SEPARATION; RIGHTS ON SEPARATION
3.1 Definitions.
(a) “Separation” shall mean the termination of Executive’s status as an employee of
InPlay or any successor of InPlay.
(b) “Separation Date” or “Date of Separation” shall mean thirty (30) days
following the date that InPlay gives Executive written notice stating that InPlay wishes to
terminate Executive’s employment under this Agreement, or 30 days following the date that Executive
gives InPlay written notice that he wishes to terminate his employment under this Agreement.
(c) “Separation Occurrences” shall mean one of the following events that would cause
Separation:
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(i) A “Change of Control” shall be deemed to have occurred if and when:
(A) Turnover of Board. The following individuals no longer constitute a majority of
the independent members of the Board of Directors of InPlay: (1) the individuals who, as of the
date of this Agreement, constitute the independent members of the Board of Directors of InPlay (the
“Current Independent Directors”); (2) the individuals who thereafter are elected as independent
members of the Board of Directors of InPlay and whose election, or nomination for election, to the
Board of Directors of InPlay was approved by a vote of at least two-thirds (2/3) of the Current
Independent Directors then still in office (such directors becoming “Additional Independent
Directors” immediately following their election); and (3) the individuals who are elected as
independent members of the Board of Directors of InPlay and whose election, or nomination for
election, to the Board of Directors of InPlay was approved by a vote of at least two-thirds (2/3)
of the Current Independent Directors and Additional Independent Directors then still in office
(such directors also becoming “Additional Independent Directors” immediately following their
election);
(B) Tender Offer. A tender offer or exchange offer is consummated for the equity
securities of InPlay representing twenty percent (20%) or more of the combined voting power of
InPlay’s then outstanding voting securities and the effect of such offer is that a third party
takes over and gains control of InPlay;
(C) Merger or Consolidation. The stockholders of InPlay shall approve a merger,
consolidation, recapitalization, or reorganization of InPlay, a reverse stock split of outstanding
voting securities, or consummation of any such transaction if stockholder approval is not obtained,
other than any such transaction that would result in at least seventy-five percent (75%) of the
total voting power represented by the voting securities of the surviving entity outstanding
immediately after such transaction being beneficially owned by the holders of outstanding voting
securities of InPlay immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially altered in the
transaction; or
(D) Liquidation or Sale of Assets. The stockholders of InPlay shall approve a plan of
complete liquidation of InPlay or an agreement for the sale or disposition by InPlay of all or a
substantial portion of InPlay ‘s assets to another person or entity, which is not a wholly owned
subsidiary of InPlay (i.e., fifty percent (50%) or more of the total assets of InPlay).
(ii) “InPlay Initiated Separation” shall mean the termination of Executive’s
employment by Executive for Good Reason or by InPlay for any reason other than Cause, Executive’s
Death or Disability, or a Change of Control.
(A) “Cause.” InPlay shall have the right to terminate Executive’s employment for
Cause, and such termination shall not be, nor shall it be deemed to be, a breach of this Agreement.
For purposes of this Agreement, InPlay shall have “Cause” to terminate Executives’ employment upon:
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(a) Executive’s conviction of (or the entering of a guilty plea or plea of no contest with
respect to) a felony by a Federal or State court of competent jurisdiction; or
(b) An act or acts of dishonesty taken by Executive that results in or is intended to result
in substantial personal enrichment of Executive at the expense of InPlay or any of its suppliers or
customers; or
(c) Executive’s failure to follow a direct, reasonable and lawful order from the Board, within
the reasonable scope of Executive’s duties, which failure is not cured within thirty (30) days; or
(d) Any other conduct or act by Executive that is intended by Executive to harm InPlay.
(B) “Good Reason” shall mean and include each of the following (unless Executive has
expressly agreed to such event in a signed writing): (1) assignment of Executive to a position that
is not substantially executive in nature; (2) relocation of Executive’s place of business by more
than fifty (50) miles; (3) any material act or acts of dishonesty by Company directed toward or
affecting Employee; (4) any illegal act or instruction directly affecting Executive by Company,
which is not withdrawn after the Company is notified of the illegality by Executive; or (5)
Company’s material breach of this Agreement (after notice and an opportunity to cure).
(iii) “Executive Initiated Separation” shall mean Executive’s termination of
Executive’s employment for any reason other than Good Reason.
3.2 Compensation and Separation Provisions.
(a) Change of Control. If in contemplation of or within one year following a Change of
Control, Executive is terminated without Cause or Executive resigns for Good Reason, in lieu of the
separation payments contemplated by the first sentence of Section 3.2(c), Executive may elect to
receive either (i) a lump sum equal to 2.99 times his gross annual base salary, less any applicable
withholding for state and federal taxes or (ii) five percent (5%) of the gross consideration given
for any merger or acquisition of InPlay that results or resulted in the Change of Control. If
Executive elects to receive five percent (5%) of the gross consideration, such amount shall be paid
in the same manner as received by InPlay or its shareholders. However, if the transaction
consideration given is non-liquid for Executive the amount equal to Federal and State tax
liabilities of Executive relating to such payment shall be converted to cash or other liquid assets
such that Executive can pay the required tax liabilities. If such a separation event occurs
Executive shall also be entitled to receive all rights as provided by local, state, or federal
rules or regulation, e.g., COBRA notification plus accrued vacation and bonus, and all stock
options held by Executive not vested as of the effective date of a Change of Control shall
immediately vest and become exercisable. Anything in this Section 3.2(a) to the contrary
notwithstanding, Executive and InPlay may agree to reduce the amount payable to Executive pursuant
to this Section in order to reduce or eliminate certain taxes payable by either Executive or
InPlay, or both.
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(b) Termination for Cause. If Executive is terminated for Cause, InPlay shall be obligated to
pay Executive only the Base Salary (from Section 1.3(a)) and expenses (from Section 1.3(c)) due to
Executive through the termination date, plus any accrued vacation, and Executive will not be
entitled to, nor will Executive receive, any type of severance payment.
(c) InPlay Initiated Separation. Upon the occurrence of an InPlay Initiated Separation,
provided such termination qualifies as a “separation from Service” within the meaning of Section
409A of the Internal Revenue Code, as amended (“Section 409A”), and after execution by Executive of
a severance agreement and release having commercially reasonable terms, Executive shall receive,
paid over a two-year period in equal installments (timed to coincide with each InPlay payroll
period), payments the sum of which is equal to two times Executive’s then-current gross annual base
salary, less any applicable withholding for state and federal taxes beginning on the Date of
Separation. After execution by Executive of such a severance agreement and release, InPlay will
also pay to Executive the bonus defined in Section 1.3(b)(i) based upon the financial results
through the quarter end in which the termination takes place as prorated for the number of days
actually worked in the quarter. The Executive will not receive any payment under the Section
1.3(b)(ii), the second alternative bonus. Additionally, for twenty-four (24) months following such
a separation, InPlay shall be required to continue to pay Executive, his spouse’s, and dependent
children’s medical and dental insurance coverage, except for any portions paid normally by any new
employer of Executive. InPlay shall make the standard premium payments on behalf of Executive and
his spouse for the applicable months commencing from the Date of Separation. InPlay may change its
insurance coverage but shall not discriminate against Executive or his spouse. To the extent
permitted by InPlay’s then health benefits provider, any rights required to be provided to
Executive by local, state, or federal rules or regulations would be granted at the end of the
period (e.g., COBRA notification) Bonus money shall be paid as soon as calculation is practicable
and unused vacation shall be paid as soon as practicable upon separation. All stock options held
by Executive but not vested would immediately vest and become exercisable on the Date of
Separation.
(d) Election Under Section 409A. For purposes of Section 409A, Executive hereby elects to
receive, and the Company hereby agrees to pay, each amount payable under this Agreement at the
times, and on the terms and conditions set forth herein.
(e) Deferral period. Notwithstanding Section 3.2(c) above, if Section 409A of the Code would
impose any additional tax on payments within the first six months following Executive’s separation
from service, such payments shall be delayed to the minimum extent necessary to avoid such
additional tax. However, if it becomes necessary to delay payments for health benefits, InPlay
shall take such actions as are necessary to ensure that continued coverage is available to
Executive and shall pay or reimburse Executive for, as appropriate, all deferred payments after the
deferral period.
(f) Executive Initiated Separation. Upon the occurrence of an Executive Initiated Separation,
and after execution by Executive of a continuing consulting, severance and release agreement having
commercially reasonable terms, Executive would receive, paid over a six-month period in equal
installments (timed to coincide with each InPlay payroll period), payments the sum of which is
equal to one-half of Executive’s then-current gross annual base
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salary, less any applicable withholding for state and federal taxes beginning on the Date of
Separation.
(g)
Death. The Executive’s employment under this Agreement shall terminate upon Executive’s death. Executive’s estate shall
be entitled to receive the Base Salary due through the date of Executive’s death. InPlay shall
also pay to Executive’s estate a prorated portion to the date of death of any incentive
compensation to which Executive would have been entitled (had Executive not died) for the quarter
in which this Agreement terminated due to Executive’s death. No Base Salary or other payment or
benefit will be payable with respect to any period after death except as expressly provided
elsewhere in this Agreement.
(h)
Disability. The Executive’s employment under this Agreement shall also terminate in the event of Executive’s “Disability.”
For purposes of this Agreement, “Disability” means the inability of Executive to perform
Executive’s essential job duties, with or without a reasonable accommodation, for a period of
thirty (30) consecutive days or for sixty (60) days within any one hundred and eighty (180) day
period due to a physical or mental injury or illness that occurs while Executive is actively
employed by InPlay. Any dispute concerning whether Disability has occurred will be determined by a
physician selected by InPlay. If this Agreement is terminated due to Executive’s Disability,
Executive shall receive a prorated portion to the date of termination of Executive’s Base Salary
and any incentive compensation to which Executive would have been entitled (had termination not
occurred) for the quarter in which this Agreement is terminated due to Executive’s disability.
ARTICLE IV
GENERAL MISCELLANEOUS PROVISIONS
4.1 No Disparagement. Following the Date of Separation, Executive shall not commercially
disparage InPlay or any of its officers, directors, employees, or agents. Following the Date of
Separation, InPlay shall not commercially disparage Executive.
4.2 Bylaw Indemnification. InPlay agrees that following the Date of Separation, the
indemnification provisions under the Bylaws of InPlay will continue in full force and effect for
the benefit of Executive for so long as such indemnification provisions would have any application
to claims against Executive.
4.3 Notices. All notices, requests, demands, and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly given, made, and
received (i) if personally delivered, on the date of delivery, (ii) if by facsimile transmission,
24 hours after transmitter’s confirmation of the receipt of such transmission, (iii) if mailed,
three days after deposit in the United States mail, registered or certified, return receipt
requested, postage prepaid and addressed as provided below, or (iv) if by a courier delivery
service providing overnight or “next-day” delivery, on the next business day after deposit with
such service addressed as follows:
| (1 | ) | If to InPlay: | ||||
| InPlay Technologies, Inc. |
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| 000 X. Xxxxxxxxx, Xxx. 000 | ||||||
| Xxxx, Xxxxxxx 00000 | ||||||
| Attention: Chairman of the Board | ||||||
| Fax: (000) 000-0000 | ||||||
| (2 | ) | If to Executive: | ||||
| Xxxxxx X. Xxxxxx | ||||||
| c/o InPlay Technologies, Inc. | ||||||
| 000 X. Xxxxxxxxx, Xxx. 000 | ||||||
| Xxxx, Xxxxxxx 00000 |
Either party may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this paragraph for the giving
of notice.
4.4 Indulgences; Waivers. Neither any failure nor any delay on the part of either party to
exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege
preclude any other or further exercise of the same or of any other right, remedy, power, or
privilege, nor shall any waiver of any right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power, or privilege with respect to any
other occurrence. No waiver shall be binding unless executed in writing by the party making the
waiver.
4.5 Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance, and enforcement, shall be governed by and construed in accordance with
the laws of the state of Arizona, notwithstanding any Arizona or other conflict-of-interest
provisions to the contrary.
4.6 Binding Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors, and assigns; provided that because the obligations of Executive
hereunder involve the performance of personal services, such obligations shall not be delegated by
Executive. For purposes of this Agreement, successors and assigns shall include, but not be
limited to, any individual, corporation, trust, partnership, or other entity that acquires a
majority of the stock or assets of InPlay by sale, merger, consolidation, liquidation, or other
form of transfer. InPlay shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
InPlay to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that InPlay would be required to perform it if no such succession had taken place.
4.7 Execution in Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of the parties reflected hereon as the signatories.
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4.8 Provisions Separable. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.
4.9 Entire Agreement. This Agreement contains the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements, and conditions, express or implied,
oral or written, except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the terms hereof. This
Agreement may not be modified or amended other than by an agreement in writing.
4.10 Paragraph Headings. The paragraph headings in this Agreement are for convenience only;
they form no part of this Agreement and shall not affect its interpretation.
4.11 Number of Days. In computing the number of days for purposes of this Agreement, all days
shall be counted, including Saturdays, Sundays, and holidays; provided, however,
that if the final day of any time period falls on a Saturday, Sunday, or holiday, then the final
day shall be deemed to be the next day that is not a Saturday, Sunday, or holiday.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
| /s/ Xxxxxx X. Xxxxxx | ||
| Xxxxxx X. Xxxxxx |
| INPLAY TECHNOLOGIES, INC. | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | Chairman of the Board | |||
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