EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, (this "Agreement") is made and entered into as of this 1st day
of August, 1998, by and between NETRADIO CORPORATION, a Minnesota corporation
(the "Company"), and XXXXX X. XXXXXX, a resident of the State of Minnesota
("Executive").
WITNESSETH
WHEREAS, Executive desires to become employed by the Company, and the Company
considers Executive to be a valuable employee and desires to employ Executive
pursuant to the terms and conditions of this Agreement.
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 Vice President, E-Commerce and Content
Development.
2. DUTIES. The services of Executive are exclusive to the Company.
Executive will make the best use of his energy, knowledge and training in,
performing his duties as Vice President, E-Commerce and Content
Development 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 CEO and have all the duties normally subscribed to the Senior Vice
President, E-Commerce and Content Development. Executive will perform his
duties in a competent and professional manner, consistent with that
expected of an Executive of the Company. Notwithstanding anything in this
Agreement to the contrary, the duties of Executive under this Agreement do
not require Executive to relocate his principal office or residence from
the Minneapolis/St. Xxxx, Minnesota metropolitan area without prior
written consent of Executive.
3. TERM. Subject only to earlier termination in accordance with Section 5 of
this Agreement, Executive's term of employment shall commence on August 1,
1998 and continue for a period of two years. (the "Term").
4. COMPENSATION. As compensation for all of Executive's services under this
Agreement, the Company agrees to pay Executive and Executive agrees to
accept the following:
(a) BASE SALARY. The base salary shall be $100,000 per annum (the "Base
Salary"), payable in accordance with the Company's standard payroll
practices. Concurrent with an initial public offering, base salary
shall be $130,000 per annum, payable in accordance with the
company's standard payroll practices.
(b) BONUS. Upon receipt of outside financing, Executive shall receive a
one-time bonus of $10,000.
(c) PERFORMANCE BONUS. As additional compensation to Executive,
Executive shall be eligible to receive an annual bonus of up to 40%
of his Base Salary if the Company achieves mutually agreed upon
management objectives of meeting or exceeding the revenue and
traffic goals outlined in the business plan. This bonus will be
paid no more that 45 days after the completion of the fiscal
year-end audit. (See attachment.)
(d) EMPLOYEE STOCK OPTION AGREEMENT. Employee has entered into a
NetRadio Performance Stock Option Agreement, the provisions of
which are hereby incorporated into this Employment Agreement.
(e) 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.
(ii) MEDICAL AND DISABILITY INSURANCE. Subject to Executive taking
and passing the physical examination, if required by the
Company's insurance carrier, the Company shall provide
Executive with the same health insurance, short-term
disability and long-term disability insurance coverage
provided to other officers of the Company.
(iii) VACATION. Executive shall be entitled to vacation in
accordance with Company policy, which may be taken at any
time subject to the Company's business needs.
(iv) 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.
(v) 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 Company under any other policies or benefit plans that are
currently in effect or that may hereafter be
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adopted. Executive shall be entitled to participate in any
other employee benefit plans of the Company generally
applicable to officers of the Company 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
Term 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 (iv) 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 and
Executive shall have the opportunity to cure such default within
said thirty (30) day period. Actions constituting "Company
Cause"shall be defined as:
(i) Any material breach by Executive of his obligations under this
Agreement;
(ii) Dereliction of his or her duties as an executive, 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. This Agreement shall terminate upon Executive's death.
(c) DISABILITY. 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 3 months or more.
(d) BY EXECUTIVE FOR EXECUTIVE CAUSE. Executive may terminate this
Agreement 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:
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(i) The Company is in material breach of this Agreement;
(ii) Any attempted 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;
(iii) 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.
6. PAYMENTS UPON TERMINATION.
(a) DEATH. In the event that this Agreement is terminated due to
Executive's death, Executive shall be paid (i) his Base Salary
through the end of the month in which his death occurred, (ii) his
accrued but unpaid vacation pay for the year in which his death
occurred, pro rated to the date of his death, and (iii) any unpaid
expense reimbursement.
(b) DISABILITY. In the event that this Agreement is terminated due to
Executive's Disability, Executive shall be paid (i) his Base Salary
through the end of the month in which the Disability occurs (ii) his
accrued but unpaid vacation pay for the year in which such
Disability occurred, pro rated to the date of such Disability, and
(iii) any unpaid expense reimbursement.
(c) TERMINATION BY COMPANY FOR COMPANY CAUSE. If Executive is
terminated pursuant to Section 5(a) 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) any unpaid expense reimbursement.
(d) TERMINATION WITHOUT COMPANY 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), 5(b) or 5(c)
hereof, or if the Executive terminates this Agreement pursuant to
Section 5(d) hereof, the Company shall pay to Executive an
additional amount equal to his Base Salary for the remaining term of
this Agreement. In addition, the Company shall pay the Executive's
health and disability insurance premiums for the remaining 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
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and/or ideas written, suggested or submitted by Executive during
the Term 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
radio, musical, computer, software, copyright, patent, publication
and/or other rights in and to the Properties, including the sole and
exclusive right to duplicate, record, publish and/or market 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, or other
versions or adaptations thereof, 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.
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 executions of this Agreement.
(b) CONFIDENTIALITY. Executive acknowledges that his services will,
throughout the Term 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 it affiliates from nearly any location in the world. In
recognition of the foregoing Executive covenants and agrees:
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(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 Term except with the Company's written consent
and except for such disclosure as is necessary in the
performance of Executive's duties during the Term; 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 employee may then possess or have under
his control.
(c) INVESTMENTS. Notwithstanding anything contained herein to the
contrary, during the Term 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 allegations 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 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.
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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
partied 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 Employee Cause for termination of this
Agreement in accordance with Section 5(d) hereof. Executive may not
assign this Agreement for any purpose whatsoever.
(b) 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.
(c) 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.
(d) 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 right or remedies, or any other rights or remedies
granted by any law or any related document.
(e) CAPTIONS. The headings in this Agreement are for convenience of
reference only and do not affect the interpretation of this
Agreement.
(f) MODIFICATION/ENTIRE AGREEMENT. Subject to Section 9(d) above, 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
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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. The parties acknowledge that in entering
into this Agreement, they have not relied and will not in any way
rely upon any parol agreements.
(g) 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 consents
to the exclusive jurisdiction of the courts of the State of
Minnesota for this purpose.
(h) NOTICES. All notices and other communications required to 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:
Net Radio Corporation
Riverplace Exposition Hall
Suite 149
00 Xxxx Xxxxxx X.X.
Xxxxxxxxxxx, XX 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, XX 00000-0000
If to Executive:
Xxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
With a copy to :
____________________
____________________
____________________
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(I) SURVIVAL. Notwithstanding the termination of this Agreement or
Executive's employment with the Company, the terms of this Agreement
concerning confidentiality 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.
THE COMPANY: EXECUTIVE:
NET RADIO CORPORATION
By: /s/ Xxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
--------------------- ----------------------
Its President XXXXX X. XXXXXX
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