EXHIBIT 10.3
RESIGNATION AND RELEASE AGREEMENT
Xxxxxxx X. Xxxxxx ("Executive") and Loudeye Corp. ("Company") wish to
amicably terminate Executive's employment with Company, and both parties wish to
clearly set forth the terms and conditions of Executive's departure from
employment. Therefore, in consideration of the mutual promises and undertakings
in this Agreement, Executive and Company agree as follows:
1. Voluntary Resignation. With Good Reason, Executive voluntarily resigns
from his position as President and Chief Executive Officer, effective January
31, 2005. Executive will remain a consultant employee of Company through March
17, 2005. During the period in which he is a consultant, Executive will not be
entitled to receive any compensation, or accrue any benefits. Company will
reimburse Executive for all reasonable and documented expenses incurred by
Executive where the Company requests that Executive provide transition services
to the Company.
2. Severance/Consideration. Company will pay Executive a total of one year
of base compensation ($250,000), less lawful withholdings, as severance ("Cash
Severance"). Payments will be made in two installments as follows: (a) one-half
(1/2) of the Cash Severance will be paid on the Effective Date (defined below),
and (b) the remaining one-half (1/2) of the Cash Severance will be paid in six
equal installments on February 28, March 31, April 30, May 31, June 30, and July
31, 2005. Executive acknowledges and agrees that this amount includes sums to
which he is not otherwise entitled, and acknowledges that no other compensation
is owed to him, or will be owed to him, including vacation, sick pay or bonus
compensation..
As additional severance, the Company agrees to extend until December 31,
2005 the period during which Executive may exercise any options that vested on
or before March 17, 2005.
As additional severance, Executive shall be eligible for the following two
benefits under the Employment Agreement dated April 1, 2003 between Executive
and Company (the "Employment Agreement"): (A) a six month tail from February 1,
2005, on compensation on sale of company or assets under Section 3(f) of the
Employment Agreement, and (B) directors' and officers' insurance under Section
15 of the Employment Agreement. Except as provided in the prior sentence, the
Employment Agreement is terminated in its entirety and Executive acknowledges
and agrees he is entitled to no additional compensation or benefits under the
Employment Agreement.
3. Confidentiality. Executive acknowledges that he signed a Proprietary
Information and Inventions Agreement ("PIIA") on November 27, 2002, a copy of
which is attached to this Agreement. Executive agrees that Paragraphs 1 through
5, 13 and 14 of the PIIA remain in full force and effect according to their
terms. Executive and Company agree that the remaining paragraphs of the PIIA are
superseded by this Agreement.
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4. Noncompetition. Until August 1, 2005, Executive covenants and agrees
that Executive will not, without the express written approval of the Chief
Executive Officer or in his absence the Board of Directors, directly or
indirectly, be employed or involved with any business that is developing or
exploiting any products or services that are competitive with the products or
services that are or were being commercially developed or exploited by the
Company during Executive's employment or were contemplated by the Company as of
February 1, 2005.
5. Non-solicitation of Company's Customers, Employees or Consultants.
Until August 1, 2005, Executive will not, without the express written approval
of the Chief Executive Officer or in his absence the Board of Directors,
directly or indirectly, contact, solicit, induce, or attempt to induce any
customer, identified prospective customer, vendor, business relation or
contractor of the Company Group (as defined below) for the purposes of diverting
sales from the Company, terminating such entity's or individual's relationship
with the Company Group, or diminishing in any respect the business being done by
the Company Group with such entity or person. Until August 1, 2005, Executive
will not, without the express written approval of the Chief Executive Officer or
in his absence the Board of Directors, personally, or through others, directly
or indirectly, hire or otherwise recruit, solicit, or induce in any way, any
employee, advisor or consultant of the Company Group to terminate his or her
relationship with the Company Group. "Company Group" includes the Company and
each of its subsidiaries and affiliates including, without limitation, Overpeer
Inc. and On Demand Distribution Limited (and any of its subsidiaries).
6. Release. In consideration for the benefits described in this Agreement,
and as a material inducement of Company to enter into this Agreement, Executive
and his successors, heirs and assigns hereby irrevocably and unconditionally
waive, release and forever discharge Company, any Company-sponsored employee
benefit plans, and all related organizations and affiliates, and each of their
respective past, present and future related organizations and affiliates, and
each of their respective past, present and future directors, officers, trustees,
agents, attorneys and employees and all of their successors and predecessors
(collectively "Releasees"), of and from, and covenant not to xxx with respect
to, any and all claims, charges, rights, damages, promises or expenses of
whatever nature (including attorneys' fees and costs lawfully incurred), either
known or presently unknown, which Executive may now have, has ever had, or may
in the future have, arising from or in any way connected with any and all
matters from the beginning of time to the date of execution of this Agreement,
including but not limited to any claims under the Civil Rights Acts of 1964 and
1991, the federal Fair Labor Standards Act and state wage/hour laws, the Older
Workers Benefits Protection Act (29 U.S.C. Section 626(f)), the Age
Discrimination in Employment Act, (29 U.S.C. Section 621 et seq.) the Washington
State Law Against Discrimination, the Executive Retirement Income Security Act
("ERISA"), any claims for workers compensation and any possible legal
restriction of Company's right to terminate any of its employees.
7. Voluntary Agreement. Executive understands the significance and
consequences of this Agreement, and acknowledges that it is voluntary and has
not been given as a result of any coercion. Executive also acknowledges that he
has been given full opportunity to review and
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negotiate this Agreement, has been advised to consult counsel before executing
the Agreement if he deems it appropriate, and executes it only after full
reflection and analysis.
8. Governing Law, Venue and Attorneys' Fees. This Agreement shall be
interpreted in accordance with the laws of the State of Washington. A breach of
any of the terms of this Agreement shall entitle the aggrieved party to xxx for
breach of the Agreement. The substantially prevailing party in any such suit or
proceeding shall be entitled to reimbursement for its reasonable costs and
attorney's fees incurred.
9. Entire Agreement. This Agreement represents and contains the entire
understanding between the parties in connection with the subject matter of this
Agreement. The Agreement shall not be modified or varied except by a written
document signed by the parties. Except as set forth above, Executive understands
that all prior written or oral agreements, understanding or representations
between Executive and Company are merged into and superseded by this Agreement.
10. Opportunity to Review. Executive acknowledges that he has twenty-one
(21) days during which to review and consider this Agreement and consult with
his attorney. By his signature, Executive acknowledges that he has carefully
read and fully understands all the provisions of the Agreement, and that he is
voluntarily entering into this Agreement.
11. Revocation Period. Executive understands and acknowledges
that he has seven (7) days after signing this Agreement to revoke it.
This Agreement will not be effective until that period has expired (the
"Effective Date").
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. THE
CONTENTS HAS BEEN FULLY EXPLAINED TO THE
UNDERSIGNED BY THEIR ATTORNEYS. THE UNDERSIGNED
FULLY UNDERSTAND THE FINAL AND BINDING EFFECT OF
THIS AGREEMENT AND ACKNOWLEDGE THAT THEY ARE
SIGNING IT VOLUNTARILY.
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SIGNED 31st day of January, 2005.
LOUDEYE CORP.
/s/ Xxxxxxxx X. Xxxxxx
---------------------------------
By Xxxxxxxx X. Xxxxxx
Its Executive Vice President and Chief Financial Officer
SIGNED this 31st day of January, 2005.
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
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