EMPLOYMENT AGREEMENT: MITCHELL



 



Exhibit 10.2


EMPLOYMENT AGREEMENT



          This Employment Agreement (this “Agreement”), dated as of July 18, 2003,
is entered into between Viewpoint Corporation, a Delaware Corporation with its
principal office at 498 Seventh Avenue, New York, N.Y. 10018 (“Viewpoint”),
and William H. Mitchell (“Executive”).



          WHEREAS, Viewpoint desires to retain Executive’s services as Chief
Financial Officer, and Executive desires to be retained by Viewpoint to serve
as Chief Financial Officer of Viewpoint.



          NOW THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged by the parties, the parties hereto hereby agree as
follows:




	 	 	1. Employment; Term.
	 
	 	 	(a) Duties and Responsibilities. Subject to the terms and conditions of
this Agreement, Viewpoint hereby employs Executive, and Executive hereby
accepts employment with Viewpoint, as Chief Financial Officer. Executive
shall devote his full business time and attention to the business and
affairs of Viewpoint and its subsidiaries. Executive shall observe and
comply with Viewpoint’s policies, rules and regulations regarding the
performance of his duties, shall use his best efforts, skills and
abilities to promote Viewpoint’s interests and shall perform his duties
faithfully, competently and in such manner as Viewpoint’s Chief Executive
Officer and Board of Directors (the “Board”) may from time to time
reasonably direct.
	 
	 	 	(b) Duty of Loyalty. Executive will execute the “Duty of Loyalty
Agreement” that is annexed hereto as Exhibit A and is made a part of this
Agreement.
	 
	 	 	(c) Principal Place of Employment. Executive’s principal place of
employment shall be at Viewpoint’s headquarters in New York, New York, or
at such other location as shall be mutually acceptable to Executive and
the Board.
	 
	 	 	(d) Representations. Executive affirms and represents that he is under
no obligation to any former employer or other party which is in any way
inconsistent with, or which imposes any restriction upon, Executive’s
acceptance of employment hereunder, the employment of Executive by
Viewpoint, or Executive’s undertakings under this Agreement.
Notwithstanding the foregoing, Viewpoint acknowledges that Executive is
an active participant in several charitable organizations and agrees that
Executive may, on up to ten (10) business days per annual period during
the Term of Employment, work remotely and on a partial day basis on days
for which Executive is performing duties relating to the charitable
organizations, provided that performance of such duties does not conflict
with his obligations under this Agreement. Viewpoint further
acknowledges that Executive may be called upon by officers of
MaxWorldwide, Inc. (Executive’s former employer) to assist in affairs
relating to MaxWorldwide, Inc.’s liquidation and agrees that Executive
may, in response to requests by officers of MaxWorldwide, Inc., spend an
average of twenty (20) hours per month over the first six (6) months of
the Term of Employment (as defined below) providing such assistance;
provided, however, that performance of such services does not conflict
with Executive’s obligations under this Agreement.



 






 







	 	 	(e) Executive’s employment hereunder shall commence on August 4, 2003
(the “Commencement Date”), and terminate at 12:01 a.m. on August 4, 2005,
unless terminated earlier pursuant to Section 3 below. Executive’s
employment shall be extended for additional one (1) year terms after the
initial term of employment unless either party gives the other party
notice of its or his intention not to renew at least sixty (60) days
prior to the expiration of the then current term of employment. The
initial term of employment and any subsequent extensions shall be
referred to as the “Term of Employment”.



          2.
Compensation and Benefits. Viewpoint shall pay the following
compensation and provide the following benefits to Executive during the Term of
Employment:




	 	 	(a) Base Salary. Executive shall receive a base salary of $225,000 per
annum (the “Base Salary”), payable in approximately equal installments in
accordance with the customary payroll practices of Viewpoint. Viewpoint
will review Executive’s Base Salary on an annual basis. If the rate of
Base Salary per annum paid to Executive is increased during the Term of
Employment, such increased rate shall thereafter constitute the Base
Salary for all purposes of this Agreement. Executive’s Base Salary shall
not be decreased during the Term of Employment without the mutual
consent of Executive and Company.
	 
	 	 	(b) Bonuses.




	 	 	 	(i) Annual Bonus. Executive shall receive a bonus of not less than
$25,000 per annum payable in four (4) equal quarterly installments,
with the first such installment payable on November 4, 2003.
	 
	 	 	 	(ii) Discretionary Bonus. Viewpoint and Executive shall cooperate
in good faith to establish management based objectives for
Executive for each annual period during the Term of Employment. To
the extent that Executive achieves these management-based
objectives, Executive will be eligible to receive a bonus of up to
$50,000 per annum in addition to the annual bonus described above
and such bonus will be payable within thirty (30) days of the
anniversary of the Commencement Date. The management-based
objectives for the first year of the Term of Employment will be
established in mutual cooperation by Executive and the Chief
Executive Officer within sixty (60) days following the Commencement
Date.




	 	 	(c) Housing Allowance. Viewpoint will reimburse Executive for his
reasonable expenses associated with lodging in New York City in an amount
not to exceed $2,080 per month during the first twelve (12) months of the
Term of Employment.
	 
	 	 	(d) Options to Acquire Viewpoint Common Stock. Viewpoint will grant to
Executive an option to acquire shares of Viewpoint common stock (the
“Options”) as follows:




	 	 	 	(i) Viewpoint will grant to Executive an Option to acquire 350,000
shares of Viewpoint common stock at an exercise price equal to the
closing price of Viewpoint’s common stock at the close of business
on the business day immediately preceding the Commencement Date.
	 
	 	 	 	(ii) Viewpoint will grant to Executive an Option to acquire an
additional 150,000 shares of Viewpoint common stock on or before
the first (1st) anniversary of the Commencement Date at an exercise
price equal to the closing price of Viewpoint’s common stock on the
date of grant.
	 
	 	 	 	(iii) Twenty-five percent (25%) of the shares subject to each of
the above Options will vest on the first (1st) anniversary of the
date the Option is granted and one-thirty-sixth (1/36th) of the
remaining shares will vest monthly thereafter.
	 
	 	 	 	(iv) The Options will be subject to the terms of award agreements
to be executed by Viewpoint and Executive.



 






 







	 	 	(e) Benefit Plans; Vacation. Executive shall be entitled to participate
in all benefit plans maintained for Viewpoint employees, and Viewpoint
shall pay for Executive’s participation in such plans to the same extent
that Viewpoint makes payments for other executive officers’
participation. Executive shall be entitled to four (4) weeks of paid
vacation per annum, to be accrued and used in accordance with Viewpoint’s
policies.
	 
	 	 	(f) Withholdings and Deductions. The payment of any Base Salary, bonus
or other compensation hereunder shall be subject to income tax, social
security and other applicable withholdings, as well as such deductions as
may be required under Viewpoint’s employee benefit plans.
	 
	 	 	3. Termination; Severance; Change in Control; Non-Renewal.
	 
	 	 	(a) Termination Without Cause or With Good Reason in First Twelve (12)
Months of Employment. If, within twelve (12) months following the
Commencement Date, Viewpoint terminates Executive’s employment without
Cause (as defined below), or if Executive terminates his employment with
Viewpoint for Good Reason (as defined below), Viewpoint will pay to
Executive an amount equal to six (6) months of Executive’s then current
Base Salary, and fifty percent (50%) of the unvested portion of Options
granted to Executive at any time before such termination will immediately
vest and will remain exercisable by Executive for three (3) months
following the effective date of termination (the “Termination Date”).
	 
	 	 	(b) Termination Without Cause or With Good Reason After Twelve (12)
Months of Employment. If, at any time during the Term after the date
that is twelve (12) months following the Commencement Date, Viewpoint
terminates Executive’s employment without Cause, or if Executive
terminates his employment with Viewpoint for Good Reason, Viewpoint will
pay to Executive an amount equal to one (1) times Executive’s then
current Base Salary, and one hundred percent (100%) of the unvested
portion of Options granted to Executive at any time before such
termination will immediately vest and will remain exercisable by
Executive for three (3) months following the Termination Date.
	 
	 	 	(c) Termination Without Cause or With Good Reason Following a Change in
Control of Viewpoint.




	 	 	 	(i) Change in Control Agreement Executed Within First Twelve (12)
Months. If, within twelve (12) months following the Commencement
Date, (A) Viewpoint enters into an agreement that leads to a Change
in Control (as defined below), and (B) Executive’s employment is
terminated by Viewpoint without Cause, or by Executive for Good
Reason, at any time within one (1) year following the Change in
Control, then




	 	 	 
	 	 	
(A) Executive shall be entitled to a lump sum amount, in cash
and payable within ten (10) days following the Termination
Date, equal to one (1) times Executive’s Base Salary;
	 	 	 
	 	 	
(B) Fifty percent (50%) of the unvested portion of Options
granted to Executive at any time before such termination will
immediately vest and will remain exercisable by Executive for
three (3) months following the Termination Date;
	 	 	 
	 	 	
(C) Unless otherwise prohibited by the terms of the
applicable plans, Executive shall be entitled to continued
participation in Viewpoint’s welfare benefit plans for one
(1) year following the Termination Date, including, without
limitation, all medical, prescription, dental, disability,
group life, accidental death and travel accident insurance
plans and programs of Viewpoint, at the level provided to
Executive immediately prior to the Change in Control;
provided, however, that if Executive becomes eligible for
coverage under any plans of another employer that provide
substantially similar coverage, the coverage provided by
Viewpoint pursuant to this Subsection 3(c)(i)(C) will cease.
In addition to the foregoing, Executive will be entitled to
continue his coverage under the



 






 




	 	 	 
	 	 	
above plans to the extent required by the Consolidated
Omnibus Budget Reconciliation Act of 1985 “COBRA”) commencing
on the first (1st) anniversary of the Termination Date.




	 	 	 	(ii) Change in Control Agreement Executed After First Anniversary
of Term of Employment. If, at any time after the first (1st)
anniversary of the Commencement Date (A) Viewpoint enters into an
agreement that leads to a Change in Control, and (B) Executive’s
employment is terminated by Viewpoint without Cause, or by
Executive for Good Reason, at any time within one (1) year
following the Change in Control, then




	 	 	 
	 	 	
(A) Executive shall be entitled to a lump sum amount, in cash
and payable within ten (10) days following the Termination
Date, equal to two (2) times Executive’s Base Salary,
	 	 	 
	 	 	
(B) One hundred percent (100%) of the unvested portion of any
Options granted to Executive at any time before such
termination will immediately vest and will remain exercisable
by Executive for three (3) months following the Termination
Date,
	 	 	 
	 	 	
(C) Unless otherwise prohibited by the terms of the
applicable plans, Executive shall be entitled to continued
participation in Viewpoint’s welfare benefit plans for one
(1) year following the Termination Date, including, without
limitation, all medical, prescription, dental, disability,
group life, accidental death and travel accident insurance
plans and programs of Viewpoint, at the level provided to
Executive immediately prior to the Change in Control;
provided, however, that if Executive becomes eligible for
coverage under any plans of another employer that provide
substantially similar coverage, the coverage provided by
Viewpoint pursuant to this Subsection 3(c)(ii)(C) will cease.
In addition to the foregoing, Executive will be entitled to
continue his coverage under the above plans to the extent
required by COBRA commencing on the first (1st) anniversary
of the Termination Date.




	 	 	(d) Non-Renewal. If Viewpoint elects not to renew this Agreement for a
one (1) year period following the expiration of the initial Term of
Employment or any renewal term, Viewpoint will pay to Executive an amount
equal to his then current Base Salary. Executive shall be entitled to a
lump sum amount, in cash and payable within ten (10) days following the
Termination Date.
	 
	 	 	(e) Termination With Cause or Without Good Reason. If, at any time
during the Term of Employment, Viewpoint terminates Executive’s
employment with Cause, or if Executive terminates his employment with
Viewpoint without Good Reason, Viewpoint will have no obligation to make
any payments to Executive under this Agreement, and the unvested portion
of any Options granted to Executive at any time before such termination
will be forfeited and will not vest and will not be exercisable at any
time by Executive.



 






 







	 	 	(f) Non-Duplication of Benefits; No Interest. In the event of the
termination of Executive’s employment, his rights under any benefit plans
in which he is a participant shall be determined in accordance with the
terms of the plans and by applicable law. Notwithstanding any other
provision in this Agreement, nothing in this Agreement shall result in a
duplication of payments or benefits provided under this Section 3, nor
shall anything in this Agreement require Viewpoint to make any payment or
to provide any benefit to Executive that Viewpoint is otherwise required
to provide under any other contract, agreement or arrangement. No
interest shall accrue on or be paid with respect to any portion of any
payments hereunder, except as required by law.
	 
	 	 	(g) General Release. No payments or benefits payable to Executive upon
the termination of his employment pursuant to this Section 3 shall be
made to Executive unless and until he executes a general release
substantially in the form attached hereto as Exhibit B.



          4. Definitions. In addition to certain terms defined elsewhere in this
Agreement, the following terms will have the following respective meanings:




	 	 	(b) “Cause” means the occurrence of any of the following:




	 	 	 	(i) the willful and continuing refusal of Executive to follow the
lawful directives of the Chief Executive Officer or the Board,
provided that such directives are consistent with Executive’s title
and position.
	 
	 	 	 	(ii) conduct that is intentional and known by Executive to be
materially harmful or potentially materially harmful to Viewpoint’s
best interest,
	 
	 	 	 	(iii) gross negligence in the performance of, or willful disregard
of, Executive’s obligations hereunder,
	 
	 	 	 	(iv) Executive’s conviction of any felony, or
	 
	 	 	 	(v) Executive’s commission of any act of dishonesty or moral
turpitude which, in the good faith opinion of the Board, is
materially detrimental to Viewpoint;
	 
	 	 	 	provided, however, that in the event of a termination due to one or
more of the reasons set forth in clauses (a)(i), (ii) and/or (iii),
Executive shall be provided with a period of five (5) business days
from the date Viewpoint gives notice of such termination to
effectively cure or remedy such reason or reasons (unless such cure
or remedy is not possible).




	 	 	(c) “Good Reason” means the occurrence of any of the following:




	 	 	 	(i) any material breach by Viewpoint of its obligations under this
Agreement,
	 
	 	 	 	(ii) a significant diminution of Executive’s duties as set forth in
Section 1 without Executive’s consent, or
	 
	 	 	 	(iii) a failure by Viewpoint to obtain a written agreement from any
successor or assign of Viewpoint to assume the material obligations
under this Agreement upon a Change in Control;
	 
	 	 	 	provided, however, that in the event of a termination for Good
Reason, Viewpoint shall be provided with a period of five (5)
business days from the date Executive gives notice of such
termination to effectively cure or remedy such reason or reasons;
and if Viewpoint fails to cure or remedy the reason or reasons for
termination, Executive’s Good Reason termination shall be effective
as of the date the notice was given.



 






 







	 	 	(c) “Change in Control of Viewpoint” means and includes each of the
following:




	 	 	 	(i) the acquisition, in one or more transactions, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) by any
person or any group of persons who constitute a group (within the
meaning of Section 13d-3 of the Exchange Act) of any securities of
Viewpoint such that, as a result of such acquisition, such person
or group beneficially owns (within the meaning of Rule 13d-3 of the
Exchange Act), directly or indirectly, more than fifty percent
(50%) of Viewpoint’s outstanding voting securities entitled to vote
on a regular basis for a majority of the members of the Board;
	 
	 	 	 	(ii) the consummation of any merger or any other business
combination, in one or more transactions, including, but not
limited to a sale of all or substantially all of the assets of
Viewpoint, other than a transaction immediately following which the
shareholders of Viewpoint who owned shares immediately prior to the
transaction continue to own, by virtue of their prior ownership of
Viewpoint shares, at least fifty percent (50%) of the voting power,
directly or indirectly, of the surviving corporation in any such
merger or business combination; or
	 
	 	 	 	(iii) the consummation of a plan of complete liquidation of
Viewpoint.



          5. Miscellaneous.



               (a) Non-Assignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by Executive, his beneficiaries or legal
representatives without Viewpoint’s prior written consent.



               (b) Binding Effect. Without limiting or diminishing the effect of Section
5(a) hereof, this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, successors, legal
representatives and assigns.



               (c) Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.



               (d) Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in person,
sent by first class certified or registered mail, postage prepaid or sent by
overnight courier, if to Viewpoint, at its principal place of business, and if
to Executive, at his home address most recently filed with Viewpoint, or to
such other address or addresses as either party shall have designated in
writing to the other party hereto.



               (e) Entire Agreement; Modifications. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.



               (f) Relevant Law. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the conflict of laws principles thereof.



               (g) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.



          6.
Acknowledgement. Executive represents and acknowledges the following:




 






 






	 	(a)	 	He has carefully read this Agreement in its entirety;
	 
	 	(b)	 	He understands the terms and conditions contained herein;
	 
	 	(c)	 	He has had the opportunity to review this
Agreement with legal counsel of his own choosing and has not
relied on any statements made by Viewpoint or its legal
counsel as to the meaning of any term or condition contained
herein or in deciding whether to enter into this Agreement;
and
	 
	 	(d)	 	He is entering into this Agreement knowingly and
voluntarily.



          IN WITNESS WHEREOF, Executive and the authorized representative of the
Board of Viewpoint execute and enter into this Agreement as of the date first
above written.




	 	 	 
	EXECUTIVE	 	
VIEWPOINT CORPORATION
	 	 	 
	/s/ William H. Mitchell	 	/s/ Robert E. Rice
	
	 	


	William H. Mitchell	 	
By: Robert E. Rice
	 	 	
         Chief Executive Officer