Document:

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                                 EXHIBIT 10.43
                             INTELEFILM CORPORATION
                AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

         The following constitute the provisions of the Amended and Restated
Employee Stock Purchase Plan of INTELEFILM CORPORATION (the "Company"), a
Minnesota corporation. This Plan is intended to amend and restate the Company's
original Employee Stock Purchase Plan that was approved by the Board and the
shareholders in 1996.

         1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2        Definitions.

                  (a)      "Board" shall mean the Board of Directors of the
Company.
                  (b)      "Code" shall mean the Internal Revenue Code of 1986,
as amended.
                  (c)      "Committee" shall mean a committee of the Board, as
described in Section 14.
                  (d)      "Common Stock" shall mean the Common Stock, $.01 par
value, of the Company.
                  (e)      "Company" shall mean iNTELEFILM CORPORATION, a
Minnesota corporation.

                  (f) "Compensation" shall mean total cash compensation received
by an Employee from the Company or a Designated Subsidiary. By way of
illustration, but not limitation, Compensation includes regular compensation
such as salary, wages, overtime, shift differentials, bonuses, commissions and
incentive compensation, but excludes relocation, expense reimbursements, tuition
or other reimbursements and income realized as a result of participation in any
stock option, stock purchase, or similar plan of the Company or any Designated
Subsidiary.
                  (g) "Continuous Status as an Employee" shall mean the absence
of any interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved by the
Committee, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise

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pursuant to Company policy adopted from time to time; or (iv) in the case of
transfers between locations of the Company or between the Company and its
Designated Subsidiaries.

                  (h) "Contributions" shall mean all amounts credited to the
account of a participant pursuant to the Plan.

                  (i) "Corporate Transaction" shall mean a sale of all or
substantially all of the Company's assets, or a merger, consolidation or other
capital reorganization of the Company with or into another corporation.

                  (j) "Designated Subsidiaries" shall mean the Subsidiaries that
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

                  (k) "Employee" shall mean any person, including an Officer,
who is customarily employed for at least twenty (20) hours per week and more
than five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.

                  (l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

                  (m) "Exercise Date" shall mean the last day
of each offering period of the Plan.

                  (n) "Offering Date" shall
mean the first business day of each offering period of the Plan.

                  (o) "Plan" shall mean this Employee Stock Purchase Plan.

                  (p) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

         3.       Eligibility.

                  (a) Any person who is an Employee as of the Offering Date of a
given offering period shall be eligible to participate in such offering period
under the Plan, subject to the requirements of paragraph 5(a) and the
limitations imposed by Section 423(b) of the Code. Anyone who meets the
eligibility criteria and becomes an Employee during the offering period but
after the Offering Date may begin participation at the beginning of the next
payroll period. All eligible Employees who elect to participate in this Plan
shall have the same rights and privileges except as provided in Subparagraph (b)
below.

                  (b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) if,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 425(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing
five percent (5%) or

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more of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) which permits his or her
rights to purchase stock under all employee stock purchase plans (described in
Section 423 of the Code) of the Company and its subsidiaries to accrue at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) of fair market value of
such stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.

         4. Offering Periods. The Plan shall be implemented by one offering
during each 12 month period of the Plan, commencing on or about January 1 and
continuing thereafter to a date no later than December 31 of the same twelve
consecutive month period or until terminated in accordance with Section 20
hereof. The Board shall have the power to change the duration and/or the
frequency of offering periods with respect to future offerings without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first offering period to be affected.
The first offering period shall commence on a date determined by the Board which
follows the date on which the Company's Common Stock has been registered under
the Exchange Act.

         5. Participation.
            (a)     An eligible Employee may become a participant in the Plan
by completing a subscription agreement authorizing payroll deduction, on the
form provided by the Company, and any other required documents ("Enrollment
Documents") and submitting such documents to the Company's payroll office prior
to the applicable Offering Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
offering period. The Enrollment Documents and their submission may be
electronic, as directed by the Company.

            (b)     Payroll deductions for a participant shall commence on the
first full payroll following the Offering Date and shall end on the Exercise
Date of the offering to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 11. Payroll deductions must
be whole dollar amounts only and may not be less than $10.00 per pay period.

         6. Method of Payment of Contributions.
            (a)     A participant shall elect to have payroll deductions made
on each payday during the offering period in an amount not less than ten dollars
($10.00) per payday and not more than ten percent (10%) of such participant's
Compensation on each payday during the offering period. All payroll deductions
made by a participant shall be credited to his or her account under the Plan. A
participant may not make any additional payments into such account.

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                  (b) A participant may discontinue his or her participation in
the Plan as provided in Section 11, or, on one occasion only during an offering
period may increase or decrease the rate of his or her Contributions with
respect to the offering period by completing and filing with the Company new
Enrollment Documents authorizing a change in the payroll deduction rate. The
change in rate shall be effective as of the beginning of the next payroll period
following the date of filing of the new Enrollment Documents, if the documents
are completed at least five (5) business days prior to such date and, if not, as
of the beginning of the next succeeding payroll period.

                  (c) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
participant's payroll deductions may be decreased during any offering period
scheduled to end during the current calendar year to 0%. Payroll deductions
shall re-commence at the rate provided in such participant's Enrollment
Documents at the beginning of the first offering period that is scheduled to end
in the following calendar year, unless terminated by the participant as provided
in Section 11.

         7.       Grant of Option.
                  (a) On the Offering Date of each offering period, each
eligible Employee participating in the Plan shall be granted an option to
purchase (at the per share option price) up to a number of shares of the
Company's Common Stock determined by dividing such Employee's Contributions to
be accumulated during such offering period (not to exceed an amount equal to ten
percent (10%) of his or her anticipated Compensation for the offering period, or
the remainder of the offering period if the election is made upon employment
after the Offering Date, to be determined as of the date of the commencement of
the applicable offering period) by eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Offering Date, subject to
the limitations set forth in Sections 3(b) and 13 hereof. Fair market value of a
share of the Company's Common Stock shall be determined as provided in Section
7(b) herein.

                  (b) The fair market value of the Company's Common Stock on a
given date (the "Fair Market Value") shall be determined by the Board in its
discretion based on the closing sales price of the Common Stock for such date
(or, in the event that the Common Stock is not traded on such date, on the
immediately preceding trading date), as reported by the National Association of
Securities Dealers Automated Quotation (Nasdaq) National Market, or, if such
price is not reported, the mean of the bid and asked prices per share of the
Common Stock as reported by Nasdaq, or, in the event the Common Stock is listed
on a stock exchange, the Fair Market Value per share shall be the closing sales
price on such exchange on such date (or, in the event that the Common Stock is
not traded on such

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date, on the immediately preceding trading date), as reported in The Wall Street
Journal.

             (c) Options to purchase Common Stock granted on the Offering
Date expire as of the Exercise Date.

         8.  Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 11, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date of the offering period, and the
maximum number of full shares subject to option will be purchased for the
participant at the applicable option price with the accumulated Contributions in
the participant's account. The shares purchased upon exercise of an option
hereunder shall be deemed to be transferred to the participant on the Exercise
Date. During his or her lifetime, a participant's option to purchase shares
hereunder is exercisable only by him or her.

         9.  Delivery. As promptly as practicable after the Exercise Date of eac
offering period, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the number of whole shares purchased
upon exercise of his or her option. Any cash remaining to the credit of a
participant's account under the Plan after a purchase by him or her of full
shares at the termination of each offering period, or which is insufficient to
purchase a full share of Common Stock of the Company, shall be returned to the
participant.

         10. Expenses. All costs of maintaining records and executing transfers
will be borne by the Company. Brokerage expenses incurred in connection with the
purchase of shares shall be included as part of the costs of the shares to the
participating employees.

         11. Withdrawal; Termination of Employment.
             (a) A participant may withdraw all but not less than all of
the Contributions credited to his or her account under the Plan at any time
prior to the Exercise Date of the offering period by giving 5 days prior written
notice to the Company. All of the participant's Contribution credited to his or
her account will be paid to the participant promptly after receipt of his or her
notice of withdrawal, and the participant's option for the current period will
be automatically terminated. Upon a participant's submission of his or her
notice of withdrawal, the Company shall make no further payroll deductions for
the purchase of shares during the offering period.

             (b) Upon the termination of the participant's Continuous
Status as an Employee prior to each Exercise Date of the offering period for any
reason, whether voluntary or involuntary, including retirement or death, the
Contributions credited to his or her account will be returned to the participant
or, in the case of his or her death, to the person or persons entitled thereto
under Section 15, and his or her option will be automatically terminated.

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             (c) In the event an Employee fails to remain in Continuous
Status as an Employee of the Company for at least twenty (20) hours per week
during the offering period in which the employee is a participant, he or she
will be deemed to have elected to withdraw from the Plan and the Contributions
credited to his or her account will be returned to him or her and his or her
option will be terminated.

             (d) A Participant who withdraws from an offering may not
revoke that withdrawal and recommence payroll deductions during the same
offering period.

             (e) A participant's withdrawal from an offering will not have
any effect upon his or her eligibility to participate in a succeeding offering
or in any similar plan which may hereafter be adopted by the Company.

         12. Interest.  No interest shall accrue on the payroll deductions
of a participant in the Plan.

         13. Stock.
             (a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 400,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 19. If the total number of shares which would otherwise be subject to
options granted pursuant to Section 7(a) hereof on the Offering Date of an
offering period exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares of
Common Stock available for purchase on such Offering Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable. In such event, the Company
shall give written notice of such reduction in the number of shares subject to
the option to each Employee affected thereby and shall similarly reduce the rate
of payroll deductions, if necessary.

             (b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

             (c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

         14. Administration. The Plan shall be administered by the
Board of the Company or a committee of members of the Board appointed by the
Board. The administration, interpretation or application of the Plan by the
Board or its Committee shall be final, conclusive and binding upon all
participants. The Board or its Committee shall have full power to adopt, amend,
and rescind any rules deemed desirable and appropriate for the administration of
the Plan. Members of the Board who are

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eligible Employees are permitted to participate in the Plan, provided that:

             (a) Members of the Board who are eligible to participate in
the Plan may not vote on any matter affecting the administration of the Plan or
the grant of any option pursuant to the Plan.

             (b) If a Committee is established to administer the Plan, no
member of the Board who is eligible to participate in the Plan may be a member
of the Committee.

         15. Designation of Beneficiary.
             (a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of the offering period but prior to delivery to him or her
of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant's
account under the Plan in the event of such participant's death prior to the
Exercise Date of the offering period.

             (b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         16. Transferability. Neither Contributions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 11.

         17. Use of Funds. All Contributions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such Contributions.

         18. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees promptly following the Exercise Date, which statements will set forth
the amounts of Contributions, the per share purchase price, the number

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of shares purchased and the remaining cash balance, if any.

         19. Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under the Plan that has not yet been exercised, the
number of shares of Common Stock that have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), the maximum member of shares of Common Stock that may be purchased
by a participant in an offering period, the number of shares of Common Stock set
forth in Section 13 above, as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

         In the event of a dissolution or liquidation of the Company, any
offering period then in progress will terminate immediately prior to the
consummation of such action, unless otherwise provided by the Board. In the
event of a Corporate Transaction, each option under the Plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation. In the event that the
successor corporation refuses to assume or substitute for outstanding options,
each offering period then in progress shall be shortened and a new Exercise Date
shall be set (the "New Exercise Date"), as of which date any offering period
then in progress will terminate. The New Exercise Date shall be on or before the
date of consummation of the transaction and the Board shall notify each
participant in writing, at least ten (10) days prior to the New Exercise Date,
that the Exercise Date for his or her option has been changed to the New
Exercise Date and that his or her option will be exercised automatically on the
New Exercise Date, unless prior to such date he or she has withdrawn from the
offering period as provided in Section 11. For purposes of this Section 19, an
option granted under the Plan shall be deemed to be assumed, without limitation,
if, at the time of issuance of the stock or other consideration upon a Corporate
Transaction, each holder of

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of an option under the Plan would be entitled to receive upon exercise of the
option the same number and kind of shares of stock or the same amount of
property, cash or securities as such holder would have been entitled to receive
upon the occurrence of the transaction if the holder had been, immediately prior
to the transaction, the holder of the number of shares of Common Stock covered
by the option at such time (after giving effect to any adjustments in the number
of shares covered by the option as provided for in this Section 19); provided,
however that if the consideration received in the transaction is not solely
common stock of the successor corporation or its parent (as defined in Section
424(e) of the Code), the Board may, with the consent of the successor
corporation, provide for the consideration to be received upon exercise of the
option to be solely common stock of the successor corporation or its parent
equal in fair market value to the per share consideration received by holders of
Common Stock in the transaction.

         The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.

         20. Amendment or Termination. The Board may at any time terminate or
amend the Plan. Except as provided in Section 19, no such termination of the
Plan may affect options previously granted, provided that the Plan or an
offering period may be terminated by the Board on an Exercise Date or by the
Board's setting of a New Exercise Date with respect to an offering period then
in progress if the Board determines that termination of the Plan and/or the
offering period is in the best interests of the Company and the stockholders or
if the continuation of the Plan and/or the offering period would cause the
Company to incur adverse accounting charges as a result of a change after the
effective date of the Plan and after applying the generally accepted accounting
rules applicable to the Plan. No amendment to the Plan shall make any change in
any option previously granted that adversely affects the rights of any
participant, nor may an amendment be made without prior approval of the
shareholders of the Company (obtained in the manner described in Section 22) if
such amendment would:

             (a) Increase the number of shares that may be issued under
the Plan;
             (b) Permit payroll deductions at a rate in excess of ten percent
(10%) of the participant's Compensation;

             (c) Change the designation of the employees (or class of employees)
eligible for

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participation in the Plan; or

             (d) If the Company has a class of equity securities registered
under Section 12 of the Exchange Act at the time of such amendment, materially
increase the benefits which may accrue to participants under the Plan.

         If any amendment requiring shareholder approval under this Section 20
of the Plan is made subsequent to the first registration of any class of equity
securities by the Company under Section 12 of the Exchange Act, such shareholder
approval shall be solicited as described in Section 22 of the Plan.

         21. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         22. Shareholder Approval.
             (a) Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted. If such shareholder approval is obtained at a duly held
shareholders' meeting, it must be obtained by the affirmative vote of the
holders of a majority of the outstanding shares of the Company, or if such
shareholder approval is obtained by written consent, it must be obtained by the
unanimous written consent of all shareholders of the Company; provided, however,
that approval at a meeting or by written consent may be obtained by a lesser
degree of shareholder approval if the Board determines, in its discretion after
consultation with the Company's legal counsel, that such a lesser degree of
shareholder approval will comply with all applicable laws and will not adversely
affect the qualification of the Plan under Section 423 of the Code.

             (b) If and in the event that the Company registers any class of
equity securities pursuant to Section 12 of the Exchange Act, any required
approval of the shareholders of the Company obtained after such registration
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.

             (c) If any required approval by the shareholders of the Plan itself
or of any amendment thereto is solicited at any time otherwise than in the
manner described in Section 22(b) hereof, then the Company shall, at or prior to
the first annual meeting of shareholders held subsequent to the later of (1) the
first registration of any class of equity securities of the Company under
Section 12 of the Exchange Act or (2) the granting of an option hereunder to an
officer or director after such registration, do the following:

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             (i) furnish in writing to the holders entitled to vote for the Plan
substantially the same information which would be required (if proxies to be
voted with respect to approval or disapproval of the Plan or amendment were then
being solicited) by the rules and regulations in effect under Section 14(a) of
the Exchange Act at the time such information is furnished; and (ii) file with,
or mail for filing to, the Securities and Exchange Commission four copies of the
written information referred to in subsection

             (ii) hereof not later than the date on which such information is
first sent or given to shareholders.

             23. Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

             As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the afore mentioned applicable provisions of law.

             24. Term of Plan. The Plan shall become effective upon approval by
the Board and shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 20. The Company shall acquire shareholder
approval of the Plan within twelve (12) months from the date of the Board's
approval of the Plan.

             25. Additional Restrictions of Rule 16b-3. The terms and conditions
of options granted hereunder to, and the purchase of shares by, persons subject
to Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.<PAGE>   1

                                  EXHIBIT 10.44

                             INTELEFILM CORPORATION

                                SEVERANCE POLICY

                                  January 2000
                        And effective as of April 1, 1999

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                -----------------

                            ARTICLE I - ESTABLISHMENT
     <S>   <C>                                                                               <C>
      1.1  Purpose...........................................................................1

                            ARTICLE II - DEFINITIONS
      2.1  Affiliate.........................................................................1
      2.2  Base Salary.......................................................................1
      2.3  Benefit Period....................................................................1
      2.4  Board of Directors................................................................1
      2.5  Cause.............................................................................1
      2.6  Change in Control.................................................................2
      2.7  Company...........................................................................4
      2.8  Date of Termination...............................................................5
      2.9  Disability........................................................................5
     2.10  Good Reason.......................................................................5
     2.11  Notice of Termination.............................................................6
     2.12  Participant.......................................................................6
     2.13  Policy............................................................................6
     2.14  Retirement........................................................................6
     2.15  Welfare Benefits..................................................................7

                             ARTICLE III - DURATION
      3.1  Duration of the Policy............................................................7

                           ARTICLE IV - PARTICIPATION
      4.1  Eligibility.......................................................................7
      4.2  Termination of Participation......................................................7

                       ARTICLE V - SEVERANCE COMPENSATION
      5.1  Termination by the Company without Cause, Termination by the Participant for Good
           Reason, and Special Termination...................................................8
      5.2  Other Termination.................................................................9
      5.3  Security.........................................................................10

                  ARTICLE VI - U.S. EXCISE TAX INDEMNIFICATION
      6.1  Indemnification..................................................................10
      6.2  Determination of Amount..........................................................10
      6.3  Procedural Aspects...............................................................11
      6.4  Refunds..........................................................................12

                             ARTICLE VII - AMENDMENT
      7.1  Amendments.......................................................................12
</TABLE>

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<TABLE>
<CAPTION>

                         ARTICLE VIII - INDEMNIFICATION
    <S>    <C>                                                                              <C>
      8.1  Indemnification..................................................................13
      8.2  Limitations......................................................................13

                          ARTICLE IX - CLAIMS PROCEDURE
      9.1  Claim for Payment................................................................13

                            ARTICLE X - MISCELLANEOUS
     10.1  Assumption of Policy.............................................................14
     10.2  Successors and Assigns...........................................................14
     10.3  Arbitration......................................................................14
     10.4  Governing Law....................................................................15
     10.5  Offsets, Withholding.............................................................15
     10.6  Non-alienation of Payment........................................................15
     10.7  Facility of Payment..............................................................15
     10.8  Effect of Return of Benefit Checks...............................................15
     10.9  Non-exclusivity of Rights........................................................16
    10.10  Severability.....................................................................16
    10.11  Notices..........................................................................16
    10.12  Reimbursement of Expenses in Enforcing Rights....................................16
    10.13  Interest on Unpaid Amounts.......................................................16
    10.14  No Contract of Employment........................................................16
    10.15  Beneficiaries....................................................................17
    10.16  No General Waivers...............................................................17
    10.17  No Obligation to Mitigate........................................................17
    10.18  Authority........................................................................17
    10.19  Counterparts.....................................................................17
    10.20  Headings and Gender..............................................................17
</TABLE>

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                             INTELEFILM CORPORATION

                                SEVERANCE POLICY

                                    ARTICLE I

                                  ESTABLISHMENT

         1.1  Purpose. iNTELEFILM Corporation (the "Company") Severance Policy
is hereby established by the Company. The purpose of the Policy is to provide
severance benefits to persons covered by the Policy who incur a termination of
employment or provision of services as a member of the Board. The Policy is
adopted effective as of April 1, 1999.

                                   ARTICLE II

                                   DEFINITIONS

         For purposes of this Policy, the following terms shall have the
following meanings (unless expressly indicated to the contrary) and the term
shall be capitalized when the meaning is intended:

         2.1  "Affiliate" means any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated association or other entity (other than the Company) that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, the Company.

         2.2  "Base Salary" means the annual (gross) base salary of the
Participant from Media Management, LLC, Harmony Holdings, Inc., and/or the
Company as in effect at the commencement of the Term or as the same may be
increased from time to time during the Term, including amounts accrued but not
paid. The annual (gross) base salary for Richard W. Perkins shall be deemed to
be $50,000.00.

         2.3  "Benefit Period" means the period commencing on the Date of
Termination and continuing for 36 consecutive months.

         2.4  "Board of Directors" or "Board" means the Board of Directors of
the Company.

         2.5  "Cause" shall mean as to the Participant any of the following:

              (a)  the Participant's committing a felony or entering a plea of
         no contest to a felonious crime in a court of law which results in
         material damage to the Company or any of its Affiliates or materially
         impairs the value of the Participant's services to the Company or its
         Affiliates; or

              (b)  the Participant's willfully engaging in one or more acts, or
         willfully omitting to act (except for sickness, a disability, vacation
         or authorized leave of absence),

<PAGE>   5

         which is demonstrably willful and materially damaging to the Company or
         any of its Affiliates committed in bad faith or with reasonable belief
         that such act or omission to act was damaging to the Company or an
         Affiliate, including acts and omissions that constitute gross
         negligence in the performance of the Participant's duties as in effect
         immediately prior to the commencement of the Term.

                   Notwithstanding the foregoing, the Participant may not be
         terminated for Cause unless and until there shall have been delivered
         to the Participant a copy of a resolution duly adopted by a majority
         affirmative vote of the membership of the Board of Directors of the
         Company (excluding the Participant, if the Participant is then a
         member) at a meeting of the Board called and held for such purpose
         (after giving the Participant reasonable notice specifying the nature
         of the grounds for such termination and not less than thirty (30) days
         to correct the acts or omissions complained of, if correctable, and
         affording the Participant the opportunity, together with the
         Participant's counsel, to be heard before the Board) finding that, in
         the good faith opinion of the Board, the Participant was guilty of
         conduct which constitutes Cause. An act or omission shall not be Cause
         if such act or omission was directed by the Board or approved by the
         Company's legal counsel.

         2.6       "Change in Control" shall mean the occurrence of any of the
                    following events:

                   (a)  Individuals who on the Effective Date constitute the
         Board (the "Incumbent Directors") cease for any reason to constitute at
         least a majority of the Board, provided that any person who becomes a
         member of the Board subsequent to the Effective Date, whose election or
         nomination for election was approved by a vote of at least two-thirds
         of the Incumbent Directors then on the Board (either by a specific vote
         or by approval of the proxy statement of the Company in which such
         person is named as a nominee for membership on the Board, without
         written objection to such nomination) shall be an Incumbent Director;
         provided, however, that no individual initially elected or nominated as
         a member of the Board as a result of an actual or threatened election
         contest with respect to the Board of Directors or as a result of any
         other actual or threatened solicitation of proxies or consents by or on
         behalf of any person other than the Board shall be deemed to be an
         Incumbent Director;

                   (b)  Any "person" (as such term is defined in Section 3(a)(9)
         of the Securities and Exchange Act of 1934, as amended, hereinafter the
         "Exchange Act", and as used in Sections 13(d)(3) and 14(d)(2) of the
         Exchange Act) is or becomes a "beneficial owner" as defined in Rule
         13d-3 under the Exchange  Act, directly or indirectly, of securities of
         the Company representing 20% or more of the combined voting power of
         the Company's then outstanding securities eligible to vote for the
         election of the Board (the "Company Voting Securities"); provided,
         however, that the event described in this definition shall not be
         deemed to be a Change in Control by virtue of any of the following
         acquisitions: (A) by the Company; (B) by any employee benefit plan (or
         related trust) sponsored or maintained by the Company or any Affiliate;
         (C) by any underwriter temporarily holding securities pursuant to an
         offering of such securities; (D) pursuant to a Non-Qualifying
         Transaction (as defined in (c) below); or (E) a transaction (other than
         one described in (c) below) in which Company Voting Securities are
         acquired from the Company, if a majority of the Incumbent Directors
         approves a resolution providing expressly that the acquisition pursuant
         to this

<PAGE>   6

         clause (E) does not constitute a Change in Control under this
         definition. For purposes of this definition a "beneficial owner" of a
         security of the Company includes any person, company, government (or
         political subdivision, agency, or instrumentality of a government),
         either alone or acting together in a partnership, limited partnership,
         syndicate, or other group that, directly or indirectly, through any
         contract, arrangement, understanding, relationship, or otherwise, that
         has or shares the power to (A) vote or to direct the voting of
         securities of the Company and/or the power to invest or to dispose or
         to direct the disposition of securities of the Company, whether
         directly or through a trust, proxy, power of attorney, pooling
         arrangement or other contract or arrangement or (B) has the right to
         acquire the beneficial ownership of a security of the Company within
         sixty (60) days, including but not limited to the right to acquire such
         through the exercise of any option.

                   (c)  The Company consummates a merger, amalgamation,
         consolidation, statutory share exchange or similar form of corporate
         transaction involving the Company or any of its Affiliates that
         requires the approval of the Company's shareholders, whether for such
         transaction or the issuance of securities in the transaction (a
         "Business Combination"), unless immediately following such Business
         Combination:

                   (i)    More than 80% of the total voting power of (A) the
              corporation resulting from such Business Combination (the
              "Surviving Corporation"), or (B) if applicable, the ultimate
              parent corporation that directly or indirectly has beneficial
              ownership of 100% of the voting securities eligible to elect
              directors of the Surviving Corporation (the "Parent Corporation"),
              is represented by Company Voting Securities that were outstanding
              immediately prior to such Business Combination (or, if applicable,
              is represented by shares into which such Company Voting Securities
              were converted pursuant to such Business Combination), and such
              voting power among the holders thereof is in substantially the
              same proportion as the voting power of such Company Voting
              Securities among the holders thereof immediately prior to the
              Business Combination;

                   (ii)   No person (other than any employee benefit plan (or
              related trust) sponsored or maintained by the Surviving
              Corporation or the Parent Corporation or any person which
              beneficially owned, immediately prior to such Business
              Combination, directly or indirectly, 20% or more of the Company
              Voting Securities (a "Company 20% Shareholder")) would become the
              beneficial owner, directly or indirectly, of 20% or more of the
              total voting power of the outstanding voting securities eligible
              to elect directors of the Parent Corporation (or, if there is no
              Parent Corporation, the Surviving Corporation) and no Company 20%
              Shareholder would increase its percentage of such total voting
              power; and

                   (iii)  At least a majority of the members of the board of
              directors of the Parent Corporation (or, if there is no Parent
              Corporation, the Surviving Corporation) following the consummation
              of the Business Combination were Incumbent Directors at the time
              of the Board's approval of the execution of the initial plan
              providing for such Business Combination (any Business Combination
              which satisfies all of the criteria specified in (i), (ii), and
              (iii) above shall be deemed to be a "Non-Qualifying Transaction");

<PAGE>   7

                   (d)  The Company consummates a plan of complete liquidation
         or dissolution of the Company or a sale of all or substantially all of
         the Company's assets other than where with respect to which,
         immediately after such sale or other disposition:

                   (i)    More than 80% of the combined voting power of the then
              outstanding securities thereof entitled to vote generally in the
              election of directors is then beneficially owned, directly or
              indirectly, by all or substantially all of the individuals and
              entities who were the beneficial owners, respectively, of the
              Outstanding Company Voting Securities immediately prior to such
              sale or other disposition;

                   (ii)   No Person (other than the Company, any employee
              benefit plan (or related trust) sponsored or maintained by the
              Company or such corporation (or any corporation controlled by the
              Company) and any Person which beneficially owned, immediately
              prior to such sale or other disposition, directly or indirectly,
              20% or more of the Outstanding Company Voting Securities)
              beneficially owns, directly or indirectly, 20% or more of the
              combined voting power of the then outstanding securities thereof
              entitled to vote generally in the election of directors; and

                   (iii)  At least a majority of the members of the board of
              directors thereof were members of the Incumbent Board at the time
              of the execution of the initial Policy or action of the Board
              providing for such sale or other disposition;

         or

              (e)  The Company makes a distribution or a series of distributions
         within a consecutive 24-month period (whether as a liquidation, a
         substantial dividend, or otherwise) whereby the Company distributes to
         shareholders cash or other property equal to at least 50% of the value
         of the Company as of the date of the initial distribution.

         Notwithstanding the foregoing, a Change in Control of the Company shall
         not be deemed to occur solely because any person acquires beneficial
         ownership of more than 20% of the Company Voting Securities as a result
         of the acquisition of Company Voting Securities by the Company which
         reduces the number of Company Voting Securities outstanding; provided,
         that if after such an acquisition by the Company such person becomes
         the beneficial owner of additional Company Voting Securities that
         increases the percentage of outstanding Company Voting Securities
         beneficially owned by such person, a Change in Control of the Company
         shall then occur.

         Section 2.6(e) shall not apply with respect to James G. Gilbertson.

         2.7  "Company" means iNTELEFILM Corporation, a company which engages in
the television commercial production and related commercial services, and any
successor or assignee of all or substantially all of its business, or of all or
substantially all of its assets, whether such succession or assignment is direct
or indirect, by purchase, merger, consolidation, assignment, or otherwise and
does not effectuate a Change in Control.

         2.8  "Date of Termination" shall mean (i) if the Participant's
employment is terminated by the Company for Cause, the date on which Notice of
Termination is given; or (ii) if the

<PAGE>   8

Participant's employment is terminated by the Company without Cause or by the
Participant for Good Reason, or in the case of Christopher T. Dahl for any other
reason during the period specified in Section 5.1, the date thirty (30) days
after the date on which a written Notice of Termination is given or, if no such
Notice of Termination is given, the date thirty (30) days after the date the
Participant ceases to render services. If the Participant is not an officer or
an employee of the Company and only a member of the Board of Directors, the
"Date of Termination" shall mean (i) if the Participant is removed from the
Board due to Cause, the date on which Notice of Termination is given; or (ii) if
the Participant ceases to be a member of the Board at the request of the Company
(but other than due to Cause) (including, without limitation, failure of the
Company to nominate such person for continued membership on the Board) or the
person resigns from the Board for Good Reason or for any other reason during the
period specified in Section 5.1, the date thirty (30) days after the date on
which a written Notice of Termination is given, or if no such Notice of
Termination is given, the date 30 days after the date the Participant ceases to
be a member of the Board.

         2.9  "Disability" means a disability which results in benefits to the
Participant under any long-term disability arrangement of the Company or an
Affiliate, or if there is no such arrangement or the Participant is not a
participant therein, then it means the failure of the Participant to render and
perform the substantial services required of the Participant for a total of 180
days or more during any consecutive 12-month period, because of any physical or
mental incapacity or disability as determined by a physician or physicians
selected by the Company and reasonably acceptable to the Participant; provided
that, if within thirty (30) days after the Participant has received written
notice from the Company of a proposed Date of Termination due to a disability,
the Participant shall have returned to the full performance of the Participant's
duties and shall have presented to the Company a written certificate of the
Participant's good health prepared by a physician selected by the Company and
reasonably acceptable to the Participant, the disability shall be disregarded.

         2.10 "Good Reason" shall mean the occurrence of any of the following
events during the Term, unless the event occurs with the Participant's express
prior written consent; unless the event is an isolated, insubstantial and
inadvertent action or failure to act which was not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof given by the
Participant; unless the event occurs in connection with the termination of the
Participant's employment or provision of services as a member of the Board for
Cause, Disability, Retirement or death; or unless the event occurs as a result
of the voluntary termination of employment or voluntary termination of service
as a member of the Board of the Participant and not in connection with the
occurrence of any of the following:

              (a)  the assignment to the Participant of any duties inconsistent
         in any respect with the Participant's position (including status,
         offices, titles and reporting requirements), authority, duties or
         responsibilities in effect immediately prior to the Term or any other
         action by the Company which results in a diminution in such position,
         authority, duties or responsibilities (including, without limitation,
         the requirement of the Participant to report to any person or entity
         other than the Board of Directors of the Company); or

              (b)  the Company's requiring the Participant to be based at any
         office or location more than 25 miles from the location of such office
         at the commencement of the Term, or the Company's requiring the
         Participant to travel on Company business to a

<PAGE>   9

         substantially greater extent than required immediately prior to the
         commencement of the Term; or

              (c)  a reduction by the Company in the Participant's rate of
         annual Base Salary as in effect immediately prior to the commencement
         of the Term or the failure by the Company to provide adjustments in the
         Participant's Base Salary which are comparable both as to frequency and
         percentage adjustment to the adjustments of other Participants; or

              (d)  the failure of the Company to continue in effect the
         Company's Welfare Benefits Plans, schemes, practices, policies and
         programs in respect of benefits, perquisites and expense reimbursements
         as in effect at the commencement of the Term, and if applicable,
         failing to continue in effect the Participant's and the Participant's
         family participation and coverage in the Company's benefits,
         perquisites and expense reimbursements at a level substantially
         equivalent in value to and on a basis consistent with the relative
         levels of participation of other Participants or as in effect at the
         commencement of the Term (whichever is greater); or

              (e)  the failure of the Company to obtain from a successor
         (including a successor to a material portion of the business or assets
         of the Company or an Affiliate) a satisfactory assumption in writing of
         the Company's obligations under this Policy; or

              (f)  any failure to maintain reasonable and adequate
         indemnification in respect of the Participant's services as an officer
         or member of the Board.

              For purposes of this Section, any good faith determination of
         "Good Reason" made by the Participant shall be conclusive.

         2.11 "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Policy relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Participant's employment or membership on the Board
under the provision so indicated.

         2.12 "Participant" shall mean a person designated to participate by the
Company in accordance with the terms of the Policy.

         2.13 "Policy" means the Company's Severance Policy, as herein set forth
and as may be amended from time to time.

         2.14 "Retirement" means the date the Participant attains an age of
superannuation upon which the Company may, under all applicable laws, force the
Participant's termination of employment or services as a member of the Board due
to age.

         2.15 "Welfare Benefits" means as to any Participant such benefits as
medical, hospitalization, prescription drug, dental, vision, life insurance,
accidental death, travel accident, disability and retiree health benefits as are
provided to the Participant by the Company or an Affiliate, or by any plan,
contract, or other arrangement to which the Company contributes on

<PAGE>   10

behalf of the Participant, including such material features of the plan,
contract, or other arrangement as the rate of Participant contributions,
co-payments, deductibles and the level of coverage, in effect on the date on
which the person most recently became a Participant in the plan.

         In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.

                                   ARTICLE III

                                    DURATION

         3.1  Duration of the Policy. The Policy shall be and become effective
as of April 1, 1999 (the "Effective Date") and shall cease to be effective on
March 31, 2002 (such period to be known as the "Term"). On each anniversary of
the Effective Date, the Term shall be automatically extended, upon the same
terms and conditions, for an additional period of one (1) year unless at least
ninety (90) days prior to the anniversary of the Effective Date as of which the
Term would be extended, the Company shall give written notice to the
Participants of its intention not to extend the Term. If a Change in Control
occurs during the original or extended Term of the Policy, the Term shall not
end prior to the end of the second anniversary of the Change in Control,
notwithstanding any written notice given by the Company to the contrary.
Anything herein to the contrary notwithstanding, the payment obligation of the
Company or an Affiliate occurring during the Term shall be continued to the
extent that any obligation of the Company or an Affiliate remains unpaid (or
otherwise not fully discharged) as of the end of the Term.

                                   ARTICLE IV

                                  PARTICIPATION

         4.1  Eligibility. Subject to the limitations herein, the Company has
selected and designated Christopher T. Dahl, James G. Gilbertson, and Richard W.
Perkins as eligible Participants. The selection of the previously named persons
as Participants for any Term shall not require the selection of any other person
as a Participant. In the event a person ceases to be a Participant for any
reason, the Company shall determine, in its sole discretion, whether such person
shall again, at any time, become a Participant.

         4.2  Termination of Participation. A person shall cease to be a
Participant on the earliest of (a) the first date following the Date of
Termination the Participant receives all compensation and benefits provided to
the Participant hereunder; (b) any date mutually agreed to by the Participant
and the Company; or (c) the date on which the Policy terminates as provided
herein.
<PAGE>   11

                                    ARTICLE V

                             SEVERANCE COMPENSATION

         5.1  Termination by the Company without Cause, Termination by the
Participant for Good Reason, and Special Termination. Subject to Sections 3.1
and 7.1, if the Participant incurs a Date of Termination during the Term that is
initiated by the Company without Cause (and is not due to death, Retirement, or
Disability) but only with respect to Christopher T. Dahl or Richard W. Perkins
(and not James G. Gilbertson), or is initiated by the Participant for Good
Reason during the Term, or is initiated by the Participant without Good Reason
(and is not due to death, Retirement or Disability) but only if such Date of
Termination is within the 180-day period after a Change in Control as defined in
2.6(e), the Company shall pay the Participant, and the Participant shall be
entitled to receive, the following:

              (a)  Compensation. The Company shall pay to Participants
         Christopher T. Dahl and Richard W. Perkins, as applicable, an amount
         equal to five (5) times the Participant's Base Salary; and shall pay to
         James G. Gilbertson an amount equal to two (2) times the Participant's
         Base Salary, plus the aggregate of the following amounts:

                   (i) subject to any terms of any long-term incentive plan,
              scheme, practice, policy or program which would provide for
              greater compensation upon the Date of Termination, any and all
              outstanding awards of compensation (including stock options) shall
              be fully vested, nonforfeitable and exercisable as of the Date of
              Termination, and any obligation (whether cash, stock or otherwise)
              shall be paid or distributed immediately;

                   (ii) to the extent not previously described, all vested,
              nonforfeitable amounts owing or accrued at the Date of Termination
              under any and all other compensation, benefit, perquisite, or
              expense reimbursement plans, schemes, practices, policies and
              programs in which the Participant theretofore participated, under
              the terms and conditions of the plans, schemes, practices,
              policies and programs pursuant to which such compensation,
              benefits, perquisite, or expense reimbursement were accrued.

              Subject to Article IX, the aggregate amount of all payments to be
         made under (a) shall be paid in a single sum on the Date of Termination
         or as soon as administratively possible thereafter.

              (b)  Other Benefits. For the Benefit Period, or such longer period
         as may be provided by the terms of the appropriate plan, scheme,
         program, practice or policy, the Company shall continue Welfare
         Benefits to the Participant and/or the Participant's family at least
         equal to those which would have been provided to them in accordance
         with the plans, schemes, programs, practices and policies as in effect
         on the commencement of the Term if the Participant's employment had not
         been terminated or, if more favorable to the Participant, as in effect
         generally at any time thereafter with respect to other Participant
         employees of the Company and its Affiliates and their families,
         provided, however, that if the Participant is employed with another
         company and is eligible to receive Welfare Benefits under another
         company-provided plan, the

<PAGE>   12

         Welfare Benefits described herein shall be secondary to those provided
         under such other plan during such applicable period of eligibility. For
         purposes of determining eligibility and benefit accrual (but not the
         time of commencement of benefits) of the Participant for retiree
         medical benefits pursuant to such plans, schemes, practices, programs
         and policies, the Participant shall be considered to have remained
         employed until the end of the Benefit Period and to have retired on the
         last day of such period. The Participant's coverage and/or the
         Participant's family's coverage for the Benefit Period shall not be
         included in the calculation of the period of coverage to be provided
         pursuant to any statutory continuation of benefits obligation and the
         Participant's right to statutory continuation coverage shall commence
         on the first day following the end of the Benefit Period. The benefits
         provided hereunder shall either be provided on a non-taxable basis or
         the Participant shall be entitled to an additional payment to indemnify
         the Participant for any tax obligation with respect to such benefits
         and the indemnification thereof. If such Welfare Benefit Plans,
         schemes, practices, policies and programs do not allow the
         Participant's continued participation, a cash payment equivalent on an
         after-tax basis to the value of the additional benefits the Participant
         and the Participant's family would have received under such benefit
         plans, schemes, practices, policies and programs in which the
         Participant was participating immediately prior to the Date of
         Termination, with such benefits payable by the Company at the same
         times and in the same manner as such benefits would have been received
         by the Participant under such plans (it being understood that the value
         of any insurance-provided benefits will be based on the premium cost to
         the Participant, which shall not exceed the highest risk premium
         charged by a carrier having an investment grade or better credit
         rating);

              (c)  Notice of Termination. Any purported termination of the
         Participant's employment or membership on the Board (other than by
         reason of death, Retirement, Disability or Cause) shall be communicated
         by a written "Notice of Termination" from one party hereto to the other
         party hereto.

              (d)  Limitation. A Date of Termination for Good Reason shall be
         permitted hereunder only if the Participant provides the Notice of
         Termination not later than six (6) months after the date the
         Participant first knew or should have known of the act or omission to
         act giving rise to the Date of Termination for Good Reason. The
         six-month period shall be tolled during any permitted period of
         correction or administrative procedure.

         5.2  Other Termination. Upon the Participant's Date of Termination
during the Term which is initiated for any reason other than a reason specified
in Section 5.1, and subject to any other plan, scheme, practice, policy or
program, the Company shall pay the Participant, and the Participant shall be
entitled to receive, the following:

              (a)  Any accrued, unpaid portion of Base Salary through the Date
         of Termination; and

              (b) All vested, nonforfeitable amounts owing and accrued at the
         Date of Termination under any and all compensation, benefit, perquisite
         and expense plans,

<PAGE>   13

         schemes, practices, policies and programs in which the Participant
         theretofore participated under the terms and conditions of the plans,
         schemes, practices, policies and programs pursuant to which such
         compensation, benefits, perquisites and expenses were accrued.

         Amounts which are immediately payable above will be paid as promptly as
practicable after the Participant's Date of Termination.

         5.3 Security. At any time but not later than thirty (30) days prior to
a Change in Control, the Board of Directors may require that the Company
establish an irrevocable, grantor trust in a form reasonably acceptable to the
Company, and provide to such trust an irrevocable letter of credit or transfer
to the trust marketable securities with a fair market value equal to 110% of the
present value of all amounts that would be paid to all Participants or payable
on behalf of all Participants and/or their family members assuming all
Participants incurred a Date of Termination under Section 5.1 upon commencement
of the Term. Each January 1 thereafter, until all potential obligations of the
Policy are fully satisfied, discharged and paid, the Company shall increase the
amount of the letter of credit or contribute cash or marketable securities equal
to the net increase in value of the obligation under Section 5.1. The Company or
an Affiliate shall remain expressly, absolutely and unconditionally liable for
all compensation, benefits or other things of value under this Policy, and
failure of the trust for any reason to fully discharge the obligations shall not
relieve the Company or any Affiliate of its obligations.

                                   ARTICLE VI

                         U.S. EXCISE TAX INDEMNIFICATION

         6.1  Indemnification. Anything in this Policy to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company or an Affiliate to or for the benefit of the
Participant (whether paid or payable or distributed or distributable pursuant to
the terms of this Policy or otherwise, but determined without regard to any
additional payments required under this Article VI) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the United States Internal
Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are
incurred by the Participant 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 Participant shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Participant of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income and employment taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Participant retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

         6.2  Determination of Amount. Subject to the provisions of Section 6.3,
all determinations required to be made under this Article VI, including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by the Company's public accounting firm (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and

<PAGE>   14

the Participant within fifteen (15) business days of the receipt of notice from
the Participant that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the change
in control transaction resulting in the tax recognition, the Participant shall
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the "Accounting Firm" hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. The Company, as determined pursuant
to this Article VI, shall pay any Gross-Up Payment, to the Participant within
five (5) days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by the Participant, it
shall furnish the Participant with a written opinion that failure to report the
Excise Tax on the Participant's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Participant. As
a result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 6.3 and the Participant thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Participant.

         6.3  Procedural Aspects. The Participant shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten (10) business days
after the Participant is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Participant shall not pay such claim prior to the
expiration of the 30-day period following the date on which the Participant
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
the Participant in writing prior to the expiration of such period that it
desires to contest such claim, the Participant shall:

              (a) give the Company any information reasonably requested by the
         Company relating to such claim;

              (b) take such action in connection with contesting such claim as
         the Company shall reasonably request in writing from time to time,
         including, without limitation, accepting legal representation with
         respect to such claim by an attorney reasonably selected by the
         Company;

              (c) cooperate with the Company in good faith in order effectively
         to contest such claim; and

              (d) permit the Company to participate in any proceedings relating
         to such claim.

         Provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall

<PAGE>   15

indemnify and hold the Participant harmless, on an after-tax basis, for any
Excise Tax or other tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 6.3(c), the
Company shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Participant to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Participant agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided further, that if
the Company directs the Participant to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Participant on an
interest-free basis and shall indemnify and hold the Participant harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Participant with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Participant shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

         6.4  Refunds. If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 6.3, the Participant becomes
entitled to receive, and receives, any refund with respect to such claim, the
Participant shall (subject to the Company's complying with the requirements of
Section 6.3) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Participant of an amount advanced by the Company
pursuant to Section 6.3, a determination is made that the Participant shall not
be entitled to any refund with respect to such claim and the Company does not
notify the Participant in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

                                   ARTICLE VII

                                    AMENDMENT

         7.1  Amendments. The Board of Directors may modify, waive or discharge
the Policy, but only if such modification, waiver or discharge is agreed to in
writing by the Participants. The Board of Directors may terminate the Policy by
terminating the Term in accordance with Section 3.1.

<PAGE>   16

                                  ARTICLE VIII

                                 INDEMNIFICATION

         8.1  Indemnification. The Company shall indemnify and hold harmless
each officer and each employee (the "Indemnified Person") to whom is delegated
duties, responsibilities and authority with respect to the Policy against all
claims, liabilities, fines and penalties, and against all expenses reasonably
incurred by or imposed upon such Indemnified Person, that arise in connection
with the operation and administration of the Policy to the extent lawfully
allowable and to the extent that such claims, liabilities, fines, penalties or
expenses are not otherwise paid for by liability insurance, including but not
limited to reasonable attorneys' fees.

         8.2  Limitations. No obligation under this Article VIII shall arise if
the action or failure to act for which indemnification is sought resulted from
gross negligence or bad faith on the part of the Indemnified Person. Promptly
after an Indemnified Person receives notice of the commencement of any action,
proceeding or investigation, such Indemnified Person will notify the Company in
writing of the commencement of such action, proceeding or investigation. The
Company shall have the right to participate in and, to the extent the Company so
elects, to assume the defense of such claim with counsel selected by the Company
and reasonably satisfactory to the Indemnified Person. The assumption of the
defense of any such claim by the Company shall not limit the right of an
Indemnified Person to participate, at his or her own expense, in the defense of
such claim with counsel selected by such Indemnified Person. The failure to
notify the Company promptly of the commencement of any such action, proceeding
or investigation if prejudicial to its ability to defend such action, proceeding
or investigation shall relieve the Company of any liability to the Indemnified
Person under this Section with respect to the settlement or compromise of any
action, proceeding, or investigation entered into without its prior written
consent.

                                   ARTICLE IX

                                CLAIMS PROCEDURE

         9.1  Claim for Payment. Unless otherwise agreed between the Company and
the Participant, a written Notice of Termination shall constitute a claim for
payment. If there is no Notice of Termination or the Participant and the Company
agree such notice is not a claim, then the Participant shall submit a written
claim for payment to the Company on a form approved by the Company. The claim
shall state the basis for payment and all other facts deemed necessary to
determine the right to payment. When any claim for benefits is submitted, the
Company shall approve or reject the claim within five business days after its
receipt of the claim. Upon approval or rejection of the claim, the Company shall
notify the Participant of its determination and, if the claim is approved, the
Company will pay or commence payment pursuant to the Policy within five business
days after the claim is approved and arrange for the provision of other benefits
and outplacement services. The Company shall establish and maintain a procedure
by which a Participant may appeal any denial of a claim for benefits. Such
procedure shall be set forth in the rules of the Company and shall be provided
to any Participant whose initial claim is denied and shall be available to all
Participants upon request.

<PAGE>   17

                                    ARTICLE X

                                  MISCELLANEOUS

         10.1 Assumption of Policy. The Company will require any successor (by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Participant, to expressly assume and agree to
perform this Policy in the same manner and to the same extent that Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Policy and shall entitle the Participant to
compensation from the Company in the same amount and on the same terms as the
Participant would be entitled hereunder if the Participant incurred a Date of
Termination for Good Reason as contemplated by Article V, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this
Policy, the term "Company" shall mean the Company as herein previously defined
and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Policy by operation of law, written agreement, or
otherwise.

         10.2 Successors and Assigns. This Policy shall inure to the benefit of
and be enforceable by the Participant and the Participant's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees, and the Policy shall be binding upon and inure to the
benefit of the Company and its permitted successors and assigns as provided in
Section 10.1. This Policy is not a personal contract and the rights and
interests of the Participant hereunder may not be sold, transferred, assigned,
pledged, encumbered, margined, gifted, conveyed, alienated, or hypothecated by
the Participant, except as otherwise expressly permitted by the provisions of
this Policy.

         10.3 Arbitration. Any dispute or controversy arising under or in
connection with this Policy (except in connection with any request for
injunctive relief) shall be resolved by binding arbitration. The arbitration
shall be held in the City of Minneapolis and except to the extent inconsistent
with this Policy, shall be conducted in accordance with the principal rules of
arbitration applied in the previously mentioned location for the arbitration of
commercial disputes then in effect at the time of the arbitration, and otherwise
in accordance with principles which would be applied by a court of law or
equity. The arbitrator(s) shall apply Minnesota law. The arbitrator shall be
acceptable to both Company and the Participant. If the parties cannot agree on
the acceptable arbitration rules or arbitrator, the dispute shall be heard by a
panel of three arbitrators, one appointed by each of the parties and the third
appointed by the other two arbitrators. Any expense of arbitration shall be
borne by the party who incurs such expense and joint expenses shall be shared
equally. The Company and the Participant hereby waive, to the fullest extent
permitted by applicable law, any objection, which either may now, or hereafter
have to such jurisdiction and any defense of inconvenient forum. The Company and
the Participant hereby agree that a judgment upon an award rendered by the
arbitrators may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Notwithstanding any provision in this Section
10.3, the Participant shall be entitled to seek specific performance of the
Participant's right to be paid during the pendency of any dispute or controversy
arising under or in connection with this Policy.

<PAGE>   18

         10.4 Governing Law. This Policy is governed by and is to be construed,
administered, and enforced in accordance with the laws of the State of
Minnesota, without regard to Minnesota's conflicts of law principles, except in
so far as federal laws and regulations may be applicable. If under the governing
law, any portion of this Policy is at any time deemed to be in conflict with any
applicable statute, rule, regulation, ordinance, or other principle of law, such
portion shall be deemed to be modified or altered to the extent necessary to
conform thereto or, if that is not possible, to be omitted from this Policy. The
invalidity of any such portion shall not affect the enforceability, or the
validity of the remaining portion hereof.

         10.5 Offsets, Withholding. Subject to Article V, the amounts required
to be paid or benefits to be provided by the Company to the Participant pursuant
to this Policy shall not be subject to offset. The foregoing and other
provisions of this Policy notwithstanding, all payments to be made to the
Participant under this Policy, will be subject to required withholding taxes and
other required deductions, and the Participant shall provide the Company such
information as the Company reasonably requests so that the Company may implement
and verify the operation of this Section 10.5.

         10.6 Non-alienation of Payment. Severance benefits payable under the
Policy shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, or encumbrance, whether voluntary or involuntary,
including any such liability for alimony or other payments for the support of a
spouse, former spouse, or children of the Participant, or for any other relative
of a Participant prior to actually being received by the person entitled to the
benefit under the terms of the Policy, and any attempt to anticipate, alienate,
sell, transfer, assign, pledge, encumber, charge, garnish, execute or levy upon,
or otherwise dispose of any right to benefits payable hereunder, shall be void.
The Company shall not in any manner be liable for, or subject to the debts,
contracts, liabilities, engagements or torts of any person entitled to severance
benefits under the Policy.

         10.7 Facility of Payment. If a Participant is declared as incompetent
or is a minor and if a conservator, guardian or other person legally charged
with the Participant's care has been appointed, any benefits to which such
Participant is entitled shall be payable to such conservator, guardian or other
person legally charged with the Participant's care. The decision of the Company
in such matters shall be final, binding and conclusive upon the Company, each
Participant, and any other interested or concerned person or party. Neither the
Company nor an Affiliate shall be under any duty to see to the proper
application of such payments. All benefits under the Policy shall be paid to the
person entitled thereto either by a check which shall be endorsed personally by
the person or, if the person makes a written request on a form approved by the
Company, by a deposit in the personal savings account or checking account of the
person; provided that if any such deposit shall be made in error or in excess of
the amount due, the person shall be liable to return any such payment or
excessive portion of any payment.

         10.8 Effect of Return of Benefit Checks. Each person entitled to
benefits under this Policy shall furnish the Company with the address to which
his or her benefit checks shall be mailed. If any benefit check mailed by
regular U.S. mail to the last address appearing on the Company's records is
returned because the addressee is not found at that address, the mailing of
benefit checks will stop. Thereafter, if the Company receives written notice of
the proper address of the person entitled to receive such benefit checks and is
furnished with evidence satisfactory to the Company that such person is living,
all amounts then due shall be forwarded to such person.

<PAGE>   19

         10.9 Non-exclusivity of Rights. Nothing in this Policy shall prevent or
limit the Participant's continuing or future participation in any Policy,
scheme, practice, policy or program or compensation, benefits, perquisites or
expense reimbursements Policy, scheme, policy, practice or program provided by
the Company or any of its Affiliates and for which the Participant and/or the
Participant's family may have under any other Plans with the Company or any of
its Affiliates. Amounts which are vested benefits or which the Participant
and/or the Participant's family is otherwise entitled to receive under any
Policy, scheme, policy, practice, program of the Company or any of its
Affiliates at or subsequent to the Date of Termination shall be payable in
accordance with such Policy, scheme, policy, practice or program.

         10.10 Severability. In the event that any one or more of the provisions
of this Policy shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.

         10.11 Notices. Any notice or other communication required or permitted
to be delivered under this Policy shall be in writing, delivered personally, by
courier service or by certified or registered mail, first-class postage prepaid
and return receipt requested, deemed to have been received on the date of
delivery or on the third business day after the mailing thereof, and addressed
as follows (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof ):

              (a)  if to the Company, to the attention of the Chairman of its
         Board of Directors at its corporate headquarters; and

              (b)  if to the Participant, to the Participant at the
         Participant's address.

         10.12 Reimbursement of Expenses in Enforcing Rights. All reasonable
costs and expenses (including, without limitation, fees and disbursements of
actuaries, accountants and counsels) incurred by the Participant in seeking to
enforce rights pursuant to this Policy shall be paid on behalf of or reimbursed
to the Participant promptly by the Company, whether or not the Participant is
successful in asserting such rights. If there shall be any dispute between the
Company and the Participant, then unless and until the dispute is decided, the
Company shall pay or provide, as applicable, all reasonably undisputed amounts
or benefits as are then payable to the Participant or the Participant's
beneficiary pursuant to this Policy.

         10.13 Interest on Unpaid Amounts. Any amounts that have become payable
pursuant to the terms of this Policy or any decision by arbitrators or any
judgment by a court of law, but which are not timely paid shall bear interest,
payable by the Company, at the lower of (a) the highest lawful rate or (b) the
prime rate in effect at the time such payment first becomes payable, as quoted
by The Wall Street Journal.

         10.14 No Contract of Employment. The Policy is entirely voluntary on
the part of the Company and is not intended to create, nor shall it be construed
as creating, a contract of employment between the Company or its successors and
any employee or as an obligation to nominate a person as a member of the Board,
nor shall it be construed as a term of employment with respect to binding effect
after a Change in Control.

<PAGE>   20

         10.15 Beneficiaries. The Participant shall be entitled to designate
(and change, to the extent permitted under applicable law) a beneficiary or
beneficiaries to receive any compensation or benefits payable hereunder
following the Participant's death. If the Participant should die while any
amount would still be payable to the Participant under the Policy had the
Participant continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Policy to the
Participant's devises, legates or other designee or, if there is no such
designee, to the Participant's estate.

         10.16 No General Waivers. The failure of any party at any time to
require performance by any other party of any provision hereof or to resort to
any remedy provided herein or at law or in equity shall in no way affect the
right of such party to require such performance or to resort to such remedy at
any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.

         10.17 No Obligation to Mitigate. The Participant shall not be required
to seek other employment or otherwise to mitigate the Participant's damages on
or after the Participant's Date of Termination, but the provisions regarding
offset and the reduction of certain benefits as expressly provided herein shall
apply.

         10.18 Authority. The Company represents and warrants that this Policy
has been authorized by all necessary corporate action of the Company and is a
valid and binding Policy of the Company enforceable against the Company in
accordance with its terms. The Participant represents and warrants that the
Participant is not a party to any Policy or instrument, which would prevent the
Participant from entering into or performing the Participant's duties in any way
under this Policy.

         10.19 Counterparts. This Policy may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.

         10.20 Headings and Gender. The section and other headings contained in
this Policy are for the convenience of the parties only and are not intended to
be a part hereof or to affect the meaning or interpretation hereof. Except where
the context indicates to the contrary, when used herein, masculine terms shall
be deemed to include the feminine, singular the plural, and plural the singular.

IN WITNESS WHEREOF, Company has duly executed this Policy by its authorized
representatives effective as of the date first above written.

                             iNTELEFILM CORPORATION

                             By:/s/ Jill J. Theis
                             Name:  Jill J. Theis
                             Title: General Counsel/Secretary

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