Document:

exv10w18

 

EXHIBIT 10.18

January 27, 2004

Don Detampel

369 Steele Street

Denver, CO 80206

Dear Don:

     Raindance Communications, Inc. (“Company”) is very pleased to offer you
employment as our Chief Executive Officer. This letter (“Agreement”) states
the complete terms and conditions of your offer. If you agree to these terms
and conditions, please initial the bottom of each page and sign at the end of
this letter in the spaces indicated.

     1.     Employment. You shall serve the Company in the capacity of President
and Chief Executive Officer. You will commence employment with the Company on
a part time basis on January 28, 2004 (“Employment Start Date”). Effective
February 2, 2004, you will become a full time employee of the Company.

     2.     At-Will Employment. Except as expressly provided herein, it is
understood and agreed by the Company and you that this Agreement does not
contain any promise or representation concerning the duration of your
employment with the Company. You specifically acknowledge that your employment
with the Company is at-will and may be altered or terminated by either you or
the Company at any time, with or without cause and/or with or without notice.
The nature, terms or conditions of your employment with the Company cannot be
changed by any oral representation, custom, habit or practice, or any other
writing. In the event of conflict between this disclaimer and any other
statement, oral or written, present or future, concerning terms and conditions
of employment, the at-will relationship confirmed by this disclaimer shall
control. This at-will status cannot be altered except in writing signed by you
and approved by the Board of Directors of the Company (the “Board of
Directors”).

     3.     Duties. As of February 2, 2004, you shall render exclusive, full-time
services to the Company as its Chief Executive Officer. You shall also
continue to be a voting member of the Company’s Board of Directors and you
shall retain such position in accordance with the provisions of the Company’s
charter documents. You understand and agree that in the event that you are no
longer acting as Chief Executive Officer, regardless of reason, you voluntarily
agree to take all steps necessary to resign your position as a member of the
Board of Directors, unless otherwise requested by the Company to remain on the
Board of Directors. You shall report to the Board of Directors. You shall
perform services under this Agreement primarily at the Colorado office of the
Company, and from time to time at such other locations as is necessary to
perform the duties of Chief Executive Officer under this Agreement. During
your employment with the Company you shall devote your best efforts and your
full business time, skill and attention to the performance of your duties on
behalf of the Company, except with respect to the duties you perform as a
member of the boards of directors of no more than two outside companies
pre-approved by the Board of Directors on which boards you may serve provided
that your service on these boards does not adversely affect your ability to
fulfill your responsibilities as Chief Executive Officer of the Company. As
of your Employment Start Date, the Board of Directors has approved your
membership on the Inflow and Masergy boards of directors.

     4.     Policies and Procedures. You agree that you are subject to and will
comply with the policies and procedures of the Company, as such policies and
procedures may be modified, added to or eliminated from time to time at the
sole discretion of the Company, except to the extent any such policy or
procedure specifically conflicts with the express terms of this Agreement. You
further agree and acknowledge that any written or oral policies and procedures
of the Company do not constitute contracts between the Company and you.

     5.     Base Salary. For all services rendered and to be rendered hereunder,
the Company agrees to pay to you, and you agree to accept a salary of $290,000
per annum (“Base Salary”) which will be paid bi-weekly in accordance with
normal Company payroll practices and shall be subject to such deductions or
withholdings as the Company is required to make pursuant to law, or by further
agreement with you. Your Base Salary shall be subject to annual review and
adjustment by the Compensation Committee of the Board of Directors.

 

 

     6.     Stock Options. Subject to approval by the Board of Directors, the
Company shall grant you one or more options (each an “Option,” and collectively
the “Option(s)”) to purchase an aggregate of Two Million (2,000,000) shares of
the Company’s common stock. The shares subject to the Option(s) shall have an
exercise price equal to the fair market value of the stock at the close of
business on the day prior to your Employment Start Date. The shares subject to
the Option(s) shall vest pursuant to a four-year vesting schedule, which shall
provide that 25% (12/48) of the shares subject to the Option(s) shall become
vested after you have completed 12 months of continuous service with the
Company, and one forty-eighth (1/48th) of the shares subject to the Option(s)
shall vest for each month of service thereafter. To the maximum extent
possible, the Option(s) shall be incentive stock options as such term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended. To
the extent that any portions of the Option(s) do not qualify as incentive stock
options under Section 422 of the Code, those portions of the Option(s) shall be
treated as nonstatutory stock options. The Option(s) shall be subject to the
terms and conditions of the Company’s 2000 Equity Incentive Plan (the “Plan”),
the Company’s form stock option agreement and stock option grant notice.

     7.     Restricted Stock Grant. Subject to approval by the Board of Directors,
on your Employment Start Date, the Company shall grant you a 275,000 share
Restricted Stock Award pursuant to the Company’s Plan. The shares subject to
the Restricted Stock Award shall vest pursuant to the following schedule: a)
50,000 shares shall vest in full on the Employment Start Date; b) 100,000
shares shall vest in full after you have completed 24 months of continuous
service with the Company; and c) 125,000 shares shall vest in full after you
have completed 37 months of continuous service with the Company. You shall, at
your discretion, either elect to pay the Company or instruct the Company to
withhold shares equal to the amount required to satisfy the Company’s
withholding obligations pursuant to applicable federal and state laws. For
purposes of determining the number of shares to be withheld, if any, the
Company’s common stock shall be valued using the average of the high and low
sales price of the Company’s common stock as reported on NASDAQ for the last
trading day prior to the applicable vesting date.

     8.     Variable Incentive Bonus. You shall be eligible to receive an annual
performance bonus of up to 100% of your Base Salary (“Bonus”), payable 60% in
cash, less standard payroll deductions and withholdings, and 40% in the
Company’s common stock, based upon your achievements of certain milestones and
performance objectives established by you and the Company (“Variable Incentive
Bonus Plan”). The financial and other objectives shall be determined by mutual
agreement between you and the Board of Directors (or the Compensation Committee
of the Board of Directors) within forty-five (45) days of your Employment Start
Date and within the first thirty (30) days of each Company fiscal year
thereafter. The Board of Directors (or the Compensation Committee of the Board
of Directors), shall determine, in its sole discretion, the actual bonus amount
payable to you, if any, based upon achievement of such objectives at the end of
each fiscal year. The number of shares of Company common stock that you shall
be entitled to receive, if any, shall be determined by dividing the cash
equivalent of 40% of the Bonus by the average of the high and low sales price
of the Company’s common stock as reported on NASDAQ on the last trading day of
the Company’s fiscal year in which the Bonus is being determined. (By way of
example only, if you earned a $100,000 Bonus in FY 2004, 40% of the Bonus or
$40,000 would be paid in Company common stock. If the average of the high and
low sales price for the last trading day of FY 2004 was $4.00 per share, you
would receive 10,000 shares of Company common stock). You must be employed by
the Company at the time of the determination of the Bonus, if any, in order to
be eligible for receipt of the Bonus. As long as you remain continuously
employed by the Company, you agree to hold all shares of the Company’s common
stock you receive through the Variable Incentive Bonus Plan, if any, for a
period of twenty-four (24) months following the date of the award of the
related shares, provided, however, the Compensation Committee of the Board of
Directors will review reasonable requests made by you for earlier sale of such
shares for bona fide reasons.

     9.     Potential Additional Stock Options. On each anniversary of your
Employment Start Date, the Compensation Committee of the Board of Directors
shall review your performance relative to the specified objectives referred to
in paragraph 8 above as well as other relevant factors and, at its sole
discretion, may recommend to the Board an award to you of additional option
grants. The targeted number of option shares to be covered by these
anticipated further stock option grants shall be 200,000 options per year for
the calendar years 2005 through 2008. Any additional option grants shall be
awarded pursuant to the Plan and be subject to all terms and conditions of the
Plan, including applicable vesting provisions, the Company’s form stock option
agreement and stock option grant notice.

     10.     Other Benefits. While employed by the Company as provided herein:

          (a) Your Benefits. You shall be entitled to all benefits to which other
executive officers of the Company are entitled, on terms comparable thereto,
including, without limitation, participation in pension and profit sharing

 

 

plans, 401(k) plan, group insurance policies and plans, medical, health,
vision, and disability insurance policies and plans, and the like, which may be
maintained by the Company for the benefit of its executives. The Company
reserves the right to alter and amend the benefits received by you from time to
time at the Company’s discretion.

          (b) Expense Reimbursement. You shall receive, against presentation of
proper receipts and vouchers, reimbursement for direct and reasonable
out-of-pocket expenses incurred by you in connection with the performance of
your duties hereunder, according to the policies of the Company.

          (c) Personal Time Off. You shall be entitled to four weeks personal time
off per year (including paid vacation and sick leave) subject to the terms of
the Company’s applicable policy.

          (d) Directors and Officers Insurance. You shall be entitled to coverage
and participation in the Company’s Directors and Officers Insurance policy.

     11.     Confidential Information, Rights and Duties.

          (a) Proprietary Information. You will be required as a condition of
employment to sign and abide by the Company’s Proprietary Information and
Inventions Agreement (the “Proprietary Information Agreement”), in the form
attached hereto as Exhibit A.

          (b) Exclusive Property. You agree that all Company-related business
procured by you, and all Company-related business opportunities and plans made
known to you while employed by the Company, are and shall remain the permanent
and exclusive property of the Company.

     12.     Termination. You and the Company each acknowledge that either party
has the right to terminate your employment with the Company at any time for any
reason whatsoever, with or with out cause or advance notice pursuant to the
following:

          (a) Termination by Death or Disability. Subject to applicable state or
federal law, in the event you shall die during the period of your employment
hereunder or become permanently disabled, as evidenced by notice to the Company
and your inability to carry out your job responsibilities for a continuous
period of more than three months, your employment and the Company’s obligation
to make payments hereunder shall terminate on the date of your death, or the
date upon which, in the sole determination of the Board of Directors, you have
become permanently disabled, except the Company shall pay you (or your estate)
any salary earned but unpaid prior to such termination, any benefits accrued
prior to such termination, all accrued but unused personal time, and any
business expenses referred to in paragraph 10(b) that were incurred but not
reimbursed as of the date of such termination. Vesting of all shares subject to
the options granted pursuant to Paragraph 6 (Stock Options) and Paragraph 9
(Potential Additional Stock Options) shall cease on the date of such
termination.

          (b) Voluntary Resignation. In the event you voluntarily terminate your
employment with the Company without Good Reason (as defined below), the
Company’s obligation to make payments hereunder shall cease upon such
termination, except the Company shall pay you any salary earned but unpaid
prior to such termination, any benefits accrued prior to such termination, all
accrued but unused personal time, and any business expenses referred to in
paragraph 10(b) that were incurred but not reimbursed as of the date of such
termination. Vesting of all shares subject to the options granted pursuant to
Paragraph 6 (Stock Options) and Paragraph 9 (Potential Additional Stock
Options) shall cease on the date of such termination.

          (c) Termination for Cause. In the event you are terminated by the Company
for Cause (as defined below), the Company’s obligation to make payments
hereunder shall cease upon the date of receipt by you of written notice of such
termination, except the Company shall pay you any salary earned but unpaid
prior to such termination, all accrued but unused personal time, and any
business expenses referred to in paragraph 10(b) that were incurred but not
reimbursed as of the date of such termination. Vesting of all shares subject
to the options granted pursuant to Paragraph 6 (Stock Options) and Paragraph 9
(Potential Additional Stock Options) shall cease on the date of termination.
For purposes of this Agreement, “Cause” shall mean any of the following: (i)
indictment or conviction of any felony or any crime involving dishonesty or
moral turpitude; (ii) dishonesty which is not the result of an inadvertent or
innocent mistake by you with respect to the

 

 

Company; (iii) your continued willful violation of your obligations to the
Company after there has been delivered to you a written demand for performance
from the Board of Directors which describes the basis for the Board of
Directors’ belief that you have not substantially satisfied your obligations to
the Company; (iv) your continued violation or breach of any material written
Company policy, agreement with the Company, or any statutory or fiduciary duty
to the Company, after there has been delivered to you a written notification of
such violation or breach; or (v) damaging or misappropriating or attempting to
damage or misappropriate any property, including any confidential or
proprietary information, of the Company.

          (d) Termination by the Company without Cause or by You with Good Reason.
The Company will have the right to terminate your employment with the Company
at any time without Cause. In the event you are terminated without Cause (as
defined herein) or in the event that you resign with Good Reason (as defined in
paragraph 13(b) below), and upon the execution of a release by you in the form
attached hereto as Exhibit B (“Release”), and upon written acknowledgment of
your continuing obligations under paragraph 14 hereof and the Proprietary
Information Agreement, you shall be entitled to receive the following severance
payments: (1) if you are terminated without Cause or you resign for Good Reason
within the first twelve months of your full time employment with the Company
(on or before February 1, 2005) you shall receive for each month of full time
service rendered to the Company the equivalent of one month of your Base Salary
as in effect immediately prior to the termination, to paid on the same basis
and at the same time as previously paid; (2) or if you are terminated without
Cause or you resign for Good Reason after the first anniversary of your full
time employment with the Company (on or after February 2, 2005) you shall
receive the equivalent of twelve (12) months of your Base Salary as in effect
immediately prior to the termination date, paid on the same basis and at the
same time as previously paid. In addition, the Company will continue vesting
of the shares subject to the options granted pursuant to Paragraph 6 (Stock
Options) and Paragraph 9 (Potential Additional Stock Options) so that you shall
receive additional vesting equal to the number of months of severance under
either (1) or (2) above (up to a maximum of the equivalent of an additional
twelve (12) months of vesting). All other terms and conditions set forth in
the Option(s) or the Plan shall remain in full force and effect. (The salary
continuation and additional vesting are collectively referred to as “Severance
Benefits”).

          (e) 280(G) Parachute Payments. Anything in this Agreement to the contrary
notwithstanding, if any payment or benefit you would receive from the Company
pursuant to this Agreement (“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) but for this sentence, be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then
such Payment shall be equal to the Reduced Amount (as defined below). For the
avoidance of doubt, a Payment shall not be considered a parachute payment for
purposes of this paragraph if such Payment is approved by the shareholders of
the Company in accordance with the procedures set forth in Section
280G(b)(5)(A)(ii) and (B) of the Code and the regulations thereunder, and at
the time of such shareholder approval, no stock of the Company is readily
tradeable on an established securities market or otherwise (within the meaning
of Section 280G(b)(5)(A)(ii)(I) of the Code) (“280G Shareholder Approval”).
The “Reduced Amount” shall be either (i) the largest portion of the Payment
that would result in no portion of the Payment being subject to the Excise Tax,
or (ii) the Payment or a portion thereof after payment of the applicable Excise
Tax, whichever amount after taking into account all applicable federal, state
and local employment taxes, income taxes, and the Excise Tax (all computed at
the highest applicable marginal rate), results in your receipt, on an after-tax
basis, of the greatest amount of the Payment to you. If a reduction in
payments or benefits constituting “parachute payments” is necessary so that the
Payment equals the Reduced Amount, reduction shall occur in the following order
unless you elect in writing a different order (provided, however, that such
election shall be subject to Company approval if made on or after the date on
which the event that triggers the Payment occurs): reduction of cash payments;
cancellation of accelerated vesting of stock awards or options; reduction of
employee benefits. In the event that acceleration of vesting of stock award or
options compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of the your stock awards
unless you elect in writing a different order for cancellation.

          The accounting firm engaged by the Company for general audit purposes as
of the day prior to the effective date of the Payment Event shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Payment Event, the Board shall have the discretion to appoint a nationally
recognized accounting firm to make the determinations required hereunder. The
Company shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.

          The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and you within fifteen (15) calendar days after the date on which
your right to a Payment is triggered (if requested at that time by the Company
or you) or such other time as requested by the Company or you. If the
accounting firm determines that no Excise Tax is payable with respect to a
Payment, either before or

 

 

after the application of the Reduced Amount, it shall furnish the Company
and you with an opinion reasonably acceptable to you that no Excise Tax will be
imposed with respect to such Payment. The Company shall be entitled to rely
upon the accounting firm’s determinations, which shall be final and binding.

     13.     Change In Control.

          (a) Change in Control shall have the same definition as found in the
Plan.

          (b) Good Reason shall mean that after notification of the Company by you
of your intention to resign for Good Reason and a reasonable opportunity for
the Company to cure any such alleged defect, the Company persists in any of the
following: (i) a significant reduction in your duties, position, or
responsibilities in effect immediately prior to such reduction, provided,
however, that a reduction in duties, position or responsibilities solely by
virtue of either: (x) the Company being acquired and made part of a larger
entity (as, for example, when the Chief Executive Officer of the Company
remains as such following a Change in Control but is not made the Chief
Executive Officer of the acquiring corporation), or (y) the Company appointing
a separate President that reports to you as Chief Executive Officer, shall not
constitute “Good Reason;”(ii) the Company materially reduces your base salary
relative to the salary in effect immediately prior to such reduction; (iii)
there is a material reduction by the Company in the kind or level of benefits
to which you are entitled immediately prior to such reduction with the result
that your overall benefits package is significantly reduced; (iv) without your
express written consent, your relocation to a facility or a location more than
fifty (50) miles from your then current location; or (v) the Company is in
material breach of this Agreement.

          (c) Change in Control Benefits. If within the twelve (12) months
immediately following a Change in Control: (1) you are involuntarily terminated
by the Company (or its successor entity) other than for Cause; or (2) you
voluntarily terminate your employment with the Company (or its successor
entity) for Good Reason (either constituting a “Change of Control
Termination”), and in each case, upon the execution of a Release and written
acknowledgment of your continuing obligations under paragraph 14 hereof and the
Proprietary Information Agreement, you shall receive the equivalent of twelve
(12) months of your Base Salary as in effect immediately prior to the Change of
Control Termination, paid on the same basis and at the same time as previously
paid. In addition, upon a Change of Control Termination, and provided you have
executed a Release and written acknowledgement of your continuing obligations
under paragraph 14 hereof and the Proprietary Information Agreement, you shall
be entitled to additional vesting of the shares subject to the options granted
pursuant to Paragraph 6 (Stock Options) and Paragraph 9 (Potential Additional
Stock Options) as follows: (i) if the Change of Control occurs within the
first eighteen (18) months of your Employment Start Date, the Company will
continue vesting of the shares subject to the options granted pursuant to
Paragraph 6 (Stock Options) and Paragraph 9 (Potential Additional Stock
Options), so that you shall receive for each month of full time service
rendered to the Company the equivalent of one additional month of vesting (up
to a maximum of eighteen (18) additional months of vesting, inclusive of any
cliff vesting that may result); or (ii) if the Change of Control occurs after
the first eighteen (18) months of your Employment Start Date, all shares
subject to the options granted pursuant to Paragraph 6 (Stock Options) and
Paragraph 9 (Potential Additional Stock Options) will immediately vest in full.
Finally, upon a Change of Control Termination, you shall be entitled to
exercise all vested options for a period of one year following the effective
date of such Change of Control Termination. All other terms and conditions set
forth in the options or the Plan shall remain in full force and effect.

     14.     Noncompetition and Nonsolicitation. You acknowledge that you will be
a member of executive and management personnel at the Company. You further
acknowledge that during your employment at the Company, you will be privy to
extremely sensitive, confidential and valuable commercial information, which
constitutes trade secrets belonging to the Company, the disclosure of which
information and secrets would greatly harm the Company.

          (a) Definitions.

               (i) Conflicting Product or Service. As used in this Agreement a
“Conflicting Product or Service” means any business in which the Company is
actively engaged on the date of termination or any business in which during the
twelve (12) months immediately preceding the date of termination the Company
actively contemplated engaging (as evidenced by inclusion in a written business
plan or proposal).

          (ii) Conflicting Organization. As used in this Agreement, a “Conflicting
Organization” means any person or organization that is engaged in or is about
to become engaged in the design, research, development, production, marketing,
distribution, leasing, licensing, selling, or servicing of a Conflicting
Product or Service.

 

 

          (b) Covenant Not to Compete. As a reasonable measure to protect the
Company from the harm of such disclosure and use of its information and trade
secrets against it, you agree to the following as part of this Agreement:
During your employment with the Company and for a period of twelve (12) months
following the separation of your employment with the Company, for any reason,
you agree that you shall not, individually or together with others, directly or
indirectly, whether as an owner, consultant, partner, joint venturer,
stockholder, broker, agent, financial agent, principal, trustee, licensor or in
any other capacity whatsoever: (i) own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, partner, principal, agent,
representative, consultant, licensor, licensee or otherwise with, any business
or enterprise which is a Conflicting Organization; or (ii) sell or assist in
the design, development, manufacture, licensing, sale, marketing or support of
any Conflicting Product or Service, or engage in any other manner, in any
Conflicting Organization. Notwithstanding the foregoing, the parties agree
that your acceptance of employment with an organization that derives not more
than 5% of its revenue from a Conflicting Product or Service shall not be
considered a violation of this paragraph provided that you are not employed in
an executive capacity within the business unit, division, group or otherwise
that has responsibility over the development, production, marketing or sale of
such Conflicting Product or Service. (By way of example only, you may accept
employment with Microsoft so long as in your position you would not have any
executive responsibility for the development, production, marketing or sale of
any conferencing products such as the former Placeware products and services).
The parties also agree that owning less than 1% of the outstanding voting stock
of a publicly traded company shall not constitute a violation of this
paragraph. You further agree and acknowledge that because of the nature and
type of business that the Company engages in, the geographic scope of the
covenant not to compete shall include all counties, cities, and states of the
United States and any other Country, territory or region in which the Company
conducts business or in which the Company actively contemplated conducting
business in (as evidenced by inclusion in a written business plan or proposal)
at the time of termination and that such a geographic scope is reasonable.
Nothing in this paragraph should be construed to narrow the obligations of you
imposed by any other provision herein, any other agreement, law or other
source.

          (c) Nonsolicitation Covenant. As a reasonable measure to protect the
Company from the harm of such disclosure and use of its information and trade
secrets against it, the parties agree to the following as part of this
Agreement: you acknowledge and agree that information regarding employees of
the Company is Confidential Information, including without limitation, the
names of the Company Employees; information regarding the skills and knowledge
of Employees of the Company; information regarding any past, present, or
intended compensation, benefits, policies and incentives for Employees of the
Company; and information regarding the management and reporting structure of
the Company. During the period of your employment by the Company and for a
period of twelve (12) months following the separation, resignation, or
termination of your employment with the Company for any reason, you agree that
you will not, individually or with others, directly or indirectly (including
without limitation, individually or through any business, venture,
proprietorship, partnership, or corporation in which they control or own more
than a five (5) percent interest, through any agents, through any contractors,
through recruiters, by their successors, by their employees, or by their
assigns) hire, solicit, or induce any employee of the Company to leave the
Company. You further agree that during the period you are employed by the
Company and for a period of twelve (12) months following the separation,
resignation, or termination of your employment with the Company for any reason,
you will not, either directly or indirectly, solicit or attempt to solicit any
customer, partner, reseller, client, supplier, investor, vendor, consultant or
independent contractor of the Company to terminate, reduce or negatively alter
his, her or its relationship with the Company. The geographic scope of the
covenants in this paragraph 14 shall include any city, county, or state of the
United States and any such other city, territory, country, or jurisdiction in
which the Company does business or in which the Company actively contemplated
conducting business in (as evidenced by inclusion in a written business plan or
proposal) at the time of termination. Nothing in this paragraph 14 should be
construed to narrow the obligations of you imposed by any other provision
herein, any other agreement, law or other source.

          (d) Reasonable. You agree and acknowledge that the time limitation and
the geographic scope on the restrictions in this paragraph and its subparts are
reasonable. You also acknowledge and agree that the limitation in this
paragraph and its subparts is reasonably necessary for the protection of the
Company, that through this Agreement you shall receive adequate consideration
for any loss of opportunity associated with the provisions herein, and that
these provisions provide a reasonable way of protecting the Company’s business
value which was imparted to you. In the event that any term, word, clause,
phrase, provision, restriction, or section of this paragraph of this Agreement
is more restrictive than permitted by the law of the jurisdiction in which the
Company seeks enforcement thereof, the provisions of this Agreement shall be
limited only to the extent that a judicial determination finds the same to be
unreasonable or otherwise unenforceable. Moreover, notwithstanding any
judicial determination that any term, word, clause, phrase, provision,
restriction, or section of

 

 

this Agreement is not specifically enforceable, the parties intend that
the Company shall nonetheless be entitled to recover monetary damages as a
result of any breach hereof.

          (e) Legal and Equitable Remedies. In view of the nature of the rights in
goodwill, your relations, trade secrets, and business reputation and prospects
of the Company to be protected under this paragraph, you understand and agree
that the Company could not be reasonably or adequately compensated in damages
in an action at law for your breach of your obligations (whether individually
or together) hereunder. Accordingly, you specifically agree that the Company
may be entitled to temporary and permanent injunctive relief, specific
performance, and other equitable relief to enforce the provisions of this
Agreement and that such relief may be granted without bond. You acknowledge
and agree that the provisions in this paragraph and its subparts are essential
and material to this Agreement, and that upon breach of this paragraph by you,
the Company is entitled to withhold providing payments or consideration, to
equitable relief, to prevent continued breach, to recover damages and to seek
any other remedies available to the Company. This provision with respect to
injunctive relief shall not, however, diminish the right of the Company to
claim and recover damages or other remedies in addition to equitable relief.

     15 Miscellaneous.

          (a) Taxes. You agree to be responsible for the payment of any taxes due
on any and all compensation, stock option, or benefit provided by the Company
pursuant to this Agreement. You agree to indemnify the Company and hold the
Company harmless from any and all claims or penalties asserted against the
Company for any failure to pay taxes due on any compensation, stock option, or
benefit provided by the Company pursuant to this Agreement. You expressly
acknowledge that the Company has not made, nor herein makes, any representation
about the tax consequences of any consideration provided by the Company to you
pursuant to this Agreement.

          (b) Modification/Waiver. This Agreement may not be amended, modified,
superseded, canceled, renewed or expanded, or any terms or covenants hereof
waived, except by a writing executed by each of the parties hereto or, in the
case of a waiver, by the party waiving compliance. Failure of any party at any
time or times to require performance of any provision hereof shall in no manner
affect your or its right at a later time to enforce the same. No waiver by a
party of a breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of agreement contained in the
Agreement.

          (c) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of any successor or assignee of the business of the
Company. This Agreement shall not be assignable by you.

          (d) Notices. All notices given hereunder shall be given by certified
mail, addressed, or delivered by hand, to the other party at your or its
address as set forth herein, or at any other address hereafter furnished by
notice given in like manner. You promptly shall notify Company of any change
in your address. Each notice shall be dated the date of its mailing or
delivery and shall be deemed given, delivered or completed on such date.

          (e) Governing Law; Personal Jurisdiction and Venue. This Agreement and
all disputes relating to this Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements
between Colorado residents entered into and performed entirely in Colorado.
The parties acknowledge that this Agreement constitutes the minimum contacts to
establish personal jurisdiction in Colorado and agree to Colorado court’s
exercise of personal jurisdiction.

          (f) Entire Agreement. This Agreement together with the Exhibits A and B
attached hereto (as well as any stock option agreements related to your
options) sets forth the entire agreement and understanding of the parties
hereto with regard to your employment by the Company and supersede any and all
prior agreements, arrangements and understandings, written or oral, pertaining
to the subject matter hereof. No representation, promise or inducement
relating to the subject matter hereof has been made to a party that is not
embodied in these Agreements, and no party shall be bound by or liable for any
alleged representation, promise or inducement not so set forth.

     (g)  Agents. You and the Company represent and warrant to each other that
neither has incurred any liability for any employment agency or finders fees or
commissions, or the like, in connection with the employment contemplated
herein. You hereby agree to indemnify and hold the Company harmless from and
against and in respect of any

 

 

claim for employment agency or finders fees or commissions or the like
relating to the employment contemplated by this Agreement except for any
finders fees or commissions or the like due by the Company to Spencer Stuart
who was retained by the Company to assist in the Chief Executive Officer
search.

          (h) Representation and Warranty of the Company. The Company represents
and warrants that it has made no misrepresentation or untrue statement of a
material fact to you about the Company and has not omitted to disclose any
material fact to you, the omission of which would render misleading any
statements made to you about the Company.

If you wish to accept this offer of employment, please sign and date this
letter and return it to me along with the release of current employment
contract described above.

Sincerely,

Raindance Communications, Inc.

	 	 	 
	By:	 	

	Title:	 	

I have read, understand and agree to the foregoing terms.

	 	 	 
	
     Don
Detampel	 	

     DateMarch 04 Exhibit 10.15 to RC2 Form 10-K

                                                                                                                                                     EXHIBIT 10.15

EMPLOYMENT AGREEMENT 

THIS EMPLOYMENT AGREEMENT is made as of March 4, 2003, by and between Racing Champions Ertl Corporation, a Delaware corporation and its subsidiaries (the "Company"), and Richard E. Rothkopf (the "Employee"). Certain capitalized terms used herein are defined in section 10 below. 

RECITALS 

A.   The Company and the Employee desire to terminate any and all prior agreements, whether oral or written, between the parties and between the Employee and Company relating to the Employee’s employment. 

B.   The Company desires to employ the Employee and the Employee is willing to make his services available to the Company on the terms and conditions set forth below. 

AGREEMENTS 

In consideration of the premises and the mutual agreements which follow, the parties agree as follows: 

1.   Employment. The Company hereby employs the Employee and the Employee hereby accepts employment with the Company on the terms and subject to the conditions set forth in this Agreement. 

2.   Term. The term of the Employee’s employment hereunder shall commence on the date hereof and shall continue until terminated as provided in section 6 below. 

3.   Duties. The Employee shall serve as the Chairman of Learning Curve International, Inc. ("LCI") a wholly owned subsidiary of the Company and as an Executive Vice President of Racing Champions Ertl Corporation and will, under the direction of the Company’s Chief Executive Officer and President, faithfully and to the best of his ability, perform the duties of such position. The Employee shall be one of the principal executive officers and Senior Management of the Company and shall, subject to the control of the Company’s Board of Directors, have the normal duties, responsibilities and authority associated with such position. The Employee shall also perform such additional duties and responsibilities which may from time to time be reasonably assigned or delegated by the Chief Executive Officer and/or President and/or the Board of Directors of the Company. The Employee agrees to devote his entire business time, effort, skill and attention to the proper discharge of such duties while employed by the Company; provided that the Employee may serve on corporate, civic or charitable boards or committees, fill speaking engagements, manage personal investments or engage in other business activities from time to time on the condition that such activities do not individually or in the aggregate significantly interfere with the performance of the Employee’s duties under this Agreement, subject in each case to the prior approval of the Company, such approval not to be unreasonably withheld or delayed. 

	 
	 		 
	

	 

 

4.   Compensation. Effective March 1, 2003, the Employee shall receive a base salary of $200,000 per year, payable in regular and equal monthly installments (the "Base Salary"). 

5.   Fringe Benefits.

 

(a)   Vacation. The Employee shall be entitled to four weeks of paid vacation annually. The Employee and the Company shall mutually determine the time and intervals of such vacation. 

(b)   Medical, Health, Dental, Disability and Life Coverage. The Employee shall be eligible to participate in any medical, health, dental, disability and life insurance policy in effect for the Senior Management of the Company. 

(c)   Incentive Bonus and Stock Ownership Plans. The Employee shall be entitled to participate in any incentive bonus plan, incentive stock option or other stock ownership plan or other incentive compensation plan developed generally for the Senior Management of the Company, on a basis consistent with his position and level of compensation with the Company. Without limiting the foregoing, Employee shall be entitled to participate in (i) the annual Management Incentive Bonus Plan on a basis consistent with past practice and his position and level of compensation with the Company, and (ii) the Additional Senior Management Incentive Bonus Plan described on Exhibit A. With respect to Employee's participation in the annual Management Incentive Bonus Plan, Employee shall have a target bonus amount of $350,000 based on an agreed formula consistent with the bonus formula applicable to the Company's Chief Executive Officer and President. In addition, Employee shall be entitled to participate in the Racing Champions Ertl Corporation Stock Incentive Plan, as amended as of May 10, 2002 (the "Option Plan"), with discretionary grants targeted at a number of Options with a value equal to $300,000. The Options shall be valued using the Black-Scholes model of option valuation as used by the Company to value option grants to other Senior Management. 

(d)   Automobile. The Company agrees to reimburse the Employee up to $600.00 per month, as such amount may be increased from time to time consistent with the Company’s reimbursement policy for the Senior Management of the Company to cover Employee’s expenses in connection with his leasing or use of an automobile. Additionally, the Company will pay for the gas used for business purposes. All maintenance and insurance expense for the automobile is the responsibility of the Employee. 

(e)   Reimbursement for Reasonable Business Expenses. The Company shall pay or reimburse the Employee for reasonable expenses incurred by him in connection with the performance of his duties pursuant to this Agreement including, but not limited to, travel expenses, expenses in connection with seminars, professional conventions or similar professional functions and other reasonable business expenses. 

(f)   Key Man Insurance. The parties agree that the Company has the option to purchase one or more key man life insurance policies upon the life of the Employee. The Company shall own and shall have the absolute right to name the beneficiary or beneficiaries of said policy. The Employee agrees to cooperate fully with the Company in securing said policy, including, but not limited to submitting himself to any physical examination which may be required at such reasonable times and places as Company shall specify. 

	 
	 	2	 
	

	 

 

(g)   Term Life Insurance Policy. During the Employment Period, the Company shall provide a term life insurance policy with a principal amount equal to the lesser of (i) two million dollars ($2,000,000) and (ii) the maximum amount that may be purchased with a premium of $20,000 per year, to be owned by any one or more members of Employee’s immediate family or by a trust for the primary benefit of Employee’s immediate family. The owner of the policy shall have the power to designate the beneficiary and to assign any rights under the policy. The Company shall pay the premiums required under the policy up to a maximum of $20,000 per year. 

6.   Termination. 

(a)   Termination of the Employment Period. The Employment Period shall continue until the earlier of: (i) April 30, 2006 unless the parties mutually agree in writing to extend the term of this Agreement (such date hereof or such extended date being referred to herein as the "Expected Completion Date"), (ii) the date of the Employee’s death or Disability, (iii) the date the Employee resigns or (iv) the date that the Board of Directors determines that termination of Employee’s employment is in the best interests of the Company (the "Employment Period"). The last day of the Employment Period shall be referred to herein as the "Termination Date." 

(b)   Definitions. 

(i)   For purposes of this Agreement, "Disability" shall mean a physical or mental sickness or any injury which renders the Employee incapable of performing the services required of him as an employee of the Company and which does or may be expected to continue for more than six months during any 12-month period. In the event Employee shall be able to perform his usual and customary duties on behalf of the Company following a period of Disability, and does so perform such duties or such other duties as are prescribed by the Board of Directors for a period of three continuous months, any subsequent period of Disability shall be regarded as a new period of Disability for purposes of this Agreement. The Company and the Employee shall determine the existence of a Disability and the date upon which it occurred. In the event of a dispute regarding whether or when a Disability occurred, the matter shall be referred to a medical doctor selected by the Company and the Employee. In the event of their failure to agree upon such a medical doctor, the Company and the Employee shall each select a medical doctor who together shall select a third medical doctor who shall make the determination. Such determination shall be conclusive and binding upon the parties hereto. 

	 
	 	3	 
	

	 

 

(ii)   For purposes of this Agreement, "Cause" shall be deemed to exist if the Employee shall have (1) engaged in a material breach of the terms of section 7 or section 8 of this Agreement; (2) refused to perform a lawful written directive of the Board of Directors of the Company or the Company’s Chief Executive Officer that is consistent with Employee’s duties and responsibilities; (3) been convicted of, or plead guilty to, or plead nolo contendere to a felony or a crime involving moral turpitude; (4) committed an act of fraud, embezzlement or material misappropriation against the Company, including, but not limited to, the offer, payment, solicitation or acceptance of any unlawful bribe or kickback with respect to the Company’s business; (5) habitually neglected his duties (other than resulting from Employee’s incapacity due to physical or mental illness); (6) failed to perform the duties incident to his employment with the Company on a regular basis, including but not limited to by reason of chronic absence from work (excluding a failure resulting from the Employees’ Disability, vacations, illnesses or leaves of absence approved by the Board); (7) made a knowing material misrepresentation to the stockholders or directors of the Company; or (8) engaged in willful and intentional material misconduct in the performance of his duties or gross negligence of his duties under this Agreement or a material violation of his fiduciary obligations to the Company; provided, that for purposes of clause (2) and only the first act or omission with respect to section 8 of this Agreement for clause (1), any act or omission that is curable shall not constitute Cause unless the Company gives Employee written notice of such act or omission, that specifies the act or omission in reasonable detail, and that specifically refers to this section and, within 15 days after such notice is received by Employee, Employee fails to cure such act or omission (except that the Company shall not be required to provide such notice more than once in cases of repeated acts or omissions). 

(iii)   For purposes of this Agreement, "Good Reason" shall mean (1) the material diminution of the Employee’s duties set forth in section 3 above or any material adverse change in title, status, responsibilities, authorities or material perquisites of Employee; (2) the relocation of the offices at which the Employee is principally employed to a location which is more than 50 miles from the offices at which the Employee is principally employed as of the date hereof; provided, that travel necessary for the performance of the Employee’s duties set forth in section 3 above shall not determine the location where the Employee is "principally employed;" (3) assignment to Employee of duties materially inconsistent with his position and duties described in this Agreement; (4) any material reduction in or failure to pay Employee’s Base Salary as provided herein; or (5) any breach of Section 5 of this Agreement by the Company regarding Employee's eligibility to participate in incentive option or other incentive compensation. 

(c)   Termination for Disability or Death. In the event of termination for Disability or death, payments of the greater of (i) the Employee’s Base Salary or (ii) $300,000 shall be made to the Employee, his designated beneficiary or his estate for a period of six months after the Termination Date in accordance with the normal payroll practices of the Company. During this period, the Company shall also reimburse the Employee for amounts paid, if any, to continue medical, dental and health coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act. During this period, the Company will also continue Employee’s life insurance and disability coverage, to the extent permitted under applicable policies, and will pay to the Employee the fringe benefits pursuant to section 5 which have accrued prior to the Termination Date. 

	 
	 	4	 
	

	 

 

(d)   Termination by the Company without Cause or by the Employee for Good Reason. If (i) the Employment Period is terminated by the Company for any reason other than for Cause, Disability or death, (ii) the Employment Period is terminated by the Company for what the Company believes is Cause or Disability, and it is ultimately determined that the Employment Period was terminated without Cause or Disability or (iii) the Employee resigns for Good Reason, the Employee shall be entitled to receive, as damages for such a termination, the greater of (i) his Base Salary from the Termination Date to the second anniversary of the Termination Date or (ii) $600,000, provided, however, that if such termination or resignation occurs at any time after the occurrence of or in contemplation of a Change of Control, then Employee shall be entitled to receive the greater of (i) his Base Salary from the Termination Date to the third anniversary of the Termination Date or (iii) $900,000. Such payment shall be made in accordance with the normal payroll practices of the Company. During this period, the Company shall also reimburse the Employee for amounts paid, if any, to continue medical, dental and health coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act. During this period, the Company will also continue Employee’s life insurance and disability coverage and will pay to the Employee the fringe benefits pursuant to section 5 which have accrued prior to the date of termination. 

(e)   Termination by the Company for Cause or by the Employee Without Good Reason. If the Employment Period is terminated by the Company with Cause or as a result of the Employee’s resignation without Good Reason, the Employee shall not be entitled to receive his Base Salary or any fringe benefits or bonuses for periods after the Termination Date. 

(f)   Effect of Termination. The termination of the Employment Period pursuant to section 6(a) shall not affect the Employee’s obligations as described in sections 7 and 8. 

7.   Noncompetition and Nonsolicitation. The Employee acknowledges and agrees that the contacts and relationships of the Company and its Subsidiaries with its customers, suppliers, licensors and other business relations are, and have been, established and maintained at great expense and provide the Company and its Subsidiaries with a substantial competitive advantage in conducting their business. The Employee acknowledges and agrees that by virtue of the Employee’s employment with the Company, the Employee will have unique and extensive exposure to and personal contact with the Company’s customers and licensors, and that he will be able to establish a unique relationship with those Persons that will enable him, both during and after employment, to unfairly compete with the Company and its Subsidiaries. Furthermore, the parties agree that the terms and conditions of the following restrictive covenants are reasonable and necessary for the protection of the business, trade secrets and Confidential Information (as defined in section 8 below) of the Company and its Subsidiaries and to prevent great damage or loss to the Company and its Subsidiaries as a result of action taken by the Employee. The Employee acknowledges and agrees that the noncompete restrictions and nondisclosure of Confidential Information restrictions contained in this Agreement are reasonable and the consideration provided for herein is sufficient to fully and adequately compensate the Employee for agreeing to such restrictions. The Employee acknowledges that he could continue to actively pursue his career and earn sufficient compensation in the same or similar business without breaching any of the restrictions contained in this Agreement. 

	 
	 	5	 
	

	 

 

(a)   Noncompetition. The Employee hereby covenants and agrees that during the Employment Period and for two years thereafter (the "Noncompete Period"), he shall not, directly or indirectly, either individually or as an employee, principal, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant, representative or in any other capacity, participate in, become associated with, provide assistance to, engage in or have a financial or other interest in any business, activity or enterprise which is competitive with the business of the Company or any of the Company’s Subsidiaries. The ownership of less than three percent interest in a corporation whose shares are traded in a recognized stock exchange or traded in the over-the-counter market, even though that corporation may be a competitor of the Company, shall not be deemed financial participation in a competitor. If the final judgment of a court of competent jurisdiction declares that any term or provision of this section is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. The term "indirectly" as used in this section and section 8 below is intended to include any acts authorized or directed by or on behalf of the Employee or any Affiliate of the Employee. 

(b)   Nonsolicitation. The Employee hereby covenants and agrees that during the Noncompete Period, he shall not, directly or indirectly, either individually or as an employee, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor, consultant or in any other capacity: 

(i)   canvass, solicit or accept from any Person who is a customer or licensor of the Company or any of its Subsidiaries (any such Person is hereinafter referred to individually as a "Customer," and collectively as the "Customers") any business which is in competition with the business of the Company or any of its Subsidiaries (as the Company's or its Subsidiaries’ business existed during the Employment Period) including, without limitation, the canvassing, soliciting or accepting of business competitive with the Company’s or its Subsidiaries business (as the Company's or its Subsidiaries’ business existed during the Employment Period) from any Person which is or was a Customer of the Company or any of its Subsidiaries within two years preceding the date of this Agreement, or during the Employment Period; 

(ii)   advise, request, induce or attempt to induce any of the Customers, suppliers, or other business contacts of the Company or any of its Subsidiaries who currently have or have had business relationships with the Company or any of its Subsidiaries within two years preceding the date of this Agreement, during the Employment Period, to withdraw, curtail or cancel any of its business or relations with the Company or any of its Subsidiaries; 

	 
	 	6	 
	

	 

 

(iii)   induce or attempt to induce any employee, sales representative, consultant or other agent of the Company or any of its Subsidiaries to terminate his relationship or breach any agreement with the Company or any of its Subsidiaries other than Larry Bernicky, Barry Gersowsky, John Lee, and Richard E. Rothkopf; or 

(iv)   hire any person who within six months prior to the date of hiring was an employee, sales representative, consultant or other agent of the Company or any of its Subsidiaries at any time during the Noncompete Period other than (1) Larry Bernicky, Barry Gersowsky, John Lee, and Richard E. Rothkopf or (2) a person whose relationship with the LCI or its Subsidiaries has been terminated by the LCI, its Subsidiaries, or their respective successors and assigns. 

8.   Confidential Information. The Employee acknowledges and agrees that the customers, business connections, customer lists, procedures, operations, techniques, and other aspects of and information about the business of the Company and its Subsidiaries (the "Confidential Information") are established at great expense and protected as confidential information and provides the Company and its Subsidiaries with a substantial competitive advantage in conducting their business. The Employee further acknowledges and agrees that by virtue of his past employment with the Company, and by virtue of his employment with the Company, he has had access to and will have access to, and has been entrusted with and will be entrusted with, Confidential Information, and that the Company would suffer great loss and injury if the Employee would disclose this information or use in a manner not specifically authorized by the Company. Therefore, the Employee agrees that during the Employment Period and for five years thereafter, he will not, directly or indirectly, either individually or as an employee, agent, partner, shareholder, owner trustee, beneficiary, co-venturer distributor, consultant or in any other capacity, use or disclose or cause to be used or disclosed any Confidential Information, unless and to the extent that any such information (a) becomes generally known to and available for use by the public other than as a result of the Employee’s acts or omissions or (b) is legally required to be disclosed (by oral questions, deposition, interrogatory, request for information or documents, subpoena, civil investigative demand or similar process); provided, that to the extent practicable the Employee shall provide the Company with prompt written notice of such legal requirement so that the Company may seek a protective order or other appropriate remedy and, in the event that such protective order or other remedy is not obtained, the Employee shall furnish only that portion of the Confidential Information which is legally required to be disclosed and will cooperate with the Company to obtain assurances that confidential treatment will be accorded such Confidential Information. At the Company’s request, the Employee shall deliver to the Company at the termination of the Employment Period, or at any other time the Company may reasonably request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies thereof) relating to the Confidential Information, Work Product (as defined below) or the business of the Company or any of its Subsidiaries which he may then possess or have under his control. The Employee acknowledges and agrees that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to the Company’s or any of its Affiliate’ actual or anticipated business research and development or existing or future products or services and which are conceived, developed or made by the Employee while employed by the Company and its Subsidiaries ("Work Product") belong to the Company or such Affiliate, as the case may be. 

	 
	 	7	 
	

	 

 

9.   Common Law of Torts and Trade Secrets. The parties agree that nothing in this Agreement shall be construed to limit or negate the common law of torts or trade secrets where it provides the Company and its Affiliates with broader protection than that provided herein. 

10.   Definitions. 

"Affiliate" means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person and any partner of a Person which is a partnership. 

"Change of Control" means: 

(a)   The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of Company (the "Outstanding Common Stock") or (ii) the combined voting power of the then outstanding voting securities of Company entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Company, (ii) any acquisition by Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this definition; or 

(b)   Individuals who, as of the date hereof, constitute the Board of Directors of Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of Company; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of Company; or 

	 
	 	8	 
	

	 

 

(c)   Approval by the stockholders of Company of a reorganization, merger or consolidation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Company through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the approval of the initial agreement, or of the action of the Board of Directors of Company, providing for such Business Combination; or 

(d)   Approval by the stockholders of Company of (i) a complete liquidation or dissolution of Company or (ii) the sale or other disposition of all or substantially all of the assets of Company, other than to a corporation, with respect to which following such sale or other disposition, [a] more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation 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 Common Stock and Outstanding Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, [b] less than 20% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by any Person (excluding any employee benefit plan (or related trust) of Company or such corporation), except to the extent that such Person owned 20% or more of the Outstanding Common Stock or Outstanding Voting Securities prior to the sale or disposition, and [c] at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the approval of the initial agreement, or of the action of the Board of Directors of Company, providing for such sale or other disposition of assets of Company or were elected, appointed or nominated by the Board of Directors of Company. 

"Person" means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any governmental entity or any department, agency or political subdivision thereof. 

	 
	 	9	 
	

	 

 

"Senior Management" at any time means the senior executive officers of the Company which will include, without limitation, the Chief Executive Officer, President, Chief Operating Officer, Executive Vice Presidents, Chief Financial Officer and such other officers of the Company as the Board of Directors shall determine from time to time. 

"Subsidiary" means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such partnership, association or other business entity. 

11.   Specific Performance. The Employee acknowledges and agrees that irreparable injury to the Company may result in the event the Employee breaches any covenant or agreement contained in sections 7 and 8 and that the remedy at law for the breach of any such covenant will be inadequate. Therefore, if the Employee engages in any act in violation of the provisions of sections 7 and 8, the Employee agrees that the Company shall be entitled, in addition to such other remedies and damages as may be available to it by law or under this Agreement, to injunctive relief to enforce the provisions of sections 7 and 8. 

12.   Waiver. The failure of either party to insist in any one or more instances, upon performance of the terms or conditions of this Agreement shall not be construed as a waiver or a relinquishment of any right granted hereunder or of the future performance of any such term, covenant or condition. 

13.   Notices. Any notice to be given hereunder shall be deemed sufficient if addressed in writing and delivered by registered or certified mail or delivered personally, in the case of the Company, to its principal business office, and in the case of the Employee, to his address appearing on the records of the Company, or to such other address as he may designate in writing to the Company. 

14.   Severability. In the event that any provision shall be held to be invalid or unenforceable for any reason whatsoever, it is agreed such invalidity or unenforceability shall not affect any other provision of this Agreement and the remaining covenants, restrictions and provisions hereof shall remain in full force and effect and any court of competent jurisdiction may so modify the objectionable provision as to make it valid, reasonable and enforceable. Furthermore, the parties specifically acknowledge the above covenant not to compete and covenant not to disclose confidential information are separate and independent agreements. 

	 
	 	10	 
	

	 

 

15.   Complete Agreement. Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. Without limiting the generality of the foregoing, this Agreement supersedes the Employment Agreement, dated as of October 25, 2002, between LCI and the Employee (together with all amendments thereto, the "Prior Agreement"). The Prior Agreement is hereby terminated and shall cease to be of any further force or effect. 

16.   Amendment. This Agreement may only be amended by an agreement in writing signed by each of the parties hereto. 

17.   Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the laws of the State of Illinois, regardless of choice of law requirements. 

18.   Benefit. This Agreement shall be binding upon and inure to the benefit of and shall be enforceable by and against the Company, its successors and assigns and the Employee, his heirs, beneficiaries and legal representatives. It is agreed that the rights and obligations of the Employee and the Company may not be delegated or assigned. 

[remainder of page intentionally left blank; signature page follows] 

	 
	 	11	 
	

	 

[signature page to Employment Agreement] 

IN WITNESS WHEREOF, the parties have executed or caused this Employment Agreement to be executed as of the date first above written. 

 

RACING CHAMPIONS ERTL CORPORATION - 

COMPENSATION COMMITTEE 

 

_/s/ John S. Bakalar______________________ 

John S. Bakalar, Director and Compensation

Committee Chairman 

 

_/s/ John J. Vosicky______________________ 

John J. Vosicky, Director and Compensation

Committee Member 

_/s/ Robert E. Dods _____________________ 

Robert E. Dods, Chairman of the Board 

_/s/ Richard E. Rothkopf__________________ 

Richard E. Rothkopf 

 

 

	 
	 	12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]