EMPLOYMENT AGREEMENT

 

 

 

                                                                   Exhibit 10.13

 

      EMPLOYMENT AGREEMENT (the "Agreement"),   dated as of September 9, 2005, by

and   between   MEDIALINK   WORLDWIDE   INCORPORATED,   a Delaware   corporation   with

offices at 708 Third Avenue, New York, New York 10017 (the   "Corporation"),   and

Lawrence A. Thomas, an individual   residing at 204 Borden Road,   Middletown,   NJ

07748 ("Employee").

 

 

                              W I T N E S S E T H:

 

      WHEREAS,   the Corporation   desires to retain the services of Employee upon

the terms and conditions hereinafter set forth; and

 

      WHEREAS,   Employee   desires to render services to the Corporation upon the

terms and conditions hereinafter set forth.

 

      NOW, WHEREFORE, the parties mutually agree as follows:

 

      Section 1.   Employment.   The Corporation   employs Employee and Employee on

the Effective Date accepts such   employment,   as Chief Operating   Officer of the

Corporation, subject to the terms and conditions set forth in this Agreement.

 

      Section 2. Duties.

 

            2.1.   Chief   Operating   Officer.   Employee   shall be employed as the

Corporation's   Chief Operating   Officer.   Employee shall report to, and properly

perform   such   duties   as may be   assigned   to him   from   time to time   by,   the

Corporation's Chairman and Chief Executive Officer and the Board of Directors of

the Corporation as the case may be. During the term of this Agreement,   Employee

shall devote all of his available business time to the performance of his duties

hereunder.

 

            2.2. Teletrax; US Newswire Division. During the period commencing on

the Effective   Date and ending on the first   anniversary   thereof,   and for such

longer period as the Board of Directors shall determine,   Employee shall have no

authority   or   control   over   the    Corporation's   TTX   (US)   LLC   and   Teletrax

subsidiaries   (collectively   "Teletrax") or US Newswire division ("USN") and the

presiding officers of Teletrax and USN shall have no reporting responsibility to

Employee.

 

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            2.3.   Solicitation   Restrictions.   Employee   agrees   that during the

period   commencing   on the   Effective   Date and ending on the first   anniversary

thereof,   and for such longer   period   during the term of this   Agreement as the

Board of Directors   shall   determine,   he shall not solicit or direct   others to

solicit,   any customers or prospective   customers of Employee's   former employer

with whom Employee had contact,   or which   Employee   gained   knowledge of, while

employed by his former   employer.   The parties   agree and   acknowledge   that the

Corporation has in its possession, without the assistance of Employee, knowledge

of   the   identity   of   Employee's   former   employer's    customers,    prospective

customers,   and potential   customers.   It is understood that the Corporation may

assign other personnel to solicit or direct others to solicit,   as it has in the

past,   such   customers   and potential and   prospective   customers.   In addition,

Employee   agrees that during the period   commencing   on the   Effective   Date and

ending on the first anniversary   thereof,   and for such longer period during the

term of this Agreement as the Board of Directors shall   determine,   he shall not

solicit   for hiring or direct   others to solicit for hiring,   any   employees   of

Employee's former employer.

 

            2.4.   No   Admission   of   Enforceability.    The   provisions   of   this

Agreement shall in no way be deemed to be an admission by either the Corporation

or Employee that any purportedly   restrictive   covenants to which Employee is or

may be subject are valid or enforceable.

 

            Section 3. Term of   Employment.   The term of   Employee's   employment

shall   commence   on the date hereof (the   "Effective   Date") and shall   continue

until terminated in accordance with Section 5.

 

      Section 4. Benefits.

 

            4.1.   Compensation.    The   Corporation   shall   pay   to   Employee   as

compensation for his services hereunder an annual salary ("Salary") in an amount

equal to Two Hundred and Fifty Thousand ($250,000) Dollars.

 

            4.2.   Expenses.   The Corporation shall pay or reimburse Employee for

all reasonable and necessary business,   travel or other expenses incurred by him

with the prior consent of the Corporation, upon proper documentation thereof, in

connection with the rendition of the services contemplated hereunder.

 

            4.3. Benefits. During the term of this Agreement,   Employee shall be

entitled to participate in such pension, profit sharing, group insurance, option

plans,   hospitalization,   group health   benefit plans and all other benefits and

plans as the Corporation provides to its employees.

 

            4.4.   Discretionary   Payments.   Nothing   herein   shall   preclude the

Corporation from paying Employee such additional bonuses or other   compensation,

as the Board of Directors, in its discretion, may authorize from time to time.

 

            4.5. Stock Options.

 

                  (a) Upon the Effective Date, Employee shall receive,   pursuant

to the Corporation's Amended and Restated Stock Option Plan, options to purchase

20,000   shares of the   Corporation's   common   stock,   such   options   to be at an

exercise price equal to the closing price for the Corporation's   common stock as

of the end of the business day immediately   preceding the Effective Date. During

the term of this   Agreement,   Employee   shall   receive   on each of the first and

second   anniversaries   of the   Effective   Date,   additional   options to purchase

20,000   shares of the   Corporation's   common   stock,   such   options   to be at an

exercise price equal to the closing price for the Corporation's   common stock as

of the end of the   business   day   immediately   preceding   the first   and   second

anniversaries of the Effective Date, as the case may be.

 

 

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                  (b) The options granted to Employee in accordance with Section

4.5(a) shall be governed by the Corporation's   Amended and Restated Stock Option

Plan and shall vest in twenty (20%) percent   increments   commencing on the grant

date and continuing on each of the first four anniversaries thereof.

 

                  (c) Upon the death or Disability,   as hereinafter   defined, of

Employee or in the event Employee is terminated   Without   Cause,   as hereinafter

defined,   or as a result of a Change in Control,   as   hereinafter   defined,   all

stock options granted to Employee,   under the Corporation's Amended and Restated

Stock Option Plan,   including   non-vested options,   shall   automatically   become

vested and immediately exercisable.

 

            4.6. Bonus.

 

                  (a)   For   calendar   year   2005,   Employee   shall   receive   the

following:

 

                        (i)   a   bonus   equal   to   $30,000   to   be   paid   by   the

                   Corporation within thirty (30) days of the Effective Date;

 

                        (ii) a bonus equal to $30,000 to be paid upon the filing

                  of the   Corporation's   Form 10-K for the year ending   December

                  31, 2005;

 

                  (b) For   calendar   year 2005,   Employee   shall be   eligible to

receive the following:

 

                        (i) a bonus of up to $24,000 based on the   Corporation's

                  performance   with respect to certain   financial   targets to be

                  agreed upon by the Corporation and Employee; and

 

                        (ii) a bonus of up to $16,000 based on the Corporation's

                  performance   with   respect to certain   functional   goals to be

                   agreed upon by the Corporation's Chairman and Employee.

 

                  (c) For calendar year 2006 and each calendar year   thereafter,

Employee   shall be eligible to receive a bonus equal to up to sixty (60%) of his

base   salary   based on the   Corporation's   performance   with   respect to certain

financial   targets   and   functional   goals,   each   to   be   agreed   upon   by   the

Corporation and Employee.

 

                  (d) The   Corporation's   Chairman   and   Compensation   Committee

shall determine,   using commercially reasonable standards,   whether Employee has

earned the   bonuses set forth above   based on their   relative   criteria.   Unless

noted   otherwise,   any bonus, to the extent earned,   shall be payable within 120

days of the end of the calendar year to which such bonus relates.

 

 

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                  (e)   If   any of the   Corporation's   financial   statements   are

required   to be   restated,   resulting   from   errors,   omissions,   or fraud,   the

Corporation may (in its sole   discretion,   but acting in good faith) recover all

or a portion of any   performance   bonus   paid to   Employee   with   respect to any

fiscal year of the   Corporation   the financial   results of which are   negatively

affected by such restatement.   The amount to be recovered from Employee shall be

the amount by which the affected   bonus exceeded the amount that would have been

payable to such participant had the financial statements been initially filed as

restated.   The Corporation's   Compensation Committee shall determine whether the

Corporation   shall   effect   any such   recovery   (i) by   seeking   repayment   from

Employee;   (ii) by   reducing   (subject   to   applicable   law and   the   terms   and

conditions of the applicable agreement, plan, program or arrangement) the amount

that would   otherwise be payable to Employee;   (iii) by   withholding   payment of

future   increases in   compensation   (including the payment of any   discretionary

bonus amount) or grants of   compensatory   awards that would   otherwise have been

made in accordance   with the   Corporation's   otherwise   applicable   compensation

practices; or (iv) by any combination of the foregoing.

 

            4.7. SERP; Deferred Compensation.

 

                  (f)   Upon   presentation   to the   Corporation   by   Employee   of

documentation   satisfactory to the Corporation which evidences   Employee's fully

vested matching Allocation Account ending balance in the SERP Plan of Employee's

previous   employer   ("Ending   Balance"),   irrespective of the application of any

non-compete or "bad boy" clauses,   the Corporation shall deposit an amount equal

to   the   Ending   Balance   into   a   deferred    compensation    account   ("Deferred

Compensation Account") for the benefit of Employee,   which Deferred Compensation

Account   shall be fully   vested.   Employee   agrees   to use his best   efforts   to

withdraw   any and all funds   available   to him from the SERP Plan of   Employee's

previous   employer.   In the event   Employee   receives any proceeds from the SERP

Plan of Employee's   previous employer,   Employee shall so notify the Corporation

and the   Corporation   shall be   entitled   to reduce   the   credit   in   Employee's

Deferred Compensation Account by the amount so received by Employee.

 

                  (g) The Deferred   Compensation Account shall be in the form of

a money market account,   certificate of deposit or similar instrument, or mutual

funds (collectively, "Investment Funds"), as directed by Employee.

 

                  (h) All interest, dividends, gains, losses and other additions

or   returns   thereon   shall be   credited   to   Employee's   Deferred   Compensation

Account.

 

                  (i) The amount of the Deferred   Compensation   Account shall be

paid to Employee upon his reaching the earlier of age of sixty-five   (65) or the

Corporation's normal retirement age, if any, provided,   however, that the amount

of the Deferred   Compensation Account shall be payable to Employee in all events

upon the date which is six (6) months after the effective date of termination of

Employee's   employment,   if such   termination is earlier than sixty-five (65) or

the Corporation's normal retirement age, if any.

 

                  (j) It is the   intention   of the   parties   that   all   deferred

compensation   hereunder shall constitute an unfunded arrangement for purposes of

Title I of   Employee   Retirement   Income   Security   Act of 1974   and all   rights

created   pursuant to this   Agreement   with respect to the deferred   compensation

shall   be an   unsecured   contractual   right   of   Employee,   his   estate   and his

beneficiaries against the Corporation. Employee acknowledges that any assets the

Corporation   invests are   intended to provide the   Corporation   with a source of

funds to assist it in meeting its liabilities   under this Agreement and that the

assets in the   separate   funds are   subject to the   claims of the   Corporation's

general creditors under Federal and state law in the event of insolvency.

 

 

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            4.8. Indemnification; Legal Representation.

 

                  (a) Subject to subsection (c) below, the Corporation agrees to

indemnify   and hold Employee   harmless   from any and all liability   Employee may

incur   as   a   result   of   Employee's   violation   or   alleged   violation   of   the

purportedly   restrictive   covenants   specified   on   Exhibit A   attached   hereto;

provided   that such   violation   or alleged   violation   is related to   Employee's

employment with the Corporation.

 

                  (b) Subject to subsection (c) below, the Corporation agrees to

supply,   by counsel chosen by the Corporation,   legal   representation   to defend

Employee from any action   threatened or brought by   Employee's   former   employer

relating to his employment with the Corporation.

 

                   (c) In the event   any of the   conditions   precedent   specified

below are not satisfied,   then the Corporation shall be under no duty to provide

indemnification or legal representation for Employee. As conditions precedent to

Employee's right to   indemnification   and legal   representation   provided by the

Corporation:

 

                        (i)   Employee   shall   give   the   Corporation   notice   in

                  writing   within ten (10) days of any claim made, or threatened

                  to   be   made,    against   him   for   which   the    provision    of

                  indemnification   or legal   representation   by the   Corporation

                  will or could be sought; and

 

                        (ii) Employee   shall not, at the time such claim is made

                  or   threatened to be made, or at any time during the provision

                  of indemnification or legal representation by the Corporation,

                  be in   breach   of a   material   provision   of   this   Agreement,

                  including without limitation,   Employee's   representations and

                  warranties contained herein; and

 

                        (iii)    Employee    shall    fully    cooperate    with   the

                  Corporation   in   connection   with any   matter   for   which   the

                  Corporation provides   indemnification or legal representation;

                  and

 

                        (iv) This   Agreement   shall not have been   terminated at

                  the time such claim is made or   threatened   to be made,   or at

                  any time   during the   provision   of   indemnification   or legal

                  representation   by the Corporation,   except that a termination

                  by the   Corporation   Without   Cause (as   hereinafter   defined)

                  shall not, for purposes of this Section   4.8(c)(iv)   only,   be

                  deemed a termination of this Agreement.

 

 

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                  (d) The   provisions   of this Section shall in no way be deemed

to be an admission by either the   Corporation   or Employee that any   purportedly

restrictive   covenants   to which   Employee   is or may be   subject   are   valid or

enforceable.

 

      Section 5. Termination.

 

            5.1. Termination of Employment.   This Agreement shall terminate upon

the death,   Disability,   as   hereinafter   defined,   termination of employment of

Employee For Cause,   as   hereinafter   defined,   termination of the employment of

Employee   Without Cause or because   Employee   voluntarily   leaves his employment

hereunder.

 

            5.2.   Termination   For Cause or   Employee's   Voluntary   Departure or

Employee's   Death. In the event of a termination   For Cause or because   Employee

voluntarily leaves his employment   hereunder or as a result of Employee's death,

the Corporation   shall pay Employee,   through the date of   termination,   all (i)

accrued and unpaid   Salary and bonus;   (ii) accrued and unused   vacation;   (iii)

incurred, but unreimbursed expenses; and (iv) in accordance with Section 4.7(d),

the balance in Employee's Deferred   Compensation   Account. The Corporation shall

have no further obligation to Employee hereunder.

 

            5.3. Termination Without Cause.

 

                  (a) A   termination   "Without   Cause"   shall be deemed to occur

upon the termination by the Corporation of Employee's   employment for any reason

other than upon a Change in Control,   Employee's death or Disability,   For Cause

or Employee's voluntarily leaving his employment hereunder;

 

                  (b)   It   shall   also   be   deemed   to be a   termination   by the

Corporation   Without   Cause in the event   Employee   voluntarily   terminates   his

employment   hereunder upon the occurrence of (i) a significant adverse change in

Employee's working condition or status, such that Employee's employment has been

effectively terminated;   or (ii) a reduction in Employee's base salary; or (iii)

the   Corporation's   treatment   of   Employee   such   that   Employee   is   unable to

participate in the Corporation's incentive and employee benefit plans on a level

which is consistent with the   Corporation's   other senior level   executives;   or

(iv) the   relocation   of Employee's   office   location more than fifty (50) miles

from its current   location;   or (v) any breach by the   Corporation of a material

provision of this   Agreement   which remains   uncured   fifteen (15) calendar days

after notice thereof from Employee.

 

                  (c) The   Corporation   shall   be   permitted,   at any   time,   to

terminate   Employee's   employment   hereunder   Without   Cause.   In the event of a

termination   Without Cause, the Corporation   shall pay Employee through the date

of   termination   (in   addition to the benefits   set out in   subsections   (d)-(f)

below),   all (i) accrued and unpaid   Salary and bonus;   (ii)   accrued and unused

vacation; (iii) incurred, but unreimbursed expenses; and (iv) in accordance with

Section 4.7(d), the balance in Employee's Deferred Compensation Account.

 

                  (d) In the event of a termination Without Cause within six (6)

months of the Effective Date, then Employee shall receive his Salary for six (6)

months after such termination.

 

 

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                  (e) In the event of a termination   Without Cause after six (6)

months from the   Effective   Date,   then   Employee   shall   receive his Salary for

twelve (12) months after such termination.

 

                  (f) In   addition   to the   Salary   continuation   benefit as set

forth   above,   Employee   shall be entitled to   continue   to   participate   in the

hospitalization, group health benefit and disability plans of the Corporation on

the same terms and conditions as immediately   prior to his   termination for such

period as his Salary continues.

 

            5.4. Termination Upon Disability. In the event of a termination upon

the Disability of Employee,   the Corporation shall pay to Employee or any person

designated   by Employee   during the first six (6) months   immediately   after the

termination   of   employment   due to such   Disability,   the   Salary   which   would

otherwise be payable to Employee less any amounts   Employee   receives   under any

disability   insurance   plans. In addition,   the Corporation   shall pay the COBRA

insurance   premiums of Employee and his   dependents   for six (6) months from the

date of Disability.   Employee hereby acknowledges that payments pursuant to this

Section 5.4 are in lieu of Employee's   receipt of funds under the   Corporation's

Salary   Continuation   Plan and that   Employee   hereby   agrees   to   assign to the

Corporation   any   benefits   that he may be   entitled   to   under   any   disability

insurance plans of the Corporation.

 

            5.5. Definition of "For Cause". As used herein, the term "For Cause"

means (i) Employee's   indictment,   plea or conviction of any criminal   violation

involving dishonesty,   fraud, breach of trust or any other crime involving moral

turpitude which constitutes a felony,   whether or not involving the Corporation;

(ii) Employee's willful engagement in gross misconduct in the performance of his

duties that materially   injures the Corporation;   (iii) Employee's gross neglect

of his duties under this Agreement;   (iv) Employee's   violation of Sections 9 or

10 of this   Agreement;   (v) Employee's   habitual   drunkenness or habitual use of

illegal   substances;   (vi)   behavior by   Employee   which is   detrimental   to the

Corporation's   reputation;   (vii) Employee's   willful and continuous   failure to

substantially perform his duties under this Agreement, including but not limited

to failure   resulting from gross   insubordination;   or (viii) Employee's acts or

omissions   which cause the   Corporation's   securities   filings to be inaccurate,

false or misleading.   A termination of Employee pursuant to subparagraphs   (iii)

or (vii) shall occur only after the Board provides written notice to Employee of

his failure and 10 calendar days'   opportunity   to cure such failure.   An act of

Employee   will not be deemed   "willful"   unless   done or   omitted   to be done by

Employee   not in good   faith   and   without   reasonab