Exhibit 10.12
SEPARATION AGREEMENT AND
GENERAL RELEASE
This SEPARATION AGREEMENT AND GENERAL
RELEASE (“Agreement”) is made as of this 18
th day of June 2009 by and between MEDIALINK
WORLDWIDE INCORPORATED, a Delaware corporation, having an address
at 708 Third Avenue, New York, New York 10017
(“Medialink”), and KENNETH G. TOROSIAN, an individual
residing at 420 Bellwood Avenue, Sleepy Hollow, New York 10591
(“Torosian”).
NOW, THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, the parties agree as
follows:
1. This
Agreement shall be deemed effective (the “Effective
Date”) upon the execution date of that certain agreement and
plan of merger (the “Merger Agreement”) between
Medialink, The NewsMarket, Inc. (“TNM”) and a wholly
owned subsidiary of TNM (the “Merger Partner”);
provided, however, that in the event that the proposed merger
transaction (the “Merger”) pursuant to the Merger
Agreement is not consummated by December 31, 2009, then this
Agreement shall be null and void and of no force and
effect.
2. Torosian
and Medialink are parties to that certain Amended and Restated
Employment Agreement dated as of November 12, 2008 (the
“Employment Agreement”) pursuant to which Torosian
performed duties as the Chief Financial Officer of
Medialink. Certain terms of the Employment Agreement,
including without limitation, Sections 5.3-5.5, 8.3 and 11 and
Exhibit A are expressly modified by the terms of this
Agreement. Torosian’s employment relationship with
Medialink will be deemed (with no further action required by
Medialink) terminated by Medialink effective as of the date on
which the Merger becomes effective (the “Termination
Date”). The termination of Torosian’s
employment hereunder shall not be deemed a For Cause termination,
as such term is defined in the Employment
Agreement. Nothing herein shall be deemed to affect
Torosian’s compensation or benefits prior to the Termination
Date.
3. Torosian
acknowledges that he fully understands the terms and implications
of this Agreement. Torosian has carefully considered
other alternatives to executing this Agreement and has decided that
he will execute this Agreement.
4. Torosian
understands that he will have up to twenty-one (21) days from the
date hereof to review and execute this Agreement and that he shall
have the right, within seven (7) days after his execution of this
Agreement, to revoke same unless such right is waived by
Torosian. If and to the extent Torosian executes this
Agreement prior to the expiration of the twenty-one (21) day period
referred to above, Torosian represents and warrants to Medialink
that he has done so knowingly and voluntarily.
5. Torosian
further recognizes that he executes this Agreement voluntarily and
that Medialink requires that he discuss the same with his legal
advisors to ensure full and thorough knowledge of the legal
significance of this Agreement. Medialink agrees to
reimburse Torosian for all reasonable legal fees incurred in the
review of this Agreement, up to a maximum reimbursement of
$1,500. Torosian has been represented by
__________________________ in his review and consideration of this
Agreement.
6. (a) In
lieu and in place of any payments or benefits otherwise due
Torosian under Sections 5.3-5.5 and/or 8.3 and Exhibit A of the
Employment Agreement and in consideration for Torosian signing and
adhering to the terms and conditions of this Agreement, Torosian
will receive the gross amount of Six Hundred Twenty Thousand and
00/100 ($620,000) Dollars, subject to downward adjustment as set
forth below, which amount shall be reduced by all applicable
deductions as shall be required to be withheld by applicable law
and regulation (the “Severance
Payment”). Such Severance Payment will be payable
in one lump sum no later than fifteen (15) business days after the
Termination Date and shall not be offset by any amounts Torosian
earns or could have earned with reasonable diligence after the
Termination Date. Torosian expressly releases Medialink
from making any payments or making any benefits available pursuant
to Sections 5.3-5.5 and/or 8.3 and Exhibit A of the Employment
Agreement.
(b) The
amount of the Severance Payment referenced above is subject to
downward adjustment based on Medialink’s Adjusted Cash
Balance as of the closing of the Merger (the
“Closing”). For purposes of this
calculation, Adjusted Cash Balance means the sum of (A) the actual
cash available at the Closing (after payment or accrual of
Medialink’s transaction costs associated with the Merger) (i)
prior to payment of (x) contractual and non-contractual severance
obligations (including the Severance Payment) and (y) 2009 board of
directors’ fees, and (ii) adjusted, upward or downward for
the Working Capital Adjustment (as such term is defined in the
Merger Agreement) and (B) the amount of severance obligations
assumed by the Merger Partner pursuant to the Merger
Agreement. The amount of the Severance Payment shall be
adjusted as follows:
(i) If
the Adjusted Cash Balance is at least equal to $1,390,000, there
shall be no adjustment to the amount of the Severance
Payment;
(ii) If
the Adjusted Cash Balance is at least equal to $1,126,000 but less
than $1,390,000, then the Severance Payment shall be reduced by an
amount equal to the product of (A) 0.55 and (B) the amount by which
the actual Adjusted Cash Balance falls short of $1,390,000;
or
(iii) If
the Adjusted Cash Balance is less than $1,126,000, then the
Severance Payment shall be reduced by an amount equal to the sum of
(A) $145,000 and (B) the product of (x) 0.50 and (y) the amount by
which the actual Adjusted Cash Balance falls short of
$1,126,000.
For purposes of
clarification, an adjustment shall be made pursuant to only one of
Sections 6(b)(ii) or 6(b)(iii) above, but not both.
(c) Torosian
and Medialink agree that notwithstanding anything to the contrary
herein, in the event that during the period between the Effective
Date and the Termination Date, Torosian dies or suffers a
Disability (as such term is defined in Section 6.1 of the
Employment Agreement), then Torosian (or his estate, as the case
may be) shall be entitled to receive from Medialink the benefits
set forth in Sections 5.4 (upon death) or 5.5 (upon a Disability)
of the Employment Agreement until the Termination Date, and from
and after the Termination Date, if any, Torosian (or his estate, as
the case may be) shall receive, in lieu of such benefits, the
payment set forth in Section 6(a), as adjusted by Section 6(b) of
this Agreement.
7. The
Company agrees to pay and Torosian acknowledges that he will have
been paid his accrued and unpaid salary and bonus through the
Termination Date and is not entitled to any further payments for
same. Torosian further acknowledges that he will not be
entitled to participate in any of Medialink’s benefit plans
after the Termination Date; provided, however, that Torosian may
continue to participate in Medialink’s hospitalization and
group health benefit plans pursuant to the Consolidated Omnibus
Budget Reconciliation Act (COBRA) at Torosian’s sole cost and
expense, unless otherwise provided by law.
8. As
a condition to Torosian receiving the Severance Payment referenced
above and as a material inducement for Medialink to enter into this
Agreement:
(a) Torosian
agrees to be available to Medialink for telephone consultations for
up to thirty (30) days after the Termination Date. In no
event shall Torosian be required to be available for more than an
aggregate of ten (10) hours during such period.
(b) Torosian
agrees that on the Termination Date, Torosian shall deliver all
Medialink Property, as hereinafter defined, in his custody or
possession to Medialink or its representatives, and Torosian
represents and warrants that no such Medialink Property or copies
thereof have been knowingly retained by him, any of his
representatives or any person, firm or corporation owned or
controlled by him or delivered to any third party other than in the
normal course of performing his duties pursuant to the Employment
Agreement. The term “Medialink Property” as
used herein means any and all confidential or proprietary materials
belonging to Medialink that are in Torosian’s possession,
including but not limited to books, records, files, documents,
accounting or financial records, statements, reports, equipment,
computer hardware, computer software, programs, contact lists,
customer data and files (hardcopies and electronic), any
proprietary information or data of Medialink in any format and any
and all copies thereof, hard drives, keys to Torosian’s
offices and files, computer passwords provided by Medialink to
Torosian, passwords established by Torosian on Medialink hardware
and passwords established by Torosian on any file containing
Medialink information. Notwithstanding the foregoing,
Torosian shall be permitted, at his sole option, to retain the cell
phone and phone number, pda/BlackBerry, laptop computer with one
docking station and one monitor that were used by Torosian
immediately prior to the Termination Date; provided however, that
all Medialink Property must be removed from each item retained, and
each
