SEPARATION AGREEMENT AND GENERAL RELEASE
This SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is made as of this 30 th day of December 2005 by and between MEDIALINK WORLDWIDE INCORPORATED, a Delaware corporation, having an address at 708 Third Avenue, New York, New York (“Medialink”), and J. GRAEME McWHIRTER, with an address of 22 Eglantine Avenue, Pennington, New Jersey (“McWhirter”).
NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the parties agree as follows:
1. McWhirter’s Employment with Medialink will terminate effective at the close of business on December 31, 2005 (the “Effective Date”). McWhirter shall resign as an officer and director of Medialink and its subsidiaries as of the Effective Date.
2. McWhirter acknowledges that he fully understands the terms and implications of this Agreement.
3. McWhirter has carefully considered other alternatives to executing this Agreement and has decided that he will execute this Agreement.
4. McWhirter 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 McWhirter.
5. McWhirter further recognizes that he executes this Agreement voluntarily and acknowledges that he has discussed this Agreement and the terms hereof with Charles Crow, Esq., his legal advisor. McWhirter further acknowledges that he has a full and thorough knowledge of the legal significance of this Agreement.
6. In consideration for McWhirter signing and adhering to the terms and conditions of this Agreement and in consideration for certain consulting services and other obligations as specified below, McWhirter will, commencing on Medialink’s next regularly scheduled payroll date after the expiration of the seven (7) day revocation period pursuant to Section 4 hereof, receive the following:
(a) One Hundred Seventy-Nine Thousand Six Hundred Eight and 56/100 ($179,608.56) Dollars (the “Consulting Payment”). Such Consulting Payment will be payable in twelve semi-monthly installments of Fourteen Thousand Nine Hundred Sixty-Seven and 38/100 ($14,967.38) Dollars, in accordance with Medialink’s normal payroll schedule, through the period ending June 30, 2006 (the period from the Effective Date through June 30, 2006 hereinafter referred to as the “Consulting Period”) in consideration for the provision of certain consulting services as follows;
During the Consulting Period, Medialink shall pay all necessary and reasonable costs of consultant in providing such services, including but not limited to, the attorneys’ fees associated with negotiating this Agreement, any subsequent agreement and any future consulting agreement, provided that in no event shall such legal fees exceed $5,000 in the aggregate. Medialink further agrees to provide McWhirter with, and access to, the reasonably necessary resources required for McWhirter to provide the consulting services during the Consulting Period.
(b) One Million Four Hundred Eighty-Two Thousand Two Hundred Fifty-Nine and 92/100 (1,482,259.92) Dollars (the “Severance Payment”). Such Severance Payment shall be payable over the four and one-half year period from July 1, 2006 through December 31, 2010 (the period from July 1, 2006 through December 31, 2010 hereinafter referred to as the “Severance Period”) as follows:
(c) Immediate vesting of all Medialink stock options now held by McWhirter. All stock options held by McWhirter may be exercised only until the earlier of (i) their expiration date or (ii) December 31, 2006. All stock options not exercised by such date will thereafter no longer be exercisable; and
(d) In the event McWhirter elects to continue to participate in the hospitalization, group health benefit, group term life insurance and disability plans of Medialink, then McWhirter shall be entitled to continue in such plans on the same terms and conditions as immediately prior to the Effective Date, for the period ending on the earlier of (i) December 31, 2006 or (ii) the date that he becomes eligible for similar coverage through a new employer. McWhirter acknowledges that after the Effective Date his continuing participation in Medialink’s hospitalization and group health benefit plans shall be pursuant to COBRA. In the event that McWhirter continues to remain eligible for Medialink’s hospitalization and group health benefit plans under COBRA beyond December 31, 2006, then McWhirter’s continuing participation beyond such date shall be at McWhirter’s sole cost and expense.
All payments referenced herein are gross amounts and shall be paid on a net amount after all applicable deductions and shall be paid only on the condition that McWhirter executes this Agreement, does not revoke same, and adheres to its terms. All payments referenced herein shall be payable regardless of Employee’s death or disability.
7. McWhirter acknowledges that he was paid his accrued and unpaid salary and any bonuses to which he was entitled through the Effective Date and is not entitled to any further payments for same.
8. As a condition to McWhirter’s receiving the payments referenced above and as a further material inducement for Medialink to enter into this Agreement:
(a) McWhirter agrees that upon the delivery of this Agreement from Medialink to McWhirter, McWhirter shall deliver all Medialink Property, as hereinafter defined, in his custody or possession to Medialink or its representatives, and McWhirter represents and warrants that no such Medialink Property or copies thereof have been retained by him, any of his representatives or any person, firm or corporation owned or controlled by him or delivered to any third party. The term “Medialink Property” as used herein means any and all confidential or proprietary materials belonging to Medialink which are in McWhirter’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, information/customer data and files (hardcopies and electronic), any proprietary information or data of Medialink in any format and any and all copies thereof, hard drive disks, keys to McWhirter’s offices and files, computer passwords provided by Medialink to McWhirter, passwords established by McWhirter on Medialink hardware and passwords established by McWhirter on any file containing Medialink information. Notwithstanding the foregoing, McWhirter shall be permitted to retain the cell phone/PDA (make: Palm, model: Treo 650) and laptop computer (make: IBM, model: T43, serial #: L3-AD598) that were used by McWhirter immediately prior to the Effective Date; provided however, that such equipment shall be subject to review by Medialink’s IT personnel to ensure that all Medialink Property has been permanently removed.
(b) McWhirter acknowledges that the principal business of Medialink is providing video and audio production and satellite and other distribution services to television and radio stations and Internet sites for corporations and other organizations seeking to communicate their news to the public; corporation communications consultation and production primarily employing audio and video capabilities; distribution of public relations text, audio and video to news media and the general public via satellite, streaming media, cassette, wire or other means; distribution of press releases by the Internet, mail and facsimile; the maintenance of databases of media contacts for and on behalf of clients; providing closed-captioned text and associated streaming video clips; electronic tracking of watermark embedded materials that are distributed or broadcast for the purpose of reporting such broadcast or distribution; and such other businesses as Medialink may conduct from time to time (the “Business”). McWhirter acknowledges that he has acquired confidential information concerning Medialink and the Business and that, among other things, his knowledge of the Business was enhanced through his employment by Medialink. McWhirter acknowledges that such information is of great value to Medialink, is the sole property of Medialink, and was acquired by him in confidence.
(c) McWhirter agrees that he will not, at any time, now or hereafter, use, reveal, divulge or make known to any person, any information which is treated as confidential by Medialink and not otherwise in the public domain, except as required by law.
(d) McWhirter acknowledges that it is reasonably necessary for the protection of Medialink that McWhirter agrees, and, accordingly, McWhirter does hereby agree, that he will not, directly or indirectly, in the entire world, at any time during the three-year period from the Effective Date (the “Restricted Period”):
i. engage in the Business for his account or render any services that constitute engaging in the Business, in any capacity to any entity; or become interested in any entity engaged in the Business either on his own behalf or as an officer, director, stockholder, partner, principal, consultant, associate, employee, owner, agent, creditor, independent contractor, or co-venturer of any third