UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
December 4, 2006
Date of report (Date of earliest event reported)
Wireless Ronin Technologies, Inc.
(Exact name of registrant as specified in its charter)
|(State or other jurisdiction
14700 Martin Drive
Eden Prairie, Minnesota 55344
(Address of principal executive offices, including zip code)
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF
PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
December 7, 2006, our Board of Directors ratified the election of Brian S. Anderson
as a vice president, controller and principal accounting officer of our company. His employment
commenced on December 4, 2006. We have entered into an employment agreement with Mr. Anderson,
pursuant to which he will receive an annual base salary of $137,000 and is eligible to receive a
performance-based cash bonus in 2007 of up to $25,000, contingent upon reaching agreed-upon goals
and objectives. The employment agreement provides that a severance payment will be made if Mr.
Andersons employment is terminated by us without cause, or by Mr. Anderson for good reason. A
severance payment would also be payable under certain circumstances upon a change of control. The
severance payment will be equal to twelve months of Mr. Andersons base salary. The employment
agreement has an initial term ending April 1, 2008, and is automatically renewed for additional
one-year periods unless timely notice is given by us or Mr. Anderson of intention not to extend his
agreement. Mr. Anderson has agreed to certain nondisclosure and inventions and noncompetition and
nonrecruitment provisions during the term of his employment and for a period of one year following
termination of employment.
with his employment, we have agreed to grant Mr. Anderson a stock option under our 2006 Equity Incentive Plan to purchase 50,000 shares of common
stock. We have agreed that the option will be granted on or before
January 15, 2007 and the
exercise will be fixed at the fair market value of our common stock on the date of grant. The
other terms of such option, when granted, will be comparable to the terms of options granted to our
other executive officers.
We previously granted an option to
Mr. Anderson for the purchase of 25,000 shares of common stock at $4.00 per share to secure his
services as an independent contractor.
The grant of such options are subject to approval of our 2006 Equity
Incentive Plan by our shareholders on or before March 30, 2007.
There are no familial relationships between Mr. Anderson and any other officer or director of
our company. Each of our executive officers is appointed to serve until his or her successor is
duly appointed or his or her earlier removal or resignation from office.
From June 2005 to October 2005, Mr. Anderson served as a consultant to our company and as a
consultant to GMAC RFC, a real estate finance company, from November 2005 to December 2006. From
December 2000 to June 2005, Mr. Anderson served as the Chief Financial Officer, Treasurer, and
Secretary of Orbit Systems, Inc., a privately-held information technology company. From 1990 to
June of 2000, Mr. Anderson served in positions of increasing responsibility with Arcadia Financial,
Ltd., a publicly-held auto finance company, most recently as Senior Vice President-Corporate
Controller. From 1988 to 1990, he served as Assistant Controller for Walden Leasing, Inc., a
vehicle leasing company. From 1978 to 1988, he served in various accounting and tax positions of
increasing responsibility with National Car Rental Systems, Inc., an international vehicle rental
and commercial leasing company.
The foregoing description is qualified in its entirety by reference to Mr. Andersons
employment agreement, which appears as Exhibit 10.1 to this Current Report on Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) See Exhibit Index.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Date: December 8, 2006
||Wireless Ronin Technologies, Inc.
||/s/ John A. Witham
||John A. Witham
||Executive Vice President and
Chief Financial Officer
||Employment Agreement, dated as of December 4, 2006, between the Registrant and Brian S.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (Agreement) is made and entered into effective December
4, 2006, by and between Wireless Ronin Technologies, Inc., a corporation duly organized and
existing under the laws of the State of Minnesota, with a place of business at 14700 Martin Drive,
Eden Prairie, Minnesota 55344 (hereinafter referred to as the Company), and Brian S. Anderson, a
resident of the state of Minnesota (hereinafter referred to as Executive).
BACKGROUND OF AGREEMENT
||The Company desires to employ Executive, and Executive desires to
accept such employment.
||This Agreement provides, among other things, for base compensation
for Executive, a term of employment and severance payments in the
event Executive is terminated without Cause or by reason of a
Change of Control of the Company.
||In consideration of the foregoing, the Company and Executive agree as follows:
1.01 Subject to the terms of Articles 3 and 6, the Company hereby employs Executive as its
Vice President and Controller pursuant to the terms of this Agreement, and Executive agrees to such
employment. Executives primary place of employment shall be the Companys executive offices at
Eden Prairie, Minnesota.
1.02 Executive shall generally have the authority, responsibilities, and such duties as are
customarily performed by the controller and principal accounting officer of a public company of
similar size and industry, specifically including, without limitation, the following
Controller of WRT will have direct responsibility for the financial
statement preparation and review.
Assist in filing with Securities and Exchange Commission and other
regulatory bodies as may be required.
Oversee federal and state tax filing requirements with assistance
from outside accounting firm.
Development, document and testing (including continue to update) of
Assist CFO to cause the Company to become compliant with
Oversee day to day general accounting operations, including
receivables, payables, fixed assets, inventory control, and cash management.
Manage annual audit and quarterly reviews with external accounting
Help design and install new financial systems.
Interact with senior management and Audit Committee.
Assist sales and operations organizations in ordering and processing
of customer orders.
Manage financial forecasts for annual budgets and quarter update
Consistent with the foregoing, the Company may assign to Executive other duties relating to
accounting and finance functions from time to time during his employment.
1.03 Executive shall report to and be subject to direction by, the Companys chief financial
officer and other officer as the Board shall specify, and shall generally be subject to direction
and advice of the Board.
BEST EFFORTS OF EXECUTIVE
2.01 Executive shall use his best energies and abilities in the performance of his duties,
services and responsibilities for the Company.
2.02 During the term of his employment, Executive shall devote substantially all of his
business time and attention to the business of the Company and its subsidiaries and affiliates and
shall not engage in any substantial activity inconsistent with the foregoing, whether or not such
activity shall be engaged in for pecuniary gain, unless approved by the Board; provided, however,
that, to the extent such activities do not violate, or substantially interfere with his performance
of his duties, services and responsibilities under this Agreement.
TERM AND NATURE OF EMPLOYMENT
3.01 Executives employment hereunder shall be for an initial term commencing December 4, 2006
and ending April 1, 2008. Neither the Company nor Executive shall be obligated to extend the term
of Executives employment.
3.02 The term of Executives employment shall automatically be extended for successive one (1)
year periods commencing on April 1, 2008 unless the Company or Executive elects not
to extend employment, by giving written notice to the other not less than thirty (30) days
prior to the end of the initial term or any extension period.
ALL PARTIES: NOTE AUTOMATIC RENEWAL
3.03 The terms and conditions of this Agreement may be amended from time to time with the
consent of the Company and Executive. All such amendments shall be effective when memorialized by
a written agreement between the Company and Executive, following approval by the Companys
Compensation Committee (the Committee).
COMPENSATION AND BENEFITS
4.01 During the initial term of employment hereunder, Executive shall be paid a base salary of
One Hundred Thirty-Seven Thousand Dollars ($137,000) per year (Base Salary), payable in
accordance with the Companys established pay periods, reduced by all deductions and withholdings
required by law and as otherwise specified by Executive. The Company agrees to review Executives
performance and compensation annually. Executives Base Salary may be increased (but not
decreased) in the sole discretion of the Board. Base Salary shall not be reduced after any such
increase except in connection with Company compensation reductions applied to all other senior
executives of the Company. In the event Executives employment shall for any reason terminate
during the Term, Executives final monthly Base Salary payment shall be made on a pro-rated basis
as of the last day of the month in which such employment terminated.
4.02 During the term of employment, in addition to payments of Base Salary set forth above,
Executive may be eligible to participate in any performance-based cash bonus or equity award plan
for senior executives of the Company, based upon achievement of individual and/or Company goals
established by the Board or Committee. The extent of Executives participation in bonus plans
shall be within the discretion of the Companys Board or Compensation Committee. You will be
entitled to earn a bonus of up to $25,000 for the year 2007 based upon achievement of agreed-upon
goals and performance objectives.
4.03 You will be entitled to receive a stock option for the purchase of 50,000 shares of
common stock on or before January 15, 2007 on terms and conditions of options awarded to other
executive-level employees. Such grant is in addition to a stock option granted to Executive in his
capacity as a consultant to the Company on November 24, 2006, for the purchase of 25,000 shares of
common stock at an exercise price of $4.00 per share, to vest 25% on the date of grant and 25% each
year thereafter. Such options granted to employee in such consulting capacity or employment will be
granted subject to the terms of a 180-day lock-up agreement with the underwriter of the Companys
initial public offering and shall further be subject to approval of the Companys 2006 Equity
Incentive Plan by the Companys shareholders on or before March 30, 2007.
4.04 During the term of employment, Executive shall be entitled to participate in employee
benefit plans, policies, programs, perquisites and arrangements, as the same may be
provided and amended from time to time, that are provided generally to similarly situated
executive employees of the Company, to the extent Executive meets the eligibility requirements for
any such plan, policy, program, perquisite or arrangement.
4.05 The Company shall reimburse Executive for all reasonable business expenses incurred by
Executive in carrying out Executives duties, services, and responsibilities under this Agreement.
Executive shall comply with generally applicable policies, practices and procedures of the Company
with respect to reimbursement for, and submission of expense reports, receipts or similar
documentation of, such expenses.
VACATION AND LEAVE OF ABSENCE
5.01 Executive shall be entitled to twenty-two (22) business days of paid time off (PTO) for
each twelve (12) months of employment, in addition to the Companys normal holidays. PTO includes
sick days and leaves of absence. PTO will be scheduled taking into account the Executives duties
and obligations at the Company. Unused PTO shall not be accumulated from year to year, unless
approved in writing by the Board or Committee. PTO, sick leave and all other leaves of absence
will be taken in accordance with the Companys stated personnel policies. Upon termination or
expiration of the Executives employment, Executive shall be entitled to compensation for any
accrued, unused PTO time, as of date of termination.
6.01 The Company may terminate Executives employment upon written notice thereof. In the
event of a termination of Executive without Cause, including a termination by Executive for Good
Reason, Executive shall be entitled to receive: (i) the Severance Payment provided in Section 7.01
and (ii) the bonus described in Section 7.03. For the purposes of this Agreement, an election by
the Company not to extend this Agreement pursuant to Section 3.01 shall be deemed a termination
6.02 Executives employment will terminate as of the date of the death or Disability of the
Executive. In the event of such termination, there shall be payable to Executive or Executives
estate or beneficiaries Base Salary earned through the date of death together with a pro-rata
portion of any bonus due Executive pursuant to any bonus plan or arrangement established or
mutually agreed-upon prior to termination, to the extent earned or performed based upon the
requirements or criteria of such plan or arrangement, as the Board shall in good faith determine.
Such pro-rated bonus shall be payable at the time and in the manner payable to other executives of
the Company who participate in such plan or arrangement. For purposes of this Agreement
Disability shall mean a determination by the Board of the Company of the inability of Executive
to perform substantially all of his duties and responsibilities under this Agreement due to
illness, injury, accident or condition of either a physical or psychological nature, and such
inability continues for an aggregate of ninety (90) days during any period of
three hundred and sixty-five (365) consecutive calendar days. Such determination shall be
made in good faith by the Board, the decision of which shall be conclusive and binding.
6.03 Any other provision of this Agreement notwithstanding, the Company may terminate
Executives employment upon written notice specifying a termination date based on any of the
following events that constitute Cause:
||Any conviction or nolo contendere plea by Executive to a felony, gross
misdemeanor or misdemeanor involving moral turpitude, or any public conduct by
Executive that has or can reasonably be expected to have a detrimental effect on the
Company and the image of its management;
||Any act of material misconduct, willful and gross negligence, or breach of duty
with respect to the Company, including, but not limited to, embezzlement, fraud,
dishonesty, nonpayment of an obligation owed to the Company, or willful breach of
fiduciary duty to the Company which results in a material loss, damage, or injury to
||Any material breach of any material provision of this Agreement or of the
Companys announced or written rules, codes or polices; provided, however, that such
breach shall not constitute Cause if Executive cures or remedies such breach within
thirty (30) days after written notice to Executive, without material harm or loss to
the Company, unless such breach is part of a pattern of chronic breaches of the same,
which may be evidenced by reports or warning letters given by the Company to Executive,
in which case such breach is not deemed curable.
||Any act of insubordination by Executive; provided, however, an act of
insubordination by Executive shall not constitute Cause if Executive cures or remedies
such insubordination within thirty (30) days after written notice to Executive, without
material harm or loss to the Company, unless such insubordination is a part of a
pattern of chronic insubordination, which may be evidenced by reports or warning
letters given by the Company to Executive, in which case such insubordination is deemed
||Any unauthorized disclosure of any Company trade secret or confidential
information, or conduct constituting unfair competition with respect to the Company,
including inducing a party to breach a contract with the Company; or
||A willful violation of federal or state securities laws.
6.04 Executive may terminate his employment upon sixty (60) days prior written notice to the
Company for Good Reason. For purposes of this Agreement, Good Reason means any of the
following actions taken by the Company without Cause:
||the Company or any of its subsidiaries materially reduces Executives Base
Salary or base rate of annual compensation, or otherwise materially changes benefits
provided to Executive under compensation and benefit plans, arrangements,
policies and procedures to be as a whole materially less favorable to Executive,
other than reductions in Base Salary permitted under Section 4.01;
||without Executives express written consent, the Company or any of its
subsidiaries requires Executive to change the location of Executives job or office, to
a location more than fifty (50) miles from the location of Executives job or office
immediately prior to such required change;
||a successor company fails or refuses to assume the Companys obligations under
this Agreement; or
||the Company or any successor company breaches any of the material provisions of
If Executive intends to terminate this Agreement for Good Reason, Executive must give not less than
sixty (60) days written notice to the Company of the facts or events giving rise to Good Reason,
and must give such notice within ninety (90) days following the facts or event alleged to give rise
to Good Reason. The failure to give such notice shall be deemed a waiver of the right to terminate
this Agreement for Good Reason based on such fact or event.
6.05 During the term of his employment and for 24 months after the date of Executives
termination of employment, (i) Executive shall not, directly or indirectly, make or publish any
disparaging statements (whether written or oral) regarding the Company or any of its affiliated
companies or businesses, or the affiliates, directors, officers, agents, principal shareholders or
customers of any of them and (ii) neither the Company or any of its directors, or officers shall
directly or indirectly, make or publish any disparaging statements (whether written or oral)
regarding Executive. Information which the Company or Executive is required to make or disclose
regarding the other to comply with laws or regulations, or makes in a pleading on the advice of
litigation counsel, shall not constitute a disparaging statement.
6.06 Upon any termination of Executives employment with the Company, Executive shall be
deemed to have resigned from all other positions he then holds as an officer, employee or director
or other independent contactor of the Company or any of its subsidiaries or affiliates, unless
otherwise agreed by the Company and Executive.
7.01 The Company, its successors or assigns, will pay Executive as severance pay (the
Severance Payment) amount equal to twelve (12) months of the Executives monthly Base Salary for
full-time employment at the time of Executives termination if (i) there has been a Change of
Control of the Company (as defined in Section 7.02), and (ii) Executive is an active and full-time
employee at the time of the Change of Control, and (iii) within twelve (12) months following the
date of the Change of Control, Executives employment is involuntarily terminated for any reason
(including Good Reason (as definition Section 6.04)), other than for Cause or death or disability.
If Executives employment is terminated by the Company without Cause, or by Executive for Good
Reason, other than in connection with a Change of Control, the
Severance Payment shall be limited and equal to twelve (12) months of Executives Base Salary.
Nothing in this Section 7.01 shall limit the authority of the Committee or Board to terminate
Executives employment in accordance with Section 6.03. Payment of the Severance Payment pursuant
to Section 7.01, less customary withholdings, shall be made in one lump sum within thirty (30) days
of the Executives termination or resignation or, at the Companys election, in equal installments
over the non-competition period specified in Section 9.01. No Severance shall be payable if
Executives employment is terminated due to death or Disability.
7.02 For the purposes of this Agreement, Change of Control shall mean any one of the
||an 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) of 50% or more of either: (1) the then outstanding Stock; or (2) the
combined voting power of the Companys outstanding voting securities immediately after
the merger or acquisition entitled to vote generally in the election of directors;
provided, however, that the following acquisition shall not constitute a Change of
Control: (i) any acquisition directly from the Company; (ii) any acquisition by the
Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any
employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any
acquisition by any corporation with respect to which, following such acquisition, more
than 50% of the Stock or combined voting power of Stock and other voting securities of
the Company is beneficially owned by substantially all of the individuals and entities
who were beneficial owners of Stock and other voting securities of the Company
immediately prior to the acquisition in substantially similar proportions immediately
before and after such acquisition; or
||individuals who, as of the date of this Agreement, constitute the Board (the
Incumbent Board), cease to constitute a majority of the Board. Individuals nominated
or whose nominations are approved by the Incumbent Board and subsequently elected shall
be deemed for this purpose to be members of the Incumbent Board; or
||approval by the shareholders of the Company of a reorganization, merger,
consolidation, liquidation, dissolution, sale or statutory exchange of Stock which
changes the beneficial ownership of Stock and other voting securities so that after the
corporate change the immediately previous owners of 50% of Stock and other voting
securities do not own 50% of the Companys Stock and other voting securities either
legally or beneficially; or
||the sale, transfer or other disposition of all substantially all of the
Companys assets; or
||a merger of the Company with another entity after which the pre-merger
shareholders of the Company own less than 50% of the stock of the surviving
A Change of Control shall not be deemed to occur with respect to Executive if the
acquisition of a 50% or greater interest is by a group that includes the Executive, nor shall it be
deemed to occur if at least 50% of the Stock and other voting securities owned before the
occurrence are beneficially owned subsequent to the occurrence by a group that includes the
7.03 In addition to the Severance Payment, the Company, upon a Change of Control, will pay
Executive a bonus (Severance Bonus) in a lump sum within thirty (30) days following a termination
of employment pursuant to 7.01, an amount equal to two (2) times Executives bonus earned for the
prior fiscal year or, upon a termination of Executives employment without cause other than in
connection with a Change of Control, a Severance Bonus equal to one and one-half (1.5) times
Executives bonus earned for the prior fiscal year. The Severance Bonus payable pursuant to this
Section 7.03 shall not, however, exceed Executives target bonus as set forth in any bonus plan or
arrangement in which Executive participates at the time of termination of his employment. The
Severance Payment or Severance Bonus shall be reduced by the amount of cash severance benefits to
which Executive may be entitled pursuant to any other cash severance plan, agreement, policy or
program of the Company or any of its subsidiaries; provided, however, that if the amount of
cash severance benefits payable under such other severance plan, agreement, policy or program is
greater than the amount payable pursuant to this Agreement, Executive will be entitled to receive
the amounts payable under such other plan, agreement, policy or program which exceeds the Severance
Payment or Severance Bonus payable pursuant to this Section. Without limiting other payments which
would not constitute cash severance-type benefits hereunder, any cash settlement of stock
options, accelerated vesting of stock options and retirement, pension and other similar benefits
shall not constitute cash severance-benefits for purposes of this Section 7.03.
7.04 If Executive becomes entitled to the Severance Payment pursuant to Section 7.01,
Executive shall be entitled to receive, if Executive is eligible to and elects to continue medical
coverage from the Company as provided by law (commonly referred to as the COBRA continuation
period), as part of his severance benefit, continued medical coverage under the Companys medical
plan. The Company will pay the Companys portion of contribution to monthly medical insurance
premiums paid at the time of termination of employees employment for such COBRA coverage for
Executive and his eligible dependents for a period ending on the earlier of one year following
termination, or until Executive is eligible to be covered by another plan providing medical
benefits to Executive. To be eligible to receive such benefit, Executive must be eligible for
COBRA coverage, elect COBRA during the COBRA election period, and comply with all requirements to
obtain such coverage, to be eligible for coverage and for this benefit.
7.05 Notwithstanding any other provision of this Agreement, the Company and Executive intend
that any payments, benefits or other provisions applicable to this Agreement comply with the payout
and other limitations and restrictions imposed under Section 409A of the Code (Section 409A), as
clarified or modified by guidance from the U.S. Department of Treasury or the Internal Revenue
Service in each case if and to the extent Section 409A is otherwise applicable to this Agreement
and such compliance is necessary to avoid the penalties otherwise imposed under Section 409A. In
this connection, the Company and Executive agree that the payments, benefits and other provisions
applicable to this Agreement, and the terms of
any deferral and other rights regarding this Agreement, shall be deemed modified if and to the
extent necessary to comply with the payout and other limitations and restrictions imposed under
Section 409A, as clarified or supplemented by guidance from the U.S. Department of Treasury or the
Internal Revenue Service in each case if and to the extent Section 409A is otherwise applicable
to this Agreement and such compliance is necessary to avoid the penalties otherwise imposed under
7.06 The Company may withhold from any amounts payable under this Agreement all federal,
state, city or other taxes required by applicable law to be withheld by the Company.
7.07 The provisions of this Article 7 will be deemed to survive the termination of this
Agreement for the purposes of satisfying the obligations of the Company and Executive hereunder.
7.08 Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code to or for the benefit of Executive, whether paid or payable pursuant
to this Agreement (including, without limitation, the accelerated vesting of equity awards held by
Executive), would be subject to the excise tax imposed by Section 4999 of the Code, then Executive
shall be entitled to receive an additional payment (the Gross-Up Payment) in an amount such that,
after payment by Executive of all taxes, including, without limitation, any income taxes and excise
tax imposed on the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to
the excise tax imposed upon the payments. The Companys obligation to make Gross-Up Payments under
this Section 7.08 shall not be conditioned upon the Executives termination of employment.
||Unless otherwise agreed by the Company and Executive, all determinations
required to be made under this Section 7.08, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by an accounting firm that
does not have a material relationship with either of the parties that is selected by
mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days
of the receipt of notice from the Executive that there has been a Payment or such
earlier time as is requested by the Company. All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15
days of the receipt of the Accounting Firms determination. Absent manifest error, any
determination by the Accounting Firm shall be binding upon the Company and the
||The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable, but no
later than ten business days after the Executive is informed in writing of such claim.
The Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim prior
to the expiration of the 30-day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on, the date that any payment
of taxes with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that the Company desires to contest such
claim, the Executive shall:
(i) give the Company any information reasonably requested by the Company
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such
provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest, and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 7.08, the Company shall
control all proceedings taken in connection with such contest, and, at its sole discretion, may
pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole discretion, either pay
the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the
Executive to sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that, if the Company pays such claim and directs the Executive to sue for a
refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment
or with respect to any imputed income in connection with such payment; and provided, further, that
any extension of the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Companys control of the contest shall be limited to issues
with respect to which the Gross-Up Payment would be payable hereunder, and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
||If, after the receipt by the Executive of a Gross-Up Payment or payment by the
Company of an amount on the Executives behalf pursuant to this Section 7.08, the
Executive becomes entitled to receive any refund with respect to the Excise Tax to
which such Gross-Up Payment relates or with respect to such claim, the Executive shall
promptly pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after payment by the Company
of an amount on the Executives behalf pursuant to this Section 7.08, a determination
is made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such determination, then
the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
||Notwithstanding any other provision of this Section 7.08, the Company may, in
its sole discretion, withhold and pay over to the Internal Revenue Service or any other
applicable taxing authority, for the benefit of the Executive, all or any portion of
any Gross-Up Payment, and the Executive hereby consents to such withholding and
NONDISCLOSURE AND INVENTIONS
8.01 Except as permitted or directed by the Company or as may be required in the proper
discharge of Executives employment hereunder, Executive shall not, during his employment or at any
time thereafter, divulge, furnish or make accessible to anyone or use in any way any Confidential
Information of the Company. Confidential Information means any information or compilation of
information that the Executive learns or develops during the course of his/her employment that is
not generally known by persons outside the Company (whether or not conceived, originated,
discovered, or developed in whole or in part by Executive). Confidential Information includes but
is not limited to, the following types of information and other information of a similar nature
(whether or not reduced to writing), all of which Executive agrees constitutes the valuable trade
secrets of the Company: research, designs, development, know how, computer programs and processes,
marketing plans and techniques, existing and contemplated products and services, customer and
product names and related information, prices sales, inventory, personnel, computer programs and
related documentation, technical and strategic plans, and finances. Confidential Information also
includes any information of the foregoing nature that the Company treats as proprietary or
designates as Confidential Information, whether or not owned or developed by the Company.
Confidential Information does not include information that (a) is or becomes generally available
to the public through no fault of Executive, (b) was known to Executive prior to its disclosure by
the Company, as demonstrated by files in existence at the time of the disclosure, (c) becomes known
to Executive, without restriction, from a source other than the Company, without breach of this
Agreement by Executive and otherwise not in violation of the Companys rights, or (d) is explicitly
approved for release by written authorization of the Company.
8.02 Executive acknowledges that all inventions, innovations, improvements, developments,
methods, designs, trade secrets, analyses, drawings, reports and all similar related information
(whether or not patentable) which relate to the Companys or any of its subsidiaries actual or
anticipated business, research and development or existing products or services and which are
conceived, developed or made by Executive while employed by the Company or any of its subsidiaries
(Work Product) belong to the Company or such subsidiary. Executive shall promptly disclose such
Work Product to the Board of Directors of the Company and, at the Companys expense, perform all
actions reasonably requested by the Board (whether during or after employment by the Company) to
establish and confirm such ownership (including, without limitation, assignments, consents, powers
of attorney and other instruments). For purposes of this Agreement, any Work Product or other
discoveries relating to the business of the Company or any subsidiaries on which Executive files or
claims a copyright or files a patent application, within one year after termination of employment
with the Company, shall be presumed to cover and be Work Product conceived or developed by
Executive in whole or in part during the term of his employment with the Company, subject to proof
to the contrary by good faith, written and duly corroborated records establishing that such Work
Product was conceived and made following termination of employment.
Notwithstanding the foregoing, the Company advises Executive, and Executive understands and
agrees, that the foregoing does not apply to inventions or other discoveries for which no
equipment, supplies, facility or trade secret information of the Company was used and that was
developed entirely on Executives own time, and (a) that does not relate (i) directly to the
Companys business, or (ii) to the Companys actual or demonstrably anticipated business research
or development, or (b) that does not result from any work performed by Executive for the Company.
8.03 In the event of a breach or threatened breach by Executive of the provisions of this
Article 8, the Company shall be entitled to an injunction restraining Executive from directly or
indirectly disclosing, disseminating, lecturing upon, publishing or using such confidential, trade
secret or proprietary information (whether in whole or in part) and restraining Executive from
rendering any services or participating with any person, firm, corporation, association or other
entity to whom such knowledge or information (whether in whole or in part) has been disclosed,
without the posting of a bond or other security. Nothing herein shall be construed as prohibiting
the Company from pursuing any other equitable or legal remedies available to it for such breach or
threatened breach, including the recovery of damages from Executive.
8.04 Executive agrees that all notes, data, reference materials, documents, business plans,
business and financial records, computer programs, and other materials that in any way incorporate,
embody, or reflect any of the Confidential Information, whether prepared by Executive or others,
are the exclusive property of the Company, and Executive agrees to forthwith deliver to the Company
all such materials, including all copies or memorializations thereof, in Executives possession or
control, whenever requested to do so by the Company, and in any event, upon termination of
Executives employment with the Company.
8.05 The Executive understands and agrees that any violation of this Article 8 while employed
by the Company may result in immediate disciplinary action by the Company, including termination of
employment for Cause.
8.06 The provisions of this Article 8 shall survive termination of this Agreement
NON-COMPETITION, NON-INTERFERENCE AND NON-SOLICITATION
9.01 In further consideration of the compensation to be paid to Executive hereunder, including
amounts payable to Executive as a Severance Payment, Executive acknowledges that in the course of
his employment with the Company he will become familiar, and during his employment with the Company
he has become familiar, with the Companys trade secrets and other Confidential Information
concerning the Company and that his services have been and will be of a special, unique and
extraordinary value to the Company, and therefore, Executive agrees that, during the period of his
employment, and for a period of one year following the end of Executives employment term specified
in Section 3.01 or any extension thereof, he shall not directly or indirectly own any interest in,
manage, control, participate in, consult with, render services for, or in any manner engage in any
business competing with the business of the Company, its subsidiaries or affiliates, as defined
below and as such businesses exist or are in the process during the period of his employment on the
date of termination or the expiration of the period his employment, within any geographical area in
which the Company or its subsidiaries or affiliates engage or have defined plans to engage in such
businesses. Nothing herein shall prevent Executive from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly traded, so long as
Executive has no participation in the business of such corporation. For the purposes of this
Agreement, business or business of the Company means, with respect to and including the Company
and its subsidiaries or affiliates, the design, development, marketing and sale of digital signage
products and solutions.
9.02 Executive agrees that during the term of his employment and for a period of one (1) year
after the termination of Executives employment he will not directly or indirectly (i) in any way
interfere or attempt to interfere with the Companys relationships with any of its current or
potential customers, vendors, investors, business partners, or (ii) employ or attempt to employ any
of the Companys employees on behalf of any other entity, whether or not such entity competes with
9.03 Executive agrees that breach by him of the provisions of this Article 9 will cause the
Company irreparable harm that is not fully remedied by monetary damages. In the event of a breach
or threatened breach by Executive of the provisions of this Article 9, the Company shall be
entitled to an injunction restraining Executive from directly or indirectly competing or recruiting
as prohibited herein, without posting a bond or other security. Nothing herein shall be construed
as prohibiting the Company from pursuing any other equitable or legal remedies available to it for
such breach or threatened breach, including the recovery of damages from Executive.
9.04 The Executive understands and agrees that any violation of this Article 9 while employed
by the Company may result in immediate disciplinary action by the Company, including termination of
employment for Cause.
9.05 The obligations contained in this Article 9 shall survive the termination of this
Agreement as described in this Article 9.
10.01 Governing Law. This Agreement shall be governed and construed according to the
laws of the State of Minnesota without regard to conflicts of law provisions. The Company and
Executive agree that if any action is brought pursuant to this Agreement that is not otherwise
resolved by arbitration pursuant to Section 10.06, such dispute shall be resolved only in the
District Court of Hennepin County, Minnesota, or the United States District Court for Minnesota,
and each party hereto unconditionally (a) submits for itself in any proceeding relating to this
Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive
jurisdiction of the Hennepin County, Minnesota District Courts or the United States Federal
District Court for Minnesota, and agrees that all claims in respect to any such proceeding shall be
heard and determined in Hennepin County, Minnesota, Minnesota District Court or, to the extent
permitted by law, in such federal court, (b) consents that any such proceeding may and shall be
brought in such courts and waives any objection that it may now or thereafter have to the venue or
jurisdiction of any such proceeding in any such court or that such proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; waives all right to trial by jury in
any proceeding (whether based on contract, tort or otherwise) arising out of or relating to this
Agreement, or its performance under or the enforcement of this Agreement; (d) agrees that service
of process in any such proceeding may be effected by mailing a copy of such process by registered
or certified mail (or any substantially similar form of mail), postage prepaid, to such party at
its address as provided in Section 10.08; and (e) agrees that nothing in this Agreement shall
affect the right to effect service of process in any other manner permitted by the laws of the
State of Minnesota.
10.02 Successors. This Agreement is personal to Executive and Executive may not
assign or transfer any part of his rights or duties hereunder, or any compensation due to him
hereunder, to any other person or entity. This Agreement may be assigned by the Company. The
Company shall require any successor or assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, of all or substantially all the business or assets of the Company,
expressly and unconditionally to assume and agree to perform the Companys obligations under this
Agreement, in the same manner and to the same extent that the Company would be required to perform
if no such succession or assignment had taken place. In such event, the term Company, as used in
this Agreement, shall mean the Company as defined above and any successor or assignee to the
business or assets which by reason hereof becomes bound by the terms and provisions of this
10.03 Waiver. The waiver by the Company of the breach or nonperformance of any
provision of this Agreement by Executive will not operate or be construed as a waiver of any future
breach or nonperformance under any such provision or any other provision of this Agreement or any
similar agreement with any other Executive.
10.04 Entire Agreement; Modification. This Agreement supersedes, revokes and replaces
any and all prior oral or written understandings, if any, between the parties relating to the
subject matter of this Agreement. The parties agree that this Agreement: (a) is the entire
understanding and agreement between the parties; and (b) is the complete and exclusive statement of
the terms and conditions thereof, and there are no other written or oral agreements in regard to
the subject matter of this Agreement. Except for modifications described in Section 3.01 and
Section 4.01, this Agreement shall not be changed or modified except by a written document signed
by the parties hereto.
10.05 Severability and Blue Penciling. To the extent that any provision of this
Agreement shall be determined to be invalid or unenforceable as written, the validity and
enforceability of the remainder of such provision and of this Agreement shall be unaffected. If
any particular provision of this Agreement shall be adjudicated to be invalid or unenforceable, the
Company and Executive specifically authorize the tribunal making such determination to edit the
invalid or unenforceable provision to allow this Agreement, and the provisions thereof, to be valid
and enforceable to the fullest extent allowed by law or public policy.
10.06 Arbitration. Any dispute, claim or controversy arising under this Agreement
shall, at the request of any party hereto be resolved by binding arbitration in Hennepin County,
Minnesota by a single arbitrator selected by the Company and Executive, with arbitration governed
by The United States Arbitration Act (Title 9, U.S. Code); provided, however, that a dispute, claim
or controversy shall be subject to adjudication by a court in any proceeding against the Company or
Executive involving third parties (in addition to the Company or Executive). Such arbitrator shall
be a disinterested person who is either an attorney, retired judge or labor relations arbitrator.
In the event employer and Executive are unable to agree upon such arbitrator, the arbitrator shall,
upon petition by either the Company or Executive, be designated by a judge of the Hennepin County
District Court. The arbitrator shall have the authority to make awards of damages as would any
court in Minnesota having jurisdiction over a dispute between employer and Executive, except that
the arbitrator may not make an award of exemplary damages or consequential damages. In addition,
the Company and Executive agree that all other matters arising out of Executives employment
relationship with the Company shall be arbitrable, unless otherwise restricted by law.
||In any arbitration proceeding, each party shall pay the fees and expenses of
its or his own legal counsel.
||The arbitrator, in his or her discretion, shall award legal fees and expenses
and costs of the arbitration, including the arbitrators fee, to a party who
substantially prevails in its claims in such proceeding.
||Notwithstanding this Section 10.06, in the event of alleged noncompliance or
violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may
alternatively apply to a court of competent jurisdiction for a temporary restraining
order, injunctive and/or such other legal and equitable remedies as may be appropriate.
10.07 Legal Fees. If any contest or dispute shall arise between the Company and
Executive regarding any provision of this Agreement, and such dispute results in court proceedings
or arbitration, a party that prevails with respect to a claim brought and pursued in connection
with such dispute, shall be entitled to recover its legal fees and expenses reasonably incurred in
connection with such dispute. Such reimbursement shall be made as soon as practicable following
the resolution of the dispute (whether or not appealed) to the extent a party receives documented
evidence of such fees and expenses.
10.08 Notices. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly given when personally
delivered or may send by certified mail, return receipt requested, postage prepaid, addressed to
Executive at his residence address appearing on the records of the Company and to the Company at
its then current executive offices to the attention of the Board. All notices and communications
shall be deemed to have been received on the date of delivery thereof or on the third business day
after the mailing thereof, except that notice of change of address shall be effective only upon
actual receipt. No objection to the method of delivery may be made if the written notice or other
communication is actually received.
10.09 Survival. The provisions of this Article 10 shall survive the termination of
this Agreement, indefinitely.
IN WITNESS WHEREOF the following parties have executed the above instrument the day and year
first above written.
||WIRELESS RONIN TECHNOLOGY, INC.
||/s/ Jeffrey C. Mack
||Jeffrey C. Mack
||President and Chief Executive Officer
||/s/ Brian S. Anderson
||Brian S. Anderson