EXHIBIT 10.2 FORM OF TERMINATION AGREEMENT FOR EXECUTIVES OF THE COMPANY.
TERMINATION AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of November , 2001, by and
between NAVARRE CORPORATION, a Minnesota corporation (the "Company"), and
_____________________Vice President (the "Executive").
WHEREAS, the Company is engaged in the business of developing, marketing,
distributing and selling products to retailers and wholesalers of the musical
and computer software industry and their respective affiliated products; and
WHEREAS, the Company and Executive mutually desire to enter into a
Termination Agreement outlining specific terms and conditions in the case that
certain events trigger either the Executive's termination or diminishment in
position.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises herein contained, the parties hereto agree as follows:
1. TERMINATION. This Agreement and the obligation to pay the Executive under
paragraph 2 of this Agreement will only be triggered if (i) there is Change
in Control (as defined below) and (ii) within one (1) year after such
Change in Control any one of the following events occurs:
(a) Executive's employment with the company is terminated by the Company;
or
(b) There is any adverse change in Executive's status or position as an
executive officer of the Company, including without limitation, any adverse
change in Executive's status or position as a result of a material diminution in
Executive's duties, responsibilities or authority immediately prior to the
Change in Control or the assignment to Executive of any duties or
responsibilities which, in Executive's reasonable judgment, are inconsistent
with the Executive's status or position; or
(c) The Company substantially reduces the Executive's base salary that was
in effect immediately before the Change in Control or otherwise changes the
eligibility requirements or performance criteria for any benefit other than
salary, which adversely effects Executive.
2. PAYMENTS DUE. If any of the events described in paragraph 1 above is
triggered, the Company shall pay Executive a cash bonus ("Severance
Payment") in an amount equal to the Executive's Average Compensation (as
that term is defined below) for twelve (12) months, provided, however, that
in no event shall the amount due and payable hereunder constitute a
"Parachute Payment" within the meaning of the Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended. In the event that any portion of
the Severance Payment would be deemed a Parachute Payment, the amount of
the Severance Payment shall be reduced only to the extent necessary to
eliminate any such treatment or characterization.
3. DEFINITIONS. For purposes of this Agreement the following definitions
apply:
(a) "Average Annual Compensation" shall mean the average of all taxable
compensation and fringe benefits paid to or on behalf of the Executive by
Company, based on the two (2) most recent calendar years.
(b) "Change in Control" shall mean:
(i) the sale of all or substantially all of the assets of the Company,
(ii) the acquisition by any means of more than fifty percent (50%) of
the issued and outstanding voting stock of the Company by any entity, person or
group of persons acting in concert; provided, however, this subparagraph (ii)
does not apply to any offering by the Company to the public that has been
approved by the Company's Board of Directors,
(iii)the merger of the Company with, or the consolidation of the
Company into, another corporation or entity,
(iv) the commencement by an entity, person or group (other than the
Company or a subsidiary of the Company) of a tender offer or an exchange offer
for fifty percent (50%) or more of the outstanding voting stock of the Company;
or
(v) the election to the Board of Directors of the Company without the
recommendation or approval of the incumbent Board of Directors of the Company
the lesser of (i) three directors or (ii) directors constituting a majority of
the number of directors of the Company then in office.
4. MODIFICATIONS - WAIVER. No termination or modification of any provision of
this Termination Agreement or waiver of any right provided in it shall be
effective for any purpose unless specifically set forth in a writing signed
by the party to be bound thereby. No waiver of any right or remedy in
respect of any occurrence or event on one occasion shall be deemed a waiver
of such right or remedy in respect of such occurrence or event on any other
occasion.
5. ENTIRE AGREEMENT. This Termination Agreement contains the entire agreement
of the parties with respect to the subject matter hereof and supersedes all
other agreements, oral or written, with respect to the subject matter
contained in this Agreement.
6. CONTROLLING LAW. All questions concerning the validity and operation of
this Termination Agreement and the performance of the obligations imposed
upon the parties hereunder shall be governed by the laws of the State of
Minnesota.
IN WITNESS WHEREOF, the parties have executed this Termination Agreement as
of the date first set forth above.
NAVARRE CORPORATION, a Minnesota corporation
By:
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Its:
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Vice President
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