EXHIBIT 10.23
-------------
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT, dated as of December 31, 1996 by and between MetaTools, Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇ ("Executive").
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Company is acquiring by means of a merger transaction all of the shares of
capital stock to be issued and outstanding of Real Time Geometry Corp., a
Delaware corporation ("RTG"), of which Executive has been an executive officer
and a holder of shares of capital stock or options or other rights to acquire
shares; and
WHEREAS, the Company desires to employ Executive as an executive officer of
the Company, and Executive desires so to serve the Company, upon the terms and
conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. Prior Agreements. Executive hereby represents and warrants to the
----------------
Company that all agreements, understandings or arrangements between Executive
and any other person or entity contain no terms that would be breached by
Executive as a result of, or that would in any way preclude or prohibit
Executive from, entering into this Agreement with the Company or performing any
of the responsibilities provided for in this Agreement.
2. Employment and Responsibilities.
--------------------------------
(a) General. Upon the terms and conditions herein set forth, the
-------
Company hereby agrees to employ Executive and Executive agrees to serve as Vice
President, Business Development of the Company, for the Term of Employment (as
defined in Section 3 hereof). In such capacity, Executive shall be responsible
for the business of RTG and the strategic business development activities of RTG
and shall report solely and directly to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman, President and
Chief Executive Officer of the Company, or to any successor Chief Executive
officer of the Company.
(b) Nature of Services. Except as provided in Sections 2(c) and 2(d)
------------------
hereof, during the Term of Employment Executive shall, except as from time to
time may be otherwise agreed to in writing by ▇▇. ▇▇▇▇▇▇▇, devote his full time
and attention during normal business hours to carrying out his responsibilities
hereunder, shall diligently serve the Company, shall in all respects conform to,
comply with and execute the lawful directions and
-1-
instructions given to him by ▇▇. ▇▇▇▇▇▇▇, or any successor Chief Executive
Officer of the Company, and shall diligently use his best efforts, skills and
abilities to promote the interests of the Company.
(c) Other Employment. During the Term of Employment, Executive may
----------------
render employment or consulting services to, invest in and engage in related
activities for (including, without limitation, acting as a director, partner or
joint venturer) Wexford Management LLC or any of its investment funds or other
affiliates and shall use reasonable, good faith efforts to do so in ways which
will (i) minimize any interference with the fulfillment of his responsibilities
hereunder, (ii) not result in the disclosure of any Confidential Information (as
defined in Section 6(a)) in violation of this Agreement, and (iii) not result in
any conflict of interest between the Company and any such Wexford entity.
(d) Charitable or Other Activities. Executive may (i) serve on
------------------------------
corporate, civic or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions, and (iii)
manage personal and immediate family investments, so long as such activities do
not interfere with the fulfillment of Executive's responsibilities hereunder.
(e) Place of Performance. The principal place of employment of
--------------------
Executive shall be at offices maintained by the Company (or RTG) in Short Hills,
New Jersey or another location within 10 miles of Short Hills, New Jersey, and
the Company understands that Executive and his family shall have their permanent
residence in or around Short Hills, New Jersey. Subject to the foregoing,
Executive realizes that his responsibilities hereunder may require travel to and
the rendering of services in Carpenteria, California, where the headquarters
offices of the Company are located, and other locations.
3. Term of Employment. Subject to the provisions of Section 5 hereof,
------------------
Executive's term of employment under this Agreement shall commence on January 1,
1997 (the "Commencement Date") and shall terminate on December 31, 1999 (the
"Term of Employment").
4. Compensation and Other Benefits. The Company shall pay and provide
-------------------------------
the following compensation and other benefits to Executive during the Term of
Employment for the services to be provided hereunder:
(a) Base Salary. The Company shall pay to Executive a base salary
-----------
(the "Base Salary") at the rate of $150,000 per annum, payable in approximately
equal installments in accordance with the customary payroll practices of the
Company. If the rate per annum of the base salary paid to Executive is
increased during the Term of Employment, such increased rate shall thereafter
constitute the Base Salary for all purposes of this Agreement.
(b) Annual Bonus. Executive shall be paid a cash bonus with respect
------------
to the first year of the Term of Employment of not less than $100,000 and with
respect to each
-2-
subsequent year of the Term of Employment in amounts which are commensurate with
the bonuses awarded to the senior executives of the Company (the "Annual
Bonus"). The Annual Bonus shall be paid in accordance with the policies of the
Company, but in no event later than two months after the end of each such year.
(c) Company Stock Options. The Company shall grant to Executive
---------------------
options (the "Options") to purchase 200,000 shares of Common Stock of the
Company plus such additional number of shares to be determined on the date
hereof (the "Common Stock"). The Options shall conform to the following terms:
(i) the Options shall be granted on or before January 15, 1997;
(ii) the Options shall be exercisable at a price per share equal to
the fair market value per share of the Common Stock on the date of grant;
(iii) the Options shall become exercisable with respect to one
third of the number of shares of Common Stock subject to them each year on the
anniversary of the date of grant;
(iv) the Options shall become exercisable with respect to all of the
shares of Common Stock subject to them upon any termination of the Term of
Employment by the Company without Cause or by Executive for Good Reason pursuant
to Section 5(b) hereof or upon any Change of Control (as defined below in this
Section 4(c)) [Side letter to follow re: FD transaction];
(v) The Options shall be issued under the Company's 1996 Nonstatutory
Stock Option Plan and except as expressly stated in this Section, in all other
respects, the Options shall conform to the terms of the Company's standard
option agreement; provided, however, that the Options may only be amended with
-----------------
the prior consent of Executive;
(vi) as soon as possible after the Closing the shares of Common Stock
subject to the Options shall be registered under the Securities Act of 1933, as
amended, pursuant to a Registration Statement on Form S-8 that has been declared
effective as to such shares by the Securities and Exchange Commission, and such
shares shall be qualified for trading on the principal markets for the Common
Stock upon their issuances; and
(vii) the Options shall be approved by the Board of Directors of
the Company or a compensation committee thereof satisfying the conditions
specified for approval by a Board of Directors or committee thereof consisting
of "nonemployee directors" under Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended.
The grant of the Options shall not preclude Executive from participating in
stock option plans maintained by the Company from time to time for the benefit
of its Executive Employees generally. "Change in Control" shall mean (i) the
acquisition by any individual, entity or
-3-
group (as defined for purposes of Sections 13 and 14 of the Securities Exchange
Act of 1934, as amended) of 35% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors or (ii) the approval by the shareholders of the Company of
a reorganization, merger, consolidation or other transaction that upon
consummation would effectively result in such an acquisition of (as described
above in (i)) voting securities of the Company (or of any successor or surviving
entity).
(d) Employee Benefit Plans. During the Term of Employment, Executive
----------------------
shall be entitled to participate in such pension, retirement, life insurance,
health and other welfare plans, programs and benefits as are maintained by the
Company from time to time for the benefit of its executive employees (the
"Plans").
(e) Vacation; Fringe Benefits. During the Term of Employment,
-------------------------
Executive shall be entitled to four weeks of vacation per year and to any other
fringe benefits and perquisites that are accorded to its executive employees
generally by the Company from time to time (the "Fringe Benefits").
(f) Reimbursement of Expenses. The parties anticipate that in the
-------------------------
course of fulfilling his responsibilities under this Agreement, Executive will
incur reasonable travel, entertainment and other out-of-pocket business expenses
for the account of the Company. Executive shall be entitled to reimbursement
for all reasonable out-of-pocket business expenses so incurred, upon submission
to the Company of an adequate, written accounting which complies with the
Company's policies regarding reimbursement for business expenses. The travel
expense policy applicable to Executive shall be that applicable to the most
senior executives of the Company.
(g) Company Loan. At the Closing, the Company shall loan to Employee
------------
the principal amount of $1,000,000 pursuant to a note and other instruments and
agreements as shall be consistent with the terms of this Section 4(g) (the
"Loan"). The Loan shall be repayable on January 15, 2000, shall be prepayable
without penalty in whole or in part (including all accrued interest on the
principal amount prepaid), and shall bear interest at the Applicable Federal
Rate under Section 1274(d) of the Internal Revenue Code of 1986, as amended, as
reported by the Internal Revenue Service, on the date the loan is made, payable
at maturity or upon prepayment as aforesaid, and compounded semiannually. The
Loan shall be secured by all of the shares of Common Stock underlying the fully-
exercisable and vested stock options received by Executive under Section 1.2 of
the Stock Purchase Agreement (as defined below) and held by Executive as of the
date the Loan is made, pursuant to arrangements that permit the release of
shares underlying such options in order to permit the sale or pledge thereof to
raise after-tax proceeds to pay or prepay principal and accrued interest on the
Loan at maturity or from time to time before maturity. Executive shall not be
personally obligated to pay any principal of or interest on the Loan nor shall
any of his assets secure payment of the principal of and interest on the Loan,
except for such shares underlying such options, solely from which the Company
shall seek to realize payment in the event of any failure of payment on the part
of Executive.
-4-
5. Termination of the Term of Employment.
-------------------------------------
(a) Termination for Cause or Without Good Reason.
--------------------------------------------
(i) The Company shall have the right to terminate the Term of
Employment for Cause (as defined in Section 5(a)(ii) hereof) prior to December
31, 1999, and Executive shall have the right to terminate the Term of Employment
without Good Reason (as defined in Section 5(b)(ii) hereof) prior to December
31, 1999. If the Term of Employment is so terminated, Executive shall be
entitled to receive payment of the pro rata portion of the Base Salary through
and including the date of such termination. Executive shall not be eligible to
receive Base Salary or to participate in any of the Plans or to receive any of
the Fringe Benefits with respect to any periods after the date of such
termination, except for the right to receive vested or statutorily available
benefits under any of the Plans in which Executive participates in accordance
with the terms of such Plans. The Company shall also pay to Executive promptly
(rather than when normally payable) a pro rata portion of the Annual Bonus (with
respect to only the first year of the Term of Employment) corresponding to the
portion of the year occurring prior to the date of such termination.
(ii) "Cause" shall mean (A) the commission of an act of fraud or
embezzlement which results in loss, damage or injury to the Company, whether
directly or indirectly; (B) Executive's use of narcotics, liquor or illicit
drugs has had a detrimental effect on the performance of his employment
responsibilities, as determined by the Company's Board of Directors; (C) the
arrest, indictment or filing of charges relating to a felony or misdemeanor,
either in connection with the performance of the Executive's obligations to the
Company or which shall adversely affect the Executive's ability to perform such
obligations; (D) gross negligence, breach of fiduciary duty or material breach
of the terms of this Agreement; or (E) the commission of an act which
constitutes unfair competition with the Company. "Good Reason" shall mean a
material breach by the Company of its obligations under this Agreement which is
not remedied within 30 calendar days after receipt by the Company of written
notice of such breach from Executive, including without limitation any
diminution in the responsibilities of Executive hereunder, any change in the
office to which Executive reports, any change in the principal place of
employment of Executive or any reduction of or failure to pay when due the Base
Salary or the Annual Bonus (as and to the extent provided for in Section 4(b)
above).
(iii) The date of termination of the Term of Employment by the
Company under this Section 5(a) shall be the date specified in a written notice
of termination delivered by the Company to Executive (which date shall not be
earlier than the date of such written notice), unless no such date is specified
in such notice, in which case the date of termination shall be the date of
receipt by Executive of written notice of termination. The date of termination
of the Term of Employment by Executive under this Section 5(a) shall be 60
calendar days after receipt by the Company of written notice of termination.
-5-
(b) Termination Without Cause or for Good Reason.
--------------------------------------------
(i) The Company shall have the right to terminate the Term of
Employment without Cause prior to December 31, 1999, and Executive shall have
the right to terminate the Term of Employment for Good Reason prior to December
31, 1999. If the Term of Employment is so terminated, Executive shall be
entitled to receive (A) payment when due under Section 4 hereof of the Base
Salary and Annual Bonus through December 31, 1999, (B) such benefits and
payments as may be provided in the event of termination of employment or
resignation under the terms and provisions of any of the Plans in which
Executive participates, (C) reimbursement in accordance with Section 4(f) hereof
of all business expenses incurred through the date of termination, (D) payment
of all vacation pay not previously paid, and (E) continuation of such coverage
for Executive and Executive's immediate family as was in effect on the date of
termination under any of the Plans, or comparable benefits, commencing on the
date of such termination and ending on December 31, 1999; provided, however,
that such coverage shall cease, with respect to any or all of the Plans, when
Executive is covered by an employee plan or program providing substantially
similar or more generous benefits. In the event of such termination of the Term
of Employment, the Options shall become exercisable on the date of termination
with respect to all of the shares of Common Stock subject to them. After such
termination of the Term of Employment, Executive shall no longer be entitled to
any of the Fringe Benefits. Any obligations of the Company pursuant to this
Section are contingent on Executive signing a Release of Claims. A "Release of
Claims" shall mean a waiver by Executive, in a form reasonably satisfactory to
the Company, of all employment related obligations of and claims and causes of
action against the Company (other than claims for any such severance payments
due and payable).
(ii) The amounts provided for in Section 5(b)(i) hereof are intended
to be liquidated damages in lieu of any other liability or obligations of the
Company in respect of termination of the Term of Employment by the Company
without Cause or by Executive for Good Reason.
(iii) The date of termination of the Term of Employment by the
Company under this Section 5(b) shall be the date specified in a written notice
of termination delivered by the Company to Executive (which date shall not be
earlier than the date of such written notice), unless no such date is specified
in such notice, in which case the date of termination shall be the date of
receipt by Executive of written notice of termination. The date of termination
of the Term of Employment by Executive under this Section 5(b) shall be 30
calendar days after receipt by the Company of written notice of termination,
provided that the Good Reason specified in such notice shall not have been
remedied by the Company during such 30 calendar day period.
(c) Death. If Executive dies during the Term of Employment, the Term
-----
of Employment shall terminate on the date of death and Executive's beneficiary
or estate shall be entitled to receive (i) payment of the pro rata portion of
the Base Salary through and including the date of death, (ii) payment (promptly,
rather than when normally due) of a pro rata portion of the Annual Bonus
corresponding to the portion of the year occurring prior to
-6-
the date of death, and (iii) such survivor benefits and payments for Executive's
family as Executive is entitled to under any of the Plans.
(d) Disability. If Executive becomes Permanently Disabled (as defined
----------
below in this Section 5(d)) during the Term of Employment, the Company shall be
entitled to terminate the Term of Employment by written notice to Executive
specifying the reason for and date of such termination (which date shall not be
earlier than the date of such written notice). In the event of such
termination, Executive shall be entitled to receive (i) payment of the pro rata
portion of the Base Salary through and including the date of termination, (ii)
payment (promptly, rather than when normally due) of a pro rata portion of the
Annual Bonus corresponding to the portion of the year occurring prior to the
date of death, and (iii) such disability and other benefits and payments as
Executive is entitled to under any of the Plans. Executive shall be deemed
"Permanently Disabled" when, and only when, he is, and has for a period of six
consecutive months been, unable by reason of illness or accident to
substantially perform his responsibilities hereunder.
6. Confidentiality; Company Property.
---------------------------------
(a) Confidentiality. Executive recognizes that the services to be
---------------
performed by him hereunder are special, unique and extraordinary in that, by
reason of his employment hereunder and his association with the Company, he may
acquire or has acquired Confidential Information concerning the Company the use
or disclosure of which could cause the Company substantial loss which could not
be readily calculated and for which no remedy at law would be adequate.
Accordingly, Executive agrees that he will not at any time, except in
fulfillment of his responsibilities hereunder or with the written consent of the
Company disclose any Confidential Information that he may learn or has learned
by reason of his employment or association with the Company or use any such
information for his own personal benefit or gain. The term "Confidential
Information" means information not previously disclosed to the public or to the
trade by the Company's management with respect to the Company's products,
facilities and methods, trade secrets and other intellectual property, systems,
procedures, manuals, confidential reports, price information, customer lists,
financial information (including the revenues, costs or profits associated with
any of the Company's activities or products), business plans, prospects,
opportunities or other information. Confidential Information shall not include
information which (i) is or becomes generally available to the public other than
as a result of disclosure by Executive in violation of this Section 6(a) or (ii)
Executive is required to disclose under any applicable laws, regulations or
directives of any government agency, tribunal or authority having jurisdiction
in the matter or under subpoena or other process of law. Executive understands
and agrees that the rights and obligations set forth in this Section 6(a) shall
extend beyond the Term of Employment.
(b) Company Property. Executive confirms that all Confidential
----------------
Information is and shall remain the exclusive property of the Company. All
business records, papers and documents kept or made by Executive relating to the
business of the Company or any Confidential Information shall be and remain the
property of the Company. Upon the
-7-
termination of the Term of Employment or upon the request of the Company at any
time, Executive shall promptly deliver to the Company, and shall not without the
prior express written consent of the Company retain, all copies of (i) any
written materials not previously made available to the public, or (ii) records
and documents made by Executive or coming into his possession concerning any
Confidential Information. Executive agrees that the rights and obligations set
forth in this Section 6(b) shall extend beyond the Term of Employment.
(c) Assignment of Inventions. Executive shall sign and abide by the
------------------------
Company's standard invention assignment agreement.
(d) Injunctive Relief. Without intending to limit the remedies
-----------------
available to the Company, Executive acknowledges that a breach of any of the
covenants contained in this Section 6 may result in material irreparable injury
to the Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Company shall be entitled to obtain a
temporary restraining order or a preliminary or permanent injunction restraining
Executive from engaging in activities prohibited by this Section 6.
7. Assignability.
--------------
(a) By Executive. Neither this Agreement nor any right, duty,
------------
obligation or interest hereunder shall be assignable by Executive without the
prior express written consent of the Company.
(b) By the Company. This Agreement and all of the Company's rights
--------------
and obligations hereunder may be assigned or transferred by it to any entity
which at any time by sale, merger, consolidation or other transaction acquires
all or substantially all of the assets of the Company or to which the Company
transfers all or substantially all of its assets, provided that any such
assignee agrees in writing to assume all of the obligations of the Company
hereunder. Upon such assignment or transfer, and upon such assumption, any such
entity shall be deemed to be substituted for all purposes as the Company
hereunder.
8. Severability. If the final determination of a court of competent
------------
jurisdiction declares, after the expiration of the time within which judicial
review (if permitted) of such determination may be perfected, that any term
hereof is invalid or unenforceable, (a) the remaining terms hereof shall be
unimpaired and (b) the invalid or unenforceable term shall be deemed replaced by
a term that is valid and enforceable and that comes closest to implementing the
intention of the invalid or unenforceable term.
9. Amendment; Waiver. This Agreement may not be modified, amended or
-----------------
waived in any manner except by an instrument in writing signed by both parties
hereto. The waiver by either party of compliance with any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any other provision of this Agreement, or of any subsequent breach by such party
of any provision of this Agreement.
-8-
10. Withholding. The Company shall be entitled to deduct and withhold all
-----------
applicable Federal, state and local taxes which the Company is required to
deduct or withhold from any payments to or on behalf of Executive under this
Agreement.
11. Beneficiaries. Executive shall be entitled to select a beneficiary or
-------------
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such selection, in either case by giving the
Company written notice thereof.
12. Governing Law. All matters affecting this Agreement, including the
-------------
validity thereof, are to be governed by, interpreted and construed in accordance
with the laws of the State of Delaware.
13. Notices. Any notice hereunder by either party to the other shall be
-------
given in writing by personal delivery or certified mail, return receipt
requested. If addressed to Executive, the notice shall be delivered or mailed
to Executive at the address specified in the Company's personnel records or such
other address as may be specified in a notice of change of address given by
Executive to the Company, or if addressed to the Company, the notice shall be
delivered or mailed to:
MetaTools, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or to such other address as may be specified in a notice of change of address
given by the Company to Executive. A notice shall be deemed given, if by
personal delivery, on the date of such delivery or, if by certified mail, on the
date shown on the applicable return receipt.
14. Merger. This Agreement supersedes all prior or contemporaneous
------
negotiations, commitments and agreements between the Company and Executive with
respect to the subject matter hereof, and such other negotiations, commitments
and agreements will have no further force or effect.
15. Counterparts. This Agreement may be executed by either of the parties
------------
hereto in counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
16. Headings. The headings of paragraphs herein are included solely for
--------
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
17. Effectiveness of Agreement. This Agreement shall not be effective
--------------------------
unless the transaction contemplated by the Stock Purchase Agreement dated as of
December 20, 1996 (the "Stock Purchase Agreement"), is consummated and the Stock
Purchase Agreement is
-9-
signed by the Company and RTG (The "Purchase"). In the event the Purchase is
terminated pursuant to Section 8.1 of the Stock Purchase Agreement, this
Agreement shall be null and void.
18. Arbitration.
------------
(a) Except as provided in Section 6(d), Executive agrees, that any
dispute or controversy arising out of, relating to or in connection with this
Agreement, or the interpretation, validity, construction, performance, breach,
or termination thereof, shall be finally settled by binding arbitration to be
held in Santa ▇▇▇▇▇▇▇ County, California under the National Rules for the
Resolution of Employment Disputes supplemented by the Supplemental Procedures
for Large Complex Disputes, of the American Arbitration Association as then in
effect (the "Rules"). The arbitrator may grant injunctions or other relief in
such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) shall apply Delaware law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitrations proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law.
(c) Except as is otherwise provided in Section 21 below, the Company
and the Executive shall each pay half of the costs and expenses of such
arbitration.
(d) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 18, WHICH
DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, ANY ASPECT OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH
OR TERMINATION THEREOF TO BINDING ARBITRATION AND THAT THIS ARBITRATION CLAUSE
CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE
RELATIONSHIP.
19. No Mitigation; No Offset. In the event of any termination of
------------------------
employment under Section 5, Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts due Executive under
this Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain. Any amounts due under Section 5 are in
the nature of severance payments, or liquidated damages, or both, and are not in
the nature of a penalty.
20. Legal Fees and Other Expenses. In the event that a claim for payment
-----------------------------
or benefits under this Agreement is disputed, Executive shall be reimbursed for
all attorney fees and expenses incurred by Executive in pursuing such claim,
provided that Executive is
-10-
successful as to a substantial part of the disputed claim by reason of
litigation, arbitration or settlement.
21. Indemnification. The Company agrees that if Executive is made a party
---------------
or is threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a director or officer of the Company and/or any
affiliate or subsidiary or is or was serving at the request of the Company
and/or any affiliate or subsidiary as a director, officer, member, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including, without limitation, service with respect to employee
benefit plans, whether or not the basis of such Proceeding is alleged action in
an official capacity as a director, officer, member, employee or agent while
serving as a director, officer, member, employee or agent, he shall be
indemnified and held harmless by the Company to the fullest extent authorized by
Delaware law, including without limitation by the advancement of his expenses,
as the same exists or may hereafter be amended, against all expenses incurred or
suffered by Executive in connection therewith, and such indemnification shall
continue as to Executive even if Executive has ceased to be an officer, director
or agent, or is no longer employed by the Company and shall inure to the benefit
of his heirs, executors and administrators.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed pursuant to the authority of its Board of Directors, and Executive has
executed this Agreement, as of the day and year first written above.
METATOOLS, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Title: Chairman and CEO
--------------------
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
-11-