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EXHIBIT 10.18
March 26, 1998
Xxxxx Xxxxxxx, President
Opryland Music Group
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxxxx:
This letter agreement (the "Agreement"), dated as of the date above, is
between Xxxxxxx Entertainment Company (the "Company"), a Delaware corporation,
and you. Upon the terms and conditions of this Agreement, the Company will
employ you and you accept employment with the Company and agree to perform the
duties required of you to the best of your ability. The term of this Agreement
will begin on the date above and will terminate at the close of business on
February 28, 2003, unless otherwise extended or earlier terminated (the
"Employment Period").
1. In return for the services rendered by you, you will be
entitled to the following compensation:
(a) A base salary of $200,000 per annum (the "Base Salary"),
subject to such increases as may from time to time be determined by the
Board of Directors and/or the Chief Executive Officer of the Company,
payable in monthly installments in accordance with the ordinary payroll
payment schedule of the Company. Your Base Salary will be subject to
all applicable withholding and payroll taxes plus other withholdings
authorized by you.
(b) A cash bonus payable annually in the amount of 3% of
the three-year average of the net publishers' share of Opryland
Music Group, Inc. to be calculated in a manner consistent with
previous computations by the Company of the net publishers' share.
(c) A cash bonus payable annually in the discretion of the
Company and at such time and upon such terms and conditions as that
paid to other key executives of the Company not to exceed nine percent
(9%) of Base Salary.
(d) Options to acquire 25,000 shares of Xxxxxxx Entertainment
Company common stock under the Company's 1997 Stock Option and
Incentive Plan, with an exercise price equal to the closing price of
the Company's stock on February 19, 1998, to vest over three (3) years
in increments on each date set forth below on which you are an employee
of the Company:
33 1/3% on February 28, 2001
33 1/3% on February 28, 2002
33 1/3% on February 28, 2003.
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Xxxxx Xxxxxxx, President
March 26, 1998
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Notwithstanding the foregoing, 100% of such options shall vest
immediately upon your death or Disability (as defined in Section 2 of
this Agreement), or upon termination of employment with the Company
pursuant to the terms of the Severance Agreement between you and the
Company dated August 8, 1994.
(e) Use of a luxury automobile provided by the Company.
(f) All other benefits and perquisites as are customarily
provided to other executive officers of the Company.
In return for the compensation and benefits described above (the
"Compensation"), you agree that you will provide substantially all of your
working time, attention and energies to the business of the Company in your
position as President, Opryland Music Group, and will perform services at the
request of the Chief Executive Officer or the Board of Directors of the Company;
you will use your best efforts to advance the best interests of the Company; and
you will not engage in outside business activities which would interfere with
the performance of your duties. Notwithstanding the foregoing, it is
acknowledged by the Company that you may continue your association with Xxxxxxx
Hills Music and Xxxxxxx'x Barn, and that such continued involvement in a manner
and extent consistent with previous involvement will not be deemed to interfere
with the duties described in this letter. You will not be required at any time
as a condition of continued employment to relocate your domicile from Nashville,
Tennessee, to any other location.
2. Your employment with the Company may be terminated before the
end of the Employment Period, as follows:
(a) You may be terminated by the Company for cause upon oral
notification by the Company. If you are terminated for cause, you will
not be entitled to receive any Compensation beyond the date of your
termination for cause. Termination for cause, as used here, means
termination of your employment by the Company because: (i) you are
convicted of or plead guilty or nolo contendere to any felony or any
misdemeanor involving moral turpitude, (ii) you engage in self-dealing
or fraud with respect to the Company, (iii) you engage in competition
with the Company. To engage in competition means to own, manage,
operate, control or participate in the ownership, management, operation
or control of, or be connected as an officer, employee, consultant,
partner, director or otherwise with, or have any financial interest in,
or aid or assist anyone else in the conduct of, any business engaged in
music publishing or any similar or related business. Ownership of one
percent or less of the voting stock of any publicly held corporation or
involvement with Xxxxxxx Hills Music or Xxxxxxx'x Barn will not be a
violation of this noncompetition covenant.
(b) You may be terminated by the Company without cause upon
oral notification by the Company. If you are terminated without cause,
you will be entitled to receive your Base Salary and bonuses for the
period prior to termination, the Company will continue to pay your Base
Salary and bonuses for the balance of the Employment Period, and the
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Xxxxx Xxxxxxx, President
March 26, 1998
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unvested options provided to you under paragraph 1(d) above and all
other unvested options shall vest upon the date of such termination.
For purposes of this Section 2(b), the bonus of net publishers' share
payable to you for each year (including any partial year) during the
balance of the Employment Period shall be identical to the bonus of net
publishers' share actually paid to you for 1997 (prorated for any
partial year). You will not be entitled to any other Compensation
beyond the date of such termination.
(c) You may be terminated by the Company on account of
disability upon oral notification by the Company. Disability means your
absence from or inability to perform your duties on a full-time basis
for ninety (90) consecutive days due to physical or mental illness, as
determined by the Company. If the Company terminates this Agreement due
to Disability, you will not be entitled to Compensation except amounts
you are entitled to receive under the Company's long term disability
benefits plan (payable in accordance with the terms of that plan as of
the date of your Disability) and except as set forth in Sections 1(d)
and 2(f) of this Agreement.
(d) If you should die during the Employment Period, the
Company will pay an amount equal to three (3) monthly installments of
your Base Salary in effect at the time of your death directly to your
Beneficiary (as set forth on the attached Designation of Beneficiary
form). Neither your Beneficiary nor your estate will be entitled to any
other Compensation beyond the date of your death except as set forth in
Sections 1(d) and 2(f) of this Agreement.
(e) You may resign at any time upon ninety (90) days prior
written notice to the Company. If you resign, you will be entitled only
to the payment of your Base Salary up to and including the date of your
resignation. You will not be entitled to any other Compensation except
as set forth in Section 2(f) of this Agreement.
(f) Upon termination of your employment for any reason, you
(or your beneficiary) will be entitled to receive any Company
retirement benefits from employee benefit plans sponsored by the
Company to which you are entitled by virtue of your age and length of
service under the terms of those employee benefit plans. Those benefits
include: Retirement Plan and 401(k) Savings Plan benefits; nonqualified
plan benefits from those plans in which you participate at the time of
your termination of employment; and retiree medical benefits. These
benefits are fully described in the employee benefit plan documents
and, where applicable, in the summary plan descriptions for those
plans.
You also agree to keep confidential all trade secrets, proprietary
information, and confidential information (the "Confidential Information") which
you have learned during your employment with the Company, which you acknowledge
to be the property of the Company. You will use your best efforts and utmost
diligence to guard and protect the Confidential Information. Furthermore, you
agree that you will not take with you but will leave with the Company all
records
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Xxxxx Xxxxxxx, President
March 26, 1998
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and papers on all matter of whatever kind which bear on this Confidential
Information, regardless of the reason your employment is terminated.
3. There are also several miscellaneous matters in connection
with this Agreement to which you and the Company agree. They are as follows:
(a) During the Employment Period, you will be eligible for and
entitled to participate in all employee benefit plans that are provided
to other key executives of the Company.
(b) You may incur reasonable expenses for promoting the
Company's business, including expenses for entertainment, travel and
similar items. The Company will reimburse you for all such expenses
upon your periodic presentation of an itemized account or voucher of
such expenditures consistent with Company policy.
(c) The validity, interpretation, construction and performance
of this Agreement (and every other issue arising under it) will be
governed by the laws of the State of Tennessee, without giving effect
to the principles of conflict of laws of such State. Since the
Agreement is made, negotiated and executed between you, a resident of
Davidson County, Tennessee, and the Company which has its principal
executive offices located in Davidson County, Tennessee, you and the
Company each agree and consent to the jurisdiction of, and agree that
any controversy between you and the Company arising out of this
Agreement will be brought in: the United States District Court for the
Middle District of Tennessee, Nashville Division; the Davidson County,
Tennessee Circuit Court; or such other court located within Davidson
County, Tennessee, as may have subject matter jurisdiction over the
controversy.
(d) You acknowledge that the services to be rendered by you
are unique and personal and therefore may not be assigned or delegated.
The rights and duties of the Company under this Agreement will inure to
the benefit of and will be binding upon the successors and assigns of
the Company.
(e) You and the Company entered into a Severance Agreement
dated August 8, 1994. As a result of the Merger Agreement between
Westinghouse Electric Corporation and the Company dated February 9,
1997, which merger was consummated on September 30, 1997, the Severance
Agreement provides to you certain rights and benefits for a period of
two years ending on September 30, 1999. The Severance Agreement shall
remain in full force and effect in accordance with its terms. You will
be entitled to the benefits of this letter agreement and the Severance
Agreement; provided that any monetary payments to be made to you
pursuant to Sections 2(b) or 2(d) of this letter agreement shall offset
or be offset by any Severance Compensation payable to you under the
Severance Agreement.
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Xxxxx Xxxxxxx, President
March 26, 1998
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(f) You acknowledge and agree that there are no agreements,
representations or other promises about employment that are not set
forth in this Agreement, and that this Agreement embodies the entire
Agreement between you and the Company on this subject. This Agreement
may be amended only by a subsequent agreement in writing signed by you
and the Company.
I apologize for the length of this letter agreement, but I wanted to
make sure that it is clear about everything. If this satisfactorily expresses
our agreement, please sign both of the originals I have enclosed. Keep one for
your files and send the second to my attention.
I look forward to our continued working relationship for at least the
next five years.
Sincerely,
Xxxxx X. London
President and Chief Executive Officer
I, Xxxxx Xxxxxxx, by signing below, signify that I have read this
letter agreement, understand its terms and conditions, and agree to be bound.
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Xxxxx Xxxxxxx
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