Exhibit 10.20
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 17th day of June, 1997 by and between
ACME TELEVISION HOLDINGS, LLC, a Delaware limited liability company, with
offices at 2450 Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 (hereinafter "Company") and
XXXXXXX X. XXXXX, residing at 0000 Xxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000
(hereinafter "Executive").
STATEMENT OF PURPOSE
Executive is one of the Management Members of the Company as that term
is defined in the Limited Liability Company Operating Agreement for the Company
(the capitalized terms used in this Agreement that are not defined herein are
defined in the LLC Agreement). Company wishes to employ Executive, and Executive
is willing to undertake such employment on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs Executive as President and
Chief Operating Officer to perform such management and executive duties on
behalf of the Company as the Chief Executive Officer or Board of Advisors of the
Company may from time to time determine.
2. DUTIES. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full
professional time, attention, knowledge and skills faithfully, diligently and to
the best of his ability in furtherance of the business of the Company. Executive
currently resides with his family in Columbus, Ohio. If the Board of Advisors or
60% in interest of the holders of the Class B Founders Units, as that term is
defined in the LLC Agreement, determine that it is in the best interest of the
Company, Executive will relocate to a city in a Company station market (along
with a majority of the Company's staff). In that event, Executive will be
entitled to a relocation package satisfactory to both Executive and 60% in
interest of the holders of the Class B Founders Units.
3. TERM. Executive shall be employed for a term of six (6) years subject
to a reduction to five (5) years in the event of an initial public offering of
the Company prior to the fifth anniversary of this Agreement, unless Executive's
employment is terminated prior to the expiration of that term pursuant to the
provisions hereof. After the expiration of the term, employment of the Executive
shall continue at will until terminated for any reason by either the Executive
or the Company upon ninety (90) days prior written notice to the other.
4. COMPENSATION. As compensation for his services hereunder, the Company
will pay Executive the following:
4.1 BASE SALARY. A Base Salary ("Base Salary") of a minimum of
$250,000.00 retroactive to January 1, 1997 per annum payable in monthly
installments in accordance with the Company's normal payroll practices.
Starting in 1998, the Base Salary shall increase annually as of January
1 by the amount of the increase in the Consumer Price Index (All Urban
Consumers) during the previous year, and shall be reviewed annually by
the Company's Compensation Committee to determine whether an additional
increase is appropriate. Executive's Base Salary shall be subject to
reduction (and subsequent restoration) as provided in Section 4.08 of
the LLC Agreement.
4.2 PERFORMANCE BONUS. Starting in 1998, Executive shall receive
a performance bonus in respect of each fiscal year during the term of
this Agreement in an amount up to 50% of his Base Salary in effect at
the end of such fiscal year in which the Company achieves between 101%
and 130% of its projected earnings before interest, taxes, depreciation
and amortization, which projections have been delivered to and accepted
by, the Company's Class B Founders as contemplated by the LLC Agreement
and the Investment Agreement referred to therein, and adjusted as
contemplated in the Investment Agreement for subsequent acquisitions
(the "EBITDA Projections"). The bonus shall be awarded on a straightline
basis in proportion to the EBITDA actually achieved, e.g. a bonus equal
to 1 2/3% of salary for each 1% by which actual EBITDA exceeds EBITDA
Projections.
4.3 MANAGEMENT CARRY. In addition to his Base Salary, performance
bonus and additional benefits, Executive shall be entitled to receive a
participating interest in distributions of the Company referred to as
the Management Carry, which is subject to vesting and divestment, all as
governed by and more particularly set out in the LLC Agreement for the
Company.
4.4 ADDITIONAL BENEFITS. During the term of this Agreement,
Executive shall be entitled to participate, to the extent he is eligible
under the terms and conditions thereof, in any pension, profit sharing,
retirement, hospitalization, insurance, medical service or other
employee benefit plan generally available to the executives of the
Company which may be in effect from time to time during the period of
his employment hereunder, it being understood that the Company shall pay
the entire costs of any health insurance or disability insurance
maintained by the Company for Executive in accordance with Company's
policies generally in effect.
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4.5 VACATIONS. Executive shall be entitled to four (4) weeks of
paid vacation (in addition to Company-wide holiday periods) annually,
two weeks of which may be carried forward to the following year.
5. REIMBURSEMENT. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder or in the business of the Company.
6. NON-COMPETITION AND BUSINESS OPPORTUNITIES. Executive is subject to
and agrees to be bound by the provisions of Section 9.02 of the LLC Agreement
regarding restrictions on competition with the Company and business
opportunities which provisions shall be deemed to be incorporated herein by
reference as if fully set out.
7. TERMINATION.
(a) The employment relationship of Executive with the Company may
be terminated prior to the expiration of the term of this Agreement as
contemplated by the provisions of Section 4.09 of the LLC Agreement
which shall be deemed to be incorporated herein as if fully set out. In
addition, the employment relationship may be terminated upon any sale of
the Company or all or substantially all of the Company's assets (a
"Company Sale").
(b) Severance pay shall be payable in connection with the
termination of this Agreement as follows:
(i) In the event of early termination by reason of
Executive's death or disability, Executive or his estate will be
entitled to one year's Base Salary as severance pay, payable in
monthly installments in advance.
(ii) In the event Executive's employment is terminated by
the Company after the occurrence of a "Sales Event" as that term
is defined in the Investment Agreement regarding the Company, he
shall be entitled to receive one year's Base Salary as severance
pay, payable in monthly installments in advance; provided,
however, that in the event that the Executive has breached his
FCC Cooperation obligations as set forth in the Investment
Agreement, he may be terminated without any severance payment and
if he subsequently breaches such FCC cooperation obligations he
shall not thereafter receive any further severance payments.
(iii) In the event Executive's employment is terminated by
the Company, without Cause, as that term is defined in the LLC
Agreement,
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he shall be entitled to receive severance pay for a period of
18 months, based upon his Base Salary in effect at the time of
his termination, payable in monthly installments in advance.
(iv) In the event that the Executive's employment is
terminated as a result of his resignation, termination for Cause
or a Company Sale, he shall not be entitled to any severance
payments.
8. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES. Executive represents and
warrants to the Company that: (i) the Executive has the unfettered right to
enter into this Agreement on the terms and subject to the conditions hereof and
(ii) neither the execution and delivery of this Agreement nor the performance by
Executive of any of Executive's obligations hereunder constitute or will
constitute a violation or breach of or a default under any agreement,
arrangement or understanding or any other restriction of any kind to which
Executive is a party or by which Executive is bound.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than those
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
10. NOTICE. Any notice required, permitted or desired to be given
pursuant to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
Acme Television Holdings, LLC
0000 Xxxxx, Xxxxxx, XX 00000
Attention: Xxx Xxxxx
Facsimile No.: (000) 000-0000
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If to Executive, to him at:
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under Paragraph 10. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail; by any other means of delivery it
shall be the date of receipt.
11. ASSIGNMENT. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive nor Company.
12. WAIVER. No course of dealing nor any delay on the part of the
Company in exercising any rights hereunder shall operate as a waiver of any such
rights. No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
executed and to be performed entirely therein.
14. SEVERABILITY. Should any clause, paragraph or part of this Agreement
be held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement which can be effected without such illegal
clause, paragraph or part shall nevertheless remain in full force and effect.
If, in the opinion of any court, any clause, paragraph or part of this Agreement
is unreasonable or unenforceable, such court shall have the right, power and
authority to excise or modify such provisions, or portions thereof, of this
Agreement as the court shall find not be reasonable or enforceable and to
enforce the remainder of such clause, paragraph or part as so excised or
modified.
15. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, Executive and Executive's heirs and personal
representatives.
16. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not constitute a part hereof or affect
in any way the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
ACME TELEVISION HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxx
_________________________________
Xxxxxx X. Xxxxx
Executive Vice President
/s/ Xxxxxxx X. Xxxxx
_________________________________
Xxxxxxx X. Xxxxx
President
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