EXHIBIT 10.1 EMPLOYMENT AGREEMENT
CELEBRITY INTERVIEWS, INC.
000 XXXXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
November 1, 1999
Xx. Xxxx Xxxxxx 0000 Xxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Dear Mr. Berlin:
The following constitutes the employment agreement (the "Agreement") between
you (the "Executive") and Celebrity Interviews, Inc. (the "Company"), a Delaware
corporation and a wholly-owned subsidiary of Xx0.xxx Inc., a Colorado
corporation ("Xx0.xxx"). This is the Employment Agreement referred to in the
Asset Purchase Agreement (the "Purchase Agreement"), dated as of November 11,
1999, among Xx0.xxx, the Company, the Executive and Xxx Xxxxxx. Capitalized
terms used herein without definition shall have the meanings accorded them in
the Purchase Agreement.
1. EMPLOYMENT; ACCEPTANCE OF EMPLOYMENT The Company hereby employs the
Executive during the Term (as defined below) on a full-time and in-person basis
to render exclusive services to the Company as its president. The Executive
hereby accepts this employment and will render his services as required by the
Company conscientiously, loyally, competently and to the best of his talents and
abilities throughout the Term in accordance with the direction and control of
his designated supervisor. During the Term, the Executive will also have the
title of Senior Vice President, Program Content and Licensing, of Xx0.xxx.
2. TERM OF AGREEMENT. The initial term of this Agreement shall commence on
the date hereof and terminate on the day prior to the third anniversary of the
date of this Agreement. This Agreement may be renewed by the Company upon
90 days' written notice to the Executive prior to the expiration of the initial
term or any renewal term and acceptance of such offer of renewal by the
Executive. The initial term, as extended by any renewal term agreed to by the
parties, is referred to herein as the "Term".
3. EXECUTIVE'S DUTIES AND RIGHTS.
a. The Executive's principal duties shall be to use his contacts and
experience in the entertainment industry to further the interests of
Xx0.xxx in its effort to become a significant presence as a producer
of and an outlet for entertainment-related audio and video information
distributed on the World Wide Web and syndicated in various other
media. The Executive shall endeavor to conduct video and audio
interviews with celebrities, in cooperation with the needs of Xx0.xxx,
and appear on-screen as host and interviewer upon request. The
Executive shall manage the ongoing syndication business of the Company
subject to direction by Xx0.xxx. The Executive shall provide such
other related duties and services as may be reasonably assigned to him
from time to time in the conduct of the business of the Company or
Xx0.xxx.
b. The Executive's services shall be rendered at the Company's West Coast
and East Coast offices, as appropriate. The Executive shall travel
between the Company's offices and to such other locations as the
Company may request consistent with its business needs. Travel and all
ordinary and necessary business expenses will be reimbursed by the
Company in accordance with the Company's policies applicable to its
senior executives.
c. At the request of the Executive, the Company will employ up to three
employees, at an aggregate annual compensation cost of $105,000 (plus
standard employee benefits), who will
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primarily participate in the ongoing interviewing and radio
syndication business of the Company.
d. At the request of the Executive, the Company will employ as many
independent contractors as it believes necessary as long as the fees
paid to such independent contractors are within the Company's annual
budget as approved by its Board.
4. EXCLUSIVITY, RESTRICTIVE AGREEMENTS.
a. During his employment, the Executive shall devote all of his business
time, skill and energies exclusively to the business of the Company
and Xx0.xxx; PROVIDED, that (i) the Executive shall have the right to
devote such amounts of his time to produce and broadcast the Critics'
Choice Awards for the Broadcast Film Critics Association ("BFCA")
consistent with past requirements and to his own screenwriting
activities (so long as, in either case), the Executive performs the
work outside the course of his employment and without interruption to
his duties and without the use or benefit of any property owned by the
Company or Xx0.xxx and (ii) nothing in this Agreement shall impair the
rights of the Executive to his book TOXIC FAME and all proceeds of any
exploitation thereof.
b. The Executive acknowledges that the nature of the services, position
and expertise of the Executive are such that he is capable of
competing with the Company and seriously damaging its business and its
prospects to the detriment of its stockholders and employees. In
consideration of the Company's performance of its obligations under
this Agreement, during the Term and thereafter during the Restricted
Period (as defined below) the Executive shall not (i) directly or
indirectly enter into the employ of, or render any advice or services,
whether or not for compensation, to, any Person (as defined below)
engaged in any Competitive Business (as defined below); (ii) directly
or indirectly engage in any Competitive Business; and (iii) directly
or indirectly become interested, whether or not for compensation, in
any Competitive Business as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor or in any other relationship or capacity or, in
the case of any such company whose securities are traded on a national
securities exchange in the United States or otherwise or in the
over-the-counter market, acquire, directly or indirectly, an interest
in excess of one percent (1%) of the outstanding capital stock of such
company. The Company's business is worldwide in scope; accordingly,
the Executive agrees that this covenant not to compete shall not be
subject to any geographical limit.
c. For purposes of this Section, any "Competitive Business" shall mean
any business (including, for the avoidance of doubt, any division,
unit, subsidiary or affiliate of any other business whether or not
such other business is a Competitive Business, unless the Executive
can demonstrate that his employment by, engagement in, or his interest
in, such unit, division, subsidiary or affiliate does not and will not
require him to provide services, information, advice or relevant
knowledge, skill, know-how or contacts to the Competitive Business
during the Restricted Period) which is principally engaged in the
design or development of digital compression, or streaming
technologies, in the design, development or operation of broadcast
sites on the Internet, or in the production of broadband or other
content which is directly competitive with content produced by
Xx0.xxx.
d. For purposes of this Section, "Person" shall mean any corporation,
partnership, trust, individual or any other entity.
e. For all purposes of this Section 4, "Restricted Period" shall be the
365 days immediately following termination of employment if such
termination is by resignation by the Executive or termination by the
Company with Cause (as defined in Section 7.a). There shall be no
Restricted Period upon expiration of the Term.
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5. COMPENSATION.
a. During the Term, the Executive shall receive base compensation at the
rate of $125,000 per year, payable in accordance with the Company's
regular payroll policies. In addition, the Executive will be entitled
to receive an annual bonus of at least $25,000 as determined by the
Company's Board of Directors in its sole discretion. In determining
the amount of the bonus in excess of $25,000, the Company's Board of
Directors will consider (i) the extent to which efforts of the
Executive have increased the assets or the results of Xx0.xxx or have
otherwise added value to the business of Xx0.xxx, and (ii) the
productivity of the Executive in developing new materials exploitable
by Xx0.xxx in its business.
b. The Company will reimburse the Executive for expenses related to its
business actually incurred or paid by the Executive in the performance
of his duties under this Agreement in accordance with policies
applicable to its senior executives or the senior executives of
Xx0.xxx, upon presentation of accountings, expense statements,
vouchers or such other supporting information as may be required by
the Company's policies.
c. The Company will provide the Executive with a monthly car allowance of
$850. Fuel expenses incurred in the course of the Company's business
will be reimbursed in accordance with the Company's policies
applicable to reimbursement of business expenses.
6. EXECUTIVE BENEFITS.
a. During the Term, the Executive shall be entitled to participate in
such group health, retirement, profit sharing, 401(k) and other
benefits programs or plans, qualified or unqualified, including any
future stock option, bonus or other incentive program, which are or
become available to other senior executives of the Company, subject to
the policies of the Company with respect to all of such programs or
plans. Nothing in this Section 6.a shall be construed to create a
contractual obligation to provide the Executive with any particular
form or type of benefit or to limit the discretion of the Board of
Directors or Compensation Committee or any other duly authorized or
appointed plan administrator.
b. During the Term, the Executive shall be entitled to three weeks' paid
vacation per Year of employment to be scheduled on reasonable notice
to the Company and to be taken, accrued and paid on the same basis as
other employees of the Company.
7. TERMINATION OF EMPLOYMENT FOR CAUSE.
a. The Company may terminate employment of the Executive for any of the
following reasons, each of which is defined as "Cause":
i. commission of a felony, any crime of moral turpitude or any act of
fraud or dishonesty involving the business of the Company or
Xx0.xxx;
ii. repeated failure to satisfactorily perform material services
required under this Agreement in accordance with the requests of
the Board of Directors of the Company or Xx0.xxx;
iii. willful misconduct or gross negligence in the performance of his
duties;
iv. disregard or violation of the legal rights of any employees of the
Company or Xx0.xxx or of the written policies of Xx0.xxx or the
Company regarding harassment or discrimination; or
v. a breach of any material provisions of this Agreement (including,
but not limited to, any breach of Sections 3 or 9).
If the Company terminates the employment of the Executive for Cause, or if
the Executive resigns during the Term, certain shares of the common stock of
Xx0.xxx shall become forfeitable in accordance
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with the terms of the Escrow Agreement, and the Company's obligations under this
Agreement to pay further compensation shall cease forthwith, except that the
Company will pay the Executive, within 30 days from the date of termination of
his employment, in full and complete satisfaction of all of the Company's
obligations under this Agreement, (i) the Base Salary and, subject to submission
of all required documentation, reimbursable expenses accrued (but unpaid) to the
date of termination and (ii) any accrued but unused vacation days paid at the
rate of the Executive's Base Salary.
b. If the Executive dies during the Term, such death shall be deemed
termination for Cause and the Company's obligation to the Executive's
estate shall be the same as those for termination for Cause as defined
in Section 7.a.
c. If, as a result of the Executive's disability or incapacity during the
Term due to physical illness or condition, or mental illness during
his employment with the Company, the Executive is unable to perform
his duties hereunder for a consecutive 6-calendar week period, or an
aggregate period of 12 calendar weeks during any 12 months (or such
longer period as may be required to comply with the Family Leave Act
or other applicable law), the Company shall have the right, upon
written notice to the Executive, to terminate the Executive's
employment under this Agreement. Such a termination shall be deemed
termination for Cause as defined in Section 7.a, but shall in no case
become effective until the date at which the Company's long-term
disability plan pays benefits to him.
d. Any alleged breach of this Agreement by either party shall not be
deemed a breach until such time as the breaching party shall have
received written notice from the non-breaching party setting forth the
alleged breach ("Alleged Breach Notice") and the breaching party shall
not have cured (if curable) the breach set forth in the Alleged Breach
Notice in the 15 days (10 days for defaults in payments) after receipt
of such Alleged Breach Notice. If the breach set forth in the Alleged
Breach Notice is not curable and has not resulted in a substantive and
material adverse effect on the party sending the Alleged Breach
Notice, the Company and the Executive shall, at the request of the
other, attempt to meet and discuss such alleged breach before
resorting to remedies or rights under this Agreement or otherwise.
Notwithstanding the foregoing, this Section shall not apply to, and
the Executive shall have no right to cure, a breach by him under
clauses (i) and (iv) of the definition "Cause" contained in
Section 7.a.
8. TERMINATION OTHER THAN FOR CAUSE.
If the Company terminates the Executive's employment without Cause, the
Company's obligations under this Agreement to pay further compensation shall
cease forthwith, except that the Company will pay the Executive (i) all Base
Salary for the period remaining under the Term, (ii) within 30 days after
submission of all required documentation, reimbursable expenses accrued (but
unpaid) to the date of termination and (iii) within 10 business days after such
termination, any accrued but unused vacation days paid at a rate determined
consistently with the Company's practices; provided; that payments of Base
Salary shall not be accelerated and shall remain payable as otherwise provided
in this Agreement. Notwithstanding the foregoing, at all times after termination
the Executive shall have the affirmative duty to seek other employment of
comparable stature and with comparable base compensation to attempt to mitigate
his right to payment, and the foregoing payments of Base Salary shall decrease
if and to the extent that the Executive obtains other employment or provides his
services as a consultant by the amount of compensation (other than contingent or
in kind compensation) payable thereunder in respect of services provided to or
provided by the Executive during the time period prior to the termination of the
Term (without giving effect to early termination). For purposes of defining the
Executive's obligation to mitigate damages and the obligation of the Company to
make the payments referred to in this Section following termination of
employment without Cause, the "Term" shall be the remaining period of the
unexpired Term. The provisions of this Section 8 are the exclusive provisions
that will apply if a court or arbitrator
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should determine that the Company's termination of the Executive's employment
was without Cause or by reason of a material breach by the Company of any of its
material obligations under this Agreement.
9. NONDISCLOSURE.
a. Except as required in order to perform his obligations under this
Agreement, the Executive shall not, without the express prior written
consent of the Company, directly or indirectly, disclose or divulge to
any other person or entity any of the Company's Confidential
Information or Trade Secrets at any time (during or after the
Executive's employment) during which such data or information
continues to constitute Confidential Information or a Trade Secret;
PROVIDED, that the provisions of this Section 9.a shall not restrict
the Executive from exercising his rights strictly in accordance with
Section 7.9 of the Purchase Agreement nor from disclosing the
provisions of this Agreement to his personal advisors. The Executive
shall not disclose or divulge to any other person (particularly to any
other employee) any terms of the Executive's compensation under this
Agreement. Upon any termination or expiration of his employment, the
Executive will promptly upon request therefor deliver to the Company
all data, lists, information, memoranda, documents and all other
property belonging to the Company or containing Confidential
Information or Trade Secrets of the Company.
b. As used in this Agreement:
i. "Confidential Information" of the Company shall mean any valuable,
competitively sensitive data and information related to the
Company's business other than Trade Secrets that are not generally
known by or readily available to the Company's competitors,
including, among other things, that which relates to services
performed by the Executive for the Company, or was created or
obtained by the Executive while performing services for the Company
or by virtue of the Executive's relationship with the Company; and
ii. "Trade Secrets" shall mean information or data of the Company,
including but not limited to technical or non-technical data,
compilations, programs, devices, methods, techniques, processes,
financial data and financial plans, that: (a) derive economic
value, actual or potential, from not being generally known to, and
not being readily ascertainable by proper means by, other persons
who can obtain economic value from their disclosure or use; and
(b) are the subject of efforts that are reasonable under the
circumstances to maintain their secrecy. To the extent that the
foregoing definition is inconsistent with a definition of "trade
secret" mandated under applicable law, the latter definition shall
govern for purposes of interpreting the Executive's obligations
under this Agreement.
iii. The obligations set forth in this Section shall not be applicable
to any information which: (i) the Company has authorized the
Executive in writing to publicly disclose, copy or use, but only
to the extent of such authorization; (ii) is generally known or
becomes part of the public domain through no fault of the
Executive; (iii) is disclosed to the Company by third parties
without restrictions on disclosure; or (iv) is required to be
disclosed in the context of any administrative or judicial
proceedings; PROVIDED that, if the Executive is requested or
becomes legally compelled to disclose any Confidential Information
or Trade Secrets, the Executive will provide the Company with
prompt written notice so that the Company may seek a protective
order or other appropriate remedy and/or waive compliance with the
provisions of this Section and the Executive will cooperate with
the Company in any effort the Company undertakes to obtain a
protective order or other remedy. If such a protective order or
other remedy is not obtained or the Company waives compliance with
this Section, the Executive will furnish only that portion of the
Confidential Information and Trade Secrets that is legally
required and will exercise all reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded
the Confidential Information to be disclosed. The Company hereby
agrees to indemnify and hold harmless the Executive from
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all costs and expenses, including attorneys' fees, he incurs in
carrying out his obligations under the proviso provisions of this
subsection 9.b.iii and further agrees upon the written request of
the Executive to advance to the Executive the anticipated cost of
complying with his obligations under such proviso provisions.
10. REPRESENTATIONS AND WARRANTIES. The Executive hereby represents and
warrants that (a) he has the right to enter into this Agreement with the Company
and to grant the rights contained in this Agreement, and (b) the provisions of
this Agreement do not violate any other contracts or agreements that the
Executive has entered into with any other individual or entity.
11. SERVICES OF THE EXECUTIVE. In the course of his employment under this
Agreement, the Executive will have access to Trade Secrets, the disclosure or
unauthorized use of which, the Company seeks to protect and the Executive has
agreed to protect. As a result of benefits accruing to the Executive from his
access to such Trade Secrets, and of the improvement in his knowledge, and
proficiency arising therefrom, the Executive acknowledges that (a) his services
are and will remain special and extraordinary, and have and will have a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in any action at law; (b) he is willing to comply with the restrictions
contained in Sections 4.b and 4.c; (c) the restrictions contained in those
Sections will not impair his ability to earn a living in any businesses other
than those businesses from which he is prohibited during the time of such
restriction; and (d) a material breach of his obligations under Sections 4.b,
4.c or 9 will cause the Company irreparable injury and damage. It is, therefore,
agreed that the Company, in addition to any other remedies, shall be entitled to
injunctive and other equitable relief to enforce its rights under, and to
prevent a breach of, Sections 4.b, 4.c and 9 of this Agreement by the Executive.
12. ASSIGNABILITY, ETC. This Agreement shall be nondelegable and
nonassignable by the Executive. This Agreement shall be binding upon and inure
to the benefit of the Company and any entity succeeding to all or substantially
all of the business assets of the Company by merger, consolidation, purchase of
assets or otherwise.
13. NOTICES. Any notice pertaining to this Agreement shall be in writing and
shall be served by delivering said notice (i) by hand, (ii) by overnight mail by
an internationally recognized carrier, (iii) by sending it by certified mail,
postage prepaid, return receipt requested, or (iv) by confirmed telefax, with
notice confirmed, to the Executive at the address first stated above or his
office at the Company, with a courtesy copy to Berlack, Israels & Xxxxxxxx, LLP,
000 Xxxx 00(xx) Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxxxxx, Esq.
and to the Company at:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: President
Fax: (000) 000-0000
with a courtesy copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxxx Traurig
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
The addresses for notice may be changed by notice given to the other party
pursuant to this Section.
14. MISCELLANEOUS.
a. This Agreement shall be governed by and construed under the laws and
decisions 0of the State of New York applicable without regard to the
principles of conflicts of laws. The parties to this Agreement agree
that the state or federal courts in the State of New York shall have
personal
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jurisdiction over them with respect to, and shall be the exclusive
forum for the resolution of, any matter or controversy arising from or
with respect to this Agreement. Service of a summons and complaint
concerning any such matter or controversy may, in addition to any
other lawful means, be effected by sending a copy of such summons and
complaint by certified mail to the party to be served as specified in
Section 13 of this Agreement or at such other address as the party to
be served shall have provided in writing to the other from time to
time in accordance with Section 13.
b. To the extent permitted by law, the Executive and the Company
irrevocably waive trial by jury and any objection which he or it may
now or hereafter have to the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in the City of
New York, and to the extent permitted by law, the Executive and the
Company hereby further irrevocably waive any claim that any such suit,
action or proceeding brought in the City of New York has been brought
in an inconvenient forum.
c. This Agreement contains the entire understanding of the parties to
this Agreement with respect to the subject matter of this Agreement
and supersedes all previous written and oral agreements between the
parties with respect to the subject matter set forth in this
Agreement.
d. This Agreement may not be modified or amended except by a writing
signed by the parties to this Agreement.
e. Any provision of this Agreement that is deemed invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction and
subject to this Section, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any
way the remaining provisions of this Agreement in such jurisdiction or
rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction. If the covenant
should be deemed invalid, illegal or unenforceable because its scope
is considered excessive, such covenant shall be modified so that the
scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.
f. The following provisions of this Agreement shall survive in accordance
with their terms, the expiration or termination of this Agreement for
any reason: Sections 4, 5, 7, 8, 9 and 14.
g. A waiver by either party of any Section, term or condition of this
Agreement in any instance shall not be deemed or construed to be a
waiver of such Section, term or condition for the future or of any
subsequent breach thereof, and any such waiver must be in writing,
signed by the party to be charged. All rights and remedies contained
in this Agreement are cumulative, and none of them shall be construed
so as to limit any other right or remedy of either party.
h. This Agreement may be executed in counterparts, all of which shall
constitute one and the same agreement.
i. The headings and titles to the Sections of this Agreement are inserted
for convenience only and shall not be deemed a part of or affect the
construction or interpretation of any provisions of this Agreement.
j. All references to Sections shall be to sections and schedules of this
Agreement.
k. All references using male pronouns shall be deemed to include female
pronouns.
l. This Agreement may be signed in multiple counterparts, each of which
shall be deemed an original. Any executed counterpart returned by
facsimile shall be deemed an original executed counterpart.
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If the foregoing accurately reflects the Executive's understanding, please
countersign and return one counterpart of this Agreement to the Company.
Sincerely yours,
CELEBRITY INTERVIEWS, INC.
By:
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman
Accepted and agreed to:
-------------------------------------------
Xxxx Xxxxxx
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GUARANTEE
1. In consideration of the sum of $10.00 now paid by the Executive to
Xx0.xxx, Inc. ("Xx0.xxx") receipt whereof is hereby acknowledged, Xx0.xxx
hereby irrevocably and unconditionally guarantees as a continuing guarantee
the payment when due of all sums due, owing or outstanding from the Company
to the Executive hereunder and the performance of all of the Company's
obligations hereunder and agrees to idemnify the Executive from and against
all loss, damage, costs and expenses which the Executive may suffer through
or arising from any failure by the Company duly, fully and punctually to pay
any such sum required to be paid by it in relation to or otherwise to
perform its obligations under this Agreement.
2. Without prejudice to the Executive's rights against the Company as between
the Executive and Xx0.xxx, Xx0.xxx shall be liable hereunder as if it were
the sole principal debtor and not merely a surety, and Xx0.xxx's liability
hereunder shall not be released, discharged or diminished by:
(a) any legal limitation, lack of capacity or authorization or defect in the
actions of the Company in relation to, any invalidity or unenforceability
of, or any variation (whether or not agreed by Xx0.xxx) of any of the
terms of this Agreement, the bankruptcy, liquidation, insolvency, or
dissolution of the Company or any change in the Company's identity,
constitution, status or control; or
(b) any forbearance, neglect or delay in seeking performance of the
obligations of the Company, any granting of time indulgence or other
relief to the Company in relation to such performance, or any composition
with, discharge, waiver or release of the Company; or
(c) any other act, omission, fact or circumstance which might otherwise
release, discharge or diminish the liability of a guarantor.
3. Any release, settlement or discharge between the Executive and Xx0.xxx shall
be conditional upon no security or payment made or given to the Executive
being avoided, reduced, set aside or rendered unenforceable by virtue of any
provision or enactment now or hereafter in force relating to bankruptcy,
insolvency or liquidation and if any such security or payment shall be
avoided, reduced, set aside or rendered unenforceable, the Executive shall
be entitled to recover the full amount or value of any such security or
payment from Xx0.xxx and otherwise to enforce this Section as if such
release, settlement or discharge had not taken place.
IN WITNESS WHEREOF, the undersigned has executed this Guarantee as of
November , 1999.
XX0.XXX INC.
a Colorado corporation
By: __________________________________
Name:
Title:
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