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Exhibit 15
EMPLOYMENT AGREEMENT
This AGREEMENT made as of January 25, 2000, by and between Ascent
Entertainment Group, Inc., a Delaware corporation ("Ascent" or the "Company"),
and Xxxxx Xxxxxxx, a resident of the State of Colorado(the "Executive").
WHEREAS, Ascent desires to employ the Executive as Vice President and
General Counsel and Corporate Secretary of Ascent, and the Executive desires to
accept such employment, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
made herein, and intending to be legally bound hereby, Ascent and the Executive
agree as follows:
1. Employment; Duties.
(a) Employment and Employment Period. Ascent shall employ the
Executive to serve as Vice President and General Counsel and Corporate Secretary
of Ascent or its successor entity for a period (the "Employment Period")
commencing on January 25, 2000 (the "Effective Date") and continuing thereafter
for a term of two years until January 25, 2002 unless terminated in accordance
with the provisions of this Agreement. Each 12 month period ending on the
anniversary date of the Effective Date is sometimes referred to herein as a
"year of the Employment Period."
(b) Offices, Duties and Responsibilities. The Executive shall report
directly to either the Executive Vice President, Business Affairs or, if there
is one, the Chief Executive Officer of Ascent (the "CEO"). The Executive shall
have all duties and authority customarily accorded a senior legal officer,
general counsel and corporate secretary.
(c) Devotion to Interests of Ascent. During the Employment Period,
the Executive shall render his business services solely in the performance of
his duties hereunder. The Executive shall use his best efforts to promote the
interests and welfare of Ascent. Notwithstanding the
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foregoing, the Executive shall be entitled to undertake such outside activities
(e.g., charitable, educational, personal interests, board of directors
membership, and so forth, that do not compete with the business of Ascent as do
not unreasonably or materially interfere with the performance of his duties
hereunder as reasonably determined by the CEO or the Board in consultation with
the Executive.
2. Compensation and Fringe Benefits.
(a) Base Compensation. Ascent shall pay the Executive a base salary
("Base Salary") at the rate of $150,000 per year during the Employment Period
with payments made in installments in accordance with Ascent's regular practice
for compensating executive personnel, provided that in no event shall such
payments be made less frequently than twice per month. The Base Salary for the
Executive shall be reviewed each year during the Employment Period commencing
the second year of the Employment Period. Any Base Salary increases shall be
approved by the Board in its sole discretion.
(b) Bonus Compensation. The Executive will be eligible to receive
bonuses ("Annual Bonus") during the Employment Period in accordance with the
following parameters: (i) the target bonus for each year during the Employment
Period shall be 25% of Base Salary for achieving 100% of the target level for
the performance measures; and (ii) the performance measures, the relative weight
to be accorded each performance measure and the amount of bonus payable in
relation to the target bonus for achieving more or less than 100% of the target
level for the performance measures shall be determined for each year during the
Employment Period by the Compensation Committee.
(c) Fringe Benefits. The Executive also shall be entitled to
participate in group health, dental and disability insurance programs, and any
group profit sharing, deferred compensation, supplemental life insurance or
other benefit plans as are generally made available by Ascent to the senior
executives of Ascent on a favored nations basis. Such benefits shall include
reimbursement of documented expenses reasonably incurred in connection with
travel and entertainment related to Ascent's business and affairs. All benefits
described in the foregoing sentence that are reportable as earned or unearned
income will be "grossed up" by Ascent in connection with federal and state tax
obligations to provide Executive with appropriate net tax coverage so that the
benefits received by the Executive from the foregoing sentence shall be net of
income and employment taxes thereon. Ascent reserves the right to modify or
terminate from time to time the fringe benefits provided to the senior
management group, provided that the fringe benefits provided to the Executive
shall not be materially reduced on an overall basis during the Employment
Period.
(d) Stock Options. Ascent hereby grants to Executive as of the
Effective Date options to purchase ("Options") 40,000 shares of Ascent's common
stock, par value $0.01 per share, each such SAR exercisable at the per-share
price equal to $11.9063 per share. The Options shall be exercisable by Executive
according to the following schedule:
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(i) 50% of the Options on or after January 25, 2001; and
(ii) 50% of the Options on or after January 25, 2002.
Notwithstanding the foregoing, 100% of the Options shall immediately vest and
become immediately exercisable, without any further action by the Executive,
upon the occurrence of any "Change of Control Event" as defined in Section 7(a)
below, or upon the occurrence of any event that results in Ascent's Common Stock
no longer being traded on any of the New York Stock Exchange, American Stock
Exchange or NASDAQ National Market System (including, without limitation, as a
result of any so-called "going private" transaction with Ascent). Such Options
shall be represented by an Option agreement containing appropriate terms
consistent with the provisions of this Agreement. The Options, to the extent
they remain unexercised, shall automatically and without further notice
terminate and become of no further force and effect only at the time of the
earliest of the following to occur:
(x) Three months after the date upon which a termination for cause by
Ascent (as provided in Section 5(b)) shall have become effective and final; or
(y) January 25, 2010.
In the event of any stock split, stock dividend, spin-off,
reclassification, recapitalization, merger, consolidation, subdivision,
combination or other change which affects the character or amount of Ascent's
common stock after the Effective Date and prior to the exercise and/or
expiration of all of the Options, the number and exercise price of and/or the
formula for determining the value of such unissued or unexercised Options shall
be adjusted in order to make such Options, as nearly as may be practicable,
equivalent in nature and value to the Options that would have existed had such
change not taken place. In addition, if Ascent adopts a stock-based incentive
plan that in Executive's sole judgment provides for any term(s) more favorable
to the grantee than
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any term(s) set forth above, Executive will be entitled to the benefit of such
more favorable term(s) with respect to the Options, other than with respect to
the vesting schedule thereof, but in no event will any term(s) applicable to the
Options be less favorable to Executive than those set forth above.
During the Employment Period, the Executive may be granted additional
stock-based incentives as determined by the Compensation Committee in its sole
discretion. Notwithstanding any other provision of this Agreement except Section
5(b), the Compensation Committee may in its discretion provide that any
stock-based incentives granted to the Executive which have not vested prior to
his termination of employment shall continue to vest in accordance with their
original terms as if the Executive's employment had not terminated.
(e) Conflicting Provisions. Solely to the extent of any conflict
between the provisions of this Agreement and the provisions of any agreement
between Executive, on the one hand, and Ascent and any of its affiliated or
related entities, on the other hand, relating to stock-based incentives
(including the Options), life insurance, health insurance, any other employee
equity participation, profit sharing or retirement plan, group health plan or
other employee benefits (individually and collectively referred to herein as the
"Fringe Benefits"), the provisions of this Agreement will control.
3. Trade Secrets; Return of Documents and Property.
(a) Executive acknowledges that during the course of his employment
he will receive secret, confidential and proprietary information ("Trade
Secrets") of Ascent and of other companies with which Ascent does business on a
confidential basis and that Executive will create and develop Trade Secrets for
the benefit of Ascent. Trade Secrets shall include, without limitation, (a)
literary, dramatic or other works, screenplays, stories, adaptations, scripts,
treatments, formats, "bibles," scenarios, characters, titles of any kind and any
rights therein, custom databases, "know-how," formulae, secret processes or
machines, inventions, computer
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programs (including documentation of such programs) (collectively, "Technical
Trade Secrets"), and (b) matters of a business nature, such as customer data and
proprietary information about costs, profits, markets and sales, customer
databases, and other information of a similar nature to the extent not available
to the public, and plans for future development (collectively, "Business Trade
Secrets"). All Trade Secrets disclosed to or created by Executive shall be
deemed to be the exclusive property of Ascent (as the context may require).
Executive acknowledges that Trade Secrets have economic value to Ascent due to
the fact that Trade Secrets are not generally known to the public or the trade
and that the unauthorized use or disclosure of Trade Secrets is likely to be
detrimental to the interests of Ascent and its subsidiaries. Executive therefore
agrees to hold in strict confidence and not to disclose to any third party any
Trade Secret acquired or created or developed by Executive during the term of
this Agreement except (i) when Executive is required to use or disclose any
Trade Secret in the proper course of the Executive's rendition of services to
Ascent hereunder, (ii) when such Trade Secret becomes public knowledge other
than through a breach of this Agreement, or (iii) when Executive is required to
disclose any Trade Secret pursuant to any valid court order in which the
Executive is compelled to disclose such Trade Secret. The Executive shall notify
Ascent immediately of any such court order in order to enable Ascent to contest
such order's validity. For a period of two (2) years after termination of the
Employment Period for all Business Trade Secrets and for a period of five (5)
years after termination of the Employment Period for all Technical Trade
Secrets, the Executive shall not use or otherwise disclose Trade Secrets unless
such information (x) becomes public knowledge or is generally known in the
entertainment or sports industry among executives comparable to the Executive
other than through a breach of this Agreement, (y) is disclosed to the Executive
by a third party who is entitled to receive and disclose such Trade Secret, or
(z) is required to be disclosed pursuant to any valid court order, in which case
the Executive shall notify Ascent immediately of any such court order in order
to enable Ascent
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to contest such order's validity.
(b) Upon the effective date of notice of the Executive's or Ascent's
election to terminate this Agreement, or at any time upon the request of Ascent,
the Executive (or his heirs or personal representatives) shall deliver to Ascent
(i) all documents and materials containing or otherwise relating to Trade
Secrets or other information relating to Ascent's business and affairs, and (ii)
all documents, materials and other property belonging to Ascent, which in either
case are in the possession or under the control of the Executive (or his heirs
or personal representatives). The Executive shall be entitled to keep his
personal records relating to Ascent's business and affairs except to the extent
those contain documents or materials described in clause (i) or (ii) of the
preceding sentence, in which case Executive may retain copies for his personal
and confidential use.
4. Discoveries and Works. All discoveries and works made or conceived by
the Executive during his employment by Ascent pursuant to this Agreement,
jointly or with others, that relate to Ascent's activities ("Discoveries and
Works") shall be owned by Ascent. Discoveries and Works shall include, without
limitation, literary, dramatic or other works, screenplays, stories,
adaptations, scripts, treatments, formats, "bibles," scenarios, characters,
titles of any kind and any rights therein, other works of authorship,
inventions, computer programs (including documentation of such programs),
technical improvements, processes and drawings. The Executive shall (i) promptly
notify, make full disclosure to, and execute and deliver any documents
reasonably requested by, Ascent to evidence or better assure title to such
Discoveries and Works in Ascent, (ii) assist Ascent in obtaining or maintaining
for itself at its own expense United States and foreign copyrights, trade secret
protection or other protection of any and all such Discoveries and Works, and
(iii) promptly execute, whether during his employment by Ascent or thereafter,
all applications or other endorsements necessary or appropriate to maintain
copyright and other rights for Ascent and to protect their title thereto. Any
Discoveries and Works which, within sixty days after the termination of the
Executive's employment by Ascent, are made, disclosed, reduced to a tangible or
written form or
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description, or are reduced to practice by the Executive and which pertain to
work performed by the Executive while with Ascent and COMSAT, shall, as between
the Executive and Ascent and COMSAT, be presumed to have been made during the
Executive's employment by Ascent.
5. Termination. This Agreement shall remain in effect during the
Employment Period, and this Agreement and Executive's employment with Ascent may
be terminated only as follows:
(a) By the Executive (an "Executive Election") at any time upon sixty
(60) days advance written notice to Ascent upon an "Executive Election Event"
(as defined below). In such event or if the Executive's employment is terminated
by Ascent without "cause" (as defined below), there will be no forfeiture,
penalty, reduction or other adverse effect upon any rights or interests relating
to any Fringe Benefits, all of which will fully vest, to the extent not
previously vested, immediately upon such termination becoming effective and
final. Without limiting the foregoing, in the event of an Executive Election or
if the Executive's employment is terminated without "cause," the Executive shall
be entitled to receive the following benefits for a period equal to eighteen
months following the date of such termination (the "Duration Period"): (i) his
then current Base Salary; (ii) an Annual Bonus equal to twenty-five percent
(25%) of his then current Base Salary; and (iii) all other benefits provided
pursuant to Sections 2(c) and (d) of this Agreement. The Executive shall have no
obligation to seek other employment in the event of his termination pursuant to
this paragraph (a), and there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain. Ascent shall have the option at
any time during the Duration Period to pay to the Executive in a lump sum the
amounts remaining under clauses (i) and (ii) of this paragraph (a). If Ascent
exercises such option, Ascent shall have no further compensation payment
obligations under clauses (i) and (ii) above. Upon any termination of the
Executive's employment
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under this Section 5(a), Ascent shall establish a "rabbi" trust, i.e., a trust
for the benefit of the Executive which is irrevocable by Ascent, but whose
assets will be available to Ascent's general creditors upon Ascent's insolvency,
with terms and provisions reasonably acceptable to the Executive, and shall
contribute to such trust an amount equal to the sum of all payments to be made
to the Executive by reason of such termination of employment, including, but not
limited to, the amounts set forth in Sections 5(a)(i), (ii) and (iii), and the
amount which the Executive would receive if he exercised all of his Options and
stock-based incentives on the date of his termination of employment. Ascent
shall at all times remain liable to carry out its obligations under this
Agreement, but such obligations may be satisfied with the assets of such trust
distributed pursuant to the terms of the trust, and any such distribution shall
reduce Ascent's obligations under this Agreement. In all circumstances of
termination under this Section 5(a), Ascent shall remain obligated under clause
(iii) and all stock-based incentives(including the Options) will remain
exercisable for the maximum period provided in each applicable grant.
An "Executive Election Event" shall be any of the following: (I) any
substantial reduction (except in connection with the termination of his
employment voluntarily by the Executive or by Ascent for "cause" as defined
below) by Ascent, without the Executive's express written consent, of his
responsibilities as Vice President and General Counsel of Ascent; (II) any
change in the reporting structure set forth in Section 1(b) above; (III) any
requirement that Executive perform material services of lesser stature than
those typically performed by the general counsel of comparable companies; (IV) a
"Change of Control Event" (as defined in Section 7(a) below); provided that in
such event, the amounts payable to the Executive under this Section 5(a) will be
contributed to the "rabbi" trust as provided above no later than one day before
such change of control becomes effective, whether or not the Executive has given
notice of termination at such time, and payable to the Executive in a lump sum
upon the effectiveness of his termination as a result of a Change in Control
Event; provided further that, the Executive and the Company shall explore
alternatives to minimize any excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended as of the Effective Date (the "Code") that
would otherwise be payable; (V) any other material default of this Agreement
which continues for ten (10) business days following Ascent's receipt of written
notice from the Executive
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specifying the manner in which Ascent is in default of this Agreement; (VI) the
Board's requiring Executive to be based at any office location other than the
principal offices of Ascent, or the relocation, without Executive's consent, of
such principal offices to a location outside the greater Denver area; or (VII)
any purported termination of Executive's employment otherwise than as expressly
permitted by the Agreement.
(b) By Ascent at any time for "cause." For purposes of this
Agreement, Ascent shall have "cause" to terminate the Executive's employment
hereunder upon (i) the continued and deliberate failure of the Executive to
perform his material duties, in a manner substantially consistent with the
manner reasonably prescribed by the Executive Vice President, Business Affairs
or CEO and in accordance with the terms of this Agreement (other than any such
failure resulting from his incapacity due to physical or mental illness), which
failure continues for ten (10) business days following the Executive's receipt
of written notice from the Executive Vice President, Business Affairs or CEO
specifying the manner in which the Executive is in default of his duties, (ii)
the engaging by the Executive in intentional serious misconduct that is
materially and demonstrably injurious to Ascent or its reputation, which
misconduct, if it is reasonably capable of being cured, is not cured by the
Executive within ten (10) business days following the Executive's receipt of
written notice from the Executive Vice President, Business Affairs or CEO
specifying the serious misconduct engaged in by the Executive, (iii) the
conviction of the Executive of commission of a felony involving a crime of moral
turpitude, whether or not such felony was committed in connection with Ascent's
business, or (iv) any material breach by the Executive of Section 8 hereof. If
Ascent shall terminate the Executive's employment for "cause," there will be no
forfeiture, penalty, reduction or other adverse effect upon any vested rights or
interests relating to any Fringe Benefits. In such event, Ascent, in full
satisfaction of all of Ascent's obligations under this Agreement and in respect
of the termination of the Executive's employment with Ascent, shall pay the
Executive
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his Base Salary, a prorated Annual Bonus and all other compensation, benefits
and reimbursement through the date of termination of his employment, provided
that the Options and any other stock options granted to the Executive under the
Ascent option or any successor plan shall terminate three months after the date
of termination of his employment for "cause".
6. Disability; Death.
(a) If, prior to the expiration or termination of the Employment
Period, the Executive shall be unable to perform substantially his duties by
reason of disability or impairment of health for at least six consecutive
calendar months, Ascent shall have the right to terminate this Agreement by
giving sixty (60) days written notice to the Executive to that effect, but only
if at the time such notice is given such disability or impairment is still
continuing. Following the expiration of the notice period, the Employment Period
shall terminate, and Ascent's payment obligations to the Executive under Section
2(a) and (b) shall terminate with the payment of the Executive's Base Salary for
the month in which the Employment Period terminates and a prorated Annual Bonus
through such month, and there will be no forfeiture, penalty, reduction or other
adverse effect upon any vested rights or interests relating to any Fringe
Benefits; provided that the Options and any other stock options granted to the
Executive under the Ascent option plan or any successor plan shall become fully
vested and shall terminate in accordance with their terms, but in no event less
than one year after such termination, notwithstanding the limitations of Section
2(d) of this Agreement. In the event of a dispute as to whether the Executive is
disabled within the meaning of this paragraph (a), or the duration of any
disability, either party may request a medical examination of the Executive by a
doctor appointed by the Chief of Staff of a hospital selected by mutual
agreement of the parties, or as the parties may otherwise agree, and the written
medical opinion of such doctor shall be conclusive and binding upon the parties
as to whether the Executive has become disabled and the date when such
disability arose. The cost of any such medical examinations shall be borne by
Ascent.
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(b) If, prior to the expiration or termination of the Employment
Period, the Executive shall die, Ascent shall pay to the Executive's estate his
Base Salary and a prorated Annual Bonus through the end of the month in which
the Executive's death occurred, at which time the Employment Period shall
terminate without further notice and there will be no forfeiture, penalty,
reduction or other adverse effect upon any vested rights or interests relating
to any Fringe Benefits; provided that the Options and any other stock options
granted to the Executive under the Ascent option plan or any successor plan
shall become fully vested and shall terminate one year after the date of
termination of the Executive's employment for death, notwithstanding the
limitations of Section 2(d) of this Agreement.
(c) Nothing contained in this Section 6 shall impair or otherwise
affect any rights and interests of the Executive under any compensation plan or
arrangement of Ascent which may be adopted by the Board.
7. Change of Control.
(a) If, prior to the termination of the Employment Period, there is a
"Change of Control Event" (as hereinafter defined in this paragraph (a)), the
Executive shall have the right to exercise his Executive Election in accordance
with Section 5(a) by giving notice either prior to such Change of Control Event
becoming effective or up to 180 days following such Change of Control Event, but
termination pursuant to such notice shall not take effect in accordance with
Section 5(a) in any event prior to 120 days following such Change of Control
Event, provided, however, payment to the Executive shall be made as set forth in
Section 5(a)(IV). The expiration of such 180-day period shall not affect the
Executive's right to give notice under Section 5(a) with respect to any other
Executive Election Event. A "Change of Control Event" shall mean and include
either the occurrence of any of the following with respect to Ascent, or any of
the following becoming highly likely to occur, in the determination of the
Board: (i) the acquisition by any
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individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock") or (B)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this clause (i), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of clause (iii) below; or (ii)
individuals who, as of the date hereof, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or (iii) Consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company (a "Business Combination"), in
each case, unless, following such Business Combination, (1) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 75% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
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outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this clause (i), the following acquisitions shall
not constitute a Change of Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (1), (2) and (3) of clause
(iii) below; or (ii) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or (iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (1) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
75% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (3) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or (iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(b) In the event that Ascent adopts any "change of control"
provisions applicable to any Ascent benefits plans, respectively, providing for
the accelerated vesting and/or payment of any benefits for its senior management
group, solely to the extent that such provisions give Executive greater rights
than those provided in paragraph (a) above, such better provisions shall apply
to the Executive to the same extent as other Ascent senior executives on a
favored nations basis with respect to the benefits affected by such Ascent
provisions, respectively.
8. Non-Competition.
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(a) As an inducement for Ascent to enter into this Agreement, the
Executive agrees that for a period commencing as of the Effective Date and
running through the earlier of (i) the end of the Employment Period if the
Executive remains employed by Ascent for the entire Employment Period or (ii)
one year following termination of the Executive's employment by Ascent for
"cause" as defined in Section 5(b) hereof, or by the Executive for any reason
(other than an Executive Election Event, in which case the provisions of this
paragraph (a) shall not apply) (the "Non-Competition Period"), the Executive
shall not, without the prior written consent of the Board, engage or
participate, directly or indirectly, as principal, agent, employee, employer,
consultant, stockholder, partner or in any other individual capacity whatsoever,
in the conduct or management of, or own any stock or any other equity investment
in or debt of, any business which is competitive with any business conducted by
Ascent.
For the purpose of this Agreement, a business shall be considered to
be competitive with any business of Ascent only if such business is engaged in
providing services or products (i) substantially similar to (A) any service or
product currently provided by Ascent during the Employment Period; (B) any
service or product which directly evolves from or directly results from
enhancements in the ordinary course during the Non-Competition Period to the
services or products provided by Ascent as of the date hereof or during the
Employment Period; or (C) any future service or product of Ascent as to which
the Executive materially and substantially participated in the development or
enhancement, and (ii) to customers, distributors or clients served by Ascent
during the Non-Competition Period.
(b) Non-Solicitation of Employees. During the Non-Competition Period,
the Executive will not (for his own benefit or for the benefit of any person or
entity other than Ascent) solicit, or assist any person or entity other than
Ascent to solicit, any officer, director, executive or employee (other than an
administrative or clerical employee) of Ascent to leave his or her employment.
(c) Reasonableness; Interpretation. The Executive acknowledges and
agrees, solely for purposes of determining the enforceability of this Section 8
(and not for purposes of determining
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the amount of money damages or for any other reason), that (i) the markets
served by Ascent are national and international and are not dependent on the
geographic location of executive personnel or the businesses by which they are
employed; (ii) the length of the Non-Competition Period is linked to the term of
the Employment Period and the severance benefit provided for in Section 5(a);
and (iii) the above covenants are reasonable as an inducement to Ascent to enter
into this Agreement, and the parties expressly agree that such restrictions have
been designed to be reasonable and no greater than is required for the
protection of Ascent. In the event that the covenants in this Section 8 shall be
determined by any court of competent jurisdiction in any action to be
unenforceable by reason of their extending for too great a period of time or
over too great a geographical area or by reason of their being too extensive in
any other respect, they shall be interpreted to extend only over the maximum
period of time for which they may be enforceable, and/or over the maximum
geographical area as to which they may be enforceable and/or to the maximum
extent in all other respects as to which they may be enforceable, all as
determined by such court in such action.
(d) Investment. Nothing in this Agreement shall be deemed to prohibit
the Executive from owning equity or debt investments in any corporation,
partnership or other entity which is competitive with Ascent, provided that such
investments (i) are passive investments and constitute five percent (5%) or less
of the outstanding equity securities of such an entity the equity securities of
which are traded on a national securities exchange or other public market, or
(ii) are approved by the Board.
9. Indemnification; Liability Insurance. The Executive shall be entitled
to indemnification and coverage under Ascent's liability insurance policy for
directors and officers to the same extent as other officers of Ascent. During
and after the term of employment, Ascent hereby agrees to indemnify and hold
Executive harmless against any and all
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claims arising from or in connection with his employment by or service to Ascent
to the full extent permitted by law and, in connection therewith, to advance the
expenses of Executive incurred in defending against such claims subject to such
limitations as may actually be required by law.
10. Enforcement. The Executive acknowledges that a breach of the covenants
or provisions contained in Sections 3, 4 and 8 of this Agreement will cause
irreparable damage to Ascent, the exact amount of which will be difficult to
ascertain, and that the remedies at law for any such breach will be inadequate.
Accordingly, the Executive agrees that if the Executive breaches or threatens to
breach any of the covenants or provisions contained in Sections 3, 4 and 8 of
this Agreement, in addition to any other remedy which may be available at law or
in equity, Ascent shall be entitled to seek specific performance and injunctive
relief.
11. Arbitration.
(a) Subject to Ascent's right to enforce Sections 3, 4 and 8 hereof
by an injunction issued by a court having jurisdiction (which right shall
prevail over and supersede the provisions of this Section 11), any dispute
relating to this Agreement, including the enforceability of this Section 11,
arising between the Executive and Ascent shall be settled by arbitration which
shall be conducted in Denver, Colorado, or any other location where the
Executive then resides at Ascent's request, before a single arbitrator in
accordance with the commercial arbitration rules of the American Arbitration
Association ("AAA"). Within 90 days after the Effective Date, the parties shall
mutually agree upon three possible arbitrators, one of whom shall be selected by
the AAA within 2 days after notice of a dispute to be arbitrated under this
Section 11. The parties shall instruct the arbitrator to use his or her best
efforts to conclude the arbitration within 60 days after notice of the dispute
to AAA.
(b) The award of any such arbitrator shall be final. Judgment upon
such award may be entered by the prevailing party in any federal or state court
sitting in Denver, Colorado or any other location where the Executive then
resides at Ascent's request.
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(c) The parties will bear their own costs associated with arbitration
and will each pay one-half of the arbitration costs and fees of AAA; however,
the arbitrator may in his sole discretion determine that the costs of the
arbitration proceedings, including attorneys' fees, shall be paid entirely by
one party to the arbitration if the arbitrator determines that the other party
is the prevailing party in such arbitration.
12. Severability. Should any provision of this Agreement be determined to
be unenforceable or prohibited by any applicable law, such provision shall be
ineffective to the extent, and only to the extent, of such unenforceability or
prohibition without invalidating the balance of such provision or any other
provision of this Agreement, and any such unenforceability or prohibition in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13. Assignment. The Executive's rights and obligations under this
Agreement shall not be assignable by the Executive. Ascent's rights and
obligations under this Agreement shall not be assignable by Ascent except as
incident to the transfer, by merger or otherwise, of all or substantially all of
the business of Ascent. In the event of any such assignment by Ascent, all
rights of Ascent hereunder shall inure to the benefit of the assignee.
14. Notices. All notices and other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered; when transmitted if
transmitted by telecopy, electronic or digital transmission method, provided
that in such case it shall also be sent by certified or registered mail, return
receipt requested; the day after it is sent, if sent for next day delivery to a
domestic address by recognized overnight delivery service (e.g., Federal
Express); and upon receipt, if sent by certified or registered mail, return
receipt requested.
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Unless otherwise changed by notice, in each case notice shall be sent to:
If to Executive, addressed to:
Xxxxx Xxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to Ascent, addressed to:
Ascent Entertainment Group, Inc.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopier No. (000) 000-0000
With a copy to:
Ascent Entertainment Group
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopier No. (000) 000-0000
15. Miscellaneous. This Agreement constitutes the entire agreement, and
supersedes all prior agreements, of the parties hereto relating to the subject
matter hereof, and there are no written or oral terms or representations made by
either party other than those contained herein. No amendment, supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. The validity, interpretation,
performance and enforcement of the Agreement shall be governed by the laws of
the State of Colorado. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
/s/ XXXXX XXXXXXX
------------------------------------
Xxxxx Xxxxxxx, Executive
ASCENT ENTERTAINMENT GROUP, INC.
By: /s/ XXXXX X. XXXXXX
---------------------------------
Title: Executive Vice President and
Chief Financial Officer
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