EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 1st day of
January, 1997 (the "Effective Date") by and between PREMIERE RADIO NETWORKS,
INC., a Delaware corporation with an office for the conduct of its business at
00000 Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 (the "Company"), and
XXXXXXX XXXXX, an individual residing at 00000 Xxxxxxxxxx Xx., Xxxx Xxxxx, XX
00000 (the "Executive").
In consideration of the mutual covenants and agreements herein set forth,
the parties hereto agree as follows:
1. EMPLOYMENT AND ACCEPTANCE; TERMS
(a) INITIAL TERM. The Company hereby employs the Executive, and the
Executive agrees to be employed by the Company, for a term (the "Initial Term")
commencing on the Effective Date and continuing for a period of one (1) year.
(b) OPTION TERM. The Company shall have an option (the "Option")
exercisable in its sole discretion to extend the term of this Agreement for
an additional one (1) year (the "Option Term") beyond the Initial Term by
written notification of such extension (an "Extension Notice") to the
Executive at any time prior to October 31, 1997; provided that if the
Company shall exercise the Option the Executive may, in his sole discretion
by providing written notice to the Company within ten (10) days after the
date of the Extension Notice, decline to have the term of this Agreement
extended and cause this Agreement to terminate following the expiration of
the Initial Term.
2. DUTIES.
(a) OFFICE. During the term of this Agreement, the Executive
shall be employed as the Executive Vice President/Programming of the
Company and as such shall supervise the Company's current programming and
assist in the development and acquisition of new programs and services.
Executive shall also perform such duties and responsibilities as shall be
reasonably assigned to the Executive by the Chairman of the Board of the
Company, or which are from time to time assigned to or vested in him by the
Executive Committee of the Company's Board of Directors (the "Executive
Committee"), and which are customarily incident to the position of
Executive Vice President/Programming of an independent creator, producer
and distributor of comedy, entertainment and music related radio programs.
Except to the extent expressly set forth herein, Executive shall comply
with all policies and procedures of the Company in the performance of his
duties hereunder.
(b) EXCLUSIVITY. The Executive shall devote substantially all of
his business time, labor, skill and energy to the business and affairs of
the Company and to the duties and responsibilities specified in Section
2(a) of this Agreement; provided, however, that the Executive may engage in
other activities, such as charitable, educational, religious and similar
types of activities, to the extent that such activities do not prohibit or
prevent the performance of the
Executive's duties under this Agreement, or inhibit or conflict in any material
way with the business of the Company.
(c) NON-COMPETITION. The Executive covenants and agrees that so
long as he is actively employed by the Company he shall inform the Company
of each business opportunity related to the business of the Company of
which he becomes aware, and that he will not, directly or indirectly,
exploit any such opportunity for his own account, nor will he render any
services to any other person or business, or acquire any interest of any
type in any other business, which is in competition with the Company;
provided, however, that the foregoing shall not prohibit the Executive from
acquiring, solely as an investment, (i) up to 10% of any securities of a
partnership, trust, corporation or other entity which is not publicly
traded so long as he remains a passive investor in such entity and such
entity is not, directly or indirectly, in competition with the Company, or
(ii) up to 5% of any securities of any publicly traded partnership, trust,
corporation or other entity provided he remains a passive investor in such
entity.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company shall, during the continuance of the
Executive's employment hereunder, pay to the Executive, and the Executive
agrees to accept, in consideration of his services, a salary (the "Base
Salary") at an annual rate of $150,000 during the Initial Term and, if the
Option is exercised, at an annual rate of $170,000 during the Option Term,
payable in accordance with the Company's normal payroll practices. The
Base Salary may, in the sole discretion of the Executive Committee, be
increased.
(b) BENEFITS. During the term of this Agreement, the Executive shall
be entitled to participate in all group insurance, hospitalization, medical,
health and accident, profit-sharing, disability or similar plans or programs of
the Company.
(c) DEDUCTIONS. The Company shall deduct from the Base Salary and
all other cash amounts payable by the Company under the provisions of this
Agreement, including any severance payments paid pursuant to Sections 3(f) and
13 hereof, to the Executive or, if applicable, to his estate, legal
representative or other beneficiary designated in writing by the Executive (a
"designee"), all social security taxes, all federal, state and municipal taxes
and all other charges and deductions which now or hereafter are imposed by law
as charges on the compensation of the Executive or charges on cash benefits
payable by the Company hereunder or his estate, legal representative or
designee.
(d) ANNUAL BONUS. The Executive may receive an annual incentive
bonus (the "Annual Bonus") during the continuance of the Executive's
employment hereunder in an amount to be determined by the Compensation
Committee of the Board. The Annual Bonus shall be payable within a
reasonable period of time not to exceed ninety (90) says following the end
of each twelve-month period of this Agreement. Any such Annual Bonus shall
be in recognition of Executive's personal development and/or his
contributions to the acquisition of new programs
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and/or services or other contributions which significantly enhance the
profitability of the Company.
(e) QUARTERLY BONUS. The Executive may receive a quarterly bonus
(the "Quarterly Bonus") during the continuance of the Executive's employment
hereunder in an amount to be determined by the Executive Committee. Any such
Quarterly Bonus shall be in recognition of the departmental launch of new
programs and/or services precleared as expected to be profitable (excluding
programs launched through the efforts of personnel of the Xxxxxx Productions
division of the Company, the Company's After Midnite subsidiary or any
personnel employed by companies acquired by the Company after the date hereof).
The Quarterly Bonus shall be payable within a reasonable period of time not to
exceed ninety (90) days following the end of each three month period of this
Agreement. Among the factors to be considered by the Executive Committee in
determining whether to award a Quarterly Bonus or the amount of any such
Quarterly Bonus shall be the anticipated profit to be earned by the Company in
the first year from such new product or service; provided that during the
Initial Term the Quarterly Bonus shall not exceed $8,750 in any quarter and
during the Option Term shall not exceed $6,250 in any quarter.
(f) SEVERANCE BENEFITS. In the event (i) the Company does not
exercise the Option and Executive is not employed by the Company following the
expiration of the Initial Term, (ii) the Company exercises the Option, but
Executive declines to have the term of the Agreement extended in accordance with
Section 1(b) hereof and Executive is not employed by the Company following the
expiration of the Initial Term, or (iii) the Company exercises the Option,
Executive is employed by the Company throughout the Option Term, but is not
employed by the Company following the expiration of the Option Term, then
Executive shall be entitled to receive severance payments in an aggregate amount
of $100,000, payable in six (6) equal monthly installments.
(g) AUTOMOBILE. The Company shall pay to Executive a non-accountable
automobile allowance of $500 per month.
4. REIMBURSEMENT OF CERTAIN EXPENSES; APPROVAL OF EXPENDITURES. The
Company shall reimburse the Executive, upon production of detailed accounts and
vouchers or other reasonable evidence of payment by the Executive, all in
accordance with the Company's regular procedures in effect from time to time and
in form suitable to establish the validity of such expenses for tax purposes,
all ordinary, reasonable and necessary travel, entertainment and other expenses
as shall be incurred by him in the performance of his duties hereunder.
5. VACATION. The Executive shall be entitled to paid vacation time at
the rate of four (4) weeks per calendar year during the term of his employment
hereunder.
6. TOTAL DISABILITY. The Company shall provide disability insurance
coverage to the Executive as of the Effective Date of this Agreement. If the
Executive becomes disabled during his employment hereunder so that he is unable
for a period of six (6) consecutive months to
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perform his duties under this Agreement ("Total Disability"), the Company shall
pay to the Executive his full Base Salary and maintain in effect his group
health insurance coverage during such six (6) month period; thereafter, the
Company shall pay the Executive his full Base Salary and maintain in effect his
group health insurance coverage for an additional six (6) month period, after
which no further obligations shall be due to the Executive from the Company
hereunder. The Company shall have the right to offset against the foregoing
payments the amounts of any proceeds received by the Company and paid to the
Executive under any disability insurance policies maintained by the Company.
7. INSURANCE. The Executive agrees to submit himself, for physical
examination by any physician designated by the Executive Committee as required
or advisable in connection with the obtaining of any keyman insurance policy or
similar coverage which the Company may wish to obtain. The cost and expenses
for any such medical examinations and any such insurance shall be borne by the
Company.
8. CONFIDENTIAL INFORMATION. All records, papers, models, programs and
other documents and those kept or made by the Executive relating to the business
or affairs of the Company and/or its clients or customers (the "Premiere
Information") shall be and remain the property of the Company, and to the extent
available shall be delivered by the Executive to the Company as required by the
Executive Committee and, in any event, upon the expiration or earlier
termination of the Executive's employment by the Company. Executive shall
maintain the confidentiality of any Premiere Information provided or made
available to him.
9. INTELLECTUAL PROPERTY.
(a) Executive shall disclose in writing to the Company complete
information concerning all intellectual property, including, but not limited to,
original works of authorship, trademarks, service marks, and trade secrets,
(hereinafter sufficient to as "intellectual property") which are made,
developed, created, devised, conceived, perfected, reduced to practice or
discovered by Executive, either solely or in collaboration with others, during
the period of his employment by the Company, whether or not during regular
working hours, relating either directly or indirectly to the business, products,
programs, practices or techniques of the Company or resulting from any work
performed by Executive for the Company. The Company shall have complete control
(artistic and otherwise) over any such intellectual property.
(b) All copyrightable works with regard to Section 9(a) above, will
be deemed "work for hire" as defined in Section 101 of the Federal Copyright Act
and such copyrightable works shall exclusively belong to the Company. In the
event that Section 101 of the Copyright Act is found to be inapplicable,
Executive will assign all right, title and interest in and to such copyrightable
works to the Company. In addition, Executive will, upon request and without
further compensation therefore, but at no expense to Executive, assist the
Company in obtaining all registrations for such copyrights pursuant to Section
9(c) below.
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(c) Executive will, at any time during his employment, or thereafter,
upon request and without further compensation therefore, but at no expense to
Executive, do all lawful acts, including the execution of papers and oaths and
the giving of testimony, that in the opinion of the Company, its successors or
assigns, may be necessary or desirable for obtaining registrations for
intellectual property, including, but not limited to trademarks, service marks,
and copyrights, in the United States and throughout the world.
(d) For avoidance of doubt, all programs and services developed by
Executive during the term of this Agreement shall be the property of the Company
and as between Executive and the Company, the Company shall have final control
over the development and distribution and other business aspects of the programs
and services.
10. INDEMNIFICATION. The Company shall indemnify the Executive and his
legal representatives to the fullest extent permitted by the laws of the State
of Delaware, and the Executive shall be entitled to the protection of such
insurance policies which the Company hereby agrees to maintain for the benefit
of its directors and officers, against all costs, charges or expenses whatsoever
incurred or sustained by his or his legal representatives in connection with any
action, suit or proceeding to which he or his legal representatives may be made
a party thereto by reason of his being or having been an officer of the Company,
or because of actions taken purportedly on behalf of the Company. The Company
shall, upon request by the Executive, promptly advance or pay any amount for
costs, charges or expenses (including, but not limited to, legal fees and
expenses incurred by counsel retained by the Executive) in response of his right
to indemnification hereunder, subject to a later determination as to the
Executive's ultimate right to receive such payment.
11. TERMINATION OF EXECUTIVE'S EMPLOYMENT. Notwithstanding the provisions
of Section 1 hereof, this Agreement may be terminated prior to the expiration of
the Initial Term and, if the Option is exercised, prior to the expiration of the
Option Term by the Executive Committee, in the name and on behalf of the
Company, upon the happening of any of the following events: (i) the death of the
Executive; (ii) upon the Total Disability of the Executive; or (iii) upon the
occurrence of any material breach of any material covenant of the Executive
contained in this Agreement and the continuation of such breach for a period of
thirty (30) days following written notice by the Company to the Executive of
such breach, or in the event of willful malfeasance in the performance of his
duties hereunder having a material adverse effect on the business of the
Company.
12. CONSEQUENCES OF TERMINATION OF THIS AGREEMENT.
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(a) DEATH. In the event that this Agreement is terminated in
accordance with clause (i) of Section 11 above, the Executive's estate, legal
representatives or designees shall be entitled to receive, in full satisfaction
of all obligations due to the Executive from the Company hereunder, the
following sums:
(i) all accrued but unpaid Base Salary and any unpaid Annual
Bonus and Quarterly Bonus in respect to a year or quarter, respectively ended
prior to the Executive's death; and
(ii) an amount equal to the lesser of one year's Base Salary or
the amount of Base Salary that would have been due over the remainder of the
term of this Agreement, payable quarterly to the Executive's estate, legal
representatives or designee over a two (2) year period commending with the end
of the calendar quarter following the death of the Executive.
(b) DISABILITY. In the event this Agreement is terminated in
accordance with clause (ii) of Section 11 above, the Executive (or, if
applicable, his estate, legal representatives or designee) shall be entitled to
receive, in full satisfaction of all obligations due to the Executive from the
Company hereunder, the benefits set forth in Section 6 of this Agreement.
(c) BREACH. In the event that this Agreement is terminated in
accordance with clause (iii) of Section 11 above, the Executive shall be
entitled to receive all accrued but unpaid Base Salary through the date of
termination, and upon payment of said sum the Company shall have no further
obligations or liabilities to the Executive hereunder.
13. CHANGE OF CONTROL.
(a) In the event that a "Change of Control" (as hereinafter defined)
of the Company occurs during the term of this Agreement and within one year
thereafter the employment of Executive is either terminated for reasons other
than those set forth in Section 11, or the Executive voluntarily terminates his
employment within 60 days after the diminution of his responsibilities,
severance compensation in an amount equal to the sum of (i) Executive's Base
Salary at the time of such termination or resignation, plus (ii) four times the
average of the two highest Quarterly Bonuses paid to Executive in the year prior
to the Change of Control, will be paid promptly by the Company to Executive.
Amounts payable to Executive pursuant to this Section 13 shall not be reduced by
amounts earned by Executive from employment obtained by Executive following the
Change of Control. Amounts payable to Executive pursuant to this Section 13
shall be in lieu of any amounts which would otherwise be payable to Executive
pursuant to Section 3(f) hereof.
(b) "Change of Control" for the purposes of this Agreement shall mean
any change of control which is required to be reported to the Securities and
Exchange Commission or if (i) any person or entity acquires or controls 30% or
more of the Corporation's outstanding voting securities or (ii) during any
period of two consecutive years the persons who were
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directors of the Company immediately prior to such period ceases to constitute a
majority of the Board of Directors of the Company; provided, however, that
control by Archon and its affiliates shall not be deemed a "Change of Control"
for purposes of this Agreement.
14. NON-SOLICITATION. For a period of 12 months following the termination
of this Agreement Executive shall not solicit or assist in the solicitation for
employment any employees of the Company or its affiliates and shall not attempt
or assist in any attempt to engage any persons under contract with the Company
or performing or assisting in any programs produced by the Company.
15. OTHER POSITIONS. Following the termination of Executive's
employment with the Company, regardless of the reason for such termination,
Executive shall at the request of the Company made from time to time immediately
resign from all positions as an officer or director or any other positions with
any subsidiary or affiliate of the Company and all positions as an officer or
director or any other positions with any other entity where Executive was
appointed or designated to such position by the Company.
16. ASSIGNABILITY. This Agreement and the rights and obligations of the
parties hereunder may not be assigned by either party for any reason without the
prior written consent of the other party.
17. ARBITRATION OF DISPUTES. Any dispute or controversy between the
parties relating to or arising out of this Agreement or any amendment or
modification hereof shall be determined by arbitration in Los Angeles,
California by and pursuant to the rules then prevailing of the American
Arbitration Association. The arbitration award shall be final and binding upon
the parties and judgment may be entered thereon by any court of competent
jurisdiction. The service of any notice, process, motion or other document in
connection with any arbitration under this Agreement or the enforcement of any
arbitration award hereunder may be effectuated either personal service upon a
party or by certified mail duly addressed to him or his executors,
administrators, personal representatives, next of kin, successors or assigns, at
the last known address or addresses of such party or parties. If the Executive
is the prevailing party on any issue in any such arbitration proceeding, he
shall be entitled to recover from the Company any actual expenses for attorney's
fees and disbursements incurred by him.
18. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of California applicable to contracts
executed in and to be performed solely within the State of California.
19. ABILITY TO FULFILL OBLIGATIONS. Neither the Company nor the Executive
is a party to or bound by any agreement which would be violated by the terms of
this Agreement.
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20. NOTICE. Any notice, direction or instruction required or permitted to
be given hereunder shall be given in writing and may be given by telex,
telegram, facsimile transmission or similar method if confirmed by mail as
herein provided; by mail if sent postage prepaid by registered mail, return
receipt requested; or by hand delivery to any party at the address of the party
first above set forth. If notice, direction or instruction is given by telex,
telegram of facsimile transmission or similar method or by hand delivery, it
shall be deemed to have been given or made on the date on which it was given,
and if mailed, shall be deemed to have been given or made on the third business
day following the day after which it was mailed. Any party may, from time to
time, by like notice give notice of any change of address and in such event, the
address of such party shall be deemed to be changed accordingly.
21. FURTHER ASSURANCES. The parties hereto agree that, after the
execution of this Agreement, they will make, do, execute or cause or permit to
be made, done or executed all such further and other lawful acts, deeds, things,
devices, conveyances and assurances in law whatsoever as may be required to
carry out the true intentions and to give full force and effect to this
Agreement.
22. MISCELLANEOUS. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous oral and prior written agreements and
understandings, including, without limitation the Employment Agreement dated
January 6, 1995 between the Executive and the Company (the "1995 Agreement").
Executive acknowledges that the Company has fully performed all its obligations
under the 1995 Agreement and Executive has no claims against the Company for any
breach or alleged breach of the 1995 Agreement. There are no oral promises,
conditions, representations, understandings, interpretations or terms of any
kind as conditions or inducements to the execution hereof or in effect among the
parties. No custom or trade usage, nor course of conduct amount the parties,
shall be relied upon to vary the terms hereof. This Agreement may not be
amended, and no provision hereof shall be waived, except by a writing signed by
all of the parties to this agreement which states that it is intended to amend
or waive a provision of this Agreement. Any waiver of any rights or failure to
act in a specific instance shall relate only to such instance and shall not be
construed as an agreement to waive any rights or fail to act in any other
instance, whether or not similar.
23. SEVERABILITY. Should any provision of this Agreement be unenforceable
or prohibited by any applicable law, this Agreement shall be considered
divisible as to such provision which shall be inoperative, and the remainder of
this Agreement shall be valid and binding as though such provision were not
included herein.
24. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.
25. HEADINGS. All headings in this Agreement are for convenience only and
will not affect the meaning of any provision hereof.
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26. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 8, 9, 10,
14, 15 and 17, shall, to the extent applicable, continue in full force and
effect notwithstanding the expiration or earlier termination of this Agreement
or of the Executive's employment in accordance with the terms of this Agreement.
27. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall inure to the benefit of, and be binding upon, the Company and
any corporation with which the Company merges or consolidates, and upon the
Executive and his executors, administrators, heirs and legal representatives.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by a duly authorized officer as
of the day and year first above written.
PREMIERE RADIO NETWORKS, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name:Xxxxx Xxxxxx
Title:President/Chief Executive Officer
/s/ Xxxxxxx Xxxxx
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XXXXXXX XXXXX
The undersigned spouse of Xxxxxxx Xxxxx hereby irrevocably consents to the
terms of this Employment Agreement.
/s/ Xxxxxx Xxxxx
--------------------------------------------
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