Exhibit 10.48.1
ACTV, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of January 1, 1999, and amended as of
January 1, 2000, by and between ACTV, INC., a Delaware corporation, having an
office at 1270 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter referred to as "Employer"), and XXXXXXXXXXX X. XXXXX, an individual
residing at 000 Xxxx Xxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred
to as "Employee")
W I T N E S S E T H:
WHEREAS, Employer employs, and desires to continue to employ,
Employee as its Senior Vice President - New Business Development and Finance and
Chief Financial Officer; and
WHEREAS, Employee is willing to continue to be employed as, and is
willing to continue to perform the duties of, the Senior Vice President - New
Business Development and Finance and Chief Financial Officer of Employer in the
manner provided for herein and upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein set forth it is agreed as follows:
1. Employment by ACTV, Inc. Employer hereby employs Employee as
Senior Vice President - New Business Development and Finance and Chief Financial
Officer of Employer.
2. Term. Subject to Section 9 below, the term of this Agreement
shall commence on January 1, 1999 and end on December 31, 2004. Each 12-month
period from January 1st through December 31st during the term hereof shall be
referred to as an "Annual Period." During the term hereof, Employee shall,
whether in the foregoing position or in such other position as Employer may then
be employing him, devote substantially all of his business time and efforts to
Employer and its subsidiaries and affiliates.
3. Duties. The Employee shall perform any and all duties and shall
have any and all powers as may be prescribed by Employer's Chairman and Chief
Executive Officer and shall be available to confer and consult with and advise
the officers and directors of Employer at such times that may be required by
Employer. Employee shall report directly and solely to the Chairman or his
designee.
4. Compensation.
a. (i) Employee shall be paid a minimum of $150,000 for the
initial Annual Period, commencing January 1, 1999, and shall be paid a minimum
of $200,000 for each subsequent Annual Period, commencing January 1, 2000.
Employee shall be paid periodically in accordance with the policies of the
Employer during the term of this Agreement, but not less than monthly.
(ii) Employee is eligible for bonuses, if any, which
will be determined and paid in accordance with policies set from time to time by
the Board.
(iii) Employee shall be entitled to a leased car of his
choice, the cost of which shall reduce the total cash compensation paid under
section 4 (a) (i)
b. (i) In the event of a "Change of Control" whereby:
(A) A person (other than a person who is an officer or a
Director of Employer on the effective date hereof) including a "group" as
defined in Section 13(d) (3) of the Securities Exchange Act of 1934, becomes, or
obtains the right to become, the beneficial owner of Employer securities having
30% or more of the combined voting power of then outstanding securities of the
Employer that may be cast for the election of directors of the Employer;
(B) At any time, a majority of the Board-nominated slate
of candidates for the Board is not elected;
(C) Employer consummates a merger in which it is not the
surviving entity;
(D) Substantially all Employer's assets are sold; or
(E) Employer's stockholders approve the dissolution or
liquidation of Employer; then
(ii) (A) All stock options, warrants and stock
appreciation rights ("Rights") granted by Employer to Employee under any plan or
otherwise prior to the effective date of the Change of Control, shall become
vested, accelerate and become immediately exercisable; at an exercise price of
10(cent) per stock appreciation right if applicable; and in addition the
employee, at his option, shall receive a special compensation payment for the
exercise cost of all vested options upon exercising those options any time
within twelve months after the effective date of the change of control, adjusted
for any stock splits and capital reorganizations having a similar effect
subsequent to the effective date hereof. In the event Employee owns or is
entitled to receive any unregistered securities of Employer, then Employer shall
use its best efforts to effect the registration of all such securities as soon
as practicable, but no later than 120 days after the effective date of the
registration statement; provided, however, that such period may be extended or
delayed by Employer for one period of up to 60 days if, upon the advice of
counsel at the time such registration is required to be filed, or at the time
Employer is required to exercise its best efforts to cause such registration
statement to become effective, such delay is advisable and in the best interests
of Employer because of the existence of non-public material information, or to
allow Employer to complete any pending audit of its financial statements;
(B) If upon said Change of Control, (i) a new
Chief Executive Officer of Employer is appointed and (ii) Employee is not
retained in his immediately prior position or a substantially similar position
with Employer or the surviving entity, as applicable, then in addition, Employee
shall be eligible to receive a one-time bonus, equal on an after-tax basis to
his then current annual base salary. To effectuate this provision, the bonus
shall be "grossed-up" to include the amount necessary to reimburse Employee for
his federal, state and local income tax liability on the bonus and on the
"gross-up" at the respective effective marginal tax rates. Said bonus shall be
paid within thirty (30) days of the Change of Control.
c. Employer shall include Employee in its health insurance
program available to Employer's executive officers.
d. After January 1, 2000, Employer shall maintain a life,
accidental death and dismemberment insurance policy on Employee for the benefit
of a beneficiary named by Employee in an amount not less than $750,000.
Ownership of the policy shall be assigned to Employee upon termination of
Employee's employment under this Agreement.
e. Employee shall also be entitled to participate pari passu
in any other program established by Employer pursuant to which any executive
officers receive a share of the profits of Employer.
f. Employee shall have the right to participate in any other
employee benefit plans established by Employer.
g. Unless a pre-existing plan of Employer expressly forbids
it, all Rights which may become exercisable during the term hereof shall be paid
for in cash only if Employee so elects, otherwise they may be paid for:
(i) by the transfer by Employee to Employer of so much of
Employee's Rights which, when valued at the highest trading price of the
underlying securities of Employer during the previous six months, will offset
the price of the Rights then being exercised;
(ii) by means of a non-recourse Note with interest at the
lowest rate, it any, required to be charged by any governmental authority, to
accrue and become due and payable with the principal, in an amount no greater
than the exercise price, given by Employee to Employer and secured solely by the
shares of stock being paid for thereby, which Note shall become due and payable
at the earlier of the expiration hereof or, on a pro rata basis, the sale by
Employee of all or part of the Rights or underlying stock which constitute
security for the Note; or
(iii) by any combination of cash and (ii) or (iii), above.
5. Expenses. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.
6. Vacation. Employee shall be entitled to receive three (3) weeks
paid vacation time after each year of employment upon dates agreed upon by
Employer. Upon separation of employment, for any reason, vacation time accrued
and not used shall be paid at the salary rate of Employee in effect at the time
of employment separation.
7. Secrecy. At no time shall Employee disclose to anyone any
confidential or secret information (not already
constituting information available to the public) concerning (a) internal
affairs or proprietary business operations of Employer or (b) any trade secrets,
new product developments, patents, programs or programming, especially unique
processes or methods.
8. Covenant Not to Compete. Employee acknowledges and confirms that
the Company is placing its confidence and trust in Employee. Accordingly,
Employee covenants and agrees that he will not, during the term of his
employment, and for a period of one (1) year thereafter, either directly or
indirectly, engage in any business, either directly or indirectly (whether as a
creditor, guarantor, financial backer, stockholder, director, officer,
consultant, advisor, employee, member, inventor, producer, or otherwise) , with
or for any company, enterprise, institution, organization or other legal entity
(whether a sole proprietorship, a corporation, a partnership, a limited
liability company, an association, or otherwise, and whether or not for profit),
which is in competition with the ACTV Business (as defined herein) . As used in
this Agreement, the term "ACTV Business" shall mean the invention, development,
application, implementation, extension, operation and/or management by ACTV
and/or any ACTV affiliate of any invention, software, technology, business,
service or product of ACTV and/or any ACTV affiliate, including without
limitation the convergence and digital television technologies commonly referred
to by ACTV as "Individualized Television", "HyperTV" and "eSchool"
Furthermore, Employee will not during the term of his
employment, and for a period of one (1) year thereafter, individually or through
any entity, directly or indirectly, become an employee, consultant, advisor,
director, officer, producer, partner or joint or co-venturer of or to, or enter
into any contract, agreement or arrangement with, any entity or business venture
of any kind to or of which ACTV and/or any ACTV affiliate is a licensor or
licensee or with which ACTV and/or any ACTV affiliate is a joint or co-venturer,
partner or otherwise engaged in any on-going business relationship or
discussions or negotiations with a view to entering into such a relationship to
provide services or products, without the express prior written consent of ACTV.
Employee hereby acknowledges and agrees that the ACTV Business
extends throughout the United States, and that --given the nature of the ACTV
Business -- ACTV and/or any ACTV affiliate can be harmed by competitive conduct
anywhere in the United States. Employee therefore agrees that the covenants not
to compete contained in this Section 8 shall be applicable in and throughout the
United States, as well as throughout such additional non-U.S. areas in which
ACTV and/or any ACTV affiliate may
be (or has prepared written plans to be) doing business as of the date of
termination of Employee's employment. Employee further warrants and represents
that, because of his varied skill and abilities, he does not need to compete
with the ACTV Business, and that this Agreement will therefore not prevent him
from earning a livelihood. Employee acknowledges that the restrictions contained
in this Section 8 constitute reasonable protections for ACTV and its affiliates
in light of the foregoing and in light of the promises to Employee contained
herein. Employee and the Company hereby agree that, if the period of time or the
scope of the restrictive covenant not to compete contained in this Section 8
shall be adjudged unreasonable by any proper arbiter of a dispute hereunder,
then the period of time and/or scope shall be reduced accordingly, so that this
covenant may be enforced in such scope and during such period of time as is
judged by such arbiter to be reasonable.
9. Termination.
(i) For Cause. Employer may terminate this Agreement
upon written notice for Cause. For purposes hereof, "Cause" shall mean (A)
engaging by the Employee in conduct that constitutes activity in competition
with Employer; (B) the conviction of Employee for the commission of a felony;
and/or (C) the habitual abuse of alcohol or controlled substances.
Notwithstanding anything to the contrary in this Section 9(a) (i) Employer may
not terminate Employee's employment under this Agreement for Cause unless
Employee shall have first received notice from the Board advising Employee of
the specific acts or omissions alleged to constitute Cause, and such acts or
omissions continue after Employee shall have had a reasonable opportunity (at
least 10 days from the date Employee receives the notice from the Board) to
correct the acts or omissions so complained of.
(ii) Without Cause. Employer may terminate this
Agreement without cause with no notice to Employee. In the event Employee is
terminated without cause, Employee shall receive severance pay equal to six
months.
(iii) Disability. Employer may terminate Employee's
employment under this Agreement if, as a result of any physical or mental
disability, Employee shall fail or be unable to perform his duties under this
Agreement for any consecutive period of 90 days during any twelve-month period.
If Employee's employment is terminated under this Section 9(a) (iii) (A) for the
first six months after termination, Employee shall be paid 100% of his full
compensation under Section 4(a) of this Agreement at the rate in effect on the
date of termination, and in each successive 12 month period thereafter Employee
shall be paid an amount equal to 67% of his compensation under Section
4(a) of this agreement at the rate in effect on the date of termination; (B)
Employer's obligation to pay life insurance premiums on the policy referred to
in Section 4(d) shall continue in effect until five years after the date of
termination; and (C) Employee shall continue to be entitled, insofar as is
permitted under applicable insurance policies or plans, to such general medical
and employee benefit plans (including profit sharing or pension plans) as
Employee had been entitled to on the date of termination. Any amounts payable by
Employer to Employee under this paragraph shall be reduced by the amount of any
disability payments payable by or pursuant to plans provided by Employer and
actually paid to Employee.
(iv) Death. This Agreement shall automatically terminate
upon the death of Employee, except that Employee's estate shall be entitled to
receive any amount accrued under Section 4(a) and the pro-rata amount payable
under Section 4(e) for the period prior to Employee's death and any other amount
to which Employee was entitled of the time of his death.
10. Arbitration. Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 7 and 8 hereof, shall on the written request of either party served on
the other be submitted to arbitration. Such arbitration shall comply with and be
governed by the rules of the American Arbitration Association. An arbitration
demand must be made within one (1) year of the date on which the party demanding
arbitration first had notice of the existence of the claim to be arbitrated, or
the right to arbitration along with such claim shall be considered to have been
waived. An arbitrator shall be selected according to the procedures of the
American Arbitration Association. The cost of arbitration shall be born by the
losing party or in such proportions as the arbitrator shall decide. The
arbitrator shall have no authority to add to, subtract from or otherwise modify
the provisions of this Agreement, or to award punitive damages to either party.
11. Attorneys' Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
12. Entire Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to Employer's employment of Employee
and supersedes, effective as of the date hereof any prior agreement or
understanding between
Employer and Employee with respect to Employee's employment by Employer (other
than that certain Confidentiality/Non-Disclosure Agreement dated as of November
1, 1993 between Employer and Employee, which agreement shall continue in full
force and effect in accordance with the respective terms thereof) . The
unenforceability of any provision of this Agreement shall not affect the
enforceability of any other provision. This Agreement may not be amended except
by an agreement in writing signed by the Employee and the Employer, or any
waiver, change, discharge or modification as sought. Waiver of or failure to
exercise any rights provided by this Agreement and in any respect shall not be
deemed a waiver of any further or future rights.
b. The provisions of Sections 4, 7, 8, 9 (a) (iii), 9(a) (iv),
14, 15 and 16 shall survive the termination of this Agreement.
13. Assignment. This Agreement shall not be assigned to other
parties.
14. Governing Law. This Agreement and all the amendments hereof, and
waivers and consents with respect thereto shall be governed by the internal laws
of the state of New York, without regard to the conflicts of laws principles
thereof.
15. Notices. All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when
a. delivered by hand;
b. sent be telex or telefax, (with receipt confirmed),
provided that a copy is simultaneously mailed by registered or certified mail,
return receipt requested; or
c. received by the addressee as sent be express delivery
service (receipt requested), in each case to the appropriate addresses, telex
numbers and telefax numbers as the party may designate to itself by notice to
the other parties:
(i) if to the Employer:
ACTV, Inc.
1270 Avenue of the Americas, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Xxxxxxx X. Xxxxxxx
Telefax: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
ACTV, Inc.
1270 Avenue of the Americas, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Day X. Xxxxxxxxx - Law Dept.
Telefax: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to the Employee:
Xx. Xxxxxxxxxxx X. Xxxxx
000 Xxxx Xxx Xxxxxx, #0X
Xxx Xxxx, XX 00000
16. Severability of Agreement. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which remaining
[ILLEGIBLE] shall remain in full force and effect as if this [ILLEGIBLE] been
executed with the invalid portion thereof eliminate [ILLEGIBLE] is hereby
declared the intention of the parties that [ILLEGIBLE] have executed the
remaining portions of this Agreement [ILLEGIBLE] including any such part, parts
or portions which may, [ILLEGIBLE] reason, be hereafter declared invalid.
IN WITNESS WHEREOF, the undersigned have execu[ILLEGIBLE] agreement
as of the day and year first above written.
ACTV, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx,
Chairman and CEO
/s/ Xxxxxxxxxxx X. Xxxxx
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XXXXXXXXXXX X. XXXXX
