EMPLOYMENT AGREEMENT
Dated ____, 1999
The parties to this agreement are Xxxxxx X. Xxxxx, residing at
____________ ("Xxxxx"), and YouthStream Media Networks, Inc., a Delaware
corporation with its principal office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Company").
The Company has today acquired (directly and indirectly) all of the
outstanding membership interests in Network Event Theater, Inc., a Delaware
corporation of which Xxxxx was the Chairman of the Board and Chief Executive
Officer. The Company desires to secure the services of Xxxxx as its Chairman of
the Board and Chief Executive Officer, and Xxxxx has agreed to serve the
Company, on the terms set forth in this agreement.
It is therefore agreed as follows:
1. Employment. During the term of Xxxxx'x employment under this
agreement, the Company shall employ Xxxxx, and Xxxxx shall serve the Company, as
the Chairman of the Board and Chief Executive Officer of the Company. Xxxxx
shall report to the Company's board of directors (and not to any other officer
of the Company. Xxxxx shall have the responsibility for overall company
management, management of all non-Internet business lines, finance and
administration, public and investor relations, and mergers and acquisitions
(subject to input from the President of the Company's Common Places subsidiary
with respect to Internet-related acquisitions). Xxxxx shall devote substantially
all his business time to the performance of his duties under this agreement.
2. Term of Employment. The term of Xxxxx'x employment under this
agreement shall commence on the date of this agreement and, subject to earlier
termination upon Xxxxx'x death or disability pursuant to section 5.1 or pursuant
to section 6, shall continue until the third anniversary of the date of this
agreement.
3. Compensation. As full consideration for his services under this
agreement and subject to section 6.3, Xxxxx shall be entitled to a salary at the
rate of $250,000 a year, payable in equal installments in accordance with the
Company's customary payroll practices for its employees. Following the end of
each fiscal year during the term, the Company's board of directors may increase
(but not decrease) Xxxxx'x salary or xxxxx Xxxxx a bonus of up to $40,000 based
on his performance during that year.
4. Reimbursement of Expenses; Fringe Benefits.
4.1 Expenses. The Company shall reimburse Xxxxx for all
reasonable expenses incurred by Xxxxx in connection with the performance of his
duties, upon presentation of appropriate vouchers covering the expenses.
4.2 Fringe Benefits. Xxxxx (and his immediate family) shall be
entitled to participate in medical, dental, disability, life insurance and other
fringe benefits and executive perquisites generally provided to senior
executives of the Company.
5. Disability or Death.
5.1 Disability. If, as the result of any physical or mental
disability, Xxxxx shall fail or be unable to perform his duties for a total of
180 days in any 12-month period, the Company may, by notice to the Xxxxx,
terminate his employment under this agreement as of the date of the notice.
5.2 Payments on Disability. If Xxxxx'x employment is
terminated pursuant to section 5.1, Xxxxx shall be paid, in full discharge of
all the Company's obligations to Xxxxx, Xxxxx'x full salary under section 3 for
one year following the date of termination (or, if a shorter period, the
remainder of the term), less the amount of any disability payments received by
him under any disability insurance coverage provided to him by the Company. If
Xxxxx shall request, for that one-year period (or the balance of the term), the
Company shall, at Xxxxx'x expense, keep Xxxxx and his immediate family on all
medical, dental and other plans they previously enjoyed under this agreement.
5.3 Payments on Death. Xxxxx'x employment under this agreement
shall be terminated upon his death and Xxxxx'x estate shall be paid, in full
discharge of all the Company's obligations to the Xxxxx, Xxxxx'x full salary
under section 3 for one year following the date of termination (or, if a shorter
period, the remainder of the term), plus the proceeds of any life insurance
policy purchased by the Company on Xxxxx'x life and payable to Xxxxx'x heirs and
estate. If Xxxxx'x immediate family shall request, for that one-year period (or
the balance of the term), the Company shall, at the expense of Xxxxx'x immediate
family, keep them on all medical, dental and other plans they previously enjoyed
under this agreement.
6. Termination.
6.1. Payments Upon Termination for Cause or Voluntary
Termination. The Company may terminate Xxxxx'x employment under this agreement
for cause (as defined in section 6.4). If Xxxxx'x employment under this
agreement is terminated for cause pursuant to section 6.1 or by Xxxxx
voluntarily (other than for Good Reason, as defined in section 6.4), the Company
shall pay Xxxxx, in full discharge of its obligations to Xxxxx under this
agreement, (a) the accrued amount of the salary and benefits due to him through
the date of termination and the amount of all expense reimbursements due for
periods prior to termination, and (b) the amounts, if any, payable pursuant to
section 6.3.
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6.2. Payments Upon Termination for Other Reasons. If Xxxxx'x
employment under this agreement is terminated by the Company for any reason
other than for cause pursuant to section 6.1 or death or disability pursuant to
section 5, or if Xxxxx'x employment under this agreement is terminated by Xxxxx
for Good Reason, the Company shall pay Xxxxx (a) to the extent not previously
paid (and not subject to proration, offsets or claims of any kind), if, as and
when otherwise payable, all compensation payable pursuant to section 3 through
the remainder of the term, (b) to the extent not previously paid (and not
subject to proration, offsets or claims of any kind), all bonuses previously
authorized by the Company's board of directors and (c) the amounts, if any,
payable pursuant to section 6.3. In addition, upon the request of Xxxxx, the
Company shall, at Xxxxx'x expense, keep Xxxxx and his immediate family on all
medical, dental and other plans they have enjoyed under this agreement through
the remainder of the term. None of the payments provided for in this section 6.2
shall be reduced by any amounts earned or received by Xxxxx from any third party
at any time. Without limiting the generality of the foregoing, in the case of
any termination of employment for any reason other than pursuant to section 6.1,
there shall be no requirement on the part of Xxxxx to mitigate damages.
6.3 Option to Invoke Section 8. If Xxxxx'x employment is
terminated under section 6.2, the Company may, at its option (exercisable by the
Company by notice given to Xxxxx within 30 days after termination of
employment), determine that Xxxxx shall be bound by the provisions of section
8.1. If the Company exercises this option, Xxxxx shall be bound by section 8.1,
and during the 18-month period referred to in section 8 the Company shall make
payments to Xxxxx, in addition to any amounts otherwise payable to him under
this agreement, at the rate of his annual basic salary in effect as of the date
of termination, in equal installments in accordance with the Company's customary
payroll practices for its employees.
6.4 Definitions. As used in this agreement:
(a) the term "cause" shall be limited to mean: (i) the
conviction of Xxxxx of a felony, (ii) the conviction of Xxxxx of a crime
involving any financial impropriety or that would materially interfere with
Xxxxx'x ability to perform his services required under this agreement or
otherwise be materially injurious to the Company or (iii) the willful breach by
Xxxxx in a material respect of his obligations under this agreement after ten
days notice and an opportunity to cure and after a hearing before the board; and
(b) the term "Good Reason" shall be limited to mean the
occurrence, without the express written consent of Xxxxx, of any of the
following circumstances: (i) a significant adverse alteration in Xxxxx'x status
in the Company, in the nature of Xxxxx'x responsibilities, or in the material
conditions of Xxxxx'x employment; (ii) a reduction by the Company in Xxxxx'x
annual basic salary or benefits as provided for in this agreement; (iii) the
Company requiring that Xxxxx be based at a location more than 100 miles from his
residence on the date of this agreement, except for required travel on the
Company's business; and (iv) the Company's breach of any of its material
obligations under this agreement and the continuation of that breach for 30 days
after written notice by Xxxxx to the Company.
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7. Confidential Information. Xxxxx shall not, directly or
indirectly, either during his employment by the Company or at any time
thereafter, disclose to anyone or use (except as authorized in the regular
course of the Company's business) any information acquired by him during his
employment with respect to any of the Company's trade secrets or other
confidential information. For this purpose, information generally known to the
public shall not be considered a trade secret or confidential information.
8. Non-Competition, etc
8.1 Non-Competition. For a period of 18 months after
termination of his employment under this agreement, Xxxxx shall not, directly or
indirectly, engage or be interested in any business or entity that engages in
(a) the business of developing and operating an Internet portal targeted
primarily to individuals between the ages of 16 and 25, (b) any business
directly competitive with any business resulting from an expansion of the
Internet portal business of the Company or any of its subsidiaries into other
Internet businesses, or (c) any other business the Company or any of its
subsidiaries is then engaged in (any such business, a "Restricted Business");
provided, however, that nothing in this paragraph shall limit Xxxxx'x right to
be employed by a media company whose businesses include a Restricted Business,
as long as he does not provide any services to that Restricted Business. For the
purpose of this provision, Xxxxx shall be deemed to be directly or indirectly
engaged or interested in a business or entity if he is engaged or interested in
that business or entity as a stockholder, member, partner, individual
proprietor, director, officer, employee, agent, lender, consultant or otherwise,
but not if his interest is limited solely to the ownership of 5% or less of any
class of the equity or debt securities of a corporation as to which he has only
a passive role.
8.2 Non-Solicitation. Xxxxx shall not, for a period of 18
months after termination of his employment (regardless of the reason for
termination), directly or indirectly employ or retain, solicit the employment or
retention of, or be associated with any entity that employs or retains or
solicits the employment or retention of, any person who was an employee of the
Company or any of its subsidiaries at any time during the twelve months
preceding the termination of Xxxxx'x employment.
8.3 Injunction. Xxxxx acknowledges that the remedy at law for
breach of the provisions of sections 8.1 or 8.2 will be inadequate and that, in
addition to any other remedy the Company may have, it shall be entitled to an
injunction restraining any breach or threatened breach, without any bond or
other security being required and without the necessity of showing actual
damages.
8.4 Inapplicability. If Xxxxx'x employment is terminated under
section 6.2, Xxxxx shall have no obligations under section 8.1 if the Company
does not exercise the option referred to in section 6.3.
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9. Miscellaneous.
9.1. Headings. The section headings of this agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this agreement.
9.2. Notices. All notices and other communications under this
agreement shall be in writing and shall be deemed given when delivered
personally or mailed by registered mail, return receipt requested, to the
parties at their respective addresses set forth above (or to such other address
as a party may have specified by notice given to the other party pursuant to
this provision).
9.3. Separability. The invalidity or unenforceability of any
provision of this agreement shall not affect the validity or enforceability of
any other provision of this agreement, which shall remain in full force and
effect.
9.4. Waiver. Either party may waive compliance by the other
party with any provision of this agreement. The failure of a party to insist on
strict adherence to any term of this agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this agreement. No waiver of
any provision shall be construed as a waiver of any other provision. Any waiver
must be in writing.
9.5. Assignment. Neither party may assign any of its rights or
delegate any of its duties under this agreement (other than as contemplated by
this agreement) without the prior consent of the other and any assignment or
delegation in violation of this prohibition shall be void.
9.6. Governing Law. This agreement shall be governed by and in
accordance with the substantive law of the state of New York applicable to
agreements made and to be performed in New York.
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8.7. Entire Agreement. This agreement contains, and is
intended as, a complete statement of all the terms of the arrangements between
the parties with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those matters
and cannot be changed or terminated orally.
YOUTHSTREAM MEDIA NETWORKS, INC.
By:
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Xxxxxxxx Xxxxx, President
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Xxxxxx Xxxxx
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