Exhibit 10.1 Amended and Restated Employment Agreement as of May 7, 2001 by and
between Source Media Inc., IT Network and Xxxxxx Xxxxxx
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT, dated as of May 7, 2001,
by and between SOURCE MEDIA, INC.,
a Delaware corporation (the
"Company"), IT NETWORK, INC., a
Delaware corporation and a wholly
owned subsidiary of the Company
(the "Subsidiary"), and XXXXXX
XXXXXX (the "Employee").
WHEREAS, The Company desires to engage Employee to perform services for
the Company, and Employee desires to perform such services, on the terms and
conditions set forth below; and
WHEREAS, The Company entered into an Employment Agreement, dated as of
October 6, 2000 (the "Prior Employment Agreement") with Employee; and
WHEREAS, The Subsidiary desires to engage Employee to perform services
for the Subsidiary, and Employee desires to perform such services, on the terms
and conditions set forth below; and
WHEREAS, The Company and Employee desire to amend and restate the Prior
Employment Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual promises herein made and
for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree to amend and restated the Prior
Employment Agreement in its entirety as follows:
1. EMPLOYMENT. The Company hereby employs Employee as its Senior Vice
President and the Subsidiary additionally employs Employee as its President and
Chief Executive Officer, and Employee hereby accepts such employment, upon the
terms and conditions hereinafter set forth.
2. TERM. The term (the "Term") of employment of Employee pursuant to
this Agreement shall commence on May 7, 2001 and shall terminate on May 7, 2003.
The Term shall automatically be renewed for successive one year periods unless
either party gives the other written notice to the contrary at least 120 days
prior to the end of the Term or any such renewal thereof.
3. DUTIES AND SERVICES. Employee shall devote his full time and best
efforts to the business and affairs of the Company and the Subsidiary, and
perform, in a competent manner, such executive and managerial functions and
duties commensurate with his position as Senior Vice President of the Company,
and as President and Chief Executive Officer of the Subsidiary, as the
President of the Company may reasonably prescribe from time to time. Employee
shall report directly to the President of the Company. The parties acknowledge
that Employee will spend such time at the Company's offices in Dallas, Texas as
is reasonably required to perform his functions and duties. The Company will not
require Employee to relocate his home from the New York metropolitan area.
4. COMPENSATION.
A. SALARY. For all services to be rendered by Employee
hereunder, the Company shall pay Employee an annual base salary of $200,000. The
Company shall pay Employee's salary in accordance with the Company's standard
payroll practices as in effect from time to time, with appropriate deductions
required by applicable laws, rules and regulations.
B. DISCRETIONARY BONUS. On an annual basis, the Board of
Directors of the Company shall consider a bonus payment to Employee based on his
performance, and the Company's results of operations. The timing and amount of
any such bonus payment shall be in the sole and absolute discretion of the Board
of Directors.
C. STOCK OPTION PARTICIPATION. Each of the Employee and the
Company acknowledge that Employee has received a ten-year option to purchase
150,000 shares of the common stock, par value $.001 per share, of the Company.
5. EXPENSES. The Company shall reimburse Employee for all reasonable,
ordinary and necessary expenses incurred on behalf of the Company by Employee,
including reasonable expenses associated with rental cars and, subject to the
approval of the President of the Company, a temporary residence in Dallas,
Texas. Employee shall submit to the Company an expense report and receipts or
other verification of expenses to be reimbursed in accordance with the Company's
standard policies.
6. BENEFITS. Employee shall be entitled to such insurance and
retirement plan benefits as are generally available to other senior management
employees of the Company, pursuant to Company policy in effect from time to
time, such as health insurance, disability and life insurance, and the right to
participate in any retirement plans maintained by the Company.
7. VACATION AND SICK DAYS. Employee shall be entitled to fifteen (15)
business days of paid vacation during each calendar year (pro-rated for periods
shorter than a calendar year). Vacation and sick days shall be taken in
accordance with the Company's published guidelines.
8. TERMINATION PROVISIONS.
A. TERMINATION FOR CAUSE. Notwithstanding the provisions of
Section 2 above, the Company, on two days' prior written notice, may terminate
the employment of Employee for any of the following reasons (for "cause"),
without the payment of any compensation to Employee, except accrued salary and
vacation pay due for the period prior to the date of termination of employment:
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(i) Employee shall be convicted of a felony or any
crime involving an act of dishonesty, such as embezzlement, theft or larceny;
(ii) Commission of theft from or fraud against the
Company or the Subsidiary or any willful misconduct by Employee that is
materially injurious to the financial condition or business reputation of the
Company or the Subsidiary, including by reason of material breach by Employee of
the provisions of this Agreement; and
(iii) Willful and continued failure by the Employee
to substantially perform his duties hereunder.
B. TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE, DEATH OR
DISABILITY.
(i) If the employment of Employee is terminated by
the Company other than for cause, death or disability, the Company shall pay to
Employee as severance, in equal monthly installments, the remaining base salary
payments that Employee would have earned if he had continued his employment
throughout the Term, and an amount equal to any accrued vacation pay on the date
of termination of employment. Such payments shall cease in the event Employee
obtains other employment following termination of employment by the Company;
provided, however, that in the event the base salary payable to Employee by the
Company on the date of termination exceeds the base salary payable to Employee
by such new employer, the Company shall pay such excess, in equal monthly
installments, through the expiration of the Term.
(ii) The Company will continue life, medical, dental
and disability coverage substantially identical to the coverage maintained by
the Company for Employee and his dependents prior to termination of his
employment, except to the extent such coverage may be changed in its application
to all Company employees on a nondiscriminatory basis. Such coverage shall cease
when Employee obtains other employment.
C. TERMINATION ON ACCOUNT OF DISABILITY OR DEATH.
(i) In the event Employee shall, during the term of
this Agreement, become physically or mentally disabled so that he is unable, or
can reasonably be expected to be unable, to perform his duties hereunder for a
period of seventy five (75) consecutive days, or ninety (90) non-consecutive
days within any twelve (12) month period, the Company shall have the right to
terminate Employee's employment, provided that (a) the Company provides Employee
with not less than five (5) days' prior written notice of the termination of his
employment and (b) the Company makes the payments to Employee referred to in
clause (ii) below. Any determination of disability shall be made by a physician
selected by the Company and reasonably acceptable to Employee.
(ii) In the event the Company terminates Employee's
employment for disability as set forth in clause (i) above ("Disability
Termination"), Employee shall be entitled to receive, in monthly installments,
the base salary Employee would have received in the following three months. All
payments made pursuant to this paragraph shall be made in accordance with the
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Company's standard payroll practices as in effect from time to time, with
appropriate deductions required by applicable laws, rules and regulations. In
addition, the Company, at its expense, for a period of three months following
the date of Disability Termination, will continue medical and dental insurance
coverage substantially identical to the coverage maintained by the Company for
Employee and his dependents prior to termination of employment, except to the
extent such coverage may be changed in its application to all Company employees
on a non-discriminatory basis.
(iii) In the event of the death of Employee, the
Company shall pay the estate of the Employee or his legal representative the
accrued salary and vacation pay due for the period prior to the date of
Employee's death.
D. TERMINATION BY EMPLOYEE.
(i) Notwithstanding the provisions of Section 2
above, Employee will be considered to have resigned his employment for "good
reason" if the Company, without the express written consent of Employee,
materially breaches this Agreement.
(ii) In the event that Employee resigns from his
employment for good reason, the Company shall be obligated to provide Employee
with the severance payments, insurance coverage as required if the Company had
terminated Employee other than for cause pursuant to Section 8B above.
(iii) In the event that Employee resigns from his
employment without good reason, the Company shall be obligated to provide
Employee with the payments as required if the Company had terminated Employee
for cause pursuant to Section 8A above.
9. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants
that Employee is not subject to or a party to any agreement, contract, covenant,
order or other restriction which in any way prohibits, restricts or impairs
Employee's ability to enter into this Agreement and carry out his duties and
obligations hereunder. Each party hereto represents and warrants to the other
that (i) it has the full legal right and power and all authority and approvals
required to enter into, execute and deliver this Agreement and to perform fully
all of its obligations hereunder; and (ii) this Agreement has been duly executed
and delivered by it and constitutes a valid and binding obligation of such
party, enforceable in accordance with its terms.
10. NON-COMPETITION AND SECRECY.
10.1 NO INTERFERENCE. For the period ending twelve (12) months
after the later of (i) the termination of Employee's employment and (ii) the
expiration of the Term, Employee shall not, whether for his own account or for
the account of any other individual, partnership, firm, corporation or other
business organization (other than the Company and its affiliates), intentionally
solicit, endeavor to entice away from the Company or its affiliates, or
otherwise interfere with the relationship of the Company or any of its
affiliates with, any person who is employed by the Company or its affiliates at
the time of the termination of Employee's employment and Employee will not
interfere with relationship of the Company or any of its affiliates with any
individual, partnership, firm,
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corporation or other business organization with which the Company or its
affiliates had any relationship while the Employee was employed by the Company.
10.2 SECRECY. Employee recognizes that the services to be
performed by him hereunder are special, unique and extraordinary in that, by
reason of his employment hereunder, he may acquire confidential information and
trade secrets concerning the operation of the Company or any affiliate thereof,
the use or disclosure of which could cause the Company and/or its affiliates
substantial loss and damages which could not be readily calculated and for which
no remedy at law would be adequate. Accordingly, Employee covenants and agrees
with the Company and the Subsidiary that he will not at any time, except in
performance of Employee's obligations to the Company and the Subsidiary
hereunder or with the prior written consent of the Company, directly or
indirectly, disclose any secret or confidential information that he may learn or
has learned by reason of his association with the Company. The term
"confidential information" includes, without limitation, information not
previously disclosed to the public or to the trade with respect to the products,
facilities, applications and methods, trade secrets and other intellectual
property, systems, procedures, manuals, confidential reports, product price
lists, customer lists, technical information, financial information (including
the revenues, costs or profits associated with any of its products), business
plans, prospects or opportunities but shall exclude any information already in
the public domain. Notwithstanding anything to the contrary herein contained,
Employee's obligation to maintain the secrecy and confidentiality of the
confidential information under this Section 10 shall not apply to any such
confidential information which is disclosed through any means other than as a
result of any act by Employee constituting a breach of this Agreement or which
is required to be disclosed under applicable law.
10.3 EXCLUSIVE PROPERTY. Employee hereby agrees to keep all
such records in connection with Employee's employment as the Company and the
Subsidiary may from time to time reasonably direct, and all such records shall
be the sole and exclusive property of the Company and/or the Subsidiary, as the
case may be. Upon termination of Employee's employment, Employee shall return to
the Company and/or the Subsidiary, as the case may be, all confidential and/or
proprietary information that exists in written or other physical form (and all
copies thereof) under Employee's control.
10.4 INJUNCTIVE RELIEF. Without intending to limit the
remedies available to the Company or the Subsidiary, Employee acknowledges that
a breach of any of the covenants contained in this Section 10 may result in
material irreparable injury to the Company and/or the Subsidiary for which there
is no adequate remedy at law, that it will not be possible to measure damages
for such injuries precisely and that, in the event of such a breach or threat
thereof, the Company and/or the Subsidiary shall be entitled to seek to obtain a
temporary restraining order and/or a preliminary injunction restraining Employee
from engaging in activities prohibited by this Section 10 or such other relief
as may be required to specifically enforce any of the covenants in this Section
10.
11. SECTION HEADINGS. The titles to the Sections of this Agreement are
solely for the convenience of the parties and shall not be used to explain,
modify, simplify, or aid in the interpretations of the provisions of this
Agreement.
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12. NOTICES. All notices, demands and requests provided or permitted to
be given pursuant to this Agreement, shall be given in writing, sent by
certified mail, return receipt requested, and addressed as follows or to such
other address so designated in the appropriate manner by the parties. All
notices shall be deemed effective when mailed.
Company: Source Media, Inc.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Employee: Xxxxxx Xxxxxx
000 Xxxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxxxx Xxxxxx, Esq.
00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
13. ASSIGNMENT AND ASSUMPTION. The rights of each party under this
Agreement are personal to that party and may not be assigned, delegated or
transferred to any other person, firm, corporation, or other entity without the
prior written consent of the other party, except that the Company may transfer
its rights under this Agreement to any affiliate or other entity which succeeds,
by contract or operation of law, to all or substantially all of the business of
the Company and agrees in writing to assume the Company's obligations under this
Agreement.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES OF THE LAWS OF SAID STATE.
15. ENTIRE AGREEMENT. This Agreement, and the stock option agreement
evidencing the stock option referred to in paragraph 4C, shall constitute the
entire agreement between the parties and any prior written or oral understanding
or representation of any kind, or any oral communications shall not be binding
upon either party except to the extent incorporated in this Agreement. This
Agreement supercedes any and all prior agreements between the parties.
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16. MODIFICATION OF AGREEMENT. This Agreement can be modified only in
writing and shall be binding only if executed with and under the same formality
by the parties hereto or their duly authorized representatives.
17. NO WAIVER. The failure of either party to this Agreement to insist
upon the performance of any of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this Agreement,
shall not be construed as thereafter waiving any such terms and conditions, but
each same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.
18. EFFECT OF PARTIAL INVALIDITY. The invalidity or unenforceability of
any provision or covenant of this Agreement shall not be deemed to affect the
validity or enforceability of any other provision or covenant. In the event that
any provision or covenant of this Agreement is held invalid or unenforceable,
the same shall be deemed automatically modified to the minimum extent necessary
to make such provision or covenant enforceable and the parties agree that the
remaining provisions shall be deemed to be and to remain in full force and
effect.
19. COUNTERPARTS. This Agreement may be executed in counterparts and
all counterparts so executed shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SOURCE MEDIA, INC.
By:
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Xxxxxxx X. Xxxxxx,
President and Chief Executive Officer
IT NETWORK, INC.
By:
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Xxxxxxx X. Xxxxxx,
Authorized Signatory
EMPLOYEE:
--------------------------------------
XXXXXX XXXXXX
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