EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of March 7, 1997, between
Telemundo Group, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxxxxx XX (the "Executive").
Section 1. Employment and Term. The Company agrees to
employ the Executive, and the Executive agrees to serve as an
employee of the Company, with the duties set forth in Section 2,
for a term (the "Term of Employment") beginning as of January 1,
1997 (the "Commencement Date") and ending at the close of
business on December 31, 1997 or any earlier date of termination
under Section 8. The Employment Agreement, dated as of May 15,
1994, between the Company and the Executive is hereby superseded
by this Agreement and terminated with no further force or effect
effective as of the close of business on December 31, 1996.
Section 2. Duties. The Executive agrees during the
Term of Employment to serve as Chief Financial Officer and
Treasurer of the Company reporting to the President and Chief
Executive Officer of the Company. The Executive agrees to use
his best efforts to promote the interests of the Company,
subject at all times to the direction of the President and Chief
Executive Officer of the Company. The Executive agrees to devote
his entire business time and attention with undivided loyalty,
to the performance of such duties.
Section 3. Consideration: Salary and Bonus During Term
of Employment.
(a) Consideration. The consideration for entering
into this Agreement shall be the performance of
services by the Executive pursuant to this Agreement
and the employment of the Executive by the Company as
well as the payments and benefits provided under this
Agreement.
(b) Salary. The Company shall pay salary to the
Executive at the annual rate of $325,000, to be paid
(subject to required withholding taxes) in arrears in
equal installments bi-weekly.
(c) Bonus. During the Term of Employment, the
Executive will be eligible for a bonus based on the
attainment by the Company of the performance targets
set forth on Exhibit A as "Net Contribution" if the
Executive is employed by the Company on the last day
of the performance period to which a performance
target relates. The Compensation Committee has
established performance targets for the period covered
by this Agreement, which are attached hereto as
Exhibit A. If the Company attains the threshold but
not the mid-level target, the Executive shall receive
a bonus in an amount equal to 50% of his annual salary
(pro-rated for a short period). If the Company attains
mid-level but not the high-point target, the Executive
shall receive a bonus in an amount equal to 75% of his
annual salary (pro-rated for a short period). If the
Company attains the high-point target, the Executive
shall receive a bonus in an amount equal to 100% of
his annual salary (pro-rated for a short period). If
the Company attains an amount of earnings between the
threshold and mid-level targets, or between the
mid-level and high-point targets, as the case may be,
the amount of the bonus shall be determined by linear
interpolation between the relevant bonus percentages
and targets. The Compensation Committee shall meet
within two months (or as soon thereafter as is
practicable) after the end of a performance period to
which a bonus relates to certify whether a performance
target has been satisfied. If the Compensation
Committee so certifies, the bonus will be paid
(subject to applicable withholding taxes) promptly but
in no event later than ten days after such
certification. For purposes of this Agreement, the
"Compensation Committee" shall mean a committee
consisting of at least two (2) directors of the
Company, all of whom are "non-employees" within the
meaning of Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, and "outside directors"
within the meaning of Section 162(m) of the Internal
Revenue Code of 1986, as amended.
Section 4. Stock Option Agreement. The parties hereto
hereby agree that the Nonqualified Stock Option Agreement for
Corporate Officers, dated as of June 30, 1995, between the
Company and the Executive (the "Stock Option Agreement") shall
be promptly amended to provide that, subject to the terms and
conditions of the Stock Option Agreement, the Executive shall be
entitled to purchase one-third of the total number of shares
covered by the Stock Option Agreement on or after December 31,
1997 instead of on the third anniversary of the Grant Date (as
such term is defined in the Stock Option Agreement) as currently
provided therein (i.e., June 30, 1998). Executive understands
that the Company makes no representation whatsoever with respect
to the tax effect, if any, of any such amendment to the Stock
Option Agreement.
Section 5. Vacations. The Executive shall be entitled
during the Term of Employment to vacations in accordance with
the policies of the Company for senior executive officers (but
in no event to less than 20 paid vacation days per year). The
Company shall not pay the Executive any additional compensation
for any vacation time not used by the Executive.
Section 6. Fringe Benefits. During the Term of
Employment the Executive shall enjoy the benefits being
customarily afforded to senior executive officers of the Company
(including $300,000 of term life insurance), except that the
Executive shall not participate in any bonus plan now or
hereafter maintained by the Company (the provisions of Section
3(c) and this Section 6 being in lieu of such participation).
During the Term of Employment, the Company will pay bonuses to
the Executive which, on an after tax basis, equal the premiums
paid by the Executive under the Company's long-term disability
insurance plan for basic and supplemental coverage (or up to
$10,000 per annum in premiums paid by the Executive under his
personal long-term disability insurance policy). Nothing in this
Agreement shall restrict the right of the Company generally to
amend, modify or terminate any such benefits.
Section 7. Intentionally Omitted.
Section 8. Termination.
(a) The Company may terminate this Agreement and the
Executive's employment for Cause as determined by the
President and Chief Executive Officer of the Company.
"Cause" means the Executive's knowingly or recklessly
causing material injury to the Company, the
Executive's willful misconduct in the performance of
(or failure to perform) his duties hereunder, or the
Executive's dishonest, fraudulent or unlawfu1 behavior
involving moral turpitude whether or not in connection
with his employment.
(b) This Agreement and the Executive's employment
shall terminate immediately upon the death, disability
or other event rendering the Executive unable to
perform his duties and obligations under this
Agreement as determined by the President and Chief
Executive Officer of the Company and supported by
appropriate medical evidence.
(c) If the Company terminates this Agreement and
thereby the Executive's employment other than pursuant
to Section 8(a) or 8(b), then the Company's sole
obligation to the Executive (in addition to its
obligations under the Stock Option Agreement) shall be
to continue to pay salary in accordance with Section
3(b) and provide medical benefits substantially
similar to those provided the Executive during the
Term of Employment, in each case until December 31,
1997. The continuation of such medical benefits shall
be in satisfaction of the Company's obligations under
Section 4980B of the Internal Revenue Code of 1986, as
amended, or any similar state law requiring
continuation of such benefits, with respect to the
period of time during which such benefits are
continued hereunder. The obligations of the Company
under this Section 8(c) shall continue only so long as
the Executive does not breach his obligations under
Sections 9 and 10. Upon the effective date of
termination under this Section 8(c), the obligations
of the parties under this Agreement shall cease,
except for the obligations of the Company specifically
set forth in this Section 8(c) and the obligations of
the Executive contained in Sections 9 and 10.
(d) If the Executive's employment terminates other
than pursuant to Section 8(c), the obligations of the
parties under this Agreement shall cease, except for
the obligations of the Executive contained in Sections
9 and 10.
Section 9. Confidentiality. Except as required in his
duties hereunder, the Executive will not, directly or
indirectly, use, disseminate or disclose any Confidential
Information. Upon expiration or termination of the Term of
Employment, all documents, records and similar repositories of
or containing Confidential Information, including copies
thereof, then in the Executive's possession, whether prepared by
the Executive or others, will be left with the Company.
"Confidential Information" means non-public information relating
to the Company or any affiliate of the Company. Following the
expiration or termination of the Term of Employment, the
Executive agrees to cooperate, for a period of five years with
respect to legal matters and for a period of one year with
respect to all other matters, with the Company and its
affiliates with respect to matters with which the Executive was
involved during the Term of Employment. This Section 9 shall
survive the expiration or termination of the Term of Employment.
Section 10. Covenant Not to Interfere. The Executive
agrees and covenants that, for a period of one year following
the expiration or termination of the Term of Employment, he will
not interfere directly or indirectly in any way with the
Company. "Interfere" means to influence or attempt to influence,
directly or indirectly, present or active prospective customers,
employees, performers, directors, representatives, agents or
independent contractors of the Company, its subsidiaries or any
of its network affiliates to restrict, reduce, sever or
otherwise alter their relationship with the Company, its
subsidiaries or any of its network affiliates. In the event any
court having jurisdiction shall reduce the duration or scope of
the covenant not to interfere set forth in this Section 10, such
covenant, in its reduced form, shall be enforceable. This
Section 10 shall survive the expiration or termination of the
Term of Employment.
Section 11. Assignability, etc. The rights and
obligations of the Company under this Agreement shall inure to
the benefit of and shall be binding upon the successors and
assigns of the Company. The Executive acknowledges that the
services to be rendered by him are unique and personal and
accordingly that he may not assign any of his rights or delegate
any of his duties or obligations under this Agreement.
Section 12. Notices. All notices given hereunder shall
be in writing and shall be sent by registered or certified mail
or delivered by hand and shall be deemed to be given on the date
received. Any notice by the Company to the Executive shall be
mailed or delivered to:
Xxxxx X. Xxxxxxx XX
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
or such other address as may from time to time be provided by
the Executive to the Company for such purposes.
Any notice by the Executive to the Company shall be mailed
or delivered to:
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: President and Chief Executive Officer
and
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: General Counsel
or such address or addresses as may from time to time be
provided by the Company to the Executive for such purpose.
Section 13. Captions. The captions in this Agreement
are inserted for convenience only and do not constitute a part
of this Agreement.
Section 14. Amendments, etc. This Agreement may be
amended, modified or terminated only by an instruments in
writing signed by the parties hereto.
Section 15. Governing Law. This Agreement is made in
and shall be governed by and construed in accordance with the
laws of the State of Florida, without giving effect to conflict
of law principles. The Executive hereby consents to the
jurisdiction of the courts of the State of Florida. The
Executive hereby appoints the Corporate Secretary of the Company
as his agent for service of process and agrees to accept service
of process upon delivery to such agent, with a copy sent by
registered or certified mail to the Executive at his address as
set forth in Section 12.
Section 16. Understandings and Remedies. Each of the
parties to this Agreement will be entitled to enforce its rights
under this Agreement specifically, to recover damages by reason
of any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce or prevent any violations
of the provisions of this Agreement. Such specific performance
and/or injunctive relief shall be available without the posting
of any bond or other security. Except when a party is seeking an
injunction or specific performance hereunder, the parties agree
to submit any dispute concerning this Agreement to binding
arbitration. The parties may agree to submit the matter to a
single arbitrator or to several arbitrators, may require that
arbitrators possess special qualifications or expertise or may
agree to submit a matter to a mutually acceptable firm of
experts for decision. In the event the parties shall fail to
thus agree upon terms of arbitration within twenty (20) days
from the first written demand for arbitration, then such
disputed matter shall be settled by arbitration under the Rules
of the American Arbitration Association, by three arbitrators
appointed in accordance with such Rules. Such arbitration shall
be held in Miami, Florida. Once a matter has been submitted to
arbitration pursuant to this section, the decision of the
arbitrators reached and promulgated as a result thereof shall be
final and binding upon all parties. The cost of arbitration
shall be shared equally by the parties and each party shall pay
the expenses of his/its attorneys, except that the arbitrators
shall be entitled to award the costs of arbitration, attorneys
and accountants' fees, as well as costs, to the party that they
determine to be the prevailing party in any such arbitration.
Section 17. Entire Agreement; Severability. This
Agreement and the Exhibits hereto constitute the entire
agreement between the parties with respect to the subject matter
hereof. The Executive specifically acknowledges that no
representations have been made to him by the Company or any of
its affiliates regarding the value of the common stock of the
Company, now or in the future. Whenever possible, each
provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any
other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained
herein.
Section 18. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
TELEMUNDO GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief
Executive Officer
/s/ Xxxxx X. Xxxxxxx XX
-----------------------
Xxxxx X. Xxxxxxx XX
EXHIBIT A
---------
Telemundo Group, Inc.
Bonus Schedule
(dollars in thousands)
Net Contribution(1)
-------------------
% of Salary if
Target Achieved(2) 1997 Targets
--------------- ------------
100% $52,200
75% 45,900
50% 39,500
_______________________________
(1) "Net Contribution" means operating income plus
depreciation and amortization determined in accordance with
generally accepted accounting principles, without giving effect
to any income, gain or loss associated with WSNS, but determined
consistent with the accounting method for determining "Net
Contribution" on the Company's internal financial statements in
prior periods and adjusted to eliminate the impact of changes in
accounting principles after the date of this Agreement and of
acquisitions or divestitures of operating units after the date
of this Agreement if taking such operating units into account
would either increase or decrease the actual Net Contribution by
at least 5% of the 50% Net Contribution target in the year of
acquisition or divestiture on an annualized basis.
(2) If Net Contribution is between targets, % of salary
will be determined by linear interpolation.
