SECOND AMENDED AND RESTATED Exhibit 6.1
EMPLOYMENT AGREEMENT -----------
THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the "Agreement") is made as of this 8th day of August, 1997, by and between
MEDIA DROPIN PRODUCTIONS, INC., a Delaware corporation (the "Employer"), and
XXXXXX X. XXXXXXX (the "Employee").
WHEREAS, Employer and Employee entered into an Employment Agreement
dated August 27, 1993 (the "Original Agreement"), for Employee to act as
Employer's President and Chief Operating Officer; and
WHEREAS, Employer and Employee entered into an Amended and Restated
Employment Agreement November 1, 1995 (the "First Amended Agreement") for
Employee to act as Employer's President and Chief Executive Officer; and
WHEREAS, on or about the date hereof, the Employer has become a wholly
owned subsidiary of MDI Entertainment, Inc. (the "Parent"); and
WHEREAS, as a result of Employee's recent outstanding performance on
behalf of Employer, Employer desires to procure the services of Employee beyond
the current expiration of the First Amended Agreement; and
WHEREAS, Employee is willing to extend the term of his employment with
Employer upon the terms and conditions herein contained.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Employment.
The Employer hereby hires the Employee and the Employee hereby accepts
such employment as the President and Chief Executive Officer to render the
Services on behalf of the Employer, subject to the supervision and direction of
the Board of Directors of the Employer.
2. Term.
The term of employment shall be for the period commencing on the date
of closing under the Agreement and Plan of Reorganization between the Employer,
the Parent and certain related entities and terminating on the later to occur of
(a) five (5) years from the date of commencement or (b) three (3) years from the
date Parent first files a registration statement with the Securities
and Exchange Commission registering all of the shares of common or preferred
stock owned by Employee, and Employer's shares are being traded on the NYSE,
AMEX or NASDAQ (but excluding NASDAQ Bulletin Board or Small Cap). After the
initial term of employment as described above, this Agreement shall
automatically renew from year to year, unless either party gives the other
written notice of its intention not to renew this Agreement at least ninety (90)
days prior to the expiration of the original term or any annual renewal.
3. Duties.
The Employee hereby accepts employment by the Employer for the term and
upon the conditions set forth in this Agreement, and shall:
(a) During the term of this Agreement, the Employee shall
render to the very best of the Employee's ability, on behalf of and in the best
interest of the Employer, the Services to and for the Employer carrying on such
Services in accordance with reasonable policies and reasonable directives of the
Employer from time to time established.
(b) Devote such time, energy and skill reasonably necessary to
the performance of the Services for which the Employee is engaged, at such place
or places and during regular business days as well as the business hours during
the day necessary in order to accomplish the Services in the Employer's best
interests, and in accordance with the ethical standards of the Employer from
time to time established.
(c) The Employee shall faithfully and industriously assume and
perform with skill, care, diligence and attention all responsibilities and
duties connected with his employment on behalf of the Employer.
(d) The Employee shall have no authority to enter into any
contracts binding upon the Employer, which would create any obligations on the
part of the Employer, except as may be specifically authorized by the Employer.
(e) During the employment with the Employer, the Employee
shall not engage in or perform services of any nature in any capacity with any
business, including, but not limited to any such business or organization
competitive with the Employer. The Employee shall work at all times during the
period of employment hereunder in the best interests of Employer and for the
advancement of the Employer and never knowingly take action against the best
interests of the Employer.
4. Compensation
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(a) Salary. For all services to be rendered by the Employee to
the Employer during the period from date of this Agreement through February 28,
1998, the Employer shall pay the Employee a salary of $300,000.00 per year
payable twice per month, in equal installments, during the term of employment,
with appropriate deduction therefrom for all federal, state and local
withholding taxes. The Employer shall evaluate the Employee's salary on n March
1, 1998 and on each anniversary thereafter, Employee's salary may be increased
to an amount equal to the greater of (i) the salary payable in the previous year
increased by five percent (5%) or (ii) the salary payable in the previous year
multiplied by a fraction, the numerator of which shall be the Consumer Price
Index (the "CPI") as of the last day of the previous twelve (12) month period
and the denominator of which shall be the CPI as of the last day of the second
previous twelve (12) month period (except that to determine the denominator for
the adjustment for the second year of this Agreement, the denominator shall be
the CPI as of the date of the Agreement). In no event, however, shall the salary
be increased by more than ten percent (10%) over the salary for the then
immediately preceding year. The adjusted salary thereby established shall
continue in effect as the salary until again adjusted as herein provided. As
used herein, the term "Consumer Price Index" or "CPI" shall mean the Consumer
Price Index for All Urban Consumers ("CPI-U"), Hartford, Connecticut, all items
(1982-1984 = 100) issued and published by the Bureau of Labor Statistics of the
United States Department of Labor. In the event that CPI Increases to use a
1982-1984 base rate of 100 as a basis for calculation, or if substantial changes
made in the terms or number of items contained in CPI-U, then CPI shall be
adjusted to the figure that would have been arrived at had the manner of
computing the CPI-U is in effect as of the date of this Lease not been altered.
If CPI-U is not available, the term Consumer Price Index shall mean (i) a
successor or substitute index to CPI-U, appropriately adjusted; or (ii) if such
a successor or substitute index is not available or may not lawfully be used for
the purposes herein stated, a reliable governmental or other non-partisan
publication selected by Employer evaluating the information theretofore used in
determining CPI-U. The Employer and Employee may, from time to time, reflect
increases and decreases in the Employee's compensation as may be mutually agreed
upon, in accordance with the foregoing, by evidencing such change in writing
signed by both parties.
(b) Incentive Compensation.
(i) The parties acknowledge that Employee has been
paid all bonuses Employee was entitled to under the terms of the Original
Agreement and First Amended Agreement.
(ii) Throughout the term of this Agreement, Employee
shall be entitled to a bonus equal to two percent of the gross income of
Employer or any Related Entity (as herein defined) of Employer. The bonus shall
be paid within thirty (30) days after the end of each calendar quarter based on
the gross income during that quarter. Related Entity as used in this
subparagraph (ii) shall include any subsidiary or affiliated company of
Employer. In the event of any dispute over the amount of the amount of gross
income in any quarter, the certified public accountant auditing Parent shall
resolve the dispute. Notwithstanding anything to the contrary,
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the maximum amount of incentive compensation payable pursuant to this paragraph
4(b) over the term of this Agreement shall be Three Hundred Thirty-Five Thousand
Dollars ($335,000.00). After Employee has received One Hundred Forty Thousand
Dollars ($140,000.00) of incentive compensation hereunder, Employer shall have
the right to withhold seventy-two percent (72%) of any payment due hereunder and
apply the same against the officer loan currently due from Employee to Employer
until the said officer loan is repaid.
5. Fringe Benefits.
The Employer only shall provide and furnish to the Employee, all fringe
benefits which Employer may from time to time generally make available to other
employees of the Employer, as determined by the Employer in its discretion,
including by way of example, health insurance comparable to the health insurance
being maintained for Employee's benefit prior to the date hereof, group
disability insurance and profit sharing plan. Employee shall additionally be
entitled to those fringe benefits listed on Exhibit B, attached hereto and made
a part hereof. Nothing herein contained shall create a contractual obligation on
the part of Employer to provide any particular fringe benefit to employees of
Employer holding comparable positions to that of Employee.
6. Records of the Employer.
The Employee, during the course of his employment with the Employer may
work on and be consulted with respect to matters for clients of the Employer.
All such matters are highly confidential. The Employee understands and agrees
that the Employee shall acquire no rights to any of this information. All
records, notes, memoranda, files, financial statements, client and client lists,
brochures, documents and all other similar material relating to the Employer or
the business of the Employer or those of its clients (hereinafter referred to as
the "Records") which shall come into the possession of the Employee, shall
remain and be deemed to be the property of the Employer. The Employee shall
promptly return any originals and all copies of the Records to the Employer upon
request. Upon cessation of employment for whatever reason, the Employee shall
promptly deliver to the Employer the Records in his possession or delivered to
or otherwise acquired by the Employee concerning the Employer or its clients.
7. Non-Disclosure.
Except with the prior written consent of the Employer, which consent is
within the sole discretion of the Employer, the Employee agrees that he will not
directly or indirectly, during the term of his employment, disclose or reveal
(except as Employee is required to disclose by court order, summons, subpoena or
similar process of law or to Employer's attorney in connection with the
foregoing) to or use for the Employee or others, the confidential information of
the Employer or its clients including, but not limited to proprietary
information, secrets, the lists of the
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Employer's clients, the lists of employees of the Employer, any secret or
confidential information or data regarding the business of the Employer, any
secret or confidential information or data concerning the clients or prospective
clients of the Employer. Such business methods and secrets shall include but are
not limited to programs, data systems, processes, computer programs, computer
systems, equipment and configurations, financial information, pricing policies,
names of employees, names of clients, any information contained on any Records
and all other business knowledge and techniques of the Employer.
8. Termination.
The employment of the Employee shall terminate for "good cause" upon
the occurrence of any one of the following conditions or events:
(a) By the death or disability of the Employee;
(b) In the event the Employee shall fail or refuse to
faithfully or diligently perform the provisions of this Agreement or the usual
customary duties of his employment and such failure is not corrected within
thirty (30) days of written notice from Employer;
(c) In the event that the Employee is convicted of a felony;
(d) The withholding by Employee of any fees or income
rightfully belonging to Employer.
For the purposes of subparagraph (a) hereof, "disability" shall mean a
physical or mental illness, which results in Employee not being able to carry
out his duties under this Agreement for a period of six (6) consecutive months.
As of the date of termination, Employer shall be responsible to pay to Employee
only such salary and incentive compensation as has been earned by Employee prior
to the date of termination and Employer shall have no further obligations to
Employee.
9. Employee Resignation
(a) The Employee may resign at any time for "good reason",
upon not less than thirty (30) days prior written notice to the Corporation
specifying in reasonable detail the reason therefor. For purposes of this
Section 9, "good reason" means any of the following:
(i) INTENTIONALLY DELETED.
(ii) The failure of the Employer, within ten (10)
business days after the Employee has provided written notice to the Board of
Directors of the Corporation (with a copy
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to the President of Parent.) requesting any payment of salary or material
reimbursable expenses due and owing to the Employee hereunder, to make said
payment to the Employee;
(iii) The Employer requires the Employee to be based
at any office or location more than 25 miles from the office at which the
Employee is based as of the date of this Agreement, except for travel reasonably
required in the performance and discharge of the Employee's tasks and duties
hereunder, and unless Employer and Employee agree that such requirement shall
not constitute "good reason";
(iv) Any failure by Parent to obtain the assumption
of this Agreement by any successor or parent;
(v) Any material change by the Employer in the
Employee's function, duties, or responsibilities from those contemplated herein,
without the prior written consent of the Employee; or
(vi) Any pattern or practice of harassment or other
conduct by the Board of Directors or senior management of Parent or the Board of
Directors of Employer intended to provoke the Employee's resignation, or which
modifies in any material adverse respect the manner in which the business of the
Employer is operated from the manner in which the Employer's business has been
operated prior to the date hereof;
(b) In the event that, on or before February 28, 2002, the
Employer terminates the Employee's employment without "good cause" or the
Employee resigns for "good reason", the Employer shall pay to the Employee or,
in the event of the Employee's death subsequent to the date of termination or
resignation, to the Employee's estate, in addition to the salary and benefits
earned by him prior to the date of termination (computed pro rata through the
date of termination) and all reimbursable expenses incurred through the date of
termination, an amount equal to the present value sum of the salary fixed at the
salary rate on the date of termination or resignation which the Employee would
have received through February 28, 2002 had his employment not been terminated
or had he not resigned ("Present Value Amount"). The Present Value Amount shall
be payable in twelve ( 12) consecutive, equal monthly payments, commencing on
the fifteenth day of the month immediately following the month in which the
termination or resignation occurred. In determining the Present Value Amount, a
discount factor equal to the Prime Rate of Citibank shall be used.
10. Indemnification.
The Employee agrees to indemnify, save and hold the Employer and its
officers, directors and stockholders harmless from any and all claims and
damages which may arise out of or result from or in connection with any breach
by the Employee of the provisions herein, including, but not limited to
reasonable attorney's fees and litigation and legal expenses, if Employer shall
prevail in such litigation, provided that if Employee shall prevail in such
litigation, then
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Employer shall pay Employee's reasonable attorney's fees and litigation and
legal expenses. For purposes of the obligations of Employee set forth in
paragraphs 1, 3(a), 3(b), and 3(c) hereof, Employee shall not be deemed to be in
breach of such obligations unless Employer shall have given Employee written
notice of the nature of such breach, and Employee shall have failed to cure the
breach within fifteen (15) days after receipt of such written notice.
11. Enforceability.
The Employee acknowledges that the restrictions contained herein,
including those contained in Sections 6, 7, and 10 hereof, are reasonable, but
agrees that if any court of competent jurisdiction shall hold any such
restrictions unreasonable as to time, activities, or otherwise, such restriction
shall be deemed to be reduced to the extent necessary in the opinion of the
court to make it reasonable.
The covenants of the Employee set forth herein are the essence of this
Agreement; they shall be construed as independent of any other provisions in
this Agreement; and the existence of any claim or cause of action of the
Employee against the Employer, whether predicated on this Agreement or not,
shall not constitute a defense to the enforcement by the Employer.
12. Remedies.
The Employee acknowledges that a violation of any of the agreements or
covenants contained herein could cause irreparable injury to the Employer and
there may be no adequate remedy at law for such violation. In the event of a
breach or a threatened breach by the Employee of the provisions of this
Agreement, the Employer shall have the right, in addition to any other remedies
available to it at law or in equity, to enjoin the Employee or any Employee
representatives, agents, employees of the Employee or employer of the Employee,
in a court of equity from violating any of the provisions hereof.
This subsection shall not be construed to limit in any manner
whatsoever any other rights and remedies an aggrieved party may have by virtue
of any breach of this Agreement.
13. Construction.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of
Connecticut.
14. Notices.
All notices under this Agreement shall be in writing and shall be
deemed to have been duly given when mailed by certified mail, return receipt
requested to the Employer at its principal place of business and to the Employee
at his residence address then listed in the
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Employer's Records, or to such other addresses as either of them, by written
notice to the other, may from time to time designate. Time shall be counted from
the date of mailing.
15. Entire Agreement.
This instrument contains the entire Agreement among the parties and
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided forth herein and no modifications shall be
binding upon the party affected unless set forth in writing and duly executed by
each party affected.
16. Severability.
In the event that one or more of the provisions of this Agreement shall
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
17. Headings.
The descriptive headings of the several sections and paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
18. Singular, Plural and Gender.
Unless the context otherwise requires, whenever used in this Agreement,
the singular shall include the plural, the plural shall include the singular and
the masculine gender shall include the neuter and feminine gender, and vice
versa.
19. Survival.
The provisions of Sections 6 through 11 inclusive shall survive any termination
of this Agreement.
20. Representation.
Employer and Employee acknowledge that the Law Firm of Xxxxxx, Heyman,
Greenberg, Xxxxxxxx & Belgrad, P.A., and Xxxxxxx X. Fine, Esquire solely
represent Employer and that Employee has been previously advised by counsel for
the Employer that he should obtain an independent attorney to represent him with
respect to this matter. Employee is hereby on notice and is again being advised
that he should obtain independent legal counsel.
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IN WITNESS WHEREOF, the parties do hereby sign, seal and deliver this
Employment Agreement.
WITNESS:
/s/ Xxxxxxx Xxxxxxxxxx /s/ Xxxxxx X. Xxxxxxx
-------------------------- ----------------------------
XXXXXX X. XXXXXXX
EMPLOYEE
WITNESS: MEDIA DROP-IN PRODUCTIONS, INC.
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxxxxxx By: (SEAL)
-------------------------- -------------------------
President
.
EMPLOYER
GUARANTY
--------
MDI Entertainment, Inc., for the purpose of inducing Employee to enter
into this Agreement, joins in this Agreement and does hereby absolutely and
unconditionally guarantee to Employee, his personal representatives and heirs,
the performance of all covenants and agreements of Employer under this
Agreement, including but not limited to payment of all salary and Present Value
Amount due hereunder.
MDI ENTERTAINMENT, INC.
By: ------------------------------
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FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the "Amendment") is made as of this 21st day of September, 1998, by and between
MEDIA DROP-IN PRODUCTIONS, INC., a Delaware corporation (the "Employer"), and
XXXXXX X. XXXXXXX (the "Employee").
WHEREAS, Employer and Employee entered into an Employment Agreement dated
August 27, 1993 (the "Original Agreement"), for Employee to act as Employer's
President and Chief Operating Officer; and
WHEREAS, Employer and Employee entered into an Amended and Restated
Employment Agreement dated as of November 1, 1995 (the "First Amended
Agreement") for Employee to act as Employer's President and Chief Executive
Officer; and
WHEREAS, Employer and Employee entered into a Second Amended and Restated
Employment Agreement dated as of August 8, 1997 (the "Second Amended Agreement")
whereby Employee extended the term of his employment; and
WHEREAS, Employer and Employee desire to amend the Second Amended Agreement
to modify the provision relating to incentive compensation, upon the terms and
conditions herein contained.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Section 4(b)(ii) of the Second Amended Agreement is hereby modified by
deleting the word "gross income" and inserting the words "gross revenue
calculated in accordance with generally accepted accounting principles" in lieu
thereof.
2. Except as expressly provided herein, the Second Amended Agreement shall
remain in full force and effect as if the terms hereof were expressly
incorporated therein.
3. This Amendment may be executed in counterparts, each of which shall be
deemed an original and each of which when taken together shall constitute one
and the same instrument.
SEE ATTACHED SIGNATURE PAGE
IN WITNESS WHEREOF, the parties do hereby sign, seal and deliver this
Amendment.
WITNESS:
/s/ Xxxxxxx X. Xxxxxxxxxx /s/ Xxxxxx X. Xxxxxxx (SEAL)
------------------------- ----------------------------
Xxxxxx X Xxxxxxx
EMPLOYEE
WITNESS: MEDIA DROP-IN PRODUCTIONS, INC.
/s/ Xxxxxxx X. Xxxxxxxxxx /s/ Xxxxxx X. Xxxxxxx (SEAL)
------------------------- ----------------------------
, President
EMPLOYER
MDI Entertainment, Inc., as Guarantor of the Seconded Amended Agreement,
joins in this Amendment and does hereby absolutely and unconditionally guarantee
to Employee, his personal representatives and heirs, the performance of all
covenants and agreements of Employer under this Agreement.
MDI ENTERTAINMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
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