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[INTERNATIONAL FAMILY ENTERTAINMENT* LETTERHEAD]
As of January 1, 1997
Xxxxx Linen Xxxxxx
0000 X. Xxxxx Xxxx
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
Dear Xxxxx:
This letter will set forth the terms of the agreement between you and
International Family Entertainment, Inc. ("IFE"), regarding your employment
with IFE.
1. Employment
You will serve as IFE's Senior Vice President - Corporate Communications, and
as such you will report to and perform those duties which are reasonably
assigned to you by IFE's Board of Directors or such person or persons as the
Board of Directors may, from time to time, designate (the Board of Directors
and such person or persons, collectively referred to as "Management"). You
will perform full-time service on an exclusive basis for IFE. Your principal
base of employment shall be in Virginia Beach, Virginia, or as Management shall
otherwise reasonably determine. You acknowledge that IFE is not required to
actually utilize your services hereunder, but that IFE's sole obligation shall
be to pay you the compensation and provide you the benefits set forth herein,
subject to all the terms and conditions of this Agreement.
2. Term
Your employment under this Agreement shall commence January 1, 1997, and,
unless sooner terminated pursuant to the terms of Paragraph 6 of this
Agreement, shall continue for an initial period of five (5) years (as completed
or earlier terminated, the "Initial Period"). Following the completion of the
Initial Period, unless thereupon terminated pursuant to the terms of this
Paragraph 2, your employment under this Agreement shall continue from year to
year, subject to earlier termination pursuant to the terms of Paragraph 6 of
this Agreement (each subsequent year, as completed or earlier terminated, a
"Renewal Period," and together with the Initial Period, the "Term"). Either
party may terminate this Agreement as of the last day of the Initial Period or
any Renewal Period by giving the other party written notice of such
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termination not less than thirty (30) days prior to such date. You acknowledge
and agree that IFE has no obligation to allow this Agreement to renew or to
otherwise continue your employment after expiration of the Initial Period or
any Renewal Period, and you expressly acknowledge that no promises or
understandings to the contrary have been made or reached.
3. Base Compensation
As compensation for your services hereunder, IFE shall pay you, and you shall
accept, an initial annual base salary of One Hundred Fifty Thousand Dollars
($150,000.00), less all appropriate deductions and withholdings, payable in
accordance with the schedule IFE may adopt or alter from time to time in its
discretion. Management shall review the performance of your duties hereunder
on at least an annual basis. Provided your performance hereunder is within
acceptable limits as established, from time to time, by Management, your annual
base salary may be increased, in Management's discretion, on January 1 of each
calendar year of the Term. For each Renewal Period, your annual base salary
shall be as determined by the Board; provided, however, that in any event your
annual base salary for any Renewal Period shall be not less than your annual
base salary for the final calendar year of the Initial Period.
4. Bonus Structure
a. Annual Bonus. In accordance with the executive bonus plan established
by Management, as may be amended from time to time, in addition to
annual base salary, you shall be eligible to earn and receive an
annual bonus based on your achievement of certain goals during each
annual review period (which shall commence January 1 and conclude
December 31 of each calendar year of the Term). During the first
forty-five (45) days of each annual review period of the Term,
Management, with your consultation, shall establish reasonable goals
for you and your division to achieve during such review period.
In the event Management determines that the goals set for any annual
review period have been achieved, you shall be entitled to receive a
targeted bonus of thirty-three and 1/3 per cent (33.33%) of your base
salary for such calendar year, with the exact amount of such bonus to
be determined in the discretion of Management, subject to the terms of
the executive bonus plan then in effect. In the event Management
determines that the goals set for any annual review period have not
been achieved during such annual review period, you shall receive
bonus compensation for such year, if any, as Management, in its
discretion, deems appropriate.
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b. Apportionment. For those periods of your employment which do not
coincide with the calendar year, the amount of the annual bonus shall
be prorated for the number of months you are in the employ of IFE
during such period.
c. Payment. Payment of the annual bonus shall be made no later than
March 31 of the year following the annual review period for which the
annual bonus is calculated.
5. Reimbursement for Expenses
The parties recognize that in the course of performing your duties hereunder,
you will necessarily incur expenses in connection with your duties for such
items as entertainment, traveling, hotels, and similar items. You shall be
entitled to have paid or be reimbursed all reasonable expenses incurred by you
in the performance of your duties hereunder, subject to such requirements,
procedures, and rules as may be established by IFE for similarly situated
executives from time to time in its discretion, including, without limitation,
the requirement of submission of appropriate receipts for such expenses prior
to reimbursement.
6. Termination
Either party shall have the right to terminate this Agreement, and the
employment relationship created hereunder, at any time, without cause, upon
thirty (30) days prior written notice to the other. IFE shall have the right
to terminate this Agreement, and your employment hereunder, at any time, for
cause, immediately upon written or oral notice to you. As used herein,
termination of this Agreement "for cause" shall mean termination due to your
willful breach of contract, habitual neglect of duties, or gross misconduct.
Except as otherwise specifically set forth herein, all benefits set forth in
this Agreement shall cease as of the last day of your employment hereunder.
7. Severance Payment
a. In the event IFE terminates this Agreement without cause at any time
during the Term, or this Agreement is not renewed by IFE pursuant to
Paragraph 2 of this Agreement, then IFE's sole obligation shall be to
pay you (i) for all accrued but unused vacation, which sum shall be
paid to you, less all appropriate deductions and withholdings, in a
single payment not more than thirty (30) days following the effective
date of such termination; and (ii) a severance payment equal to your
then current base salary for twenty-four (24) months, which shall be
paid to you, less all appropriate deductions and withholdings, in
equal, bi-weekly installments over a period of twenty-four (24)
months.
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b. In the event that you terminate this Agreement pursuant to Paragraph 6
of this Agreement, or IFE terminates this Agreement for cause at any
time during the Term, or this Agreement is not renewed by you pursuant
to Paragraph 2 of this Agreement, then IFE's sole obligation shall be
to pay you for all accrued but unused vacation, which shall be paid to
you, less all appropriate deductions and withholdings, in a single
payment not more than thirty (30) days following the effective date of
such termination.
c. Notwithstanding any other provision of this Agreement to the contrary,
in the event of termination of this Agreement for any reason, you
agree that IFE may offset from any payment made under this Paragraph 7
any sums owed by you to IFE.
8. Other Benefits
a. Vacation. For each year of the Term of this Agreement, you will be
entitled to four (4) weeks vacation with pay, subject to IFE's normal
personnel policies regarding vacation for similarly situated
executives, as such policies may be modified from time to time in the
discretion of IFE.
b. Health Plans. IFE may, in its discretion, from time to time establish
and maintain employee health, medical, life, and disability insurance
benefit plans. During the Term of this Agreement, your eligibility to
participate in such plans shall be governed by the generally
applicable terms and conditions of the particular plan, as such terms
and conditions may be amended from time to time in the discretion of
IFE.
c. 401(k) Plan. IFE may, in its discretion, from time to time, establish
and maintain, or participate in an affiliated company's, 401(k)
retirement plan. During the Term of this Agreement, your eligibility
to participate in such plan shall be governed by the generally
applicable terms and conditions of such plan, as such terms and
conditions may be amended from time to time in the discretion of IFE
or such affiliated company.
d. Additional Benefits. You expressly agree and acknowledge that
following the Term of this Agreement, you will be entitled to no
additional benefits except as otherwise specifically set forth in this
Agreement, and except as specifically provided under the benefit plans
referred to in this Paragraph 8 and those benefit plans in which you
may subsequently become a participant, subject in every case to the
terms and conditions of each such plan.
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9. Duty to Mitigate; Offset
It is expressly agreed and understood that in the event of the termination of
this Agreement by IFE you shall have no affirmative duty to mitigate the
damages payable to you by IFE and further that no amounts actually earned or
accrued by you for employment or similar services during the period of time
subsequent to such termination will be offset against any amounts to which you
are otherwise entitled hereunder.
10. Non-Compete
You agree that upon voluntary termination of this Agreement you will not work
for a direct competitor of IFE for a period of twelve (12) months, unless given
specific agreement in writing from IFE. Direct competitors shall include other
cable or satellite television networks, or television production and
distribution companies.
11. Remedy For Breach
(a) Notwithstanding the agreement to settle disputes by arbitration as
provided in Paragraph 12 of this Agreement, both parties recognize
that the services to be rendered under this Agreement by you are
special, unique, and of an extraordinary character, and that in the
event of a breach by you of any term or condition of this Agreement,
IFE shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction to obtain the
specific performance thereof by you, or to enjoin you from performing
services for any other person, firm, or corporation, during the period
herein contracted for, and nothing herein contained shall be construed
to prevent such remedy. In the event IFE institutes proceedings
against you pursuant to this Paragraph 10 and is the prevailing party,
you shall pay to IFE the amount of any fees (including reasonable
attorneys' fees), costs, or expenses incurred by IFE in the
prosecution of any such proceeding.
(b) The payments and benefits provided to you pursuant to this Agreement
shall constitute your sole and exclusive remedy against IFE in the
event of any claim you may have arising out of or in any way connected
with your employment by IFE or IFE's termination thereof. You do
hereby expressly waive any right you may have to seek punitive damages
in connection with any such claim.
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12. Disputes
Except as provided in Paragraph 11 of this Agreement, any and all disputes,
controversies, or claims arising out of or relating to your employment or
cessation of employment with IFE shall be settled exclusively by final and
binding arbitration in Virginia Beach, Virginia, before an arbitrator selected
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association ("AAA"). Such disputes include, but are not limited
to, claims arising under this Agreement as well as other employment-related
legal claims such as discrimination or tort. Any arbitration shall be
conducted in accordance with the Employment Dispute Resolution Rules of the
AAA.
13. Entire Agreement; Modification
Except as specifically referenced herein, this instrument contains the entire
Agreement between you and IFE with respect to the subject matter hereof and
supersedes all prior or contemporaneous understandings or agreements. This
Agreement may be altered only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, or discharge is
sought.
14. Choice of Law; Binding Effect
This Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Virginia without reference to conflicts of laws
principles and shall be binding upon and inure to the benefit of any successor
or successors of IFE and the personal representatives of you. The parties to
this Agreement hereby consent to the exclusive personal jurisdiction of the
Circuit Court of the City of Virginia Beach or, provided other jurisdictional
requirements are satisfied, the United States District Court for the Eastern
District of Virginia, Norfolk Division, for the adjudication of any proceedings
referenced in Paragraph 11 of this Agreement, or the enforcement of any final
and binding arbitration pursuant to Paragraph 12 of this Agreement, or for the
resolution of any other dispute arising from, relating to, or in any other way
connected with this Agreement or your employment hereunder.
15. Severability
If any clause or provision of this Agreement shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect.
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16. Confidential Information
You agree that any information received by you during the Term which concerns
the financial, business, or other affairs of IFE, its clients, or its
affiliates will be treated by you in full confidence and that you shall not, at
any time during or after the Term, reveal, directly or indirectly, to any
persons, firms, or organizations, or otherwise make use of such confidential
information. The obligation set forth in this Paragraph 15 shall survive the
expiration or termination of this Agreement.
17. Remedies Cumulative; No Waiver
All remedies, rights, undertakings, obligations, and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation of
any other remedy, right, undertaking, obligation, or agreement of either party,
whether under this Agreement or otherwise. The failure of IFE to insist upon
strict performance of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or similar nature.
18. Paragraph Headings
The titles of the paragraphs of this Agreement are for convenience only and
shall not in any way affect the interpretation of any paragraphs of this
Agreement or of the Agreement itself.
If this letter accurately sets forth our agreement, please sign where indicated
below.
Very truly yours,
International Family Entertainment, Inc.
/s/ XXXXXXX X. XXXXXXXXX
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Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
READ AND AGREED:
/s/ XXXXX LINEN XXXXXX
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