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Exhibit 10.197
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of this day of June, 1998, (this
"Agreement") by and between Xxxxxx Communications Corporation, a Delaware
corporation with its principal place of business at 000 Xxxxxxxxxx Xxxx Xxxx,
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000 (the "Company") and Xxxxxxx Xxxxxxxx, an
individual, currently residing at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Executive") (collectively, the "Parties").
WHEREAS, the Company desires to employ the Executive as President and Chief
Executive Officer ("CEO"), and the Parties desire to enter into this agreement
to secure the Executive's employment during the term hereof, all on the terms
and conditions set forth herein.
NOW, THEREFORE, the Parties agree as follows:
1. TITLE. The Company hereby employs the Executive and the Executive
agrees to serve the Company as President and CEO, headquartered
principally in the Company's West Palm Beach, Florida offices, on the
terms and conditions hereinafter set forth.
2. EMPLOYMENT TERM AND LOCATION. The Executive's employment by the Company
pursuant to this Agreement will commence May 14, 1998, and continue
through June 30, 2002, unless sooner terminated pursuant to Paragraph 8
hereof (the "Term of Employment"). During the first twelve months of
the Term of Employment, the Executive shall reside principally in the
West Palm Beach, Florida area. Following the first anniversary of this
Agreement, the Executive may reside in the New York, New York
metropolitan area but shall commute to the Company's West Palm Beach,
Florida offices on a schedule mutually acceptable to the Executive and
the Chairman.
3. DUTIES. Executive shall report directly and solely to the Chairman of
the Board of the Company (the "Chairman"). The Executive shall have all
of the power, authority and responsibilities customarily attendant to
the position of President and CEO, including the supervision and
responsibility for all operations and management of the Company, its
subsidiaries, its affiliates and any entity controlled by the Company
(the "Xxxxxx Group"). All employees of the Xxxxxx Group, other than the
Chairman, shall report to the Executive or to such other managers as
the Executive shall designate. Consistent with the position of
President and CEO, the Executive shall work under the direction and
control of the Chairman. (The Executive acknowledges and understands
that he will be sharing the title of President with the
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now current President and Chief Operating Officer, Xxxxx X. Xxxxxx, but
that Xx. Xxxxxx will report directly and only to the Executive.) The
Company agrees to use its reasonable efforts to ensure that the
Executive is elected to the Board of Directors of the Company and to
the Executive Committee of the Board of Directors, if and when the
Board establishes such a committee. The Company agrees that during the
Term of Employment Xx. Xxxxxx shall not serve as a member of the Board
of Directors unless the Executive also is a member of the Board of
Directors.
The Executive agrees to render his services under this Agreement
loyally and faithfully, to the best of his abilities and in substantial
conformance with all laws and all written Company rules and policies
which apply to senior executives and of which the Executive has notice.
Except as expressly modified herein, the Executive shall be subject to
all of the Company's policies, including conflicts of interest, as well
as the following:
(a) The Executive will comply with all Company and professional
standards governing the Executive's objectivity in the
performance of the Executive's duties. The Executive will not,
without the prior approval of the Chairman or the Compensation
Committee of the Company's Board of Directors (the
"Compensation Committee"), accept any gift, compensation, or
gratuity (which excludes business meals and entertainment
received by the Executive in the ordinary course of business)
from any person or entity with which the Xxxxxx Group or any
of their broadcast properties is or may be in competition or
in any instance where there is a stated or implied expectation
of favorable treatment of that person or entity. The Executive
will not, without the prior written approval of the Chairman
or the Compensation Committee, take advantage of any business
opportunity or situation or engage in any enterprise or
venture of which the Xxxxxx Group has an interest on his or
her own behalf, if said business opportunity or situation,
enterprise or venture is related in any material way to the
business of the Xxxxxx Group.
(b) In performing his duties under this Agreement, the Executive
shall conduct himself with due regard to social conventions,
public morals and standards of decency, and will not cause or
permit any situation or occurrence which would tend to
degrade, scandalize, bring into public disrepute, or otherwise
lower the community standing of the Executive, or the
Company's public image; provided that this clause (b) shall
not apply to conduct after the date Xxxxxx X. Xxxxxx ceases to
own or control more than fifty percent (50%) of the
outstanding voting interests of the Company.
4. (a) BASE SALARY. The Company shall pay the Executive a base salary
(the "Base Salary"), to be paid on the same payroll cycle as
other executive officers of
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the Company, at an initial annual rate of $600,000. The Base
Salary shall be increased annually, effective July 1 of each
year beginning in 1999 and thereafter during the Term of
Employment, by an amount equal to 10% of the Base Salary in
effect for the most recently ended twelve months (i.e.,
cumulatively).
(b) ANNUAL BONUS. In addition to the Base Salary, the Executive
shall be eligible to earn a bonus for each of the whole or
partial calendar years during the Term of Employment, subject
to (i) the satisfaction of certain annual performance
benchmarks established by the Compensation Committee of the
Board of Directors, and (ii) the Executive being actively
employed by the Company on December 31 of such calendar year,
unless the Executive's employment has terminated due to the
Executive's death, Disability or other than for Good Cause,
pursuant to subparagraphs (a), (d) or (e) of Paragraph 8. The
bonus shall be equal to 50%, 100% or 200% of the Base Salary
paid to the Executive in the preceding calendar year, with the
applicable percentage dependent upon the attainment of certain
benchmarks. For 1998, the benchmarks shall be the Company's
attainment of total revenue, as stated in the Company's
audited financial reports, of $160 million, $170 million or
$200 million, respectively. With respect to future years, the
benchmarks established by the Compensation Committee with
respect to the bonus for the Chairman shall be applied to the
bonus for the Executive. For calendar year 2002, the
benchmarks for the period ending on June 30, 2002, shall be
50% of the benchmarks established by the Compensation
Committee with respect to the bonus for the Chairman for
calendar year 2002. The bonus will be payable within the first
six months of the calendar year following the year to which
the bonus applies, provided that the bonus for the six month
period ending June 30, 2002, shall be paid no later than July
31, 2002. In the event the Compensation Committee fails to
establish new benchmarks for the Chairman, the benchmarks for
the Executive shall remain at those last set for the Chairman.
No employee of the Company, other than the Chairman, shall be
entitled to a larger annual performance bonus from the Company
(except for calendar years 1998 and 2002). Without limiting
the foregoing, nothing shall preclude the Executive from
receiving an additional cash bonus, determined from time in
the sole discretion of the Compensation Committee of the Board
of Directors.
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(c) OPTIONS. The Company shall grant the Executive non-qualified
stock options for 1,200,000 shares of Class A common stock of
the Company, at an exercise price of $7.25 per share. The
options shall vest according to the following schedule: June
30, 1999 -- 30%, June 30, 2000 -- 55%, June 30, 2001 -- 80%,
and June 30, 2002 -- 100% in accordance with the terms of a
Stock Option Agreement, substantially in the form attached
hereto as Exhibit 1, and once vested shall be exercisable any
time prior to May 13, 2008. The Company shall adopt a stock
option plan under which these stock options may be granted
within ninety (90) days of the date this Agreement is
executed. The Executive agrees to execute a Stock Option
Agreement, substantially in the form attached hereto as
Exhibit 1, upon grant of the options.
(d) CARRIED INTERESTS. The Company hereby gives the Executive a
carried interest in all consideration of any kind received by
or credited to the Xxxxxx Group (i) with respect to any and
all programming produced by or for the Company, d/b/a Pax Net,
Inc., or its successors and assigns, the production of which
is committed to development or placed in development or
ordered or committed during the Term of Employment, and (ii)
derived from such programming or any rights therein created
during or after the Term of Employment, including sequels,
subsequent seasons or partial season orders, feature film
versions, merchandising, licensing, and revenue, (iii) offset
by any returns, refunds, credits, or rebates attributable to
the revenue from such programming or rights (the "Carried
Interest Revenue"). For programming delivered by broadcast or
cable television, the carried interest shall be equal to 5% of
the difference of the Carried Interest Revenue less guild or
union residuals. For all uses of programming, other than
delivery by broadcast or cable television, the carried
interest shall be equal to 5% of the difference of the Carried
Interest Revenue less the following expenses: (i) guild or
union residuals, (ii) other contractually required payments to
talent (including producers, directors and the like), (iii)
unrelated (to Xxxxxx Group) third party distribution fees
actually paid to or deducted by independent third parties
(including commissions and agency fees), (iv) direct
out-of-pocket costs expended by the Xxxxxx Group to unrelated
third parties to distribute (but not to produce or finance)
said programming, and (v) state and local taxes (if any)
applicable to the distribution of such programming. This
carried interest shall have a perpetual term and shall be
nonforfeitable. The Company shall provide to the Executive not
less than twice per year, at six month accounting intervals
determined by the Company, a detailed accounting of the
Carried Interest Revenue and the allowable deductions
therefrom, together with payment of the carried interest
through the applicable accounting period. Executive shall have
the right, not more frequently than annually, to examine the
Company's books and records during normal business hours, at
the
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Company's headquarters or such other location mutually
acceptable to the Parties, so that the Executive can verify
the proper calculation of his carried interest payments.
(e) WITHHOLDING. The Company will have the right to withhold from
payments otherwise due and owing to the Executive, an amount
sufficient to satisfy any required federal, state, and/or local
income and payroll taxes or as required to satisfy any or court
order or lien imposed by the Internal Revenue Service.
5. EMPLOYEE BENEFITS. During the Term of Employment, the Executive shall
be eligible to participate in all employee benefit plans and
arrangements sponsored or maintained by the Company for the benefit of
its senior executive group (which for this purpose means any one or
more senior executives, excluding the Chairman), including, without
limitation, all group insurance plans (term life, medical and
disability) and retirement plans, as long as any such plan or
arrangement remains generally applicable to its senior executive group.
The Executive shall be entitled to four weeks of vacation for each
twelve month period of employment; the Executive may take vacation in
accordance with Company policy, consistent with the best interests of
the Company.
6. BUSINESS EXPENSES. The Executive shall be reimbursed for all reasonable
expenses incurred by him in the discharge of his duties, including, but
not limited to, expenses for entertainment and travel, provided the
Executive shall account for and substantiate all such expenses in
accordance with the Company's written policies for its senior executive
group (which for this purpose means any one or more senior executives,
excluding the Chairman). Executive shall be entitled to travel via
first class air transportation.
7. FREEDOM TO CONTRACT. The Executive represents and warrants that he has
the right to enter into this Agreement, is eligible for employment by
the Company and that no other written or verbal agreements exist which
would be in conflict with or prevent performance of any portion of this
Agreement. The Executive further agrees to hold the Company harmless
from any and all liability arising out of any prior contractual
obligations entered into by the Executive. The Executive represents and
warrants that he has not made and will not make any contractual or
other commitments that would conflict with or prevent his performance
of any portion of this Agreement or conflict with the full enjoyment by
the Company of the rights herein granted.
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8. TERMINATION. Notwithstanding the provisions of Paragraph 2 of this
Agreement, the Executive's employment under this Agreement and the Term
of Employment hereunder shall terminate on the earliest of the
following dates:
(a) DEATH. Upon the date of the Executive's death. In such event,
the Company shall pay to the Executive's legal representatives
or named beneficiaries (as the Executive may designate from
time to time in a writing delivered to the Company), (x) the
Executive's Base Salary in effect on the date of death for a
twelve (12) month period following the date of the Executive's
death (payable in accordance with the Company's normal payroll
practices during such period), plus (y) any bonus earned but
not paid as of the date of death, plus (Z) a pro rata bonus for
the calendar year in which the Executive died equal to the
bonus the Executive would have earned for such year if he had
remained actively employed with the Company through the end of
such calendar year (or through June 30, 2002, if earlier) and
had continued to receive his Base Salary through the end of
such period multiplied by a fraction, the numerator of which is
the total number of days of the year which have lapsed as of
the date of his death and the denominator of which is 365.
(b) GOOD CAUSE. Subject to the notice and cure provisions set forth
below, upon the date specified in a written notice from the
Board of Directors terminating the Executive's employment for
"Good Cause," consistent with the provisions of this
subparagraph (b). The term "Good Cause" as used in this
Agreement shall mean the occurrence of any of the following
events:
(i) the Executive's arrest for the commission of (A) a felony,
(B) any criminal act with respect to the Executive's employment
(including any criminal act involving a violation of the
Communications Act of 1934, as amended, or regulations
promulgated by the Federal Communications Commission), or (C)
any act contrary to law that materially threatens to result in
suspension, revocation, or adverse modification of any FCC
license of any broadcast station owned by the Xxxxxx Group or
would subject any such broadcast station to fine or forfeiture;
(ii) the Executive's demonstrable gross negligence in (A)
taking any action, or (B) in omitting to take any action, and
such act or omission would cause any member of the Xxxxxx Group
to be in default under any material contract, lease or other
agreement;
(iii) the Executive's dependence on alcohol or illegal drugs;
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(iv) the Executive's failure or refusal to perform according to
or follow the lawful policies and directives of the Chairman
(which shall be consistent with Paragraph 3);
(v) the Executive's misappropriation, conversion or
embezzlement of the assets of any member of the Xxxxxx Group;
(vi) the Executive's material breach of this Agreement,
including engaging in action in violation of Paragraph 10; or
(vii) the Executive making any representation in this Agreement
which is false when made.
In the event of a termination for Good Cause under this
subparagraph (b), the Company shall notify the Executive of its
intention to terminate his employment and the specific
reason(s) therefore, and the Executive, on at least ten (10)
business days notice, shall have had an opportunity to respond
thereto in writing; and, provided further, if the basis for
such termination is susceptible of being cured by the
Executive, the Company shall afford the Executive a period of
at least ten (10) additional business days to cure, and the
Executive's employment may not be terminated until such period
has expired and the Executive has failed to effect such cure.
The above notwithstanding, in the event of a termination for
Good Cause under Paragraph 8(b)(i) above, the Company shall
afford the Executive a period of at least sixty (60) days,
following such notice of intention to terminate, in which to
cure, and the Executive's employment may not be terminated if
Executive cures such arrest within such sixty (60) day period,
it being acknowledged and agreed that the Executive will be
deemed to have cured such arrest only if such charges have been
dropped within such sixty (60) day period.
In the event of termination for Good Cause, the Company will be
released from all further obligation to the Executive, except
for (i) the payment of such Base Salary as may have been earned
but not paid prior to termination, (ii) payments under his
carried interest pursuant to Paragraph 4(d), (iii) his rights
to exercise any vested options, pursuant to his Stock Option
Agreement, and (iv) any accrued benefits under the Company's
employee benefit plans in accordance with the terms of those
plans.
(c) GOOD REASON. Upon the date specified in a written notice from
the Executive terminating his employment for "Good Reason",
consistent with the provisions of this subparagraph (c). For
purposes of this subparagraph (c), "Good Reason" shall mean
that (i) the Company has breached any of the
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material terms, conditions and provisions of this Agreement, or
(ii) Xxxxxx X. Xxxxxx (other than by reason of his death or
disability) resigns as Chairman, is removed by the Company's
Board of Directors as Chairman or (together with his spouse)
ceases to control (and his spouse does not control) more than
fifty percent (50%) of the outstanding voting interests of the
Company (except that in the event of the death or disability of
Xx. Xxxxxx, Xx. Xxxxxx will be deemed to continue to control
50% of the outstanding voting interests of the Company only so
long as Xx. Xxxxxx, his spouse and/or his children control such
voting interests). In such case, the Executive shall notify the
Company of his intentions to terminate his employment and the
specific reason(s) therefor, and the Company, on at least ten
(10) business days notice, shall have an opportunity to respond
thereto; and, provided further, if the basis for such
termination is susceptible of being cured by the Company, the
Executive shall afford the Company a period of at least ten
(10) additional business days, to effect such cure, and the
Executive may not terminate his employment until such period
has expired and the Company has failed to effect such cure. In
the event of such termination for Good Reason, the Company
shall pay to the Executive (w) the Executive's Base Salary,
including annual increases therein, for the remainder of the
original Term of Employment (payable in accordance with the
Company's normal payroll practices during such period), plus
(x) any bonus earned but not paid as of the date of
termination, plus (y) any other bonus the Executive would have
earned under subparagraph 4(b) as if he remained actively
employed through the original Term of Employment (subject to
the Company's satisfaction of the benchmarks for such calendar
year), plus (z) continued coverage under any Company employee
benefit plans in which the Executive participates as of such
date of termination (on the same terms and conditions then in
effect) through the original Term of Employment.
(d) OTHER THAN GOOD CAUSE. Upon the date specified in a written
notice from the Board of Directors terminating the Executive's
employment for any reason other than "Good Cause", or the
Executive's death or the Executive's Disability (as defined in
Paragraph 8(e)) (including in the event of a change of control
of the Company), or in the event no date is specified in the
notice, upon the date on which the notice is delivered to the
Executive. In the event of the termination of the Executive's
employment pursuant to this subsection (d), the Company shall
pay to the Executive (w) the Executive's Base Salary, including
annual increases therein, for the remainder of the original
Term of Employment (payable in accordance with the Company's
normal payroll practices during such period), plus (x) any
bonus earned but not paid as of the date of termination, plus
(y) any other bonus the Executive would have earned under
subparagraph 4(b) as if he remained actively employed through
the original Term of Employment (subject to the Company's
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satisfaction of the benchmarks for such calendar year), plus
(z) continued coverage under any Company employee benefit plans
in which the Executive participates as of such date of
termination (on the same terms and conditions then in effect)
through the original Term of Employment.
(e) DISABILITY. Upon the date specified in a written notice from
the Board of Directors terminating the Executive's employment
for "Disability." For purposes of this Agreement, the term
"Disability" shall mean that, due to illness or injury, the
Executive is unable to perform and exercise the essential
functions required of him under this Agreement, for either (i)
four consecutive months or longer, or (ii) a total of four
months or longer in any twelve month period. The Compensation
Committee shall determine whether the Executive has a
Disability based on written physician reports provided to the
Compensation Committee under the following procedures. The
Compensation Committee and the Executive shall each chose a
physician to supply a report regarding whether the Executive
should be deemed to have a Disability under the terms of this
subparagraph 8(e). If the reports of these two physicians reach
contrary conclusions regarding whether the Executive should be
deemed to have a Disability under the terms of this
subparagraph 8(e), the two physicians shall select a third
physician to prepare and provide to the Compensation Committee
another report regarding whether the Executive should be deemed
to have Disability under the terms of this subparagraph 8(e).
The Executive shall cooperate fully with each such physician
preparing a report to the Compensation Committee under the
terms of this subparagraph 8(e) by, among other things,
executing any necessary releases to grant such physician access
to any and all of Executive's medical records reasonably deemed
by such physician to be relevant to such determination,
authorizing or requiring physicians and any other health care
professionals who have treated or dealt with Executive to
consult with such physician regarding any matter reasonably
deemed by such physician to be relevant to such determination
and submitting to such physical or mental examinations or
testing as may be reasonably deemed by such physician to be
relevant to such determination. The Parties acknowledge and
agree that any determination by the Compensation Committee that
the Executive has a Disability, which is used as a basis for
termination of the Executive's employment pursuant to this
Paragraph 8(e), shall be subject to the arbitration provisions
of Paragraph 12 below. In the event of the Executive's
Disability, the Company shall pay to the Executive (x) the
Executive's Base Salary, including annual increases therein,
for the remainder of the original Term of Employment (payable
in accordance with the Company's normal payroll practices
during such period), plus (y) any bonus earned but not paid as
of the date of death, plus (Z) continued coverage under any
Company employee benefit plans in which the Executive
participates as of such date
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of termination (on the same terms and conditions then in
effect) through the original Term of Employment.
(f) VOLUNTARILY. Upon the date the Executive voluntarily, including
in conjunction with his retirement, resigns or otherwise ceases
his employment with the Company at a time when the Company is
not in material breach of this Agreement. In the event of the
Executive's voluntary termination of his employment, the
Company will be released from all further obligation to the
Executive, except for the payment of such Base Salary as may
have been earned but not paid prior to termination. Or
(g) TERM. Upon the expiration of the Term of Employment on June 30,
2002. In the event of the termination of the Executive's
employment upon the expiration of the Term of Employment on
June 30, 2002, the Company will be released from all further
obligation to the Executive, except for such compensation as
may have been earned but not paid prior to termination.
Following the termination of the Term of Employment and the Executive's
employment under this Agreement, the Company will have no further
liability to the Executive hereunder and no further payments will be
made to him, except (i) as provided in subparagraphs (a) through (g)
above, (ii) to the extent that the Executive qualifies for benefits
under any employee benefit plan available to the Executive as provided
in Xxxxxxxxx 0, (xxx) for carried interest payments, pursuant to
Paragraph 4(d), and (iv) for the Executive's rights under the Stock
Option Agreement. In the event the Executive's employment is terminated
for Good Reason, other than for Good Cause or for Disability, pursuant
to subparagraphs 8(c),(d) or (e), respectively, the Executive's right
to continue to participate in any Company employee benefit plan shall
not be affected by the Executive's termination of employment, except
(i) the Company may substitute for its contribution to any
tax-qualified retirement plan on behalf of the Executive, an equivalent
contribution to a non-qualified retirement plan, and (ii) the Company
may terminate any welfare plan coverage to the extent the applicable
insurance carrier refuses to continue to provide such coverage under
the group insurance policy, in which event the Company shall have the
option of providing the Executive with comparable coverage under
individual insurance policies, to the extent such policies are
available, provided that if the Executive's employment is terminated by
the Company for other than Good Cause pursuant to Paragraph 8(d) or the
Executive terminates his employment with the Company for Good Reason
because the Company has breached any of the material terms, conditions
and provisions of this Agreement, the Company shall be obligated to
continue to provide benefits comparable to such welfare plan coverage
regardless of whether or not insurance policies are available to
provide such benefits. The Company shall not have the right to reduce
any payments the Executive is entitled to hereunder by any payments the
Executive
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receives from any other source of employment (whether before, during or
after the Term of Employment), and the Executive shall not have any
duty to mitigate the damages the Company will incur in making any
payments hereunder to the Executive following his termination of
employment with the Company. Upon the date of the termination of the
Executive's employment pursuant to subparagraph (c), (d) or (e) above,
in consideration of (i) the payments to be made to the Executive
pursuant to such subparagraph and as a condition to the payment
thereof, and (ii) the Company's undertaking to make no derogatory or
disparaging statement about the Executive to any unrelated (to the
Xxxxxx Group) third party, the Executive acknowledges that all such
payments, if made in accordance with this Agreement, shall constitute
complete satisfaction of all obligations owed by the Company to the
Executive (other than any benefits Executive has accrued under the
Company's employee benefit plans) and shall further constitute the
Executive's sole remedy against the Company; the Executive agrees that
if this provision becomes applicable he will execute a general release
to reflect these terms.
In the event that the Term of Employment has expired, no successor
agreement has been executed by the Executive and the Company, and the
Executive continues to provide his services to the Company at the
Company's request, such employment shall be at will on such terms and
conditions as may be established by the Company and may be terminated
for any reason or no reason at any time by either Party with or without
notice.
9. INSURANCE. If the Company desires at any time or from time to time
during the Term of Employment to apply in its own name or otherwise,
but at its own expense, for life, health, accident or other insurance
covering the Executive, the Company may do so and may take out such
insurance for any sum which the Company may deem necessary to protect
its interests hereunder. The Executive will have no right, title or
interest in or to such insurance, but will, nevertheless, assist the
Company in procuring and maintaining the same by submitting from time
to time to the usual, customary medical, physical, and other
examinations and signing such applications, statements and other
instruments as may reasonably be required by the insurance company or
companies issuing such policies. The Company acknowledges that the
Executive has made no representation that he is insurable for these
purposes.
10. RESTRICTIVE COVENANTS.
(a) FCC COMPLIANCE. The Executive represents that he does not currently
have, and warrants that during the Term of Employment he will not have,
or be involved with any investment ownership interest or outside
activity (such as a board membership) which would result in either he
or the Company being in violation of
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the rules and regulations of the Federal Communications Commission or
the Communications Act of 1934, as amended.
(b) EXCLUSIVE SERVICES. The Executive shall during the Term of
Employment, except during vacation periods, periods of illness and the
like, devote his full and undivided business time and attention to his
duties and responsibilities for the Company. During the Executive's
employment with the Company, the Executive shall not: (i) engage in any
other business activity that would interfere with his responsibilities
or the performance of his duties under this Agreement; (ii) have any
interest or involvement, directly or indirectly, in any capacity
(including as employee, director, consultant, owner, lessor, manager,
or lender), in any business enterprise that competes with the Xxxxxx
Group or that otherwise has interests in conflict with the Xxxxxx
Group, including without limitation, any television broadcast, cable
television network, or television programming service, provided
however, that (x) the Executive may own up to one percent (1%) of the
issued and outstanding common stock of any entity whose common stock is
traded on a nationally recognized stock exchange, and (y) the Executive
may sit on the boards of directors of other entities, with the prior
written approval of the Chairman, which approval shall not be
unreasonably withheld. The Executive will not, during the Term of
Employment solicit offers for the Executive's services, negotiate with
potential employers, enter into any oral or written agreement for the
Executive's services, give or accept any option for the Executive's
services, enter into the employment of, perform services for, or grant
or receive future rights of any kind relating to the Executive's
services to or from any person or entity whatsoever other than the
Company.
(c) NONINTERFERENCE. The Executive agrees that from the date of this
Agreement through the first anniversary of the date the Executive's
employment with the Company terminates, the Executive will not,
directly or indirectly, whether as sole proprietor, partner, lessor,
venturer, stockholder, director, officer, employee, consultant or in
any other capacity as principal or agent or through any person,
subsidiary, affiliate or employee acting as nominee or agent, engage or
participate in any of the following actions:
(i) Influencing or attempting to influence any person or
entity who is a contracting party with any member of
the Xxxxxx Group to terminate any written or oral
agreement with such member of the Xxxxxx Group; or
(ii) Hiring or attempting to hire for employment or as an
independent contractor any person who is actively
employed (or in the preceding six months was actively
employed) by any member of the Xxxxxx Group or
attempting to influence any such person to terminate
employment with any member of the Xxxxxx Group.
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(d) CONFIDENTIALITY. The Executive covenants and agrees that both
during the Term of Employment and thereafter he will not disclose to
any third party or use in any way any confidential information,
business secrets, or business opportunity of the Company, including,
without limitation, advertiser lists, rate cards, programming
information, programming plans, marketing, advertising and promotional
ideas and strategies, marketing surveys and analyses, ratings reports,
budgets, research, or financial, purchasing, planning, employment or
personnel data and information. Immediately upon termination of the
Executive's employment with the Company for any reason, or at any other
time upon the Company's request, the Executive will return to the
Company all memoranda, notes, records or other documents compiled by
the Executive or made available to the Executive during the Term of
Employment concerning the business of the Company, all other
confidential information and all personal property of the Company,
including, without limitation, all files, audio or video tapes,
recordings, records, documents, drawings, specifications, lists,
equipment, supplies, promotional material, scripts, keys, phone or
credit cards and similar items and all copies thereof or extracts
therefrom.
(e) ENFORCEMENT. The Executive agrees that the restrictive covenants
contained in this Paragraph 10 are a material part of the Executive's
obligations under this Agreement for which the Company has agreed to
compensate the Executive as provided in this Agreement. The Executive
agrees that the injury the Company will suffer in the event of the
breach by the Executive of any clause of this Paragraph 10 will cause
the Company irreparable injury that cannot be adequately compensated by
monetary damages alone. Therefore, the Executive agrees that the
Company, without limiting any other legal or equitable remedies
available to it, shall be entitled to obtain equitable relief by
injunction or otherwise from any court of competent jurisdiction,
including, without limitation, injunctive relief to prevent the
Executive's failure to comply with the terms and conditions of
Paragraph 10.
11. INTANGIBLE PROPERTY. The Executive will not at any time during or after
the Term of Employment have or claim any right, title or interest in
any trade name, trademark, or copyright belonging to or used by any
entity in the Xxxxxx Group and, except as specifically provided in
Paragraph 4(f) hereof, shall not have or claim any right, title or
interest in any material or matter of any sort prepared for or used in
connection with the programming, advertising, broadcasting, or
promotion of any entity of the Xxxxxx Group, whatever the Executives'
involvement with such matters may have been, and whether procured,
produced, prepared, published or broadcast in whole or in part by the
Executive, it being the intention of the Parties that the Executive
shall, and hereby does, recognize that the Xxxxxx Group now has and
shall hereafter have and retain the sole and exclusive rights in any
and all such trade names, trademarks, copyrights (all the Executive's
work in this regard being a work
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for hire for the Company under the copyright laws of the United
States), character names, material and matter as described above. The
Executive shall cooperate fully with the Company during his employment
and thereafter in the securing of trade name, patent, trademark or
copyright protection or other similar rights in the United States and
in foreign countries and shall give evidence and testimony and execute
and deliver to the Company all papers reasonably requested by it in
connection therewith, provided however that the Company shall reimburse
the Executive for reasonable expenses related thereto.
12. ARBITRATION. Any dispute regarding this Agreement shall be decided by
arbitration in West Palm Beach, Florida, in accordance with the
Expedited Arbitration Rules of the American Arbitration Association
then obtaining unless the Parties mutually agree otherwise; and,
provided further, that both Parties will be entitled to all rights of
discovery in connection with such arbitration, including, without
limitation, all discovery rights described in the Florida Rules of
Civil Procedure. Any such arbitration shall be submitted to three
arbitrators from the Panel of Arbitrators of the American Arbitration
Association. The three arbitrators shall be selected in the following
fashion: (i) the Executive and the Company each shall select an
arbitrator from the Panel of Arbitrators of the American Arbitration
Association; and (ii) such two arbitrators by mutual agreement shall
select a third arbitrator from such Panel of Arbitrators. This
undertaking to arbitrate shall be specifically enforceable. The
decision rendered by the arbitrator will be final and judgment may be
entered upon it in accordance with appropriate laws in any court having
jurisdiction thereof. Notwithstanding the foregoing, the Company may
seek injunctive relief in accordance with Paragraph 10 of this
Agreement.
13. INDEMNIFICATION. The Company shall indemnify and hold the Executive
harmless, to the maximum extent permitted by law, against claims,
judgments, fines, amounts paid in settlement of and reasonable expenses
(including reasonable attorneys fees) incurred by the Executive in
connection with the defense of any claim, action or proceeding in which
he is a party by reason of his position with the Company, provided such
liability does not arise as a result of the Executive's gross
negligence. The Executive shall notify the Company promptly upon
learning of any claim, action or proceeding for which the Executive
intends to assert his right to indemnification under this Paragraph,
and the Company shall have the right to control the defense of any such
claim, action or proceeding on behalf of the Executive, including any
decision regarding the terms (if any) of settlement of such claim,
action or proceeding, provided that unless otherwise agreed to by the
Executive, any such settlement shall include statements that the
Executive does not admit any wrongdoing and the Company does not admit
any wrongdoing on the part of the Executive. The Company shall not
agree to any settlement of a claim, action or
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proceeding for which it is indemnifying the Executive until it first
has informed and consulted with the Executive regarding the terms of
such settlement, but the Company shall not need the consent of the
Executive to such settlement (so long as the settlement complies with
the immediately preceding sentence). The Company's indemnification of
the Executive under this Paragraph shall indefinitely survive the
termination or expiration of this Agreement.
14. MISCELLANEOUS.
(a) WAIVER OR MODIFICATION. Any waiver by either Party of a breach
of any provision of this Agreement shall not operate as, or to
be, construed to be a waiver of any other breach of such
provision of this Agreement. The failure of a Party to insist
upon strict adherence to any term of this Agreement on one or
more occasions 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. Neither this
Agreement nor any part of it may be waived, changed or
terminated orally, and any waiver, amendment or modification
must be in writing and signed by each of the Parties. Any
waiver of any right of the Company hereunder or any amendment
hereof shall require the approval of the Chairman or the
Compensation Committee of the Board of Directors. Until such
approval or waiver has been obtained, no such waiver or
amendment shall be effective.
(b) SUCCESSORS AND ASSIGNS. The rights and obligations of the
Company under this Agreement shall be binding on and inure to
the benefit of the Company, its successors and permitted
assigns. The rights and obligations of the Executive under this
Agreement shall be binding on and inure to the benefit of the
heirs and legal representatives of the Executive. Neither Party
may assign this Agreement without the prior written consent of
the other.
(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall, when executed, be deemed to
be an original and all of which shall be deemed to be one and
the same instrument.
(d) GOVERNING LAW. This Agreement will be governed and construed
and enforced in accordance with the laws of the State of
Florida, without regard to its conflicts of law rules.
(e) ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the Parties relating to the subject matter of
this Agreement and supersedes all other prior written or oral
agreements, understandings or arrangements. The Executive and
the Company each acknowledges that, in entering into this
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Agreement, he/it does not rely on any statements or
representations not contained in this Agreement.
(f) SEVERABILITY. Any term or provision of this Agreement which is
determined to be invalid or unenforceable by any court of
competent jurisdiction in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction and such
invalid or unenforceable provision shall be modified by such
court so that it is enforceable to the extent permitted by
applicable law.
(g) NOTICES. Except as otherwise specifically provided in this
Agreement, all notices and other communications required or
permitted to be given under this Agreement shall be in writing
and delivery thereof shall be deemed to have been made (i)
three business days following the date when such notice shall
have been deposited in first class mail, postage prepaid,
return receipt requested, to any comparable or superior postal
or air courier service then in effect, or (ii) transmitted by
hand delivery to, or (iii) transmitted by telegram, telex,
telecopier or facsimile transmission (with receipt confirmed by
telephone), to the party entitled to receive the same, at the
address indicated below or at such other address as such party
shall have specified by written notice to the other party
hereto given in accordance herewith:
if to the Company: Xxxxxx X. Xxxxxx
Chairman
Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000
(tel) (000) 000-0000
(fax) (000) 000-0000
with a copy to: Xxxx X. Xxxxx, Esq.
Dow, Xxxxxx & Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
(tel) (000) 000-0000
(fax) (000) 000-0000
if to the Executive: Xxxxxxx Xxxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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(tel) (000) 000-0000
(fax) (000) 000-0000
with a copy to: Xxxxxxx Xxxxxxx, Esq.
Gang, Tyre, Xxxxx & Xxxxx, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
(tel) (000) 000-0000
(fax) (000) 000-0000
(h) TITLES. The titles and headings of any paragraphs in this
Agreement are for reference only and shall not be used in
construing the terms of this Agreement.
(i) NO THIRD PARTY BENEFICIARIES. This Agreement does not create,
and shall not be construed as creating, any rights enforceable
by any person not a party to this Agreement.
(j) SURVIVAL. The covenants, agreements, representations and
warranties contained in this Agreement shall survive the
termination of the Term of Employment and the Executive's
termination of employment with the Company for any reason.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties as of the first date written above.
XXXXXXX XXXXXXXX
--------------------------------
XXXXXX COMMUNICATIONS CORPORATION
By:
-------------------------------
Xxxxxx X. Xxxxxx
Chairman
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