Exhibit 10.10
Employment Agreement (Avalon Media Group, Inc. - Xxxxx Xxxxxxx)
EMPLOYMENT AGREEMENT
This Agreement, dated the 1st day of June, 1999, by and between AVALON
MEDIA GROUP, INC., a corporation organized and existing under the laws of the
State of Tennessee (referred to as "Employer") and XXXXX X. XXXXXXX, an
individual (referred to as "Employee").
In consideration of the mutual convenants contained in this agreement,
and other good and valuable consideration, the parties agree as follows:
SECTION ONE
EMPLOYMENT
Employer hereby agrees to employ Employee, and Employee agrees to serve
as an employee of Employer and in addition, as needed, as an employee of one or
more of its subsidiaries, during the Period of Employment, as defined in Section
Two, in such executive capacity as is decided from time to time by the
Employer's Board of Directors. During the Period of Employment, Employee also
agrees, if elected, to serve as a Director of the Board of Directors of
Employer, as well as a member of any committee of the Board of Directors of the
Employer to which Employee may be elected or appointed. At its meeting to be
held on the same date of this Agreement, the Board of Directors of Employer
will, at its sole discretion, elect Employee to the additional post of President
and Chief Operating Officer of Employer effective as of the date of this
Agreement and it is the intention of the Board of Directors to reelect Employee
to such positions where necessary to comply with the Employer's Articles and
ByLaws during the balance of the Period of Employment.
SECTION TWO
PERIOD OF EMPLOYMENT
The "Period of Employment" shall be the period commencing on June 1,
1999 and ending on June 1, 2002, and the period of any extensions in accordance
with the further provisions of this Section. Unless otherwise extended,
modified, or terminated, the Period of Employment shall be extended on a
month-to-month basis automatically without further action by either party,
unless either party shall have served written notice to the other party at least
Thirty (30) days prior to the contemplated termination date.
SECTION THREE
DUTIES DURING THE PERIOD OF EMPLOYMENT
Employee shall devote his full time, attention and best efforts to the
affairs of Employer and
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its affiliates and subsidiaries during the Period of Employment. Employee shall
perform all duties and tasks requested by and at the direction of the Employer's
Board of Directors. Employee will not be required to perform any duties or tasks
of an unlawful or immoral nature or that would in any way compromise Employee's
religious beliefs.
SECTION FOUR
CURRENT CASH COMPENSATION
(a) REIMBURSEMENT. Employer agrees to reimburse Employee upon execution
of this Agreement a total of Ten Thousand Dollars ($10,000) for and in
consideration of past business expenses borne by Employee (the "Reimbursement").
However, in the event Employee should terminate this Agreement at any time prior
to June 1, 2000 for any reason other than for Employer's adjudicated material
breach of this Agreement, Employee shall be required to immediately return the
Reimbursement to Employer.
(b) BASE ANNUAL SALARY. Employer will pay to Employee during the Period
of Employment a base annual salary of Eighty Thousand Dollars ($80,000), payable
in substantially equal bi-monthly (twice monthly) installments during each
calendar year, or portion of a year, of the Period of Employment; provided,
however, that the Employer shall review annually, and in light of such review
may, in the sole discretion of the Board of Directors, increase such base annual
salary taking into account such things as Employee's then responsibilities,
profitability of Employer, increases in the cost of living, increases in
compensation of other executives of Employer and its subsidiaries, and other
pertinent factors.
(c) BONUS. During the Period of Employment, Employer, in its sole
discretion, will award Employee certain quarterly bonuses based on his
performance and other factors; provided, however, that such bonuses shall not
exceed Ten Thousand Dollars ($10,000) each quarter or Forty Thousand Dollars
($40,000) annually for each year of Employee's service under this Agreement. If
the Period of Employment should terminate other than at the end of bonus
quarter, Employer will pay Employee as his last bonus a prorated amount over the
number of complete weeks of service during the last three months of service.
While not being legally required to pay any bonus, Employer agrees to take into
account, in determining the amount of any quarterly bonuses, the factors
described in paragraph (a) of this Section, including the gross revenues of the
Employer. In addition, Employer will disclose and make known in detail to
Employee all such factors to be considered in determining a bonus prior to the
beginning of each quarter. The bonus in respect to any quarter shall be paid on
or before the last day of the month following the quarter.
SECTION FIVE
STOCK INCENTIVES
On the date of this Agreement, Employer shall grant to Employee an
option to purchase shares of Employer's parent corporation's common stock
according to the following vesting
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schedule:
VESTING DATE NO. OF SHARES EXERCISE PRICE
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June 1, 2000 50,000 $1.00 per share
June 1, 2001 50,000 $2.00 per share
June 1, 2002 50,000 $3.00 per share
No shares may be purchased under this option before June 1, 2000. In
addition, and not-with-standing anything contained herein to the contrary, any
and all stock options that have not been exercised, whether or not such options
have vested, as of the termination of this Agreement, whether such termination
is with or without cause, shall immediately terminate, expire and become void
entirely at such termination. In the event of any merger, consolidation or other
reorganization of Employer in which Employer is not the surviving or continuing
corporation, unless the surviving corporation agrees to grant Employee options
on terms substantially equivalent to the foregoing, all or a portion of the
shares remaining subject to the option may be purchased by Employee immediately.
SECTION SIX
OTHER EMPLOYEE BENEFITS
(a) VACATION AND SICK LEAVE. Employee shall be entitled to reasonable
paid annual vacation periods and to reasonable sick leave. Unless otherwise
approved by Employer's Board of Directors, Employee shall be entitled to two (2)
weeks paid vacation during the first year of the Period of Employment, three (3)
weeks paid vacation during the second year of the Period of Employment, and four
(4) weeks paid vacation during the third and final year of the Period of
Employment.
(b) REGULAR REIMBURSED BUSINESS EXPENSES. Employer shall reimburse
Employee for all expenses and disbursements directly related to Employer's
business and reasonably incurred by Employee in the performance of his duties
during the Period of Employment that have been approved in advance by Employer.
(c) EMPLOYER'S BENEFIT PLANS OR ARRANGEMENTS. In addition to the cash
compensation provided for in Section Four, Employee, subject to meeting
eligibility provisions and to the provisions of this Agreement, shall be
entitled to participate in all employee benefit plans of Employer, as presently
in effect or as they may be modified or added to by the Employer from time to
time.
(d) REIMBURSEMENT FOR TEMPORARY AND INCIDENTAL EXPENSES. In
consideration of Employee's acceptance of employment pursuant to this Agreement,
Employee expects to incur certain special and temporary expenses for which
Employer agrees to reimburse Employee, subject to the further provisions of this
paragraph (e), namely: (i) reasonable travel and lodging expenses to and from
the Employer's other offices where ever located which are incurred by Employee
during the Period of Employment, and (ii) if Employee is transferred to another
location at the request of the Employer, any reasonable moving expenses from the
City of Knoxville to such new business location. Employee must receive prior
written approval for any and all such Temporary and Incidental
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Expenses, and shall furnish Employer with itemized receipts and vouchers
covering such expenses in order to be reimbursed by Employer.
(e) MEDICAL AND DENTAL INSURANCE COVERAGE. Employer will provide
Employee with medical and dental insurance which is substantially comparable to
that provided by Employer to its current employees.
(f) PENSION BENEFITS. Employee (and to spouse or beneficiary, if the
form of pension includes a continuing payment to spouse or beneficiary after
death) shall be entitled to participate in any pension plans established and
provided by Employer with terms as shall be offered to any other Executive
Officer of Employer.
SECTION SEVEN
TERMINATION
(a) TERMINATION BY EMPLOYER WITHOUT CAUSE; VOLUNTARY TERMINATIONS.
Either party may terminate this Agreement at any time with or without cause upon
thirty (30) days written notice to the other party. If Employer should terminate
the Period of Employment without cause, other than for material breach or just
cause, as defined herein, Employer shall forthwith pay to Employee a severance
benefit in one lump sum according to the following severance schedule:
TERMINATION DATE SEVERANCE BENEFIT
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Termination on or before January 1, 2000 No severance benefit
Termination after January 1, 2000,
and before June 1, 0000 Xxx (1) Month Base Salary
Termination after June 1, 2000,
and before June 1, 2001 Two (2) Months Base Salary
Termination after June 1, 2001,
And before June 1, 2002 Three (3) Months Base Salary
Not-with-standing anything contained herein to the contrary, Employee
shall not be entitled to any severance benefits upon the termination by Employee
of this Agreement, or the for cause termination by Employer.
(b) TERMINATION BY EMPLOYER FOR CAUSE. Employer may terminate this
Agreement at any time for a Breach or Just Cause. As used herein, "Breach" and
"Just Cause" shall mean the breach of any term of this Agreement, any willful
misconduct or derogation in following the directions of the Employer's Chief
Executive Officer or Board of Directors; commission by the Employee of a felony
under the laws of any state or the United States of America; alcohol abuse of
the Employee while on or off the job which interferes with the Employee's
ability to perform his duties pursuant to this Agreement; abuse by the Employee
of any substance which interferes with the Employee's mental faculties and/or
physical performance, including but not limited to alcohol, illicit drugs, and
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prescription drugs; mental incompetency of the Employee; excessive absenteeism
not related to illness, sick leave or vacations; dishonesty; conflicts of
interest; any disability of Employee that would prevent Employee from performing
his duties under this Agreement; repeated conduct of the Employee which violates
any written rules, policy or guidelines established by the Employer; any course
of conduct of the Employee which proves to be detrimental to the Employer.
(c) RESIGNATION OF EMPLOYEE. If during the Period of Employment,
Employee shall exercise his right of voluntary termination of this Agreement
pursuant to this Section Seven, Employee shall immediately resign as Director
and as an Officer of Employer, and Employee hereby agrees that any termination
by either party of this Agreement shall constitute the voluntary resignation by
Employee as a Director and Officer of Employer.
SECTION EIGHT
NONDISCLOSURE
Employee shall not, at any time during or following the Period of
Employment, disclose, use, transfer or sell, except in the course of employment
with Employer, any confidential information or proprietary data of Employer
and/or its affiliates and subsidiaries so long as such information or
proprietary data remains confidential and has not been disclosed or is not
otherwise in the public domain. Employee further agrees to keep all terms of
this Agreement confidential, and shall not disclose any term of this Agreement
to any person or entity, whether or not related to or employed by Employer
without the prior written consent of Employer's Board of Directors.
SECTION NINE
NONCOMPETITION
Employee hereby agrees that at any time while he is employed by
Employer, and for a period of two (2) years thereafter, he will not individually
or as an employee, partner, officer or agent of any person, firm, partnership,
corporation, governmental unit, company or other entity, anywhere within the
states of Alabama, Georgia, Mississippi, Kentucky, Tennessee and such other
states in which Employer transacts between during the Period of Employment,
engage in the business of manufacturing, selling or leasing any cable
ad-insertion systems, or engage in the business of selling cable advertising
avails. Employee agrees that this noncompetition provision is reasonable and
necessary to protect Employer's business, and that Employee's violation of this
provision would result in irreparable harm to Employer. In the event Employee
breaches this provision, Employer shall be entitled to injunctive relief in
addition to any other remedies legally available. This provision shall survive
any termination of this Agreement except where Employer terminates this
Agreement without cause.
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SECTION TEN
GOVERNING LAW
This Agreement is governed by and is to be construed and enforced in
accordance with the laws of the State of Alabama. If under such law, any portion
of this Agreement is at any time deemed to be in conflict with any applicable
statute, rule, regulation or ordinance, such portion shall be deemed to be
modified or altered to conform to such provisions, or, if that is not possible,
to be omitted from this Agreement; and the invalidity of any such portion shall
not affect the force, effect and validity of the remaining portion of this
agreement.
SECTION ELEVEN
NOTICES
All notices under this Agreement shall be in writing and shall be
deemed effective when delivered in person (in the Employer's case, to its
Secretary) or thirty-six (36) hours after deposit in the United States mails,
postage prepaid, for delivery as registered or certified mail, addressed, in the
case of Employee, to the employee's residential address, and in the case of
Employer, to its corporate headquarters, attention of the Secretary, or to such
other address as Employee or Employer may designate in writing at any time or
from time to time to the other party. In lieu of personal notice or notice by
deposit in the United States mail, a party may give notice by telegram or telex.
SECTION TWELVE
REPRESENTATIVES AND WARRANTIES
Employer represents and warrants that the execution of this Agreement
has been duly authorized by resolution of its Board of Directors, and that this
Agreement constitutes a valid and binding obligation of Employer in accordance
with its terms. Employee represents and warrants that any and all information
relating in any way to Employer or Employer's business has been disclosed to
Employer prior to the date of this Agreement, and that such information is true
and correct, and that no material information relating in any way to Employer
and Employee's decision to accept employment with Employer was intentionally,
recklessly or negligently omitted from being disclosed to Employer.
SECTION THIRTEEN
INDEMNIFICATION
Employee agrees to indemnify and hold harmless Employer from and
against any losses, claims, damages, liabilities and/or expenses relating in any
way to the Employee or Employer's business, arising prior to the date of this
Agreement or during the term of this Agreement (including any legal or other
expenses reasonably incurred in investigating or defending any action
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or claim in respect thereof) to which may be proximate cause of Employee's
unauthorized actions and that Employer may in any way become subject.
SECTION FOURTEEN
MISCELLANEOUS
This Agreement constitutes the entire understanding between Employer
and Employee relating to employment of Employee by Employer and its affiliates
or subsidiaries and supersedes and cancels all prior written and oral agreements
and understandings with respect to the subject matter of this Agreement. This
Agreement may be amended but only by a subsequent written agreement of the
parties. This Agreement shall be binding upon and shall inure to the benefit of
Employee, his heirs, executors, administrators and beneficiaries and to the
benefit of Employer and its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AVALON MEDIA GROUP, INC.
By: /s/ XX. XXXXX X. XXXXXXXX
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Xx. Xxxxx X. Xxxxxxxx
Its Chairman of the Board
(EMPLOYER)
By: /s/ XX. XXXXX X. XXXXXXX
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Xx. Xxxxx X. Xxxxxxx
(EMPLOYEE)
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STATE OF TN )
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COUNTY OF XXXXXXXX )
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I, the undersigned, a Notary Public in and for said County, in said
State, hereby certify that Xxxxx X. Xxxxxxxx, is signed to the foregoing
application as Chairman of AVALON MEDIA GROUP, INC. and who presented proper
identification, and acknowledged before me on this day that, being informed of
the contents of said application, he signed the same voluntarily.
Given under my hand and official seal this the 25 day of June, 1999.
/s/ XXXXXXX XXXXXXXX
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Notary Public
My Commission Expires: 3/21/2001
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STATE OF TN )
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COUNTY OF XXXXXXXX )
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I, the undersigned, a Notary Public in and for said County, in said
State, hereby certify that Xxxxx X. Xxxxxxx, is signed to the foregoing
application and who presented proper identification, and acknowledged before me
on this day that, being informed of the contents of said application, he signed
the same voluntarily.
Given under my hand and official seal this the 25 day of June, 1999.
/s/ XXXXXXX XXXXXXXX
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Notary Public
My Commission Expires: 3/21/2001
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