EXHIBIT 10.25
EMPLOYMENT AGREEMENT made February 27, 2003, effective as of November
1, 2001 (the "Effective Date"), between AOL TIME WARNER INC., a Delaware
corporation (the "Company"), and XXXXX X. XXXX.
You and the Company desire to set forth the terms and conditions of
your employment by the Company and agree as follows:
1. Term of Employment. Your "term of employment" as this phrase is used
throughout this Agreement, shall be for the period beginning on the Effective
Date and ending on December 31, 2005 (the "Term Date"), subject, however, to
earlier termination as set forth in this Agreement.
2. Employment. During the term of employment, you shall serve as
Executive Vice President and Chief Financial Officer of the Company and you
shall have the authority, functions, duties, powers and responsibilities
normally associated with such position and such additional authority, functions,
duties, powers and responsibilities as may be assigned to you from time to time
by the Company consistent with your senior position with the Company. During the
term of employment, (i) your services shall be rendered on a substantially
full-time, exclusive basis and you will apply on a full-time basis all of your
skill and experience to the performance of your duties, (ii) you shall report to
the Chief Executive Officer of the Company, (iv) you shall have no other
employment and, without the prior written consent of the Chief Executive Officer
or a Chief Operating Officer of the Company, no outside business activities
which require the devotion of substantial amounts of your time, and (v) the
place for the performance of your services shall be the principal executive
offices of the Company in the New York City metropolitan area, subject to such
reasonable travel as may be required in the performance of your duties. The
foregoing shall be subject to the Company's written policies, as in effect from
time to time, regarding vacations, holidays, illness and the like.
3. Compensation.
3.1 Base Salary. The Company shall pay you a base salary
at the rate of not less than $1,000,000 per annum during the term of employment
("Base Salary"). The Company may not decrease your Base Salary during the term
of employment. Base Salary shall be paid in accordance with the Company's
customary payroll practices.
3.2 Bonus. In addition to Base Salary, the Company
typically pays its executives an annual cash bonus ("Bonus"). Although your
Bonus is fully discretionary, your target annual Bonus is $2,000,000, pro-rated
for any year in which you are employed for less than the whole year. Each year,
your personal performance will be considered in the context of your executive
duties and any individual goals set for you, and your actual Bonus will be
determined. Although as a general matter the Company expects to pay bonuses at
the target level in cases of satisfactory individual performance, it does not
commit to do so, and your Bonus may be negatively affected by the exercise of
the Company's discretion or by overall Company performance.
3.3 Stock Options. So long as the term of employment has
not terminated, you will be eligible to receive discretionary annual grants of
stock options. Each such stock option grant shall be at an exercise price equal
to the fair market value of the Common Stock on the date of grant and shall be
reflected in a separate Stock Option Agreement in accordance with the Company's
customary practices.
3.4 Indemnification. You shall be entitled throughout the
term of employment (and after the end of the term of employment, to the extent
relating to service during the term of employment) to the benefit of the
indemnification provisions contained on the date hereof in the Certificate of
Incorporation and By-laws of the Company (not including any amendments or
additions after the date hereof that limit or narrow, but including any that add
to or broaden, the protection afforded to you by those provisions).
4. Termination.
4.1 Termination for Cause. The Company may terminate the
term of employment and all of the Company's obligations under this Agreement,
other than its obligations set forth below in this Section 4.1, for "cause".
Termination by the Company for "cause" shall mean termination by action of the
Company because of (a) your conviction (treating a nolo contendere plea as a
conviction) of a felony (whether or not any right to appeal has been or may be
exercised), (b) willful refusal without proper cause to perform your obligations
under this Agreement, (c) fraud, embezzlement or misappropriation or (d) your
breach of any of the covenants provided for in Section 9. Such termination shall
be effected by written notice thereof delivered by the Company to you and shall
be effective as of the date of such notice; provided, however, that if (i) such
termination is because of your willful refusal without proper cause to perform
any one or more of your obligations under this Agreement, (ii) such notice is
the first such notice of termination for any reason delivered by the Company to
you under this Section 4.1, and (iii) within 15 days following the date of such
notice you shall cease your refusal and shall use your best efforts to perform
such obligations, the termination shall not be effective.
In the event of termination by the Company for cause, without
prejudice to any other rights or remedies that the Company may have at law or in
equity, the Company shall have no further obligation to you other than (i) to
pay Base Salary through the effective date of termination, (ii) to pay any Bonus
for any year prior to the year in which such termination occurs that has been
determined but not yet paid as of the date of such termination, and (iii) with
respect to any rights you have pursuant to any insurance or other benefit plans
or arrangements of the Company. You hereby disclaim any right to receive a pro
rata portion of any Bonus with respect to the year in which such termination
occurs.
4.2 Termination by You for Material Breach by the Company
and Termination by the Company Without Cause. Unless previously terminated
pursuant to any other provision of this Agreement and unless a Disability Period
shall be in effect, you
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shall have the right, exercisable by written notice to the Company, to terminate
the term of employment effective 15 days after the giving of such notice, if, at
the time of the giving of such notice, the Company is in material breach of its
obligations under this Agreement; provided, however, that, with the exception of
clause (i) below, this Agreement shall not so terminate if such notice is the
first such notice of termination delivered by you pursuant to this Section 4.2
and within such 15-day period the Company shall have cured all such material
breaches. A material breach by the Company shall include, but not be limited to,
(i) the Company violating Section 2 with respect to your title, reporting lines,
duties or place of employment or (ii) the Company failing to cause any successor
to all or substantially all of the business and assets of the Company expressly
to assume the obligations of the Company under this Agreement.
The Company shall have the right, exercisable by written
notice to you, to terminate your employment under this Agreement without cause,
which notice shall specify the effective date of such termination.
4.2.1 After the effective date of a termination
pursuant to this Section 4.2 (a "termination without cause"), you shall receive
Base Salary and a pro rata portion of your Average Annual Bonus (as defined
below) through the effective date of termination. Your Average Annual Bonus
shall be equal to the average of the regular annual bonus amounts (excluding the
amount of any special or spot bonuses) in respect of the two calendar years
during the most recent five calendar years for which the annual bonus received
by you from the Company or from TBS was the greatest.
4.2.2 After the effective date of a termination
without cause, you shall remain an employee of the Company for a period ending
on the date (the "Severance Term Date") which is the later of (i) the Term Date
and (ii) the date which is 24 months after the effective date of such
termination and during such period you shall be entitled to receive, whether or
not you become disabled during such period but subject to Section 6, (a) Base
Salary at an annual rate equal to your Base Salary in effect immediately prior
to the notice of termination, and (b) an annual Bonus in respect of each
calendar year or portion thereof (in which case a pro rata portion of such Bonus
will be payable) during such period equal to your Average Annual Bonus. Except
as provided in the second succeeding sentence, if you accept other full-time
employment during such period or notify the Company in writing of your intention
to terminate your status as an employee during such period, you shall cease to
be an employee of the Company effective upon the later of (x) July 1, 2003, or
(y) commencement of such other employment or the effective date of such
termination as specified by you in such notice (whichever is applicable), and
you shall be entitled to receive, as severance, a lump sum payment within 30
days after such commencement or such effective date (provided that if you were
named in the compensation table in the Company's then most recent proxy
statement, such lump sum payment shall be made within 30 days after the end of
the calendar year in which such commencement or effective date occurred),
discounted as provided in the immediately following sentence, equal to the
balance of the payments you would have received pursuant to this Section 4.2.2
had you remained on the Company's payroll. That lump sum
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shall be discounted to present value as of the date of payment from the times at
which such amounts would otherwise have become payable absent such commencement
or termination at an annual discount rate for the relevant periods equal to 120%
of the "applicable Federal rate" (within the meaning of Section 1274(d) of the
Internal Revenue Code of 1986, as amended (the "Code"), in effect on the date of
such commencement or termination, compounded semi-annually. Notwithstanding the
foregoing, if you accept employment with any not-for-profit entity, then you
shall be entitled to remain an employee of the Company and receive the payments
as provided in the first sentence of this Section 4.2.2; or if you accept
full-time employment with any affiliate of the Company, then the payments
provided for in this Section 4.2.2 shall immediately cease and you shall not be
entitled to any lump sum payment. For purposes of this Agreement, the term
"affiliate" shall mean any entity which, directly or indirectly, controls, is
controlled by, or is under common control with, the Company.
4.3 After the Term Date. If at the Term Date, the term of
employment shall not have been previously terminated pursuant to the provisions
of this Agreement, no Disability Period is then in effect and the parties shall
not have agreed to an extension or renewal of this Agreement or on the terms of
a new employment agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the Company
pursuant to the terms of this Agreement, subject to termination by either party
hereto on 60 days written notice delivered to the other party (which notice may
be delivered by either party at any time on or after the date which is 60 days
prior to the Term Date). If the Company shall terminate the term of employment
on or after the Term Date for any reason (other than for cause as defined in
Section 4.1, in which case Section 4.1 shall apply), which the Company shall
have the right to do so long as no Disability Date (as defined in Section 5) has
occurred prior to the delivery by the Company of written notice of termination,
then such termination shall be deemed for all purposes of this Agreement to be a
"termination without cause" under Section 4.2 and the provisions of Sections
4.2.1 and 4.2.2 shall apply.
4.4 Office Facilities. In the event of a termination
without cause, then for the period beginning on the effective date of such
termination and ending on the earlier of (a) six months thereafter or (b) the
date you commence other full-time employment, the Company shall, without charge
to you, make available to you office space at or near your principal job
location immediately prior to such termination, together with secretarial
services, office facilities, services and furnishings, in each case reasonably
appropriate to an employee of your position and responsibilities prior to such
termination but taking into account your reduced need for such office space,
secretarial services and office facilities, services and furnishings as a result
of you no longer being a full-time employee.
4.5 Release. A condition precedent to the Company's
obligation to make the payments associated with a termination without cause
shall be your execution and delivery of a release in the form attached hereto as
Annex A. If you shall fail to execute and deliver such release, or if you revoke
such release as provided therein, then in
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lieu of the payments provided for herein, you shall receive a severance payment
determined in accordance with the Company's policies relating to notice and
severance.
4.6 Mitigation. In the event of a termination without
cause under this Agreement, you shall not be required to seek other employment
in order to mitigate your damages hereunder, unless Section 280G of the Code
would apply to any payments to you by the Company and your failure to mitigate
would result in the Company losing tax deductions to which it would otherwise
have been entitled. In such an event, you will engage in whatever mitigation is
necessary to preserve the Company's tax deductions. With respect to the
preceding sentences, any payments or rights to which you are entitled by reason
of your termination of employment without cause shall be considered as damages
hereunder. In addition, whether or not you are required to mitigate your damages
hereunder, if following a termination without cause you obtain other employment
with any entity, other than a not-for-profit entity or government institution,
then you shall pay over to the Company the total cash salary and bonus (of any
kind) payable to you in connection with such other employment for services
during the period prior to the Severance Term Date (whether paid or deferred),
at the time received by you, to the extent of the amounts previously paid to you
by the Company following your termination with respect to such period, as
damages or severance, in excess of the Company's standard policy. (The
provisions of the foregoing sentence shall not apply to any equity interest,
stock option, phantom or restricted stock or similar benefit received in
connection with such other employment). Any obligation to mitigate your damages
pursuant to this Section 4.6 shall not be a defense or offset to the Company's
obligation to pay you in full the amounts provided in this Agreement upon the
occurrence of a termination without cause, at the time provided herein, or the
timely and full performance of any of the Company's other obligations under this
Agreement.
4.7 Payments. So long as you remain on the payroll of the
Company or any subsidiary of the Company, payments of Base Salary and Bonus
required to be made after a termination without cause shall be made at the same
times as similar payments are made to other senior executives of the Company.
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5. Disability.
5.1 Disability Payments. If during the term of employment
and prior to the delivery of any notice of termination without cause, you become
physically or mentally disabled, whether totally or partially, so that you are
prevented from performing your usual duties for a period of six consecutive
months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay your full compensation
through the last day of the sixth consecutive month of disability or the date on
which the shorter periods of disability shall have equaled a total of six months
in any twelve-month period (such last day or date being referred to herein as
the "Disability Date"). If you have not resumed your usual duties on or prior to
the Disability Date, the Company shall pay you a pro rata Bonus (based on your
Average Annual Bonus) for the year in which the Disability Date occurs and
thereafter shall pay you disability benefits for the period ending on the later
of (i) the Term Date or (ii) the date which is 24 months after the Disability
Date (in the case of either (i) or (ii), the "Disability Period"), in an annual
amount equal to 75% of (a) your Base Salary at the time you become disabled and
(b) the Average Annual Bonus.
5.2 Recovery from Disability. If during the Disability
Period you shall fully recover from your disability, the Company shall have the
right (exercisable within 60 days after notice from you of such recovery), but
not the obligation, to restore you to full-time service at full compensation. If
the Company elects to restore you to full-time service, then this Agreement
shall continue in full force and effect in all respects and the Term Date shall
not be extended by virtue of the occurrence of the Disability Period. If the
Company elects not to restore you to full-time service, you shall be entitled to
obtain other employment, subject, however, to the following: (i) you shall
perform advisory services during any balance of the Disability Period; and (ii)
you shall comply with the provisions of Sections 9 and 10 during the Disability
Period. The advisory services referred to in clause (i) of the immediately
preceding sentence shall consist of rendering advice concerning the Company's
finances as requested by the Chief Executive Officer or a Chief Operating
Officer of the Company but you shall not be required to devote more than five
days (up to eight hours per day) each month to such services, which shall be
performed at a time and place mutually convenient to both parties. Any income
from such other employment shall not be applied to reduce the Company's
obligations under this Agreement.
5.3 Other Disability Provisions. The Company shall be
entitled to deduct from all payments to be made to you during the Disability
Period pursuant to this Section 5 an amount equal to all disability payments
received by you during the Disability Period from Worker's Compensation, Social
Security and disability insurance policies maintained by the Company; provided,
however, that for so long as, and to the extent that, proceeds paid to you from
such disability insurance policies are not includible in your income for federal
income tax purposes, the Company's deduction with respect to such payments shall
be equal to the product of (i) such payments and (ii) a fraction, the
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numerator of which is one and the denominator of which is one less the maximum
marginal rate of federal income taxes applicable to individuals at the time of
receipt of such payments. All payments made under this Section 5 after the
Disability Date are intended to be disability payments, regardless of the manner
in which they are computed. Except as otherwise provided in this Section 5, the
term of employment shall continue during the Disability Period and you shall be
entitled to all of the rights and benefits provided for in this Agreement,
except that Sections 4.2 and 4.3 shall not apply during the Disability Period
and unless the Company has restored you to full-time service at full
compensation prior to the end of the Disability Period, the term of employment
shall end and you shall cease to be an employee of the Company at the end of the
Disability Period and shall not be entitled to notice and severance or to
receive or be paid for any accrued vacation time or unused sabbatical.
6. Death. If you die during the term of employment, this Agreement and
all obligations of the Company to make any payments hereunder shall terminate
except that your estate (or a designated beneficiary) shall be entitled to
receive Base Salary to the last day of the month in which your death occurs and
Bonus compensation (at the time bonuses are normally paid) based on the Average
Annual Bonus, but prorated according to the number of whole or partial months
you were employed by the Company in such calendar year.
7. Life Insurance. During your employment with the Company, the Company
shall (i) provide you with $50,000 of group life insurance and (ii) pay you
annually an amount equal to two times the premium you would have to pay to
obtain life insurance under the Group Universal Life ("GUL") insurance program
made available by the Company in an amount equal to $3,000,000. You shall be
under no obligation to use the payments made by the Company pursuant to the
preceding sentence to purchase GUL insurance or to purchase any other life
insurance. If the Company discontinues its GUL insurance program, the Company
shall nevertheless make the payments required by this Section 7 as if such
program were still in effect. The payments made to you hereunder shall not be
considered as "salary" or "compensation" or "bonus" in determining the amount of
any payment under any pension, retirement, profit-sharing or other benefit plan
of the Company or any subsidiary of the Company.
8. Other Benefits.
8.1 General Availability. To the extent that (a) you are
eligible under the general provisions thereof (including without limitation, any
plan provision providing for participation to be limited to persons who were
employees of the company or certain of its subsidiaries prior to a specific
point in time) and (b) the Company maintains such plan or program for the
benefit of its executives, during the term of employment and so long as you are
an employee of the Company, you shall be eligible to participate in any savings
or similar plan or program and in any group life insurance (to the extent set
forth in Section 7), hospitalization, medical, dental, accident, disability or
similar plan or program of the Company now existing or established hereafter.
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8.2 Benefits After a Termination or Disability. During
the period you remain on the payroll of the Company after a termination without
cause or during the Disability Period, you shall continue to be eligible to
participate in the benefit plans and to receive the benefits required to be
provided to you under this Agreement to the extent such benefits are maintained
in effect by the Company for its executives; provided, however, you shall not be
entitled to any additional awards or grants under any stock option, restricted
stock or other stock based incentive plan. At the time you leave the payroll of
the Company, your rights to benefits and payments under any benefit plans or any
insurance or other death benefit plans or arrangements of the Company or under
any stock option, restricted stock, stock appreciation right, bonus unit,
management incentive or other plan of the Company shall be determined in
accordance with the terms and provisions of such plans and any agreements under
which such stock options, restricted stock or other awards were granted.
However, notwithstanding the foregoing or any more restrictive provisions of any
such plan or agreement, if your employment with the Company is terminated as a
result of a termination pursuant to Section 4.2, then, except if you shall
otherwise qualify for retirement under the terms of the applicable stock option
agreement, (i) all stock options granted to you by the Company or Time Warner
Inc. on or after January 10, 2000 (which options are collectively referred to as
your "Term Options") which would have vested on or before the Severance Term
Date (or the comparable date under any employment agreement that amends,
replaces or supersedes this Agreement) shall vest and become immediately
exercisable upon the effective date of such termination, (ii) all your vested
options shall remain exercisable while you are on the payroll of the Company and
for a period of three years after the date you leave the payroll of the Company
(but not beyond the term of such options), and (iii) the Company shall not be
permitted to determine that your employment was terminated for "unsatisfactory
performance" within the meaning of any stock option agreement between you and
the Company or Time Warner Inc.
8.3 Post Retirement Medical Benefits. Each year
commencing on the date (the "Retirement Date") which is the earlier of (a) your
65th birthday, or (b) the date you retire from the Company by giving notice to
the Company that you intend to retire and do not intend to seek other full-time
employment, the Company shall (x) to the extent permitted by applicable law and
the rules and regulations of applicable government agencies, provide you access
to medical insurance coverage for you, your spouse and dependents, if any, that
is substantially similar to the coverage afforded to active employees of the
Company at that time and you shall reimburse the Company annually for the full
amount of the insurance premiums paid by the Company for such coverage, or if
the Company is prevented by law, rule or regulation from providing the coverage
described in this clause (x), then the Company shall (y) annually reimburse you
an amount (the "Annual Premium Amount") of up to an aggregate of $15,000 (which
shall be increased each year in the manner as set forth below) for insurance
premiums with respect to medical insurance covering you, your spouse and
dependents, if any. Immediately prior to the Retirement Date, the Annual Premium
Amount shall be adjusted by multiplying the Annual Premium Amount by a fraction
(expressed as a percentage), the numerator of
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which is the most recently published "CPI" (as hereinafter defined) as of the
Retirement Date and the denominator of which shall be the most recently
published CPI as of December 1, 2001. In addition, at the beginning of each
calendar year thereafter, the Annual Premium Amount shall be adjusted by
multiplying the then current Annual Premium Amount by a fraction (expressed as a
percentage), the numerator of which shall be the most recently published CPI as
of the end of the immediately preceding year and the denominator of which shall
be the numerator used in the calculation relating to the previous calendar year.
For the purposes of this Agreement, "CPI" shall mean the Consumer Price Index
for All Urban Consumers, U.S. City Average, Medical Care Index (2000-2001=100)
(unadjusted) published by the Bureau of Labor Statistics, United States
Department of Labor.
8.4 Payments in Lieu of Other Benefits. In the event the
term of employment and your employment with the Company is terminated pursuant
to any section of this Agreement, you shall not be entitled to notice and
severance under the Company's general employee policies or to be paid for any
accrued vacation time or unused sabbatical, the payments provided for in such
sections being in lieu thereof.
9. Protection of Confidential Information; Non-Compete.
9.1 Confidentiality Covenant. You acknowledge that your
employment by the Company (which, for purposes of this Section 9 shall mean AOL
Time Warner Inc. and its affiliates) will, throughout the term of employment,
bring you into close contact with many confidential affairs of the Company,
including information about costs, profits, markets, sales, products, key
personnel, pricing policies, operational methods, technical processes and other
business affairs and methods and other information not readily available to the
public, and plans for future development. You further acknowledge that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. You further acknowledge that the
business of the Company is international in scope, that its products and
services are marketed throughout the world, that the Company competes in nearly
all of its business activities with other entities that are or could be located
in nearly any part of the world and that the nature of your services, position
and expertise are such that you are capable of competing with the Company from
nearly any location in the world. In recognition of the foregoing, you covenant
and agree:
9.1.1 You shall keep secret all confidential
matters of the Company and shall not disclose such matters to anyone outside of
the Company, or to anyone inside the Company who does not have a need to know or
use such information, and shall not use such information for personal benefit or
the benefit of a third party, either during or after the term of employment,
except with the Company's written consent, provided that (i) you shall have no
such obligation to the extent such matters are or become publicly known other
than as a result of your breach of your obligations hereunder and (ii) you may,
after giving prior notice to the Company to the extent practicable under the
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circumstances, disclose such matters to the extent required by applicable laws
or governmental regulations or judicial or regulatory process;
9.1.2 You shall deliver promptly to the Company on
termination of your employment, or at any other time the Company may so request,
all memoranda, notes, records, reports and other documents (and all copies
thereof) relating to the Company's business, which you obtained while employed
by, or otherwise serving or acting on behalf of, the Company and which you may
then possess or have under your control; and
9.1.3 If the term of employment is terminated
pursuant to Section 4, for a period of one year after such termination, without
the prior written consent of the Company, you shall not employ, and shall not
cause any entity of which you are an affiliate to employ, any person who was a
full-time employee of the Company at the date of such termination or within six
months prior thereto but such prohibition shall not apply to your secretary or
executive assistant or to any other employee eligible to receive overtime pay.
9.2 Non-Compete. During the term of employment and
through the later of (i) the Term Date, (ii) the date you leave the payroll of
the Company, and (iii) twelve months after the effective date of any termination
of the term of employment pursuant to Section 4, you shall not, directly or
indirectly, without the prior written consent of the Chief Executive Officer or
any Chief Operating Officer of the Company, render any services to, or act in
any capacity for, any Competitive Entity, or acquire any interest of any type in
any Competitive Entity; provided, however, that the foregoing shall not be
deemed to prohibit you from acquiring, (a) solely as an investment and through
market purchases, securities of any Competitive Entity which are registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which
are publicly traded, so long as you are not part of any control group of such
Competitive Entity and such securities, including converted securities, do not
constitute more than one percent (1%) of the outstanding voting power of that
entity and (b) securities of any Competitive Entity that are not publicly
traded, so long as you are not part of any control group of such Competitive
Entity and such securities, including converted securities, do not constitute
more than three percent (3%) of the outstanding voting power of that entity. For
purposes of the foregoing, the following shall be deemed to be a Competitive
Entity: (x) during the period that you are actively employed with the Company,
any person or entity that engages in any line of business that is substantially
the same as either (i) any line of business which the Company engages in,
conducts or, to your knowledge, has definitive plans to engage in or conduct or
(ii) any operating business that is engaged in or conducted by the Company as to
which, to your knowledge, the Company covenants, in writing, not to compete with
in connection with the disposition of such business, and (y) during the period
following a termination of your term of employment pursuant to Section 4, any of
the following: AT&T Corporation, Bertelsmann A.G., The Xxxx Disney Company,
Comcast Corporation, EarthLink, Inc., General Electric Corporation, Microsoft
Corporation, The News Corporation, Sony Corporation, Vivendi Universal, S.A.,
Viacom Inc. and Yahoo! Inc., and their respective
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subsidiaries and affiliates and any successor to any internet service provider,
media or entertainment businesses thereof.
10. Ownership of Work Product. You acknowledge that during the term of
employment, you may conceive of, discover, invent or create inventions,
improvements, new contributions, literary property, material, ideas and
discoveries, whether patentable or copyrightable or not (all of the foregoing
being collectively referred to herein as "Work Product"), and that various
business opportunities shall be presented to you by reason of your employment by
the Company. You acknowledge that all of the foregoing shall be owned by and
belong exclusively to the Company and that you shall have no personal interest
therein, provided that they are either related in any manner to the business
(commercial or experimental) of the Company, or are, in the case of Work
Product, conceived or made on the Company's time or with the use of the
Company's facilities or materials, or, in the case of business opportunities,
are presented to you for the possible interest or participation of the Company.
You shall (i) promptly disclose any such Work Product and business opportunities
to the Company; (ii) assign to the Company, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(iii) sign all papers necessary to carry out the foregoing; and (iv) give
testimony in support of your inventorship or creation in any appropriate case.
You agree that you will not assert any rights to any Work Product or business
opportunity as having been made or acquired by you prior to the date of this
Agreement except for Work Product or business opportunities, if any, disclosed
to and acknowledged by the Company in writing prior to the date hereof.
11. Notices. All notices, requests, consents and other communications
required or permitted to be given under this Agreement shall be effective only
if given in writing and shall be deemed to have been duly given if delivered
personally or sent by a nationally recognized overnight delivery service, or
mailed first-class, postage prepaid, by registered or certified mail, as follows
(or to such other or additional address as either party shall designate by
notice in writing to the other in accordance herewith):
11.1 If to the Company:
AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Vice President - Global
Compensation and Benefits
(with a copy, similarly addressed
but Attention: General Counsel)
11.2 If to you, to your residence address set forth on the
records of the Company.
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12. General.
12.1 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the substantive laws of the State
of New York applicable to agreements made and to be performed entirely in New
York.
12.2 Captions. The section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.3 Entire Agreement. This Agreement, including Annex A,
sets forth the entire agreement and understanding of the parties relating to the
subject matter of this Agreement and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties.
12.4 No Other Representations. No representation, promise
or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or be liable for any alleged
representation, promise or inducement not so set forth.
12.5 Assignability. This Agreement and your rights and
obligations hereunder may not be assigned by you and except as specifically
contemplated in this Agreement, neither you, your legal representative nor any
beneficiary designated by you shall have any right, without the prior written
consent of the Company, to assign, transfer, pledge, hypothecate, anticipate or
commute to any person or entity any payment due in the future pursuant to any
provision of this Agreement, and any attempt to do so shall be void and shall
not be recognized by the Company. The Company shall assign its rights together
with its obligations hereunder in connection with any sale, transfer or other
disposition of all or substantially all of the Company's business and assets,
whether by merger, purchase of stock or assets or otherwise, as the case may be.
Upon any such assignment, the Company shall cause any such successor expressly
to assume such obligations, and such rights and obligations shall inure to and
be binding upon any such successor.
12.6 Amendments; Waivers. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended and the terms or covenants
hereof may be waived only by written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The failure
of either party at any time or times to require performance of any provision
hereof shall in no manner affect such party's right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
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12.7 Specific Remedy. In addition to such other rights and
remedies as the Company may have at equity or in law with respect to any breach
of this Agreement, if you commit a material breach of any of the provisions of
Sections 9.1, 9.2, or 10, the Company shall have the right and remedy to have
such provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company.
12.8 Resolution of Disputes. Except as provided in the
preceding Section 12.7, any dispute or controversy arising with respect to this
Agreement and your employment hereunder (whether based on contract or tort or
upon any federal, state or local statute, including but not limited to claims
asserted under the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, as amended, any state Fair Employment Practices Act and/or
the Americans with Disability Act) shall, at the election of either you or the
Company, be submitted to JAMS/ENDISPUTE for resolution in arbitration in
accordance with the rules and procedures of JAMS/ENDISPUTE. Either party shall
make such election by delivering written notice thereof to the other party at
any time (but not later than 45 days after such party receives notice of the
commencement of any administrative or regulatory proceeding or the filing of any
lawsuit relating to any such dispute or controversy) and thereupon any such
dispute or controversy shall be resolved only in accordance with the provisions
of this Section 12.8. Any such proceedings shall take place in New York City
before a single arbitrator (rather than a panel of arbitrators), pursuant to any
streamlined or expedited (rather than a comprehensive) arbitration process,
before a non-judicial (rather than a judicial) arbitrator, and in accordance
with an arbitration process which, in the judgment of such arbitrator, shall
have the effect of reasonably limiting or reducing the cost of such arbitration.
The resolution of any such dispute or controversy by the arbitrator appointed in
accordance with the procedures of JAMS/ENDISPUTE shall be final and binding.
Judgment upon the award rendered by such arbitrator may be entered in any court
having jurisdiction thereof, and the parties consent to the jurisdiction of the
New York courts for this purpose. The prevailing party shall be entitled to
recover the costs of arbitration (including reasonable attorneys fees and the
fees of experts) from the losing party. If at the time any dispute or
controversy arises with respect to this Agreement, JAMS/ENDISPUTE is not in
business or is no longer providing arbitration services, then the American
Arbitration Association shall be substituted for JAMS/ENDISPUTE for the purposes
of the foregoing provisions of this Section 12.8. If you shall be the prevailing
party in such arbitration, the Company shall promptly pay, upon your demand, all
legal fees, court costs and other costs and expenses incurred by you in any
legal action seeking to enforce the award in any court.
12.9 Beneficiaries. Whenever this Agreement provides for
any payment to your estate, such payment may be made instead to such beneficiary
or beneficiaries as you may designate by written notice to the Company. You
shall have the right to revoke any such designation and to redesignate a
beneficiary or beneficiaries by written notice to the Company (and to any
applicable insurance company) to such effect.
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12.10 No Conflict. You represent and warrant to the Company
that this Agreement is legal, valid and binding upon you and the execution of
this Agreement and the performance of your obligations hereunder does not and
will not constitute a breach of, or conflict with the terms or provisions of,
any agreement or understanding to which you are a party (including, without
limitation, any other employment agreement). The Company represents and warrants
to you that this Agreement is legal, valid and binding upon the Company and the
execution of this Agreement and the performance of the Company's obligations
hereunder does not and will not constitute a breach of, or conflict with the
terms or provisions of, any agreement or understanding to which the Company is a
party.
12.11 Withholding Taxes. Payments made to you pursuant to
this Agreement shall be subject to withholding and social security taxes and
other ordinary and customary payroll deductions.
12.12 No Offset. Neither you nor the Company shall have any
right to offset any amounts owed by one party hereunder against amounts owed or
claimed to be owed to such party, whether pursuant to this Agreement or
otherwise, and you and the Company shall make all the payments provided for in
this Agreement in a timely manner.
12.13 Severability. If any provision of this Agreement
shall be held invalid, the remainder of this Agreement shall not be affected
thereby; provided, however, that the parties shall negotiate in good faith with
respect to equitable modification of the provision or application thereof held
to be invalid. To the extent that it may effectively do so under applicable law,
each party hereby waives any provision of law which renders any provision of
this Agreement invalid, illegal or unenforceable in any respect.
12.14 Survival. Sections 3.4, 8.3 and 9 through 12 shall
survive any termination of the term of employment by the Company for cause
pursuant to Section 4.1. Sections 3.4, 4.2, 4.4, 4.5, 4.6 and 8 through 12 shall
survive any termination of the term of employment pursuant to Sections 4.2, 5 or
6.
12.15 Definitions. The following terms are defined in this
Agreement in the places indicated:
affiliate - Section 4.2.2
Average Annual Bonus - Section 4.2.1
Base Salary - Section 3.1
Bonus - Section 3.2
cause - Section 4.1
Code - Section 4.2.2
Company - the first paragraph on page 1 and Section 9.1
Competitive Entity - Section 9.2
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Disability Date - Section 5
Disability Period - Section 5
Effective Date - the first paragraph on page 1
TBS - Section 3.2
Term Date - Section 1
Term Options - Section 8.2
Severance Term Date - Section 4.2.2
term of employment - Section 1
termination without cause - Section 4.2.1
Work Product - Section 10
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AOL TIME WARNER INC.
By /s/ Xxxx X. Xxxxxxx
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/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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ANNEX A
RELEASE
Pursuant to the terms of the Employment Agreement made as of
_____________, between AOL TIME WARNER INC., a Delaware corporation (the
"Company"), 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the undersigned
(the "Agreement"), and in consideration of the payments made to me and other
benefits to be received by me pursuant thereto, I, [Name], being of lawful age,
do hereby release and forever discharge the Company and any successors,
subsidiaries, affiliates, related entities, predecessors, merged entities and
parent entities and their respective officers, directors, shareholders,
employees, benefit plan administrators and trustees, agents, attorneys,
insurers, representatives, affiliates, successors and assigns from any and all
actions, causes of action, claims, or demands for general, special or punitive
damages, attorney's fees, expenses, or other compensation or damages
(collectively, "Claims"), which in any way relate to or arise out of my
employment with the Company or any of its subsidiaries or the termination of
such employment, which I may now or hereafter have under any federal, state or
local law, regulation or order, including without limitation, Claims related to
any stock options held by me or granted to me by the Company that are scheduled
to vest subsequent to the Severance Term Date, as defined in the Agreement, and
Claims under the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the Fair Labor
Standards Act, the Family and Medical Leave Act and the Employee Retirement
Income Security Act, each as amended through and including the date of this
Release; provided, however, that the execution of this Release shall not prevent
the undersigned from bringing a lawsuit against the Company to enforce its
obligations under the Agreement.
I acknowledge that I have been given at least 21 days from the day I
received a copy of this Release to sign it and that I have been advised to
consult an attorney. I understand that I have the right to revoke my consent to
this Release for seven days following my signing. This Release shall not become
effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.
I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP
VALAUBLE LEGAL RIGHTS AND THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE
SIGNING. I further state that I have read this document and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.
WITNESS my hand this ____ day of ___________, ____.
__________________________
[Name]
