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EXHIBIT 10.21
CONFIDENTIAL
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of April 10, 1995 (the "Effective
Date"), between Xxxxxxx X. Xxxxxxx (the "Executive"), and 2Way Media, Inc. (the
"Company").
WITNESSETH THAT:
WHEREAS, the parties desire to enter into this Agreement pertaining to the
Executive's employment by the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Executive and the
Company as follows:
1. Term. Subject to the terms and conditions of this Agreement, the
Company hereby agrees to employ the Executive as Chief Financial Officer of the
Company during the Agreement Term (as defined below) and the Executive hereby
agrees to remain in the employ of the Company and, in such capacity, to provide
services during the Agreement Term in accordance with this Agreement. The
"Agreement Term" shall be the period beginning on the Effective Date and ending
on the first anniversary thereof; provided, however, that unless one party
gives written notice to the contrary to the other party at least 60 days in
advance of the last day of the Agreement Term, the Agreement Term shall be
automatically extended for 12-month periods.
2. Duties. The Executive agrees that, during the Agreement Term, while
he is employed by the Company, he will devote his full time, energies and
talents to serving as the Chief Financial Officer of the Company and shall be
the principal accounting and financial officer of the Company. The Executive
shall: (a) have charge of and be responsible for the maintenance of adequate
books of account for the Company; (b) have charge and custody of all funds and
securities of the Company, and be responsible therefor and for the receipt and
disbursement thereof; and (c) perform the duties incident to the Office of
Chief Financial Officer and such other duties as may from time to time be
prescribed by the Board of Directors, Chief Executive Officer or President. The
Executive will report directly to the Company's Chief Executive Officer and
President. The Executive shall perform all duties assigned to him faithfully
and efficiently, subject to the directions of the Chief Executive Officer and
President of the Company. Notwithstanding the foregoing provisions of this
Section 2, the Executive may devote reasonable time to performing consulting
services for entities other than the Company to the extent that such activities
do not, in the reasonable judgment of the Board of Directors (the "Board"),
inhibit or prohibit the performance of the Executive's duties or obligations
under this Agreement or conflict in any material way with the business of the
Company.
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3. Compensation. Subject to the terms and conditions of this Agreement,
during the Agreement Term while he is employed by the Company, the Company
shall compensate the Executive for his services as follows:
(a) The Executive shall receive an annual salary (the "Base Salary")
of $80,000.00. The Executive's Base Salary shall be payable in
substantially equal monthly or more frequent installments, in
accordance with the regular payroll practices of the Company.
(b) The Executive's cash compensation package shall be reviewed
annually by the Board beginning with the first anniversary of the
Effective Date.
(c) The Executive shall be eligible to participate in employee
benefit plans maintained from time to time by the Company on
terms and conditions that are substantially similar to those
that apply to other management employees of the Company, as in
effect from time to time, including any long-term disability or
dental programs that may be established by the Company in its
sole discretion.
(d) The Executive will be provided with parking, similar to that
provided to the Company's other senior executives, at the
Company's office at the Company's expense.
(e) The Executive shall be reimbursed, on terms and conditions that
are substantially similar to those that apply to other
management employees of the Company, for reasonable expenses for
entertainment, travel (local and out of town), meals, lodging
and similar items actually incurred by him in the promotion of
the Company's business.
(f) The Executive shall be entitled to paid vacations in accordance
with the Company's policy in effect from time to time for
similarly situated employees; provided, however, that in no
event shall the Executive be entitled to less than three weeks'
vacation for any calendar year.
(g) The President of the Company will recommend to the Board that
the Executive be awarded, as soon as practicable after the
Effective Date, incentive stock options to purchase 260 shares
of common stock of the Company under the terms of the 2Way
Media, Inc. 1994 Stock Option Plan (the "Stock Option Plan")
which options shall have an
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exercise price equal to the fair market value on the date of grant,
will vest monthly over a five year period beginning 90 days after the
Effective Date (with 3 months' vesting to occur on such 90th day),
subject to the terms of the Stock Option Plan and the option agreement
evidencing the grant of such options. The Executive shall continue to
be eligible for future awards under the Stock Option Plan in
accordance with its terms.
4. Rights Upon Termination. The Executive's employment with the Company
may be terminated during the Agreement Term by the Company or the Executive for
any reason upon no less than two weeks' notice (the date on which such
termination of employment, if any, occurs being referred to herein as the
Executive's "Termination Date"); provided, however, that any termination by the
Company on account of Cause (as defined in paragraph 4(b)) shall be effective
upon notice to the Executive and shall not be subject to any advance notice
requirement. In the event of any such termination, the Executive's right to
benefits and payments under this Agreement for periods after his Termination
Date shall be determined in accordance with the following provisions of this
Section 4:
(a) If the Executive's Termination Date occurs during the Agreement Term
for any reason, the Executive shall be entitled to the following
payments and benefits, in addition to any payments or benefits to
which the Employee may be entitled under the specific terms of any
employee benefit plans or arrangements or the following provisions of
this Section 4 (other than this paragraph 4(a)):
(i) his accrued but unpaid Base Salary for the period ending with
his Termination Date;
(ii) his earned but unpaid bonuses, if any, for the period ending
with his Termination Date;
(iii) payment for accrued but unpaid vacation days, determined as of
his Termination Date in accordance with the Company's policy as
in effect from time to time.
Payments to be made to the Executive pursuant to this paragraph 4(a)
shall be made in a lump sum as soon as practicable after the
Executive's Termination Date but in no event more than 60 days
thereafter.
(b) If the Executive's Termination Date occurs during the
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Agreement Term on account of (i) Cause (as defined below), (ii) the
Executive's death, (iii) the Executive's disability (as defined
below), (iv) voluntary resignation (including notice by the Executive
to the Company in accordance with Section 1 that the Agreement Term
will not be extended past the last day of the then current 12-month
period), or (v) the mutual agreement of the Executive and the
Company, then, except as otherwise expressly provided in this
Agreement or as agreed in writing between the Executive and the
Company, the Company shall have no obligation to make payments or
provide benefits under this Agreement for periods after the
Executive's Termination Date. For purposes of this Agreement, "Cause"
shall be determined by the Board in good faith and shall mean (1) the
willful and continued failure by the Executive to substantially
perform his duties for the Company; (2) the willful engaging by the
Executive in conduct which is demonstrably and materially injurious
to the Company, monetarily or otherwise; (3) an illegal or negligent
action of the Executive which substantially and adversely affects the
Company; or (4) the violation by the Executive of the provisions of
Section 5 or 6 of this Agreement. For purposes of this Agreement, the
term "disability" shall mean the inability of the Executive, with
reasonable accommodation, to continue to perform his duties under
this Agreement on a full-time basis as a result of mental or physical
illness, sickness or injury for a period of 90 days within any
12-month period, as determined in the sole reasonable discretion of
the Board after receipt of an opinion by a physician selected by the
Executive. The Executive shall be entitled to payment of his Base
Salary for any period of disability, up to a maximum of 90 days
within any 12-month period.
(c) If, in accordance with Section 1, the Company gives notice to the
Employee that the Agreement Term will not be extended past the last
day of the then current 12-month period, then, in addition to the
benefits and payments to be provided pursuant to paragraph 4(a), the
Executive shall be entitled to receive from the Company for the
period commencing on the last day of the then current 12-month period
and ending on the earliest of (i) the date which is three months
after the last day of the then current 12-month period, (ii) the
first day on which the Employee violates the provisions of Section 5
or 6, or (iii) the date of the Employee's death, the Base Salary
described in paragraph 3(a), as in effect on the last day of the then
current 12-month period,
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payable in accordance with paragraph 3(a).
(d) If the Executive's Termination Date occurs during the Agreement Term and
is on account of the Executive's termination of employment by the Company
for reasons other than Cause (and is not on account of any reason
described in paragraph 4(b) or does not occur under circumstances to which
paragraph 4(c) applies) and after the date which is 90 days after the
Effective Date, then in addition to the benefits and payments to be
provided pursuant to paragraph 4(a), the Executive shall be entitled to
receive from the Company for the period commencing on his Termination Date
and ending on the earlier of (i) the date which is five months after his
Termination Date, (ii) the first date on which the Executive violates the
provisions of Section 5 or 6, or (iii) the date of the Executive's death,
the Base Salary described in paragraph 3(a), as in effect on his
Termination Date, payable in accordance with paragraph 3(a).
(e) Notwithstanding any other provision of this Agreement, the Executive's
Termination Date shall be deemed to be on account of termination by the
Company for reasons other than Cause if his employment is terminated by
the Company within six months of a Change in Control and, upon such
termination of employment, the Executive shall be entitled to benefits, if
any, pursuant to paragraph (d). For purposes of this Agreement, a "Change
in Control" shall be deemed to occur on the earliest to occur of the
following events (i) the shareholders of the Company (determined as of the
Effective Date) cease to own, either directly or indirectly, at least 50%
of the voting power of all outstanding common stock of the Company, or
(ii) the election to the Board of directors constituting a majority of the
number of directors in office unless such directors are individuals who
were directors on the Effective Date or were recommended for election by
the Board as comprised on the Effective Date. Once a Change in Control has
occurred for purposes of this Agreement, no future events which would
otherwise constitute a Change in Control shall entitle the Executive to
benefits pursuant this paragraph (e).
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5. Confidentiality. The Executive hereby agrees that:
(a) Except as may be required by law or the lawful order of a court or
agency of competent jurisdiction or as expressly consented to or
authorized by the Company, he will not, directly or indirectly,
disclose, or use for his own benefit or for the benefit of any other
person or entity (other than the Company) any secret or confidential
information, customer lists, supplier information or any other
information pertaining to the Company or the business, financial
affairs or products of the Company which is not public.
(b) Upon his Termination Date, he will promptly return to the Company any
and all records, documents, physical property, information or other
materials relating to the business of the Company obtained by him
during his course of employment with the Company.
Nothing in the foregoing provisions of this Section 5 shall be construed so as
to prevent the Executive from using in connection with employment for himself
or an employer other than the Company knowledge that he possessed prior to his
employment with the Company.
6. Noncompetition. The Executive hereby agrees that, except as
expressly permitted by Section 2:
(a) During the Agreement Term he will not, directly or indirectly, own an
interest in, operate, join, control, or participate in, or be
connected as an officer, employee, agent, independent contractor,
partner, shareholder, or principal of any corporation, partnership,
proprietorship, firm, association, person, or other entity producing,
designing, providing, soliciting orders for, selling, distributing,
or marketing products, goods, equipment,or services that directly or
indirectly compete with the Company's product or the Company's
business.
(b) For one year following his Termination Date, he will not undertake any
employment or activity competitive with the Company's business of
publishing an interactive CD-ROM music magazine in which the loyal and
complete fulfillment of the duties of the competitive employment or
activity would call on him to reveal, to make judgments on, or
otherwise to use any confidential business information or trade
secrets of the Company's business to which he had access during the
course of his employment with the Company.
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The foregoing provisions of this Section 6 shall not apply if the Company ceases
to exist other than by reason of merger, sale of stock, sale of assets,
reorganization or other corporate transaction or if the Company ceases to
publish an interactive CD-ROM music magazine.
7. Equitable Remedies. The Executive acknowledges that the Company
would be irreparably injured by a violation of Section 5 or 6 and he agrees that
the Company, in addition to any other remedies available to it for a breach or
threatened breach of such Sections, shall be entitled to a preliminary
injunction, temporary restraining order or other equivalent relied, restraining
the Executive from any actual or threatened breach of either Section 5 or 6. If
a bond is required to be posted in order for the Company to secure an injunction
or other equitable remedy, the parties agree that said bond need not be more
than a nominal sum.
8. Withholding. All compensation payable under this Agreement shall
be subject to applicable withholding taxes and other employment taxes as
required with respect to compensation paid by an employer to an employee.
9. Nonalienation. The Executive's interests under this Agreement are
not subject to the claims of his creditors and may not otherwise be voluntarily
or involuntarily assigned, alienated or encumbered.
10. Amendment. This Agreement may by amended or cancelled only by
mutual written agreement of the parties hereto without the consent of any other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement or the subject
matter hereof.
11. Applicable Law. The provisions of this Agrement shall be construed
in accordance with the laws of the state of California.
12. Severability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforeceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid ore unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).
13. Waiver of Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as
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a waiver of any subsequent breach by such other party or any similar or
dissimilar provisions and conditions at the same or any subsequent time. The
failure of any party hereto to take any action by reason of such breach will
not deprive such party of the right to take actions at any time while such
breach continues.
14. Successors. This Agreement shall be binding upon and insure to the
benefit of the Executive, the Company and the Company's successors and assigns,
including, without limitation, any corporation into which the Company is merged
and any other person or entity acquiring or succeeding to, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
Company's assets and business.
15. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or
sent by facsimile or prepaid overnight courier to the parties at the addresses
set forth below (or such other addresses as shall be specified by the parties
by like notice). Such notices, demands, claims and other communications shall
be deemed given:
(a) in case of delivery by overnight service with guaranteed next day
delivery, the next day or the date designated for delivery;
(b) in the case of certified or registered U.S. mail, five days after
deposit in the U.S. mail; or
(c) in the case of facsimile, the date upon which the transmitting party
received confirmation of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that
are to be delivered by the U.S. mail or by overnight service are to be
available to the addresses set forth below:
to the Company:
2Way Media, Inc.
0000 0xx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: President
to the Executive:
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Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
16. Arbitration of All Disputes. Any controversy or claim arising out of
or relating to this Agreement (or the breach of this Agreement), including
whether Cause exists, shall be settled by final, binding and non-appealable
arbitration in Los Angeles, California by three arbitrators. Except as
otherwise provided in this Section 16, the arbitration shall be conducted in
accordance with the rules of the American Arbitration Association (the
"Association") then in effect. One of the arbitrators shall be appointed by the
Company, one shall be appointed by the Executive, and the third shall be
appointed by the first two arbitrators. If the first two arbitrators cannot
agree on the third arbitrator within 30 days of the appointment of the second
arbitrator, then the third arbitrator shall be appointed by the Association.
This Section 16 shall not be construed to limit the Company's right to obtain
relief under Section 7 with respect to any matter or controversy subject to
Section 7 and, pending a final determination by the arbitrator with respect to
any such matter or controversy, the Company shall be entitled to obtain any
such relief by direct application to a court of law, without being required to
first arbitrate such matter or controversy.
17. Costs of Enforcement. If it becomes necessary for either party to
retain legal counsel or incur other costs or expenses in connection with either
enforcing or defending against any allegations of breach of this Agreement by
the other party, the prevailing party shall be entitled to recover from the
other party costs, expenses and reasonable attorneys' fees incurred by the
prevailing party in connection with such enforcement or defense.
18. Entire Agreement. Except as otherwise noted herein or in any
separation agreement subsequently entered into by the Executive and the
Company, this Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes all prior and
contemporaneous agreements, if any, between the parties relating to the subject
matter hereof. The enforceability of this Agreement shall not cease or
otherwise be adversely affected by the termination of the Executive's
employment with the Company.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the day and year first above written.
/s/ XXXXXXX X. XXXXXXX
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Executive
2Way Media, Inc.
By /s/ XXXXXX X. XXXXXX
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Its President
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