EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is executed as of the 16th
day of July, 2001, by and between SUN EXPRESS GROUP, INC., a Florida corporation
("Company"), and T. XXXXXX XXXXXXX ("Executive"), and is made with respect to
the following facts:
A. Concurrently herewith, RadioTV Network, LLC, a Delaware limited
liability company ("LLC"), is merging (the "Merger") with and into RadioTV
Network, Inc., a Florida corporation and wholly-owned subsidiary of Company
("Sub"), wherein Sub will be the surviving corporation and LLC will disappear
pursuant to the terms of an Agreement and Plan of Merger (the "Merger
Agreement") by and among Company, LLC and Sub.
B. As a condition to the Merger Agreement, without which neither
Company nor LLC would consummate the Merger, Company and LLC have required the
execution of this Agreement pursuant to which Executive will be employed by
Company for a period of three years.
C. Executive acknowledges that his services under the provision of this
Agreement are of a special, unique, unusual and extraordinary character.
D. The parties have entered into this Agreement for the purpose of
setting forth the terms of employment of Executive by Company.
E. Company and Executive believe it is in their mutual best interests
to enter into an employment agreement pursuant to the terms hereinafter set
forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Employment. Company hereby employs Executive and Executive hereby
accepts employment upon the terms and conditions hereinafter set forth.
2. Term of Agreement. This Agreement shall commence on the first day
after the closing of the Merger under the terms of the Merger Agreement and
shall continue, unless terminated as provided in Section 9 hereof, for a term of
thirty-six (36) months (the "Term"); provided, however, that if the parties
hereto shall, after such termination date, continue to perform as provided
hereunder, then the Term shall automatically be extended until terminated by
thirty (30) days written notice given by either party to the other at any time
thereafter. If the Term is extended pursuant to this Section 2, during such
period of extension Company shall pay Executive all compensation to which
Executive is entitled under this Agreement.
3. Duties and Authority of Executive.
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3.01 Company hereby employs Executive as the Chief Executive
Officer of Sub. Subject to Section 3.02 hereof, Executive shall report directly
to the Board of Directors of the Company and his powers and duties shall be all
of the duties customarily performed by executives employed in the capacity of
chief executive officer of companies engaged in the business of Sub.
3.02 Company covenants and agrees that it will promptly
contribute to Sub 66.66% of all cash raised by Company from the sale of any of
its securities plus all cash raised by Company from the sale of any of its
securities after 33.34% of such cash equals $1,500,000.
3.03 Notwithstanding any other provision of this Agreement to
the contrary, Executive shall have the sole operating authority over Sub
including, without limitation, the sole authority to operate Sub in the ordinary
course of its business and expend and make commitments for all of the cash of
Sub.
4. Time and Efforts. Executive shall only be required devote such time
and effort to the Sub as Executive deems reasonably advisable to discharge his
duties under this Agreement. Executive will at all times faithfully and
industriously and to the best of his ability, experience and talent, perform all
of the duties that may be required of and from him pursuant to the terms hereof.
Company agrees that Executive shall render his services to Sub hereunder on a
non-exclusive basis, provided, however, that during the Term Executive shall not
be under or subject to any contractual restriction that is inconsistent with the
performance of his duties hereunder. Such duties shall be rendered at such place
or places as Sub shall in good faith require, or as the interest, need, business
and/or opportunities of Sub shall require or deem advisable so long as such
duties do not reasonably require Executive to move his principal residence.
5. Compensation. As full compensation for all services to be performed
by Executive pursuant to this Agreement during the Term, Company shall pay
Executive the compensation set forth in this Section 5, in addition to such
other benefits and compensation as are provided in this Agreement. Any and all
payments of compensation to Executive hereunder may be paid by Sub; provided,
however, that Company shall remain primarily liable for the full payment
thereof.
5.01 Salary. During the Term, Executive shall receive an
annual salary (the "Salary") in the amount of One Hundred Twenty Thousand
Dollars ($120,000). The Salary shall be payable in equal semi-monthly
installments on the 15th and last day of each calendar month during the Term
(prorated for partial periods). If the 15th or last day of a month is not a
business day of Company, then such payment of the Salary shall be on the
preceding business day before such payment date.
5.02 Annual Guaranteed Bonus. During the Term, Executive shall
receive an annual bonus in the amount of Thirty Thousand Dollars ($30,000)
payable within 30 days after the end of each fiscal year of Company("Guaranteed
Bonus"). The Guaranteed Bonus payable during the first and last 12 months of the
Term shall be prorated for partial periods.
5.03 Incentive Bonus.
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(a) During the Term, Executive shall receive an
incentive bonus ("Incentive Bonus") equal to ten percent (10%) of the "EBITDA of
Company" (as defined herein) for each of Company's fiscal years during the Term;
provided that there shall be deducted from the Incentive Bonus the amount of the
Guarantee Bonus paid to Executive in such fiscal year. The Incentive Bonus
payable during the first and last 12 months of the Term shall be prorated for
partial periods.
(b) "EBITDA" means the net income, if any, of Company
and its controlled subsidiaries (including Sub) for the applicable fiscal year
with the following adjustments: (i) there shall be no deduction or debit for
federal and state taxes on income; depreciation or amortization; and interest
paid in cash during the year; (ii) there shall be a deduction or debit for
pension, profit-sharing and incentive plans, and any other employee benefits or
bonuses, incurred or accrued by Company; and (iii) there shall be eliminated all
inter-Company items; all earnings attributable to equity interests in entities
that are not controlled subsidiaries of Company unless actually received by
Company or a controlled subsidiary; all income arising from the forgiveness,
adjustment, or negotiated settlement of any indebtedness; any extraordinary
items of income or expense; and any increase or decrease in income arising from
any change in Company's method of accounting.
(c) Company shall pay the Incentive Bonus for each
applicable fiscal year to Executive on the date that is 90 days after the end of
each applicable fiscal year.
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5.04 Participation in Company Incentive Plans. In addition to
any other compensation or benefits to be received by Executive pursuant to the
terms of this Agreement, if Company and/or Sub adopts from time-to-time one or
more bonus, incentive, retention and/or stock option plans for any of its
employees or executives, Executive shall participate in each such plan at its
highest level to the extent allowable in accordance with his status.
5.05 Discretionary Bonus. Nothing herein contained shall
preclude the Board of Directors of Company, in its sole and absolute discretion,
from authorizing the payment of additional compensation to Executive over and
above the Salary at any time payable to him under this Agreement, whether as a
bonus or otherwise. The payment of such additional compensation shall not
operate as an amendment obligating Company to make any similar payment or to pay
additional compensation at any future time or for any future period or be deemed
to affect the Salary in any manner.
6. Executive Benefits.
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6.01 Medical Coverage and Life and Disability Insurance.
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(a) During the Term, Company shall provide Executive
and his children with group medical and hospital insurance coverage on terms at
least as favorable as those in effect with respect to Executive on the day
immediately preceding the date of this Agreement and no less favorable than
those provided to other senior executives of the Company. At the option of
Executive, Company shall reimburse Executive for the cost of his current
policies (in the approximate amount of $600 per month).
(b) During the Term, Company shall fully reimburse
Executive for all premiums on a life insurance policy on the life of Executive
that Executive currently holds (approximately $400 per month). The beneficiary
of such life insurance policy shall be designated by Executive.
(c) During the Term, Company shall fully reimburse
Executive for all premiums on policy of disability insurance on Executive with
benefits to be mutually approved by Company and Executive. Executive shall be
the beneficiary of such disability insurance policy.
6.02 Benefits Generally Offered. In addition to any other
compensation or benefits to be received by Executive pursuant to the terms of
this Agreement, Executive shall be entitled to participate, to the extent
allowable in accordance with his status, in all employee benefits offered from
time-to-time by Company to its senior executives.
6.03 Automobile. During the Term of this Agreement, Company
shall furnish Executive with an automobile allowance in the amount of Six
Hundred Fifty Dollars ($650) per month.
7. Reimbursement of Expenses. Company shall reimburse Executive for all
reasonable and necessary business expenses incurred by Executive in connection
with the performance of his duties hereunder. Reimbursement shall be made only
against receipts and a signed itemized list of such expenditures.
8. Vacations. Executive shall be entitled to fifteen (15) business days
of vacation with pay for each twelve (12) months during the Term, which vacation
days shall accrue prorata on a monthly basis. Each vacation shall be taken by
Executive at a time convenient to Executive subject to the business needs of
Company. Executive shall also be entitled to such holidays as are recognized by
Company.
9. Termination. This Agreement may be terminated in the following
manner.
9.01 Mutual Agreement. This Agreement may be terminated by the
mutual agreement of Company and Executive.
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9.02 Termination by Company. Company may terminate this
Agreement for "Cause" as defined in Section 10.02 hereof upon thirty (30) days
written notice from Company, unless Executive has cured the conduct or cause
specified in such notice within thirty (30) days following Executive's receipt
of such notice; provided, however, that the conduct or cause shall not result
from Executive's sickness, accident or disability except in accordance with
Section 9.05 hereof.
9.03 Termination by Executive. Executive may terminate this
Agreement for "Good Reason" as defined in Section 10.03 hereof upon thirty (30)
days written notice from Executive, unless Company has cured the conduct or
cause specified in such notice within thirty (30) days following Company's
receipt of such notice.
9.04 Termination Upon Death. This Agreement shall terminate
upon the death of Executive.
9.05 Termination Upon the Disability of Executive. In the
event Executive becomes "Disabled" (as defined in this Section), Company may
terminate this Agreement by giving thirty (30) days written notice to Executive
of its intent to terminate unless Executive resumes performance of his duties
within thirty (30) days of the date of the notice. As used in this Section
"Disabled" means the complete disability of Executive to discharge his duties
and responsibilities as previously performed for a continuous period of not less
than one hundred twenty (120) days or for a non-continuous period of at least
one hundred eighty (180) days within any twelve (12) month period, all as
reasonably determined in good faith by Company.
10. Payments Upon Termination of Employment.
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10.01 Payments.
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(a) Termination by Executive. In the event of the
termination of Executive's employment under this Agreement by Executive pursuant
to Section 9.03 hereof or by Company other than pursuant to Sections 9.02, 9.04
or 9.05 hereof, Executive shall be entitled to receive the full amount of all
Salary, Guarantee Bonuses, Incentive Bonuses and all other benefits under this
Agreement (including, without limitation, the benefits set forth in Section 6
hereof) for the balance of the Term (without giving effect to such termination)
or 18 months, whichever is greater.
(b) Termination Upon Disability. In the event of
termination upon the disability of Executive pursuant to Section 9.05 hereof,
Executive shall be entitled to Seventy-Five Thousand Dollars ($75,000), which
shall be payable in six (6) equal monthly installments commencing on the last
business day of the first full calendar month after the date of termination,
plus the full amount of all benefits under Section 6 hereof for the balance of
the Term (without giving effect to such termination).
(c) Termination by Death. In the event of termination
upon the death of Executive, Executive shall receive the Salary, accrued
vacation and other vested benefits to the date of termination.
10.02 Definition of Cause. "Cause" means the final conviction
of Executive for a felony involving willful conduct materially injurious.
harmful or detrimental to Company; or the final adjudication of Executive in a
civil proceeding for acts or omissions to act involving willful conduct
materially injurious. harmful or detrimental to Company. For the purposes of
this definition, "final conviction" and "final adjudication" shall be and mean a
conviction or an adjudication, as the case may be, that is no longer appealable
due to the passage of time or otherwise, and with respect to which a final
judgment has been entered on the judgment roles of the court in which the action
was commenced. Further, for the purposes of this definition, no act or omission
to act on Executive's part shall be considered "willful" unless done, or omitted
to be done, by Executive in bad faith and without reasonable belief that
Executive's act or omission was in the best interest of Company.
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10.03 Definition of Good Reason. "Good Reason" shall mean: (a)
the assignment to Executive of any duties inconsistent in any respect with
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
2 above, or any other action by Company which results in a diminution in such
position, authority, duties or responsibilities excluding for this purpose any
action taken with the consent of Executive and any isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by Company
promptly after receipt of notice of such action given by Executive; (b) a
reduction in the overall level of Executive's compensation or benefits as
provided in Section 3; (c) Company's requiring Executive to be based at any
office or location other than in Los Angeles, California, except for travel
reasonably required in the performance of Executive's responsibilities; (d) any
purported termination by Company of Executive's employment otherwise than as
expressly permitted by this Agreement; or (e) the nomination by the Board of a
Chairman (or person serving in a similar capacity) of a person other than the
current Chairman or Executive. For purposes of this Agreement, any good faith
determination of "Good Reason" made by Executive shall be conclusive.
10.04 No Duty to Mitigate. Executive shall have no duty to
mitigate any damages payable by Company to Executive hereunder.
10.05 Interest on Late Payments. Any payments not made when
due under this Agreement shall bear interest at the rate of 10% per annum until
such payment has been made in full.
11. Covenant Not to Compete. Executive agrees that so long as he
continues to be employed by Company, he will not be engaged, employed, concerned
or have any financial interest, directly or indirectly, in the same or similar
business as that then conducted by Company, all as reasonably determined by
Executive.
12. Indemnification.
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12.01 Company shall indemnify and hold harmless Executive for
any liability incurred by reason of any act or omission performed by Executive
while acting in good faith on behalf of Company and within the scope of the
authority of Executive pursuant to this Agreement and under the rules and
policies of Company, except that Executive must have in good faith believed that
such action was in the best interest of Company and such course of action or
inaction must not have constituted gross negligence, fraud, willful misconduct,
or breach of a fiduciary duty.
12.02 Company shall use its reasonable commercial efforts to
provide Executive with directors and/or officers liability insurance appropriate
to the nature and scope of his responsibilities hereunder.
13. Compliance With Law. During the Term, Executive shall comply with
all laws and regulations applicable to Executive in the conduct of Company's
business and Executive acknowledges that Company has not urged, counseled, or
advised the use of any unfair business practice.
14. Notice. Except as otherwise specifically provided, any notices to
be given hereunder shall be deemed given upon personal delivery, upon the next
business day immediately following the day sent if sent by overnight express
carrier, or upon the third business day following the day sent if sent postage
prepaid by certified or registered mail, return receipt requested, to the
following addresses (or to such other address or addresses as shall be specified
in any notice given):
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In the Case of Company: Sun Express Group, Inc.
0000 Xxxxxxxxxx Xx., Xxxxx 000x
Xxxxx Xxxxxxx, Xxxxxxx 00000-0000
Attn. Chairman
In the Case of Executive: Mr. T. Xxxxxx Xxxxxxx
0000 Xxxxxxxxxx Xx., Xxxxx 000x
Xxxxx Xxxxxxx, Xxxxxxx 00000-0000
15. Assignment; Successors. Any assignment of this Agreement shall be
in accordance with the following: (a) the rights and benefits of Executive under
this Agreement, other than accrued and unpaid amounts due hereunder, are
personal to him and shall not be assignable by Executive, except with the prior
written consent of Company; (b) subject to the provisions of Section 15(c)
hereof, this Agreement shall not be assignable by Company, provided, that with
the consent of Executive, Company may assign this Agreement to another
corporation wholly owned by it either directly or through one or more other
corporations, or to any corporate successor of Company or any such corporation;
and (c) any business entity succeeding to substantially all of the business of
Company by purchase, merger, consolidation, sale of assets or otherwise shall be
bound by and shall adopt and assume this Agreement.
16. Applicable Law. This Agreement shall be interpreted in accordance
with the laws of the State of California.
17. Entire Agreement. This Agreement, together with the documents and
exhibits referred to herein, embodies the entire understanding among the parties
with respect to the subject matter hereof and merges all prior discussions or
communications among them, and no party shall be bound by any definitions,
conditions, warranties or representations other than as expressly stated in this
Agreement or as subsequently set forth in writing signed by the duly authorized
representatives of all of the parties hereto.
18. No Oral Change; Waiver. This Agreement may only be changed,
modified, or amended in writing by the mutual consent of the parties hereto. The
provisions of this Agreement may only be waived in or by a writing signed by the
party against whom enforcement of any waiver is sought.
21. Interpretation. This Agreement shall be construed as a whole and in
accordance with its fair meaning to effect the intentions of the parties and
this Agreement. Captions are for convenience only and shall not be used in
construing meaning. The provisions of this Agreement shall be construed neither
for nor against either party, but shall be given reasonable interpretation in
accordance with the plain meaning of their terms and the intent of the parties.
This Agreement shall be construed without regard to any presumption or other
rule requiring construction against the party drafting the document.
Accordingly, any rule of law, including but not limited to, California Civil
Code Section 1654 or any legal decision that would require interpretation of any
ambiguities in this Agreement against the party that drafted it, is of no
application and is hereby expressly waived.
22. Exclusive Venue. The parties hereby agree that the sole and
exclusive venue and forum for any and all actions or proceedings initiated by
any party hereto and arising directly or indirectly out of this Agreement shall
be the Superior Court of the State of California, County of Los Angeles, or the
United States District Court for the Central District of the State of
California. The parties hereby expressly submit and consent in advance to such
jurisdiction in any action or proceeding commenced in any of such courts and
hereby waive personal service of the summons and complaint, or other process of
papers issued therein, and agree that service of such summons and complaint or
other process or papers may be made by registered or certified mail addressed to
any of the parties at the address to which notices are to be sent pursuant to
this Agreement. The parties hereto waive any claim that Los Angeles, California
is an inconvenient forum or an improper forum based on lack of venue. The
exclusive choice of forum for the parties set forth in this Section shall not be
deemed to preclude the enforcement of any judgment obtained in any other forum
or the taking of any action to enforce the same in any other appropriate
jurisdiction, and the parties hereby waive the right to collaterally attack any
such judgment or action.
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23. Attorneys' Fees. In the event any party hereto brings any legal
action, suit, counterclaim, appeal, arbitration, mediation or other proceeding
("Party Action") against any other party hereto, declaratory or otherwise, in
connection with this Agreement, in addition to any damages, costs or other
relief to which the prevailing party otherwise would be entitled, the prevailing
party shall be entitled to reimbursement from the non-prevailing party for all
reasonable attorneys' fees and all other costs incurred in such Party Action
and/or enforcing any judgment, order, ruling or award ("Decision") granted
therein, all of which must be paid whether or not such Party Action is
prosecuted to a Decision. Any Decision entered in such Party Action must contain
a specific provision providing for the recovery of attorneys' fees and costs
incurred in enforcing such Decision. The court or arbitrator may fix the amount
of reasonable attorneys' fees and costs on the request of either party. For
purposes hereof, attorneys' fees include, without limitation, fees incurred in
the following: (a) post-judgment motions and collection actions; (b) contempt
proceedings; (c) garnishment, levy and debtor and third party examinations; (d)
discovery; and (e) bankruptcy. As used in this Section, "prevailing party"
includes, without limitation, a party who agrees to dismiss a Party Action on
the other party's payment of the sum allegedly due, or performance of the
covenants allegedly breached, or who obtains substantially the relief sought by
it. If there are multiple claims, a prevailing party shall be established for
each claim separately by determining which party obtained the greater relief in
connection with such claim; provided, however, that the court or arbitrator may
determine that there is no prevailing party with respect to any particular
claim.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
"COMPANY" SUN EXPRESS GROUP, INC., a Florida corporation
By
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Name
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Title
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"EXECUTIVE" ----------------------------------------------
T. XXXXXX XXXXXXX
