AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this 22nd
day of December, 2008 (“Effective Date” or “Commencement Date”) by and between HOLLYWOOD MEDIA
CORP., a Florida corporation with its principal office at Xxxxx 000X, 0000 Xxxxxx Xxxx, Xxxx Xxxxx,
Xxxxxxx 00000 (hereinafter called the “Company”), and Xxxxxxxx Xxxxxxxxxx, whose residence address
is 0000 Xxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000 (hereinafter called the “Executive”).
Recitals
A. The Executive currently serves as the Chairperson of the Board and Chief Executive Officer
of the Company pursuant to a written Employment Agreement with the Company entered into as of July
1, 1993 (as amended by those certain Extension and Amendment Agreements between the Company and the
Executive dated as of July 1, 1998, July 1, 2003, May 31, 2004, November 15, 2004 and August 21,
2008, the “Current Employment Agreement”).
B. The Executive possesses intimate knowledge of the business and affairs of the Company, its
policies, methods and personnel.
C. The Board of Directors (the “Board”) of the Company recognizes that the Executive’s
contribution, as Chairperson of the Board and Chief Executive Officer of the Company, to the growth
and success of the Company will be substantial and desires to assure the Company of the Executive’s
present and continued employment in an executive capacity and to compensate him therefor.
D. The Board has determined that this Agreement, which amends and restates the Current
Employment Agreement, will reinforce and encourage the Executive’s continued attention and
dedication to the Company.
E. The Executive is willing to make his services available to the Company on the terms and
conditions hereinafter set forth.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the
parties hereby agree as follows:
1. Employment.
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1.1 Employment and Term. The Company shall continue to employ the Executive and the
Executive shall continue to serve the Company, on the terms and conditions set forth herein, for
the period (the “Term”) effective as of the date first set forth above (the
“Commencement Date”) and expiring on December 31, 2010 (the “Termination Date”), unless sooner
terminated as hereinafter set forth; provided, however, that the Term of this Agreement shall
automatically be extended for periods of one year each (commencing on the day after the Termination
Date (January 1, 2011) and each anniversary thereof unless, at least 90 days prior to January 1,
2011, or any anniversary of such date, the Company shall have delivered to the Executive or the
Executive shall have delivered to the Company written notice that the Term of the Executive’s
employment hereunder will not be extended.
1.2 Duties of Executive. The Executive shall serve as Chairperson of the Board and
Chief Executive Officer of the Company and shall perform the duties of an executive commensurate
with such position, shall perform all services as may be reasonably assigned to him by the Board
and shall exercise such power and authority as may from time to time be delegated to him by the
Board. The Executive shall devote such time as he deems necessary to the business and affairs of
the Company. Nothing herein shall be construed to prevent the Executive from investing in,
participating in the management of, serving on the board of directors of, or acting as an officer,
managing member or consultant to other companies or other entities. Without limitation of the
foregoing, it is acknowledged that the Executive is currently Chief Executive Officer of
Xxxxxxxxx.xxx, LLC, and that he may continue his current involvement in such business and other
businesses.
1.3 Place of Performance. In connection with his employment by the Company, the
Executive shall be based at the Company’s principal executive offices in Boca Raton, Florida except
for required travel on the Company’s business to an extent substantially consistent with his
present travel obligations.
2. Compensation.
2.1 Base Salary. During the Term, the Executive shall receive a base salary at the
annual rate of $464,833.80 (which is the base salary paid to the Executive as of the date hereof
pursuant to the Current Employment Agreement), subject to adjustment in accordance with this
Section (the “Base Salary”), during the Term. Such Base Salary shall be payable in substantially
equal installments consistent with the Company’s normal payroll schedule, subject to applicable
withholding and other taxes. Commencing on the first anniversary of the Commencement Date, and each
anniversary of the Commencement Date thereafter during the Term, the Base Salary shall be
increased, but shall not be decreased, by that percentage by which the Consumer Price Index for
Urban Wage Earners and Clerical Workers (All Items Less Shelter), for the Xxxxx-Xxxx Xxxxxxxxxx,
Xxxxxxx xxxx (0000-0000 = 100), as published by the United States Government (the “Index”) for the
immediately preceding calendar month, exceeds such index for the same month of the next preceding
calendar year. If publication of the Index is discontinued, the parties hereto shall accept
comparable statistics on the cost of living for the Miami, Florida area as computed and published
by an agency of the United States government or, if no such agency computes and publishes such
statistics, by any regularly published national periodical that does compute and publish such
statistics.
2.2 Additional Cash Compensation. The Executive shall also be entitled to receive
such increments and base salary and performance or merit bonuses (collectively, “Bonus”) as shall
be determined from time to time during the Term by the Compensation Committee of the Board or by
the Board. Any Bonus relating to a calendar year or other period shall be paid by the
15th day of the second month following the end of the calendar year or other
period to which such bonus relates.
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2.3 Other Compensation. The Executive shall receive such awards of stock options,
restricted stock, and other equity-based incentives as may be granted from time to time by the
Board or by any Committee of the Board (including, without limitation, its Compensation Committee).
3. Expense Reimbursement and Other Benefits.
3.1 Expense Reimbursement. During the Term, the Company, upon the submission of
supporting documentation by the Executive, and in accordance with Company policies for its
executive officers, shall reimburse the Executive for all expenses actually paid or incurred by the
Executive in the course of and relating to the business of the Company, including expenses for
travel and entertainment. Any such reimbursement shall be made by the last day of the calendar
year following the calendar year in which the expense was incurred, and the expenses eligible for
reimbursement in any one calendar year shall not affect the expenses eligible for reimbursement in
any other calendar year.
3.2 Other Benefits. The Company shall obtain or shall continue in force comprehensive
major medical and hospitalization insurance coverages, including dental coverages, either group or
individual, for the Executive and his dependents, and shall obtain or shall continue in force
disability and life insurance for the Executive (collectively, the “Policies”), which Policies the
Company shall keep in effect at its sole expense throughout the Term. The Policies to be provided
by the Company shall be on terms as determined by the Board; provided, however, that such Policies
shall in no event provide benefits to the Executive which are less than the benefits to which he is
currently receiving.
3.3 Working Facilities. The Company shall furnish the Executive with an office, a
secretary, and such other facilities and services suitable to his position and adequate for the
performance of his duties hereunder.
3.4 Automobile Allowance. Throughout the Term of this Agreement, the Company will pay
the Executive an automobile allowance in the amount of $650 per month. Such automobile allowance
shall be for no more than one automobile and shall include all expenses related thereto, including,
without limitation, lease expenses, maintenance and insurance.
3.5 Vacation. The Executive shall be entitled to reasonable vacations during each
year of the Term, the time and duration thereof to be determined by mutual agreement between the
Executive and the Company, consistent with past practices.
4. Termination.
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4.1 Termination for Cause. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may be terminated by the Company for Cause. As used in this Agreement,
“Cause” shall only mean (i) subject to the following sentences, any action or omission of the
Executive which constitutes a willful and material breach of this Agreement which is not cured or
as to which diligent attempts to cure have not commenced within 30 business days after receipt by
the Executive of written notice of same, (ii) fraud,
embezzlement or misappropriation as against the Company, or (iii) the conviction (from which
no appeal can be taken) of the Executive for any criminal act which is a felony. Upon any
determination by the Company’s Board of Directors that Cause exists under clause (i) of the
preceding sentence, the Company shall cause a special meeting of the Board to be called and held at
a time mutually convenient to the Board and the Executive, but in no event later than 10 business
days after the Executive’s receipt of the notice contemplated by clause (i). The Executive shall
have the right to appear before such special meeting of the Board with legal counsel of his
choosing to refute any determination of Cause specified in such notice, and any termination of the
Executive’s employment by reason of such Cause determination shall not be effective until the
Executive is afforded such opportunity to appear. Any termination for Cause pursuant to clause (ii)
or (iii) of this Paragraph 4.1 shall be made in writing to the Executive, which notice shall set
forth in detail all acts or omissions upon which the Company is relying for such termination. Upon
any termination pursuant to this Paragraph 4.1, the Company shall pay to the Executive any unpaid
Base Salary accrued through the effective date of termination specified in such notice. In
addition, the Company shall pay any benefits, if any, owed to the Executive under any plan provided
for the Executive under Paragraph 3 hereof in accordance with the terms of such plan as in effect
on the date of termination of employment under this Paragraph 4.1. Except as provided above, the
Company shall have no further liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however, to the provisions of
Paragraph 3.1 hereof).
4.2 Disability. Notwithstanding anything to the contrary contained in this Agreement,
if, during the term hereof, the Executive suffers a disability (as defined below) the Company may,
at its election, by a vote of 75% of the members of the Board of Directors, terminate this
Agreement and the employment of the Executive. In the event of such termination, the Executive
shall receive any unpaid Base Salary through the date of termination of employment, and any
benefits under any plan provided for the Executive under Paragraph 3 through the date of such
termination. In addition, a payment in an amount equal to the Executive’s Base Salary for the
remainder of the scheduled Term or 12 months, whichever is greater, shall be made in a lump sum to
the Executive within 30 days after termination of employment, and benefits shall be continued (to
extent permissible by applicable law) for 12 months or the remainder of the scheduled Term,
whichever is greater. As used in this Agreement, the term “disability” shall mean the complete
inability of the Executive to perform his duties under this Agreement as determined by an
independent physician selected with the approval of the Company and the Executive. Except as
provided above, the Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination subject, however, to the
provisions of Paragraph 3.1 hereof).
4.3 Death. In the event of the death of the Executive during the Term of this
Agreement, the Company shall pay to the Executive’s legal representative, any unpaid Base Salary
accrued through the date of the Executive’s death, as well as a lump sum payment equal to (A) 12
months’ Base Salary at the rate prevailing on the date of the death of the Executive and (B) the
share of Bonus to which he would have been entitled pro rated based on the percentage of the
current fiscal year that had been completed on the date of his death. Except as provided above, the
Company shall have no further liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of the Executive’s death, subject, however to the
provisions of Paragraph 3.1 hereof).
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4.4 Effect of Termination by the Company Other Than for Cause. If the employment of
the Executive is terminated by the Company other than for Cause, death, or disability pursuant to
Paragraphs 4.1 through 4.3, the Company will pay to the Executive (i) Base Salary through the date
of termination of employment, (ii) any benefits owed under a plan described in Paragraph 3 as in
effect on the date of termination, (iii) reimbursement for reasonable expenses incurred prior to
the date of termination, and (iv) an amount equal to the Base Salary for the remainder of the Term
or 12 months, whichever is greater. The amounts described in clauses (i)-(iii) of the preceding
sentence shall be paid in accordance with the usual practices and procedures of the Company and the
amount described in clause (iv) shall be paid in a lump sum within 30 days after termination of
employment. If the Executive terminates his employment for “Good Reason” as defined below, such
termination shall be treated as a termination of employment by the Company other than for Cause.
The Executive shall be treated as terminating his employment for Good Reason if he terminates his
employment within two years following the initial existence of one or more of the following
events: (a) a material diminution in the Executive’s base compensation; (b) a
material diminution in the Executive’s authority, duties, or responsibilities; (c) a
material diminution in the budget over which the Executive retains authority; (d) a
material change in the geographic location at which the Executive must perform the services
described in this Agreement; and (e) any other action or inaction that constitutes a
material breach by the Company of this Agreement; provided, that the Executive provide notice to
the Company within 90 days after the first occurrence of such event; provided further, that the
Company shall have a period of 30 days in which to cure any ground for termination for Good Reason.
4.5 Termination by Executive. In the event that, during the Term, the Company shall
terminate the employment of Xxxxxx Xxxxxxx without “Cause” as defined in the Employment Agreement
of even date herewith between Xxxxxx Xxxxxxx and the Company, such termination shall be considered
a material breach by the Company of the terms of this Agreement.
4.6 Determinations Relating to Termination of Employment. Any decision of the Company
relating to the termination of employment of the Executive or Xxxxxx Xxxxxxx shall be made by a
committee comprised of one or more members of the Board other than the Executive, Xxxxxx Xxxxxxx,
or any other officer or former officer of the Company.
4.7 Six-Month Delay for Payments to Specified Employee. If the Executive is a
“specified employee” (as defined in Treas. Reg. section 1.409A-1(i)) as of the date of his
termination of employment under this Agreement, then, notwithstanding any other provision of this
Agreement, any lump sum payment to the Executive following such termination of employment that is
made under the third sentence of Paragraph 4.2 or under clause (iv) of Paragraph 4.4 (in each case,
the “Termination Payment”) shall be made on the date that is six months after the date of
termination of employment (the “Termination Payment Date”). From the date of termination of
employment until the Termination Payment Date (or, if later, the date of actual payment), such
amounts due to the Executive and described in the preceding sentence shall be set aside in a “rabbi
trust” (within the meaning of Internal Revenue Service Revenue Procedure 92-64) established by the
Company for purposes of holding the funds payable under clause (iv) of Paragraph 4.4 of this
Agreement. Such funds shall be invested in short-term U.S. Government obligations until the date
of payment of the Termination Payment to the Executive, and an amount equal to the interest earned
on obligations held by the rabbi trust shall be paid to
the Executive on the Termination Payment Date or, if later, the date the Termination Payment
is actually paid to the Executive.
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5. Full Settlement. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement.
6. Change of Control.
(a) For the purposes of this Agreement, a “Change of Control” shall be deemed to have taken
place if (i) any person, or more than one person acting as a group as defined in Treas. Reg.
section 1.409A-3(i)(5)(v)(B), acquires Company stock (or has acquired such stock within a 12-month
period ending on the date of the most recent acquisition by such person or persons) having 30% or
more of the combined voting power of the then outstanding stock of the Company (other than as a
result of an issuance of securities initiated by the Company, or open market purchases approved by
the Board, as long as the majority of the Board approving the purchases is the majority at the time
the purchases are made), (ii) a majority of the persons who were directors of the Company before
such transactions shall be replaced by directors whose appointment was not endorsed by the Board
before such appointment, as the direct or indirect result of or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets or contested election, or
any combination of the foregoing transactions, or (iii) any one person, or more than one person
acting as a group as defined in Treas. Reg. section 1.409A-3(i)(5)(v)(B), acquires (or has acquired
within the 12-month period ending on the date of the most recent acquisition by such person or
persons) assets from the Company having a total gross fair market value equal to or greater than
40% of the total gross fair market value of the assets of the Company immediately before such
acquisition or acquisitions.
(b) The Company and the Executive hereby agree that, if the Executive is affiliated with the
Company (as an employee, director, or both) on the date on which a Change of Control occurs (the
“Change of Control Date”), the Company will pay to the Executive a lump sum payment equal to 300%
of the Executive’s “base period income” as determined under (c) below. Such amount will be paid to
the Executive within 5 days after the Change of Control.
(c) The Executive’s “base period income” shall be the sum of (i) his Base Salary paid or
payable to him with respect to the last fiscal year ending before the date of the Change of
Control, and (ii) the greater of (x) the Executive’s Bonus (both cash and stock) for the last
fiscal year ending before the date of the Change of Control and (y) the Executive’s Bonus (both
cash and stock) for the second fiscal year preceding such date.
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(d) If the payment described in clause (b) of this Paragraph 6 or any amount payable to the
Executive under any other compensation arrangement maintained by the Company (or a subsidiary)
which became payable after payment of the lump sum provided for in (b), upon or as a result of the
Change of Control and/or the exercise by the Executive of rights which are contingent on a Change
of Control (each a “Payment” and collectively the “Payments”), or any portion thereof would be
considered a “parachute payment” under Internal Revenue Code section
280G and regulations thereunder subject to the excise tax imposed by I.R.C. section 4999, or
by any successor provision, or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and penalties, collectively,
the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(e) In the event of a proposed Change in Control, the Company will allow the Executive to
participate in all meetings and negotiations related thereto.
7. Restrictive Covenants.
7.1 Nondisclosure. During the Term and following termination of the Executive’s
employment with the Company, the Executive shall not divulge, communicate, use to the detriment of
the Company or for the benefit of any other person or persons, or misuse in any way, any
Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any
Confidential Information or data now or hereafter acquired by the Executive with respect to the
business of the Company (which shall include, but not be limited to, information concerning the
Company’s financial condition, prospects, technology, customers, suppliers, methods of doing
business and marketing and promotion of the Company’s services) shall be deemed a valuable, special
and unique asset of the Company that is received by the Executive in confidence and as a fiduciary,
and the Executive shall remain a fiduciary to the Company with respect to all of such information.
For purposes of this Agreement “Confidential Information” means information disclosed to the
Executive or known by the Executive as a consequence of or through his employment by the Company
(including information conceived, originated, discovered or developed by the Executive) prior to or
after the date hereof, and not generally known, about the Company or its business. Notwithstanding
the foregoing, nothing herein shall be deemed to restrict the Executive from disclosing
Confidential Information to the extent required by law, or from the disclosure or other use of
Confidential Information that relates to the business activities of Xxxxxxxxx.xxx, LLC and its
affiliates.
7.2 Books and Records. All books, records, accounts and similar repositories of
Confidential Information of the Company, whether prepared by the Executive or otherwise coming into
the Executive’s possession, shall be the exclusive property of the Company and shall be returned
immediately to the Company on termination of this Agreement or on the Board’s request at any time.
8. Injunction. It is recognized and hereby acknowledged by the parties hereto that a
breach by the Executive of any of the covenants contained in Paragraph 7 of this Agreement will
cause irreparable harm and damage to the Company, the monetary amount of which may be virtually
impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the
Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and
restraining any violation of any or all of the covenants contained in Paragraph 7 of this Agreement
by the Executive or any of his affiliates, associates, partners or agents, either directly or
indirectly, and that such right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
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9. Consolidation, Merger or Sale of Assets. Nothing in this Agreement shall preclude
the Company from consolidating or merging into or with, or transferring all or substantially all of
its assets to, another corporation which assumes this Agreement, and all obligations of the Company
hereunder, in writing. Upon such consolidation, merger, or transfer of assets and assumption, the
term “the Company” as used herein, shall mean such other corporation and this Agreement shall
continue in full force and effect, subject to the provisions of Paragraph 6 hereof.
10. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, or any successor thereof, and judgment
upon the award rendered by the Arbitrators may be entered in any Court having jurisdiction thereof.
Venue of the arbitration shall in Palm Beach County, Florida. Any controversy or claim shall be
submitted to three arbitrators selected from the panels of the Arbitrators of the American
Arbitration Association. Each party shall bear the costs of its own counsel and presentation of
evidence, and each party shall share equally the cost of such arbitration proceeding. Any award
made hereunder may be docketed in a court of competent jurisdiction in Palm Beach County, Florida,
and all parties hereby consent to the personal jurisdiction of such court for purposes of the
enforcement of the arbitration award.
11. Binding Effect. Except as herein otherwise provided, this Agreement shall inure
to the benefit of and shall be binding upon the parties hereto, their personal representatives,
successors, heirs and assigns.
12. Severability. Invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provisions.
13. Terminology. All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the singular shall include
the plural and vice versa. Titles of Paragraphs are for convenience only, and neither limit nor
amplify the provisions of the Agreement itself.
14. Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of Florida.
15. Entire Agreement. This Agreement contains the entire understanding between the
parties with respect to services to be provided by the Executive to the Company on and after the
Effective Date, and may not be changed or modified except by an agreement in writing signed by all
the parties.
16. Notice. Any notice required or permitted to be delivered hereunder shall be in
writing and shall be deemed to be delivered when deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested, addressed to the parties at the
addresses first stated herein, or to such other address as either party hereto shall from time to
time designate to the other party by notice in writing as provided herein.
17. Other Instruments. The parties hereby covenant and agree that they will execute
such other and further instruments and documents as are or may become necessary or convenient to
effectuate and carry out the terms of this Agreement.
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18. Counterparts. This Agreement may be executed in any number of counterparts and
each such counterpart shall for all purposes be deemed an original.
19. Assignability. This Agreement shall not be assigned by either party, except with
the written consent of the other and except as provided in Paragraph 9 hereof.
20. Termination of Employment. For all purposes of this agreement, “termination of
employment” (and any phrase of similar meaning) shall have the meaning assigned to such term in
Treas. Reg. section 1.409A-1(h)(1).
IN WITNESS WHEREOF, this Agreement has been duly signed by the parties hereto on the day and
year first above written.
| HOLLYWOOD MEDIA CORP. |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | Chief Accounting Officer | |||
| /s/ Xxxxxxxx Xxxxxxxxxx | ||||
| XXXXXXXX XXXXXXXXXX | ||||
