EXHIBIT 10.2
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT made as of April 29, 1997 and effective as of the
Effective Date (as defined below), between UC Television Network Corp., a
Delaware corporation (the "Company"), UC Holdings, L.L.C., a Delaware limited
liability company ("Holdings") and Xxxxxx X. Xxxxx ("Executive").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive accepts
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employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning on the date hereof and ending as provided in
paragraph 5 hereof (the "Employment Period").
2. Position and Duties.
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(a) During the Employment Period, Executive shall serve as the Vice
Chairman of the Board of Directors of the Company and shall have such duties,
responsibilities and authority as delegated to him by the Chairman of the Board
of Directors and Chief Executive Officer, subject to the direction of the
Company's board of directors (the "Board"). In connection with such duties,
Executive shall maintain an office in Atlanta, Georgia. Executive shall not be
required by the Company to re-locate his principal office to any location
outside of the metropolitan Atlanta, Georgia area during the Employment Period.
(b) Executive shall report to the Board Chairman and Chief Executive
Officer, and Executive shall devote his full business time, attention and skills
to the business and affairs of the Company, except as otherwise approved by the
Board. Notwithstanding the foregoing, nothing in this Agreement shall restrict
Executive from (i) owning and operating WFXP-TV in Erie, Pennsylvania and (ii)
managing his personal portfolio of investments so long as such activities do not
materially interfere or compete with the Company's business as presently
constituted or as conducted during the Employment Period.
3. [INTENTIONALLY OMITTED]
4. Base Salary and Benefits.
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(a) During the Employment Period, Executive's base salary shall be Two
Hundred Thousand and No/100 Dollars ($200,000.00) per annum or such higher rate
as the Board may designate from time to time (the "Base Salary"), which salary
shall be payable in regular installments in accordance with the Company's
general payroll practices. The Base Salary shall be increased on an annual
basis by at least ten percent
(10%) over the Base Salary paid to Executive during the previous year of the
Employment Period, to be increased on each anniversary date of this Agreement.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses. Company shall also pay the rent with respect to 0000 Xxxx Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, and the reasonable operating expenses
of such office (including the salary of reasonable staff at such office) only to
the extent such expenses are principally related to the conduct of Company's
business and affairs. In addition, during the Employment Period, the Company
shall provide Executive with an automobile allowance of Five Hundred and No/100
Dollars ($500.00) per month for the monthly payments, maintenance and operating
expenses for any automobile used by Executive.
(c) In addition to the Base Salary, Executive shall receive an annual
bonus in an amount to be determined by the Board of Directors of the Company,
based upon the recommendation of the Compensation Committee.
(d) In addition to the Base Salary and any Bonus payable to Executive
pursuant to this paragraph 4, Executive shall be entitled to participate in all
employee benefit plans and programs of the Company for which senior executive
officers of the Company are eligible, including, to the extent available or
established by the Company, any:
(i) family health insurance, disability insurance, and dental
insurance coverage;
(ii) 401(k), retirement or similar benefit plans;
(iii) stock option plans of the Company; and
(iv) Executive shall be entitled to such vacation days as he
believes appropriate given his responsibilities and duties, not to exceed a
maximum of 25 business days.
5. Term.
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(a) The Employment Period shall commence on the Effective Day (as
defined in the Action of Board of Directors of the Company, dated April 25,
1995, pursuant to which the directors elected Executive to the office of Vice
Chairman and end on the fourth anniversary of the date of this Agreement (the
"Expiration Date"); provided, however, that the Employment Period shall be
automatically extended for one year on the Expiration Date and at the end of
each subsequent year of the Executive's employment
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(an "Extension Period"; any such Extension Periods shall be included in the
definition of Employment Period) unless at least six (6) months prior to the
Expiration Date or the end of the then current Extension Period, either the
Company or the Executive shall give written notice to the other that this
Agreement shall not be so extended; and provided further that (i) the Employment
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Period shall terminate prior to such date upon Executive's permanent disability
or incapacity (determined as set forth below), resignation or death and (ii) the
Employment Period may be terminated by the Company at any time prior to such
date for Cause (as defined below) or without Cause. Permanent Disability or
incapacity shall occur if Executive misses sixty (60) consecutive days of work
and it is determined by an independent physician that such disability or
incapacity is permanent.
(b) If the Employment Period is terminated due to the Executive's
death, disability or incapacity, Executive shall be entitled to receive an
aggregate amount equal to twice his Base Salary. This amount shall be payable by
the Company in equal monthly installments over a period of two years following
termination of the Employment Period.
(c) If the Employment Period is terminated by the Company without
Cause, Executive shall be entitled to receive an aggregate amount equal to his
Base Salary payable for the remainder of the Employment Period. This amount
shall be payable by the Company in equal monthly installments over the remainder
of the Employment Period, so long as Executive has not breached any of the
provisions of Paragraphs 9, 10 or 11 hereof.
(d) If the Employment Period is terminated by the Company for Cause,
upon the Executive's resignation or upon the expiration of the Employment Period
after either party has given notice of non-extension pursuant to Paragraph 5(a),
Executive shall be entitled to receive his Base Salary through the date of
termination and shall not be entitled to any other amounts hereunder.
(e) All of Executive's rights to fringe benefits hereunder (if any)
accruing at any time prior to or after the termination of the Employment Period
shall cease upon such termination; provided, however, that if Executive is
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terminated by the Company without Cause, the Company shall permit Executive to
continue to receive benefits under the Company's health insurance policies to
the extent permitted by such policies and applicable law, provided that such
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insurance coverage can be maintained at a reasonable cost to the Company; and
provided further, that the Company shall only maintain such insurance coverage
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until the earlier of (y) the end of the period for which Executive is receiving
severance payments pursuant to paragraph 5 hereof and (z) the date Executive
accepts other employment.
(f) For purposes of this Agreement, "Cause" shall mean (i) the
conviction of a felony or a crime involving moral turpitude or the conviction of
any other crime involving dishonesty, disloyalty or fraud with respect to the
Company or Holdings, (ii) gross negligence or willful misconduct with respect to
the Company, (iii) any other
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material breach of this Agreement; or (iv) the repeated failure to perform
Executive's duties as directed by the Board; provided, however, that with
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respect to clause (iii) or (iv) above, if such failure or breach is capable of
cure, such failure or breach, as the case may be, shall not be deemed to
constitute Cause unless such failure or breach remains uncured after the
expiration of 15 days after notice thereof to Executive.
6. Vesting of Executive Securities.
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(a) All of the Investor Units will be fully vested as of the date of
purchase and shall not be subject to repurchase. Except as otherwise provided
in paragraph 6(b) below, the Management Units will become vested over the 30
month period after the date hereof, in equal proportions on each six month
anniversary date following the date of this Agreement if, as of such anniversary
date, Executive is employed by Company (i.e. 20% on the anniversary of each 6
month period).
(b) Upon a Sale of the Company, as defined in the Class C Warrant, or a
Sale of Holdings, all of the Management Units, which have not yet become vested
shall become vested at the time of such event. All of the Management Units
which have become vested pursuant to this paragraph 6 are referred to herein as
"Vested Executive Securities", and all Unvested Management Units are referred to
herein as "Unvested Executive Securities."
7. Repurchase Option.
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(a) General Repurchase Option. Upon the occurrence of the Termination
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Date the Executive Securities (whether held by Executive or one or more of
Executive's Permitted Transferees) shall be subject to repurchase by Holdings
pursuant to the terms and conditions set forth in this paragraph 7 (the
"Repurchase Option"). The date on which Executive ceases to be employed by the
Company for any reason, is referred to herein as the "Termination Date."
(b) Termination For Other Than Cause. Notwithstanding anything herein
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to the contrary, if Executive is terminated without Cause all Unvested Executive
Securities shall become Vested Executive Securities and such Executive
Securities shall be subject to repurchase at Fair Market Value of such Executive
Securities.
(c) Termination for Cause or Resignation. Subject to paragraph 7(g)
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below, the purchase price for the Unvested Executive Securities on the
Termination Date if Executive is terminated for Cause, death, permanent
disability or he resigns, will be the Executive's Original Cost; and the
purchase price for the Vested Executive Securities shall be the Fair Market
Value for such Vested Executive Securities, as of the date of termination.
(d) Repurchase Option. As set forth above, Holdings may elect to
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purchase the applicable Executive Securities by delivering written notice (the
"Holdings
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Repurchase Notice") to the holder or holders of such Executive Securities within
90 days after the Termination Date. The Repurchase Notice will set forth the
number of such Executive Securities to be acquired from each holder, the
aggregate consideration to be paid for such Executive Securities and the time
and place for the closing of the transaction. The number of such Executive
Securities to be repurchased by Holdings shall first be satisfied to the extent
possible from the Unvested Executive Securities held by Executive at the time of
delivery of the Repurchase Notice. If the number of such Executive Securities
then held by Executive is less than the total number of Executive Securities
Holdings has elected to purchase, Holdings shall purchase the remaining
Executive Securities elected to be purchased from the other holder(s) of such
Executive Securities under this paragraph 7, pro rata according to the number of
such Executive Securities held by such other holder(s), respectively, at the
time of delivery of the Repurchase Notice (determined as nearly as practicable
to the nearest unit or other applicable denomination).
(e) Closing. Subject to paragraph 7(f) below, the closing of the
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purchase of the applicable Executive Securities pursuant to the Repurchase
Option shall take place on the date designated by Holdings in the Repurchase
Notice, which date shall not be more than 60 days nor less than five days after
the later of (i) the delivery of such notice(s) or (ii) the Fair Market
Valuation Date. Payment for such Executive Securities to be purchased pursuant
to the Repurchase Option shall be made by Holdings in four (4) equal
installments, the first installment payable on the closing of such purchase, the
second payable four (4) months after the closing, the third payable eight (8)
months after the closing and the fourth payable twelve (12) months after the
closing, each such payment made by check or wire transfer of funds, at the
option of Holdings. Notwithstanding anything to the contrary contained in this
Agreement, Holdings may withdraw their Repurchase Notice at any time prior to
the closing of a purchase of such Executive Securities pursuant to the
Repurchase Option.
(f) Termination of Repurchase Option. The right of Holdings to
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repurchase Executive Securities pursuant to this paragraph 7 shall terminate
upon the first
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to occur of (i) the Sale of Holdings, or (ii) the Sale of the Company. The
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Repurchase Option set forth in this paragraph 7 will continue with respect to
such Executive Securities following any transfer thereof other than a transfer
to Holdings.
(g) Repurchase Restrictions. Notwithstanding anything to the contrary
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contained in this Agreement, all repurchases of Executive Securities by
Holdings shall be subject to applicable restrictions contained in the General
Corporate Law of the State of Delaware. If any such restrictions prohibit the
repurchase of the Executive Securities hereunder which Holdings is otherwise
entitled or required to make, Holdings may make such repurchases as soon as it
is permitted to do so under such restrictions.
(h) Section 83B Election. Within 30 days after Executive purchases
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any Executive Securities from Holdings, Executive shall make an effective
election with
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the Internal Revenue Service under Section 83(b) of the Internal Revenue Code
and the regulations promulgated thereunder.
8. Definitions.
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"Executive Securities" mean: (i) any Management Units acquired by
Executive, and (ii) any equity or debt securities issued or issuable directly or
indirectly with respect to the Executive Securities referred to in clauses (i)
above by any of a conversion, split, distribution or dividend or in connection
with a combination of securities, recapitalization, merger, consolidation or
other reorganization. Executive Securities shall continue to be Executive
Securities in the hands of any holder thereof (other than Holdings or any of its
members).
"Fair Market Valuation Date" with respect to any Executive Securities
means the date on which its Fair Market Value is finally determined pursuant to
the definition of "Fair Market Value."
"Fair Market Value" of the Executive Securities means the Fair Market
Value as shall be determined jointly in good faith by Holdings and Executive;
provided that if Holdings and Executive cannot so agree, then such value shall
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be determined by an independent investment banking firm of national or regional
reputation utilizing valuation techniques then commonly used for the valuation
of such investment interests, which investment banking firm will be jointly
selected by Holdings and Executive in good faith, or if such parties cannot
agree on an investment banking firm, then such value shall be determined by an
investment banking firm selected by lot from a group of six firms possessing the
above described qualifications (three of whom shall be selected by Holdings and
three of whom shall be selected by Executive) from which one firm designated as
objectionable by each of Holdings and Executive has been eliminated (in either
case, the investment banking firm's determination shall be conclusive). The
expenses of any such appraisal shall be borne equally by the parties. In
determining the Fair Market Value of Executive Securities to be purchased
pursuant to the exercise of the Repurchase Option, the parties or the investment
bank, as the case may be, shall use the average of the thirty (30) day trading
price of Common Stock of the Company as a partial determining factor. There
shall be no discount in value to reflect minority interest, and it shall be
assumed for purposes of such determination that there are no restrictions on
transfer of any Executive Securities, that a willing buyer exists for purchase
of the same and that the Executive is under no compulsion to sell any Executive
Securities. It is the intent of the parties that the value shall be the value of
the securities owned by Holdings in the Company multiplied by Executive's
Ownership Interest in Holdings. References in this definition to Executive shall
mean Executive's personal representative if he is deceased or incapacitated.
"Investor Units" shall have the meaning ascribed to it in the LLC
Agreement.
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"LLC Agreement" shall mean the Limited Liability Company Agreement of
U-C Holdings, L.L.C. dated April 25, 1997.
"Management Units" shall have the meaning ascribed to it in the LLC
Agreement.
"Original Cost" of the Executive Securities will be the price per such
security paid by Executive pursuant to this Agreement or otherwise (in each
case, as proportionately adjusted for all subsequent security splits, security
dividends, security distributions and other recapitalizations affecting the
Executive Securities).
"Sale of Holdings" shall mean the sale of substantially all of the
equity interest of Holdings or the sale of all or substantially all the assets
of Holdings in Company.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
9. Confidential Information. The Executive acknowledges that the
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information, observations and data obtained by him while employed by the
Company, or during the due diligence process in connection with Holdings
investment in the Company, concerning the business or affairs of the Company
("Confidential Information") are the property of the Company. Therefore,
Executive agrees that, except in the performance of duties for the Company, he
shall not disclose to any unauthorized person or use for his own account any
Confidential Information without prior written consent of the Board, except (i)
to the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of Executive's wrongful
acts or omissions to act, (ii) as necessary to comply with compulsory legal
process, provided that Executive shall provide prior notice to the Company
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regarding such disclosure and the Company, as applicable, shall have the right
to contest such disclosure, (iii) as necessary to counsel and other professional
advisors retained by the Executive, subject to the attorney/client privilege or
a valid and binding non-disclosure agreement between Executive and such
professional and (iv) disclosures of information obtained from a third party
free of restrictions or disclosure of information in Executive's possession
prior to the date hereof which was obtained from a source other than the Company
or its predecessors. Executive shall deliver to the Company at the termination
of the Employment Period, all memoranda, notes, plans, records, reports,
computer tapes and software and other documents and data (and copies thereof)
relating to Confidential Information, Work Product or the business of the
Company which he may then possess or have under his control.
10. Inventions and Patents. Executive agrees that all ideas, concepts,
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marketing strategies, management techniques, product development, methods,
designs, analyses, drawings, reports, and all similar or related information
which relates to the Company's actual or anticipated business, research and
development or existing or future
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products or services and which are conceived, developed or made by Executive
while employed by the Company ("Work Product") belong to the Company. Executive
will promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
11. Non-Compete, Non-Solicitation.
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(a) Executive acknowledges that in the course of his employment with
the Company he will become familiar with the Company's trade secrets and with
other confidential information concerning the Company and that his services will
be of special, unique and extraordinary value to the Company. Therefore,
Executive agrees that, during the Employment Period, during any period in which
he is receiving payments pursuant to paragraph 5 or for which he has received a
lump sum payment pursuant to this Agreement or any subsequent agreement, and, if
terminated for Cause or by Executive's resignation before the Expiration Date,
for two years after such termination (the "Non-Compete Period"), he shall not
directly or indirectly own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business competing with the
businesses of the Company as such businesses exist or are in process on the date
of the termination of Executive's employment, within any geographical area in
which the Company engages or plans to engage in such businesses, including
without limitation, hold a significant management position with any information
or entertainment network which markets to colleges or universities or any direct
broadcast satellite operator serving markets where the Company operates
(including markets in which, during the Employment Period, the Company has
executed or was in the process of negotiating a written agreement to acquire
such an operator). Notwithstanding the foregoing, nothing herein shall prohibit
Executive from (i) continuing his ownership, management and/or control of any
business in which and to the extent which he held such interests and managed
such interests prior to the Non-Compete Period, or (ii) being a passive owner of
not more than 5% of the outstanding stock of any class of a company which is
publicly traded, so long as Executive has no active participation in the
management or the business of such company.
(b) During the Employment Period and for eighteen months thereafter,
Executive shall not directly or indirectly through another entity (i) solicit,
encourage, interview, entice, discuss with or induce or attempt to induce any
employee of the Company to leave the employ of the Company, or in any way
interfere with the relationship between the Company and any employee thereof,
(ii) hire any person who was an employee of the Company at any time during the
Employment Period or (iii) induce or attempt to induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company to cease
doing business with the Company, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company.
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12. Enforcement. If, at the time of enforcement of paragraphs 9, 10 or 11
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of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parities hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope and area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages would be an inadequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provision hereof (without posting a bond or
other security).
13. Executive Representations. Executive hereby represents and warrants
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to the Company that (i) the execution, delivery and performance of this
Agreement by Executive does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, non-compete agreement or
confidentiality agreement with any other person or entity, which would prohibit
his performance under this Agreement and (iii) upon the execution and delivery
of this Agreement by the Company, this Agreement shall be valid and binding
obligation of Executive, enforceable in accordance with its terms.
14. Survival. Paragraphs 9, 10, 11, 12 and 13 shall survive and continue
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in full force in accordance with their terms notwithstanding any termination of
the Employment Period.
15. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by telecopy or reputable
overnight courier service (charges prepaid) to the recipient at the address or
telecopy number below indicated:
Notices to Holdings:
U-C Holdings, L.L.C.
c/o Xxxxxx Xxxxx & Partners, L.P.
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Avy X. Xxxxx
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With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.:(000) 000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
Notices to Executive:
Xxxxxx X. Xxxxx
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxxx and Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, XX
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Notices to Company:
UC Television Network Corp.
c/o Xxxxxx Xxxxx & Partners, L.P.
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.:(000) 000-0000
Attention: Xxxxxxxx Xxxxxx, Esq.
or such other address or telecopy number or to the attention of such other
person as the recipient party shall have specified by prior written notice to
the sending party. any notice under this Agreement will be deemed to have been
given when so delivered or sent or, if mailed, five days after deposit in the
U.S. mail.
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16. Severability. Whenever possible, each provision of this agreement will
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be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
17. Complete Agreement. This Agreement and those documents expressly
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referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
18. Counterparts. This Agreement may be executed in separate
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counterparts, each of which to be an original and all of which taken together
constitute one and the same agreement.
19. Successors and Assigns. This Agreement is intended to bind and inure
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to the benefit of and be enforceable by all parties and their respective heirs,
successors and assigns, except that Executive may not assign his rights or
delegate his obligations hereunder without the prior written consent of the
Company.
20. Choice of Law. This Agreement will be governed by the internal law,
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and not the laws of conflicts, of the State of New York.
21. Amendment and Waiver. The provisions of this Agreement may be amended
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or waived with the prior written consent of the Company and Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity binding effect or enforceability of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
UC TELEVISION NETWORK CORP.
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Chief Executive Officer and
Chairman of the Board
U-C HOLDINGS, L.L.C.
By: Xxxxxx Xxxxx & Partners, L.P.
Its: Managing Partner
By: Xxxxxx Xxxxx & Partners, L.L.C
Its: General Partner
By: /s/ Avy X. Xxxxx
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Avy X. Xxxxx
Its Manager
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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