Exhibit 10.5
Big City Radio, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
As of December __, 1997
Xx. Xxxx Xxxxxxxxx
00 Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Dear Xxxx:
When executed by you and by Big City Radio, Inc. (f/k/a Odyssey
Communications, Inc.), a Delaware corporation (the "Company"), this letter
agreement (the "Agreement") shall amend and restate in its entirety the
letter agreement dated as of July 20, 1996 (the "Prior Agreement"), as
amended, between you and the Company for your employment with the Company, to
read as follows:
1. (a) The Company hereby employs you as its Director of Engineering
for a term ending December 31, 1998 or such earlier time as it may be
terminated by you or by the Company as provided in this Agreement.
(b) The Company can terminate your employment for cause at any time
effective upon the date set forth in written notice of such termination
delivered to you in the manner provided in this Agreement. The term "for
cause" shall mean and include, but shall not be limited to, any of the
following events:
(i) fraud, misappropriation or embezzlement of funds or
property by you involving (x) the Company, (y) any of the radio stations
owned or operated by the Company or any Affiliated Company (as defined
in paragraph 5 of this Agreement) during the term of this Agreement (the
"Stations") or (z) any Affiliated Company;
(ii) your arrest, indictment or conviction in any jurisdiction
for any crime which constitutes a felony, or which constitutes a
misdemeanor that involves fraud, moral turpitude or material loss to the
Company, any Station, or any Affiliated Company or their respective
businesses or reputations;
(iii) your misconduct in, or neglect of, the performance of
your duties and responsibilities hereunder, or your violation of any
specific direction of the Board of Directors of the Company (the "Board
of Directors"), the Chairman of the Board of Directors, the President of
the Company or his designee;
(iv) your breach of the agreements and covenants set forth in
paragraphs 1(f), (g) or (h), or 3, 4, 5, 6 or 7 of this Agreement; or
(v) your breach of any other material provision of this
Agreement which breach continues uncured for a period of fifteen (15)
days after written notice thereof is given to you by the Company.
(c) If you are unable to perform your duties hereunder by reason of
illness or disability, as determined by your physician and, at the
election of the Company, confirmed by a physician selected by the
Company, which inability continues for a period of ninety (90)
consecutive days or more or any ninety (90) days or more within any one
hundred eighty (180) day period, then while such inability continues,
the Company can terminate your employment hereunder by giving you
written notice thereof and paying to you upon termination a lump sum
equal to six (6) times your base monthly salary in effect on the date of
termination. In addition to the foregoing, the Company's obligations for
payments and benefits provided to you pursuant to this Agreement will
terminate upon your death.
(d) The Company shall have the right, at any time, to terminate your
employment without "cause" (as such term is used herein), by providing
written notice delivered to you at least thirty (30) days prior to the
effective date of such termination. If your employment is terminated by
the Company without cause, the Company shall pay to you an amount equal
to six (6) times your base monthly salary in effect on the date of
termination, payable to you in a lump sum upon termination. If your
employment is terminated by the Company for cause, or if your employment
is terminated by you, the Company shall have no obligation to you for
severance payments.
(e) (i) If there is a Change of Control (as defined below) of the
Company, you shall have the right, at any time within ninety (90) days
following the occurrence of such Change of Control, to terminate your
employment hereunder, by written notice to the Company, effective upon
the date specified in such notice, for any reason or for no reason
whatsoever. Upon a Change of Control and your election to terminate
your employment as provided herein, the Company shall pay you a
severance payment in an amount equal to twelve (12) times your base
monthly salary in effect on the date of termination, payable to you in a
lump sum upon termination.
(ii) For purposes of this Agreement, a "Change of Control" of
the Company shall be deemed to have occurred (i) when all or
substantially all of the assets of the Company are sold, leased,
exchanged or otherwise
transferred to any person or entity or group of persons or entities
acting in concert other than a Permitted Holder (as defined below) or a
Wholly-Owned Subsidiary (as defined below) of the Company, (ii) when the
Company is merged or consolidated with or into another entity with the
effect that stockholders of the Company immediately prior to such merger
or consolidation hold less than 50% of the combined voting power of the
then outstanding securities of the surviving entity of such merger or
the entity resulting from such consolidation ordinarily (and apart from
rights arising under special circumstances) having the right to vote in
the election of directors, (iii) on the first day within any two-year
period on which a majority of the members of the Board of Directors of
the Company are not Continuing Directors (as defined below), or (iv)
when any person or entity or group of persons or entities acting in
concert other than Permitted Holders becomes the beneficial owner,
directly or indirectly, of more than 50% of the combined voting power of
the then outstanding securities of the Company having the right to vote
in the election of directors.
(iii) "Permitted Holder" shall include only the following
persons: (w) Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx and their respective
estates, guardians, conservators or committees; (x) each descendant of
Xxxxxx Xxxxxxxxx or Xxxxx Xxxxxxxxx (a "Xxxxxxxxx Descendant") and their
respective estates, guardians, conservators or committees; (y) each
Subotnick Family Controlled Entity (as defined below); and (z) the
trustees, in their respective capacities as such, of each Subotnick
Family Trust (as defined below).
(iv) "Subotnick Family Controlled Entity" means (w) any
not-for-profit corporation if at least a majority of its board of
directors is composed of Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx and/or
Subotnick Descendants; (x) any other corporation if at least a majority
of the value of its outstanding equity is owned by Permitted Holders;
(y) any partnership if at least a majority of the economic interest of
its partnership interests is owned by Permitted Holders; and (z) any
limited liability or similar company if at least a majority of the
economic interest of the company is owned by Permitted Holders.
(v) "Subotnick Family Trust" includes trusts the primary
beneficiaries of which are Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxx
Descendants, Stuart or Xxxxx Xxxxxxxxx'x siblings, spouses of Subotnick
Descendants and their respective estates, guardians, conservators or
committees and/or charitable organizations (collectively, "Subotnick
Beneficiaries"). For purposes of this provision, the primary
beneficiaries of a trust will be deemed to be Subotnick Beneficiaries
if, under the maximum exercise of discretion by the trustee in favor of
persons who are not Subotnick Beneficiaries, the value of the interests
of such persons in such trust, computed actuarially, is 50% or less.
The factors and methods prescribed in section 7520 of the Internal
Revenue Code of 1986, as amended, for use in ascertaining the value of
certain interests shall be used in determining a beneficiary's actuarial
interest in a trust for purposes of applying this provision. For
purposes of this provision, the actuarial value of the interest in a
trust of any person in whose favor a testamentary power of appointment
may be exercised shall be deemed to be zero. For purposes of this
provision, in the case of a trust created by a Subotnick Descendant, the
actuarial value of the interest in such trust of any person who may
receive trust property only at the termination of the trust and then
only in the event that, at the termination of the trust, there are no
living issue of such Subotnick Descendant, shall be deemed to be zero.
(vi) "Wholly-Owned Subsidiary" means any corporation, limited
liability company, partnership or other entity of which all the
outstanding voting securities or similar interests are owned by the
Company or any Wholly-Owned Subsidiary of the Company or by the Company
and a Wholly-Owned Subsidiary of the Company.
(vii) "Continuing Director" means, as of the date of any
determination, any member of the Board of Directors of the Company who
(x) was a member of such Board of Directors on the date of this
Agreement or (y) was nominated for election or elected to such Board of
Directors with, or whose election to such Board of Directors was
approved by, the affirmative vote of a majority of the Continuing
Directors who were members of such Board of Directors at the time of
such nomination or election or (z) is a designee of the Permitted
Holders or their affiliates or was nominated by the Permitted Holders or
their affiliates or any designees of the Permitted Holders or their
affiliates on the Board of Directors.
(f) Your duties shall include without limitation overseeing the
technical facilities of the Company and any Affiliated Company;
directing and implementing all necessary procedures to improve the
facilities, the antenna system, coverage and day-to-day maintenance of
the Stations during the term of this Agreement; advising the Company and
any Affiliated Company as to the technical feasibility of acquisition
properties while meeting all requirements and rules of the Federal
Communications Commission; and developing annual budgets, monthly
reports and attending weekly department head meetings of the Stations on
an intermittent basis. Notwithstanding the foregoing, the Board of
Directors will have the right to change your responsibilities, or assign
to you additional responsibilities, commensurate with your position as
the Company's Director of Engineering. You will devote your entire
working time and best efforts to the faithful performance of the duties
to which you are assigned during the term of your employment to the
exclusion of (i) all other employment for yourself or for others or any
business activities which conflict or interfere with your performance of
duties hereunder and (ii) all other employment for yourself or for
others or any business activities which do not conflict with or
interfere with your performance of duties hereunder except with the
prior written consent of the Company, which consent will not be
unreasonably withheld. You will be working with the General Managers,
Program Directors and other managers of the Stations but your
performance of duties hereunder will be subject to the direction and
control of the Board of Directors, the Chairman of the Board of
Directors, the President of the Company or his designee. You will be
based in Westchester County, New York, or another location
in the metropolitan New York area. You will perform your duties at such
other locations and will perform all travel reasonably requested by the
Board of Directors, the Chairman of the Board of Directors, the
President of the Company or his designee or otherwise necessary in the
performance of your duties. If the Board of Directors, the Chairman of
the Board of Directors, the President of the Company or his designee
requires you to be based in a location outside the metropolitan New York
area and such location is not mutually agreeable, you shall have the
right to require the Company to terminate this Agreement "without cause"
and the terms of section 1(d) hereof will apply.
(g) In addition to the prohibition on other employment set
forth in paragraph 1(f), upon termination of your employment "for cause"
or "without cause" or by reason of your resignation or pursuant to
paragraph 1(c) hereof, and thereafter for thirty (30) days after the
date of such termination (the "Non-Competition Period"), you shall not,
without the prior written consent of the Company, which consent the
Company may withhold in its sole and absolute discretion, serve in any
engineering or technical capacity for, or otherwise be involved in the
engineering and technical functions of any radio station in the
"Territory". For purposes of this Agreement, the "Territory" means the
area within fifty (50) miles of the transmitter of any radio station
owned or operated by the Company and any Affiliated Company during the
Non-Competition Period. In the event that the Company consents to your
rendering services in connection with the engineering and technical
functions of any radio stations during the Non-Competition Period, the
Company will be relieved of its obligation to pay any severance or other
payments to you pursuant to paragraph 1(d) or 1(e) hereof. In addition,
to the foregoing, you agree that for a period of 180 days after the
termination of your employment, you will not solicit, hire or endeavor
to solicit or hire any person employed by the Company.
(h) You represent and warrant to the Company that you have full
power and authority to execute, deliver and perform this Agreement and
that the execution, delivery and performance by you will not result in
the breach of or default under any other agreement to which you are a
party or by which you are bound, including but not limited to any
employment agreement or agreement to not compete with any other person
or entity.
2. (a) In consideration of and in full payment for the due and faithful
performance by you of your duties and obligations hereunder, during your
employment pursuant to this Agreement the Company will pay you and you agree to
accept a salary at the rate of $110,000.00 per annum. The Company will pay
your salary hereunder in accordance with Company policy.
(b) In addition to the salary payable to you hereunder, the Company
may, at its sole discretion, pay a discretionary bonus to you of up to
$15,000.00 based on an annual management performance review by the Compensation
Committee of the Company or the Board of Directors, pending the formation of a
Compensation Committee.
(c) All payments made to you pursuant to this Agreement will be
subject to all deductions and withholding required by law or agreement of the
parties.
(d) You will be entitled to reimbursement for reasonable and
necessary expenses incurred by you in connection with your employment, upon
approval in advance from the Company and presentation of proper documentation
for all expenses in accordance with the usual procedures of the Company.
(e) During your employment with the Company you will be entitled
to participate in and to receive benefits under and in accordance with the
provisions of any Company employee benefit plans, programs and arrangements
which may now or hereafter be available to senior executives of the Company,
as such plans, programs and arrangements may be in effect from time to time
and which are applicable to you and for which you qualify under and pursuant
to such plans. In addition to the foregoing, in the event of your death
during the term of this Agreement, your rights and benefits under employee
benefit plans shall be determined in accordance with the terms and conditions
of such plans. Nothing contained herein shall require the Company to initiate
or maintain any employee benefit plans, and the terms and conditions of any
such plans shall be determined by the Company in its sole discretion.
(f) During your employment with the Company you shall be entitled
to take periodic vacations with pay aggregating three (3) weeks during each
calendar year (prorated for any partial calendar year during the term of this
Agreement based on your employment during such year), provided that the
Company has approved the dates of such vacations, which approval shall not be
unreasonably withheld and provided, further, that you shall not be permitted
to accrue more than fifteen (15) calendar vacation days until such time as
you have used up one (1) vacation day. Each time you reach the maximum
accrual level of fifteen (15) days, you shall not be permitted to accrue
further vacation time until another vacation day has been used. You shall
also be entitled to five (5) paid personal days during each calendar year
(prorated for any partial calendar year during the term of this Agreement
based on your employment during such year). You shall also be entitled to
take official Company holidays with pay.
(g) During your employment with the Company, the Company will
provide a 4-wheel drive vehicle to you at the Company's expense (including
payment of insurance and maintenance costs but excluding gasoline or other
operating expenses and income taxes payable by you hereunder) which is owned
or leased by the Company at its expense. The benefits provided to you in
this paragraph 2(g) are subject to tax as provided in the Internal Revenue
Code of 1986, as amended, and shall be reported by you as taxable income in
accordance therewith.
3. (a) For purposes of this Agreement, "Invention" will mean (i) any
and all machines, apparatuses, compositions of matter, methods, know-how,
processes, designs, configurations, uses thereof, or writings of any kind,
discovered, conceived, developed, made or produced, or any improvement to
them, and will not be limited to the definition of any invention contained in
the United States patent laws; (ii) all matters subject to copyright
protection under United States copyright laws; (iii) all matters subject to
trademark protection under trademark laws of the United States, those of any
state of the United States or under common law of any jurisdiction within the
United States; and (iv) all matters subject to protection as trade secrets
under the laws or common law of any state of the United States or of the
United States, including, without limitation, the Company's Synchronized
Total Marketing Concept (the "STMC").
(b) You understand and agree that all Inventions, or patents,
trademarks, copyrights or trade secrets relating to the radio, television or
broadcasting field, including, without limitation, the STMC, or any other
rights relating to any of the foregoing, which have or may have a material
importance to the business of the Company and which are conceived or made by
you during your employment by the Company, either alone or with others, are
the sole and exclusive property of the Company, whether or not they are
conceived or made during your working time for the Company, except to the
extent generally known or knowable by persons generally knowledgeable in the
radio broadcasting field.
(c) You will immediately disclose to the Company any and all
improvements, discoveries, ideas and Inventions (whether or not patentable)
relating to the radio, television or broadcasting field, including, without
limitation, the STMC, heretofore made (other than those which are the
property of your previous employers) or conceived by you while in the employ
of the Company, or hereafter made or conceived by you while in the employ of
the Company, either alone or in conjunction with others, whether or not made
or conceived at the request or upon the suggestion of the Company, whether or
not resulting from any work done in the course of your employment by the
Company, and whether or not made or conceived during or outside of the usual
hours of employment or upon or not upon any premises of the Company.
(d) You hereby assign and will hereafter assign to the Company all
present or future right, title and interest in and to all Inventions referred
to in subparagraphs (b) and (c) of this paragraph 3. You will not disclose
any such Inventions to any third party without the written consent of the
Company.
(e) At any time and from time to time during and after your
employment by the Company, at the request of the Company, without further
consideration you will: (i) execute specific documents of assignment in favor
of the
Company, or its nominee, of any of the Inventions covered by this Agreement;
(ii) execute all papers and perform all acts the Company considers necessary or
advisable for the preparation, application, procurement, maintenance,
enforcement, and defense of patent applications and patents of the United States
or other jurisdictions of such Inventions, for the perfection or enforcement of
any trademarks, copyrights or trade secrets relating to such Inventions, and for
the transfer of any interest you may have in such Inventions; and (iii) execute
any and all papers and documents which the Company considers to be necessary to
vest sole right, title and interest in the Company or its nominee in and to the
above Inventions, patent applications, patents, or any trademarks or copyrights
or applications therefor relating thereto. Notwithstanding the foregoing, after
the term of this Agreement, unless your employment was terminated for cause, in
which case you agree to do so without any compensation, you will be entitled to
reasonable compensation for more than incidental time and effort required to be
expended by you to fulfill your responsibilities under clause (ii). You will
execute all documents (including those referred to above) and do all other acts
which the Company considers to be necessary to assist in the preservation of all
the Company's interests in such Inventions.
(f) You have identified on Exhibit A attached hereto a complete list of
all Inventions which have been made or conceived or first reduced to practice by
you alone or in conjunction with others prior to your employment by the Company
and which you desire to exclude from the operation of paragraph 3 of this
Agreement.
4. (a) For purposes of this Agreement, "proprietary information" will
mean any information relating to the business, operations or personnel of the
Company (including but not limited to the Stations and any Affiliated Company
for the purposes of the confidentiality provisions of this Agreement) that has
not previously been publicly released by a duly authorized representative of the
Company and will include but will not be limited to such information encompassed
in all drawings, designs, plans, proposals, marketing and sales plans, financial
information, costs, pricing information, customer information, personnel
information, programming, promotion, engineering strategies and all methods,
concepts, or ideas used in and which have or may have a material importance to
the business of the Company including, without limitation, the STMC.
(b) You will agree, to the best of your ability, to preserve as
confidential all proprietary information that has been or may be obtained by you
during your employment by the Company or otherwise, whether you have such
information in your memory or in writing or other physical form. You will
neither use for your benefit or purposes nor disclose to others any proprietary
information, either during the term of this Agreement or thereafter, except as
required by the conditions of your employment hereunder. This provision will
not apply to proprietary information which has been voluntarily disclosed to the
public by the Company for the benefit of the Company or upon its express
authorization or has been independently developed and disclosed by others who
are not subject to any obligations of confidentiality to the Company.
(c) You will not remove from the premises of the Company or
elsewhere, except as an employee of the Company in pursuit of the business of
the Company, any documents or objects containing or reflecting any proprietary
information or any other property of the Company. You recognize that all such
documents and objects, whether developed by you or by someone else, are the
exclusive property of the Company. Upon termination of your employment
hereunder you will forthwith deliver up to the Company all proprietary
information, including, without limitation, all correspondence, accounts,
records and any other documents or property made or held by you or under your
control in relation to the business or affairs of the Company, and no copy of
any such proprietary information will be retained by you.
(d) Except for such information which has been previously disclosed
to the general public without breaching any confidentiality agreement, under no
circumstances and at no time, during or after the term of your employment, will
you, directly or indirectly, disclose, divulge, render or offer any knowledge or
information with respect to any proprietary information, except in the course of
the proper performance of your duties hereunder and you acknowledge and agree
that any and all such information will be received by you in a confidential
capacity.
5. (a) You agree to perform your duties in full compliance with
all laws, rules and regulations of any governmental authority applicable to the
Company and its business or to any Affiliated Company or its business, to the
extent you are engaged in business on behalf of an Affiliated Company, or to the
performance of your duties pursuant to this Agreement. For purposes of this
Agreement, "Affiliated Company" means, with respect to the Company, any other
person that, directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the Company.
(b) You represent and warrant that to the best of your
knowledge, information and belief, neither you nor any person acting on your
behalf has accepted or agreed to accept, or paid or agreed to pay any money,
service or any valuable consideration, as defined in Section 508 of the
Communications Act of 1934, as amended, for the broadcast of any matter
contained in any program on any Station. You further covenant that during your
employment, you will not accept or agree to accept (excepting from the Company)
or pay or agree to pay any money, service or valuable consideration, as defined
in Section 508 of the Communications Act of 1934, as amended, for the broadcast
of any matter contained in any program on any Station. You will not make or
promise to make or accept any payments or transfer of value which have the
purpose or effect of public or commercial bribery, acceptance of or
acquiescence in extortion, kickbacks or other unlawful or improper means of
obtaining business for the Company or any Affiliated Company. This paragraph
5(b) shall not prohibit normal and customary business entertainment or the
giving of business mementos of nominal value.
6. (a) You agree to comply with any and all of the Company's
policies, regulations and procedures including but not limited to those which
now or hereafter may relate to the matters set forth in this Agreement, provided
such policies, regulations and procedures are reasonably consistent with the
material terms of this Agreement. Periodically, at the request of the Company,
you also agree to execute and/or to respond fully, truthfully, accurately and
completely to all documents or questionnaires as may be submitted to you in
connection therewith.
(b) In the event of a breach or threatened breach by you of any
of the provisions of paragraphs 1(g), 3, 4, 5, 6(a) or 7 hereof, the Company
will be entitled to an injunction (without posting a bond or other security)
restraining you from the commission of such breach. In addition to the
foregoing, any violation by you of any provision of any such paragraphs will be
grounds for immediate termination of your employment hereunder for cause, and,
without limiting any right, claim or remedy the Company has or may have pursuant
to this Agreement or at law or equity, the Company will be relieved of its
obligation to pay any severance or other payments to you pursuant to paragraph
1(d) or 1(e) hereof.
7. The Company may assign this Agreement and all its rights hereunder.
You may not at any time assign this Agreement nor any right or interest
hereunder. Except as herein otherwise provided, this Agreement will be binding
upon and inure to the benefit of the parties hereto, your legal representatives
and the Company's successors and assigns.
8. Any notice required or permitted to be given hereunder will be in
writing and will be delivered personally to you, or duly mailed to the other
party by prepaid registered or certified mail, return receipt requested, or by
courier service providing delivery receipts or by facsimile transmission with
document reception of transmission. Such duly mailed notice will be deemed given
two (2) days after the date of dispatch or twenty-four (24) hours after the time
of facsimile transmission, such time being determined by the local time of the
recipient. The address for mailed notices will be (a) for you, the address set
forth on the first page of this Agreement and (b) for the
Company: c/o Metromedia Company, Xxx Xxxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx
Xxxxxx 00000, Attention: General Counsel. The numbers for facsimile transmission
will be the number contained in the Company's records for you and 000-000-0000
and the copy to 000-000-0000 for the Company. Either party may notify the other
party in writing of a change of address by serving notice in the manner provided
in this Section.
9. If any provision of this Agreement or the application thereof will for
any reason be invalid or unenforceable, such provision will be limited only to
the extent necessary in the circumstances to make such provision valid or
enforceable and its partial or total invalidity or unenforceability will in any
event not affect the remaining provisions of this Agreement, which will continue
in full force and effect.
10. This Agreement will be construed according to the laws of the State of
New York applicable to agreements made and to be performed within the State of
New York. This Agreement constitutes the entire understanding between the
parties, cancels and supersedes all prior oral or written understandings and
agreements between the parties hereto including without limitation the Prior
Agreement and cannot be changed or terminated orally but only by an instrument
in writing signed by both parties hereto.
11. The covenants, representations and warranties of this Agreement will
survive its execution, delivery and performance, and all accrued obligations
will survive its termination.
If this is in accordance with your understanding, kindly so indicate by
signing the enclosed copy of this letter in the space provided below and
returning the same to the undersigned.
Very truly yours,
Big City Radio, Inc.
By: ________________________
Xxxxxxx Xxxxxxxxxxx
President
ACCEPTED AND AGREED TO:
__________________________
Xxxx Xxxxxxxxx
Date:____________________
Exhibit A
None.
