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EXHIBIT 10.19
PARADIGM MUSIC ENTERTAINMENT COMPANY, INC.
00 Xxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 1, 1996
Xx. Xxxxxx XxXxxxxxxx
000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, Xxx Xxxx 00000
Dear Xxx:
Paradigm Music Entertainment Corporation, Inc., a New York corporation
(hereinafter referred to as "Paradigm"), agrees to employ you and you agree to
accept such employment under the following terms and conditions:
1. TERM OF EMPLOYMENT.
Except for earlier termination as provided in this Agreement, your employment
under this Agreement shall be for a term of three (3) years commencing on the
date hereof and terminating on December 31, 1998 (hereinafter referred to as
the "Term").
2. COMPENSATION.
(a) You shall be compensated for all services rendered by you under this
Agreement at the rate of Three Hundred Seventy-five Thousand Dollars ($375,000)
per annum (your "base salary"), payable in such manner as is consistent with
Paradigm's payroll practices for its most senior executive employees. Paradigm
currently pays its employees on a bi-weekly basis. Prior to December 31 of each
year during your employment with Paradigm, commencing with December 31, 1997,
the Board of Directors shall review your performance, the earnings of Paradigm
during the prior year and Paradigm's economic prospects for the coming year and
shall consider in its good faith business judgment and discretion whether to
increase the base salary payable to you hereunder.
(b) During the Term of your employment hereunder at such time as
determined by the Board following the completion of the audit of Paradigm's
financial statements for the fiscal year of Paradigm ending during such year of
employment, but in no case later than March 31, you shall receive additional
compensation in the form of a cash bonus based upon such performance goals and
objectives as shall be mutually determined, in good faith, by you and the Board.
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(c) Notwithstanding subparagraphs 2(a) and (b) hereinabove, you hereby
acknowledge and agree that your base salary shall not be increased during the
first thirteen (13) months of the Term.
(d) In addition to your salary, you shall be entitled to receive bonus
compensation for each of the calendar years, commencing February 1997, during
the Term, which will be based upon the measurement of performance against
reasonable objectives, mutually determined by you and the Board, in accordance
with the Paradigm incentive plan, as same may be amended from time to time.
3. EMPLOYMENT OF EXECUTIVE, ACCEPTANCE OF EMPLOYMENT; TIME AND ATTENTION.
(a) Paradigm hereby employs you as President, Chief Executive Officer and
Chairman of the Board of Paradigm to perform such duties and responsibilities
incident to such office, subject at all times to the reasonable control and
reasonable direction of the Board of Directors of Paradigm (hereinafter
referred to as the "Board"). You may be elected to such other offices as may,
from time to time, be determined by the mutual agreement of you and the Board.
(b) You hereby accept such employment and agree that throughout the period
of your employment hereunder, you will devote such time, attention, knowledge
and skills, faithfully, diligently, and to the best of your ability, in
furtherance of the business of Paradigm as is necessary to perform your duties
and responsibilities herein. As Chief Executive Officer, you shall be the
principal Executive Officer of Paradigm and shall in general, manage and
control all of the day-to-day operations of Paradigm. You shall have the
responsibility for and control of the day-to-day operations of the Paradigm,
including, but not limited to, developing and reviewing Paradigm's business
plans and its profit and cash budgets, formulating policies and marketing
strategies, setting inventory levels, selecting product manufacturers
evaluating personnel and subject to the reasonable approval of the Board, the
selection of operating officers and managers of Paradigm. You shall also
perform such specific duties and shall exercise such specific authority related
to the management of the day-to-day operations of Paradigm consistent with your
position of Chief Executive Officer as may be reasonably assigned to you from
time to time by the Board. You shall be President and Chief Executive Officer
of Paradigm. Promptly after the execution hereof you will be appointed a
Director of the Corporation.
Notwithstanding the foregoing in this paragraph, you shall not be
precluded from engaging in recreational, eleemosynary, educational and other
activities which do not materially interfere with his duties hereunder.
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4. BENEFITS.
You shall be entitled to four (4) weeks vacation during each year of your
employment with Paradigm you shall be entitled to any other employee benefits
which are provided to senior executives of Paradigm. For example, you will be
eligible to participate in life and medical insurance, 401 (k), stock option
and other similar plans as the Board may have approved or may from time to time
hereafter approve for its senior executive employees and in accordance with the
terms of such plans. The foregoing, however, shall not be construed to require
Paradigm to establish any such plans or to prevent Paradigm from modifying or
terminating any such plans, and no such action or failure thereof shall affect
this Agreement.
5. EXPENSES.
Paradigm will promptly reimburse you for reasonable expenses, including
traveling expenses, actually incurred by you in connection with the business of
Paradigm upon the presentation by you of appropriate substantiation for such
expenses.
6. RESTRICTIVE COVENANTS.
(a) During such time as you shall be employed by Paradigm (the
"Restricted Period"), you shall not, without the consent of the Board, directly
or indirectly, become associated with, render services to, invest in,
represent, advise or otherwise participate in as an officer, employee,
director, stockholder, partner, promoter, agent of, consultant for or
otherwise, any business which is conducted in any of the jurisdictions in which
Paradigm's business is conducted and which is competitive with the business in
which Paradigm is engaged or plans to be engaged at the time your employment
with Paradigm ceases; provided, however, that nothing contained herein will
prevent you from owning less than five percent (5%) of any class of equity or
debt securities listed on a national securities exchange or traded in any
established over-the-counter securities market, so long as such involvement
with the issuer of any such securities is solely that of a passive investor.
(b) During the Restricted Period, you shall not employ or otherwise
engage, or offer to employ or otherwise engage, or solicit, entice or induce
for you or any other person, entity or corporation, the services or employment
of any person who is or has been an employee, sales representative, consultant
to or agent of Paradigm at the time of, or at any time during the year prior
to, the termination of your employment with Paradigm.
(c) The parties hereto intend that the covenants contained in this
Section 6 shall be deemed a series of separate covenants for each country,
state, county and city. If, in any judicial
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proceeding, a court shall refuse to enforce all the separate covenants deemed
included in this Section 6 because, taken together, they cover too extensive a
geographic area the parties intend that those of such covenants (taken in order
of the cities, counties, states and countries therein which are least populous)
which if eliminated would permit the remaining separate covenants to be enforced
in such proceeding shall, for the purpose of such proceeding, be deemed
eliminated from the provisions of this Section 6.
(d) The provisions of this Section 6 shall survive your employment
hereunder and the termination of this Agreement for any reason whatsoever.
7. CONFIDENTIALITY, NON-INTERFERENCE AND PROPRIETARY INFORMATION.
(a) Confidentiality. In the course of your employment by Paradigm, you
will have access to and possession of valuable and important confidential or
proprietary data or information of Paradigm and its operations. You will not at
any time divulge or communicate to any person nor shall you direct any of
Paradigm's employees to divulge or communicate to any person (other than to a
person bound by confidentiality obligations similar to those contained herein
and other than as necessary in performing your duties hereunder) or use to the
detriment of Paradigm or for the benefit of any other person, any of such
confidential or proprietary data or information or make or remove any copies
thereof, whether or not marked or otherwise identified as confidential or
secret. You shall take all reasonable precautions in handling the confidential
or proprietary data or information, shall limit the use and circulation of the
confidential or proprietary data or information within Paradigm to a strict
need-to-know basis and shall comply with any and all security systems and
measures adopted from time to time by Paradigm to protect the confidentiality
of the confidential or proprietary data or information, however, you may
disclose such information when you are required to do so pursuant to a court or
governmental order.
(b) Confidential or Proprietary Data or Information. The term
"confidential or proprietary data or information" as used in this Agreement
shall mean information not generally available within industry or received from
a non-affiliated third party who is not bound by confidentiality, including,
without limitation, personnel information, financial information, customer
lists, supplier lists, trade secrets, information regarding operations,
systems, services, know how, computer and any other processed or collated data,
computer programs, pricing, marketing and advertising data.
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(c) Non-Interference. You agree that, for the period one (1) year after
the termination or expiration of your employment hereunder, you will not at any
time after the termination of your employment with Paradigm, for your own
account or for the account of any other person, unduly interferes with
Paradigm's relationship with any of its suppliers, customers or employees.
However, this sub-paragraph is not intended to prevent you from pursuing the
professional services of performing artists which are not and have not been
under contract to Paradigm.
(d) Return of Property. All written materials, records and documents made
by you or coming into your possession during your employment concerning any
products, processes or equipment manufactured, used, developed, investigated or
considered by Paradigm or otherwise concerning the business or affairs of
Paradigm shall be the sole property of Paradigm, and upon termination of your
employment, or upon request of Paradigm during your employment, you shall
promptly deliver the same to Paradigm. In addition, upon termination of your
employment, or upon request of Paradigm during your employment, you will
deliver to Paradigm all other property belonging to Paradigm in your possession
or under your control, including, but not limited to, financial statements,
marketing and sales data, customer and supplier lists and other documents, and
all Paradigm credit cards.
(e) Paradigm. For purposes of this Section 7,"Paradigm" shall mean the
Company and any subsidiaries or affiliates of Paradigm.
(f) Survival. The provisions of this Section 7 shall survive your
employment hereunder and the termination of this Agreement for any reason
whatsoever.
8. EQUITABLE RELIEF.
With respect to the covenants contained in Sections 6 and 7 of this Agreement,
you agree that any remedy at law for any breach or threatened or attempted
breach of such covenants may be inadequate and that Paradigm shall be entitled
to seek specific performance or any other mode of injunctive and/or other
equitable relief to enforce its rights hereunder or any other relief to enforce
its rights hereunder or any other relief a court might award.
9. EARLIER TERMINATION.
(a) Your employment under this Agreement shall terminate on the
following terms and conditions:
(i) Your employment under this Agreement shall terminate
automatically on the date of your death.
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ii) Your employment under this Agreement shall terminate immediately
upon a determination in the sole judgment of a third party physician that you
have been unable by reason of physical or mental disability to adequately
perform fully your duties hereunder for an aggregate of 90 calendar days
(whether or not continuous) during any period of 360 consecutive calendar days.
iii) Your employment under this Agreement shall terminate immediately
upon Paradigm sending your written notice terminating your employment hereunder
for just cause. For purposes of this Agreement, "just cause" shall include, but
not be limited to, (A) action by you involving dishonesty, fraud or misconduct,
(B) your conviction of a felony, or your willful refusal or any material
failure by you to perform your duties in accordance with this Agreement. A
written notice of termination in reasonable detail given to you by Paradigm
shall specify the reason(s) for such termination, and in the case where a cause
for termination shall be susceptible of cure, and such notice of termination is
the first notice of termination given to you for such reason, if you fail to
cure such cause for termination within fifteen (15) business days after the
date of such notice, termination shall be effective upon the expiration date of
such fifteen (15) day period, and if you cure such cause within said period,
such notice of termination shall be ineffective.
iv) If your employment is terminated during the Term pursuant to
Paragraph 9(a)(i), (ii) or (iii) herein above, Paradigm will pay you, in lieu
of any other payments hereunder, your base salary, bonus and vacation pay that
has accrued to that date and is payable under Paradigm's standard policies. You
acknowledge that upon receipt of such payment, Paradigm will have no further
obligations to you under this agreement.
(b) If Paradigm terminates this Agreement other than for cause, you
shall have the right to receive, for the unexpired Term, your base salary,
benefits and bonus, plus any base salary that has actually accrued to the date
of termination without regard to mitigation or offset by you.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement constitutes the full and complete understanding of the parties
hereto and supersedes all prior agreements and understandings, oral or written,
with respect to the subject matter hereof, and as to any such prior agreements
and understandings you hereby acknowledge that you have no outstanding or
contingent rights or claims of any nature. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements oral
or otherwise, have been made by either party, or anyone acting on behalf of
either party, which are not embodied herein and that no other agreement,
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statement or promise not contained in this Agreement shall be valid or binding.
This Agreement may not be modified or amended except by an instrument in writing
signed by the party against which enforcement may be sought.
11. SEVERABILITY.
Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.
12. WAIVER OF BREACH.
The waiver by either party of a breach of any provision of this Agreement, which
waiver must be in writing to be effective, shall not operate as or be construed
as a waiver of any subsequent breach.
13. NOTICES.
All notices hereunder shall be in writing and shall be sent by express mail or
by certified or registered mail, postage prepaid, return receipt requested, if
to you, to your residence as listed in Paradigm's records; and if to Paradigm,
to Paradigm Music Entertainment Company, 00 Xxxxxx Xxxxx, 0xx xxxxx, Xxx Xxxx,
XX 00000 and to Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxx, Esq.
13. ASSIGNABILITY: BINDING EFFECT
This Agreement shall not be assignable by you. This Agreement shall be binding
upon and inure to the benefit of you, your legal representatives, heirs and
distributees, and shall be binding upon and inure to the benefit of Paradigm,
its successors and assigns.
14. THIRD PARTIES
Except as specifically set forth or referred to herein, nothing in this
Agreement, expressed or implied, is intended or shall be construed to confer
upon or give to any person or corporation other than the parties hereto and
their successors or permitted assigns any rights or remedies under or by reason
of this Agreement.
15. GOVERNING LAW.
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This Agreement shall be construed and governed in accordance with the laws of
the State of New York, without giving effect to the conflicts or choice of law
provisions thereof.
16. HEADINGS.
The headings in this Agreement are intended solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
17. REVIEW OF THIS AGREEMENT: NO CONFLICTING AGREEMENTS.
The parties hereto hereby acknowledge that they have carefully read this
Agreement and each hereby represents and warrants to each other that they are
entering into this Agreement, and the respective obligations and duties
undertaken by them hereunder, will not conflict with, constitute a breach of or
otherwise violate the terms of any employment or other agreement to which they
are a party and that each party is not required to obtain the consent of any
person, firm, corporation or other entity in order to enter into this Agreement.
If this letter correctly sets forth our understanding, please sign the
duplicate original in the space provided below and return it to Paradigm,
whereupon this shall constitute the Employment Agreement between you and
Paradigm effective for the term as stated herein.
PARADIGM MUSIC ENTERTAINMENT
COMPANY, INC.
By: /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Agreed as of the date
first above written:
/s/ XXXXXX XXXXXXXXXX
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XXXXXX XXXXXXXXXX
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