EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into by and between Xxxxxxx X. Xxxxxxxxx, a
resident of the State of Texas (the "Executive") and FIRESTONE COMMUNICATIONS,
INC., a Delaware corporation (the "Company").
WHEREAS, the Company desires to employ the Executive; and
WHEREAS, the Company and the Executive desire to Further set forth in a
written agreement the complete terms and conditions pursuant to which the
Executive shall be employed by the Company; and
WHEREAS, the Company and the Executive intend that this Agreement shall
supersede any and all previous oral or written employment agreements between the
Company and the Executive.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1.
DEFINITIONS
As used in this Agreement, the following words and/or phrases shall have
the meanings set forth below unless a different meaning plainly is required by
the context:
1.1 Agreement shall mean this Employment Agreement between the Company
and the Executive.
1.2 Affiliate shall mean any parent, brother-sister or subsidiary
corporation of the Company, any joint venture in which the Company owns at least
a 50 percent interest, and any
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partnership, limited liability partnership or limited liability corporation in
which the Company or any of its wholly-owned subsidiaries owns at least a 50
percent interest.
1.3 Cause shall mean (i) the Executive's breach of a material provision
of this Agreement; (ii) the Executive's failure to perform any substantial duty
and responsibility of his position with the Company and its affiliates (other
than any such failure resulting from incapacity due to Disability); (iii) the
Executive's engagement in any illegal conduct or misconduct which is injurious
to the Company; (iv) violation of or failure to adhere to any published Company
policy or procedure or any directive of the Board of Directors; (v) Executive's
being charged with or conviction of, or a plea of guilty or nolo contendere to,
(a) a felony or (b) a misdemeanor involving moral turpitude; (vi) violation of
any of the restrictive covenants contained in Section 4 hereof; (vii) violation
of any rule or regulation or agreement applicable to the Company's business;
(viii) Executive's self-employment or employment of Executive by any person or
entity other than the Company or its affiliates; or (ix) the Executive's
engagement in any activity that is in conflict of interest or competitive with
the Company or its affiliates (other than any isolated, insubstantial and
inadvertent action not taken in bad faith and which is promptly remedied by the
Executive upon notice by the Company).
1.4 Company shall mean FIRESTONE COMMUNICATIONS, INC., its successors
and assigns, and any other corporation, partnership, limited liability company,
sole proprietorship or other type of business entity into which the Company may
be merged, consolidated or otherwise combined.
1.5 Confidential Information shall mean any data or information, other
than Trade Secrets, that is valuable to the Company and is not generally known
by the public. To the extent consistent with the foregoing, Confidential
Information includes, but is not limited to, lists (whether or not in writing)
of the Company's current or potential sponsors or advertisers; current or
potential programming or ideas; lists of and other information about the
Company's executives and employees; financial information (whether or not in
writing) that has not been released to the public by the Company; marketing
techniques; price lists and pricing policies; the Company's business methods,
contracts and contractual relations with the Company's sponsors, advertisers,
and cable and satellite television systems; and future business plans and
strategies.
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Confidential Information also includes any information or data described above
which the Company obtains from another party and which the Company treats as
proprietary or designates as confidential information whether or not owned or
developed by the Company.
1.6 Disability shall mean a physical or mental impairment that prohibits
the Executive from performing the duties of his position, for which he becomes
eligible to receive benefits under the Company's long-term disability plan, if
such a plan is then in existence, or as determined in the sole direction of the
Board of Directors.
1.7 Employment Commencement Date shall mean the date on which the
Executive and the Company shall sign and execute this Agreement.
1.8 Executive shall mean Xxxxxxx X. Xxxxxxxxx.
1.9 Good Reason shall exist if the Company, without Executive's written
consent, (a) takes any action that is inconsistent with, or results in the
reduction of, Executive as a senior executive officer of the Company; (b)
commits a breach of this Employment Contract which is not remedied by the
Company within thirty (30) days of receiving written notice by Executive of such
breach; (c) requires Executive to relocate more than five hundred (500) miles
from the location of the Company's offices in Fort Worth, Texas; or (d) any
successor or assignee of the Company fails to assume and perform the Company's
obligations under this Employment Contract.
1.10 Termination Date shall mean the date of the Executive's official
termination of employment for any reason (including death or disability).
1.11 Trade Secret shall mean information, without regard to form,
including, but not limited to, technical or nontechnical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, programming plans or a
list of actual or potential customers, sponsors or suppliers which is not
commonly known by or available to the public and which information; (a) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (b) is the subject of efforts
that are reasonable under the circumstances to maintain its
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secrecy. Trade Secrets also includes any information or data described above
which the Company obtains from another party and which the Company treats as
proprietary or designates as trade secrets, whether or not owned or developed by
the Company.
2.
DUTIES AND AUTHORITY
2.1 Duties and Authority. The Executive is engaged and agrees to per-
form services for and on behalf of the Company as its Chairman and Chief
Executive Officer and shall report directly to the Board of Directors. The
Executive's duties shall include the planning and directing of all the
functional activities of the company including marketing, sales, accounting
production, broadcasting, technical services, materials management and general
administration. The Executive will establish and monitor the company goals and
annual budget. The Executive will review, on a continuous basis, the general
business climate for the company to develop new business opportunities, ensure
excellent customer service, expand business and maintain existing relationships
with vendors. Executive will also promote a marketing and promotional strategy
aimed at increasing sales and measuring company performance. Additionally, the
Executive will control the process of attaining higher company productivity by
analyzing organizational structure, culture and systems. Executive will identify
resources (staff, equipment, funds) required, and communicate with pertinent
department managers on the supporting strategies and needs involving company
goals. The Executive will also develop and maintain an effective company through
the selection, termination, training, compensation, review and motivation of
department managers. The Executive's duties may be modified or enhanced at the
discretion of the Board of Directors or as dictated by the Company's bylaws.
Attached as Exhibit A is a more detailed statement of job duties and
responsibilities. The Executive agrees to perform such duties diligently and
efficiently and in accordance with the reasonable directions of the Board of
Directors. The Executive shall conduct himself at all times in a business-like
and professional manner as appropriate for his position and shall represent the
Company in all respects in compliance with good business and ethical practices.
In addition, the Executive shall be subject
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to and abide by the policies and procedures of the Company applicable to
personnel of the Company, as may be adopted from time to time.
2.2 Best Efforts. During the term of this Agreement, the Executive shall
devote his full attention, energies and best efforts to rendering services on
behalf of the Company. The Executive is not prohibited from investing or trading
in stocks, bonds, commodities or other forms of investment, including real
property, so long as the Executive does not "participate" (within the meaning of
Treas. Reg. xx.xx. 1.469-5(f) and 1.469-5T(f)) in such investments.
2.3 Term. The initial term of Executive's employment pursuant to this
Agreement shall commence on the Employment Commencement Date hereof and shall
continue until for three years after the Employment Commencement Date, subject
to earlier termination as provided in this Agreement.
3.
COMPENSATION AND BENEFITS
3.1 Annual Base Salary. The Company shall pay to the Executive as
compensation for his services provided hereunder a base salary of Two Hundred
and Five Thousand Dollars ($205,000) per year ("Base Salary"), payable on a
periodic basis consistent with the regular payroll practices of the Company. All
payments to Executive shall be subject to all applicable tax withholdings.
3.2 Incentive Compensation. The Executive shall qualify for additional
semi-annual bonuses based on his individual performance and the performance of
the Company. Such bonuses, shall be up to an amount not to exceed fifty percent
(50%) of his base annual salary.
3.3 Employee Benefit Plans and Policies. The Executive shall be entitled
to participate in each employee benefit plan, policy or arrangement which is
sponsored, maintained or contributed to by the Company and in which current
executive officers of the Company may participate, in accordance with the terms
and provisions of such plans, which may include group health insurance, 401(k)
plan participation, and life insurance benefits. If the Company does not
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have a group health insurance plan in place as of the Employment Commencement
Date, the Company shall reimburse Executive for the reasonable costs of
obtaining individual health insurance coverage until such time as a group plan
is established, in an amount not to exceed $750 per month.
3.4 Vacation. Executive shall be entitled to such paid vacation time as
is generally provided to the Company's executive officers, but not less than
four weeks of paid vacation time during the first twelve months of employment,
pursuant to the Company's policies, which may be amended from time to time.
Executive shall not be entitled to carry over, or receive any payment for, any
vacation time which is not used during the calendar year.
3.5 Expense Reimbursement. The Company shall reimburse the Executive for
reasonable, ordinary and necessary travel and other business related expenses,
including entertainment expenses, incurred by him in performance of the business
of the Company in accordance with the Company's standard expense reimbursement
practices and policies in existence from time to time for senior executive
officers of the Company, subject to such dollar limitations and verification and
record keeping requirements as may be established from time to time by the
Company.
Equity Grant. In accordance with and subject to the terms of FIRESTONE
COMMUNICATIONS, INC. Stock Incentive Plan for Management (the "Option Plan") and
to the approval of the Board, the Company agrees to issue stock or options (as
defined in the Option Plan) and subject to any additional terms and conditions
of such grant to be as specified in the Option Plan. The date of grant of all
future options shall be the Employment Commencement Date;
4.
RESTRICTIVE COVENANTS
4.1 Nondisclosure of Trade Secrets and Confidential Information. In the
course of Executive's employment by the Company, Executive has had access to and
will have access to the Company's most sensitive and most valuable trade
secrets, proprietary information, and
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confidential information concerning the Company and its subsidiaries, their
present and future business plans, development and programming projects,
customers, sponsors, advertisers, MSO relationships and business affairs all of
which constitute valuable business assets of the Company, the use, application
or disclosure of any of which would cause substantial and possibly irreparable
damage to the business and asset value of the Company. Accordingly, Executive
accepts and agrees to be bound by the following provisions:
(a) At any time, upon the request of the Company and in any event
upon the termination of employment, Executive shall deliver to the Company
all memoranda, notes, records, drawings, manuals, files or other
documents, and all copies of each, concerning or constituting Confidential
Information or Trade Secrets and any other property or files belonging to
the Company or any of its subsidiaries that are in the possession of
Executive, whether made or compiled by Executive or furnished to or
acquired by Executive from the Company.
(b) In order to protect the Company's Trade Secrets and
Confidential Information, Executive agrees that:
(i) Executive shall hold in confidence the Trade Secrets of
the Company. Except in the performance of services for the Company,
Executive shall not, for so long as the Trade Secrets remain "trade
secrets" under applicable law, use, disclose, reproduce, distribute,
transmit, reverse engineer, decompile, disassemble, or transfer the Trade
Secrets of the Company or any portion thereof.
4.2 Executive shall hold in confidence the Confidential Information of
the Company. Except in the performance of services for the Company,
Executive shall not at any time during his employment with the Company and
for a period of three (3) years thereafter, use, disclose, reproduce,
distribute, transmit, reverse engineer, decompile, disassemble, or
transfer the Confidential Information of the Company or any portion
thereof.
4.3 Return of Documents and Property. On the Termination Date, Executive
shall return to the Company all property belonging to the Company, including,
but not limited to, the original and any copy (regardless of the manner in which
it is recorded) of all information
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provided by the Company to Executive or which Executive has developed or
collected in the scope of his employment, as well as all Company-issued
equipment, supplies, accessories, vehicles, keys, instruments, tools, devises,
computers, cellphones, pagers, materials, documents, plans, records, notebooks,
drawings or papers.
4.4 Reasonableness. Executive has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred
on the Company under this Agreement, and Executive hereby acknowledges and
agrees that:
(a) the restrictions and covenants contained herein, and the
rights and remedies conferred upon the Company, are necessary to
protect the goodwill and other value of the business of the Company;
(b) the restrictions placed upon Executive hereunder are fair and
reasonable, will not prevent him from earning a livelihood, and
place no greater restraint upon the Executive than is reasonably
necessary to secure the business and goodwill of the Company;
(c) the Company is relying upon the restrictions and covenants
contained herein in continuing to make available to Executive information
concerning the business of the Company;
(d) Executive's employment hereunder places him in a position of
confidence and trust with the Company and its employees, customers and
suppliers; and
(e) the provisions of this Article 4 shall be interpreted so as to
protect the Trade Secrets and Confidential information, and to secure for
the Company the exclusive benefits of the work performed on behalf of the
Company by the Executive under this Agreement, and not to unreasonably
limit his ability to engage in employment and consulting activities in
noncompetitive areas which do not endanger the Company's legitimate
interests expressed in this Agreement.
4.5 Remedy for Breach. Executive acknowledges and agrees that his breach
of any of the covenants contained in this Article 4 of this Agreement will
cause irreparable injury
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to the Company and that remedies at law available to the Company for any
actual or threatened breach by the Executive of such covenants will be
inadequate and that the Company shall be entitled to specific performance
of the covenants in this Article 4 or injunctive relief against activities
in violation of this Article 4 by temporary or permanent injunction or
other appropriate judicial remedy, writ or order, without the necessity of
proving actual damages. This provision with respect to injunctive relief
shall not diminish the right of the Company to claim and recover monetary
damages against the Executive for any breach of this Agreement, in
addition to injunctive relief. The Executive acknowledges and agrees that
the covenants contained in this Article 4 shall be construed as agreements
independent of any other provision of this or any other contract between
the parties hereto, and that the existence of any claim or cause of action
by the Executive against the Company, whether predicated upon this or any
other contract, shall not constitute a defense to the enforcement by the
Company of said covenants.
4.6 No Conflicting Obligations. Executive represents and warrants to the
Company that he is not now under any obligation of a contractual or other
nature to any person or entity which is inconsistent or in conflict with
this Agreement, or which would prevent, limit or impair in any way the
performance by him of his obligations hereunder.
4.7 Intellectual Property. Executive acknowledges and agrees that all
Employee Works produced by the Executive during Executive's employment
with the Company shall be considered "works for hire" as such term is
defined in 17 U.S.C. Section 101, et seq. Executive hereby assigns to the
Company all right, title and interest whatsoever in and to any and all
Employee Works, including all worldwide copyrights, trade secrets, patent
rights, and all confidential, proprietary and property rights therein, and
Executive will execute, without requiring the Company to provide any
further consideration therefore, such patent applications (including
continuations and related materials), confirmatory assignments,
instruments and documents as the Company deems necessary or desirable in
order to effect such assignment and to protect and enforce such rights.
The term "Employee Works" as used in this Agreement means any and all
works of authorship, inventions, discoveries, improvements, designs,
techniques, and work product, whether or not patentable, and in whatever
form, which are created, made,
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developed or reduced to practice, or caused to be created, made, developed
or reduced to practice by Executive during the period of time that
Executive is employed by the Company, that relate in any way to the
current or future business of the Company or its Affiliates, and that
result from any work performed by Executive for the Company or its
Affiliates. The obligation of Executive to execute materials to effect
assignment of Employee Works shall survive termination of Executive's
employment with the Company.
5.
TERMINATION OF EMPLOYMENT
5.1 Termination by Company.
(a) The Company shall have the right to terminate the Executive's
employment under this Agreement at any time, with or without Cause,
and with or without prior written notice to the Executive.
(b) If the Company terminates Executive's employment with Cause
{as defined in section 1.3 above), the Company shall have no further
obligation to Executive except to pay to Executive the Executive's
Base Salary through the Termination Date to the extent not
theretofore paid, which salary shall be paid in a lump sum within 30
days after the Termination Date.
(c) If the Company terminates Executive's employment without
Cause, the Company shall be obligated to pay to Executive the following
amounts: (I) Executive's Base Salary through the Termination Date to the
extent not theretofore paid, which salary shall be paid in a lump sum
within 30 days after the Termination Date; and (ii) Executive's Base
Salary for the remainder of the full term of this Agreement, which shall
be paid in installments in accordance with the Company's standard payroll
practices.
5.2 Death or Total and Permanent Disability; Temporary Disability.
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(a) This Agreement automatically shall terminate upon the death or
total and permanent disability of Employee. Total and permanent disability
shall mean an infirmity preventing Employee from performing his duties
under this Agreement without any hope or expectation of an ability to
resume such duties during the term as determined by Employee's treating
physician. If Employee's employment is terminated due to death or total
and permanent disability, Employee or Employee's estate, as the case may
be, shall be entitled to receive (i) his then current periodic
compensation for a period of three (3) months following the date of such
termination, based upon the per annum compensation set forth in this
Agreement as his base salary. The timing and manner of payment of such
compensation shall be in accordance with the normal salary payment
arrangements then in effect as to Employee prior to the termination.
(b) For purposes of this provision, the term "temporary
disability" shall mean an infirmity preventing Employee from performing
his duties under this Agreement that cannot or is not considered to be
total and permanent disability as defined above. In the event that
Employee is temporarily disabled, this Agreement shall NOT be terminated
and Employee shall be entitled to receive (i) his then current base salary
during the first two months of such disability, based on the then current
periodic compensation payable to Employee under the terms of this
Agreement. The timing and manner of payment of such compensation shall be
in accordance with the normal salary payment arrangements then in effect
as to Employee prior to the termination. No additional compensation shall
be paid to Employee until he is able to perform his duties on a full or
part time basis, provided that any benefits such as health insurance
normally provided in whole or in part by Employer shall continue to be
provided by the Employer for a period of up to six months of temporary
disability. In the event that the Executive is not able to perform his
duties on a full time basis for a consecutive period of six months from
the date of the temporary disability then this Agreement shall
automatically terminate and the Company shall pay to the Executive his
Base Salary through the Termination Date to the extent not theretofore
paid, which salary shall be paid in a lump sum within 30 days after the
Termination Date; and
(c) Any unpaid bonus payment due Executive for any fiscal
year ending prior to the fiscal year in which the Agreement is
terminated.
5.3 Termination by Executive. The Executive shall have the right
to voluntarily terminate his employment for any reason, at any time, upon
sixty (60) days' prior written notice to the Company.
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(d) In the event the Executive terminates his employment under
circumstances constituting Good Reason, the Company shall be obligated to
pay to Executive the following amounts: (i) Executive's Base Salary
through the Termination Date to the extent not theretofore paid, which
salary shall be paid in a lump sum within 30 days after the Termination
Date; and (ii) severance pay equivalent to Executive's Base Salary for the
remainder of the full term of this Agreement, which shall be paid in
installments in accordance with the Company's standard payroll practices.
(e) In the event the Executive terminates his employment under
circumstances not constituting Good Reason, the Company shall have no
further obligation to Executive except to pay to Executive the Executive's
Base Salary through the Termination Date to the extent not theretofore
paid, which salary shall be paid in a lump sum within 30 days after the
Termination Date.
5.4 Cooperation by Executive Upon Termination. In the event of a
termination of Executive's employment under this Section 5 (whether
initiated by the Executive or the Company, with or without cause),
Executive agrees to cooperate with the Company in transitioning his duties
to any successor appointed by the Company and to provide the Company with
information about the ongoing business activities of the Company. In the
event that the Company requests that Executive provide cooperation
services after the termination of Executive's employment exceeding a de
minimis amount of Executive's time, the Company will compensate Executive
for his cooperation efforts at the rate of $100 per hour.
6.
MISCELLANEOUS PROVISIONS
6.1 Invalidity of Any Provision. It is the intention of the parties
hereto that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws of each stale and jurisdiction
in which such enforcement is sought, but that the unenforceability (or the
modification to conform with such Laws) of any provision hereof shall not
render unenforceable or impair the remainder of this Agreement, which
shall be
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deemed amended to delete or modify, as necessary, the invalid or
unenforceable provisions. The parties further agree to alter the balance
of this Agreement in order to render the same valid and enforceable. The
terms of the restrictive covenant provisions of this Agreement shall be
deemed modified to the extent necessary to be enforceable and,
specifically, without limiting the foregoing, if the term of the
applicable restrictive covenant is too long to be enforceable, it shall be
modified to encompass the longest term which is enforceable and, if the
scope of the geographic area of the applicable restrictive covenant is too
great to be enforceable, it shall be modified to encompass the greatest
area that is enforceable.
6.2 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
6.3 Arbitration. With the exception of an action to enforce the
restrictive covenants in Article 4 hereof, any dispute arising out of or
relating to this Agreement or Executive's employment by the Company shall
be resolved by arbitration in accordance with the then-current rules of
the American Arbitration Association ("AAA"). The arbitration hearing
shall be held in Fort Worth, Texas (or such other location as may he
agreed to by the parties and the arbitrator), before a single arbitrator
selected in accordance with the procedures established by the AAA, and the
arbitration award may be enforced in any court of competent jurisdiction.
An action by the Company to enforce the restrictive covenants in Article 4
may be filed in a court of competent jurisdiction as provided in Section
4.7.
6.4 Waiver of Breach. The waiver of a breach of any provision of this
Agreement by a party hereto shall not operate or be construed as a wavier
of any subsequent breach by the other party hereto.
6.5 Successors and assigns. This Agreement shall inure to the benefit of
the Company and its Affiliates, and their respective successors and
assigns. This Agreement shall more to the benefit of and be enforceable by
the Executive's estate and/or legal representatives.
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6.6 Assignment of Agreement. This Agreement is not assignable by the
Executive, but shall be freely assignable by the Company to any successor.
The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place.
6.7 Attorney's Fees. In the event of legal action by either party to
enforce this Agreement, the prevailing party in such action shall be
entitled to recover its or his expenses of litigation (including
attorney's fees, court costs, and expert witness fees) from the other
party.
6.8 Notices. All notices, demands and other communications hereunder
shall be in writing and shall be delivered in person or deposited in the
United States mail, certified or registered, with return receipt
requested, as follows:
(a) if to Executive: ___________________________________________
___________________________________________
___________________________________________
(b) if to Company: FIRESTONE COMMUNICATIONS, INC
0000 Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx, Director
___________________________________________
6.7 Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the subject matter hereof. All understanding
and agreements heretofore
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made between the parties hereto with respect to the subject matter of this
Agreement are merged into this document which alone fully and completely
expresses their agreement. This Agreement may not be changed orally but
only by an agreement in writing, signed by both parties.
6.8 Survival of Provisions. The provisions of Article 4 and Article 6
shall survive termination of this Agreement.
6.9 Captions. The captions appearing m this Agreement are inserted only
as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any provisions of this Agreement or in any
way affect this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of this 20th day of December, 2004,
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
COMPANY:
FIRESTONE COMMUNICATIONS, INC.
BY: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Director, Chairman Compensation
Committee
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