Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
22nd day of June, 1998 by and between NORTHERN RADIO NETWORK CORP. ("Company")
and XX. XXXXXX X. XXXXXXX ("Xxxxxxx").
WHEREAS, the Company desires to employ Xxxxxxx as the "Chief Executive
Officer" of the Company;
WHEREAS, Xxxxxxx has agreed to provide such services in accordance with the
terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the mutual promises herein made and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Employment. Company shall employ Xxxxxxx as Chief Executive Officer
during the term of this Agreement and Xxxxxxx hereby accepts such employment.
Xxxxxxx shall be responsible for all of the strategic and operational aspects of
the Company, supervise all other officers and employees of the Company, and
shall have such other duties regarding the Company as shall be determined from
time to time by the Board of Directors of the Company ("Board"). It is
understood and acknowledged by the parties hereto that Xxxxxxx is not to be
employed on a full-time basis, but shall be available and accessible to other
senior management of the Company in order to supervise and control the
operational activities of the business on less than a day-to-day basis. Nothing
contained in this Agreement shall prohibit Xxxxxxx from engaging, on a full-time
basis, in the private practice of medicine during the Initial Term or any
Renewal Term.
2. Term of Employment. The term of employment of Xxxxxxx shall be for a term
of five (5) years from the date of this Agreement ("Initial Term") and shall
automatically extend for additional terms of one (1) year ("Renewal Term")
unless this Agreement is terminated as of the last day of the Initial Term or as
of the last day of any Renewal Term upon not less than ninety (90) days prior
written notice by either party to the other, subject to earlier termination as
provided in paragraphs 4, 5, and 6 hereof.
3. Compensation.
(a) Base Salary. Xxxxxxx shall be paid a base salary at the annual rate of
$75,000 in the 1st year of this Agreement; $100,000 in the 2nd year of this
Agreement; and $125,000 in the 3rd year of this Agreement, payable in equal
installments semi-monthly ("Initial Salary"), commencing on the date that the
Company completes full funding of the $7.5 million offering of its common stock,
which offering is being made pursuant to the Company's Registration Statement on
Form SB-2 to be filed under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission on or about June 23, 1998 (the "Offering"),
or the Company otherwise increases its paid in capital to such a level during
the term of this Agreement, whichever event occurs first ("Minimum
Capitalization"). In the event that the Company receives less than $7.5 million
from the Offering, Xxxxxxx'x Initial Salary shall be established in an amount
which is proportional to the initial base compensation received by other members
of the Company's senior management.
(b) Cash Bonus. Xxxxxxx shall be paid a cash bonus, if any,
within the sole discretion of the Board of Directors of the Company. Such bonus
shall be paid within a reasonable period of time after the Board of Directors in
its discretion awards such cash bonus, but not to exceed a period of ninety (90)
days of the end of the Company's accounting period during which the cash bonus
was declared.
(c) Stock Bonus. Xxxxxxx shall receive a stock bonus, if any,
within the sole discretion of the Board of Directors of the Company. Such stock
bonus shall be implemented within a reasonable period of time after the Board of
Directors in its discretion awards such stock bonus, but not to exceed a period
of ninety (90) days of the end of the Company's accounting period during which
the stock bonus was declared.
(d) Vacation. Xxxxxxx shall be entitled to paid vacation and
paid Federal and state holidays in accordance with the vacation policy of the
Company then in effect, but no less than four (4) weeks of vacation each year.
(e) Other Benefits. Xxxxxxx shall be entitled to participate
in all benefit programs made generally available to other management employees
of the Company, on the same terms and conditions as they are offered to others,
including but not limited to medical, dental, and term life insurance benefits.
Xxxxxxx shall also be provided, at Company expense, with a vehicle for business
use, including all transportation and insurance costs associated therewith.
(f) Severance Payment. In the event of the termination of
Xxxxxxx'x employment hereunder prior to the end of the Initial Term, or any
Renewal Term, by the Company without cause (except termination upon death or
total and permanent disability) including any deemed termination by the Company
as set forth in paragraph 4(b) hereof, the Company shall pay Xxxxxxx lump-sum
severance benefits equal to twenty-four (24) months of base compensation
("Severance Payment"), which Severance Payment shall be made to Xxxxxxx within
thirty (30) days of the notice of termination of employment.
(g) Stock Option Grants/Employee Stock Ownership Plan. Xxxxxxx shall be
entitled to participate and receive stock option grants from the Company's
Employee Stock Option Plan ("ESOP") during his employment with the Company, at
the discretion of the Board of Directors or committee of the Board responsible
to administer the ESOP, in amounts which are proportional to and at the same
time as option grants are made to other members of the Company's senior
management and according to terms and conditions which are comparable to such
ESOP option grants received by other members of the Company's senior management.
4. Termination of Employment.
(a) Termination For Cause. The Company may terminate the employment of
Xxxxxxx at any time for cause (as hereinafter defined) upon written notice. The
term "for cause" shall mean:
(i) the continued failure by Xxxxxxx to substantially perform his
primary duties as Chief Executive Officer of the Company in a reasonable
professional manner other
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than due to temporary or total disability or death, after a written demand
for such substantial performance is delivered to Xxxxxxx by the Board of
Directors of the Company;
(ii) the unauthorized dissemination of significant trade secrets or
other proprietary property of the Company;
(iii) the commission of a felony or commission of a crime involving
dishonesty or moral turpitude;
(iv) the commission of any act or acts of dishonesty which acts are
intended to result or do result directly or indirectly in gain or personal
enrichment of Xxxxxxx or a related person or affiliated company or when
such acts are intended to cause harm or damages to the Company;
(v) the illegal use of controlled substances;
(vi) the continued use of alcohol so as to have an adverse effect on
the performance of his duties;
(vii) the misappropriation or embezzlement of Company assets;
(viii) the knowingly furnishing of material false reports or
information to the directors or officers of the Company; or
(ix) the making of serious disparaging remarks regarding the Company
publicly or to suppliers and/or customers or potential customers of the
Company.
(b) Default. Either party may terminate this Agreement upon the breach of
any material provision of this Agreement by the other party upon thirty (30)
days prior written notice; provided, however, that such termination notice shall
not be effective if the defaulting party corrects such default prior to the date
of termination. Termination by Xxxxxxx of his employment hereunder by reason of
the default of the Company shall be deemed for all purposes of this Agreement a
termination by the Company without cause.
5. Disability. The Company may terminate the employment of Xxxxxxx under
this Agreement by written notice upon the total and permanent disability of
Xxxxxxx. Total and permanent disability shall mean the inability of Xxxxxxx to
substantially perform the essential functions of his position, with or without
reasonable accommodations, due to sickness or other physical or mental
disability, for ninety (90) days in any one hundred twenty (120) day period or a
period of time which exceeds the time for medical leave provided by law,
whichever period is longer. The Company shall give Xxxxxxx written notice of any
termination hereunder.
6. Death. The employment of Xxxxxxx under this Agreement automatically
terminates upon the death of Xxxxxxx.
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7. Expense Reimbursement. Xxxxxxx shall be reimbursed, upon a proper
accounting, for all expenses reasonably incurred in connection with this
employment hereunder, including all reasonable travel and entertainment expenses
pursuant to Company policy.
8. Confidential Information. During the Initial Term or any Renewal Term of
this Agreement, Xxxxxxx shall not use or disclose to others, without the prior
written consent of the Company, any customer lists, trade secrets, secret
know-how, or other confidential information relative to the business of the
Company obtained by Xxxxxxx in the course of rendering services pursuant to this
Agreement. The obligation of Xxxxxxx with respect to any item of such
information shall terminate if that item of information becomes disclosed in
published literature or otherwise becomes publicly available, provided that such
public disclosure did not result, directly or indirectly, from any act or
omission of Xxxxxxx. Upon the leaving the employ of the Company for any reason,
Xxxxxxx shall continue to be bound by this Paragraph 8 for a period of two (2)
years, and shall not take with him any customer lists, confidential data, or
other documents and instruments which are the property of the Company. All such
data, documents and instruments and all copies thereof shall be surrendered by
Xxxxxxx to the Company on or prior to the termination of his employment.
9. Notices. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
given when delivered by hand or upon delivery to the address set forth below, if
delivered by any other means, addressed to the party and delivered to the
address set forth below or to such other address as such party gives written
notice in substitution therefor:
(i) if to Company:
Northern Radio Network Corp.
0000 X-00 Xxxx
Xxxxxx, Mich. 49707
Attention: Xxxx Xxxxxx, President
(ii) if to Xxxxxxx:
Xx. Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxxx, Xxxx. 00000
10. Limitations.
(a) Non-Compete. Xxxxxxx agrees that during the term of his employment with
the Company hereunder and for a period of two (2) years thereafter he shall
refrain, directly and indirectly, jointly and severally, from managing,
operating, financing, participating in the ownership, management or operation of
or be employed by, consult with, advise or be otherwise engaged in any manner
with, any business engaged in the providing of services or products competitive
to those provided by the Company in any geographic area in which the Company
operates as of the date that
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Xxxxxxx leaves the Company's employment. Ownership of less than 5% of companies
whose securities are publicly traded is not prohibited by this Agreement.
(b) Non-solicitation of Customers. Xxxxxxx agrees that during the term of
his employment with the Company hereunder and for a period of two (2) years
thereafter he shall not, on his own behalf, or on behalf of another, directly or
indirectly, solicit, contact, call upon, communicate with or attempt to
communicate with any customer or prospective customer of the Company with a view
to the providing of services or products which are competitive with those that
are marketed or provided by the Company as of the date that Xxxxxxx leaves the
Company's employment, provided that these restrictions shall apply only to
customers or prospects of the Company which have been customers or prospects
with whom Xxxxxxx has had contacts on behalf of the Company.
(c) Non-solicitation of Employees. Xxxxxxx agrees that during the term of
his employment hereunder and for a period of two (2) years thereafter, Xxxxxxx
will not directly or indirectly solicit or in any other manner encourage
employees of the Company to leave its employ for an engagement in any capacity
with any other company or entity.
(d) Limitations. Notwithstanding the foregoing, the covenants of Xxxxxxx
pursuant to this paragraph 10 shall terminate upon the termination of Xxxxxxx'x
employment by the Company without cause or by Xxxxxxx by reason of the Company's
breach of its obligations hereunder.
11. Dispute Resolution. Any dispute regarding the interpretation, breach,
damages or otherwise related to the interpretation or construction of this
Agreement shall be resolved by binding arbitration before one or more
arbitrators appointed by the American Arbitration Association ("AAA") in the
city of Alpena, Michigan, pursuant to the AAA's Commercial Arbitration Rules.
Either party may institute the action by notice to the AAA and to the other
party. Prior to the filing of any complaint with the AAA, the parties shall meet
and attempt to resolve the dispute. The cost of such arbitration shall be borne
equally by the parties. Any decision or award by said arbitrator(s) shall be
binding on the parties. Notwithstanding the foregoing, any party hereto may
apply to any court for a temporary or permanent injunction or restraining order
to specifically enforce any provision hereof.
12. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon Xxxxxxx and his estate and personal representatives and upon the
Company and its successors and assigns. This Agreement may not be assigned,
pledged or otherwise hypothecated by Xxxxxxx.
13. Successors and Assigns. The Company shall cause any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the assets or outstanding securities of the Company, by
written agreement in form and substance reasonably satisfactory to counsel to
Xxxxxxx to perform the obligations of the Company pursuant to this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place. In the event the Company has a
parent, the parent shall guaranty the obligations of the Company hereunder. The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Company
regardless of whether such successor or assign consents in writing thereto. The
rights of Xxxxxxx hereunder shall inure to the benefit of and be enforceable by
Xxxxxxx and his estate and legal representative.
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14. Severability. In the event of the invalidity, in whole or in part, of
any term or provision of this Agreement, the parties agree that such invalidity
shall not affect the validity of any other term or provision of this Agreement
and that such provision shall be subject to partial enforcement to the extent
permitted under applicable law.
15. Entire Agreement. This Agreement constitutes the entire understandings
of the parties with respect to the employment of Xxxxxxx by the Company and
supersedes all prior agreements and understandings, oral or written.
16. Amendments. This Agreement may not be amended or modified except in a
writing signed by both parties.
17. Waiver. The failure by a party to insist upon strict performance of any
provision hereof shall not constitute a waiver of such provision. All waivers
must be in writing to be enforceable hereunder.
18. Governing Law. This Agreement shall be made and in all respects shall be
interpreted, construed and governed by and in accordance with the laws of the
State of Michigan, without giving effect to the rules governing conflicts of
law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NORTHERN RADIO NETWORK CORP.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President and Chief Operating
Officer
Xx. Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
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