EXHIBIT 10.13
XXXXXXX X. XXXXXXX
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into by and
between Telemundo Holdings, Inc., a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxxxx (the "Executive"), dated as of January 1, 2000.
WHEREAS, Telemundo Network, Inc. and Executive entered into that
certain Employment Agreement dated as of September 10, 1997 (the "Original
Agreement"); and
WHEREAS, the Company and Executive desire to enter into a new
employment agreement on the terms and conditions set forth herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. EMPLOYMENT AND TERM. The Company hereby agrees to employ Executive,
and Executive hereby agrees to enter into such employment, as Vice President,
Finance of the Company reporting to the Chief Financial Officer and Treasurer of
the Company for the period commencing on January 1, 2000 and ending on December
31, 2000 (the "Employment Period"). The Executive also agrees, during the
Employment Period, to serve (without additional compensation) on the Board of
Directors (and appropriate committees thereof) of the Company, if requested by
the Company.
2. TERMS OF EMPLOYMENT. (a) During the Employment Period, Executive
agrees, subject to the provisions of Section 9(d)(ii) of this Agreement, to
devote all but a DE MINIMUS amount of his business time and attention to the
business and affairs of the "Telemundo Group" (as defined below) and to use his
best efforts to perform faithfully and efficiently such responsibilities. For
purposes of this Agreement, the term "Telemundo Group" shall mean any and all of
the Company and any of its current or future divisions or subsidiaries.
(b) The principal place of employment of Executive shall be
Hialeah, Florida. Executive understands and agrees that in connection with his
employment hereunder, he may be required to travel extensively on behalf of the
Telemundo Group.
3. BASE SALARY. During the Employment Period Executive shall receive a
base salary (the "Base Salary") as follows. For the period of the Employment
Period beginning on January 1, 2000 and ending on February 7, 2000, the Base
Salary shall be payable to Executive at an annual rate of $150,000. For the
period of the Employment Period beginning on February 8, 2000 and ending on
December 31, 2000, the Base Salary shall be payable to Executive at an annual
rate to be mutually agreed upon by Executive and the Company after negotiating
in good faith, but in no event shall the Base Salary be increased by an amount
equivalent to less than ten percent of the then current Base Salary. The Base
Salary shall be payable consistent with the executive payroll practices of the
Company. Executive acknowledges and agrees that he has been paid in full his
Base Salary for periods prior to the effective date of this Agreement.
4. BONUS. (a) For the 1999 fiscal year, the parties
acknowledge and agree that the Company shall pay Executive a performance bonus
("Performance Bonus") equal to 20% of Executive's then current Base Salary for
such fiscal year (or a total of $30,000) and a budget bonus ("Budget Bonus")
equal to 20% of Executive's then current Base Salary for such fiscal year (or a
total of $30,000), regardless of the Company's earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the 1999 fiscal year. The
Performance Bonus and the Budget Bonus are hereinafter collectively referred to
as the "Bonus". Such Bonus shall be payable on January 31, 2000.
(b) For the 2000 fiscal year, the Company shall pay Executive a
Performance Bonus equal to 20% of Executive's then current Base Salary for such
fiscal year and a Budget Bonus equal to 20% of Executive's then current Base
Salary for such fiscal year, regardless of the Company's EBITDA for the 2000
fiscal year. Such Bonus shall be payable on January 31, 2001.
5. EMPLOYEE BENEFIT PLANS; ETC. (a) Executive shall be entitled during
the Employment Period to participate in all retirement, disability, pension,
savings, medical, insurance and other plans of the Company generally available
to all senior executives (other than any performance based bonus plans).
Executive shall be entitled to paid vacations during each year of his employment
consistent with the Company's vacation policy for executive level employees
(which shall provide for at least 20 vacation days per year).
(b) The Company agrees that it will provide Executive, in his
capacity as an officer and, if applicable, as a director, with indemnification
rights which are not materially less favorable to the Executive, in his capacity
as an officer and as a director, than those provided as of the date of this
Agreement in the By-laws of the Company.
6. [Intentionally omitted]
7. [Intentionally omitted]
8. EXPENSES. The Company shall reimburse Executive for all reasonable
expenses properly incurred by him in accordance with the policies of the
Telemundo Group in effect from time to time on behalf of the Telemundo Group in
the performance of his duties hereunder, provided that proper vouchers are
submitted to the Company by Executive evidencing such expenses and the purposes
for which the same were incurred.
9. TERMINATION. The Company shall have the right to terminate
Executive's employment only as expressly provided in this Agreement.
(a) DEATH OR DISABILITY. Except as otherwise provided herein,
this Agreement shall terminate automatically upon Executive's death.
The Company may terminate this Agreement after having established
Executive's "Disability" (as defined below), by giving Executive written notice
of its intention to terminate Executive's employment. For purposes of this
Agreement, "Disability" means Executive's inability to perform substantially all
his duties and responsibilities to the Telemundo Group by reason of a physical
or mental disability or infirmity (i) for a continuous period of twelve
consecutive months or (ii) at such earlier time as Executive submits medical
evidence satisfactory to
-2-
the Company or the Board of Directors determines in good faith and upon
competent medical advice that Executive has a physical or mental disability or
infirmity that will likely prevent Executive from substantially performing his
duties and responsibilities for twelve consecutive months or longer. The date of
Disability shall be the day on which Executive receives notice from the Company
pursuant to this Section 9.
Upon termination of Executive's employment because of death or
Disability, the Company shall pay Executive or his estate or other personal
representative (i) within 60 days, the amount of Executive's Base Salary earned
up to the date of death or Disability, (ii) all benefits and other items
referred to in Sections 5 and 8 which are due up to the date of death or
Disability and (iii) when otherwise due in accordance with the provisions of
Section 4, the Bonus, if any, earned for the year in which such termination
occurred, without regard to whether Executive is an employee of the Company on
the last day of such fiscal year.
(b) CAUSE AND RESIGNATION WITHOUT GOOD REASON. The Company shall
have the right to terminate Executive's employment for "Cause" (as defined
below). Except as provided in Section 15 herein, (i) upon termination of
Executive's employment for Cause or (ii) upon Executive's resigning as an
employee without "Good Reason" (as defined below), this Agreement shall
terminate and the Executive shall not be entitled to receive any compensation or
other benefits other than (x) Base Salary earned up to the date of termination
and (y) all benefits and other items referred to in Sections 5 and 8 which are
due up to the date of termination or resignation.
For purposes of this Agreement, "Cause" shall mean (i) the
willful and continued failure by Executive to perform substantially all his
duties to the Company or the failure by the Executive to comply with the
reasonable written policies, procedures and directives of the President and
Chief Executive Officer (other than any such failure resulting from his death or
Disability), in each case after being given written notice by the President and
Chief Executive Officer of a failure to perform or comply (which notice
specifically identifies the manner in which Executive has failed to perform or
comply) and a reasonable opportunity to cure such noncompliance or
nonperformance; (ii) the willful misconduct by Executive in the performance of
his duties to the Company, provided that (for purposes of this clause (ii) only
and not for any other purpose or interpretation of this Agreement) an act shall
be considered "willful" only if done in bad faith and not in the best interests
of the Company; (iii) the grossly negligent performance by Executive of his
duties to the Company; (iv) the conviction of Executive by a court of competent
jurisdiction of the commission of (x) a felony or (y) a crime involving moral
turpitude; or (v) a material breach by Executive of Sections 10 or 11 hereof.
Notwithstanding the foregoing, the Company shall not be entitled
to terminate Executive for any of the reasons specified in clause (i), (ii),
(iii) or (v) of the immediately preceding paragraph unless the Company shall
have provided at least five business days' prior written notice to Executive,
which prior written notice shall state the general facts, circumstances or
deficiencies supporting a claim for Cause termination and after affording
Executive an opportunity to be heard before the President and Chief Executive
Officer.
(c) TERMINATION WITHOUT CAUSE BY COMPANY; RESIGNATION WITHOUT
GOOD REASON EFFECTIVE DECEMBER 31, 2000 BY EXECUTIVE. Notwithstanding anything
to the contrary contained herein, the Company shall have the right to terminate
the employment of Executive at any time without Cause. Upon a termination
without Cause, except as provided in Section 15, this Agreement shall terminate
and the Executive shall not be entitled to receive any compensation or
-3-
other benefits, except that the Company shall (i) through June 30, 2001 continue
to pay to Executive the Base Salary in effect immediately prior to the date of
termination, such payments to be made in installments at the times such amounts
would have been paid if the Agreement had not been so terminated, and (ii) pay
to the Executive, when otherwise due in accordance with Section 4, the Bonus, if
any, earned for the fiscal year in which such termination occurs, without regard
to whether Executive is employed on the last day of such fiscal year, and (iii)
through June 30, 2001 continue Executive's benefits and other items referred to
in Section 5 or, to the extent the Company is legally unable to provide any such
benefits or other items as a result of Executive no longer being an employee,
reimburse Executive for his cost (not to exceed the actual cost to the Company
if he were still an employee) of obtaining the equivalent coverage and benefits.
Notwithstanding anything to the contrary contained herein,
Executive shall have the right to resign as an employee without Good Reason
effective December 31, 2000 upon at least 30 days prior written notice to the
Company. Upon such resignation, except as provided in Section 15, this Agreement
shall terminate and the Executive shall not be entitled to receive any
compensation or other benefits, except that the Company shall (i) through June
30, 2001 continue to pay to Executive the Base Salary in effect immediately
prior to the date of termination, such payments to be made in installments at
the times such amounts would have been paid if the Agreement had not been so
terminated, and (ii) pay to the Executive, when otherwise due in accordance with
Section 4, the Bonus for the 2000 fiscal year and (iii) through June 30, 2001
continue Executive's benefits and other items referred to in Section 5 or, to
the extent the Company is legally unable to provide any such benefits or other
items as a result of Executive no longer being an employee, reimburse Executive
for his cost (not to exceed the actual cost to the Company if he were still an
employee) of obtaining the equivalent coverage and benefits.
(d) TERMINATION FOR GOOD REASON.
(i) Executive shall have the right to terminate his
employment under this Agreement upon the occurrence of any event that
constitutes Good Reason by giving written notice to the Company. "Good Reason"
means any of the following: (A) a "Diminution in Duty" (as defined below), (B) a
"Designated Relocation" (as defined below) or (C) any "Other Good Reason Event"
(as defined below); PROVIDED, HOWEVER, that Good Reason shall not be deemed to
have occurred prior to the giving of written notice by the Executive to the
Company generally describing both the alleged Good Reason and the actions the
Executive believes are necessary to cure such alleged Good Reason, and the
Company's failure to so cure within 15 days of receipt of such notice. The
giving of such notice and the action or failure to take action by the Company
shall be irrelevant in determining whether a Good Reason has in fact occurred.
Upon a termination for Good Reason, except as provided in Section 15, this
Agreement shall terminate and the Executive shall not be entitled to receive any
compensation or other benefits other than the Company shall (i) through June 30,
2001 continue to pay to Executive the Base Salary in effect immediately prior to
the date of termination, such payments to be made in installments at the times
such amounts would have been paid if the Agreement had not been so terminated,
(ii) pay to the Executive, when otherwise due in accordance with Section 4, the
Bonus, if any, earned for the fiscal year in which such termination occurs,
without regard to whether Executive is employed on the last day of such fiscal
year and (iii) through June 30, 2001 continue Executive's benefits and other
items referred to in Section 5 or, to the extent the Company is legally unable
to provide any such benefits or other items as a result of Executive no longer
being an employee, reimburse Executive for his cost (not to exceed the actual
cost to the Company if he were still an employee) of obtaining the equivalent
coverage and benefits.
-4-
(ii) A "Diminution in Duty" means that, without Executive's
express prior written consent, that Executive is required to report to anyone
other than the Chief Financial Officer and Treasurer of the Company or the
President of the Company. Effective upon the parties' execution and delivery of
this Agreement, Executive hereby waives any right, power or remedy, if any,
accruing to Executive resulting from any "Diminution in Duty" under the terms of
the Original Agreement prior to the date of this Agreement.
(iii) "Designated Relocation" means the Company requiring
Executive's work location to be other than within thirty (30) miles of the
Company's current corporate offices in Hialeah, Florida.
(iv) "Other Good Reason Event" means any of the following:
(A) a material breach of this Agreement by the Company (which shall include,
without limitation, any reduction in the amount of any compensation or benefits
provided to Executive under this Agreement), or (B) any termination or attempted
termination by the Company of Executive's employment other than as expressly
permitted in this Agreement.
(e) OFFICER AND BOARD POSITIONS. Upon the termination of
employment with the Company for any reason, Executive shall be deemed to have
resigned any and all of his positions as an officer and a member of the Board of
Directors of the Company and any of its subsidiaries and as a member of any
committees of such Board, effective on the date of termination.
(f) CERTAIN CONDITION. Notwithstanding anything to the contrary
contained in this Section 9, the obligations of the Company under this Section 9
shall continue only so long as the Executive does not breach his obligations
under Section 10 and 11.
(g) CERTAIN EFFECT. As used in this Agreement, termination of
this Agreement shall also result in and mean termination of the Employment
Period hereunder.
(h) MITIGATION OF DAMAGES. Executive shall have no duty to
mitigate any of his damages in the event of any breach of or default or failure
in performance under this Agreement by the Company.
(i) STOCK OPTIONS. The references in Section 9(a), 9(b), 9(c) or
9(d) to Executive, other than as therein stated, not being entitled to receive
compensation or benefits upon termination of his employment under any of such
Sections shall not affect Executive's rights under any stock option or similar
award agreements between Executive and the Company.
10. CONFIDENTIALITY, ETC. During the Employment Period and at all
times thereafter, Executive agrees and covenants that he will not divulge,
furnish or make accessible to anyone (otherwise than in the regular course of
business of the Telemundo Group) any confidential information, plans or
materials or trade secrets of the Telemundo Group or with respect to any aspect
of the business of the Telemundo Group; PROVIDED, HOWEVER, that during his
employment, Executive shall have the latitude customarily given a vice president
of finance to disclose information in good faith for the benefit of the Company
and its stockholders (taken as a whole). All memoranda, notes, lists, records
and other documents or papers (and all copies thereof), including such items
stored in computer memories, on microfiche or by any other means, made or
compiled by or on behalf of Executive, or made available to him relating to the
Telemundo Group are and shall be the Company's property and shall be delivered
to the Company promptly upon the termination of his
-5-
employment with the Company; PROVIDED, HOWEVER, that (i) this obligation shall
not apply to information that (A) is not confidential (other than as a result of
Executive's breach of this Section) and (B) does not contain certain trade
secrets of the Company, (ii) Executive shall have the right to retain such of
the foregoing as shall be reasonably necessary to enforce his rights under this
Agreement and to comply with and enforce his rights, including the right to
defend himself against claims, provided copies of such retained information are
provided to the Company and the retained information remain subject to the
provision of this Section, and (iii) Executive shall have no obligation to
return information that is no longer in his possession, custody or control.
11. NO INTERFERENCE; AFFILIATE TRANSACTIONS. (a) During the Employment
Period and for one (1) year thereafter, Executive agrees and covenants that he
will not, directly or indirectly, for himself, or as agent of or on behalf of,
or in conjunction with, any person, firm, corporation, or other entity, engage
or participate in the "Company Business" (as hereinafter defined), whether as
employee, consultant, partner, principal, shareholder or representative, or
render advisory or other services to or for any person, firm, corporation or
other entity, which is engaged, directly or indirectly, in the Company Business;
PROVIDED, HOWEVER, that (i) Executive may own less than 5% of the common stock
of a publicly traded company that is engaged in the Company Business and (ii)
Executive may own Common Stock and securities convertible into Common Stock (or
securities into which Common Stock is converted in any business combination
transaction). For purposes of this Section 11(a), "Company Business" shall mean
and be limited to any of (x) the provision of Spanish language television
programming in the United States (which includes Puerto Rico), (y) the ownership
of television broadcast stations, networks or any over-the-air television
signal, and cable in the United States (which includes Puerto Rico) that
broadcast primarily Spanish language programming, and (z) the sale of television
advertising time and programs inside and outside the United States (which
includes Puerto Rico) for Spanish language television stations, cable and
networks.
(b) During the Employment Period and for one (1) year thereafter,
Executive agrees and covenants that he will not interfere directly or indirectly
in any way with the Company. "Interfere" means to influence or attempt to
influence, directly or indirectly, present or active prospective customers,
employees, suppliers, performers, directors, representatives, agents or
independent contractors of the Company, or any of its network affiliates to
restrict, reduce, sever or otherwise alter their relationship with the Telemundo
Group or any of its network affiliates.
(c) Executive agrees that during the Employment Period, he will
not at any time enter into, on behalf of the Telemundo Group, or cause the
Telemundo Group to enter into, directly or indirectly, any transactions (each, a
"Transaction") with any business organization in which he or, to his knowledge
after due inquiry, any member of his family may be interested as a partner,
trustee, director, officer, employee, shareholder, lender of money or guarantor,
except to the extent disclosed to the Company and agreed to by the board of
directors of the Company in writing. Executive will use his best efforts to
ensure that any Transaction is disclosed to the Board of Directors of the
Company and approved thereby prior to entering into a contract relating thereto
and/or consummation thereof, as contemplated by the preceding sentence.
(d) During the Employment Period and at all times thereafter,
Executive agrees and covenants that he will not disparage the Company, its
officers, directors, employees or business, nor shall the Company or any of its
officers, directors, employees or agents disparage the Executive or members of
his family, and neither party shall disclose any facts relating to such
termination; PROVIDED, HOWEVER, that nothing contained in this Section 11(d)
shall restrict the parties
-6-
from making any statements or disclosure believed necessary to enforce in any
judicial or similar proceeding the provisions of this Agreement or as a party
believes may be required by applicable law.
(e) In the event any court having jurisdiction determines that
any part of this Section 11 is unenforceable, such court shall have the power to
reduce the duration or scope of such provision and such provision, in its
reduced form, shall be enforceable. This Section 11 shall survive the expiration
or termination of this Agreement and the Employment Period; PROVIDED, HOWEVER,
that if Executive's employment is terminated pursuant to Section 9(c) or Section
9(d), then this Section 11 will terminate on June 30, 2001.
12. INJUNCTIVE RELIEF. Executive acknowledges that the provisions of
Sections 10 and 11 herein are reasonable and necessary for the protection of the
Telemundo Group and that the Telemundo Group will be irrevocably damaged if such
provisions are not specifically enforced. Accordingly, Executive agrees that, in
addition to any other relief to which the Company may be entitled in the form of
damages, the Company shall be entitled to seek and obtain injunctive relief from
a court of competent jurisdiction (without the posting of a bond therefor) for
the purposes of restraining Executive from any actual or threatened breach of
such provisions.
13. REMEDIES; SERVICE OF PROCESS.
(a) Except when a party is seeking an injunction or specific
performance hereunder, the parties agree to submit any dispute concerning this
Agreement to binding arbitration. The parties may agree to submit the matter to
a single arbitrator or to several arbitrators, may require that arbitrators
possess special qualifications or expertise or may agree to submit a matter to a
mutually acceptable firm of experts for decision. In the event the parties shall
fail to thus agree upon terms of arbitration within twenty (20) days from the
first written demand for arbitration, then such disputed matter shall be settled
by arbitration under the Rules of Employment Arbitration of the American
Arbitration Association, by three arbitrators appointed in accordance with such
Rules. Such arbitration shall be held in Miami, Florida. Once a matter has been
submitted to arbitration pursuant to this Section, the decision of the
arbitrators shall be final and binding upon all parties. The cost of arbitration
shall be shared equally by the parties and each party shall pay the expenses of
his/its attorneys, except that the arbitrators shall be entitled to award the
costs of arbitration, attorneys and accountants' fees, as well as costs, to the
party that they determine to be the prevailing party in any such arbitration.
(b) The Company and Executive hereby irrevocably consent to the
jurisdiction of the Courts of the State of Florida and of any Federal Court
located in such State in connection with any action or proceedings arising out
of or relating to the provisions of Sections 10 and 11 of this Agreement.
Executive further agrees that he will not commence or move to transfer any
action or proceeding arising out or relating to the provisions of Sections 10
and 11 of this Agreement to any Court other than one located in the State of
Florida. In any such litigation, Executive waives personal service of any
summons, complaint or other process and agrees that the service thereof may be
made by certified mail directed to Executive at his address for purposes of
notice under Section 17(b) hereof.
14. SUCCESSORS. This Agreement and the rights and obligations
hereunder are personal to Executive and without the prior written consent of the
Company and Executive shall not be assignable.
-7-
15. SURVIVAL OF PROVISIONS. Notwithstanding anything to the contrary
contained herein, the provisions of Sections 5(b), 9, 10, 11, 12, 13, 14, 15 and
17 hereof shall survive the termination or expiration of this Agreement,
irrespective of the reasons therefor.
16. [Intentionally omitted]
17. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without reference
to principles of conflict of laws.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered, telecopied or
mailed, certified or registered mail, return receipt requested:
If to Executive:
Xxxxxxx X. Xxxxxxx
0000 X.X. 00xx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
If to the Company:
Telemundo Holdings, Inc.
Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Telemundo Holdings, Inc.
Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Phone: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee or upon refusal if properly delivered.
(c) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
-8-
(d) Executive represents and warrants that he is not a party to
any agreement, contract or understanding, whether employment or otherwise, which
would in any way restrict or prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this Agreement.
(e) The parties agree that the Original Agreement is superseded
by this Agreement and terminated upon the parties' execution and delivery of
this Agreement and, therefore, the Original Agreement is of no further force or
effect and that this Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party except as
expressly set forth herein. This Agreement shall not be changed or terminated
orally. This Agreement supersedes and cancels all prior agreements between the
parties, whether written or oral, relating to the employment of Executive. The
headings and captions contained in this Agreement are for convenience only and
shall not be deemed to affect the meaning or construction of any provision
hereof.
(f) If, at any time subsequent to the date hereof, any provision
of this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any provision of this Agreement.
(g) The Company's failure to insist upon strict compliance with
any provision hereof shall not be deemed to be a waiver of such provision or any
other provision hereof. Executive's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision hereof.
(h) This Agreement shall inure to the benefit of and be binding
upon any successor to the Company and shall inure to the benefit of Executive's
successors, heirs and personal representatives.
IN WITNESS WHEREOF, Executive has hereunto set his hand and, pursuant
to the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name and on its behalf, all as of the day and
year first above written.
/s/ Xxxxxxx X. Xxxxxxx
__________________________________________
Xxxxxxx X. Xxxxxxx
TELEMUNDO HOLDINGS, INC.
/s/ Xxxxx X. Xxxxxxx XX
By:_______________________________________
Print Name: Xxxxx X. Xxxxxxx XX
Title: Chief Financial Officer & Treasurer
-9-
