Exhibit 10.207.1
AGREEMENT
This Agreement (the "Agreement") is made as of this 16th day
of December, 2002 (the "Effective Date"), by and between XXXXXX COMMUNICATIONS
CORPORATION, a Delaware corporation with its principal place of business at 000
Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000 (the "Company"), and Xxxx
Xxxxxxxx, residing at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Sagansky") (collectively, the "Parties") and amends and restates that certain
Employment Agreement dated as of September 16, 1999 between the Company and
Executive (the "Existing Agreement").
RECITALS
WHEREAS, the Company is a network television broadcasting company which
owns and operates a broadcast television station group and a television network
that provides family entertainment programming (the "Network").
WHEREAS, the Company and Sagansky desire to enter into this agreement
and amend and restate the Existing Agreement to (i) terminate the employment
services of Sagansky, who on or before the Effective Date was employed by the
Company as its President and CEO, (ii) provide for Sagansky to remain a member
of the Company's Board of Directors and become its Vice Chairman, and (iii) make
such other revisions as required in connection with the foregoing, in each case
on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the Parties intending to be bound legally, hereby
agree to amend and restate the Existing Agreement as follows:
AGREEMENTS
1. TERMINATION OF EMPLOYMENT SERVCIES; CONTINUATION AS BOARD MEMBER. On
the Effective Date (as defined herein), the employment duties and all other
obligations of Sagansky under the terms of the Existing Agreement shall
terminate, and the terms and conditions of this Agreement shall become
effective. On or before the Effective Date, the terms and conditions of the
Existing Employment Agreement shall continue without regard to any amendment and
restate effected hereby. Without limiting the foregoing, and notwithstanding the
termination of employment duties by Sagansky in accordance with the terms
hereof, Sagansky shall during the term hereof remain a member of the Board of
Directors and, subject to applicable action by the Board of Directors and
shareholder vote, to the extent required, shall assume the title of Vice
Chairman of the Board of Directors, all on the terms and conditions hereinafter
set forth. Company and Sagansky acknowledge that Sagansky shall, as a Board
Member, consult with the Company's senior management regarding program
development and production for the Network as the Company may request from time
to time. Notwithstanding anything herein to the contrary, Sagansky's services
with regard to consulting hereunder shall be limited to those of a part-time
consultant, with no minimum hours and not necessarily in-person at any specific
location. Moreover, nothing in this agreement shall be deemed to prevent
Sagansky from accepting employment, providing consulting services or engaging in
any other business activities with any other entity, in each case on a full or
part time basis and including a competitor of Xxxxxx (collectively, "Third Party
Business Relationships") during the term hereof.
2. TERM. The term of this Agreement between the Company and Sagansky
shall commence on the Effective Date and shall terminate on the date Sagansky is
no longer a member of the Board of Directors (the "Term of Agreement").
3. DUTIES. (a) Sagansky shall serve as a member of the Board of
Directors, in the capacity of Vice Chairman, in accordance with the Company's
articles and bylaws and applicable duties and standards of conduct under
applicable law for members of the Board of Directors. The Company shall use
reasonable efforts to assure that Sagansky is from time to time re-elected to
the Board of Directors of the Company and to the Executive Committee of the
Board of Directors, if and when the Board establishes such a committee.
Sagansky acknowledges and agrees that, as a Director, his acceptance of
any gift, compensation or gratuity, or involvement in any Third Party Business
Relationship or business opportunity or situation with other members of the
media and communications industry shall be subject to any limitations arising
under applicable laws with respect to the members Board of Directors of the
Company. Sagansky agrees to use reasonable efforts to disclose to the Company
any and all transactions or Third Party Business Relationship which may give
rise to an actual or apparent conflict of interest (but any inadvertent failure
to so disclose shall not be a breach hereof), so that Sagansky and the Company
may reasonably determine jointly any action required, if any, to resolve such
conflict, including, the resignation of Sagansky from the Board of Directors.
Nothing in this agreement shall be deemed to limit Sagansky's right or
obligation, under applicable law, to resign from the Board of Directors at any
time. Without limiting the foregoing, Sagansky and the Company understand that
the business relationships among members of the broadcast television industry,
television networks, television programming production entities and related
areas within the media and entertainment industry are often complex and the
purpose of this provision is to ensure that the Company and Sagasnky share
sufficient information to identify and resolve to the mutual satisfaction of the
parties, and in the best interests of the Company and its shareholders, and
actual or apparent conflicts of interest.
4. COMPENSATION.
(a) OPTIONS. In consideration of Sagansky executing this Agreement and
agreeing to remain on the Board of Directors the continuation of Sagansky as a
member of the Board of Directors, Sagansky shall vest in full on the date hereof
in all of the unvested options granted to Sagansky under the terms of the
Existing Agreement. Without limiting the foregoing, (i) the Company agrees to
include Sagansky in any offering made to employees generally to exchange their
options with a strike price at or above $7.25 per share into another form of
stock based compensation with Sagansky's election to participate being made in
his sole discretion and subject to, and on the terms and conditions set forth in
the documents governing such exchange offer, and (ii) the options held by
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Sagansky, to the extent vested or vesting in the future, shall remain
exercisable by Sagansky for a period commencing on the applicable vesting date
and ending three years after the termination of this Agreement. No minimum
period of service on the Board or as Vice Chairman shall be required for said
options to vest as agreed hereunder.
(b) EMPLOYEE BENEFITS. The Company agrees to pay Sagansky the sum of
$519,750, in full satisfaction of any cash compensation required under the terms
of the Existing Agreement with respect to bonus awards or other payments. The
Company shall make such payment on or before January 15, 2003. Notwithstanding
the foregoing, Sagansky shall be entitled to receive all unpaid expense
reimbursements accrued or incurred through and including December 31, 2002 as
reimbursable expenses under the terms of the Existing Agreement, and nothing
herein shall be deemed to modify the right of Sagansky to any payments due under
the terms of the Supplemental Executive Retirement Plan, as provided for under
the documents governing such plan.
(c) WITHHOLDING. The Company will have the right to withhold from
payments otherwise due and owing to Sagansky, an amount sufficient to satisfy
any required federal, state, and/or local income and payroll taxes and any other
amounts required by law to be withheld.
5. EMPLOYEE BENEFITS. Sagansky shall be eligible, throught September
15, 2003, to continue to participate in, on the same basis as the members of the
Company's senior executive group, in all employee health and benefit plans and
arrangements sponsored or maintained by the Company for the benefit of its
employees generally, including, all group insurance plans (term life, medical
and disability) as long as any such plan or arrangement remains generally
applicable to its employees generally.
6. BUSINESS EXPENSES. Sagansky shall be reimbursed for all reasonable
expenses incurred by Sagansky in serving on the Board of Directors including,
but not limited to, expenses for entertainment and travel, provided Sagansky
shall account for and substantiate all such expenses in accordance with the
Company's written policies for its senior executive group (which for this
purpose means any one or more senior executives, excluding the Chairman).
Sagansky shall be entitled to first class commercial air transportation and
hotel accommodations.
7. FREEDOM TO CONTRACT. Sagansky represents and warrants that he has
the right to enter into this Agreement, is eligible as of the date hereof to
continue serving on the Board of Directors of the Company and that no other
written or verbal agreements exist which would be in conflict with or prevent
performance of any portion of this Agreement.
8. TERMINATION. Notwithstanding the provisions of Paragraph 2 of this
Agreement, this Agreement shall terminate on the earliest of the following
dates:
(a) DEATH. Upon the date of Sagansky's death, disability or such other
event as a result of which Sagansky no longer serves on the under which Sagansky
no longer serves.
(b) TERM. Upon the expiration of the Term of Agreement.
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Following the Term of Agreement the Company will have no further
liability to Sagansky hereunder and no further payments will be made to him, and
Sagansky shall have no further obligations or liability to the Company; provided
any rights to indemnification hereunder, Sagansky's rights under any Stock
Option Agreement between the Company and Sagansky, any rights of Sagansky to
unreimbursed expenses and confidentiality obligation of Sagansky shall survive
the termination of this Agreement. The Company and Sagansky acknowledge that the
completion of all payments made in accordance with this Agreement shall
constitute complete satisfaction of all obligations owed by the Company to
Sagansky under this Agreement and the Existing Agreement (other than any
benefits Sagansky has accrued under the Company's employee benefit plans) and
shall further constitute Sagansky's sole remedy against the Company. Sagansky
and the Company agree that if this provision becomes applicable, each will will
execute a general release to reflect these terms; provided, nothing herein shall
be deemed to limit or restrict any obligation or liability between the Company
and Sagansky arising under law with respect to Sagansky acting as a member of
the Board of Directors of the Company.
9. RESERVED.
10. RESTRICTIVE COVENANTS.
(a) FCC COMPLIANCE. Sagansky represents that he does not currently
have, and warrants that during the Term of Agreement he will not have, or be
involved with any investment ownership interest or outside activity (such as a
board membership) which would result in either he or the Company being in
violation of the rules and regulations of the FCC or the Communications Act of
1934, as amended.
(b) CONFIDENTIALITY. Sagansky covenants and agrees that both during the
Term of this Agreement and thereafter he will not disclose to any third party or
use in any way (other than in connection with the performance of the Services
under this Agreement) any confidential information, business secrets, or
business opportunity of the Company or its affiliates, including, without
limitation, advertiser lists, rate cards, marketing, advertising and promotional
ideas and strategies, marketing surveys and analyses, ratings reports, budgets,
research, or financial, purchasing, planning, employment or personnel data and
information; provided that nothing shall restrict or prohibit Sagansky from
utilizing his acquired skills and knowledge to develop, produce and finance
programming concepts or other services for third parties, notwithstanding the
fact that such development, production and finance techniques are the same as
those Sagansky employees on behalf of the Company. Immediately upon termination
of this Agreement for any reason, or at any other time upon the Company's
request, Sagansky will return to the Company or destroy all memoranda, notes,
records or other documents compiled by Sagansky or made available to Sagansky
during the Term concerning the business of the Company or its affiliates, all
other confidential information and all personal property of the Company or its
affiliates, including, without limitation, all files, audio or video tapes,
recordings, records, documents, drawings, specifications, lists, equipment,
supplies, promotional material, scripts, keys, phone or credit cards and similar
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items and all copies thereof or extracts therefrom, except to the extent
retained by Sagansky as records and files maintained, and directly related to
discharging his duties, as a member of the Board of Directors of the Company.
(e) ENFORCEMENT. Sagansky agrees that the restrictive covenants
contained in this Paragraph 10 are a material part of Sagansky's obligations
under this Agreement for which the Company has agreed to compensate Sagansky as
provided in this Agreement. Sagansky agrees that the injury the Company will
suffer in the event of the breach by Sagansky of any clause of this Paragraph 10
will cause the Company irreparable injury that cannot be adequately compensated
by monetary damages alone. Therefore, Sagansky agrees that the Company, without
limiting any other legal or equitable remedies available to it, shall be
entitled to obtain equitable relief by injunction or otherwise from any court of
competent jurisdiction, including, without limitation, injunctive relief to
prevent Sagansky's failure to comply with the terms and conditions of Paragraph
10.
11. RESERVED.
12. ARBITRATION. Any dispute regarding this Agreement shall be decided
by arbitration in West Palm Beach, Florida, in accordance with the Expedited
Arbitration Rules of the American Arbitration Association then obtaining unless
the Parties mutually agree otherwise; and, provided further, that both Parties
will be entitled to all rights of discovery in connection with such arbitration,
including, without limitation, all discovery rights described in the Florida
Rules of Civil Procedure. Any such arbitration shall be submitted to three
arbitrators from the Panel of Arbitrators of the American Arbitration
Association. The three arbitrators shall be selected in the following fashion:
(i) Sagansky and the Company each shall select an arbitrator from the Panel of
Arbitrators of the American Arbitration Association; and (ii) such two
arbitrators by mutual agreement shall select a third arbitrator from such Panel
of Arbitrators. This undertaking to arbitrate shall be specifically enforceable.
The decision rendered by the arbitrator will be final and judgment may be
entered upon it in accordance with appropriate laws in any court having
jurisdiction thereof. Notwithstanding the foregoing, the Company may seek
injunctive relief in accordance with Paragraph 10 of this Agreement.
13. INDEMNIFICATION. The Company shall indemnify and hold Sagansky
harmless, to the maximum extent permitted by law, against claims, judgments,
fines, amounts paid in settlement of and reasonable expenses (including
reasonable attorneys fees) incurred by Sagansky in connection with the defense
of any claim, action or proceeding in which he is a party by reason of his past
or present position with the Company, provided such liability does not arise as
a result of Sagansky's gross negligence. Sagansky shall notify the Company
promptly upon learning of any claim, action or proceeding for which Sagansky
intends to assert his right to indemnification under this Paragraph, and,subject
to any possible conflicts of interests, the Company shall have the right to
control the defense of any such claim, action or proceeding on behalf of
Sagansky, including any decision regarding the terms (if any) of settlement of
such claim, action or proceeding, provided that unless otherwise agreed to by
Sagansky, any such settlement shall include statements that neither Sagansky nor
the Company admits any wrongdoing and the Company does not admit any wrongdoing
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on the part of Sagansky. The Company shall not agree to any settlement of a
claim, action or proceeding for which it is indemnifying Sagansky until it first
has informed and consulted with Sagansky regarding the terms of such settlement,
but the Company shall not need the consent of Sagansky to such settlement (so
long as the settlement complies with the immediately preceding sentence). The
Company's indemnification of Sagansky under this Paragraph shall indefinitely
survive the termination or expiration of this Agreement.
14. MISCELLANEOUS.
(a) Waiver or Modification. Any waiver by either Party of a breach of
any provision of this Agreement shall not operate as, or to be, construed to be
a waiver of any other breach of such provision of this Agreement. The failure of
a Party to insist upon strict adherence to any term of this Agreement on one or
more occasions shall not be considered a waiver or deprive that Party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Neither this Agreement nor any part of it may be waived,
changed or terminated orally, and any waiver, amendment or modification must be
in writing and signed by each of the Parties. Any waiver of any right of the
Company hereunder or any amendment hereof shall require the approval of the
Chairman or the Compensation Committee of the Board of Directors. Until such
approval or waiver has been obtained, no such waiver or amendment shall be
effective.
(b) Successors and Assigns. The rights and obligations of the Company
under this Agreement shall be binding on and inure to the benefit of the
Company, its successors and permitted assigns. The rights and obligations of
Sagansky under this Agreement shall be binding on and inure to the benefit of
the heirs and legal representatives of Sagansky. Neither Party may assign this
Agreement without the prior written consent of the other.
(c) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall, when executed, be deemed to be an original
and all of which shall be deemed to be one and the same instrument.
(d) Governing Law. This Agreement will be governed and construed and
enforced in accordance with the laws of the State of Florida, without regard to
its conflicts of law rules.
(e) Entire Agreement. This Agreement contains the entire understanding
of the Parties relating to the subject matter of this Agreement and supersedes
all other prior written or oral agreements, understandings or arrangements.
Sagansky and the Company each acknowledges that, in entering into this
Agreement, he/it does not rely on any statements or representations not
contained in this Agreement.
(f) Severability. Any term or provision of this Agreement which is
determined to be invalid or unenforceable by any court of competent jurisdiction
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 and such invalid or unenforceable provision
shall be modified by such court so that it is enforceable to the extent
permitted by applicable law.
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(g) Notices. Except as otherwise specifically provided in this
Agreement, all notices and other communications required or permitted to be
given under this Agreement shall be in writing and delivery thereof shall be
deemed to have been made (i) three business days following the date when such
notice shall have been deposited in first class mail, postage prepaid, return
receipt requested, to any comparable or superior postal or air courier service
then in effect, or (ii) transmitted by hand delivery to, or (iii) transmitted by
telegram, telex, telecopier or facsimile transmission (with receipt confirmed by
telephone), to the party entitled to receive the same, at the address indicated
below or at such other address as such party shall have specified by written
notice to the other party hereto given in accordance herewith:
If to the Company: Xxxxxx X. Xxxxxx, Chairman
Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to: Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Sagansky: Xxxxxxx Xxxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
(h) Titles. The titles and headings of any paragraphs in this Agreement
are for reference only and shall not be used in construing the terms of this
Agreement.
(i) No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
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(j) Survival. The covenants, agreements, representations and warranties
contained in this Agreement shall survive the termination of the Term of
Agreement and Sagansky(s termination of employment with the Company for any
reason.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the Parties as of the first date written above.
XXXXXX COMMUNICATIONS CORPORATION
By:
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Name: Xxxxxx X. Xxxxxx
Title: Chairman
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Xxxx Xxxxxxxx
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