EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of June 11, 1996, between
TELEMUNDO GROUP, INC., a Delaware corporation (the
"Company"), and XXXXXX X. XXXXXXXX (the "Executive").
Section 1. Employment and Term. The Company agrees to
-------------------
employ the Executive and the Executive agrees to serve as an
employee of the Company with the duties set forth in Section
2 for a term (the "Term") beginning as of June 11, 1996 (the
"Commencement Date") and ending at the close of business on
February 27, 1998 any earlier date of termination under
Section 6 or any later date of termination after extension
under Section 7 (the "Termination Date").
Section 2. Duties. The Executive agrees during the
------
Term to serve as Executive Vice President of the Company,
which office shall become effective upon the election by the
Board of Directors. The Executive agrees to use his best
efforts to promote the interest of the Company, subject at
all times to the direction of the President and Chief
Executive Officer of the Company (the "President"), to whom
the Executive shall report. The Executive agrees to devote
his entire business time and attention, with undivided
loyalty, to the performance of such duties.
Section 3. Consideration; Salary and Bonus During Term.
-------------------------------------------
(a) Consideration. The consideration for entering
-------------
into this Agreement shall be the performance of
services by the Executive pursuant to this
Agreement and the employment of the Executive by
the Company as well as the payments and benefits
provided under this Agreement.
(b) Salary. The Company shall pay salary to the
------
Executive at the annual rate of $320,000 during the
period from the date hereof through February 27,
1997, and, at the rate of $350,000, during the
period from February 28, 1997 through February 27,
1998, to be paid (subject to required withholdings)
in accordance with the Company's regular payroll
practices.
(c) Bonus. During the Term, the Executive will be
-----
eligible for a bonus each year in an amount
computed in accordance with Exhibit A hereto.
Bonuses hereunder shall be paid at the times
bonuses are customarily paid to the Company's
executives. Except as set forth in the last
sentences of Sections 6(b) and 6(c), the Executive
must be employed by the Company on the last day of
the calendar year to receive a bonus for such year.
Section 4. Vacations. The Executive shall be entitled
---------
during the Term to vacations in accordance with the policies
of the Company, except that he shall be entitled to three
weeks of vacation per calendar year during the first year of
employment hereunder and four weeks of vacation per calendar
year during the second year of employment (pro rata for
partial years). The Company shall not pay the Executive any
additional compensation for any vacation time not used by the
Executive. To the extent that the Executive cannot take his
vacation as a result of the request of the President of the
Company, he may carry such unused vacation over to the
following calendar year.
Section 5. Fringe Benefits. During the Term, the
---------------
Executive shall enjoy the benefits, including, without
limitation, participation in medical insurance, group term
life insurance and retirement and savings plans, and salary
continuation benefits, customarily afforded to executives of
the Company in positions comparable to the Executive's.
Nothing in this Agreement shall restrict the right of the
Company generally to amend, modify or terminate any such
benefits for executives in positions comparable to the
Executive's, but at no time shall they be less favorable to
the Executive than those generally afforded to executives
with lower level positions than the Executive.
Section 6. Termination.
-----------
(a) The Company may terminate this Agreement for
Cause as determined by the President. "Cause"
means the Executive's willful misconduct in the
performance of (or failure to perform) his duties
hereunder; the Executive's fraudulent or unlawful
behavior whether or not in connection with his
employment; or the Executive's grossly negligent
performance of his duties hereunder. Upon the
effective date of termination under this Section
6(a), the obligations of the parties under this
Agreement shall cease, except for the obligations
of the Executive contained in Sections 8 and 9.
(b) This Agreement shall terminate immediately upon
the death or other event rendering the Executive
unable to perform his duties and obligations under
this agreement for a period in excess of 90 days,
whether or not consecutive, during the Term as
determined by the President. Upon the effective
date of termination under this Section 6(b), the
obligations of the parties under this Agreement
shall cease, except (i) the obligations of the
Executive contained in Sections 8 and 9, and (ii)
if the Executive would otherwise have been entitled
to a bonus under Section 2(c), the Executive (or
Executive's heirs, in the event of death), shall be
entitled to a proportionate amount of such bonus
based upon the amount of the year worked prior to
termination.
(c) If the Company terminates this Agreement other than
pursuant to Section 6(a) or 6(b) or if the
Executive terminates this Agreement pursuant to
Section 6(d), then, except as provided in Section
7, the Company's sole obligation to the Executive
shall be to continue to pay salary in accordance
with Section 3(b) and maintain benefits in
accordance with Section 5 until the Termination
Date. Upon the effective date of termination under
this Section 6(c), the obligations of the parties
under this Agreement shall cease, except (i) the
obligations of the Company under the preceding
sentence and under Section 7; (ii) the obligations
of the Executive contained in Sections 8 and 9, and
(iii) if the Executive would otherwise have been
entitled to a bonus under Section 3(c), the
Executive (or Executive's heirs, in the event of
death), shall be entitled to a proportionate amount
of such bonus based upon the amount of the year
worked prior to termination.
(d) The Executive shall have the right to terminate his
employment under this Agreement in the event that
he suffers a Diminution of Duty (as defined below)
within sixty days' of a Change of Control (as such
term is defined in the Company's 1994 Stock Plan).
A "Diminution in Duty" means a change in the
Executive's responsibilities which represents a
material demotion or material diminution from his
responsibilities as in effect on the date hereof.
A Diminution in Duty shall not be deemed to have
occurred prior to the giving of written notice by
the Executive to the Company specifically
describing the alleged diminution or demotion, and
the actions the Executive believes are necessary to
cure such alleged Diminution in Duty, 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 material demotion or material diminution
constituting a Diminution in Duty has in fact
occurred.
Section 7. Intentionally Omitted.
---------------------
Section 8. Confidentiality. Except as required in his
---------------
duties hereunder, the Executive will not, directly or
indirectly, use, disseminate or disclose any Confidential
Information. Upon expiration or termination of the Term, all
documents, records and similar repositories of or containing
Confidential Information, including copies thereof, then in
the Executive's possession, whether prepared by the Executive
or others, will be left with the Company. "Confidential
Information" means nonpublic information relating to the
Company or any affiliate of the Company. Following the
expiration or termination of the Term, the Executive agrees
to reasonably cooperate with the Company and its affiliates
with respect to matters with which the Executive was involved
during the Term. This Section 8 shall survive the expiration
or termination of the Term. If in connection with
Executive's cooperation with respect to legal matters, it is
necessary for Executive to be represented by separate
counsel, the Company will pay the reasonable fees of such
counsel, provided that if Executive is named as a defendant
in an action or proceeding by reason of fact that he was an
officer of the Company, any fees or expenses paid by the
Company will be subject to procedures and rights of
indemnification of officers and directors of the Company
under the Company's By-Laws and the laws of the State of
Delaware.
Section 9. Covenant Not to Interfere. The Executive
-------------------------
agrees and covenants that, for a period of one year following
the expiration or termination of the Term, he will not
interfere directly or indirectly in any way with the Company.
"Interfere" means to influence or attempt to influence,
directly or indirectly, customers, program suppliers,
employees, performers or independent contractors of the
Company, its subsidiaries or any of its network affiliates to
restrict, reduce, sever or otherwise alter their relationship
with the Company, its subsidiaries or any of its network
affiliates. In the event any court having jurisdiction shall
reduce the duration or scope of the covenant not to interfere
set forth in this Section 9, such covenant, in its reduced
form, shall be enforceable. This Section 9 shall survive the
expiration or termination of the Term.
Section 10. Assignability, etc. The rights and
------------------
obligations of the Company under this Agreement shall inure
to the benefit of and shall be binding upon the successors
and assigns of the Company. The Executive acknowledges that
the services to be rendered by him are unique and personal
and accordingly that he may not assign any of his rights or
delegate any of his duties or obligations under this
Agreement.
Section 11. Notices. All notices given hereunder shall
-------
be in writing and shall be sent by registered or certified
mail or delivered by hand and shall be deemed to be given on
the date received. Any notice by the Company to the
Executive shall be mailed or delivered to:
Xxxxxx X. Xxxxxxxx
0000 X. Xxxxx Xxxxx
Xxxxxx, XX 00000
or such other address as may from time to time be provided by
the Executive to the Company for such purposes. Any notice
by the Executive to the Company shall be mailed or delivered
to:
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: President and Chief Executive Officer
and
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: General Counsel
or such address or addresses as may from time to time be
provided by the Company to the Executive for such purpose.
Section 12. Captions. The captions in this Agreement
--------
are inserted for convenience only and do not constitute a
part of this Agreement.
Section 13. Amendments, etc. This Agreement may be
---------------
amended, modified or terminated only by an instrument in
writing signed by the parties hereto.
Section 14. Governing Law. This Agreement is made in
-------------
and shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to
conflict of law principles. The Executive hereby consents to
the jurisdiction of the courts of the State of New York.
Section 15. Remedies. Each of the parties to this
--------
Agreement will be entitled to enforce its rights under this
Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree
and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and
that any party may in its sole discretion apply to any court
of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.
Such specific performance and/or injunctive relief shall be
available without the posting of any bond or other security.
Section 16. Entire Agreement: Severability. This
------------------------------
Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof. Wherever
possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
Section 17. No Conflicts. The Executive represents and
------------
warrants to the Company that the execution and performance of
this Agreement by the Executive does not violate or conflict
with any agreement, arrangement, understanding or
restriction, written or oral, between the Executive and any
other firm or person. The Executive shall indemnify and hold
harmless the Company and its subsidiaries, shareholders,
directors and officers from any and all loss, damage or expense,
including attorneys' fees, arising out of any breach of the
foregoing representation and warranty by the Executive.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
TELEMUNDO GROUP, INC.
By:_____________________________________
President and Chief Executive Officer
___________________________
Xxxxxx X. Xxxxxxxx
EXHIBIT A
to Agreement dated as of June 11, 1996
between Telemundo Group, Inc. and
Xxxxxx X. Xxxxxxxx
(dollars in thousands)
Adjusted Net Contribution(1)
% of Salary if
Target Achieved(2) 1996 Target 1997 Targets
----------------- ---------- ------------
100% $39,824 $47,789
75% $34,630 $41,556
50% $29,435 $35,322
--------------------
(1)"Adjusted Net Contribution" means operating income plus
depreciation and amortization determined in accordance
with generally accepted accounting principles, without
giving effect to any income, gain or loss associated
with TeleNoticias del Mundo, L.P. or WSNS, but
determined consistent with the accounting method for
determining "Net Contribution before TeleNoticias and
WSNS" on the Company's internal financial statements in
prior periods and adjusted to eliminate the impact of
changes in accounting principles after the date of this
Agreement and of acquisitions or divestitures of
operating units after the date of this Agreement if
taking such operating units into account would either
increase or decrease the actual Net Contribution by at
least 5% of the Adjusted Net Contribution target in the
year of acquisition or divestiture on an annualized
basis and also adjusted to eliminate: (i) all monetary
compensation paid to executive officers who are
terminated during calendar year 1995 (but only such
compensation paid after such termination); (ii) any
legal fees and costs paid by the Company with respect to
item (i); (iii) $95,000 of expenses in 1995; (iv) the
expense associated with the exercise of options to
acquire common stock held on March 7, 1995 by the
executive officers of the Company, to the extent not in
the Company's budget; (v) the expense associated with
the exercise of options issued to those persons who are
executive officers of the Company on March 7, 1995 in
connection with their termination prior to July 1995, to
the extent not in the Company's budget; (vi) direct
costs incurred in the Company's bankruptcy
reorganization, to the extent not included in the
Company's budget; (vii) direct costs incurred in
settling the Xxxxx litigation, to the extent not included
in the Company's budget; and (viii) certain contingent
expenses relating to Puerto Rico as discussed between
the parties, to the extent not included in the Company's
budget. The adjustments set forth in clauses (i) -
(viii) (other than clause (iii)) shall occur only when
and to the extent actually expensed by the Company and
to the extent considered in the calculation of Adjusted
Net Contribution.
(2)Each bonus payment shall be subject to required
withholdings. For purposes of computing the bonus for
the calendar year 1996, the salary shall be deemed to be
$320,000 for the entire year. For subsequent years, the
bonus shall be based on the actual annualized salary for
that calendar year. Calculations hereunder shall be
based upon data provided by the Company's Chief
Financial Officer to the Chief Executive Officer, whose
decision shall be final.
