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Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 24th day of May 1999, by and between Xxxxx
Xxxxxx, an individual currently residing at 0000 XX 000xx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000 (the "EXECUTIVE") AmeriVision Communications, Inc., an Oklahoma
corporation maintaining business offices at 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxxx Xxxx, Xxxxxxxx 00000, and each successor in interest (collectively the
"COMPANY").
BACKGROUND INFORMATION
The Company wishes to obtain the continued service of Executive as an
executive of the Company. Executive is willing to serve as an executive of the
Company on the terms and conditions set forth below.
OPERATIVE PROVISIONS
1. Employment and Term.
The Company hereby employs the Executive and the latter hereby accepts
employment by the Company commencing as of May 24, 1999 ("the COMMENCEMENT
DATE") and continuing to the fifth anniversary date thereof (the "INITIAL
TERM"), which employment shall thereafter be automatically extended for
unlimited successive one-year periods (each a "SUCCESSOR TERM") unless it is
terminated during the pendency of any such Term, whether Initial or Successor,
by the occurrence of one of the events described in Section 7, hereof, or by one
party furnishing the other with written notice, at least six months prior to the
expiration of such Term, of an intent to terminate this Agreement upon the
expiration of such Term. If the Company, prior to, on or subsequent to the
Commencement Date, effects a merger with and into another entity such that it
then has no continuing legal existence, the Company shall, in connection with
the consummation of such transaction, ensure to the extent possible that the
surviving entity assumes the obligations described hereunder. To the extent that
such an assumption is undertaken, references herein to the Company shall also be
deemed to refer to the party assuming its obligations hereunder.
2. Duties.
During the Term of this Agreement, whether Initial or Successor, the
Executive shall render to the Company services as Chairman of the Board of
Directors and shall perform such duties normally associated with that position
and commensurate with those performed by such chairmen of similarly sized and
functioning entities and as may be reasonably designated by the Company, through
action of its Board of Directors.
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3. Base Compensation.
For the services to be rendered by the Executive under this Agreement
the Company shall pay him, while he is rendering such services and performing
his duties hereunder, and the Executive shall accept as full payment for such
service, an annualized base compensation starting on the Commencement Date of
not less than $300,000 and for each succeeding 12-month period during the
Initial or any Successor Term (inclusive of any amounts subject to federal,
state or local employment-related withholding requirements), payable in
substantially equal installments coinciding with the Company's normal employment
compensation payment cycle or pursuant to such other arrangements as the parties
may agree upon (the "BASE COMPENSATION"). Such Base Compensation shall be
reviewed as of each anniversary of the Commencement Date and may then be
increased by action of the Company's Board of Directors; but under no condition
may the Executive's Base Compensation be decreased below the amounts hereinabove
set forth, or any higher amount then being paid to him, regardless of any change
in or diminution of the Executive's duties owed to the Company. Each year
thereafter, Executive's compensation shall increase at the annual C.P.I. rate of
increase (up to 5%) in lieu of any Board action as described herein to further
increase Executive's salary.
4. Fringe Benefits; Reimbursement of Expenses.
During his period of employment hereunder, the Executive shall be
entitled to (a) such leave by reason of physical or mental disability or
incapacity and to such participation in the medical, dental and group insurance,
pension and other retirement benefits and disability and other fringe benefit
plans and vacation as the Company may make generally available to all of its
most senior executive employees from time to time; subject, however, as to such
plans, to such budgetary constraints or other limitation as may be imposed by
the Board of Directors of the Company from time to time; and (b) reimbursement
for all normal and reasonable expenses necessarily incurred by him in the
performance of his obligations hereunder, subject in each case to such
reasonable substantiation requirements as may be imposed by the Company.
5. Proprietary Interests.
During or after the expiration of his term of employment with the
Company, the Executive shall not communicate or divulge to, or use for the
benefit of, any individual, association, partnership, trust, corporation or
other entity except the Company, any proprietary or confidential information of
the Company received by the Executive by virtue of such employment, without
first being in receipt of the Company's written consent to do so and in
compliance with the terms of any other confidentiality or non-competition
agreement which the Executive may hereafter execute with the Company; provided
that nothing contained herein shall restrict the Executive's use or disclosure
of such information known to the public (other than that which he may have
disclosed in breach of this Agreement), or as required by law (so long as
Executive gives the Company prior notice of such required disclosure).
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6. Remedies for Breach of Obligations.
a. Injunctive Relief.
The parties agree that the services of the Executive are of a personal,
specific, unique and extraordinary character and cannot be readily replaced by
the Company. They further agree that in the course of performing his services,
the Executive will have access to various types of proprietary information of
the Company, which, if released to others or used by the Executive other than
for the benefit of the Company, in either case without the Company's consent,
could cause the Company to suffer irreparable and continuing injury. Therefore,
the confidentiality obligations of the Executive established under Section 5
hereof shall be enforceable by the Company both at law and in equity, by
injunction, specific performance, damages or other remedy; and the right of the
Company to obtain any such remedy shall be cumulative and not alternative and
shall not be exhausted by any one or more uses thereof.
b. Arbitration.
In the event of any dispute between the parties under or relating to
this Agreement or relating to the Executive's employment by the Company, such
dispute shall be submitted to and settled by arbitration in Oklahoma County,
Oklahoma, in accordance with the rules and regulations of the American
Arbitration Association then in effect. The arbitrator(s) shall have the right
and authority to determine how their award or decision as to each issue and
matter in dispute may be implemented or enforced. Any decision or award shall be
final and conclusive on the parties; there shall be no appeal therefrom other
than for claimed bias, fraud or misconduct by the arbitrator(s); judgment upon
any award or decision may be entered in any court of competent jurisdiction in
the State of Oklahoma or elsewhere; and the parties hereto consent to the
application by any party in interest to any court of competent jurisdiction for
confirmation or enforcement of such award. The party against whom a decision is
made shall pay the fees of the American Arbitration Association. Notwithstanding
the foregoing, the Company, at its sole option shall be entitled to enforce its
rights, as contemplated by Section 6a hereof, to injunctive and other equitable
relief in the event of a breach of Section 5 hereof or of any material term of a
confidentiality or non-competition agreement to which the Company and the
Executive shall then be parties, either by arbitration pursuant to this Section
6b, or directly in any court of competent jurisdiction.
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7. Termination of Employment.
a. Death. The Executive's employment hereunder shall terminate in the
event of the Executive's death. Except for (i) any salary and benefits accrued,
vested and unpaid as of the date of any such termination and (ii) any benefits
to which the Executive or his heirs or personal representatives may be entitled
under and in accordance with the terms of any employee benefit plan, policy or
program maintained by the Company, the Company shall be under no further
obligation hereunder to the Executive or to his heirs or personal
representatives, and the Executive or his heirs or personal representatives no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.
b. Disability. The Company may terminate the Executive's employment
hereunder for "DISABILITY," if an independent physician mutually selected by the
Executive (or his legal representative) and the Board of Directors or its
designee (or, upon an inability of such parties to effect the selection within a
period of ten days, by the independent certified public accounting firm then
serving the Company) shall have determined that the Executive has been
substantially unable to render to the Company services of the character
contemplated by Section 2 of this Agreement, by reason of a physical or mental
illness or other condition, for more than 60 consecutive days or for shorter
periods aggregating more than 120 days in any period of 12 consecutive months
(excluding in each case days on which the Executive shall be on vacation). In
the event of such Disability, the Executive shall be entitled to receive any
salary and benefits accrued, vested and unpaid as of the date of any such
termination and any benefits to which the Executive may be entitled under and in
accordance with the terms of any employee benefit plan, policy or program
maintained by the Company; and upon the Executive's receipt of such salary and
benefits the Company shall be under no further obligation hereunder to the
Executive and the Executive no longer shall be entitled to receive any payments
or any other rights or benefits under this Agreement.
c. Termination by the Company for Cause. The Company may terminate the
Executive's employment hereunder for "CAUSE." For purposes of this Agreement,
"CAUSE" shall mean any of the following:
i. The Executive's repeated willful misconduct or gross
negligence;
ii. The Executive's repeated conscious disregard of his
obligations hereunder or of any other written duties
reasonably assigned to him by the Board of Directors;
iii. The Executive's repeated conscious violation of any provision
of the Company's by-laws or of its other stated policies,
standards or regulations;
iv. The Executive's commission of any act involving fraud; or
v. A determination that the Executive has demonstrated a
dependence upon any addictive substance, including alcohol,
controlled substances, narcotics or barbiturates;
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provided, however, that if the Board of Directors of the Company desires to
terminate the Executive for any of the reasons set forth in: (1) clause (i),
(ii) or (iii) of this Section 7c, the Company, within the 60-day period
immediately following each alleged commission of a proscribed act or omission,
shall have furnished to the Executive a written description of the allegedly
proscribed act or omission and a statement advising him that the Company views
such conduct as being of the type which could lead to a termination of the
Executive for Cause; (2) clause (ii) or (iii) of this Section 7c, the Board must
be able to demonstrate that the Executive has been furnished with a copy of the
written duty, by-law provision, policy, standard or regulation, the violation of
which the Executive is being accused, at a time prior to the alleged commission
of the violation: or (3) clause (iv) or (v) of this Section 7c, the Board shall
first be required to obtain an opinion from Company counsel to the effect that
there is an adequate basis upon which either such determination may be made.
Except for any salary and benefits accrued, vested and unpaid as of the date of
any such termination, the Company shall be under no further obligation hereunder
to the Executive, and the Executive no longer shall be entitled to receive any
payments or any other rights or benefits, under this Agreement.
d. Termination by the Company Other Than for Cause. The
Company may terminate the Executive's employment hereunder upon the expiration
of the Initial Term or any Successor Term, provided that notice of termination
is furnished as set forth in Section 1, and subject to the right of the
Executive, within such notification period, to effect his own Good Reason
termination as described in subsection 7e below. In the event of either such
termination, the Executive shall be entitled to receive any salary and benefits
accrued, vested and unpaid as of the date of any such termination and any
benefits to which the Executive may be entitled under and in accordance with the
terms of any employee benefit plan, policy or program maintained by the Company,
as well as, in the event that the Executive shall have timely effected a Good
Reason termination, those benefits authorized under the provisions of subsection
7e; and following his receipt of such salary and benefits the Company shall be
under no further obligation hereunder to the Executive and the Executive no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.
e. Termination by the Executive for Good Reason.
Notwithstanding anything herein to the contrary, the Executive shall be entitled
to terminate his employment hereunder for "Good Reason" without breach of this
Agreement. For purposes of this Agreement, "GOOD REASON" shall exist upon the
occurrence of any of the following events or matters, in each case without the
Company first being in receipt of the Executive's written consent thereto, and
the period of time within which the Executive shall be required to exercise a
Good Reason termination of service shall be 30 days, measured from the date upon
which he is notified by the Company of such occurrence, or, with respect to the
matter identified in clause (iii) below, from the date upon which the Executive
notifies the Company of his belief that a material breach has occurred, and,
with respect to the matter identified in clause (vi) below, from the later of
the dates upon which the Executive's or the Company's physician statement is
furnished:
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i. A directed change in the Executive's principal place of
employment to a location outside of the metropolitan Oklahoma
City area;
ii. A material adverse change in, or a substantial elimination
of, the duties and responsibilities of the Executive;
iii. A material breach by the Company of its obligations
hereunder;
iv. A change in control of the Company;
v. Receipt by the Executive of the Company's notice that it
intends to terminate him other than for Cause either at the
end of a particular Term of employment, whether Initial or
Successor; or
vi. Impairment of the Executive's health to an extent that makes
his continued performance of duties under this Agreement
hazardous to his physical or mental health, provided that the
Executive shall have furnished the Company with a written
statement from a qualified physician to that effect, and,
provided further, that, at the Company's request, made within
ten days after its being furnished with a copy of such
statement, the Executive shall submit to an examination by a
physician selected by the Company and such physician shall
have concurred in writing with the conclusion of the
Executive's physician.
For purposes of clause (iv) above, a "CHANGE IN CONTROL OF THE COMPANY" shall
mean (a) the acquisition, directly or indirectly, after the date hereof, by any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as in effect on the date hereof), of voting power over
voting shares of the Company that would entitle the holder(s) thereof to cast at
least 25% of the votes that all shareholders would be entitled to cast in the
election of directors of the Company, provided that such term shall not be
deemed to apply to an acquisition by one or more institutional underwriters
directly from the Company in accordance with the conditions of a registration
statement theretofore filed with and declared effective by the United States
Securities and Exchange Commission; or (b) the failure, at any time within the
Term of this Agreement (inclusive of both Initial and Successor), of the
individuals who at the Commencement Date shall constitute the Company's Board of
Directors to constitute at least a majority of such membership, unless the
election of each director who is not a director at the Commencement Date shall
have been approved in advance by directors representing at least 75% of the
directors then in office who are directors at the Commencement Date.
In the event of a Good Reason termination by the Executive within the
Initial or any Successor Term, the Executive shall be entitled to continue to
receive from the Company the Executive's current annual Base Compensation
through the Initial Term or Successor Term as applicable, and in addition
Executive shall receive the Executive's current annual Base Compensation payable
over the succeeding 12-month period from the effective date of termination.
Except for such termination compensation following any such termination, and
except for any salary and benefits accrued, vested and unpaid as of the date of
any such termination, the Executive no longer shall be entitled to receive any
payments or any other rights
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or benefits under this Agreement, and the Company shall have no further
obligation hereunder to the Executive following any such termination.
f. Termination by the Executive for Other Than Good Reason.
The Executive may terminate his employment hereunder upon the expiration of the
Initial Term or any Successor Term, provided that notice of termination is
provided as set forth in Section 1. In the event of such termination, the
Executive shall be entitled to receive any salary and benefits accrued, vested
and unpaid as of the date of any such termination and any benefits to which the
Executive may be entitled under and in accordance with the terms of any employee
benefit plan, policy or program maintained by the Company; and following his
receipt of such salary and benefits to the Company shall be under no further
obligation hereunder to the Executive and the Executive no longer shall be
entitled to receive any payments or any other rights or benefits under this
Agreement.
g. Life and Disability Insurance Coverage. If termination of
employment is due to any reason other than death, the Executive shall have the
right, subject to receiving approval of the Company (which shall not be
unreasonably withheld), to purchase any policy of insurance on his life or
insuring against his disability which is owned by the Company, the exercise of
which right shall be made by notice furnished to the Company within 30 days
subsequent to the date of termination. The purchase price of each policy of life
insurance shall be the sum of its interpolated terminal reserve value (computed
as of the closing date) and the proportional part of the gross premium last paid
before the closing date which covers any period extending beyond that date; or
if the policy to be purchased shall not have been in force for a period
sufficient to generate an interpolated terminal reserve value, the price shall
be an amount equal to all net premiums paid as of the closing date. The purchase
price of each disability income policy shall be the sum of its cash value and
the proportional part of the gross premium last paid before the closing date
which covers any period extending beyond that date. The purchase of any
insurance policy by the Executive shall be closed as promptly as may be
practicable after the giving of notice, in no event to exceed 30 days therefrom.
h. Termination Plan. The provisions of subsections 7a-g,
inclusive, shall be eliminated and be of no further legal effect immediately
following the adoption by the Company's Board of Directors of a resolution,
voluntarily joined in by the Executive, either in his capacity as a member
thereof or, if he is then not such a member, individually, approving a
termination of employment plan applicable to the Executive and all other elected
officers of the Company.
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8. Indebtedness of Executive.
If, during the course of his employment, the Executive becomes
indebted to the Company for any reason, the Company shall, if it so elects, have
the right to set-off and to collect any sums due it from the Executive out of
any amounts which it may owe to the Executive for unpaid compensation. In the
event that this Agreement terminates for any reason, all sums owed by the
Executive to the Company shall become immediately due and payable.
9. Miscellaneous Provisions.
a. Notice: All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered properly given to the recipient party if furnished by hand
delivery; by sending a copy thereof by first class or express mail, postage
prepaid, or by courier service (with charges prepaid), in each case to the
address indicated above or to such other address as the recipient shall have
provided in accordance with the terms hereof; or by sending a copy thereof by
whatever telecopier service the recipient shall have designated below (or by
subsequent notice provided in accordance with the terms hereof). If the notice
is sent by mail or courier service, it shall be deemed to have been given to the
recipient when deposited in the United States mail or courier service for
delivery to that party; or if by telecopier, when the sending party is in
receipt of documentary evidence that the transmission has been successfully
completed. Whenever the furnishing of notice is required, the same may be waived
by the party entitled to receive such notice.
b. Assignability: The Company may assign this Agreement to,
and only to, an entity owned more than 50% by the Company (directly or
indirectly), and which acquires all or substantially all of the Company's
business, and upon such assignment this Agreement shall inure to the benefit of
and be binding upon such entity. Neither this Agreement nor any right or
interest hereunder shall be assignable by Executive but shall inure to the
benefit of and be binding upon him, his Beneficiaries and legal representatives.
c. Entire Agreement: This Agreement, and any other document
referenced herein, constitute the entire understanding of the parties hereto
with respect to the subject matter hereof, and no amendment, modification or
alteration of the terms hereof shall be binding unless the same be in writing,
dated subsequently to the date hereof and duly approved and executed by each of
the parties hereto.
d. Enforceability: If any term or condition of this Agreement
shall be invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement, and such term or condition except to such extent or
in such application, shall not be affected thereby and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.
e. Governing Law: This Agreement shall be deemed to have been
made in and shall be construed and interpreted in accordance with the laws of
the State of Oklahoma without giving effect to principles of conflicts of laws.
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f. Counterparts: This Agreement may be executed by any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
g. Binding Effect: Each of the provisions and agreements
herein contained shall be binding upon and inure to the benefit of the personal
representatives, devisees, heirs, successors, transferees and assigns of the
respective parties hereto.
h. Legal Fees and Costs: If a legal action is initiated by any
party to this Agreement against another, arising out of or relating to the
alleged performance or non-performance or any right or obligation established
hereunder, or any dispute concerning the same, any and all fees, costs and
expenses reasonably incurred by each successful party or his or its legal
counsel in investigating, preparing for, prosecuting, defending against, or
providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of and shall be paid
or reimbursed by the unsuccessful party(ies).
i. Beneficiary: As used herein, the term "Beneficiary" shall
mean the person or persons (who may be designated contingently or successively
and who may be an entity other than an individual, including an estate or trust)
designated in writing to receive the expiration of Agreement or death benefits
described in Section 7 above. Each Beneficiary designation shall be effective
only when filed with the secretary of the Company during the Executive's
lifetime. Each Beneficiary designation filed with the Secretary will cancel all
designations previously so filed. If the Executive fails to properly designate a
Beneficiary or if the Beneficiary predeceases the Executive or dies before
complete distribution of the benefit has been made, the Company shall distribute
the benefit (or balance thereof) to the Executive's probate estate.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
AmeriVision Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx,
Chief Executive Officer
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