EMPLOYMENT AGREEMENT
Effective July 1, 2000
The parties to this agreement are Xxxx X. Xxxxxxxx, residing at 000 Xxxx
00xx Xxxxxx, Xxx. 0X, Xxx Xxxx, N.Y. 10021 (the "Executive"), and YouthStream
Media Networks, Inc., a Delaware corporation with its principal office at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company").
The parties have agreed upon the employment of the Executive as Vice
President and General Counsel on the terms set forth in this agreement.
It is therefore agreed as follows:
1. Employment.
During the term of the Executive's employment under this agreement, the
Company shall employ the Executive, and the Executive shall serve the Company,
as the Company's Vice President and General Counsel. The Executive shall have
all of the duties and responsibilities customarily associated with the position
of general counsel of a publicly held company, shall report to the Company's
President and Chief Executive Officer, and shall devote substantially all her
business time to the performance of her duties under this agreement. The
Executive shall be a member of the Company's senior management team with such
duties as the Company's President and Chief Executive Officer from time to time
may assign to her (including continued membership on the Company's China
Preparatory Committee).
2. Term of Employment.
The term of the Executive's employment under this agreement shall commence
on July 1, 2000 and, subject to earlier termination upon the Executive's death
or disability pursuant to section 5.1 or pursuant to section 6, shall continue
until the close of business on June 30, 2002.
3. Compensation.
3.1 Cash Compensation. As compensation for her services under this
agreement, the Executive shall be entitled to (a) a "sign-on bonus" in the
amount of $25,000, payable simultaneously with the execution and delivery of
this agreement, and (b) a salary at the rate of $200,000 a year through June 30,
2001 and at the rate of $240,000 a year from July 1, 2001 through June 30, 2002,
payable in equal installments in accordance with the Company's customary payroll
practices for its management employees. The Company shall review the Executive's
performance annually (either prior to or within a reasonable period after the
end of each fiscal year) and, in its sole discretion, may grant the Executive a
bonus based on the Executive's performance during that fiscal year.
3.2 Stock Option. In connection with her services for the Company, the
Company is granting to the Executive, pursuant to the Company's 2000 Stock
Incentive Plan, a non-incentive stock option to purchase an aggregate of 150,000
shares of the Company's Common Stock. The terms of the option shall be set forth
in a separate agreement between the Executive and the Company.
4. Reimbursement of Expenses; Fringe Benefits.
4.1 Expenses. The Company shall reimburse the Executive for all
reasonable expenses incurred by the Executive in connection with the performance
of her duties, upon presentation of appropriate vouchers covering the expenses.
4.2 Fringe Benefits. The Executive (and her immediate family) shall be
entitled to participate in all medical, dental, disability, life insurance and
other fringe benefits and executive perquisites generally provided to the
Company's senior executives.
4.3 Professional Fees. The Company shall reimburse the Executive for (a)
attorney registration fees in New York State, (b) American Bar Association, New
York City and New York State bar association dues, and (c) tuition fees for
continuing legal education courses required to be attended by the Executive to
maintain her license as an attorney in New York State in good standing.
5. Disability or Death.
5.1 Disability. If, as the result of any physical or mental disability,
the Executive shall fail or be unable to perform her duties for a total of 120
days in any 12-month
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period, the Company may, by notice to the Executive, terminate her employment
under this agreement as of the date of the notice.
5.2 Payments on Disability. If the Executive's employment is terminated
under section 5.1, the Executive shall be paid, in full discharge of all the
Company's obligations to the Executive, (a) the Executive's full salary under
section 3.1 until the date of termination (or, if a shorter period, the
remainder of the term), less the amount of any disability payments received by
her under any disability insurance coverage provided to her by the Company, and
(b) the amount of all expense reimbursements (including professional dues and
fees) due for periods prior to termination.
5.3 Payments on Death. The Executive's employment under this agreement
shall be terminated upon her death and the Executive's estate shall be paid, in
full discharge of all the Company's obligations to the Executive, the
Executive's full salary under section 3 until the date of termination and the
amount of all expense reimbursements (including professional dues and fees) due
for periods prior to termination.
6. Termination.
6.1 Payments Upon Termination for Cause or Voluntary Termination. The
Company may terminate the Executive's employment under this agreement for cause
(as defined in section 6.3). If the Executive's employment under this agreement
is terminated for cause pursuant to this section 6.1 or by the Executive
voluntarily (other than for Good Reason, as defined in section 6.3), the Company
shall pay to the Executive, in full discharge of its obligations to the
Executive under this agreement, the accrued amount of the salary and benefits
due to her through the date of termination and the amount of all expense
reimbursements (including professional dues and fees) due for periods prior to
termination.
6.2 Payments Upon Termination for Other Reasons. If the Executive's
employment under this agreement is terminated by the Company prior to the
expiration of the term for any reason other than for cause or as a result of the
Executive's death or disability, or if the Executive's employment under this
agreement is terminated by the Executive for Good Reason, (a) all of the
Executive's stock options shall then become fully vested and (b) the Company
shall continue to pay to the Executive her full salary under section 3 for a
period of six months following the date of termination and shall pay to the
Executive any unpaid bonus previously authorized by the Company's board of
directors. In addition, upon the Executive's request, during that six month
period the Company shall, at its expense, keep the Executive on all medical,
dental and other plans previously provided to the Executive under this
agreement. None of the payments provided for in this section 6.2 shall be
reduced by any amounts earned or received by the Executive from any third party
at any time. Without limiting the generality of the
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foregoing, if the Executive's employment under this agreement is terminated for
any reason other than termination by the Company for cause or termination by the
Executive without Good Reason, the Executive shall not have any obligation to
mitigate damages.
6.3 Definitions. As used in this agreement:
(a) the term "cause" shall be limited to mean: (i) the conviction of the
Executive of a felony, (ii) the conviction of the Executive of a crime involving
any financial impropriety or that would materially interfere with the
Executive's ability to perform her services required under this agreement or
otherwise be materially injurious to the Company or (iii) the willful breach by
the Executive in a material respect of her obligations under this agreement
after ten days notice and an opportunity to cure; and
(b) the term "Good Reason" shall be limited to mean the occurrence,
without the express written consent of the Executive, of any of the following
circumstances: (i) a significant adverse alteration in the Executive's status in
the Company, in the nature of the Executive's responsibilities, or in the
material conditions of the Executive's employment; (ii) a reduction by the
Company in the Executive's annual basic salary or benefits as provided for in
this agreement; (iii) the Company requiring that the Executive be based at a
location more than 50 miles from New York City, except for required travel on
the Company's business; and (iv) the Company's breach of any of its material
obligations under this agreement and the continuation of that breach for 10 days
after written notice by the Executive to the Company.
6.4 Time of Payments After Termination. Any amounts payable to the
Executive or her estate after termination of her employment shall be paid
periodically in the same amounts and at the same intervals as they would have
been paid if the Executive's employment had not terminated.
7. Confidential Information.
The Executive shall not, directly or indirectly, either during her
employment by the Company or at any time thereafter, disclose to anyone or use
(except as authorized in the regular course of the Company's business) any
information acquired by her during her employment with respect to any of the
Company's trade secrets or other confidential information. For this purpose,
information generally known to the public shall not be considered a trade secret
or confidential information.
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8. Non-Competition, etc
8.1 Non-Competition. For a period of one year after the termination of
the Executive's employment under this agreement, the Executive shall not
directly or indirectly engage or be interested in any business or entity that
engages, anywhere in the world, in any business directly competitive with any
material segment of the business in which the Company and its subsidiaries are
engaged at the time of termination of the Executive's employment or with any
business activity that the Company or any subsidiary then has under active
consideration in which the Executive has been actively involved (any such
business, a "Restricted Business"), provided, however, that nothing in this
paragraph shall limit the Executive's right to be employed by a media,
advertising or Internet company whose businesses include a Restricted Business,
so long as the Executive does not provide services to that Restricted Business,
and further provided that the Executive shall not be prohibited from (a)
practicing as an attorney (including for a consulting firm, venture capital
group, incubator, accelerator or other similar business), and, in that capacity,
representing clients engaged in any business competitive with the Company's
business, or (b) from being in-house counsel to any individual, partnership,
firm or company regardless of the businesses in which it engages, so long as the
Executive shall not breach Paragraphs 7 or 8.2 of this Agreement. The
restriction provided for in the previous sentence shall apply regardless of the
reason for termination of the Executive's employment, except that it shall not
apply after termination of the Executive's employment if the Executive's
employment is terminated prior to the expiration of the two-year term due to the
Executive's termination of her employment for Good Reason or due to termination
by the Company without cause. For the purpose of this section 8.1, the Executive
shall be deemed to be directly or indirectly interested in a business or entity
if she is engaged or interested in that business or entity as a stockholder,
director, officer, employee, agent, partner, consultant or otherwise, but not if
her interest is limited solely to the passive ownership of 5% or less of any
class of the equity or debt securities of a corporation whose shares are
publicly traded.
8.2 Non-Solicitation. The Executive shall not, for a period of 18 months
after termination of her employment (regardless of the reason for termination),
directly or indirectly employ or retain, solicit the employment or retention of,
or be associated with any entity that employs or retains or solicits the
employment or retention of, any person (other than her secretary or legal or
executive administrative assistant) who was an employee of the Company or any of
its subsidiaries at any time during the twelve months preceding the termination
of the Executive's employment.
8.3 Injunction. The Executive acknowledges that the remedy at law for
breach of the provisions of sections 8.1 or 8.2 will be inadequate and that, in
addition to any other remedy the Company may have, it shall be entitled to an
injunction restraining any breach or threatened breach, without any bond or
other security being required and without the necessity of showing actual
damages. The provisions of section 10 shall not apply with respect to this
section 8.
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9. Merger or Sale of Assets.
If the Company shall merge or consolidate with another corporation or
shall transfer all or substantially all of its assets, this agreement shall be
assigned to the successor in the merger or consolidation or the transferee of
the assets, the Company shall cause the successor or transferee to assume all of
the Company's obligations under this agreement, and the Executive shall
thereafter be employed by the successor or transferee in accordance with the
terms of this agreement. The Company's failure to obtain such assumption prior
to the effectiveness of any such transaction shall be a breach of this agreement
by the Company.
10. Arbitration.
Except as otherwise provided in section 8.3, any dispute arising out of
or relating to this agreement shall be settled exclusively by arbitration in New
York, New York in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Service of process or notice of motion or
other application in connection with any arbitration may be served by the means
by which notices are to be given under this agreement, provided that a
reasonable time for appearance is allowed. Any award in any arbitration may be
enforced on application of either party by the order or judgment of any Federal
or state court in the State of New York.
11. Miscellaneous.
11.1 Headings. The section headings of this agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this agreement.
11.2 Notices. All notices and other communications under this agreement
shall be in writing and shall be deemed given when delivered personally or
mailed by registered mail, return receipt requested, to the parties at their
respective addresses set forth above (or to such other address as a party may
have specified by notice given to the other party pursuant to this provision).
11.3 Separability. The invalidity or unenforceability of any provision
of this agreement shall not affect the validity or enforceability of any other
provision of this agreement, which shall remain in full force and effect.
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11.4 Waiver. Either party may waive compliance by the other party with
any provision of this agreement. The failure of a party to insist on strict
adherence to any term of this agreement on any occasion 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. No waiver of any
provision shall be construed as a waiver of any other provision. Any waiver must
be in writing.
11.5 Assignment. Neither party may assign any of its rights or delegate
any of its duties under this agreement (other than as contemplated by section 9
of this agreement) without the prior consent of the other and any assignment or
delegation in violation of this prohibition shall be void.
11.6 Governing Law. This agreement shall be governed by and construed
in accordance with the law of the state of New York applicable to agreements
made and to be performed in New York.
11.7 Entire Agreement; Nor Oral Change. This agreement and the stock
option agreement referred to in section 3.2 contain, and are intended as, a
complete statement of all the terms of the arrangements between the parties,
supersede any previous agreements and understandings between the parties, and
cannot be changed or terminated orally.
YOUTHSTREAM MEDIA NETWORKS, INC.
By: /s/ XXXXX X. XXXXXXXX CEO
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/s/ XXXX XXXXXXXX
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Xxxx Xxxxxxxx
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