EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 30th day of June, 1996 but is effective as of August 1, 1996 (the "Effective
Date") by and between Magicworks Entertainment Incorporated, a Florida
corporation (hereinafter called the "Company"), and Xxxx X. Xxxxxxxx
(hereinafter called the "Executive").
RECITALS
A. The Executive is currently serving as the Co-Chairman of the Board
of Directors, Chief Executive Officer and a director of the Company.
B. The Executive possesses intimate knowledge of the business and
affairs of the Company, its policies, methods and personnel.
C. The Board of Directors of the Company (the "Board") recognizes that
the Executive's contribution to the growth and success of the Company has been
substantial and desires to retain the services of the Executive and to
compensate him therefor.
D. The Board has determined that this Agreement will reinforce and
encourage the Executive's continued attention and dedication to the Company.
E. The Executive is willing to continue to make his services available
to the Company on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereby agree as follows:
1. TERMINATION OF PRIOR AGREEMENTS. Any and all prior agreements
relative to the rendering of services by the Executive to the Company shall
automatically terminate upon the execution of this Agreement, and the provisions
of this Agreement alone shall govern the relationship between the parties. Upon
the execution of this Agreement, each of the parties hereto shall thereupon and
thereby, without any further action, release and forever discharge the other
from any and all liabilities and obligations of any nature arising out of or in
connection any and all such prior employment and/or consulting agreements,
understandings or arrangements.
2. EMPLOYMENT.
2.1 EMPLOYMENT AND TERM. The Company shall employ the Executive and
the Executive shall serve the Company, on the terms and conditions set forth
herein, for the period commencing on the Effective Date and expiring August 1,
2001 (the "Term"), unless extended or sooner terminated as hereinafter set
forth.
2.2 DUTIES OF EXECUTIVE. The Executive shall serve as the
Co-Chairman of the Board of Directors and Chief Executive Officer of the Company
and shall have such powers and authority commensurate with such position, shall
diligently perform all services as may be reasonably assigned to him by the
Board and shall exercise such power and authority as may from time to time be
delegated to him by the Board. The Executive shall devote substantially all of
his working time and attention to the affairs of the Company.
2.3 PLACE OF PERFORMANCE. In connection with his employment by the
Company, the Executive shall be based at any one of the Company's corporate
offices except for required travel on the Company's business to an extent
substantially consistent with his present travel obligations.
3. COMPENSATION.
3.1 BASE SALARY.
(a) Commencing on the Effective Date, the Executive shall
receive a base salary at a rate equal to $150,000 per annum (the "Base Salary")
during the Term, such Base Salary to be payable in substantially equal
installments consistent with the Company's normal payroll schedule (the "Payment
Schedule" and each day upon which such a payment is made, a "Payment Date"),
PROVIDED, HOWEVER, that on the first Payment Date the Company shall pay to
Executive the Base Salary for the period from August 1, 1996 through such date,
and thereafter in accordance with the Payroll Schedule, subject to applicable
withholding and other taxes.
(b) On August 1, 1997 and on each August 1 thereafter during the
Term, the Base Salary shall be increased by $25,000. Effective upon each such
increase, the term "Base Salary" shall be modified to mean such increased amount
without further action by the Company.
3.2 ADDITIONAL COMPENSATION. In addition to the Base Salary,
Executive may also receive bonuses in such amounts and at such times as may be
determined in the sole discretion of the Board (or the Compensation Committee
thereof).
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4. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.
4.1 EXPENSE REIMBURSEMENT. During the Term, the Company, upon the
submission of supporting documentation by the Executive, shall reimburse the
Executive for all reasonable expenses actually paid or incurred by the Executive
in the course of and pursuant to the business of the Company, including expenses
for first class travel and entertainment. In addition, the Company shall provide
the Executive with a corporate credit card to be used for business related
expenses.
4.2 OTHER BENEFITS. The Executive shall be entitled to receive such
benefits of employment as are described on Exhibit A attached hereto. In
addition, during the Term, the Company shall, upon receipt of proper
documentation relating thereto, reimburse Executive for amounts expended for a
disability policy (with maximum benefits payable under such policy to be
determined by the Board) and a life insurance policy (with benefits payable
thereunder to be in the amount of no more than $1,000,000) for the Executive
(collectively, the "Policies"). Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the Base Salary and/or Bonus payable to the Executive pursuant
to this Agreement.
4.3 CONTINUING BENEFITS. In the event that the Executive's
employment is terminated other than for "Cause" (as defined in Section 5.1
below) the Company shall continue to provide to the Executive, for a period of
two years following such termination, health and dental insurance substantially
similar to that in effect at the time of such termination.
4.4 WORKING FACILITIES. The Company shall furnish the Executive with
an executive office, a personal secretary and such other facilities and services
suitable to his position and adequate for the performance of his duties
hereunder.
4.5 AUTOMOBILE ALLOWANCE. The Company shall pay the Executive an
automobile allowance of $750 per month during the Term.
4.6 VACATION. The Company shall allow Executive six (6) weeks of
paid leave time each year for vacation or other similar purposes.
5. TERMINATION.
5.1 TERMINATION FOR CAUSE. Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated by the Company
for Cause. As used in this Agreement, "Cause" shall only mean (i) subject to the
following sentences, any action or omission of the Executive which constitutes a
willful and material breach of this Agreement which is not cured or as to which
diligent attempts to cure have not commenced within thirty (30) business days
after receipt by the Executive of notice of same, which notice specifies the
conduct necessary to cure such breach, (ii) a finding by a court of law that the
Executive has committed fraud, embezzlement or misappropriation as against the
Company or (iii) the conviction of the
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Executive for any criminal act which is a felony. Any termination for Cause
shall be made in writing to the Executive, which notice of termination shall set
forth in detail all acts or omissions upon which the Company is relying for such
termination. The Executive shall have the right to address the Company's Board
regarding the acts set forth in the notice of termination. Upon any termination
pursuant to this Section 5.1, the Company shall pay to the Executive any unpaid
Base Salary accrued through the effective date of termination specified in such
notice. Except as provided above, the Company shall have no further liability
hereunder (other than for reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 4.1).
5.2 DISABILITY. Notwithstanding anything contained in this Agreement
to the contrary, the Company, by written notice to the Executive, shall at all
times have the right to terminate this Agreement, and the Executive's employment
hereunder, if the Executive shall, as the result of mental or physical
incapacity, illness or disability, fail to perform his duties and
responsibilities provided for herein for a consecutive period of more than one
hundred eighty (180) days in any 12-month period. Upon any termination pursuant
to this Section 5.2, the Company shall pay to the Executive any unpaid Base
Salary accrued through the effective date of termination. Except as provided
above, the Company shall have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however to the provisions of Section 4.1).
5.3 DEATH. In the event of the death of the Executive during the
term of his employment hereunder, the Company shall pay to the personal
representative of the estate of the deceased Executive any unpaid Base Salary
accrued through the date of his death. Except as provided above, the Company
shall have no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of the Executive's
death, subject, however, to the provisions of Section 4.1).
5.4 TERMINATION WITHOUT CAUSE. The Company shall have the right to
terminate the Executive's employment hereunder for any reason other than as set
forth in Sections 5.1, 5.2 or 5.3 upon thirty (30) days written notice to the
Executive; PROVIDED, HOWEVER, that upon any such termination pursuant to this
Section 5.4, the Company shall (i) pay to the Executive any unpaid Base Salary
through the effective date of termination specified in such notice, (ii)
continue to pay the Executive's Base Salary throughout the remainder of the
Term, PROVIDED, HOWEVER, that in no event shall the Company pay to Executive
less than two years Base Salary at the rate in effect on the date of termination
pursuant to this Section 5.4, and (iii) make a payment to the Executive equal to
one years Base Salary at the rate in effect on the date of termination pursuant
to this Section 5.4 for each year or portion of a year served hereunder prior to
such termination, which amount shall be paid within ten (10) days of such
termination.
5.5 VOLUNTARY RESIGNATION. In the event the Executive resigns as an
employee of the Company, the Company shall pay to the Executive any unpaid Base
Salary accrued through the effective date of resignation. Except as provided
above, the Company shall have no further
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liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of resignation, subject, however, to the
provisions of Section 4.1).
6. RESTRICTIVE COVENANTS.
6.1 NON-COMPETITION. The Executive shall not, during the Term of
this Agreement and, unless the Company terminates the Executive's employment
hereunder other than pursuant to Section 5.1, for a one (1) year period
thereafter, serve as or be a consultant to or employee, officer, agent director
or owner of more than five percent of another corporation, partnership or other
entity which competes in any manner with or detracts from any business in which
the Company or its subsidiaries or affiliates then engages (the "Business").
6.2 NONDISCLOSURE. The Executive shall not, during the Term of this
Agreement and for a period ending on the third anniversary of the expiration of
the Term, divulge, communicate, use to the detriment of the Company or for the
benefit of any other person or persons, or misuse in any way, any Confidential
Information (as hereinafter defined) pertaining to the business of the Company.
Any Confidential Information or data now or hereafter acquired by the Executive
with respect to the business of the Company (which shall include, but not be
limited to, non-public information concerning the Company's productions,
processes, know-how, financial condition, prospects, technology, customers,
methods of doing business and marketing and promotion of the Company's
productions) shall be deemed a valuable, special and unique asset of the Company
that is received by the Executive in confidence and as a fiduciary, and the
Executive shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, "Confidential Information" means
information disclosed to the Executive or known by the Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered, invented or developed by the Executive) prior
to or after the date hereof, and not generally known about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information to the extent
required by law.
6.3 NONSOLICITATION. The Executive shall not, during the Term of
this Agreement and, unless the Company terminates the Executive's employment
hereunder other than pursuant to Sections 5.1 or 5.2, for a one (1) year period
thereafter, directly or indirectly, (i) solicit for employment or endeavor in
any way to entice away from employment with the Company or its affiliates any
employee of the Company or its affiliates; nor (ii) solicit or accept business
competitive with the Business from any customers or clients of the Company or
its affiliates, from any prospective customers or clients whose business the
Company or any affiliate of the Company is in the process of soliciting at the
time the Executive's employment with the Company terminated or ceased, or from
any former customers or clients which had been doing business with the Company
or its affiliates within one (1) year prior to the time the Executive's
employment with the Company terminated or ceased.
6.4 BOOKS AND RECORDS. All books, records, manuals, notations,
applications, accounts and similar repositories of Confidential Information of
the Company, whether created,
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used, received or otherwise coming into the Executive's possession during the
course of the Executive's employment hereunder, shall be the exclusive property
of the Company and shall be immediately returned to the Company upon termination
of this Agreement or at the Board's request at any time provided, however, that
Executive's personal rolodex and any other property of the Executive on the
Company's premises which is not and does not contain Confidential Information
shall not be deemed Company property and shall not be subject to this Section
6.4.
7. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Executive of any of the covenants contained in
Section 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Section 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio without regard to any conflict of
law rule or principle that would give effect to the laws of another
jurisdiction. In the event that any dispute shall arise with respect to this
Agreement, then such dispute shall be submitted for resolution to arbitration in
_____________, Ohio in accordance with the rules of the American Arbitration
Association then in effect. The non-prevailing party in such arbitration shall
pay all reasonable fees and expenses of the prevailing party, including fees and
expenses of counsel for the prevailing party.
9. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company: Magicworks Entertainment Incorporated
000 Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
If to the Executive: Xxxx X. Xxxxxxxx
c/o Magicworks Entertainment Incorporated
000 Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
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or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, upon
its effectiveness, shall supersede all prior agreements, understandings and
arrangements, both oral and written, between the Executive and the Company with
respect to such subject matter. This Agreement may not be modified in any way
unless by a written instrument which specifically refers to this Agreement which
is signed by both the Company and the Executive.
11. BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns. Notwithstanding the foregoing, neither party may assign its rights or
benefits hereunder without the prior written consent of the other party hereto.
12. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by duration, geographic scope or
both, the otherwise invalid provision will be considered to be reduced to a
period or area which would cure such invalidity.
13. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
14. DAMAGES. Nothing contained herein shall be construed to prevent the
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement.
15. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Executive, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
MAGICWORKS ENTERTAINMENT
INCORPORATED
By:
-------------------------------------
Xxx Xxxxxxxx, President and Chief
Operating Officer
-------------------------------------
Xxxx X. Xxxxxxxx
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EXHIBIT A
1. Attach health plans, dental plans, etc. pursuant to Section 4.2.
2. 401K Plan of the Company.
3. Pension Plan of the Company.
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