Contract
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Exhibit 10.49 |
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Xxxxxxx X. Xxxx Chairman, Chief Executive Officer and President |
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0000 Xxxxxxxx Xxxxxxxxx Xxxxxxxxx, XX 00000 865-560-4328 Xxx.Xxxx@xxxxxxxxxxxxxxx.xxx |
July 28, 2017
Xxxx Xxxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Dear Xxxx:
Scripps Networks Interactive, Inc., either directly or through one of its subsidiaries (the “Company”), agrees to employ you and you agree to accept such employment upon the following terms and conditions:
1.Term. Subject to the provisions for earlier termination provided in paragraph 8 below, the term of your employment hereunder shall become effective as of July 1, 2017 and continue until December 31, 2020. Such period shall be referred to as the “Term,” subject to an earlier termination of your employment pursuant to this Agreement. The Company shall provide you with at least ninety (90) days’ notice prior to the expiration of the Term if the Company does not intend to continue to employ you beyond the expiration of the Term. If the Company does not provide you with such notice and the Company and you do not agree in writing to renew or extend this Agreement or enter into a new employment agreement upon the expiration of the Term, the parties agree that, notwithstanding the expiration of this Agreement, you shall continue to be employed by the Company under this Agreement on an at-will basis, which means that either you or the Company may terminate the employment relationship at any time, with or without Cause or Good Reason or advance notice, subject to the other terms hereof.
2.Duties. You will be the Executive Vice President, Chief Financial & Development Officer, reporting to the Chief Executive Officer of the Company (“Reporting Senior”). You agree as a member of management to devote substantially all your business time, and apply your best reasonable efforts, to promote the business and affairs of the Company during your employment. You will perform such duties and responsibilities commensurate with your position and title during the Term, and as may be reasonably assigned to you from time to time by your Reporting Senior. While employed by the Company, you shall not, without the prior written consent of the Company, render services of a business, professional or commercial nature either directly or indirectly for any other person or firm, whether for compensation or otherwise, other than in the performance of duties naturally inherent to the businesses of the Company and in furtherance thereof; provided, however, that so long as it does not materially interfere with the performance of your duties hereunder, you may serve as a director, trustee or officer of,
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or otherwise participate in, educational, welfare, social, religious, civic, professional or trade organizations. Your principal place of employment shall be in Knoxville, Tennessee.
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5.Business Expenses. During your employment hereunder, upon delivery of proper documentation in accordance with the Company’s expense reimbursement policy, the Company shall reimburse you for reasonable travel and other expenses incurred in the performance of your duties as are customarily reimbursed to similarly situated executives of the Company.
7.Non-Competition, Confidential Information, Etc.
(b)Confidential Information. Except as provided in paragraph 7(e)(v), you agree that, during the Term or at any time thereafter: (i) you shall not use for any purpose other than the duly authorized business of the Company, or disclose to any third party, any Confidential Information; and (ii) you will comply with any and all confidentiality obligations of the Company to a third party, whether arising under a written agreement or otherwise. “Confidential Information” means information about the Company and its businesses that is not generally known outside of the Company, which you learn in connection with your employment with the Company. Confidential Information may include, without limitation: (i) the Company’s business strategies, plans, policies and processes; (ii) the Company’s finances, budgets, financial policies and financial projections, including but not limited to annual sales forecasts and targets and any
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computation(s) of the market share; (iii) customized software, marketing tools and/or supplies that you are provided access to by the Company and/or created; (iv) the identity and personally identifiable information (e.g., names, addresses, bank/credit card account numbers, credit histories/reports, social security numbers and telephone numbers) of the Company’s distribution and production partners, on-air and digital talent, customers, vendors and/or any other business contacts, and prospects for any of the foregoing (collectively, “Business Contacts”); (v) any list(s) of the Company’s Business Contacts; (vi) the terms and conditions and/or the proposed terms and conditions of the Company’s contracts with its Business Contacts or any other party and any and all information about the Company’s negotiations with its Business Contacts or any other party, including without limitation executed or partially executed contracts, draft contracts, memoranda of understanding, letters of intent or other expressions of mutual assent, whether written or oral, as well as term sheets; (vii) the names and addresses of the Company’s employees; (viii) the techniques, methods, processes and strategies by which the Company develops, markets, distributes and/or sells any of its services or products, including without limitation the Company’s programming, scheduling and marketing strategies and plans and information about the content of the Company’s programming; (ix) the Company’s intellectual property rights, including but not limited to all business methods, trade secrets, inventions, ideas in development and non-published creative works and the Company’s license agreements for use of third-party intellectual property; and (x) any and all legal advice, opinions, work product, communications and strategies. Information shall not be deemed Confidential Information that: (y) is or becomes generally available to the public other than as a result of a disclosure by you or at your direction or by any other person who directly or indirectly receives such information from you, or (z) is or becomes available to you on a non-confidential basis from a source who is entitled to disclose it to you. Further, in accordance with the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833(b),
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(i) |
you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law; |
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(ii) |
you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and |
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(iii) |
if you file a lawsuit for retaliation by an employer for reporting a suspected violation of law, you may disclose a trade secret to your attorney and use the trade secret information in the court proceeding, provided that you file any document containing the trade secret under seal and do not disclose the trade secret other than pursuant to court order. |
(c)No Solicitation or Interference. You agree that, during the Non-Compete Period, no matter how the Term ends, you shall not, directly or indirectly: (i) employ or solicit the employment of any person who is then or has been within six (6) months prior thereto, an
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employee, independent contractor or consultant of the Company; or (ii) interfere with, disturb or interrupt the relationships (whether or not such relationships have been reduced to formal contracts) of the Company with any of its Business Contacts.
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as required by this paragraph shall not limit your ability to communicate with any Government Agency as outlined in paragraph 7(e)(v) below. |
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(ii) |
You further agree that, during the Term, for one (1) year thereafter and, if longer, during the pendency of any litigation or other proceeding, and except as may be required by law or legal process or in those situations identified in paragraph 7(e)(v) below: (x) you shall not communicate with anyone (other than your own attorneys and tax advisors), except to the extent necessary in the performance of your duties under this Agreement, with respect to the facts or subject matter of any pending or potential litigation, or regulatory or administrative proceeding involving the Company, other than any litigation or other proceeding in which you are a party-in-opposition, without giving prior notice to the Company’s Chief Ethics and Compliance Officer; and (y) you shall not provide any information or documents in response to another party’s attempts to obtain information or documents from you with respect to such matter, either through formal legal process such as a subpoena or by informal means such as interviews, without giving prior notice to the Company’s Chief Ethics and Compliance Officer. |
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(iii) |
You agree to cooperate with the Company and its attorneys, both during employment and during the five (5)-year period following termination of your employment, in connection with any litigation or other proceeding arising out of or relating to matters in which you were involved prior to the termination of your employment. Your cooperation shall include, without limitation, providing assistance to the Company’s counsel, experts or consultants, and providing truthful testimony in pretrial and trial or hearing proceedings. In the event that your cooperation is requested after the termination of your employment, the Company will: (x) seek to minimize interruptions to your schedule to the extent consistent with its interests in the matter; and (y) reimburse you for all reasonable and appropriate out-of-pocket expenses actually incurred by you in connection with such cooperation upon reasonable substantiation of such expenses. |
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(iv) |
Except as required by law or legal process or in those situations identified in paragraph 7(e)(v) below, you agree that you will not testify (x) in any lawsuit or other proceeding that directly or indirectly involves the Company that was not filed by you, or (y) if your testimony may create the impression that such testimony is endorsed or approved by the Company. If you are contacted by any person or entity and asked to testify in any proceeding, except as otherwise provided in paragraph 7(e)(v) and to the maximum extent permitted by law, you shall promptly notify the Company’s Chief Ethics and Compliance Officer that you have been so contacted, and in no event shall such notice be delivered to the Company’s Chief Ethics and Compliance Officer later than two (2) days after the initial contact. All attorney-client and other privileges belong to the Company, and you are not permitted to waive any such privileges unless expressly authorized in writing by the Company’s Chief Ethics and Compliance Officer. |
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(i)Survival; Modification of Terms. The rights and obligations set forth under paragraphs 7(a) through (i) shall remain in full force and effect for the entire period provided therein notwithstanding the termination of your employment under this Agreement for any reason or the expiration of the Term; provided, however, that your obligations under paragraph 7(a) (but not under any other provision of this Agreement) shall cease if you terminate your employment for Good Reason or the Company terminates
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your employment without Cause and you notify the Company in writing, prior to the Company's payment of any severance benefits in accordance with paragraph 8(e)(ii) through (viii), that you have elected to waive your right to receive the severance benefits set forth in paragraphs 8(e)(ii) through (viii). You and the Company agree that the restrictions and remedies contained in paragraphs 7(a) through (h) are reasonable and that it is your intention and the intention of the Company that such restrictions and remedies shall be enforceable to the fullest extent permissible by law. If a court of competent jurisdiction shall find that any such restriction or remedy is unenforceable but would be enforceable if some part were deleted or the period or area of application reduced, then such restriction or remedy shall apply with the modification necessary to make it enforceable. For the avoidance of doubt, and without limiting the generality of the foregoing, you will be required to waive your rights to receive the severance benefits set forth in paragraphs 8(e)(ii) through (viii) if you wish to be released from paragraph 7(a).
(b)Good Reason Termination. You may terminate your employment under this Agreement for Good Reason at any time by written notice to the Company in accordance with paragraph 13. “Good Reason” shall mean exclusively the following events, should one or more of them occur without your consent (other than in connection with the termination
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or suspension of your employment or duties for Cause or in connection with your Disability): (i) a material diminution in your Annual Salary or Annual Incentive opportunity; (ii) a material diminution in your authority, duties or responsibilities; (iii) a material diminution in the authority, duties or responsibilities of the supervisor to whom you are required to report; (iv) a requirement that you report to someone else other than your Reporting Senior or any similar position then in effect, which requirement results in a material change in your reporting structure; (v) a material diminution in the budget over which you retain authority (except for good-faith budget adjustments necessitated by the legitimate business needs of the Company); (vi) a material change in geographic location at which you must perform services under this Agreement from the Company's offices at which you were principally employed; or (vii) any other action or inaction that constitutes a material breach by the Company of the terms of this Agreement. Notwithstanding the foregoing, no event described above shall constitute Good Reason unless: (1) you give notice of termination for Good Reason to the Company in accordance with paragraph 13 specifying the condition or event relied upon for such termination within ninety (90) calendar days after the initial existence of such event; (2) the Company fails to cure the condition or event constituting Good Reason within thirty (30) calendar days after receipt of such notice; and (3) you actually terminate employment within sixty (60) calendar days after delivering such notice.
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Accrued Benefits: The portion of your Annual Salary earned, but not yet paid, through your Date of Termination; any Annual Incentive earned, but not yet paid, for a completed fiscal year preceding the Date of Termination; and any accrued paid time off through your Date of Termination, to the extent not yet used or paid (collectively, the “Accrued Benefits”). The Accrued Benefits shall be paid in a single lump sum |
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within 30 calendar days after your Date of Termination, or as otherwise may be provided in a valid deferral election made pursuant to the terms of the Company’s deferred compensation plan. |
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Prorated Annual Incentive. A prorated Annual Incentive, which shall be in lieu of any annual incentive that you would have otherwise been entitled to receive under the terms of the Annual Incentive Plan covering you for the fiscal year during which your Date of Termination occurs. |
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Severance Payment. As additional severance (and not in lieu of any incentive compensation for the fiscal year in which your Date of Termination occurs), a severance payment equal to 1.5 times the sum of your Annual Salary and Annual Incentive. The severance shall be paid in a single lump sum within 20 calendar days after the Release Deadline. |
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Health Care Coverage. A lump-sum cash payment equal to 18 times the monthly premiums based on the level of coverage in effect for you (e.g., PPO or low/high HSA, employee only or family coverage) on the Date of Termination. |
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Life Insurance. The Company shall take all steps reasonably necessary to continue the life insurance coverage applicable to you on your Date of Termination (and if the policy cannot be continued in its then-current form, the Company shall exercise any required conversion features to continue the policy), at no cost to you, for 1.5 years following your Date of Termination. The amount of such coverage will be reduced by the amount of life insurance coverage furnished to you at no cost by a third-party employer. |
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Financial Planning. A net amount of $10,000, which is intended to cover the approximate cost of financial planning services for you for a period of one year after your Date of Termination. This financial planning stipend shall be paid in a single lump sum within 20 calendar days after the Release Deadline. |
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Outplacement. The Company shall, at its sole expense as incurred, provide you with outplacement services from a recognized outplacement service provider for twelve (12) months, the scope of such services to be determined in the sole discretion of the Company. |
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Pension Enhancement. If, as of your date of termination, you have not yet attained both age 55 and at least 10 “years of service” as defined in the Executive Supplemental Retirement Plan (the “SERP”), then, regardless of any provision in the SERP or the Executive Severance Plan to the contrary, you shall receive a “Pension Enhancement”, payable in a lump sum within 20 calendar days after the Release Deadline, that is intended to provide you with all retirement benefits that would have been available to you if your employment had terminated after you attained both age 55 and 10 years of service. The “Pension Enhancement” will be calculated as follows: |
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the excess, if any, of (1) the actuarial equivalent of the benefit under the Scripps Networks Interactive Pension Plan or its successor (the “Pension Plan”) and the Scripps Networks Interactive, Inc. Supplemental Executive Retirement Plan or its successor (the “SERP”) (utilizing actuarial assumptions and factors no less favorable to you than the most favorable of those in effect under the Pension Plan for computing lump sum benefit payments at any time during the Term) that you would have received under the terms of those plans as in effect on January 1, 2012, or if more favorable to you, on your termination of employment, if your employment had continued for a number of years (or fractions thereof) in the period commencing on the day immediately following your date of termination and ending on the date that you would have attained both age 55 with at least 10 “years of service” (within the meaning of the SERP as in effect on January 1, 2012), assuming for this purpose that: (x) your age and vesting service (but not your benefits service) is increased by the number of years that you are deemed to be so employed, and (y) the rate of base salary and bonus for each year that you are deemed to be so employed shall be determined by reference to your Annual Salary and Annual Incentive, over (2) the actuarial equivalent of your actual benefit, if any, under the Pension Plan and the SERP (utilizing actuarial assumptions and factors no less favorable to you than the most favorable of those in effect under the Pension Plan for computing lump sum benefit payments at any time during the Term) as of your date of termination. The pension enhancement benefits set forth in this paragraph 8(e)(iii) shall be payable to you upon a qualified termination that occurs prior to your 55th birthday, notwithstanding any earlier expiration of the Term of this Agreement. |
9.Severance Contingent on Release. Any severance benefits to be provided under the Company’s Executive Severance Plan, as described in paragraphs 8(e)(ii) through (viii) shall be provided only if you (or in the case of your death or Disability, your legal representative, if applicable) execute and do not later revoke or materially violate a release
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of claims in the form of that certain Form of Release attached to the Company’s Executive Severance Plan (with such changes as the Company may determine to be required or reasonably advisable in order to make the release enforceable and otherwise compliant with applicable law) (the “Release”). The Release must be executed by you and become effective and irrevocable in accordance with its terms no later than the deadline specified at the time of the termination of your employment (the “Release Period”). In the event that the Release Period commences in one calendar year and ends in a second calendar year, the payment of the severance benefits set forth in paragraphs 8(e)(ii) through (viii) shall, to the extent required to comply with Section 409A of the Internal Revenue Code, be paid in the second calendar year, or such later date as may be required by paragraph 20.
12.Indemnification; Liability Insurance. If you are made a party to, are threatened to be made a party to, receive any legal process in, or receive any discovery request or request for information in connection with, any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that you were an officer, director, employee, or agent of the Company, or were serving at the request of or on behalf of the Company, the Company shall indemnify and hold you harmless to the fullest extent permitted or authorized by the Company’s Articles of Incorporation or Code of Regulations or, if greater, by the laws of the State of Tennessee, against all costs, expenses, liabilities and losses you incur in connection therewith. Such indemnification shall continue even if you have ceased to be an officer, director, employee or agent of the Company, and shall inure to the benefit of your heirs, executors and administrators. The Company shall reimburse you for all costs and expenses you incur in connection with any Proceeding within twenty (20) business days after receipt by the Company of a written request for such reimbursement and appropriate documentation associated with such expenses. In addition, the Company agrees to maintain a director’s and officer’s liability insurance policy or policies covering you at a level and on terms and conditions no less favorable than the Company provides its directors and senior-level officers currently (subject to any future improvement in such terms and conditions), until such time as legal or regulatory actions against you are no longer permitted by law.
13.Notices. All notices under this Agreement must be given in writing, by personal delivery or by registered mail, return receipt requested and postage prepaid, if to you, to the
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address shown on this Agreement (or any other address designated in writing by you), with a copy to any other person you designate in writing, and, if to the Company, to your Reporting Senior to the address shown on this Agreement (or any other address designated in writing by the Company), with a copy, to the attention of the Company’s Chief Human Resources Officer. Any notice given by mail shall be deemed to have been given three (3) days following such mailing.
15.Governing Law and Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Tennessee without reference to its choice of law principles. Further, the parties agree that any matter arising out of or relating to this Agreement shall be subject to the sole and exclusive jurisdiction and venue of a state or federal court sitting in Xxxx County, Tennessee, and you hereby waive any objection that you might have now or hereafter with respect to jurisdiction, venue or forum.
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19.Deductions and Withholdings. All amounts payable under this Agreement shall be paid less deductions and income and payroll tax withholdings as may be required under applicable law.
20.Section 409A of the Code. It is the Company’s intent that this Agreement be exempt from the application of, or otherwise comply with, the requirements of Section 409A of the Internal Revenue Code. In particular, any expense eligible for reimbursement must be incurred, or any entitlement to a benefit must be used, during the Term (or the applicable expense reimbursement or benefit continuation period provided in this Agreement). The amount of the reimbursable expense or benefit to which you are entitled during a calendar year will not affect the amount to be provided in any other calendar year, and your right to receive the reimbursement or benefit is not subject to liquidation or exchange for another benefit. Provided the requisite documentation is submitted, the Company will reimburse the eligible expenses on or before the last day of the calendar year following the calendar year in which the expense was incurred. Any payments and benefits provided pursuant to paragraph 8 shall be subject to the applicable provisions regarding Section 409A of the Internal Revenue Code set forth in Section 21 of the Executive Severance Plan.
If the foregoing correctly sets forth our understanding, please sign, date and return an original executed copy to me for our records.
Sincerely yours,
SCRIPPS NETWORKS INTERACTIVE, INC.
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/s/ Xxxxxxx X. Xxxx |
Xxxxxxx X. Xxxx
Chairman, Chief Executive Officer and President
ACCEPTED AND AGREED: |
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/s/ Xxxx Xxxxxx |
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Xxxx Xxxxxx |
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Dated: |
7/28/17 |
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