EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the ____ day of _____________, 19___, by and
between Audio Book Club, Inc., a Florida corporation, with offices at 0000
Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000, P.O. Box 5010, Boca Raton, Florida
33431-0810 (the "Company"), and Xxxxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the audio book club business; and
WHEREAS, the Company recognizes the Executive's substantial
contribution to the growth and success of the Company and desires to provide for
his continued employment by reinforcing and encouraging his continued attention
and dedication to the Company; and
WHEREAS, the Executive is willing to commit himself to continue to
serve and to establish a minimum period during which he will serve the Company
on the terms and conditions herein provided.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, in consideration of
the Executive's services and value to the Company over and beyond his
obligations as an employee, and intending to be legally bound hereby, the
parties agree as follows:
1. Recitals. The Whereas clauses recited above are hereby incorporated
by reference as though they were fully set forth herein.
2. Employment. The Company shall employ the Executive and the Executive
shall serve the Company, on the terms and conditions set forth herein.
3. Term. The employment of the Executive by the Company as provided in
paragraph 2 shall commence on the effective date of this Agreement and end on
the second (2nd) anniversary of the effective date, subject, however, to the
other termination provisions contained herein.
4. Position and Duties. (a) The Executive shall be employed by the
Company as its Chief Executive Officer and may also serve, at his option, as the
Company's Chairman of the Board of Directors. His power and authority shall be
and remain superior to those of any other officer or employee of the Company.
Subject to the direction and control of the Board of Directors, the Executive
shall have general strategic oversight and control of the business and affairs
of the Company consistent with his current position as Chief Executive Officer
of the Company. The scope of his duties and the extent of his responsibilities
shall be substantially the same as the duties and responsibilities that the
Executive currently performs. In addition, the Executive shall not be required
to spend any fixed amount of time in connection with his performance of his
duties.
5. Compensation and Related Matters.
(a) Salary. During the term of this Agreement, the Company
shall pay to the Executive, as basic compensation for his services, an initial
annual salary of $100,000 in equal monthly installments during the first year of
the term of this Agreement; thereafter at any time during the term of this
Agreement the Board of Directors may increase, but not decrease such amount. In
addition the Executive shall be entitled to participate in the Company's
incentive stock option plans and may receive a performance-based bonus, to be
determined by the Board of Directors. The Executive's salary and bonus shall be
reconsidered at least once each fiscal year of the Company and shall not
necessarily be limited to such increases granted other officers.
(b) Expenses. The Executive shall be entitled to receive
prompt reimbursement for all reasonable travel and business expenses in
connection with services performed hereunder in accordance with normal Company
policy, as the same may be determined from time to time.
(c) Insurance and Employee Benefits. The Executive shall be
entitled to receive insurance and employee benefits applicable to all officers
of the Company.
6. Termination by the Company. The Executive's employment hereunder may
be terminated by the Company without any breach of this Agreement only under the
circumstances described below.
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. If, as a result of the Executive's incapacity
due to physical or mental illness, as determined by a physician mutually chosen
by the Executive and the Company, the Executive shall have been absent from his
duties hereunder for a consecutive period of one hundred eighty (180) days and
after notice of termination is given (which may be given before or after the end
of such 180 day period but which will in no event be effective until, at the
earliest, the day following the one hundred eightieth (180th) day of the period)
shall not have returned to the performance of his duties hereunder, as that
concept is contemplated in this Agreement, within thirty (30) days after the
notice of termination is given, the Company may terminate the Executive's
employment hereunder.
(c) Cause. The Company may terminate the Executive's
employment under this Agreement at any time for cause. For purposes of this
Agreement, the term "cause" shall include one or more of the following: (i)
willful misconduct and continued failure by the Executive in the performance of
his duties, as contemplated in this Agreement, as Chief Executive Officer (other
than through disability as defined in paragraph 6(b), above), or (ii) conviction
of a crime involving moral turpitude, theft, embezzlement or continuing alcohol
or drug abuse to the extent that he is unable to perform the duties of his
office. The termination
2
shall be evidenced by written notice thereof to the Executive, which shall
specify the cause for termination.
(d) Without Cause. In addition to any other rights the Company
has to terminate the Executive's employment under this Agreement, the Company
may, at any time, by a vote of not less than sixty percent (60%) of the
directors then in office (excluding the vote of the Executive if he is also a
director), terminate the Executive without cause upon ninety (90) days' prior
written notice to the Executive setting forth the reasons, if any, for the
termination. For purposes of this Agreement, the term "without cause" shall mean
termination by the Company on any grounds other than those set forth in
paragraphs 6(a), (b) or (c) hereof.
(e) Severance Pay. In the event that the Company has
terminated the Executive's employment under this Agreement "without cause" or in
the event there is a "Change of Control" (as defined below), then the Executive
will be entitled to receive severance pay equal to the greater of Two Hundred
Thousand and 00/100 U.S. Dollars ($200,000.00) or two (2) times the total
compensation received by the Executive from the Company during the twelve (12)
months prior to the date of termination. In the event there is a "Change of
Control" (as defined below), the Executive will have six (6) months following
the event which constituted the "Change of Control" to elect to resign (unless
in connection with such event the Executive was terminated) at which time the
Executive will then receive the aforementioned severance pay.
(f) Change of Control. For purposes of this Agreement, a
"Change of Control" shall be deemed to occur, unless previously consented to in
writing by the Executive, upon (i) the actual acquisition or the execution of an
agreement to acquire twenty percent (20%) or more of the voting securities of
the Company by any person or entity not affiliated with the Executive (other
than pursuant to a bona fide underwriting agreement relating to a public
distribution of securities of the Company), (ii) the commencement of a tender or
exchange offer for more than twenty percent (20%) of the voting securities of
the Company by any person or entity not affiliated with the Executive, (iii) the
commencement of a proxy contest against the management for the election of a
majority of the Board of Directors of the Company if the group conducting the
proxy contest owns, has or gains the power to vote at least twenty percent (20%)
of the voting securities of the Company, (iv) a vote by the Board of Directors
to merge, consolidate, sell all or substantially all of the assets of the
Company to any person or entity not affiliated with the Executive, or (v) the
election of directors constituting a majority of the Board of Directors who have
not been nominated or approved by the Executive.
(g) The Executive shall not be required to mitigate the amount
of any payment provided for in this paragraph 6 by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this paragraph 6
be reduced by any compensation earned by the Executive as the result of
employment by another employer or business or by profits earned by the Executive
from any other source at any time before and after the date of termination. The
amounts payable to the Executive under this Agreement shall not be treated as
damages, but as severance pay to which the Executive is entitled by reason of
his employment and the circumstances contemplated by this Agreement.
3
(h) The severance pay which the Executive will be entitled to
receive as a result of the termination of his employment under this Agreement,
shall not be the Executive's exclusive remedy in the event of such termination,
and the Executive will continue to be entitled to all other damages to which the
Executive may be entitled as a result to the termination of his employment under
this Agreement, including all legal fees and expenses incurred by him in
contesting or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by this Agreement.
7. Non-Competition Covenant. The Executive hereby covenants and agrees
that he will not serve as an officer of or perform any equivalent functions for
any other audio book company during the term of his employment under this
Agreement. Nothing in the immediately preceding sentence is intended to be
construed as otherwise preventing the Executive from (i) engaging in other
business activities, (ii) holding positions in charitable organizations, (iii)
purchasing, holding or owning interests in other entities and/or serving as a
director and/or officer of other corporations, or serving as a manager of
limited liability companies or a general partner of partnerships, or (iv) having
any other interest in other businesses. In addition, during the term of this
Agreement and for a period of two (2) years immediately following the
termination of his employment, whether said termination is occasioned by the
Company, the Executive or a mutual agreement of the parties, the Executive shall
not, for himself or on behalf of any other person, persons, firm, partnership,
corporation or company, engage or participate in any activities which are in
direct conflict with the interests of the Company or solicit or attempt to
solicit the business or patronage of any person, firm, corporation, company or
partnership, which had previously been a customer of the Company, for the
purpose of selling products and services similar to those provided by the
Company.
8. Indemnification. To the maximum extent permitted under the corporate
laws of the State of Florida or, if more favorable, the Articles of
Incorporation and/or By-Laws of the Company as in effect on the date of this
Agreement, (a) the Executive shall be indemnified and held harmless by the
Company, as provided under such corporate laws or such Articles of Incorporation
and/or By-Laws, as applicable, for any and all actions taken or matters
undertaken, directly or indirectly, in the performance of his duties and
responsibilities under this Agreement or otherwise on behalf of the Company, and
(b) without limiting clause (a), the Company shall indemnify and hold harmless
the Executive from and against (i) any claim, loss, liability, obligation,
damage, cost, expense, action, suit, proceeding or cause of action
(collectively, "Claims") arising from or out of or relating to the Executive's
acting as an officer, director, employee or agent of the Company or any of its
affiliates or in any other capacity, including, without limitation, any
fiduciary capacity, in which the Executive serves at the request of the Company,
and (ii) any cost or expense (including, without limitation, fees and
disbursements of counsel) (collectively, "Expenses") incurred by the Executive
in connection with the defense or investigation thereof. If any Claim is
asserted or other matter arises with respect to which the Executive believes in
good faith the Executive is entitled to indemnification as contemplated hereby,
the Company shall pay the Expenses incurred by the Executive in connection with
the defense or investigation of such Claim or matter (or cause such Expenses to
be paid) on a monthly basis, provided that the Executive shall reimburse the
Company for such amounts, plus
4
simple interest thereon at the then current Prime Rate as in effect from time to
time, compounded annually, if the Executive shall be found, as finally
judicially determined by a court of competent jurisdiction, not to have been
entitled to indemnification hereunder.
9. Binding Agreement. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees. In addition, this Agreement and the
obligations and rights of the Company hereunder shall be binding on any person,
firm or corporation which is a successor-in-interest to the Company.
10. Notice. For the purpose of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally, or by private
overnight courier or mail service, postage prepaid or (unless otherwise
specified) mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive: Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000
P.O. Box 5010
Xxxx Xxxxx, Xxxxxxx 00000-0000
(000) 000-0000
If to the Company: Audio Book Club, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, X.X., Xxxxx 000
P.O. Box 5010
Xxxx Xxxxx, Xxxxxxx 00000-0000
(000) 000-0000
or to such other address as the parties may furnish to each other in writing.
Copies of all notices, demands and communications shall be sent to the home
addresses of all members of the Board of Directors of the Company.
11. Miscellaneous.
(a) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the parties hereto, provided, however, that this Agreement may be
modified, waived or discharged by mutual agreement in writing.
(b) No delay, waiver, omission or forbearance (whether by
conduct or otherwise) by any party hereto at any time to exercise any right,
option, duty or power arising out of breach or default by the other party of any
of the terms, conditions or provisions of this Agreement to be performed by such
other party shall constitute a waiver by such party or a waiver of such party's
rights to enforce any right, option or power as against the other party or as to
subsequent
5
breach or default by such other party, and no explicit waiver shall constitute a
waiver of similar or dissimilar terms, provisions or conditions at the same time
or at any prior or subsequent time.
(c) In the event of a dispute between the Executive and the
Company concerning any of the provisions of this Agreement or the enforcement of
the terms hereof, should the Executive prevail in any settlement or final,
unappealable judgment of a court of competent jurisdiction, the Company shall
pay the Executive's costs incurred therein, including reasonable attorneys'
fees.
12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Florida and any action brought by either party shall be
commenced in the courts of the State of Florida. The Executive and the Company
hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Florida and the United States of
America located in Palm Beach County, Florida for any and all actions, suits or
proceedings arising out of or resulting from or relating to this Agreement and
the transactions contemplated hereby and the parties agree not to commence any
action, suit or proceeding relating thereto except in such courts. The parties
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any such action, suit or proceeding arising out of, resulting from or
relating to this Agreement or the transactions contemplated hereby in such
courts and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
13. Validity. The invalidity or unenforceability of any provision or
provisions 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.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. Entire Agreement. This Agreement contains the entire understanding
of the Company and the Executive with respect to his employment by the Company.
This Agreement supersedes all prior agreements and understandings whether
written or oral between the Executive and the Company, and there are no
restrictions, agreements, promises, warranties or covenants other than those
stated in this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK -
SIGNATURE BLOCKS APPEAR ON NEXT PAGE]
6
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date shown below effective as of the date first written above.
"COMPANY"
Date Signed:___________, 19__ AUDIO BOOK CLUB, INC., a Florida
corporation
By:___________________________________
Printed Name:_________________________
Title:________________________________
"EXECUTIVE"
Date Signed:___________, 19__ _____________________________________
Printed Name:_________________________
7
