Exhibit 10.5
This
EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of March 1, 2003, by and
between EMMIS OPERATING COMPANY, an Indiana corporation (“Employer” or
“Emmis”), and XXXXXXX X. XXXXXXXXX, a New York resident
(“Executive”).
RECITALS
WHEREAS,
Employer and its subsidiaries are engaged in the ownership and operation of certain radio
and television stations, magazines, and related operations; and
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WHEREAS,
Employer desires to employ Executive as an executive, and Executive desires to be so
employed. NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
covenants set forth in this |
Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
AGREEMENT
1.
Employment Status. Upon the terms and subject to the conditions set forth
in this Agreement, Employer hereby employs Executive, and Executive hereby
accepts exclusive employment with Employer.
2.
Term. The term of Executive’s employment shall be for a
period of three (3) years commencing on March 1, 2003, and continuing until
February 28, 2006 (the “Term”). This Agreement shall expire at the end
of the Term unless earlier terminated in accordance with the terms of this
Agreement. For purposes of this Agreement, the term “Contract Year”
shall be defined to mean each twelve (12) month period commencing on March 1,
2003, and on each anniversary thereof during the Term. The term “First
Contract Year” shall refer to the period commencing on March 1, 2003, and
ending on February 29, 2004; “Second Contract Year” shall refer to the
period commencing on March 1, 2004, and ending on February 28, 2005; “Third
Contract Year” shall refer to the period commencing on March 1, 2005, and
ending on February 28, 2006. It is understood and agreed that, in the event
Employer does not intend to provide Executive with a written proposal for
continued employment in the same position he is then-currently holding upon the
expiration of the Term, Employer shall provide written notice of such fact to
Executive no later than 366 days prior to the expiration of the Term.
3.
Executive’s Position, Duties and Authority.
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3.1
Position. Employer shall employ Executive, and Executive shall serve as an
executive of Employer, and of any successor of Employer by merger, acquisition of
substantially all of the assets or stock of Employer, or otherwise. Executive shall serve
as President – Television Division and, subject to the provisions of Exhibit A
(attached hereto and made a part hereof), shall serve in such other senior management
positions to which Employer may appoint Executive during the Term.
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3.2
Duties and Authority. Executive shall have such duties, functions, authority and
responsibilities as are commensurate with the office(s) Executive holds with the Employer
during the Term.
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3.3
Directorships and Other Offices. If Executive is elected as a Director of Emmis
Communications Corporation, Executive shall serve in such position without additional
remuneration but shall be entitled to the benefit of indemnification pursuant to the terms
of Section 15.11. Notwithstanding the foregoing, in the event Employer adopts a
policy whereby Employer remunerates “inside” Directors of Emmis Communications
Corporation who are also employees of Employer, Executive shall be entitled to receive
compensation for such services according to the terms and subject to the conditions of
Employer’s policy. Executive shall also serve without remuneration as a director
and/or officer of one or more of Employer’s subsidiaries or affiliates if appointed
to such position(s) by Employer.
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3.4
Subsequent Employment by Employer. According to the terms and subject to the
conditions set forth in this Section 3.4, in the event Employer does not offer
Executive reasonably acceptable employment with Employer, any related entity, or any
entity established in connection with a Separation Event (as defined below) upon the
expiration of the Term, Employer shall continue to make regular payments of
Executive’s Base Salary (as defined below; provided, however, that for purposes of
this Section 3.4, Executive’s Base Salary shall be $535,000), plus Auto
Allowance (as defined below), plus Life and Disability Insurance Premium (as defined
below) (collectively, the “Severance Payment”) for a period of twelve (12)
months immediately following Executive’s termination of employment with Employer (the
“Severance Period”); provided, however, that in the event Executive commences
subsequent employment at any time during the Severance Period, Employer’s financial
obligation pursuant to this provision shall be reduced by any amounts paid to Executive by
Executive’s subsequent employer during the Severance Period. In the event that
Executive’s subsequent compensation equals or exceeds the Severance Payment,
Employer’s financial obligation to Executive pursuant to this provision shall
immediately terminate. It is understood and agreed that, as a material condition upon
which Executive shall be entitled to receive the Severance Payment, and as an inducement
to Emmis’ agreement to pay Executive the Severance Payment, Executive agrees to: (i)
execute a general release in a form acceptable to Emmis upon the termination of
Executive’s employment; and (ii) promptly notify Employer in writing of the
commencement date upon which Executive begins subsequent employment along with the
particulars of Executive’s subsequent compensation package for purposes of
determining Employer’s continuing obligations, if any, under this Section 3.4.
Notwithstanding anything to the contrary contained in this Agreement: (i) Executive shall
not be entitled to the Severance Payment if Executive’s employment is terminated
either (a) by Employer under Section 11.1, (b) by reason of Executive’s
disability or death under Section 12 or 13, or (c) by Executive for any
reason other than a material breach of any of the terms and conditions of this Agreement
by Employer (after providing Employer with notice of such breach and a reasonable
opportunity to cure such breach), or if Employer offers Executive reasonably acceptable
employment upon the expiration of the Term; and (ii) it is expressly understood and agreed
that, in the event Executive commences employment with a “Competitor” at any
time during the Severance Period, Executive shall no longer be entitled to receive any
unpaid portion of the Severance Payment. For purposes of this Agreement,
“Competitor” shall be defined to mean any individual or entity that owns or
operates one (1) or more television station in any city in which Employer or any of its
affiliates or related entities owns or operates any television station. Furthermore, it is
expressly agreed that any individual or entity that does not own or operate a television
station in any city in which Employer or any of its affiliates or related entities owns or
operates any television station at the time of commencement of Employee’s employment
with such individual or entity, but subsequently acquires a television station at any time
during the Severance Period, shall be deemed a “Competitor” for purposes of this
Section 3.4. Executive acknowledges that Executive shall not be entitled to any
additional severance compensation upon the termination or expiration of this Agreement
other than the Severance Payment. It is understood and agreed that any offer of subsequent
employment by Employer requiring Executive to permanently relocate from New York City
shall be deemed not to be an offer of “reasonably acceptable employment” for
purposes of this Section 3.4.
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4.
Full-Time, Exclusive Services. Executive’s services pursuant to this
Agreement shall be performed on a full-time and exclusive basis in a
professional, diligent and competent manner to the best of Executive’s
abilities. Executive shall not undertake any outside employment or outside
business activity without the prior written consent of Employer; provided,
however, that Executive shall be permitted to serve on the board of charitable
or other civic organizations so long as such services do not interfere with
Executive’s duties and obligations pursuant to this Agreement.
5.
Location of Employment; Travel. The location for performance of
Executive’s services hereunder shall be primarily at the Employer’s
headquarters in Indianapolis, Indiana, and secondarily in New York, New York.
Executive shall allocate Executive’s time at each location in the same
manner and frequency as required by Employer at the time of execution of this
Agreement. It is understood and agreed that any modification of this arrangement
shall be mutually agreed upon in writing by the parties. Executive shall
undertake such travel as the performance of Executive’s duties pursuant to
this Agreement may require.
6.
Compensation.
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6.1
Base Salary. Employer shall pay or cause to be paid to Executive an annualized base
salary in the amount of Four Hundred Thirty Five Thousand Dollars ($435,000) (subject to
withholding for applicable taxes and as otherwise required by law) (the “Base
Salary”) each Contract Year during the Term. Employer shall pay Executive the Base
Salary according to Employer’s customary payroll practices. Executive acknowledges
and agrees that: (i) Employer may pay a portion of Executive’s Base Salary (not to
exceed ten percent (10%)) in Shares (as defined below) pursuant to a plan adopted for
Emmis employees or for other executive-level officers of Employer; and (ii) ten percent
(10%) of any Base Salary paid pursuant to this Agreement is being paid in consideration of
Employer’s rights set forth in Section 10 of this Agreement.
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6.2
Annual Incentive Compensation. Pursuant to the terms and subject to the conditions
of this Section 6.2, each Contract Year during the Term, Executive shall be
eligible to receive one (1) annual performance bonus in a target amount of Three Hundred
Thousand Dollars ($300,000) (subject to withholding for applicable taxes and as otherwise
required by law) (each, a “Contract Year Bonus”), to be paid after the
conclusion of each Contract Year, the exact amount of which shall be determined by means
of Executive’s attainment of certain performance goals as determined each Contract
Year by the Compensation Committee of the Employer’s Board of Directors (the
“Compensation Committee”) after reasonable consultation with Executive.
Executive acknowledges and agrees that, as a material condition to receiving a Contract
Year Bonus, as of the end of each respective Contract Year: (i) this Agreement must be in
effect and not previously terminated for any reason (other than a breach of this Agreement
by Employer); and (ii) Executive must be fully performing Executive’s duties and
obligations as required hereunder and shall not be in breach of any of the terms and
conditions of this Agreement. It is understood and agreed that Emmis may, at its sole
election, pay any Contract Year Bonus, if any, in cash or Shares. In the event Emmis
elects pursuant to this Section 6.2 to pay a Contract Year Bonus in Shares, the
exact number of Shares to be awarded to Executive shall be determined by dividing the
total dollar amount of the applicable Contract Year Bonus by the average of the reported
high and low Share price on a valuation date to be used by Employer in determining similar
annual incentive compensation awards for other members of Employer’s senior
management team (the “Valuation Formula”). Any Contract Year Bonus amounts
earned by Executive pursuant to the terms and conditions of this Section 6.2 shall
be awarded promptly following Employer’s fiscal year end earnings release or at such
other time as annual incentive compensation awards are generally made to other members of
Employer’s senior management team (but in no event later than ninety (90) days after
the expiration of the applicable Contract Year).
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6.3
Equity Incentive Compensation. On or about the commencement of each Contract Year
during the Term, or at any other time or times during each Contract Year when Employer
generally awards Options (as defined below) to members of Employer’s senior
management team, Executive shall receive an option to acquire Fifty Thousand (50,000)
shares of Class A Common Stock of Emmis Communications Corporation (the
“Shares”) pursuant to the terms and subject to the conditions of the applicable
Equity Incentive Plan of Employer (each, an “Option”). It is understood and
agreed that in the event of any change in the outstanding Shares by reason of any
reorganization, recapitalization, stock split, reverse stock split, stock dividend, share
combination, consolidation or similar event, including without limitation a Separation
Event, the number and class of Shares awarded pursuant to this Agreement or covered by an
Option granted pursuant to this Section 6.3 and any applicable Option exercise
price shall be adjusted by the Compensation Committee in its sole discretion and in
accordance with the terms of the applicable Equity Incentive Plan of Employer and the
Option agreement evidencing the grant of the Option. The determination of the Compensation
Committee shall be conclusive and binding. Executive hereby acknowledges Executive’s
receipt of an Option for the First Contract Year on or about March 1, 2003.
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6.4
Stock Bonus. On or about February 28, 2006, Executive shall receive Thirty Seven
Thousand Five Hundred (37,500) Shares (the “Bonus Shares”); provided, that (i)
this Agreement is in effect on February 28, 2006 and has not been previously terminated
for any reason (other than a breach of this Agreement by Employer); and (ii) Executive has
fully performed all of Executive’s duties and obligations under this Agreement
throughout the Term and is not in breach of any of the terms and conditions of this
Agreement. Employer shall have the right, in its sole and absolute discretion, to pay to
Executive the value of the Bonus Shares (according to the Valuation Formula) in cash in
lieu of granting Executive the Bonus Shares.
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6.5
Auto Allowance. During the Term, Executive shall receive a monthly auto allowance
(“Auto Allowance”) in the amount of One Thousand Dollars ($1,000) (subject to
withholding for applicable taxes and as otherwise required by law) consistent with
Employer’s policy or practice regarding such allowances, as such policy or practice
may be changed or eliminated from time to time during the Term in Employer’s sole
discretion; provided, however, that in no event shall the amount paid to Executive under
this Section 6.5 be reduced.
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6.6
Life and Disability Insurance. Each Contract Year during the Term, Employer agrees
to reimburse Executive in an amount not to exceed Five Thousand Dollars ($5,000) (the
“Life and Disability Insurance Premium”) for the annual premium associated with
Executive’s purchase of a term life and disability insurance policy or policies on
the life of Executive. Executive shall be entitled to freely select and change the
beneficiary or beneficiaries under such policy or policies. Notwithstanding anything to
the contrary contained in this Agreement, Employer’s obligations under this
Section 6.6 are expressly contingent upon Executive providing required information
and taking all necessary actions required of Executive in order to obtain and maintain the
subject policy or policies, including without limitation, passing any required physical
examinations.
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6.7
Performance-Based Compensation; Fractional Shares. It is the intention of the
parties that each Contract Year Bonus paid to Executive pursuant to this Section 6
will be deemed performance-based compensation in order to permit such compensation to
qualify for deduction under Section 162(m) of the Internal Revenue Code of 1986.
Accordingly, to the extent permitted by law, the provisions of this Section 6 shall
be construed to permit each Contract Year Bonus paid hereunder to so qualify.
Additionally, in the event that the calculation of a certain number of Shares awarded to
Executive pursuant to any of the provisions of this Section 6 results in a
fractional Share, such fractional Share shall be rounded up to the nearest whole Share.
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7.
Business Expenses. Employer shall pay or reimburse Executive for all
reasonable expenses actually incurred by Executive during the Term directly
related to the performance of Executive’s services hereunder upon
presentation of expense statements, vouchers or similar documentation, or such
other supporting information as Employer may require of Executive.
8.
Fringe Benefits and Vacation. During the Term, Executive shall receive
four (4) weeks of paid vacation in accordance with Employer’s applicable
policies and procedures for executive-level employees. Executive shall also be
eligible to participate in and receive the fringe benefits generally made
available to other executive-level employees of Employer in accordance with the
general provisions of Employer’s fringe benefit plans or programs;
provided, however that Executive understands that these benefit plans or
programs may be increased, changed, eliminated or added to from time to time
during the Term as determined in Employer’s sole and absolute discretion.
9.
Confidential Information.
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9.1
Non-Disclosure. Executive acknowledges that certain information concerning the
business of Employer is of a proprietary and highly confidential nature, and that as a
result of Executive’s employment with Employer prior to and during the Term,
Executive has received and developed, and will hereafter receive and continue to develop,
proprietary and other confidential information concerning the business of Employer and its
subsidiaries and related entities which, if known to competitors of Employer, would damage
Employer, its subsidiaries and related entities, and their respective businesses.
Accordingly, Executive agrees that, during the Term and thereafter, Executive shall not
divulge or appropriate for Executive’s own use, or for the use or benefit of any
third party (other than Employer or its representatives or as specifically directed in
writing by Employer) any information or knowledge concerning the business of Employer or
any of its subsidiaries or related entities which is not generally available to the public
other than through the activities of Executive. Executive further agrees that upon
termination of Executive’s employment for any reason, Executive shall promptly
surrender to Employer all documents, brochures, writings, illustrations, price lists,
marketing plans, budgets, presentations, financial or other information, plans, forecasts
and any other such materials (regardless of form or character) that Executive received
from or developed on behalf of Employer in connection with Executive’s employment
with Employer prior to and during the Term. Executive acknowledges that all such materials
shall remain at all times during and after the expiration or termination of the Term for
any reason the sole and exclusive property of Employer, and that nothing in this Agreement
shall be deemed to grant Executive any right, title or interest in such material.
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9.2
Injunctive Relief. Executive acknowledges that: Executive’s breach of
Section 9.1 will cause irreparable harm and damage to Employer, the exact amount
of which will be difficult to ascertain; that the remedies at law for any such breach
would be inadequate; and that the provisions of this Section 9 have been
specifically negotiated and carefully written to prevent such irreparable harm and damage.
Accordingly, if Executive breaches Section 9.1, Employer shall be entitled to
injunctive relief enforcing Section 9.1 to the extent reasonably necessary to
protect Employer’s legitimate interests, without posting bond or other security.
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10.
Non-Interference; Injunctive Relief.
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10.1
Non-Interference. During the Term and for a period of two (2)
years immediately thereafter (the “Restrictive Period”), Executive shall not,
directly or indirectly, take any action (or permit any action to be taken by an entity
with which Executive is associated in a management role) which has the effect of
interfering with Employer’s relationship (contractual or otherwise) with any employee
of Employer or any of its subsidiaries, affiliates or related entities. Without limiting
the generality of the foregoing, during the Restrictive Period, Executive shall refrain
from, either directly or indirectly, soliciting, inducing, recruiting or encouraging any
of Employer’s employees to leave their employment with Employer either for
Executive’s benefit or on behalf of or for the benefit of any other person or entity.
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10.2
Injunctive Relief. Executive acknowledges and agrees that the provisions of this
Section 10 have been specifically negotiated and carefully worded in recognition of
the opportunities which shall be afforded to Executive by Employer by virtue of
Executive’s continued association with Employer and the influence that Executive has
and will continue to have over Employer’s employees, customers and vendors. Executive
further acknowledges that: Executive’s breach of Section 10.1 will cause
irreparable harm and damage to Employer, the exact amount of which will be difficult to
ascertain; that the remedies at law for any such breach would be inadequate; and that the
provisions of this Section 10 have been specifically negotiated and carefully
written to prevent such irreparable injury and damage. Accordingly, if Executive breaches
Section 10.1, Employer shall be entitled to injunctive relief enforcing Section
10.1 to the extent reasonably necessary to protect Employer’s legitimate
interests, without posting bond or other security. If Executive violates Section
10.1 and Employer brings legal action for injunctive or other relief, Employer shall
not, as a result of the time involved in obtaining such relief, be deprived of the benefit
of the full period of non-interference set forth herein. Accordingly, the obligations set
forth in Section 10.1 shall be deemed to have the duration set forth therein,
computed from the date such relief is granted but reduced by the time expired between the
date the restrictive period began to run and the date of the first violation of the
obligations by Executive. Additionally, it is understood and agreed that, in the event
Employer brings legal action for injunctive or other relief pursuant to this Section
10, the prevailing party in any such action shall be reimbursed for all reasonable
attorneys’ fees and expenses related to any action brought pursuant to this
Section 10.
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10.3
Construction. Despite the express agreement herein between Employer and Executive,
in the event that any of the provisions set forth in this Section 10 shall be
determined by any court or other tribunal of competent jurisdiction to be unenforceable
for any reason whatsoever, the parties agree that this Section 10 shall be
interpreted to extend only to the maximum extent as to which it may be enforceable, and
that this Section 10 shall be severable into its component parts, all as determined
by such court or tribunal.
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11.
Termination of Agreement.
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11.1
Termination of Agreement by Employer for Cause. Employer may terminate this
Agreement and Executive’s employment hereunder for Cause (as defined in Section
11.3 below) in accordance with the terms and conditions of this Section 11.
Following a determination by Employer that Executive should be terminated for Cause,
Employer shall give written notice to Executive specifying the grounds for such
termination (the “Preliminary Notice”), and Executive shall have five (5) days
after receipt of the Preliminary Notice to respond in writing. If following the expiration
of such five (5) day period Employer reaffirms its determination that Executive should be
terminated for Cause, such termination shall be effective upon delivery by Employer to
Executive of a final notice of termination (the “Final Notice”).
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11.2
Effect of Termination by Employer for Cause. In the event of termination for
Cause as provided in Section 11.1 above:
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(i) Executive
shall have no further obligations or liabilities hereunder, except
Executive’s obligations under Sections9 and 10,
which shall survive the termination of this Agreement. |
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(ii) Employer
shall have no further obligations or liabilities hereunder, except that
Employer shall, not later than two (2) weeks after the termination date: |
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(a) Pay
to Executive all unpaid Base Salary with respect to any applicable pay period
ending on or before the termination date; and |
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(b) Pay
to Executive any Contract Year Bonus, if any, which Executive earned for
a Contract Year ending on or prior to the termination date pursuant to Section 6.2
but which is unpaid as of the termination date. |
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11.3
Definition of Cause. For purposes of this Agreement, “Cause” shall
be defined to mean any of the following: (i) any action or omission by Executive involving
willful or repeated failure, neglect or refusal to perform any of Executive’s duties
or obligations under this Agreement (or any duties assigned to Executive consistent with
the terms of this Agreement) or abide by any applicable policy of Employer, and
continuation of such breach after written notice and the expiration of a ten (10) day cure
period; provided, however, that it is not the parties’ intention that Employer shall
be required to provide successive such notices, and in the event Employer has provided
Executive with a notice and opportunity to cure pursuant to this Section 11.3,
Employer may terminate this Agreement for a subsequent breach similar or related to the
breach for which notice was previously given or for a continuing series or pattern of
breaches (whether or not similar or related) without providing notice or an opportunity to
cure; (ii) commission of any felony or any other crime involving an act of moral
turpitude; (iii) Executive’s action or omission, or knowing allowance of actions or
omissions, which are in violation of any law or the rules and regulations of the Federal
Communications Commission (the “FCC”), or which otherwise jeopardize the
licenses granted to Employer or any of Employer’s subsidiaries or affiliates in
connection with the ownership or operation of any radio or television station; (iv) theft
in any amount; (v) actual or threatened violence against another employee; (vi) sexual or
other prohibited harassment of others; (vii) unauthorized disclosure or use of proprietary
or confidential information, as described more fully in Section 9.1; (viii) any
action which brings Employer or any of Employer’s subsidiaries or affiliates into
public disrepute, contempt, scandal or ridicule; and (ix) any matter constituting cause or
gross misconduct under applicable laws.
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11.4
Change in Control. In the event of a
“Change in Control”, the rights and obligations of Executive and Employer shall
be set forth in a separate Change in Control Agreement to be executed by the parties in a
form acceptable to Employer and thereafter attached to this Agreement as Exhibit A.
“Change in Control” shall have the meaning ascribed to it in Exhibit A.
Notwithstanding anything to the contrary contained herein or in Exhibit A, a
Change in Control shall be deemed not to have occurred if, immediately following a
Separation Event or the transaction or transactions described in the definition of Change
in Control in Exhibit A: (i) Xxxxxxx X. Xxxxxxx (“Xxxxxxx”) is Chairman
or Chief Executive Officer of Employer or any successor thereto, including without
limitation, the Television Division or any entity established as a result of a Separation
Event (collectively, “Successor”); or (ii) Smulyan retains the ability to vote
at least fifty percent (50%) of all classes of stock of the Employer or any Successor; or
(iii) Smulyan retains the ability to elect a majority of the Board of Directors of
Employer or any Successor. For purposes of this Agreement, “Separation Event” shall
be defined as any separation or bifurcation of Employer’s radio and television
divisions by means of merger, corporate reorganization, sale or disposition of assets,
spin off, tax free reorganization, or otherwise.
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12. Disability.
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12.1
Termination of Employment. If Executive shall become Disabled (as defined in
Section 12.2), Employer shall continue to compensate Executive under the
terms of this Agreement without diminution and otherwise without regard to such disability
or nonperformance of duties until Executive has been disabled for a cumulative period of
six (6) months, at which time Employer may, in its sole discretion, elect to terminate
Executive’s employment. If Employer elects to terminate Executive’s employment
pursuant to this Section 12.1, the date that Executive’s employment terminates
shall be referred to herein as the “Disability Termination Date.”
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12.2
Definition of Disability. Executive shall be deemed to have become
“Disabled” for purposes of this Agreement if, during the Term, because of ill
health, physical or mental disability, or for other causes beyond Executive’s
reasonable control, Executive shall have been unable to perform Executive’s duties
hereunder as reasonably determined by a physician selected by Employer.
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12.3
Obligations after Termination. Following a Disability Termination Date, Executive
shall have no further obligations or liabilities hereunder except Executive’s
obligations under Sections 9 and 10 which shall survive the
termination of the Term. After a Disability Termination Date, Employer shall have no
further obligations or liabilities hereunder except its obligations under Section 12.4
which shall also survive the termination of the Term.
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12.4
Payment of Unpaid Amounts after Termination. Employer shall, not later than two (2)
weeks after a Disability Termination Date, pay to Executive: (i) all unpaid Base Salary
with respect to any period ending on or before the Disability Termination Date; plus (ii)
any Contract Year Bonus, if any, earned by Executive for a Contract Year ending on or
prior to the Disability Termination Date pursuant to Section 6.2 but which is
unpaid as of the Disability Termination Date; provided, however, that in the event a
Disability Termination Date occurs at least six (6) months after the commencement of a
Contract Year during the Term, Employer shall pay to Executive a pro-rated portion of the
Contract Year Bonus for the Contract Year during which the Disability Termination Date
occurs, such amount to be determined in the sole discretion of Employer.
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12.5
No Reduction. Amounts payable pursuant to this Section 12 shall not be
reduced by the value of any benefits payable to Executive under any disability insurance
plan or policy, including without limitation, any policy contemplated by Section
6.6 of this Agreement.
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13.
Death
of Executive.
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13.1
Termination of Agreement. This Agreement shall terminate immediately upon
Executive’s death. In the event of such termination, Employer shall have no further
obligations or liabilities hereunder except its obligations under Section 13.2
which shall survive such termination.
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13.2
Compensation. Employer shall, not later than two (2) weeks after Executive’s
date of death, pay to Executive’s estate or designated beneficiary all unpaid Base
Salary and Contract Year Bonus amounts earned by Executive, if any, with respect to any
period ending on or before Executive’s date of death; provided, however, that in the
event Executive’s date of death occurs at least six (6) months after the commencement
of a Contract Year during the Term, Employer shall pay to Executive’s estate or
designated beneficiary a pro-rated portion of the Contract Year Bonus for the Contract
Year during which Executive’s death occurs, such amount to be determined in the sole
discretion of Employer.
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13.3
No Reduction. Amounts payable pursuant to this Section 13 shall not be
reduced by the value of any benefits payable to Executive’s estate or designated
beneficiaries under any applicable life insurance plan or policy, including without
limitation, any policy contemplated by Section 6.6 of this Agreement.
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13.4
Death after Termination. In the event that Executive dies after termination of this
Agreement pursuant to Section 11 or 12, all amounts required to be paid by
Employer prior to Executive’s death in connection with such termination that remain
unpaid as of Executive’s date of death shall be paid to Executive’s estate or
designated beneficiary.
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14.
Notices. All notices, requests, consents and other communications,
required or permitted to be given hereunder, shall be made in writing and shall
be deemed to have been duly given if delivered personally or sent by prepaid
telegram, or mailed first-class, postage prepaid, by registered or certified
mail, as follows (or to such other or additional address as either party shall
designate by notice in writing to the other in accordance herewith):
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(i) If to Employer:
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Emmis Communications Corporation
00 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx, Esq.
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With a copy to:
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Xxxx X. Xxxxxx, Esq.
00000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
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(ii) If to Executive, to Executive's address on the personnel records of Employer.
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15.
Miscellaneous.
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15.1
Governing Law. This Agreement shall be deemed to have been entered into in the
State of Indiana and shall be governed by, and construed and enforced in accordance with,
the laws of the State of Indiana without regard to its choice of law provisions.
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15.2
Arbitration. The parties agree that any controversy or claim of either party hereto
arising out of or in any way relating to this Agreement, or breach thereof, shall be
settled by final and binding arbitration in Indianapolis, Indiana in accordance with the
applicable rules of the American Arbitration Association, and that judgment upon any award
rendered may be entered by the prevailing party in any court having jurisdiction thereof.
The parties agree to share equally all costs associated with any arbitration; provided,
however, that each party shall be responsible for its own attorneys’ fees and
expenses.
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15.3
Captions. The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of any of the terms or
conditions of this Agreement.
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15.4
Entire Agreement; Merger. This Agreement and Exhibit A set forth the entire
agreement and understanding of the parties relating to the subject matter herein, and
supersede all prior agreements, arrangements and understandings, written or oral, between
the parties, which are merged herein.
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15.5 Successors
and Assigns. This Agreement, and Executive’s rights and obligations hereunder,
may not be assigned by Executive without the prior written consent of Employer, which
consent may be granted or withheld in Employer’s sole and absolute discretion;
provided, however, that Executive may designate pursuant to Section 15.7 one or
more beneficiaries to receive any amounts that would otherwise be payable hereunder to
Executive’s estate. Employer may assign all or any portion of its rights and
obligations hereunder to any subsidiary, affiliate or related entity, or any third party
by way of merger, corporate reorganization, acquisition of substantially all of the
assets or stock of Employer, or otherwise.
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15.6
Amendments; Waivers. This Agreement cannot be changed, modified or amended, and no
provision or requirement hereof may be waived, without the written consent of Executive
and Employer. The failure of either party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such party at a later time to
enforce such provision. No waiver by a party of the breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing waiver of any
such breach or a waiver of the breach of any other term or covenant contained in this
Agreement.
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15.7
Beneficiaries. Whenever this Agreement provides for any payment to Executive’s
estate, such payment may be made instead to such beneficiary or beneficiaries as Executive
may have designated in a writing filed with Employer. Executive shall have the right to
revoke any such designation and to re-designate a beneficiary or beneficiaries by written
notice to Employer (and to any applicable insurance company).
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15.8
Executive’s Warranty and Indemnity. Executive hereby represents and warrants
that Executive: (i) has the full and unqualified right to enter into and fully perform
this Agreement according to each and every term and condition contained herein; and (ii)
has not made any agreement, contractual obligation, or commitment in contravention of any
of the terms and conditions of this Agreement or which would prevent Executive from
performing according to any of the terms and conditions contained herein. Furthermore,
Executive hereby agrees to fully indemnify and hold harmless Employer and each of its
subsidiaries, affiliates and related entities, and each of their respective officers,
directors, employees, agents, attorneys, insurers and representatives (the “Emmis
Group”) from and against any and all losses, costs, damages, expenses (including
attorneys’ fees and expenses), liabilities and claims, arising out of, in connection
with, or in any way related to Executive’s breach of any of the representations or
warranties contained in this Section 15.8 or Executive’s breach of any of the
material terms or conditions contained in this Agreement.
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15.9
No Obligation to Utilize Services. Employer shall not be obligated to utilize
Executive’s services nor use the results or products of such services even if
Executive is not in default hereunder. Employer may at any time during the Term, for any
reason, elect not to use Executive’s services or have any further obligations to
Executive under this Agreement except as provided in the next sentence. If Employer elects
not to use Executive’s services as permitted herein, Executive shall be paid
Executive’s full compensation as described more fully in Section 6 at the
times and in the installments as provided herein as if Executive had fulfilled
Executive’s obligations hereunder through the expiration of the Term.
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15.10
Change in Fiscal Year. If Employer changes its fiscal year, Employer shall make
such adjustments to the various dates and amounts included herein or in any plan or
program referenced herein as are necessary or appropriate; provided, however, that the end
of the Term shall in no event be extended beyond the expiration of the Term without the
written consent of the parties.
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15.11
Indemnification. Executive shall be entitled to the benefit of the indemnification
provisions set forth in Employer’s Amended and Restated Articles of Incorporation
and/or By-Laws, or any applicable corporate resolution, as the same may be amended from
time to time during the Term (not including any limiting amendments or additions, but
including any amendments or additions that add to or broaden the protection afforded to
Executive at the time of execution of this Agreement) to the fullest extent permitted by
applicable law. Additionally, Employer shall cause Executive to be indemnified in
accordance with Chapter 37 of the Indiana Business Corporation Law (the “IBCL”),
as the same may be amended from time to time during the Term, to the fullest extent
permitted by the IBCL as required to make Executive whole in connection with any
indemnifiable loss, cost or expense incurred in Executive’s performance of
Executive’s duties and obligations pursuant to this Agreement. Employer shall also
maintain during the Term an insurance policy providing directors’ and officers’
liability coverage in a commercially reasonable amount. It is understood that the
foregoing indemnification obligations shall survive the expiration or termination of the
Term.
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[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties, intending to be legally bound, have duly executed this
Agreement as of the date first written above.
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EMMIS OPERATING COMPANY
("Employer")
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By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Chairman of the Board and Chief Executive Officer
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XXXXXXX X. XXXXXXXXX
("Executive")
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/s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
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