EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of September, 1998
between XXXX Media Corporation, an Oregon corporation (the "Company"), and Xxxxx
X. Xxxxx ("Executive").
RECITALS
WHEREAS, the Company is purchasing all of the outstanding capital stock of
Xxxxxxx & Xxxxx, Inc., a New York corporation ("P & C"), pursuant to a Stock
Purchase Agreement dated August 25, 1998 among the Company, P & C and Executive
(the "Transaction");
WHEREAS, Executive is the record and beneficial owner of all of the
outstanding capital stock of P & C; and
WHEREAS, a condition to the closing of the Transaction is that the Company
and Executive enter into an employment and non-competition agreement.
NOW, THEREFORE, In consideration of the mutual promises and conditions
contained herein and other good and valuable consideration, the Company and
Executive hereby agree as follows:
SECTION 1. EMPLOYMENT
Subject to the terms and conditions contained herein, the Company hereby
agrees to employ Executive, and Executive hereby agrees to be and remain in
employ of the Company, upon the terms and conditions hereinafter set forth.
This Agreement is a contract for personal services of Executive and services
pursuant hereto may only be performed by Executive.
SECTION 2. TERM
The term of Executive's employment under this Agreement shall commence on
the date of this Agreement set forth above and shall, subject to earlier
termination as provided in Section 7, continue for a period of five years
thereafter (the "Employment Period"). At the end of the Employment Period, the
parties hereto will negotiate in good faith to arrive at a mutually acceptable
extension of the Employment Term for an additional five-year period.
SECTION 3. DUTIES
During the Employment Period, Executive shall serve as Executive Vice
President of the Company and as President of P & C (subject to its continued
operation as a separate entity from the Company), with such duties as are
associated with this position. Executive agrees to use his best efforts to
promote the interests of the Company and to devote his entire working time,
attention and energies to performance of his duties under this Agreement.
Executive shall at all
times faithfully use the best of his abilities to perform the duties that may be
required of him by the Company's Board of Directors. Executive shall not be
required to relocate from the Philadelphia area.
SECTION 4. COMPENSATION
Subject to Section 7 of this Agreement, the Company agrees to pay a salary
of $150,000 per year less any federal and state withholding taxes or other
employment taxes, payable in substantially equal installments at the same
intervals as other senior executives of the Company are paid. The salary shall
increase by $25,000 in each of the second, third, fourth and fifth years of
employment.
SECTION 5. BENEFITS
Subject to Section 7 of this Agreement, the Company agrees to provide
Executive the following benefits:
5.1 INSURANCE. During the Employment Period, Executive shall be
eligible to participate in the Company's benefit plans in a manner commensurate
with the Company's other senior executives.
5.2 VACATION. Executive shall be entitled to 4 weeks of paid vacation
per calendar year. Vacation not used during a calendar year will be forfeited
and will not be accrued for use by Executive in subsequent calendar years.
5.3 EXPENSE REIMBURSEMENT. The Company shall reimburse Executive for,
or assume directly, Executive's travel and entertainment expenses that are
approved by the Company and are incurred reasonably and necessarily by Executive
in the performance of his duties under this Agreement, provided that Executive
accounts for such expenses and that such expenses are ordinary and necessary
business expenses of the Company within the meaning of Section 162 of the
Internal Revenue Code.
5.4 Automobile Allowance. The Company shall pay Executive an automobile
allowance of $500 per month, and shall reimburse employee for his gasoline,
maintenance and insurance expenses for his business use of a vehicle.
SECTION 6. STOCK OPTIONS
Executive shall be granted a non-statutory stock option for 135,000 shares
of the Company's common stock (the "Option Shares"). Twenty-five thousand of
the Option Shares will be exercisable upon the date of issuance. The remaining
100,000 Option Shares will become exercisable in 25,000 increments on each of
the first, second, third and fourth anniversaries of the date of this Agreement,
irrespective of whether Executive is employed at that time. Termination of this
Agreement by Executive during the first three years of the term of this
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Agreement for any reason other than breach by Company shall terminate
Executive's rights to any options which have not become exercisable as of the
date of such termination. Termination of this Agreement for any other reason
shall not affect Executive's right to receive the Option Shares. The exercise
price for the Option Shares shall be equal to $8.71 per share, with respect to
115,000 shares, and $10.25 with respect to 20,000 shares. In the event of
Executive's death, or total disability as defined in Section 7.3, all unvested
options shall become immediately exercisable. All other terms of the stock
options granted hereunder, including expiration, shall be governed by the terms
and conditions of the Company's stock option plan in effect on the date of this
Agreement.
SECTION 7. TERMINATION
7.1 FOR CAUSE. The Company may terminate Executive's employment at any
time for cause with immediate effect, upon delivering written notice thereof to
Executive. For purposes of this Agreement, "for cause" shall include: (A)
misconduct or dishonesty that adversely affects the Company, which is defined as
follows: (i) a willful act in conflict with the financial interests of the
Company, (ii) a willful act that could damage the reputation or customer/public
relations of the Company, (iii) a willful act outside of the normal course of
business that could subject the Company to liability, (iv) an act constituting
sexual harassment or other violation of the civil rights of the Company's
employees, (v) failure to obey any lawful instruction of the Board and (vi)
failure to comply with, or perform any duty required under, the terms of any
confidentiality, assignment of inventions or non-competition agreement that
Executive may have signed with the Company, (B) acts constituting the
unauthorized disclosure of any of the trade secrets or confidential information
of the Company, unfair competition with the Company or the inducement of any
customer or employee of the Company to breach any agreement with the Company,
(C) gross negligence or willful misconduct in the performance of Executive's
duties under this Agreement, (D) conviction of or entrance of a plea of guilty
or nolo contendere to a felony, or (E) conduct involving moral turpitude. Upon
termination for cause, the Company's sole and exclusive obligation will be to
pay Executive a pro rata portion of his Base Salary earned through the date of
termination, plus any employee benefits earned through the date of termination
in accordance with the applicable plans and this Agreement. Employee shall not
be entitled to any compensation after the date of such termination.
7.2 UPON DEATH. In the event of Executive's death during the term of
this Agreement, the Company's sole and exclusive obligation under this Agreement
will be to pay Executive's widow, or to his estate, if he is not survived by his
spouse, an amount equal to the annual salary payable to Executive during the
next year of this Agreement, unless death occurs during the last year of this
Agreement, in which case the payment shall be an amount equal to Executive's
annual salary at the date of death. Employee shall not be entitled to any other
compensation after the date of death.
7.3 UPON DISABILITY. This Agreement shall terminate, at the Company's
option, upon Executive's total disability. Executive's total disability means
his inability to perform substantially all of his duties under this Agreement by
reason of illness or accident for a period of three consecutive months. Upon
termination by reason of Executive's total disability, the
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Company's sole and exclusive obligation will be to pay Executive an amount equal
to the annual salary payable to Executive during the next year of this
Agreement, unless disability occurs during the last year of this Agreement, in
which case the payment shall be an amount equal to Executive's annual salary at
the date of disability. Executive shall not be entitled to any other
compensation after the date of such termination.
7.4 BY EXECUTIVE. Executive acknowledges and agrees that, if Executive
terminates his employment prior to expiration of the term of this Agreement, the
Company's sole and exclusive obligation will be to pay Executive a pro rata
portion of his Base Salary earned through the date of termination, plus any
employee benefits earned through the date of termination in accordance with the
applicable plans and this Agreement. Executive shall not be entitled to any
compensation after the date of such termination.
7.5 BY EXECUTIVE DUE TO A CHANGE OF MANAGEMENT. Executive shall have
the option to terminate this Agreement within 90 days following a change of
management of the Company. A "change of management" shall mean that Xxxxx X.
Xxxx shall, for any reason, cease to be the Chief Executive Officer of the
Company or own, directly or indirectly through any member of his immediate
family, less than 25 percent of the Company's outstanding common stock. If
Executive terminates his employment pursuant to this Section 7.5 he will not be
bound by the non-compete obligations set forth in Section 8.1, and the Company's
sole and exclusive obligation will be to pay Executive a pro rata portion of his
Base Salary earned through the date of termination, plus any employee benefits
earned through the date of termination in accordance with the applicable plans
and this Agreement. Executive shall not be entitled to any compensation after
the date of such termination.
7.6 WITHOUT CAUSE. The Company may terminate Executive's employment at
any time after the third anniversary of the date of this Agreement without cause
with immediate effect, upon delivering written notice thereof to Executive. In
the event of such termination, the Company shall immediately pay to Executive a
one time payment equal to the annual salary payable to Executive during the next
year of this Agreement, unless termination occurs during the last year of this
Agreement, in which case the payment shall be an amount equal to Executive's
annual salary at the date of termination pro-rated for the remainder of such
year.
7.7 RETURN OF MATERIALS AT TERMINATION. In the event of any termination
of his employment, Executive will promptly deliver to the Company, all
documents, data, records and other information pertaining to his employment, and
Executive shall not take with him any Company documents or data, or any
reproduction or excerpt of any documents or data, including without limitation
documents containing or pertaining to any proprietary or confidential
information.
SECTION 8. COVENANT NOT TO COMPETE; NONSOLICITATION
In view of the unique value to the Company of Executive's services and
because of the confidential information to be obtained by or disclosed to
Executive as described above, Executive agrees as follows:
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8.1 NON-COMPETITION. During the term of this Agreement, and for a
period of two years after termination of this Agreement, Executive will not
directly or indirectly, as principal, owner, employee, consultant or agent,
engage in any business which competes with the business of the Company or P & C
as and where conducted as of the date of this Agreement and during the term of
the employment of Executive pursuant to this Agreement.
8.2 SAVINGS CLAUSE. If any court or arbitrator before which this
Section 8 is sought to be enforced should deem the restrictions contained herein
to be unreasonably broad in time or geographic scope, such restrictions shall be
modified to the extent necessary to be deemed reasonable by such court or
arbitrator and shall be enforceable as so modified.
SECTION 9. DISCLOSURE OF INFORMATION
During the course of his employment or any time thereafter, Executive
agrees not to disclose to any other person outside of the Company, firm,
corporation, or any other entity confidential financial information, marketing
strategies, or any other confidential or trade secret information of the Company
or P & C.
SECTION 10. DISCLOSURE TO COMPANY; INVENTIONS AND DESIGNS AS SOLE PROPERTY
OF COMPANY
Executive agrees promptly to disclose to the Company any and all
inventions, designs, discoveries, improvements, trade secrets, formulae,
techniques, processes and know-how, whether or not patentable and whether or not
reduced to practice, conceived or learned by Executive during the period of his
employment, either alone or jointly with others, which relate to or result from
the actual or anticipated business, work, research or investigations of the
Company, or which result, to any extent, from use of the Company's premises or
property (the work being thereafter collectively referred to as the
"Inventions").
Executive acknowledges and agrees that all the Inventions shall be the sole
property of the Company or any other entity designated by it, and Executive
hereby assigns to Company his entire right and interest in and to all
Inventions. The Company or any other entity designated by it shall be the sole
owner of all domestic and foreign rights pertaining to the Inventions.
Executive further agrees as to all the Inventions to assist the Company in every
way (at the Company's expense) to obtain and from time to time enforce
intellectual property rights in the Inventions in any and all countries. To
that end, by way of illustration, but not limitation, Executive will testify in
any suit or other proceeding involving any of the Inventions, execute all
documents which the Company reasonably determines to be necessary or convenient
for use in applying for and obtaining and enforcing intellectual property rights
in the Inventions. This Agreement shall continue beyond the termination of his
employment, but the Company shall compensate Executive at a reasonable rate
after such termination for time actually spent by Executive at the Company's
request on such assistance.
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SECTION 11. RESOLUTION OF DISPUTES
11.1 INJUNCTIVE RELIEF. Executive agrees that it would be difficult to
measure damages to the Company from any breach by Executive of the promises set
forth in Sections 8, 9 and 10 herein, that injury to the Company from any such
breach would be impossible to calculate, and that money damages would therefore
be an inadequate remedy for any such breach. Accordingly, Executive agrees that
if Executive shall breach any provisions of Sections 8, 9 and 10, or any of
them, the Company shall be entitled to seek injunctions or other appropriate
orders to restrain any such breach by Executive in a court of competent
jurisdiction without showing or proving any actual damage sustained by Company.
11.2 ARBITRATION. Executive understands that agreement to submit all
claims related to Executive's employment and the termination therefrom
(excluding workers' compensation and unemployment insurance disputes and claims
for breach of this Agreement for which injunctive relief is authorized under
Section 11.1 above) which cannot be resolved through direct discussion or
mediation, to final and binding arbitration is a condition of employment at the
Company. Executive and the Company agree to submit all claims relating to
Executive's employment and termination therefore to binding arbitration
including, but not limited to, violation of federal, state or local statutes
such as Title VII, 48 USC 2000e ET. SEQ., Age Discrimination in Employment Act,
Americans with Disabilities Act, Fair Labor Standards Act, state civil rights
statutes, wage statutes under both federal and state law and common law.
Arbitration under this provision shall be conducted under the Federal
Arbitration Act and the Commercial Arbitration Rules of the American Arbitration
Association. One arbitrator shall be selected under these rules and arbitration
shall be initiated in Portland, Oregon. EXECUTIVE ACKNOWLEDGES AND AGREES THAT
BY EXECUTING THIS AGREEMENT, EXECUTIVE IS WAIVING ANY RIGHT TO SEEK RESOLUTION
OF SUCH DISPUTES IN ANY OTHER FORUM.
SECTION 12. MISCELLANEOUS PROVISIONS
12.1 ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Executive herein may
not be sold, transferred or assigned. The rights and obligations of the Company
shall be binding upon and run in favor of the successors and assigns of the
Company. In the event of any attempted assignment or transfer of rights
hereunder contrary to the Agreement, the Company shall have no further liability
for payments hereunder.
12.2 WAIVER. The waiver by either party of the breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by the other party.
12.3 MODIFICATION. No amendment, modification, or discharge of this
Agreement shall be valid unless it is in writing and duly executed by the
parties.
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12.4 CONSTRUCTION. This Agreement shall be construed in accordance with
and governed by the laws of the State of Oregon.
12.5 ENTIRE AGREEMENT. This is a fully integrated agreement which
contains the entire agreement between the parties and supersedes any and all
prior agreements and understandings between the parties. There are no promises
or representations made on behalf of the Company to induce Executive to enter
into this Agreement which are not set forth herein.
12.6 NOTICES. All notices, requests, demands and other communications
required or permitted by this Agreement shall be given in writing and shall be
sufficient if personally delivered or mailed, postage prepaid by same-day or
overnight mail, or by certified mail return receipt requested, as follows:
If to the Company: Xxxxx Xxxx, President
XXXX Media Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxxxx
Xxxxxx Xxxx LLP
1600 Pioneer Tower
000 X.X. Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
If to Executive: Xx. Xxxxx X. Xxxxx
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxxxxx
Xxxxx, Xxxxxx & Bacine PC
220 Union Meeting Corporate Center
000 Xxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
12.7 SEVERABILITY. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
12.8 ATTORNEY FEES. If any suit or action arising out of or related to
this Agreement is brought by any party, the prevailing party shall be entitled
to recover the costs and reasonable attorney fees incurred by such party in such
suit or action, including without limitation any post-arbitration or appellate
proceeding.
12.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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12.10 LEGAL COUNSEL. Each party acknowledges that it or he has been
represented by independent counsel in connection with the preparation of this
Agreement, and the drafting of this Agreement by counsel for either party shall
not affect the interpretation hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
XXXX Media Corporation
By: /s/ Xxxxx Xxxx /s/ Xxxxx X. Xxxxx
-------------------------------- -----------------------------------
Xxxxx X. Xxxxx
Its: President
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