AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") dated January 16,
1997 but effective as of December 1, 1996 by and between THE RECOVERY NETWORK,
INC., a Colorado corporation ("Company"),and XXXXXXX X. XXXXX, an individual
residing in Ojai, California ("Employee"),
WITNESSETH:
WHEREAS, Company desires to employ Employee to serve as its president and chief
executive officer on the terms and conditions set forth herein; and
WHEREAS, as an inducement to Company to offer such employment, Employee desires
to enter into certain covenants, including without limitation a covenant not to
compete with Company if his employment is terminated;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties agree as follows:
1. Employment. Company shall employ Employee, and Employee shall be
employed by Company, on the terms and conditions set forth herein for the period
commencing on October 1, 1996 and (unless sooner terminated pursuant to section
4) ending on September 30, 1998.
2. Position and Duties. Employee shall serve as president and chief
executive officer of Company. Employee shall report to and be responsible
directly to the board of directors of Company and shall have and perform such
duties and responsibilities relating to the business and operations of Company
as may be appropriate to Employee's position and as the board of directors of
Company from time to time may assign to him. In addition, Employee shall serve
on the executive committee of the board of directors of Company. During his
employment, Employee shall devote his full time, attention, and best efforts to
Company and to the furtherance of its interests and shall not directly or
indirectly engage in, or enter into the employment of, or otherwise render
services to or for, or act as a director, manager, member, or officer of, any
other business (other than and established trade associations of which Company
is a member), except for non-remunerative participation in charitable
organizations.
3. Compensation. (a) Employee shall receive a base salary of $12,000
per month through September 30, 1998, payable in substantially equal
semi-monthly installments on the fifteenth and the last day of each calendar
month during the term of this Agreement.
(b) Employee shall be entitled to participate in and receive
benefits under any employee benefit plans and arrangements from time to time
made available to the employees of Company, when and as implemented and subject
to and on a basis consistent with the terms, conditions, and overall
administration of such plans and arrangements. Amounts paid to
Employee under any such plan or arrangement shall not be deemed to be in lieu of
the base salary payable to Employee under section 3(a).
(c) Employee shall be entitled to fifteen business days of
paid vacation and holidays in accordance with Company policy, as determined by
the chief operating officer of Company from time to time. Vacation days shall
accrue at the rate of 1.25 days per month commencing on October 1, 1996, but no
vacation may be taken until April 1, 1997.
4. Termination. The term of Employee's employment hereunder may be
terminated before September 30, 1998 on the following terms and conditions:
(a) By Employee for any reason, upon at least 30 days advance written
notice, or upon Employee's death, with Company's only liability
being the payment of base salary and vacation compensation earned
and unpaid as of Employee's last day of work;
(b) By mutual agreement of Company and Employee, with such
compensation as may be mutually agreed upon, but in no event to
exceed the amount of severance compensation to which Employee
would be entitled if the termination occurred pursuant to section
4(d);
(c) By Company for "good cause" (as hereinafter defined), upon 30
days written notice, with Company's only liability being the
payment of base salary and vacation compensation earned and
unpaid as of Employee's last day of work; or
(d) By Company without "good cause," upon 30 days written notice, and
with severance compensation equal to the lesser of (i) base
salary and vacation compensation due through September 30, 1998
and (ii) base salary and vacation compensation for one year;
provided that one-half of such severance compensation shall be
payable on the date of termination and the balance shall be
payable ratably over the six months following the date of
termination.
For purposes of this section 4, "good cause" shall mean any act or omission of
Employee constituting gross negligence or willful misconduct in the conduct of
his duties for Company, any breach by Employee of the terms of his
Nondisclosure/Inventions Agreement, or (given the nature of Company's mission)
alcohol or substance abuse.
5. Competitive Activity. (a) During the term of this Agreement and for
two years after the termination of this Agreement for any reason, whether or not
such termination shall be alleged or later found to be unlawful, wrongful, or in
breach of contract, Employee shall not, directly or indirectly (as an officer,
director, employee, consultant, owner, shareholder, adviser, joint venturer, or
otherwise), engage in any activities that could be deemed a conflict of interest
or in any way compete with Company or its affiliates within the United States in
(i) the development or provision of television, radio, interactive and other new
media services, (ii) any other line of business in which Company or its
affiliates shall be engaged at any time during the
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term of Employee's covenant not to compete, including without limitation sales
and merchandising of recovery related material, or (iii) any other line of
business into which Company or its affiliates shall form an intention to enter
during the term of Employee's covenant not to compete, including without
limitation sales and merchandising of recovery related material. Employee shall
not be precluded from owning less than one percent of the securities of any
competitor of Company or its affiliates if such securities are publicly traded
on a national securities exchange. Employee represents and warrants that he is
under no competitive restrictions or obligations to third parties that affect
his performance hereunder.
(b) During the term of this Agreement and for two years after
the termination of this Agreement for any reason, whether or not such
termination shall be alleged or later found to be unlawful, wrongful, or in
breach of contract, Employee shall not contact, directly or indirectly, any
customer of Company with whom Employee had contact during the term of this
Agreement.
(c) Employee acknowledges that, through his employment with
Company, he will acquire access to information suited to immediate application
by a business in competition with Company. Employee acknowledges that he has
executed concurrently with this Agreement a Non-Disclosure and Inventions
Agreement, the terms of which are incorporated herein by reference as if set
forth herein verbatim, that imposes obligations on Employee with respect to
information about Company. Employee considers the restrictions on his future
employment or business activities contained in this section 5 to be in all
respects reasonable and necessary. Employee acknowledges that Company and its
affiliates and competitors operate throughout the United States, expressly
consents to the geographic restriction on competition contained in this section
5, and believes that such restriction is reasonable given the nature of
Company's business.
(d) Employee acknowledges the following provision of Colorado
law, as set forth in section 8-2-113(2) of the Colorado Revised Statutes:
Any covenant not to compete which restricts the right of any person to
receive compensation for performance of skilled or unskilled labor for
any employer shall be void, but this subsection (2) shall not apply
to:
(a) Any contract for the purchase and sale of a business or
the assets of a business;
(b) Any contract for the protection of trade secrets;
(c) Any contractual provision providing for the recovery of
the expense of educating and training an employee who has served an
employer for a period of less than two years;
(d) Executive and management personnel and officers and
employees who constitute professional staff to executing and management
personnel.
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Employee acknowledges that this Agreement is a contract for the protection of
trade secrets under clause (b) and that he is an executive and management
employee within the meaning of clause (d).
(e) Employee acknowledges the possibility that his standard of
living may be reduced during the two years following the termination of this
Agreement and assumes the risk associated with that possibility.
(f) Employee acknowledges that, upon a breach of this section
5, Company will suffer immediate and irreparable harm and damage for which money
damages alone cannot fully compensate. Employee therefore agrees that, upon such
breach or threat thereof, Company shall be entitled to a temporary restraining
order, preliminary injunction, permanent injunction, and all other injunctive
relief, without posting any bond or other security, to bar Employee from
violating this Agreement. Nothing in this section shall be construed as an
election of remedies or waiver of any right available to Company under this
Agreement or by law, including without limitation the right to seek damages from
Employee for breach of this Agreement.
6. Change of Control. If a Change in Control (as hereinafter defined)
occurs, Employee shall be considered to have been terminated without "good
cause" as provided in section 4(d) and the covenant not to compete set forth in
section 5 shall have no further force and effect. A Change in Control" is deemed
to have occurred if (a) a "person" (as defined in section 13(d) of the
Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of shares of Common Stock
representing 30 percent or more of the shares as to which votes may be cast for
the election of directors of Company or (b) individuals who are directors of
Company at the begging of a 24-month period cease to constitute at least
two-thirds of all directors of Company at any time during such period.
7. Successors and Assigns. This Agreement and all rights hereunder
shall inure to the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees and by Company's successors and assigns. This Agreement is personal in
nature, and neither party shall, without the prior written consent of the other,
assign or transfer this Agreement or any right or obligation hereunder.
8. Notice. Any notice or other communication hereunder to either party
shall be in writing and shall be deemed to have been duly given when delivered
personally or mailed by certified mail, return receipt requested, postage
prepaid, addressed (a) if to Company at 000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 and (b) if to Employee at 000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000, or to such other address
as either party may have furnished to the other in writing in accordance
herewith.
9. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Colorado. Venue for any action arising
out of this Agreement shall be proper in Denver County, Colorado.
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10. Severability. If any court of competent jurisdiction shall declare
any provision of this Agreement to be invalid or unenforceable, the remainder of
this Agreement shall remain fully enforceable. To the extent that any court
shall conclude that any provision of this Agreement is void or voidable, the
court shall reform such provision only to the extent necessary to render the
provision enforceable with a view to the parties' desire that Company be
protected to the greatest extent possible under applicable law from improper
competition and the disclosure of its trade secrets.
11. Integration. This Agreement constitutes the entire agreement of the
parties and a complete merger of poor negotiations and agreements. This
Agreement may be modified only in a writing signed by the parties.
12. Waiver, No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by a written instrument signed by both
parties. No written waiver shall be deemed a continuing waiver unless
specifically stated therein, and a written waiver shall operate only as to the
specific term or condition waived and not for the future or as to any act other
than that specifically waived.
13. Construction. The parties have reviewed this Agreement in its
entirety and acknowledge that each has had a full opportunity to negotiate its
terms and to consult concerning this Agreement with counsel of its own choosing.
The parties expressly waive any and all applicable common law and statutory
rules of construction to the effect that any provision of a contract should be
construed against the drafter. This Agreement and all provisions hereof shall in
all cases be construed as a whole, according to the fair meaning of the language
used. Any party contesting the validity, existence, adequacy, or terms of this
Agreement shall have the burden of proof as to fraud, concealment, the failure
to disclose material information, unconscionability, misrepresentation, mistake
of fact or law, and any other matters. The headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to bean original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE RECOVERY NETWORK, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Xxxxxx X. Xxxxxxx, Xx.
Chairman of the Board
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/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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