EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 1998,
and effective as of the first day of January, 1999 (the "Effective Date"),
between Xxxxxxxx Communications, Inc., a Maryland corporation ("SCI"), and Xxxxx
Xxxxxx ("Employee").
R E C I T A L S
- - - - - - - -
A. The radio division of SCI, through its wholly-owned subsidiaries,
owns and/or programs radio broadcast stations.
B. Employee has served as a consultant to the radio division of SCI.
C. SCI desires to employ Employee as Chairman of the radio division of
SCI, and Employee desires to accept such employment.
D. SCI and Employee desire to set forth the terms of employment of
Employee with SCI as Chairman of the radio division of SCI (including the
granting to Employee of Stock Options).
NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES
1.1. Duties Upon Employment. Upon the terms and subject to the other
provisions of this Agreement, commencing on the Effective Date, Employee will be
employed by SCI in Baltimore, Maryland as Chairman of the radio division of SCI.
As Chairman of the radio division, Employee will
(a) report to the Chief Executive Officer of SCI; and
(b) have such responsibilities and perform such duties as may
from time to time be established by the Chief Executive Officer of SCI.
1.2. FULL-TIME EMPLOYMENT. While an employee of SCI, Employee agrees
to devote Employee's full working time, attention, and best efforts exclusively
to the business of the radio division of SCI.
2. TERM. The term of Employee's employment as the Chairman of the radio
division of SCI under this Agreement (the "Employment Term") will begin on the
Effective Date and continue until December 31, 2001 unless terminated earlier in
accordance with Section 4. As
used in this Agreement, an "employment year" is a twelve (12) month period
beginning on January 1 and ending an the next following December 31.
3. COMPENSATION AND BENEFITS.
3.1. COMPENSATION. Employee shall be entitled during each employment
year to the compensation at the rate of Three Hundred Fifty Thousand Dollars
($350,000) per annum.
3.2. OPTIONS. Contingent upon Employee's execution of this Agreement,
the Company will recommend to the Stock Option Committee of the Board of
Directors of Xxxxxxxx Broadcast Group, Inc. ("SBG"), the parent corporation of
SCI, that Employee be granted options to acquire Fifty Thousand (50,000) shares
of stock of SBG, subject to the terms and conditions contained in the Long-Term
Incentive Plan of SBG and pursuant to a Non-Qualified Stock Option Agreement,
the form of which has been or is being provided to Employee.
3.3. VACATION. While employed by SCI, Employee shall be entitled to
two weeks of paid vacation leave during each calendar quarter.
3.4. HEALTH INSURANCE AND OTHER BENEFITS. During the Employment Term,
Employee shall be eligible to participate in health insurance programs that may
from time to time be provided by SCI for its employees generally, and Employee
shall be eligible to participate in other employee benefits plans that may from
time to time be provided by SCI to its employees generally.
3.5. TAX ISSUES. To the extent taxable to Employee, Employee will be
responsible for accounting for and payments of taxes on the benefits provided to
Employee by SCI, and Employee will keep such records regarding uses of these
benefits as SCI reasonably requires and will furnish SCI all such information as
may be reasonably requested by SCI with respect to such benefits.
3.6. EXPENSES. SCI will pay or reimburse Employee from time to time
for all expenses incurred by Employee during the Employment Term on behalf of
SCI in accordance with corporate policies established by SCI; provided, that (i)
such expenses must be reasonable business expenses, and (ii) Employee supplies
to SCI itemized accounts or receipts in accordance with SCI's procedures and
policies with respect to reimbursernent of expenses in effect from time to time.
4. Employment Termination.
4.1. Termination of Employment.
(a) The Employment Term will end, and the parties will not have
any rights or obligations under this Agreement (except for the rights and
obligations under those
2
Sections of this Agreement which are continuing and will survive the end of the
Employment Terms, as specified in Section 8.10 of this Agreement) on the
earliest to occur of the following events (the "Termination Date"):
(i) the death of Employee;
(ii) the Disability (as defined in Section 4.1(b) below) of
Employee;
(iii) the termination of Employee's employment by Employee
upon at least six (6) months prior written notice to Employer;
(iv) the termination of Employee's employment by SCI for
Cause (as defined in Section 4.1(c) below); or
(v) the termination of Employee's employment by SCI without
Cause upon at least six (6) months prior written notice to Employee.
(b) For the purposes of this Agreement, "Disability" means
Employee's inability, whether mental or physical, to perform the normal duties
of Employee's position for ninety (90) days (which need not be consecutive)
during any twelve (12) consecutive month period, and the effective date of such
Disability shall be the day next following such ninetieth (90th) day. If SCI and
Employee are unable to agree as to whether Employee is disabled, the question
will be decided by a physician to be paid by SCI and designated by SCI, subject
to the approval of Employee (which approval may not be unreasonably withheld)
whose determination will be final and binding on the parties.
(c) For the purposes of this Agreement, "Cause", means any of the
following: (i) the wrongful appropriation for Employee's own use or benefit of
property or money entrusted to Employee by SCI, (ii) the commission of any act
involving moral turpitude, (iii) Employee's continued willful disregard of
Employee's duties and responsibilities hereunder after written notice of such
disregard, (iv) Employees continued violation of SCI policy after written notice
of such violations (such policy may include policies as to drug or alcohol
abuse), (v) any action by Employee which is reasonably likely to jeopardize a
Federal Communications Commission license of any broadcast station owned
directly or indirectly by SCI, (vi) insubordination of Employee and/or
Employee's repeated failure to follow the reasonable directives of Employee's
superiors.
4.2. Termination Payments.
(a) if Employee's employment with SCI terminates Pursuant to
Sections 4.1(a)(1), 4.1(a)(2),4.1(a)(3), or 4.1(a)(5), Employee (or in the event
of the death of Employee, the person or persons designated by Employee in a
written instrument delivered to SCI prior to
3
Employee's death or, if no such written designation has been made, Employee's
estate) will be entitled to receive, and SCI will pay to the same, all of the
following:
(i) the salary payable to Employee through the Termination
Date;
(ii) a payment in respect of unutilized vacation time that
has accrued through the Termination Date (determined in accordance with
corporate policies established by SCI); and
(iii) the benefits, if any, set forth in the Long-Term
Incentive Plan, upon the terms and conditions set forth therein, but only to the
extent that Employee is entitled to such benefits pursuant to the provisions of
the Long-Term Incentive Plan; provided, if Employee's employment with SCI
terminates pursuant to Section 4.1(a) (5), in consideration of the survival of
the covenants (including, without limitation, the covenant not to compete) set
forth in Section 5 hereof, all of the options issued to Employee pursuant to
Section 3.2 hereof shall become exercisable immediately prior to such
termination.
(b) if Employee's employment with SCI terminates Pursuant to
Section 4.1(a)(4), Employee will be entitled to receive, and SCI will pay to
Employee, only the salary payable to Employee through the Termination Date (and
Employee shall not be entitled to any benefits under the Long-Term Incentive
Plan).
(c) The termination payments described in this Section 4 will be
in lieu of any termination or severance payments required by SCI policy or, to
the fullest extent permissible thereunder, applicable law (including
unemployment compensation) and will constitute Employee's exclusive rights and
remedies with respect to termination of Employee's employment.
5. CONFIDENTIALITY AND NON-COMPETITION.
5.1. Confidential Information.
(a) Employee will:
(i) keep all Confidential Information in trust for the use
and benefit of SCI and any affiliate or subsidiary of SCI (collectively, the
"SCI Entities") and broadcast stations owned or operated directly or indirectly
by any of the SCI Entities;
(ii) not, except as required by Employee's duties under this
Agreement, authorized by the General Counsel of SCI or as required by law or any
order, rule, or regulation of any court or governmental agency (but only after
notice to SCI of such requirement), at any time during or after the termination
of Employee's employment with SCI,
4
directly or indirectly, use, publish, disseminate, distribute, or otherwise
disclose any Confidential Information (as defined below);
(iii) take all reasonable steps necessary, or reasonably
requested by any of the SCI Entities, to ensure that all Confidential
Information is kept confidential for the use and benefit of the SCI Entities;
and
(iv) upon termination of Employee's employment or at any
other time any of the SCI Entities in writing so request, promptly deliver to
such SCI Entity all materials constituting Confidential Information relating to
such SCI Entity (including all copies) that are in Employees possession or under
Employees control. If requested by any of the SCI Entities to return any
Confidential Information, Employee will not make or retain any copy of or
extract from such materials.
(b) For purposes of this Section 5.1, Confidential Information
means any proprietary or confidential information of or relating to any of the
SCI Entities that is not generally available to the public. Confidential
Information includes all information developed by or for any of the SCI Entities
concerning marketing used by any of the SCI Entities, suppliers, any customers
(including advertisers) with which any of the SCI Entities has dealt prior to
the Termination Date, plans for development of new services and expansion into
now areas or markets, internal operations, financial information, operations,
budgets, and any trade secrets or proprietary information of any type owned by
any of the SCI Entities, together with all written, graphic, other materials
relating to all or any of the same, and any trade secrets as defined in the
Maryland Uniform Trade Secrets Act, as amended from time to time.
5.2. Non-Competition.
(a) During the Employment Term and for twelve (12) months
thereafter, if Employee's employment is terminated for any reason other than
pursuant to section 4.1 (a)(5), Employee will not, directly or indirectly,
engage in the following conduct within any Designated Market Area (as defined
below) or any Metro Survey Area (as defined below) in which any of the SCI
Entities owns or operates a broadcast television or radio station immediately
prior to such termination:
(i) participate in any activity involved in the ownership or
operation of a broadcast television or radio station (other than, during the
term, broadcast television or radio stations owned or operated by any of the SCI
Entities); provided, the restriction set forth in this clause (i) shall not
apply with respect to those broadcast stations in which (and to the extent)
Employee participates as of the date hereof
(ii) hire, attempt to hire, or to assist any other person or
entity in hiring or attempting to hire any employee of any of the SCI Entities
or any person who was an employee of any of the SCI Entities within the prior
one (1) year period; or
5
(iii) solicit, in competition with any of the SCI Entities,
the business of any customer of any of the SCI Entities or my entity whose
business any of the SCI Entities solicited during the one (1) year period prior
to Employee's termination.
(b) Notwithstanding anything else contained in this Section 5.2,
Employee may own, for investment purposes only, up to five percent (5%) of the
stock of any publicly-held corporation whose stock is either listed on a
national stock exchange or on the NASDAQ National Market System if Employee is
not otherwise affiliated with such corporation.
(c) As used herein, "participate" means lending ones name to,
acting as consultant or advisor to, being employed by or acquiring any direct or
indirect interest in any business or enterprise, whether as a stockholder,
partner, officer, director, employee, consultant, or otherwise.
(d) In the event that (i) SCI places all or substantially all of
its broadcast radio stations up for sale within one (1) year after termination
of Employee's employment hereunder, or (ii) Employee's employment is terminated
in connection with the disposition of all or substantially all of such radio
stations (whether by sale of assets, equity, or otherwise), Employee agrees to
be bound by, and to execute such additional instruments as may be necessary or
desirable to evidence Employee's agreement to be bound by, the terms and
conditions of any non-competition provisions relating to the purchase and sale
agreement for such radio stations, without any consideration beyond that
expressed in this Agreement provided that the purchase and sale agreement is
negotiated in good faith with customary terms and provisions, and the
transaction contemplated thereby is consummated. Notwithstanding the foregoing,
in no event shall Employee be bound by, or obligated to enter into, any
non-competition provisions referred to in this Section 5.2(d) which extend
beyond twelve (12) months (including following a termination pursuant to Section
4. 1 (a)(5)), in each case from the date of termination of Employee's employment
hereunder or whose scope extends the scope of the non-competition provisions set
forth in Section 5.2(a) (as limited by Sections 5.2(b) and (c) above).
(e) The twelve (12) month time period referred to above shall be
tolled on a day-for-day basis for each day during which Employee participates in
any activity in violation of this Section 5.2 of this Agreement, so that
Employee is restricted from engaging in the conduct referred to in this Section
5.2 for a full twelve (12) months.
(f) For purposes of this Section 5.2, designated market area
shall mean the Designated Market Area ("DMA") as defined by The X.X. Xxxxxxx
Company (or such other similar term as is used from time to time in the
television broadcast community).
(g) For purposes of this Section 5.2, Metro Survey Area shall
mean the Metro Survey Area ("MSA"), as defined from time to time by the Arbitron
Company (or such other similar term as is used from time to time in the radio
broadcast community).
6
(h) Notwithstanding anything to the contrary contained herein,
the restrictions set forth in clause (a) of this Section 5.2 shall not apply
following termination more than four months after the date hereof, if the
options referred in Section 3.2 have not been granted prior to such termination.
5.3. ACKNOWLEDGMENT. Employee acknowledges and agrees that this
Agreement (including, without limitation, the provisions of Sections 5 and 6) is
a condition of Employee's being employed by SCI, Employee's having access to
Confidential Information, Employee's being eligible to receive the items
referred to in Section 3 (including, without limitation, Employee's eligibility
to participate in the Long-Term Incentive Plan), Employee's advancement at SCI,
and Employee being eligible to receive other special benefits at SCI; and
further, that this Agreement is entered into, and is reasonably necessary, to
protect the SCI Entities' investment in Employee's training and development, and
to protect the goodwill and other business interests of the SCI Entities.
6. REMEDIES.
6.1. INJUNCTIVE RELIEF. The covenants and obligations contained in
Section 5 relate to matters which are of a special, unique, and extraordinary
character and a violation of any of the terms of such Section will cause
irreparable injury to the SCI Entities, the amount of which will be impossible
to estimate or determine and which cannot be adequately compensated. Therefore,
the SCI Entities will be entitled to an injunction, restraining order or other
equitable relief from any court of competent jurisdiction (subject to such terms
and conditions that the court determines appropriate), restraining any violation
or threatened violation of any of such terms by Employee and such other persons
as the court orders. The parties acknowledge and agree that judicial action,
rather than arbitration, is appropriate with respect to the enforcement of the
provisions of Section 5. The forum for any litigation hereunder shall be the
Circuit Court of Baltimore County or the United States District Court (Northern
Division) sitting in Baltimore, Maryland.
6.2. CUMULATIVE RIGHTS AND REMEDIES. Rights and remedies provided by
Sections 5 and 6 are cumulative and an in addition to any other rights and
remedies any of the SCI Entities may have at law or equity.
7. ABSENCE OF RESTRICTIONS. Employee warrants and represents that
Employee is not a party to or bound by any agreement, contact, or understanding,
whether of employment or otherwise, with any third person or entity which would
in any way restrict or prohibit Employee from undertaking or performing
employment with SCI in accordance with the terms and conditions of this
Agreement.
8. MISCELLANEOUS.
7
8.1. ATTORNEYS' FEES. In any action, litigation, or proceeding
(collectively, "Action") between the parties arising out of or in relation to
this Agreement, the prevailing party in the Action will be awarded, in addition
to any damages, injunctions, or other relief, and without regard to whether such
Action is prosecuted to final appeal, such party's costs and expenses, including
reasonable attorneys' fees.
8.2. HEADINGS. The descriptive headings of the Sections of this
Agreement are inserted for convenience only, and do not constitute a part of
this Agreement.
8.3. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a) oral or written
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery of
a standard overnight courier or when delivered by hand, or (c) the expiration of
five (5) business days after the date mailed, postage prepaid, to the parties at
the following addresses:
If to SCI to: Xxxxxxxx Communications, Inc.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
If to Employee to: Xxxxx Xxxxxx
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
or to such other address as will be furnished in writing by any party. Any such
notice or communication will be deemed to have been given as of the date so
mailed.
8.4. ASSIGNMENT. SCI may assign this Agreement to any of the SCI
Entities, and Employee hereby consents and agrees to be bound by any such
assignment by SCI. Employee may not assign, transfer, or delegate Employee's
rights or obligations under this Agreement and any attempt to do so is void.
This Agreement is binding on and inures to the benefit of the parties, their
successors and assigns, and the executors, administrators, and other legal
representatives of Employee. No other third parties, other than SCI Entities,
shall have, or are intended to have, any rights under this Agreement.
8.5. COUNTERPARTS. This Agreement may be signed in one or more
counterparts.
8.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF MARYLAND (REGARDLESS OF THE LAWS THAT MIGHT BE APPLICABLE UNDER
PRINCIPLES OF CONFLICTS OF LAW) AS TO
8
ALL MATTERS (INCLUDING VALIDITY, CONSTRUCTION, EFFECT, AND PERFORMANCE.)
8.7. SEVERABILITY. If the scope of any provision contained in
this Agreement is too broad to permit enforcement of such provision to its full
extent, then such provision shall be enforced to the maximum extent permitted by
law, and Employee hereby consents that such scope may be reformed or modified
accordingly, and enforced as reformed or modified, in any proceeding brought to
enforce such provision. Subject to the immediately preceding sentence, whenever
possible, each provision of this Agreement will be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision, to the extent of such prohibition or invalidity, shall not be deemed
to be a part of this Agreement, and shall not invalidate the remainder of such
provision or the remaining provisions of this Agreement.
8.8. ENTIRE AGREEMENT. This Agreement, the Non-Qualified Stock
Option Agreement, the Long-Term incentive Plan and the Stock Option Agreement,
dated as of May 31, 1996, between SBG and Employee constitute the entire
agreement, and supersede all prior agreements and understandings, written or
oral, among the parties with respect to the subject matter of this Agreement and
the Long-Term Incentive Plan. This Agreement may not be amended or modified
except by agreement in writing, signed by the party against whom enforcement of
any waiver, amendment, modification, or discharge is sought.
8.9. INTERPRETATION. This Agreement is being entered into among
competent and experienced business professionals (who have had an opportunity to
consult with counsel), and any ambiguous language in this Agreement will not
necessarily be construed against any particular party as the drafter of such
language.
8.10. CONTINUING OBLIGATIONS. The following provisions of this
Agreement will continue and survive the termination of this Agreement: 4.2, 5,
6, 7 and 8.
8.11. TAXES. SCI may withhold from any payments under this
Agreement all applicable federal, state, city, or other taxes required by
applicable law to be so withheld.
8.12. ARBITRATION AND EXTENSION OF TIME. Except as specifically
provided in Section 6, any dispute or controversy arising out of or relating to
this Agreement shall be determined and settled by arbitration in Baltimore,
Maryland in accordance with the Commercial Rules of the American Arbitration
Association then in effect, the Federal Arbitration Act, 9 U.S.C. ss. 1 et seq.,
and the Maryland Uniform Arbitration Act, and judgment upon the award rendered
by the arbitrator(s) may be entered in any court of competent jurisdiction. The
expenses of the arbitration shall be borne by the non-prevailing party to the
arbitration, including, but not limited to, the cost of experts, evidence, and
legal counsel. Whenever any action is required to be taken under this Agreement
within a specified period of time and the taking of such action is materially
affected by a matter submitted to arbitration, such period shall automatically
be
9
extended by the number of days, plus ten (10) that are taken for the
determination of that matter by the arbitrator(s). Notwithstanding the
foregoing, the parties agree to use their best reasonable efforts to minimize
the costs and frequency of arbitration hereunder.
THIS AGREEMENT CONTAINS A WAIVER OF YOUR RIGHT TO A TRIAL BY COURT OR JURY
IN EMPLOYMENT DISPUTES.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
XXXXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxx
-----------------------------------
Its: Secretary
-----------------------------------
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
10
