EXHIBIT 10.6
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PAYMENT AGREEMENT AND GENERAL RELEASE
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1. General Release. I, Xxxxxx X. Xxxxx ("Employee"), release, dismiss,
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covenant not to xxx and forever discharge College Television Network, Inc., a
Delaware corporation ("CTN") and its majority shareholder, U-C Holdings, L.L.C.
("Holdings"), a Delaware limited liability company (collectively, all of the
foregoing are referred to as the "Company") and all affiliated corporations,
limited liability companies or partnerships and stockholders, members, managers,
officers, directors, employees, agents, predecessors, successors, transferees
and assigns from any and all actions, causes of action, suits, damages, debts,
claims, counterclaims, obligations and liabilities of whatever nature, known or
unknown, including, but not limited to those actions, causes of action, suits,
damages, debts, claims, counterclaims, obligations and liabilities, resulting or
arising out of, directly or indirectly, the employment relationship between
Employee and the Company (including, but not limited to, claims for
compensation, salary, bonuses, severance pay or other benefits), the termination
of the employment relationship, any promises made to or agreements with Employee
while he was employed at the Company, Employee's ownership, directly or
indirectly, of capital stock in the Company, Employee's ownership or right to
receive equity in Holdings, or the failure to offer employment with the Company,
including, without limitation, by reason of specification, any claims for breach
of contract, failure to hire, wrongful discharge of any kind, and any claims
arising under any federal, state, or local laws or ordinances, including,
without limitation, by reason of specification, the Federal Securities Act of
1933, as amended, the Federal Securities Exchange Act of 1934, as amended, the
Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act
of 1964, the Older Workers Benefits Protection Act, and any common law claims
now or hereafter recognized. Employee does hereby agree and acknowledge that
except for the payments pursuant to Paragraph 3 below, Employee is entitled to
no compensation, benefits or other rights or privileges from the Company.
2. No Admission. Employee agrees and acknowledges that neither this
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Agreement nor the Company's offer to enter into this Agreement should be
construed as an admission by the Company that it has acted wrongfully toward the
Employee or any other employee, and that the Company expressly denies any
liability to, or wrongful acts against the Employee on the part of itself, its
employees or its agents. Employee acknowledges and agrees that he has no
disagreement with the Company in connection with his resignation as an officer
and director.
3. Consideration.
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a. In full consideration and as material inducement for signing this
Agreement, CTN will, upon the expiration of the revocation period set forth in
Paragraph 5(d) herein, pay or provide to Employee the following: (i) $18,333.33
per month to be paid at the same time as the other employees of CTN commencing
as of February 19, 1999 and ending as of April 28, 2001 which payments shall
continue even if Employee dies; and (ii) CTN shall permit Employee and his
dependents to continue to receive benefits under CTN's health and dental
insurance policies to the extent permitted by such policies and applicable law,
and provided further, that CTN shall only maintain such insurance coverage until
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the earlier of (y) April 28, 2001 and (z) the date Employee accepts other
employment, which insurance shall continue for Employee's dependents after his
death, for the time period set forth above, but no later than April 28,
2001. Employee agrees that at any time Company may, in its sole discretion,
prepay the amount owed pursuant to subparagraph 3(a)(i) above and pay the net
present value of such amount based upon a 8.5% annual rate of return. Such
payments shall be subject to normal withholdings required by law and are subject
to Employee's continued compliance with this Agreement.
b. Further, in accordance with Employee's Employment Agreement dated
April 29, 1997 (the "Employment Agreement"), Holding's does hereby repurchase
400 of the Class A Management Units (collectively, the "Units"), as defined in
the Second Amended and Restated Limited Liability Company Agreement of Holdings
dated as of May 15, 1997, as amended (the "LLC Agreement"), held by Employee and
Employee does hereby transfer, assign and sell the Units to Holdings, free and
clear of all liens, encumbrances, options or warrants. The consideration paid to
Employee hereunder for the Units is $400, and Employee does hereby acknowledge
receipt of said $400. The Units shall be placed in the Pool established
pursuant to the LLC Agreement and that certain Amended and Restated Equity
Allocation Agreement dated November 30, 1997 among Employee, Xxxxx Xxxxx, Xxxx
Xxxxxx, the Company and Holdings. Employee shall be entitled to retain 100
Class A Management Units and the 35 Class R Management Units (the "Retained
Units"), which Retained Units shall be fully vested and not subject to
repurchase or the restrictions set forth in Section 7 of the Employment
Agreement. Employee represents and warrants that he does not, directly or
indirectly, hold, own or have a beneficial interest in any other equity or
securities of the Company, other than the Retained Units, the options referred
to in Paragraph 3d. below or common stock of the Company purchased by Employee
on the NASDAQ Exchange.
c. Employee acknowledges that the 333,333 Investor Units, as defined
in the LLC Agreement (the "Investor Units"), held by Employee have not been paid
for by Employee and Employee owes Holdings $333,333.30, plus interest, pursuant
to that certain Promissory Note (the "Note") dated May 12, 1997, and $188,704,
plus interest, pursuant to that certain Promissory Note dated October 2, 1998
(the "Second Note"), which Note and Second Note are secured by a pledge of the
Investor Units pursuant to that certain Unit Pledge Agreement between Employee
and Holdings dated as of May 12, 1997, as amended pursuant to that certain
Amended and Restated Unit Pledge Agreement dated October 2, 1998 (the "Pledge
Agreement"). Employee, the Company and Holdings agree that Employee shall
forfeit the Investor Units, which are hereby transferred to Xxxxx Xxxxx, free
and clear of all liens, claims or encumbrances, the Note, the Second Note and
Pledge Agreement shall be cancelled and Employee shall have no further
obligations thereunder, shall be released therefrom and Xxxxx Xxxxx shall assume
such obligations. The Note and Second Note shall be returned to Employee marked
"Paid."
d. Contemporaneously herewith Employee shall be granted an option to
purchase 100,000 shares of the common stock of the Company with an exercise
price of $2.75 per share, which shall be immediately exercisable and shall have
a term of five (5) years. The Company agrees to amend its current S-8
Registration Statement to include the option share within 120 days after the
date hereof.
4. Taxes. Employee agrees to pay federal, state or local taxes, if any,
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which are required by law to be paid with respect to this settlement. The
Employee further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, levies, assessments, executions, judgments or
recoveries by any governmental entity against the
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Company for any amounts claimed due on account of this Agreement and Release or
pursuant to claims made under any federal or state tax laws, and any costs,
expenses or damages sustained by the Company by reason of any such claims,
including any amounts paid by the Company as taxes, attorneys' fees,
deficiencies, levies, assessments, fines, penalties, interest or otherwise.
5. Compliance with Law. Employee hereby acknowledges and agrees that this
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Agreement and the termination of his employment or the failure to offer
employment and all actions taken in connection therewith are in compliance with
the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights
Act of 1964, and the Older Workers Benefits Protection Act, and that the release
set forth in Paragraph 1 hereof shall be applicable, without limitation, to any
claims brought under these Acts. Employee further acknowledges and agrees that:
a. The release given by the Employee in this Agreement is given
solely in exchange for the consideration set forth in Paragraph 3 of this
Agreement and such consideration is in addition to anything of value to which
the Employee received prior to entering into this Agreement;
b. Employee has consulted or has had an opportunity to consult an
attorney prior to entering into this Agreement;
c. Employee waives the requirement that he have twenty-one (21) days
to consider this Agreement and Release;
d. For a period of seven (7) days following execution of this
Agreement, the Employee may revoke this Agreement and this Agreement shall not
become effective or enforceable until such seven (7) day period has expired.
6. Confidentiality.
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a. Employee agrees to keep confidential the terms of this Agreement
and the transactions or events which led to its execution, and Employee
covenants not to disclose this information to any other person, except that
Employee may disclose the terms of this Agreement to the Internal Revenue
Service, his attorneys, his financial advisors, and his immediate family
members, who shall be informed of the confidential nature of the information.
If Employee is compelled to disclose this Agreement pursuant to service of a
subpoena on him, Employee shall immediately provide written notice to the
Company and shall not make any such disclosure for ten (10) business days in
order to give the Company an opportunity to seek an appropriate protective
order, unless disclosure is required sooner than ten (10) business days by court
order, rule, or regulation, in which case disclosure will not be made by such
party before the time required by such court order, rule, or regulation.
b. Employee agrees that he will not, without the prior written
consent of the Company, make or cause to be made any oral or written statements
to any person, firm, corporation or governmental or other entity which reflect
negatively on the Company or any of its direct and indirect parents,
subsidiaries, affiliates, related companies, successors and assigns, or on its
and their directors, officers, members, and employees, or which could reasonably
be understood to be detrimental to the business interests of the Company or any
of its direct and
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indirect parents, subsidiaries, affiliates, related companies,
successors and assigns, or to its and their directors, officers, members, and
employees.
c. Employee acknowledges that the receipt of the consideration set
forth in Paragraph 3(a) is conditioned on Employee's compliance with this
Paragraph 6 and the other terms and provisions of this Agreement.
7. No Assignment of Claims and No Claim Filed. Employee represents and
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warrants that he has not heretofore assigned or transferred to any person not a
party to this Agreement any claim being released by this Agreement or any part
or portion thereof and that he shall defend, indemnify, and hold harmless the
Company from and against any claim (including the payment of attorneys' fees and
costs actually incurred whether or not litigation is commenced) based on or in
connection with or arising out of any such assignment or transfer. Employee
further represents and warrants that neither he nor his attorneys have made any
allegations to, or have filed any complaints, charges, or lawsuits with any
court or government agency relating to any matters being released by Employee in
this Agreement, including matters arising out of Employee's employment with the
Company or the termination of such employment, and that neither he nor his
attorneys shall file any complaints, charges, or lawsuits, at any time
hereafter, arising out of such released claims.
8. Return of Property. Contemporaneously with the delivery of the
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executed Agreement, Employee, his attorneys, their agents, and all persons
acting on their behalf, shall deliver to the Company all non-public documents
and materials that relate to the Company, if any and all property of the Company
in his possession, other than the laptop computer which he currently uses, which
he may keep at no cost.
9. Choice of Law. The rights and obligations of the parties hereunder
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shall be construed and enforced in accordance with, and governed by, the laws of
the State of Georgia, without regard to principles of conflict of laws.
10. Employment Agreement. The parties hereto do hereby agree that the
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Employment Agreement is terminated, except for the provisions in Sections 9, 10,
11, 12, 13 and 15 through 21 of the Employment Agreement shall remain and
continue in full force and effect in accordance with their terms. Employee
resigns as an officer and director of the Company effective as of February 19,
1999.
11. Future Equity. Employee hereby waives, cancels and terminates any
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right to receive any additional equity or securities in the Company or related
entities, including, but not limited to, the rights (if any) pursuant to that
certain Amended and Restated Equity Allocation Agreement dated November 11, 1997
among the Company, Xxxxx Xxxxx, Xxx Xxxxx and Employee.
12. Knowledgeable Decision by Employee. Employee has read all of the
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terms of this Agreement and has had an opportunity to discuss it with
individuals of Employee's own choice who are not associated with the Company.
Employee understands the terms of this Agreement and that this Agreement
releases forever the Company from any legal action arising from Employee's
employment relationship, any promises or agreements with Employee while he was
employed at the Company, any rights he has as a shareholder of CTN or
equityholder or member of Holdings, the termination of this employment
relationship or the failure to offer employment
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with the Company. Employee signs this Agreement of his own free will in exchange
for the consideration to be given to Employee, which Employee acknowledges is
adequate and satisfactory. Neither the Company nor its agents, representatives
or employees have made any representations to Employee concerning the terms or
effects of this Agreement, other than those contained in this Agreement.
EMPLOYEE ACKNOWLEDGES THAT HE HAS HAD THE OPPORTUNITY TO OR HAS RETAINED
LEGAL COUNSEL. THE PARTIES HERETO ACKNOWLEDGE THAT XXXXXX, XXXXXXX & XXXXXX,
L.L.P. REPRESENTS THE COMPANY IN THIS MATTER AND ALL PARTIES WAIVE ANY CONFLICT
OF INTEREST OF XXXXXX, XXXXXXX & XXXXXX, L.L.P. DUE TO THE FACT THAT XXXXXX,
XXXXXXX & XXXXXX, L.L.P. HAS REPRESENTED EMPLOYEE IN THE PAST.
IN WITNESS WHEREOF, the undersigned have executed this agreement this 19th
day of February, 1999.
EMPLOYEE:
/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
COMPANY:
COLLEGE TELEVISION NETWORK, INC.
By: /s/ Xxxxx Xxxxx
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Its: Chief Executive Officer
U-C HOLDINGS, L.L.C.
By: Xxxxxx Xxxxx & Partners, L.P.
Its: Managing Member
By: Xxxxxx Xxxxx & Partners, L.L.C.
Its: General Partner
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Its: Manager
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