EMPLOYMENT AGREEMENT
EXHIBIT 10.3
Agreement, made as of June 15, 2009
(“Effective Date”), between Crown Media Holdings, Inc., a Delaware corporation,
with offices at 00000 Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000
(“Employer”) and Xxxxxx Xxxxxxx (“Employee”).
(a) As of the
Effective Date, Employer and Employee agree to terminate any and all existing
agreements between them and agree to extend Employee’s employment pursuant to
the terms of this agreement (“Employment Agreement”). Employee agrees
to serve as Executive Vice President, Advertising Sales, reporting directly to
the President and Chief Executive Officer of Employer. Additionally,
Employee agrees to serve in such other capacities and perform responsibilities
as shall be designated from time to time by Employer. Employee shall
use Employee’s best efforts to promote the interests of Employer and shall
devote Employee’s full business time, energy and skill exclusively to the
business and affairs of Employer during the “Term” (as “Term” is defined in
Paragraph 2 below).
(b) During
the course of Employee’s employment hereunder, Employer may create or utilize
subsidiary companies for the production and distribution of programming or to
conduct the other activities and businesses of Employer. Employer
shall have the right, without additional compensation to Employee, to loan or
make Employee available to any subsidiary of Employer or company in common
ownership with Employer to perform services for any programming, property or
project owned or controlled by Employer or any such entity, provided that
Employee’s services for any such entity shall be consistent with Employee’s
duties hereunder. Employee further agrees that all the terms of this
Employment Agreement shall be applicable to Employee’s services for each such
entity.
2. Term of
Employment. The term of Employee’s employment (“Term”) with
Employer shall commence on the Effective Date and shall end on December 31,
2011, unless terminated earlier as provided in Paragraph 8 of this Agreement or
extended by mutual agreement of the parties.
(a) Salary. As
compensation for Employee’s services hereunder, Employer shall pay to Employee a
base salary at the annual rate of Five Hundred Ten Thousand Dollars ($510,000)
per year. During the Term and any extensions, Employer will consider
an adjustment of Employee’s base salary in June of each year.
(b) Performance
Bonus. Contingent on employment through each year end; the end
of the Term; or for termination of employment pursuant to Paragraph 8(b) below,
following the end of each calendar year during the Term, Employee will be paid a
bonus, to be pro rated for partial calendar years within the Term, in an amount
based on achievement of criteria outlined in Annual Incentive Plans approved by
the Compensation Committee of Employer. The target bonus will be 50%
of regular earnings for the applicable period of which there will be a 25 %
bonus opportunity for full attainment of goals under the Executive Bonus Plan
and a 25% bonus opportunity for the full attainment of year end revenue goals
under the Advertising Sales Incentive Plan. Such bonus will be paid
to Employee on the date following the applicable calendar year that Employer
designates for payment of bonuses to its employees in general, but in no event
later than March 15.
(d) LTI. Employer
will award to Employee additional long term incentive, which together with the
original 2009 long term incentive grant (collectively, “LTI”) is reflected in
the attached Amended and Restated 2009 Long Term Incentive Compensation
Agreement (attached as Schedule A) and
pursuant to the terms of and conditions of the Amended and Restated Crown Media
Holdings, Inc. 2000 Long Term Incentive Plan (attached as Schedule
B). Employee has also been granted RSUs under a prior
agreement which is attached hereto as Schedule C
(collectively, with the Schedule A agreement,
referred to herein as the “Incentive Agreements”).
(e) Withholding. All
payments of salary shall be made in appropriate installments to conform with the
regular payroll dates for salaried personnel of Employer. Employer
shall be entitled to deduct from each payment of compensation amounts required
under applicable laws or for participation in any employee benefit
plans.
(f) Expenses. During
the Term, Employer shall pay or reimburse Employee on an accountable basis for
all reasonable and necessary out-of-pocket expenses for entertainment, travel,
meals, hotel accommodations and other expenditures incurred by Employee in
connection with Employee’s services to Employer in accordance with Employer’s
expense account policies for its senior executive personnel. When
Employee is required by Employer for business reasons to travel by air, Employer
shall have the option to upgrade to business class air accommodations if such
fare does not exceed $100 more than the coach fare.
(g) Fringe
Benefits. During the Term, Employee shall be entitled to
receive the following fringe benefits pursuant to plans which may be amended
from time to time: (i) group medical, dental, life and disability insurance as
per Employer policy; (ii) any other fringe benefits on terms that are or
may become available generally to senior executives of Employer and (iii) four
(4) weeks paid vacation for each year of the Term, subject to accrual and usage
as outlined in Employer’s policies, as may be amended from time to
time.
4. Travel. During
the Term, shall undertake all travel required by Employer in connection with the
performance of Employee’s duties hereunder.
(a) Employee
agrees that Employee will not during the Term or thereafter divulge to anyone
(other than Employer and its executives, representatives and employees who need
to know such information or any persons designated by Employer) any knowledge or
information of any type whatsoever designated or treated as confidential by
Employer relating to the business of Employer or any of its subsidiaries or
affiliates, including, without limitation, all types of trade secrets, business
strategies, marketing and distribution plans as well as concrete proposals,
plans, scripts, treatments and formats described in Subparagraph (b)
below. Employee further agrees that Employee will not disclose,
publish or make use of any such knowledge or information of a confidential
nature (other than in the performance of Employee’s duties hereunder) without
the prior written consent of Employer. This provision does not apply
to information which becomes available publicly without the fault of Employee or
information which Employee discloses in confidence to Employee’s own privileged
representatives or is required to disclose in legal proceedings, provided
Employee gives advance notice to the Chief Executive Officer of Employer and an
opportunity to Employer to resist such disclosure in legal
proceedings.
(b) During
the Term, Employee will disclose to Employer all concrete proposals, plans,
scripts, treatments, and formats invented or developed by Employee during the
Term which relate directly or indirectly to the business of Employer or any of
its subsidiaries or affiliates including, without limitation, any proposals and
plans which may be copyrightable, trademarkable, patentable or otherwise
exploitable. Employee agrees that all such proposals, plans, scripts,
treatments and formats are and will be the property of
Employer. Employee further agrees, at Employer’s request, to do
whatever is necessary or desirable to secure for the Employer the rights to said
proposals, plans, scripts, treatments, and formats, whether by copyright,
trademark, patent or otherwise and to assign, transfer and convey the rights
thereto to Employer at Employer’s expense.
(c) Employer
shall have the right in perpetuity to use Employee’s name in connection with
credits for programming, properties and projects for which Employee performs any
services pursuant to this Agreement.
6. Employee’s
Representations. Employee represents and warrants that
Employee has the right to enter into this Agreement and is not subject to any
contract, commitment, agreement, arrangement or restriction of any kind which
would prevent Employee from performing Employee’s duties and obligations
hereunder.
(a) During
the Term, Employee shall not engage directly or indirectly, whether through
self-employment or as an employee, independent contractor, consultant, partner,
shareholder or otherwise, in a business or other endeavor which materially
interferes with any of Employee’s duties or obligations hereunder or which is
directly competitive with the business of the Employer or its subsidiaries,
including but not limited to the production, distribution or any other
exploitation of audiovisual television material (the “Other
Business”). In the event of a breach of this Paragraph 7(a) by
Employee or a claim by Employee pursuant to this paragraph, both Employer and
Employee shall have all of the remedies available to Employer at law or
equity. Notwithstanding Paragraph 9 below, Employee and Employer
agree that temporary and permanent injunctive relief may be sought by either in
a court of law to enforce this Paragraph 7(a) and Paragraph 7(b)
below.
(b) Employee
further agrees that during the Term and for a period of one year thereafter,
Employee will not employ, or attempt to employ or assist anyone else to employ,
any person who is, at the date of termination of Employee’s employment, working
as an officer, policymaker or in high-level creative development or distribution
(including without limitation executive employees) for or rendering
substantially full-time services as such to Employer.
|
8.
|
(a) This
Agreement may be terminated and the Term ended on five (5) business days’
written notice for any one of the following reasons (except (i) in which case
termination shall occur on the date of death):
|
(i)
|
The
death of Employee;
|
(ii) A serious
health condition of Employee that incapacitates Employee (as defined under the
Family Medical Leave Act) for a period exceeding an aggregate of twelve (12)
work weeks during any twelve (12) month period of the Term. For
purposes of counting the aggregate work weeks, days properly designated by
Employee as vacation days shall not be counted. In the case of
termination by virtue of either the death or disability of Employee, Employee or
his heirs will be paid any bonuses which Employee has earned and which are
attributable to periods prior to the effective date of termination, such payment
to occur on the date such bonus would normally be paid;
(iii) For
“cause,” which for purposes of this Agreement shall be defined as:
(A) The use
of a controlled substance and/or alcohol, either of which materially interfere
with Employee’s performance of Employee’s services under this
Agreement;
(B) Employee’s
commission of any act which constitutes a felony under federal, state or local
laws or the law of any foreign country;
(C) Employee’s
persistent failure or refusal after written notice to perform any of Employee’s
duties and responsibilities pursuant to this Agreement as determined by the
Board of Directors;
(D) Employee’s
dishonesty in financial dealings with or on behalf of Employer, its
subsidiaries, affiliates and parent corporation or in connection with
performance of Employee’s duties hereunder; or
(E) Employee’s
material breach of any provision of this Agreement.
(b) Employer
shall also have the right to terminate Employee prior to the expiration of the
Term in addition to pursuant to Paragraph 8(a) above by providing Employee with
written notice. In the event of a termination pursuant to this
Paragraph 8(b), Employee shall not be entitled to any further compensation or
benefits except (1) as may be provided under the Incentive Agreements; (2) the
lesser of twelve (12) months base salary or the remaining base salary described
in Paragraph 3(a) above for the balance of the Term (as though no termination
had occurred), paid in a lump sum and discounted at “prime rate” to present
value at the time of payment; (3) vested ERISA benefits (e.g., 401k plan); (4)
benefits that may be required by law (e.g., COBRA); and (5) pro rata bonus
through the date Employee’s job duties end to be paid as provided in Paragraph
3(b) above. Employee shall have no obligation to seek comparable
employment and if Employee does accept other employment, there will be no offset
by Employer against the amounts payable under this Paragraph 8(b). If
Employer terminates Employee under this Paragraph 8(b), Paragraph 7(a) shall not
apply from the date of termination.
(c) In the
event that Employer terminates this Agreement due to any of the reasons set
forth in Paragraph 8(a) above, Employee shall be paid Employee’s salary through
the later of the expiration of the five (5) business days period referred to in
Paragraph 8(a) or the end of the month in which the termination event occurs,
after which Employer’s obligation to pay salary to Employee shall
terminate. After making the payments provided for in this
Subparagraph (c), Employer shall have no further obligations to Employee
pursuant to this Agreement, except (1) as may be provided under the Incentive
Agreements; (2) vested ERISA benefits; or (3) benefits that may be required by
law (e.g., COBRA).
(d) Upon
termination of this Agreement, Employee shall promptly return all of Employer's
records and property to Employer.
(e) Upon
termination of Employee’s employment for any reason, Employee shall tender
Employee’s resignation from the Board of Directors of Employer or any of
Employer’s subsidiaries or affiliates on which Employee is serving, and Employer
shall accept such resignation forthwith.
9. Arbitration. Any
dispute between the Employee and Employer involving any provision of this
Agreement of employment matter; including any claim of discrimination under
state and federal law, other than an action in court requesting temporary or
permanent injunctive relief as set forth in Paragraph 7 above, shall be resolved
by arbitration under the employment rules of the American Arbitration
Association and in accordance with applicable law, allowing all damages and
remedies available in a court action. Such arbitration shall be
conducted in the New York City metropolitan area before one (1) neutral
arbitrator who is a lawyer with expertise in employment law. Employer
shall pay the expenses of the arbitration and each party shall pay its own legal
fees and expenses. The arbitrator shall provide a reasoned opinion
supporting his/her conclusion, including detailed findings of fact and
conclusions of law. Such findings of fact shall be final and binding
on the parties, but such conclusions of law shall be subject to appeal in any
court of competent jurisdiction. The parties further stipulate that
the laws of New York shall apply to any dispute or action regarding this
Agreement.
10. Assignment. This
Agreement is a personal contract and, without the prior written consent of
Employer, shall not be assignable by the Employee. The rights and
obligations of Employer may be assigned and such assignment shall bind in their
entirety the successors and assigns of Employer. As used in this
Agreement, the term “successor” shall include any person, firm, corporation or
other business entity which at the time, whether by merger, purchase or
otherwise, acquires all of substantially all of the assets or business of
Employer.
11. Amendment;
Captions. This Agreement contains the entire agreement between
the parties. It may not be changed orally, but only by agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought. Paragraph headings are for
convenience of reference only and shall not be considered a part of this
Agreement. If any clause in this Agreement is found to be
unenforceable, illegal or contrary to public policy, the parties agree that this
Agreement shall remain in full force and effect except for such
clause.
12. Notices. Any
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed effective when delivered in person or if mailed, by
registered or certified mail, return receipt requested, in which case the notice
shall be deemed effective on the date of deposit in the mails, postage prepaid,
addressed to Employee at the address for Employee appearing in Employer’s
records. Notices to Employer shall be addressed to its Chief
Executive Officer at the address first written above, with a copy to the
Executive Vice President of Legal and Business Affairs, Crown Media Holdings,
Inc., 00000 Xxxxxxx Xxxx., Xxxxxx Xxxx, XX 00000. Either
party may change the address to which notices are to be addressed by notice in
writing given to the other in accordance with the terms hereof.
13. Periods of
Time. Whenever in this Agreement there is a period of time
specified for the giving of notices or the taking of action, the period shall be
calculated excluding the day on which the giver sends notice and excluding the
day on which action to be taken is actually taken.
14. Laws. The
laws of the state of New York shall apply to this Agreement and the employment
relationship without the application of any conflict of law
provisions.
15. Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, and all of which, taken together, shall constitute one
instrument.
CROWN MEDIA HOLDINGS,
INC.
By: /s/ Xxxxxxx X.
Abbott___________
Title: /s/ President &
CEO__________
/s/ Xx Xxxxxxx
________________________________
Xxxxxx
Xxxxxxx