EXHIBIT 10.3
AMENDED EMPLOYMENT AGREEMENT
THIS AMENDED EMPLOYMENT AGREEMENT (this "Agreement") is effective as of
this 15th day of September, 1998 (the "Effective Date"), between Xxxxxxxx
Broadcast Group, Inc., a Maryland corporation ("SBG"), and Xxxxx X. Xxx
("Employee").
R E C I T A L S
A. SBG, through its wholly-owned subsidiaries, owns or operates
television broadcast stations.
B. Through and including the Effective Date, the Employee was employed
as the Chief Financial Officer and Treasurer (the "CFO") of SBG pursuant to an
employment agreement (the "Previous Employment Agreement") effective on February
1, 1998.
C. It is the intent of the parties hereto that this Agreement shall
supercede and replace the Previous Employment Agreement.
D. Upon the recommendation of the Employee, the Board of Directors
(the "Board) of SBG elected Xxxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx") to the office
of Treasurer of SBG, effective as of the Effective Date.
E. In order to facilitate the promotion of Xxxxxxxxxx, the Employee
resigned as Treasurer of SBG, effective as of the Effective Date.
F. SBG, recognizing the significant contributions to SBG made by the
Employee and wishing to continue to employ Employee as CFO of SBG, elected the
Employee to the office of Vice President of SBG and reconfirmed the Employee's
appointment to the position of CFO, both effective as of the Effective Date
G. SBG and Employee now desire to: (i) set forth the terms of
Employee's current employment with SBG as Vice President and CFO, (ii) ratify
the previous grant to Employee of certain stock options (the "Stock Options")
made pursuant to the Previous Employment Agreement, and (iii) terminate,
supercede and replace the Previous Employment Agreement by this Agreement in
order to reflect Employee's replacement as Treasurer of SBG.
1
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
continues to be employed by SBG in Baltimore, Maryland as CFO and was also
elected as Vice President of SBG. As the CFO and Vice President, Employee will:
(a) report to the Board and the Chief Executive Officer of SBG
(the "CEO");
(b) have such responsibilities and perform such duties as may
from time to time be established by the CEO and/or the Board; and
(c) set the performance goals for, and supervise the performance
of, the financial and accounting departments of SBG, including those of the
Treasurer.
1.2. FULL-TIME EMPLOYMENT. While an employee of SBG, Employee agrees
to devote Employee's full working time, attention, and best efforts exclusively
to the business of SBG.
2. TERM.
2.1. TERM. The term of Employee's employment as CFO and Vice President
of SBG under this Agreement (the "Employment Term") began on the Effective Date
and shall continue until employment is terminated 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 on the next following December 31; provided,
however, that the first "employment year" shall begin on the Effective Date and
shall end on December 31, 1998.
2.2. AT WILL EMPLOYMENT. Notwithstanding anything else in this
Agreement seemingly to the contrary (including, without limitation, the
provisions of Sections 2.1. and 3 regarding the employment term and compensation
and benefits of Employee), the employment of Employee is not for a specified
period of time, and SBG may terminate the employment of Employee with or without
Cause (as defined below) at any time. There is not, nor will there be, unless in
a writing signed by all of the parties to
2
this Agreement, any express or implied agreement as to the continued employment
of Employee.
3. COMPENSATION AND BENEFITS.
3.1 COMPENSATION. During each employment year, Employee shall be
entitled to the compensation determined by the SBG Compensation Committee (the
"Committee") after consulting with the CEO, which compensation may include a
bonus based upon the performance of the Employee and/or the Company. Such bonus,
if any, shall be determined in the sole discretion of the Compensation Committee
and shall be declared, if at all, after all financial and/or ratings data
necessary for the determination of such amount is available to the Compensation
Committee for its review.
3.2 OPTIONS. Concurrent with the Employee's execution of the Previous
Employment Agreement, Employee was granted (the "Grant") Stock Options to
acquire Sixty Seven Thousand (67,000) shares of Class A Common stock (the
"Stock") of SBG subject to the terms and conditions contained in the Long-Term
Incentive Plan of SBG and pursuant to the Non-Qualified Stock Option Agreement,
both of which have been previously provided to Employee. The terms and
conditions of Section 3.2 of the Previous Employment Agreement relating to the
grant of the Stock Options are incorporated herein and are hereby ratified. On
May 28, 1998 (a date subsequent to the Grant of the Stock Options and prior to
the date hereof), SBG declared a Stock split (the "Split") of two (2) shares of
Stock for every one (1) share of Stock owned as of the date of the Split. As a
result of the Split, the Stock Options held by the Employee pursuant to the
Grant are currently for One Hundred Thirty-Four Thousand (134,000) shares of
Stock and not for the original number of Sixty Seven Thousand (67,000) Shares of
Stock. The Employee is not granted any stock options in addition to the Stock
Options granted in the Previous Employment Agreement by as a result of, or
pursuant to, his entrance into this Agreement.
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 Sections of this Agreement which are continuing and will
survive the end of the Employment Term, as specified in Section 8.10 of this
Agreement) on the earliest to occur of the following events (individually a
"Termination Date"):
3
(1) the death of Employee;
(2) the Disability [as defined in Section 4.1(b) below] of
Employee;
(3) the termination of Employee's employment by Employee;
(4) the termination of Employee's employment by SBG for
Cause (as defined in Section 4.1(c) below); or
(5) the termination of Employee's employment by SBG without
Cause.
(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 SBG and
Employee are unable to agree as to whether Employee is disabled, the question
will be decided by a physician to be paid by SBG and designated by SBG, 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 SBG, (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 and the reasonable opportunity to correct such disregard, (iv)
Employee's continued violation of SBG policy after written notice of such
violations (such policy may include policies as to drug or alcohol abuse) and
the reasonable opportunity to cure such violations, (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 SBG or
programmed by SBG, (vi) the continued insubordination of Employee and/or
Employee's repeated failure to follow the reasonable directives of the CEO or
the Board after written notice of such insubordination or the failure to follow
such reasonable directives, or (vii) the repeated unsatisfactory performance by
Employee of Employee's job or duties hereunder as determined by the CEO or the
Board in his or their sole discretion after written notice thereof.
4
4.2. TERMINATION PAYMENTS.
(a) If Employee's employment with SBG 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 SBG prior to Employee's death or, if no such
written designation has been made, Employee's estate) will be entitled to
receive, and SBG will pay to the same, all of the following:
(1) the salary payable to Employee through the Termination
Date;
(2) a payment in respect of unutilized vacation time that
has accrued through the Termination Date (determined in accordance with
corporate policies established by SBG); and
(3) 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.
(b) If Employee's employment with SBG terminates pursuant to
Section 4.1(a)(4), Employee will be entitled to receive, and SBG 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); provided, however, that if Employee's employment terminates pursuant to
Subsection (vii) of Section 4.1(c), Employee shall be entitled to the benefits,
if any, set forth in the Long Term Incentive Plan in accordance with the terms
of Subsection (3) of this Section 4.2.
(c) If the Employee's employment with SBG terminates pursuant to
Section 4.1(a)(5), the Employee, in addition to the benefits he is entitled to
receive pursuant to Section 4.2(a), shall be entitled to receive, and SBG shall
pay to the Employee, one (1) month's base salary in effect at the time of
termination (not including bonuses) for each full year of his continuous
employment with SBG or its predecessor regardless of whether the employment has
been pursuant to this Agreement or has been prior to this Agreement.
(d) The termination payments (the "Termination Payments")
described in this Section 4 will be in lieu of any other termination or
severance payments
5
required by any other SBG policy (whether existing previously or currently or
adopted in the future) or, to the fullest extent permissible thereunder, or
under applicable law (including unemployment compensation) and the Termination
Payments 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:
(1) keep all Confidential Information in trust for the use
and benefit of SBG and its affiliates or subsidiaries (collectively the "Company
Entities") and any broadcast stations owned or operated directly or indirectly
by any of the Company Entities;
(2) not, except as required by Employee's duties under this
Agreement, authorized in writing by SBG or as required by law or any order,
rule, or regulation of any court or governmental agency (but only after notice
to SBG of such requirement), at any time during or after the termination of
Employee's employment with SBG, directly or indirectly, use, publish,
disseminate, distribute, or otherwise disclose any Confidential Information (as
defined below);
(3) take all reasonable steps necessary, or reasonably
requested by any of the Company Entities, to ensure that all Confidential
Information is kept confidential for the use and benefit of the Company
Entities; and
(4) upon termination of Employee's employment or at any
other time any of the Company's Entities in writing so request, promptly deliver
to such Company Entity all materials constituting Confidential Information
relating to such Company Entity (including all copies) that are in Employee's
possession or under Employee's control. If requested by any of the Company
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
Company Entities that is not generally available to the public. Confidential
Information includes all information developed by or for any of the Company
Entities concerning marketing used by
6
any of the Company Entities, suppliers, any customers (including advertisers)
with which any of the Company Entities has dealt prior to the Termination Date,
plans for development of new services and expansion into new areas or markets,
internal operations, financial information, operations, budgets, and any trade
secrets or proprietary information of any type owned by any of the Company
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 Company Entities
owns or operates a broadcast station or otherwise conducts business immediately
prior to such termination:
(i) participate in any activity involved in the ownership or
operation of a broadcast station (other than, during the Employment Term,
broadcast stations owned or operated by any of the Company Entities);
(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 Company
Entities or any person who was an employee of any of the Company Entities within
the prior one (1) year period; or
(iii) solicit, in competition with any of the Company
Entities, the business of any customer of any of the Company Entities or any
entity whose business any of the Company 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 one's name to,
acting as consultant or advisor to, being employed by or acquiring any direct or
indirect
7
interest in any business or enterprise, whether as a stockholder, partner,
officer, director, employee, consultant, or otherwise.
(d) In the event that (i) SBG places all or substantially all of
its broadcast 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 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
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 in the
case of terminations 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).
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 continued employment by SBG, Employee's continued
access to Confidential Information, Employee's continued eligibility to receive
the items referred to in Sections 3 (including, without limitation, Employee's
eligibility to participate in the Long Term Incentive Plan), Employee's
continued advancement at SBG, and Employee being eligible
8
to receive other special benefits at SBG; and further, that this Agreement is
entered into, and is reasonably necessary, to protect the Company Entities'
previous and future investment in Employee's training and development, and to
protect the goodwill and other business interests of the Company 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 Company Entities, the amount of which will be
impossible to estimate or determine and which cannot be adequately compensated.
Therefore, the Company 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 are in addition to any other rights and
remedies any of the Company 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, contract, 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
SBG in accordance with the terms and conditions of this Agreement.
8. MISCELLANEOUS.
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.
9
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 SBG to: Xxxxxxxx Broadcast Group, Inc.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
Copy to: Xxxxxx & Xxxxxxxx, P.A.
Suite 1100
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx
If to Employee to: Xxxxx X. Xxx
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. SBG may assign this Agreement to any company which
acquires all or substantially all of its assets or into which it merges
regardless of whether it survives as the successor, and in such an event and so
long as his employment continues hereunder, Employee hereby consents and agrees
to be bound by any such assignment by SBG. 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 permitted successors and assigns, and the executors,
administrators, and other legal representatives of Employee. No other third
parties, other than Company Entities, shall have, or are intended to have, any
rights under this Agreement.
10
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 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, and the Long Term Incentive Plan 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. SBG may withhold from any payments under this
11
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 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.
[REST OF PAGE LEFT INTENTIONALLY BLANK
SIGNATURES ON FOLLOWING PAGE]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
____ date of ______________, 1998 intending same to be effective as of the
Effective Date.
XXXXXXXX BROADCAST GROUP, INC.
By:
-------------------------------
Xxxxx X. Xxxxx
Its: PRESIDENT
------------------------------
EMPLOYEE
------------------------------
XXXXX X. XXX
13
