EXHIBIT 10.39
EMPLOYMENT AGREEMENT made March 20, 2001, effective as of March 1,
2001 (the "Effective Date"), between AOL TIME WARNER INC., a Delaware
corporation (the "Company"), and XXXX X. XXXXXXXXX.
You and the Company desire to set forth the terms and conditions of
your employment by the Company and agree as follows:
1. Term of Employment. Your "term of employment" as this phrase is
used throughout this Agreement, shall be for the period beginning on the
Effective Date and ending on June 30, 2005 (the "Term Date"), subject, however,
to earlier termination as set forth in this Agreement.
2. Employment. During the term of employment, you shall serve as
Executive Vice President, General Counsel and Secretary of the Company and you
shall have the authority, functions, duties, powers and responsibilities
normally associated with such position and such additional authority, functions,
duties, powers and responsibilities as may be assigned to you from time to time
by the Company consistent with your senior position with the Company. During the
term of employment, (i) your services shall be rendered on a substantially
full-time, exclusive basis and you will apply on a full-time basis all of your
skill and experience to the performance of your duties, (ii) you shall report to
a Co-Chief Operating Officer of the Company, (iii) you shall have no other
employment and, without the prior written consent of the Chairman, the Chief
Executive Officer or a Chief Operating Officer of the Company, no outside
business activities which require the devotion of substantial amounts of your
time, and (iv) the place for the performance of your services shall be the
principal executive offices of the Company in the New York City metropolitan
area, subject to such reasonable travel as may be required in the performance of
your duties. The foregoing shall be subject to the Company's written policies,
as in effect from time to time, regarding vacations, holidays, illness and the
like.
3. Compensation.
3.1 Base Salary. The Company shall pay you a base salary at
the rate of not less than $750,000 per annum during the term of employment
("Base Salary"). The Company may not decrease your Base Salary during the term
of employment. Base Salary shall be paid in accordance with the Company's
customary payroll practices.
3.2 Bonus. In addition to Base Salary, the Company typically
pays its executives an annual cash bonus ("Bonus"). Although your Bonus is fully
discretionary, your target annual Bonus is $1,500,000. Each year, your personal
performance will be considered in the context of your executive duties and any
individual goals set for you, and your actual Bonus will be determined. Although
as a general matter
the Company expects to pay bonuses at the target level in cases of satisfactory
individual performance, it does not commit to do so, and your Bonus may be
negatively affected by the exercise of the Company's discretion or by overall
Company performance.
3.3 Stock Options. So long as the term of employment has not
terminated, you will be eligible to receive annual grants of stock options
although the Company does not commit to do so. Each such stock option grant
shall be at an exercise price equal to the fair market value of the Common Stock
on the date of grant and shall be reflected in a separate Stock Option Agreement
in accordance with the Company's customary practices.
3.4 Indemnification. You shall be entitled throughout the term
of employment (and after the end of the term of employment, to the extent
relating to service during the term of employment) to the benefit of the
indemnification provisions contained on the date hereof in the Certificate of
Incorporation and By-laws of the Company (not including any amendments or
additions after the date hereof that limit or narrow, but including any that add
to or broaden, the protection afforded to you by those provisions).
4. Termination.
4.1 Termination for Cause. The Company may terminate the term
of employment and all of the Company's obligations under this Agreement, other
than its obligations set forth below in this Section 4.1, for "cause".
Termination by the Company for "cause" shall mean termination by action of the
Company because of (a) your conviction (treating a nolo contendere plea as a
conviction) of a felony (whether or not any right to appeal has been or may be
exercised), (b) willful refusal without proper cause to perform your obligations
under this Agreement, (c) fraud, embezzlement or misappropriation or (d) because
of your breach of any of the covenants provided for in Section 9. Such
termination shall be effected by written notice thereof delivered by the Company
to you and shall be effective as of the date of such notice; provided, however,
that if (i) such termination is because of your willful refusal without proper
cause to perform any one or more of your obligations under this Agreement, (ii)
such notice is the first such notice of termination for any reason delivered by
the Company to you under this Section 4.1, and (iii) within 15 days following
the date of such notice you shall cease your refusal and shall use your best
efforts to perform such obligations, the termination shall not be effective.
In the event of termination by the Company for cause, without
prejudice to any other rights or remedies that the Company may have at law or in
equity, the Company shall have no further obligation to you other than (i) to
pay Base Salary through the effective date of termination, (ii) to pay any Bonus
for any year prior to the year in which such termination occurs that has been
determined but not yet paid as of the date of such termination, and (iii) with
respect to any rights you have pursuant to any insurance or other benefit plans
or arrangements of the Company. You hereby disclaim
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any right to receive a pro rata portion of any Bonus with respect to the year in
which such termination occurs.
4.2 Termination by You for Material Breach by the Company and
Termination by the Company Without Cause. Unless previously terminated pursuant
to any other provision of this Agreement and unless a Disability Period shall be
in effect, you shall have the right, exercisable by written notice to the
Company, to terminate the term of employment effective 15 days after the giving
of such notice, if, at the time of the giving of such notice, the Company is in
material breach of its obligations under this Agreement; provided, however,
that, with the exception of clause (i) below, this Agreement shall not so
terminate if such notice is the first such notice of termination delivered by
you pursuant to this Section 4.2 and within such 15-day period the Company shall
have cured all such material breaches. A material breach by the Company shall
include, but not be limited to, (i) the Company violating Section 2 with respect
to your title, reporting lines, duties or place of employment or (ii) the
Company failing to cause any successor to all or substantially all of the
business and assets of the Company expressly to assume the obligations of the
Company under this Agreement.
The Company shall have the right, exercisable by written
notice to you, to terminate your employment under this Agreement without cause,
which notice shall specify the effective date of such termination.
4.2.1 After the effective date of a termination pursuant
to this Section 4.2 (a "termination without cause"), you shall receive Base
Salary and a pro rata portion of your Average Annual Bonus (as defined below)
through the effective date of termination. Your Average Annual Bonus shall be
equal to the average of the regular annual bonus amounts (excluding the amount
of any special or spot bonuses) in respect of the two calendar years during the
most recent five calendar years for which the annual bonus received by you from
the Company was the greatest; provided, however, if the Company has previously
paid you no annual Bonus, then your Average Annual Bonus shall equal your target
Bonus and if the Company has previously paid you one annual Bonus, then your
Average Annual Bonus shall equal the average of such Bonus and your target
Bonus.
4.2.2 After the effective date of a termination without
cause, you shall remain an employee of the Company for a period ending on the
date (the "Severance Term Date") which is the later of (i) the Term Date and
(ii) the date which is two years after the effective date of such termination
and during such period you shall be entitled to receive, whether or not you
become disabled during such period but subject to Section 6, (a) Base Salary at
an annual rate equal to your Base Salary in effect immediately prior to the
notice of termination, and (b) an annual Bonus in respect of each calendar year
or portion thereof (in which case a pro rata portion of such Bonus will be
payable) during such period equal to your Average Annual Bonus. Except as
provided in the second succeeding sentence, if you accept other full-time
employment during such period or notify the Company in writing of your intention
to terminate your status as an employee during
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such period, you shall cease to be an employee of the Company effective upon the
commencement of such other employment or the effective date of such termination
as specified by you in such notice, whichever is applicable, and you shall be
entitled to receive, as severance, a lump sum payment within 30 days after such
commencement or such effective date (provided that if you were named in the
compensation table in the Company's then most recent proxy statement, such lump
sum payment shall be made within 30 days after the end of the calendar year in
which such commencement or effective date occurred), discounted as provided in
the immediately following sentence, equal to the balance of the payments you
would have received pursuant to this Section 4.2.2 had you remained on the
Company's payroll. That lump sum shall be discounted to present value as of the
date of payment from the times at which such amounts would otherwise have become
payable absent such commencement or termination at an annual discount rate for
the relevant periods equal to 120% of the "applicable Federal rate" (within the
meaning of Section 1274(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), in effect on the date of such commencement or termination, compounded
semi-annually. Notwithstanding the foregoing, if you accept employment with any
not-for-profit entity, then you shall be entitled to remain an employee of the
Company and receive the payments as provided in the first sentence of this
Section 4.2.2; and if you accept full-time employment with any affiliate of the
Company, then the payments provided for in this Section 4.2.2 shall immediately
cease and you shall not be entitled to any lump sum payment. For purposes of
this Agreement, the term "affiliate" shall mean any entity which, directly or
indirectly, controls, is controlled by, or is under common control with, the
Company.
4.3 After the Term Date. If at the Term Date, the term of
employment shall not have been previously terminated pursuant to the provisions
of this Agreement, no Disability Period is then in effect and the parties shall
not have agreed to an extension or renewal of this Agreement or on the terms of
a new employment agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the Company
pursuant to the terms of this Agreement, subject to termination by either party
hereto on 60 days written notice delivered to the other party (which notice may
be delivered by either party at any time on or after the date which is 60 days
prior to the Term Date). If the Company shall terminate the term of employment
on or after the Term Date for any reason (other than for cause as defined in
Section 4.1, in which case Section 4.1 shall apply), which the Company shall
have the right to do so long as no Disability Date (as defined in Section 5) has
occurred prior to the delivery by the Company of written notice of termination,
then such termination shall be deemed for all purposes of this Agreement to be a
"termination without cause" under Section 4.2 and the provisions of Sections
4.2.1 and 4.2.2 shall apply.
4.4 Office Facilities. In the event of a termination without
cause, then for the period beginning on the effective date of such termination
and ending on the earlier of (a) six months thereafter or (b) the date you
commence other full-time employment, the Company shall, without charge to you,
make available to you office space at or near your principal job location
immediately prior to such termination, together
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with secretarial services, office facilities, services and furnishings, in each
case reasonably appropriate to an employee of your position and responsibilities
prior to such termination but taking into account your reduced need for such
office space, secretarial services and office facilities, services and
furnishings as a result of you no longer being a full-time employee.
4.5 Release. A condition precedent to the Company's obligation
to make the payments associated with a termination without cause shall be your
execution and delivery of a release in the form attached hereto as Annex A. If
you shall fail to execute and deliver such release, or if you revoke such
release as provided therein, then in lieu of the payments provided for herein,
you shall receive a severance payment determined in accordance with the
Company's policies relating to notice and severance.
4.6 Retirement. Notwithstanding the provisions of this
Agreement relating to a termination without cause and Disability, on the date
you first become eligible for normal retirement as defined in any applicable
retirement plan (or, if none, any applicable qualified employee benefit plan) of
the Company or any subsidiary of the Company (the "Retirement Date"), then this
Agreement shall terminate automatically on such date and your employment with
the Company shall thereafter be governed by the policies generally applicable to
employees of the Company, and you shall not thereafter be entitled to the
payments provided in this Agreement to the extent not received by you on or
prior to the Retirement Date. In addition, no benefits or payments provided in
this Agreement relating to termination without cause and Disability shall
include any period after the Retirement Date and if the provision of benefits or
calculation of payments provided in this Agreement with respect thereto would
include any period subsequent to the Retirement Date, such provision of benefits
shall end on the Retirement Date and the calculation of payments shall cover
only the period ending on the Retirement Date.
4.7 Mitigation. In the event of a termination without cause
under this Agreement, you shall not be required to seek other employment in
order to mitigate your damages hereunder unless Section 280G of the Code would
apply to any payments to you by the Company and your failure to mitigate would
result in the Company losing tax deductions to which it would otherwise have
been entitled. In such an event, you will engage in whatsoever mitigation is
necessary to preserve the Company's tax deductions. With respect to the
preceding sentences, any payments or rights to which you are entitled by reason
of the termination of employment without cause shall be considered as damages
hereunder. Any obligation to mitigate your damages pursuant to this Section 4.7
shall not be a defense or offset to the Company's obligation to pay you in full
the amounts provided in this Agreement upon the occurrence of a termination
without cause, at the time provided herein, or the timely and full performance
of any of the Company's other obligations under this Agreement.
4.8 Payments. So long as you remain on the payroll of the
Company or any subsidiary of the Company, payments of Base Salary and Bonus
required
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to be made after a termination without cause shall be made at the same times as
similar payments are made to other senior executives of the Company.
5. Disability.
5.1 Disability Payments. If during the term of employment and
prior to the delivery of any notice of termination without cause, you become
physically or mentally disabled, whether totally or partially, so that you are
prevented from performing your usual duties for a period of six consecutive
months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay your full compensation
through the last day of the sixth consecutive month of disability or the date on
which the shorter periods of disability shall have equaled a total of six months
in any twelve-month period (such last day or date being referred to herein as
the "Disability Date"). If you have not resumed your usual duties on or prior to
the Disability Date, the Company shall pay you a pro rata Bonus (based on your
Average Annual Bonus) for the year in which the Disability Date occurs and
thereafter shall pay you disability benefits for the period ending on the later
of (i) the Term Date or (ii) the date which is two years after the Disability
Date (in the case of either (i) or (ii), the "Disability Period"), in an annual
amount equal to 75% of (a) your Base Salary at the time you become disabled and
(b) the Average Annual Bonus.
5.2 Recovery from Disability. If during the Disability Period
you shall fully recover from your disability, the Company shall have the right
(exercisable within 60 days after notice from you of such recovery), but not the
obligation, to restore you to full-time service at full compensation. If the
Company elects to restore you to full-time service, then this Agreement shall
continue in full force and effect in all respects and the Term Date shall not be
extended by virtue of the occurrence of the Disability Period. If the Company
elects not to restore you to full-time service, you shall be entitled to obtain
other employment, subject, however, to the following: (i) you shall perform
advisory services during any balance of the Disability Period; and (ii) you
shall comply with the provisions of Sections 9 and 10 during the Disability
Period. The advisory services referred to in clause (i) of the immediately
preceding sentence shall consist of rendering advice concerning the business,
affairs and management of the Company as requested by the Chairman, the Chief
Executive Officer or a Chief Operating Officer of the Company but you shall not
be required to devote more than five days (up to eight hours per day) each month
to such services, which shall be performed at a time and place mutually
convenient to both parties. Any income from such other employment shall not be
applied to reduce the Company's obligations under this Agreement.
5.3 Other Disability Provisions. The Company shall be entitled
to deduct from all payments to be made to you during the Disability Period
pursuant to this Section 5 an amount equal to all disability payments received
by you during the Disability Period from Worker's Compensation, Social Security
and disability insurance policies maintained by the Company; provided, however,
that for so long as, and to the extent that, proceeds paid to you from such
disability insurance policies are not includible in your
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income for federal income tax purposes, the Company's deduction with respect to
such payments shall be equal to the product of (i) such payments and (ii) a
fraction, the numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to individuals at
the time of receipt of such payments. All payments made under this Section 5
after the Disability Date are intended to be disability payments, regardless of
the manner in which they are computed. Except as otherwise provided in this
Section 5, the term of employment shall continue during the Disability Period
and you shall be entitled to all of the rights and benefits provided for in this
Agreement, except that Sections 4.2 and 4.3 shall not apply during the
Disability Period and unless the Company has restored you to full-time service
at full compensation prior to the end of the Disability Period, the term of
employment shall end and you shall cease to be an employee of the Company at the
end of the Disability Period and shall not be entitled to notice and severance
or to receive or be paid for any accrued vacation time or unused sabbatical.
6. Death. If you die during the term of employment, this Agreement
and all obligations of the Company to make any payments hereunder shall
terminate except that your estate (or a designated beneficiary) shall be
entitled to receive Base Salary to the last day of the month in which your death
occurs and Bonus compensation (at the time bonuses are normally paid) based on
the Average Annual Bonus, but prorated according to the number of whole or
partial months you were employed by the Company in such calendar year.
7. Life Insurance. During your employment with the Company, the
Company shall (i) provide you with $50,000 of group life insurance and (ii) pay
you annually an amount equal to two times the premium you would have to pay to
obtain life insurance under the Group Universal Life ("GUL") insurance program
made available by the Company in an amount equal to $3 million. You shall be
under no obligation to use the payments made by the Company pursuant to the
preceding sentence to purchase GUL insurance or to purchase any other life
insurance. If the Company discontinues its GUL insurance program, the Company
shall nevertheless make the payments required by this Section 7 as if such
program were still in effect. The payments made to you hereunder shall not be
considered as "salary" or "compensation" or "bonus" in determining the amount of
any payment under any pension, retirement, profit-sharing or other benefit plan
of the Company or any subsidiary of the Company.
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8. Other Benefits.
8.1 General Availability. To the extent that (a) you are
eligible under the general provisions thereof (including without limitation, any
plan provision providing for participation to be limited to persons who were
employees of the company or certain of its subsidiaries prior to a specific
point in time) and (b) the Company maintains such plan or program for the
benefit of its executives, during the term of employment and so long as you are
an employee of the Company, you shall be eligible to participate in any savings
or similar plan or program and in any group life insurance (to the extent set
forth in Section 7), hospitalization, medical, dental, accident, disability or
similar plan or program of the Company now existing or established hereafter.
8.2 Benefits After a Termination or Disability. During the
period you remain on the payroll of the Company after a termination without
cause or during the Disability Period, you shall continue to be eligible to
participate in the benefit plans and to receive the benefits required to be
provided to you under this Agreement to the extent such benefits are maintained
in effect by the Company for its executives; provided, however, you shall not be
entitled to any additional awards or grants under any stock option, restricted
stock or other stock based incentive plan. At the time you leave the payroll of
the Company, your rights to benefits and payments under any benefit plans or any
insurance or other death benefit plans or arrangements of the Company or under
any stock option, restricted stock, stock appreciation right, bonus unit,
management incentive or other plan of the Company shall be determined in
accordance with the terms and provisions of such plans and any agreements under
which such stock options, restricted stock or other awards were granted.
However, notwithstanding the foregoing or any more restrictive provisions of any
such plan or agreement, if your employment with the Company is terminated as a
result of a termination pursuant to Section 4.2, then except if you shall
otherwise qualify for retirement under the terms of the applicable stock option
agreement, (i) all stock options granted to you by the Company or America
Online, Inc. ("America Online") on or after September 1, 2000 (which options are
collectively referred to as your "Term Options") which would have vested on or
before the Severance Term Date (or the comparable date of any employment
agreement that amends, replaces or supersedes this Agreement) shall vest and
become immediately exercisable upon the effective date of such termination, (ii)
all your vested Term Options shall remain exercisable while you are on the
payroll of the Company and for a period of three years after the date you leave
the payroll of the Company (but not beyond the term of such options), and (iii)
the Company shall not be permitted to determine that your employment was
terminated for "unsatisfactory performance" within the meaning of any stock
option agreement between you and the Company. All stock options granted to you
by America Online prior to September 1, 2000 shall be governed by the terms of
the applicable stock option agreement.
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8.3 Payments in Lieu of Other Benefits. In the event the term
of employment and your employment with the Company is terminated pursuant to any
section of this Agreement, you shall not be entitled to notice and severance
under the Company's general employee policies or to be paid for any accrued
vacation time or unused sabbatical, the payments provided for in such sections
being in lieu thereof.
9. Protection of Confidential Information; Non-Compete.
9.1 Confidentiality Covenant. You acknowledge that your
employment by the Company (which, for purposes of this Section 9 shall mean AOL
Time Warner Inc. and its affiliates) will, throughout the term of employment,
bring you into close contact with many confidential affairs of the Company,
including information about costs, profits, markets, sales, products, key
personnel, pricing policies, operational methods, technical processes and other
business affairs and methods and other information not readily available to the
public, and plans for future development. You further acknowledge that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. You further acknowledge that the
business of the Company is international in scope, that its products and
services are marketed throughout the world, that the Company competes in nearly
all of its business activities with other entities that are or could be located
in nearly any part of the world and that the nature of your services, position
and expertise are such that you are capable of competing with the Company from
nearly any location in the world. In recognition of the foregoing, you covenant
and agree:
9.1.1 You shall keep secret all confidential matters of
the Company and shall not disclose such matters to anyone outside of the
Company, or to anyone inside the Company who does not have a need to know or use
such information, and shall not use such information for personal benefit or the
benefit of a third party, either during or after the term of employment, except
with the Company's written consent, provided that (i) you shall have no such
obligation to the extent such matters are or become publicly known other than as
a result of your breach of your obligations hereunder and (ii) you may, after
giving prior notice to the Company to the extent practicable under the
circumstances, disclose such matters to the extent required by applicable laws
or governmental regulations or judicial or regulatory process;
9.1.2 You shall deliver promptly to the Company on
termination of your employment, or at any other time the Company may so request,
all memoranda, notes, records, reports and other documents (and all copies
thereof) relating to the Company's business, which you obtained while employed
by, or otherwise serving or acting on behalf of, the Company and which you may
then possess or have under your control; and
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9.1.3 If the term of employment is terminated pursuant
to Section 4, for a period of one year after such termination, without the prior
written consent of the Company, you shall not employ, and shall not cause any
entity of which you are an affiliate to employ, any person who was a full-time
employee of the Company at the date of such termination or within six months
prior thereto but such prohibition shall not apply to your secretary or
executive assistant or to any other employee eligible to receive overtime pay.
9.2 Non-Compete. During the term of employment and through the
later of (i) the Term Date, (ii) the date you leave the payroll of the Company,
and (iii) twelve months after the effective date of any termination of the term
of employment pursuant to Section 4, you shall not, directly or indirectly,
without the prior written consent of the Chairman, the Chief Executive Officer
or any Chief Operating Officer of the Company, render any services to, or act in
any capacity for, any Competitive Entity, or acquire any interest of any type in
any Competitive Entity; provided, however, that the foregoing shall not be
deemed to prohibit you from acquiring, (a) solely as an investment and through
market purchases, securities of any Competitive Entity which are registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which
are publicly traded, so long as you are not part of any control group of such
Competitive Entity and such securities, including converted securities, do not
constitute more than one percent (1%) of the outstanding voting power of that
entity and (b) securities of any Competitive Entity that are not publicly
traded, so long as you are not part of any control group of such Competitive
Entity and such securities, including converted securities, do not constitute
more than three percent (3%) of the outstanding voting power of that entity. For
purposes of the foregoing, the following shall be deemed to be a Competitive
Entity: (x) during the period that you are actively employed with the Company,
any person or entity that engages in any line of business that is substantially
the same as either (i) any line of business which the Company engages in,
conducts or, to your knowledge, has definitive plans to engage in or conduct or
(ii) any operating business that is engaged in or conducted by the Company as to
which, to your knowledge, the Company covenants, in writing, not to compete with
in connection with the disposition of such business, and (y) during the period
following a termination of your term of employment pursuant to Section 4, any of
the following: AT&T Corporation, Bertelsmann A.G., The Xxxx Disney Company,
EarthLink, Inc., General Electric Corporation, Microsoft Corporation, The News
Corporation, Sony Corporation, Vivendi, S.A., Viacom Inc. and Yahoo! Inc., and
their respective subsidiaries and affiliates and any successor to any of the
internet service provider, media or entertainment businesses thereof.
10. Ownership of Work Product. You acknowledge that during the term
of employment, you may conceive of, discover, invent or create inventions,
improvements, new contributions, literary property, material, ideas and
discoveries, whether patentable or copyrightable or not (all of the foregoing
being collectively referred to herein as "Work Product"), and that various
business opportunities shall be presented to you by reason of your employment by
the Company. You acknowledge that all of the foregoing shall be
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owned by and belong exclusively to the Company and that you shall have no
personal interest therein, provided that they are either related in any manner
to the business (commercial or experimental) of the Company, or are, in the case
of Work Product, conceived or made on the Company's time or with the use of the
Company's facilities or materials, or, in the case of business opportunities,
are presented to you for the possible interest or participation of the Company.
You shall (i) promptly disclose any such Work Product and business opportunities
to the Company; (ii) assign to the Company, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(iii) sign all papers necessary to carry out the foregoing; and (iv) give
testimony in support of your inventorship or creation in any appropriate case.
You agree that you will not assert any rights to any Work Product or business
opportunity as having been made or acquired by you prior to the date of this
Agreement except for Work Product or business opportunities, if any, disclosed
to and acknowledged by the Company in writing prior to the date hereof.
11. Notices. All notices, requests, consents and other
communications required or permitted to be given under this Agreement shall be
effective only if given in writing and shall be deemed to have been duly given
if delivered personally or sent by a nationally recognized overnight delivery
service, or mailed first-class, postage prepaid, by registered or certified
mail, as follows (or to such other or additional address as either party shall
designate by notice in writing to the other in accordance herewith):
11.1 If to the Company:
AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President - Global
Compensation and Benefits
(with a copy, similarly addressed
but Attention: General Counsel)
11.2 If to you, to your residence address set forth on the
records of the Company.
12. General.
12.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the substantive laws of the State of
New York applicable to agreements made and to be performed entirely in New York.
12.2 Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
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12.3 Entire Agreement. This Agreement, including Annex A, sets
forth the entire agreement and understanding of the parties relating to the
subject matter of this Agreement and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties.
12.4 No Other Representations. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or be liable for any alleged representation,
promise or inducement not so set forth.
12.5 Assignability. This Agreement and your rights and
obligations hereunder may not be assigned by you and except as specifically
contemplated in this Agreement, neither you, your legal representative nor any
beneficiary designated by you shall have any right, without the prior written
consent of the Company, to assign, transfer, pledge, hypothecate, anticipate or
commute to any person or entity any payment due in the future pursuant to any
provision of this Agreement, and any attempt to do so shall be void and shall
not be recognized by the Company. The Company shall assign its rights together
with its obligations hereunder in connection with any sale, transfer or other
disposition of all or substantially all of the Company's business and assets,
whether by merger, purchase of stock or assets or otherwise, as the case may be.
Upon any such assignment, the Company shall cause any such successor expressly
to assume such obligations, and such rights and obligations shall inure to and
be binding upon any such successor.
12.6 Amendments; Waivers. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended and the terms or covenants
hereof may be waived only by written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The failure
of either party at any time or times to require performance of any provision
hereof shall in no manner affect such party's right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
12.7 Specific Remedy. In addition to such other rights and
remedies as the Company may have at equity or in law with respect to any breach
of this Agreement, if you commit a material breach of any of the provisions of
Sections 9.1, 9.2, or 10, the Company shall have the right and remedy to have
such provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company.
12.8 Resolution of Disputes. Except as provided in the
preceding Section 12.7, any dispute or controversy arising with respect to this
Agreement and your employment hereunder (whether based on contract or tort or
upon any federal, state or
12
local statute, including but not limited to claims asserted under the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as
amended, any state Fair Employment Practices Act and/or the Americans with
Disability Act) shall, at the election of either you or the Company, be
submitted to JAMS/ENDISPUTE for resolution in arbitration in accordance with the
rules and procedures of JAMS/ENDISPUTE. Either party shall make such election by
delivering written notice thereof to the other party at any time (but not later
than 45 days after such party receives notice of the commencement of any
administrative or regulatory proceeding or the filing of any lawsuit relating to
any such dispute or controversy) and thereupon any such dispute or controversy
shall be resolved only in accordance with the provisions of this Section 12.8.
Any such proceedings shall take place in New York City before a single
arbitrator (rather than a panel of arbitrators), pursuant to any streamlined or
expedited (rather than a comprehensive) arbitration process, before a
non-judicial (rather than a judicial) arbitrator, and in accordance with an
arbitration process which, in the judgment of such arbitrator, shall have the
effect of reasonably limiting or reducing the cost of such arbitration. The
resolution of any such dispute or controversy by the arbitrator appointed in
accordance with the procedures of JAMS/ENDISPUTE shall be final and binding.
Judgment upon the award rendered by such arbitrator may be entered in any court
having jurisdiction thereof, and the parties consent to the jurisdiction of the
New York courts for this purpose. The prevailing party shall be entitled to
recover the costs of arbitration (including reasonable attorneys fees and the
fees of experts) from the losing party. If at the time any dispute or
controversy arises with respect to this Agreement, JAMS/ENDISPUTE is not in
business or is no longer providing arbitration services, then the American
Arbitration Association shall be substituted for JAMS/ENDISPUTE for the purposes
of the foregoing provisions of this Section 12.8. If you shall be the prevailing
party in such arbitration, the Company shall promptly pay, upon your demand, all
legal fees, court costs and other costs and expenses incurred by you in any
legal action seeking to enforce the award in any court.
12.9 Beneficiaries. Whenever this Agreement provides for any
payment to your estate, such payment may be made instead to such beneficiary or
beneficiaries as you may designate by written notice to the Company. You shall
have the right to revoke any such designation and to redesignate a beneficiary
or beneficiaries by written notice to the Company (and to any applicable
insurance company) to such effect.
12.10 No Conflict. You represent and warrant to the Company
that this Agreement is legal, valid and binding upon you and the execution of
this Agreement and the performance of your obligations hereunder does not and
will not constitute a breach of, or conflict with the terms or provisions of,
any agreement or understanding to which you are a party (including, without
limitation, any other employment agreement). The Company represents and warrants
to you that this Agreement is legal, valid and binding upon the Company and the
execution of this Agreement and the performance of the Company's obligations
hereunder does not and will not constitute a breach of, or conflict with the
terms or provisions of, any agreement or understanding to which the Company is a
party.
13
12.11 Withholding Taxes. Payments made to you pursuant to this
Agreement shall be subject to withholding and social security taxes and other
ordinary and customary payroll deductions.
12.12 No Offset. Neither you nor the Company shall have any
right to offset any amounts owed by one party hereunder against amounts owed or
claimed to be owed to such party, whether pursuant to this Agreement or
otherwise, and you and the Company shall make all the payments provided for in
this Agreement in a timely manner.
12.13 Severability. If any provision of this Agreement shall
be held invalid, the remainder of this Agreement shall not be affected thereby;
provided, however, that the parties shall negotiate in good faith with respect
to equitable modification of the provision or application thereof held to be
invalid. To the extent that it may effectively do so under applicable law, each
party hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
12.14 Survival. Sections 3.4, 8.3 and 9 through 12 shall
survive any termination of the term of employment by the Company for cause
pursuant to Section 4.1. Sections 3.4, 4.4, 4.5, 4.7 and 8 through 12 shall
survive any termination of the term of employment pursuant to Sections 4.2, 5
or 6.
12.15 Definitions. The following terms are defined in this
Agreement in the places indicated:
affiliate - Section 4.2.2
Average Annual Bonus - Section 4.2.1
Base Salary - Section 3.1
Bonus - Section 3.2
cause - Section 4.1
Code - Section 4.2.2
Company - the first paragraph on page 1 and Section 9.1
Competitive Entity - Section 9.2
Disability Date - Section 5
Disability Period - Section 5
Effective Date - the first paragraph on page 1
Retirement Date - Section 4.6
Severance Term Date - Section 4.2.2
Term Date - Section 1
Term Options - Section 8.2
term of employment - Section 1
termination without cause - Section 4.2.1
Work Product - Section 10
14
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
AOL TIME WARNER INC.
By /s/Xxxx X. Xxxxxxx
----------------------------------
/s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxxx
15
ANNEX A
RELEASE
Pursuant to the terms of the Employment Agreement made as of
_____________, between AOL TIME WARNER INC., a Delaware corporation (the
"Company"), 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the undersigned
(the "Agreement"), and in consideration of the payments made to me and other
benefits to be received by me pursuant thereto, I, [Name], being of lawful age,
do hereby release and forever discharge the Company and any successors,
subsidiaries, affiliates, related entities, predecessors, merged entities and
parent entities and their respective officers, directors, shareholders,
employees, benefit plan administrators and trustees, agents, attorneys,
insurers, representatives, affiliates, successors and assigns from any and all
actions, causes of action, claims, or demands for general, special or punitive
damages, attorney's fees, expenses, or other compensation or damages
(collectively, "Claims"), which in any way relate to or arise out of my
employment with the Company or any of its subsidiaries or the termination of
such employment, which I may now or hereafter have under any federal, state or
local law, regulation or order, including without limitation, Claims related to
any stock options held by me or granted to me by the Company that are scheduled
to vest subsequent to the Severance Term Date, as defined in the Agreement, and
Claims under the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the Fair Labor
Standards Act, the Family and Medical Leave Act and the Employee Retirement
Income Security Act, each as amended through and including the date of this
Release; provided, however, that the execution of this Release shall not prevent
the undersigned from bringing a lawsuit against the Company to enforce its
obligations under the Agreement.
I acknowledge that I have been given at least 21 days from the day I
received a copy of this Release to sign it and that I have been advised to
consult an attorney. I understand that I have the right to revoke my consent to
this Release for seven days following my signing. This Release shall not become
effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.
I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP
VALUABLE LEGAL RIGHTS AND THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE
SIGNING. I further state that I have read this document and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.
WITNESS my hand this ____ day of ___________, ____.
__________________________
[Name]
