EMPLOYMENT AGREEMENT
(Xxxx Xxxxxxxxxx)
EMPLOYMENT AGREEMENT (the "Agreement") dated November 1, 1999
by and between American Media, Inc. (the "Company") and Xxxx Xxxxxxxxxx (the
"Executive").
The Company, Executive, Globe International Publishing Inc.,
Globe International Inc. and EMP Group LLC have entered into a Stock and Asset
Purchase Agreement, dated as of November 1, 1999 (the "Stock and Asset Purchase
Agreement"), pursuant to which the Company will purchase certain stock and
assets controlled by Executive.
The Company desires to employ Executive and to enter into an
agreement embodying the terms of such employment.
Executive desires to accept such employment and enter into
such an agreement.
In consideration of the premises and mutual covenants herein
and for other good and valuable consideration, the parties agree as follows:
1. Term of Employment; Executive Representation.
a. Employment Term. Subject to early termination
under the provisions of Section 6 of this Agreement, Executive shall be employed
by the Company for a period commencing on Closing Date (as defined in the Stock
and Asset Purchase Agreement) (the "Commencement Date") and ending on the fifth
anniversary thereof (the "Employment Term"), on the terms and subject to the
conditions set forth in this Agreement.
b. Executive Representation. Executive hereby
represents to the Company that the execution and delivery of this Agreement by
Executive and the Company and the performance by Executive of Executive's duties
hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which Executive is a
party or otherwise bound.
2. Position
a. During the Employment Term, Executive shall serve
as the Chairman of the Board of Directors of the Company (the "Board") and a
member of the Board of Directors of EMP Group LLC. In such position, Executive
shall have such duties and authority as shall be determined from time to time by
the Board of Directors of the Company and agreed by Executive, including,
without limitation, to enhance the image of the Company, for which Executive
shall entertain clients and others associated with the Company at his Florida
residence; provided that Executive shall have no executive power, authority or
responsibility with respect to the operation of the Company or any of its
subsidiaries (including, without limitation, the authority to contractually bind
the Company) unless otherwise determined by the Chief Executive Officer and
Board of Directors of the Company; provided, further, that Executive must agree
to the location at which his services are to be performed.
b. During the Employment Term, Executive shall have
the right to designate Xxxxx Xxxxxxxxxx as a member of the Board and the Board
of Directors of EMP Group LLC.
3. Compensation. During the Employment Term, the Company shall
pay to Executive compensation equal to $1,000,000 per year, less any amounts
paid during the Employment Term to any of Executive's children who are employed,
or retained as consultants, by the Company or its subsidiaries (other than
pursuant to consulting contracts between the Company and Xxxx Xxxxxxxxxx and/or
Xxxxx Xxxxxxxxxx) (the "Compensation"), payable in regular installments in
accordance with the Company's usual payment practices.
4. Employee Benefits. During the Employment Term, Executive
shall be entitled to participate in the Company's employee benefit plans as in
effect from time to time, in accordance with their terms and applicable law, on
the same basis as those benefits are generally made available to other senior
executives of the Company.
5. Business Expenses and Discretionary Expense Allowance.
During the Employment Term, the Company shall provide Executive with (i) a Boca
Raton office and support staff substantially comparable to Executive's current
arrangements, (ii) use of and reimbursement for expenses directly related to
such use of the condominium located at Xxxxxx Tower (the "Old Condo") until
completion of the condominium at Xxxxxx Grand (the "New Condo"), and thereafter
for the expenses directly related to use of the New Condo, in each case, up to a
maximum of $90,000 per year, (iii) use of a Mercedes S600 (the "Company Car")
and (iv) a discretionary expense allowance (for costs including country club
memberships and other travel and entertainment reimbursement) of up to $250,000
per year (the "Discretionary Expense Allowance"). In addition, Executive shall
have the option to purchase the Old Condo for $500,000 at any time up to the
sixth anniversary of Commencement Date (the "Condo Option").
6. Termination.
a. By the Company For Cause or Disability, Upon Death
or By Executive Resignation.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company for Cause (as defined below) or
Disability (as defined below), and shall terminate upon the death of Executive
or Executive's resignation.
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(ii) For purposes of this Agreement, "Cause" shall
mean (A) Executive's conviction of, or plea of guilty or nolo contendere to, any
felony which materially adversely affects the Company, (B) Executive's wilful or
gross misconduct in the performance of duties owed to the Company that is
intended to materially adversely affect the Company or that Executive knew or
should have known would have such effect or (C) Executive's wilful refusal or
wilful failure to substantially perform Executive's essential duties to the
Company (other than due to Executive's illness); provided that prior to any
termination pursuant to this clause (C), (x) the Company must provide Executive
with written notice specifically identifying the reasons the Company believes
this clause (C) is applicable and (y) Executive must have continued to wilfully
refuse or wilfully fail to perform such essential duties for a 30 day period
following receipt of such notice; provided, further, that it is understood this
clause (C) shall not permit the Company to terminate Executive's employment for
Cause because of dissatisfaction with the quality of services provided by, or
disagreement with the actions taken by, Executive in the good faith performance
of Executive's duties to the Company. Any act or inaction believed in good faith
by Executive to be in the best interests of the Company shall not be considered
"wilful" for purposes of this Agreement.
(iii) For purposes of this Agreement, "Disability"
shall mean Executive becomes physically or mentally incapacitated and is
therefore unable for a period of six (6) consecutive months or for an aggregate
of nine (9) months in any twenty-four (24) consecutive month period to perform
Executive's duties. Any question as to the existence of the Disability of
Executive as to which Executive and the Company cannot agree shall be determined
in writing by a qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing.
The determination of Disability made in writing to the Company and Executive
shall be final and conclusive for all purposes of the Agreement.
(iv) If Executive's employment is terminated by the
Company for Cause or Disability, or if Executive dies or resigns after giving
the Company at least 30 days advance written notice of such resignation,
Executive shall be entitled to receive:
(A) Compensation, Discretionary Expense Allowance and
the Company Car through the date of termination;
(B) reimbursement for any unreimbursed business
expenses properly incurred by Executive in accordance with
Section 5(ii) hereof prior to the date of Executive's
termination; and
(C) such employee benefits, if any, as to which
Executive may be entitled under the employee benefit plans of
the Company and continuation of the Condo Option for its full
term (the amounts described in clauses (A) through (C) hereof
being referred to as the "Accrued Rights").
Following such termination of Executive's employment by the
Company for Cause or Disability, upon the death of Executive or upon resignation
by Executive, except as set forth in this Section 6(a), Executive shall have no
further rights to any compensation or any other benefits under this Agreement.
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b. By the Company Without Cause.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company without Cause.
(ii) If Executive's employment is terminated by the
Company without Cause (other than by reason of death or Disability, but
including removal from any Board of Directors due to Executive's failure to hold
Class A-1 Units of EMP Group LLC (as provided in Section 6(e)(iv)), Executive
shall be entitled to receive:
(A) the Accrued Rights; and
(B) subject to Executive's continued compliance with
the provisions of the Noncompete Agreement between Executive
and the Company, dated as of the date hereof (the "Noncompete
Agreement"), continued payment of the Compensation and
Discretionary Expense Allowance and provision of Employee
Benefits and Company Car, in each case, until the expiration
of the Employment Term, determined as if such termination had
not occurred.
Following Executive's termination of employment by the Company
without Cause (other than by reason of Executive's death or Disability), except
as set forth in this Section 6(b), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
c. Expiration of Employment Term. Unless the parties
otherwise agree in writing, continuation of Executive's employment with the
Company beyond the expiration of the Employment Term shall be deemed an
employment at will and shall not be deemed to extend any of the provisions of
this Agreement and Executive's employment may thereafter be terminated at will
by either Executive or the Company; provided that the provisions of the
Noncompete Agreement shall survive any termination of this Agreement or
Executive's termination of employment hereunder.
d. Notice of Termination. Any purported termination
of employment by the Company or by Executive (other than due to Executive's
death) shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 7(g) hereof.
e. Board Positions. Executive's positions on the
Board and the Board of Directors of any of the Company's affiliates, including,
but not limited to, EMP Group LLC, shall be automatically terminated on the
earliest of (i) the end of the Employment Term, (ii) the date on which
Executive's employment with the Company and/or its subsidiaries is terminated,
(iii) Executive's death and (iv) the date on which Executive does not hold any
Class A-1 Units of EMP Group LLC. In addition, at such time described in the
foregoing sentence, as well as upon the death or Disability of Xxxxx Xxxxxxxxxx,
any position held by Xxxxx Xxxxxxxxxx on the Board and the Board of Directors of
any of the Company's affiliates, including, but not limited to, EMP Group LLC,
shall be automatically terminated.
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7. Miscellaneous.
a. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
b. Entire Agreement/Amendments. Except for the
Noncompete Agreement, this Agreement contains the entire understanding of the
parties with respect to the employment of Executive by the Company. Subject to
the Noncompete Agreement, there are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
d. Severability. In the event that any one or more of
the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
e. Assignment. This Agreement shall not be assignable
by Executive. This Agreement may be assigned by the Company to a company which
is a successor in interest to substantially all of the business operations of
the Company. Such assignment shall become effective when the Company notifies
Executive of such assignment or at such later date as may be specified in such
notice. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such successor company;
provided that any assignee expressly assumes the obligations, rights and
privileges of this Agreement; provided, further, that in the event of any such
assignment, the Company will guarantee the obligations of the assignee
hereunder.
f. Successors; Binding Agreement. This Agreement
shall inure to the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devises and legatees.
g. Notice. For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
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If to the Company:
American Media, Inc.
000 Xxxxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
with a copy to:
Evercore Partners, Inc.
00 X. 00xx Xxxxxx, Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
If to Executive:
To the most recent address of Executive set forth in the personnel
records of the Company.
with a copy to:
Xxxxxxx Xxxxxxxx & Xxxxxxxx
0000 XxXxxx Xxxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxxxx
h. Withholding Taxes. The Company may withhold from
any amounts payable under this Agreement such Canadian or United States Federal,
state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.
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i. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
AMERICAN MEDIA, INC.
/s/ Xxxxx Xxxxxx
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By:
Title:
/s/ Xxxx Xxxxxxxxxx
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XXXX XXXXXXXXXX
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