EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of March 7, 1997 (the
"Agreement"), between Telemundo Group, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxxx (the
"Executive").
Section 1. Employment and Term. The Company agrees to
employ the Executive, and the Executive agrees to serve as an
employee of the Company, with the duties set forth in Section 2
for a term (the "Term of Employment") beginning as of January
1, 1997 (the "Commencement Date") and ending at the close of
business on December 31, 1997 or any earlier date of
termination under Section 7. The Employment Agreement, dated
as of May 15, 1994, between the Company and the Executive is
hereby superseded by this Agreement and terminated with no
further force or effect effective as of the close of business
on December 31, 1996.
Section 2. Duties. The Executive agrees during the
Term of Employment to serve as Executive Vice President of the
Company reporting to the President and Chief Executive Officer
of the Company. The Executive agrees to use his best efforts
to promote the interests of the Company, subject at all times
to the direction of the President and Chief Executive Officer
of the Company. The Executive agrees to devote his entire
business time and attention, with undivided loyalty, to the
performance of such duties.
Section 3. Consideration: Salary and Bonus During Term
of Employment.
(a) Consideration. The consideration for entering into
this Agreement shall be the performance of services by the
Executive pursuant to this Agreement and the employment of the
Executive by the Company as well as the payments and benefits
provided under this Agreement.
(b) Salary. The Company shall pay salary to the
Executive at the annual rate of $400,000 during the period from
January 1, 1997 through May 31, 1997, and, at the annual rate
of $300,000, during the period from June 1, 1997 through
December 31, 1997, to be paid (subject to required withholding
taxes) in arrears in equal installments bi-weekly.
(c) Bonus. During the Term of Employment, the Executive
will be eligible for a bonus based on the attainment by each of
Telemundo of Florida, Inc. (the "Miami Station") and Telemundo
of Puerto Rico, Inc. (the "Puerto Rico Station") of the budget
targets set forth in Exhibit A if the Executive is employed by
the Company on the last day of the Term of Employment. If the
Miami Station achieves 100% of the applicable budget target
indicated on Exhibit A, the Executive shall receive a bonus in
the amount of $90,000. In addition, for every $1 over the
budget target achieved by the Miami Station, the Executive will
receive $.05; provided that, if the Miami Station exceeds the
budget target for the Miami Station by $250,000 or more, the
Executive shall receive an additional bonus of $20,000. If the
Puerto Rico Station achieves 100% of the applicable budget
target indicated on Exhibit A, the Executive shall receive a
bonus in the amount of $90,000. In addition, for every $1 over
the budget target achieved by the Puerto Rico Station, the
Executive will receive $.04; provided that, if the Puerto Rico
Station exceeds the budget target by $500,000 or more, the
Executive shall receive an additional bonus of $20,000. The
Compensation Committee shall meet within two months after the
end of the performance period (or as soon thereafter as is
practicable) to certify whether the budget targets have been
satisfied. If the Compensation Committee so certifies, the
bonuses will be paid (subject to applicable withholding taxes)
promptly but in no event later than ten days after such
certification. For purposes of this Agreement, the
"Compensation Committee" shall mean a committee consisting of
at least two (2) directors of the Company, all of whom are "non-
employees" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, and "outside
directors" within the meaning of Section 162(m) of the Internal
Revenue Code of 1986, as amended.
Section 4. Stock Option Agreement. The parties hereto
hereby agree that if, and only if, each of the Miami Station
and the Puerto Rico Station achieve the "Applicable Budget
Target" indicated on Exhibit A attached hereto, the
Nonqualified Stock Option Agreement for Corporate Officers,
dated as of June 30, 1995, between the Company and the
Executive shall be promptly amended to provide that, subject to
the terms and conditions of the Stock Option Agreement, the
Executive shall be entitled to purchase one-third of the total
number of shares covered by the Stock Option Agreement on or
after December 31, 1997 rather than on June 30, 1998 as
currently provided therein. Executive understands that the
Company makes no representation whatsoever with respect to the
tax effect, if any, of any such amendment to the Stock Option
Agreement.
Section 5. Vacations. The Executive shall be entitled
during the Term of Employment to vacations in accordance with
the policies of the Company for senior executive officers (but
in no event to less than 20 paid vacation days per year). The
Company shall not pay the Executive any additional compensation
for any vacation time not used by the Executive.
Section 6. Fringe Benefits. During the Term of
Employment, the Executive shall enjoy the benefits being
customarily afforded to senior executive officers of the
Company (including $300,000 of term life insurance), except
that the Executive shall not participate in any bonus plan now
or hereafter maintained by the Company (the provisions of
Section 3(c) and this Section 6 being in lieu of such
participation). During the Term of Employment, the Company
will pay bonuses to the Executive which, on an after tax basis,
equal the premiums paid by the Executive under the Company's
long-term disability insurance plan for basic and supplemental
coverage (or up to $10,000 per annum in premiums paid by the
Executive under his personal long-term disability insurance
policy). Nothing in this Agreement shall restrict the right of
the Company generally to amend, modify or terminate any such
benefits.
Section 7. Termination.
(a) The Company may terminate this Agreement and the
Executive's employment for Cause as determined by the President
and Chief Executive Officer of the Company. "Cause" means the
Executive's knowingly or recklessly causing material injury to
the Company, the Executive's willful misconduct in the
performance of (or failure to perform) his duties hereunder, or
the Executive's dishonest, fraudulent or unlawful behavior
involving moral turpitude whether or not in connection with his
employment.
(b) This Agreement and the Executive's employment shall
terminate immediately upon the death, disability or other event
rendering the Executive unable to perform his duties and
obligations under this Agreement as determined by the President
and Chief Executive Officer of the Company and supported by
appropriate medical evidence.
(c) If the Company terminates this Agreement and thereby
the Executive's employment other than pursuant to Section 7(a)
or 7(b), then the Company's sole obligation to the Executive
shall be to continue to pay salary in accordance with Section
3(b) and provide medical benefits substantially similar to
those provided the Executive during the Term of Employment, in
each case until December 31, 1997; however, any such payments
shall be reduced by any amounts earned by Executive from other
sources during the Term of Employment. In that regard,
Executive shall be obligated to make good faith efforts to
obtain other employment if Executive's employment hereunder is
terminated other than pursuant to Section 7(a) or 7(b). The
continuation of such medical benefits shall be in satisfaction
of the Company's obligations under Section 4980B of the
Internal Revenue Code of 1986, as amended, or any similar state
law requiring continuation of such benefits, with respect to
the period of time during which such benefits are continued
hereunder. The obligations of the Company under this Section
7(c) shall continue only so long as the Executive does not
breach his obligations under Sections 8 and 9. Upon the
effective date of termination under this Section 7(c), the
obligations of the parties under this Agreement shall cease,
except for the obligations of the Company specifically set
forth in this Section 7(c) and the obligations of the Executive
contained in Sections 8 and 9.
(d) If the Executive's employment terminates other than
pursuant to Section 6(c), the obligations of the parties under
this Agreement shall cease, except for the obligations of the
Executive contained in Sections 7 and 8.
Section 8. Confidentiality. Except as required in his
duties hereunder, the Executive will not, directly or
indirectly, use, disseminate or disclose any Confidential
Information. Upon expiration or termination of the Term of
Employment, all documents, records and similar repositories of
or containing Confidential Information, including copies
thereof, then in the Executive's possession, whether prepared
by the Executive or others, will be left with the Company.
"Confidential Information" means non-public information
relating to the Company or any affiliate of the Company.
Following the expiration or termination of the Term of
Employment, the Executive agrees to cooperate, for a period of
five years with respect to legal matters and for a period of
one year with respect to all other matters, with the Company
and its affiliates with respect to matters with which the
Executive was involved during the Term of Employment. This
Section 8 shall survive the expiration or termination of the
Term of Employment.
Section 9. Covenant Not to Interfere. The
Executive agrees and covenants that, for a period of one year
following the expiration or termination of the Term of
Employment, he will not interfere directly or indirectly in any
way with the Company. "Interfere" means to influence or
attempt to influence, directly or indirectly, present or active
prospective customers, employees, performers, directors,
representatives, agents or independent contractors of the
Company, its subsidiaries or any of its network affiliates to
restrict, reduce, sever or otherwise alter their relationship
with the Company, its subsidiaries or any of its network
affiliates. In the event any court having jurisdiction shall
reduce the duration or scope of the covenant not to interfere
set forth in this Section 9, such covenant, in its reduced
form, shall be enforceable. This Section 9 shall survive the
expiration or termination of the Term of Employment.
Section 10. Assignability. The rights and obligations
of the Company under this Agreement shall inure to the benefit
of and shall be binding upon the successors and assigns of the
Company. The Executive acknowledges that the services to be
rendered by him are unique and personal and accordingly that he
may not assign any of his rights or delegate any of his duties
or obligations under this Agreement.
Section 11. Notices. All notices given hereunder shall
be in writing and shall be sent by registered or certified mail
or delivered by hand and shall be deemed to be given on the
date received. Any notice by the Company to the Executive shall
be mailed or delivered to:
Xxxx X. Xxxxxxx
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
or such other address as may from time to time be provided by
the Executive to the Company for such purposes.
Any notice by the Executive to the Company shall be mailed
or delivered to:
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: President and Chief Executive Officer
and
Telemundo Group, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: General Counsel
or such address or addresses as may from time to time be
provided by the Company to the Executive for such purpose.
Section 12. Captions. The captions in this Agreement
are inserted for convenience only and do not constitute a part
of this Agreement.
Section 13. Amendments, etc. This Agreement may be
amended, modified or terminated only by an instrument in
writing signed by the parties hereto.
Section 14. Governing Law. This Agreement is made in
and shall be governed by and construed in accordance with the
laws of the State of Florida, without giving effect to conflict
of law principles. The Executive hereby consents to the
jurisdiction of the courts of the State of Florida. The
Executive hereby appoints the Corporate Secretary of the
Company as his agent for service of process and agrees to
accept service of process upon delivery to such agent, with a
copy sent by registered or certified mail to the Executive at
his address as set forth in Section 11.
Section 15. Understandings Remedies. Each of the
parties to this Agreement will be entitled to enforce its
rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions of this
Agreement. Such specific performance and/or injunctive relief
shall be available without the posting of any bond or other
security. Except when a party is seeking an injunction or
specific performance hereunder, the parties agree to submit any
dispute concerning this Agreement to binding arbitration. The
parties may agree to submit the matter to a single arbitrator
or to several arbitrators, may require that arbitrators possess
special qualifications or expertise or may agree to submit a
matter to a mutually acceptable firm of experts for decision.
In the event the parties shall fail to thus agree upon terms of
arbitration within twenty (20) days from the first written
demand for arbitration, then such disputed matter shall be
settled by arbitration under the Rules of the American
Arbitration Association, by three arbitrators appointed in
accordance with such Rules. Such arbitration shall be held in
Miami, Florida. Once a matter has been submitted to
arbitration pursuant to this section, the decision of the
arbitrators reached and promulgated as a result thereof shall
be final and binding upon all parties. The cost of arbitration
shall be shared equally by the parties and each party shall pay
the expenses of his/its attorneys, except that the arbitrators
shall be entitled to award the costs of arbitration, attorneys
and accountants' fees, as well as costs, to the party that they
determine to be the prevailing party in any such arbitration.
Section 16. Entire Agreement: Severability. This
Agreement and the Exhibits hereto constitute the entire
agreement between the parties with respect to the subject
matter hereof. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
Section 17. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
TELEMUNDO GROUP, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief
Executive Officer
/s/ Xxxx X. Xxxxxxx
----------------------------
Xxxx X. Xxxxxxx
EXHIBIT A
---------
Telemundo Group, Inc.
Bonus Schedule
Base % Awarded Amount
Bonus of Every in excess
If Appli- $1 Achieved of Budget
cable in excess Target at
Applicable Budget of the which Added Added
Budget Target Budget Bonus is Bonus
Station Target Achieved Target Achieved Amount
------- ----------- ---------- --------- --------- ------
Miami $10,070,000 $90,000 5% $250,000 $20,000
Puerto Rico $17,698,000 $90,000 4% $500,000 $20,000
