EXHIBIT 10.14
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is executed on this ___ day of
December, 1998, and shall be effective as of January 1, 1998 (the "Effective
Date"), by and between XXXXX-XXXXXX TELEVISION NETWORK, INC., a Delaware
corporation (the "Company"), and XXXXXXX X. XXXXXX (the "Executive").
WHEREAS, the Company is currently primarily engaged in the business of
buying and selling direct response television media (the "Business").
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept employment with the Company, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, covenant and agree as follows:
1. Recitals. The foregoing recitals are hereby made a part of this
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Agreement.
2. Employment.
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(a) The Company hereby employs the Executive upon the terms and
conditions set forth herein, as Chief Operating Officer ("COO") of the Company
(or other mutually agreed upon position) to oversee and be responsible for the
day to day operations of the Company and to perform such duties as may be
determined and assigned to him from time to time by the Board of Directors of
the Company (the "Board") in the conduct of the Business or such other business
activities in which the Company shall engage in addition to or in lieu of the
Business in the discretion of the Board which duties may include, without
limitation, employee hiring and termination decisions with respect to the
Company, including Company executives, other than the President, Chief Executive
Officer ("CEO") or COO. The Executive hereby accepts such employment and agrees
that he will serve the Company and perform such duties to the best of his
ability.
(b) During the "Term" (as defined in Section 3 hereof), the Executive
shall be a full-time employee of the Company and shall devote substantially all
of his professional time and attention to the performance of his duties
hereunder, except during permitted vacations and reasonable absences due to
illness.
(c) During the "Term" (as defined in Section 3 hereof), the Executive
shall be entitled to a seat on the Board.
(d) During the "Term" (as defined in Section 3 hereof), the Board shall
seek input from the Executive regarding the selection of a President, CEO and
COO for the Company.
3. Term. The term of the Executive's employment hereunder (the "Term")
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shall commence as of January 1, 1998, and shall continue until the earlier of
(i) December 31, 2001 (the "Expiration Date") or (ii) a termination pursuant to
Section 6 hereof.
4. Compensation.
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4.1 Base Salary. The Company agrees to pay the Executive an annual
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base salary (the "Base Salary") of Three Hundred Thousand Dollars ($300,000).
During the Term, the Base Salary shall be no less than Three Hundred Thousand
Dollars ($300,000) per annum. The Executive's Base Salary, less amounts required
to be withheld under applicable law, shall be payable in equal installments in
accordance with the practice of the Company in effect from time to time for the
payment of salaries to officers of the Company, but in no event less frequently
than monthly.
4.2 Bonuses.
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(a) Performance Bonus. The Company shall pay to the Executive
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with respect to each fiscal year of the Company during the Term (each a "Bonus
Year"), an annual performance bonus (the "Performance Bonus") in an amount equal
to (i) ten percent (10%) of the Net Profits (as defined in Section 4.2(b)
hereof) of the Company, if any, for each of the Company's fiscal years ending
December 31, 1998, and December 31, 1999; and (ii) seven and one-half percent
(7.5%) of the Net Profits of the Company for each of the Company's fiscal years
ending December 31, 2000, and December 31, 2001. The Company shall pay the
Performance Bonus to the Executive no later than thirty (30) days after receipt
from its independent auditors of the audited annual financial report of the
Company for the Bonus Year or ninety (90) days after the close of each such
Bonus Year, whichever is earlier. If the Executive is employed pursuant to this
Agreement for less than the full twelve-month period, the Executive shall be
entitled to receive a Performance Bonus in an amount determined by multiplying
the amount of the Performance Bonus to which the Executive would have been
entitled had the entire Bonus Year been within the Term by a fraction, the
numerator of which is the number of calendar days in such Bonus Year and the
denominator of which is three hundred sixty-five (365).
(b) Net Profits. For purposes of this Agreement, "Net Profits"
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shall mean the net profits before income taxes for the Company as determined by
the Company's independent auditors for the relevant fiscal year in accordance
with generally accepted accounting principles consistently applied (but not
taking into account any salaries, bonuses or other compensation paid to
directors or other individuals who are not actively engaged in the business of
the Company). For purposes of the foregoing calculation of "Net Profits", the
amount of the expenses of Xxxxx-Xxxxxx Corporation, a Delaware corporation and
the owner of a majority of the issued and outstanding common stock of the
Company (GRC), attributed to the Company as an
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indirect expense for services provided to the Company (the "Indirect Expenses")
shall be a fixed amount (as opposed to a percentage of gross revenues) and
jointly calculated and agreed upon by and between the Executive and Xxxxx Knee,
the Treasurer of the Company and Executive Vice President of GRC ("Knee"), or
Knee's successor, and the Executive and Knee (or his successor) shall use their
good faith best efforts to agree upon such amounts; provided, however, that if
no agreement is reached after use of such good faith efforts, then Knee's (or
his successor) determination shall prevail. The parties acknowledge and agree
that, for the calendar year 1999, their current best estimate is that the amount
of such Indirect Expenses will approximate Eight Hundred Thousand Dollars
($800,000). The parties further acknowledge and agree that, if the operations of
the Company as measured by its gross revenues increase or decrease from the
level of its 1999 gross revenues, the amount of Indirect Expenses shall depend
on the actual increases or reductions of indirect costs resulting from changes
to the business (e.g., merger, marketplace changes) and not on increases or
decreases in gross revenues.
(c) Guaranteed Bonus. In addition to any amount paid pursuant to
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Section 4.2(a), the Company shall pay to the Executive, a guaranteed annual
bonus (the "Guaranteed Bonus") in the amount of Two Hundred Fifty Thousand
Dollars ($250,000) for each calendar year during the Term. The Company shall pay
the Guaranteed Bonus to the Executive on or before January 1, 1999, January 1,
2000, January 1, 2001 and December 31, 2001, respectively.
4.3 Adjustments to Compensation. During the Term, the Company shall
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not reduce the Executive's Base Salary, Performance Bonus, Guaranteed Bonus or
other benefits described in Sections 4 and 5 hereof without the Executive's
prior written consent.
5. Fringe Benefits and Other Plans. The Company shall provide the
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Executive with the following benefits:
(a) Company Plans. During the Term, the Executive shall be entitled to
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participate in the Company's sickness, accident and health insurance programs,
made available by the Company to its executives and employees generally, subject
to and on a basis consistent with the terms, conditions and overall
administration of each such plan or arrangement.
(b) Vacation. The Executive shall be entitled to three (3) weeks paid
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vacation annually during the Term in accordance with the policies of the
Company. In the event that the Executive is employed hereunder for less than
all of a calendar year during the Term, he shall be entitled in that year to a
number of paid vacation days which shall be prorated in accordance with the
number of days on which he is so employed in that year.
(c) Expenses. During the Term, the Executive shall be entitled to
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receive reimbursement from the Company for all business expenses reasonably
incurred by him in performing his duties hereunder; provided, however, that the
Executive shall submit to the Company such statements and other evidence
supporting said expenses as the Company may reasonably require.
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6. Termination.
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(a) General. The employment of the Executive hereunder shall terminate
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on the Expiration Date, unless earlier terminated in accordance with the
provisions of this Section 6.
(b) Termination Upon Mutual Agreement. The Company and the Executive
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may, by mutual written agreement, terminate the employment of the Executive
hereunder at any time.
(c) Termination Upon Death of Executive. The employment of the
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Executive hereunder shall terminate as of the date of the death of the
Executive, in which event the Company shall have no further obligations or
liabilities under this Agreement (including, without limitation, under Section 4
hereof) except to pay to the Executive's estate any accrued but unpaid amounts
of Base Salary for the period through the date of termination as well as a pro-
rata portion of the Executive's Performance Bonus and other benefits through the
date of early termination determined and payable in accordance with Section 4
hereof. In addition, the Company shall continue to pay to the Executive's estate
the Guaranteed Bonus payments, when payable pursuant to Section 4.2(c).
(d) Termination Upon Disability of Executive.
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(1) The employment of the Executive hereunder may be terminated, at
the option of the Company, upon not less than thirty (30) days prior written
notice to the Executive or his legal representative, as the case may be, in the
event the Executive suffers a "Total Disability" (as defined below), in which
event the Company shall have no further obligations or liabilities under this
Agreement (including, without limitation, under Section 4 hereof) except to pay
to the Executive any accrued but unpaid amounts of Base Salary for the period
through the date of termination as well as a pro-rata portion of the Executive's
Performance Bonus and other benefits through the date of early termination
determined and payable in accordance with Section 4 hereof. In addition, the
Company shall continue to pay to the Executive the Guaranteed Bonus payments,
when payable pursuant to Section 4.2(c).
(2) For purposes of this Agreement, "Total Disability" shall mean
(i) if the Executive is subject to a legal decree of incompetency, or (ii) the
written determination by a physician selected by the Executive or his legal
representative that, because of a medically determinable disease, condition,
injury or other physical or mental disability, the Executive is unable to
substantially perform the duties of the Executive required hereby, and that such
disability is determined or reasonably expected to last for a continuous period
of one hundred eighty (180) day; provided however, that the Company may, by
written notice delivered to the Executive or his legal representative within
thirty (30) days of the receipt by the Company of such written determination
request a second determination and, in such event, the Company and the Executive
or his legal representative shall agree upon an independent physician to review
such written determination and
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independently determine whether the Executive suffers from a Total Disability.
Any physician selected hereunder shall be Board certified in the specialty most
closely related to the nature of the disability alleged to exist.
(3) In conjunction with determining mental and/or physical
disability for purposes of this Agreement, in the event that an independent
physician is selected pursuant to Section 6(d)(2), the Executive consents to any
examinations by such independent physician which are relevant to a determination
of whether he is mentally and/or physically disabled, and agrees to furnish such
medical information as may be reasonably requested by such independent
physician, and to waive any applicable physician patient privilege that may
arise because of such examination, all solely in connection with such
determination.
(4) For purposes of determining whether the Executive is mentally
incompetent or physically disabled for the continuous one hundred eighty (180)
day period specified in this Section 6(d), such disability shall be deemed to
continue from the date of any legal decree of incompetency, or written opinion
which is conclusive as to the mental and/or physical disability, through the
date the legal decree expires or is otherwise revoked or removed, or the date on
which the mental and/or physical disability has ceased, as the case may be, as
set forth in a written opinion prepared by the physician described in this
Section 6(d).
(e) Termination By Company For Good Cause.
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(1) The employment of the Executive hereunder may be terminated, at
the option of the Company, for "Good Cause" (as defined herein), upon written
notice to the Executive specifying in reasonable detail the reason therefor, in
which event the Company shall have no further obligations or liabilities under
this Agreement (including, without limitation, under Section 4 hereof) except to
pay to the Executive any accrued but unpaid amounts of Base Salary for the
period through the date of termination as well as a pro-rata portion of the
Executive's Performance Bonus and other benefits through the date of early
termination determined and payable in accordance with Section 4 hereof. In
addition, the Company shall continue to pay to the Executive the Guaranteed
Bonus payments, when payable pursuant to Section 4.2(c).
(2) For purposes of this Agreement, "Good Cause" shall mean:
(i) the material failure by the Executive to comply with any
material obligation imposed upon the Executive pursuant to this Agreement if (in
the event such failure is susceptible of cure) such failure continues uncured
(to the reasonable satisfaction of the Company) for thirty (30) days after
written notice specifying in reasonable detail such failure;
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(ii) willful malfeasance by the Executive in connection with
the performance of his duties for the Company that could, in the good faith
judgment of the Board (A) have a material adverse effect on the business of the
Company, (B) subject the Company to criminal penalties, or (C) result in the
incarceration of any officer, director or employee of the Company;
(iii) the Executive being convicted of, or pleading guilty or
nolo contendere to, or being indicted for, a felony or other crime involving
theft, fraud or moral turpitude which, in the good faith judgment of the Board,
could have a material adverse effect on the business of the Company;
(iv) the prolonged abuse by the Executive of drugs or alcohol,
or conduct by the Executive involving moral turpitude, if the Board, in good
faith, reasonably believes such abuse or conduct could have material adverse
effect on the business of the Company;
(v) fraud or embezzlement by the Executive against the Company;
(vi) the appropriation by the Executive of any material
business opportunity which the Board, in good faith, reasonably believes to be a
corporate opportunity of the Company, unless (A) such opportunity was previously
offered to the Company, the Company elected not to pursue such opportunity, and
the Executive provides thirty (30) days prior written notice to the Company of
his intent to pursue such opportunity, (B) the Executive, within thirty (30)
days after written notice specifying in reasonable detail such appropriation,
agrees to return the net profits of the corporate opportunity to the Company or
otherwise to make the Company whole with respect to the net profits of such
corporate opportunity, or (C) the Executive is permitted to pursue such business
opportunity. The parties acknowledge and agree that the Executive may, on his
own behalf and independent of his employment obligations to the Company, fund,
own, produce, market and/or distribute infomercials;
(vii) the failure of the Executive to obey in any material
respect any proper written direction of the Board that is not inconsistent with
this Agreement, and which failure has a material adverse effect on the Company;
(viii) the material failure of the Executive to perform his
duties for the Company in a manner which materially adversely affects the
Company or its business; or
(ix) the violation by the Executive of the confidentiality or
non-competition provisions of Section 7 hereof.
(f) Termination By Company Without Good Cause.
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(i) The employment of the Executive hereunder may be
terminated, at the option of the Company, at any time (upon thirty (30) days
prior written notice to the Executive), without Good Cause, in which event the
Company shall continue to pay to the Executive, for the full duration of the
Term, in full satisfaction of any and all obligations and liabilities of the
Company hereunder and in lieu of any and all other damages his Base Salary,
Guaranteed Bonus and Performance Bonus to which the Executive would have been
entitled pursuant to Section 4 hereof had the Executive remained in the employ
of the Company during the Term, and such payments shall be made in the manner
and at such times as such payments would otherwise be payable hereunder, until
such amounts are paid in full.
(ii) In the event of termination of employment of the Executive
by the Company pursuant to Section 6(f)(i) hereof, the Executive shall use his
best efforts to mitigate the amount of payments provided for in this Section 6
for any period subsequent to the termination date by actively seeking
employment, and the amount of any payment provided for in this Section 6(f)
shall be reduced dollar for dollar by any compensation or remuneration earned as
the result of employment of the Executive by another employer after such date of
termination; provided, however, that in no event shall mitigation be required
with respect to the Executive's Guaranteed Bonus pursuant to Section 4.2(c)
hereof or any other amounts owed by the Company to the Executive through the
date of termination.
(iii) The parties acknowledge and agree that, in the event of
termination of employment of the Executive by the Company pursuant to Section
6(f)(i) hereof, the payments made to the Executive by the Company pursuant to
this Section 6(f) shall be in full and complete satisfaction of all of the
obligations of the Company to the Executive under or pursuant to this Agreement.
If the Executive is fully paid pursuant to Section 6(f)(i) hereof, then the
Executive, for himself and his personal representatives, heirs, successors and
assigns, hereby waives and releases, and agrees not to assert or pursue, any and
all claims against the Company, each of its Affiliates and their officers,
employees and directors, that he has had, now has or may in the future acquire,
in connection with, resulting from or arising out of his employment by the
Company and termination of his employment by the Company pursuant to Section
6(f)(i), and agrees to and shall defend, indemnify and hold harmless the Company
and each of its Affiliates and their officers, employees and directors from and
against any obligations liabilities, damages, costs or expenses (including
reasonable attorneys' and other professional advisors' fees and expenses)
arising from any such claim.
(g) Termination By Executive.
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If the Executive elects to terminate his employment with the
Company for any reason or no reason prior to the Expiration Date, the Company
shall have no further obligations or liabilities under this Agreement
(including, without limitation, under Section 4 hereof) except to pay the
Executive any accrued but unpaid amounts of Base Salary for the period through
the date of termination as well as a pro-rata portion of the
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Executive's Performance Bonus and other benefits through the date of early
termination determined and payable in accordance with Section 4 hereof. In
addition, the Company shall continue to pay the Executive the Guaranteed Bonus
payments, when payable pursuant to Section 4.2(c).
7. Confidentiality and Non-Competition.
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(a) Confidentiality; Intellectual Property.
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(1) The Executive recognizes that the Company's business interests
require a confidential relationship between the Company and the Executive and
the fullest practical protection and confidential treatment of all "Trade
Secrets or Confidential or Proprietary Information" (as defined in Section 7(c)
hereof), including, without limitation, the "Specified Trade Secrets" (as
defined therein). Accordingly, the Executive agrees that, except as required by
law or court order, the Executive will keep confidential and will not disclose
to anyone (other than the Company or any persons designated by the Company), or
publish, utter, exploit, make use of (or aid others in publishing, uttering,
exploiting or using), or otherwise "Misappropriate" (as defined in Section 7(c)
hereof) any Trade Secrets or Confidential or Proprietary Information at any
time. The Executive's obligations hereunder shall continue during the Term
hereof for so long as such Trade Secrets or Confidential or Proprietary
Information remain Trade Secrets or Confidential or Proprietary Information of
the Company.
(2) The Executive acknowledges and agrees that:
(i) each of the Specified Trade Secrets is, and for all
purposes hereof shall be, a "Trade Secret," within the meaning of Division 4,
Part I, Title 5, Section 3426, et. seq. of the California Civil Code (the
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"California UTSA"), of the Company and its "Affiliates" (as defined in
Section 7(c) hereof);
(ii) the Executive occupies a unique position within the
Company and that he is and will be intimately involved in the development and/or
implementation of the Specified Trade Secrets;
(iii) in the event the Executive breaches Section 7(a)(1)
hereof with respect to any Trade Secrets or Confidential or Proprietary
Information, such breach shall be deemed to be a Misappropriation of such Trade
Secrets or Confidential or Proprietary Information; and
(iv) any Misappropriation of the Specified Trade Secrets or any
other Trade Secrets or Confidential or Proprietary Information is likely to
result in immediate and irreparable harm to the Company.
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(3) The Executive acknowledges and agrees that all ideas,
inventions and business plans developed by him during the Term which relate to
the Business, including, without limitation, any process, operation, product or
improvement which may be patentable or copyrightable, is and will be the
property of the Company and/or its Affiliates, and that he will do, at the
Company's request and cost, whatever is reasonably necessary to secure the
rights thereto by patent, copyright or otherwise to the Company and/or its
Affiliates.
(4) Upon the termination of the Executive's employment with the
Company and at any other time upon request, the Executive further agrees to
surrender to the Company all documents, writings, notes, business, marketing or
strategic plans, financial information, customer, distributor and supplier
lists, manuals, illustrations, models, and other such materials produced by the
Executive or coming into his possession by or through employment with the
Company during the Term hereof, and agrees that all such materials are at all
times the Company's property.
(5) The Company and the Executive acknowledge and agree that the
Company and its Affiliates currently compete with other businesses which provide
similar products and services and perform similar business functions. For
example, "Cornerstone", "Diamond" and "AMN" all compete with respect to the
business acquired by the Company with Coast-to-Coast Media, LLC and the Company
also competes with "Access" and "PIN". The parties further acknowledge and agree
that the business practices, approaches and techniques utilized by such
competitors as well as the Company, even if identical or similar to the business
practices, approaches and techniques of the Company and its Affiliates, are not
"Specified Trade Secrets". Further, the Company and GRC acknowledge that the
Executive has been actively involved in the direct response business for over
ten (10) years and developed certain expertise prior to working with the
Company, including but not limited to infomercial production, media buying and
selling, infomercial project financial data and response rate, among other
allotted items, all of which enable the Executive to successfully arrange direct
response projects and businesses.
(b) Noncompetition.
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(1) Subject to the provisions of Section 7(b)(2) hereof, during the
Term of this Agreement and for the period thereafter during which the Executive
or any of his Affiliates (as defined in Section 7 hereof) holds an ownership
interest in the Company directly or indirectly, the Executive agrees that the
Executive will not, without the prior written consent of the Company or GRC,
directly or indirectly, on the Executive's own behalf or as a partner, officer,
director, stockholder, member, employee, agent or consultant of any other
Person:
(i) within the United States of America, or in any other
country or territory in which any of the "Company's Businesses" (as defined
herein) are conducted during the Term, own, finance, consult with, manage,
operate, control, be employed by, provide services as a consultant to or
participate in the ownership,
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management, operation, or otherwise be involved with control of, any
Disqualified Person (as defined in Section 7(c) hereof); or
(ii) make any material disparaging remarks about the
businesses, services, products, stockholders, officers, directors or other
personnel of the Company or any of its Affiliates, or materially interfere
(i.e., as opposed to competing in a manner not prohibited herein) in any way
with the Company's Businesses.
The provisions of this Section 7(b)(1) shall be inapplicable
and of no further force and effect when and if the Executive is no longer
employed by the Company or any Affiliate of the Company and no longer owns,
directly or indirectly, an ownership interest in the Company.
(2) Notwithstanding anything herein to the contrary, the parties
acknowledge and agree that the Executive may own or hold, as a passive
investment, securities of any corporation whose stock is listed for trading on
any national securities exchange or is quoted on a national market.
(3) Nothing in this Section 7 is intended to prohibit the Executive
from engaging in any direct response activities which are not similar to or in
competition with the Company's Businesses defined in Section 7(c) hereof, so
long as such activities do not interfere with his duties and responsibilities
under this Agreement. It is understood that producing, funding, marketing and
distributing infomercials during the Term will not be deemed to be in
competition with the Company.
(c) Definitions. For purposes of this Agreement, the
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following terms shall have the following meanings:
(1) An "Affiliate" of a specified Person means any other Person
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directly or indirectly "controlling" or "controlled" by or under direct or
indirect common "control" (each as defined below) with such specified Person, or
alternatively, any other Person, whether now or hereafter existing, in which the
Company owns equity interests possessing fifty percent (50%) or more of the
total combined voting power of all classes of equity interests in such Person,
and, in the case of a Person who is an individual, shall include (A) members of
such specified Person's immediate family (as defined in Instruction 2 of Item
404(a) of Regulations S-K promulgated by the Securities and Exchange
Commission), (B) trusts, the trustee and all beneficiaries of which are such
specified Person or members of such Person's immediate family, as determined in
accordance with clause (A) hereof, and (C) any heir or estate of such specified
Person.
(2) "Company's Businesses" means the Business and all other
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businesses engaged in or carried on by the Company or any of its Affiliates.
(3) "control," or any form thereof, when used with respect to any
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Person, means the power to direct the management and policies of such
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Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
(4) "Disqualified Person" means any third party conducting any
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business similar to the Company's Businesses.
(5) "Misappropriation," or any form thereof, means:
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(i) the acquisition of any Trade Secret or Confidential or
Proprietary Information by a Person who knows or has reason to know that the
Trade Secret or Confidential or Proprietary Information was acquired by theft,
bribery, misrepresentation, breach or inducement of a breach of a duty to
maintain secrecy, or espionage through electronic or other means (each, an
"Improper Means"); or
(ii) the disclosure or use of any Trade Secret or Confidential
or Proprietary Information without the express consent of the Company by a
Person who (x) used Improper Means to acquire knowledge of the Trade Secret or
Confidential or Proprietary Information; (y) at the time of disclosure or use,
knew or had reason to know that his or her knowledge of the Trade Secret or
Confidential or Proprietary Information was (i) derived from or through a Person
who had utilized Improper Means to acquire it, (ii) acquired under circumstances
giving rise to a duty to maintain its secrecy or limit its use, or (iii) derived
from or through a Person who owed a duty to the Company and/or any of its
Affiliates to maintain its secrecy or limit its use; or (z) before a material
change of his or her position, knew or had reason to know that it was a Trade
Secret or Confidential or Proprietary Information and that knowledge of it had
been acquired by accident or mistake.
(6) "Person" means any individual, corporation, partnership,
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limited liability company, joint venture, association, business trust, joint-
stock company, estate, trust, unincorporated organization, or government or
other agency or political subdivision thereof; or any other legal or commercial
entity.
(7) "Specified Trade Secrets" means the following Trade Secrets or
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Confidential or Proprietary Information that the Executive is or will be
intimately involved in developing or implementing and any additional Trade
Secrets or Confidential or Proprietary Information developed or implemented by
the Executive during the term:
(i) product costs, media costs, and vendor costs paid or
payable by the Company and its Affiliates; and
(ii) product distribution processes from the Company and its
Affiliates to their respective customers.
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(8) "Trade Secrets or Confidential or Proprietary Information"
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shall mean:
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(i) any and all information, formulae, patterns, compilations,
programs, devices, methods, techniques, processes, know how, plans (marketing,
business, strategic or otherwise), arrangements, pricing and other data
(collectively, "Information") that (A) derives independent economic value,
actual or potential, from not being generally known to the public or to other
Persons who can obtain economic value from its disclosure or use, and (B) is the
subject of efforts by the Company and/or any of its Affiliates that are
reasonable under the circumstances to maintain its secrecy; or
(ii) any and all other Information (A) unique to the Company
or any of its Affiliates which has a significant business purpose and is not
known or generally available from sources outside the Company or its Affiliates
or typical of industry practice, and (B) the disclosure of which would have a
material adverse effect on the business of the Company or any of its Affiliates.
8. Remedies. The Executive acknowledges and agrees that if the Executive
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breaches any of the material provisions of this Agreement, the Company may
suffer immediate and irreparable harm for which monetary damages alone will not
be a sufficient remedy, and that, in addition to all other remedies that the
Company may have (including, without limitation, the recovery of damages
pursuant to Section 3426.3 of the California UTSA), the Company shall be
entitled to seek injunctive relief (including, without limitation, an injunction
pursuant to Section 3426.2 of the California UTSA), specific performance or any
other form of equitable relief to remedy a breach or threatened breach of this
Agreement (including, without limitation, any actual or threatened
Misappropriation) by the Executive and to enforce the provisions of this
Agreement. The existence of this right shall not preclude or otherwise limit the
applicability or exercise of any other rights and remedies when which the
Company may have at law or in equity.
9. Interpretation; Severability.
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(a) The Executive has carefully considered the possible effects on the
Executive of the covenants not to compete, the confidentiality provisions, and
the other obligations contained in this Agreement as agreed to and set forth
herein, and the Executive recognizes that the Company has made every effort to
limit the restrictions placed upon the Executive to those that are reasonable
and necessary to protect the Company's legitimate business interests.
(b) The Executive acknowledges and agrees that the restrictive
covenants set forth in this Agreement are reasonable and necessary in order to
protect the Company's valid business interests. It is the intention of the
parties hereto that the covenants, provisions and agreements contained herein
shall be enforceable to the fullest extent allowed by law. If any covenant,
provision, or agreement contained herein is found
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by a court having jurisdiction to be unenforceable, only such covenant,
provision or agreement shall be unenforceable and all other covenants,
provisions and agreements contained herein shall remain in effect and shall be
fully enforceable, according to their terms.
10. Indemnification. The Company shall, to the maximum extent permitted
---------------
by law, defend, indemnify and hold harmless the Executive from and against any
and all claims made against the Executive concerning or relative to his service,
actions or omissions on behalf of the Company as an employee, officer, director
or agent of the Company.
11. Arbitration. Subject to the Company's right to seek injunctive or
-----------
other equitable relief as specified in this Agreement, any dispute between the
parties hereto arising under or relating to this Agreement shall be resolved in
accordance with the procedures and Commercial Arbitration Rules of the American
Arbitration Association. Any resulting hearing shall be held in the Los Angeles,
California area. The resolution of any dispute achieved through such arbitration
shall be binding and enforceable by a court of competent jurisdiction. The
parties shall each bear their own arbitration costs.
12. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of California, without regard to
principles of conflict of laws.
13. Notices. All notices, requests, demands, and other communications
-------
between the parties under this Agreement shall be in writing and shall be deemed
to have been duly given if hand delivered, delivered by facsimile or by other
delivery service that provides evidence of delivery, or mailed by certified or
registered mail, with postage pre-paid to:
If to the Executive:
Xxxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx, XX 00000
If to GRC:
Xxxxx-Xxxxxx Corporation
0000 Xxxxx Xxxx, 0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Bennet Van xx Xxxx
If to the Company:
Xxxxx-Xxxxxx Television Network, Inc.
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00-000 Xxxxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Knee
or to such other address as a party provides (in accordance herewith) to the
other party from time to time. Notice shall be effective when so delivered
personally or by courier service, or if by facsimile, upon receipt, or if
mailed, three (3) days after the date of mailing.
14. Entire Agreement; Amendment; Waiver. This Agreement constitutes the
-----------------------------------
entire agreement between the parties pertaining to the subject matter hereof,
and supersedes any and all prior and contemporaneous agreements, understandings,
negotiations, and discussions of the parties, whether oral or written. No
amendment, modification or waiver of this Agreement shall be binding unless
executed in writing by all of the parties hereto, or in the case of a waiver, by
the party for whom such benefit was intended. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision of this Agreement, whether or not similar, nor shall such waiver
constitute a continuing waiver unless otherwise expressly so provided in
writing.
15. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. Except as permitted
hereunder and in that certain Stockholders Agreement by and among the Executive,
the Company, GRC and T&T Productions, Inc. of even date herewith the Executive
may not assign any of his rights or obligations hereunder without the prior
written consent of the Company.
16. Representation by Counsel. Each of the parties hereto acknowledges
-------------------------
that (i) it or he has read this Agreement in its entirety and understands all of
its terms and conditions, (ii) it or he has had the opportunity to consult with
any individuals of its or his choice regarding its or his agreement to the
provisions contained herein, including legal counsel of its or his choice, and
any decision not to was his or its alone, and (ii) it or he is entering into
this Agreement of its or his own free will, without coercion from any source.
17. Interpretation. The parties and their respective legal counsel
--------------
actively participated in the negotiation and drafting of this Agreement, and in
the event of any ambiguity or mistake herein, or any dispute among the parties
with respect to the provisions hereto, no provision of this Agreement shall be
construed unfavorably against any of the parties on the ground that he, it, or
his or its counsel was the drafter thereof.
18. Survival. The applicable provisions this Agreement shall survive its
--------
termination (e.g., Sections 7-15 inclusive and Sections 17-18 inclusive).
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19. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same Agreement shall survive its
termination (e.g., Sections 7-15 inclusive and Sections 17-18 inclusive).
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20. Guarantee. The performance and obligations of the Company under this
---------
Agreement shall be guaranteed by GRC; provided, however, that if the
Company is no longer an Affiliate of GRC as defined in Section 7(c) hereto, GRC
may employ or cause an Affiliate of GRC to employ the Executive during the
remaining balance of the Term of this Agreement on the same terms and conditions
as set forth in this Agreement in full satisfaction of such guaranty. In such
event, the obligations of GRC and the Company under this Agreement shall
terminate with no further obligation by GRC or the Company, except that the
Company shall pay to the Executive any accrued but unpaid amounts of Base Salary
as well as a pro-rata portion of the Executive's Performance Bonus and other
benefits owed by the Company to the Executive for the period prior to such
termination.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized representative, and the Executive has executed this
Agreement, each as of the date first above written.
WITNESS/ATTEST: COMPANY:
-------
XXXXX-XXXXXX TELEVISION
NETWORK, INC.
/s/ Xxxxxxx X. Xxxxxx By: /s/ B. Van xx Xxxx (SEAL)
---------------------- -------------------
Name:
Title:
EXECUTIVE:
---------
/s/ B. Van xx Xxxx /s/ Xxxxxxx X. Xxxxxx
------------------ ---------------------
Xxxxxxx X. Xxxxxx
THE UNDERSIGNED has caused this Agreement to be executed by its duly
authorized representative as of the date first above written for the limited
purpose of guaranteeing the performance obligations of the Company pursuant to
Section 20 hereof.
WITNESS/ATTEST: XXXXX-XXXXXX CORPORATION
/s/ Xxxxxxx X. Xxxxxx By: /s/ B. Van xx Xxxx (SEAL)
--------------------- ----------------------------
Name: Ben Van xx Xxxx
Title: Executive Vice-President
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