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Exhibit 13
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED AGREEMENT made as of June 27, 1997, and
amended and restated as of January 25, 2000, by and between Ascent Entertainment
Group, Inc., a Delaware corporation ("Ascent" or the "Company"), and Xxxxxx X.
Xxxxx, a resident of the State of Colorado(the "Executive").
WHEREAS, Ascent desires to employ the Executive as Executive Vice
President, Business Affairs of Ascent, and the Executive desires to accept such
employment, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements made herein, and intending to be legally bound hereby, Ascent and the
Executive agree as follows:
1. Employment; Duties.
(a) Employment and Employment Period. Ascent shall employ the
Executive to serve as Executive Vice President, Business Affairs of Ascent or
its successor entity for a period (the "Employment Period") commencing on
January 25, 2000 (the "Effective Date") and continuing thereafter until June 27,
2003 unless terminated in accordance with the provisions of this Agreement. Each
12 month period ending on the anniversary date of the Effective Date is
sometimes referred to herein as a "year of the Employment Period."
(b) Offices, Duties and Responsibilities. The Executive shall
report directly to the chief executive officer of Ascent, if there is one (the
"CEO"), and otherwise directly to the Board of Directors of Ascent (the
"Board"). The Executive shall have all duties and authority customarily accorded
a senior business affairs officer, and such other duties as determined by the
CEO or the Board from time to time.
(c) Devotion to Interests of Ascent. During the Employment
Period, the Executive shall render his business services solely in the
performance of his duties hereunder. The Executive shall use his best efforts to
promote the interests and welfare of Ascent. Notwithstanding the foregoing, the
Executive shall be entitled to undertake such outside activities (e.g.,
charitable, educational, personal interests, board of directors membership, and
so forth, that do not compete with the business of Ascent as do not unreasonably
or materially interfere with the performance of his duties hereunder as
reasonably determined by the Board in consultation with the Executive.
2. Compensation and Fringe Benefits.
(a) Base Compensation. Ascent shall pay the Executive a base
salary ("Base Salary") at the rate of $300,000 per year during the Employment
Period with payments made in installments in accordance with Ascent's regular
practice for compensating executive personnel, provided that in no event shall
such payments be made less frequently than twice per month. The Base Salary for
the Executive shall be reviewed each year during the Employment Period
commencing the second year of the Employment Period. Any Base Salary increases
shall be approved by the Board in its sole discretion.
(b) Bonus Compensation. The Executive will be eligible to
receive bonuses
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("Annual Bonus") during the Employment Period in accordance with the following
parameters: (i) the target bonus for each year during the Employment
Period shall be 50% of Base Salary for achieving 100% of the target level for
the performance measures; and (ii) the performance measures, the relative weight
to be accorded each performance measure and the amount of bonus payable in
relation to the target bonus for achieving more or less than 100% of the target
level for the performance measures shall be determined for each year during the
Employment Period by the Compensation Committee after consultation with the
Board and the Executive.
(c) Fringe Benefits. The Executive also shall be entitled to
participate in group health, dental and disability insurance programs, and any
group profit sharing, deferred compensation, supplemental life insurance or
other benefit plans as are generally made available by Ascent to the senior
executives of Ascent on a favored nations basis. Such benefits shall include
reimbursement of documented expenses reasonably incurred in connection with
travel and entertainment related to Ascent's business and affairs. All benefits
described in the foregoing sentence that are reportable as earned or unearned
income will be Agrossed up@ by Ascent in connection with federal and state tax
obligations to provide Executive with appropriate net tax coverage so that the
benefits received by the Executive from the foregoing sentence shall be net of
income and employment taxes thereon. Ascent reserves the right to modify or
terminate from time to time the fringe benefits provided to the senior
management group, provided that the fringe benefits provided to the Executive
shall not be materially reduced on an overall basis during the Employment
Period.
(d) Stock Appreciation Rights. On June 27, 1997, Ascent
granted to Executive stock appreciation rights ("SARs"), exercisable only for
cash, with respect to 100,000 shares of Ascent's common stock, par value $0.01
per share, each such SAR exercisable at the per-share price equal to $9.5250.
The SARs shall be exercisable by Executive according to the following schedule:
(i) 10% of the SARs on or after June 27, 1997;
(ii) 15% of the SARs on or after December 18, 1997;
(iii) 25% of the SARs on or after December 18, 1998;
(iv) 25% of the SARs on or after December 18, 1999;
(v) 25% of the SARs on or after December 18, 2000.
Notwithstanding the foregoing, 100% of the SARs shall immediately vest and
become immediately exercisable, without any further action by the Executive,
upon the occurrence of any "Change of Control Event" as defined in Section 7(a)
below, or upon the occurrence of any event that results in
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Ascent's Common Stock no longer being traded on any of the New York Stock
Exchange, American Stock Exchange or NASDAQ National Market System (including,
without limitation, as a result of any so-called "going private" transaction
with Ascent). Such SARs shall be represented by a SAR agreement containing
appropriate terms consistent with the provisions of this Agreement. The SARs, to
the extent they remain unexercised, shall automatically and without further
notice terminate and become of no further force and effect only at the time of
the earliest of the following to occur:
(x) Three months after the date upon which a termination for cause by
Ascent (as provided in Section 5(b)) shall have become effective and final; or
(y) December 18, 2005.
In the event of any stock split, stock dividend, spin-off,
reclassification, recapitalization, merger, consolidation, subdivision,
combination or other change which affects the character or amount of Ascent's
common stock after the Effective Date and prior to the exercise and/or
expiration of all of the SARs, the number and exercise price of and/or the
formula for determining the value of such unissued or unexercised SARs shall be
adjusted in order to make such SARs, as nearly as may be practicable, equivalent
in nature and value to the SARs that would have existed had such change not
taken place. In addition, if Ascent adopts a stock-based incentive plan that in
Executive's sole judgment provides for any term(s) more favorable to the grantee
than any term(s) set forth above, Executive will be entitled to the benefit of
such more favorable term(s) with respect to the SARs, other than with respect to
the vesting schedule thereof, but in no event will any term(s) applicable to the
SARs be less favorable to Executive than those set forth above.
During the Employment Period, the Executive shall be granted additional
stock-based incentives as determined by the Compensation Committee in its sole
discretion. Notwithstanding any other provision of this Agreement except Section
5(b), the Compensation Committee may in its discretion provide that any
stock-based incentives granted to the Executive which have not vested prior to
his termination of employment shall continue to vest in accordance with their
original terms as if the Executive's employment had not terminated.
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(e) Stock Options. Ascent hereby grants to Executive options
("Options") to purchase 100,000 shares of Ascent's common stock, par value $0.01
per share, each such Option exercisable at the per-share price equal to
$11.9063. The Options shall be exercisable by Executive according to the
following schedule:
(i) 50,000 Options on or after January 25, 2001;
(ii) an additional 50,000 Options on or after January 25, 2002.
Notwithstanding the foregoing, 100% of the Options shall immediately vest and
become immediately exercisable, without any further action by the Executive,
upon the occurrence of any "Change of Control Event" as defined in Section 7(a)
below, or upon the occurrence of any event that results in Ascent=s Common Stock
no longer being traded on any of the New York Stock Exchange, American Stock
Exchange or NASDAQ National Market System (including, without limitation, as a
result of any so-called "going private" transaction with Ascent). Such Options
shall be represented by a Option agreement containing appropriate terms
consistent with the provisions of this Agreement. The Options, to the extent
they remain unexercised, shall automatically and without further notice
terminate and become of no further force and effect only at the time of the
earliest of the following to occur:
(x) Three months after the date upon which a termination for cause by
Ascent (as provided in Section 5(b)) shall have become effective and final; or
(y) January 25, 2010.
In the event of any stock split, stock dividend, spin-off,
reclassification, recapitalization, merger, consolidation, subdivision,
combination or other change which affects the character or amount of Ascent's
common stock after the Effective Date and prior to the exercise and/or
expiration of all of the Options, the number and exercise price of and/or the
formula for determining the value of such unissued or
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unexercised Options shall be adjusted in order to make such Options, as nearly
as may be practicable, equivalent in nature and value to the Options that would
have existed had such change not taken place. In addition, if Ascent adopts a
stock-based incentive plan that in Executive's sole judgment provides for any
term(s) more favorable to the grantee than any term(s) set forth above,
Executive will be entitled to the benefit of such more favorable term(s) with
respect to the Options, other than with respect to the vesting schedule thereof,
but in no event will any term(s) applicable to the Options be less favorable to
Executive than those set forth above.
During the Employment Period, the Executive may be granted additional
stock-based incentives as determined by the Compensation Committee in its sole
discretion. Notwithstanding any other provision of this Agreement except Section
5(b), the Compensation Committee may in its discretion provide that any
stock-based incentives granted to the Executive which have not vested prior to
his termination of employment shall continue to vest in accordance with their
original terms as if the Executive's employment had not terminated.
(f) Conflicting Provisions. Solely to the
extent of any conflict between the provisions of this Agreement and the
provisions of any agreement between Executive, on the one hand, and Ascent and
any of its affiliated or related entities, on the other hand, relating to
stock-based incentives (including the SARs and Options), life insurance, health
insurance, any other employee equity participation, profit sharing or retirement
plan, group health plan or other employee benefits (individually and
collectively referred to herein as the "Fringe Benefits"), the provisions of
this Agreement will control.
3. Trade Secrets; Return of Documents and Property.
(a) Executive acknowledges that during the course of his
employment he will receive secret, confidential and proprietary information
("Trade Secrets") of Ascent and of other companies with which Ascent does
business on a confidential basis and that Executive will create and develop
Trade Secrets for the benefit of Ascent. Trade Secrets shall include, without
limitation, (a) literary, dramatic or other works, screenplays, stories,
adaptations, scripts, treatments,
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formats, "bibles," scenarios, characters, titles of any kind and any rights
therein, custom databases, "know-how," formulae, secret processes or machines,
inventions, computer programs (including documentation of such programs)
(collectively, ATechnical Trade Secrets@), and (b) matters of a business nature,
such as customer data and proprietary information about costs, profits, markets
and sales, customer databases, and other information of a similar nature to the
extent not available to the public, and plans for future development
(collectively, ABusiness Trade Secrets@). All Trade Secrets disclosed to or
created by Executive shall be deemed to be the exclusive property of Ascent (as
the context may require). Executive acknowledges that Trade Secrets have
economic value to Ascent due to the fact that Trade Secrets are not generally
known to the public or the trade and that the unauthorized use or disclosure of
Trade Secrets is likely to be detrimental to the interests of Ascent and its
subsidiaries. Executive therefore agrees to hold in strict confidence and not to
disclose to any third party any Trade Secret acquired or created or developed by
Executive during the term of this Agreement except (i) when Executive is
required to use or disclose any Trade Secret in the proper course of the
Executive's rendition of services to Ascent hereunder, (ii) when such Trade
Secret becomes public knowledge other than through a breach of this Agreement,
or (iii) when Executive is required to disclose any Trade Secret pursuant to any
valid court order in which the Executive is compelled to disclose such Trade
Secret. The Executive shall notify Ascent immediately of any such court order in
order to enable Ascent to contest such order's validity. For a period of two (2)
years after termination of the Employment Period for all Business Trade Secrets
and for a period of five (5) years after termination of the Employment Period
for all Technical Trade Secrets, the Executive shall not use or otherwise
disclose Trade Secrets unless such information (x) becomes public knowledge or
is generally known in the entertainment or sports industry among executives
comparable to the Executive other than through a breach of this Agreement, (y)
is disclosed to the Executive by a third party who is entitled to receive and
disclose such Trade Secret, or (z) is required to be disclosed pursuant to any
valid court order, in which case the Executive shall notify Ascent
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immediately of any such court order in order to enable Ascent to contest such
order's validity.
(b) Upon the effective date of notice of the Executive's or
Ascent's election to terminate this Agreement, or at any time upon the request
of Ascent, the Executive (or his heirs or personal representatives) shall
deliver to Ascent (i) all documents and materials containing or otherwise
relating to Trade Secrets or other information relating to Ascent's business and
affairs, and (ii) all documents, materials and other property belonging to
Ascent, which in either case are in the possession or under the control of the
Executive (or his heirs or personal representatives). The Executive shall be
entitled to keep his personal records relating to Ascent's business and affairs
except to the extent those contain documents or materials described in clause
(i) or (ii) of the preceding sentence, in which case Executive may retain copies
for his personal and confidential use.
4. Discoveries and Works. All discoveries and works made or conceived
by the Executive during his employment by Ascent pursuant to this Agreement,
jointly or with others, that relate to Ascent's activities ("Discoveries and
Works") shall be owned by Ascent. Discoveries and Works shall include, without
limitation, literary, dramatic or other works, screenplays, stories,
adaptations, scripts, treatments, formats, "bibles," scenarios, characters,
titles of any kind and any rights therein, other works of authorship,
inventions, computer programs (including documentation of such programs),
technical improvements, processes and drawings. The Executive shall (i) promptly
notify, make full disclosure to, and execute and deliver any documents
reasonably requested by, Ascent to evidence or better assure title to such
Discoveries and Works in Ascent, (ii) assist Ascent in obtaining or maintaining
for itself at its own expense United States and foreign copyrights, trade secret
protection or other protection of any and all such Discoveries and Works, and
(iii) promptly execute, whether during his employment by Ascent or thereafter,
all applications or other endorsements necessary or appropriate to maintain
copyright and other rights for Ascent and to protect their title thereto. Any
Discoveries and Works which, within sixty days after the termination of the
Executive's employment by Ascent, are made,
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disclosed, reduced to a tangible or written form or description, or are reduced
to practice by the Executive and which pertain to work performed by the
Executive while with Ascent and COMSAT, shall, as between the Executive and
Ascent and COMSAT, be presumed to have been made during the Executive's
employment by Ascent.
5. Termination. This Agreement shall remain in effect during the
Employment Period, and this Agreement and Executive's employment with Ascent may
be terminated only as follows:
(a) By the Executive (an "Executive Election") at any time
upon sixty (60) days advance written notice to Ascent upon an "Executive
Election Event" (as defined below). In such event or if the Executive's
employment is terminated by Ascent without "cause" (as defined below), there
will be no forfeiture, penalty, reduction or other adverse effect upon any
rights or interests relating to any Fringe Benefits, including, without
limitation, the SARs, the Options and any other stock-based compensation, all of
which will fully vest, to the extent not previously vested, immediately upon
such termination becoming effective and final. Without limiting the foregoing,
in the event of an Executive Election or if the Executive's employment is
terminated without "cause," the Executive shall be entitled to receive the
following benefits through the longer of (x) the remainder of the Employment
Period as if this Agreement had remained in effect until the end of such
five-year Employment Period and (y) three years following the date of such
termination (the "Duration Period"): (i) his then current Base Salary; (ii) an
Annual Bonus equal to fifty percent (50%) of his then current Base Salary; and
(iii) all other benefits provided pursuant to Sections 2(c) and (d) of this
Agreement. The Executive shall have no obligation to seek other employment in
the event of his termination pursuant to this paragraph (a), and there shall be
no offset against amounts due the Executive under this Agreement on account of
any remuneration attributable to any subsequent employment that he may obtain.
Ascent shall have the option at any time during the Duration Period to pay to
the Executive in a lump sum the amounts remaining under clauses (i) and (ii) of
this paragraph (a). If Ascent exercises such option, Ascent shall have no
further compensation payment obligations under clauses (i) and (ii) above. Upon
any termination of the Executive's employment
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under this Section 5(a), Ascent shall establish a "rabbi" trust, i.e., a trust
for the benefit of the Executive which is irrevocable by Ascent, but whose
assets will be available to Ascent's general creditors upon Ascent's insolvency,
with terms and provisions reasonably acceptable to the Executive, and shall
contribute to such trust an amount equal to the sum of all payments to be made
to the Executive by reason of such termination of employment, including, but not
limited to, the amounts set forth in Sections 5(a)(i), (ii) and (iii), and the
amount which the Executive would receive if he exercised all of his SARs,
Options and stock-based incentives on the date of his termination of employment.
Ascent shall at all times remain liable to carry out its obligations under this
Agreement, but such obligations may be satisfied with the assets of such trust
distributed pursuant to the terms of the trust, and any such distribution shall
reduce Ascent's obligations under this Agreement. In all circumstances of
termination under this Section 5(a), Ascent shall remain obligated under clause
(iii) and all stock-based incentives(including the SARs and Options) will remain
exercisable for the maximum period provided in each applicable grant.
An "Executive Election Event" shall be any of the following:
(I) any substantial reduction (except in connection with the termination of his
employment voluntarily by the Executive or by Ascent for "cause" as defined
below) by Ascent, without the Executive's express written consent, of his
responsibilities as Executive Vice President, Business Affairs of Ascent; (II)
any change in the reporting structure set forth in Section 1(b) above; (III) any
requirement that Executive perform material services of lesser stature than
those typically performed by the senior business affairs officer of comparable
companies; (IV) a "Change of Control Event" (as defined in Section 7(a) below);
provided that in such event, the amounts payable to the Executive under this
Section 5(a) will be contributed to the "rabbi" trust as provided above no later
than one day before such change of control becomes effective, whether or not the
Executive has given notice of termination at such time, and payable to the
Executive in a lump sum upon the effectiveness of his termination as a result of
a Change in Control Event; and provided, further, the Executive and the Company
shall explore alternatives to minimize any excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended as of the Effective Date (the
"Code") that would otherwise be payable;
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(V) any other material default of this Agreement which continues for ten (10)
business days following Ascent's receipt of written notice from the Executive
specifying the manner in which Ascent is in default of this Agreement; (VI) the
Board=s requiring Executive to be based at any office location other than the
principal offices of Ascent, or the relocation, without Executive=s consent, of
such principal offices to a location outside the greater Denver area; or (VII)
any purported termination of Executive=s employment otherwise than as expressly
permitted by the Agreement.
(b) By Ascent at any time for "cause." For purposes of this
Agreement, Ascent shall have "cause" to terminate the Executive's employment
hereunder upon (i) the continued and deliberate failure of the Executive to
perform his material duties, in a manner substantially consistent with the
manner reasonably prescribed by the CEO or the Board and in accordance with the
terms of this Agreement (other than any such failure resulting from his
incapacity due to physical or mental illness), which failure continues for ten
(10) business days following the Executive's receipt of written notice from the
CEO or the Board specifying the manner in which the Executive is in default of
his duties, (ii) the engaging by the Executive in intentional serious misconduct
that is materially and demonstrably injurious to Ascent or its reputation, which
misconduct, if it is reasonably capable of being cured, is not cured by the
Executive within ten (10) business days following the Executive's receipt of
written notice from the CEO or the Board specifying the serious misconduct
engaged in by the Executive, (iii) the conviction of the Executive of commission
of a felony involving a crime of moral turpitude, whether or not such felony was
committed in connection with Ascent's business, or (iv) any material breach by
the Executive of Section 8 hereof. If Ascent shall terminate the Executive's
employment for "cause," there will be no forfeiture, penalty, reduction or other
adverse effect upon any vested rights or interests relating to any Fringe
Benefits. In such event, Ascent, in full satisfaction of all of Ascent's
obligations under this Agreement and in respect of the termination of the
Executive's employment with Ascent, shall pay the Executive his Base Salary, a
prorated Annual
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Bonus and all other compensation, benefits and reimbursement through the date of
termination of his employment, provided that the SARs, the Options and any other
stock options granted to the Executive under the Ascent option or any successor
plan shall terminate three months after the date of termination of his
employment for "cause".
6. Disability; Death.
(a) If, prior to the expiration or termination of the
Employment Period, the Executive shall be unable to perform substantially his
duties by reason of disability or impairment of health for at least six
consecutive calendar months, Ascent shall have the right to terminate this
Agreement by giving sixty (60) days written notice to the Executive to that
effect, but only if at the time such notice is given such disability or
impairment is still continuing. Following the expiration of the notice period,
the Employment Period shall terminate, and Ascent's payment obligations to the
Executive under Section 2(a) and (b) shall terminate with the payment of the
Executive's Base Salary for the month in which the Employment Period terminates
and a prorated Annual Bonus through such month, and there will be no forfeiture,
penalty, reduction or other adverse effect upon any vested rights or interests
relating to any Fringe Benefits; provided that the SARs, the Options and any
other stock options granted to the Executive under the Ascent option plan or any
successor plan shall become fully vested and shall terminate in accordance with
their terms, but in no event less than one year after such termination,
notwithstanding the limitations of Sections 2(d) and (e) of this Agreement. In
the event of a dispute as to whether the Executive is disabled within the
meaning of this paragraph (a), or the duration of any disability, either party
may request a medical examination of the Executive by a doctor appointed by the
Chief of Staff of a hospital selected by mutual agreement of the parties, or as
the parties may otherwise agree, and the written medical opinion of such doctor
shall be conclusive and binding upon the parties as to whether the Executive has
become disabled and the date when such disability arose. The cost of any such
medical examinations shall be borne by Ascent.
(b) If, prior to the expiration or termination of
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the Employment Period, the Executive shall die, Ascent shall pay to the
Executive's estate his Base Salary and a prorated Annual Bonus through the end
of the month in which the Executive's death occurred, at which time the
Employment Period shall terminate without further notice and there will be no
forfeiture, penalty, reduction or other adverse effect upon any vested rights or
interests relating to any Fringe Benefits; provided that the SARs, the Options
and any other stock options granted to the Executive under the Ascent option
plan or any successor plan shall become fully vested and shall terminate one
year after the date of termination of the Executive=s employment for death,
notwithstanding the limitations of Section 2(d) and (e) of this Agreement.
(c) Nothing contained in this Section 6 shall impair or
otherwise affect any rights and interests of the Executive under any
compensation plan or arrangement of Ascent which may be adopted by the Board.
7. Change of Control.
(a) If, prior to the termination of the Employment Period,
there is a "Change of Control Event" (as hereinafter defined in this paragraph
(a)), the Executive shall have the right to exercise his Executive Election in
accordance with Section 5(a) by giving notice either prior to such Change of
Control Event becoming effective or up to 180 days following such Change of
Control Event, but termination pursuant to such notice shall not take effect in
accordance with Section 5(a) in any event prior to 120 days following such
Change of Control Event, provided, however, payment to the Executive shall be
made as set forth in Section 5(a)(IV). The expiration of such 180-day period
shall not affect the Executive's right to give notice under Section 5(a) with
respect to any other Executive Election Event. A "Change of Control Event" shall
mean and include either the occurrence of any of the following with respect to
Ascent, or any of the following becoming highly likely to occur, in the
determination of the Board: (i) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares of common
stock of the Company (the
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"Outstanding Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this clause (i), the following acquisitions shall
not constitute a Change of Control: (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (1), (2) and (3) of clause
(iii) below; or (ii) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or (iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (1) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
75% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
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through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (2) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (3) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or (iv) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(b) In the event that Ascent adopts any "change of control"
provisions applicable to any Ascent benefits plans, respectively, providing for
the accelerated vesting and/or payment of any benefits for its senior management
group, solely to the extent that such provisions give Executive greater rights
than those provided in paragraph (a) above, such better provisions shall apply
to the Executive to the same extent as other Ascent senior executives on a
favored nations basis with respect to the benefits affected by such Ascent
provisions, respectively.
8. Non-Competition.
(a) As an inducement for Ascent to enter into this Agreement,
the Executive agrees that for a period commencing as of the Effective Date and
running through the earlier of (i) the end of the Employment Period if the
Executive remains employed by Ascent for the entire Employment Period or (ii)
one year following termination of the Executive's employment by Ascent for
"cause" as defined in Section 5(b) hereof, or by the Executive for any reason
(other than an
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Executive Election Event, in which case the provisions of this paragraph (a)
shall not apply) (the "Non-Competition Period"), the Executive shall not,
without the prior written consent of the Board, engage or participate, directly
or indirectly, as principal, agent, employee, employer, consultant, stockholder,
partner or in any other individual capacity whatsoever, in the conduct or
management of, or own any stock or any other equity investment in or debt of,
any business which is competitive with any business conducted by Ascent.
For the purpose of this Agreement, a business shall be
considered to be competitive with any business of Ascent only if such business
is engaged in providing services or products (i) substantially similar to (A)
any service or product currently provided by Ascent during the Employment
Period; (B) any service or product which directly evolves from or directly
results from enhancements in the ordinary course during the Non-Competition
Period to the services or products provided by Ascent as of the date hereof or
during the Employment Period; or (C) any future service or product of Ascent as
to which the Executive materially and substantially participated in the
development or enhancement, and (ii) to customers, distributors or clients
served by Ascent during the Non-Competition Period.
(b) Non-Solicitation of Employees. During the Non-Competition
Period, the Executive will not (for his own benefit or for the benefit of any
person or entity other than Ascent) solicit, or assist any person or entity
other than Ascent to solicit, any officer, director, executive or employee
(other than an administrative or clerical employee) of Ascent to leave his or
her employment.
(c) Reasonableness; Interpretation. The Executive acknowledges
and agrees, solely for purposes of determining the enforceability of this
Section 8 (and not for purposes of determining the amount of money damages or
for any other reason), that (i) the markets served by Ascent are national and
international and are not dependent on the geographic location of executive
personnel or the businesses by which they are employed; (ii) the length of the
Non-Competition Period is linked to the term of the Employment Period and the
severance benefit provided for in Section 5(a); and (iii) the above covenants
are reasonable as an inducement to Ascent to enter into this Agreement, and the
parties expressly agree that such restrictions have been designed to be
reasonable and
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no greater than is required for the protection of Ascent. In the event that the
covenants in this Section 8 shall be determined by any court of competent
jurisdiction in any action to be unenforceable by reason of their extending for
too great a period of time or over too great a geographical area or by reason of
their being too extensive in any other respect, they shall be interpreted to
extend only over the maximum period of time for which they may be enforceable,
and/or over the maximum geographical area as to which they may be enforceable
and/or to the maximum extent in all other respects as to which they may be
enforceable, all as determined by such court in such action.
(d) Investment. Nothing in this Agreement shall be deemed to
prohibit the Executive from owning equity or debt investments in any
corporation, partnership or other entity which is competitive with Ascent,
provided that such investments (i) are passive investments and constitute five
percent (5%) or less of the outstanding equity securities of such an entity the
equity securities of which are traded on a national securities exchange or other
public market, or (ii) are approved by the Board.
9. Indemnification; Liability Insurance. The Executive shall be
entitled to indemnification and coverage under Ascent's liability insurance
policy for directors and officers to the same extent as other officers of
Ascent. During and after the term of employment, Ascent hereby agrees to
indemnify and hold Executive harmless against any and all claims arising from or
in connection with his employment by or service to Ascent to the full extent
permitted by law and, in connection therewith, to advance the expenses of
Executive incurred in defending against such claims subject to such limitations
as may actually be required by law.
10. Enforcement. The Executive acknowledges that a breach of the
covenants or provisions contained in Sections 3, 4 and 8 of this Agreement will
cause irreparable damage to Ascent, the exact amount of which will be difficult
to ascertain, and that the remedies at law for any such breach will be
inadequate. Accordingly, the Executive agrees that if the Executive breaches or
threatens to breach any of the
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covenants or provisions contained in Sections 3, 4 and 8 of this Agreement, in
addition to any other remedy which may be available at law or in equity, Ascent
shall be entitled to seek specific performance and injunctive relief.
11. Arbitration.
(a) Subject to Ascent's right to enforce Sections 3, 4 and 8
hereof by an injunction issued by a court having jurisdiction (which right shall
prevail over and supersede the provisions of this Section 11), any dispute
relating to this Agreement, including the enforceability of this Section 11,
arising between the Executive and Ascent shall be settled by arbitration which
shall be conducted in Denver, Colorado, or any other location where the
Executive then resides at Ascent's request, before a single arbitrator in
accordance with the commercial arbitration rules of the American Arbitration
Association ("AAA"). Within 90 days after the Effective Date, the parties shall
mutually agree upon three possible arbitrators, one of whom shall be selected by
the AAA within 2 days after notice of a dispute to be arbitrated under this
Section 11. The parties shall instruct the arbitrator to use his or her best
efforts to conclude the arbitration within 60 days after notice of the dispute
to AAA.
(b) The award of any such arbitrator shall be final. Judgment
upon such award may be entered by the prevailing party in any federal or state
court sitting in Denver, Colorado or any other location where the Executive then
resides at Ascent's request.
(c) The parties will bear their own costs associated with
arbitration and will each pay one-half of the arbitration costs and fees of AAA;
however, the arbitrator may in his sole discretion determine that the costs of
the arbitration proceedings, including attorneys= fees, shall be paid entirely
by one party to the arbitration if the arbitrator determines that the other
party is the prevailing party in such arbitration.
12. Severability. Should any provision of this Agreement be determined
to be unenforceable or prohibited by any applicable law, such provision shall be
ineffective to the extent, and only to the extent, of such unenforceability or
prohibition without invalidating the balance of such provision or any other
provision of this Agreement, and any such
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unenforceability or prohibition in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13. Assignment. The Executive's rights and obligations under this
Agreement shall not be assignable by the Executive. Ascent's rights and
obligations under this Agreement shall not be assignable by Ascent except as
incident to the transfer, by merger or otherwise, of all or substantially all of
the business of Ascent. In the event of any such assignment by Ascent, all
rights of Ascent hereunder shall inure to the benefit of the assignee.
14. Notices. All notices and other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered; when transmitted if
transmitted by telecopy, electronic or digital transmission method, provided
that in such case it shall also be sent by certified or registered mail, return
receipt requested; the day after it is sent, if sent for next day delivery to a
domestic address by recognized overnight delivery service (e.g., Federal
Express); and upon receipt, if sent by certified or registered mail, return
receipt requested. Unless otherwise changed by notice, in each case notice shall
be sent to:
If to Executive, addressed to:
Xxxxxx X. Xxxxx
0000 X. Xxxxxxxxx Xx.
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
If to Ascent, addressed to:
Ascent Entertainment Group, Inc.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
With a copy to:
Ascent Entertainment Group
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0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No. (000) 000-0000
16. Miscellaneous. This Agreement constitutes the entire agreement, and
supersedes all prior agreements, of the parties hereto relating to the subject
matter hereof, and there are no written or oral terms or representations made by
either party other than those contained herein. No amendment, supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. The validity, interpretation,
performance and enforcement of the Agreement shall be governed by the laws of
the State of Colorado. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/ XXXXXX X. XXXXX
--------------------------------
Xxxxxx X. Xxxxx, Executive
ASCENT ENTERTAINMENT GROUP, INC.
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Title: Chairman
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