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Exhibit 10.205
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT made as of this 14th day of April, 1999, (this
"Agreement") by and between Xxxxxx Communications Corporation, a Delaware
corporation with its principal place of business at 000 Xxxxxxxxxx Xxxx Xxxx,
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000 ("Company") and Xxxx X. XxXxxxxxx, an
individual, currently residing at the address set forth under such individual's
signature below (the "Executive") (collectively, the "Parties").
WHEREAS, Company desires to employ Executive as Executive Vice President,
Treasurer and Chief Financial Officer, and the Parties desire to enter into
this agreement to secure Executive's employment as Executive Vice President,
Treasurer and Chief Financial Officer during the term hereof, all on the terms
and conditions set forth herein.
NOW, THEREFORE, the Parties agree as follows:
1. The Company agrees to employ the Executive and the Executive agrees to
serve the Company as Executive Vice President, Treasurer and Chief
Financial Officer based primarily at the Company's West Palm Beach,
Florida offices, on the terms and conditions hereinafter set forth.
Unless otherwise agreed, Executive shall not be required to relocate
to any other office of the Company outside of the South Florida
region.
2. Employment of the Executive by the Company pursuant to this Agreement
will be for a two year (2) year period commencing effective April 14,
1999 (the "Commencement Date"), unless sooner terminated, pursuant to
Paragraph 7 hereof (the "Term of Employment").
3. Subject to the direction and control of the Chief Executive Officer,
the Executive shall have all of the power and authority inherent in
the position of Executive Vice President, Treasurer and Chief
Financial Officer and shall supervise and be responsible for the
operations and management of the Company and its subsidiaries. The
Executive shall also have such other executive powers and duties,
consistent with his responsibilities as Executive Vice President,
Treasurer and Chief Financial Officer, as may, from time to time, be
prescribed by the Chief Executive Officer. The Company agrees to use
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its reasonable efforts to nominate Executive to the Board of Directors
and ensure that the Executive is elected to the Board of Directors of
the Company throughout the Term of Employment. The Executive agrees to
render his services under this Agreement loyally and faithfully, to
the best of his abilities and in substantial conformance with all
laws, rules and Company policies, and in connection therewith, will
not improperly or without good cause, in the best interest of the
Company, disclose any trade secrets or other confidential information
of the Company. Without limiting the foregoing, except as expressly
modified herein, Executive shall be subject to all of the Company's
policies including payola, plugola and conflicts of interests, as well
as the following:
(1) Executive will comply with all the Company and professional
standards governing Executive's objectivity in the
performance of Executive's duties, including restrictions on
outside activities, investments, business interests, or other
involvements which could compromise Executive's objectivity
or create an impression of conflict of interest. Executive
will not, without the prior approval of the Chairman of the
Board or the Chief Executive Officer , accept any gift,
compensation, or gratuity (which excludes business meals and
entertainment received by Executive in the ordinary course of
business) from any person or entity with which the the
Company or any of its broadcast properties is or may be in
competition or in any instance where there is a stated or
implied expectation of favorable treatment of that person or
entity. Executive will not, without the prior written
approval of the Chairman of the Board or the Chief Executive
Officer, take advantage of any business opportunity or
situation or engage in any enterprise or venture of which the
the Company may have an interest on his or her own behalf, if
said business opportunity or situation, enterprise or venture
is related in any way to or is similar to the business of the
the Company. Nothing herein shall prohibit Executive from
investing in any broadcast company where such investment does
not cause Executive to be an "affiliate" of such entity under
the terms of the Securities Act of 1993.
(2) In performing Executive's duties under this Agreement,
Executive shall conduct himself with due regard to social
conventions, public morals and standards of decency, and will
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not cause or permit any situation or occurrence which would
tend to degrade, scandalize, bring into public disrepute, or
otherwise lower the community standing of Executive or the
Company's public image. (1)
4. Compensation.
(1) Base Salary. Company will pay the Executive a base salary
(the "Base Salary"), to be paid on the same payroll cycle as
other salaried employees of the Company, at an annual rate
during the first year of the term hereof of $250,000, which
Base Salary shall be increased, effective on each anniversary
of Commencement Date, by an amount equal to not less than 10%
of the Base Salary in effect for the most recently ended
calendar year.
(2) Annual Bonus. In addition to the Base Salary, Executive
agrees to participate in and the Company shall make bonus
awards under, the Company's Executive Bonus Plan and receive
bonus awards from time thereunder, subject to the
satisfaction of the terms and conditions set forth therein
and as described in this paragraph 4(b). The Executive shall
be eligible to earn a bonus for each of the whole or partial
calendar years during the Term of Employment under the terms
of the Company's Executive Bonus Plan, which plan provides
for a bonus award, calculated as a percent of Executive's
Base Salary, subject to (i) the satisfaction of certain
annual performance benchmarks established by the Compensation
Committee of the Board of Directors, and (ii) the Executive's
employment is not terminated under subclause (c) of Paragraph
7. The bonus will be payable within the first six months of
the calendar year (the "Payment Year") following the year to
which the bonus applies (the "Bonus Year"), provided that the
bonus earned, if any, for calendar year 2001 will be paid
after the completion of such Bonus Year or as otherwise paid
to other senior management. The bonus shall be equal to 15%,
30% or 60% of the Base Salary paid to Executive in the Bonus
Year, with the applicable percentage dependent upon the
attainment of certain benchmarks established by the
Compensation Committee for members of the Executive Bonus
Plan. Without limiting the foregoing, nothing shall preclude
the Executive from receiving an additional cash bonus,
determined from time in the sole discretion of the
Compensation Committee of the Board of Directors.
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(3) Options. The Company shall grant the Executive non-qualified
stock options for 180,000 shares of Class A common stock of
the Company, at an exercise price of $7.25 per share. The
options shall be granted subject to an annual cumulative
"cliff" vesting schedule of 10%, 25%, 45%, 70%, and 100% over
five years commencing on the Commencement Date (i.e., first
10% vests April 14, 2000). The options shall be granted, at
the Company's option, under the terms of the 1998 Stock
Option Plan in the form of Exhibit 1 annexed hereto (the
"Plan") or under an individual stock option grant agreement,
which agreement shall contain substantially similar terms,
conditions and limitations of the Plan and the form of stock
option agreement pursuant to which other awards under the
Plan are made from time to time. Notwithstanding the
foregoing, the options of the Executive shall vest fully upon
the occurrence of a change of control as defined in Paragraph
7(f)(i) hereof.
Without limiting the foregoing, nothing shall preclude Executive from
receiving special cash bonus awards not included within the Executive
Bonus Plan, as determined from time to time in the sole discretion of
the Company. In addition to Executive's Base Salary and participation
in the Executive Bonus Plan, Executive may, as determined from time to
time, in the sole discretion of the Company, be eligible to receive or
participate in various other non-cash compensation programs,
including, without limitation, annual and special non-cash bonus
awards, grants of stock options, restricted stock, "phantom-equity"
and stock appreciation rights (collectively, "Non-Cash Bonus Awards")
as awarded or made available to other comparable senior management
(e.g., the Chairman and the Chief Executive Officer), including,
inclusion within the Executive Supplemental Retirement Plan (e.g., the
deferred compensation plan) made available to certain members of
senior management. Employee's rights in respect of any Non-Cash
Compensation shall be governed under the terms of a separate document
or documents, if any Non-Cash Compensation is to be awarded to
Employee.
The Company will have the right to withhold from payments otherwise
due and owing to Executive or to require the Executive to remit to the
Company in cash upon demand an amount sufficient to satisfy any
federal (including FICA and FUTA amounts), state, and/or local
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withholding tax requirements at the time the Executive recognizes
income for federal, state, and/or local tax purposes with respect to
any payments to Executive under the terms hereof or under any other
compensation arrangements, including, Non-Cash Compensation. If any
excise tax withholding by the Company is required pursuant to Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") on
an "excess parachute payment," as this term is defined in Section 4999
of the Code, in connection with any payments made under the terms
hereof, or under any other compensation arrangements, including, the
Executive Bonus Plan and any Non-Cash Compensation, the Company will
be required to pay compensation to the Executive ("Gross-Up Payment")
in an amount equal to the excise tax withholding required to be
withheld by the Company on such amounts paid to Executive and the
Gross-Up Payment itself. The Company then will withhold the Gross-Up
Payment to satisfy this withholding obligation. Except as otherwise
provided by this Paragraph 4, the Company will not be liable to
Executive for any tax consequences incurred by Executive with respect
to payments to Executive under the terms hereof or under any other
compensation arrangements, including, Non-Cash Compensation.
5. During the Term of Employment, the Executive shall be eligible to
participate in all employee benefit plans and arrangements now in
effect or which may hereafter be established, which are generally
available to other senior executives of the Company, including,
without limitation, all life, group insurance and medical plans and
all disability, retirement and other employee benefit plans of the
Company, as long as any such plan or arrangement remains generally
applicable to other senior executives of the Company.
6. The Executive shall be reimbursed for all reasonable expenses incurred
by him in the discharge of his duties, including, but not limited to,
expenses for entertainment and travel. Executive shall be entitled to
travel in business class (and if unavailable, first class) on any
flight with an air duration of three (3) hours or more. In addition to
the foregoing, Executive shall be reimbursed for reasonable relocation
expenses incurred in connection with relocating (e.g., packing and
moving household and personal items, transporting automobiles and
temporary housing) from the Southern California area to West Palm
Beach, Florida, in accordance with the applicable policies of Xxxxxx
and as separately pre-approved by the Company. To the extent any such
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relocation reimbursement payments are deemed to be taxable income to
the Executive under IRS guidelines, the Executive will be entitled to
a further payment (the "Relocation Gross-up Payment"), equal to the
income tax payable on such income and the Relocation Gross-up Payment
itself. In addition, the Executive shall be entitled to be reimbursed
for up to $5,000 of out of pocket home purchase closing costs incurred
in connection with the Executive's purchasing a home in Palm Beach
County, Florida. The Executive shall account to the Company for all
such expenses.
7. Notwithstanding the provisions of Paragraph 2 of this Agreement, the
Executive's Term of Employment pursuant to this Agreement shall
terminate on the earliest of the following dates:
(1) The date of the Executive's death. In such event, the Company
shall pay to the Executive's legal representatives or named
beneficiaries (as the Executive may designate from time to
time in a writing delivered to the Company) accrued and
unpaid Base Salary plus the Executive's Base Salary for a one
(1) year period following the date of the Executive's death;
(2) If the Board of Directors chooses to give the Executive
notice of termination of his employment due to his
disability, as defined in the Company's Long Term Disability
Plan, a date specified in the notice which shall be not less
than thirty (30) days after the date on which the notice is
received by the Executive. In the event that the Executive's
employment is terminated due to his disability under this
subparagraph (b), the Executive or the Executive's legal
representative shall continue to be paid the Executive's Base
Salary then in effect for the lesser of (i) two years and
(ii) the remaining Term of Employment. If, prior to the
specified termination date in such notice by the Company, the
Executive's illness or disability has terminated and the
Executive has resumed his duties under this Agreement, the
Executive shall be entitled to resume employment under this
Agreement as though such notice had not been given. The
opinion of the Executive's physician as to disability shall
be deemed presumptively valid;
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(3) If the Board of Directors chooses to give the Executive
notice of termination of his employment for "good cause", a
date specified in the notice, consistent with the provisions
of subparagraph (c). The term "good cause" as used in this
Agreement shall mean the occurrence of any of the following
events:
(1) Executive's arrest for the commission of (A) a felony,
(B) any criminal act with respect to Executive's
employment (including any criminal act involving a
violation of the Communications Act of 1934, as
amended, or regulations promulgated by the Federal
Communications Commission), or (C) any act that
materially threatens to result in suspension,
revocation, or adverse modification of any FCC license
of any broadcast station owned by any affiliate of the
Company or would subject any such broadcast station to
fine or forfeiture;
(2) Executive's willful taking of any action or inaction
the intended or reasonably foreseeable result of which
would cause the Company to be in default under any
material contract, lease or other agreement;
(3) Executive's dependence on alcohol or illegal drugs;
(4) Failure or refusal to perform according to or follow
the lawful policies and directives of the Chairman of
the Board or the Chief Executive Officer;
(5) Executive's misappropriation, conversion or
embezzlement of the assets of the Company or any
affiliate of the Company;
(6) A material breach of this Agreement by Executive; or
(7) Any representation of Executive in Paragraph 9 of this
Agreement being false when made; or
(8) The Executive voluntarily, including retirement, ceases
his employ with the Company at a time when the
Company is not in material breach of this Agreement.
In the event of a termination under this subparagraph (c),
other than pursuant to clause (c)(viii), the Company shall
notify the Executive of its intentions to terminate his
employment and the specific reason(s) therefore, and the
Executive, on at least ten (10) business days notice, shall
have had an opportunity to respond thereto; and, provided
further, if the basis for such termination is susceptible of
being cured by the Executive, the Company shall afford the
Executive a reasonable period, not to exceed 60 days, to
effect such cure, and the Executive's employment may not be
terminated during said period.
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In the event of termination for good cause, the Company will
be released from all further obligation to the Executive
under this Agreement, except for such salary as may have been
earned or bonus award made but not paid prior to the
termination;
(4) The date on which the Board of Directors chooses to notify
the Executive that the Board of Directors, in its sole
discretion, has determined that it is in the best interest of
the Company to terminate the Executive's employment. In the
event of such termination, the Executive will continue to be
paid the Executive's Base Salary then in effect for the
lesser of (i) one year and (ii) the remaining Term of
Employment. In addition, Executive shall be entitled to
receive any earned and unpaid cash bonus and Executive shall
automatically vest in stock options under Section 4(c) hereof
in an amount which, together with the number of stock options
in which Executive is vested in prior to such termination
date, equals 90,000 vested shares in the aggregate;
(5) On the date that the Executive terminates his employment for
Good Reason. For purposes of this subparagraph (e), "Good
Reason" shall mean that the Company has breached any of the
material terms, conditions and provisions of this Agreement
(including, a material diminution of Executive's
responsibilities). In such case, the Executive shall notify
the Company of his intentions to terminate his employment and
the specific reason(s) therefor, and the Company, on at least
ten (10) business days notice, shall have an opportunity to
respond thereto; and, provided further, if the basis for such
termination is susceptible of being cured by the Company, the
Executive shall afford the Company a reasonable period, not
to exceed 60 days, to effect such cure, and the Executive may
not terminate his employment during said 60 day period. In
the event of such termination, the Executive will continue to
be paid Executive's Base Salary then in effect for the lesser
of (i) one year and (ii) the remaining Term of Employment;
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(6) If, within one year after a Change of Control (as defined
below), the Company terminates Executive's employment with
the Company without Cause, the Executive will continue to be
paid Executive's Base Salary then in effect for the lesser of
(i) one year and (ii) the remaining Term of Employment. For
purposes of this Agreement:
(1) A "Change of Control" will occur if (a) none of Xxxxxx
X. Xxxxxx, his estate, his wife, his lineal
descendants, or any trust created for the sole benefit
of any one or more of them during their lifetimes, or
any combination of any of the foregoing, shall (i) own,
directly or indirectly, at least 35 percent of the
issued and outstanding capital stock of the Company or
(ii) have voting control, directly or indirectly, equal
to at least 51 percent of the issued and outstanding
capital stock of the Company entitled to vote in the
election of Board of Directors of the Company; (b) the
approval by the shareholders of the Company of a
reorganization, merger, or consolidation, in each case,
with respect to which persons who were shareholders of
the Company immediately prior to this reorganization,
merger or consolidation do not, immediately thereafter,
own more than 50 percent of the combined voting power
entitled to vote generally in the election of directors
of the reorganized, merged or consolidated company's
(or any successor entity's) then outstanding
securities; or (c) a liquidation or dissolution of the
Company or of the sale of all or at least 80 percent of
the Company's assets.
(7) The expiration of the Term of Employment as described in
Paragraph 2 of this Agreement. In the event of the
termination of the Executive's employment upon the expiration
of the Term of Employment, the Company will be released from
all further obligation to the Executive, except for such
compensation as may have been earned but not paid prior to
termination.
Following the termination of the Executive's employment under this
Agreement, the Company will have no further liability to the Executive
hereunder and no further payments will be made to him, except as
provided in subparagraphs (a) through (f) above or any bonus awards
not paid as of such termination, and except to the extent that the
Executive qualifies for benefits under any employee benefit plan
available to the Executive as provided in Paragraph 5.
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8. Renegotiation and Exclusive Services.
(1) Executive and the Company agree to renegotiate this agreement
during the first three (3) months after the first anniversary
of the Commencement Date, to provide for an extension of the
term hereunder provided, nothing shall require any such
extension to be agreed upon by the Company or the Executive.
(2) The Executive shall during the Term of Employment, except
during vacation periods, periods of illness and the like,
devote his full and undivided business time and attention to
his duties and responsibilities for the Company. During the
Executive's employment with the Company, the Executive shall
not: (i) engage in any other business activity that would
interfere with his responsibilities or the performance of his
duties under this Agreement; (ii) have any interest or
involvement, directly or indirectly, in any capacity
(including as employee, director, consultant, owner, lessor,
manager, or lender), in any business enterprise that competes
with the Xxxxxx Group or that otherwise has interests in
conflict with the Xxxxxx Group, including without limitation,
any television broadcast, cable television network, or
television programming service, provided however, that (x)
the Executive may own up to one percent (1%) of the issued
and outstanding common stock of any entity whose common stock
is traded on a nationally recognized stock exchange, and (y)
the Executive may sit on the boards of directors of other
entities, with the prior written approval of the Chairman,
which approval shall not be unreasonably withheld. The
Executive will not, prior to the conclusion of the
renegotiation period contemplated under 8(a) hereof, the Term
of Employment solicit offers for the Executive's services,
negotiate with potential employers, enter into any oral or
written agreement for the Executive's services, give or
accept any option for the Executive's services, enter into
the employment of, perform services for, or grant or receive
future rights of any kind relating to the Executive's
services to or from any person or entity whatsoever other
than the Company.
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9. To induce the Company to enter into this Agreement and to employ
Executive, Executive represents and warrants to the Company as of the
date hereof and as of each date of payment of any compensation under
the terms hereof as follows:
(1) The execution, delivery and performance of this Agreement by
Executive does not conflict with result in a breach of, or
constitute a default under any covenant not to compete or any
other agreement, instrument, or license, to which Executive
is a party or by which Executive is bound.
(2) Executive has not:
(1) Been convicted of any felony;
(2) Committed any criminal act with respect to Executive's
current or any prior employment (including any criminal
act involving a violation of the Communication Act of
1934, as amended, or regulations promulgated by the
FCC), or
(3) Committed any act that materially threatened to result
in suspension, revocation, or adverse modification of
any FCC license of any broadcast station or which
subjected any broadcast station to fine or forfeiture.
(3) Executive is not dependent on alcohol or illegal drugs.
Executive recognizes that the Company shall have the right to
conduct random drug testing of its employees and that
Executive may be called upon in such a manner.
10. Any dispute regarding this Agreement shall be decided by arbitration
by a single arbitrator in West Palm Beach, Florida, in accordance with
the Expedited Arbitration Rules of the American Arbitration
Association then obtaining unless the Parties mutually agree
otherwise; and, provided further, that both Parties will be entitled
to all rights of discovery in connection with such arbitration,
including, without limitation, all discovery rights described in the
Florida Rules of Civil Procedure. This undertaking to arbitrate shall
be specifically enforceable. The decision rendered by the arbitrator
will be final and judgment may be entered upon it in accordance with
appropriate laws in any court having jurisdiction thereof. During any
arbitration proceeding initiated by the Executive, the Company agrees,
to the extent that it may legally do so, to continue the Executive in
the Company's long-term disability, life and medical insurance plans.
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11. Both during and after the Term of Employment, neither Party will
disclose the financial terms of this Agreement to persons not involved
in the operations of the business of the Company, except as required
by applicable law, regulation, the rules or regulations of a stock
exchange or association on which securities of the Company or any
parent company thereof are listed or legal process (including, without
limitation, oral questions, interrogatories, requests for information
or documents, subpoenas, civil investigative demands, orders,
judgments or decrees). As to persons involved in the operations of the
business of the Company, disclosure of such terms may be made only on
a need-to-know basis. This restriction shall not apply to members of
the Executive's immediate family nor to the Executive's professional
advisers, lenders and investors, provided such persons agree to keep
the financial terms confidential and not disclose them to third
parties.
12. Any waiver by either Party of a breach of any provision of this
Agreement shall not operate as to be construed to be a waiver of any
other breach of such provision of this Agreement. The failure of a
Party to insist upon strict adherence to any term of this Agreement on
one or more occasions shall not be considered a waiver or deprive that
Party of the right thereafter to insist upon strict adherence to that
term or any other term of this Agreement. Neither this Agreement nor
any part of it may be waived, changed or terminated orally, and any
amendment or modification must be in writing and signed by each of the
Parties. Any waiver of any right of the Company hereunder or any
amendment hereof shall require the approval of the members of the
Compensation Committee of the Board of Directors who are not employees
of the Company or, if the Company does not have a Compensation
Committee or the Compensation Committee does not have any members who
are not employees of the Company, by the members of the Board of
Directors who are not employees of the Company. Until such approval or
waiver has been obtained, no such waiver or amendment shall be
effective.
13. The obligations and rights of the Executive under this Agreement shall
inure to the benefit of and shall be binding upon the heirs and legal
representatives of the Executive. Neither Party may assign this
Agreement without the prior written consent of the other.
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14. This Agreement may be executed in any number of counterparts, each of
which shall, when executed, be deemed to be an original and all of
which shall be deemed to be one and the same instrument.
15. No action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or
agreements contained herein or made pursuant hereto.
16. This Agreement will be governed and construed and enforced in
accordance with the laws of the State of Florida.
17. This Agreement contains the entire understanding of the Parties
relating to the subject matter of this Agreement and supersedes all
other prior written or oral agreements. The Executive acknowledges
that, in entering into this Agreement, he does not rely on any
statements or representations not contained in this Agreement.
18. Any term or provision of this Agreement which is determined to be
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
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19. Except as otherwise specifically provided in this Agreement, all
notices and other communications required or permitted to be given
under this Agreement shall be in writing and delivery thereof shall be
deemed to have been made when such notice shall have been either (i)
deposited in first class mail, postage prepaid, return receipt
requested, or any comparable or superior postal or air courier service
then in effect, or (ii) transmitted by hand delivery, telegram, telex,
telecopier or facsimile transmission, to the party entitled to receive
the same at the address indicated below or at such other address as
such party shall have specified by written notice to the other party
hereto given in accordance herewith:
if to the Company: Xxxxxx X. Xxxxxx
Chairman
Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000
if to the Executive: address below Executive's signature below
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties as of the first date written above.
Name: Xxxx X. XxXxxxxxx
Address: c/o TrenWest Development, LLC
00000 Xxxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
XXXXXX COMMUNICATIONS CORPORATION
By:
Name:
Title:
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