Exhibit 10.58
ACTV EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of October 1, 2000 by and between ACTV, INC., a
Delaware corporation having an office at 1270 Avenue of the Americas, Xxx Xxxx,
Xxx Xxxx 00000 ("ACTV"), and XXXXX X. XXXXXXX ("EMPLOYEE")
W I T N E S S E T H :
WHEREAS, ACTV desires to employ Employee, and Employee desires
to accept employment, as an Executive Vice President of ACTV;
NOW, THEREFORE, in consideration of the premises and the
mutual agree-ments herein set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. EMPLOYMENT OF EMPLOYEE. ACTV hereby employs Employee as an
Exec-utive Vice President of ACTV. During the term hereof, Employee shall devote
all of his business time and efforts to ACTV and its affiliates, and shall
perform such services and duties and have such powers as may from time to time
be prescribed by the Chief Executive Officer of ACTV ("ACTV'S CEO") or his
designee.
2. COMPENSATION AND BENEFITS.
a. SALARY. ACTV shall pay Employee a salary at the rate of Two
Hundred Twenty Five Thousand dollars ($225,000.00) per year, less applicable
withholding taxes and other payroll deductions required by law, payable in
accordance with ACTV's customary payroll practices.
b. ACCELERATION OF VESTING SCHEDULE. Upon any Acceleration
Event (as such term is defined below), all then unvested, unexpired stock
options granted by ACTV to Employee, whether prior to, on or after the date
hereof and whether under any stock incentive plan or otherwise, shall become and
be immediately exercisable, at the respective option price(s) thereof, at any
date prior to the respective expiration date(s) thereof.
For purposes hereof, an "ACCELERATION EVENT" shall be deemed to occur
upon the date that any of the following shall first occur:
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(i) a majority of the Board-nominated slate of candidates for election
to ACTV's Board of Directors shall not be elected thereto;
(ii) there shall occur a Change of Control (as such term is defined
below) which, prior to the effective date thereof, shall not have been
unanimously approved by all of the members of the Board of Directors of ACTV; or
(iii) there shall occur a Change of Control which, prior to the
effective date thereof, shall have been unanimously approved by all of the
members of the Board of Directors of ACTV and, upon or within two years after
the effective date of such unanimously-approved Change of Con-trol, there shall
also occur a Separation Event (as such term is defined below) (the effective
date of such Separation Event to be deemed, for purposes of this clause (iii),
the date of the respective Acceleration Event).
For purposes hereof, a "CHANGE OF CONTROL" shall be deemed to occur
upon the date that any of the following shall first occur:
(i) a person (other than a person who is an officer or a director of
ACTV on the effective date hereof), including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, becomes, or obtains the right
to become, the beneficial owner of ACTV securities having more than 50% of the
combined voting power of such of the then outstanding securities of ACTV as may
be cast for the election of directors of ACTV;
(ii) a merger of ACTV is consummated in which ACTV is not the surviving
entity;
(iii) substantially all of the assets of ACTV are sold; or
(iv) ACTV's stockholders approve the dissolution or liquidation of
ACTV.
For purposes hereof, a "SEPARATION EVENT" shall be deemed to occur upon
the date that (i) ACTV (or the surviving entity) terminates Employee's
employment without cause (as such term is defined in Section 3(a)(ii) below) or
(ii) Employee terminates his employment hereunder for Good Reason (as such term
in defined in Section 3(a)(i) hereof).
c. BONUSES. Employee shall be eligible for such bonuses, if
any, as may hereafter be determined and paid in accordance with such policies as
the Compensation Com-mittee of the Board of Directors of ACTV may set from time
to time.
d. BENEFITS. Employee shall be entitled to participate in all
employee health and other benefit plans or programs of ACTV to the extent that
his position, title, tenure, salary and other qualifications make him eligible
to participate. ACTV does not guarantee the continuance of any particular
employee benefit plan or program during the period of Employee's employment, and
Employee's participation in any such plan or program shall be subject to all
terms, provisions, rules and regulations applicable thereto.
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3. EMPLOYMENT AT-WILL/TERMINATION.
a. TERM; TERMINATION. Employee's employment hereunder shall be
at-will, without fixed term or duration, and this Agreement and Employee's
employment here-under may be terminated at any time as follows:
i. BY EMPLOYEE. Employee may terminate this
Agreement, and Employee's employment hereunder, at will, upon written notice to
ACTV, whereupon this Agree-ment and Employee's employment hereunder (and all of
ACTV's and Employee's respective rights, duties and obligations hereunder) shall
terminate, subject in all respects to Section 3(a)(iv) hereof.
In the event that Employee shall terminate his employment for
Good Reas-on (as such term is hereafter defined), Employee shall be entitled to
severance pay equal to six months' of Employee's base salary, in addition to
such rights as Employee may have under any other provisions of this Agreement
(including Section 2(b)(iii) above) upon any termination of his employment for
Good Reason.
"GOOD REASON" shall mean any termination of this Agreement
effected by Employee on account of (i) a material breach hereof by ACTV
(including, without limitation, a reduction in base salary from the amount set
forth in Section 2(a) hereof), which breach ACTV shall have failed to cure
within 15 days after its receipt of written notice thereof from Employee, which
notice shall have made specific reference to this Section of this Agreement,
(ii) ACTV's relocation of Employee's office to a location outside of the City of
New York, NY, which relo-cation ACTV shall have failed to rescind within 15 days
after its receipt of a written rescission request from Employee, which request
shall have made specific reference to this Section of this Agreement, or (iii)
the assignment to or taking from Employee, upon or after any Change of Con-trol,
of any duties, responsibilities, status, title or position that is or are, in
the case of any such assignment to Employee materially inconsistent with, or in
the case of any such taking from Em-ployee materially detractive from,
Employee's duties, responsibilities, status, title and position, viewed in the
aggregate, as in effect immediately prior to such Change of Control, which
assign-ment or taking ACTV shall have failed to rescind within 15 days after its
receipt of a written rescission request from Employee, which request shall have
made specific reference to this Section of this Agreement.
ii. BY ACTV FOR CAUSE. ACTV may terminate this
Agreement, and Employee's employment hereunder, upon written notice for cause.
For purposes hereof, "CAUSE" shall mean Employee's (1) refusing to carry out the
business of ACTV and its affiliates, as lawfully directed by ACTV, (2) breach of
this Agreement or the CIWP Agreement in any material respect, (3) engaging in
conduct that constitutes competitive activity in violation of Section 7 hereof,
(4) conviction of a felony, (5) continuing or repeated abuse of alcohol or
pres-cription drugs, (6) abuse of any controlled substance, or (7) inability to
perform and fulfill his assigned duties due to a disability. Notwithstanding
anything to the contrary in this Section 3(a)(ii), ACTV may not terminate
Employee's employment for cause under clause (1) hereof unless Employee shall
have first received 15 days written notice from ACTV's CEO advising
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Employee of the specific acts or omissions alleged to constitute cause, and such
acts or omissions continue thereafter. Any termination of Employee's employment
for disability shall not affect Employee's right to receive any benefits to
which he may be entitled pursuant to any of the em-ployee benefit plans or
programs referenced in Section 2(e).
iii. BY ACTV WITHOUT CAUSE. ACTV may terminate this
Agree-ment and Employee's employment hereunder without cause at any time, upon
written notice to Employee. In the event that Employee is terminated without
cause, Employee shall be entitled to severance pay equal to six months' salary,
in addition to such rights as Employee may have under any other provisions of
this Agreement (including Section 2(b)(iii) above) upon any termination of his
employment without cause.
iv. SURVIVAL. Notwithstanding any termination of
Employee's em-ployment (whether effected by ACTV, any surviving entity or
Employee under this Section 3 or under any other provision of this Agreement),
the provisions of Sections 6 (Confidential Inform-ation and Work Product
Agreement) and 7 (Covenant Not to Compete) hereof, and Employee's covenants,
duties and obligations thereunder, shall survive such termination and shall
continue in full force and effect in accordance with the respective terms
thereof; provided, that if Employee's employment is terminated by Employee for
Good Reason, the provisions of Section 7 (Covenant Not to Compete) shall not
survive or have any force or effect after the date of such termination.
b. TERMINATION UPON DEATH. This Agreement and Employee's
employment hereunder shall automatically terminate upon the death of Employee,
except that Employee's estate shall be entitled to receive any amount accrued
under Section 2(a) for the period prior to Employee's death and any other amount
which Employee was entitled to be paid by ACTV at the time of his death, and
Employee's estate shall be entitled to receive any benefits provided pursuant to
any of the employee benefit plans or programs referenced in Section 2(d).
4. EXPENSES. Employee shall be reimbursed for all reasonable and
necessary out-of-pocket expenses incurred in the performance of Employee's
duties hereunder, provided that Employee shall have timely submitted to ACTV
reasonably detailed expense reports and receipts with respect thereto on a
timely basis. All air travel shall be in accordance with ACTV's established
travel policies as in effect from time to time.
5. VACATION. Employee shall be entitled to three weeks of paid vacation
time per year (except as to calendar years 2001 and 2002, in each of which
Employee shall be entitled to four weeks of paid vacation time), on dates to be
agreed upon between ACTV and Employee. In the event that Employee's employment
is terminated for any reason other than for cause, Em-ployee's accrued vacation
time shall be paid to him at his then current base salary.
6. CONFIDENTIAL INFORMATION AND WORK PRODUCT AGREEMENT. Employee has
executed (or is executing, simultaneously herewith) a Confidential Information
and Work Product Agreement (the "CIWP AGREEMENT"). Neither this Agreement nor
any employment relationship between Employee and ACTV shall be effective until
Employee has executed and
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delivered the CIWP Agreement. Employee's obligations under the CIWP Agreement
shall survive termination of this Agreement for any reason.
7. COVENANT NOT TO COMPETE. Employee acknowledges and confirms that
ACTV is placing its confidence and trust in Employee. Accordingly, and in
consideration of ACTV's execution of this Agreement, Employee covenants and
agrees that he will not, during the term of his employment, and for a period of
one (1) year thereafter, either directly or indirectly, engage in any business,
either directly or indirectly (whether as a creditor, guarantor, financial
backer, stockholder, director, officer, consultant, advisor, employee, member,
inventor, producer, or otherwise), with or for any company, enterprise,
institution, organization or other legal entity (whether a sole proprietorship,
a corporation, a partnership, a limited liability company, an asso-ciation, or
otherwise, and whether or not for profit), which is in competition with the ACTV
Business (as defined herein). As used in this Agreement, the term "ACTV
BUSINESS" shall mean the invention, development, application, implementation,
extension, operation, licensing and/or management by ACTV and/or any ACTV
affiliate of any invention, software, technology, business, service or product
of ACTV and/or any ACTV affiliate.
Furthermore, Employee will not during the term of his
employment, and for a period of one (1) year thereafter, individually or through
any entity, directly or indirectly, without the express prior written consent of
ACTV, become an employee, consultant, advisor, director, officer, producer,
partner or joint or co-venturer of or to, or enter into any contract, agreement
or arrangement with, any entity or business venture of any kind to or of which
ACTV and/or any ACTV affiliate is a licensor or licensee or with which ACTV
and/or any ACTV affili-ate is a joint or co-venturer, partner or otherwise
engaged in any material (or then potentially material) on-going business
relationship or discussions or negotiations with a view to entering into such a
relationship to provide services or products, without the prior written consent
of ACTV, which consent ACTV shall not unreasonably withhold. Nor shall Employee,
during the term of his employment, and for a period of two (2) years thereafter,
individually or through any entity, directly or indirectly, without the express
prior written consent of ACTV, make or otherwise extend any offer of full-time
or part-time employment to any officer or employee of ACTV and/or of any ACTV
affiliate, or otherwise solicit any officer or employee of ACTV and/or of any
ACTV affiliate to seek or accept any full-time or part-time employment, by or
with any person or entity other than ACTV or any ACTV affiliate.
Employee hereby acknowledges and agrees that the ACTV Business
ex-tends throughout the United States, and that -- given the nature of the ACTV
Business -- ACTV and/or any ACTV affiliate can be harmed by competitive conduct
anywhere in the United States. Employee therefore agrees that the covenants not
to compete contained in this Section 8 shall be applicable in and throughout the
United States, as well as throughout such non-U.S. areas in which ACTV and/or
any ACTV affiliate may be (or has, with Employee's knowledge and assist-ance,
prepared written plans to be) doing business as of the date of termination of
Employee's employment. Employee further warrants and represents that, because of
his varied skill and abilities, he does not need to compete with the ACTV
Business, and that this Agreement will therefore not prevent him from earning a
livelihood. Employee acknowledges that the restrictions contained in this
Section 8 constitute reasonable protections for ACTV and its
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affiliates in light of the foregoing and in light of the promises to Employee
contained herein. Employee and ACTV hereby agree that, if the period of time or
the scope of the restrictive covenant not to compete contained in this Section 8
shall be adjudged unreasonable by any proper arbiter of a dispute here-under,
then the period of time and/or scope shall be reduced accordingly, so that this
covenant may be enforced in such scope and during such period of time as is
judged by such arbiter to be reasonable.
Notwithstanding anything hereinabove set forth in this Section
8, Employee may - solely in his capacity as a passive investor - make equity
investments in any publicly listed company, provided that the amount of any such
investment does not exceed 2% of the issued and outstanding shares of the
capital stock of the respective class of equity securities of such company and
provided, further, that such investment does not violate any then current
investments policy published by ACTV.
Notwithstanding anything hereinabove set forth in this Section
8, the provi-sions of this Section 8 shall not survive or otherwise apply to
Employee from and after any date upon which Employee may terminate his
employment hereunder for Good Reason.
As used in this Agreement, the term "AFFILIATE" shall mean any
person, corp-oration, partnership, joint venture, limited liability company or
other legal entity that is controlled by ACTV. For purposes of the foregoing
definition, the term "CONTROL" shall mean the capability (whether by ownership
of, or the right to vote, such equity stock or other ownership ------- interests
as shall enable the party owning or voting same, or by the right to elect or
appoint a majority of those directors or other such persons having the
authority) to direct the policies and management of such legal entity.
Accordingly, at the date hereof, such of ACTV's affiliates as are operating
companies are ACTV Entertainment, Inc., Bottle Rocket, Inc., Digital ADCO, Inc.,
HyperTV Networks, Inc. and Media Online Services, Inc.
8. ENTIRE AGREEMENT. This Agreement, together with the CIWP Agreement
as executed by Employee, contains (with the exception of any stock options that
ACTV may have heretofore granted to Employee) the entire agreement between the
parties at the date hereof with respect to the employment and compensation of
Employee by or on behalf of ACTV or any affili-ate of ACTV and supersedes in all
respects any prior agreement or understanding between Em-ployee and ACTV or any
affiliate of ACTV with respect to the employment and compensation of Employee by
or on behalf of ACTV or any affiliate of ACTV. The unenforceability of any
provi-sion of this Agreement shall not affect the enforceability of any other
provision. This Agreement may not be amended or modified in any way except by an
agreement in writing signed by ACTV, as one party, and by Employee, as the other
party. Any delay in exercising, or any failure to exer-cise, any rights provided
by this Agreement shall not be deemed a waiver thereof, and any express written
waiver thereof shall not be deemed a waiver of any further or future rights.
9. ASSIGNMENT. Neither party shall have the right to assign any of his
or its respective rights, duties or obligations hereunder to any third party
without the prior written con-sent of the other party hereto, provided that
Employee's consent thereto shall not be required for
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or in connection with ACTV's assignment of this Agreement to any entity that
shall succeed ACTV as a consequence of any sale of all or substantially all of
ACTV's assets, merger, con-solidation or Change of Control.
10. NOTICES. All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when:
a. delivered by hand, with receipt confirmed;
b. transmitted by facsimile, with receipt confirmed, provided
that a copy is mailed on that same transmittal date by certified or registered
mail, return receipt requested; or
c. delivered by express delivery service, with receipt
confirmed;
in each case to the appropriate addresses or telecopier numbers set forth below,
or to such address or facsimile number as the respective party may hereafter
otherwise designate in writing:
(i) if to ACTV, to:
ACTV, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx,
Chairman and CEO
Facsimile: (000) 000-0000
with a separate and complete copy, under separate cover, to:
ACTV, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Day X. Xxxxxxxxx,
Law Department
Facsimile: (000) 000-0000
and
(ii) if to Employee, to:
Xx. Xxxxx X. Xxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxx, XX 00000
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11. SPECIFIC PERFORMANCE AND INJUNCTIVE RELIEF. Employee hereby
recogni-zes and acknowledges that irreparable injury or damage may result to
ACTV and its affiliates in the event of a breach or threatened breach by
Employee of certain of the terms or provisions of this Agreement including,
without limitation, Employee's covenants in Section 8 hereof, and that ACTV and
its affiliates may have no adequate remedy at law for such breach or threatened
breach. Accordingly, Employee hereby agrees that, in addition to any other
available remedies in equity or at law, ACTV and its affiliates shall be
entitled to an injunction restraining Employee from engaging in any activity
constituting such breach or threatened breach and requiring specific performance
of the terms hereof. Nothing contained herein shall be construed as prohibiting
ACTV or any ACTV affiliate from pursuing any other remedies available to ACTV or
any ACTV affiliate at law or in equity for such breach or threatened breach,
including but not limited to, the recovery of damages from Employee and the
termination of his employment with ACTV in accordance with the terms and
provisions of this Agreement.
12. ARBITRATION. All controversies which may arise between the parties
hereto shall be determined by binding arbitration applying the laws of the State
of New York. Any arbi-tration pursuant to this Agreement shall be conducted in
New York, New York before the Ameri-can Arbitration Association ("AAA") in
accordance with its arbitration rules. Any dispute to be submitted to
arbitration must be reduced to writing and shall be provided to the other party
and to the AAA in order to initiate the proceedings. The award of the
arbitrator(s), or a majority of them, shall be final, and judgment upon the
award may be confirmed and entered in any state or federal court having
jurisdiction; provided, that the arbitrators shall not have the right to award
any punitive damages (and each of the parties hereto waives any right to claim
or receive any punitive damages, whether in any arbitration proceeding or
otherwise). Nothing in this Section 13 will prevent ACTV or any ACTV affiliate
from resorting to judicial proceedings if interim injunc-tive relief under the
laws of the State of New York from a court is necessary to prevent serious and
irreparable injury or harm to ACTV or any ACTV affiliate.
13. GOVERNING LAW. This Agreement and any amendments hereto, and
wai-vers and consents with respect thereto, shall be governed by the internal
laws of the State of New York, without regard to the conflict of laws principles
thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ACTV, INC.
By:
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Day X. Xxxxxxxxx,
Exec. Vice President
and General Counsel
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XXXXX X. XXXXXXX
(Employee)
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