EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
November ___, 1997 by and between GAY ENTERTAINMENT TELEVISION, INC., a
corporation organized and existing under the laws of the State of New York and
having its executive offices at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Company"), and XXXXXX X. XXXXXX, residing at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Xx. Xxxxxx").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Xx. Xxxxxx is currently serving as President and Chief
Executive Officer of the Company and as Chairman of the Company's Board of
Directors (the "Board"); and
WHEREAS, the Company desires to secure for itself the continued
availability of Xx. Xxxxxx'x services; and
WHEREAS, for purposes of securing for the Company Xx. Xxxxxx'x
services, the Board has approved and authorized the execution of this Agreement
with Xx. Xxxxxx on the terms and conditions set forth herein; and
WHEREAS, Xx. Xxxxxx is willing to continue to make his services
available to the Company on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and obligations hereinafter set forth, the Company and Xx. Xxxxxx
hereby agree as follows:
SECTION 1. EMPLOYMENT
The Company hereby agrees to continue the employment of Xx. Xxxxxx and
Xx. Xxxxxx hereby agrees to continue such employment during the period and upon
the terms and conditions set forth in this Agreement.
SECTION 2. EMPLOYMENT PERIOD.
Except as otherwise provided in this Agreement to the contrary, the
terms and conditions of this Agreement shall be and remain in effect during the
period of employment ("Employment Period") established under this Section 2. The
Employment Period shall be for a term of three (3) years commencing on the later
of November 14, 1997 and the initial closing of any public offering of the
Company's securities (the "IPO") and shall automatically be extended for each
successive year thereafter unless (i) the parties mutually agree in writing to
alter or amend the terms of the Agreement; or (ii) one or both of the parties
exercises their right, pursuant to this Agreement, to terminate this employment
relationship.
SECTION 3. DUTIES
Xx. Xxxxxx shall serve as President and Chief Executive Officer of the
Company. Xx. Xxxxxx'x responsibilities, duties and authority as President and
Chief Executive Officer of the Company shall, subject to the direction of the
Board and the By-laws of the Company and any applicable provisions of the
Business Corporation Law of the State of New York, be those commonly associated
with such position and shall include, but shall not be limited to, the
employment, general supervision and direction of all operating officers, the
employment, general supervision and direction of the Company's personnel and
planning for the Company's long-term needs and objectives. Xx. Xxxxxx shall be
responsible for the general supervision and management of the business affairs
of the Company, and, under authority given to him by the Board, shall execute
documents in the name of the Company and do such other official acts on behalf
of the Company as are appropriate and permitted by the By-laws of the Company.
Xx. Xxxxxx shall serve as President and Chief Executive Officer of any and all
subsidiaries hereafter created by the Company during the Employment Period
without additional compensation therefor.
SECTION 4. COMPENSATION
(a) In consideration for the services rendered by Xx. Xxxxxx under this
Agreement, the Company shall pay to Xx. Xxxxxx a salary at an annual rate equal
to One Hundred Fifty-Five Thousand Dollars ($155,000.00). The annual salary
payable under this Section 4(a) shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices.
(b) In addition to the salary provided under Section 4(a), Xx. Xxxxxx
shall be entitled to receive a bonus at the times and in the amounts and
determined in such reasonable manner as may be prescribed by the Board from time
to time.
Section 5. EMPLOYEE BENEFIT PLANS AND PROGRAMS.
(a) Xx. Xxxxxx shall be entitled to a minimum of four (4) weeks of paid
vacation in each calendar year, all of which shall be deemed accrued, earned and
available for use on the first day of the year.
(b) The Company shall purchase or lease for Xx. Xxxxxx'x exclusive use
a new, domestic or imported luxury-class automobile of his choice and shall
replace such automobile, at Xx. Xxxxxx'x request, not more frequently than once
in any period of two (2) years.
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(c) The Company shall also purchase or lease for Xx. Xxxxxx'x exclusive
use a beeper and cellular telephone of his choice and shall pay, or reimburse
Xx. Xxxxxx for his payment of, all charges relating thereto.
(d) Except as otherwise provided in this Agreement, Xx. Xxxxxx shall,
during the Employment Period, be entitled to participate in and receive benefits
under the Company's group life, health (including hospitalization, medical and
major medical), dental, accident and long term disability insurance plans, and
such other employee benefit plans and programs, including, but not limited to,
any pension plans, incentive compensation plans or programs (whether or not
employee benefit plans or programs), and any stock option and appreciation
rights plan, employee stock ownership plan and restricted stock plan, as may
from time to time be maintained by, or cover executive and/or employees of, the
Company, in accordance with the terms and conditions of such benefit plans and
programs and compensation plans and programs and with the Company's customary
practices.
SECTION 6. INVESTMENTS AND OTHER BUSINESS INTERESTS.
Xx. Xxxxxx may engage in personal business and investment activities
for his own account including, without limitation, serving on boards of
directors and engaging in charitable and community affairs; provided, however,
that such personal business and investment activities shall not materially
interfere with the performance of his duties under this Agreement and shall in
all events be subject to the provisions of Section 10 hereof.
SECTION 7. WORKING FACILITIES AND EXPENSES.
Xx. Xxxxxx'x principal place of employment shall be at the Company's
executive offices at the address first above written, or at such other location
as the Company and Xx. Xxxxxx may mutually agree upon. The Company shall provide
Xx. Xxxxxx at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
position with the Company and necessary or appropriate in connection with the
performance of his assigned duties under this Agreement. The Company shall
reimburse Xx. Xxxxxx for his ordinary and necessary business expenses,
including, without limitation, fees for memberships in one business or social
club of his choice (up to maximum cost of $5,000 per year) and in such other
clubs and organizations as Xx. Xxxxxx and the Company shall mutually agree are
necessary and appropriate for business purposes, and his travel and
entertainment expenses incurred in connection with the performance of his duties
under this Agreement upon presentation to the Company of an itemized account of
such expenses in such form as the Company may reasonably require.
SECTION 8. TERMINATION OF EMPLOYMENT WITH COMPANY LIABILITY
(a) In the event that Xx. Xxxxxx'x employment with the Company shall
terminate during the Employment Period on account of:
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(i) Xx. Xxxxxx'x voluntary resignation from employment with
the Company within ninety (90) days after the occurrence, without the
express written consent of Xx. Xxxxxx, of any of the following:
(A) the failure of the Company's Board to appoint or
re-appoint or elect or re-elect Xx. Xxxxxx to the offices of President
and Chief Executive Officer (or a more senior office) of the Company;
(B) the failure of the stockholders of the Company to
elect or re-elect Xx. Xxxxxx as Chairman of the Board and a Director of
the Company;
(C) a material failure of the Company, whether by
amendment of the Company's Certificate of Incorporation or By-laws,
action of the Board or the Company's stockholders or otherwise, to vest
in Xx. Xxxxxx the functions, duties, or responsibilities prescribed in
Section 3 of this Agreement or the By-Laws of the Company or any
significant change in any of the foregoing;
(D) a material breach of this Agreement by the
Company;
(E) a "Change of Control"(as hereinafter defined) of
the Company; as used herein, a "Change of Control" shall mean:
(a) individuals who as of the date hereof
constitute the Board (the "Incumbent Board") cease for any
reason to constitute a majority of the Board other than
through action by the Board in creating and filling vacancies
on the Board; or
(b) either
(i) the acquisition, after the
completion of the IPO, 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 voting
securities of the Company where such acquisition
causes such Person to own 35% or more of the
outstanding voting securities of the Company
("Securities Acquisition"); or
(ii) the approval by the
stockholders of the Company of a reorganization,
merger or consolidation or sale or other disposition
of all or substantially all of the assets of the
Company ("Business Combination"),
unless pursuant to such Securities Acquisition or Business
Combination (A) all or substantially all of the individuals
and entities who were the beneficial owners of the outstanding
voting securities of the Company prior to the Securities
Acquisition or
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Business Combination beneficially own more than
66-2/3 % of the then outstanding voting securities of the
Company (if it is the surviving corporation) or the surviving
corporation (if it is other than the Company) in substantially
the same proportions as their ownership immediately prior to
the Securities Acquisition or Business Combination, and (B) at
least a majority of the members of the Board of the surviving
corporation were members of the Incumbent Board immediately
prior to the Securities Acquisition or Business Combination;
(F) a five percent (5%) reduction in Xx. Xxxxxx'x
compensation below the salary in effect immediately prior to such
reduction;
(G) a material reduction of Xx. Xxxxxx'x benefits
under any employee benefit plan, program or arrangement (for Xx. Xxxxxx
individually or as part of a group) of the Company as then in effect or
as in effect on the effective date of the Agreement, which reduction
shall not be effectuated for similarly situation employees of the
Company; or
(H) failure by a successor company to assume the
obligations under the Agreement; or
(ii) the discharge of Xx. Xxxxxx by the Company for any
reason other than for "cause" as provided in Section 9(a);
then the Company shall provide the benefits and pay to Xx. Xxxxxx the amounts
provided for under Section 8(b). Notwithstanding anything contained herein to
the contrary, the Company shall not be liable for the payments and benefits
under Section 8(b) in the case of (a) a resignation described in Section
8(a)(i)(C) or (D) for reasons other than failure to pay compensation due
hereunder unless Xx. Xxxxxx has given written notice to the Company of its
breach and the Company fails to cure such breach within thirty (30) days
thereafter or Xx. Xxxxxx has, within the twelve (12) month period ending on the
date of his resignation, given the Company written notice of a substantially
similar breach which was subsequently cured, or (b) Xx. Xxxxxx'x employment with
the Company shall terminate under circumstances described in this Section 8(a)
which Xx. Xxxxxx has directly and willfully caused to occur.
(b) Upon the termination of Xx. Xxxxxx'x employment with the Company
under circumstances described in Section 8(a) of this Agreement, the Company
shall pay and provide to Xx. Xxxxxx (or, in the event of his death, to his
estate):
(i) his earned but unpaid salary as of the date of the
termination of his employment with the Company, and his earned but
unpaid bonus as of the date of his termination, pro-rated for the
fiscal quarter during which his termination occurs (based on the number
of days that he was in the Company's employ during such fiscal quarter)
if the termination is other than on the last day of a fiscal quarter;
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(ii) except as provided in Section 8(b)(iv), the benefits, if
any, to which he is entitled as a former employee under the employee
benefit plans and programs and compensation plans and programs
maintained for the benefit of the Company's officers and employees;
(iii) continued life, health (including hospitalization,
medical and major medical), dental, accident and long term disability
insurance benefits, in addition to that provided pursuant to Section
8(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for Xx.
Xxxxxx for the remaining unexpired Employment Period, coverage
equivalent to the coverage to which he would have been entitled if he
had continued working for the Company during the remaining unexpired
Employment Period at the highest annual rate of compensation achieved
during that portion of the Employment Period which is prior to Xx.
Xxxxxx'x termination of employment with the Company;
(iv) within thirty (30) days following his termination of
employment with the Company and in lieu of any monetary payments to
which he may be entitled under any severance pay plan, program or
policy, a lump sum payment, in an amount equal to the present value of
the salary that Xx. Xxxxxx would have earned at the rate set forth in
Section 4(a) if he had continued working for the Company during the
remaining unexpired Employment Period, where such present value is to
be determined using a discount rate of six percent (6%) per annum,
compounded monthly (or the compounding period corresponding to the
Company's regular payroll periods with respect to its officers, if not
monthly), such lump sum to be paid in lieu of all other payments of
salary provided for under this Agreement in respect of the period
following any such termination (other than the additional severance
payment provided for in Section 8(c) as set forth therein);
(v) within thirty (30) days following his termination of
employment with the Company, a lump sum payment in an amount equal to
the excess, if any, of: (A) the present value of the benefits to which
he would be entitled under any benefit plans maintained by, or covering
employees of, the Company if he were 100% vested thereunder and had
continued working for the Company during the remaining unexpired
employment period at the highest annual rate of compensation achieved
during that portion of the Employment Period which is prior to Xx.
Xxxxxx'x termination of employment with the Company, over (B) the
present value of the benefits to which he is actually entitled under
any benefit plans maintained by, or covering employees of, the Company
as of the date of his termination, where such present values are to be
determined using a discount rate of six percent (6%) per annum,
compounded monthly;
(vi) within thirty (30) days following his termination of
employment with the Company a lump sum cash payment in the amount of
the payments that would have been made to Xx. Xxxxxx (in cash and
stock) under Section 4(b) of this Agreement if he had continued working
for the Company during the remaining unexpired Employment Period and
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had earned an annual bonus payment for each fiscal quarter equal to the
highest amount, if any, actually paid to Xx. Xxxxxx for any fiscal
quarter pursuant to Section 4(b);
(vii) at the election of Xx. Xxxxxx made within thirty (30)
days following his termination of employment with the Company, upon the
surrender of options or appreciation rights issued to Xx. Xxxxxx under
any stock option and appreciation rights plan or program or restricted
stock plan maintained by, or covering employees of, the Company, a lump
sum payment in an amount equal to the product of:
(A) in the case of a stock option or appreciation
rights plan or program:
(I) the excess of (A) the fair market value
of a share of stock of the same class as the stock subject to
the option or appreciation right, determined as of the date of
termination of employment, over (B) the exercise price per
share for such option or appreciation right, as specified in
or under the relevant plan or program; multiplied by
(II) the number of shares with respect to
which options or appreciation rights are being surrendered;
and
(B) in the case of a restricted stock plan:
(I) the fair market value of a share of
stock of the same class of stock granted under such
plan, determined as of the date of Xx. Xxxxxx'x
termination of employment; multiplied by
(II) the number of shares which are being
surrendered.
For purposes of this Section 8(b)(vii) and for purposes of determining Xx.
Xxxxxx'x right following his termination of employment with the Company to
exercise any options or appreciation rights not surrendered pursuant hereto, Xx.
Xxxxxx shall be deemed fully vested in all options and appreciation rights under
any stock option or appreciation rights plan or program maintained by, or
covering employees of, the Company, even if he is not vested under such plan or
program.
(c) In the event that a termination of employment occurs pursuant to
Section 8(a) on or after November 1, 1999, then in addition to all of the
payments and benefits which the Company shall pay or provide pursuant to Section
8(b), the Company shall also pay to Xx. Xxxxxx (or his estate, as applicable)
within thirty (30) days following his termination of employment, the following
severance payments:
(A) a lump sum cash payment in an amount equal to the
difference between the amounts actually paid relating to Xx. Xxxxxx'x
salary under Section 8(b) and an amount
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equal to two (2) times Xx. Xxxxxx'x annual salary, based upon the
greater of Xx. Xxxxxx'x salary (i) immediately prior to the effective
date of termination or (ii) as of ninety (90) days prior to the
effective date of termination; plus
(B) a lump sum cash payment in an amount equal to the highest
annual bonus payment, if any, that was actually paid to Xx. Xxxxxx (in
cash and stock) for any fiscal year pursuant to Section 4(b).
(d) The Company and Xx. Xxxxxx hereby stipulate that the damages which
may be incurred by Xx. Xxxxxx following any termination of employment pursuant
to Section 8(a) are not capable of accurate measurement as of the date first
above written and that the payments and benefits contemplated by Section 8(b)
and 8(c) constitute reasonable damages under the circumstances and shall be
payable without any requirement of proof of actual damage and without regard to
Xx. Xxxxxx'x efforts, if any, to damages.
(e) In the event of the death of Xx. Xxxxxx during the Employment
Period of the Agreement, salary shall be paid to Xx. Xxxxxx'x designated
beneficiary, or, in the absence of such designation, to the estate or other
legal representative of Xx. Xxxxxx for a period of up to the date of death.
Other death benefits will be determined in accordance with the terms of the
Company's benefit programs and plans.
(f) In the event of Xx. Xxxxxx'x disability, as hereinafter defined,
Xx. Xxxxxx shall be entitled to compensation in accordance with the Company's
disability compensation practice for senior executives, including any separate
arrangement or policy covering Xx. Xxxxxx, but in all events Xx. Xxxxxx shall
continue to receive Xx. Xxxxxx'x salary for a period, at the annual rate in
effect immediately prior to the commencement of disability, of not less than 180
days from the date on which the disability has been deemed to occur as
hereinafter provided below. "Disability" for the purposes of this Agreement,
shall be deemed to have occurred in the event (A) Xx. Xxxxxx is permanently
unable by reason of sickness or accident to perform Xx. Xxxxxx'x duties under
this Agreement for a continuous period of 180 days. Termination due to
disability shall be deemed to have occurred upon the first day of the month
following the determination of disability as defined in the preceding sentence.
(g) In the event of termination as a result of Xx. Xxxxxx'x death or
disability, and in addition to the payments set forth in Sections 8(e) or 8(f),
as the case may be, Xx. Xxxxxx (or his estate) shall also be paid his earned but
unpaid bonus as of the date of his termination, pro-rated for the fiscal quarter
during which his termination occurs (based on the number of days he was in the
Company's employ during such fiscal quarter) if the date of termination is other
than on the last day of a fiscal quarter; and the provisions of such other
benefits, if any, to which he is entitled as a former employee under this
Agreement and the employee benefit plans and programs and compensation plans and
programs maintained by, or covering employees of, the Company.
SECTION 9. TERMINATION WITHOUT ADDITIONAL COMPANY LIABILITY.
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In the event that Xx. Xxxxxx'x employment with the Company shall
terminate during the Employment Period on account of:
(a) the discharge of Xx. Xxxxxx for "cause" which, for purposes of this
Agreement, shall mean his repeated and gross negligence in the fulfillment of,
or repeated failure of Xx. Xxxxxx to fulfill, his material obligation under this
Agreement, in either event after due written notice thereof (which notice
requirement shall be deemed satisfied if due written notice of a substantially
similar act or omission shall have been given within three (3) months prior to
such discharge), or willful misconduct by Xx. Xxxxxx in respect of his
obligations hereunder, or his conviction of a felony under the laws of the
United States or any State, but only if such gross negligence, repeated failure,
willful misconduct or conviction materially impairs his ability to effectively
perform his duties under this Agreement; provided, however, that cause shall not
include, without limitation:
(i) the refusal by Xx. Xxxxxx of an assignment not
consistent with the status, titles and reporting requirements set
forth herein or contemplated hereby; or
(ii) bad judgment or negligence of Xx. Xxxxxx; or
(iii) any act or omission (other than one constituting a
material breach of trust committed in willful and reckless disregard of
the interests of the Company and undertaken for personal gain) in
respect of which a determination could properly have been made by the
Board that Xx. Xxxxxx met the applicable standard of conduct prescribed
for indemnification or reimbursement under the By-Laws of the Company
or the laws of the State in which the Company is then chartered, in
each case in effect at the time of such act or omission; or
(iv) any act or omission with respect to which notice of
termination is given more than three (3) months after the earliest date
on which any non-employee director of the Company who was not a party
to such act or omission knew or should have known of such act or
omission; or
(b) Xx. Xxxxxx'x voluntary resignation from employment with the Company
for reasons other than those specified in Section 8(a)(i);
then the Company shall have no further obligations under this Agreement, other
than the payment to Xx. Xxxxxx of his earned but unpaid salary as of the date of
the termination of his employment; his earned but unpaid bonus as of the date of
his termination, pro-rated for the fiscal quarter during which his termination
occurs (based on the number of days he was in the Company's employ during such
fiscal quarter) if the date of termination is other than on the last day of a
fiscal quarter; and the provisions of such other benefits, if any, to which he
is entitled as a former employee under this Agreement and the employee benefit
plans and programs and compensation plans and programs maintained by, or
covering employees of, the Company.
SECTION 9A. SEVERANCE AT EXPIRATION OF EMPLOYMENT PERIOD.
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In the event that at the expiration of the Employment Period, Xx.
Xxxxxx'x employment is not continued for any reason, then the Company shall pay
to Xx. Xxxxxx (or his estate, as applicable) his earned but unpaid salary as of
the date of the termination of his employment and his earned but unpaid bonus,
if any, as of the date of his termination, pro-rated for the fiscal quarter
during which his termination occurs (based on the number of days he was in the
Company's employ during such fiscal quarter) if the date of termination is other
than on the last day of a fiscal quarter; shall provide to Xx. Xxxxxx all of the
benefits, if any, to which he is entitled as a former employee under this
Agreement and the employee benefit plans and programs and compensation plans and
programs maintained by, or covering employees of, the Company; and, in addition,
shall pay to Xx. Xxxxxx an amount equal to the aggregate of the highest salary
and bonus earned by Xx. Xxxxxx during any calendar year during the Employment
Period.
SECTION 10. COVENANT NOT TO COMPETE.
Xx. Xxxxxx hereby covenants and agrees that, during the Employment
Period and in the event of his termination of employment with the Company prior
to the expiration of the Employment Period, for a period of one (1) year
following the date of his termination of employment with the Company (or, if
less, for the remaining unexpired Employment Period), he shall not, without the
written consent of the Company, become an officer, employee, consultant,
director or trustee of any entity, or any direct or indirect subsidiary or
affiliate of any such entity, that directly or indirectly competes with this
Company in providing services to the gay community in any market area in which
it is active; provided, however, that this Section 10 shall not apply if Xx.
Xxxxxx'x employment is terminated for the reasons set forth in Section 8(a);
and, provided, further, that if Xx. Xxxxxx'x employment shall be terminated on
account of disability as provided in Section 9(d) of this Agreement, this
Section 10 shall not prevent Xx. Xxxxxx from accepting any position or
performing any services if (a) he first offers, by written notice, to accept a
similar position with, or perform similar services for, the Company on
substantially the same terms and conditions and (b) the Company declines to
accept such offer within ten (10) days after such notice is given.
SECTION 11. CONFIDENTIALITY; PROPRIETARY INFORMATION.
(a) Unless he obtains the prior written consent of the Company (which
consent shall not be unreasonably withheld), Xx. Xxxxxx shall keep confidential
and shall refrain from using for the benefit of any person or entity other than
the Company or any entity which is a subsidiary of the Company or of which the
Company is a subsidiary, any material document or information obtained from the
Company, or from its parent or subsidiaries, in the course of his employment
with any of them concerning their properties, operations or business (unless
such document or information is readily ascertainable from public or published
information or trade sources or has otherwise been made available to the public
through no fault of his own) until the same ceases to be material (or becomes so
ascertainable or available); provided, however, that nothing in this Section 11
shall prevent Xx. Xxxxxx, with or without the Company's consent, from
participating in or disclosing documents or information in connection with any
judicial or administrative investigation, inquiry or proceeding to the extent
that such participation or disclosure is required under applicable law.
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(b) Xx. Xxxxxx acknowledges that during the course of his employment
with the Company he may develop or otherwise acquire papers, files or other
records involving or relating to confidential or secret processes, formulas,
discoveries, inventions, machinery, plans, design information of any kind,
devices, material, research, new product development, customers or customer
lists. All such papers, files and other records shall be the exclusive property
of the Company and shall, together with any and all copies thereof, be returned
to the Company upon Xx. Xxxxxx'x termination of employment.
SECTION 12. SOLICITATION.
Xx. Xxxxxx hereby covenants and agrees that in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one (1) year following his termination of
employment with the Company (or, if less, the remaining unexpired Employment
Period), he shall not, without the written consent of the Company, either
directly or indirectly:
(a) solicit, offer employment to, or take any other action intended, or
that a reasonable person acting in like circumstances would expect, to have the
effect of causing any officer or employee of the Company (other than a member of
Xx. Xxxxxx'x family) or any subsidiary of the Company to terminate his or her
employment and accept employment or become affiliated with, or provide services
for compensation in any capacity whatsoever to, any entity that directly or
indirectly competes with this Company in any market area in which it is then
active;
(b) provide any information, advice or recommendation with respect to
any officer or employee of the Company (other than a member of Xx. Xxxxxx'x
Family) or any subsidiary of the Company to any entity engaged or to be engaged
in the same or competing business with the Company that is intended, or that a
reasonable person acting in like circumstances would expect, to have the effect
of causing any such officer or employee to terminate his or her employment and
accept employment or become affiliated with, or provide services for
compensation in any capacity whatsoever to, any entity that directly or
indirectly competes with the Company in any market area in which it is then
active; provided, however, that nothing in this Section 12(b) shall be construed
as prohibiting Xx. Xxxxxx from serving as a reference if so requested by an
officer or employee of the Company or subsidiary of the Company;
(c) solicit, provide any information, advice or recommendation or take
any other action intended, or that a reasonable person acting in like
circumstances would expect, to have the effect of causing any customer of the
Company with which Xx. Xxxxxx has had substantial contact to terminate an
existing business or commercial relationship with the Company;
provided, however, that this Section 12 shall not apply if Xx. Xxxxxx'x
employment is terminated for any of the reasons set forth in Section 8(a).
Nothing in this Section 12 shall prevent Xx. Xxxxxx from directly or indirectly
advertising employment opportunities or disseminating marketing materials
through newspapers of general circulation or other mass media.
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SECTION 13. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.
The termination of Xx. Xxxxxx'x employment during the term of this
Agreement or thereafter, whether by the Company or by Xx. Xxxxxx, shall have no
effect on the rights and obligations of the parties hereto, which shall continue
for a period of two (2) years after Xx. Xxxxxx'x termination under the Company's
pension plan, group life, health (including hospitalization, medical and major
medical), dental, accident and long term disability insurance plans or such
other employee benefit plans or programs, or compensation plans or programs
(whether or not employee benefit plans or programs) and any stock option and
appreciation rights plan, employee stock ownership plan and restricted stock
plan, as may be maintained by, or cover employees of, the Company from time to
time.
SECTION 14. INDEMNIFICATION AND ATTORNEYS' FEES.
The Company shall provide Xx. Xxxxxx with payment of legal fees and
indemnification to the maximum extent permitted from time to time by the New
York General Corporation Law or other applicable laws or regulations. Xx. Xxxxxx
shall continue to be covered by the Certificate of Incorporation and/or the
Bylaws of the Company with respect to matters occurring on or prior to the date
of termination of Xx. Xxxxxx'x employment with the Company, subject to all the
provisions of New York and Federal law and the Certificate of Incorporation and
Bylaws of the Company then in effect. The Company shall indemnify and hold
harmless Xx. Xxxxxx against reasonable costs, including, without limitation,
legal fees and expenses, incurred by him in connection with or arising out of
any action, suit or proceeding in which he may be involved to defend or enforce
the terms of this Agreement, without regard to whether Xx. Xxxxxx is the
prevailing party in such action, suit or proceeding. Such reasonable expenses,
including attorneys' fees that may be covered by the Certificate of
Incorporation and/or Bylaws of the Company shall be paid by the Company on a
current basis in accordance with such provision, the Company's Certificate of
Incorporation and applicable law. To the extent that any such payments by the
Company pursuant to the Company's Certificate of Incorporation and/or Bylaws may
be subject to repayment by Xx. Xxxxxx pursuant to the provisions of the
Company's Certificate of Incorporation or Bylaws, or pursuant to applicable law,
such repayment shall be due and payable by Xx. Xxxxxx to the Company within
twelve (12) months after the termination of all proceedings, if any, which
relate to such repayment and to the Company's affairs for the period prior to
the date of termination of Xx. Xxxxxx'x employment with the Company and as to
which Xx. Xxxxxx has been covered by such applicable provisions.
SECTION 15. EXCISE TAX.
(a) If, in connection with the termination of Xx. Xxxxxx'x employment,
Xx. Xxxxxx shall be liable for the payment of an excise tax under Section 4999
of the Code with respect to any payment of money or property made by the
Company, the Company shall pay to Xx. Xxxxxx an amount to indemnify Xx. Xxxxxx
against such excise tax and against any additional income and excise taxes
imposed on him as a result of such indemnification. With respect to any payment
that is made to Xx. Xxxxxx under the terms of this Agreement in the year of his
termination of
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employment and on which an excise tax under Section 4999 of the Code will be
assessed, the payment determined under this Section 15(a) shall be made to Xx.
Xxxxxx not later than thirty (30) days following his termination of employment.
With respect to any payment made under the terms of this Agreement in any other
year and on which an excise tax under Section 4999 of the Code will be assessed,
the payment under this Section 15(a) shall be made to Xx. Xxxxxx not later than
December 31st of the year in which the payment on which such excise tax will be
assessed is made to Xx. Xxxxxx or, if earlier, the date on which such tax is
required to be remitted to the Internal Revenue Service. The payments made by
the Company under this Section 15(a) shall be determined by the Company on the
basis of advice from the firm of independent certified public accountants
regularly retained by the Company to audit its books and shall be subject to
subsequent adjustment as provided in Section 15(b).
(b) In the event that Xx. Xxxxxx'x liability for the excise tax under
Section 4999 of the Code for a taxable year is subsequently determined to be
different than the amount paid for such year pursuant to Section 15(a), Xx.
Xxxxxx or the Company, as the case may be, shall pay to the other party at the
time that the amount of such excise tax is finally determined, an appropriate
amount, plus interest, such that the payment made under Section 15(a), when
increased by the amount of the payment made to Xx. Xxxxxx under this Section
15(b) by the Company, or when reduced by the amount of the payment made to the
Company under this Section 15(b) by Xx. Xxxxxx, equals the amount finally
determined to have been properly payable to Xx. Xxxxxx under Section 15(a). The
interest paid under this Section 15(b) shall be determined at the rate provided
under Section 1274(b)(2)(B) of the Code. To confirm that the proper amount, if
any, was paid to Xx. Xxxxxx under this Section 15, Xx. Xxxxxx shall furnish to
the Company a copy of each tax return which reflects a liability for an excise
tax payment under Section 4999 of the Code with respect to a payment made by the
Company, at least twenty (20) days before the date on which such return is
required to be filed with the Internal Revenue Service. If Xx. Xxxxxx fails to
furnish any such return by the prescribed date, then (i) the Company's payment
obligation hereunder shall be deferred until twenty (20) days after the date on
which such return is actually furnished and (ii) the Company shall have no
liability to indemnify Xx. Xxxxxx against any excess tax payment which the
Company reasonably believes to have been made in error.
SECTION 16. SUCCESSORS AND ASSIGNS; SURVIVORSHIP.
This Agreement will inure to the benefit of and be binding upon Xx.
Xxxxxx, his legal representatives, heirs and assigns, and the Company, its
respective successors and assigns, including any successor by merger or
consolidation or a statutory receiver or any other person or firm or corporation
to which all or substantially all of the respective assets and business of the
Company may be sold or otherwise transferred.
SECTION 17. WAIVER.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this
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Agreement must be made in writing, designated as a waiver, and signed by the
party against whom its enforcement is sought. Any waiver or relinquishment of
any right or power hereunder at any one or more times shall not be deemed a
waiver or relinquishment of such right or power at any other time or times.
SECTION 18. NOTICES.
Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:
If to Xx. Xxxxxx:
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with copy to:
Esanu Katsky Xxxxxx & Siger, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XXX X. XXXXXX, ESQ.
If to the Company:
Gay Entertainment Television, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CORPORATE SECRETARY
with copy to:
Atlas, Xxxxxxxx, Trop & Borkson, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: XXXXXXX X. XXXXXXXX, ESQ.
SECTION 19. SEVERABILITY.
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A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.
SECTION 20. COUNTERPARTS.
This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same Agreement.
SECTION 21. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without reference to
conflicts of law principles.
SECTION 22. HEADINGS AND CONSTRUCTION
The headings of Sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any Section. Any
reference to a Section number shall refer to a Section of this Agreement, unless
otherwise stated.
SECTION 23. SURVIVAL.
The rights and obligations of the Company and Xx. Xxxxxx under Sections
10, 11, 12, 14 and 15 of this Agreement shall survive the termination or
expiration of this Agreement, notwithstanding anything contained herein to the
contrary.
SECTION 24. EQUITABLE REMEDIES.
The Company and Xx. Xxxxxx hereby stipulate that monetary damages shall
be an inadequate remedy for violations of Sections 10, 11 and 12, of this
Agreement and agree that equitable remedies, including, without limitation, the
remedies of specific performance and injunctive relief, shall be available with
respect to the enforcement of such provisions.
SECTION 25. ENTIRE AGREEMENT, MODIFICATIONS.
This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or rep- representations relating to the subject
matter hereof. No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and Xx. Xxxxxx has hereunto set his hand, all as of the day and year
first above written.
-----------------------------------------
XXXXXX X. XXXXXX
ATTEST: GAY ENTERTAINMENT TELEVISION, INC.
By: ___________________________ By:______________________________________
Secretary Name:
Title:
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