EXHIBIT 10.13
EMPLOYMENT AGREEMENT, DATED AS OF JULY 1, 1999, BETWEEN TELEMUNDO NETWORK
GROUP LLC AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
AGREEMENT dated as of July 7, 1999, between TELEMUNDO NETWORK GROUP
LLC, a Delaware limited liability company (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("Employee"), residing at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
The parties hereby agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby employs Employee, and
Employee hereby accepts employment, on the terms and subject to the conditions
hereinafter set forth, for a term (the "Employment Period") commencing on July
7, 1999 (the "Start Date") and continuing until July 6, 2004. The expiration
date of the Employment Term is hereinafter referred to as the "Expiration Date."
2. DUTIES AND PRIVILEGES.
(a) During the Employment Period, Employee shall serve as
President and Chief Executive Officer of Telemundo Network Group LLC, be
responsible to and report to the designated officer of the Managing Member of
the Company (the "Designee"); perform such services as are consistent with
Employee's position hereunder as the Chief Executive Officer of the Company and
such services consistent therewith as the Designee may from time to time
require; devote Employee's entire business time, ability and energy exclusively
to the performance of Employee's duties hereunder; and use Employee's best
efforts to advance the interests and businesses of the Company, its divisions
and subsidiaries. During the Employment Period nobody shall be given the title
of Chairman of the Company other than Employee; provided, however, that
notwithstanding the foregoing, a top executive of the Managing Member (i.e., an
executive who holds the position now currently held by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇
▇▇▇▇▇▇▇▇▇▇) may be appointed Chairman of the Board of the Company but in that
capacity will not render services in connection with the day-to-day operations
of the Company on a regular basis; provided, further, that Employee shall
continue to report directly to the Designee notwithstanding any such
appointment. Employee acknowledges that his duties and responsibilities
encompass the affairs of the Company and not that of its Members.
(b) All personnel of the Company, including without limitation
Telemundo Entertainment so long as it exists, shall report to Employee and
Employee shall have full authority to hire and fire any and all personnel of the
Company at Employee's sole discretion subject, with respect to hiring (not
firing) a chief operating officer, a chief financial officer and a programming
director, to such approval rights as are accorded to the Members in the Company
Operating Agreement then controlling between the Members.
(c) Employee shall not be required initially to relocate his
offices from Los Angeles to the principal executive offices of the Telemundo
Network (presently located in Miami, Florida), it being understood that the
Company may require such relocation at a later date but only after good faith
consultation with Employee and subject to the Company's full reimbursement to
Employee of any and all costs incurred by Employee arising from or in connection
with such relocation. Notwithstanding the foregoing, Employee shall travel to
the Telemundo Network principal executive offices as reasonably necessary in the
performance of his duties hereunder.
(d) Employee may not accept a board position or have any other
affiliation requiring his services with another business entity without the
approval of the Members; provided, however, that Employee's service on the board
of SBS Broadcasting SA is hereby approved.
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3. COMPENSATION.
(a) The Company shall pay to Employee a salary at the rate of
$750,000 per year during the Employment Period. Effective each anniversary of
the Start Date occurring during the Employment Period (each, an "Adjustment
Date"), the amount of the annual salary payment pursuant to this Section 3(a)
shall be increased to reflect the increase, if any, in the cost of living during
the previous year by adding to the salary payable for such previous year the
amount obtained by multiplying such previous annual salary by the percentage by
which the level of the Consumer Price Index for the Los Angeles-Long
Beach-Anaheim Metropolitan Area, as reported as of the then-current Adjustment
Date by the Bureau of Labor Statistics of the United States Department of Labor,
has increased over its level as of the prior year's Adjustment Date. In the
event the information is not available on any such Adjustment Date, Employee's
annual salary shall be adjusted retroactively immediately after such information
becomes available, and Employee shall be paid promptly thereafter a lump sum
equal to the amount Employee would have received, less actual amounts received,
had such adjustment been made earlier.
(b) During the Employment Period, Employee shall be eligible
to participate in all then-operative employee benefit plans adopted and/or
implemented by the Company or its affiliates which are applicable generally to
the Company's senior executives (including, but not limited to, the benefit
plans applicable to the immediately preceding Chief Executive Officer and the
current Chief Operating Officer of the Company) ("Employee Benefit Plans"),
subject to the respective terms and conditions of such Employee Benefit Plans.
The Company has separately provided to Employee a listing of all Employee
Benefit Plans currently in place. Nothing contained in this Agreement shall
obligate the Company and/or any of its Affiliates to adopt or implement any
Employee Benefit Plan, or prevent or limit the Company and/or any of its
Affiliates from making any blanket amendments, changes, or modifications of the
eligibility requirements or any other provisions of, or terminating, any
Employee Benefit Plan at any time (whether during or after the Employment
Period), and Employee's participation in or entitlement under any such Employee
Benefit Plan shall at all times be subject in all respects thereto.
(c) Employee shall be entitled to a one-time payment (the
"Bonus Payment") determined as set forth in this Section 3(c) (subject to the
limitations set forth in Section 3(c)(iv) below). The Bonus Payment shall be
payable on the
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90th day following the sixth anniversary of the Start Date (the "Payment Date").
At the time the Bonus Payment is paid to Employee, the Company shall also pay to
Employee an amount in the nature of interest on the amount of the Bonus Payment
accrued from the 90th day following the fifth anniversary of the Start Date
until the date the Bonus Payment is actually paid at the then-current prime rate
charged by Bank of America.
(i) Definitions. Capitalized terms used in this
Section 3(c) shall be defined as set forth below, unless otherwise expressly
defined elsewhere:
(A) "Average IAV" shall mean an amount
determined by dividing (i) the sum of each of the IAVs for the three
Measurement Years included in the Measurement Period, by (ii) the
number 3.
(B) "Consolidated Indebtedness" means, with
respect to the Company and the Station Group, Indebtedness actually
incurred by the Company or the Station Group, as the case may be,
determined on a consolidated basis in accordance with GAAP, that by its
terms matures more than one year after any date of determination or
matures less than one year from such date but is renewable or
extendible, at the option of the Company or Station Group, as
applicable, to a date more than one year after such date or arises
under a revolving credit or similar agreement that obligates the lender
or lenders to extend credit during a period of more than one year after
such date, in each case determined on a consolidated basis in
accordance with GAAP.
(C) "Enterprise EBITDA" means, with respect
to each Measurement Year, the sum of (i) 100% of the Network EBITDA,
plus (ii) 50% of the Station Group EBITDA, for such Measurement Year.
(D) "IAV" for any Measurement Year shall be
an amount equal to (i) that amount which is eleven times the Enterprise
EBITDA for such Measurement Year, minus (ii) 100% of the Consolidated
Indebtedness of the Company on the last day of such Measurement Year
(net of cash and cash equivalents owned by the Company as of such
date), minus (iii) 50% of the Consolidated Indebtedness of Station
Group on the last day of such Measurement Year (net of 50% of the cash
and cash equivalents owned by Station Group as of such date), minus
(iv) 100% of the
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Network Group Contributed Capital Amount as of the last day of such
Measurement Year, and minus (v) 50% of the Station Group Contributed
Capital Amount as of the last day of such Measurement Year.
(E) "Indebtedness" means:
(a) All indebtedness for borrowed
money;
(b) All obligations for the
deferred purchase price of property and assets or services (other than
trade payables or other accounts payable incurred in the ordinary
course of business and not past due for more than 90 days after the
date on which such trade payable or account payable is created);
(c) All obligations evidenced by
notes, bonds, debentures or other similar instruments, or upon which
interest payments are customarily made;
(d) All obligations created or
arising under any conditional sales or other title retention agreement
with respect to property or assets acquired (even though the rights and
remedies of the seller or the lender under such agreement in the event
of default are limited to repossession or sale of such property or
assets);
(e) All obligations of such person
as lessee under any capitalized lease;
(f) All obligations, contingent or
otherwise, under acceptance, letter of credit of similar facilities
(other than letters of credit given in support of trade payables
incurred in the ordinary course of such business and with an expiration
date of not more than 90 days after the date on which such letter of
credit was issued); and
(g) All obligations under any
synthetic lease, tax retention operating lease, off balance sheet loan
or similar off balance sheet financing if the transaction giving effect
to such obligation is considered indebtedness for borrowed money for
tax purposes but is classified as an operating lease in accordance with
GAAP.
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Notwithstanding the foregoing, no amounts shall be included as
Indebtedness hereunder unless such amounts are actually paid to the
Company or Station Group, as the case may be, or to a third party
(other than the Affiliates of Station Group or the Company, as the case
may be) on behalf of the Company or the Station Group, as the case may
be.
(F) "Liberty" means Liberty Media Corporation or its
subsidiary that is a member of the Company.
(G) "Measurement Period" means the three Measurement
Years commencing on July 1, 2002 and ending on June 30, 2005.
(H) "Measurement Year" means a twelve consecutive
month period, commencing on each July 1 during the Measurement Period.
(I) "Members" means those persons holding membership
interests in the Company. The initial Members of the Company are
Liberty and Sony.
(J) "Network Group Contributed Capital Amount" means
the aggregate amount of net equity capital contributions of the Members
to the Company.
(K) "Network EBITDA" means, with respect to a
particular Measurement Year, (a) the net income (or net loss) of the
Company and its subsidiaries for such Measurement Year, determined
after giving effect to the provisions of the Affiliate Agreement
between Station Group and Network Group regarding pooling and sharing
of Network and national spot ad revenues on a consolidated basis in
accordance with GAAP for such period ("Consolidated Net Income"), plus
(b) the sum of each of the following expenses that have been deducted
from the determination of Consolidated Net Income: (i) all interest
expense of the Company and its subsidiaries, (ii) all income tax
expense (whether federal, state, local, foreign or otherwise), (iii)
all depreciation expense, (iv) all amortization expense (other than any
such amortization expense attributable to programming costs,
third-party participations and residuals computed in accordance with
GAAP consistently applied during the Measurement Period) and (v) all
extraordinary losses deducted in determining Consolidated Net Income
less all
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extraordinary gains added in determining Consolidated Net Income, in
each case determined on a consolidated basis in accordance with GAAP
for such period.
(L) "Station Group EBITDA" means, with respect to a
particular Measurement Year, (a) the net income (or net loss) of the
Station Group and its subsidiaries (after deduction for minority
interest) for such period ("Consolidated Station Group Net Income"),
determined after giving effect to the provisions of the Affiliate
Agreement between Station Group and Network Group regarding pooling and
sharing of Network and national spot ad revenues on a consolidated
basis in accordance with GAAP for such period, plus (b) the sum of each
of the following expenses that have been deducted from the
determination of Consolidated Station Group Net Income: (i) all
interest expense of the Station Group and its subsidiaries, (ii) all
income tax expense (whether federal, state, local, foreign or
otherwise), (iii) all depreciation expense, (iv) all amortization
expense (other than any such amortization expense attributable to
programming costs, participation and residuals) and (v) all
extraordinary losses deducted in determining Consolidated Station Group
Net Income less all extraordinary gains added in determining
Consolidated Station Group Net Income, in each case determined on a
consolidated basis in accordance with GAAP for such period.
(M) "Sony" means Sony Pictures Entertainment Inc. or
its subsidiary that is a member of the Company.
(N) "Station Group Contributed Capital" means the
aggregate amount of net equity capital contributions of the Members to
the Station Group.
(ii) Amount of Bonus Payment. The Bonus Payment shall be equal
to the sum of (x) three and three tenths percent (3.3%) of the portion of the
IAV that is less than $758 million, plus (y) ten percent (10%) of the remaining
portion of the Average IAV (i.e., that portion of the Average IAV that exceeds
$758 million).
(iii) Adjustments. In the event that the Company or the
Station Group makes any corporate acquisition and/or divestiture of a material
portion of its assets (which for these purposes shall include any acquisition or
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disposition of assets with a fair market value of $25 million or more or any
disposition of assets during the Measurement Period, the parties agree that an
equitable adjustment to the formula for determining IAV's will be negotiated in
good faith at the time of such acquisition or divestiture. In the event that,
during the Measurement Period, the Company makes an equity offering to the
public, the parties agree to convert the Bonus Payment into stock, stock
options, warrants or other forms of equity in the Company, as applicable, and to
negotiate in good faith the appropriate nature and formula for such conversion.
(iv) Early Termination. Notwithstanding anything to the
contrary contained in this Section 3(c), if Employee's employment is terminated
on or prior to the Expiration Date for any reason other than pursuant to Section
4(d) below, then the amount of the Bonus Payment payable to the Employee on the
Payment Date shall be reduced to Employee's vested portion of such Bonus Payment
at the date of such termination. During each Measurement Year, Employee shall
vest in the Bonus Payment as follows:
Percentage
----------
Measurement Year to Be Vested
---------------- ------------
First year 20%
Second year 20%
Third year 20%
Fourth year 20%
Fifth year 20%
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Employee shall become vested in the Percentage To Be Vested during each
Measurement Year in four equal installments on September 30, December 31, March
30, and June 30 (each a "Vesting Date") during such year. Employee's vested
portion of the Bonus Payment at any given date shall be the aggregate percentage
vested as of the Vesting Date immediately preceding the date such vested portion
is being determined. Notwithstanding anything herein to the contrary, if
Employee's employment is terminated during the fourth or fifth year of the
Employment Period pursuant to Section 4(g) hereof, Employee's vested portion of
the Bonus Payment shall be the aggregate percentage vested as of the Vesting
Date immediately preceding the date such vested portion is being determined plus
ten percent (10%); provided, however, that the maximum percentage in which
Employee may be vested shall be one hundred percent (100%). For example, if
Employee's employment is terminated pursuant to Section 4(g) during the third
quarter of the fourth year of the Employment Period, Employee's vested portion
shall be eighty percent (80%). In the event that this Agreement is terminated by
the Company prior to the Expiration Date pursuant to Section 4(d) hereof,
Employee shall not be deemed to have vested in any portion of the Bonus Payment
and no payment shall be due and owing to Employee pursuant to this Section 3(c).
(v) Computation of Bonus Payment. The Bonus Payment payable
hereunder shall be computed by the Company's independent certified public
accountants during the 90 day period following the sixth anniversary of the
Start Date in accordance with the terms and conditions of this Section 3(c). The
amount of the Bonus Payment as so computed shall be final and binding on the
parties and neither shall have any right to contest such computation in any form
whatsoever, except in the case of bad faith or fraud.
4. EXPIRATION OF TERM AND TERMINATION.
(a) Employee's employment by the Company and this Agreement
shall automatically expire and terminate on the Expiration Date unless sooner
terminated pursuant to the provisions of this Section 4.
(b) Employee's employment by the Company and this Agreement
shall automatically terminate upon Employee's death.
(c) The Company shall have the right and option, exercisable
by giving written notice to Employee, to terminate
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Employee's employment by the Company and this Agreement at any time after
Employee has been unable to perform the material services or a material portion
of the material duties required of Employee in connection with Employee's
employment by the Company as a result of physical or mental disability (or
disabilities) which has (or have) continued for a period of twelve (12)
consecutive weeks, or for a period of sixteen (16) weeks in the aggregate,
during any twelve (12) month period.
(d) The Company shall have the right and option, exercisable
by giving written notice to Employee, to terminate Employee's employment by the
Company and this Agreement at any time after the occurrence of any of the
following events or contingencies (any such termination being deemed to be a
termination "for cause"):
(i) Employee materially breaches, materially
repudiates or otherwise materially fails (except in instances provided for by
Section 4(b) or (c) above) to comply with or perform any of the material terms
of this Agreement, any material duties of Employee in connection with Employee's
employment by the Company or any of the Company's material policies or material
procedures, or deliberately interferes with the compliance by any other employee
of the Company with any of the foregoing; provided, that if any action or
omission by Employee constituting one of the foregoing is curable and not
"intentional" and does not constitute any of the events or actions described in
clause (ii), below, Employee shall have five (5) business days to cure such
breach following notice thereof from the Company (which notice shall be written
or, if immediate written notice is not possible, oral notice may be given,
provided that such oral notice is confirmed in writing within the foregoing five
business day period.) (For purposes of this clause (i) and clauses (iii) and
(iv), below, an action (or omission) shall be "intentional" if Employee knows,
or reasonably should have known, that such action (or omission) constitutes a
material breach hereof);
(ii) The commission by Employee of a felony (whether
or not prosecuted) or the pleading by Employee of no contest (or similar plea)
to any felony (other than a crime for which vicarious liability is imposed upon
Employee solely by reason of Employee's position with the Company, and not by
reason of Employee's conduct);
(iii) Any act or omission by Employee constituting
fraud, gross negligence or willful misconduct in connection with Employee's
employment by the Company;
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provided, that if any action or omission by Employee constituting one of the
foregoing is curable and not "intentional" and does not constitute any of the
events or actions described in clause (ii), above, Employee shall have five (5)
business days to cure such breach following notice thereof from the Company
(which notice shall be written or, if immediate written notice is not possible,
oral notice may be given, provided that such oral notice is confirmed in writing
within the foregoing five business day period.); or
(iv) Any other act, omission, event or condition
constituting cause for the discharge of an employee under applicable law (other
than instances covered by Sections 4(b) or 4(c) above; provided that if any such
act, omission, event or condition constituting one of the foregoing is curable
and not "intentional" and does not constitute any of the events or actions
described in clause (ii), above, Employee shall have five (5) business days to
cure such breach following notice thereof from the Company (which notice shall
be written or, if immediate written notice is not possible, oral notice may be
given, provided that such oral notice is confirmed in writing within the
foregoing five business day period).
(e) The Company shall have no obligation to renew or extend
the Employment Period. Neither (i) the expiration of the Employment Period, (ii)
the failure or refusal of the Company to renew or extend the Employment Period,
this Agreement, or Employee's employment by the Company upon the Expiration Date
nor (iii) the termination of this Agreement by the Company pursuant to any
provision of this Section 4 (except Section 4(g)), shall be deemed to constitute
a termination of Employee's employment by the Company "without cause" for the
purpose of triggering any rights of or causes of action by Employee.
(f) If this Agreement, the Employment Period or Employee's
employment by the Company is terminated or expires pursuant to any provision of
this Section 4 (other than Section 4(g)), or is terminated by Employee,
Employee's right to receive salary or other compensation from the Company and
all other rights and entitlements of Employee pursuant to this Agreement or as
an employee of the Company shall forthwith cease and terminate, and the Company
shall have no liability or obligation whatsoever to Employee, except that:
(i) The Company shall be obligated to pay to Employee
not later than the effective date of such termination
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all unpaid salary, car allowance (if any) vacation and reimbursable expenses
which shall have accrued as of the effective date of such termination;
(ii) The terms and conditions of applicable Employee
Benefit Plans, if any, shall control Employee's entitlement, if any, to receive
benefits thereunder; and
(iii) The Company shall be obligated to pay to
Employee such portion of the Bonus Payment as is payable in accordance with and
subject to the terms and conditions of Section 3 hereof.
(g) The Company shall not be obligated to utilize Employee's
services or any of the results and proceeds thereof or to permit Employee to
retain any corporate office or to continue to do so; and the Company shall have
the unilateral right, at any time, without notice, in the Company's sole and
absolute discretion, to terminate Employee's employment by the Company, without
cause, and for any reason or for no reason (the Company's "Termination Rights").
The Company's Termination Rights are not limited or restricted by, and shall
supersede, any policy of the Company requiring or favoring continued employment
of its employees during satisfactory performance, any seniority system or any
procedure governing the manner in which the Company's discretion is to be
exercised. No exercise by the Company of its Termination Rights shall, under any
circumstances, be deemed to constitute (i) a breach by the Company of any term
of this Agreement, express or implied (including without limitation a breach of
any implied covenant of good faith and fair dealing), (ii) a wrongful discharge
of Employee or a wrongful termination of Employee's employment by the Company,
(iii) a wrongful deprivation by the Company of Employee's corporate office (or
authority, opportunities or other benefits relating thereto) or (iv) the breach
by the Company of any other duty or obligation, express or implied, which the
Company may owe to Employee pursuant to any principle or provision of law
(whether contract or tort). If the Company elects to terminate Employee's
employment by the Company without cause prior to the Expiration Date, the
Company shall have no obligation or liability to Employee pursuant to this
Agreement or otherwise, except to pay to Employee (x) not later than the
effective date of such termination all unpaid vacation which shall have accrued
as of the effective date of such termination, (y) until the Expiration Date
amounts equal to the salary and benefits provided in Sections 3(a) and 3(b)
hereto, payable in the same installments and on the same dates
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as if Employee's employment by the Company had not been terminated, and (z) such
portion of the Bonus Payment as is payable in accordance with and subject to the
terms and conditions of Section 3(c) on the Payment Date (as defined in Section
3(c)). If the Company terminates Employee's employment without cause prior to
the Expiration Date, Employee shall have no obligation to mitigate and, except
with respect to the salary provided in Section 3(a) above, the Company shall
have no right to offset any of the Company's payment obligations under this
Section 4(g) by the amount of employment income received by Employee from any
subsequent employer. Notwithstanding anything herein to the contrary, if
Employee's employment is not formally terminated hereunder but the Company
elects to have Employee perform no further services, then Employee shall
continue, as if Employee was continuing to render full services hereunder, to
receive all compensation and benefits otherwise payable or accruing to Employee
hereunder and to become vested in the Bonus Payment during the continuation of
the Employment Period.
(h) Immediately upon any termination of Employee's employment
hereunder or of this Agreement (whether or not pursuant to this Section 4),
Employee shall return to the Company all then existing property of the Company
heretofore provided to Employee by the Company that is in the custody,
possession or control of Employee (including, without limitation, the
"Confidential Materials" described in Paragraph 6(b) of Exhibit A attached
hereto), but excluding Employee's personal files and rolodex to the extent no
Confidential Materials are contained therein. Notwithstanding any provision of
this Agreement to the contrary, no termination of this Agreement or of
Employee's employment for any reason whatsoever shall in any manner operate to
terminate, limit or otherwise affect the Company's ownership of any of the
rights, properties or privileges granted to the Company hereunder.
5. CODE OF BUSINESS CONDUCT. Employee acknowledges that Employee has
received and reviewed the Company's Code of Business Conduct and has completed
and returned a signed copy thereof.
6. STANDARD TERMS. Attached as Exhibit A hereto and deemed a part
hereof are the Company's Standard Terms and Conditions of Employment Agreement,
all of which terms are binding on the parties hereto and incorporated herein.
For convenience, provisions of this Agreement shall be referred to as "Sections"
and provisions of the Standard Terms shall be
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referred to as "Paragraphs". In the case of any conflict between the terms of
this Agreement and the terms of Exhibit A hereto, the terms of this Agreement
shall govern.
7. SUPERSEDING AGREEMENT. This Agreement, including Exhibit A hereto,
shall constitute the full and entire understanding of the parties hereto with
respect to the subject matter hereof and shall supersede any prior agreements
with respect thereto.
8. INDEMNIFICATION. Employee shall be indemnified by the Company
(whether during or, notwithstanding anything to the contrary contained herein,
after the Employment Period) for all claims arising from or in connection with
Employee's position or services as an officer of the Company, and covered by the
Company's directors and officers insurance, which coverage shall be no less
favorable than that accorded any other current or past officer of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed on their behalf as of the date first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TELEMUNDO NETWORK GROUP LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
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EXHIBIT A
STANDARD TERMS AND CONDITIONS OF EMPLOYMENT AGREEMENT
1. Definitions. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement attached hereto. The following words,
terms and phrases (and variations thereof) used herein shall have the following
meanings:
(a) An "Affiliate" of a party means a Person which, directly
or indirectly, owns or controls, is owned or controlled by, or is under common
ownership or control with, such party.
(b) "Intellectual Property" means any and all intellectual,
artistic, literary, dramatic or musical rights, works or other materials of any
kind or nature (whether or not entitled to protection under applicable copyright
laws, or reduced to or embodied in any medium or tangible form), including
without limitation all copyrights, patents, trademarks, service marks, trade
secrets, contract rights, titles, characters, plots, themes, dialogue, stories,
scripts, treatments, outlines, submissions, ideas, concepts, packages,
compositions, artwork and logos, and all audio, visual or audio-visual works of
every kind and in every stage of development, production and completion, and all
rights to distribute, advertise, promote, exhibit or otherwise exploit any of
the foregoing by any means, media or processes now known or hereafter devised.
(c) "Media Business" means all Persons engaging in any of the
following: (i) the creation, production, distribution, exhibition or other
exploitation of theatrical motion pictures, television programs, sound
recordings or other visual, audio or audio-visual works or recordings of any
kind; (ii) television (including pay, free, over-the-air, cable and satellite)
or radio broadcasting; (iii) book, newspaper or periodical publishing; (iv)
music publishing; (v) "merchandising" (as that term is generally understood in
the entertainment industry); or (vi) advertising.
(d) "Person" means any individual, corporation, trust, estate,
partnership, joint venture, company, association, league, group, governmental
agency or other entity of any kind or nature.
2. Compensation.
(a) Employee's salary shall be payable in equal installments
(not less frequently than monthly) in accordance with the Company's customary
payroll
practices. No additional compensation shall be payable to Employee by reason of
the number of hours worked or by reason of any hours worked on Saturdays,
Sundays, holidays or otherwise. All compensation payable to Employee hereunder
(whether in the form of salary, benefits or otherwise) shall be subject to all
applicable laws, statutes, governmental regulations or orders, the terms of all
applicable Employee Benefit Plans and the terms of all agreements between or
binding upon the Company and Employee requiring the deduction or withholding of
any amounts from such payments, and the Company shall have the right to make
such deductions and withholdings in accordance with the Company's interpretation
thereof in the Company's sole judgment.
(b) Subject to Section 4 of the Agreement, Employee shall be
eligible to participate in all fringe benefits, if any, (including without
limitation, office, parking space, secretary or private assistant, business
expenses, first class travel (ground and air) and first class hotel
accommodations) maintained by the Company on the same basis as applicable
generally to the Company's most senior executives (including but not limited to
the immediately preceding Chief Executive Officer and the current Chief
Operating Officer).
(c) Subject to the requirements of Employee's position and
corporate office, Employee shall be entitled to annual vacations in accordance
with the Company's vacation policy in effect from time to time and applicable
generally to the Company's most senior executives (including but not limited to
the immediately preceding Chief Executive Officer and the current Chief
Operating Officer).
(d) The Company recognizes that, in connection with Employee's
performance of Employee's duties and obligations hereunder, Employee will incur
certain ordinary and necessary expenses of a business character. The Company
shall pay Employee for such business expenses (including without limitation
business calls from cellular phones) on the presentation of itemized statements
of such expenses, provided their extent and nature are approved in accordance
with the policies and procedures of the Company applicable generally to the
Company's most senior executives (including but not limited to the immediately
preceding Chief Executive Officer and the current Chief Operating Officer).
3. Right to Insure. The Company shall have the right to secure, in its
own name or otherwise and at its own expense, life, health, accident or other
insurance covering or otherwise insuring Employee, and Employee shall have no
right, title or interest in or to any such insurance or any of the proceeds or
benefits thereof. Employee shall fully assist and cooperate with the Company in
procuring any such insurance, including without limitation by submitting to such
examinations, and by signing such applications and other instruments, as may
reasonably be required by any insurance carrier to which application is made by
the Company for any such insurance. Employee shall have the right to have his
doctor present as well, at his own expense, at any such examination.
2
4. Employment Exclusive. Employee shall not perform services for any
Person other than the Company during the Employment Period without the prior
written consent of the Company and will not during the Employment Period engage
in any activity which would interfere with the performance of Employee's
services hereunder, or become financially interested in or associated with,
directly or indirectly, any Media Business. Notwithstanding anything herein to
the contrary, Employee may engage in charitable and/or political and/or
non-profit activities, provided that such activities do not interfere with
Employee's performance of his services hereunder.
5. Interest In Other Corporations. Notwithstanding anything to the
contrary contained in Paragraph 4 hereof, Employee may own up to one percent
(l%) of any class of any Person's outstanding securities which are listed on any
national securities exchange, registered under Section 12(g) of the Securities
Exchange Act of 1934 or otherwise publicly traded, provided that the holdings of
Employee of any such security of a Media Business or any Person which does
business with the Company or its Affiliates do not represent more than 10% of
the aggregate of Employee's investment portfolio at any time.
6. Ownership of Proceeds of Employment; Confidentiality of Information,
Etc.
(a) The Company shall be the sole and exclusive owner
throughout the universe in perpetuity of all of the results and proceeds of
Employee's services, work and labor during the Employment Period in connection
with Employee's employment by the Company, including without limitation all
Intellectual Property which Employee may develop, create, write or otherwise
produce during the Employment Period, free and clear of any and all claims,
liens or encumbrances. All results and proceeds of Employee's services, work and
labor during the Employment Period in connection with Employee's employment by
the Company shall be deemed to be works-made-for-hire for the Company within the
meaning of the copyright laws of the United States and the Company shall be
deemed to be the sole author thereof in all territories and for all purposes.
(b) All information, documents, notes, memoranda and
Intellectual Property of any kind received, compiled, produced or otherwise made
available to Employee during or in connection with Employee's employment by the
Company relating in any way to the business of the Company or of any of its
Affiliates and which has not been made available or confirmed to the public by
the Company ("Confidential Materials") shall be the sole and exclusive property
of the Company and shall in perpetuity (both during and after Employee's
employment by the Company) be maintained in utmost confidence by Employee and
held by Employee in trust for the benefit of the Company. Employee shall not
during the Employment
3
Period or at any time thereafter directly or indirectly release or disclose to
any other Person any Confidential Materials, except with the prior written
consent of the Company and in furtherance of the Company's business or as
required by law or court or other tribunal order or by subpoena (whether
Employee's or otherwise).
(c) Employee shall not (without the Company's consent),
directly or indirectly, at any time during the Employment Period or until
Employee's earlier termination (and, in the case of clause (i) below, for a
period of twelve (12) months thereafter), nor shall Employee during such time
period authorize or assist any other Person to, solicit, entice, persuade or
induce any Person to do any of the following:
(i) Terminate or refrain from extending or renewing
(on the same or different terms) such Person's employment by, or contractual or
business relationship with, the Company or any of its Affiliates (except for
Employee's secretary and/or personal assistant); or
(ii) Become employed by, enter into contractual
relationships with, or make, create, produce or distribute any motion picture,
television program or other Intellectual Property, or otherwise engage in any
Media Business, for any Person other than the Company or its Affiliates (this
clause (ii) shall not apply if the Company has exercised its Termination Rights
pursuant to Section 4 of the Agreement).
(d) The Company shall have the right to use Employee's name,
approved biography (such approval not to be unreasonably withheld), and approved
likeness (such approval not to be unreasonably withheld) in connection with its
business, including in advertising its products and services, and may grant this
right to others, but not for use as an endorsement.
7. Warranties and Covenants. Employee warrants, represents and
covenants to the Company as follows:
(a) Employee is free to enter into this Agreement and to
perform the services contemplated hereunder.
(b) Employee is not currently (and will not, to the best
knowledge and ability of Employee, at any time during the Employment Period be)
subject to any agreement, understanding, obligation, claim, litigation,
condition or disability which could adversely affect Employee's performance of
any of Employee's obligations hereunder or the Company's complete ownership and
enjoyment of all of the rights, powers and privileges granted to the Company
hereunder.
(c) No Intellectual Property written, composed, created or
submitted by Employee at any time during Employee's employment by the Company
shall, to
4
the best of Employee's knowledge, violate the rights of privacy or publicity,
constitute a libel or slander or infringe upon the copyright, literary,
personal, private, civil, property or other rights of any Person.
(d) Company represents and warrants and covenants to Employee
that it is free to enter into this Agreement and to perform its obligations
hereunder.
8. Employment after Term. Employee's employment by the Company may be
continued beyond the Expiration Date by the express consent of both parties
(which consent each party shall have the right to grant or withhold in its sole
and absolute discretion). In the event of any such continuation of Employee's
employment by the Company beyond the Expiration Date, the relationship between
the Company and Employee shall be that of employment-at-will which may be
terminated by either the Company or Employee at any time upon ten (10) days'
written notice, with or without cause, for any reason or for no reason, and
without liability of any nature. Employee's employment by the Company, if any,
after the Expiration Date shall be governed by all of the terms and conditions
of this Agreement not inconsistent with the at-will nature of such employment.
9. Immigration. In accordance with the Immigration Reform and Control
Act of 1986 and the regulations adopted thereunder (8 CFR, Parts 109 and 274a),
the obligations of the Company under this Agreement are subject to and
conditioned upon Employee verifying and delivering to the Company, within three
(3) business days of Employee's first date of employment, the Form I-9
prescribed by the Immigration and Naturalization Service, and presenting to the
officer of the Company designated therefor the original documentation required
under such regulations to establish (i) the identity of Employee and (ii) that
Employee is lawfully authorized to work in the United States. If Employee is
unable to provide the documents required within the aforesaid three (3)
business-day period, Employee must (i) present to such designated officer within
said three (3) business days a receipt for the application for the documents
prescribed and (ii) the original documents required within twenty-one (21) days
of Employee's first date of employment. If Employee fails to verify and deliver
the Form I-9 and present the required original documents within the stated time
period, this Agreement and Employee's employment hereunder shall cease and
terminate as if this Agreement had never been entered into and neither party
shall have any further right, duty or obligation to the other under this
Agreement.
10. Equitable Relief. Employee acknowledges that the services to be
rendered by Employee under this Agreement, and the rights and privileges granted
by Employee to the Company hereunder, are of a special, unique, extraordinary
and intellectual character which gives them a peculiar and special value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law, and a breach by Employee of any of the provisions hereof will
cause the Company great and irreparable injury. Employee acknowledges that the
Company
5
shall, therefore, be entitled, in addition to any other remedies which it may
have under this Agreement or at law, to seek injunctive and other equitable
relief (including without limitation specific performance) to enforce any of the
rights and privileges of the Company or any of the covenants or obligations of
Employee hereunder. Nothing contained herein, and no exercise by the Company of
any right or remedy, shall be construed as a waiver by the Company of any other
rights or remedies which the Company may have. In the event that any court or
tribunal shall at any time hereafter hold any covenants or restrictions
contained in this Agreement to be unenforceable or unreasonable as to the scope,
territory or period of time specified therein, such court shall have the power,
and is specifically requested by Employee and the Company, to declare or
determine the scope, territory or period of time which it deems to be reasonable
or enforceable and to enforce the restrictions contained therein to such extent.
11. Governing Law and Reference Proceedings
(a) The substantive laws (as distinguished from the choice of
law rules) of the State of California shall govern (i) the validity and
interpretation of this Agreement, (ii) the performance by the parties hereto of
their respective duties and obligations hereunder and (iii) all other causes of
action (whether sounding in contract or in tort) arising out of or relating in
any fashion to Employee's employment by the Company or the termination of such
employment.
(b) The parties hereto agree that any dispute or controversy
arising out of or relating to this Agreement, to the employment of Employee by
the Company or to the termination of such employment shall be decided, pursuant
to California Code of Civil Procedure ("CCP") Section 638(1), by a reference
before a Private Judge (also known as "Rent-A-Judge") sitting without a jury.
Pursuant to CCP Section 640, the Private Judge shall be a person mutually agreed
upon by the parties; provided that the parties agree to select a retired judge
from either the Los Angeles Superior Court or the United States District Court
for the Central District of California as the Private Judge. In the event that
the parties cannot agree upon a Private Judge, pursuant to CCP Section 640,
either party may apply to the Presiding Judge of the Los Angeles Superior Court
for the appointment of a Private Judge. The prevailing party in such action
shall be entitled to reasonable outside attorneys' fees and costs, provided that
if either party seeks to take an appeal from the determination of any such
Private Judge, then the prevailing party in such appeal shall be entitled to
reasonable outside attorneys' fees and costs. For the purposes hereof, the
Company and Employee each hereby submit and subject themselves irrevocably to
the personal jurisdiction of the California state and federal courts.
12. Notices. All notices, requests, demands or other communications in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if delivered in person, by telegram, by telecopier to the
applicable
6
telecopier number listed below, or by United States mail, postage prepaid,
certified or registered, with return receipt requested, or otherwise actually
delivered:
(i) if to the Company:
Telemundo Network Group LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile:
with a copy to:
Sony Pictures Entertainment Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Sony Pictures Entertainment Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Troop ▇▇▇▇▇▇▇ Pasich Reddick & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: C.N. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ III
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Liberty Media Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Facsimile:
7
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Facsimile:
(ii) if to Employee: at address shown above
with a copy to:
Del, ▇▇▇▇, ▇▇▇▇ & Moonves
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ Del
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other addresses as Employee or the Company shall have designated by
written notice to the other party hereto. Any such notice, demand or other
communication shall be deemed to have been given on the date actually delivered
(or, in the case of telecopier, on the date actually sent by telecopier) or upon
the expiration of three (3) days after the date mailed, as the case may be.
13. Service as Expert Witness. Employee acknowledges that during the
Employment Period Employee will have access to confidential and proprietary
information concerning the Company, including, without limitation, access to
various proprietary and confidential contracts and financial data. Employee
agrees that Employee shall not at any time either during or after the term of
this Agreement serve as an "expert witness" or in any similar capacity in any
litigation or other proceeding to which the Company or any of its affiliates or
subsidiaries is a party without the prior written consent of the Company or such
affiliate or subsidiary, as the case may be.
14. Miscellaneous.
(a) This Agreement and the exhibits hereto contain a complete
statement of all of the arrangements between the parties with respect to
Employee's employment by the Company, supersede all existing agreements between
them concerning Employee's employment and cannot be changed or terminated
orally. No provision of this Agreement shall be interpreted against any party
because that party or its legal representative drafted the provision. There are
no warranties, representations or covenants, oral or written, express or
implied,
8
except as expressly set forth herein. Employee acknowledges that Employee does
not rely and has not relied upon any representation or statement made by the
Company or any of its representatives relating to the subject matter of this
Agreement except as set forth herein.
(b) If any provision of this Agreement or any portion thereof
is declared by any court of competent jurisdiction to be invalid, illegal or
incapable of being enforced, the remainder of such provision, and all of the
remaining provisions of this Agreement, shall continue in full force and effect
and no provision shall be deemed dependent on any other provision unless so
expressed herein.
(c) The failure of a party to insist on strict adherence to
any term of this Agreement shall not be considered a waiver of, or deprive that
party of the right thereafter to insist on strict adherence to, that term or any
other term of this Agreement.
(d) The headings in this Agreement (including the exhibits
hereto) are solely for convenience of reference and shall not affect its
interpretation.
(e) The relationship between Employee and the Company is
exclusively that of employer and employee, and the Company's obligations to
Employee hereunder are exclusively contractual in nature.
(f) Employee shall, at the request of the Company, execute and
deliver to the Company all such documents consistent herewith as the Company may
from time to time reasonably deem necessary or desirable to evidence, protect,
enforce or defend its right, title and interest in or to any Confidential
Materials, Intellectual Property or other items described in Paragraph 6 hereof.
If Employee shall fail or refuse to execute or deliver to the Company any such
document following good faith negotiation thereof but in any event within 5
business days following the Company's written request therefor, the Company
shall have, and is granted, after reasonable notice to Employee, the power and
authority to execute the same in Employee's name, as Employee's
attorney-in-fact, which power is coupled with an interest and irrevocable.
(g) The Company may assign this Agreement, Employee's services
hereunder or any of the Company's interests herein (i) to any Person which is a
party to a merger or consolidation with the Company, or (ii) to any Person
acquiring substantially all of the assets of the Company or the unit of the
Company for which Employee is rendering services provided that Employee remains
President and Chief Executive Officer of the Company or its successor to which
all such assets or unit of the Company is assigned (this proviso is not intended
to affect the continuing termination rights of the Company and/or any assignee
pursuant to the terms of this Agreement); and, provided that any such assignee
assumes the Company's obligations under this Agreement in writing, the Company
shall thereupon be
9
relieved of any and all liability hereunder. Employee shall not have the right
to assign this Agreement or to delegate any duties imposed upon Employee under
this Agreement without the written consent of the Company, and any such
purported assignment or delegation shall be void ab initio.
10
