EXHIBIT 10.24
EMPLOYMENT AGREEMENT made as of June 13, 2001, effective July 1, 2001
(the "Effective Date"), between AOL TIME WARNER INC., a Delaware corporation
(the "Company"), and XXXXXX X. XXXXXXX.
You and the Company desire to set forth the terms and conditions of
your employment by the Company and agree as follows:
1. Term of Employment. Your "term of employment" as this phrase
is used throughout this Agreement, shall be for the period beginning on the
Effective Date and ending on June 30, 2005 (the "Term Date"), subject, however,
to earlier termination as set forth in this Agreement.
2. Employment. During the term of employment, you shall serve as
Executive Vice President, Global and Strategic Policy of the Company, and you
shall be responsible for the Company's public policy and government relations
worldwide and you shall have such additional authority, functions, duties,
powers and responsibilities as may be assigned to you from time to time by the
Company consistent with your senior position with the Company. During the term
of employment, (i) you shall be a member of the Company's Executive Committee,
for so long as it continues to exist, or any successor thereto, (ii) your
services shall be rendered on a substantially full-time, exclusive basis and you
will apply on a full-time basis all of your skill and experience to the
performance of your duties, (iii) you shall report to the Chairman or Chief
Executive Officer of the Company, (iv) you shall have no other employment and,
without the prior written consent of the Vice Chairman, Chairman or Chief
Executive Officer of the Company, no outside business activities which require
the devotion of substantial amounts of your time, and (v) the place for the
performance of your services shall be the offices of the Company in the
Washington D.C. metropolitan area (including Virginia), subject to such
reasonable travel as may be required in the performance of your duties. The
foregoing shall be subject to the Company's written policies, as in effect from
time to time, regarding vacations, holidays, illness and the like and shall not
prevent you from devoting such time to your personal affairs as shall not
interfere with the performance of your duties hereunder, including your services
as a director of other corporations, charitable and civic groups, subject to
compliance with the provisions of Section 9 hereof and other generally
applicable policies of the Company.
3. Compensation.
3.1 Base Salary. The Company shall pay you a base salary
at the rate of not less than $1,000,000 per annum during the term of employment
("Base Salary"). The Company may increase, but not decrease, your Base Salary
during the term of employment. Base Salary shall be paid in accordance with the
Company's customary payroll practices.
3.2 Bonus. In addition to Base Salary, the Company
typically pays its executives an annual cash bonus ("Bonus"). Although your
Bonus is fully discretionary, your target annual Bonus is $2,000,000. Each year,
your personal performance will be considered in the context of your executive
duties and any individual goals set for you, and your actual Bonus will be
determined. Although as a general matter the Company expects to pay bonuses at
the target level in cases of satisfactory individual performance, it does not
commit to do so, and your Bonus may be negatively affected by the exercise of
the Company's discretion or by overall Company performance.
3.3 Stock Options. Subject to your execution of this
Agreement, you will be granted a new hire option to purchase 900,000 shares of
Common Stock of the Company following your execution of this Agreement (the "New
Hire Grant"). So long as the term of employment has not terminated, you will be
eligible to receive a stock option grant in 2002 with respect to 200,000 shares
of Company Common stock. Without limiting the Company's discretion, commencing
in 2003 you will be eligible to receive annual grants of stock options and,
although the Company does not commit to do so, you will have a target annual
award of an option to purchase between 350,000 and 400,000 shares of Company
Common Stock. The Company's determination of your annual grant will be based on
a review of the same criteria, facts and circumstances as generally applied to
the Company's other Executive Vice Presidents. Each such stock option grant
shall be at an exercise price equal to the fair market value of the Common Stock
on the date of grant and shall be reflected in a separate Stock Option Agreement
in accordance with the Company's customary practices.
3.4 Restricted Stock. Subject to your execution of this
Agreement, you will be granted a one-time award of 25,000 shares of Common Stock
of the Company, one-sixth of such shares shall vest on the following dates:
December 31,
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2001, June 30, 2002, December 31, 2002, June 30, 2003, December 31, 2003 and
June 30, 2004.
3.5 Indemnification. You shall be entitled throughout the
term of employment (and after the end of the term of employment, to the extent
relating to service during the term of employment) to the benefit of the
indemnification provisions contained on the date hereof in the Certificate of
Incorporation and By-laws of the Company (not including any amendments or
additions after the date hereof that limit or narrow, but including any that add
to or broaden, the protection afforded to you by those provisions).
4. Termination.
4.1 Termination for Cause. The Company may terminate the
term of employment and all of the Company's obligations under this Agreement,
other than its obligations set forth below in this Section 4.1, for "cause".
Termination by the Company for "cause" shall mean termination because of (a)
your conviction (treating a nolo contendere plea as a conviction) of a felony
(whether or not any right to appeal has been or may be exercised), (b) willful
refusal without proper cause to perform your obligations under this Agreement,
(c) fraud, embezzlement or misappropriation or (d) because of your breach of any
of the covenants provided for in Section 9. Such termination shall be effected
by written notice thereof delivered by the Company to you and shall be effective
as of the date of such notice; provided, however, that following notice of
termination for cause, you shall have the right to appeal to the full Board of
Directors of the Company which shall have the discretion to rescind and void
such notice and termination and, if (i) such termination is because of your
willful refusal without proper cause to perform any one or more of your
obligations under this Agreement, (ii) such notice is the first such notice of
termination for any reason delivered by the Company to you under this Section
4.1, and (iii) within 15 days following the date of such notice you shall cease
your refusal and shall use your best efforts to perform such obligations, the
termination shall not be effective.
In the event of termination by the Company for cause, without
prejudice to any other rights or remedies that the Company may have at law or in
equity, the Company shall have no further obligation to you other than (i) to
pay Base Salary through the effective date of termination, (ii) to pay any Bonus
for any year prior to the year in which such termination occurs that has been
determined but not yet paid as of the
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date of such termination, and (iii) with respect to any rights you have pursuant
to any insurance or other benefit plans or arrangements of the Company. You
hereby disclaim any right to receive a pro rata portion of any Bonus with
respect to the year in which such termination occurs.
4.2 Termination by You for Material Breach by the Company
and Termination by the Company Without Cause. Unless previously terminated
pursuant to any other provision of this Agreement and unless a Disability Period
shall be in effect, you shall have the right, exercisable by written notice to
the Company, to terminate the term of employment effective 15 days after the
giving of such notice, if, at the time of the giving of such notice, the Company
is in material breach of its obligations under this Agreement; provided,
however, that, with the exception of clause (i) below, this Agreement shall not
so terminate if such notice is the first such notice of termination delivered by
you pursuant to this Section 4.2 and within such 15-day period the Company shall
have cured all such material breaches. A material breach by the Company shall
include, but not be limited to, (i) the Company violating Section 2 with respect
to your title, reporting lines, duties or place of employment, or (ii) the
Company failing to cause any successor to all or substantially all of the
business and assets of the Company expressly to assume the obligations of the
Company under this Agreement.
The Company shall have the right, exercisable by written
notice to you, to terminate your employment under this Agreement without cause,
which notice shall specify the effective date of such termination.
4.2.1 After the effective date of a termination
pursuant to this Section 4.2 (a "termination without cause"), you shall receive
Base Salary and a pro rata portion of your Average Annual Bonus (as defined
below) through the effective date of termination. Your Average Annual Bonus
shall be equal to the average of the regular annual bonus amounts (excluding the
amount of any special or spot bonuses) in respect of the two calendar years
during the most recent five calendar years for which the annual bonus received
by you from the Company was the greatest; provided, however, if the Company has
previously paid you no annual Bonus, then your Average Annual Bonus shall equal
your target Bonus and if the Company has previously paid you one annual Bonus,
then your Average Annual Bonus shall equal the average of such Bonus and your
target Bonus.
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4.2.2 After the effective date of a termination
without cause, you shall remain an employee of the Company for a period ending
on the date (the "Severance Term Date") which is the later of (i) the Term Date
and (ii) the date which is 12 months after the effective date of such
termination and during such period you shall be entitled to receive, whether or
not you become disabled during such period but subject to Section 6, (a) Base
Salary at an annual rate equal to your Base Salary in effect immediately prior
to the notice of termination, and (b) an annual Bonus in respect of each
calendar year or portion thereof (in which case a pro rata portion of such Bonus
will be payable) during such period equal to your Average Annual Bonus. Except
as provided in the second succeeding sentence, if you accept other full-time
employment during such period or notify the Company in writing of your intention
to terminate your status as an employee during such period for any other reason,
you shall cease to be an employee of the Company effective upon the commencement
of such other employment or the effective date of such termination as specified
by you in such notice, whichever is applicable, and you shall be entitled to
receive, as severance, a lump sum payment within 30 days after such commencement
or such effective date (provided that if you were named in the compensation
table in the Company's then most recent proxy statement, such lump sum payment
shall be made within 30 days after the end of the calendar year in which such
commencement or effective date occurred), discounted as provided in the
immediately following sentence, equal to the balance of the payments you would
have received pursuant to this Section 4.2.2 had you remained on the Company's
payroll. That lump sum shall be discounted to present value as of the date of
payment from the times at which such amounts would otherwise have become payable
absent such commencement or termination at an annual discount rate for the
relevant periods equal to 120% of the "applicable Federal rate" (within the
meaning of Section 1274(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), in effect on the date of such commencement or termination, compounded
semi-annually. Notwithstanding the foregoing, if you accept employment with any
not-for-profit entity, then you shall be entitled to remain an employee of the
Company and receive the payments as provided in the first sentence of this
Section 4.2.2; and if you accept full-time employment with any affiliate of the
Company, then the payments provided for in this Section 4.2.2 shall immediately
cease and you shall not be entitled to any lump sum payment. For purposes of
this Agreement, the term "affiliate" shall mean any entity which, directly or
indirectly, controls, is controlled by, or is under common control with, the
Company.
4.3 After the Term Date. If at the Term Date, the term of
employment shall not have been previously terminated pursuant to the provisions
of this
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Agreement, no Disability Period is then in effect and the parties shall not have
agreed to an extension or renewal of this Agreement or on the terms of a new
employment agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the Company
pursuant to the terms of this Agreement, subject to termination by either party
hereto on 60 days written notice delivered to the other party (which notice may
be delivered by either party at any time on or after the date which is 60 days
prior to the Term Date). If the Company shall terminate the term of employment
on or after the Term Date for any reason (other than for cause as defined in
Section 4.1, in which case Section 4.1 shall apply), which the Company shall
have the right to do so long as no Disability Date (as defined in Section 5) has
occurred prior to the delivery by the Company of written notice of termination,
then such termination shall be deemed for all purposes of this Agreement to be a
"termination without cause" under Section 4.2 and the provisions of Sections
4.2.1 and 4.2.2 shall apply.
4.4 Office Facilities. In the event of a termination
without cause, then for the period beginning on the effective date of such
termination and ending on the earlier of (a) twelve months thereafter or (b) the
date you commence other full-time employment, the Company shall, without charge
to you, make available to you office space at or near your principal job
location immediately prior to such termination, together with secretarial
services, office facilities, services and furnishings, in each case reasonably
appropriate to an employee of your position and responsibilities prior to such
termination but taking into account your reduced need for such office space,
secretarial services and office facilities, services and furnishings as a result
of you no longer being a full-time employee.
4.5 Release. A condition precedent to the Company's
obligation to make the payments associated with a termination without cause
shall be your execution and delivery of a release in the form attached hereto as
Annex A. Within ten days of receipt by the Company of such release signed by
you, the Company shall deliver to you a release substantially in the form
attached hereto as Annex B, signed by the Company. If you shall fail to execute
and deliver such release, or if you revoke such release as provided therein,
then in lieu of the payments provided for herein, you shall receive a severance
payment determined in accordance with the Company's policies relating to notice
and severance.
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4.6 Mitigation. In the event of a termination without
cause under this Agreement, you shall not be required to seek other employment
in order to mitigate your damages hereunder unless Section 280G of the Code
would apply to any payments to you by the Company and your failure to mitigate
would result in the Company losing tax deductions to which it would otherwise
have been entitled. In such an event, you will engage in whatsoever mitigation
is necessary to preserve the Company's tax deductions. With respect to the
preceding sentences, any payments or rights to which you are entitled by reason
of the termination of employment without cause shall be considered as damages
hereunder. Any obligation to mitigate your damages pursuant to this Section 4.6
shall not be a defense or offset to the Company's obligation to pay you in full
the amounts provided in this Agreement upon the occurrence of a termination
without cause, at the time provided herein, or the timely and full performance
of any of the Company's other obligations under this Agreement.
4.7 Payments. So long as you remain on the payroll of the
Company or any subsidiary of the Company, payments of Base Salary and Bonus
required to be made after a termination without cause shall be made at the same
times as similar payments are made to other senior executives of the Company.
5. Disability.
5.1 Disability Payments. If during the term of employment
and prior to the delivery of any notice of termination without cause, you become
physically or mentally disabled, whether totally or partially, so that you are
prevented from performing your usual duties for a period of six consecutive
months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay your full compensation
through the last day of the sixth consecutive month of disability or the date on
which the shorter periods of disability shall have equaled a total of six months
in any twelve-month period (such last day or date being referred to herein as
the "Disability Date"). If you have not resumed your usual duties on or prior to
the Disability Date, the Company shall pay you a pro rata Bonus (based on your
Average Annual Bonus) for the year in which the Disability Date occurs and
thereafter shall pay you disability benefits for the period ending on the later
of (i) the Term Date or (ii) the date which is 12 months after the Disability
Date (in the case of either (i) or (ii), the "Disability Period"), in an annual
amount equal to 75% of (a) your Base Salary at the time you become disabled and
(b) the Average Annual Bonus.
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5.2 Recovery from Disability. If during the Disability
Period you shall fully recover from your disability, the Company shall have the
right (exercisable within 60 days after notice from you of such recovery), but
not the obligation, to restore you to full-time service at full compensation. If
the Company elects to restore you to full-time service, then this Agreement
shall continue in full force and effect in all respects and the Term Date shall
not be extended by virtue of the occurrence of the Disability Period. If the
Company elects not to restore you to full-time service, you shall be entitled to
obtain other employment, subject, however, to the following: (i) you shall
perform advisory services during any balance of the Disability Period; and (ii)
you shall comply with the provisions of Sections 9 and 10 during the Disability
Period. The advisory services referred to in clause (i) of the immediately
preceding sentence shall consist of rendering strategic policy advice as
requested by the Company but you shall not be required to devote more than five
days (up to eight hours per day) each month to such services, which shall be
performed at a time and place mutually convenient to both parties. Any income
from such other employment shall not be applied to reduce the Company's
obligations under this Agreement.
5.3 Other Disability Provisions. The Company shall be
entitled to deduct from all payments to be made to you during the Disability
Period pursuant to this Section 5 an amount equal to all disability payments
received by you during the Disability Period from Worker's Compensation, Social
Security and disability insurance policies maintained by the Company; provided,
however, that for so long as, and to the extent that, proceeds paid to you from
such disability insurance policies are not includible in your income for federal
income tax purposes, the Company's deduction with respect to such payments shall
be equal to the product of (i) such payments and (ii) a fraction, the numerator
of which is one and the denominator of which is one less the maximum marginal
rate of federal income taxes applicable to individuals at the time of receipt of
such payments. All payments made under this Section 5 after the Disability Date
are intended to be disability payments, regardless of the manner in which they
are computed. Except as otherwise provided in this Section 5, the term of
employment shall continue during the Disability Period and you shall be entitled
to all of the rights and benefits provided for in this Agreement, except that
Sections 4.2 and 4.3 shall not apply during the Disability Period and unless the
Company has restored you to full-time service at full compensation prior to the
end of the Disability Period, the term of employment shall end and you shall
cease to be an employee of the Company at the end of the Disability Period and
shall not be entitled to notice and severance or to receive or be paid for any
accrued vacation time or unused sabbatical.
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6. Death. If you die during the term of employment, this
Agreement and all obligations of the Company to make any payments hereunder
shall terminate except that your estate (or a designated beneficiary) shall be
entitled to receive Base Salary to the last day of the month in which your death
occurs and Bonus compensation (at the time bonuses are normally paid) based on
the Average Annual Bonus, but prorated according to the number of whole or
partial months you were employed by the Company in such calendar year.
7. Life Insurance. During your employment with the Company, the
Company shall (i) provide you with $50,000 of group life insurance and (ii) pay
you annually an amount equal to two times the premium you would have to pay to
obtain life insurance under the Group Universal Life ("GUL") insurance program
made available by the Company in an amount equal to $3,000,000. You shall be
under no obligation to use the payments made by the Company pursuant to the
preceding sentence to purchase GUL insurance or to purchase any other life
insurance. If the Company discontinues its GUL insurance program, the Company
shall nevertheless make the payments required by this Section 7 as if such
program were still in effect. The payments made to you hereunder shall not be
considered as "salary" or "compensation" or "bonus" in determining the amount of
any payment under any retirement, profit-sharing or other benefit plan of the
Company or any subsidiary of the Company.
8. Other Benefits.
8.1 General Availability. To the extent that (a) you are
eligible under the general provisions thereof (including without limitation, any
plan provision providing for participation to be limited to persons who were
employees of the company or certain of its subsidiaries prior to a specific
point in time) and (b) the Company maintains such plan or program for the
benefit of its executives, during the term of employment and so long as you are
an employee of the Company, you shall be eligible to participate in any savings
or similar plan or program and in any group life insurance (to the extent set
forth in Section 7), hospitalization, medical, dental, accident, disability or
similar plan or program of the Company now existing or established hereafter. It
is understood and acknowledged that any obligation you may have to fulfill
annual U.S. Army Reserve duty will be in addition to your regular annual
vacation time.
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8.2 Benefits After a Termination or Disability. During
the period you remain on the payroll of the Company after a termination without
cause or during the Disability Period, you shall continue to be eligible to
participate in the benefit plans and to receive the benefits required to be
provided to you under this Agreement to the extent such benefits are maintained
in effect by the Company for its executives; provided, however, you shall not be
entitled to any additional awards or grants under any stock option, restricted
stock or other stock based incentive plan. At the time you leave the payroll of
the Company, your rights to benefits and payments under any benefit plans or any
insurance or other death benefit plans or arrangements of the Company or under
any stock option, restricted stock, stock appreciation right, bonus unit,
management incentive or other plan of the Company shall be determined in
accordance with the terms and provisions of such plans and any agreements under
which such stock options, restricted stock or other awards were granted.
However, notwithstanding the foregoing or any more restrictive provisions of any
such plan or agreement, if your employment with the Company is terminated as a
result of a termination pursuant to Section 4.2, then (i) all stock options
granted to you by the Company which would have vested on or before the Severance
Term Date (or the comparable date of any employment agreement that amends,
replaces or supersedes this Agreement) shall vest and become immediately
exercisable, including, without limitation, all of the New Hire Grant, (ii) all
your vested options shall remain exercisable while you are on the payroll of the
Company and for a period of three years after the date you leave the payroll of
the Company (but not beyond the term of such options), (iii) the Company shall
not be permitted to determine that your employment was terminated for
"unsatisfactory performance" within the meaning of any stock option agreement
between you and the Company, and (iv) all restricted shares granted to you by
the Company shall vest.
8.3 Relocation Reimbursement and Assistance. You shall be
eligible to receive the highest level of benefits under the Company's executive
relocation program in connection with the relocation of you and your family to
Washington, D.C. from San Francisco (including, without limitation, home
purchase and sale assistance, loss on sale coverage and reimbursement for moving
of household goods and furniture, all as provided in and in accordance with such
policy). In addition, the Company will provide temporary housing in the
Washington, D.C. area for up to 15 months.
8.4 Payments in Lieu of Other Benefits. In the event the
term of employment and your employment with the Company is terminated pursuant
to any section of this Agreement, you shall not be entitled to notice and
severance under the
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Company's general employee policies or to be paid for any accrued vacation time
or unused sabbatical, the payments provided for in such sections being in lieu
thereof.
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9. Protection of Confidential Information; Non-Compete.
9.1 Confidentiality Covenant. You acknowledge that your
employment by the Company (which, for purposes of this Section 9 shall mean AOL
Time Warner Inc. and its affiliates) will, throughout the term of employment,
bring you into close contact with many confidential affairs of the Company,
including information about costs, profits, markets, sales, products, key
personnel, pricing policies, operational methods, technical processes and other
business affairs and methods and other information not readily available to the
public, and plans for future development. You further acknowledge that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. You further acknowledge that the
business of the Company is international in scope, that its products and
services are marketed throughout the world, that the Company competes in nearly
all of its business activities with other entities that are or could be located
in nearly any part of the world and that the nature of your services, position
and expertise are such that you are capable of competing with the Company from
nearly any location in the world. In recognition of the foregoing, you covenant
and agree:
9.1.1 You shall keep secret all confidential
matters of the Company and shall not disclose such matters to anyone outside of
the Company, or to anyone inside the Company who does not have a need to know or
use such information, and shall not use such information for personal benefit or
the benefit of a third party, either during or after the term of employment,
except with the Company's written consent, provided that (i) you shall have no
such obligation to the extent such matters are or become publicly known other
than as a result of your breach of your obligations hereunder and (ii) you may,
after giving prior notice to the Company to the extent practicable under the
circumstances, disclose such matters to the extent required by applicable laws
or governmental regulations or judicial or regulatory process;
9.1.2 You shall deliver promptly to the Company on
termination of your employment, or at any other time the Company may so request,
all memoranda, notes, records, reports and other documents (and all copies
thereof) relating to the Company's business, which you obtained while employed
by, or otherwise serving or acting on behalf of, the Company and which you may
then possess or have under your control; and
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9.1.3 If the term of employment is terminated
pursuant to Section 4, for a period of one year after such termination, without
the prior written consent of the Company, you shall not employ, and shall not
cause any entity of which you are an affiliate to employ, any person who was a
full-time employee of the Company at the date of such termination or within six
months prior thereto but such prohibition shall not apply to your secretary or
executive assistant or to any other employee eligible to receive overtime pay.
9.2 Non-Compete. During the term of employment and
through the later of , (i) the date you leave the payroll of the Company, and
(ii) twelve months after the effective date of any termination of the term of
employment pursuant to Section 4, you shall not, directly or indirectly, without
the prior written consent of the Vice Chairman, Chairman or Chief Executive
Officer of the Company, render any services to, or act in any capacity for, any
Competitive Entity, or acquire any interest of any type in any Competitive
Entity; provided, however, that the foregoing shall not be deemed to prohibit
you from acquiring, (a) solely as an investment and through market purchases,
securities of any Competitive Entity which are registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934 and which are publicly traded, so
long as you are not part of any control group of such Competitive Entity and
such securities, including converted securities, do not constitute more than one
percent (1%) of the outstanding voting power of that entity and (b) securities
of any Competitive Entity that are not publicly traded, so long as you are not
part of any control group of such Competitive Entity and such securities,
including converted securities, do not constitute more than three percent (3%)
of the outstanding voting power of that entity. For purposes of the foregoing,
the following shall be deemed to be a Competitive Entity: (x) during the period
that you are actively employed with the Company, any person or entity that
engages in any line of business that is substantially the same as either (i) any
line of business which the Company engages in, conducts or, to your knowledge,
has definitive plans to engage in or conduct or (ii) any operating business that
is engaged in or conducted by the Company as to which, to your knowledge, the
Company covenants, in writing, not to compete with in connection with the
disposition of such business, and (y) during the period following a termination
of your term of employment pursuant to Section 4 or 5.2, any of the following:
AT&T Corporation, Bertelsmann A.G., The Xxxx Disney Company, EarthLink, Inc.,
General Electric Corporation, Microsoft Corporation, The News Corporation, Sony
Corporation, Vivendi Universal, S.A., Viacom Inc. and Yahoo! Inc., and their
respective subsidiaries and affiliates and any successor to any internet service
provider, media or entertainment business thereof;
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provided that it is understood and agreed that you are not prohibited from
accepting employment with any law, consulting or financial services firm
providing services to or on behalf of any of the foregoing entities, so long as
appropriate steps are taken to ensure that you do not have any direct
involvement in rendering services to, or acting in any capacity for, any of the
foregoing entities.
10. Ownership of Work Product. You acknowledge that during the
term of employment, you may conceive of, discover, invent or create inventions,
improvements, new contributions, literary property, material, ideas and
discoveries, whether patentable or copyrightable or not (all of the foregoing
being collectively referred to herein as "Work Product"), and that various
business opportunities shall be presented to you by reason of your employment by
the Company. You acknowledge that all of the foregoing shall be owned by and
belong exclusively to the Company and that you shall have no personal interest
therein, provided that they are either related in any manner to the business
(commercial or experimental) of the Company, or are, in the case of Work
Product, conceived or made on the Company's time or with the use of the
Company's facilities or materials, or, in the case of business opportunities,
are presented to you for the possible interest or participation of the Company.
You shall (i) promptly disclose any such Work Product and business opportunities
to the Company; (ii) assign to the Company, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(iii) sign all papers necessary to carry out the foregoing; and (iv) give
testimony in support of your inventorship or creation in any appropriate case.
You agree that you will not assert any rights to any Work Product or business
opportunity as having been made or acquired by you prior to the date of this
Agreement except for Work Product or business opportunities, if any, disclosed
to and acknowledged by the Company in writing prior to the date hereof.
11. Notices. All notices, requests, consents and other
communications required or permitted to be given under this Agreement shall be
effective only if given in writing and shall be deemed to have been duly given
if delivered personally or sent by a nationally recognized overnight delivery
service, or mailed first-class, postage prepaid, by registered or certified
mail, as follows (or to such other or additional address as either party shall
designate by notice in writing to the other in accordance herewith):
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11.1 If to the Company:
AOL Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President - Global
Compensation and Benefits
(with a copy, similarly addressed
but Attention: General Counsel)
11.2 If to you, to your residence address set forth on the
records of the Company, with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
12. General.
12.1 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the substantive laws of the State
of New York applicable to agreements made and to be performed entirely in New
York.
12.2 Captions. The section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.3 Entire Agreement. This Agreement, including the
Annexes hereto, sets forth the entire agreement and understanding of the parties
relating to the subject matter of this Agreement and supersedes all prior
agreements, arrangements and understandings, written or oral, between the
parties.
12.4 No Other Representations. No representation, promise
or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or be liable for any alleged
representation, promise or inducement not so set forth.
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12.5 Assignability. This Agreement and your rights and
obligations hereunder may not be assigned by you and except as specifically
contemplated in this Agreement, neither you, your legal representative nor any
beneficiary designated by you shall have any right, without the prior written
consent of the Company, to assign, transfer, pledge, hypothecate, anticipate or
commute to any person or entity any payment due in the future pursuant to any
provision of this Agreement, and any attempt to do so shall be void and shall
not be recognized by the Company. The Company shall assign its rights together
with its obligations hereunder in connection with any sale, transfer or other
disposition of all or substantially all of the Company's business and assets,
whether by merger, purchase of stock or assets or otherwise, as the case may be.
Upon any such assignment, the Company shall cause any such successor expressly
to assume such obligations, and such rights and obligations shall inure to and
be binding upon any such successor.
12.6 Amendments; Waivers. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended and the terms or covenants
hereof may be waived only by written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The failure
of either party at any time or times to require performance of any provision
hereof shall in no manner affect such party's right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement.
12.7 Specific Remedy. In addition to such other rights and
remedies as the Company may have at equity or in law with respect to any breach
of this Agreement, if you commit a material breach of any of the provisions of
Sections 9.1, 9.2, or 10, the Company shall have the right and remedy to have
such provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company.
12.8 Resolution of Disputes. Except as provided in the
preceding Section 12.7, any dispute or controversy arising with respect to this
Agreement and your employment hereunder (whether based on contract or tort or
upon
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any federal, state or local statute, including but not limited to claims
asserted under the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, as amended, any state Fair Employment Practices Act and/or
the Americans with Disability Act) shall, at the election of either you or the
Company, be submitted to JAMS/ENDISPUTE for resolution in arbitration in
accordance with the rules and procedures of JAMS/ENDISPUTE. Either party shall
make such election by delivering written notice thereof to the other party at
any time (but not later than 45 days after such party receives notice of the
commencement of any administrative or regulatory proceeding or the filing of any
lawsuit relating to any such dispute or controversy) and thereupon any such
dispute or controversy shall be resolved only in accordance with the provisions
of this Section 12.8. Any such proceedings shall take place in New York City
before a single arbitrator (rather than a panel of arbitrators), pursuant to any
streamlined or expedited (rather than a comprehensive) arbitration process,
before a non-judicial (rather than a judicial) arbitrator, and in accordance
with an arbitration process which, in the judgment of such arbitrator, shall
have the effect of reasonably limiting or reducing the cost of such arbitration.
The resolution of any such dispute or controversy by the arbitrator appointed in
accordance with the procedures of JAMS/ENDISPUTE shall be final and binding.
Judgment upon the award rendered by such arbitrator may be entered in any court
having jurisdiction thereof, and the parties consent to the jurisdiction of the
New York courts for this purpose. The prevailing party shall be entitled to
recover the costs of arbitration (including reasonable attorneys fees and the
fees of experts) from the losing party. If at the time any dispute or
controversy arises with respect to this Agreement, JAMS/ENDISPUTE is not in
business or is no longer providing arbitration services, then the American
Arbitration Association shall be substituted for JAMS/ENDISPUTE for the purposes
of the foregoing provisions of this Section 12.8. If you shall be the prevailing
party in such arbitration, the Company shall promptly pay, upon your demand, all
legal fees, court costs and other costs and expenses incurred by you in any
legal action seeking to enforce the award in any court.
12.9 Beneficiaries. Whenever this Agreement provides for
any payment to your estate, such payment may be made instead to such beneficiary
or beneficiaries as you may designate by written notice to the Company. You
shall have the right to revoke any such designation and to redesignate a
beneficiary or beneficiaries by written notice to the Company (and to any
applicable insurance company) to such effect.
12.10 No Conflict. You represent and warrant to the Company
that this Agreement is legal, valid and binding upon you and the execution of
this
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Agreement and the performance of your obligations hereunder does not and will
not constitute a breach of, or conflict with the terms or provisions of, any
agreement or understanding to which you are a party (including, without
limitation, any other employment agreement). The Company represents and warrants
to you that this Agreement is legal, valid and binding upon the Company and the
execution of this Agreement and the performance of the Company's obligations
hereunder does not and will not constitute a breach of, or conflict with the
terms or provisions of, any agreement or understanding to which the Company is a
party.
12.11 Withholding Taxes. Payments made to you pursuant to
this Agreement shall be subject to withholding and social security taxes and
other ordinary and customary payroll deductions.
12.12 No Offset. Neither you nor the Company shall have any
right to offset any amounts owed by one party hereunder against amounts owed or
claimed to be owed to such party, whether pursuant to this Agreement or
otherwise, and you and the Company shall make all the payments provided for in
this Agreement in a timely manner.
12.13 Severability. If any provision of this Agreement
shall be held invalid, the remainder of this Agreement shall not be affected
thereby; provided, however, that the parties shall negotiate in good faith with
respect to equitable modification of the provision or application thereof held
to be invalid. To the extent that it may effectively do so under applicable law,
each party hereby waives any provision of law which renders any provision of
this Agreement invalid, illegal or unenforceable in any respect.
12.14 Survival. Sections 3.5, 8.4 and 9 through 12 shall
survive any termination of the term of employment by the Company for cause
pursuant to Section 4.1. Sections 3.4, 4.5, 4.6, 4.7 and 8 through 12 shall
survive any termination of the term of employment pursuant to Sections 4.2, 5 or
6.
12.15 Definitions. The following terms are defined in this
Agreement in the places indicated:
affiliate - Section 4.2.2
Average Annual Bonus - Section 4.2.1
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Base Salary - Section 3.1
Bonus - Section 3.2
cause - Section 4.1
Code - Section 4.2.2
Company - the first paragraph on page 1 and Section 9.1
Competitive Entity - Section 9.2
Disability Date - Section 5
Disability Period - Section 5
Effective Date - the first paragraph on page 1
Severance Term Date - Section 4.2.2
Term Date - Section 1
term of employment - Section 1
termination without cause - Section 4.2.1
Work Product - Section 10
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
AOL TIME WARNER INC.
By: /s/ Xxxxxxx X. Case
---------------------------
Xxxxxxx X. Case
/s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
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ANNEX A
RELEASE
Pursuant to the terms of the Employment Agreement made as of
_____________, between AOL TIME WARNER INC., a Delaware corporation (the
"Company"), 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the undersigned
(the "Agreement"), and in consideration of the payments made to me and other
benefits to be received by me pursuant thereto, I, [Name], being of lawful age,
do hereby release and forever discharge the Company and any successors,
subsidiaries, affiliates, related entities, predecessors, merged entities and
parent entities and their respective officers, directors, shareholders,
employees, benefit plan administrators and trustees, agents, attorneys,
insurers, representatives, affiliates, successors and assigns from any and all
actions, causes of action, claims, or demands for general, special or punitive
damages, attorney's fees, expenses, or other compensation or damages
(collectively, "Claims"), which in any way relate to or arise out of my
employment with the Company or any of its subsidiaries or the termination of
such employment, which I may now or hereafter have under any federal, state or
local law, regulation or order, including without limitation, Claims related to
any stock options held by me or granted to me by the Company that are scheduled
to vest subsequent to my termination of employment and Claims under the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Fair Labor Standards Act, the Family and
Medical Leave Act and the Employee Retirement Income Security Act, each as
amended through and including the date of this Release; provided, however, that
the execution of this Release shall not prevent the undersigned from bringing a
lawsuit against the Company to enforce its obligations under the Agreement.
I acknowledge that I have been given at least 21 days from the day I
received a copy of this Release to sign it and that I have been advised to
consult an attorney. I understand that I have the right to revoke my consent to
this Release for seven days following my signing. This Release shall not become
effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.
I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP
VALAUBLE LEGAL RIGHTS AND THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE
SIGNING. I further state that I have read this document and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.
WITNESS my hand this ____ day of ___________, ____.
_____________________________
[Name]
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ANNEX B
Release
In connection with the Employment Agreement made June ___, 2001,
effective July 1, 2001 between AOL TIME WARNER INC. (the "Company") and Xxxxxx X
Xxxxxxx ("Executive") (the "Agreement"), the Company does hereby release and
forever discharge Executive and his estate, heirs, beneficiaries and
representatives, for any and all actions, causes of action, claims, or demands
for general, special or punitive damages, attorney's fees, expenses, or other
compensation or damages, which in any way relate to or arise out of his
employment with the Company or any of its subsidiaries or the termination of
such employment which the Company may now or hereafter have under any federal,
state or local law, regulation or order, through and including the date of this
Release; provided, however, that the execution of this Release shall not prevent
the Company from bringing a lawsuit against Executive (x) to enforce Executive's
obligations under Section 9 of the Agreement, or (y) to seek damages or
reimbursement for fraud or embezzlement committed by Executive during his
employment with the Company.
IN WITNESS WHEREOF the Company has caused this Release to be executed
on its behalf by a duly authorized officer this ___ day of _______, 200__.
AOL TIME WARNER INC.
By:____________________________
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June 14, 2001
Xxxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Dear Xxx:
AOL Time Warner will arrange for you to receive a substitute loan on
substantially the same terms and conditions as the First Amended Relocation Loan
Agreement entered into as of January 31, 2001 between you and Commerce One, Inc.
Where terms need to be changed, such changes will not have an adverse financial
impact on you.
Sincerely,
AOL Time Warner Inc.
By /s/ Xxxx X. Xxxxxxx
-------------------------
Xxxx X. Xxxxxxx
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