EXHIBIT 10.1
XXXXXXX RADIO CORP.
0 XXXXX XXXX
XXXXXXXXXX, XX 00000
February 21, 2006
Via Hand Delivery
Xx. Xxx X. Xxxxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
RE: Separation Agreement with Xxxxxxx Radio
Dear Guy:
In furtherance of the business transactions presently being or to be
contemplated and/or negotiated by Xxxxxxx Radio Corp. ("Xxxxxxx Radio"), the
present state of Xxxxxxx'x business and the need for your assistance by the
continued performance of your job duties as Chief Financial Officer of Xxxxxxx
Radio, this letter agreement ("Agreement") shall confirm the following:
1. In the event that (a) Xxxxxxx Radio terminates your employment at any time
for Cause (as defined below) or (b) your employment relationship with Xxxxxxx
terminates as a result of your death, then Xxxxxxx Radio's sole obligation to
you under this Agreement or otherwise shall be to (i) pay any base salary earned
by you, but not yet paid, prior to the effective date of such termination, (ii)
pay to you an amount necessary to reimburse you for all vacation/sick/personal
days which accrued on or after April 1, 2005 and were unused as of the date of
termination of employment and (iii) pay and/or provide any other amounts or
benefits that are vested amounts or vested benefits or that you are otherwise
entitled to receive under any plan, program, policy, or practice (with the
exception of those, if any, relating to severance) on the date of termination,
in accordance with such plan, program policy or practice (clauses (i) and (ii)
of this sentence are collectively referred to herein as the "Accrued
Obligations").
2. In the event that (a) Xxxxxxx Radio terminates your employment at any time
without Cause, or (b) your employment with Xxxxxxx Radio is terminated at any
time as a result of your Permanent Disability (as defined below), then Xxxxxxx
Radio's sole obligation to you under this Agreement or otherwise shall be to (i)
pay and/or provide to you or your estate, as applicable, the Accrued
Obligations, and (ii) subject to your execution, delivery and non-revocation of
a separation and general release in the form attached to this letter as Exhibit
A, (y) pay to you an aggregate amount equal to your annual base salary as in
effect on the date of termination (less applicable withholdings and customary
payroll deductions) (the "Severance Payment"), and (z) if you timely elect COBRA
coverage and provided you continue to make contributions to such continuation
coverage equal to your contribution amount in effect immediately preceding the
date of your termination of employment, Xxxxxxx Radio will pay the remaining
portion of your healthcare continuation payments under COBRA for a 12-month
period following the date of your termination of employment (unless you sooner
become eligible to obtain healthcare coverage from a new employer, in which case
Xxxxxxx Radio's obligation to pay its portion of your healthcare continuation
payments shall cease) (the "Subsidized COBRA Coverage"). The Severance Payment
shall be payable in equal installments over a 12-month period in accordance with
Xxxxxxx Radio's customary payroll practices, commencing on the next regular
paydate following the 8th day after your execution and delivery of the Release
(in the form attached as Exhibit A).
3. In the event that you resign from your employment with Xxxxxxx Radio at any
time for any reason or no reason, then Xxxxxxx Radio's sole obligation to you
under this Agreement or otherwise shall be to (i) pay and/or provide to you the
Accrued Obligations, and (ii) subject to your execution, delivery and
non-revocation of a separation and general release agreement in the form
attached to this letter as Exhibit B, (y) execute and deliver to you, and
perform its obligations under, the consulting agreement in the form attached to
this Agreement as Exhibit C (the "Consulting Agreement"), and (z) provide the
Subsidized COBRA Coverage; provided, however, in the event that you resign from
your employment after February 28, 2006, in lieu of the Subsidized COBRA
Coverage, if you timely elect and obtain COBRA coverage (at your sole cost and
expense), Xxxxxxx Radio shall reimburse you for the portion of your healthcare
continuation payments under COBRA that exceed your contribution amount to
medical insurance in effect immediately preceding the date of resignation that
are incurred by you during the 12-month period following the effective date of
your resignation ("COBRA Reimbursement"). If applicable, Xxxxxxx Radio's
obligation to provide the COBRA Reimbursement shall commence 180 days after the
date of your resignation and you will receive on (or within 10 days following)
the 180th day following your date of resignation a lump sum COBRA Reimbursement
amount equal to Xxxxxxx Radio's accrued COBRA Reimbursement obligations through
such payment date and, thereafter, will receive the remaining COBRA
Reimbursement on a monthly basis.
4. In addition to the payments and benefits set forth in Sections 2 and 3 above,
in the event that (a) your employment is terminated at any time by Xxxxxxx Radio
other than for Cause, (b) your employment with Xxxxxxx Radio is terminated at
any time as a result of your Permanent Disability, or (c) you resign from your
employment with Xxxxxxx Radio for any reason or no reason, then, subject to your
execution, delivery and non-revocation of the Release (in the form attached as
Exhibit A or Exhibit B, as applicable), all stock options granted to you by
Xxxxxxx Radio to purchase shares of its common stock pursuant to the Xxxxxxx
Radio Corp. 2004 Employee Stock Incentive Plan (the "Plan") shall become
exercisable in full immediately upon the expiration of the revocation period set
forth in the applicable Release. All of your currently outstanding options shall
remain exercisable by you for the applicable periods following the termination
of your employment as set forth in the stock option plan of Xxxxxxx Radio under
which such options were issued and, at your request, Xxxxxxx Radio will provide
a positive letter of recommendation to your potential future employers, in a
form reasonably acceptable to Xxxxxxx Radio and you.
5. Xxxxxxx Radio will promptly reimburse you for the legal fees incurred by you
in connection with the negotiation and execution of this Agreement up to
$11,000, subject to your presentation to Xxxxxxx Radio of invoices
substantiating such fees.
6. As used in this Agreement, the following terms shall have the respective
meanings set forth below:
(a) "Cause" means your (i) continued and willful failure to perform
substantially your duties (including the duties associated with your position as
CFO, as well as such transition-related duties as are reasonably assigned to
you) to Xxxxxxx Radio or its affiliates (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to you by Xxxxxxx Radio that specifically
identifies the manner in which Xxxxxxx Radio believes that you have not
substantially performed your duties and a reasonable time for such substantial
performance has elapsed since delivery of such demand, or (ii) willful
engagement in illegal conduct or gross misconduct that is materially injurious
to Xxxxxxx Radio or its affiliates. For purposes of the definition of "Cause,"
no act or failure to act, on your part, shall be considered "willful" unless it
is done, or omitted to be done, by you in bad faith or without reasonable belief
that your action or omission was in the best interests of Xxxxxxx Radio. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board of Directors of Xxxxxxx Radio (the "Board") or upon the
instructions of the Chief Executive Officer of Xxxxxxx Radio or based upon the
advice of counsel for Xxxxxxx Radio shall be conclusively presumed to be done,
or omitted to be done, by you in good faith and in the best interests of Xxxxxxx
Radio. Further, your failure to agree to travel on Xxxxxxx Radio business (other
than to Dallas or California for operational matters) shall not constitute
"Cause."
(b) "Permanent Disability" means your inability, as determined by the
Board and confirmed by competent medical evidence, to work for a period of 3
continuous full calendar months or 90 non-consecutive days during any 24
consecutive calendar months due to illness or injury of a physical or mental
nature. To determine issues of disability, you agree to submit yourself for
appropriate medical examination to physicians reasonably acceptable to Xxxxxxx
Radio and you.
(c) "Written demand" means a writing that must be issued or delivered
in any one of the following manners: personally delivered, delivered via any
reputable overnight delivery service, sent via email to the party's email
specified below or mailed by certified mail, return receipt requested, to the
other party at the address written in this contract, and with a copy that
party's attorney as indicated below. Notices may also be served by facsimile to
the fax number indicated below, with notice effective upon confirmed facsimile
transmission.
XX XXX XXXXXXXX
00 Xxxxxxxxxx Xxxx
Xxxxxxxx XX 00000
Fax #000-000-0000
Email address: xxxxxxxxx@xxxxxxxxxxxx.xxx
WITH A COPY TO:
Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxx Price Xxxxx & Xxxx, LLP
00 Xxxxxxxxxx Xxxxxx (for delivery)
XX Xxx 000 (for cert mail rrr)
Morristown NJ 00000 0000
Fax # 000 000 0000
Email address: xxx@xxxx.xxx
XXXXXXX RADIO CORP
0 Xxxxx Xxxx
Xxxxxxxxxx XX 00000
Attn: General Counsel
Fax #000-000-0000
Email address: xxxxxxx@xxxxxxxxxxxx.xxx
WITH A COPY TO:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxx, PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax# 000-000-0000
Email address: xxxxxxxxx@xxxxxxxxxx.xxx
7. This Agreement contains the entire agreement between the you and Xxxxxxx
Radio with respect to the subject matter hereof and supersedes any and all prior
agreements and understandings, whether written or oral, between you and Xxxxxxx
Radio or any of its affiliates, with respect to the subject matter of this
Agreement, including, without limitation, the letter agreement effective as of
June 14, 2005 from Xxxxxxx Radio to you and the term sheet captioned "Updated
(Dec 16, 2005) Outline of Paglinco's Offer." This Agreement may only be changed
by a written instrument signed by you and the President/CEO of Xxxxxxx Radio.
8. This Agreement shall inure to the benefit of and shall be binding upon
Xxxxxxx Radio and its successors and assigns. This Agreement also shall inure to
the benefit of and be binding upon you and your heirs, administrators, executors
and assigns. Given the full and fair opportunity provided to each of the parties
hereto to consult with their respective counsel and financial advisors with
respect to the terms of this Agreement, ambiguities shall not be construed
against either party by virtue of such party having drafted the subject
provision.
9. This Agreement and any and all matters arising directly or indirectly
herefrom shall be governed under the laws of the State of New Jersey, without
reference to choice of law rules.
Please indicate your understanding and agreement with the terms set forth above
by signing below and returning a signed copy of this Agreement to my attention.
This Agreement shall be of no force and effect unless a copy, signed by you, is
delivered to me on or before March 24, 2006.
Very truly yours,
XXXXXXX RADIO CORP.
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Authorized Officer
AGREED, UNDERSTOOD AND ACCEPTED THIS 23rd DAY OF MARCH, 2006
/s/ Xxx X. Xxxxxxxx
--------------------------
Xxx X. Xxxxxxxx
