Exhibit 10.1
AMENDMENT TO THE XXXXXX X. XXXXXXXX
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
OF DECEMBER 8, 1997
This Amendment is made and entered into as of this 12th day of February,
1999, by and between The Music Connection Corporation, a Delaware corporation
(the "Company") and Xxxxxx X. Xxxxxxxx (the "Employee") (the "Agreement").
WHEREAS, the Company and the Employee are parties to that certain Amended
and Restated Employment Agreement of December 8, 1997 (the "Employment
Agreement"); and
WHEREAS, the Company and the Employee desire to amend that certain
Employment Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by each of the parties hereto,
such parties, intending to be legally bound, covenant and agree as follows:
1. Amendment. The Employment Agreement is amended so as to provide that
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the Employee's employment, as defined in Section 1 of the Employment Agreement,
be for the term of five (5) years, and that the Employee's term, as defined in
Section 2 of the Employment Agreement, be extended to continue through and
including December 7, 2002.
2. Authorizing Actions. Each party agrees promptly to do all things and
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take all actions as may be necessary or desirable to authorize and facilitate
the performance of this Agreement.
3. Counterparts. This Agreement may be executed in counterparts, each of
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which when so executed and delivered shall constitute an original, but all of
such counterparts taken together shall constitute one and the same instrument.
4 Entire Agreement. This Agreement together with the Employment
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Agreement represents the entire understanding of the parties pertaining to the
subject matter hereof and supersedes any and all prior agreements, negotiations
and discussions, whether written or oral, between the parties with respect to
the subject matter hereof.
5. Governing Law. The validity of this Agreement, its interpretation and
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construction shall be governed by the laws of the Commonwealth of Virginia,
without regard to principles of conflict of laws.
6. Amendment. This Agreement may modified only by a written instrument
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signed by each of the parties hereto.
7. Recitals. The Recitals to this Agreement are incorporated herein and
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made a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be executed by their duly authorized
representatives as of the date first above written.
THE MUSIC CONNECTION CORPORATION
By: /s/ Raju Puthukarai
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Raju Puthukarai
President
EMPLOYEE
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
2
Xxxxxx X. Xxxxxxxx
Amended and Restated Employment Agreement
AGREEMENT by and between The Music Connection Corporation, a Delaware
corporation (herein called the "Company") and Xxxxxx X. Xxxxxxxx (herein called
the "Employee").
WITNESSETH:
The parties entered into an Employment Agreement, dated March 20, 1997,
which the parties now desire to amend and restate in its entirety as follows:
For and in consideration of the mutual promises and covenants herein
contained, the parties hereto mutually agree as follows:
Section 1. Employment. The Company hereby employs the Employee for the term of
two (2) years and upon the terms and conditions hereinafter set forth, the
Employee hereby accepts such employment and agrees to perform services for the
Company, as provided in this Agreement.
Section 2. Term. The Employee's employment hereunder shall be for a term
commencing on December 8, 1997 and continuing through and including December 7,
1999, renewable automatically from year to year thereafter unless either the
Company or the Employee provides the other with written notice of non-renewal at
least 90 days prior to the expiration of the initial term or of any renewal
term.
Section 3. Duties; Control and Direction by Board of Directors.
Section 3(a). Duties. Employee shall be employed on a full time basis to
serve as Chairman and Chief Executive Officer of the Company. As such, the
Employee (i) shall assist the Company in the development of all phases of the
Company's operating activities and (ii) shall perform such other appropriate
executive duties as from time to time may be assigned to him by the Board of
Directors of the Company. The Company intend to maintain an office in the
Northern Virginia metropolitan area out of which the Employee shall work. Unless
the Employee otherwise consents, the Employee shall not be required to work out
of any office outside of the Northern Virginia metropolitan area.
Section 3(b). Rules and Regulations. The Employee shall comply with all
Company rules and regulations applicable to the executive employees of the
Company or to its employees generally and with all Company policies established
by the Board of Directors.
Section 4. Extent of Services. During the term of this Agreement, the Employee
shall devote substantially all of his time and his best efforts to the business
of the Company and the furthering of its interests and to the discharge of his
duties, functions and responsibilities hereunder.
Section 5. Compensation. As compensation during the term of the Employee's
employment hereunder, the Company shall pay to the Employee, and the Employee
shall accept, a salary at the rate of $175,000 per annum, or at such higher rate
as the Compensation Committee of the Board of Directors (the "Compensation
Committee"), after periodic review, at its option and in its sole discretion,
may fix. Any future compensation, including bonuses and stock options, if any,
shall be determined by the Compensation Committee in its sole discretion, and
will to the extent granted, be based on milestones and performance.
Section 6. Fringe Benefits. The Company agrees to maintain a $1,000,000 term
life insurance policy on the life of the Employee to the extent insurable. Such
policy shall be owned by the Company and the Employee, and the Employee shall
designate the beneficiary or beneficiaries under the policy. Furthermore, the
Employee shall have the right to participate, on the same terms and subject to
the same conditions, limitations, restrictions and requirements as the executive
employees of the Company in such medical, health, insurance, pension, profit
sharing, stock option and other plans, if any, as the Company may from time to
time provide for the benefit of its employees and in which executive employees
of the Company are eligible to participate.
Section 7. Expenses. The Employee is authorized to incur reasonable expenses
in performing services for and in promoting the business of the Company,
including expenses for business entertainment and travel. The Company shall
promptly reimburse the Employee for such expenses provided that the Employee
presents an itemized statement of the same together with such supporting
vouchers as the Company may from time to time require and are normally
available.
Section 8. Proprietary Information Agreement. On or prior to the date hereof,
the Employee shall have executed and delivered to the Company a Proprietary
Information Agreement in the form annexed hereto as Exhibit A.
Section 9. Insurance. The Employee agrees to submit to the usual and customary
medical examinations and otherwise cooperate with the Company in its procurement
of such insurance policies on the Employee's life as the Company may desire. If
at any time in the Employee's lifetime the Employee ceases to be employed by the
Company, then the Company shall promptly, if requested by the Employee and
subject to the applicable regulations of the insurance company or companies
concerned, transfer, assign and deliver to the Employee, upon payment of the
then cash surrender value thereof, if any, any and all insurance policies on the
life of the Employee then held and/or owned by the Company. Premiums shall be
adjusted to the date of such transfer, assignment and delivery.
Section 10. Participation in Competing Business. During the period beginning
on the date of this Agreement and ending one year following the expiration of
the term of this Agreement (the "Non-Competition Period"), Employee shall not
without the prior written consent of the Company: (i) call upon any customer or
business prospect of the Company for the purpose of soliciting or selling
similar services in competition with the Company's business (for the purposes of
this section, the term "customer" shall mean any past or present customer with
whom the Company is
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conducting business or has conducted business within the immediately preceding
one-year period, the term "business prospect" shall mean any past or present
business prospect with respect to the Company's business which the Company is
soliciting or has actively solicited within the immediately preceding one-year
period and the term "Company's business" shall mean the online custom
compilation of music; (ii) call upon any employee of the Company for the
purpose or with the intent of enticing the employee away or out of the employ of
the Company for any reason whatsoever; and (iii) be the owner of more than five
(5%) of the outstanding capital stock of any U.S. publicly traded corporation,
or an officer, director or employee of any corporation which is engaged in the
Company's business within the United States.
Section 11. Termination of the Agreement and of the Employee's Employment
Hereunder.
Section 11(a). Termination for Cause by the Company. The Company shall have
the right to terminate this Agreement and Employee's employment hereunder at any
time for cause (as defined in Section 18 hereunder) upon written notice of such
termination specifying the reasons therefor. In the event of such termination
for cause, the Employee shall be entitled to receive accrued salary and benefits
as of the date of termination.
Section 11(b). Termination Without Cause by the Company or for Good Reason
by the Employee. In the event that:
(1) the Company terminates this Agreement and the Employee's employment
hereunder without cause, that is, for any reason other than "cause" (as defined
in Section 18 hereof), death or incapacity; or
(2) the Employee terminates this Agreement for "Good Reason" (as
defined in Section 18 hereof); then, in either such case: the Employee shall
receive from the Company as of the effective time of such termination: (i) all
Employee's accrued salary and bonuses and the Employee's accrued benefits
through the date of such termination; and (ii) a sum equal in the aggregate to
the full amount, discounted by three percent (3%), of (a) the salary which the
Employee would have received and the benefits which the Employee would have
received, at the average rate or rates in effect during the six-month period
immediately prior to termination and (b) the annual bonus or bonuses which the
Employee would have received, at the rate of the Employee's annual bonus for the
last full fiscal year of the Company ending prior to termination, had, with
respect to both (a) and (b), the Employee's employment under this Agreement
continued for the full initial term or renewal term thereof, as the case may be,
as provided in Section 2 hereof. For purposes of the immediately preceding
sentence, the remaining full initial term or the remaining renewal term, as the
case may be, shall not be less than 12 months. The Employee shall not be
required to mitigate the amount of any payments provided for in this Section
11(b) by seeking other employment or otherwise, and any such employment, if
obtained, shall not be deemed to mitigate such amount nor shall Employee be
obligated to resell to the Company any shares of the Company's stock the
Employee may own.
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Section 12. Termination by Reason of Death or Incapacity of the Employee.
Section 12(a). This Agreement will terminate upon the Employee's death.
Section 12(b). Incapacity:
(i) In the event Employee, during the term of employment, shall fail
substantially to perform his duties hereunder for a period of six
(6) consecutive months because of illness or other incapacity, he
shall, upon the furnishing by a physician (acceptable to both
Company and Employee or his family) of a written statement that
Employee is totally incapacitated or that it would be unsafe or
unwise for serious health reasons for Employee to perform his
duties hereunder, be deemed to be totally incapacitated. In the
event a physician cannot be located who is acceptable to both
parties, each shall select a physician who shall together select a
third, whose decision shall be final. In the event of a dispute or
inability to select a third, a physician shall be selected by the
American Arbitration Association, and such physician's decision
shall be final.
(ii) If Employee shall be deemed totally incapacitated as set forth
above, the Company, unless this Agreement shall have earlier
terminated, may at its option, by giving the Employee written
notice of its intention to do so, terminate Employee's employment
hereunder effective as of the end of the calendar month in which
such notice is given, and the Company shall pay the Employee prior
to the effective time of such termination a sum equal in the
aggregate to an additional twelve (12) months' base salary, less
any amounts the Employee receives through disability policies
maintained by the Company.
(iii) In the event Employee shall not have been deemed totally
incapacitated as provided above, but shall have failed as a result
of temporary incapacitation to perform his duties hereunder for an
aggregate of more than twelve (12) months in any period of twenty-
four (24) consecutive months, the Company may at its option, by
giving the Employee written notice of its intention to do so,
terminate Employee's employment hereunder effective as of the end
of the calendar month in which such notice is given, and the
Company shall pay the Employee prior to the effective time of such
termination a sum equal in the aggregate to an additional twelve
(12) months' base salary, less any amounts the Employee receives
through disability policies maintained by the Company.
Section 13. Severance. In the event that the Company elects not to renew the
Employee's contract as specified in Section 2 of this Agreement, then the
Employee shall be entitled to receive from the Company at the effective time of
such termination a one year severance equal to the Employee's base salary and
benefits in effect immediately prior to termination.
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Section 14. Effect of Termination. The provisions of Sections 5 and 7 (as to
amounts owing prior to termination), 8, 10, 11, 12 and 15 through 22 shall
survive the termination of this Agreement.
Section 15. Medical Examination. The Employee shall be required to have a
medical examination annually by a physician acceptable to the Company and at the
Company's cost, the results of which shall be submitted to the Company.
Section 16. Waiver of Breach. Forbearance by a party to require performance of
any provision hereof shall not constitute or be deemed a waiver by such party of
such provision or of the right thereafter to enforce the same, and no waiver by
a party of any breach or default hereunder shall constitute or be deemed a
waiver of any subsequent breach or default, whether of the same or similar
nature or of any other nature, or a waiver of the provision or provisions
breached or with respect to which such default occurred.
Section 17. Notices. All notices and other communications required or permitted
hereunder shall be in writing and may be personally delivered, deposited in the
United States mail (first class postage prepaid, return receipt requested), sent
by nationally recognized overnight courier service, transmitted by telecopier or
telex, or sent by a private messenger or carrier which issues delivery receipts,
addressed to the party for whom they are intended at the following addresses:
Address for the Company: President
The Music Connection Corporation
000 Xxxxxxxx Xxxxx, Xxxxx X
Xxxxxxx, Xxxxxxxx 00000
Address for the Employee: 00000 Xxxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Such notices and other communications shall be deemed effective upon receipt.
The above addresses may be changed by notice given pursuant to this Section 17.
Section 18. Definitions. As used in this Agreement:
Person. The term "person" shall mean and include any individual, partnership,
firm, corporation, trust, unincorporated organization, or joint venture.
Cause. The term "cause" for termination by the Company of this Agreement and of
Employee's employment shall mean (i) such act or omission to act, or series of
acts or omissions to act, or course of conduct of the Employee that would
constitute willful or criminal misconduct or (ii) Employee's breach of Sections
4, 8, or 10 under the Agreement.
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Good Reason. The term "Good Reason" for termination by the Employee of this
Agreement and of Employee's employment hereunder shall mean a failure by the
Company to comply with any material provision of this Agreement where such
noncompliance has not been cured by the Company within thirty (30) days after
the giving of written notice thereof by the Employee to the Company.
Section 19. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not invalidate or render unenforceable any other
provisions of this Agreement.
Section 20. Binding Effect. The rights and obligations of the Company and the
Employee under this Agreement shall inure to the benefit of and be binding upon
them and their respective successors and assigns. This Agreement shall be
binding upon the Employee and, except that the Employee may not delegate his
obligations hereunder, shall inure to the benefit of the Employee and his heirs,
executors and administrators.
Section 21. Governing Law. This Agreement shall be governed by, and construed
under and in accordance with, the laws of the Commonwealth of Virginia.
Section 22. Entire Agreement. This instrument embodies the entire agreement and
understanding by and between the parties hereto and supersedes all prior
agreements (written or oral), arrangements and discussions between the parties,
with respect to the subject matter hereof. This Agreement may not be changed,
modified or amended in whole or in part except by a writing signed by all the
parties. No waiver of any party's rights hereunder shall be effective or
binding unless such waiver shall be in writing and signed by the party against
whom such waiver is sought to be enforced.
Section 23. Prior Agreement. This Agreement shall supersede in its entirety a
prior Employment Agreement in effect between the Company and Xx. Xxxxxxxx which
was signed effective March 20, 1997 which Agreement is null and void and of no
further force or effect. Notwithstanding the foregoing, the Company acknowledges
that it continues to owe Employee for certain accrued salary and bonus payments
for the period commencing July 1, 1996 and ending December 8, 1997.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of this 8th day
of December, 1997
The Music Connection Corporation
By: /s/ Raju Puthukarai
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Raju Puthukarai
President
Employee:
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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