EXHIBIT 10.39
May 28 , 1997
Muzak Limited Partnership/Xxxxxxx Xxxx Employment Agreement
In accordance with our discussions, this revised letter outlines the terms of my
employment at Muzak Limited Partnership ("the Company") on terms more fully
described below:
1. Title/Responsibility. Chief Executive Officer and Chairman of the Company's
Board of Directors during my employment. I will report to the Board of
Directors and will spend my full-time with responsibility for all aspects of
the Company's operations with the primary goal of maximizing shareholder
value;
2. Base Salary. My base salary will be $300,000.00 annually; salary to be
reviewed annually;
3. Bonus. The Company will establish a bonus plan for all senior employees. My
annual bonus potential will be up to $150,000.00 payable at the end of each
fiscal year based on the achievement of certain goals to be mutually agreed
upon; year one, $20 million; year two, $23 million; year three, $26 million.
All of these numbers shall be based upon accounting principals which were in
effect at Muzak at January 1, 1997 and shall be exclusive of all severance
and extraordinary costs;
4. Contract Term. The contract will have a four-year term commencing on May 21,
1997. In the fourth year, at my discretion, the role can be limited to
Chairman of the Board which would require a commensurate reduction in
salary;
5. Stock Options. I will receive options to acquire 1,000,000 partnership units
of the company at a price per unit equal to $2.33 per share. 400,000 units
of these options stay will be subject to vesting in equal annual amounts
over a three-year period; 300,000 of these units will be subject to the same
vesting but will be earned upon the Company's achieving $22 million of
EBITDA within three years. Options on the final 300,000 of these units will
be subject to the same vesting but will be earned upon the Company's
achieving $25 million of EBITDA within three years. The vesting period will
be accelerated upon a "change of control." Calculation of the EBITDA levels
shall be comparable to these under item No. 3;
6. Non Competition Agreement. The contract will contain a covenant by me not to
compete with the Company or to hire any of its employees for a period of two
years after any termination event;
7. Personal Investment. As we discussed, I will make a personal investment of
$200,000 for partnership interests at 2.33 per unit;
8. Board Membership Expense Reimbursement. I will be reimbursed for Board
membership and meetings' expenses per previous agreement. All stock and
stock options associated with Board membership shall continue; and
9. Benefits. I will be entitled to participate in all of the Company's employee
benefit plans. Additionally, if I believe the current plans should be
changed or improved, the Board will work with me to establish guidelines for
approval of such changes.
I very much look forward to the opportunity to lead Muzak, and I am confident I
will have a significant, positive impact on the company.
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