This Amended and
Restated Employment Agreement (“ Agreement ”) is
made this 7th day of March, 2008 by and between Discovery
Communications, LLC (“ Company ”) and Joseph A.
LaSala, Jr. (“ Executive ”) (herein referred to
as “ this Agreement ”).
WHEREAS, Executive
and Company entered into an employment agreement dated
December 21, 2007, and effective as of January 14,
2008;
WHEREAS, the
parties now desire to enter into an amended and restated employment
agreement (“Agreement”) to reflect certain
changes;
NOW THEREFORE, in
consideration of the mutual promises and covenants set forth in
this Agreement, the parties hereby agree as follows:
I. DUTIES, ACCEPTANCE, LOCATION
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A.
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Company shall continue to employ
Executive, and Executive agrees to continue to render exclusive and
full-time services as Senior Executive Vice President, General
Counsel and Secretary upon the terms and conditions set in this
Agreement. Executive’s duties shall be consistent with his
title and duties, and as otherwise directed by Company.
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B.
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Executive shall not be required to
report to any position other than Company’s President and CEO
without Executive’s consent. Company reserves the right, if
Company deems it necessary, subject to Section IV(D)(1)(c)
hereof, to change the location where Executive works.
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C.
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Throughout his employment with
Company, Executive agrees to serve Company faithfully and to the
best of his ability, and to devote his full business time and
energy to perform the duties arising under this Agreement in a
professional manner that does not discredit, but furthers the
interests of Company.
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D.
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Executive shall be permitted to
maintain his position as a Director for Mainline Management LLC
(“ Mainline ”) and to serve on any board
committee designated by Mainline. Executive represents that service
on the Mainline Board of Directors shall not encumber his ability
to perform his duties as set forth in Section I(C) and shall
not require his absence from Company for such time as to impair his
ability to fulfill his duties as a senior officer of Company.
Executive shall produce and provide acceptable evidence that he is
included in the coverage of Directors and Officers liability
insurance maintained by Mainline for the benefit of Directors.
Executive will have a continuing obligation to insure that such
insurance is current and shall promptly notify Company if such
insurance lapses. Company shall have the right to require Executive
to resign from this Directorship on thirty (30) days notice in
the absence of appropriate insurance or if the Company believes and
can reasonably show that Executive is unable to perform his duties
as provided herein. Executive shall be entitled to retain any fees
paid to Directors and such fees as shall be paid upon execution of
this Agreement shall not be applied to Section IV(F) should that
section become applicable.
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A.
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Subject to Section IV,
Executive’s term of employment shall be the period beginning
on January 14, 2008 and ending December 31, 2010 (“
Term of Employment ”).
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B.
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Company shall have the option to
enter negotiations with Executive to renew this Agreement with
Executive for an additional term. If Company wishes to exercise its
option to enter negotiations with Executive to renew this
Agreement, it will give Executive written notice of its intent to
enter such negotiations to renew not later than sixty
(60) days prior to the end of the Term of Employment. The Term
of Employment may not, however, be extended unless by mutual
agreement of the Company and Executive as to all of the material
terms and conditions of the extension. In the event the parties do
not enter into an agreement to extend this Agreement for an
additional term, this Agreement shall expire, and Executive shall
automatically become an at-will employee following the end of the
Term of Employment.
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A.
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Base Salary . Effective January 14, 2008,
Company agrees to provide Executive with an annual base salary of
$600,000.00. This sum will be paid in increments paid on
regular-Company paydays, less such sums as the law requires Company
to deduct or withhold. Thereafter, Executive shall be eligible for
an annual salary review commencing in January 2009, and each
year thereafter. Executive’s future salary increases will be
reviewed and decided in accordance with Company standard practices
and procedures. Notwithstanding the foregoing, Executive’s
Annual base salary for the Term of Employment, including calendar
years 2009 and 2010, shall be no less than $600,000.
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B.
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Bonus/Incentive Payment
. In addition to the
base salary paid to Executive pursuant to Section III(A):
(1) Executive shall be eligible for an annual incentive
payment target of 60 percent (60%) of his base salary for
calendar year 2008 pro rated based upon his start date of
January 14, 2008 and on a full year basis for years 2009 and
2010. The bonus/incentive payment to be received by Executive will
be determined and paid in accordance with Company’s
applicable incentive or bonus plan in effect at that time (
e.g. , subject to reduction for Company under-performance
and increase for Company over-performance and subject to
Executive’s rated performance).
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C.
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Benefits . Executive shall be entitled to
participate in and to receive any and all benefits generally
available to executives Executive’s level in Company in
accordance with the terms and conditions of the applicable plan or
arrangement. Executive shall also be entitled to relocation
expenses in accordance with Company’s relocation policy for
senior executives.
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D.
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Unit Appreciation Plan
. Company currently
maintains the Discovery Appreciation Plan, otherwise referred to as
the DAP a copy of which (as it currently exists) is attached as
Attachment 1 (the “ Plan ”). It shall be
recommended that upon execution of this Agreement Executive shall
be awarded 180,000 units on the fifteenth of the month following
the month on which this Agreement is executed. Any participation by
Executive in the Plan shall be in accordance with the terms of the
Plan, as may be expressly modified by this Agreement. If
Executive’s employment under this Agreement is terminated by
Company not For Cause as defined in Section IV(D) of this
Agreement, or if Executive leaves for Good Reason as defined in
Section IV(D)(1a) of this Agreement, Executive’s Units
shall be treated in accordance with the Plan document. The parties
acknowledge and agree that the terms and conditions of the Plan are
subject to change at any time, particularly, but not limiting the
generality of the foregoing, as may be required by changes to U.S.
law that may affect the Plan.
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IV. TERMINATION OF EMPLOYMENT AND
AGREEMENT
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A.
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Death . If Executive should die during the
Term of Employment, this Agreement will terminate. In that case,
the Parties agree that Company shall pay to Executive’s
heirs/beneficiaries in accordance with applicable law: (1) any
and all wages due to Executive, including any earned but unpaid
base salary and accrued but unused vacation pay, as well as a pro
rata share (computed based on the date of Executive’s death)
of Executive’s annual bonus/incentive payment target under
Company’s Bonus/Incentive plan for the year in which the
termination occurs, paid in accordance with the Company’s
standard payroll practices; and (2) any and all other earned,
accrued or vested benefits that Executive was entitled to receive
in accordance with the terms of the applicable Company benefit
plan, which documents are controlling, including the provisions of
such plans governing the time and manner of payment, and that no
further amounts or benefits shall be payable hereunder.
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B.
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Inability To Perform
Duties . If,
during the Term of Employment, Executive should become physically
or mentally disabled, such that he is unable to perform his duties
under Sections I(A) and (C) hereof for (i) a period
of six (6) consecutive months, or (ii) for shorter
periods that add up to six (6) months in any eight (8)-month
period, by written notice to Executive, Company may terminate this
Agreement. Notwithstanding the foregoing, Executive’s
employment shall terminate upon Executive incurring a
“separation from service” under the medical leave rules
of Section 409A. In that case, the Parties agree that Company
shall pay to Executive in accordance with applicable law:
(1) any and all compensation due to Executive, paid in
accordance with the Company’s standard payroll practices, and
(2) any and all other earned, accrued or vested benefits that
Executive was entitled to receive in accordance with the terms of
the applicable Company benefit plan, including the provisions of
such plans governing the time and manner of payment, and that no
further amounts or benefits shall be payable hereunder except that
until (1) he is no longer disabled or (2) he becomes
65 years old — whichever happens first — Executive
may be entitled to receive continued coverage under the relevant
medical or disability plans to the extent permitted by such plans
and to the extent such benefits continue to be provided to Company
executives at Executive’s level in Company generally;
provided that in the case of any continued coverage under one or
more of the Company’s medical plans, if the Company
determines that the provision of the continued medical coverage at
the Company’s sole or partial expense may result in Federal
taxability of the benefits provided thereunder to Executive or his
dependents because such benefits are provided on a self-insured
basis by the Company, then Executive shall be obligated to pay the
full monthly COBRA or similar premium for such coverage.
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C.
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Termination For Cause
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1.
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In
the event that Executive is convicted of any felony, or any lesser
crime of sufficient import to potentially discredit or adversely
affect Company’s reputation or ability to conduct its
business in the normal course, or any offense involving the
property of Company or any of its subsidiaries or affiliates (e.g.,
theft, conversion, destruction of property, tampering with
Company’s computer system), or engages in willful misconduct
in connection with the performance of Executive’s duties,
Company may terminate Executive’s employment and this
Agreement for “Cause” by written notice to
Executive.
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2.
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In
the event that Executive materially neglects his duties under
Sections I(A) or (c) hereof or engages in other conduct
that constitutes a breach by Executive of this Agreement
(collectively “ Breach ”.), Company shall so
notify Executive in writing, which notice shall describe the
alleged Breach with reasonable specificity. Executive will be
afforded a one-time-only opportunity to cure such Breach within ten
(10) days from receipt of such notice. If no cure is achieved
within this time, or if Executive engages in the same Breach a
second time after once having been given the opportunity to cure,
Company may terminate Executive’s employment and this
Agreement for “Cause” by written notice to
Executive.
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3.
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Any
termination of employment pursuant to Sections IV(C)(1) or
Section IV(C)(2) hereof shall be considered a termination of
Executive’s employment “For Cause” (or for
“Cause”) and upon such termination, Executive shall
only be entitled to receive any amounts or benefits hereunder that
have been earned or vested at the time of such termination in
accordance with the terms of the applicable governing Company
plan(s), (including the provisions of such plan(s) governing the
time and manner of payment), and/or as may be required by law.
Notwithstanding anything in the Plan to the contrary,
“Cause” as used in any such Company plan shall be
deemed to mean solely the commission of the acts described in
Sections IV(C)(1) or IV(C)(2) hereof (after giving effect to
the cure opportunity described therein).
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D.
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Termination of Agreement by
Executive for Good Reason/Termination of Agreement by Company Not
For Cause .
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1.
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Company may terminate
Executive’s employment and this Agreement not for Cause (as
“Cause” is defined above) with fifteen (15) days
written notice to Executive stating the basis for the Termination
of Agreement by Company Not for Cause, and Executive may terminate
his employment and this Agreement for “Good Reason.”
For purposes of this Agreement, “Good Reason” shall
mean the occurrence of any of the following events without
Executive’s consent: (a) a material breach or material
failure by Company or its successor to perform its material
obligations hereunder; (b) a material reduction in
Executive’s title, authority, duties, base compensation or
responsibilities; (c) Company’s material change in the
location of the Company office where Executive works (i.e.
relocation to a location outside the Washington DC metropolitan
area); and/or (d) Company requires Executive to report to a
position other than its President and CEO, and Company fails to
obtain Executive’s consent to the reporting relationship,
provided however, that Executive must provide Company with written
notice of the existence of the change constituting Good Reason
within thirty-five (35) days of any such event having occurred
or having become known to him, and allow Company thirty
(30) days to cure the same. If the Company so cures the
change, Executive shall not have a basis for terminating his
employment for Good Reason with respect to such cured change. In
addition, in the event a change occurs that triggers
Executive’s right to terminate this Agreement for Good
Reason, Executive must exercise his right in writing to terminate
this Agreement for Good Reason within thirty-five (35) days of
the effective date of the applicable change or upon the change
becoming known to him or such right shall be deemed
waived.
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2.
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If
Company terminates Executive’s employment and this Agreement
not for Cause, or if Executive terminates his employment and this
Agreement for Good Reason then, subject to the execution and
effectiveness of a release described in Section IV(D)(3)
hereof on or before the Release Deadline (defined in
Section IV(D)(3) hereof), the following payments (“
Severance Payment ”) will be made:
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(a)
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Consistent with the Company’s
normal payroll practices, within thirty (30) days following
the last day of the Release Deadline, Company will commence to pay
Executive his annual base salary for the balance of the Term of
Employment and in any event no less than twelve months base salary
and accrued but unused vacation, to be paid in equal increments on
regular Company paydays (based upon the number of months base
salary that is payable and the number of paydays per month) until
the balance (less required deductions and withholdings) is paid in
full. Additionally, Company shall reimburse Executive for business
expenses incurred during his employment in accordance with
Company’s policy while employed hereunder, provided that
Executive submits documentation in accordance with Company’s
policy within thirty (30) days of Executive’s last day
of employment. To the extent any such reimbursements are includable
in the Executive’s gross income for Federal income tax
purposes, all such reimbursements shall be made no later than
March 15 of the calendar year next following the calendar year
in which the expenses to be reimbursed are incurred.
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(b)
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Executive will be paid the portion
of his Units in the Plan that has vested as of Executive’s
last day of employment according to the terms of the Plan, whether
such Units are the Units described in Section III(D) or
otherwise. Such payment will be made within thirty (30) days
following the Release Deadline if Executive has the executed the
Release and the Release has become effective.
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(c)
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Executive will be paid
Executive’s bonus under Company’s bonus/incentive plan
for the year in which the termination occurs. The bonus/incentive
payment portion of the Severance Payment will be paid in the year
following the calendar year in which the termination occurs on the
date that Company pays bonuses/incentive payments to its other
executives at Executive’s level in Company and will be
calculated based at one hundred percent (100%) of the target amount
set forth in Section III(B) for the year, subject to the terms
and conditions of the actual bonus/incentive plan in effect at the
time ( e.g. , Executive’s bonus/incentive payment will
be subject to reductions for Company under-performance or increases
for Company over-performance if Company under-performance or
over-performance is a factor in determining bonus/incentive awards,
or for any change to the applicable bonus/incentive payment plan,
that may result in Executive’s receiving an amount that is
less than the target amount set forth in Section III(B)), but
Executive’s bonus/incentive payment will not be subject to
reduction for Executive’s individual performance.
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(d)
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Except as otherwise provided in the
next sentence of this Subsection (d), and assuming Executive is
eligible for and elects to have COBRA coverage, Company shall
reimburse Executive for the monthly COBRA premiums Executive pays
to obtain COBRA coverage in Company’s health and dental
plans, until (1) the end of the Term of Employment; or
(2) the end of the maximum amount of time which Executive is
eligible for COBRA, whichever period is least. If Executive accepts
other employment prior to the end of the Term of Employment,
Executive shall notify Company of Executive’s coverage by the
successor employer’s health and dental insurance, and, upon
such coverage, Company shall cease reimbursing Executive for COBRA
premiums.
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3.
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No
Severance Payment will be made if Executive fails to sign a release
in substantially the form attached hereto, provided that such
release shall not release Executive’s rights to
indemnification (whether by contract, insurance, or otherwise) or
Executive’s rights under employee benefit plans. Such release
must be executed and become effective within the sixty
(60) calendar day period following the date of the
Executive’s “separation from service” within the
meaning of Section 409A (the last day of such period being the
“ Release Deadline ”). In addition, if Executive
violates the provisions of Section VI hereof, all further
increments of the Severance Payment shall cease, and Executive
shall be required to repay to Company those increments of the
Severance Payment already made.
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4.
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Company agrees that if, at the time
Executive is Terminated not For Cause, or Executive terminates his
employment for Good Reason, Company has a standard severance policy
in effect that would be applicable in the absence of this Agreement
(i.e., applicable to the circumstances surrounding the termination)
and that would result in Executive’s receiving a sum greater
than the Severance Payment, Executive will receive whichever is the
greater of these two payments; provided, that if (i) the
standard severance policy would provide for a sum greater than the
Severance Payment, and (ii) the payment schedule under the
Severance Policy is different from the payment schedules for the
Severance Payment and would result in an impermissible acceleration
or delay in payment in violation of the time and manner of payment
requirements of Section 409A, then the payment schedule
provided in the Company’s standard severance policy shall
only apply to the portion of the amount payable under the standard
severance policy that exceeds the Severance Payment.
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5.
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If
Executive terminates this Agreement before the Term of Employment
has expired for a reason other than those stated in
Section IV(D)(1) hereof, it will be deemed a material breach
of this Agreement. Executive agrees that, in that event, in
addition to any other rights and remedies which Company may have as
a result of such breach, he will forfeit all right and obligations
to be compensated for any remaining portion of his annualized base
salary, Severance Payment, bonus/incentive payment and DAP Units
that may otherwise be due under this Agreement, pursuant to other
Company plans or policies, or otherwise, that has not been earned
or vested at the time Executive’s employment terminates,
except as may be required by law.
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E.
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Treatment of Units Upon
Non-Renewal .
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1.
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In
the event that Executive and
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