THIS
EMPLOYMENT AGREEMENT (this “ Agreement ”) is
made and effective as of March 30, 2007, between EQUITY
MEDIA HOLDINGS CORPORATION , a Delaware corporation (the
“ Parent ” or the “ Company
”) and GREGORY FESS , a resident of the State of
Arkansas (the “ Employee ”).
This Agreement is
entered into in connection with that certain Agreement and Plan of
Merger dated April 7, 2006, as amended on May 5, 2006 and
September 14, 2006 (the “ Merger Agreement
”) among the Parent, Equity Broadcasting Corporation (“
EBC ”), and certain majority shareholders of EBC,
pursuant to which EBC will merge with and into Parent with Parent
being the surviving corporation.
In consideration
of the premises and mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as
follows.
1.
Employment . The Company hereby employs the Employee
and the Employee hereby accepts employment by the Company, upon all
of the terms and conditions set forth in this Agreement.
2.
Employment Period . The period during which the
Employee shall serve as an employee of the Company shall commence
on the date hereof and, unless earlier terminated pursuant to this
Agreement, shall expire on the third anniversary of the date hereof
(the “ Employment Period ”).
3.
Duties and Responsibilities . The Employee agrees to
perform all duties required of Senior Vice President of the
Company. Employee further agrees to perform his duties honestly,
diligently, competently, in good faith and in the best interests of
the Company and shall give his best efforts in performing these
duties for the Company. During his tenure as Senior Vice President
Employee shall devote his full time to the rendering of services on
behalf of the Company.
4.
Compensation . In consideration for the
Employee’s services hereunder and the restrictive covenants
contained herein, and subject to the terms and conditions herein
during the Employment Period, the Company shall pay to the Employee
an annual base salary of Three Hundred and Fifteen Thousand Dollars
and 00/100 (US $315,000.00) payable in accordance with the
Company’s customary payroll practices, which salary will be
reviewed annually by the Board of Directors of the Company (the
“ Base Salary ”); provided however, that during
the Employment Period the Base Salary shall not be reduced. Any
bonus compensation in addition to the Base Salary shall be
determined at the discretion of the compensation committee of the
Board of Directors of the Company.
There shall be
withheld from all amounts due to the Employee as compensation for
services performed by him such federal and state income taxes, FICA
and other amounts as may be required to be withheld under
applicable law.
5.
Grant of Stock Options . The Company shall grant the
Employee 250,000 stock options, adjusted for any and all splits,
for stock in the Company with an exercise price at fair market
value which options shall vest in four equal installments
commencing at the signing of this agreement and on each anniversary
thereafter and which shall be a part of and granted pursuant to the
terms of the Company’s 2007 Stock Incentive Plan adopted in
connection with the Merger Agreement. Said Stock Options shall be
exercisable for a minimum of five (5) years. Notwithstanding
any provisions contained herein to the contrary, in the event
Employee is terminated for any reason whatsoever the termination
shall be structured such that Employee shall have two years to
exercise his options.
6.
Management Incentive Pool . During the Employment
Period, Employee will be entitled to maximum participation in the
Company’s Management Incentive Compensation Plan, to be
established for current and future executives in conjunction with
the Merger Agreement, with a minimum amount of not less than
$500,000.00, subject to Employee’s employment at the time the
target stock price is obtained.
7. Vacation
and Holidays; Insurance
(a) During
the Employment Period, the Employee shall be entitled to twenty
(20) business days of vacation leave each calendar year to be
taken at such times as the Employee and the Company shall mutually
determine and provided that no vacation time shall significantly
interfere with the duties required to be rendered by the Employee
hereunder. Any vacation time not taken by the Employee during any
calendar year may not be carried forward into any succeeding
calendar year.
(b) During
the Employment Period, the Employee shall also be entitled to take
regular office holidays in addition to the vacation leave provided
in Section 7(a) above.
(c) During
the Employment Period, the Employee shall be entitled to health,
medical, dental, disability, retirement, and life insurance benefit
plans fully funded by the Company in the normal course and
comparable at least to the level of benefits as those benefit plans
that were in place with Employee’s employment prior to the
Merger Agreement, and including any further benefit enhancements to
the extent exceeding such pre-merger benefit levels hereinafter
offered by the Company to its executive personnel as may be
approved by the Company’s Board of Director’s for all
employees..
8.
Expenses. During the Employment Period, the Employee
shall be entitled to reimbursement of reasonable expenses incurred
by him which reimbursement shall be subject to and made in
accordance with such policies and procedures as may be established
by the Company and as requested by the Board of Directors of the
Company. Employee shall be provided with a corporate credit card
for out of pocket business expenses, including but not limited to,
travel and accommodations.
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(a)
Termination with Notice by Either Party . The Company
or the Employee may terminate this Agreement for any reason or no
reason upon sixty (60) days prior written notice to the other.
If the Company terminates the employment of the Employee without
Good Cause (as defined below), the Company shall pay the Employee
the remainder of Employee’s Compensation at the rate of the
Base Salary in effect as of the date immediately preceding the date
of termination and the cost of premiums for any Company sponsored
insurance policies or other benefits, medical, dental, disability,
retirement and travel plans (or the cash equivalent) for the
greater of twelve (12) months or the remainder of the Employment
Period, payable in the manner and at such times as the Base Salary
and benefits otherwise would have been payable to the Employee
hereunder were the Employee to continue to be employed by the
Company. If the Employee terminates his employment with the Company
hereunder without Good Cause (as defined below), the Company shall
pay the Employee the Base Salary earned and reasonable expenses
reimbursable under this Agreement incurred through the date of
Employee’s termination; provided that the Company shall not
be under any obligation to pay the Employee any unearned or
non-accrued Compensation, and the Employee shall not be entitled
to, any such severance compensation.
(b)
Termination for Good Cause by Company . In the case
of the Company terminating this Agreement, “ Good
Cause ” means any one or more of the
following:
(i)
a material breach or default by the Employee of the terms of this
Agreement which remains uncured after thirty (30) days
following Employee’s receipt from the Company of written
notice specifying such breach or default;
(ii)
gross negligence or willful misfeasance by Employee or the breach
of fiduciary duty by Employee in the performance of his duties as
an employee hereunder;
(iii)
the commission by Employee of an act of fraud, embezzlement or any
other crime in connection with Employee’s duties;
(iv)
conviction of Employee of a felony which involves dishonesty or a
breach of trust;
(v)
the Employee is unable to perform any of the functions of his
position for which he was hired, because such performance is
prohibited or enjoined by a judicial or administrative order or
other agreement enforcing any non-competition, non-solicitation or
other restrictive covenant or agreement to which the Employee is a
party.
In the event of a
termination for Good Cause, the Company will pay the Employee the
Base Salary earned and reasonable expenses reimbursable under this
Agreement incurred through the date of Employee’s
termination; except in the case of theft or fraud against the
Company in which case no payments of any kind shall be made by the
Company to the Employee. Upon termination of the employee for Good
Cause, as provided above, all outstanding and unexercised stock
options, vested shall remain with the employee. Upon termination of
Employee for Good Cause, as provided above, the Employee shall also
be deemed to have resigned as a director of the Company (if such
Employee is then a director) and shall
3
deliver to the
Company a letter of resignation to this effect. Other than as
provided in this paragraph, the Company shall have no further
liability to the Employee in the event of termination of Employee
for Good Cause.
(c)
Termination for Good Cause by Employee . In the case of the
Employee terminating this Agreement, “ Good Cause
” means any one or more of the following: (i) there
shall be a continuing breach or continuing default by the Company
of the terms of this Agreement which remains uncured after thirty
(30) days following the Company’s receipt from the
Employee of written notice specifying such breach or default;
(ii) requirement by Company for Employee to relocate more than
fifty (50) miles; or (iii) a substantial change in
Employee’s requirements or duties except as provided
hereunder. If the Employee terminates his employment with Good
Cause, the Company shall pay the Employee the remainder of
Employee’s Compensation at the rate of the Base Salary in
effect as of the date immediately preceding the date of termination
and the cost of premiums for any Company sponsored insurance
policies or other benefits, medical, dental, disability or
retirement and travel plans (or the cash equivalent) for the
greater of twelve (12) months or the remainder of the
Employment Period, payable in the manner and at such times as the
Base Salary and benefits otherwise would have been payable to the
Employee hereunder were the Employee to continue to be employed by
the Company.
(d) In
the event of death of the Employee, Employee’s spouse, or in
the event of a death of the spouse, Employee’s children,
shall receive all payments and benefits contained
herein.
10.
Change in Control and Other Grounds Entitling Employee to
Terminate . “ Change in Control ” shall
mean (a) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions) of all or substantially
all of the assets of the Company; (b) any consolidation or
merger or other business combination of the Company with any other
entity where the shareholders of the Company, immediately prior to
the consolidation or merger or other business combination would
not, immediately after the consolidation or merger or other
business combination, beneficially own, directly or indirectly,
shares representing fifty percent (50%) of the combined voting
power of all of the outstanding securities of the entity issuing
cash or securities in the consolidation or merger or other business
combination (or its ultimate parent corporation, if any); or
(c) the Board of Directors of the Company adopts a resolution
to the effect that a “Change In Control” has occurred
for purposes of this Agreement. Notwithstanding the foregoing, no
transaction shall be
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