EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into on this May 6, 1996 by and between TM Century, Inc., a Delaware
corporation (the "Company") and R. David Graupner (the "Employee").
WITNESSETH:
RECITALS:
1. Company is engaged in the business of providing products and
services to radio stations and other companies and to the television
and film industries.
2. Company desires to employ Employee and Employee desires
employment with the Company upon the following terms and conditions.
AGREEMENTS:
ARTICLE 1
EMPLOYMENT AND TERM
1.01 Employment. The Company hereby employs the Employee, and the
Employee accepts employment with the Company, to serve the Company as
Vice President/Operations and in any additional position to which he
may hereafter be appointed by the President during the Employment
Term. Employee acknowledges and agrees that (i) the employment
relationship created between the Employee and the Company is a
contractual relationship; (ii) the Company's right to terminate this
Agreement is subject to the terms on this Agreement; and (iii) the
employment relationship is created by this Agreement is not an "at-
will" relationship.
1.02 Employment Term. Employee's employment hereunder shall be for
a term of three years commencing on May 6, 1996 unless earlier
terminated pursuant to Article 5 hereof. The term "Employment Term"
shall mean the term stated herein.
ARTICLE 2
DUTIES OF EMPLOYEE
2.01 Duties. The Company hereby employs the Employee as Vice
President/Operations of the Company, and the Executive hereby accepts
such employment with the Company in such capacity, and to perform such
other reasonable duties and services for the Company and its
Affiliates (as defined in Section 4.08) as shall be assigned to him
from time to time by the President of the Company (the "Services").
Except for travel required from time to time in connection with the
performance of his duties under this Agreement, as Vice
President/Operations of the Corporation, the Employee and the Company
agree that his duties shall be performable at the Company's
headquarters.
2.02 Attention to Duties. During the Employment Term the Employee
shall devote his entire productive time, ability, attention, and best
efforts to the business of the Company. The Employee shall not
directly or indirectly render any services of a business, commercial,
or professional nature to any other person or organization, whether
for compensation or otherwise, without the prior written consent of
Company.
ARTICLE 3
COMPENSATION
3.01 Base Salary. As compensation for services hereunder and in
consideration for the protective covenants set forth in Article 4
hereof, the Employee shall be paid an annual salary of $100,000,
payable in twenty-four (24) equal installments, in accordance with the
Company's customary payroll procedures. At the end of each fiscal year
and at such other times as they determine in their sole discretion the
Board of Directors or the Compensation Committee of the Board of
Directors will review the Employee's salary and other compensation and
determine whether any salary increase or increase in other
compensation is appropriate. Nothing contained herein will, however,
be construed to require the Company to increase the Employee's salary
or other compensation.
3.02 Bonus. The Company has a bonus plan which provides for bonus
awards based on the profitability of the Company, and the Employee
shall be eligible to participate in the plan.
3.03 Other Benefits. During the Employment Term the Company shall
provide Employee with the same insurance and other benefits that the
Company makes available to other similarly situated employees in
accordance with the Company's policies as they exist from time to
time.
3.04 Vacation and Sick Pay. The Employee shall be entitled to an
annual paid vacation of fifteen (15) business days with full pay, Such
vacation shall be taken at a time selected by the Employee and
approved by the Company. In addition, the Employee shall be entitled
to ten (10) business days per year as sick leave or personal business
days with full pay. Vacation time, sick leave and personal business
days may be accumulated and used by January 15th of the year following
the year in which such days were earned, but if not used by January
15th of the calendar year following the year in which they were
earned, they shall be deemed to have been waived by the Employee.
3.05 Holidays. The Employee shall be entitled to a holiday with
full pay on New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day, and such other days as the Company
shall from time to time determine.
3.06 Business Expenses. The Employee is authorized to incur
reasonable and necessary business expenses in the performance of the
Employee's duties under this Agreement, including expenditures for
travel and entertainment. The Company will reimburse the Employee from
time to time for all such business expenses, provided that the
Employee presents to the Company:
(a) A statement of expense in which the Employee recorded at or near the
time each expenditure was made:
&
(i) the amount of the expenditure;
(ii) the time, place and type of entertainment and travel or other
expense;
(iii) the reason for the expenditure and the nature of the business
benefit derived or
expected to be derived as a result of the expenditure;
(iv) the name, occupation, address and any other pertinent information
concerning each person who is entertained, sufficient to establish
the business relationship to the Company; and
(b) Documentary evidence, such as receipts or paid bills, that state
sufficient information to establish the amount, date, place and
essential character of the expenditure for each expenditure.
(c) If such statement of expense is not presented to the Company within 60
days of such expense the Company will have no obligation to reimburse
said expense.
ARTICLE 4
PROTECTIVE COVENANTS
4.01 General. Employee expressly acknowledges and agrees that he
has been and will be given access to and become familiar with Trade
Secrets (as defined in Section 4.03) developed at the Company's
expense, which are valuable, unique, and essential to the performance
of Employee's duties hereunder, as well as being essential to the
overall continued success and business goodwill of the company.
Employee expressly acknowledges and agrees that the Trade Secrets are
proprietary and confidential, and if any of the Trade Secrets were
imparted to or become known by any person(s) engaging in a business in
any way competitive with that of the Company's, such would result in
hardship, loss, irreparable injury and damage to the Company, the
measurement thereof would be difficult, if not impossible, to
determine. Accordingly, Employee expressly agrees that (i) the Company
has a legitimate interest in protecting the Trade Secrets and its
business goodwill, (ii) it is necessary for the Company to protect its
business from such hardship, loss, irreparable injury and damage,
(iii) the following covenants are a reasonable means by which to
accomplish that purpose, and (iv) any intentional violation of any of
the protective covenants contained herein shall constitute a breach of
trust and represent grounds for immediate dismissal and for
appropriate legal action for damages, enforcement and/or injunction
4.02 Noncompetition. Employee covenants that, during the term of
this Agreement and for a period of one (1) year immediately thereafter
(the "Limitation Period"), irrespective of which party terminates this
Agreement and whether such termination is for cause or otherwise, he
will not directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder (other than
ownership of securities of publicly held corporations of which
Employee owns less than one percent (1%) of any class of outstanding
securities), corporate officer, director, investor, or financier or in
any other individual or representative capacity, directly or
indirectly:
(a) Engage or participate in any business within the Prohibited Area, as
hereinafter defined, that is in competition in any manner whatsoever
with the Company's business and the products or services offered by
the Company in such areas, without the prior written consent of the
Company. For purposes of this subsection & the term "Prohibited Area"
means the United States and any foreign country in which the Company's
products or services are sold at the time this Agreement is
terminated.
(b) Solicit or attempt to solicit, any of the Company's past, present or
prospective (as of the termination of this Agreement) investors,
customers, or suppliers, in any manner which is competitive with the
Company's business as it is operated as of the termination of
Employee's employment hereunder;
(c) Induce, or attempt to induce, any employee of the Company to
terminate his employment or hire away or attempt to hire away,
any employee of the Company;
(d) Induce, or attempt to induce, any present or future supply or service
resource (including investment and other financing resources) to
withdraw, curtail, or cancel the furnishing of supplies or services
(including investment and other financing resources) to the Company;
or
(e) Engage in any act or activity which would interfere with or harm
any business relationship the Company may have with any investor,
customer, employee, principal or supplier.
4.03 Trade Secrets. It is understood that during the course of his
employment hereunder, the Employee will have access to and become
familiar with certain proprietary and confidential information of the
Company (the "Trade Secrets"), which includes, by way of illustration
and not by way of limitation:
(a) Lists containing the names of past, present and prospective
customers, employees, principals, and suppliers;
(b) The past, present and prospective methods, procedures and techniques
utilized in identifying prospective markets, customers, and suppliers
and in soliciting the business thereof;
(c) The past, present and prospective methods, procedures and techniques
used in the operations of the Company's business, including marketing
plans and objectives and the methods, procedures and techniques
utilized in selling, pricing, applying and delivering the Company's
products and services; and,
(d) Compilations of information, records, and processes which are owned or
developed by the Company and/or which are used in the operation of the
business of the Company, including, without limitation, electronically
stored information.
Trade Secrets do not include information which (i) at the time it
is disclosed by the Employee was already known to the public; or (ii)
is required to be disclosed by a court order.
Employee acknowledges that the Trade Secrets give the Company an
advantage over its competitors, and that the same is not available to
or known by the Company's competitors or the general public. Employee
further acknowledges that the Company has devoted substantial time,
money, and effort in the development of the Trade Secrets and in
maintaining the proprietary and confidential nature thereof. Employee
further acknowledges his position with the Company is one of the
highest trust and confidence by reason of Employee's knowledge of,
access to, and contact with the Trade Secrets. Employee agrees to use
his best efforts and exercise utmost diligence to protect and
safeguard the Trade Secrets. Employee covenants that, during the term
of this Agreement and for the Limitation Period regardless of which
party terminates this Agreement and whether such termination is for
cause, he will not intentionally disclose, disseminate or distribute
to another, nor induce any other person to disclose, disseminate or
distribute, any
Trade Secrets of the Company, directly or indirectly, either for
Employee's own benefit or for the benefit of another, whether or not
acquired, learned, obtained or developed by Employee alone or in
conjunction with others, nor will Employee use or cause to be used in
Trade Secrets in any way except as is required in the course of his
employment with the Company. For the purposes of this section, any
disclosure, dissemination or distribution of any Trade Secrets caused
by the Employee's gross negligence shall be deemed to be made
intentionally. Employee acknowledges and covenants that all Trade
Secrets relating to the business of the Company, whether prepared by
Employee or otherwise coming into his possession, shall remain the
exclusive property of the Company. Employee further covenants that all
memoranda, notes, records, drawings or other documents made, compiled,
acquired or received by Employee during the term of this Agreement and
in his possession or under his control at the termination of his
employment hereunder, concerning any corporate activity, including,
but not limited to, techniques and applications developed by the
Company, management techniques, names of investors and customers,
marketing and sales techniques, and product and service pricing
information, shall together with all copies, be delivered, in good
condition, to the Company immediately upon Employee's termination
(whether or not so requested by the Company), or at any time upon the
Company's request.
4.04 Extension of Limitation Period. The parties acknowledge that
if Employee violates any of the protective covenants hereunder and the
Company brings legal action for injunctive or other relief hereunder,
the Company shall, as a result of the time involved in obtaining the
relief, be deprived of the benefit of the full Limitation Period of
these protective covenants. Accordingly, the Limitation Period shall
be deemed to have the full duration of the period stated therein,
computed from the date relief is granted, but reduced by the time
between the period when the restriction began to run at the
termination of Employee's employment hereunder and the date of the
first violation of the covenant by Employee.
4.05 Survival of Protective Covenants. Each covenant on the part of
Employee contained in this Article 4 shall be construed as an
agreement independent of any other provision of this Agreement and
shall survive the termination of this Agreement. The existence of any
claim or cause of action of Employee against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenant.
4.06 Remedies for Breach. Employee acknowledges that the legal
remedies for breach of the protective covenants hereunder are
inadequate and therefore agrees that, in addition to all of the
remedies available to the Employee in the event of a breach or a
threatened breach of any covenant contained in this Article 4, the
Company may:
(a) Obtain temporary, preliminary, and permanent injunctions against
any and all such actions; and
(b) Seek to recover from Employee monetary damages to the Company arising
from such breach or threatened breach and all costs and expenses
(including attorneys' fees) incurred by the Company in the enforcement
of such protective covenants.
4.07 Intent of Parties.. Employee recognizes and agrees that this
Agreement is necessary and essential to protect the business of the
Company and to realize and derive all the benefits, rights, and
expectations of conducting the Company's business; that the area and
duration of the protective
covenants herein are in all things reasonable; and that good and
valuable consideration exists for Employee's agreement to be bound by
such protective covenants.
4.08 Affiliates of the Company. The protective covenants in the
Article 4 shall also benefit the business and Trade Secrets of the
Company's Affiliates (as hereinafter defined) and these covenants
shall be enforceable against Employer by each of such Affiliates as
third party beneficiaries. An "Affiliate" of the Company is any person
or entity that directly, or indirectly through one or may
intermediaries, controls or is controlled by, or is under common
control with, the Company.
ARTICLE 5
TERMINATION OF EMPLOYMENT
5.01 Resignation of Employee. In the event of the termination of
this Agreement prior to the completion of any term of employment
specified above by the voluntary resignation of the Employee, the
Employee shall be entitled to:
(a) his base salary earned prior to the date of termination as
provided for in Section 3.01 of this Agreement computed pro rata
up to and including the date of termination or resignation;
(b) accrued but unused vacation, sick leave and personal business
days; and
(c) nothing more.
Employee expressly waives and releases any other or future right to
damages or additional compensation relating to termination of
Employee's employment pursuant to this Section 5.01.
5.02 Termination by Reason of Death or Disability of Employee.
(a) Upon the death of the Employee, the Employment Term shall
automatically terminate on the last day of the month in which
the death of Employee occurs.
(b) If Employee is determined to be Disabled (as hereinafter defined) then
the Company may, upon thirty (30) days written notice to Employee,
terminate Employee's employment hereunder, but in addition to the
benefits described in Section 5.02(c) below, Employee shall continue
to be eligible to receive any benefits to which he may be entitled
under the terms of the long-term disability coverage provided by the
Company. For the purposes of this Agreement, the "Disability" of
Employee shall mean any incapacity or inability to perform Employee's
normal or assigned duties to the Company, in either case due to injury
or illness (physical or mental), for a period of at least forty-five
(45) days out of any sixty (60) consecutive day period.
(c) Upon termination of employment pursuant to Section 5.02 (a) or (b)
of the Employee or his estate shall be entitled to receive:
(i) The base salary that the Employee was then receiving through the
date of termination as provided above;.
(ii) All bonuses earned through the date of termination, paid in
accordance with the terms of the bonus plan pursuant to which
the bonus was earned; and
(iii) Accrued by unused vacation and sick leave pay.
5.03 Termination by the Company for Cause. Subject to any
opportunity to cure on the part of Employee, the Company may for Cause
(as hereinafter defined) terminate Employee's employment hereunder
upon written notice specifying the particulars of the Cause. "Cause"
shall mean:
(a) Any intentional material breach by the Employee of any of the terms
and conditions of this Agreement, and for the purposes of this
section, any breach caused by the Employee's gross negligence shall be
deemed to be intentional;
(b) A breach of the Employee's fiduciary duties to the Company;
(c) Misappropriation of any material amount of the Company's assets;
(d) A plea of guilty or no contest to, or conviction of, a felony or a
serious misdemeanor, which would materially and adversely affect the
reputation of the Company or the utility of the Employee's services to
the Company in its business;
(e) A plea of guilty or no contest to, or is convicted of, a crime
involving moral turpitude;
(f) Any conduct inimical to the best interests of the Company or any
dishonest, unethical, fraudulent, disloyal, or felonious act committed
or engaged in by Employee in respect of his duties to the Company
which would materially and adversely affect the reputation of the
Company or the utility of his services to the Company in its business;
(g) Employee's habitual negligence or nonfeasance in the performance
of his duties hereunder; or
(h) The inability of the Employee to pay his debts as they become
due, or the making of an assignment for the benefit of the
creditors.
With respect to any of the events specified in (a), (b), (f), and (g)
above, the Company will provide Employee with written notice thereof
and a ten (10) day opportunity to cure such matter to the satisfaction
of the Company. Termination of Employee shall not affect any of the
Company's other rights and remedies at law, in equity, or under this
Agreement.
In the event of the termination of this Agreement for any of the
reasons set forth in this Section 5.03 the Employee shall be entitled
to receive:
(a) his base salary earned prior to the date of termination as
provided in Section 3.01 of this Agreement computed pro rata up
to an including the date of termination;
(b) accrued but unused vacation, sick leave and personal business
days; and
(c) nothing more.
Employee expressly waives and releases any other or future right to
damages or additional compensation relating to termination of
Employee's employment pursuant to this Section 5.03.
5.04 Termination on Grounds Other Than for Cause, Death or
Disability. Should the Employee's employment hereunder be terminated
by the Company on grounds other than for cause, disability,
resignation or death, the Employee shall be entitled to receive, as
the Employee's sole remedy and as liquidated damages:
(a) the base salary that the Employee was then receiving for six
months following date of termination of employment, paid as set
forth in Section 3.01 above; and
(b) any bonuses earned throughout the date of termination, paid in
accordance with the terms of the bonus plan pursuant to which any
bonus may have been earned. The Employees share of any annual cash
bonus pool shall be computed pro rata based on the actual number of
days during the year the Employee was employed by the Company;
provided, however, nothing herein shall be construed to require the
Company to calculate or pay any bonus prior to the regularly scheduled
time for making such calculation or payment.
(c) accrued but unused vacation and sick leave pay;
(d) professional "out placement services" at a cost not to exceed
"$5,000 from the out-placement consulting company of the Employee's
choice;
(e) ten days to exercise any stock options that have vested under the
terms of any Company Stock Option Plan in which the Employee is
then participating;
(g) life insurance benefits to six months and monthly payments for six
months equal to the monthly premium required by the Employee to
maintain his health insurance benefits pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") under the
Company's group health insurance plan.
If the Employee is terminated by the Company other than for Cause
the Employee agrees to use his best efforts to locate other full time
employment. If the Employee obtains full time employment during the
period between his termination by the Company other than for Cause and
the end of the term of employment set forth in Section 1.02 above at a
salary that is greater than or equal to that set forth in Section 3.01
above the Company's obligations to make payments to the Employee under
this Section 5.04 shall immediately and forever cease. If the Employee
obtains full time employment during the period between his termination
by the Company other than for Cause and the end of the term of
employment set forth in Section 1.02 above at a salary level that is
less than that set forth in Section 3.01 above, the Company's
obligations to make payments under Section 5.04(a) above shall
immediately and forever be reduced to the difference between the
salary set forth in Section 3.01 above and the salary which the
employee receives from such other employment. If the Employee obtains
part time employment during the period between his termination by the
Company other than for Cause and the end of the term of employment set
forth in Section 1.02 above the Company's obligations to make payments
under Section 5.94(a) above shall be reduced to the difference between
the salary set forth in Section 3.01 above and all salary or wages
received by the Employee from time to time from such part time
employment. Employee hereby expressly waives and releases
any other or further right to damages or additional compensation
relating to termination of Employee's employment hereunder.
ARTICLE 6
INVENTIONS
Employee agrees that all processes, procedures, programs,
discoveries, formulae, improvements, technologies, designs, inventions
(collectively, 'Inventions"), including new contributions,
developments, ideas, and discoveries, whether or not patentable or
copyrightable, conceived, developed, invented, or made solely by
Employee, or jointly with others, during the Employment "Term shall be
conclusively deemed "work for hire" and is property of, and belong to,
the Company. In connection therewith, Employee shall:
(a) Promptly disclose all such Inventions to the Company
(b) Assign to the Company, without additional compensation, all patent,
copyright, trademark, tradename, servicemark and other rights to such
Inventions, whether or not patentable, copyrightable or otherwise
protectable including all substitute, continuation-in-part, and
reissue applications, patents of addition or reissue applications,
patents of addition or confirmation relative thereto, for the United
States of America and foreign countries and sign all documents and
instruments necessary to carry out the foregoing;
(c) Give testimony in support of inventorship; provided, however, that if
such testimony is required after termination of the Employee's
employment with the Company the Company shall pay the Employee a fee
of $100 per hour for the time spent by the Employee in giving such
testimony and reasonable expenses incurred by the Employee in
connection with giving such testimony; and
(d) Use his best efforts to cooperate with the Company, and take such
further actions as Employee may request, in order to protect and
otherwise perfect Employee's rights to such Inventions.
Furthermore, if any Invention is described in a patent or copyright
application where it is disclosed to third parties, directly or
indirectly, by Employee within one (1) year after the termination of
employment by the Company, is presumed that the Invention was
conceived or made during the period of Employee's employment by the
Company. Employee agrees not to assert, and otherwise hereby waives,
any rights to any Invention as having been made or acquired prior to
the date of this Agreement, except for Inventions, if any, disclosed
to the Company in writing prior to the date hereof.
ARTICLE 7
ASSIGNMENT OF CONTRACT
7.01 Assignment by the Company. Employee understands and agrees
that the Company may assign all of its rights and delegate all of its
duties under this Agreement upon notice to Employee.
7.02 Assignment by Employee. Employee understands that this
Agreement is personal to him and that he may not assign his rights or
delegate his duties under this Agreement, or any portion thereof, to
any other person or entity without the prior written approval of the
Company.
ARTICLE 8
GENERAL PROVISIONS
8.01 Indemnification. Employee shall indemnify and hold each of the
Company and its Affiliates harmless against any and all cost, losses,
claims, and damages, including, the legal fees, costs, expenses, and
disbursements, incurred, in investigating, preparing, or defending any
suit, investigation or proceeding as and when incurred by the Company
or any of its Affiliates, which are directly or indirectly, caused by,
relating to, based upon arising out of, or in connection with any
intentional breach of the covenants by Employee set forth in Section
2.02, Article 4, Article 6 or the occurrence of any event described in
Section 5.03. For the purposes of this Section, any breach caused by
the gross negligence of the Employee shall be deemed to be
intentional.
Provisions of this Section 8.01 shall survive the termination of this
Agreement.
8.02 Attorneys' Fees and Costs. If any action at law or in equity
is necessary to enforce or interpret any of the rights or obligations
under this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which the prevailing party may be
entitled.
8.03 Miscellaneous.
(a) Amendments or Modifications. This Agreement may be amended or
modified from time to time but only by a written instrument
executed by all parties hereto.
(b) Notices. Notices and other communications provided for herein shall be
in writing and shall be delivered or mailed (or in a case of
telegraphic communication, delivered by telegram, telex, or facsimile
transmission, or other form of telegraphic communication), as follows:
If To: The Company
TM Century, Inc.
2002 Academy
Dallas, TX 75234
Attn: Nell Sargent, President/CEO
If To: The Employee
R. David Graupner