Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and
between Julius Genachowski ("Employee") and USA Networks, Inc., a Delaware
corporation (the "Company"), and is effective August 9, 2000 (the "Effective
Date").
WHEREAS, the Company desires to establish its right to the
services of Executive, in the capacity described below, on the terms and
conditions hereinafter set forth, and Executive is willing to accept such
employment on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, Executive and the Company have agreed and do hereby agree
as follows:
1A. EMPLOYMENT. The Company agrees to employ Executive as Senior Vice President,
General Counsel and Secretary, and Executive accepts and agrees to such
employment. During Executive's employment with the Company, Executive shall do
and perform all services and acts necessary or advisable to fulfill the duties
and responsibilities as are commensurate and consistent with Executive's
position and shall render such services on the terms set forth herein. Executive
shall have supervision and day-to-day authority over the legal affairs of the
Company and such other business and legal affairs as the parties may mutually
agree. During Executive's employment with the Company, Executive shall report
directly to the Vice Chairman and/or, from time to time, the senior executive
officer who has responsibility for corporate staff functions (hereinafter
referred to as the "Reporting Officer"). Executive shall have such powers and
duties with respect to the Company as may reasonably be assigned to Executive by
the Board or Reporting Officer, to the extent consistent with Executive's
position and status as set forth above. Executive agrees to devote all of his
working time, attention and efforts to the Company and to perform the duties of
Executive's position in accordance with the Company's policies as in effect from
time to time. Executive's principal place of employment shall be the Company's
offices located in New York City.
2A. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence on the
Effective Date and shall continue for a period of three years, unless sooner
terminated in accordance with the provisions of Section 1 of the Standard Terms
and Conditions attached hereto.
3A. COMPENSATION.
(a) BASE SALARY. During the Term, the Company shall pay Executive an
annual base salary of $400,000 (the "Base Salary"), payable in equal biweekly
installments or in accordance with the Company's payroll practice as in effect
from time to time.
(b) DISCRETIONARY BONUS. During the Term, Executive shall be eligible
to receive discretionary annual bonuses.
(c) STOCK OPTIONS. In consideration of Executive's entering into this
Agreement, Executive shall be granted under USA Networks, Inc.'s 1997 Stock and
Annual Incentive Plan (the "Plan") a non-qualified stock option (the "Options")
to purchase 200,000 shares of USA Networks, Inc. ("USAi") common stock, par
value $.0l per share (the "Common Stock"), subject to the approval of the
Compensation Committee of the Board of Directors of USAi. The date of grant of
the Option shall be the date on which the grant is approved by such Compensation
Committee. The exercise price of the Option shall equal the last reported sales
price of the Common Stock in the over-the-counter market (or such other market
on which the Common stock is then traded) on the date preceding the date of
grant. Such Option shall vest and become exercisable in four equal installments
on each of the first, second, third and fourth anniversaries of the Effective
Date, provided that the Option shall become 100% vested and exercisable upon a
Change in Control (as such term is defined in the Plan). The Option shall expire
upon the earlier to occur of (i) ten years from the date of grant (the "Option
Term") or (ii) except as otherwise provided in the Option award agreement, 90
days following the termination of Executive's employment with the Company for
any reason. Other than acceleration of the Option following a Change in Control,
the Option shall not otherwise become vested and exercisable as a result of the
termination or non-renewal of this Agreement (or the termination of Executive's
employment with the Company) for any reason.
(d) BENEFITS. From the Effective Date through the date of termination
of Executive's employment with the Company for any reason, Executive shall be
entitled to participate in any welfare, health and life insurance and pension
benefit and incentive programs as may be adopted from time to time by the
Company on the same basis as that provided to similarly situated Executives of
the Company. Without limiting the generality of the foregoing, Executive shall
be entitled to the following benefits:
(i) REIMBURSEMENT FOR BUSINESS EXPENSES. During the Term, the
Company shall reimburse Executive for all reasonable and necessary
expenses incurred by Executive in performing his duties for the
Company, on the same basis as similarly situated Executives and in
accordance with the Company's policies as in effect from time to time.
(ii) VACATION. During the Term, Executive shall be entitled to
four weeks of paid vacation per year, in accordance with the plans,
policies, programs and practices of the Company applicable to similarly
situated Executives of the Company generally.
(iii) APARTMENT. Throughout the period of the Executive's
employment with the Company during the Term, the Company shall
reimburse Executive for an apartment in New York City for Executive's
use at a rental rate not to exceed $50,000 annually. The Company shall
pay the Executive such additional amounts as shall be necessary to make
the Executive whole on a net after-tax basis for all Taxes (as defined
herein) required to be paid by the Executive with respect to all
taxable income he receives pursuant to the provisions of this Section
3A(d)(iii). The term "Taxes" means all federal, state and local income,
employment and capital gains taxes.
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4A. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be given by first-class mail,
certified or registered with return receipt requested or hand delivery
acknowledged in writing by the recipient personally, and shall be
deemed to have been duly given three days after mailing or immediately
upon duly acknowledged hand delivery to the respective persons named
below:
If to the Company: USA Networks, Inc.
152 West 57th Street
New York, NY 10019
Attention: General Counsel
If to Executive: [EXECUTIVE'S ADDRESS]']
Either party may change such party's address for notices by notice duly given
pursuant hereto.
5A. GOVERNING LAW; JURISDICTION. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the internal laws of the State of New York without reference
to the principles of conflicts of laws. Any and all disputes between the parties
which may arise pursuant to this Agreement will be heard and determined before
an appropriate federal court in New York, or, if not maintainable therein, then
in an appropriate New York state court. The parties acknowledge that such courts
have jurisdiction to interpret and enforce the provisions of this Agreement, and
the parties consent to, and waive any and all objections that they may have as
to, personal jurisdiction and/or venue in such courts.
6A. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument. Executive expressly understands and
acknowledges that the Standard Terms and Conditions attached hereto are
incorporated herein by reference, deemed a part of this Agreement and are
binding and enforceable provisions of this Agreement. References to "this
Agreement" or the use of the term "hereof" shall refer to this Agreement and the
Standard Terms and Conditions attached hereto, taken as a whole.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed and delivered by its duly authorized officer and Executive has
executed and delivered this Agreement on August 9, 2000.
USA NETWORKS, INC.
---------------------------
By: Victor A. Kaufman
Title: Vice Chairman
---------------------------
Julius Genachowski
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STANDARD TERMS AND CONDITIONS
1. TERMINATION OF EXECUTIVE'S EMPLOYMENT.
(a) DEATH. In the event Executive's employment hereunder is
terminated by reason of Executive's death, the Company shall pay Executive's
designated beneficiary or beneficiaries, within 30 days of Executive's death in
a lump sum in cash, Executive's Base Salary through the end of the month in
which death occurs and any Accrued Obligations (as defined in paragraph 1(f)
below).
(b) DISABILITY. If, as a result of Executive's incapacity due
to physical or mental illness ("Disability"), Executive shall have been absent
from the full-time performance of Executive's duties with the Company for a
period of four consecutive months and, within 30 days after written notice is
provided to him by the Company (in accordance with Section 6 hereof), Executive
shall not have returned to the full-time performance of his duties, Executive's
employment under this Agreement may be terminated by the Company for Disability.
During any period prior to such termination during which Executive is absent
from the full-time performance of Executive's duties with the Company due to
Disability, the Company shall continue to pay Executive's Base Salary at the
rate in effect at the commencement of such period of Disability, offset by any
amounts payable to Executive under any disability insurance plan or policy
provided by the Company. Upon termination of Executive's employment due to
Disability, the Company shall pay Executive within 30 days of such termination
(i) Executive's Base Salary through the end of the month in which termination
occurs in a lump sum in cash, offset by any amounts payable to Executive under
any disability insurance plan or policy provided by the Company; and (ii) any
Accrued Obligations (as defined in paragraph 1(f) below).
(c) TERMINATION FOR CAUSE. The Company may terminate
Executive's employment under this Agreement for Cause at any time prior to the
expiration of the Term. As used herein, "Cause" shall mean: (i) the plea of
guilty or nolo contendere to, or conviction for, the commission of a felony
offense by Executive; PROVIDED, HOWEVER, that after indictment, the Company may
suspend Executive from the rendition of services, but without limiting or
modifying in any other way the Company's obligations under this Agreement; (ii)
a material breach by Executive of a fiduciary duty owed to the Company; (iii) a
material breach by Executive of any of the covenants made by Executive in
Section 2 hereof; or (iv) the willful or gross neglect by Executive of the
material duties required by this Agreement. In the event of Executive's
termination for Cause, this Agreement shall terminate without further obligation
by the Company, except for the payment of any Accrued Obligations (as defined in
paragraph 1(f) below).
(d) TERMINATION BY THE COMPANY OTHER THAN FOR DEATH,
DISABILITY OR CAUSE. If Executive's employment is terminated by the Company for
any reason other than Executive's death or Disability or for Cause, then (i) the
Company shall pay Executive the Base Salary through the end of the Term over the
course of the then remaining Term; and (ii) the Company shall pay Executive
within 30 days of the date of such termination in a lump sum in cash any Accrued
Obligations (as defined in paragraph 1(f) below).
(e) MITIGATION; OFFSET. In the event of termination of
Executive's employment prior to the end of the Term, Executive shall use
reasonable best efforts to seek other employment and to take other reasonable
actions to mitigate the amounts payable under Section 1 hereof. If Executive
obtains other employment during the Term, the amount of any payment or benefit
provided for under Section 1 hereof which has been paid to Executive shall be
refunded to the Company by Executive in an amount equal to any compensation
earned by Executive as a result of employment with or services provided to
another employer after the date of Executive's termination of employment and
prior to the otherwise applicable expiration of the Term, and all future amounts
payable by the Company to Executive during the remainder of the Term shall be
offset by the amount earned by Executive from another employer. For purposes of
this Section 1(e), Executive shall have an obligation to inform the Company
regarding Executive's employment status following termination and during the
period encompassing the Term.
(f) ACCRUED OBLIGATIONS. As used in this Agreement, "Accrued
Obligations" shall mean the sum of (i) any portion of Executive's Base Salary
through the date of death or termination of employment for any reason, as the
case may be, which has not yet been paid; and (ii) any compensation previously
earned but deferred by Executive (together with any interest or earnings
thereon) that has not yet been paid.
2. CONFIDENTIAL INFORMATION; NON-SOLICITATION; AND PROPRIETARY RIGHTS.
(a) CONFIDENTIALITY. Executive acknowledges that while
employed by the Company Executive will occupy a position of trust and
confidence. Executive shall not, except as may be required to perform
Executive's duties hereunder or as required by applicable law, without
limitation in time or until such information shall have become public other than
by Executive's unauthorized disclosure, disclose to others or use, whether
directly or indirectly, any Confidential Information regarding the Company or
any of its subsidiaries or affiliates. "Confidential Information" shall mean
information about the Company or any of its subsidiaries or affiliates, and
their clients and customers that is not disclosed by the Company or any of its
subsidiaries or affiliates for financial reporting purposes and that was learned
by Executive in the course of employment by the Company or any of its
subsidiaries or affiliates, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists and all papers, resumes, and records (including computer records) of the
documents containing such Confidential Information. Executive acknowledges that
such Confidential Information is specialized, unique in nature and of great
value to the Company and its subsidiaries or affiliates, and that such
information gives the Company and its subsidiaries or affiliates a competitive
advantage. Executive agrees to deliver or return to the Company, at the
Company's request at any time or upon termination or expiration of Executive's
employment or as soon thereafter as possible, all documents, computer tapes and
disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by the Company and its subsidiaries or
affiliates or prepared by Executive in the course of Executive's employment by
the Company and its subsidiaries or affiliates. As used in this Agreement,
"subsidiaries" and "affiliates" shall mean any company controlled by,
controlling or under common control with the Company.
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(b) PROPRIETARY RIGHTS; ASSIGNMENT. All Executive Developments
shall be made for hire by the Executive for the Company or any of its
subsidiaries or affiliates. "Executive Developments" means any idea, discovery,
invention, design, method, technique, improvement, enhancement, development,
computer program, machine, algorithm or other work or authorship that (i)
relates to the business or operations of the Company or any of its subsidiaries
or affiliates, or (ii) results from or is suggested by any undertaking assigned
to the Executive or work performed by the Executive for or on behalf of the
Company or any of its subsidiaries or affiliates, whether created alone or with
others, during or after working hours. All Confidential Information and all
Executive Developments shall remain the sole property of the Company or any of
its subsidiaries or affiliates. The Executive shall acquire no proprietary
interest in any Confidential Information or Executive Developments developed or
acquired during the Term. To the extent the Executive may, by operation of law
or otherwise, acquire any right, title or interest in or to any Confidential
Information or Executive Development, the Executive hereby assigns to the
Company all such proprietary rights. The Executive shall, both during and after
the Term, upon the Company's request, promptly execute and deliver to the
Company all such assignments, certificates and instruments, and shall promptly
perform such other acts, as the Company may from time to time in its discretion
deem necessary or desirable to evidence, establish, maintain, perfect, enforce
or defend the Company's rights in Confidential Information and Executive
Developments.
(c) COMPLIANCE WITH POLICIES AND PROCEDURES. During the Term,
Executive shall adhere to the policies and standards of professionalism set
forth in the Company's Policies and Procedures as they may exist from time to
time.
(d) REMEDIES FOR BREACH. Executive expressly agrees and
understands that the remedy at law for any breach by Executive of this Section 2
will be inadequate and that damages flowing from such breach are not usually
susceptible to being measured in monetary terms. Accordingly, it is acknowledged
that upon Executive's violation of any provision of this Section 2 the Company
shall be entitled to obtain from any court of competent jurisdiction immediate
injunctive relief and obtain a temporary order restraining any threatened or
further breach as well as an equitable accounting of all profits or benefits
arising out of such violation. Nothing in this Section 2 shall be deemed to
limit the Company's remedies at law or in equity for any breach by Executive of
any of the provisions of this Section 2, which may be pursued by or available to
the Company.
(e) SURVIVAL OF PROVISIONS. The obligations contained in this
Section 2 shall, to the extent provided in this Section 2, survive the
termination or expiration of Executive's employment with the Company and, as
applicable, shall be fully enforceable thereafter in accordance with the terms
of this Agreement. If it is determined by a court of competent jurisdiction in
any state that any restriction in this Section 2 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.
3. TERMINATION OF PRIOR AGREEMENTS. This Agreement constitutes the entire
agreement between the parties and terminates and supersedes any and all prior
agreements and
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understandings (whether written or oral) between the parties with respect to the
subject matter of this Agreement. Executive acknowledges and agrees that neither
the Company nor anyone acting on its behalf has made, and is not making, and in
executing this Agreement, the Executive has not relied upon, any
representations, promises or inducements except to the extent the same is
expressly set forth in this Agreement. Executive hereby represents and warrants
that by entering into this Agreement, Executive will not rescind or otherwise
breach an employment agreement with Executive's current employer prior to the
natural expiration date of such agreement
4. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its nature and none of
the parties hereto shall, without the consent of the others, assign or transfer
this Agreement or any rights or obligations hereunder, provided that, in the
event of the merger, consolidation, transfer, or sale of all or substantially
all of the assets of the Company with or to any other individual or entity, this
Agreement shall, subject to the provisions hereof, be binding upon and inure to
the benefit of such successor and such successor shall discharge and perform all
the promises, covenants, duties, and obligations of the Company hereunder, and
all references herein to the "Company" shall refer to such successor.
5. WITHHOLDING. The Company shall make such deductions and withhold such amounts
from each payment and benefit made or provided to Executive hereunder, as may be
required from time to time by applicable law, governmental regulation or order.
6. HEADING REFERENCES. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose. References to "this Agreement" or the use of
the term "hereof" shall refer to these Standard Terms and Conditions and the
Employment Agreement attached hereto, taken as a whole.
7. WAIVER; MODIFICATION. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto. Notwithstanding
anything to the contrary herein, neither the assignment of Executive to a
different Reporting Officer due to a reorganization or an internal restructuring
of the Company or its affiliated companies nor a change in the title of the
Reporting Officer shall constitute a modification or a breach of this Agreement.
8. SEVERABILITY. In the event that a court of competent jurisdiction determines
that any portion of this Agreement is in violation of any law or public policy,
only the portions of this Agreement that violate such law or public policy shall
be stricken. All portions of this Agreement that do not violate any statute or
public policy shall continue in full force and effect. Further, any court order
striking any portion of this Agreement shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the intentions of the
parties under this Agreement.
9. INDEMNIFICATION. The Company shall indemnify and hold Executive harmless for
acts and omissions in Executive's capacity as an officer, director or Executive
of the Company to
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the maximum extent permitted under applicable law; PROVIDED, HOWEVER, that
neither the Company, nor any of its subsidiaries or affiliates shall indemnify
Executive for any losses incurred by Executive as a result of acts described in
Section 1(c) of this Agreement.
ACKNOWLEDGED AND AGREED:
Date:
USA NETWORKS, INC.
---------------------------
By: Victor A. Kaufman
Title: Vice Chairman
---------------------------
Julius Genachowski
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