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EXHIBIT 10.23
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of February 15, 2000, by and between GAYLORD
ENTERTAINMENT COMPANY, a Delaware corporation having its corporate headquarters
at One Gaylord Drive, Nashville, Tennessee 37214 ("the Company") and JAMES
"TIM" DUBOIS, a resident of Nashville, Davidson County, Tennessee
("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive and Executive desires
to serve as Executive Vice President of the Company and the President of its
Creative Content Group pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. Employment; Term; Place of Employment. The Company hereby employs
Executive, and Executive hereby accepts employment with the Company upon the
terms and conditions contained in this Agreement. The term of Executive's
employment hereunder shall commence on February 15, 2000 (the "Effective Date")
and shall continue for a period of five (5) years from and after the Effective
Date, unless sooner terminated as hereinafter provided (the "Employment
Period"). For purposes of this Agreement, a "Contract Year" shall mean a one
year period commencing on the Effective Date or any anniversary thereof.
Executive shall render services at the offices established by the Company in
the greater Nashville metropolitan area; provided that Executive agrees to
travel on temporary trips to such other places as may be required to perform
Executive's duties hereunder.
2. Duties; Title.
(a) Description of Duties.
(i) During the Employment Period, Executive shall
serve the Company as an Executive Vice President and the President of
its Creative Content Group and shall serve under such other titles as
the Chief Executive Officer of the Company shall determine. Executive
shall report directly to the Chief Executive Officer. Executive shall
be primarily responsible for the management, operations, growth, and
development of the Creative Content Group. Executive shall be assigned
such areas of responsibility as the Chief Executive Officer shall from
time to time determine, including, without limitation, the development
and oversight of country, pop, and Christian music record companies or
divisions, the oversight of the Opry Group (including the Grand Ole
Opry, the Ryman Auditorium, the Wildhorse Saloon, and live
entertainment and theatricals), music publishing, children's
programming, film and video production and distribution (including
Pandora Films), artist management, and sports management and
marketing. During the Employment Period, the Chief Executive Officer
shall be entitled to modify Executive's responsibilities
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with respect to the Creative Content Group; provided, however, that
Executive's responsibilities regarding the development and oversight
of the pop, country, and Christian music record companies or
divisions, together with music publishing relating to the foregoing,
shall not be materially reduced without Executive's consent; and
provided, further, that Executive shall not, without his consent,
become other than the most senior executive officer of the Creative
Content Group.
(ii) Executive and the Company acknowledge that a
strategic plan for the Creative Content Group has been established by
the Company, a copy of which has been delivered to Executive. On an
annual basis, at such time as is consistent with the Company's overall
planning and budgeting process, Executive shall prepare a written
update to the strategic plan for the Creative Content Group for
presentation to, and approval by, the Company.
(iii) Executive shall faithfully perform the duties
required of his office. Subject to Section 2(b), Executive shall
devote substantially all of his business time and effort to the
performance of his duties to the Company.
(b) Other Activities. Notwithstanding anything to the
contrary contained in Section 2(a), Executive shall be permitted to engage in
the following activities, provided that such activities do not materially
interfere or conflict with Executive's duties and responsibilities to the
Company:
(i) Executive may serve on the governing boards of,
or otherwise participate in, a reasonable number of trade
associations and charitable organizations, whose purposes are
not inconsistent with the activities and the image of the
Company;
(ii) Executive may engage in a reasonable amount of
charitable activities and community affairs; and
(iii) Subject to the prior approval of the Chief
Executive Officer, Executive may serve on the board of
directors of one or more business corporations, so long as
they do not compete, directly or indirectly, with the
Company.
(c) Executive shall be subject to and shall comply with all
codes of conduct, personnel policies and procedures applicable to senior
executives of the Company, including, without limitation, policies regarding
sexual harassment, conflicts of interest and insider trading.
3. Cash Compensation.
(a) Signing Bonus. The Company shall pay Executive a signing
bonus in the amount of $1,000,000 (the "Signing Bonus"). The Signing Bonus
shall be payable as follows: (i) an amount shall be paid to Executive on the
effective date equal to $1,000,000 less the projected "applicable employee
remuneration" as defined in Section 162(m)(4)* to be received by Executive
during the calendar year ending December 31, 2000; and (ii) the remainder of
the Signing Bonus (the "Deferred Signing Bonus") shall be a fully vested
deferred obligation of the Company which shall be payable, together with
investment earnings thereon, in accordance with Section 6 hereof. Payment of
the Deferred Signing Bonus shall be facilitated by the Company contributing to
the rabbi
* All section references are to the Internal Revenue Code of 1986, as amended,
unless otherwise specified.
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trust established pursuant to Section 6 (the "Rabbi Trust") an amount
of cash equal to the Deferred Signing Bonus, as set forth in Sections 6.
(b) Base Salary. During the initial Contract Year, the
Company shall pay to Executive an annual salary of $650,000. Executive's annual
salary shall be increased in each subsequent Contract Year by a percentage
equal to the annual percentage increase, if any, generally granted to other
senior executives, such percentage to be determined from time to time by the
Compensation Committee of the Board of Directors (such annual salary, together
with any increases under this subsection (b), being herein referred to as the
"Base Salary").
(c) Annual Cash Bonus.
(i) For each of the first two Contract Years,
Executive shall be entitled to receive an annual cash bonus
equal to 60% of his Base Salary for the Contract Year for
which such bonus is awarded (the "Guaranteed Cash Bonus").
Subject to the provisions of Section 6 herein relating to the
possible deferral of a portion of the Guaranteed Cash Bonus,
the Guaranteed Cash Bonus shall be paid to Executive in a
single lump sum on or before the last business day of each of
the first two Contract Years. To the extent any portion of
the Guaranteed Cash Bonus is deferred pursuant to Section 6,
the Company shall make a corresponding contribution in an
equal amount to the Rabbi Trust, as set forth in Sections 6.
(ii) For each of the third, fourth, and fifth
Contract Years, Executive shall be eligible for an annual
cash bonus that is targeted to be 60% of his Base Salary for
the Contract Year for which such bonus is awarded but which
may be greater or less than the targeted percentage depending
upon actual performance. The cash bonus awarded to Executive
for the third, fourth and fifth Contract Years (the "Cash
Bonus") shall be based upon such criteria as are utilized in
connection with the granting of bonuses to similarly situated
executive officers of the Company under the Company's annual
Management Incentive Plan, and shall further be based on
Executive's performance for each of the Company's calendar
years immediately preceding the third, fourth and fifth
anniversaries of this Agreement. The Cash Bonus shall be paid
to Executive on or before the end of the calendar month in
which the anniversary of this Agreement occurs.
(d) The Base Salary, the Guaranteed Cash Bonus, and the Cash
Bonus shall be subject to applicable withholding and shall be payable in
accordance with the Company's payroll practices.
4. Equity Compensation.
(a) Stock Option Grant. The Company hereby grants to
Executive options to purchase 200,000 shares of common stock of the Company
("Company Common Stock") (the "Stock Options"). The Stock Options shall (i) be
granted pursuant to the Company's 1997 Stock Option and Incentive Plan, as
amended and restated as of August 15, 1998, and as may hereinafter be further
amended; (ii) be subject to the terms of a stock option agreement between the
Company and Executive in the form prescribed for Company executives generally
and attached hereto as Exhibit B; (iii) vest in 40,000 share increments on the
first through the fifth anniversaries of the Effective Date (each a "Vesting
Date"), but shall be subject to accelerated vesting on each such Vesting Date
with respect to an additional 40,000 shares granted hereunder if, as of such
Vesting Date, the Creative
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Content Group has achieved the targets to be determined by the parties hereto
(which when so determined shall be attached as Exhibit C hereto) which relates
to such Vesting Date; (iv) be exercisable at the closing price of the Company
Common Stock as reported in the Wall Street Journal for the trading day
immediately preceding the award of the option grant by the Compensation
Committee of the Board of Directors; and (v) have a term of ten years from the
Effective Date.
(b) Restricted Stock Grant. The Company shall deliver to the
trustee of the Rabbi Trust 50,000 restricted shares of Company Common Stock
(the "Restricted Stock Grant") to be held in a separate share known as "Account
B." The Restricted Stock Grant shares shall become eligible for termination of
restrictions (i.e., become available for distribution to Executive) in 10,000
share increments on the first through the fifth anniversaries of the Effective
Date (each a "Restricted Stock Grant Eligibility Date"). Elimination of
restrictions on eligible Restricted Stock Grant shares shall occur upon the
Creative Content Group achieving, on the Restricted Stock Grant Eligibility
Date to which such eligible shares relate, the performance targets to be
determined by the parties hereto (which when so determined shall be attached as
Exhibit D hereto). Should Executive fail to achieve the aforesaid performance
targets set forth in Exhibit D on any Restricted Stock Grant Eligibility Date,
the eligible shares shall cumulate and the restrictions shall be removed on all
eligible shares if the performance goals are met on a subsequent Restricted
Stock Grant Eligibility Date. Restricted Stock Grant shares not otherwise
eligible for termination of restrictions shall be subject to accelerated
removal of restrictions on each Restricted Stock Grant Eligibility Date with
respect to an additional 10,000 shares of Restricted Stock upon the attainment
of the performance targets set forth in Exhibit D as well as the performance
targets set forth on Exhibit C. The Restricted Stock Grant shall be granted
pursuant to the Company's 1997 Stock Option and Incentive Plan, as amended, and
as may hereafter be further amended, and shall otherwise be subject to the
terms of a restricted stock grant agreement between the Company and Executive
in the form prescribed for Company executives generally, which form is attached
hereto as Exhibit E. If a restriction terminates as to a 10,000 share
increment, the trustee of the Rabbi Trust shall deliver such shares to
Executive unless Section 6 herein requires that the distribution be deferred.
If distribution is deferred, the Restricted Stock Grant shall continue to be
held in Account B of the Rabbi Trust, until distribution is made in accordance
with Section 6(d) hereof. Nothing herein shall, however, prevent the trustee of
the Rabbi Trust upon the direction of the Company, which shall be made only
after consultation with Executive, from selling unrestricted shares held in
Account B and reinvesting the proceeds in other investments selected by Company
(in which event the benefit under this paragraph (b) shall be determined by
reference to the value of such substituted assets). Except as provided in
Section 9(e) and 10(b), if Executive's employment is terminated, any Restricted
Stock held in the Rabbi Trust, the restrictions of which have not been
eliminated, will be delivered to the Company.
5. Benefits; Expenses; Etc.
(a) Custom Non-Qualified Mid-Career Supplemental Employee
Retirement Plan.
(i) The Company shall create a supplemental employee
retirement plan (the "SERP"), for Executive which shall provide for
the payment of a benefit (the "SERP Benefit") to him, equal to the
value of 60 shares of CBS Corporation Series B Participating Preferred
Stock (which shares shall be exchanged for Viacom Class C Preferred
Stock upon completion of the merger of CBS and Viacom Inc., and which
shall thereafter be convertible on a 1,000 for 1 basis into Viacom
Class B Common Stock upon the election of the holder thereof) and any
dividends thereon (the "SERP Shares"), which benefit shall, at the
election of Executive, be payable in cash or SERP Shares. The Company
may, but only at the request
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of the Executive, substitute for the SERP Shares (or for a portion
thereof) one or more mutual funds, to be selected by Company after
consultation with Executive, which have a value equal to the SERP
Shares being substituted. After any such substitution, the SERP
Benefit shall be determined solely by reference to the value of such
substituted assets (the "SERP Replacement Assets"), instead of the
original SERP Shares which have been substituted. The SERP Benefit
shall be payable upon the fifth anniversary of the Effective Date;
provided, however, that no later than the fourth anniversary of the
Effective Date, Executive may, with the permission of the Company,
elect to substitute a date that is later than the fifth annual
anniversary of the Effective Date as the payout date. Furthermore,
Executive may, with the permission of the Company, make a subsequent
election to further defer the payout date, so long as such request is
submitted no less than one year before the payout date then in effect.
At the time Executive makes any such election, Executive may also
elect, with the permission of the Company, to have distributions made
in installments for a period not in excess of his life expectancy in
lieu of a lump sum payment.
(ii) In the event that Executive's employment is not
terminated prior to the fifth anniversary of the Effective Date and
the value of the SERP Benefit on the fifth anniversary of the
Effective Date is less than $2,500,000, the amount of the SERP Benefit
shall automatically be adjusted upward to $2,500,000.
(iii) In order to facilitate the payment of the SERP
Benefit, within five (5) days of the establishment of the Rabbi Trust,
the Company shall deposit the SERP Shares with the trustee of the
Rabbi Trust in a separate share of the Rabbi Trust known as Account C.
Moreover, if the SERP Benefit is adjusted upward to $2,500,000 on the
fifth anniversary of the Effective Date pursuant to Section 5(a)(ii),
at the time of the adjustment the Company shall deposit with the
trustee of the Rabbi Trust an amount in cash equal to the difference
between $2,500,000 and the SERP Benefit immediately before such
adjustment. Except for the guarantee by the Company that the SERP
Benefit as of the fifth anniversary of the Effective Date will not be
less than $2,500,000, the Company shall not be responsible for the
investment performance of the SERP Shares or succeeding investments.
(iv) In the event of Executive's termination for any
reason other than by the Company for Cause or by Executive without
Good Reason, a portion of the SERP Benefit shall vest as hereinafter
provided and be payable within ten (10) days to Executive, subject to
the provisions of Section 6 hereof. If Executive's employment is
terminated, any unvested portion of the SERP Benefit, as determined
pursuant to other provision of this Agreement, shall be delivered to
the Company by the trustee of the Rabbi Trust.
(v) If Executive elects to receive the SERP Shares
rather than cash, and if the merger between CBS and Viacom has not
occurred, Executive acknowledges that the CBS shares will be
"restricted securities," as defined in Rule 144 of the Securities Act
of 1933. As "restricted securities", the CBS shares may not be
transferred, sold, or otherwise disposed of unless registered under
the Securities Act of 1933 or an exemption from registration is
available under such Act. Executive acknowledges that the certificates
evidencing the CBS shares will bear a restrictive legend to this
effect.
(b) Expenses. During the Employment Period, the Company shall
reimburse Executive, in accordance with the Company's policies and procedures,
for all reasonable expenses incurred by Executive, including reimbursement for
his reasonable first class travel expenses and, on
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up to two occasions per year, those of his spouse, in connection with the
performance of his duties for the Company.
(c) Vehicle Allowance. During the Employment Period,
Executive shall be entitled to receive from the Company a vehicle allowance of
$1,050 per month, subject to future increases as may be granted to senior
executives.
(d) Use of Company Aircraft. During the Employment Period and
subject to availability, Executive shall be entitled to use of the Company
airplane for travel in connection with the performance of his duties.
(e) Vacation. During the Employment Period, Executive shall
be entitled to four (4) weeks vacation during each Contract Year.
(f) Company Plans. During the Employment Period, Executive
shall be entitled to participate in and enjoy the benefits of (i) the Company
Health Insurance Plan, (ii) the Company Retirement Plan, (iii) the Company
401(k) Savings Plan, (iv) the Company Retirement Benefit Restoration Plan, (v)
the Company Supplemental Deferred Compensation ("SUDCOMP") Plan, and (vi) any
health, life, disability, retirement, pension, group insurance, or other
similar plan or plans which may be in effect or instituted by the Company for
the benefit of senior executives generally, upon such terms as may be therein
provided. Such benefits as in effect on the date hereof are summarized in
Exhibit F hereto, provided that, notwithstanding Exhibit F, during the
Employment Period, Executive shall be entitled to a life insurance benefit of
not less than $1,800,000.
6. Deferral of Excessive Employee Remuneration.
(a) During any period in which Executive is a "covered
employee" within the meaning of Section 162(m)(3), any "applicable employee
remuneration" otherwise payable to Executive in excess of the limit specified
in Section 162(m)(1) or any successor provision of the Code (currently
$1,000,000) shall not be currently paid, but shall be a deferred payment
obligation of the Company governed by the provisions of this Section 6.
(b) All such deferred payment obligations shall be fully
vested and shall be credited with investment earnings (or losses). The rate of
investment earnings (or losses) of such deferred amounts shall be equal to the
rate of investment earnings (or losses) of one or more mutual funds selected by
the Company after consultation with Executive and identified to Executive as
such, which mutual funds may be changed from time to time by the Company after
consultation with Executive. While the Company shall make reasonable efforts to
act prudently in the selection of such mutual funds, taking into account
Executive's investment preferences, the Company shall not be responsible for
the investment performance of any such fund(s).
(c) In order to facilitate the payment of the Company's
deferred payment obligation, at the time that the Company would otherwise make
a payment to Executive but for the Code Section 162(m) limitations, the Company
shall deposit an amount of cash equal to the amount which is being deferred,
into "Account A" of a "rabbi trust" to be known as the Deferred Compensation
Rabbi Trust (the "Rabbi Trust") to be established by the Company with an
independent corporate trustee acceptable to the Company and Executive within
thirty (30) days from the Effective Date. The Rabbi Trust shall satisfy the
requirements of Section 7 hereof and shall be in substantially the form
attached hereto as Exhibit A.
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(d) Amounts deferred pursuant to this Section 6 and earnings
thereon, shall be paid to the Executive at the earliest time possible without
being nondeductible by the Company under Code Section 162(m), but in all events
not later than ten (10) days following the termination of Executive's
employment with the Company (without regard to the reason of such termination),
except that if the Company believes, based on the written opinion of counsel,
that payment at such time will result in nondeductibility by the Company under
Section 162(m), payment may, at the election of Company be further deferred but
not beyond the end of the first full week following the calendar year in which
the termination of employment occurs. Distributions from the Rabbi Trust shall
to the extent feasible be made from Account A prior to any distributions from
Account B.
(e) The Restricted Shares, which are to be held by the
trustee of the Rabbi Trust pursuant to Section 4(b) herein, shall be subject to
subparagraphs (a) and (d) of this Section 6. The provisions of Section 4(b)
shall apply to the holding and investment of the Restricted Shares by the
trustee of the Rabbi Trust, and accordingly Section 6(b) and 6(c) shall not
apply to the Restricted Shares to the extent that they are inconsistent with
Section 4(b).
7. Rabbi Trust. It is understood and agreed by the parties that (i)
the Rabbi Trust shall remain subject to the claims of the Company's general
creditors; (ii) any income tax payable with respect to the Rabbi Trust shall be
the sole obligation and responsibility of the Company (and shall not reduce the
assets in the Rabbi Trust so long as the Rabbi Trust remains a "grantor trust"
for federal income tax purposes); and (iii) the establishment of the Rabbi
Trust shall not relieve the Company of its liability to pay amounts due under
this Agreement. The Rabbi Trust shall, however, relieve the Company of its
liability to pay amounts due under this Agreement to the extent that payments
are made in accordance with the terms of this Agreement and the Rabbi Trust.
8. Termination. Executive's employment hereunder may be terminated
prior to the expiration of the Employment Period as follows:
(a) Termination by Death. Upon the death of Executive
("Death"), Executive's employment shall automatically terminate as of the date
of Death.
(b) Termination by Company for Permanent Disability. At the
option of the Company, Executive's employment may be terminated by written
notice to Executive or his personal representative in the event of the
Permanent Disability of Executive. As used herein, the term "Permanent
Disability" shall mean a physical or mental incapacity or disability which
renders Executive unable substantially to render the services required
hereunder for a period of ninety (90) consecutive days or one hundred eighty
(180) days during any twelve (12) month period as determined in good faith by
the Company.
(c) Termination by Company for Cause. At the option of the
Company, Executive's employment may be terminated by written notice to
Executive upon the occurrence of any one or more of the following events (each,
a "Cause"):
(i) any action by Executive constituting fraud,
self-dealing, embezzlement, or dishonesty in the course of
his employment hereunder;
(ii) any conviction of Executive of a crime
involving moral turpitude;
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(iii) any action of Executive, regardless of its
relation to his employment, that has brought or reasonably
could bring the Company into substantial public disgrace or
disrepute;
(iv) failure of Executive after reasonable notice
promptly to comply with any valid and legal directive of the
Board of Directors or the Chief Executive Officer;
(v) a material breach by Executive of any of his
obligations under this Agreement and failure to cure such
breach within ten (10) days of his receipt of written notice
thereof from the Company; or
(vi) a failure by Executive to perform adequately
his responsibilities under this Agreement as demonstrated by
objective and verifiable evidence showing that the business
operations under Executive's control have been materially
harmed as a result of Executive's gross negligence or willful
misconduct.
(d) Termination by Executive for Good Reason. At the option
of Executive, Executive may terminate his employment by written notice to the
Company given within a reasonable time after the occurrence of a material
breach by the Company of any of its obligations under this Agreement and the
failure by the Company to cure such breach within thirty (30) days of such
notice ("Good Reason").
(e) Termination by Company Without Cause. At the option of
the Company Executive's employment may be terminated by written notice to
Executive at any time ("Without Cause").
9. Effect of Termination.
(a) Effect Generally. If Executive's employment is terminated
prior to the fifth anniversary of the Effective Date, the Company shall not
have any liability or obligation to Executive other than as specifically set
forth in Section 8 and Section 9 hereof.
(b) Effect of Termination by Death. Upon the termination of
Executive's employment as a result of Death, Executive's estate shall be
entitled to receive an amount equal to the accrued but unpaid Base Salary
through the date of termination and a pro rata portion of Executive's cash
bonus, if any, for the Contract Year in which termination occurs. Such cash
bonus, if not a Guaranteed Cash Bonus, shall be based on Executive's
performance through the date of termination, as reasonably determined by the
Compensation Committee of the Board of Directors at the time bonuses are
determined for Company executives generally. Executive's estate shall be
entitled to any unpaid portion of the Signing Bonus, accrued and unpaid
vacation pay, unreimbursed expenses incurred pursuant to Section 5(b) or (c),
and any other benefits owed to Executive pursuant to any written employee
benefit plan or policy of the Company, excluding benefits payable pursuant to
any plan beneficiary pursuant to a contractual beneficiary designation by
Executive. In addition, Executive's estate shall also be entitled to a pro-rata
portion of the SERP benefit. The vested portion of the SERP Benefit shall be
equal to the value of the SERP Shares (including any SERP Replacement Assets)
at the time of such termination (but in all events the value of the SERP Shares
(including any SERP Replacement Assets) shall be no less than $2,500,000)
multiplied by a fraction, the numerator of which is the total number of months
(including any fractional month) during which Executive was employed hereunder,
and the denominator of which is 60. Executive's estate shall be entitled only
to the Restricted Stock that has vested as of the date of death, and the
exercise of
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Executive's Stock Options shall be governed by the Company's 1997 Stock Option
and Incentive Plan, as amended and restated, and as may hereinafter be further
amended without prejudice to Executive.
(c) Effect of Termination for Permanent Disability. Upon the
termination of Executive's employment hereunder as a result of Permanent
Disability, Executive shall be entitled to receive an amount equal to the
accrued but unpaid Base Salary through the date of termination and a pro rata
portion of Executive's cash bonus, if any, for the Contract Year in which
termination occurs. Such cash bonus, if not a Guaranteed Cash Bonus, shall be
based on Executive's performance through the date of termination, as reasonably
determined by the Compensation Committee of the Board of Directors at the time
bonuses are determined for Company executives generally. In addition, Executive
shall be entitled to long-term disability benefits available to executives of
the Company, accrued and unpaid vacation pay, unreimbursed expenses incurred
pursuant to Section 5(b) or (c), and any other benefits owed to Executive
pursuant to any written employee benefit plan or policy of the Company.
Payments to Executive hereunder shall be reduced by any payments received by
Executive under any worker's compensation or similar law. In addition,
Executive shall also be entitled to a pro-rata portion of the SERP benefit. The
vested portion of the SERP Benefit shall be equal to the value of the SERP
Shares (including any SERP Replacement Assets) at the time of such termination
(but in all events the value of the SERP Shares (including any SERP Replacement
Assets) shall be no less than $2,500,000) multiplied by a fraction, the
numerator of which is the total number of months (including any fractional
month) during which Executive was employed hereunder, and the denominator of
which is 60. Executive shall be entitled only to the Restricted Stock that has
vested as of the date of termination, and the exercise of Executive's Stock
Options shall be governed by the Company's 1997 Stock Option and Incentive
Plan, as amended and restated, and as may hereinafter be further amended
without prejudice to Executive.
(d) Effect of Termination by the Company for Cause or by
Executive Without Good Reason. Upon the termination of Executive's employment
by the Company for Cause or by Executive for any reason other than Good Reason,
Executive shall be entitled to an amount equal to the accrued but unpaid Base
Salary through the date of termination plus any unpaid portion of the Signing
Bonus, unpaid vacation pay, unreimbursed expenses incurred pursuant to Section
5(b) or (c), and any other benefits owed to Executive pursuant to any written
employee benefit plan or policy of the Company. All Stock Options, to the
extent not theretofore exercised, shall terminate on the date of termination of
employment under this Section 7(d).
(e) Effect of Termination by the Company Without Cause or by
Executive for Good Reason. Upon the termination of Executive's employment
hereunder either by the Company Without Cause or by Executive for Good Reason,
Executive shall be entitled to (i) the continued payment of Executive's Base
Salary for the remainder of the initial five-year term of this Agreement; (ii)
continued payment of the annual cash bonuses for the remaining years of the
initial five-year term of this Agreement, each such annual cash bonus to be
calculated as an amount equal to the average amount of the annual cash bonuses
previously granted to Executive hereunder; (iii) any unpaid portion of the
Signing Bonus, accrued and unpaid vacation pay, unreimbursed expenses incurred
pursuant to Section 5(b) or (c), and any other benefits owed to Executive
pursuant to any written employee benefit plan or policy of the Company; and
(iv) the continuation of benefits under (or comparable to those provided under)
the Company's Health Insurance Plan for the remainder of the initial five-year
term, at the same cost to Executive as the cost that he would have paid had his
employment not been terminated. In lieu of the continued payments required
under clauses (i) and (ii) of this Section 9(e), the Company may elect to pay
to Executive a lump sum amount equal to the present value, using an 8% discount
rate, of the payments required under clauses (i) and (ii) of this
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Section 9(e). In addition, Executive shall also be entitled to a pro-rata
portion of the SERP benefit. The vesting portion of the SERP Benefit shall be
equal to the value of the SERP Shares (including any SERP Replacement Assets)
at the time of such termination (but in all events the value of the SERP Shares
(including any SERP Replacement Assets) shall be no less than $2,500,000)
multiplied by a fraction, the numerator of which is the total number of months
(including any fractional month) during which Executive was employed hereunder,
and the denominator of which is 60. Upon termination, all unvested Stock
Options and Restricted Stock Grants shall immediately vest. Executive shall
have 90 days from the date of termination to exercise the Stock Options.
10. Change of Control.
(a) Definition. A "Change of Control" shall be deemed to have
taken place if:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, other than the Company, a wholly-owned subsidiary
thereof, Edward L. Gaylord or any member of his immediate
family or any trusts or other entities controlled by Edward
L. Gaylord or any member of his immediate family, or any
employee benefit plan of the Company or any of its
subsidiaries becomes the beneficial owner of Company
securities having 50% or more of the combined voting power of
the then outstanding securities of the Company that may be
cast for the election of directors of the Company (other than
as a result of the issuance of securities initiated by the
Company in the ordinary course of business);
(ii) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, becomes the beneficial owner of Company securities
having greater voting power than the Company securities held
by Edward L. Gaylord, any member of his immediate family, and
any trusts or other entities controlled by Edward L. Gaylord
or any member of his immediate family.
(iii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions, less than a
majority of the combined voting power of the then-outstanding
securities of the Company or any successor corporation or
entity entitled to vote generally in the election of the
directors of the Company or such other corporation or entity
after such transactions, is held in the aggregate by the
holders of the Company's securities entitled to vote
generally in the election of directors of the Company
immediately prior to such transaction;
(iv) the Company sells all or substantially all of
the assets of the Company;
(v) the Company sells all or substantially all of
the Creative Content Group business, whether by way of an
asset sale, stock spin-off or other similar transaction; or
(vi) during any period of two consecutive years,
individuals who at the beginning of such period were members
of the Company's Board of Directors cease for any reason to
constitute at least a majority thereof (unless the election,
or the nomination for election by the Company's shareholders,
of each new director was
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approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
such period).
(b) Effect of Change of Control. In the event that within one
year following a Change of Control the Company terminates Executive Without
Cause or Executive terminates employment for Good Reason, Executive shall be
entitled to (i) an amount equal to the present value, using an 8% discount
rate, of the continued payment of Executive's Base Salary for the remainder of
the initial five-year term of this Agreement; (ii) an amount equal to the
present value, using an 8% discount rate, of the unpaid annual cash bonuses for
the remainder of the initial five-year term of this Agreement, each such annual
cash bonus to be calculated as an amount equal to the average amount of the
annual cash bonuses previously granted to Executive hereunder; (iii) any unpaid
portion of the Signing Bonus, unpaid vacation pay, unreimbursed expenses
incurred pursuant to Section 5(b) or (c), and any other benefits owed to
Executive pursuant to any written employee benefit plan or policy of the
Company; and (iv) the continuation of benefits under (or comparable to those
provided under) the Company's Health Insurance Plan for the remainder of the
initial five-year term, at the same cost to Executive as the cost that he would
have paid had his employment not been terminated. Upon such termination,
Executive shall also be entitled to receive the full SERP Benefit. In addition,
upon termination, all unvested Stock Options and Restricted Stock Grants shall
immediately vest. Executive shall have 90 days from the date of termination to
exercise the Stock Options.
11. Confidential Information.
(a) Nondisclosure; Etc. Executive agrees that he shall not
commit any act, or in any way assist others to commit any act, which could
reasonably be expected to injure the Company or any of its businesses. Without
limiting the generality of the foregoing, Executive recognizes and acknowledges
that all information about the Company or relating to any of its respective
products, services, or any phase of its operations, business, or financial
affairs which is not a matter of public record, including without limitation,
trade secrets, contracts with agents, artists, distributors, or producers,
computer programs, financial information of every type and kind, plans, and
strategies, ("Confidential Information") is not generally known to the
Company's competitors and is valuable, special, and unique to the business of
the Company. Accordingly, Executive shall not, directly or indirectly, use any
such Confidential Information for his own benefit, divulge, disclose, or make
accessible any such Confidential Information or any part thereof to any person,
firm, corporation, association, or other entity for any reason or purpose
whatsoever (other than in the course of carrying out his duties hereunder), or
render any services to any person, firm, corporation, association, or other
entity to whom any such Confidential Information, in whole or in part, has been
disclosed or is threatened to be disclosed by or at the instance of Executive.
Confidential Information shall not include any information which is or becomes
generally available to the public other than as a result of disclosure in
violation of this Agreement.
(b) Property of Company. All memoranda, notes, lists,
records, and other documents (and all copies thereof) constituting Confidential
Information made or compiled by Executive or made available to Executive shall
be the Company's property, shall be kept confidential in accordance with the
provisions of this Section 11, and shall be delivered to the Company at any
time on request and in any event upon the termination of Executive's employment
for any reason.
(c) Relief. Since the Company shall be irreparably damaged if
the provisions of this Section 11 are not specifically enforced, the Company
shall be entitled to an injunction or any other appropriate decree of specific
performance (without the necessity of posting any bond or other security in
connection therewith) restraining any violation of Executive's covenants or
failure of
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Executive to fulfill such covenants under this Section 11. Such remedies shall
not be exclusive and shall be in addition to any other remedy which the Company
may have for any breach or threatened breach of this Section 11 by Executive.
12. Covenant Against Competition. Executive covenants and agrees that:
(a) Definitions. As used herein:
(i) "Affiliate" shall mean any entity directly or
indirectly controlling, controlled by, or under common
control with the Company and any entity in which the Company,
directly or indirectly, is a general partner, member,
manager, or holder of greater than a 10% common equity,
partnership, or membership interest.
(ii) "Company Business" shall mean the business of
the Company on the date hereof, and any business which the
Company is engaged in or has under development (including
preliminary stages of development), at the earlier to occur
of the time of the alleged violation of this Section 12 or
the termination of Executive's employment under this
Agreement.
(iii) "Geographic Area" shall mean the world.
(b) Non-Competition. During the Employment Period, and, if
Executive's employment is terminated by the Company for Cause or by Executive
for other than Good Reason, for a period of one (1) year thereafter, Executive
shall not, directly or indirectly, in the Geographic Area: (i) engage for his
own account in the Company Business; (ii) render any services in any capacity
to any person or entity (other than the Company or its Affiliates) engaged in
the Company Business; or (iii) become interested in any person or entity
engaged in the Company Business (other than the Company or its Affiliates) as a
partner, shareholder, director, officer, employee, principal, member, manager,
agent, trustee, or consultant or in any other relationship or capacity;
provided, however, Executive may own, directly or indirectly, solely as a
passive investment, securities of any such entity which are traded on any
national securities exchange if Executive (A) is not a controlling person of,
or a member of a group which controls, such entity and (B) does not, directly
or indirectly, own 1% or more of any class of securities of such entity.
(c) Non-Solicitation of Employees, Others. During the
Employment Period, and for a period of one (1) year thereafter, Executive shall
not, without the prior written consent of the Company, directly or indirectly,
solicit or encourage any employee of the Company or any of its Affiliates to
leave the employment of the Company or any of its Affiliates or hire any
employee who has left the employment of the Company or any of its Affiliates,
nor shall Executive directly or indirectly, knowingly solicit or encourage any
artist, producer, writer, distributor, customer, client, agent, or account of
the Company or any of its Affiliates to engage the services of Executive or any
person or entity (other than the Company or its Affiliates) in which Executive
is a partner, shareholder, director, officer, employee, principal, member,
manager, agent, trustee, or consultant or engaged in any other relationship or
capacity.
(d) Remedies. Since the Company shall be irreparably damaged
if the provisions of this Section 12 are not specifically enforced, the Company
shall be entitled to an injunction or any other appropriate decree of specific
performance (without the necessity of posting any bond or other security in
connection therewith) restraining any violation of Executive's covenants or
failure of Executive to fulfill any covenant under this Section 12. Such
remedies shall not be exclusive and
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shall be in addition to any other remedy which the Company may have for any
breach or threatened breach of this Section 12 by Executive.
(e) Enforceability. If any provision of this Section 12 is
held to be unenforceable because of its scope, duration, area of applicability,
or otherwise, it is the intention of the parties that the court making such
determination shall modify such provision and that such modified provision
shall then be applicable.
13. Public Disclosure of Employment Agreement. The Company
acknowledges that Executive has been under contract to Arista Records, Inc. and
has contractual agreements regarding the disclosure of certain information. The
Company hereby agrees that it will make no further public disclosure or
announcement regarding the termination of the agreement between Executive and
Arista Records, Inc. or the employment of Executive or the terms of this
Agreement prior to April 30, 2000, unless agreed to in writing by Arista
Records, Inc, except as otherwise required by applicable law, including the
Securities Exchange Act of 1934.
14. Indemnification. The Company shall indemnify Executive and hold
him harmless from and against any and all costs, expenses, losses, claims,
damages, obligations or liabilities (including actual attorneys fees and
expenses) arising out of or relating to any acts, or omissions to act, made by
Executive on behalf of or in the course of performing services for the Company
to the fullest extent permitted by the Bylaws of the Company, or, if greater,
as permitted by applicable law, as the same shall be in effect from time to
time. If any claim, action, suit or proceeding is brought, or any claim
relating thereto is made, against Executive with respect to which indemnity may
be sought against the Company pursuant to this Section, Executive shall notify
the Company in writing thereof, and the Company shall have the right to
participate in, and to the extent that it shall wish, in its discretion, assume
and control the defense thereof, with counsel satisfactory to Executive.
15. Executive's Representations and Warranties. Executive represents
and warrants that he is free to enter into this Agreement and, as of the
Effective Date, that he is not subject to any conflicting obligation or any
disability which shall prevent or hinder Executive's execution of this
Agreement or the performance of his obligations hereunder; that no lawsuits or
claims are pending or, to Executive's knowledge, threatened against Executive;
and that he has never been subject to bankruptcy, insolvency, or similar
proceedings, has never been convicted of a felony or a crime involving moral
turpitude, and has never been subject to an investigation or proceeding by or
before the Securities and Exchange Commission or any state securities
commission. The Company shall have the authority to conduct an independent
investigation into the background of Executive and Executive agrees to fully
cooperate in any such investigation. The Company shall notify Executive if it
intends to conduct such an investigation.
16. Notices. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered
or mailed by first class registered mail, return receipt requested, or by
commercial courier or delivery service, or by facsimile or electronic mail,
addressed to the parties at the addresses set forth below (or at such other
address as any party may specify by notice to all other parties given as
aforesaid):
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(a) if to the Company, to:
Gaylord Entertainment Company
One Gaylord Drive
Nashville, Tennessee 37214
Attention: Terry London
Facsimile Number: (615) 316-6010
E-Mail: TLondon@gaylordentertainment.com
With a copy to:
Sherrard & Roe, PLC
424 Church Street, Suite 2000
Nashville, TN 37219
Attention: Thomas J. Sherrard, Esq.
Facsimile Number: (615) 742-4539
E-Mail: TSherrard@sherrardroe.com
(b) if to Executive, to:
Tim DuBois
4529 Tyne Valley Boulevard
Nashville, TN 37220
E-Mail: PTbois@aol.com
With a copy to:
Loeb & Loeb
10100 Santa Monica Blvd.
Suite 2200
Los Angeles, CA 90067-4164
Attention: John Frankenheimer, Esq.
Facsimile Number: (310) 282-2192
E-Mail: JFrankenheimer@loeb.com
and/or to such other persons and addresses as any party shall have specified in
writing to the other by notice as aforesaid.
17. Miscellaneous.
(a) Entire Agreement. This writing and the Exhibits hereto
constitute the entire agreement of the parties with respect to the subject
matter hereof and may not be modified, amended, or terminated except by a
written agreement signed by all of the parties hereto. Nothing contained in
this Agreement shall be construed to impose any obligation on the Company to
renew this Agreement and neither the continuation of employment nor any other
conduct shall be deemed to imply a continuing obligation upon the expiration of
this Agreement.
(b) Assignment; Binding Effect. This Agreement shall not be
assignable by Executive, but it shall be binding upon, and shall inure to the
benefit of, his heirs, executors,
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administrators, and legal representatives. This Agreement shall be binding upon
the Company and inure to the benefit of the Company and its respective
successors and permitted assigns. This Agreement may only be assigned by the
Company to an entity controlling, controlled by, or under common control with
the Company in connection with a sale and assignment of the assets of the
Creative Content Group to such other entity; provided, however, that no such
assignment shall relieve the Company of any of its obligations hereunder.
(c) Waiver. No waiver of any breach or default hereunder
shall be considered valid unless in writing, and no such waiver shall be deemed
a waiver of any subsequent breach or default of the same or similar nature.
(d) Enforceability. Subject to the terms of Section 12(e)
hereof, if any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not
contained herein, unless the invalidity or unenforceability of such provision
substantially impairs the benefits of the remaining portions of this Agreement.
(e) Headings. The section headings contained herein are for
the purposes of convenience only and are not intended to define or limit the
contents of the sections.
(f) Counterparts. This Agreement may be executed in two or
more counterparts, all of which taken together shall be deemed one original.
(g) Confidentiality of Agreement. The parties agree that the
terms of this Agreement as they relate to compensation, benefits, and
termination shall, unless otherwise required by law (including, in the
Company's reasonable judgment, as required by federal and state securities
laws), be kept confidential; provided, however, that any party hereto shall be
permitted to disclose this Agreement or the terms hereof with any of its legal,
accounting, or financial advisors provided that such party ensures that the
recipient shall comply with the provisions of this Section 16(g).
(h) Governing Law. This Agreement shall be deemed to be a
contract under the laws of the State of Tennessee and for all purposes shall be
construed and enforced in accordance with the internal laws of said state.
(i) No Third Party Beneficiary. This Agreement shall not
confer any rights or remedies upon any person or entity other than the parties
hereto and their respective successors and permitted assigns.
(j) Arbitration. Any controversy or claim between or among
the parties hereto, including but not limited to those arising out of or
relating to this Agreement or any related agreements or instruments, including
any claim based on or arising from an alleged tort, shall be determined by
binding arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the law of the
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state of Tennessee), the Commercial Arbitration Rules of the American
Arbitration Association in effect as of the date hereof, and the provisions set
forth below. In the event of any inconsistency, the provisions herein shall
control. Judgment upon any arbitration award may be entered in any court having
jurisdiction. Any party to the Agreement may bring an action, including a
summary or expedited proceeding, to compel arbitration of any controversy or
claim to which this Agreement applies in any court having jurisdiction over
such action; provided, however, that all arbitration proceedings shall take
place in Nashville, Tennessee. The arbitration body shall set forth its
findings of fact and conclusions of law with citations to the evidence
presented and the applicable law, and shall render an award based thereon. In
making its determinations and award(s), the arbitration body shall base its
award on applicable law and precedent, and shall not entertain arguments
regarding punitive damages, nor shall the arbitration body award punitive
damages to any person.
(Remainder of Page Intentionally Left Blank)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
GAYLORD ENTERTAINMENT COMPANY, INC.
By:
--------------------------------
Terry E. London, President and
Chief Executive Officer
EXECUTIVE:
-----------------------------------
James "Tim" DuBois
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