Employment Agreement - Sinclair Communications Inc. and Barry Drake
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of this 21st
day of February, 1997, between Sinclair Communications, Inc., a Maryland
corporation ("SCI"), and Barry Drake ("Employee").
RECITALS
A. SCI through its wholly-owned subsidiaries, owns or operates
television and radio broadcast stations.
B. SCI desires to employ Employee as Chief Operating Officer/Radio
of SCI, and Employee desires to accept such employment.
C. SCI and Employee desire to set forth the terms of employment of
Employee with SCI as Chief Operating Officer/Radio.
NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES.
1.1. DUTIES UPON EMPLOYMENT. Upon the terms and subject to the other
provisions of this Agreement, commencing on the date hereof (the "Effective
Date"), Employee will be employed by SCI in Baltimore, Maryland as Chief
Operating Officer/Radio of SCI. As the Chief Operating Officer/Radio, Employee
will
(a) report to the Chief Executive Officer and such other
officer(s) of SCI as the Chief Executive Officer of SCI designates; and
(b) have such responsibilities and perform such duties as may
from time to time be established by the Chief Executive Officer or such other
senior officers.
1.2 FULL-TIME EMPLOYMENT. While an employee of SCI, Employee agrees
to devote Employee's full working time, attention, and best efforts exclusively
to the business of SCI.
2. TERM
2.1. TERM. The term of Employee's employment as the Chief Operating
Officer/Radio of SCI under this Agreement (the "Employment Term") will begin on
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Effective Date and continue until employment is terminated in accordance with
Section 5. As used in this Agreement, an "employment year" is a twelve (12)
month period beginning on January 1 and ending on the next following December
31; provided, however, that the first "employment year" shall begin on the
Effective Date and shall end on December 31, 1997.
2.2. AT WILL EMPLOYMENT. Notwithstanding anything else in this
Agreement, including, without limitation, the provisions of Section 2.1. of this
Agreement and Schedule A attached hereto regarding the employment term,
compensation of Employee, or benefits of Employees respectively, the employment
of Employee is not for a specified period of time, and SCI or Employee may
terminate the employment of Employee with or without Cause (as defined below) at
any time for any reason. There is not, nor will there be, unless in a writing
signed by all of the parties to this Agreement, any express or implied agreement
as to the continued employment of Employee.
3. COMPENSATION AND BENEFITS. Employee is entitled to the compensation
and benefits described on Schedule A attached hereto on the terms and conditions
stated therein. Contingent upon Employee's execution of this Agreement, Employee
will also be granted options to acquire share of stock of Sinclair Broadcast
Group, Inc. ("Parent"), subject to the terms and conditions contained in the
Long Term Incentive Plan of Parent and the Stock Option Agreement attached
hereto as Schedule B.
4. EMPLOYMENT TERMINATION
4.1. TERMINATION OF EMPLOYMENT.
(a) The Employment Term will end, and the parties will not have
any rights or obligations under this Agreement (except for the rights and
obligations under those Sections of this Agreement which are continuing and will
survive the end of the Employment Term, as specified in Section 8.10 of this
Agreement) on the earliest to occur of the following events (the "Termination
Date"):
(1) the death of Employee;
(2) the Disability (as defined in Section 4.1(b) below) of
Employee;
(3) the termination of Employee's employment by Employee;
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(4) the termination of Employee's employment by SCI for
Cause (as defined in Section 4.1(c) below); or
(5) the termination of Employee's employment by SCI
without Cause.
(b) For the purposes of this Agreement, "Disability" means
Employee's inability, whether mental or physical, to perform the normal duties
of Employee's position for ninety (90) days (which need not be consecutive)
during any twelve (12) consecutive month period, and the effective date of such
Disability shall be the day next following such ninetieth (90th ) day. If SCI
and Employee are unable to agree as to whether Employee is disabled, the
question will be decided by a physician to be paid by SCI and designated by SCI,
subject to the approval of Employee (which approval may not be unreasonably
withheld) whose determination will be final and binding on the parties.
(c) For the purposes of this Agreement, "Cause" means any of the
following: (i) the wrongful appropriation for Employee's own use or benefit of
property or money entrusted to Employee by SCI, (ii) the commission of any act
involving moral turpitude, (iii) Employee's continued disregard of directions of
the Chief Executive Officer or other senior management of SCI after written
notice of such disregard, (iv) Employee's continued violation of SCI policy
after written notice of such violations (such policy may include policies as to
drug or alcohol abuse), or (v) any action by Employee which is reasonably likely
to jeopardize a Federal Communications Commission license of any broadcast
station owned directly by SCI.
4.2 TERMINATION PAYMENTS.
(a) If Employee's employment with SCI terminates pursuant to
Sections 4.1(a)(1), 4.1(a)(2), 4.1(a)(3), or 4.1(a)(5), Employee (or in the
event of the death of Employee, the person or persons designated by Employee in
a written instrument delivered to SCI prior to Employee's death or, if no such
written designation has been made, Employee's estate) will be entitled to
receive, and SCI will pay to the same, all of the following:
(1) the salary payable to Employee through the Termination
Date;
(2) a payment in respect of unutilized vacation time that
has accrued through the Termination Date (determined in accordance with
corporate policies established by SCI and consistent with Schedule A hereof);
and
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(3) the benefits set forth in the Stock Option Agreement,
upon the terms and conditions set forth therein.
(b) If Employee's employment with SCI terminates pursuant to
Section 4.1(a)(5), prior to August 31, 1998, Employee will be entitled to
receive, and SCI will pay to the same, in addition to any amount owed pursuant
to Section 4.2(a), Employees' base salary (but no bonuses or other benefits,
other than those which may be required by law) through and including such date,
such payment (i) to be made in accordance with SCI's regular payroll procedures
and (ii) to be reduced by 50% of any compensation earned by Employee from any
other source during the period such payments are to be made.
(c) If Employee's employment with SCI terminates pursuant to
Section 4.1(a)(4), Employee will be entitled to receive, and SCI will pay to
Employee, only the salary payable to Employee through the Termination Date.
(d) The termination payments described in this Section 4 will be
in lieu of any termination or severance payments required by SCI policy or, to
the fullest extent permissible thereunder, applicable law (including
unemployment compensation) and will constitute Employee's exclusive rights and
remedies with respect to termination of Employee's employment.
5. CONFIDENTIALITY AND NON-COMPETITION.
5.1. CONFIDENTIAL INFORMATION.
(a) Employee will:
(1) keep all Confidential Information in trust for the
use and benefit of SCI and its subsidiaries, and (ii) broadcast stations owned
or operated directly or indirectly by SCI or its subsidiaries (collectively, SCI
Entities");
(2) not, except as required by Employee's duties under
this Agreement, authorized by the General Counsel of SCI or as required by law
or any order, rule, or regulation or any court or governmental agency (but only
after notice to SCI of such requirement), at any time during or after the
termination of Employee's employment with SCI, directly or indirectly, use,
publish, disseminate, distribute, or otherwise disclose any Confidential
Information;
(3) take all reasonable steps necessary, or reasonably
requested by any of the SCI Entities, to ensure that all Confidential
Information is kept confidential for the use and benefit of the SCI Entities;
and
(4) upon termination of Employee's employment or any
other time any for the SCI Entities in writing so request, promptly deliver to
such SCI Entity all materials constituting Confidential Information relating to
such SCI Entity (including all copies) that are in Employee's possession or
under Employee's control. If requested by any of the SCI Entities to return any
Confidential Information, Employee will not make or retain any copy of or
extract from such materials.
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(b) For purposes of this Section 5.1, Confidential Information
means any proprietary or confidential information of or relating to any of the
SCI Entities that is not generally available to the public. Confidential
Information includes all information developed by or for any of the SCI Entities
concerning marketing used by any of the SCI Entities, suppliers, any customers
(including advertisers) with which any of the SCI Entities has dealt prior to
the Termination Date, plans for development of new services and expansion into
new areas or markets, internal operations, financial information, operations,
budgets, and any trade secrets or proprietary information of any type owned by
any of the SCI Entities, together with all written, graphic, other materials
relating to all or any of the same, and any trade secrets as defined in the
Maryland Uniform Trade Secrets Act, as amended from time to time.
5.2. NON-COMPETITION.
(a) During the Employment Term and for one (1) year thereafter,
if Employee's employment is terminated for any reason other than pursuant to
Section 4.1(a)(5), Employee will not, directly or indirectly, engage in the
following conduct within any Metro Survey Area (as defined below) in which any
of the SCI Entities owns or operates a broadcast station immediately prior to
such termination:
(1) participate in any activity involved in the ownership or
operation of any broadcast radio station (other than, during the Employment
Term, broadcast radio stations owned or operated by any of the SCI Entities);
(2) hire, attempt to hire, or to assist any other person or
entity in hiring or attempting to hire any employee of any of the SCI Entities
or any person who was an employee of any of the SCI Entities within the prior
one (1) year period; or
(3) solicit, in competition with any of the SCI Entities,
the business of any customer of any of the SCI Entities or any entity whose
business any of the SCI Entities solicited during the one (1) year period to
Employee's termination.
(b) Notwithstanding anything else contained in this Section 5.2,
Employee may own, for investment purposes only, up to five percent (5%) of the
stock of any publicly-held corporation whose stock is either listed on a
national stock exchange
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or on the NASDAQ National Market System if Employee is not otherwise affiliated
with such corporation.
(c) As used herein, "participate" means lending one's name to,
acting as consultant or advisor to, being employed by or acquiring any direct or
indirect interest in any business or enterprise, whether as a stockholder,
partner, officer, director, employee, consultant, or otherwise.
(d) In the event that (i) SCI places all or substantially all of
its broadcast stations up for sale within one (1) year after termination of
Employee's employment hereunder, or (ii) Employee's employment is terminated in
connection with the disposition of all or substantially all of such radio
stations (whether by sale of assets, equity, or otherwise), Employee agrees to
be bound by, and to execute such additional instruments as may be necessary or
desirable to evidence Employee's agreement to be bound by, the terms and
conditions of any non-competition provisions relating to the purchase and sale
agreement for such radio stations, without any consideration beyond that
expressed in this Agreement, provided that the purchase and sale agreement is
negotiated in good faith with customary terms and provisions, and the
transaction contemplated thereby is consummated and closed not later than one
(1) year after the date on which such SCI Entity first put the stations up for
sale. Notwithstanding the foregoing, in no event shall Employee be bound by, or
obligated to enter into, any non-competition provisions referred to in this
Section 5.2(d) which extend beyond one (1) year from the date of termination of
Employee's employment hereunder or whose scope extends the scope of the
non-competition provisions set forth in Section 5.1(a) (as limited by Sections
5.1(b) and (c) above).
(e) The one (1) year time period referred to above shall be
tolled on a day-for-day basis for each day during which Employee participates in
any activity in violation of Section 5.2 of this Agreement so that Employee is
restricted from engaging in the conduct referred to in Section 5.2 for a full
one (1) year.
(f) For purposes of this Section 5.2, Metro Survey Area shall
mean the Metro Survey Area ("MSA"), as defined from time to time by the Arbitron
Company (or such similar term as used from time to time in the radio broadcast
community.
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5.3. ACKNOWLEDGMENT. Employee acknowledges and agrees that this
Agreement (including without limitation, the provisions of Section 5 and 6) is a
condition of Employee being employed by SCI, Employee having access to
Confidential Information, being eligible to receive the items referred to in
Schedule A (including, without limitation, Employee's eligibility to participate
in the Long Term Incentive Plan, Employee's advancement at SCI, and Employee
being eligible to receive other special benefits at SCI; and further, that this
Agreement is entered into, and is reasonably necessary, to protect the SCI
Entities' investment in Employee's training and development, and to protect the
good will and other business interests of the SCI Entities.
6. REMEDIES.
6.1. INJUNCTIVE RELIEF. The covenants and obligations contained in
Section 5 relate to matters which are of a special, unique, and extraordinary
character and a violation of any of the terms of such Section will cause
irreparable injury to the SCI Entities, the amount of which will be impossible
to estimate or determine and which cannot be adequately compensated. Therefore,
SCI Entities will be entitled to an injunction restraining order or other
equitable relief from any court of competent jurisdiction (subject to such terms
and conditions that the court determines appropriate), restraining any violation
or threatened violation of any of such terms by Employee and such other persons
as the court orders. The parties acknowledge and agree that judicial action,
rather than arbitration, is appropriate with respect to the enforcement of the
provisions of Section 5. The forum for any litigation hereunder shall be the
Circuit Court of Baltimore County or the United States District Court (Northern
Division) sitting in Baltimore, Maryland.
6.2. CUMULATIVE RIGHTS AND REMEDIES. Rights and remedies provided by
Section 5 are cumulative and are in addition to any other rights and remedies
any of the SCI Entities may have at law or equity.
7. ABSENCE OF RESTRICTIONS. Employee warrants and represents that
Employee is not a party to or bound by any agreement, contract, or
understanding, whether of employment or otherwise, with any third person or
entity which would in any way restrict or prohibit Employee from undertaking or
performing employment with SCI in accordance with the terms and conditions of
this Agreement.
8. MISCELLANEOUS.
8.1. ATTORNEYS' FEES. In any action, litigation, or proceeding
(collectively, "Action") between the parties arising out of or in relation to
this Agreement, the prevailing party in the Action will be awarded, in addition
to any damages, injunctions,
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or other relief, and without regard to whether such Action is prosecuted to
final appeal, such party's costs and expenses, including reasonable attorneys'
fees.
8.2. HEADINGS. The descriptive headings of the Sections of this
Agreement are inserted for convenience only, and do not constitute a part of
this Agreement.
8.3. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given upon (a) oral or written confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery of a standard
overnight courier or when delivered by hand, or (c) the expiration of five (5)
business days after the date mailed, postage prepaid, to the parties at the
following addresses:
If to SCI to: Sinclair Communications, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn: President
CONFIDENTIAL
With a copy to: Steven A. Thomas, Esquire
Thomas & Libowitz, P.A.
USF&G Tower, Suite 1100
100 Light Street
Baltimore, Maryland 21202
If to Employee to: Barry Drake
2000 W. 41st Street
Baltimore, Maryland 21211
or to such other address as will be furnished in writing by any party. Any such
notice or communication will be deemed to have been given as of the date so
mailed.
8.4. ASSIGNMENT. SCI may assign this Agreement to any parent of SCI,
and Employee hereby consents and agrees to be bound by any such assignment by
SCI. Employee may not assign, transfer, or delegate Employee's rights or
obligations under this Agreement and any attempt to do so is void. This
Agreement is binding on and inures to the benefit of the parties, their
successors and assigns, and the executors, administrators, and other legal
representatives of Employee. No other third parties, other than SCI Entities,
shall have, or are intended to have, any rights under this Agreement.
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8.5. COUNTERPARTS. This Agreement may be signed in one or more
counterparts.
8.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF MARYLAND (REGARDLESS OF THE LAWS THAT MIGHT BE APPLICABLE UNDER
PRINCIPLES OF CONFLICTS OF LAW) AS TO ALL MATTERS (INCLUDING VALIDITY,
CONSTRUCTION, EFFECT, AND PERFORMANCE.)
8.7. SEVERABILITY. If the scope of any provision contained in this
Agreement is too broad to permit enforcement of such provision to its full
extent, then such provision shall be enforced to the maximum extent permitted by
law, and Employee hereby consents that such scope may be reformed or modified
accordingly, and enforced as reformed or modified, in any proceeding brought to
enforce such provision. Subject to the immediately preceding sentence, whenever
possible, each provision of this Agreement will be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision, to the extent of such prohibition or invalidity, shall not be deemed
to be a part of this Agreement, and shall not invalidate the remainder of such
provision or the remaining provisions of this Agreement.
8.8. ENTIRE AGREEMENT. This Agreement, including the Schedules
attached hereto, and the Stock Option Plan constitute the entire agreement, and
supersede all prior agreements and understandings, written or oral, among the
parties with respect to the subject matter of this Agreement and the Stock
Option Plan. This Agreement may not be amended or modified except by agreement
in writing, signed by the party against whom enforcement of any waiver,
amendment, modification, or discharge is sought.
8.9. INTERPRETATION. This Agreement is being entered into among
competent and experienced businessmen (who have had an opportunity to consult
with counsel), and any ambiguous language in this Agreement will not necessarily
be construed against any particular party as the drafter of such language.
8.10. CONTINUING OBLIGATION. The provisions in the following sections
of this Agreement will continue and survive the termination of this Agreement:
4.2, 5, 6 and 8.
8.11. TAXES. SCI may withhold from any payments under this Agreement
all applicable federal, state, city or other taxes required by applicable law to
be so withheld.
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8.12. ARBITRATION AND EXTENSION OF TIME. Except as specifically
provided in Section 6, any dispute or controversy arising out of or relating to
this Agreement shall be determined and settled by arbitration in Baltimore,
Maryland in accordance with the Commercial Rules of the American Arbitration
Association then in effect, and the Federal Arbitration Act, 9 U.S.C. Section 1
et seq., and judgment upon the award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction. The expenses of the arbitration
shall be borne by the non-prevailing party to the arbitration, including, but
not limited to, the cost of experts, evidence, and legal counsel. Whenever any
action is required to be taken under this Agreement within a specified period of
time and the taking of such action is materially affected by a matter submitted
to arbitration, such period shall automatically be extended by the number of
days, plus ten (10) that are taken for the determination of that matter by the
arbitrator(s). Notwithstanding the foregoing, the parties agree to use their
best reasonable efforts to minimize the costs and frequency of arbitration
hereunder.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
SINCLAIR COMMUNICATIONS, INC.
By: /s/ David D. Smith
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Its: President
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/s/ Barry Drake
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Barry Drake
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