RESTATED AND AMENDED
EMPLOYMENT AGREEMENT
RESTATED AND AMENDED EMPLOYMENT AGREEMENT, dated as of the 20th day of
January 1997, by and between TRANSMEDIA NETWORK INC., a Delaware corporation
("TRANSMEDIA"), and XXXXX X. XXXXXXXXX (the "EXECUTIVE").
WHEREAS, Transmedia and the Executive wish to amend and restate the
Employment Agreement dated as of April 1, 1992, and amended as of October 1,
1994, which they previously executed;
NOW, THEREFORE, In consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
do mutually agree as follows:
1. EMPLOYMENT. Transmedia agrees to and does hereby employ the
Executive, and the Executive accepts such employment, upon the terms and
conditions hereinafter set forth. The Executive represents and warrants that he
is free to enter into this Agreement and that entering into this Agreement is
not in violation of any obligations that he has to any other person, firm or
corporation.
2. TERM. The term of this Agreement shall be for the period commencing
April 1, 1992 and ending on September 30, 1999 (the "TERM"), unless earlier
terminated as provided herein.
3. OFFICE AND DUTIES. The Executive shall perform such executive
services in the operation of the business of Transmedia and its subsidiaries as
Transmedia's Board of Directors may from time to time reasonably assign to the
Executive. The Executive shall hold the position of Vice President of Transmedia
and President of Transmedia Restaurant Company Inc., and shall report directly
to Transmedia's President. During the term of this Agreement, the Executive
shall:
(1) work for Transmedia and its subsidiaries on a full-time, exclusive
basis;
(2) use his best efforts to apply on a full-time basis all of his skill
and experience to the performance of his duties in such employment; and
(3) not engage in any other business activities, other than personal
investments in corporations and other entities which do not compete directly or
indirectly with Transmedia and its subsidiaries. Notwithstanding the provisions
of the preceding sentence, the Executive shall be entitled, on an occasional
basis, to serve as a consultant to, or on the Board of Directors of, other
corporations during the term of this Agreement and to receive and retain all
compensation paid to him in such capacities, so long as such other corporations
do not compete directly or indirectly with Transmedia and its subsidiaries. The
provisions of this Section 3 are subject to modification as set forth in Section
10.
4. COMPENSATION AND BENEFITS.
(1) For services rendered by the Executive under this Agreement, the
Executive shall be paid a base salary (the "Salary") at the rate of One Hundred
Eighty Thousand Dollars ($180,000) per annum during the first year of the Term,
Two Hundred Fifty Thousand Dollars ($250,000) per annum during the second year
of the Term, and Three Hundred Thousand Dollars ($300,000) per annum during the
third year of the Term, Three Hundred Fifteen Thousand Dollars ($315,000) per
annum during the fourth year of the Term, and Three Hundred Thirty-Five Thousand
Dollars ($335,000) during the fifth year of the Term. The Salary shall be
payable in equal weekly installments.
(2) As additional compensation, the Executive shall be eligible to
receive annually a bonus of up to one-half (1/2) of his salary during each year
of the Term. The Bonus shall be payable on an annual basis within 120 days after
the end of each fiscal year, commencing with the fiscal year ending September
30, 1996.
(3) Transmedia shall, during the term of this Agreement, procure,
maintain in force, and pay all premiums on an insurance policy to be issued on
the life of the
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Executive, with his estate as beneficiary, in the face amount of Five Hundred
Thousand ($500,000) Dollars. Upon the expiration of the term of this Agreement,
Transmedia shall transfer the ownership of such policy to the Executive without
any payment by the Executive whether or not he becomes disabled during the
employment Term.
(4) At all times during the term of this Agreement, the Executive shall
be included in any life, medical, health and hospitalization insurance, pension,
stock option, stock ownership, incentive compensation and other benefit programs
maintained by or for Transmedia at the date hereof. If Transmedia hereafter
establishes any other programs, the Executive shall be included therein at least
at the same level as the other senior executives of Transmedia. In addition, in
the event of the Executive's Disability (as defined below), Transmedia will pay
to the Executive the following: (i) during the first six months of Disability,
100% of the Salary that would be payable to the Executive but for such
Disability; (ii) thereafter, and until the end of the Term, 75% of such Salary;
and (iii) the Bonus for the period(s) provided in the next sentence. The
Executive shall receive a Bonus for the entire fiscal year ending on any
applicable September 30, if said September 30 occurs during the first six months
of Disability; in all other instances, the Executive shall receive a portion of
the Bonus for an entire year determined by multiplying the Bonus for the entire
fiscal year by a fraction, the numerator of which is the total number of months
starting with October lst and ending upon the conclusion of said six months of
Disability and the denominator of which is 12. For purposes of this
sub-paragraph (d), all calculations shall be made on the basis of full and not
partial months. For the purposes hereof "Disability" shall mean a physical or
mental impairment of such duration and degree that the Executive is determined
by the Board of Directors of Transmedia to be substantially unable because of
the impairment to perform the services described in Section 3.
(5) Transmedia agrees to provide the Executive with a One Thousand
($1,000) Dollar monthly automobile allowance.
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(6) Transmedia may provide to the Executive such additional
compensation, bonuses, and benefits as its Board of Directors deems appropriate,
but nothing herein shall obligate Transmedia to do so.
5. VACATION. The Executive shall be entitled to take four (4) weeks
paid vacation during each twelve-month period this employment hereunder on a
basis consistent with the requirements of the business Transmedia and its
subsidiaries and in accordance with Transmedia's customary practice for senior
executives.
6. REIMBURSEMENT OF EXPENSES. During the term of this Agreement, the
Executive shall be reimbursed for reasonable travel, entertainment and other
expenses incident to the rendering, of services hereunder, upon presentation of
expense statements or vouchers or such other supporting information as
Transmedia may customarily require of its senior executives.
7. RESTRICTIONS
(1) The Executive acknowledges that the business of Transmedia is
potentially nationwide in scope, and that it expects to be marketing its
products and services throughout a wider geographical area than that in which it
presently operates. Accordingly, during the Restricted Period (as defined
below), the Executive shall not, unless acting with Transmedia's prior written
consent: (i) directly or indirectly own, manage, operate, join, or control, or
participate in the ownership, management, operations or control of, or be
connected as a director, officer, employee, partner, stockholder, consultant or
otherwise with, any business or organization located in or doing business in the
Restricted Area (as defined below) which competes with the business of
Transmedia and its subsidiaries, licensees or franchisees as conducted at any
time during the term hereof; or (ii) interfere with, or divert or attempt to
divert from them the benefits of, any relationship with employees, agents,
suppliers, restaurant clients, membership card holders or other customers
maintained by Transmedia and its subsidiaries at any time during the Restricted
Period. However, if the Executive's employment hereunder is terminated without
"cause" (as defined in Section 9 hereof), then the provisions of this Section
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7(a) shall cease, upon such termination. For the purposes of this Agreement, (i)
"RESTRICTED PERIOD" means the twenty-four-month period commencing upon the
earlier of (x) the termination of the Executive's employment with Transmedia
prior to the expiration hereof, either voluntarily by the Executive or by
Transmedia for "cause"; or (y) the expiration of this Agreement after its stated
term; and (ii) "RESTRICTED AREA" means any geographical market in or with
respect to which Transmedia, within twelve months prior to the commencement of
the Restricted Period, is then operating or has taken significant affirmative
steps to commence operations. Nothing in this Section 7(a) shall be construed to
prevent the Executive from owning or dealing in any stock actively traded
over-the-counter or on any recognized exchange and issued by a corporation which
may compete directly or indirectly with Transmedia and its subsidiaries so long
as the Executive does not participate in the management, control, or operations
of any such corporation and the Executive's holdings do not at any time exceed
Five Percent (5%) of the outstanding shares of any class of stock of such
corporation.
(2) The Executive agrees that all confidential and proprietary matters
which he may now have or may obtain during the Term of his employment hereunder
relating in any way to the business of Transmedia and its subsidiaries shall not
be disclosed to any other person, either during or after the termination of his
employment, unless Transmedia has given its prior consent to such disclosure or
such disclosure is a necessary incident to transactions which the Executive is
pursuing in accordance with duties delegated to him by Transmedia's Board of
Directors. The Executive shall promptly return all tangible evidence of such
confidential and proprietary matters to Transmedia at the termination of his
employment or upon Transmedia's earlier request.
(3) The Executive acknowledges that the remedy at law for his breach of
the covenants contained in this Section 7 is inadequate, and that therefore
Transmedia and its subsidiaries shall be entitled, in addition to any other
right or remedy available to them, to
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injunctive relief and the remedy of specific performance to restrain the
Executive from committing or continuing any such breach and to enforce the
Executive's obligations hereunder.
(4) If any court of tribunal of competent jurisdiction shall
refuse to enforce any or all of the provisions of this Section 7, because
individually or taken together, they are deemed unreasonable, then the parties
hereto understand and agree that any such provision or provisions shall not be
void but for the purpose of such proceedings, shall be revised to the extent
necessary to permit the enforcement of such provisions.
8. OWNERSHIP OF WORK PRODUCT. The Executive acknowledges that during
the term of his employment hereunder, he may conceive of, discover, invent or
create inventions, improvements, new contributions, literary property, material,
ideas and discoveries, whether or not patentable or copyrightable, which relate
to the business of Transmedia and its subsidiaries (all of the foregoing being
collectively referred to herein as "Work Product"), and that various business
opportunities appropriate for Transmedia and its subsidiaries may be presented
to him by reason of his employment. The Executive acknowledges that, unless
Transmedia otherwise agrees in writing, all of the foregoing shall be owned by
and belong exclusively to Transmedia, and he shall have no personal interest
therein. The Executive, at Transmedia's expense, shall further: (a) promptly
disclose any such Work Product and business opportunities to Transmedia; (b)
assign to Transmedia, upon request and without additional compensation, the
entire rights to such Work Product and business opportunities; (c) sign all
papers necessary to carry out the foregoing; and (d) give testimony in support
of his discovery invention, or creation in any appropriate case.
9. TERMINATION.
(1) Notwithstanding anything contained herein to the contrary, the
Executive's employment hereunder: (i) shall automatically terminate upon the
Executive's death; and (ii) may be terminated by Transmedia's Board of Directors
for "cause" (as hereinafter defined) upon 60 days prior written notice of
termination, subject to the Executive's right to cure certain
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breaches constituting "cause", as provided below. For the purposes of this
Agreement, termination shall be deemed to be "for cause" if: (i) the Executive
is convicted of a felony; (ii) the Executive declares personal bankruptcy
pursuant to any applicable law; (iii) the Executive commits an act of fraud with
respect to Transmedia or misappropriates any of its funds; or (iv) the Executive
directly and repeatedly refuses to perform his duties pursuant to this
Agreement, or directly and repeatedly breaches any covenants contained herein.
The written notice of termination shall set forth with specificity the reason
for such termination. If the reason for such termination is the Executive's
direct and repeated refusal to perform his duties hereunder or his direct and
repeated breach of any covenants contained herein, the Executive shall have the
right, within 30 days of his receipt of such notice, to notify the Board of
Directors of his intention to cure such breach. On or within 10 days before the
effective date of termination, the Board of Directors shall meet to determine
whether such breach has been effectively cured and, upon the majority vote of
the Directors (not including the Executive) that it has been cured, the notice
of termination shall be deemed ineffective. The Executive shall be entitled to
be represented at such meeting by counsel. On the effective date of termination,
except for the reimbursement of expenses incurred to such date, the Executive
shall cease to have any further rights hereunder but shall be subject to all
restrictions set forth elsewhere herein.
(2) Except where the Executive has exercised his right to attempt to
cure pursuant to the preceding subsection, the Executive may, within 15 days
following delivery of a notice of termination for "cause", by written notice to
the Board of Directors of Transmedia, cause the matter of termination for
"cause" by Transmedia to be discussed at the next regularly scheduled meeting of
the Board of Directors or at a special meeting of the Board of Directors
requested by majority of its members. The Executive shall be entitled to be
represented at such meeting by counsel. Such meeting shall be conducted
according to procedures deemed equitable by a majority of the Directors present.
If at such meeting, it shall be determined that this Agreement has been
terminated without "cause", or that such "cause" shall be waived, the
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provisions of this Agreement shall be reinstated with the same force and effect
as if the notice of termination had not been given; and the Executive shall be
entitled to receive the compensation and other benefits provided herein for the
period from the effective date of the notice of termination through the date of
such reinstatement, plus all reasonable costs of his counsel, as approved by the
Board of Directors of Transmedia. Except as provided in the first sentence of
this subsection (b), neither the Executive's election to pursue or forego the
procedures set forth in this subsection (b), nor a determination by the Board of
Directors, at any meeting pursuant to this subsection, that the Executive's
employment hereunder was terminated for "cause", shall prejudice or preclude the
exercise any other right or remedy which the Executive may have at law or
otherwise as a result of the termination of his employment hereunder.
10. SALE OF TRANSMEDIA. Upon a change of control of Transmedia, the
Executive shall be entitled to receive a severance payment in accordance with,
and subject to the terms of, the Company's severance plan.
11. NOTICES. Any Notices to be given hereunder shall be deemed to have
been given if delivered personally against receipt, if sent by nationally
recognized overnight delivery service, of if mailed by registered or certified
mail, return receipt requested, to the following address: if to Transmedia, at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy to Xxxxxx, Xxxxx &
Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the attention of
Xxxxxxx X. Xxxxxxx, Esq.; and if to the Executive, at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. Either party may change his or its address set forth above
by giving written notice to the other party in accordance with this Section.
12. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
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13. OPTIONS. The captions of the sections of this Agreement are for the
purpose of convenience only, are not intended to be part of this Agreement and
shall not be deemed to modify, explain, enlarge or restrict any of its
provisions.
14. SEVERABILITY. If any clause or provision of this Agreement shall be
held invalid or unenforceable, in whole or in part, in any jurisdiction, such
invalidity or unenforceability shall attach only to such clause or provision, or
part thereof, in such jurisdiction, and shall not in any manner affect any other
clause or provision hereof in any jurisdiction.
15. BINDING EFFECT; ASSIGNMENT. This Agreement shall bind and inure to
the benefit of the respective heirs, representatives, successors and permitted
assignees of Transmedia and the Executive. Transmedia may assign this Agreement
or any of its rights and obligations hereunder to (i) any transferee of or
successor to all or substantially all of the assets of business of Transmedia
and its subsidiaries or (ii) any subsidiary or affiliate of Transmedia;
PROVIDED, HOWEVER, that no such assignment shall release Transmedia from its
obligations hereunder. The Executive may not assign this Agreement or any of his
rights and obligations hereunder under any circumstances.
16. MISCELLANEOUS. This Agreement embodies the entire understanding
between Transmedia and the Executive with respect to its subject matter, and
there is no extrinsic agreement of any kind affecting it. This Agreement also
supersedes and replaces any prior agreement with respect to the subject matter
of this Agreement. This Agreement may not be changed or terminated orally, and
no change, termination or waiver of this Agreement or of any of the provisions
herein contained shall be binding unless made in writing and signed by the party
against whom the same is sought to be enforced.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
TRANSMEDIA NETWORK INC.
By: /s/XXXXXX XXXXXX
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Xxxxxx Xxxxxx, President
/s/XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
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