Exhibit 10.10
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 8/th/ day of March, 2002, between CBD Media LLC, a Delaware limited
liability company (the "Company"), and Xxxx Xxxxxxx (the "Employee").
RECITALS
A. It is the desire of the Company to employ the Employee to serve
as the Company's Vice President - Finance & Administration, Chief Financial
Officer.
B. The Employee desires to become an employee and to provide his
services to the Company on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:
ARTICLE I.
SERVICES AND TERM
1.1 Term. Subject to the termination provisions set forth in Section
3.1, the Company will employ the Employee and the Employee accepts employment
with the Company for a period of five years (the "Term") commencing on
completion of the acquisition of the assets of Cincinnati Xxxx Directory by the
Company (the "Effective Date").
ARTICLE II.
COMPENSATION PACKAGE
2.1 Cash Compensation.
(a) Base Salary. During the initial year of the Term, the Company
will pay the Employee an annual base salary of $131,480, thereinafter, will
implement annual salary reviews and increases commensurate with employee's
performance and position, payable in accordance with the normal payroll
procedures of the company.
(b) Bonus Opportunity. The Company shall establish an incentive
bonus compensation plan pursuant to which Employee's target bonus opportunity
shall be $26,296.
(c) Withholding and Deferrals. All base salary and bonus payable
under this Section 2.1 shall be reduced by (i) any income tax or other legally
required withholding by the Company, (ii) any elective deferrals of such amounts
as contributions to qualified and non-qualified retirement plans of the Company,
if any, and (iii) contributions payable by Employee with respect to his
participation in any employee benefit plans of the Company which the Company or
the plan requires contributions by employees to receive benefits thereunder.
2.2 Benefits and Fringes.
(a) Benefit Plans. During the Term, Employee shall be eligible to
participate in such medical, health, retirement, welfare and insurance plans
generally made available from time to time to other employees of the Company
(subject to their terms), including medical, dental, and life, as well as a
401(k) plan with a matching contribution. Employee shall be eligible to
participate in such benefits immediately upon the Effective Time. In addition,
the Company shall provide Employee with life and disability insurance coverage
of at least $500,000.
(b) Vacation. During the Term, the Employee shall be entitled to
paid vacation time in accordance with the plans, practices, policies and
programs applicable to other employees of the Company, but in no event shall
such vacation time be less than 20 days per calendar year, assuming a 12 month
work year.
(c) Business Expenses. The Company will promptly pay or reimburse
the Employee for all reasonable business-related expenses incurred by him in
connection with the performance of his duties hereunder upon presentation of
written documentation, subject, however, to the Company's reasonable policies
relating to business-related expenses as then in effect from time to time.
(d) Automobile. The Company shall provide an automobile allowance
for the employee not to exceed $400 per month, starting September 2002. Employee
acknowledges that any personal use of such automobile and the reimbursement of
costs associated therewith will be taxable income to him. Employee shall
cooperate with the Company with respect to documentation of personal use of the
automobile. Unless Employee provides documented evidence to the contrary, the
Company shall assume that all use of the automobile and reimbursement of costs
associated therewith is personal use and therefore taxable to the Employee as
such.
2.3 Equity. Employee shall be granted a .276% equity interest on a
fully diluted basis as of the Effective Date in CBD Media Holdings LLC, a
Delaware limited liability company (the "Parent"), which is the parent company
of the Company, in the form of Class C units (the "Equity"). The Class C units
shall be granted to Employee on the same terms applicable to the Company's Chief
Executive Officer. As long as the Employee remains employed by the Company, the
Equity shall be subject to vesting at the rate of 25% on each anniversary of the
Effective Date; provided however, that upon a change in control, i.e., the
occurrence of any transaction as a result of which Spectrum, its affiliates or
subsidiaries do not control at least 50% of the voting securities of Parent or
the Company, then Employee shall be fully vested in the Equity. Employee shall
sign the Limited Liability Company Agreement of Parent and a restricted unit
agreement with respect to the Equity.
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ARTICLE III.
TERMINATION OF SERVICES
3.1 Termination. Employee's employment with the Company hereunder may
be terminated by the Company or the Employee, as applicable, at any time prior
to the end of the Term for any of the following reasons:
(a) Disability. Upon the failure of the Employee to render
services to the Company for a continuous period of three (3) months because of
the Employee's physical or mental disability or illness, the Company may
terminate this Agreement and the Employee's employment hereunder, provided such
termination does not otherwise violate applicable law. If there should be a
dispute between the parties as to the Employee's physical or mental disability,
such dispute shall be settled by the opinion of an impartial reputable physician
agreed upon for such purpose by the parties or their representatives. The
certificate of such physician as to the matter in dispute shall be final and
binding on the parties.
(b) Cause. The Company may terminate this Agreement and the
Employee's employment hereunder for Cause. For purposes of this Agreement,
"Cause" shall mean: (i) the Employee's willful failure or refusal to materially
perform his duties under this Agreement; (ii) the Employee's willful failure or
refusal to follow lawful directions of the Board, the Chief Executive Officer or
other supervisor, or any other act of willful insubordination on the part of
Employee; (iii) the engaging by the Employee in willful misconduct which is
materially and demonstrably injurious to the Company or any of its divisions,
subsidiaries or affiliates, monetarily or otherwise; (iv) the commission by the
Employee of an act of fraud or embezzlement against the Company or any of its
divisions, subsidiaries or affiliates; (v) any conviction of, or plea of guilty
or nolo contendere to, the Employee with respect to a felony (other than a
traffic violation); or (vi) any act of fraud or dishonesty committed by the
Employee which is materially detrimental to the business or reputation of the
Company.
(c) Without Cause. The Company may terminate this Agreement
without Cause upon thirty (30) days written notice to the Employee.
(d) Resignation. The Employee may terminate this Agreement and
his employment with the Company upon thirty (30) days prior written notice to
the Company.
(e) Death. This Agreement shall automatically terminate on the
death of the Employee.
3.2 Payment on Termination with Cause, Resignation, Disability or
Death. In the event that Employee's employment is terminated by the Company with
Cause or by resignation, disability or death, Employee shall be entitled to
receive the following payments not later than five business days after the date
of termination:
(a) payment of any earned but unpaid salary accrued through and
including the date of termination;
(b) payment of accrued, but unused, vacation time; and
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(c) reimbursement of any unreimbursed business expenses incurred
prior to the date of termination.
3.3 Payment on Termination without Cause. Subject to the Employee's
continuing compliance with the covenants contained in Section 4.2 of this
Agreement (the "Covenants") and the execution by the Employee of a binding
general waiver and release of claims, in the event that the Employee's
employment is terminated by the Company without Cause, then the Employee shall
be entitled to receive the following less any required withholdings:
(a) payment of any earned, but unpaid salary accrued through and
including the date of termination;
(b) during the initial three years of this five year Agreement, a
lump sum payment equal to the product of (i) the rate of his annual base salary
and plus target bonus for the year in which such termination occurs, and (ii)
two. And for the fourth and fifth year of this Agreement, the lump sum payment
equal to his base salary plus target bonus.
(c) payment of accrued, but unused, vacation time;
(d) reimbursement any unreimbursed business expenses incurred
prior to the date of termination.
ARTICLE IV.
COVENANTS
4.1 During the Term, the Employee shall use his best efforts to
faithfully perform his duties as Vice President - Finance & Administration,
Chief Financial Officer. Employee shall devote his full business time and effort
to the performance of his duties hereunder; provided, however, that the Employee
shall, so long as such activities do not materially interfere or conflict with
his performance hereunder, be permitted to devote time to industry, community or
charitable organizations.
4.2 Covenants.
(a) Non-Competition. The Employee covenants and agrees that (I)
during the Term and (ii) for a period of twelve (12) months following a
termination of his employment by the Company for Cause or by the Employee (the
"Post-Termination Period"), the Employee shall not directly or indirectly own an
interest in, operate, join, control, advise, consult to, work for, serve as a
director or manager of, have a financial interest, or participate in any
corporation, partnership, proprietorship, firm, association, person, or other
entity that engages or is planning to be engaged in the production, sale or
distribution of telephone directories or any other business in which the Company
is engaged during the Term (the "Business"). This Covenant applies to each,
territory or jurisdiction, including but not limited to Butler, Clark, Clermont,
Greene, Hamilton, Miami, Xxxxxxxxxx and Warren counties in the State of Ohio,
Boone, Campbell, Grant Xxxxxxxx, Xxxxxx and Xxxxxxxxx counties in the State of
Kentucky and Dearborn and Ohio counties in the State of Indiana and the Internet
and the World Wide Web, in which the Company is doing business or is making an
active effort to do business during the
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Term and with respect to the Employee's covenants regarding the post-termination
period at the time the Employee's employment with the Company is terminated.
This Covenant does not prohibit the passive ownership of less than five percent
(5%) of the outstanding stock or debt of any public corporation as long as the
Employee is not otherwise in violation of this Covenant.
(b) No Diversion. The Employee covenants and agrees that (i)
during the Term and (ii) the Post-Termination Period, he shall not divert or
attempt to divert or take advantage of or attempt to take advantage of any
actual or potential business opportunities of the Company (e.g., joint ventures,
other business combinations, investment opportunities, potential investors in
the Company, and other similar opportunities) which the Employee became aware of
during his employment with the Company.
(c) Non-Recruitment. The Employee agrees that the Company has
invested substantial time and effort in assembling its present workforce.
Accordingly, the Employee covenants and agrees that during the Term and the
Post-Termination Period, he shall not directly or indirectly entice or solicit
(other than pursuant to general, non-targeted public media advertisements) or
seek to induce or influence any of the Company's Employees to leave their
employment.
(d) Remedies. The Employee acknowledges that should he violate
any of the Covenants, it will be difficult to determine the resulting damages to
the Company and, in addition to any other remedies it may have, and
notwithstanding the provisions of Section 5.4, the Company shall be entitled to
temporary injunctive relief without being required to post a bond and permanent
injunctive relief without the necessity of proving actual damage. The Company
may elect to seek one or more of these remedies at its sole discretion on a case
by case basis. Failure to seek any or all remedies in one case does not restrict
the Company from seeking any remedies in another situation. Such action by the
Company shall not constitute a waiver of any of its rights. Employee
acknowledges and agrees that any breach of any of the Covenants during the
period of his employment shall be grounds for immediate dismissal and forfeiture
of any accrued and unpaid, bonus or other compensation and benefits, including
all options and Bonus Stock granted pursuant to this Agreement and all other
options and restricted stock granted or purchased by Employee, as liquidated
damages. Employee acknowledges that any such liquidated damages shall be in
addition to, and not exclusive of, any and all other rights and remedies the
Company may exercise.
(e) Severability and Modification of Any Unenforceable Covenant.
It is the parties' intent that each of the Covenants be read and interpreted
with every reasonable inference given to its enforceability. However, it is also
the parties' intent that if any term, provision or condition of the Covenants is
held to be invalid, void or unenforceable, the remainder of the provisions
thereof shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. Finally, it is also the parties' intent that if it is
determine any of the Covenants are unenforceable because of over breadth, then
the covenants shall be modified so as to make it reasonable and enforceable
under the prevailing circumstances.
(f) Tolling. In the event of the breach by Employee of any
Covenant the running of the period of restriction shall be automatically tolled
and suspended for the amount of time that the breach continues, and shall
automatically recommence when the breach
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is remedied so that the Company shall receive the benefit of Employee's
compliance with the Covenants. This paragraph shall not apply to any period for
which the Company is awarded and receives actual monetary damages for breach by
the Employee of a Covenant with respect to which this paragraph applies.
ARTICLE V.
MISCELLANEOUS
5.1 Successors. This Agreement shall inure to the benefit of the
Company and its successors and assigns, as applicable. If the Company shall
merge or consolidate with or into, or transfer substantially all of its assets,
including goodwill, to another corporation or other form of business
organization, this Agreement shall be binding on, and run to the benefit of, the
successor of the Company resulting from such merger, consolidation, or transfer.
The Employee shall not assign, pledge, or encumber his interest in this
Agreement, or any part thereof, without the prior written consent of the
Company, and any such attempt to assign, pledge or encumber any interest in this
Agreement shall be null and void and shall have no effect whatsoever.
5.2 Governing Law. This Agreement is being made and executed in and
is intended to be performed in the State of Ohio and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of Ohio, without regard to the conflict of laws principles thereof.
5.3 Entire Agreement. This Agreement comprises the entire agreement
between the parties hereto relating to the subject matter hereof and as of the
Commencement Date, supersedes, cancels and annuls all previous agreements
between the Company (and/or its predecessors) and the Employee, as the same may
have been amended or modified, and any right of the Employee thereunder other
than for compensation accrued thereunder as of the date hereof, and supersedes,
cancels and annuls all other prior written and oral agreements between the
Employee and the Company or any predecessor to the Company. The terms of this
Agreement are intended by the parties to be the final expression of their
agreement with respect to the retention of the Employee by the Company and may
not be contradicted by evidence of any prior or contemporaneous agreement.
5.4 Severability; Enforceability. If any provision of this Agreement,
or the application thereof to any person, place, or circumstance, shall be held
to be invalid, unenforceable, or void by the final determination of a court of
competent jurisdiction in any jurisdiction and all appeals therefrom shall have
failed or the time for such appeals shall have expired, as to that jurisdiction
and subject to this Section 5.4, such clause or provision shall be deemed
eliminated from this Agreement but the remaining provisions shall nevertheless
be given full force and effect. In the event this Agreement or any portion
hereof is more restrictive than permitted by the law of the jurisdiction in
which enforcement is sought, this Agreement or such portion shall be limited in
that jurisdiction only, and shall be enforced in that jurisdiction as so limited
to the maximum extent permitted by the law of that jurisdiction.
5.5 Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
CBD MEDIA LLC EMPLOYEE
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxx Xxxxxxx
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Name: Xxxxxxx Xxxxx
Title: President & CEO
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