EX-10.1(a)
Performance Incentive Plan Agreement
PERFORMANCE AGREEMENT
This is an agreement made this 26th day of November, 1985, by and between
Xxxxxxx X. Xxxxxxx (hereinafter "Executive") and Central Michigan Newspapers,
Inc., a Virginia corporation (hereinafter "Company")
Recitals
Executive has loyally and effectively served Company in a key management
capacity, and Company desires to recognize Executive's past contributions to
Company's business, to retain Executive's experience and knowledge in Company's
management, and to induce Executive to remain in the employ of Company or an
Affiliate. To these ends, Company desires by this agreement to provide
identifiable financial incentives for Executive to xxxxxx the financial growth
and expansion of Company and its Affiliates.
In consideration of the foregoing and of the covenants and agreements
hereinafter contained, Company and Executive hereby covenant and agree as
follows:
1. Executive. Executive shall perform such duties as normally are incident
to Executive's current position as President of Company and such offer or
additional duties as Company's Board of Directors hereafter may, from time to
time, prescribe and shall devote such reasonable time, attention, and effort as
are necessary properly to fulfill Executive's duties and responsibilities to
Executive's employer.
2. Creation of Account. With respect to the company designated as provided
in Section 3 ("Performance Company"), Company hereby credits to a special
account identified to this agreement and created for such purpose ("Account")
the number of units ("Units") designed in Section 3. The value of the Account as
determined from time to time ("Account Value") shall be that amount, not less
than zero, determined by applying the formula set Forth in Exhibit A, adjusted
as permitted by Section 10, ("Formula") to the Performance Company, using the
factor designated in Section 3. ("Factor").
3. Participation Certificate and Designations. Subject to the provisions
of Section 10., for purposes of this agreement, the following are hereby
designated: (a) the number of Units is 4000.; (b) the Performance Company is CMN
Holding, Inc. & Subsidiaries (Consolidated); and (c) the Factor is -0-. This
designation is memorialized in participation certificate ("Certificate") number
1 delivered to Executive this date, receipt of which is hereby acknowledged by
Executive. The Certificate shall create no rights, and all rights of Executive
shall be solely as expressly
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provided in this agreement.
4. Vesting. Subject to Section 13. and if Executive is then employed by
Company or an Affiliate and vesting shall not have been earlier terminated by
Company as provided in Section 6., on February 28 of the year next following the
date of this agreement Executive's interest in the Account Value shall be 80 %
vested, and thereafter during the period of Executive's continued employment by
Company or an Affiliate an additional 20 % interest in such Account Value shall
vest on each subsequent February 28 of each of the next succeeding 1 fiscal
years.
5. Accelerated Vesting. Subject to Section 13., if Executive is then
employed by Company or an Affiliate and vesting shall not have been earlier
terminated, Executive's interest in the Account Value shall immediately be 100%
vested as of the date when any of the following occurs: (a) Executive's death,
(b) Executive's retirement from employment by Company or any Affiliate after
attaining the age of 65 years, or (c) termination of Executive's employment by.
Company or any Affiliate due to Executive's inability to perform the tasks of
Executive's then position because of a medically determinable physical or mental
impairment, not caused or contributed to by any action of Executive, that is
expected by Company to continue for a continuous period of 12 calendar months or
more extending beyond the date of such termination of employment.
6. Payment of Vested Amount; Termination of Vesting. Subject to the
provisions of Sections 7. and 13., and to the extent not then prohibited or
restricted by any agreement to which Company or its assets then are subject, on
that date (the "Satisfaction Date") which is the earlier to occur of (i) the
date when Executive ceases to be an employee of Company or any Affiliate, or
(ii) the date when Executive receives written notice from Company of Company's
election to discontinue vesting hereunder as to Executive, Executive shall
become entitled to either of the following:
A. If Executive has then ceased to be an employee of Company or any
Affiliate, Executive shall be entitled to payment in cash of an amount
equal to Executive's then vested percentage of the Executive's then
Account Value ("Vested Amount") upon delivery to Company of an acceptable
receipt, payable to Executive as follows: either (a) in full within 60
days after the Satisfaction Date, or, at Company's sole election, (b) in
quarterly installments of at least 2.5% of the Vested Amount, payable
until such time as the Vested Amount is paid in full; the first of any
such quarterly installments to be due and payable on that date
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which is l90 days after the Satisfaction Date. If paid in quarterly
installments as provided in (b), the balance of the Vested Amount owing on
any quarterly installment date may be paid in full at Company's then
election, but if not so paid the then unpaid balance of the Vested Amount
owing as of the next subsequent quarterly installment date shall be an
amount equal to 102% of the amount of any unpaid balance of the Vested
Amount as of the immediately preceding installment date, or
B. If Executive is an employee of Company or any Affiliate but has
received written notice from Company of its election to discontinue vesting
hereunder as to Executive, Executive shall be entitled to receive from Company,
within 60 days after such notice, and at Company's sole election, either (a) the
Vested Amount paid as provided in A. above, or (b) a new performance agreement
substantially identical herewith in form and economic effect but executed and
entered into by Executive and an Affiliate, whereupon xxx; Affiliate shall
thereby assume and become solely liable for any then vested percentage of the
Executive's then Account Value hereunder, as in such agreement provided, and
Company thereafter shall have no further responsibility to Executive hereunder.
In no event shall Executive be entitled to payment, or to any other right or
rights, under or pursuant to this agreement other than as herein expressly
provided, and Company, at its sole option, may discontinue vesting hereunder as
to Executive at any time, with or without cause, by delivering or mailing notice
of such discontinuance to Executive, and thereafter the Account Value shall be
fixed and no further interest in the Account Value shall vest in Executive
pursuant to this agreement.
7. Reduction for Cause. (a) If Company or any Affiliate shall terminate
Executive's employment for Cause then the terminating entity, at its sole
election, may reduce Executive's then vested interest, if any, in the Account
Value to no less than 50% of its then amount, effective as of the Satisfaction
Date. (b) If at any time or times within the period ending three years after the
Satisfaction Date Executive shall engage in Prohibited Competition, then
Company, at its sole option, may reduce Executive's then Vested Amount so that
Executive thereafter shall not receive, and Company shall not thereafter make or
be required to make, payment or payments, in whole or in part, which will cause
the aggregate amount of all payments made by Company on the Vested Amount to
exceed 30% of the amount of the Vested Amount as determined as of the
Satisfaction Date.
8. Beneficiaries. Each payment on the Vested Amount required hereby shall
be made to Executive so long as Executive shall live. After Executive's death
each required payment on the
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Vested Amount shall be made to Executive's personal representative to be a part
of Executive's estate, unless during Executive's lifetime Executive shall have
filed with Company a written designation acceptable to Company designating one
or more named beneficiaries ["Beneficiary(ies)"] to receive any such payment
after Executive's death, in which case each such required payment shall be made
to any designated Beneficiary then living, in accordance with such designation.
9. Definitions. When used in this agreement and any exhibit hereto, each
term defined in Exhibit B shall have the meaning therein set forth.
10. Subsequent Designation of Performance Company. If the Performance
Company specified in Section 3. shall (a) or any reason cease to be an
Affiliate, or (b) shall be merged or combined with or into another company, or
(c) shall have its results consolidated for accounting purposes with companies
other than those consolidated with it as of the date of this agreement, Company
at its sole option may, by a writing mailed or delivered to Executive, designate
from among Company and its then Affiliates a new Performance Company for all
purposes of this agreement. Upon any such designation the formula set forth in
Exhibit A shall be adjusted in order to minimize any change in the then amount
of the Account Value as of the date the new Performance Company is designated.
11. Not an Employment Contract. This is not an employment contract, does
not confer upon Executive any right to any present or future position or scale
of remuneration or to a continuation of employment for any time, and does not in
any way restrict or limit the right of Company or any Affiliate to terminate
Executive's employment at any time, with or without cause or for no cause.
12. No Shareholder or Other Rights. This agreement and the Certificate
delivered to Executive pursuant hereto create no rights as a shareholder in
Company or any Affiliate, create no rights with respect to any share to
Company's capital stock, and create no security or other interest or right in
and to any property or assets of Company or any Affiliate.
13. Annulment of Agreement. Anything to the contrary in this agreement
notwithstanding, this agreement and all rights of Executive or of his personal
representative, estate, or of any Beneficiary, arising hereunder, including,
without limitation, any right then or thereafter to receive any payment or
payments of all or any portion of any Vested Amount hereunder, whether then or
thereafter to be determined, shall cease and determine and this agreement, all
rights hereunder, and the Certificate, each shall be void upon Executive's (a)
executing a petition to
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be declared a bankrupt, or (b) making a general, written assignment for the
benefit of Executive's creditors, or (c) without Company's previous written
consent, attempting in any way, in whole or in part, to anticipate, sell,
assign, pledge, alienate, encumber, charge, or otherwise transfer or grant a
security or other interest in ("Transfer"), any right or rights hereunder or
thereunder.
14. No additional Units. This agreement gives the Executive no right to
any additional or different number of Units other than as expressly set forth
herein.
15. Miscellaneous. This agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, personal representatives,
successors, and assigns and sets forth the entire agreement of the parties
hereto concerning the subject matter hereof. Executive may not, directly or
indirectly, or in whole or in part, Transfer any right to Executive under this
agreement and upon any such Transfer or attempted Transfer all of Executive's
rights hereunder shall cease and determine and become void. This agreement may
not be amended without the prior written consent of all parties hereto, and
shall be governed by and construed in accordance with the domestic, substantive
laws of the Commonwealth of Virginia. The captions herein are for ease of
reference only and do not constitute a substantive part of this agreement.
WITNESS the following signatures as of the day, month, and year first
above written.
Company:
Central Michigan Newspapers, Inc.
By: /s/ Xxxx Xxxxx
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a Duly authorized officer
Executive:
/s/ Xxxxxxx X. Xxxxxxx
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(name)
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Exhibit A
Account Value
The Account Value at any time shall be the sum of
(a) Primary Unit Rights multiplied by Working Capital Adjustment,
(b) Primary Unit Rights multiplied by Long Term Debt multiplied by (-1),
(c) Primary Unit Rights multiplied by the sum of Dividends less Dividends
Received,
(d) Secondary Unit rights multiplied by the sum of
(1) Revenues, multiplied by the coverage percentage, and
(2) The quotient of Factor divided by Multiple,
when applied with respect to the Performance Company; provided that if Account
Value is determined in conjunction with a sale of this Performance Company, such
amount as determined in (d) shall not exceed 10 percent of the sale price.
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Exhibit B
DEFINITIONS
As used herein the following terms shall have the following meanings:
1. Affiliate - Means as of any time each corporation of which Xxxx X.
Xxxxx then owns, directly or through an Affiliate, at least 51 % of the then
issued and outstanding voting capital stock.
2. Coverage Percentage - Means as of any time the result, of Revenues
divided into the sum of: (a) net income (loss) before income taxes and equity in
the income of Affiliates; (b) depreciation; (c) management fee; and (d)
non-operating expenses, net of non-operating income, each to be conclusively
determined by Company from Performance Company's financial statements for its
then most recently ended fiscal year.
3. Cause - Means any fraudulent or criminal act by Executive or any
willful act by Executive to the material detriment of the operations or
business of Company or any Affiliate.
4. Dividends - Means cumulative distributions on the common stock of the
Performance Company subsequent to the date of this agreement.
5. Dividends Received - Means cumulative distributions to the Performance
Company on stock investments in its affiliates subsequent to the date of this
agreement.
6. Factor - Means the amount specified in Section 3.
7. Long-Term Debt - Means as of any time that portion of all long-term
liabilities of the Performance Company as reflected in its financial statements
plus the gross obligations under non-operating consulting or non-competition
agreements to extent not otherwise reflected in such statements, for its then
most recently ended fiscal year, which Company elects in its sole discretion, to
include in computing the Account Value.
8. Multiple - Means a number of -8- eight to be used in determination of
Secondary Unit Rights.
9. Primary Unit Rights - Primary Unit Rights are the Unit Rights
multiplied by (.25).
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10. Prohibited Competition - Means Executive's (a) serving, directly or
indirectly, as an officer agent, partner, or director of, or being employed by,
consulting with, assisting, or rendering advice to, or having more than a 5%
ownership interest as a stockholder, partner, or otherwise in any partnership,
corporation or other person, or persons, natural or corporate, engaged in any
business activity competing for personnel of or with any business conducted by
Company or any Affiliate, including any owner or operator of a business located
within, or which regularly solicits advertising in, a significant circulation or
broadcast area of any publication or broadcast station then owned by Company or
any Affiliate, or (b) divulging any material, confidential, or commercially
sensitive information concerning the business, profits, sales, customers,
financing, or financial condition of Company or any Affiliate to any person or
persons natural or corporate, other than an officer, director, stockholder, or
duly authorized agent, or employee of Company or an Affiliate.
11. Revenues - Means as of any time annual operating revenues of the
Performance Company as reported in the financial statements of Performance
Company for its then; most recently ended fiscal year, including trade, and
other non-primary revenues net of related expenses.
12. Secondary Unit Rights - Secondary Unit Rights are the Primary Unit
Rights multiplied by the Multiple.
13. Unit Rights - Unit Rights are the number of Units as specified in
Section (3) multiplied by the Unit Value.
14. Unit Value - Unit Value is .00D1.
15. Working Capital Adjustment - As of any time the Working Capital
Adjustment is the excess (or deficit) of current assets over current
liabilities, further adjusted to include non-current assets of a non-operating
investment nature (such as notes-receivable, cash value of life insurance, and
investment in subsidiaries) and less par value of preferred stock and any
deferred tax liability, all as determined by Company from the Performance
Company's financial statements for its then most recently ended fiscal year.
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