EXHIBIT 99.2
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT, originally dated as of
March 15, 2000, and amended and restated on July 1, 2005 (the "Restatement
Date"), originally entered into between MediaNews Services, Inc., a Delaware
corporation, whose rights and obligations have been assigned to and assumed by
MediaNews Group, Inc. (the "Company"), a Delaware corporation, and Xxxxxxx Xxxx
Xxxxxxxxx ("Executive"). Capitalized terms used herein but not defined herein
are used as defined in Section 13.
WITNESSETH:
WHEREAS, the Company wishes to employ and retain the services of
Executive, and Executive wishes to be employed by the Company.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
this Agreement is hereby amended and restated, to read in full, and the Company
and the Executive hereby agree, as follows:
1. Period of Employment.
Company shall employ the Executive to perform the services described
herein, with his principal office activities being situated in Denver, Colorado,
or such other location as Executive shall elect for the period commencing
January 1, 2000, and terminating December 31, 2009, unless earlier terminated as
provided herein or extended as provided in the next paragraph. Upon termination
of this Agreement, Executive's employment with the Company and its subsidiaries
shall terminate.
Effective January 1, 2010, this Agreement shall be automatically renewed
for additional periods of one year each unless either party shall have given
notice to the other at least one hundred twenty (120) days prior to December 31,
2009 or the expiration of any subsequent one-year term, electing not to renew
this Agreement, in which case this Agreement shall terminate on the next
succeeding December 31.
2. Compensation.
During the period of his employment, Executive shall:
(a) be paid a base salary, in equal monthly installments, on the
regular pay day established for executives of the Company, at the annual
rate of nine hundred eight-five Thousand nine hundred and fifty Dollars
($985,950.00), which salary shall be increased annually, commencing
January 1, 2006, at an annual rate of five percent (5%), or such higher
annual rate as the Board of Directors of the Company shall determine
appropriate; provided, that if the Company's Chief Executive Officer
determines that business conditions are such that all or a portion of the
foregoing increases should be delayed until such time as those conditions
improve, then the Chief Executive Officer may elect appropriately to delay
such increases;
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(b) be reimbursed in a manner consistent with policies of the
Company established for executive personnel, for all reasonable expenses
of the Company and its subsidiaries incurred by the Executive in the
discharge of any duties hereunder;
(c) receive such fringe benefits including accident,
hospitalization, disability, medical and life insurance plans, as shall be
made generally available to the executive personnel or other employees of
the Company or as otherwise approved by the Company's Board of Directors;
(d) have an appropriate opportunity, commensurate with his executive
stature, to participate in all stock options, restricted stock or other
forms of equity ownership plans, and incentive plans which may be
established for executive personnel of the Company;
(e) be eligible to receive an annual bonus for each of the Company's
fiscal years (commencing with the fiscal year ended June 30, 2005)
commencing before the termination of this Agreement (pro rated for partial
years prior to termination hereof based on performance for the full fiscal
year) of up to $500,000 payable as soon as practicable after completion by
the Company's independent accountants of their audit of the Company for
the relevant fiscal year (but in no event later than the March 15
immediately following the end of the relevant fiscal year), based on a
comparison of operating profits to the budget of the Company approved by
the Company's Board of Directors for such fiscal year as follows (or in
such greater amounts as may be approved by the Company's Board of
Directors):
(i) If operating profits for such fiscal year are 100% or
more of budget, then the bonus amount payable shall be
$450,000, plus 5% of the excess of operating profits
over budget, up to a total of an additional $50,000
(i.e. a maximum bonus of $500,000);
(ii) If operating profits for such fiscal year are 95% or
more (but under 100%) of budget, then the bonus amount
payable shall be $350,000;
(iii) If operating profits for such fiscal year are 90% or
more (but under 95%) of budget, then the bonus amount
payable shall be $250,000;
(iv) If operating profits for such fiscal year are 85% or
more (but under 90%) of budget, then the bonus amount
payable shall be $150,000;
(v) If operating profits for such fiscal year are 80% or
more (but under 85%) of budget, or if no budget has been
adopted and approved for such fiscal year, then the
bonus amount payable shall be $100,000; and
(vi) If operating profits for such fiscal year are under 80%
of budget, then no bonus shall be payable;
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(f) a one-time bonus of $100,000; and
(g) be reimbursed for the annual premium (up to a maximum premium of
$100,000 per year) on up to $40 million of term life insurance insuring
the life of Executive's wife (plus an additional amount such that the
total amount received pursuant to this clause (g) after payment of
federal, state and local taxes at the highest marginal rate taking into
account the deductibility for federal purposes of state and local purposes
equals the amount of such premium)
All payments made payable to the Executive under this Agreement shall be
subject to withholding for any applicable taxes, social security or other
governmental levies.
3. Duties.
The Executive shall serve as Vice Chairman and Chief Executive Officer of
the Company.
The Executive accepts the aforementioned responsibilities at the
compensation and upon the terms specified herein. During the term of this
Agreement, Executive shall devote his best efforts principally to the service of
the Company, its affiliates and their subsidiaries and the performance of the
duties specified above, it being understood that the preponderance of
Executive's time will be applied to furthering the interest of such entities.
Except at the request of the Company, Executive shall not engage in any other
business activity or outside activity which is materially inconsistent with or
an impediment to the carrying out of his duties hereunder, provided that, so
long as it does not materially interfere with the performance of his duties
hereunder, Executive may serve as a director, trustee or officer of, or
otherwise participate in, trade, professional, educational, welfare, social,
religious and civic organizations.
4. Vacation.
Executive shall be entitled to an annual paid vacation of five weeks, such
vacation to be taken at such times as he may select.
5. Death or Incapacity.
In the event of death of Executive during the term hereof, this Agreement
shall terminate.
If, on account of physical or mental disability, Executive shall fail or
be unable to perform the duties contemplated by this Agreement for a period of
180 consecutive days, the Company may, at any time thereafter upon 30 days'
notice to Executive, terminate this Agreement. In such event, this Agreement
shall terminate and come to an end on the date set forth in such notice as if
such date were the termination date of this Agreement.
In the case of termination of this Agreement pursuant to this Section 5,
except for the rights of Executive and his beneficiaries under the benefit plans
described in Sections 2(c) and 2(d) of this Agreement, the Company shall not be
subject to any further obligation to Executive (or his estate or legal
representatives) hereunder, except that Executive (or his estate or legal
representatives) shall be entitled to receive payment of unreimbursed expenses
pursuant to
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Section 2(b) of this Agreement and the unpaid salary, vacation and bonus due for
service prior to termination of this Agreement, and in the case of the death of
Executive through and including the last day of the month in which Executive
died.
6. Covenant Not To Compete.
(a) Executive agrees that after any termination hereof (other than
termination (i) by Executive pursuant to paragraphs (a) or (b) of Section
7 hereof or (ii) by the Company in breach of this Agreement), he will not,
during the Restricted Period (as defined below), unless with the prior
written consent of the Board of Directors of the Company, engage in, or
materially assist any other business enterprise in, the business of
publishing and distributing daily newspapers in any geographical areas in
which daily newspapers owned or managed by the Company and/or its
subsidiaries have paid print circulation in excess of 25,000 at the time
of termination of this Agreement; provided, however, that the ownership of
up to 5% of any class of publicly traded securities of any entity shall
not be deemed to be a violation of this Section 6. "Restricted Period"
means, in respect of the termination of Executive's employment, the period
commencing on the date of termination of employment and ending on the
first to occur of (x) the date one year after the date a replacement for
Executive is hired (or another officer of the Company takes over his
responsibilities) and (y) the second anniversary of the termination of
Executive's employment.
(b) The parties intend that the covenants contained in paragraph (a)
shall be construed as a series of separate covenants, one for each state
and other jurisdiction covered thereby, and one for each county and city
included within such state or other jurisdiction and, except for
geographic coverage, each such separate covenant shall be deemed
identical. The parties agree that the covenants deemed included in
paragraph (a) are, taken as a whole, reasonable in activities prohibited
and geographic scope and their duration and no party shall raise any issue
of the reasonableness of the scope or duration of the covenants in any
proceeding to enforce any such covenants. If, in any judicial proceeding,
a court shall refuse to enforce any such separate covenant, then the
unenforceable covenant shall be modified in order to make it acceptable to
the court and enforced accordingly, or, if necessary, deemed eliminated to
the extent necessary to permit the remaining separate covenants to be
enforced. Executive acknowledges that the remedy at law for any breach by
him of this covenant will be inadequate and that the Company shall be
entitled to injunctive relief for the same.
(c) Notwithstanding anything to the contrary in this Section 6, the
provisions of paragraph (a) of this Section 6 shall terminate and be
ineffective (whether before or after termination of Executive's
employment) from and after any Change in.
7. Termination Of This Agreement For Certain Reasons.
(a) Either party may terminate this Agreement prior to its stated
term in the event of a material breach hereof by the other, provided that
if such breach is capable of
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cure, it is not cured within 30 days of written notice thereof delivered
by the non-breaching party to the breaching party.
(b) Executive may terminate this Agreement if his responsibilities
and stature as Vice Chairman and Chief Executive Officer of the Company
are diminished in any material respect below such responsibilities on the
Restatement Date, and if such responsibilities and stature are not
restored within 15 days of written notice of diminishment thereof
delivered to the Company.
(c) The Company may terminate this Agreement for "Cause" (as defined
below).
(d) Termination pursuant to this Section 7 shall be by notice in
writing specifying such material breach or other grounds and shall be
effective on the date said notice is deemed to be given (or such later
date provided for in this Section 7), without prejudice to the rights of
the party upon whom such notice is served to contest such termination by
any judicial means at such party's disposal.
(e) For purposes of termination of this Agreement by the Company
pursuant to paragraph (c), the following events shall be considered as
"Cause":
(i) unreasonable failure by the Executive to perform his
material duties as provided in Section 3 hereof, after
he has received written notice from the Company of his
alleged failure to perform the same, and has failed
within a reasonable period of time to cure such failure;
(ii) theft, embezzlement or misappropriation by the Executive
of any material funds or other property of the Company
or its subsidiaries; or
(iii) any conviction or a plea of nolo contendere with respect
to any felony or any other serious crime involving moral
turpitude.
8. Termination by Executive Upon a Change in Control.
Executive may terminate this Agreement prior to its stated term following
the occurrence of a Change in Control. Such termination shall be by notice to
the Company in writing given during the one hundred eighty (180) days following
such Change in Control.
9. Payment Upon Termination in Certain Circumstances.
(a) If this Agreement is terminated by Executive pursuant to
paragraphs (a) or (b) of Section 7 hereof, or by the Company in breach of
this Agreement (except as provided in Section 9(b)), Executive shall be
entitled to receive a cash payment equal to the greater of (x) the present
value (based on the Company's then current cost of senior bank borrowings)
of his projected salary pursuant to Section 2(a) and bonuses pursuant to
Section 2(e) (prior to any elective deferrals or any other deductions) and
the deemed
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value of all fringe benefits (and other payments pursuant to Section 2(g))
for the balance of the term of this Agreement and (y) an amount equal to 2
times the sum of (i) Executive's annual salary in effect at termination,
plus (ii) the projected bonus payable to Executive in respect of the
Company's full fiscal year ending immediately following termination, plus
(iii) the deemed annual value of all fringe benefits being made available
to Executive immediately prior to termination (and other payments pursuant
to Section 2(g)). For this purpose, projected bonuses shall be determined
by assuming that Executive qualifies for the maximum annual bonus he is
eligible to earn. The deemed value of fringe benefits in any calendar year
shall equal eight percent of such year's base salary (actual or projected
as the case may be). Such payment shall be payable within 10 days of the
date of termination.
(b) If this Agreement is terminated pursuant to Section 8 hereof, by
the Company in breach of this Agreement following a Change in Control, or
by Executive pursuant to paragraph (a) or (b) of Section 7 hereof
following a Change in Control, Executive shall receive a cash payment
equal to 3 times the sum of (i) Executive's annual salary in effect at
termination, plus (ii) the projected bonus payable to Executive pursuant
to Section 2(e) in respect of the Company's full fiscal year ending
immediately following termination (determined as provided in Section 9(a))
plus (iii) the deemed annual value (determined as provided in Section
9(a)) of all fringe benefits (including payments pursuant to Section 2(g))
being made available to Executive immediately prior to termination. Such
payment shall be payable within 10 days of the date of termination,
provided that if Executive is a "specified employee" as defined in Section
409A of the Internal Revenue Code of 1986, as amended (the "Code"), such
payment shall be payable within 5 days of the six month anniversary of
Executive's "separation from service" (within the meaning of Section 409A
of the Code).
(c) If this Agreement terminates by expiration at the end of the
initial term or any renewal term, Executive shall be entitled to receive a
cash payment equal to his base annual salary pursuant to Section 2(a) in
effect immediately prior to termination, plus an amount equal to the
maximum annual bonus he is eligible to earn pursuant to Section 2(e). Such
payment shall be payable within 10 days of the date of termination,
provided that if Executive is a "specified employee" as defined in Section
409A of the Code, such payment shall be payable within 5 days of the six
month anniversary of Executive's "separation from service" (within the
meaning of Section 409A of the Code).
(d) Upon termination of this Agreement, in addition to the amounts
described in this Section, Executive shall be entitled to receive salary,
vacation, bonus, benefits and any other applicable compensation and
reimbursement for expenses through the date of his termination.
(e) Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor will any payments hereunder be subject to
offset in respect of any claims which the Company may have against
Executive, nor shall the amount of any payment or benefit provided for in
this Section 9 (or otherwise upon termination of this Agreement) be
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reduced by any compensation earned as a result of Executive's employment
with another employer.
(f) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment made to or benefit
provided to Executive pursuant to the terms of this Agreement or any other
plan, arrangement or agreement of the Company (or its subsidiaries or
affiliates) or a person affiliated with the Company (or its subsidiaries
or affiliates), including any acceleration of vesting or payment (a
"Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any similar federal, state or local tax that may hereafter be
imposed (such excise tax, together with any associated interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
after taking into account all other "parachute payments" received or to be
received on account of the relevant Change in Control that are required to
be taken into account under Section 280G of the Code, then the Company
shall pay to Executive an additional payment (the "Gross-Up Payment") in
an amount such that after payment by Executive of all taxes (including
federal, state and local income taxes, employment taxes, Excise Tax, and
any interest or penalties imposed with respect to such taxes), including
any taxes and Excise Tax imposed upon the Gross-Up Payment, Executive
retains a net amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. It is the intention of the parties that the
Company provide Executive with a full tax gross-up under the provisions of
this Section 9(f) so that on a net after-tax basis, the result to
Executive shall be the same as if the Excise Tax had not been imposed on a
Payment. The provisions of this paragraph shall survive termination of
this Agreement.
(g) All determinations required to be made under Section 9(f)
(including whether and when a Gross-Up Payment is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at
such determination) shall be made by Deloitte & Touche LLP, or, if
Deloitte & Touche LLP is the Company's independent accounting firm
immediately prior to the Change in Control, such other "big four"
accounting firm as is selected by the Company with the approval of
Executive (not to be unreasonably withheld) (the "Accounting Firm"). The
Accounting Firm shall provide detailed supporting calculations to both the
Company and Executive within 10 business days of the Company's receipt of
notice from Executive that there has been a Payment or at such earlier
time as is requested by the Company. In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, Executive may appoint another nationally
recognized accounting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment shall be paid by the Company
to Executive within 5 days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding
upon the Company and Executive.
(h) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments that will
not have been made by the Company should have been made (the
"Underpayment") or that Gross-Up Payments will have been made
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that should not have been made ("Overpayments"), consistent with the
calculations required to be made hereunder. In the event Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and
any such Underpayment shall be promptly paid by the Company to or for the
benefit of Executive. If the Accounting Firm shall determine that an
Overpayment has been made, Executive shall promptly repay the amount of
the Overpayment to the Company (but, if previously paid to the taxing
authorities, not prior to the time the Overpayment is refunded to
Executive or otherwise realized as a benefit by Executive). The provisions
of this paragraph shall survive termination of this Agreement.
(i) This Agreement is intended to comply with the new deferred
compensation rules under Section 409A of the Code. However, in the event
any additional taxes are imposed under Section 409A of the Code (i.e., an
amount calculated as interest under 409A(a)(1)(B)(ii) or an amount
described as an additional 20% of includable compensation under
409A(a)(1)(B)(i)(II) of the Code) on any compensation to which Executive
is entitled pursuant to this Agreement, the Company shall pay to Executive
(x) an amount equal to such additional taxes and (y) an additional amount
such that after payment of any additional federal, state and local income
and employment taxes by reason of the amounts paid by the Company pursuant
to this Section 9(i), Executive shall receive an amount equal to the
additional taxes described in clause (x). Such payments shall (to the
extent the Company has knowledge of such additional taxes) be made by the
Company prior to the date the additional taxes are due to be paid by
Executive. The Executive may notify the Company at any time if Executive
believes he has incurred additional taxes under Section 409A of the Code,
but Executive's failure to notify the Company shall not result in any
waiver or forfeiture of Executive's rights under this Section 9(i). The
Company and Executive each agrees to execute and deliver any reasonable
change to this Agreement (other than this Section 9(i)) as the Company or
Executive requests, after consultation with respective counsel, to comply
with Section 409A of the Code; provided that no change that reduces the
then present value of the payments due (or potentially due) to Executive
pursuant to this Agreement (without taking into account this Section 9(i))
shall be deemed to be reasonable. The provisions of this paragraph shall
survive termination of this Agreement.
10. Right to Sell Shares following Disability.
(a) In the event that (x) Executive's employment with the Company
terminates as a result of Executive's disability pursuant to the second
paragraph of Section 5 hereof, or (y) any time following the termination
of Executive's employment with the Company for any reason Executive is or
becomes Disabled, Executive (or any Permitted Xxxxxxxxx Holder) shall have
the right (if the right is being exercised pursuant to clause (y) above,
so long as Executive remains Disabled) to require the Company to purchase
Common Stock from Executive (or such Permitted Xxxxxxxxx Holder) from time
to time during Executive's lifetime (subject to lawfully available funds)
in an aggregate amount not to exceed $1 million in any fiscal year of the
Company, or such lesser amount of Common Stock (if any) as the Company may
purchase without violating any covenant limiting "restricted payments"
contained in any instrument governing debt of the
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Company. The purchase price for Common Stock purchased by the Company
under this Section 10 shall be the Fair Market Value of the Common Stock
so purchased. Such right shall be exercised by written notice of Executive
(or such Permitted Xxxxxxxxx Holder) given to the Company, and may be
exercised no more than 2 times in any fiscal year of the Company. The
closing of any such purchase shall take place within 30 days of the giving
of a notice of exercise by Executive (or such Permitted Xxxxxxxxx Holder).
The right of Executive or any Permitted Xxxxxxxxx Holder to require the
Company to purchase Common Stock pursuant to this Section 2 shall
terminate upon the occurrence of an Eligible IPO unless previously
exercised. The provisions of this Section 10 will survive termination of
this Agreement.
(b) The Company and Executive agree that from and after the exercise
of any right pursuant to paragraph (a) above, each shall use their
respective commercially reasonable efforts to take or cause to be taken
all actions and to do or cause to be done all things necessary, proper or
advisable to consummate the closing thereof, and to cooperate in
connection with the foregoing, including using their respective
commercially reasonable efforts to obtain all approvals that are required
to be obtained under any legal requirement, to effect all necessary
registrations, filings and submissions of information requested by any
governmental authority and obtain all consents required under agreements
binding upon the Company or its subsidiaries.
11. Notices.
All communications and notices made pursuant to this Agreement shall be in
writing and delivered by hand or sent by a nationally recognized overnight
carrier (such as Federal Express) as follows:
(a) If to Company, to:
MediaNews Services, Inc.
c/o MediaNews Group, Inc.
Attn: President
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
(b) If to the Executive, addressed to:
Xxxxxxx Xxxx Xxxxxxxxx
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
or to such other address as either of the foregoing may from time to time
specify in writing. Any such notice shall be deemed to be given upon receipt.
12. Indemnification; D&O Liability Insurance.
(a) The Company agrees that if Executive is made a party to, is
threatened to be made a party to, receives any legal process in, or
receives any discovery request or
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request for information in connection with, any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director,
officer, employee, consultant or agent of the Company or its subsidiaries,
or is or was serving at the request of, or on behalf of, the Company as a
director, officer, member, employee, consultant or agent of another
corporation, limited liability corporation, partnership, joint venture,
trust or other entity (or plan), including service with respect to
employee benefit plans, whether or not the basis of such Proceeding is
Executive's alleged action in an official capacity while serving as a
director, officer, member, employee, consultant or agent of the Company or
other entity, Executive shall be indemnified and held harmless by the
Company to the fullest extent permitted or authorized by the Company's
Certificate of Incorporation or bylaws or, if greater, by the laws of the
State of Delaware, against any and all costs, expenses, liabilities and
losses (including, without limitation, attorneys' fees reasonably
incurred, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement and any reasonable cost and fees incurred
in enforcing his rights to indemnification or contribution) incurred or
suffered by Executive in connection therewith, and such indemnification
shall continue as to Executive even though he has ceased to be a director,
officer, member, employee, consultant or agent of the Company or its
subsidiaries or other entity (or benefit plan) and shall inure to the
benefit of Executive's heirs, executors and administrators. The Company
shall reimburse Executive for all costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred by him in connection with
any Proceeding within 10 business days after receipt by the Company of a
written request for such reimbursement and appropriate documentation
associated with these expenses. Such request shall include an undertaking
by Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs
and expenses; provided that the amount of such obligation to repay shall
be limited to the after-tax amount of any such advance except to the
extent Executive is able to offset such taxes incurred on the advance by
the tax benefit, if any, attributable to a deduction for repayment.
(b) Neither the failure of the Company (including its Board,
independent legal counsel or stockholders) to have made a determination
prior to the commencement of any proceeding concerning payment of amounts
claimed by Executive under Section 12(a) above that indemnification of
Executive (or advancement of Executive's expenses) is proper because he
has met any applicable standard of conduct, nor a determination by the
Company (including its Board, independent legal counsel or stockholders)
that Executive has not met such applicable standard of conduct, shall
create a presumption or inference that Executive has not met the
applicable standard of conduct.
(c) The Company agrees to continue and maintain a directors' and
officers' liability insurance policy or policies covering Executive at a
level, and on terms and conditions, no less favorable to him than the
coverage the Company provides its directors and senior-level officers
currently (subject to any future improvement in such terms and
conditions), provided that, in satisfying its obligation under this
paragraph (c), the Company shall not upon renewal of any such policy be
obligated to pay premiums in excess of 200% of the annualized premium for
such policy based on the rate therefor in effect prior to such renewal. If
upon expiration of such a policy such insurance coverage
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can be obtained only for an amount in excess of 200% of the Company's
annual premium in effect prior to renewal, the Company shall use its
commercially reasonable efforts to cause to be obtained as much directors'
and officers' liability insurance coverage as can be obtained for an
amount equal to 200% of the Company's annual premium therefor in effect
prior to renewal, on terms and conditions substantially similar to the
Company's then existing directors' and officers' liability insurance.
(d) Nothing in this Section 12 shall be construed as reducing or
waiving any right to indemnification, or advancement of expenses,
Executive would otherwise have under the Company's Certificate of
Incorporation or bylaws or under applicable law.
(e) The provisions of this Section 12 will survive the termination
of this Agreement for a period of six years following termination of this
Agreement, provided that in the event Executive makes a claim under such
provisions prior to the expiration of such period, such provisions shall
survive until such claim is finally resolved.
13. Certain Definitions.
(a) "Average Market Price" per share of Common Stock on any date
means the average of the daily Closing Prices of Common Stock for the 10
consecutive Trading Days prior to such date.
(b) "Beneficial Owner" and "Beneficially Own" have the meaning
ascribed thereto in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended.
(c) A "Change in Control" shall be deemed to occur on:
(i) the date that both
(A) any Person (or other group of Persons acting in
concert) with a view to the acquisition, holding or disposition of
securities of the Company, becomes, directly or indirectly, the Beneficial
Owner, of securities of the Company representing 35% or more of the Voting
Securities of the Company, other than by reason of (x) the acquisition of
Company securities by the Company or any of its subsidiaries or any
employee benefit plan of the Company or any of its subsidiaries, or (y)
the acquisition of Company securities by Permitted Holders, and
(B) Permitted Holders cease to be, directly or
indirectly, the Beneficial Owners of Voting Securities of the Company
having a voting power equal to or greater than that of such Person or
group;
(ii) the consummation of a merger or consolidation of the
Company with another Person unless
(A) the shareholders of the Company, immediately prior
to the merger or consolidation, Beneficially Own, immediately after the
merger or consolidation, shares entitling such shareholders to more than
50% of the voting power of all Voting Securities of the corporation or
other entity surviving the merger or
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consolidation in substantially the same proportions as their ownership,
immediately prior to such merger or consolidation, of Voting Securities of
the Company; and
(B) the members of the Board of Directors of the
Company, immediately prior to the merger or consolidation, constitute,
immediately after the merger or consolidation, a majority of the board of
directors of the Person issuing cash or securities in the merger;
(iii) the date on which a majority of the members of the Board
of Directors of the Company consist of persons other than Current
Directors (which term shall mean any member of the Board of Directors of
the Company on the date hereof and any member whose nomination or election
has been approved by a majority of Current Directors then on the Board of
Directors of the Company);
(iv) the consummation of a sale or other disposition of all or
substantially all of the assets of the Company unless:
(A) the shareholders of the Company, immediately prior
to such sale or other disposition, Beneficially Own, immediately after
such sale or other disposition, shares entitling such shareholders to more
than 50% of the voting power of all Voting Securities of the corporation
or other entity acquiring such assets in substantially the same
proportions as their ownership, immediately prior to the consummation of
such sale or other disposition, of Voting Securities of the Company; and
(B) the members of the Board of Directors of the
Company, immediately prior to such sale or other disposition, constitute,
immediately after such sale or other disposition, a majority of the board
of directors of the Person acquiring such assets; or
(v) the date of approval by the shareholders of the Company of
a plan of complete liquidation of the Company.
(d) "Closing Price" means, as applied to Common Stock on any date,
the last reported sales price, regular way, per share of such stock on
such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in each case, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
Common Stock is listed, or if not listed on a national securities
exchange, quoted on the national market system of The NASDAQ Stock Market
(or any successor or similar system).
(e) "Common Stock" means all common stock of the Company. In the
event that the Common Stock shall be changed into or exchanged for a
different number or kind of shares of capital stock or other securities of
the Company or of another corporation or other entity as a result of a
merger, consolidation, partial or complete liquidation, sale of assets,
distribution to stockholders or otherwise, the Common Stock shall include
such different capital stock or other securities.
13
(f) "Consolidated Operating Cash Flow" shall have the meaning
specified in the Senior Credit Facility from time to time, and shall
include successor definitions contained therein having a similar meaning
and use therein. It is intended that Consolidated Operating Cash Flow
reflect all pro forma adjustments made thereto under the Senior Credit
Facility. Furthermore, regardless of whether an adjustment is made under
the Senior Credit Facility, to the extent that a capital project that
exceeds $2 million in cost and that is expected to result in aggregate
cost savings is approved, for purposes of determining Consolidated
Operating Cash Flow appropriate pro forma adjustments shall be made to
Consolidated Operating Cash Flow in order that all debt to be incurred to
finance such capital expenditure shall be deemed to have been incurred and
such cost savings shall be deemed to be recognized commencing the first
day of the four fiscal quarter period ending the last day of the fiscal
quarter ending immediately prior to the approval of such capital
expenditure for which Required Financial Information has been delivered
under the Senior Credit Facility.
(g) "Disabled" means Executive's permanent inability to perform the
material and substantial duties of his regular occupation.
(h) "EBITDA" means, at any date of determination, the Consolidated
Operating Cash Flow of the Company for the immediately preceding four
fiscal quarters of the Company for which Required Financial Information
has been delivered under the Senior Credit Facility.
(i) "Eligible IPO" means (x) a public offering by the Company or its
shareholders of shares of the Company's common stock pursuant to a
registration statement under the Securities Act of 1933 that results in
(i) aggregate cash proceeds to the Company and selling shareholders of an
amount equal to or greater than $50 million (before deduction of
underwriting discounts and commissions) and (ii) the listing of such
common stock on any national securities exchange or quotation on the
national market system of The Nasdaq Stock Market (or any successor or
similar system) or (y) consummation of any transaction that results in (i)
the listing of Common Stock on any national securities exchange or
quotation on the national market system of The NASDAQ Stock Market (or any
successor or similar system) and (ii) shares of such common stock of the
Company having a market value of at least $50 million held by Persons that
are not "affiliates" of the Company (as such term is used in Rule 144
under the Securities Act of 1933).
(j) "Fair Market Value" with respect to any Common Stock means the
fair market value of such Common Stock as of the date in question. Prior
to the occurrence of Eligible IPO, fair market value of a share of Common
Stock, on any date, shall be an amount equal to (A)(i) the product of the
Representative Multiple, multiplied by EBITDA, minus (ii) consolidated
long-term debt of the Company as of such date, divided by (B) the total
number of shares of Common Stock outstanding (including Common Stock
issuable (x) pursuant to the Company's Career RSU Plan to the extent RSUs
have vested, (y) under options and rights to purchase Common Stock,
determined using the treasury stock method, and (z) under securities
convertible into Common Stock); provided, however, that in the event that
the Fair Market Value does not at any time
14
reasonably approximate the fair market value of a share of Common Stock,
the formula described above shall be amended in such manner as the Board
of Directors of the Company reasonably determines, with the approval of
Executive (such approval not to be unreasonably withheld), so that Fair
Market Value reasonably approximates such fair market value. Following an
Eligible IPO, fair market value of Common Stock shall be the Average
Market Price of Common Stock as of the date of determination, provided
that if following an Eligible IPO on the day of determination Common Stock
is not listed or traded on a national securities exchange or the national
market system of The NASDAQ Stock Market (or any successor or similar
system) or has not been listed or traded for the 10 consecutive Trading
Days prior to such date, "Average Market Price" shall be the Fair Market
Value determined pursuant to the first sentence of this definition as if
no Eligible IPO has occurred.
(k) "Multiple" means, at any date of determination for any company,
a number equal to the quotient of (i) long-term debt (as reflected on the
most recently available balance sheet of such company) plus market
capitalization of such company on such date, divided by (ii) earnings of
such company before interest, taxes, depreciation, amortization and any
one-time or extraordinary items (such as restructuring charges) for the
four most recent fiscal quarters of such company for which financial
statements of such company are available, as determined by the Board.
(l) "Permitted Holders" means (i) each of Xxxxxxx Xxxx Xxxxxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, XX and their respective spouses,
ancestors, siblings, descendants (including children or grandchildren by
adoption) and the descendants of any of their siblings; (ii) in the event
of the incompetence or death of any of the Persons described in clause
(i), such Person's estate, executor, administrator, committee or other
personal representative, in each case who at any particular date shall
beneficially own or have the right to acquire, directly or indirectly,
capital stock of the Company; (iii) any trust created for the benefit of
the Persons described in clause (i) or (ii) or any trust for the benefit
of any such trust; or (iv) any Person controlled by any of the Persons
described in clause (i), (ii) or (iii). For purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through ownership of
voting securities or by contract or otherwise.
(m) "Permitted Xxxxxxxxx Holder" means (i) each of Executive and his
spouse, ancestors, siblings, descendants (including children or
grandchildren by adoption) and the descendants of any of their siblings;
(ii) in the event of the incompetence or death of any of the Persons
described in clause (i), such Person's estate, executor, administrator,
committee or other personal representative, in each case who at any
particular date shall beneficially own or have the right to acquire,
directly or indirectly, the relevant Common Stock; (iii) any trust created
for the benefit of the Persons described in clause (i) or (ii) or any
trust for the benefit of any such trust (including without limitation the
Xxxxxxxxx Family Revocable Trust); or (iv) any Person controlled by any of
the Persons described in clause (i), (ii) or (iii). For purposes of this
definition, "control," as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or
15
cause the direction of the management and policies of such Person, whether
through ownership of voting securities or by contract or otherwise.
(n) A "Person" means any individual, corporation, limited liability
company, partnership, joint venture, incorporated or unincorporated
association, joint-stock company or trust or other entity of any kind.
(o) "Representative Multiple" shall mean, at any date of
determination, the average of the Multiples of Gannett Co. Inc., Xxx
Enterprises Inc., Xxxxxx-Xxxxxx, Inc., The McClatchy Co. and Journal
Register Co., provided that in the event that any such company shall be
acquired or cease to be publicly traded, its name shall be deemed to be
deleted from this definition and, if as a result thereof there are less
than three companies referred to in this definition, the Board of
Directors of the Company, with the approval of Executive (not to be
unreasonably withheld), shall select another publicly traded newspaper
company, which shall be deemed to be added to this definition such that
this definition refers to three companies.
(p) "Required Financial Information" shall have the meaning
specified in the Senior Credit Facility, and shall include successor
definitions therein having a similar meaning and use therein.
(q) "Senior Credit Facility" shall means the Credit Agreement dated
as of August 30, 2004, among the Company, the Guarantors identified
therein, Bank of America, N.A., as Administrative Agent, and the other
financial institutions and lenders identified therein, as amended,
substituted, refinanced, renewed or replaced from time to time without
regard to the amount of credit extended thereunder or the identity of the
borrowers, lenders or agents with respect thereto.
(r) "Trading Day" means, as applied to Common Stock, any day on
which the principal consolidated transaction reporting system with respect
to securities listed or traded on the principal national securities
exchange or the national market system of The NASDAQ Stock Market (or any
successor or similar system) is open for the trading of securities
generally and with respect to which information regarding the sale of
securities included therein, or with respect to which sales information is
reported, is generally available.
(s) "Voting Securities" means, as to a Person, securities of such
Person having the right under ordinary circumstances to vote at an
election of the Board of Directors (or other governing body) of such
Person.
14. Interpretation.
If any provision of this Agreement or the application thereof is held
invalid or unenforceable, the invalidity or unenforceability shall not affect
any other provision of this Agreement which can be given effect without the
invalid or unenforceable provision, and to this end the provisions of this
Agreement are to be severable. No provision of this Agreement may be altered,
waived, discharged or terminated except in writing, executed by the party
against whom enforcement of any alteration, waiver, discharge or termination is
sought. No waiver of
16
any breach by either party to this Agreement shall operate or be construed as a
waiver of any subsequent breach by any party. This Agreement constitutes the
entire contract between the parties hereto with respect to employment, and no
party shall be bound in any manner related to employment by any warranties,
representations or guarantees, except as specifically set forth in this
Agreement. This Agreement shall be interpreted under the laws of the State of
Colorado, without regard to principles of conflicts of laws that would result in
the application of the laws of another jurisdiction.
15. Successors and Assigns.
This Agreement shall be binding upon the parties hereto, their respective
heirs, legal representatives, successors and assigns, but may not be assigned by
either party without the prior written consent of the other party, and any
assignment without such consent shall be void and of no effect. Permitted
Xxxxxxxxx Holders shall be third-party beneficiaries of Section 10 hereof.
16. Legal Fees.
If, with respect to alleged failure by the Company to comply with any of
the terms of this Agreement, Executive hires legal counsel with respect to this
Agreement or institutes any negotiations or institutes or responds to legal
action to assert or defend the validity of, enforce his rights under, or recover
damages for breach of this Agreement and thereafter the Company is found in a
judgment no longer subject to review or appeal to have breached this Agreement
in any material respect, then the Company shall indemnify Executive for his
actual expenses for attorneys' fees and disbursements, together with such
additional payments, if any, as may be necessary so that the net after-tax
payments to Executive equal such fees and disbursements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
MediaNews Group, Inc.
By: /s/ Xxxxxx X. Xxxxxxx, XX
--------------------------
Xxxxxx X. Xxxxxxx, XX
President
/s/ W. Xxxx Xxxxxxxxx
---------------------
W. Xxxx Xxxxxxxxx
