1
Exhibit 10.14
Restated terms of the Employment Agreement between Transportation
Displays Incorporated (the "Company") and Xxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"),
dated as of December 22, 1989 as amended through January 1, 1996 and as in
effect as of November 20, 1998 (the "Agreement").
1. Xxxxxxxxx is employed by the Company for a term ending March
25, 2001, unless terminated earlier as provided in the Agreement (the
"Employment Period").
2. (a) During the Employment Period, Xxxxxxxxx will have
the titles of President and Chief Executive Officer of the Company, will be
entitled to a seat on the Company's Board of Directors, and, subject to the
direction of the Board of Directors, will be responsible for the operation of
the Company's businesses; provided, however, that material transactions not in
the ordinary course of business, including, but not limited to, divestitures and
acquisitions, will not be undertaken without approval of the Company's Board of
Directors. Xxxxxxxxx will perform such services and duties necessary or
appropriate for the management of the Company's business as are normally
expected of officers appointed to similar positions in the franchise/transit
advertising business. During the Employment Period, Xxxxxxxxx agrees to devote
all of his business time and efforts to the performance of his duties under the
Agreement. Xxxxxxxxx will be available to travel as the needs of the business
required, but it is agreed that during the Employment Period he will be based in
New York City.
(b) Xxxxxxxxx agrees that, during the Employment Period,
he will not act in any manner or capacity, directly or indirectly, in any
individual or representative capacity, whether as principal, agent, partner,
officer, director, employee, joint venturer, member of any business entity,
consultant, adviser or investor (except that he will have the right under the
Agreement to own up to 10% of one or more public companies having a class of
equity securities registered with the Securities and Exchange Commission under
the Securities and Exchange Act of 1934, as amended) or otherwise, in or for any
business entity or enterprise which engages in the franchise/transit advertising
business as such business is now [December 22, 1989] conducted by the Company,
in any market in which the Company shall then be conducting such business. The
Company acknowledges that Xxxxxxxxx has advised the Company that he owns stock
in Gannett (less than 2,000 shares) and Xxxxxxxxx agrees to advise the Company
if he owns more than two percent (2%) of the stock in a significant competitor
whose stock is publicly traded.
3. (a) Xxxxxxxxx'x base compensation for his services under
the Agreement during the Employment Period will be a salary payable by the
Company in equal semi-monthly installments. During calendar years 1996, 1997 and
1998, Xxxxxxxxx'x base compensation is payable at the annual rate of $950,000.
-1-
2
(b) In addition to base compensation, Xxxxxxxxx is
eligible to receive an annual bonus ("Bonus"). For each of 1996, 1997 and 1998,
the Bonus is based on the achievement by the Company of specified levels of
consolidated earnings before interest, taxes, depreciation and amortization
("EBITDA") and is calculated as set forth below:
For Company EBITDA for the year of
$30 million or less: -0-
For Company EBITDA for the year A ratable portion of
greater than $30 million and up to and $1 million (e.g., a Bonus of
including $50 million: $500,000 for EBITDA of
$40 million)
For Company EBITDA for the year of
$50 million or greater: $1 million
Although the Bonus is based on an annual calculation, that
part of the Bonus which accrues each one-half year (allocating the appropriate
portion of Company EBITDA to the calendar one-half year involved) will be
calculated, on an estimated basis, by the Company's Chief Financial Officer and
as so calculated paid within ten (10) days of the end of each calendar one-half
year. Promptly after the end of each calendar year, a precise calculation of the
Bonus will be undertaken and an adjusting payment will be made from the Company
to Xxxxxxxxx or from Xxxxxxxxx to the Company, as the case may be, to equalize
the estimated Bonus payments and the actual Bonus.
4. Xxxxxxxxx will be entitled to reimbursement for travel and
other out-of-pocket expenses necessarily incurred in the performance of his
duties under the Agreement, upon submission of appropriate written statements
and bills.
In addition, Xxxxxxxxx will be entitled to medical and health
benefits at least as complete as those provided to the Company's chief executive
officer as of the date of the Agreement [December 22, 1989], dues and expenses
for one country club and one club located in New York City, $750,000 in life
insurance or reimbursement for the costs thereof to the extent of the cost of
such insurance for healthy men of the same age in the New York City area, and
such other fringe benefits as are commensurate with those provided to chief
executive officers of companies of similar size in the advertising industry.
5. Not Applicable. (Equity Participation Package and
Recapitalization Plan are no longer executory and therefore references to them
have been omitted or marked "Not Applicable.")
6. Notwithstanding anything contained in the Agreement, if on or
after the date of the Agreement [December 22, 1989] and prior to the end of the
Employment Period,
(a) Either (i) Xxxxxxxxx becomes physically or mentally
incapacitated or disabled so that he is unable to discharge his duties under the
Agreement for a continuous
-2-
3
period of six (6) months or an aggregate period of nine (9) months, (ii)
Xxxxxxxxx is convicted of a felony or commits any act in bad faith which
materially and adversely affects the business of the Company, (iii) Xxxxxxxxx
breaches any term of the Agreement and fails to correct such breach within
thirty (30) days after written notice of the same, (iv) Xxxxxxxxx willfully
fails or willfully refuses to follow such reasonable directions of the Board of
Directors as are consistent with his duties and responsibilities as President
and Chief Executive Officer, and he does not cure such willful failure or
willful refusal within thirty (30) days after written notice thereof, (v) the
Board of Directors determines for any reason to terminate Xxxxxxxxx'x employment
with the Company, (vi) (Not Applicable), (vii) Xxxxxxxxx'x authority with
respect to the Company's operations or businesses is materially diminished, or
(viii) after December 31, 0000, Xxxxxxxxx determines, for any reason, to
terminate his employment with the Company, then, in the case of items (i), (ii),
(iii), (iv) or (v), the Company, and, in the case of items [(vi)], (vii) or
(viii), Xxxxxxxxx, will have the right to give written notice of termination of
Xxxxxxxxx'x services as of a date, not earlier than one (1) day nor more than
thirty (30) days from the date of such notice (except that if termination is
pursuant to item (viii), the one (1) day and thirty (30) day periods will be
extended to sixty (60) and ninety (90) days, respectively), to be specified in
such notice and the Employment Period will terminate on the date so specified;
or
(b) Xxxxxxxxx dies, then the Employment Period will
terminate on the date of his death,
whereupon Xxxxxxxxx or his estate, as the case may be, will be entitled to
receive his base salary, Bonus and other benefits provided under the Agreement
prorated to the date on which such termination takes effect and, in addition,
the following:
Subparagraph of Paragraph 6 Additional Amount Payable
Giving Rise to Termination To Xxxxxxxxx Upon Termination
-------------------------- -----------------------------
(a)(i) $50,000
(a)(ii), (a)(iii), (a)(iv), or (a)(viii) -0-
(a)(v) Xxxxxxxxx will receive those payments and benefits
(other than the Bonus), without offset, that he would
have received had he fully performed under the
Agreement for the full term of the Agreement, such
payments and benefits to be received by him pursuant
to the same schedule that would have existed had he
so performed. Such full payments and benefits will
not be reduced or abated even if he does nothing else
for the Company and is engaged for pay in other
endeavors.
-3-
4
[(a)(vi) is no longer applicable ] [or] $250,000 [; provided that said $250,000 shall not be
(a)(vii) payable if termination by you is pursuant to subparagraph
(a)(vi) and occurs after February 28, 1990.]
(b) All Insurance Proceeds from policies on your life, other
than key man insurance required by lending agreements to
be maintained for the benefit of the Company.
Except as set forth in this Paragraph 6, the Company will have no right to
terminate Xxxxxxxxx'x employment prior to December 31, 1994.
7. The Company will indemnify Xxxxxxxxx and hold him harmless
against and in respect of any and all claims, suits, judgments, liabilities and
legal and other expenses (including reasonable legal fees) if and when incurred
arising out of or based upon any breach by Xxxxxxxxx or alleged breach by
Xxxxxxxxx of any of the Non-Compete/Confidentiality Provisions, as defined
below, resulting from or based upon the Agreement, Xxxxxxxxx'x employment by the
Company and/or any services he renders to the Company pursuant thereto. The
Non-Compete/Confidentiality Provisions means the provisions of paragraphs 6 and
7 of the Consulting Agreement dated June 21, 1989 with Gannett Transit and
Gannett Outdoor Group, the provisions of that certain covenant not to compete
dated July 1, 1988 signed by Xxxxxxxxx as Seller and issued to Gannett Co., Inc.
(copies of which have been previously delivered to the Company) and any
analogous confidentiality provisions contained in other agreements Xxxxxxxxx has
with any Gannett companies. During the Employment Period, the Company will use
its best efforts to maintain directors' and officers' liability insurance with
reputable New York carriers in a reasonable amount, but not less than
$3,000,000, if obtainable at reasonable cost. Xxxxxxxxx represents to the
Company that he has delivered to the Company true copies of the non-compete
provisions to which he is subject.
8. Except for Xxxxxxxxx'x obligations to render services, the
covenants, agreements, representations, and warranties contained in or made
pursuant to the Agreement will survive termination of Xxxxxxxxx'x employment.
9. The provisions of the Agreement will be binding upon and inure
to Xxxxxxxxx'x benefit and the benefit of his heirs and personal
representatives, and will be binding upon and inure to the benefit of the
Company and its successors and those who are its assigns.
10. If and only if the Employment Period is terminated pursuant to
items (ii), (iii), (iv) or (viii) of subparagraph 6(a) and the Company is not
then in default under the Agreement, then Xxxxxxxxx agrees that the Company will
have the following option:
The Company will have an option, exercisable within 15 days of
the effective date of such termination, to deliver a written
demand to Xxxxxxxxx to agree not to compete, and Xxxxxxxxx, if
so notified, will agree not to compete and will
-4-
5
not compete with the Company in the franchise/transit
advertising business of the Company in accordance with
Paragraph 2(b) of the Agreement for up to five years from the
effective date of termination of his employment, in
consideration for which the Company will continue to pay
Xxxxxxxxx compensation at an annual rate equal to fifty (50%)
percent of his Base Compensation for the year in which the
effective date of termination occurred, which payment will be
in addition to any other compensation Xxxxxxxxx is entitled to
receive under the Agreement. Compensation under this
subparagraph will be paid in equal quarterly installments. The
first installment will be due and payable within ten days
following the date of the Company's demand and will cover the
three-month period beginning on the first day of the
noncompete period. Each subsequent installment will be payable
within ten days after the beginning of each subsequent
three-month period.
-5-
