EXHIBIT 10.25
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),
entered into on February 11, 2003 and effective as of January 1, 2003
the "Effective Date"), is made by and among Liberty Group Operating, Inc., a
Delaware corporation (the "Company"), Xxxxxxx X. Xxxxxx ("Executive"), and
Liberty Group Publishing, Inc., a Delaware corporation (the "Parent").
RECITALS
A. The Company is engaged in the business of acquiring and publishing
community newspapers, shoppers and other publications and other related
activities.
B. The Parent has filed a Registration Statement on Form S-2 (as such
Registration Statement may be amended from time to time, the "Liberty
Registration Statement") with the U.S. Securities and Exchange Commission (the
"SEC") pursuant to the Securities Act of 1933, as amended (the "Securities
Act").
C. Executive is employed by the Company pursuant to that certain
Employment Agreement, dated as of November 21, 1997, as amended by that certain
Amendment to Employment Agreement, dated as of August 11, 2000 (the "Amendment",
and together with such Employment Agreement, the "Original Employment
Agreement").
AGREEMENTS
In consideration of the foregoing recitals and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Employment.
1.1 Term. Subject to the terms hereof, the Company agrees to
continue to employ Executive as its President, Chief Executive Officer and
Chairman, and Executive agrees to continue such employment, for the period
beginning on the Effective Date, and ending on the third anniversary of the
Effective Date, subject to extension as hereinafter provided or earlier
termination pursuant to Section 3 hereof (the "Term"). After the expiration of
the initial three year term, the Term shall be automatically extended or
re-extended on each anniversary of the Effective Date thereafter, for successive
one-year periods, subject to earlier termination pursuant to Section 3 hereof,
unless the Company or Executive delivers to the other party a notice specifying
such party's intent not to extend or re-extend the Term for an additional
one-year period, at least one hundred and eighty (180) days prior to the end of
the then current Term (including the initial three-year term of this Agreement).
During the Term, Executive also shall be President, Chief Executive Officer and
Chairman of the Parent and each subsidiary of the Company.
1.2 Duties. During the Term, Executive shall perform such duties
and functions as are customarily performed by the chief executive officer and
chairman of a company the size and nature of the Company, including the duties
and functions consistent with the positions of President, Chief Executive
Officer and Chairman as are from time to time assigned to him by the Board of
Directors of the Parent (the "Board").
1.3 Place of Performance. Executive shall perform his services
hereunder at the principal executive office of the Company which shall be
located in Chicago's central business district or the northern suburbs of
Chicago.
1.4 Time to be Devoted to Employment. Except as otherwise specified
herein and except for illness or injury and reasonable vacation periods,
Executive shall devote his full business time and efforts to his duties and
responsibilities hereunder. During the Term, Executive shall not, without the
prior written consent of the Company, accept other employment or render or
perform other services for compensation, except that Executive may serve on the
board of directors, and committees thereof, of companies other than the Company
and its subsidiaries, provided that such service does not materially interfere
with the performance by Executive of his duties and responsibilities hereunder
and provided that the Board consents to such service, which consent shall not be
unreasonably withheld. In addition, Executive's expenditure of reasonable
amounts of time on personal matters and charitable activities shall not be
deemed a breach of this Agreement, provided the same do not materially interfere
with the performance by Executive of his duties and responsibilities hereunder.
1.5 Vacations. Executive shall be entitled to such paid vacation
time as the Company customarily provides from time to time to its similarly
situated senior executives, to be taken in accordance with the then-current
employment policy of the Company regarding vacation time. Executive shall also
be entitled to all paid holidays given by the Company to its similarly situated
employees.
2. Compensation.
2.1 Base Salary. As compensation for services rendered hereunder,
Executive shall receive an annual salary of not less than $500,000 for the
period beginning on January 1, 2003 until the end of the Term, to be paid in
accordance with the Company's customary payroll practices but in no event less
frequently than monthly. Subject to the foregoing, such salary shall be reviewed
by the Board no less frequently than annually. Any increase in salary granted by
the Board shall in no way limit or reduce any other obligation of the Company
hereunder.
2.2 Annual Bonuses. (a) In addition to the salary payable pursuant
to Section 2.1, the Company shall pay to Executive an annual bonus, payable as
soon as reasonably practicable after the completion of the audit for each fiscal
year of the Company ("Fiscal Year") ending during the Term, but in any event
within thirty (30) days after completion of such audit, which audit shall be
completed within ninety (90) days of the end of each such Fiscal Year. The
annual bonus shall be based on realistic performance standards agreeable to the
Company and Executive, including standards based on revenue growth, EBITDA
growth, completion of reasonably acceptable acquisitions and growth of acquired
properties. For each Fiscal Year during the Term, such performance standards
shall be approved, within thirty (30) days after the first day of such Fiscal
Year, by the Compensation Committee of the Board (or a subcommittee thereof).
The annual bonus payable pursuant to this Section 2.2 shall not be paid under,
or be subject to, the terms of the Incentive Plan (as hereinafter defined) or
any other incentive award plan of the Parent or the Company.
(b) With respect to any Fiscal Year, the annual bonus determined to
be earned for such Fiscal Year shall be deemed to have been earned on the last
day of such Fiscal Year.
2.3 Welfare and Pension Payments. Executive shall be eligible to
participate in the various benefit plans maintained from time to time by the
Company for its employees, including, but not limited to, group life,
disability, dental and health insurance coverage, retirement, deferred
compensation, profit sharing, and other plans in accordance with the terms of
such plans as from time to time in effect and applicable to employees of the
Company. Nothing in this Section 2.3, however, shall require the Company to
maintain any benefit plans or provide any type or level of benefits to its
employees, including Executive.
2.4 Other Benefits. Executive will receive payment for all
business-related organizational or association memberships, in accordance with
the Company's current practices.
2.5 Expenses. The Company shall reimburse Executive promptly for
all reasonable travel and other business expenses incurred by him in connection
with his duties hereunder. The Company shall also pay Executive an automobile
allowance of $800 per month during the Term, payable monthly in arrears (the
"Automobile Allowance"). During the Term, upon the request of Executive, the
Company shall lease an automobile selected by Executive (the "Executive
Vehicle") for Executive's exclusive use. Executive shall reimburse the Company
for the monthly lease payment for the lease of the Executive Vehicle to the
extent such monthly lease payment exceeds $800. Executive shall not be entitled
to the Automobile Allowance for any month during which the Company has leased an
Executive Vehicle pursuant to this Section.
2.6 Withholding. All taxable compensation payable to Executive
pursuant to this Section 2 or otherwise under this Agreement shall be subject to
customary withholding taxes and such other employment taxes as are required
under Federal law or the law of any state or governmental body to be collected
with respect to compensation paid by a corporation to an employee.
2.7 Termination of Repurchase Rights. As of the IPO Effective Date
(as defined in Section 7.12), all repurchase rights of the Company, the Parent,
Green Equity Investors II, L.P. and Green Equity Investors III, L.P. related to
the Additional Equity pursuant to the Original Employment Agreement shall be
terminated and of no further force or effect.
2.8 Stock Option Grant. As of the IPO Effective Date, the Parent
shall grant Executive an option to purchase 200,000 shares of the Company's
common stock par value $.01 per share (the "Common Stock") (such number of
shares to be proportionally adjusted in the event the Common Stock is
subdivided, by stock split, stock dividend or otherwise, into a greater
number, or combined, by reverse stock split or otherwise, into a lesser number)
for an exercise price per share of Common Stock equal to the initial public
offering price per share of the Common Stock in the underwritten offering
contemplated by the Liberty Registration Statement (the "Executive Option")
pursuant to an Incentive Award Plan of the Company in the form annexed hereto as
Exhibit A (the "Incentive Plan"). The Executive Option shall be set forth in a
Stock Option Agreement in the form annexed hereto as Exhibit B (the "Stock
Option Agreement").
3. Termination.
3.1 End of Term or Earlier Death. Unless Executive's employment has
terminated sooner, such employment shall terminate at the end of the Term or, if
Executive dies prior thereto, on the date of Executive's death.
3.2 Termination by the Company for Cause. The Company may terminate
Executive's employment hereunder for Cause. For purposes of this Agreement,
"Cause" shall mean Executive's conviction of, guilty plea concerning or
confession of, fraud, theft, embezzlement or any felony. In order to terminate
Executive's employment hereunder for Cause, the Company must notify Executive of
such decision in writing, specifying the Cause and the Date of Termination (as
hereinafter defined).
3.3 Termination by the Company without Cause. The Company may
terminate Executive's employment hereunder at any time without Cause upon notice
to Executive specifying the Date of Termination.
3.4 Termination by Executive for Good Reason. Executive shall be
entitled to terminate his employment hereunder for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean the occurrence of any of the following
circumstances without the prior written consent of Executive:
(a) the relocation of the Company's principal executive office
anywhere outside Chicago's central business district or the northern suburbs of
Chicago, unless Executive agrees to such relocation, in which case, the
relocation of the Company's principal executive office to an unagreed location,
or Executive being required to be based anywhere other than the Company's
principal executive office;
(b) the requirement that Executive report to any officer,
consultant or committee other than the Board or a formal committee thereof; it
being the intent of the parties that Executive shall never be required to report
to anyone other than the Board or a formal committee thereof;
(c) a redelegation of any material duties of Executive to other
officers, employees, consultants or committees;
(d) the assignment of duties to Executive which are inconsistent
with those of a chief executive officer, president or chairman of a company the
size and nature of the Company;
(e) a material breach of the Company's or Parent's obligations
under this Agreement; or
(f) a Change of Control (as hereinafter defined). For purposes of
this Agreement, a "Change of Control" shall be deemed to have occurred:
(i) if at any time prior to the IPO Effective Date:
(A) the Company sells or otherwise disposes of all or
substantially all of its assets, except for a sale or disposition to Executive
or an entity controlled, directly or indirectly, by Executive; or
(B) Green (as hereinafter defined) no longer owns 50% or
more of the voting shares of stock of Parent or Parent no longer owns, directly
or indirectly, at least 95% of the voting securities of the Company, other than
as a result of a public offering of the securities of Parent registered under
the Securities Act or an acquisition by Executive or an entity controlled,
directly or indirectly, by Executive. For purposes hereof, "Green" means Green
Equity Investors II, L.P. and Green Equity Investors III, L.P.; and
(ii) if at any time on or after the IPO Effective Date:
(A) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of 1934,
as amended (the "Exchange Act")), other than by Xxxxxxx Xxxxx and Partners, L.P.
("LGP") or any entity controlled, directly or indirectly, by LGP, of beneficial
ownership of 35% or more of the then outstanding shares of common stock of the
Parent or the combined voting power of the then outstanding voting securities of
the Parent entitled to vote generally in the election of directors; provided,
however, that any acquisition by the Parent or any Subsidiary (as defined
herein), or any employee benefit plan (or related trust) of the Parent or any
Subsidiary, of the then outstanding shares of common stock of the Parent or the
combined voting power of the then outstanding voting securities of the Parent
entitled to vote generally in the election of directors as the case may be,
shall not constitute a Change of Control. "Subsidiary" shall mean the Company
and any other corporation or other entity, whether domestic or foreign, in which
the Parent or the Company has or obtains, directly or indirectly, a proprietary
interest of more than 50% by reason of stock ownership or otherwise;
(B) individuals who constitute the Board or the Board of
Directors of the Company (the "Company Board") as of the Effective Date (each
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board or the Company Board, provided that any individual becoming a director
subsequent to such date whose election, or nomination for election by the Parent
stockholders, was approved by a vote of at least a majority of the directors
then comprising such Incumbent Board shall be considered as though such
individual were a member of such Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest (as determined in the reasonable
and good faith discretion of such Incumbent Board) relating to the election of
the directors of the Parent (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act);
(C) approval by the stockholders of the Parent of a
reorganization, merger or consolidation of the Parent, in each case, with
respect to which the individuals and entities who were the respective beneficial
owners of the common stock and voting securities of the Parent immediately prior
to such reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding common stock
and voting securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such reorganization,
merger or consolidation, or a complete liquidation or dissolution of the Parent
or of the sale or other disposition of all or substantially all of the assets of
the Parent; or
(D) the sale of any common stock or voting securities of
the Company if, after such sale, Parent owns less than 90% of the common stock
or voting securities of the Company or the sale or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries, on a
consolidated basis.
In order to terminate his employment hereunder for Good Reason, Executive shall
give the Company written notice thereof, specifying such Good Reason and the
Date of Termination, which shall be not less than ten days from the date of such
notice, and the Company shall have such ten days to eliminate the basis of such
Good Reason to the reasonable satisfaction of Executive.
3.5 Termination for Disability. The Company may terminate
Executive's employment for Disability. For purposes of this Agreement,
"Disability" shall mean Executive's inability, due to physical or mental illness
or accident or injury, to perform his duties hereunder on a full-time basis for
ninety (90) or more business days within five consecutive months and thereafter
Executive shall not (a) within ten days after a written notice of intention to
terminate is received by Executive, have returned to the full-time performance
of his duties and (b) have continued during the following two months to perform
his duties full-time without absences due to physical or mental disability
aggregating more than ten business days. If the Company elects to terminate
Executive's employment for Disability, it shall give written notice thereof to
Executive specifying the Date of Termination.
3.6 Notice and Date of Termination. Any termination by the Company
or Executive shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 7.4. As used herein, the term "Date of
Termination" shall mean the date specified in the Notice of Termination (which,
except for termination for Cause or termination for Good Reason, shall be not
less than thirty (30) days from the date such Notice of Termination is given).
4. Payments Upon or After Termination.
4.1 Accrued Compensation. Upon termination of Executive's
employment with the Company for any reason, Executive shall be entitled to
receive the compensation earned and unpaid as of the Date of Termination. The
Company shall continue to provide Executive with all profit sharing, pension,
life, disability, accident, health insurance, and other employee benefit and
fringe benefit plans and programs through the Date of Termination in accordance
with the terms and provisions of such plans and programs
in effect at the time that Notice of Termination is given. Except as otherwise
provided in this Section 4, the Executive shall not be entitled to any portion
of his annual bonus which has not been earned as of the Date of Termination.
4.2 Termination for Cause. Other than the Company's obligations
under Section 4.1, if Executive's employment with the Company is terminated by
the Company for Cause, the Company shall have no further obligations to
Executive under this Agreement.
4.3 Termination by Company Without Cause or Termination by
Executive for Good Reason. In addition to the Company's obligations under
Section 4.1, if (a) Executive's employment is terminated by the Company without
Cause or (b) Executive's employment is terminated by Executive for Good Reason
in accordance with the provisions of Section 3.4, the Company shall pay
Executive, within thirty (30) days of the Date of Termination, an amount equal
to two (2) years' base salary (or if such termination occurs within twelve (12)
months after a Change of Control, three (3) years' base salary) at the
Executive's then current annual salary. In addition, the Company shall pay to
Executive the portion of his annual bonus (his "Pro Rata Bonus") equal to the
amount of the bonus he would have earned had he remained employed through the
last day of the Fiscal Year in which such termination occurs (based on actual
performance results for such Fiscal Year) multiplied by a fraction, the
numerator of which is the number of days the Executive was employed by the
Company during such Fiscal Year and the denominator of which is three hundred
sixty-five (365). His Pro Rata Bonus shall be paid after the end of the Fiscal
Year in which such termination occurs in the same manner as if Executive had
been employed for the full Fiscal Year.
4.4 Termination for Disability or Death. During any period that
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness or accident or injury, Executive shall continue to
receive his full salary at the annual rate in effect at the commencement of such
period and all other benefits and all other compensation pursuant to this
Agreement until his employment is terminated pursuant to Section 3.5. In
addition, in the event Executive's employment is terminated as a result of
Disability or death, the Company shall pay to Executive his Pro Rata Bonus,
which shall be paid after the end of the Fiscal Year in which such termination
occurs in the same manner as if Executive had been employed for the full Fiscal
Year.
4.5 Other Termination by Executive. If Executive shall terminate
his employment hereunder for any reason other than Good Reason, other than the
Company's obligations under Section 4.1, the Company shall have no further
obligations to Executive under this Agreement.
4.6 Disclaimer of Mitigation Duty. Executive shall not be required
to mitigate the amount of any payment provided for or referred to in this
Section 4 by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for or referred to in this Section 4 be reduced by
any compensation earned by Executive as a result of other employment, by
retirement benefits, by offset against any amount claimed to be owed to Company
or otherwise.
4.7 Other Benefits. In addition to all other amounts payable to
Executive under this Section 4, Executive shall be entitled to receive all
benefits payable to Executive under any plans or agreements relating to
retirement or other benefits in accordance with the terms and provisions
thereof.
4.8 Golden Parachute Provision. In the event that in the opinion of
tax counsel selected and compensated by Executive ("Executive's Tax Counsel"), a
payment or benefit received or to be received by Executive following his
termination (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company or any person affiliated with the
Company) (collectively, with the payments provided for in the foregoing
provisions of this Section 4, the "Post Termination Payments") would be subject
to excise tax (in whole or part) as a result of section 4999 of the Code, and
(b) as a result of such excise tax, the net amount of Post Termination Payments
retained by Executive (taking into account such excise tax) would be less than
the net amount of Post Termination Payments retained by Executive if the Post
Termination Payments were reduced or eliminated as described in this Section
4.8, then the Post Termination Payments shall be reduced or eliminated until no
portion of the Post Termination Payments is subject to excise tax, or the Post
Termination Payments are reduced to zero. For purposes of this limitation (i) no
portion of the Post Termination Payments the receipt or enjoyment of which
Executive shall have waived in writing prior to the date of payment following
termination of the Post Termination Payments shall be taken into account, (ii)
no portion of the Post Termination Payments shall be taken into account which in
the opinion of Executive's Tax Counsel does not constitute a "parachute payment"
within the meaning of section 280G(b)(2) of the Code, (iii) the Post Termination
Payments shall be reduced only to the extent necessary so that the Post
Termination Payments (other than those referred to in clauses (i) and (ii)) in
their entirety constitute reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4) of the Code or are otherwise not
subject to excise tax, in the opinion of Executive's Tax Counsel, and (iv) the
value of any non-cash benefit and all
deferred payments and benefits included in the Post Termination Payments shall
be determined by the mutual agreement of the Company and Executive in accordance
with the principles of sections 280G(d)(3) and (4) of the Code.
5. Equity.
5.1 Issuance of Equity. On the IPO Effective Date, Parent shall
issue to Executive, pursuant to the Incentive Plan and a Restricted Stock
Agreement in the form annexed hereto as Exhibit C, a number of shares of Common
Stock equal to the result of (x) $1,000,000 divided by (y) the median of the
range of the expected initial public offering price per share of the Common
Stock set forth on the first page of the last prospectus contained in the
Liberty Registration Statement filed with the SEC prior to the IPO Effective
Date and shall deliver to Executive a certificate representing such shares of
Common Stock registered in the name of Executive.
6. Board of Directors. (a) Subject to applicable law, the Parent agrees
that at all times during the Term Executive shall be nominated for election as a
member of the Board and the Board of Directors of each Subsidiary of Parent (a
"Subsidiary Board"), including, but not limited to, the Company Board.
(b) In the event that at any time, or from time to time, during the
Term the Board or any Subsidiary Board establishes an executive or similar
committee of the Board or a Subsidiary Board charged with executive functions or
responsibilities, the Parent agrees that, subject to applicable law, the
Executive will be a member of such committee.
7. Miscellaneous.
7.1 Successors and Assigns; Binding Agreement. (a) The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform this Agreement if no such succession had taken place.
(b) This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive shall die while any amounts remain unpaid
hereunder, including any amounts which would be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to Executive's spouse or
if Executive does not have a living spouse at such time, to Executive's estate.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; provided, however, that the duties of
Executive hereunder are personal to Executive and may not be delegated by him.
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois concerning
contracts made and to be wholly-performed in such state, without regard to
conflicts of law principles. Any suit, action or proceeding brought concerning
or relating to this Agreement or the rights and obligations hereunder, whether
in contract, tort, equity or otherwise, shall be brought exclusively in the
state or federal courts sitting in Xxxx County, Illinois (regardless of whether
any tribunal in any other jurisdiction also has jurisdiction over the subject
matter hereof or the parties hereto). Each party hereto waives any claim or
defense that such forum is not convenient or proper. Each party hereto agrees
that any such Xxxx County, Illinois court shall have in personal jurisdiction
over it, consents to service of process by notice delivered in accordance with
the terms of this Agreement or in any other manner authorized by Illinois law,
and agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner specified by law.
7.3 Waivers. The waiver by either party hereto of any right
hereunder or of any failure to perform or breach by the other party hereto shall
not be deemed a waiver of any other right hereunder or of any other failure or
breach by the other party hereto, whether of the same or a similar nature or
otherwise. No waiver shall be deemed to have occurred unless set forth in a
writing executed by or on behalf of the waiving party. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and each
such waiver shall operate only as to the specific term or condition waived and
shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.
7.4 Notices. All notices and communications that are required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally, upon mailing by registered or
certified mail, postage prepaid, return receipt requested, or upon delivery to
an overnight courier as follows:
If to Parent or the Company, to:
Liberty Group Publishing, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
If to Executive, to the address listed on the Company's records or
to such other address as may be specified in a notice given by one party to the
other party hereunder.
7.5 Severability. If for any reason any term or provision of this
Agreement is held to be invalid or unenforceable, all other valid terms and
provisions hereof shall remain in full force and effect, and all of the terms
and provisions of this Agreement shall be deemed to be severable in nature.
7.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one and the same instrument.
7.7 Legal Fees and Expenses. (a) The Company shall pay, or
reimburse Executive for, the legal fees and expenses of counsel to Executive in
connection with the preparation, negotiation, execution and delivery of this
Agreement.
(b) In the event Parent or the Company has failed to comply with
any of its obligations under this Agreement, or in the event that the Company,
Parent or any other person takes any action to declare this Agreement void or
unenforceable, in whole or in part, or institutes any litigation designed to
deny, or to recover from, Executive any benefits intended to be provided to
Executive hereunder (a "Covered Claim"), the Company shall pay, or reimburse
Executive for, all costs and expenses (including reasonable attorneys' fees and
court costs) incurred by the Executive in connection with the initiation or
defense of any litigation, arbitration or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction (collectively, "Actions"), with
respect to a Covered Claim unless and until it shall be ultimately determined
that neither the Company nor Parent has failed to comply with any of its
obligations under this Agreement. The Company shall advance to, or reimburse,
Executive within 30 days after each written request therefor any and all
attorneys' and related fees and expenses incurred or to be incurred by Executive
in connection with Actions with respect to Covered Claims at any time after the
earlier of (i) the disposition of such Covered Claim or (ii) such time as
Executive has paid $100,000 of fees and expenses in the aggregate with respect
to such Covered Claim. Prior to the disposition of a Covered Claim, the Company
shall advance to, or reimburse, Executive only for fees and expenses in excess
of the first $100,000 of fees and expenses which is paid by Executive. Unless
Executive becomes obligated to pay or reimburse the Company for costs and
expenses as provided in the following sentence, upon the disposition of a
Covered Claim the Company shall reimburse Executive promptly for the first
$100,000 of fees and expenses paid by Executive with respect to such Covered
Claim. Executive agrees that he will reimburse the Company for all attorneys'
and related fees and expenses received by Executive from the Company under the
provisions of this Section 7.7 and pay or reimburse the Company or Parent for
all costs and expenses (including reasonable attorneys' fees and court costs)
incurred by the Company or Parent in connection with Actions with respect to a
Covered Claim in the event and only to the extent that it shall be ultimately
determined that the Company has not failed to comply with any of its obligations
under this Agreement.
7.8 Indemnification. The Company shall indemnify and hold harmless
Executive from any claim asserted against him as an employee, officer or
director of the Company or any of its subsidiaries, or as director, officer or
partner of any other enterprise if Executive serves or served in such capacity
at the request of the Company, to the fullest extent permitted by applicable
state laws. Expenses incurred by Executive in connection with any such claim
shall be paid by the Company in advance upon the written request of Executive.
Executive shall reimburse the Company for such expenses in the event and only to
the extent that it shall be ultimately determined that Executive is not entitled
under applicable state law to be indemnified for such expenses.
7.9 Amendment. This Agreement may be amended or canceled by mutual
agreement of the parties in writing without the consent of any other person.
7.10 Entire Agreement. This Agreement amends and restates the
Original Employment Agreement in its entirety. This Agreement, together with the
agreements executed in connection herewith, constitutes the entire agreement
between the parties, and supersedes all prior oral or written understandings
between the parties, relating to Executive's employment including but not
limited to the Original Agreement.
7.11 No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
7.12 IPO Effective Date. For purposes of this Agreement, "IPO
Effective Date" means the date upon which the public offering contemplated by
the Liberty Registration Statement is consummated.
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SIGNATURE PAGE FOLLOWS.]
The parties hereto have executed this Agreement on the date and year
first above written.
LIBERTY GROUP OPERATING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Title: President
-------------------------------
LIBERTY GROUP PUBLISHING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Title: President
-------------------------------
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
XXXXXXX X. XXXXXX
Accepted solely for the purpose of agreeing
to Section 2.7:
GREEN EQUITY INVESTORS II, L.P.
By: Grand Avenue Capital Partners, L.P.,
its General Partner
By: Grand Avenue Capital Corporation,
its General Partner
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Title:
------------------------------------
GREEN EQUITY INVESTORS III, L.P.
By: GEI Capital III, LLC,
its General Partner
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Title:
------------------------------------
