Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of the 15th day of
November, 1996, by and between TRANSMEDIA NETWORK INC., a Colorado corporation
("TRANSMEDIA"), and XXXXXX XXXXXX (the "EXECUTIVE").
WHEREAS, Transmedia and the Executive entered into an Employment
Agreement, dated as of January 1, 1987, and subsequently entered into
Amendments, dated as of July 11, 1988, October 1, 1990, October 1, 1992 and
October 1, 1994 to such Employment Agreement; and
WHEREAS, Transmedia and the Executive wish to further amend and extend
the Employment Agreement and to restate the terms thereof in one instrument;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
do mutually agree as follows:
/bullet/ EMPLOYMENT. Transmedia agrees to and does hereby employ the
Executive, and the Executive accepts such employment, upon the terms and
conditions hereinafter set forth. The Executive represents and warrants that he
is free to enter into this Agreement and that entering into this Agreement is
not in violation of any obligations that he has to any other person, firm or
corporation.
/bullet/ TERM. The term of this Agreement shall be for the period commencing
October 1, 1994 and ending on September 30,
1999 (the "TERM"), unless earlier terminated as provided herein.
OFFICE AND DUTIES. The Executive shall perform such executive services
in the operation of the business of Transmedia and its subsidiaries as
Transmedia's Board of Directors may from time to time reasonably assign to the
Executive. The Executive shall hold the positions of President and Chief
Executive Officer of Transmedia, and shall report directly to Transmedia's Board
of Directors. In addition, in connection with any meeting or action of
stockholders for the election of Transmedia's Board of Directors, Transmedia
shall nominate the Executive for election to Transmedia's Board of Directors and
shall use its best efforts to cause the Executive to be elected thereto. During
the term of this Agreement, the Executive shall: (a) work for Transmedia and its
subsidiaries on a full-time, exclusive basis; (b) use his best efforts to apply
on a full-time basis all of his skill and experience to the performance of his
duties in such employment; and (c) not engage in any other business activities,
other than personal investments in corporations and other entities which do not
compete directly or indirectly with Transmedia and its subsidiaries.
Notwithstanding the provisions of the preceding sentence, the Executive shall be
entitled, on an occasional basis, to serve as a consultant to, or on the board
of directors of, other corporations during the term of this Agreement and to
receive and retain all compensation paid to him in such capacities, so long as
such other corporations do not compete directly or indirectly with Transmedia
and its subsidiaries. The Executive shall be entitled to a private office
commensurate with his position with Transmedia and to a secretary assigned
exclusively to the Executive. The provisions of this Section 3 are subject to
modification as set forth in Section 10.
/bullet/ COMPENSATION AND BENEFITS. (a) For services rendered by the
Executive under this Agreement, the Executive shall be paid a base salary (the
"SALARY") at the rate of Two Hundred Seventy-Five Thousand Dollars ($275,000)
per annum during the first year of the Term, Three Hundred Thousand Dollars
($300,000) per annum during the second year of the Term, Three Hundred Fifty
Thousand Dollars ($350,000) during the third year of the Term, Three Hundred
Seventy-Five Thousand Dollars ($375,000) during the fourth year of the Term, and
Four Hundred Thousand Dollars ($400,000) during the fifth year of the Term. The
Salary shall be payable in equal weekly installments.
(b) As additional compensation, Transmedia shall pay the Executive an
annual bonus (the "BONUS") equal to Five Percent (5%) of Pre-Tax Income (as
defined below) for each fiscal year of Transmedia or portion thereof occurring
during the Term following the fiscal year ended September 30, 1994; provided,
however, the amount of the Bonus shall not exceed $600,000, $600,000 and
$700,000 for the fiscal years (or portions thereof occurring during the Term) of
Transmedia ending September 30, 1995, 1996 and 1997, respectively, and $700,000
thereafter. "Pre-Tax Income" shall mean the pre-tax income of Transmedia for the
applicable period before computation of the Bonus, as determined by Transmedia's
independent certified public accountants on the basis of generally accepted
accounting principles consistently applied. The Bonus shall be payable on an
annual basis within
120 days after the end of each fiscal year, commencing with the fiscal year
ending September 30, 1995. If the Term includes less than all of any fiscal
year, then the Bonus, if any, payable for such fiscal year shall be determined
on a pro rata basis of the Pre-Tax Income for the portion of such fiscal year
that this Agreement is in effect except as provided in sub-paragraph 4(d)
hereof.
(c) Transmedia shall, during the term of this Agreement, pay
all premiums on the existing whole-life insurance policy issued by Executive
Life Insurance Company on the life of the Executive in the face amount of
$500,000. Upon the expiration of the term of this Agreement, Transmedia shall
transfer the ownership of such policy to the Executive without any payment by
the Executive. In the event of the death of the Executive during the term of
this Agreement, Transmedia will segregate proceeds thereof sufficient to
purchase an annuity that will pay to the estate of the Executive a death benefit
of $50,000 per year for a period of ten years, with the first such benefit
payable six months after such death. The balance of such proceeds after purchase
of the annuity shall be retained by Transmedia.
(d) At all times during the term of this Agreement, the
Executive shall be included in any life, medical, health, and hospitalization
insurance, pension, stock option, stock ownership, incentive compensation, and
other benefit programs maintained by or for Transmedia at the date hereof. If
Transmedia hereafter establishes any other programs, the Executive shall be
included therein at least the same level as
the other senior executives of Transmedia. In addition, in the event of the
Executive's Disability (as defined below), Transmedia will pay to the Executive
the following: (i) during the first six months of Disability, 100% of the Salary
that would be payable to the Executive but for such Disability; (ii) thereafter,
and until the end of the Term, 75% of such Salary; and (iii) the Bonus for the
period(s) provided in the next sentence. The Executive shall receive a Bonus for
the entire fiscal year ending on any applicable September 30th, if said
September 30th occurs during the first six months of Disability; in all other
instances, the Executive shall receive a portion of the Bonus for an entire year
determined by multiplying the Bonus for the entire fiscal year by a fraction,
the numerator of which is the total number of months starting with October 1st
and ending upon the conclusion of said six months of Disability and the
denominator of which is 12. For purposes of this sub-paragraph (d), all
calculations shall be made on the basis of full and not partial months. For the
purposes hereof "Disability" shall mean a physical or mental impairment of such
duration and degree that the Executive is determined by the Board of Directors
of Transmedia to be substantially unable because of the impairment to perform
the services described in Section 3.
(e) [RESERVED]
(f) Transmedia may provide to the Executive such additional
compensation, bonuses, and benefits as its Board of Directors deems appropriate,
but nothing herein shall obligate Transmedia to do so.
(g) In consideration of services rendered on behalf of
Transmedia by the Executive in the fiscal year ending September 30, 1990,
Transmedia shall pay the Executive, on the date chosen by the Executive in his
sole discretion, as additional compensation, a bonus of Twenty Five Thousand
Dollars ($25,000); provided, however, that such bonus shall not be payable
unless Transmedia shall achieve Pre-Tax Income for the fiscal year ending
September 30, 1990 of at least Two Hundred Thousand Dollars ($200,000).
/bullet/ VACATION. The Executive shall be entitled to take four (4) weeks'
paid vacation during each twelve-month period of his employment hereunder on a
basis consistent with the requirements of the business of Transmedia and its
subsidiaries and in accordance with Transmedia's customary practice for senior
executives. Unused accrued vacation may be carried forward and taken during any
subsequent twelve-month period; PROVIDED, HOWEVER, that the Executive may not
take more than four weeks' vacation during any three-month period. In lieu of
carrying forward unused accrued vacation, the Executive may elect to be paid for
all or any part of unused accrued vacation from any prior twelve-month period.
The amount of any such payment shall be based on the Executive's Salary in
effect at the time of payment. At the expiration of this Agreement after its
stated term or upon the earlier termination hereof by Transmedia without "cause"
(as defined in Section 9 hereof), Transmedia shall pay the Executive for any
unused vacation time which accrued prior to expiration or termination at the
rate set forth in the preceding sentence.
/bullet/ REIMBURSEMENT OF EXPENSES. During the term of this Agreement, the
Executive shall be reimbursed for reasonable travel, entertainment and other
expenses incident to the rendering of services hereunder, upon presentation of
expense statements or vouchers or such other supporting information as
Transmedia may customarily require of its senior executives.
/bullet/ RESTRICTIONS. (a) The Executive acknowledges that the business of
Transmedia is potentially nationwide in scope, and that it expects to be
marketing its products and services throughout a wider geographical area than
that in which it presently operates. Accordingly, during the Restricted Period
(as defined below), the Executive shall not, unless acting with Transmedia's
prior written consent: (i) directly or indirectly own, manage, operate, join, or
control, or participate in the ownership, management, operations or control of,
or be connected as a director, officer, employee, partner, stockholder,
consultant or otherwise with, any business or organization located in or doing
business in the Restricted Area (as defined below) which (A) is engaged in
financing restaurant advertising or equipment or providing restaurant discounts
to members of its programs or (B) directly or indirectly competes with any other
business of Transmedia or any of its subsidiaries conducted at any time during
the term hereof; or (ii) interfere with, or divert or attempt to divert the
benefits of, any relationship with employees, agents, suppliers, restaurant
clients, membership card holders or other customers maintained by Transmedia and
its subsidiaries at any time during the Restricted Period. However,
if the Executive's employment hereunder is terminated without "cause" (as
defined in Section 9 hereof), then the provisions of this Section 7(a) shall
cease upon such termination. For the purposes of this Agreement, (i) "RESTRICTED
PERIOD" means the twenty-four-month period commencing upon the earlier of (x)
the termination of the Executive's employment with Transmedia prior to the
expiration hereof, either voluntarily by the Executive or by Transmedia for
"cause"; and (y) the expiration of this Agreement after its stated term,; and
(ii) "RESTRICTED Area" means any geographical market in or with respect to which
Transmedia, within twelve months prior to the commencement of the Restricted
Period, is then operating or has taken significant affirmative steps to commence
operations. Nothing in this Section 7(a) shall be construed to prevent the
Executive from owning or dealing in any stock actively traded over-the-counter
or on any recognized exchange and issued by a corporation which may compete
directly or indirectly with Transmedia and its subsidiaries so long as the
Executive does not participate in the management, control, or operations of any
such corporation and the Executive's holdings do not at any time exceed five
percent (5%) of the outstanding shares of any class of stock of such
corporation.
(b) The Executive agrees that all confidential and proprietary
matters which he may now have or may obtain during the term of his employment
hereunder relating in any way to the business of Transmedia and its subsidiaries
shall not be disclosed to any other person, either during or after the
termination of his employment, unless Transmedia has given its
prior consent to such disclosure or such disclosure is a necessary incident to
transactions with the Executive is pursuing in accordance with duties delegated
to him by Transmedia's Board of Directors. The Executive shall promptly return
all tangible evidence of such confidential and proprietary matters to Transmedia
at the termination of his employment or upon Transmedia's earlier request.
(c) The Executive acknowledges that the remedy at law for his
breach of the covenants contained in this Section 7 is inadequate, and that
therefore Transmedia and its subsidiaries shall be entitled, in addition to any
other right or remedy available to them, to injunctive relief and the remedy of
specific performance to restrain the Executive from committing or continuing any
such breach and to enforce the Executive's obligations hereunder.
(d) If any court or tribunal of competent jurisdiction shall
refuse to enforce any or all of the provisions of this Section 7, because
individually or taken together, they are deemed unreasonable, then the parties
hereto understand and agree that any such provision or provisions shall not be
void but for the purpose of such proceedings, shall be revised to the extent
necessary to permit the enforcement of such provisions.
/bullet/ OWNERSHIP OF WORK PRODUCT. The Executive acknowledges that during
the term of his employment hereunder he may conceive of, discover, invent, or
create inventions, improvements, new contributions, literary property, material,
ideas and discoveries, whether or not patentable or copyrightable, which
relate to the business of Transmedia and its subsidiaries (all of the foregoing
being collectively referred to herein as "Work Product"), and that various
business opportunities appropriate for Transmedia and its subsidiaries may be
presented to him by reason of his employment. The Executive acknowledges that,
unless Transmedia otherwise agrees in writing, all of the foregoing shall be
owned by and belong exclusively to Transmedia, and he shall have no personal
interest therein. The Executive, at Transmedia's expense, shall further: (a)
promptly disclose any such Work Product and business opportunities to
Transmedia; (b) assign to Transmedia, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(c) sign all papers necessary to carry out the foregoing; and (d) give testimony
in support of his discovery, invention, or creation in any appropriate case.
/bullet/ TERMINATION. (a) Notwithstanding anything contained herein to the
contrary, the Executive's employment hereunder: (i) shall automatically
terminate upon the Executive's death; and (ii) may be terminated by Transmedia's
Board of Directors for "cause" (as hereinafter defined) upon 60 days' prior
written notice of termination, subject to the Executive's right to cure certain
breaches constituting "cause", as provided below. For the purposes of this
Agreement, termination shall be deemed to be "for cause" if: (i) the Executive
is convicted of a felony; (ii) the Executive declares personal bankruptcy
pursuant to any applicable law; (iii) the Executive commits an act of fraud with
respect to Transmedia or any subsidiary, franchisee or licensee of Transmedia or
misappropriates any of its funds; or (iv) the
Executive refuses to perform his duties pursuant to this Agreement, or directly
and repeatedly breaches any covenants contained herein. The written notice of
termination shall set forth with specificity the reason for such termination. If
the reason for such termination is the Executive's direct and repeated refusal
to perform his duties hereunder or his direct and repeated breach of any
covenants contained herein, the Executive shall have the right, within 30 days
of his receipt of such notice, to notify the Board of Directors of his intention
to cure such breach. On or within 10 days before the effective date of
termination, the Board of Directors shall meet to determine whether such breach
has been effectively cured and, upon the majority vote of the directors (not
including the Executive) that it has been cured, the notice of termination shall
be deemed ineffective. The Executive shall be entitled to be represented at such
meeting by counsel. On the effective date of termination, except for the
reimbursement of expenses incurred to such date, the Executive shall cease to
have any further rights hereunder but shall be subject to all restrictions set
forth elsewhere herein.
(b) Except where the Executive has exercised his right to
attempt to cure pursuant to the preceding subsection, the Executive may, within
15 days following delivery of a notice of termination for "cause", by written
notice to the Board of Directors of Transmedia, cause the matter of termination
for "cause" by Transmedia to be discussed at the next regularly scheduled
meeting of the Board of Directors or at a special
meeting of the Board of Directors requested by a majority of its members. The
Executive shall be entitled to be represented at such meeting by counsel. Such
meeting shall be conducted according to procedures deemed equitable by a
majority of the directors present. If, at such meeting, it shall be determined
that this Agreement has been terminated without "cause," or that such "cause"
shall be waived, the provisions of this Agreement shall be reinstated with the
same force and effect as if the notice of termination has not been given; and
the Executive shall be entitled to receive the compensation and other benefits
provided herein for the period from the effective date of the notice of
termination through the date of such reinstatement, plus all reasonable costs of
his counsel as approved by the Board of Directors of Transmedia. Except as
provided in the first sentence of this subsection (b), neither the Executive's
election to pursue or forego the procedures set forth in this subsection (b),
nor a determination by the Board of Directors, at any meeting pursuant to this
subsection, that the Executive's employment hereunder was terminated for
"cause", shall prejudice or preclude the exercise of any other right or remedy
which the Executive may have at law or otherwise as a result of the termination
of his employment hereunder.
/bullet/ SALE OF TRANSMEDIA; CONSULTING ARRANGEMENT. The sale of all or
substantially all of the assets of Transmedia, or the sale of a "control block"
(as hereafter defined) of its shares to any person during the Term shall be made
subject to the Executive's right to either 1) continue his employment under the
terms of this Agreement or 2) within one (1) year after such
sale, elect to resign from his positions with Transmedia. In the event the
Executive chooses to resign from his positions with Transmedia, he shall
receive, without the necessity of performing consulting or other services for
Transmedia, a payment in lump sum of One Million Dollars ($1,000,000). Such lump
sum payment shall be made by Transmedia to the Executive within seven (7) days
of Transmedia's receipt of the Executive's notice of resignation. In addition,
the Executive shall receive the benefits with respect to the life insurance
policy, and payment of death benefits, as set forth in Section 4(c). For the
purposes hereof, "control block" means any block of shares the possession of
which, when added to any shares already owned, directly or indirectly, gives the
power in any form to direct or cause the direction of the management and
policies of Transmedia.
/bullet/ NOTICES Any notices to be given hereunder shall be
deemed to have been given if delivered personally against receipt, if sent by
nationally recognized overnight delivery service, or if mailed by registered or
certified mail, return receipt requested, to the following address: if to
Transmedia, at 00000 Xxxxxxxx Xxxx, Xxxxx, Xxxxxxx 00000, with a copy to Xxxxxx,
Xxxxx & Bockius LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the attention
of Xxxxxxx X. Xxxxxxx, Esq.; and if to the Executive, at 0000 X.X. 000xx Xxxx,
Xxxxx Xxxxx, Xxxxxxx 00000. Either party may change his or her address set forth
above by giving written notice to the other party in accordance with this
Section.
/bullet/ GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
/bullet/ CAPTIONS. The captions of the sections of this Agreement are for
the purpose of convenience only, are not intended to be part of this Agreement
and shall not be deemed to modify, explain, enlarge or restrict any of its
provisions.
/bullet/ SEVERABILITY. If any clause or provision of this Agreement shall
be held invalid or unenforceable, in whole or in part, in any jurisdiction, such
invalidity or unenforceability shall attach only to such clause or provision, or
part thereof, in such jurisdiction, and shall not in any manner affect any other
clause or provision hereof in any jurisdiction.
/bullet/ BINDING EFFECT; ASSIGNMENT. This Agreement shall bind and inure to
the benefit of the respective heirs, representatives, successors, and permitted
assignees of Transmedia and the Executive. Transmedia may assign this Agreement
or any of its rights and obligations hereunder to (i) any transferee of or
successor to all or substantially all of the assets or business of Transmedia
and its subsidiaries or (ii) any subsidiary or affiliate of Transmedia;
PROVIDED, HOWEVER, that no such assignment shall release Transmedia from its
obligations hereunder. The Executive may not assign this Agreement or any of his
rights and obligations hereunder under any circumstances.
/bullet/ MISCELLANEOUS. This Agreement embodies the entire understanding
between Transmedia and the Executive with respect to its subject matter, and
there is no extrinsic agreement of any kind affecting it. This Agreement also
supersedes and replaces
any prior agreement with respect to the subject matter of this Agreement. This
Agreement may not be changed or terminated orally, and no change, termination or
waiver of this Agreement or of any of the provisions herein contained shall be
binding unless made in writing and signed by the party against whom the same is
sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
TRANSMEDIA NETWORK INC.
By: /S/XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
Vice President
/S/XXXXXX XXXXXX
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Xxxxxx Xxxxxx
