Exhibit 10.16
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into this 13th
day of September, 1985, by and between BOZELL & XXXXXX, INC., a Delaware
corporation ("B&J"), and XXXXX X. XXXX, sometimes hereinafter designated as
"Employee."
WITNESSETH:
WHEREAS, Employee is an officer, director and shareholder of B&J; and
WHEREAS, concurrently with the execution of this Agreement, an
Agreement of Merger is being entered into by and between Lorimar Acquisition
Corp., a Delaware corporation ("Acquisitionn Corp."), BJKE Holdings, Inc., a
Delaware corporation ("Holdings"), Lorimar, Inc., a Delaware corporation
("Lorimar"), Employee and other shareholders of B&J, pursuant to which and on
the Effective Time (as defined in such Agreement of Merger), Acquisition Corp.
will be merged with and into B&J with B&J surviving as a wholly-owned
subsidiary of Holdings and Holdings continuing to be a wholly-owned subsidiary
of Lorimar; and
WHEREAS, immediately following the Effective Time of such merger,
Xxxxxx & Xxxxxxxx, Incorporated ("K&E") will either (i) be merged with B&J, or
(ii) become a wholly-owned subsidiary of B&J, and immediately thereafter, B&J
will change
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its name to Bozell, Jacobs, Xxxxxx & Xxxxxxxx, Inc. (the term "the Company"
shall be hereinafter be used to refer to B&J as it shall exist after the
Effective Time); and
WHEREAS, Employee and B&J desire by this Agreement to ensure that the
Company will have the benefit of the expertise, knowledge and services of
Employee;
NOW, THEREFORE, it is agreed as follows:
1. EFFECTIVE DATE
--------------
This Agreement shall become effective only if the merger of
Acquisition Corp. with and into B&J is consummated and shall be effective from
the date of the consummation of such merger. Such date shall hereinafter be
referred to as the Effective Date.
2. TERM OF AGREEMENT; POSITION
---------------------------
The Company hereby employs Employee as Chairman of the Company's
Atlantic Division for a five (5) year term beginning on the Effective Date and
Employee hereby accepts such employment. Employee, subject and reporting only
to the Chief Executive Officer of the Company, shall devote his full time,
attention, and energies, during regular business hours, to the business and
affairs and to promote the interests and welfare of the Company and its
subsidiaries. Employee shall perform, to the best of his abilities, as
Chairman of the Company's Atlantic Division, such executive duties with
2
managerial responsibility as may, from time to time, be specified by the Chief
Executive Officer of the Company consistent with his status as Chairman of the
Company's Atlantic Division. The parties acknowledge that Employee being
Chairman of the Atlantic Division is a material term of this Agreement.
Lorimar agrees to cause Employee to be elected to the Board of Directors of
the Company.
Employee shall not, during the term hereof, be interested
directly or indirectly, in any manner, as a partner, officer, director,
stockholder, advisor, employee or in any other capacity, in any other business
similar to any of the businesses of Lorimar or any of its subsidiaries or
affiliates; provided, however, that this clause shall not prevent or limit the
right of Employee to own up to five percent (5%) of the issued and outstanding
securities of any publicly-owned company whose securities are regularly traded
on any securities exchange or in the over-the-counter market. Employee shall
not be required to perform his duties under this Agreement other than in New
York, New York, except for normal business travel consistant with his duties
as the Chairman of the Atlantic Division.
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3. COMPENSATION
------------
3.1 Base Compensation
-----------------
The Company shall compensate Employee for the
services to be rendered by Employee hereunder, including all services to
be rendered as a director and executive officer of the Company, at the
rate of $415,200 per annum, payable not less frequently than monthly in
accordance with the regular executive salary procedures from time to
time adopted by the Company. The Company shall deduct from all
compensation paid to Employee hereunder such sums, including but without
limitation, social security, income tax withholding, and unemployment
insurance, as the Company is by law obligated to deduct.
On January 1, 1987 and on each anniversary thereof
during the term of this Agreement (the "Adjustment Date"), Employee's
base compensation shall be adjusted upward based upon the Consumer Price
Index for All Urban Consumer/United States City Average, as published by
the Bureau of Labor Statistics of the United States Department of Labor
(the "CPI"). Employee's base compensation for the twelve (12) months
beginning on each Adjustment Date shall be equal to the greater of (a)
$415,200 or (b) $415,200 multiplied by a fraction, the numerator of
which shall be the CPI published most recently prior to the Adjustment
Date and the denominator
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of which shall be the CPI published most recently prior to the Effective Date
of this Agreement.
3.2 Incentive Bonus.
---------------
Employee shall be entitled to participate in the Incentive
Bonus Plan attached hereto as Exhibit A. Amounts payable pursuant to the
Incentive Bonus Plan, if any, shall be paid on or before 120 days after the
end of each bonus plan year.
3.3 B&J Wealth Accumulation Plan and Fringe Benefits.
------------------------------------------------
The Company agrees to maintain for Employee during the term
of this Agreement the B&J Wealth Accumulation Plan at not less than the
current benefit levels enjoyed by Employee. The Company agrees that
Employee's fringe benefits taken as a whole, will not be less than he received
as an employee of B&J.
3.4 Lorimar Incentive Stock Option Plan.
-----------------------------------
Employee shall, during his employment hereunder, be
eligible to participate in Lorimar's 1981 Incentive Stock Option Plan and
shall be granted each year that number of Incentive Stock Option that the
Lorimar Compensation Committee believes is appropriate considering Employee's
position and performance.
5
3.5 Expenses.
--------
Employee shall be reimbursed for the reasonable and actual
out-of-pocket expenses incurred by him in the performance of his duties and
responsiblities hereunder, provided Employee shall first furnish to the
Company proper vouchers and expense accounts in accordance with Company
policy.
4. LIFE INSURANCE
--------------
The Company may, in its sole discretion, at any time during the
term of this Agreement, apply for and procure as owner and for its own benefit
insurance on the life of Employee, in such amounts and in such form or forms
as the Company may choose. Employee shall have no interest whatsoever in any
such policy or policies, but he shall, at the request of the Company, submit
to such medical examinations, supply such information, and execute such
documents as may be required by the insurance company or companies to whom the
Company has applied for such insurance. Upon the termination of Employee's
employment by the Company, if the Company owns any whole-life life insurance
on the Employee's life, the Employee shall have the option to acquire such
life insurance from the Company at a price equal to its cash surrender value
at the date of the termination of the Employee's employment, and if the
Company owns any term life insurance on the Employee's life, the
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Employee shall have the option to acquire such life insurance from the Company
at a price equal to the pre-paid premium at the date of the termination of the
Employee's employment. However, Employee shall have no right to acquire any
insurance covering his life maintained in conection with the B&J Wealth
Accumulation Plan.
5. DISABILITY
----------
If, on account of any physical or mental disability, Employee
shall fail or be unable to perform under this Agreement for a continuous
period of one hundred twenty (120) days or an aggregate period of one hundred
eighty (180) days during any consecutive twelve (12) month period, then the
Company may, at its option, terminate this Agreement upon thirty (30) days
written notice. In such event, Employee shall be entitled to receive the base
compensation payable to him pursuant to Paragraph 3.1 hereof through the end
of the month in which such termination is made effective, and the incentive
bonus payable to him pursuant to Paragraph 3.2 hereof pro-rated through the
end of the month in which such termination is effective. The option to
terminate provided in this Paragraph 5 is separate, distinct and additional to
any right on the part of the Company to terminate this Agreement pursuant to
Paragraph 10 hereof.
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If there should be a dispute between the parties hereto as to
the Employee's physical or mental disability for purposes of this Agreement,
the question shall be settled by the opinion of an impartial reputable
physician or psychiatrist agreed upon for the purpose by the parties or their
representatives, or if the parties cannot agree within thirty (30) days after
a request for designationn of such party, then each party shall designate a
physician or psychiatrist and the two of them shall designate a third such
medical professional and the opinion of a majority of the three (3) of them
shall settle the question. The certification of such physician or
psychiatrist or the majority of the three (3) of them, as the case may be, as
to the question in dispute shall be final and binding upon the parties hereto.
6. DEATH
-----
This Agreement will terminate in the event that Employee should
die during the term hereof. In such event, Employee's personal
representative shall be entitled to receive, in addition to all other accrued
but unpaid benefits, the base compensation payable to Employee pursuant to
Paragraph 3.1 hereof through the end of the second month after the month
during which his death occurs and the incentive compensation payable pursuant
to Paragraph 3.2 hereof pro-rated
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through the end of the second month after the month in which his death occurs.
7. VACATION
--------
Employee shall be entitled to four (4) weeks' vacation in any
twelve (12) month period or to such greater vacation time that the Company's
Board of Directors determines to be the Company's vacation policy with respect
to its executive offficers.
8. SOLICITATION OF THE COMPANY EMPLOYEES
-------------------------------------
Employee agrees that from the date hereof until three (3) years
after the termination of his employment with the Company, he will not,
directly or indirectly, solicit or otherwise initiate any inducement of any
persons who are employees of the Company to terminate their employment with
the Company.
9. REMEDY FOR BREACH
-----------------
Employee hereby represents that the services to be performed by
him under this Agreement are of a special, unique, unusual, extraordinary and
intellectual character, the loss of which can not be reasonably or adequately
compensated for in damages. Accordingly, Employee agrees that, in the event
of any breach of the terms and conditions of this Agreement to be performed by
him, or in the event Employee shall, without the written consent of the
Company, leave its
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employment (except if Employee leaves the employ of the Company after the
Company or Lorimar has materially breached this Agreement) and thereafter
perform services during the five (5) year period commencing on the date hereof
for any person, firm, or corporation engaged in competition with the Company,
then the Company shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction, either in law or
in equity, to obtain damages for any breach of this Agreement, or to enforce
the specific performance thereof by Employee, or to enjoin Employee from
performing services for any such other person, firm, or corporation, during
the term of this Agreement.
10. TERMINATION FOR CAUSE
---------------------
(a) The Company shall have the right at any time, by written
notice to Employee, to terminate this Agreement forthwith and to discharge
Employee for cause if one of the following events shall occur during the
employment term:
(i) Employee's conviction in a court of law of any crime
or offense involving misuse or misappropriation of money or other property
of the Company, or
(ii) Employee's continued, willful failure or refusal to
perform specific written directives of the Board of Directors or the Chief
Executive Officer of the
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Company which directives involve material aspects of the Employee's duties
and responsibilities and which are consistent with the scope and nature of
Employee's duties and responsibilities as set forth in Paragraph 2 hereof;
and
(iii) Any flagrant act of dishonesty or disloyalty by
Employee or any act involving gross moral turpitude of the Employee which
adversely affects the business of Corporation.
11. SUCCESSORS AND ASSIGNS
----------------------
The provisions of this Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, including,
without limitation, any corporation which may acquire all or substantially all
of the Company's assets and business or with or into which the Company may be
consolidated, merged or reorganized.
The parties hereto agree that Employee's services are personal
and that this Agreement is executed with respect thereto. Accordingly,
Employee may not assign this Agreement nor any of his rights, duties or
obligations created hereunder.
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12. NOTICES
-------
All notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been
given and received forty-eight (48) hours after deposit thereof for mailing at
any general or branch United States Post Office enclosed in a registered or
certified postpaid envelope and addressed as follows:
To Employee: Xxxxx X. Xxxx
____________________________
____________________________
With copy to: Hall, Dickler, Xxxxxx Xxxx & Xxxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
To the Company: Bozell, Jacobs, Xxxxxx & Xxxxxxxx
00000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx,
Vice-Chairman of the Board
To Lorimar: Lorimar
0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Chairman of the Board - President
With copy to: Buchalter, Nemer, Xxxxxx, Xxxxxxxx
& Younger
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
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The parties hereto may designate a different place at which notice shall be
given provided, however, that any such notice of change of address shall be
effective only upon receipt.
13. ENTIRE UNDERSTANDING
--------------------
This Agreement sets forth the entire understanding of the
parties hereto with respect to the subject matter thereof and no other
representations, warranties or agreements whatsoever have been made to
Employee not herein contained. This Agreement shall not be modified, amended
or terminated except by another instrument in writing executed by the parties
hereto.
14. SEVERABILITY
------------
In case one or more of the provisions contained in this
Agreement or any portion of any such provision shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceablility shall not affect any other provision of this
Agreement or any portion of any such provision, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or portion
thereof had never been contained herein. The failure by the Company or
Lorimar, as the case may be, at any time, to require performance by Employee
of any of the provisions hereof, shall not be deemed a waiver of any kind nor
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in any affect the respective rights of the Company or Lorimar, as the case may
be, to thereafter enforce the same.
15. GOVERNING LAW
-------------
This Agreement and all rights, obligations and liabilities
arising hereunder shall be construed and enforced in accordance with the laws
of the State of New York, without regard to conflict of law principles.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
the day and year first above written.
BOZELL & XXXXXX, INC., "EMPLOYEE"
a Delaware corporation
/s/ Xxxxx X. Xxxx
By /s/ Xxxxxxx X. Xxxxxxx ------------------------------
-------------------------- XXXXX X. XXXX
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
Lorimar agrees to be bound by those provisions of Paragraph 2 and 3.4 which
apply to Lorimar.
LORIMAR, INC., a Delaware
corporation
By /s/
--------------------------
Title Chairman
-------------------
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INCENTIVE BONUS PLAN
--------------------
This Incentive Bonus Plan (this "Plan") is adopted by BOZELL & XXXXXX,
INC., a Delaware corporation (the "Company"), to be effective at the
effective time of the merger of Lorimar Acquisition Corp. with and into the
Company (the "Effective Time"), with respect to Messrs. X. XXXXXX TEMERLIN,
XXXXXXX X. XXXXXXX, XXXXX X. XXXX, AND XXXXXX XxXXXX, each of whom is or will
be at the Effective Time an executive officer of the Company and all of whom
are collectively referred to herein as the "Participants."
1. This Plan shall apply to each of the five calendar years
commencing January 1, 1986. As to any amounts payable pursuant to this Plan,
Xx. Xxxxxxx shall be entitled to 32%, Xx. Xxxxxxxx to 32%, Xx. Xxxx to 16% and
Xx. XxXxxx to 20%.
2. The Participants shall be entitled to receive incentive bonus
payments hereunder determined as follows:
A. The Participants and the Company agree that the target
operating profit pre-profit sharing and pre-tax ("TOP") for Year One will be
$11,000,000; for Year Two, the TOP will be $13,750,000; for Year Three, the
TOP will be $19,530,000; for Year Four, the TOP will be $24,410,000; and for
Year Five, the TOP will be $30,520,000.
B. In each year, the TOP will be adjusted by deducting
therefrom a Profit Sharing Allowance ("PSA"). The PSA for Year One will be
$3,000,000; the PSA for Year Two will be
$3,500,000; the PSA for Year Three will be $4,000,000; the PSA for Year Four
will be $4,500,000; and the PSA for Year Five will be $5,000,000. The TOP
less the PSAA in each year will be the target net pre-tax profit of the
Company ("TNPP").
C. After each of such calendar Years, the actual domestic net
pre-tax profit of the Company ("ANPP") will be adjusted by (a) the difference
(plus or minus) of the actual charge for the contribution to the Company's
Internal Revenue Service qualified Employees Profit Sharing Plan ("Profit
Sharing Plan") and the PSA adjustment made for each of such Years as stated
above (for example, since the PSA for Year Three is $4,000,000, if the actual
charge for the contribution to the Profit Sharing Plan is $5,000,000, ANPP
would be adjusted by adding $1,000,000 to ANPP, and conversely, if the actual
charge for the contribution to the Profit Sharing Plan is $3,000,000, ANPP
would be adjusted by subtracting $1,000,000 from ANPP); (b) adding to the
domestic net pre-tax profit the Company's profit from foreign operations after
deduction of foreign taxes attributable to such profit; (c) eliminating any
charges relating to (i) the issuance of Lorimar common stock to Messrs.
Xxxxxxx and Temerlin, and (ii) the assumption by the Company of or payment by
the Company of $750,000 of Xx. Xxxxxxx'x principal residence mortgage
obligations, all as provided in the
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respective employment agreements of Messrs. Xxxxxxx and Temerlin; (d) with
respect to the calendar year during which the Company surrenders its leasehold
interest at One Xxx Xxxxxxxxxxxx Plaza, New York, New York (the "Leasehold
Interest"), adding the net amount of the leasehold improvements carried on the
Company's books which were written off in connection with the Company's
surrender of its Leasehold Interest, and subtracting any consideration paid or
to be paid to the Company by its Lessor in connection with the surrender of
the Leasehold Interest; and (e) eliminating any intercompany charges from
Lorimar, Inc. ("Lorimar") or its affiliates, except for charges for services
actually rendered to the Company by Lorimar or its affiliates and for interest
computed in accordance with Paragraph 3 below.
D. The Adjusted ANPP for each of such Calendar Years will be
inserted in Row 1 of the attached calculation form, and the incentive bonus
payment payable for each of such Years, if any, will be determined by
completing the form. If the Cumulative Earned Bonus (item 8 on the attached
form) is equal to or greater than $5,000,000 at the end of any IBP Year, this
Plan shall terminate effective at the end of such IBP Year; however, the
Participants shall be paid as though the Plan continued through the end of
1990 and as if the Adjusted ANPP for IBP Years after the Plan is terminated is
equal to such year's TNPP.
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3. For the purpose of computing ANPP, except with respect to
interest-free loans from Lorimar to the Company or from the Company to Lorimar
in accordance with Paragraph 4 below, the Company will (i) accrue interest
expense with respect to its indebtedness to Lorimar, if any, at a rate equal
to the rate in effect from time to time between Lorimar and its principal
bank, and (ii) accrue interest income with respect to the indebtedness of
Lorimar to the Company, if any, at a rate equal to the 90-day Treasury Xxxx
rate ("T-Xxxx Rate") plus 1/2% as such T-Xxxx Rate exists from time to time.
Effective June 30, 1986, and for each year thereafter, the Company will
declare and pay a dividend to its shareholder equal to its pre-tax earnings
for the fiscal year ended on such date; provided, however, that dividends may
be declared and paid sooner if funds are available, as determined by the
Board of Directors. (The dividend with respect to June 30, 1986, will be
equal to the company's pre-tax earnings from the Effective Time to June 30,
1986.)
4. Effective July 1, 1986, 1987, 1988 and 1989, Lorimar will
advance to the Company or the Company will advance to Lorimar on an
interest-free basis an amount determined by multiplying the average previous
twelve months monthly capitalized income ("capitalized income" is determined
by multiplying 6.67 times the Company's commissions and fees) by .21 and
subtracting 17,400,000 from the product thereof. The difference thereof shall be
referred to as the "Advance". (The capitalized income for the twelve months
ended June 30, 1986
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will be determined as though the merger of K&E and B&J occurred on July 1,
1985.) If the 1986 Advance is a positive number, Lorimar will loan such
amount to the Company, and if the 1986 Advance is a negative number, the
Company will loan such amount to Lorimar. For example, if the average monthly
capitalized income for the Company during the twelve months ended June 30,
1986 was $95,000,000, then Lorimar would loan to the Company effective July 1,
1986, on an interest-free basis the sum of $2,550,000, computed as follows:
95,000,000 x .21 = $19,950,000 - 17,400,000 = $2,550,000. By way of further
example, if the average monthly capitalized income for the twelve months ended
June 30, 1986 was $75,000,000, then the Company would loan to Lorimar,
effective July 1, 1986, on an interest-free basis the sume of $1,650,000,
computed as follows: 75,000,000 x .21 = $15,750,000 - 17,400,000 =
(1,650,000).
The 1987, 1988 and 1989 Advance will be computed in the same manner,
except there wil be subtracted from the 1987, 1988 and 1989 Advances the sum
of the previous Advances. For example, if the average twelve month
capitalized income for the twelve months ending June 30, 1986 was $95,000,000,
for the twelve months ending June 30, 1987 was $105,000,000, for the twelve
months ending June 30, 1988 was $80,000,000, and for the twelve months ending
June 30, 1989 was $100,000,000, the 1986, 1987, 1988, and 1989 July 1 advances
would be as follows:
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1986
----
95,000,000 x .21 = 19,950,000 - 17,400,000 = $2,550,000;
therefore, Lorimar advances to the Company $2,550,000.
1987
----
105,000,000 x .21 = 22,050,000 - 17,400,000 = $4,650,000 - 2,550,000 =
$2,100,000; therefore, Lorimar advances to the Company
$2,100,000.
1988
----
80,000,000 x .21 = 16,800,000 - 17,400,000 = (600,000) - 4,650,000 =
$(5,250,000); therefore, the Company advances to Lorimar
$5,250,000.
1989
----
100,000,000 x .21 = 21,000,000 - 17,400,000 = 3,600,000 - (600,000) =
$4,200,000; therefore, Lorimar advances to the Company
$4,200,000.
5. Adjusted ANPP, TNPP and capitalized income for each IBP Plan
Year will be determined by the public accounting firm then retained by the
Company as soon as practical following the close of each IBP Year, and such
determinations shall be binding upon the Company and the Participants.
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(000's omitted)
-----------------------------------------------------------------------------------
IBP YEAR 1 2 3 4 5
-----------------------------------------------------------------------------------
1 This Year's Adjusted ANPP
-----------------------------------------------------------------------------------
2 Cumulative Adjusted ANPP
(1 Accumulated, including
this year)
-----------------------------------------------------------------------------------
3 This Year's TNPP 8,000 10,250 15,530 19,910 2,552
-----------------------------------------------------------------------------------
4 Cumulative TNPP
(3 Accumulated, including
this year)
-----------------------------------------------------------------------------------
5 Cumulative Surplus or
Deficit (2 less 4)
-----------------------------------------------------------------------------------
6 Theoretical Cumulative
Bonus (50% of 5 if positive;
zero, if 5 is negative)
-----------------------------------------------------------------------------------
7 Cumulative Maximum Cap 1,500 3,000 4,500 5,000 5,000
-----------------------------------------------------------------------------------
8 Cumulative Earned Bonus
(Lesser of 6 or 7)
-----------------------------------------------------------------------------------
9 Cumulative Interest Earned
(14 Accumulated, excluding
this year)
-----------------------------------------------------------------------------------
10 Cumulative Paid Bonus (15
Accumulated, excluding this
year)
-----------------------------------------------------------------------------------
11 Cumulative Owing
(8 + 9 - 10)
-----------------------------------------------------------------------------------
12 Deferred (50% of 11 if
positive; however, zero in
year 4 if 8 is $5,000,000
and zero in Year 5)
-----------------------------------------------------------------------------------
13 Current Owing
(11 - 12)
-----------------------------------------------------------------------------------
14 Interest at 10% on Last
Year Deferral (12)
-----------------------------------------------------------------------------------
15 Total Current Payment
(13 + 14; not less than
zero)
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AMENDMENT dated February 8th 1988 (the "Amendment") between BOZELL,
JACOBS, XXXXXX & XXXXXXXX, INC. (the "Company") and XXXXX XXXX (the
"Employee") to the Employment Agreement (the "Employment Agreement") dated
September 13, 1985 between BOZELL & XXXXXX, INC. (to which the Company is
successor in interest) and the EMPLOYEE.
WITNESSETH:
WHEREAS, Bozell Inc. ("Bozell") and Lorimar Telepictures Corporation
("Lorimar") have entered into an agreement (the "Acquisition Agreement") dated
September 15, 1987 pursuant to which Bozell has agreed to acquire from Lorimar
all of the stock of the Agency; and
WHEREAS, the closing of the transactions contemplated by the
Acquisition Agreement is intended to take place in or about the month of
February, 1988; and
WHEREAS, the Company and the Employee are desirous of amending the
Employment Agreement in certain respects, with such amendments to become
effective upon the consummation of the transactions contemplated in the
Acquisition Agreement;
NOW, THEREFORE, it is agreed as follows:
1. Effective Date. This Amendment shall become effective only if
the stock of the Agency is acquired by Bozell from Lorimar pursuant to the
provisions of the Acquisition Agreement, and all of the terms and conditions
of this Amendment shall become effective from and after the date of the
consummation of such transaction. Such date is hereinafter referred to as the
Effective Date.
2. Term of Agreement. The term of the Employee's employment is
hereby extended through December 31, 1993.
3. Compensation. Commencing on the Effective Date and continuing
thereafter through July 31, 1989, the Base Compensation payable to the
Employee as provided in Paragraph 3.1 of the Employment Agreement shall be
computed at the annual rate of Four Hundred and Seventy-Five Thousand
($475,000.00) Dollars. Thereafter, and through the remainder of the term as
hereby extended, the Base Compensation shall be computed at the annual rate of
Six Hundred and Seventy-Five Thousand ($675,000.00) Dollars per annum.
4. Effectiveness of Employment Agreement. The terms and conditions
of the Employment Agreement as specifically amended hereby shall remain in
full force and effect throughout the term hereof, as such term has been
extended hereby.
2
IN WITNESS WHEREOF, the parties hereto have executed this agreement on
the day and year first above written.
BOZELL, JACOBS, XXXXXX & XXXXXXXX, INC.
Successor in interest to Bozell &
Xxxxxx, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Chief Executive Officer
--------------------------------
ACCEPTED AND AGREED:
/s/ Xxxxx Xxxx
-------------------------
XXXXX XXXX
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SECOND AMENDMENT
SECOND AMENDMENT dated May , 1996 (the "Second Amendment") between
BOZELL, JACOBS, XXXXXX & XXXXXXXX, INC. (the "company") and XXXXX X. XXXX (the
"Executive") to the Employment Agreement dated September 13, 1985, as amended
by Agreement date February 8, 1988 (the employment agreement as thus amended
being hereinafter the "Employment Agreement").
WITNESSETH:
WHEREAS, the Company and the Executive have entered into the
Employment Agreement, and
WHEREAS, the parties are desirous of further amending the Employment
Agreement in certain respects in the manner hereinafter set forth,
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable considerations, receipt of which is
hereby acknowledged, the Employment Agreement is hereby amended in the
following manner:
1. Paragraph 2 of the Employment Agreement is hereby amended to
extend the Executive's employment through March 31, 1998.
2. Paragraph 3.1 is hereby deleted in its entirety, and the
following paragraph 3.1 is substituted in the place and stead thereof:
"3.1 Base Compensation.
-----------------
The Company shall compensate the Executive for the services
to be rendered by the Executive hereunder, including all services to
be rendered as a director and executive officer of the Company, at the
rate of $800,000 per annum, payable not less frequently than monthly
in accordance with the regular executive salary procedures from time
to time adopted by the Company. The Company shall deduct from all
compensation paid to the Executive hereunder such sums, including but
without limitation, social security, income tax withholding, and
unemployment insurance, as the Company is by law obligated to deduct.
On April 1, 1997 and on each anniversary thereof during the
term of this Agreement (the "Adjustment Date"), the Executive's base
compensation shall be adjusted upward based upon the Consumer Price
Index for All Urban Consumer/United States City Average, as published
2
by the Bureau of Labor Statistics of the United States Department of
Labor (the "CPI"). The Executive's base compensation for the twelve
(12) months beginning on each Adjustment Date shall be equal to the
greater of (a) $800,000 or (b) $800,000 multiplied by a fraction, the
numerator of which shall be the CPI published most recently prior to
the Adjustment Date and the denominator of which shall be the CPI
published most recently prior to April 1, 1996. In no event, however,
shall the Base Compensation for any such twelve (12) month period
exceed one hundred and six percent (106%) of the Base Compensation
payable in the previous twelve (120) month period."
3. The terms and conditions of this Second Amendment shall become
effective as of April 1, 1996.
4. A Second Amendment to the Employment Agreement dated June, 1992,
effective as of April 1, 1992, is for all intents and purposes null and void
as and after April 1, 1996.
5. All of the terms and conditions of the Employment Agreement as
amended by this Second Amendment
3
shall remain in full force and effect throughout the term hereof, as such term
has been extended hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
BOZELL, JACOBS, XXXXXX & XXXXXXXX, INC.
By /s/ Valentine X. Xxxxxx
------------------------------------
Valentine X. Xxxxxx
ACCEPTED AND AGREED:
/s/ Xxxxx Xxxx
-------------------------
XXXXX XXXX
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SECOND AMENDMENT
SECOND AMENDMENT dated June , 1992 (the "Second Amendment")
between BOZELL, JACOBS, XXXXXX & XXXXXXXX, INC. (the "Company") and XXXXX X.
XXXX (the "Executive") to the Employment Agreement dated September 13, 1985,
as amended by Agreement date February 8, 1988 (the employment agreement as
thus amended being hereinafter the "Employment Agreement").
WITNESSETH:
WHEREAS, the Company and the Executive have entered into the
Employment Agreement, and
WHEREAS, the parties are desirous of further amending the Employment
Agreement in certain respects in the manner hereinafter set forth,
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable considerations, receipt of which is
hereby acknowledged, the Employment Agreement is hereby amended in the
following manner:
1. Paragraph 2 of the Employment Agreement is hereby amended to
extend the Executive's employment through March 31, 1998.
2. Paragraph 3.1 is hereby deleted in its entirety, and the
following paragraph 3.1 is substituted in the place and stead thereof:
"3.1 Base Compensation.
-----------------
The Company shall compensate the Executive for the services
to be rendered by the Executive hereunder, including all services to
be rendered as a director and executive officer of the Company, at the
rate of $675,000 per annum, payable not less frequently than monthly
in accordance with the regular executive salary procedures from time
to time adopted by the Company. The Company shall deduct from all
compensation paid to the Executive hereunder such sums, including but
without limitation, social security, income tax withholding, and
unemployment insurance, as the Company is by law obligated to deduct.
2
On April 1, 1993 and on each anniversary thereof during the
term of this Agreement (the "Adjustment Date"), the Executive's base
compensation shall be adjusted upward based upon the Consumer Price
Index for All Urban Consumer/United States City Average, as published
by the Bureau of Labor Statistics of the United States Department of
Labor (the "CPI"). The Executive's base compensation for the twelve
(12) months beginning on each Adjustment Date shall be equal to the
greater of (a) $675,000 or (b) $675,000 multiplied by a fraction, the
numerator of which shall be the CPI published most recently prior to
the Adjustment Date and the denominator of which shall be the CPI
published most recently prior to April 1, 1992. In no event, however,
shall the Base Compensation for any such twelve (12) month period
exceed one hundred and six percent (106%) of the Base Compensation
payable in the previous twelve (12) month period."
3. The terms and conditions of this Second Amendment shall become
effective as of April 1, 1992.
4. All of the terms and conditions of the Employment Agreement as
amended hereby shall remain in full force and effect throughout the term
hereof, as such term has been extended hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
BOZELL, JACOBS, XXXXXX
& XXXXXXXX, INC.
By: /s/ Valentine X. Xxxxxx
--------------------------
Valentine X. Xxxxxx
ACCEPTED AND AGREED:
/s/ Xxxxx Xxxx
-------------------------
XXXXX XXXX
3
THIRD AMENDMENT
THIRD AMENDMENT dated July 30, 1997 (the "Third Amendment") between
BOZELL, JACOBS, XXXXXX & XXXXXXXX, INC. (the"Company") and XXXXX XXXX (the
"Executive") to the Employment Agreement dated September 13, 1985, as amended
by the Agreement dated February 8, 1988, by the Second Amendment dated June
1992 and by the Second Amendment dated May 1996 (the employment agreement as
thus amended being hereinafter the "Employment Agreement").
WITNESSETH:
WHEREAS, the Company and the Executive have entered into the
Employment Agreement; and
WHEREAS, the Company, Cherokee Acquisition Corporation and True North
Communications Inc. ("True North") have entered into an Agreement and Plan of
Merger, dated as of July 30, 1997 (the "Agreement and Plan of Merger"),
pursuant to which the Company will become a wholly-owned subsidiary of True
North; and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement to extend the term of the Employment Agreement for an additional
three years from its expiration date, with such amendment to become effective
upon the Effective Time (as such term is defined in Section 1.2 of the
Agreement and Plan of Merger).
NOW, THEREFORE, it is agreed that the Employment Agreement is hereby
amended in the following manner:
1. Effective Date. This Third Amendment shall become effective
only if Bozell, Jacobs, Xxxxxx & Xxxxxxxx, Inc. becomes a wholly-owned
subsidiary of True North Communications Inc. pursuant to the Agreement and Plan
of Merger, dated as of July 30, 1997, among Bozell, Jacobs, Xxxxxx & Xxxxxxxx,
Inc., Cherokee Acquisition Corporation and True North Communications Inc. (the
"Agreement and Plan of Merger"), and all of the terms and conditions of this
Third Amendment shall become effective from and after the
Effective Time (as such term is defined in Section 1.2 of the Agreement and
Plan of Merger).
2. Term of Agreement. Paragraph 2 of the Employment Agreement is
hereby amended to extend the term of the Executive's employment through March
31, 2001.
3. Effectiveness of Employment Agreement. All of the terms and
conditions of the Employment Agreement as amended by this Third Amendment
shall remain in full force and effect throughout the term hereof, as such term
has been extended hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment on the day and year first above written.
BOZELL, JACOBS, XXXXXX
& XXXXXXXX, INC.
By: _________________________
Title: ______________________
ACCEPTED AND AGREED:
__________________________
XXXXX XXXX
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