EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 1st day of January, 1987, by and
between TRANSMEDIA NETWORK INC., a Colorado corporation ("TRANSMEDIA"), and
XXXXXX XXXXXX (the "EXECUTIVE"). 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:
1. 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.
2. TERM. The term of this Agreement shall be for the period commencing
January 1, 1987 and ending on September 30, 1991 (the "TERM"), unless earlier
terminated as provided herein.
3. 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
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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.
4. 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 $104,000 per annum. 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 10% of excess over the initial
$100,000 of Pre-Tax Income (as defined below) for each fiscal year of Transmedia
or portion thereof occurring during the term of this Agreement, provided,
however, that the Bonus for any fiscal year shall not exceed $100,000 per year
for each full fiscal year with respect to which the Bonus is determined or, for
partial fiscal years with respect to which the Bonus is determined, the pro rata
portion of $100,000 that any such partial fiscal year bears to a full fiscal
year. "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, 1987. The Bonus with respect to the fiscal
year ending September 30,
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1987 shall be determined on the basis of the entire fiscal year. Otherwise, if
the term of this Agreement 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 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
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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. In addition, Transmedia shall provide for
payment of the living allowance set forth in Section 4(e) for the first six
months of Disability, but only for so long as the Executive remains in the New
York metropolitan area. 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) Transmedia acknowledges that the Executive's permanent
domicile is in the State of Florida. In order to compensate the Executive for
obtaining living accommodations in New York, Transmedia shall pay to the
Executive a New York living allowance of (i) $1,500 per month from the date
hereof until September 30, 1987 and (ii) $2,000 per month from October 1, 1987
until the expiration of the term of this Agreement.
(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.
5. 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
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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.
6. 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 and not covered by the
living allowance pursuant to Section 4(e), upon presentation of expense
statements or vouchers or such other supporting information as Transmedia may
customarily require of its senior executives.
7. 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
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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"; (y) the expiration of this Agreement after its
stated term,; or (z) if the Executive elects to enter into the Consulting
Agreement pursuant to Section 10, the expiration of the term thereof; 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
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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.
8. 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
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papers necessary to carry out the foregoing; and (d) give testimony in support
of his discovery, invention, or creation in any appropriate case.
9. 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 misappropriates any of its funds; or (iv) the Executive
directly and repeatedly 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.
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(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.
10. 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 of this
Agreement shall be made subject to the Executive's right to either 1) continue
his employment under the terms of this Agreement or 2) within 90 days after such
sale, elect to enter into a consulting arrangement pursuant to the
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terms of a written agreement (the "Consulting Agreement") pursuant to which he
will provide up to 40 hours of consulting services per calendar quarter to
Transmedia or its successor, as may be reasonably requested by Transmedia or its
successor, with respect to marketing, advertising and general financial matters.
The Consulting Agreement will provide for (i) compensation equal to 50% of the
Salary and Bonus which would otherwise have been payable to the Executive; (ii)
reimbursement of all of the Executive's travel expenses for performing such
services outside of Florida, in lieu of the living allowance set forth in
Section 4(e); and (iii) benefits with respect to the life insurance policy, and
payment of death benefits, as set forth in Section 4(c). The term of the
Consulting Agreement shall be the remaining term of this Agreement. 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.
11. 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
Xxxxx 000, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy to Xxxxx &
Xxxxxxx at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to the attention of
Xxxxxx 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.
12. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
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13. 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.
14. 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.
15. 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.
16. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
TRANSMEDIA NETWORK INC.
By: /s/ XXXXXX XXXXXX
------------------------
Xxxxxx Xxxxxx, President
/s/ XXXXXX XXXXXX
------------------------
Xxxxxx Xxxxxx
Approved by the
Board of Directors
of Transmedia
/s/ XXXXXXX XXXXXXXXX
----------------------------
Xxxxxxx Xxxxxxxxx, Director
/s/ XXXXXXX X. XXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxx, Director
/s/ XXXXX XXXXXXXX
----------------------------
Xxxxx Xxxxxxxx, Director
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