Employment Agreement - Affiliated Publications Inc., Globe Newspaper Co. and William O. Taylor
EMPLOYMENT AGREEMENT
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AGREEMENT dated May 19, 1993 between AFFILIATED
PUBLICATIONS, INC., a Massachusetts corporation located at
135 Morrissey Boulevard, Boston, MA 02107 (the "Company"),
GLOBE NEWSPAPER COMPANY, a Massachusetts corporation located
at the same address (the "Globe"), and WILLIAM O. TAYLOR, an
individual residing at 339 North Street, Medfield,
Massachusetts 02052 (the "Employee").
1. Employment. The Company agrees to employ the
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Employee as Chairman and President of the Company and
Chairman, Chief Executive Officer and Publisher of the Globe,
rendering the services and performing the duties prescribed
by the Company's Board of Directors. The Employee agrees,
while employed hereunder, to perform his duties faithfully
and to the best of his ability. The Employee shall be
employed at the Company's offices in Boston, Massachusetts,
and his principal duties shall be performed primarily in
Boston, Massachusetts, except for business trips reasonable
in number and duration. If there should be a Change in
Control of the Company (as defined in Section 5.2), the Globe
shall be substituted for the Company as employer and the
Globe's Board of Directors shall be substituted for the
Company's Board of Directors as the body prescribing the
Employee's duties.
2. Term. The employment of the Employee hereunder
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shall begin on the date hereof and shall continue through the
earlier of (a) December 31, 1998 or (b) the occurrence of a
Termination Date, as defined in Section 5 (the "Term").
3. Compensation.
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3.1. As compensation for the Employee's services
during the Term, the Company shall pay the Employee an
annual base salary at the rate of $382,000 per year,
payable weekly. Prior to the end of each year during
the Term, the Company shall undertake an evaluation of
the services of the Employee during the year then ended
in accordance with the Company's Compensation Program at
the date hereof (the "Program"). The Company shall
consider the performance of the Employee, his
contribution to the success of the Company and entities
under common control with the Company (collectively,
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"Affiliates"), and other factors and shall fix an annual
base salary to be paid to the Employee during the
ensuing year.
3.2. Notwithstanding the foregoing, the Company may
change the Program from time to time or institute a
successor to the Program, but the Employee's annual base
salary shall in no event be less than his annual base
salary in effect on the date of change adjusted
regularly to reflect increases in the cost of living.
3.3. If the Employee is prevented by disability,
for a period of six consecutive months, from continuing
fully to perform his obligations hereunder, the Employee
shall perform his obligations hereunder to the extent he
is able and the Company may reduce his annual base
salary to reflect the extent of the disability; provided
that in no event may such rate, when added to payments
received by him under any disability or qualified
retirement or pension plan to which the Company or an
Affiliate contributes or has contributed, be less than
one-half of the annual base salary in effect at the time
that such disability commenced. If there should be a
dispute about the Employee's disability, disability
shall be determined by the Board of Directors of the
Company based upon a report from a physician who shall
have examined the Employee. If the Employee claims
disability, the Employee agrees to submit to a physical
examination at any reasonable time or times by a
qualified physician designated by the Chief Executive
Officer and reasonably acceptable to the Employee.
4. Employee Benefits. The Employee shall be entitled
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to participate in all "employee pension benefit plans," all
"employee welfare benefit plans" (each as defined in the
Employee Retirement Income Security Act of 1974) and all pay
practices and other compensation arrangements maintained by
the Company, on a basis at least as advantageous to the
Employee as the basis on which other similarly situated
executive employees of the Company are eligible to
participate and, except as provided in Section 4.2, on a
basis at least as advantageous to the Employee as the basis
on which he participates therein on the date hereof. Without
limiting the generality of the foregoing, the Employee shall
be entitled to the following employee benefits (collectively,
with the benefits contemplated by this Section 4, the
"Benefits"):
4.1. The Employee shall continue to participate in
the Supplemental Executive Retirement Plan under the
formula in effect on the date hereof; provided that the
Company may from time to time change the Plan or
institute a successor to the Plan, so long as the
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Employee continues to be entitled to receive benefits in
amounts at least equal to those specified in the Plan as
in effect on the date hereof.
4.2. The Employee and the Employee's dependents
shall be covered by medical insurance comparable in
scope to the coverage afforded on the date hereof, with
only such contribution by the Employee toward the cost
of such insurance as may be required from time to time
from other employees at his level in the Program. If a
Change in Control of the Company, as defined in Section
5.2.2, shall have occurred, the Company may not change
the carriers providing medical insurance immediately
before the change without the consent of the Employee,
which consent will not unreasonably be withheld.
4.3. The Employee shall be covered by the cash
bonus plan currently maintained by the Company and shall
be afforded the opportunity thereunder to receive awards
of percentages of annual base salary specified for his
level in the Program, to be awarded upon the achievement
of reasonable performance goals; provided that the
Company may from time to time change the Program or
institute a successor to the Program, so long as the
Employee continues to be eligible to receive cash bonus
awards of percentages of annual base salary in amounts
at least equal to those specified for his level in the
Program as in effect on the date hereof.
4.4. The Employee shall be eligible each year
during the term of this Agreement to receive stock
options under a stock option plan maintained by the
Company for such numbers of shares and upon such terms
and conditions as determined by the Company's
Compensation Committee. If the Company no longer has a
class of stock publicly-traded by reason of a Change in
Control of the Company, as defined in Section 5.2.2, the
Company's obligation under this Section 4.4 will be
satisfied through options granted by the issuer with
public stock then in control of the Company.
4.5. The Company agrees that if the Employee dies
during the term of this Agreement, the Employee's then
spouse for the duration of her life shall be entitled to
monthly payments equal to 2.5% of the Employee's annual
base salary in effect at the time of his death ("Salary
at Death"). If the Employee is survived by one or more
children less than 23 years of age, 1.25% of the Salary
at Death shall be paid to or for each such child until
that child reaches 23 years of age, provided that each
payment to or for children shall be proportionately
reduced so that the aggregate of the payments for any
month to the spouse and to or for the children shall not
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exceed 4.167% of the Salary at Death. The aggregate
payments shall be proportionately reduced by the Family
Death Benefits and/or the Normal Form for Married
Participant benefit received by the spouse and children
or other beneficiaries under any qualified retirement or
pension plan to which the Company or any Affiliate
contributes or has contributed (for example, the Family
Death Benefit provided by subsection 6.1 of the Globe
Newspaper Company Retirement Plan and the Normal Form
for Married Participant Benefit provided by subsection
4.3 of that Plan), but in addition to any other death
benefits to which the spouse, the children or other
beneficiaries may be entitled under any other retirement
plan or agreement maintained by the Company or any
Affiliate. Payment to or for a child shall be made to
the child or to a custodian for the child under the
Uniform Transfers to Minors Act (or similar legislation)
or to a trust for the benefit of the child, whether
alone or with his or her siblings, as designated by the
Employee or, in the absence of effective designation, as
determined by the Company in its discretion.
4.6. The Employee shall be entitled to receive a
resignation bonus under the Company's Resignation Bonus
Plan as in effect on the date hereof, based on
compensation and service to the date of termination.
4.7. The Company shall reimburse the Employee from
time to time for the reasonable expenses incurred by the
Employee in connection with the performance of his
obligations hereunder.
4.8. The Employee shall be entitled to legal
holidays and to annual paid vacation in accordance with
the Company's holiday and vacation policy on the date
hereof.
4.9. The Company shall reimburse the Employee for
financial counseling services received, up to $10,000
per year, and shall gross up the reimbursement so that
it will not increase the federal or state income tax
payable by the Employee.
4.10. The Employee shall be entitled to an
automobile, including maintenance and expenses, under
the practice in effect on the date hereof.
Notwithstanding the foregoing, the Company may from time to
time change or substitute a plan or program under which one
or more of the Benefits are provided to the Employee,
provided that the Company first obtains the written consent
of the Employee, which the Employee agrees not unreasonably
to withhold, taking into account his personal situation.
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5. Termination Date; Consequences for Compensation and
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Benefits
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5.1. Definition of Termination Date. The first to
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occur of the following events shall be the Termination
Date:
5.1.1. The date on which the Employee
becomes entitled to receive long-term or shortterm
disability payments by reason of total and
permanent disability;
5.1.2. The Employee's death;
5.1.3. Voluntary resignation after one of
the following events shall have occurred, which
event shall be specified to the Company by the
Employee at the time of resignation: material
reduction in the responsibility, authority, power
or duty of the Employee or a material breach by the
Company of any provision of this Agreement, which
breach continues for 30 days following notice by
the Employee to the Company setting forth the
nature of the breach ("Resignation with Reason");
5.1.4. Voluntary resignation not
accompanied by a notice of reason described in
Section 5.1.3 ("General Resignation");
5.1.5. Discharge of the Employee by the
Company after one of the following events shall
have occurred, which event shall be specified to
the Employee by the Company at the time of
discharge: of a material act by the Employee
against the Company involving moral turpitude,
material willful misconduct in the discharge of his
duties, conviction of the Employee or the entry of
a plea of guilty or nolo contendere by the Employee
to any crime involving moral turpitude, or any
material breach of any term of this Agreement by
the Employee which is not cured within 30 days
after written notice from the Board of Directors of
the Company to the Employee setting forth the
nature of the breach ("Discharge for Cause");
5.1.6. Discharge of the Employee by the
Company not accompanied by a notice of cause
described in Section 5.1.5 ("General Discharge").
5.2. Consequences for Compensation and Benefits.
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Following a Termination Date or expiration of this
Agreement and through December 31, 2003, the Company
will furnish to the Employee, at no cost to the
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Employee, full office facilities with at least half-time
secretarial services at a location selected by the
Employee off the site of the Company's operations. If
the Termination Date occurs by reason of disability,
death, General Resignation, Discharge for Cause or,
before a Change in Control of the Company, Resignation
with Reason, the Company shall pay compensation to the
Employee through the Termination Date and shall pay to
the Employee all Benefits accrued through the
Termination Date, payable in accordance with the
respective terms of the plans, practices and
arrangements under which the Benefits were accrued. If
the Termination Date occurs by reason of General
Discharge or, after a Change in Control of the Company,
Resignation with Reason, (a) all stock options held by
the Employee shall become immediately exercisable and
shall remain exercisable for 30 days after the
Termination Date, (b) the Company shall continue the
health coverage contemplated by Section 4.2 through
December 31, 1998, (c) the Company shall engage for the
Executive, at the Company's expense, outplacement
services appropriate to the Executive's position, for up
to twelve months after the Termination Date, and (d) the
Employee shall be entitled to receive, within 60 days
after the Termination Date, the amount set forth in
Section 5.2.1 or, if Section 5.2.2 is applicable and
yields an amount equal to more than 90% of the amount
set forth in Section 5.2.1 net after all applicable
taxes, the amount set forth in Section 5.2.2.
5.2.1. The present value, calculated using
the Pension Benefit Guaranty Corporation immediate
discount rate for valuing benefits upon plan
termination, of (a) the sum of (i) 125%
of the Employee's annual base salary at the
Termination Date and (ii) the target bonus for the
year in which the Termination Date occurs, (b)
multiplied by the number of weeks between the
Termination Date and December 31, 1998 and (c)
divided by 52.
5.2.2. If a Change in Control of the
Company shall have occurred before the Termination
Date, one dollar less than the amount which is
three times the Employee's "base amount" of
compensation and benefits, as defined in Section
280G of the Internal Revenue Code of 1986.
A Change in Control of the Company shall occur upon the
first to occur of the date when (a) persons who were
Directors of the Company on May 19, 1993 no longer
constitute a majority of the Board of Directors of the
Company or (b) a person other than the trustees of
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either or both of the (i) Taylor Voting Trust created by
an agreement dated October 1, 1954, as from time to time
amended, or (ii) the trust created under the will of
Eben D. Jordan or any voting trust created to supersede
or succeed such testamentary trust, "beneficially owns"
(as defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) in the aggregate 50% or
more of the outstanding shares of capital stock entitled
to vote generally in the election of the Directors of
the Company. If the payments made pursuant to this
Section 5.2 give rise to an excise tax under Section
4999 of the Internal Revenue Code of 1986, the Company
shall also pay to the Employee or directly to the
Internal Revenue Service in a timely fashion an amount
sufficient, after federal and state income taxes, to pay
the excise tax so payable and all directly related
interest and penalties (whether reported initially or
subsequently assessed). In the event of a dispute
between the Company and the Employee with respect to the
amount contemplated by the preceding sentence, the
matter shall be determined (at the Company's expense) by
an independent nationally-recognized accounting firm
reasonably acceptable to both parties; provided,
however, that the Employee shall cooperate with the
Company in his tax reporting position and any defense
thereof (which the Company shall control) in order to
minimize the amount of such payments to the extent the
Company has a reasonable legal basis therefor.
5.3. Liquidated Damages; No Duty to Mitigate
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Damages. The amounts payable pursuant to Section 5.2
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shall be deemed liquidated damages for the early
termination of this Agreement and shall be paid to the
Employee regardless of any income the Employee may
receive from any other employer, and the Employee shall
have no duty of any kind to seek employment from any
other employer during the balance of the Term.
6. Indemnification. The Company shall indemnify the
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Employee against all loss, cost, liability and expense
arising from the Employee's service to the Company or any
Affiliate, whether as officer, director, employee, fiduciary
of any employee benefit plan or otherwise, upon terms at
least as favorable to the Employee as those provided by the
Articles of Organization and By-laws of the Company on the
date hereof.
7. Agreement Not to Compete. The Employee agrees
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that, while serving as an Employee of the Company, he will
not serve as an employee or director of any business entity
other than the Company and its Affiliates, but may serve as a
director of a reasonable number of not-for-profit
corporations and may devote a reasonable amount of time to
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charitable and community service. For the period beginning
on the Termination Date and continuing for the number of
weeks or years specified below opposite the termination
benefit payable to the Employee, the Employee shall not
engage, directly or indirectly, in the newspaper business in
the Boston Consolidated Metropolitan Statistical Area as
defined on December 31, 1992:
Termination Benefit Period
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Amount set forth in Longer of (a) number of
Section 5.2.1 weeks between Termination
Date and December 31, 1988
or (b) one year
Amount set forth in 3 years
in Section 5.2.2
Neither the amount set 1 year
forth in Section 5.2.1
nor the amount set forth
in Section 5.2.2
The Employee may hold stock or a limited partnership interest
of 5% or less in any publicly-traded entity engaged in such
newspaper business without violating this Agreement.
8. Agreement Not to Solicit. For one year following
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any Termination Date, regardless of the reason, the Employee
shall not solicit any employee of the Company or an Affiliate
to leave such employment and to provide services to the
Employee or any business entity by which the Employee is
employed or in which the Employee has a material financial
interest. Soliciting a former employee of the Company and
its Affiliates to provide such services shall not be a
violation of this Agreement.
9. Confidential Information. Unless the Employee
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shall first secure consent of the Company, the Employee shall
not disclose or use, either during or after the Term, any
secret or confidential information of the Company or any
Affiliate, whether or not developed by the Employee, except
as required by his duties to the Company or the Affiliate.
10. Arbitration. In the event that any party hereto
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has any claim hereunder, the party shall promptly notify each
other party of such claim. If within 30 days of the receipt
of such notice of claim, the parties cannot agree on a
resolution of such claim, the parties agree to submit such
dispute to binding arbitration to be held in Boston,
Massachusetts under the rules of the American Arbitration
Association. Any such arbitration shall be conducted by
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three arbitrators, one of whom shall be selected by the
Employee, one of whom shall be selected by the Company and
the Globe and one of whom shall be selected by the
arbitrators so selected. The expenses of any such
arbitration shall be paid by the non-prevailing party, as
determined by the final order of the arbitrators.
11. Guarantee. The Globe guarantees the full and
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prompt payment and performance by the Company of all its
obligations under this Agreement. This guarantee is in
consideration of past and future services by the Employee to
the Globe, and this guarantee is intended to take effect as a
sealed instrument under the laws of Massachusetts.
12. Notices. Whenever under this Agreement any notice
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is to be given by the Company, the Globe or the Employee to
the others, such notice shall be written and shall be
delivered by hand, if to the Company or the Globe, at 135
Morrissey Boulevard, Boston, MA 02107, Attention:
Treasurer, and if to the Employee, at his address specified
above or at such other address as the Employee shall furnish
to the Company in writing.
13. Governing Law. This Agreement shall be deemed a
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contract made and performed in the Commonwealth of
Massachusetts, and shall be governed by the laws of the
Commonwealth of Massachusetts.
14. Entire Agreement; Amendment. This Agreement
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constitutes the entire agreement of the parties. This
Agreement supersedes the Agreement between the Globe and the
Employee dated October 24, 1986 and any other individual
agreement between the Employee and the Company and/or the
Globe and may be altered or amended or any provision hereof
waived only by an agreement in writing signed by the party
against whom enforcement of any alteration, amendment, or
waiver is sought. No waiver by any party of any breach of
this Agreement shall be considered as a waiver of any
subsequent breach.
15. Binding Obligations. This Agreement shall be
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binding upon and inure to the benefit of the Company and the
Globe and their successors and assigns and the Employee and
his personal representatives.
16. Assignability. Neither this Agreement nor any
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benefits payable to the Employee hereunder shall be assigned,
pledged, anticipated, or otherwise alienated by the Employee,
or subject to attachment or other legal process by any
creditor of the Employee, and notwithstanding any attempted
assignment, pledge, anticipation, alienation, attachment, or
other legal process, any benefit payable to the Employee
hereunder shall be paid only to the Employee or his estate.
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IN WITNESS WHEREOF, the Company and the Globe, by their
officers hereunto duly authorized, and the Employee have
signed and sealed this Agreement as of the date first written
above.
AFFILIATED PUBLICATIONS, INC.
By: s/ William B. Huff
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Executive Vice President
GLOBE NEWSPAPER COMPANY
By: s/ Richard C. Ockerbloom
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President
s/ William O. Taylor
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William O. Taylor