Exhibit 99.5
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT is dated
as of April 1, 2005 (this “ Agreement ”), by and
among NEXTMEDIA OUTDOOR, INC., a Delaware corporation (“
Employer ”), NEXTMEDIA GROUP, INC., a Delaware
corporation (“ Group ”), and SCOT MCARTOR
(“ Executive ”).
WHEREAS, Executive is employed by
Employer under an Employment Agreement, dated June 14, 2001 (the
“ Original Employment Agreement ”);
and
WHEREAS, Executive and Employer
desire to terminate the Original Employment Agreement effective as
of January 1, 2005 and replace the Original Employment Agreement
with this Agreement on the terms and conditions herein
provided.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Employer and Executive agree as
follows:
1. Employment and Employment
Period. During the period specified in this Section 1 ,
Employer shall employ Executive, and Executive shall be employed by
Employer, on the terms and subject to the conditions set forth
herein. The term of Executive’s employment under this
Agreement commenced on January 1, 2005 (the “ Effective
Date ”) and, subject to prior termination as provided in
Section 6 below, shall continue through the fifth
anniversary of the Effective Date. The term of Executive’s
employment under this Agreement is sometimes referred to below as
the “Employment Period.”
2. Duties, Responsibilities,
Reporting, No Services for Others .
(a) At all times during the
Employment Period, Executive: (i) shall serve as an Executive Vice
President of Employer and as the Chief Operating Officer of
Employer’s traditional outdoor division or in such other
comparable management position or positions as may be designated by
the Board of Directors of Employer (the Board of Directors of
Employer, or any successor equivalent governing body of Employer,
is herein referred to as the “ Board of Directors
”) from time to time, (ii) shall perform duties in
furtherance of the business of Employer, as may have been
determined to be appropriate by the Chief Executive Officer of
Employer, including, specifically, duties relating to the
day-to-day operations of Employer’s traditional outdoor
division, (iii) except as set forth in Section 2(b) hereof,
shall devote his entire business time, energy, talent, and best
efforts to the faithful and efficient performance of his duties as
an Executive Vice President of Employer and as the Chief Operating
Officer of Employer’s traditional outdoor division and (iv)
shall report directly to the Chief Executive Officer of Employer or
his designees.
(b) Executive shall not, at any time
during the Employment Period, directly or indirectly, render any
business, commercial, or professional services to any other person,
firm, or organization (other than to Employer and its Affiliates)
for compensation without the prior approval of the Board of
Directors. Nothing in this Agreement shall preclude Executive from
devoting reasonable periods of time and effort to charitable
and
community activities or to the
management of Executive’s personal investment assets;
provided , that such activities do not interfere in any
material respect with the performance by Executive of his duties
hereunder.
3. Compensation .
(a) Base Salary . During the
Employment Period, Employer shall pay to Executive an annual base
salary (the “ Base Salary ”) in regular equal
installments in accordance with Employer’s usual payroll
practice. Executive’s Base Salary for the first contract year
(January 1, 2005 through December 31, 2005) shall be Two Hundred
Ten Thousand Dollars ($210,000), which Base Salary shall be subject
to appropriate increase each year thereafter at the discretion of
the compensation committee of the board of directors of Group (the
“ Compensation Committee ”). Any annual increase
in Executive’s Base Salary shall be based upon increases in
the cash flow generated by Employer’s traditional outdoor
division.
(b) Annual Bonus. Executive
shall be entitled to an annual bonus for each fiscal year in which
Executive is employed hereunder in an amount equal to a percentage
of Executive’s Base Salary for such fiscal year as may be
determined by the Compensation Committee in its reasonable
discretion based upon the recommendation of the Chief Executive
Officer of Employer. The parties to this Agreement currently
anticipate that the annual bonus payable pursuant to this
Section 3(b) shall not be less than forty percent (40%) of
the Base Salary then due and payable to Executive; however, the
parties acknowledge that no bonus amount is guaranteed. Any bonus
determined to be payable under this Section 3(b) shall be
paid by Employer to Executive as soon as practicable following the
completion of Employer’s annual audit.
(c) Withholdings . Employer
shall, in accordance with applicable law, deduct from the Base
Salary, any bonus amount and any other cash amounts payable by
Employer under the provisions of this Agreement to Executive, or,
if applicable, to Executive’s estate, legal representatives
or other beneficiaries designated in writing by Executive, all
social security taxes, all federal, state and municipal taxes and
all other charges and deductions that now or hereafter are required
by law to be charges on the compensation of Executive or charges on
cash benefits payable by Employer hereunder to Executive’s
estate, legal representatives or other beneficiaries.
4. Retirement and Employee
Welfare Benefits. During the Employment Period, Executive shall
be entitled to participate in, and shall be entitled to receive
benefits in accordance with the terms of, all retirement and
welfare benefits plans, practices, policies, and programs that are
made available by Group or Employer to other senior executives of
Employer, which, at a minimum, shall include the
following:
(a) Life Insurance . Group
shall provide to Executive, and shall keep in full force and effect
at all times during the Employment Period, without cost to
Executive, a term life insurance policy with a death benefit equal
to not more than Six Hundred Forty Thousand Dollars ($640,000),
subject to Executive’s insurability at standard group rates.
Executive shall be solely responsible for the payment of any
federal and/or state taxes
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that may be levied as a result of
Group furnishing such life insurance policy, and Executive, his
estate and/or heirs hereby agree to indemnify and hold harmless
Employer and Group from and against any and all taxes that may be
payable in connection with such life insurance policy. Executive
shall have the privilege of designating the beneficiary thereof and
may change the beneficiary thereof by providing written notice to
Group and shall have such other rights of ownership provided by
such life insurance policy, subject to the rules and regulations of
the issuing insurance company. Executive shall have the right to
assign such life insurance policy to Executive’s spouse or
issue, or to a trust primarily for the benefit of Executive’s
spouse and/or issue. Upon the termination of this Agreement for any
reason, Group shall assign such life insurance policy to Executive,
without cost to Executive, provided that Executive shall pay
all premiums and other costs relating to such life insurance policy
from and after the date of such assignment.
(b) Medical Benefits . Group
shall provide to Executive and his immediate family, to the extent
eligible and at all times during the Employment Period, major
medical coverage and disability insurance in accordance with
Group’s Executive Medical Benefit Plan. If Group is notified
that Executive does not qualify for such disability insurance at
standard rates, Group will so advise Executive within five (5) days
after Group has received such notification of
non-qualification.
(c) Reimbursement for Business
Expenses . Employer shall reimburse Executive promptly upon
production by Employee of reasonably detailed accounts, receipts,
vouchers or other reasonable evidence of payment by Executive, for
all ordinary, reasonable and necessary travel, entertainment and
other expenses as shall be incurred by him in the performance of
his duties hereunder.
(d) Automobile . During the
Employment Period, Employer shall provide Executive with, or pay or
reimburse Executive for his lease or purchase of, an automobile,
the aggregate expense of which shall not exceed $10,000 per
annum.
(e) Vacation . During each
complete twelve (12) month period of the Employment Period,
Executive shall be entitled to paid vacation time at the rate of
not more than four (4) weeks per calendar year, provided
that such vacation shall be taken at such time or times as
Executive may determine in such a manner as to avoid undue
disruption to the business of Employer; and, provided
further , that any accrued but unused vacation at the end of
any calendar year shall expire without consideration to Executive.
Executive shall also be entitled to such personal leave, holiday
leave and sick leave as may be permitted pursuant to the general
practice and policies of Employer.
(f) Club Membership . During
the Employment Period, Employer shall reimburse Executive for
membership dues, up to a maximum of Five Thousand Dollars ($5,000)
per calendar year, for a tennis, fitness, business lunch club or
similar facility to be used by Executive for business purposes.
Employer shall have the right to approve the club membership, which
approval shall not be unreasonably withheld.
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(g) Stock or other Equity
Plans . Upon the consummation of an initial public offering of
the stock of Group, Executive shall be entitled to participate in
such stock award, stock option or other similar equity plans as
shall be determined by the board of directors of Group to be fair,
appropriate and customary for an employee in the position of
Executive, in each case, subject to the provisions
thereof.
5. Effect of Disability While in
Employ of Employer . If, during the Employment Period,
Executive becomes disabled, by reason of physical or mental
impairment, disability or infirmity to such an extent that he is
unable to perform his duties under this Agreement for more than
ninety (90) working days in any twelve (12) consecutive month
period, as determined in good faith by the Board of Directors, in
its sole discretion (“ Disability ” or “
Disabled ”):
(a) Employer may relieve Executive
of his duties under this Agreement for as long as Executive is so
Disabled.
(b) Employer shall pay to Executive,
net of the offset referred to in the last sentence of this
Section 5(b) , all Base Salary, if any, to which Executive
would have been entitled under this Agreement had Executive
continued to be actively employed by Employer to the earliest of
(i) the first date on which he is no longer so Disabled, (ii) the
date on which his employment is terminated by Employer due to
Disability pursuant to Section 6(a) , (iii) the date of his
death, or (iv) the end of the Employment Period due to any reason
other than termination by Employer due to Disability pursuant to
Section 6(a) or death. Any payment referred to in this
Section 5(b) shall be made at the same time as that payment
would have been made if Executive were not Disabled. Payments under
this Section 5(b) for any period shall be offset, dollar for
dollar, by any disability benefits (other than benefits payable
pursuant to any disability insurance policy all of the premiums for
which were paid by Executive and not Employer) for that period that
are received by Executive.
(c) Except as provided in this
Section 5 , Employer shall have no further obligations to
Executive for Base Salary or any bonus for any period during which
Executive is so Disabled.
(d) Executive agrees to submit such
medical evidence regarding Executive’s Disability as may be
reasonably requested by the Chief Executive Officer of
Employer.
6. Termination .
(a) Death or Disability .
Executive’s employment hereunder will terminate immediately
upon Executive’s death. Employer may terminate
Executive’s employment hereunder as of the effective date
specified in Employer’s notice of termination if Executive is
Disabled, which effective date shall not be earlier than the
ninety-first (91 st ) working day (excluding vacation
days) following the commencement of Executive’s Disability,
provided , that such notice shall be delivered to Executive
not later than ten (10) days from the effective date of termination
specified in such notice.
(b) By Employer for Cause .
Employer may terminate Executive’s employment under this
Agreement for “ Cause ” (and Executive’s
employment will be
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deemed to have been terminated for
“ Cause ”) if, as of the date of termination,
any of the following circumstances have occurred:
(i) Except as otherwise permitted by
Section 2(b) hereof, Executive has refused to perform his
duties as an employee of Employer or has failed to devote his
entire business time, energy, talent and best efforts to the
performance of his duties under this Agreement in any material
respect;
(ii) Executive has been convicted
of, or has entered a plea of nolo contendere to, a
felony;
(iii) Executive has engaged in any
fraudulent or dishonest conduct or acts in the course of his
employment with Employer in connection with Employer or any of its
Affiliates;
(iv) Executive has breached any of
his obligations hereunder in any material respect;
(v) Executive has been grossly
negligent in the performance of his duties under this
Agreement;
(vi) Executive has engaged in the
illegal use of drugs or suffers from drug dependence or habitual
insobriety;
(vii) Employer or Group materially
breaches any financial covenant contained in any of its contractual
obligations and such breach is not cured or waived prior to the
expiration of any applicable grace or cure periods;
(viii) Employer or Group shall fail
to pay the principal of, or interest on, or to make any required
payment (regardless of amount) in connection with any of its
indebtedness when and as the same may become due and payable and
such failure is not cured or waived prior to the expiration of any
applicable grace or cure periods;
(ix) Any event or circumstance shall
have occurred the effect of which would permit the holder or
holders (or a trustee on its or their behalf) of any indebtedness
of Employer or Group to cause or require such indebtedness to
become due or to be redeemed or repurchased prior to its stated
maturity (or to cause or require an offer to be made to effect such
redemption or repurchase) and such event or circumstance is not
cured or waived prior to the expiration of any applicable grace or
cure periods; or
(x) Employer, Group and their
subsidiaries, if any, taken together, shall have failed to meet at
least ninety percent (90%) of their budget in any given fiscal
year, as such budget was recommended and approved in accordance
with relevant corporate policy.
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No termination of Executive pursuant to any of
clauses (i), (iv), (v), or (vi) above will be effective unless and
until Executive has first been given written notice of the conduct
or circumstance purported to constitute “Cause”
thereunder and, unless such conduct or circumstance is not
reasonably susceptible of cure or such conduct or circumstance has
already been the subject of notice hereunder and cured by Executive
previously, Executive has failed to cure that conduct or omission
within thirty (30) days following receipt of that notice by
Executive. Any termination under any of clauses (ii), (iii), (vii),
(viii), (ix) or (x) or any termination which is subject to the
exceptions provided for in the immediately preceding sentence,
shall be effective on such current or prospective date as may be
specified by Employer when giving written notice of the
termination.
(c) By Employer Without Cause
. Subject to Section 7(c) hereof, Employer may terminate
Executive’s employment hereunder without Cause upon written
notice from the Chief Executive Officer of Employer to
Executive.
(d) By Executive for Good
Reason . Executive may terminate his employment hereunder for
“ Good Reason ” at any time if, as of the date
of termination, any of the following circumstances have
occurred:
(i) Failure by Employer to pay
Executive the Base Salary or any annual bonus when due and payable
under this Agreement, or a reduction in the Base Salary by
Employer, other than a reduction pursuant to any retirement or
welfare benefit plan;
(ii) Failure by Employer or Group to
provide Executive with employee welfare benefits substantially in
accordance with Section 4 hereof;
(iii) Executive’s position,
duties and scope of responsibilities as described in Section
2(a) hereof are materially reduced from those in effect on the
Effective Date other than for Cause without the consent of
Executive (it being un
