Employment Agreement
EXHIBIT 10.3
This
Employment Agreement (this “Agreement”), entered into as of February 22,
2007, and made effective as of September 6, 2006, is by and among, LIN TV Corp., a Delaware
corporation (“Parent”), and LIN Television Corporation, a Delaware corporation with its
headquarters in Providence, Rhode Island, and a wholly-owned subsidiary of the Parent (the
“Company” and, together with Parent, the “LIN Companies”), and Xxxxxxx X. Xxxxxxx, an individual
residing in the state of Rhode Island (the “Executive”).
RECITALS:
Whereas, on September 6, 2006 (the “Appointment Date”), the board of directors
of Parent (the “Board of Parent”) and the board of directors of the Company, respectively,
appointed Executive to the offices of Executive Vice President Digital Media of each of the LIN
Companies;
Whereas, each of Parent and the Company desire that the Company employ Executive as
Executive Vice President Digital Media of the Company, and Executive desires to be employed by the
Company in such position, in accordance with the terms and subject to the conditions provided
herein;
Now, Therefore, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein contained, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Employment. The Company shall employ Executive and Executive hereby agrees to serve the
LIN Companies on the terms and conditions set forth herein.
2. Service Period. The term of this Agreement and Executive’s employment hereunder (the
“Service Period”) shall be deemed to have commenced as of the Appointment Date and shall continue
thereafter until the effective date of termination pursuant to the terms and subject to the
conditions of this Agreement.
3. Position and Duties. During the Service Period, Executive shall serve as the Executive
Vice President Digital Media of each of the LIN Companies, reporting to the President and CEO of
each of the LIN Companies and, subject to the LIN Companies’ respective Certificates of
Incorporation and By-Laws, shall have such authority and duties as may be granted or assigned from
time to time by the President and CEO of the LIN Companies.
4. Attention and Effort. Executive covenants and agrees, at all times during the Service
Period, to devote Executive’s full business-time efforts, energies and skills to Executive’s duties
as contemplated by Section 3 above, to serve each of the LIN Companies diligently and to the best
of Executive’s ability and at all times to act in compliance with the rules, regulations, policies
and procedures of the LIN Companies as shall be in effect from time to time. Executive further
covenants and agrees that Executive will not, directly or indirectly, engage or participate in any
other business, profession or occupation for compensation or otherwise at any time during the
Service Period which conflicts with the business of the LIN
Companies, without the prior written consent of the Board of Parent; provided, that nothing
herein shall preclude Executive from accepting appointment to or continuing to serve on any board
of directors or trustees of any charitable or not-for-profit organization or from managing
Executive’s personal, financial or legal affairs; provided, in each case, and in the aggregate,
that such activities do not materially conflict or interfere with the performance of Executive’s
duties hereunder or conflict with Sections 10, 11 or 12 of this Agreement in any material respect.
5. Compensation and Other Benefits.
(a) During the Service Period, Executive shall be paid by the Company an annual base salary in
an amount equal to Four Hundred Thousand Dollars ($400,000) (the “Base Salary”), payable in
accordance with the Company’s normal payroll practices. The Base Salary shall be reviewed by the
Compensation Committee of the Board of Parent no less often than once each calendar year and may be
increased, but not decreased, based on such a review.
(b) Executive shall be eligible to receive, in addition to the Base Salary described above, an
annual bonus payment (a “Performance Bonus”) to be determined by December 31 of each calendar year
during the Service Period, or as soon thereafter as practicable, but in no event later than March
15 of the subsequent calendar year; which Performance Bonus payment (if any), shall be determined
as follows:
(i) With respect to the portion of calendar year 2006 prior to the Appointment Date, Executive
shall be eligible to receive a Performance Bonus in an amount up to One Hundred Sixty-Six Thousand
Dollars ($166,000), which amount shall be prorated to reflect the portion of the calendar year
between January 1 and the Appointment Date. The Performance Bonus payment determined pursuant to
this paragraph (i), if any, shall be determined in the discretion of the President and CEO of the
LIN Companies and the Compensation Committee of the Board of Parent (the “Compensation Committee”)
based upon those bonus criteria established with respect to Executive’s performance and goals prior
to the Appointment Date.
(ii) With respect to the portion of calendar year 2006 beginning on the Appointment Date and
ending on December 31, 2006, Executive shall be eligible to receive a Performance Bonus in an
amount up to One Hundred Seventy Five Thousand Dollars ($175,000) (the “Performance Bonus Amount”),
which Performance Bonus Amount shall be prorated to reflect the portion of the calendar year
beginning on the Appointment Date and ending on December 31, 2006. The bonus payment determined
pursuant to this paragraph (ii), if any, shall be determined in the discretion of the President and
CEO of the LIN Companies and the Compensation Committee based upon those bonus criteria established
with respect to Executive’s performance and goals prior to the Appointment Date.
(iii) With respect to each calendar year during the Service Period beginning on January 1,
2007, if applicable, Executive shall be eligible to receive a Performance Bonus as follows:
- 2 -
(A) Executive shall be eligible to receive a bonus payment in an amount up to 25% of the
Performance Bonus Amount, which bonus payment, if any, shall be determined in the sole discretion
of the President and CEO of the LIN Companies and the Compensation Committee, based upon such
factors as each may determine to be relevant, which may include the performance of the LIN
Companies and Executive, general business conditions, and the relative achievement by Executive or
the LIN Companies of any goals established by the President and CEO, the Board of Parent or the
Compensation Committee.
(B) Executive shall be eligible to receive a bonus payment calculated as set forth in this
paragraph (B) using a baseline bonus amount equal to seventy-five percent (75%) of the Performance
Bonus Amount (the “Results Bonus Base Amount”). The amount of the bonus awarded to Executive, if
any, under this paragraph (B) (the “Results Bonus”) shall be an amount calculated as a percentage
of the Results Bonus Base Amount (the “Results Bonus Percentage”). The Results Bonus Percentage
shall be the percentage set forth on Schedule 5(b)(iii) hereto that corresponds to the respective
percentages by which Parent has achieved the digital media revenue targets established by the Board
of Parent for the applicable year, as determined by the Compensation Committee of the Board of
Parent (the “Budget Target”). The provisions of Schedule 5(b)(iii) shall be reviewed by the
parties on an annual basis during the annual budget review process during the Service Period. The
parties shall cooperate in good faith when revising Schedule 5(b)(iii) for future years during the
Service Period.
6. Benefits and Expenses. Executive shall receive from the Company such other benefits as may
be granted to senior management of the Company generally, including health, dental, life and
disability insurance and vacation benefits. In addition, Executive shall be provided with an
automobile allowance in accordance with the Company’s then-current plan. The Company shall
reimburse Executive for all reasonable travel, entertainment and other expenses which Executive may
incur in regard to the business of Company or Parent, in accordance with and subject to the
limitations of the Company’s standard practices and policies and Executive’s presentation of such
documents and records as Company shall require to substantiate such expenses.
7. Incentive Equity.
(a) The parties acknowledge that as of the Appointment Date, Parent granted to Executive an
option (the “Option Grant”) to purchase sixty thousand (200,000) shares of Parent’s Class A Common
Stock, par value $0.01 per share pursuant to the terms and subject to the conditions of the LIN TV
Corp. Amended and Restated 2002 Stock Plan (the “Option Plan”) and as further evidenced by that
certain Nonqualified Stock Option Letter Agreement, dated September 6, 2006, by and between Parent
and Executive (the “Option Agreement”). The Option Grant shall be on the terms and conditions of
the Option Plan and the Option Agreement; provided, however, that (i) for purposes of the Option
Grant, and notwithstanding anything to the contrary contained in the Option Agreement, the term
“Cause” shall have the meaning ascribed to such term in this Agreement; and (ii) in the event of a
Change in Control (as hereinafter defined in Section 24) (and notwithstanding the definition of
such term in the Option Agreement) the vesting of the Option Grant shall accelerate and shall be
deemed fully vested as of such Change in Control. For the avoidance of doubt, the vesting of the
Option
- 3 -
Grant shall not accelerate in the event of any termination of this Agreement, including upon a
termination Without Cause or with Good Reason; provided, however, that if Executive is able to
demonstrate that (i) Executive was terminated by the LIN Companies Without Cause in anticipation of
a Change in Control and (ii) such anticipated Change in Control occurs, then Executive will be
deemed for purposes of the Option Grant, to have remained employed through the consummation of the
Change in Control, and the vesting of the Option Grant shall accelerate as described in the
preceding sentence.
(b) With respect to all stock options and stock awards granted to Executive prior to the
Appointment Date under the 1998 Stock Option Plan, the 1998 Substitute Stock Option Plan, the 1998
Phantom Stock Plan, and the Amended and Restated 2002 Stock Plan of LIN TV (collectively, the
“Prior Options and Awards”) which are not otherwise exercisable or vested upon a Change in Control
(as hereinafter defined in Section 24 and notwithstanding any conflicting definition of Change in
Control), the vesting of each such Prior Option and Award shall accelerate and shall be deemed
fully vested as of such Change in Control.
8. Termination. This Agreement and the employment of Executive hereunder may be terminated
as follows:
(a) By the LIN Companies for “Cause.” Subject to such other terms of this Agreement, the LIN
Companies may terminate this Agreement and the employment of Executive hereunder for “Cause” by
action of the Board of Parent if the Executive:
(i) has been convicted of, or entered a pleading of guilty or nolo contendre (or its
equivalent in the applicable jurisdiction) to any criminal offense (whether or not in connection
with the performance by Executive of Executive’s obligations and duties under this Agreement),
excluding offenses under road traffic laws, or misdemeanor offenses, that are subject only to a
fine or non-custodial penalty;
(ii) has committed an act or omission involving dishonesty or fraud;
(iii) has willfully refused or willfully failed to perform her obligations and duties under
this Agreement or the duties properly assigned to her in accordance with the terms and conditions
of this Agreement, and Executive has the physical capacity to perform such obligations or duties;
or
(iv) has engaged in gross negligence or willful misconduct with respect to any of the LIN
Companies or any of their affiliates or subsidiaries.
(b) By the LIN Companies “Without Cause.” The LIN Companies may terminate this Agreement and
the employment of Executive hereunder at any time, in Parent’s sole discretion, for any reason
whatsoever or for no reason, which termination shall constitute a termination “Without Cause.”
(c) By Executive for Good Reason. Executive may terminate this Agreement and Executive’s
employment hereunder in the event of any of the following (each of
- 4 -
which shall constitute “Good Reason”) and the LIN Companies shall have failed to have
reasonably remedied such condition within thirty (30) days following receipt of the Good Reason
Notice (as defined below):
(i) Executive’s Base Salary or Performance Bonus Amount is reduced below the higher of (A) the
amount of Base Salary or Performance Bonus Amount (other than pursuant to Section 5(b)(i)) in
effect immediately prior to a Change in Control or (B) the highest amount of Base Salary or
Performance Bonus Amount in effect at any time thereafter;
(ii) (A) any failure by the Company to continue in effect or provide plans or arrangements
pursuant to which the Executive will be entitled to receive grants relating to the securities of
Parent (including, without limitation), stock options, stock appreciation rights, restricted stock
or other equity based awards) of the same type as the Executive was participating in immediately
prior to the Change in Control (hereinafter referred to as “Securities Plans”) or providing
substitutes for such Securities Plans which in the aggregate provide substantially similar economic
benefits or (B) the taking of any action by the Company which would adversely effect the
Executive’s participation in, or benefits under, any such Securities Plan or its substitute if in
the aggregate Executive is not provided substantially similar economic benefits; provided, however,
that for these purposes any determination of whether Good Reason exists under clauses (A) or (B) of
this paragraph (ii) because Executive is or is not provided substantially similar economic benefits
in the aggregate will be made with due consideration given to such Executive’s Base Salary, other
cash compensation (if any) and other equity-based incentive programs to which Executive is also
entitled to receive, and not solely on the basis of whether Executive is or is not entitled or
eligible to receive equity based incentive compensation;
(iii) Executive’s duties, authority and responsibilities or, in the aggregate, the program of
retirement and welfare benefits offered to Executive, are materially and adversely diminished, in
comparison to the duties, authority, and responsibilities or the program of benefits, in the
aggregate, enjoyed by Executive as of (A) the time immediately prior to a Change in Control or (B)
if prior to a Change in Control, as of the date of this Agreement, or Executive is demoted from the
position that Executive held as of (Y) the time immediately prior to such Change in Control or (Z)
if prior to a Change in Control, as of the date of this Agreement; provided, however, that if,
subsequent to a Change in Control, the Executive maintains the same duties, authority and
responsibility that Executive held prior to such Change in Control, the requirement that the
Executive report to officers or the board of parent companies shall not of itself constitute “Good
Reason” unless such officers or board take actions that materially and adversely interfere with the
business decisions of Executive with respect to those business matters otherwise subject to
Executive’s duties, authority and responsibilities;
(iv) Executive is required to be based at a location more than 50 miles from the location
where Executive was based and performed services on the Appointment Date, or if Executive is
required to substantially increase Executive’s business travel obligations;
provided that Executive shall give notice in writing within 90 days after Executive has knowledge
of the event forming the basis of Good Reason, which notice shall set forth the
- 5 -
particulars of such event and the reason why she believes in good faith that Good Reason exists
(the “Good Reason Notice”).
(d) By Executive Without Good Reason. Executive may terminate this Agreement and Executive’s
employment hereunder at any time, for any reason, upon giving to the LIN Companies thirty (30)
days’ written notice of termination of this Agreement and Executive’s employment hereunder pursuant
to this Section 8(d) (“Notice of Resignation”), during which notice period Executive’s employment
and performance of services will continue; provided, however, that Parent may, upon notice to
Executive and without reducing Executive’s compensation during such period, excuse Executive from
any or all of Executive’s duties during such period. The effective date of the termination of
Executive’s employment hereunder shall be the date specified in the Notice of Resignation delivered
in accordance with this Section 8(d).
(e) Automatic Termination Upon Death or Disability. This Agreement and Executive’s employment
hereunder shall terminate automatically upon the death or “total disability” of Executive. The
term “total disability” as used herein shall mean Executive’s inability, with or without reasonable
accommodations, to perform the duties of Executive contemplated by Section 3 hereof for a period
of, or periods aggregating, six (6) months in any twelve (12) month period as a result of physical
or mental illness, loss of legal capacity or any other cause beyond Executive’s control, unless
Executive is granted a leave of absence by the Board of Parent. All determinations as to whether
Executive has suffered total disability due to physical or mental illness, loss of capacity or any
other medical cause shall be made by a physician who is mutually agreed upon by Executive and a
majority of the members of the Nominating and Corporate Governance Committees of the Board of
Parent. Executive and the LIN Companies hereby acknowledge that Executive’s ability to perform the
duties set forth in Section 3 hereof is of the essence of this Agreement. Termination under this
Section 8(e) shall be deemed to be effective (i) as of the time of Executive’s death or (ii)
immediately upon determination of Executive’s total disability, as defined above, by a physician
mutually agreeable to Executive and the Board of Parent.
9. Severance for Termination Without Cause or Resignation With Good Reason.
(a) Initial Three-Year Transition Period. Subject to the terms and conditions of this
Sections 9(c) and (d) set forth below, solely in the event that this Agreement and Executive’s
employment hereunder is terminated during the three-year period ending on the third anniversary of
the Appointment Date (the “Transition Period”) (y) by the LIN Companies Without Cause pursuant to
the terms and subject to the conditions of Section 8(b) hereof; or (z) by Executive with Good
Reason pursuant to the terms and subject to the conditions of Section 8(c) hereof, then:
(i) The Company shall pay to Executive an amount calculated in accordance with Exhibit 9(a)(i)
hereto (the “Transition Severance Amount”), as adjusted pursuant to the “work down” formula set
forth in Section 9(a)(ii) below, to be paid in a lump sum, subject to Section 9(d) hereof.
- 6 -
(ii) The Transition Severance Amount shall be reduced pro rata for each day of Executive’s
employment hereunder during the Transition Period, provided that in no event shall the reduction
exceed seven hundred thirty (730) days or a reduction of two-thirds. By way of illustration and
not of limitation or modification of the foregoing:
| (A) | If Executive is terminated without Cause or resigns for Good Reason on the date one year after the Appointment Date, Executive will be entitled to receive the Transition Severance Amount reduced by one-third; if Executive is terminated without Cause or resigns for Good Reason on the date two years after the Appointment Date, Executive will be entitled to receive the Transition Severance Amount reduced by two-thirds; | ||
| (B) | If Executive is terminated without Cause or resigns for Good Reason on the date two and one-half years (or 913 days) after the Appointment Date, Executive will receive the Transition Severance Amount reduced by two-thirds because the pro rata adjustment is capped at 730 days. |
(iii) The Company shall provide Executive for a period commencing on the effective date of
termination and ending on the earlier of the third anniversary of such date of termination or the
Executive’s death (the “Transition Benefits Period”) (subject to reduction as set forth in the
provision at the end of this paragraph), life, health, disability and accident insurance benefits
and the package of “Executive benefits” substantially similar, individually and in the aggregate,
to those which the Executive was receiving immediately prior to the effective termination, or
immediately prior to a Change in Control, if greater, including without limitation, transfer of
title of a company automobile, medical, dental, vision, life and pension benefits, as if Executive
were continuing as an employee of the Company during the Transition Benefits Period, provided,
however, that with respect to the provision of insurance benefits during the Transition Benefits
Period, Executive shall be obligated to continue to pay that proportion of premiums paid by the
Executive immediately prior to such termination or Change in Control, as applicable. The Company
shall apply the statutory health care continuation coverage (“COBRA”) provisions as if the
Executive were a full-time employee of the Company during the Transition Benefits Period, with the
result that (y) the Executive’s spouse and dependents shall be eligible for continued health
insurance coverage that is in all respects equivalent to COBRA coverage (“COBRA-Equivalent
Coverage”) if an event occurs during the Transition Benefits Period that would have been a
“qualifying event” under COBRA had the Executive been an employee of the Company, and (z) the
Executive and the Executive’s spouse and dependents shall be eligible for COBRA-Equivalent coverage
at the expiration of the Transition Benefits Period and for a period of three years thereafter as
if the Executive’s employment with the Company had terminated on the last day of the Transition
Benefits Period; provided, however, that the Transition Benefits Period shall be reduced pro rata
for each day of Executive’s employment hereunder during the
- 7 -
Transition Period, provided that in no event shall the reduction exceed seven hundred thirty
(730) days or a reduction of two-thirds.
(iv) The vesting of all Prior Options and Awards which are not otherwise exercisable or vested
as of the effective date of termination shall accelerate and each such Prior Option and Award shall
be deemed fully vested and exercisable as of the effective date of such termination.
(b) Post-Transition Period. Subject to the terms and conditions of this Sections 9(c) and (d)
set forth below, solely in the event that this Agreement and Executive’s employment hereunder is
terminated after the Transition Period (y) by the LIN Companies Without Cause pursuant to the terms
and subject to the conditions of Section 8(b) hereof; or (z) by Executive with Good Reason pursuant
to the terms and subject to the conditions of Section 8(c) hereof, then:
(i) The Company shall pay to Executive a severance payment (the “Severance Payment”) in an
amount equal to the sum of (A) Executive’s Base Salary in effect at the time of such termination
and (B) the aggregate amount, if any, of the Performance Bonus most recently awarded to Executive
pursuant to Section 5(b) prior to such termination; provided, however, that if such termination
occurs prior to the award of Executive’s initial Performance Bonus under this Agreement (or the
determination that no such award shall be made), the payment under this clause (B) shall be the
maximum applicable Performance Bonus that would otherwise be due had Executive remained employed
with the Company. The Severance Payment shall be due and payable in twenty six (26) substantially
equal payments following such termination; provided, however, that the payment of the portion of
the Severance Payment comprised of any Performance Bonus based upon the determination of the
achievement of certain results may be deferred as necessary until the Compensation Committee has
made the necessary determinations.
(ii) In addition, during the twelve-month period following a termination giving rise to the
Severance Payment, the Company shall continue to pay the employer’s normal portion of the costs of
Executive’s health and dental insurance premiums in an amount consistent with that paid on the date
of termination, provided that Executive chooses to participate in COBRA or a similar health
insurance continuation program and provides the Company with proof of such participation. If
Executive chooses to receive COBRA coverage from the Company’s group health plans during this
twelve-month period, such coverage shall count toward the maximum coverage period permitted under
such plan.
(iii) The vesting of all Prior Options and Awards which are not otherwise exercisable or
vested as of the effective date of termination shall accelerate and each such Prior Option and
Award shall be deemed fully vested and exercisable as of the effective date of such termination.
(c) The payment of the Transition Severance Amount or the Severance Payment, as applicable,
and the provision of the benefits described in this Section 9 are expressly contingent on
Executive’s execution of a standard severance and release agreement containing only a release of
any and all claims by Executive against the LIN Companies and all
- 8 -
predecessors, successors, affiliates and subsidiaries thereof, except for claims relating to
(i) the Severance Payment and other post-employment payments and benefits due pursuant to the terms
and subject to the conditions of this Agreement; (ii) claims for benefits under the employee
benefit plans of the LIN Companies in which Executive participates, and (iii) claims for
indemnification or insurance, if applicable, arising following Executive’s employment.
Notwithstanding anything to the contrary contained herein, Employer retains the right to terminate
the initiation or continuation of the Severance Payment and other benefits described in this
Section 9, as applicable, and to recover from Executive any and all amounts previously paid (as
well as to pursue any other remedies available at law or in equity) if it discovers that Executive
engaged in any fraud, theft, embezzlement, serious or substantial misconduct materially injuring
the LIN Companies’ reputation, or gross negligence while employed by the Company or if Executive
materially breaches this Agreement, including any breach by Executive of Executive’s obligations
and covenants under Sections 10, 11, or 12 hereof.
(d) Subject to such adjustments as may be necessary in accordance with the proviso set forth
in the last sentence of Section 9(b)(i), all payments made under Section 9(b), other than the
Transition Severance Amount, shall be made to Executive at the same interval as payments of salary
were made to Executive immediately prior to termination. Notwithstanding the foregoing or anything
to the contrary contained herein, if the Company determines that Executive is a “Specified
Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code (as hereinafter defined), or
any successor thereto or as such may be amended hereafter (“Section 409A”), then to the extent
necessary to satisfy the requirements of Section 409A, any portion of the severance compensation
under this Section 9, that shall constitute deferred compensation within the meaning of Section
409A shall not be due and payable to Executive until the date that is six (6) months after the date
of termination, if necessary to avoid tax penalties under Section 409A. In the event of such delay
in payment, on the day following the expiration of such six month period Executive shall be paid
the delayed portion of the severance compensation plus interest for the period of such delay, which
interest shall be calculated at a rate equal to the interest rate then earned by the LIN Companies’
excess cash balances on bank deposit.
(e) Except as expressly provided in paragraphs (a) or (b) above, upon the termination of this
Agreement and Executive’s employment hereunder (including for Cause or without Good Reason, or upon
death or total disability pursuant, respectively, to Sections 8(a), 8(d) and 8(e)), Executive shall
not be entitled to any payments hereunder, other than for Accrued Obligations, which the Company
shall pay to Executive in a lump sum immediately following such termination. For purposes of this
Agreement, “Accrued Obligations” shall mean the sum of (i) any portion of Executive’s accrued but
unpaid Base Salary through the date of death or termination of employment, as the case may be; (ii)
any accrued but unpaid vacation or expense reimbursements; (iii) any then declared but unpaid
Performance Bonus, as applicable, with respect to the fiscal year preceding the fiscal year in
which the termination occurs; (iv) any (A) Performance Bonus for the fiscal year in which the
termination occurs, as applicable, pro rated for service through the date of termination (and, if
not determined as of the date of termination, such payment, if any, to be due and payable
reasonably following the determination of such amounts) or (B) Performance Bonus earned for that
year if termination occurs at the end of the year but prior to payment; provided, however,
Executive shall receive no payment under (A) or (B) upon a termination by the LIN Companies for
Cause; and (v) any compensation
- 9 -
previously earned but deferred by Executive (together with interest, to the extent and in the
manner applicable pursuant to terms and subject to the conditions of Section 9(c)) prior to the
date of termination that has not yet been paid.
10. Non-Disclosure.
(a) Executive acknowledges that during the period of Executive’s employment with the Company
prior to the Appointment Date, Executive has had, and thereafter during the Service Period,
Executive will have, access to trade secrets and other confidential or proprietary information of
the LIN Companies and their respective affiliates and subsidiaries (“Confidential Information”).
Executive acknowledges that as used herein, Confidential Information includes, but is not limited
to, all methods, processes, techniques, practices, pricing information, billing histories, customer
lists or requirements, employee lists, salary information, personnel matters, financial data,
operating results, plans, contractual relationships, projections for new business opportunities for
new or developing businesses, research, reports, and technological innovations in any stage of
development. Confidential Information also includes, but is not limited to, all notes, records,
software, drawings, handbooks, manuals, policies, contracts, memoranda, sales files, or any other
documents generated or compiled by any employee of the LIN Companies or any of its respective
affiliates or subsidiaries. Notwithstanding the foregoing, Confidential Information shall not
include any data or information that has been voluntarily disclosed to the public or the LIN
Companies’ respective competitors by either of the LIN Companies (except where such public
disclosure has been made by Executive or another without authorization) or that has been
independently developed and disclosed by others, or that otherwise enters the public domain through
lawful means.
(b) Executive agrees that, both during the Service Period and after the termination of
Executive’s employment hereunder for any reason, Executive will use Executive’s reasonable best
efforts and utmost diligence to preserve, protect, and prevent the disclosure of such Confidential
Information, and that he will not, either directly or indirectly, use, misappropriate, disclose or
aid any other person in disclosing such Confidential Information, unless done so on behalf of the
LIN Companies or to the extent required by law.
(c) All Confidential Information is, and shall remain, the exclusive property of the LIN
Companies, and Executive hereby covenants and agrees that Executive shall promptly return all such
information to the LIN Companies upon termination of this Agreement or at any other time when
requested by the LIN Companies.
11. Non-Competition.
(a) During the Service Period and for one (1) year after the termination of this Agreement for
any reason, whether with or Without Cause or whether upon resignation with or without Good Reason,
Executive shall not Compete (as hereinafter defined) with any material business then conducted by
the LIN Companies or their respective affiliates or subsidiaries (collectively, “LIN”) without the
prior written consent of the LIN Companies; except that, notwithstanding this Section 11, Executive
may perform any duties on behalf of the LIN Companies as the Board of Parent shall approve and
direct. For purposes of this Agreement, the term “Compete” shall mean engaging in a business as a
more than five percent (5%) stockholder
- 10 -
or other holder of a five percent (5%) or greater equity interest of any Person (as
hereinafter defined in Section 24) (whether direct or indirect, including the right to acquire such
percentage equity interest), as an employee, a partner, an agent, a consultant, or any other
individual representative capacity of, to or for any Person, as an officer of any Person, or a
member of the board of directors, board of managers, or other managing body of such Person (unless
Executive’s duties, responsibilities, and activities, including supervisory activities, for or on
behalf of such Person or in such business are not related in any way to such “competitive”
activity) if it involves:
(i) owning or Managing (as defined below in Section 24) one or more local television stations
in any designated market area in which the Company or any direct or indirect subsidiary thereof (a
“Subsidiary”) owns or Manages, one or more local television stations (the “Restricted Markets”); or
(ii) rendering services or advice pertaining to the business or operation of television
stations in a Restricted Market, or on behalf of, any Person which is in competition with the
Company or any of its affiliates or subsidiaries.
(b) Upon and subject to reasonable notice and information being provided to the LIN Companies
by Executive prior to Executive’s entering into a position or association which may cause Executive
to engage in activities in breach of paragraph (a) above, Parent will conduct a timely review of
such proposed position or association and notify Executive in writing regarding Parent’s view as to
whether Executive will thereby breach the terms and conditions of paragraph (a) above.
12. Non-Solicitation. Executive agrees that, during the twelve (12) month period immediately
following termination of this Agreement, for whatever reason, with or without Cause or whether
resignation with or without Good Reason, Executive shall not directly or indirectly solicit,
influence or entice, or attempt to solicit, influence or entice, or hire any executive, employee,
or consultant of LIN to cease his relationship with LIN or solicit, influence, entice or in any way
divert any customer, distributor, partner, joint venturer or supplier of LIN to terminate such
person’s relationship with LIN, in order to be employed by or do business with a Person that
Competes with the LIN Companies or with any other entity that derives benefit from the production,
marketing, broadcasting or other distribution or syndication of products, services, programs or
other content that compete with products then produced or services, programs or other content then
being provided, marketed, broadcast, distributed or syndicated by LIN or the feasibility for
production of which LIN is then actually studying or is preparing to market or is developing;
provided, however, that this Section 12 shall apply only within the geographic area set forth in
Schedule 12 hereto.
13. Acknowledgment of Restrictive Covenants. Executive acknowledges that the covenants
specified in Sections 10, 11, 12, and 15 hereof (collectively, the “Protective Provisions”) contain
reasonable limitations as to time, geographic area, and scope of activities to be restricted and
that such promises do not impose a greater restraint on Executive than is necessary to protect the
goodwill, Confidential Information, trade secrets, customer and employee relations, and other
legitimate business interests of the LIN Companies. Executive
- 11 -
also acknowledges and agrees that any violation of the covenants set forth in the Protective
Provisions would bestow an unfair competitive advantage upon any Person, which might benefit from
such violation, and would necessarily result in substantial and irreparable damage and loss to the
LIN Companies.
14. No Inconsistent Obligation. In order to induce the LIN Companies to enter into this
Agreement, Executive represents and warrants to each of the LIN Companies that neither the
execution nor the performance of this Agreement by Executive will violate or conflict in any way
with any other agreement to which Executive may be bound, or with any other duties imposed upon
Executive by corporate or other statutory or common law.
15. Intellectual Property. Executive and the LIN Companies hereby covenant and agree that all
intellectual property of any kind, whether now or later created, developed or produced, developed
by Executive, whether directly or indirectly, in connection with services rendered by Executive for
or on behalf of the LIN Companies, or from the use of premises or property owned, leased, licensed
or contracted for by the LIN Companies, both prior to and subsequent to the date of this Agreement,
or otherwise developed by Executive during the Service Period which is in any way related to the
Company’s business, as conducted or proposed to be conducted, shall be the property of the Company.
Executive hereby assigns to the Company any and all rights and interests he now has or may
hereafter acquire in and to such intellectual property.
16. Notice. For purposes of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date
of delivery when delivered by hand, (b) on the date of transmission when sent by facsimile
transmission during normal business hours with telephone confirmation of receipt, (c) one day after
dispatch when sent by reputable overnight courier maintaining records of receipt, or (d) three days
after dispatch when sent by registered or certified mail, postage prepaid, return receipt
requested, all addressed as set forth on Schedule 16 attached hereto or to such other address as
either party may have furnished to the other in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.
17. Injunctive Relief; Cumulative Rights. The parties agree that, without limitation of the
rights of the LIN Companies with respect to any other breach of this Agreement, the harm to each of
the LIN Companies arising from any breach by Executive of the Protective Provisions could not
adequately be compensated for by monetary damages, and accordingly each of the LIN Companies shall,
in addition to any other remedies available to it at law or in equity, be entitled to seek and, if
so ordered by a court of competent jurisdiction, obtain, preliminary and permanent injunctive
relief against such breach. Executive agrees that the various provisions of this Agreement shall
be construed as cumulative, and no one of them is exclusive of the other, or exclusive of any
rights allowed by law.
18. Withholding. Anything in this Agreement to the contrary notwithstanding, all payments
required to be made by the Company hereunder to Executive shall be subject to the withholding of
such amounts relating to taxes as the Company may reasonably determine it is legally required to
withhold pursuant to any applicable law or regulation. In lieu
- 12 -
of withholding such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provisions for payment of taxes and withholdings as required by law, provided it is
satisfied that all requirements of law affecting its responsibilities to withhold have been
satisfied.
19. No Waiver. No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by Executive and such officer
or director as may be specifically designated by the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of any similar or dissimilar provision or
condition at the same or at any prior or subsequent time. Except where the context otherwise
requires, wherever used the singular shall include the plural, the plural the singular, the use of
any gender shall be applicable to all genders and the word “or” is used in the inclusive sense.
20. Severability. If any covenant or provision hereof is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair the invalidity of any
other covenant or provision, each of which is hereby declared to be separate and distinct. If any
provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted
to be only so broad as is enforceable. If any provision of this Agreement is declared invalid or
unenforceable for any reason other than overbreadth, the offending provision will be modified so as
to maintain the essential benefits of the bargain among the parties hereto to the maximum extent
possible, consistent with law and public policy.
21. Amendment. No amendment, modification, waiver, termination or discharge of any provision
of this Agreement, or consent to any departure therefrom by either party hereto, shall in any event
be effective unless the same shall be in writing, specifically identifying this Agreement and the
provision intended to be amended, modified, waived, terminated or discharged and signed by each of
the LIN Companies and Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific purpose for which
it is given. No provision of this Agreement shall be varied, contradicted or explained by any oral
agreement, course of dealing or performance or any other matter not set forth in an agreement in
writing and signed by each of the LIN Companies and Executive.
22. Choice of Law and Forum. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Rhode Island. Employee hereby (a) submits to personal jurisdiction
in the State of Rhode Island for any action arising out of or in connection with this Agreement;
(b) waives any and all personal rights under the laws of any state to object to jurisdiction within
the State of Rhode Island; and (c) agrees that for any cause of action arising out of or in
connection with this Agreement, venue is solely proper in any state or federal court within Rhode
Island.
23. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.
- 13 -
24. Certain Definitions. The capitalized terms contained and used in this Agreement which are
defined below shall have the respective meanings ascribed to them as follows:
(a) “Change in Control” shall mean the occurrence of any of the following events:
(i) any sale, lease, exchange, or other transfer (in one transaction or series of related
transactions) of all or substantially all of the assets of Parent to any Person or group of related
Persons for purposes of Section 13(d) of the Exchange Act, other than one or more members of the
Shareholder Group;
(ii) a majority of the Board of Parent shall consist of Persons who are not Continuing
Directors;
(iii) the acquisition by any Person or Group (other than (A) one or more members of the
Shareholder Group or (B) with respect to a transferee of shares of Class C Common Stock, par value
$0.01 per share, of Parent, (1) one or more members of the Shareholder Group or (2) any Person
approved by an affirmative vote of no less than two-thirds of the disinterested members of the
Board of Parent) of the power, directly or indirectly, to vote or direct the voting of securities
having more than 50% of the ordinary voting power for the election of directors of Parent;
(iv) the acquisition by any Person or Group of shares of the capital stock of Parent
representing in the aggregate more than 40% of the issued and outstanding shares of such capital
stock and, as of the time of such acquisition, no other Person or Group holds, in the aggregate, a
greater number of such shares of capital stock;
(v) any sale, lease, exchange, or other transfer (in one transaction or series of related
transactions) of all or substantially all of the assets of the Company to any Person or group of
related Persons for purposes of Section 13(d) of the Exchange Act, other than to (A) a wholly-owned
subsidiary of Parent or the Company or (B) one or more members of the Shareholder Group; or
(vi) Parent shall cease, whether directly or indirectly through one or more wholly-owned
subsidiaries, to have the power to vote or direct the voting of securities having more than 50% of
the ordinary voting power for the election of directors of the Company.
(b) “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations or
other guidelines of general applicability promulgated thereunder.
(c) “Continuing Directors” shall mean any Person who (i) was a member of the Board of Parent
on the Appointment Date, (ii) is thereafter nominated for election or elected to the Board of
Parent with the affirmative vote of a majority of the Continuing Directors who are members of such
Board of Parent at the time of such nomination or election, or (iii) is a member of the Board of
Parent and also a member of the Shareholder Group.
- 14 -
(d) “Group” means any group of related Persons for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended.
(e) “Manage” (or “Managing”) means with respect to the business or operation of a television
station, (i) the provision of management services, (ii) the right to program, or select a
substantial portion of the programming of, such station, including through a local marketing
agreement, time brokerage agreement, joint sales agreement, shared services agreement, or other
similar agreements (collectively, a “Services Agreement”), or (iii) the sale of, or the right to
sell, the advertising of such station through a Services Agreement.
(f) “Person” shall mean an individual, a corporation, limited liability company, a
partnership, an association, a trust or any other entity or organization, including any other form
of business entity or any government or political subdivision or an agency or instrumentality
thereof.
(g) “Shareholder Group” shall mean HM Capital Partners, LLC, and any Person controlling,
controlled by or under common control with it.
25. Interpretation. The headings in this Agreement are inserted for convenience only and
shall not constitute a part hereof. Except where the context requires otherwise, whenever used in
this Agreement, the singular includes the plural, the plural includes the singular, the use of any
gender is applicable to all genders and the word “or” has the inclusive meaning represented by the
phrase “and/or.” The words “include” and “including” and variations thereof, shall not be deemed
to be terms of limitation, but rather shall be deemed to be followed by the words “without
limitation.” A reference in this Agreement to a Section, Paragraph, Exhibit or Schedule is to the
referenced Section, Paragraph, Exhibit or Schedule of this Agreement. The wording of this
Agreement shall be deemed to be the wording mutually chosen by the parties and no rule of strict
construction shall be applied against any party. Unless expressly provided otherwise, all dollar
figures in this Agreement are in the currency of the United States of America.
26. Survival. The expiration or termination of this Agreement shall not relieve any party of
any obligations that may have accrued hereunder prior to such expiration or termination. The
provisions of Sections 9, 10, 11, 12, 13, 15, 16, 17, 18, 19, and 20 shall survive the expiration
or termination of this Agreement except as otherwise specifically provided in such Sections.
27. Assignment. The terms and provisions of this Agreement shall inure to the benefit of and
be binding upon the LIN Companies and each of its respective successors and assigns.
Notwithstanding the foregoing or anything to the contrary contained herein, this Agreement may not
be assigned by the LIN Companies without Executive’s prior written consent unless the LIN
Companies retain joint and several liability with any of the LIN Companies’ assignee for the
financial obligations under this Agreement. This Agreement may not be assigned, in whole or in
part, by Executive without the written consent of each of the LIN Companies.
- 15 -
28. Indemnification. At all times during and after the Service Period the LIN Companies shall
indemnify Executive pursuant to the terms and subject to the conditions of the certificate of
incorporation and bylaws, respectively, of each of the LIN Companies, as such are in effect as of
the Appointment Date. Executive shall have the benefit of continuing directors’ and officers’
insurance coverage at levels no less favorable than those in effect from time to time for members
of the Board of Parent and the board of directors of the Company and other members of the LIN
Companies’ senior management.
29. Termination of Prior Agreements. That certain Severance Compensation Agreement, by and
between Executive and the Company, dated as of February 27, 1997, as amended, be and it is hereby
terminated effective as of the Appointment Date.
30. Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one and the same
instrument. Each party hereto will receive by delivery or by facsimile or other electronic
transmission a duplicate original of the Agreement executed by each party, and each party agrees
that the delivery of the Agreement by facsimile or other electronic transmission will be deemed to
be an original of the Agreement so transmitted.
31. Entire Agreement. This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral or written
agreements, commitments or understandings with respect to the matters provided for herein.
[The remainder of this page is intentionally blank; signature page follows.]
- 16 -
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
| Executive: | ||||||
| /s/ Xxxxxxx X. Xxxxxxx | ||||||
| Xxxxxxx X. Xxxxxxx | ||||||
| LIN TV Corp. | ||||||
| By: | /s/ Xxxxxx X. Parent | |||||
| Name: Xxxxxx X. Parent | ||||||
| Title: Vice President General Counsel and Secretary | ||||||
| LIN Television Corporation | ||||||
| By: | /s/ Xxxxxx X. Parent | |||||
| Name: Xxxxxx X. Parent | ||||||
| Title: Vice President General Counsel and Secretary | ||||||
| By: | /s/ Xxxxxx X. Parent | |||||
[Signature Page to Employment Agreement
Schedule 5 (b) (iii)
| Under Budget | At | Over Budget | ||||||||||||||||||||||||||||||||||
Revenue (Percent of Budget) |
78.7 | % | 84.0 | % | 89.3 | % | 94.7 | % | Budget | 105.3 | % | 110.7 | % | 116.0 | % | 121.3 | % | |||||||||||||||||||
Bonus Percentage |
Zero | 25 | % | 33 | % | 67 | % | 100 | % | 125 | % | 150 | % | 175 | % | 200 | % | |||||||||||||||||||
Potential Bonus Amount — Grid |
— | $ | 32,813 | $ | 43,313 | $ | 87,938 | $ | 131,250 | $ | 164,063 | $ | 196,875 | $ | 229,688 | $ | 262,500 | |||||||||||||||||||
Potential Bonus Amount — Other |
$ | 43,750 | $ | 43,750 | $ | 43,750 | $ | 43,750 | $ | 43,750 | $ | 43,750 | $ | 43,750 | $ | 43,750 | $ | 43,750 | ||||||||||||||||||
Potential Bonus Total |
$ | 43,750 | $ | 76,563 | $ | 87,063 | $ | 131,688 | $ | 175,000 | $ | 207,813 | $ | 240,625 | $ | 273,438 | $ | 306,250 | ||||||||||||||||||
Schedule 12
Geographic Scope of Non-Solicitation
The geographic scope to which Section 12 shall apply shall be defined as all markets in the
United States of America.
Schedule 16
Notices
If to Executive:
|
To the address as shall most currently appear on the records of the Company | |
If to the LIN Companies:
|
LIN Television Corporation | |
| 0 Xxxxxxxx Xxxxxx, Xxxxx 000 | ||
| Xxxxxxxxxx, XX 00000 | ||
| Attn: General Counsel | ||
| Fax: (000) 000-0000 |
Exhibit 9(a)(i)
Transition Severance Amount
For purposes of this Agreement, the “Transition Severance Amount” shall be
a lump sum amount equal to the sum of:
| (a) | an amount equal to three times (3x) the Executive’s Base Salary in effect on the effective date of termination; | ||
| (b) | an amount equal to three times (3x): |
(1) the amount of the highest bonus compensation
paid to the Executive with respect to the last
three complete fiscal years, and
(2) the contribution, if any, paid by the Company
for the benefit of the Executive to any 401(k) Plan
in the last complete fiscal year,
| (c) | the present value, determined as of the effective date of termination, of the sum of: |
(1) all benefits which have accrued to the
Executive but have not vested under the LIN
Television Corporation Retirement Plan (the
“Retirement Plan”) as of the effective date of
termination, and
(2) all additional benefits which would have
accrued to the Executive under the Retirement Plan
if the employee had continued to be employed by the
Company on the same terms the Executive was
employed on as of the effective date of termination
from such date of termination to the date 12 months
after the date of termination.
For purposes of this Agreement, the present value of a future payment shall be calculated by
reference to the actuarial assumptions (including assumptions with respect to interest
rates) in use immediately prior to any Change in Control for purposes of calculating
actuarial equivalents under the Retirement Plan.
