EXHIBIT 10.60
PULITZER INC.
EXECUTIVE TRANSITION AGREEMENT
WITH XXXXXXXX C.Z. XXXXX
AGREEMENT made as of the 1st day of January, 2002, by and
between PULITZER INC. ("Company") and XXXXXXXX C.Z. XXXXX ("Executive").
1. Background. Company maintains a transition/severance program for
eligible executive employees. The program is administered by the Compensation
Committee of Company's Board of Directors ("Committee"). The Committee has
designated Executive as eligible to participate in the program, subject to the
terms and conditions of this Agreement.
2. Certain Defined Terms. The following terms shall have the following
meanings when used in this Agreement.
(a) "Accrued Compensation" means, as of any date, (1) the
unpaid amount, if any, of Executive's previously earned base salary or
commissions, (2) the unpaid amount, if any, of Executive's accrued bonus for the
preceding year, and (3) additional entitlements of Executive, if any, under the
terms of any employee plan, program or arrangement of Company or an Affiliate
(other than this Agreement).
(b) "Affiliate" means an entity at least 50% of the voting,
capital or profits interests of which are owned directly or indirectly by
Company.
(c) "Benefit Continuation Coverage" means continuing group
health and group life insurance coverage for Executive and, where applicable,
Executive's covered spouse and covered eligible dependents for a specified
period following the termination of Executive's employment with Company and its
Affiliates at the same benefit and contribution levels in effect immediately
prior to such termination of employment. If such continued coverage is not
permitted by the applicable plan or by applicable law, the Executive will be
entitled to cash payments sufficient to reimburse Executive and/or Executive's
covered spouse and covered eligible dependents, on an after tax basis, for the
reasonable cost of comparable individual or other replacement coverage through
the end of such period. The period of Benefit Continuation Coverage will be
subject to early termination if and when the Executive becomes entitled to
comparable coverage from another employer. The group health part of Benefit
Continuation Coverage will be in addition to and not in lieu of COBRA
continuation coverage.
(d) "Board" means the Board of Directors of Company.
(e) "Cause" means (1) the commission of a felony involving
moral turpitude, (2) the willful and repeated failure or refusal to carry out
the material responsibilities of Executive's employment with Company or an
Affiliate, or (3) any other willful misconduct or pattern of behavior which has
had or is reasonably likely to have a significant adverse effect on Company or
an Affiliate, all as determined by the Board acting in its sole discretion.
Notwithstanding the preceding sentence, if there is a written employment
agreement then in effect between Executive and Company or an Affiliate that
defines the term "cause" (or a term of like import) in a similar context, then
the term Cause, as used in such context herein, shall have the meaning ascribed
to such term under Executive's employment agreement.
(f) "Change in Control" means the occurrence of any of the
following after January 1, 2002:
(i) any person (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended ("Exchange Act")) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 40% or more of the combined voting power of
the then outstanding voting securities of Company, other than
(1) a person who is the beneficial owner of shares of Class B
Common Stock of Company, or (2) as a result of inheritance;
(ii) a consolidation, merger or reorganization
involving Company, unless (1) the stockholders of Company
immediately before such consolidation, merger or
reorganization own, directly or indirectly, at least a
majority of the combined voting power of the outstanding
voting securities of the corporation resulting from such
consolidation, merger or reorganization, (2) individuals who
were members of the Board immediately prior to the execution
of the agreement providing for such consolidation, merger or
reorganization constitute a majority of the board of directors
of the surviving corporation or of a corporation directly or
indirectly beneficially owning a majority of the voting
securities of the surviving corporation, and (3) no person
beneficially owns more than 40% of the combined voting power
of the then outstanding voting securities of the surviving
corporation (other than a person who is (A) Company or a
subsidiary of Company, (B) an employee benefit plan maintained
by Company, the surviving corporation or any subsidiary , or
(C) the beneficial owner of 40% or more of the combined voting
power of the outstanding voting securities of Company
immediately prior to such consolidation, merger or
reorganization);
(iii) individuals who, as of January 1, 2002,
constitute the entire Board (the "Incumbent Board") cease for
any reason to constitute a majority of the Board, provided
that any individual becoming a director subsequent to January
1, 2002 whose election, or nomination for election by
Company's stockholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board;
(iv) approval by the stockholders of Company of a
complete liquidation or dissolution of Company, or a sale or
other disposition of all or substantially all of the assets of
Company (other than to an entity described in (f)(ii) above;
or
(v) any other event or transaction which the Board,
acting in its discretion and with a view toward carrying out
the purposes of the Plan, designates is a Change in Control.
Notwithstanding the foregoing, if there is a written employment or other
agreement then in effect between Executive and Company or an Affiliate that
defines the term "change in control" or a
2
term of like import in a similar context, then, for the purposes of applying the
provisions hereof, the term Change in Control, as used in such context herein,
shall have the meaning ascribed to such term under such agreement.
(g) "Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Committee" means the Compensation Committee of the Board.
(i) "Company" means Pulitzer Inc., a Delaware corporation, and
any successor thereto.
(j) "Disability" means the inability of Executive to
substantially perform the customary duties and responsibilities of Executive's
employment with Company or an Affiliate for a period of at least 120 consecutive
days by reason of a physical or mental incapacity which is expected to result in
death or last indefinitely.
(k) "Good Reason" means the occurrence of any of the following
without the written consent of Executive: (1) a material diminution by Company
or an Affiliate of Executive's duties or responsibilities in a manner which is
inconsistent with Executive's position or which has or is reasonably likely to
have a material adverse effect on Executive's status or authority; (2) a
material diminution of Executive's working conditions (including, without
limitation, relocation by more than 50 miles of Executive's principal place of
business); or (3) a reduction by Company or an Affiliate of Executive's rate of
salary or annual incentive opportunity or a breach by Company or any of its
Affiliates of a material provision of any written employment or other agreement
with Executive which is not corrected within 15 days following notice thereof by
Executive to Company. Notwithstanding the preceding sentence, if there is a
written employment agreement then in effect between Executive and Company or an
Affiliate that defines the term "good reason" (or a term of like import) in a
similar context, then, for the purpose of applying the provisions hereof, the
term Good Reason as used in such similar context herein, shall have the meaning
ascribed to that term under such employment agreement.
(l) "Pro Rata Bonus" means Executive's target bonus under
Company's executive incentive compensation plan for the fiscal year of the
Company in which Executive's employment is terminated (or, if greater, the
actual bonus earned by Executive under that plan for the preceding year)
multiplied by a fraction, the numerator of which is the number of days from the
beginning of the fiscal year through the termination date, and the denominator
of which is the total number of days in the fiscal year.
(m) "Salary & Bonus" means, as of the effective date of the
termination of Executive's employment with Company and its Affiliates, the sum
of: (1) Executive's highest annual rate of salary at any time during the
preceding 24 months, and (2) Executive's average annual bonus under Company's
executive incentive compensation plan for the preceding three fiscal years (or
such lesser number of full fiscal years of Executive's employment with Company
and/or an Affiliate). If Executive's employment terminates during the same
fiscal year of Company in which such employment begins, then the bonus component
of Executive's Salary & Bonus will be Executive's annualized target bonus for
such year.
3
3. General Severance Protection - No Change in Control. Subject to the
provisions hereof, including, without limitation, Section 7 (relating to
non-duplication of payments and benefits provided under other agreements and
arrangements) and Section 8 (relating to the execution and delivery of a release
as a condition of Executive's (or a beneficiary's) entitlement to payments and
benefits hereunder), upon the termination of Executive's employment with Company
and its Affiliates, other than a termination of employment in conjunction with a
Change in Control to which Section 4 applies, Executive (or Executive's
beneficiary, as the case may be) will be entitled to receive the applicable
severance payments and benefits set forth in this Section.
(a) Termination by Company without Cause or by Executive for
Good Reason. If Executive's employment is terminated by Company or an Affiliate
without Cause or by the Executive for Good Reason, then Executive shall be
entitled to receive the following payments and benefits:
(i) Accrued Compensation;
(ii) Pro Rata Bonus;
(iii) 1.5 times Salary & Bonus, which amount shall be
payable to Executive in equal monthly (or, at the option of
the Committee, more frequent) installments;
(iv) Benefit Continuation Coverage for 18 months; and
(v) Accelerated vesting of outstanding Company stock
options.
(b) Disability or Death. If Executive's employment is
terminated by Company or an Affiliate due to Executive's Disability or if
Executive's employment terminates by reason of death, then Executive (or
Executive's beneficiary) shall be entitled to receive the following payments and
benefits:
(i) Accrued Compensation;
(ii) Pro Rata Bonus;
(iii) Benefit Continuation Coverage for 18 months
(exclusive of life insurance if Executive is deceased); and
(iv) Accelerated vesting of outstanding Company stock
options.
(c) Termination by Company for Cause or by Executive without
Good Reason. If Company or an Affiliate terminates Executive's employment for
Cause or if Executive terminates such employment for any reason (other than
death), then Executive shall be entitled to receive any Accrued Compensation,
subject to set off for amounts owed by Executive to Company or an Affiliate, and
nothing more.
4
4. Termination in Conjunction with a Change in Control. Subject to the
provisions hereof, including, without limitation, Section 7 (relating to
non-duplication of payments and benefits provided under other agreements and
arrangements), and Section 8 (relating to execution and delivery of a general
release as a condition of Executive's entitlement to payments and benefits
hereunder), upon the termination of Executive's employment with Company and its
Affiliates in conjunction with a Change in Control, Executive (or Executive's
beneficiary, as the case may be) will be entitled to receive the applicable
severance payments and benefits set forth in this Section. For the purposes
hereof, a termination of employment is in conjunction with a Change in Control
if (and only if) it occurs during the period beginning on the date of the
definitive agreement pursuant to which the Change in Control is consummated and
ending on the second anniversary of the date of the Change in Control. If
Executive is entitled to receive payments and benefits under Section 3 (due to a
termination of employment not in conjunction with a Change in Control) and if,
by reason of a subsequent Change in Control, Executive's termination of
employment is deemed to be in conjunction with the Change in Control, then, in
order to avoid duplication, the payments and benefits to which Executive is
entitled under this Section upon and following the Change in Control will be
reduced by the payments and benefits which Executive received under Section 3,
and no further payments will be made under Section 3.
(a) Termination by Company or an Affiliate without Cause or by
Executive for Good Reason. If Executive's employment is terminated by Company or
an Affiliate without Cause or by Executive for Good Reason, then Executive shall
be entitled to receive the following payments and benefits:
(i) Accrued Compensation;
(ii) Pro Rata Bonus;
(iii) an amount equal to 2 times Salary & Bonus,
which amount shall be payable in a lump sum in cash within 10
business days following the date of Executive's termination of
employment or, if later, the date of the Change in Control;
(iv) Benefit Continuation Coverage for a period of 24
months; and
(v) Credit for two additional years of service under
Company's Supplemental Executive Benefit Pension Plan (SERP).
(b) Disability or Death. If Executive's employment is
terminated by Company or an Affiliate due to Executive's Disability, or if
Executive's employment terminates by reason of death, then Executive (or
Executive's beneficiary) shall be entitled to receive the following payments and
benefits:
(i) Accrued Compensation;
(ii) Pro Rata Cash Bonus; and
5
(iii) Benefit Continuation Coverage for 24 months
(exclusive of life insurance if Executive is deceased).
(c) Termination by Company or an Affiliate for Cause or by
Executive without Good Reason. If Executive's employment is terminated by
Company or an Affiliate for Cause or, subject to Section 4(d) below, if
Executive terminates his employment for any reason (other than death or Good
Reason), then Executive shall be entitled to receive Accrued Compensation
through the date of termination, subject to set off for amounts owed by
Executive to Company or an Affiliate, and nothing more.
(d) Voluntary Termination Window. Executive may voluntarily
terminate his employment with Company and its Affiliates at any time during the
13th month following a Change in Control. If Executive does so, he will be
entitled to the following payments and benefits:
(i) Accrued Compensation;
(ii) Pro Rata Bonus; and
(iii) an amount equal to one year's Salary & Bonus,
payable in a lump sum cash payment within 10 business days
following the date of Executive's termination of employment.
This subsection (d) will not apply if, under the circumstances, any other
subsection of this Section 4 applies to the termination of Executive's
employment during the voluntary termination window period afforded by this
subsection.
5. Effect of a Change in Control on Options and Other Equity-Based
Awards. All outstanding Company stock options and other Company equity-based
awards held by Executive shall become fully vested immediately before the
occurrence of a Change in Control if (a) Executive is then still employed by
Company or an Affiliate; or (b) Executive is entitled to payments and benefits
under Section 4(a) as a result of the termination of employment during the
pre-Change in Control severance protection period described in Section 4. If
Executive becomes vested in a stock option or other equity-based award pursuant
to part (b) of the preceding sentence, then, before the Change in Control,
Company will either reinstate the option or other award to the extent it would
otherwise not be vested, or make a cash payment to Executive equal to the
intrinsic value of the non-vested portion of the option or other award based
upon the then value per share of Company's Common Stock. The vesting and other
terms and conditions of Executive's stock options and other equity-based awards
will continue to govern except as otherwise specifically provided by this
Section 5.
6. Excise Tax Gross-up Payment. If Executive is entitled to receive
payments and benefits under this Agreement pursuant to Section 4 and/or Section
5, and if, when combined with the payments and benefits Executive is entitled to
receive under any other plan, program or arrangement of Company or an Affiliate,
Executive would be subject to excise tax under Section 4999 of the Code, then
Company shall make additional payments to Executive so that, on an after-tax
basis, Executive is placed in the same economic position in which he would have
been
6
if no excise tax were payable by him and no payments were required to be made to
him under this Section 6.
7. Effect of Other Agreements. Notwithstanding the provisions hereof,
the post-termination payment and benefit provisions of Executive's written
employment or other agreement with Company or an Affiliate in force at the
termination of Executive's employment (if any) will apply in lieu of the
provisions hereof if and to the extent that, with respect to Executive's
termination of employment, the provisions of such employment or other agreement
would provide greater payments or benefits to Executive (or to Executive's
covered dependents or beneficiaries). If any termination or severance payments
or benefits are made or provided to Executive by Company or any or its
Affiliates pursuant to a written employment or other agreement with Company or
an Affiliate, such payments and benefits shall reduce the amount of the
comparable payments and benefits payable hereunder. This Section is intended to
provide Executive with the most favorable treatment and, at the same time, avoid
duplication of payments or benefits, and it will be construed and interpreted
accordingly.
8. Release of Claims. Notwithstanding anything herein to the contrary,
the Committee or the Board may condition severance payments or benefits
otherwise payable under this Agreement upon the execution and delivery by
Executive (or Executive's beneficiary) of a general release in favor of Company,
its Affiliates and their officers, directors and employees, in such form as the
Board or the Committee may specify; provided, however, that no such release will
be required as a condition of Executive's (or the beneficiary's) entitlement to
Accrued Compensation. Any payment or benefit that is so conditioned may be
deferred until the expiration of the seven day revocation period prescribed by
the Age Discrimination in Employment Act of 1967, as amended, or any similar
revocation period in effect on the effective date of the termination of
Executive's employment.
9. No Duty to Mitigate. Except as otherwise specifically provided
herein, Executive's entitlement to payments or benefits hereunder is not subject
to mitigation or a duty to mitigate by Executive.
10. Amendment and Termination. The Board may terminate or amend this
Agreement and the Committee may amend this Agreement, provided, however, that,
no such action which would have the effect of reducing or diminishing
Executive's entitlements under this Agreement shall be effective (a) if
Executive's employment terminates before or within six months after the date
Executive is furnished with written notice that such action has been taken,
and/or (b) prior to the second anniversary of a Change in Control if such action
is taken (1) on the day of or subsequent to the Change in Control, (2) prior to
the Change in Control, at the request of a third party participating directly or
indirectly in the Change in Control, or (3) otherwise in connection with or in
anticipation of the Change in Control (as determined by the Committee, in its
discretion).
11. Interpretation and Administration. This Agreement shall be
administered by the Committee, acting in its sole and absolute discretion. The
Committee shall have full power and authority to interpret, construe and apply,
and to take such actions as it deems necessary or appropriate in order to carry
out, the provisions of this Agreement. The decision of the
7
Committee as to any disputed question relating to this Agreement shall be final
and conclusive on all persons.
12. Successors and Beneficiaries.
(a) Successors and Assigns of Company. Company shall require
any successor or assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the business or assets
of Company, expressly and unconditionally to assume and agree to perform or
cause to be performed Company's obligations under this Agreement. In any such
event, the term "Company," as used herein shall mean Company, as defined in
Section 1 hereof, and any such successor or assignee.
(b) Executive's Beneficiary. For the purposes hereof,
Executive's beneficiary will be the person or persons designated as such in a
written beneficiary designation filed with the Committee, which may be revoked
or revised in the same manner at any time prior to Executive's death. In the
absence of a properly filed written beneficiary designation or if no designated
beneficiary survives Executive, Executive's estate will be deemed to be the
beneficiary hereunder.
13. Nonassignability. With the exception of Executive's beneficiary
designation, neither Executive nor Executive's beneficiary may pledge, transfer
or assign in any way the right to receive payments or benefits hereunder, and
any attempted pledge, transfer or assignment shall be void and of no force or
effect.
14. Legal Fees to Enforce Rights after a Change in Control. If,
following a Change in Control, Company fails to comply with any of its
obligations under this Agreement or Company takes any action to declare this
Agreement void or unenforceable or institutes any litigation or other legal
action designed to deny, diminish or to recover from Executive (or Executive's
beneficiary) the payments and benefits intended to be provided, then Executive
(or Executive's beneficiary, as the case may be) shall be entitled to select and
retain counsel at the expense of Company to represent Executive (or Executive's
beneficiary) in connection with the good faith initiation or defense of any
litigation or other legal action, whether by or against Company or any director,
officer, stockholder or other person affiliated with Company or any successor
thereto in any jurisdiction.
15. Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between Executive and Company or any of its
Affiliates. Nothing contained herein shall be deemed to give Executive a right
to be retained in the employ or other service of Company or any of its
Affiliates or to interfere with the right of Company or any of its Affiliates to
terminate Executive's employment at any time.
16. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, excluding its conflict of law rules.
8
17. Withholding. Company and its Affiliates may withhold from any and
all amounts payable under this Agreement such federal, state and local taxes as
may be required to be withheld pursuant to applicable.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PULITZER INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxxxxx C.Z. Xxxxx
----------------------------------
Xxxxxxxx C.Z. Xxxxx
9
SUMMARY OF SEVERANCE PROTECTIONS
FOR XXXXXXXX C.Z. XXXXX
UNDER EXECUTIVE TRANSITION AGREEMENT*
TERMINATION NOT IN CONJUNCTION TERMINATION IN CONJUNCTION
NATURE OF TERMINATION WITH A CHANGE IN CONTROL WITH A CHANGE IN CONTROL
--------------------- ------------------------------ ------------------------
Termination by Pulitzer o ACCRUED COMPENSATION o ACCRUED COMPENSATION
WITHOUT CAUSE or by o PRO RATA BONUS for year of termination o PRO RATA BONUS for year of termination
Executive for GOOD REASON o 1.5 x SALARY & BONUS, payable monthly o 2 x SALARY & BONUS, paid in a lump sum
o BENEFIT CONTINUATION COVERAGE for 18 months o BENEFIT CONTINUATION COVERAGE for 2 years
o Accelerated vesting of Company stock options o 2 additional years of service credit under SERP
o Accelerated vesting of Company stock options
o Full 280G golden parachute excise tax gross-up
Voluntary termination by N/A o ACCRUED COMPENSATION
Executive during 13th o PRO RATA BONUS
month following a CHANGE o One year's SALARY & BONUS, payable in a lump sum
IN CONTROL
DISABILITY or Death o ACCRUED COMPENSATION o ACCRUED COMPENSATION
o PRO RATA BONUS for year of termination/death o PRO RATA BONUS for year of termination/death
o BENEFIT CONTINUATION COVERAGE for 18 months o BENEFIT CONTINUATION COVERAGE for 2 years
o Accelerated vesting of Company stock options o Accelerated vesting of Company stock options
Termination by Pulitzer ACCRUED COMPENSATION only ACCRUED COMPENSATION only
for CAUSE or voluntary
termination by Executive
(other than during
permitted window
period)
--------
* This chart is based upon the provisions of an Executive
Transition Agreement
("Agreement") between the above-named Executive and
Pulitzer Inc. dated as of
January 1, 2002. This chart is only a summary of the basic severance components
contained in the Agreement and is not part of the Agreement itself. Executive's
rights under the Agreement will be determined solely by its terms and conditions
and without regard to the contents of this chart. The capitalized terms in this
chart appearing in bold and italics are defined terms under and shall have the
meanings set forth in the Agreement.
