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EXHIBIT 10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made on the 18th day of December, 1998, by and
between PULITZER INC., a Delaware corporation with its principal offices in St.
Louis, Missouri (the "Company"), and XXXXXX X. XXXXXXXXX, a resident of the
State of Texas ("Xx. Xxxxxxxxx").
1. Employment. The Company hereby employs Xx. Xxxxxxxxx, and Xx.
Xxxxxxxxx hereby accepts such employment, upon the terms and conditions set
forth in this Agreement.
2. Term. The term of Xx. Xxxxxxxxx'x employment under this Agreement will
be three years, starting January 1, 1999. On each subsequent January 1
(beginning January 1, 2000) prior to the termination of Xx. Xxxxxxxxx'x
employment under Section 7, the term will be extended by one additional year
or, if earlier, to the date Xx. Xxxxxxxxx reaches age 65 provided Xx. Xxxxxxxxx
is then employed hereunder.
3. Position and Duties. Xx. Xxxxxxxxx will serve as the President and
Chief Executive Officer of the Company and as a voting trustee under any voting
trust agreement established by the holders of the Company's Class B common
stock. The Company will use its best efforts to cause Xx. Xxxxxxxxx to be a
member of the Company's Board of Directors ("Board"). Xx. Xxxxxxxxx will report
directly to the Board. Except as otherwise specifically provided herein, the
duties which may be assigned to Xx. Xxxxxxxxx will be the usual and customary
duties of the offices of president and chief executive officer and will be
consistent with the provisions of the Company's Certificate of Incorporation,
By-laws and applicable law. At the request of the Board, Xx. Xxxxxxxxx will
serve as an officer and director of the Company's subsidiaries and other
affiliates without additional compensation. Xx. Xxxxxxxxx will devote all of
his business time and attention to the performance of his obligations, duties
and responsibilities under this Agreement. Subject to Company policies
applicable to senior executives generally, Xx. Xxxxxxxxx may engage in
personal, charitable, professional and investment activities to the extent such
activities do not conflict or interfere with his obligations to, or his ability
to perform the duties and responsibilities of his employment by, the Company
hereunder.
4. Annual Compensation.
(a) Base Salary. The Company will pay salary to Xx. Xxxxxxxxx at an
annual rate of $575,000, in accordance with it regular payroll practices. The
Board will review Xx. Xxxxxxxxx'x salary at least annually. The Board, acting
in its discretion, may increase (but not decrease) the annual rate of Xx.
Xxxxxxxxx'x salary in effect at any time.
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(b) Bonus. Xx. Xxxxxxxxx will participate in the Company's bonus plan
established for its senior corporate executives, with an annual target equal to
100% of salary. Xx. Xxxxxxxxx'x bonus for 1999 will be no less than $425,000 if
Xx. Xxxxxxxxx remains employed by the Company through December 31, 1999. Xx.
Xxxxxxxxx'x annual bonus will be payable promptly after the end of the year for
which it is earned, subject to such deferral requirements as the Company may
impose in order to preserve its full income tax deduction for the payment of the
bonus.
5. Additional Compensation.
(a) Start Bonus. Xx. Xxxxxxxxx will be paid a bonus of $200,000 within
five days after the execution and delivery of this agreement.
(b) Initial Stock Option Grant. On the first business day following the
date the Closing (defined in Section 12(b) hereof) occurs, the Company will
grant to Xx. Xxxxxxxxx a nonstatutory option pursuant to the Company's Stock
Option Plan (the "Initial Option") to purchase shares of Company common stock.
The value of the Initial Option, as determined by the Company's outside
compensation consultants under the Black-Scholes method, will be approximately
$1,500,000, and the number of shares and exercise price per share covered by
the Initial Option will be equal to the number of shares and exercise price per
share covered by a similar option to be granted at the same time to Xxxxxxx X.
Xxxxxxxx. The Initial Option will vest ratably (1/3, 1/3, 1/3) at the end of
1999, 2000, and 2001, subject in the case of any nonvested portion, to Xx.
Xxxxxxxxx'x continuing employment (except as provided in Section 7 hereof). If
the Closing does not occur, then Pulitzer Publishing Company will grant Xx.
Xxxxxxxxx a comparable option to purchase shares of its common stock upon
comparable terms and conditions.
(c) Restricted Stock Grant. On the date the Initial Option is granted
pursuant to the preceding subsection, the Company will also credit X shares of
Company common stock to a bookkeeping account set up in the name of Xx.
Xxxxxxxxx, where X is equal to $1,000,000 divided by the closing price per
share on the award date. The shares credited to Xx. Xxxxxxxxx'x account will
vest, if at all, on January 1, 2002, subject to the satisfaction such
performance conditions as are mutually agreed upon by the parties. Payment of
shares credited to Xx. Xxxxxxxxx'x restricted stock account, or their cash
equivalent, will be subject to such deferral requirements as the Company may
impose in order to preserve its full income tax deduction attributable to the
restricted stock award. If the Closing does not occur, then Pulitzer Publishing
Company will make a comparable grant of restricted stock to Xx. Xxxxxxxxx upon
comparable terms and conditions.
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6. Employee Benefit Programs and Perquisites.
(a) General. Xx. Xxxxxxxxx will be entitled to participate in such
qualified and nonqualified employee pension plans, stock option or other equity
compensation plans, group health, long term disability and group life insurance
plans, and any other welfare and fringe benefit plans, arrangements, programs
and perquisites sponsored or maintained by the Company from time to time for
the benefit of its employees generally or its senior executives generally.
Schedule A (attached) contains a summary of the benefits currently provided to
senior executives of the Company. Xx. Xxxxxxxxx will be entitled to annual stock
option grants on a basis not less favorable than other senior officers.
(b) SERP Vesting Credit. Notwithstanding any contrary provision in the
Company's supplemental executive retirement plan, Xx. Xxxxxxxxx will become
fully vested in his accrued benefit under that plan if he remains in the
continuous employ of the Company through December 31, 2001.
(c) Reimbursement of Business Expenses. Xx. Xxxxxxxxx is authorized to
incur reasonable expenses in carrying out his duties and responsibilities under
this Agreement, and the Company will promptly reimburse him for all expenses
that are so incurred upon presentation of appropriate vouchers or receipts,
subject to the Company's expense reimbursement policies applicable to senior
executive officers generally.
(d) Relocation Expenses. Xx. Xxxxxxxxx will establish his principal
residence in the St. Louis metropolitan area ("St. Louis") as soon as
practicable after the execution of this Agreement. The Company will pay or
reimburse Xx. Xxxxxxxxx for the payment of all expenses reasonably incurred by
him in connection with the relocation of his residence to St. Louis, including,
without limitation, the cost of packing and moving household goods, traveling
expenses, interim living expenses during a transition period, and house hunting
trips for Xx. Xxxxxxxxx and his wife. Xx. Xxxxxxxxx will also be entitled to
reimbursement for the real estate commission and other closing costs incurred by
him on the sale of his present home in Texas ("present home") and any points
applicable to a loan Xx. Xxxxxxxxx may take out in purchasing his new residence
in St. Louis. In the event Xx. Xxxxxxxxx ends up having to carry two home loans
at the same time, he will be entitled to reimbursement for the interest portion
of the loan on his present home. If Xx. Xxxxxxxxx wishes to buy a home in St.
Louis before selling his present home, the Company will make available an
interest-free bridge loan to Xx. Xxxxxxxxx approximately equal to the equity in
his present home. The Company will make a tax gross-up payment to Xx. Xxxxxxxxx
to make him whole for income taxes incurred in respect of any nondeductible and
nonexcludable relocation payments and reimbursement amounts. If Xx. Xxxxxxxxx
cannot sell his present home by March 31, 1999, the Company will make
arrangements with a third party relocation company or otherwise for the purchase
of Xx. Xxxxxxxxx'x present home at its mutually agreed upon appraised value.
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(e) Conditions of Employment. Xx. Xxxxxxxxx'x place of employment during
the term of his employment under this Agreement will be at the principal office
of the Company in St. Louis, Missouri, subject to the need for business travel.
The conditions of Xx. Xxxxxxxxx'x employment, including, without limitation,
office space and accouterments, secretarial, administrative and other support,
will be consistent with his status as a senior executive officer of the Company.
7. Termination of Employment.
(a) Death. If Xx. Xxxxxxxxx'x employment with the Company terminates
before the end of the term by reason of his death, then (1) as soon as
practicable thereafter, the Company will pay to his estate an amount equal to
his "Accrued Compensation" (defined below), (2) the unvested portion (if any)
of the Initial Option and the special restricted stock grant (described in
Sections 5(b) and (c) hereof) will become fully vested, and (3) Xx. Xxxxxxxxx'x
spouse and covered dependents will be entitled to continue to participate in
the Company's group health plan(s) at the same benefit level at which they
participated immediately before Xx. Xxxxxxxxx'x death for a period of at least
one year after Xx. Xxxxxxxxx'x death or, if longer, for the balance remaining
in the then current term of this Agreement at the time of his death, and,
thereafter, for such additional continuation period as may be available under
COBRA or under any post-retirement group health plan or arrangement in which
Xx. Xxxxxxxxx participated prior to his death. For the purposes of this
Agreement, the term "Accrued Compensation" means, as of any date, the amount of
any unpaid salary earned by Xx. Xxxxxxxxx through that date, plus a pro rata
amount of Xx. Xxxxxxxxx'x target bonus for the year in which such date occurs,
plus any additional amounts and/or benefits payable to or in respect of Xx.
Xxxxxxxxx under and in accordance with the provisions of any employee plan,
program or arrangement under which Xx. Xxxxxxxxx is covered immediately prior
to his death. For the purpose of the preceding sentence, the target for 1999
will be deemed to be $425,000.
(b) Disability. If the Company terminates Xx. Xxxxxxxxx'x employment by
reason of Xx. Xxxxxxxxx'x "disability" (defined below), then (1) as soon as
practicable thereafter, Xx. Xxxxxxxxx will be entitled to receive his Accrued
Compensation through his employment termination date, (2) the unvested portion
(if any) of the Initial Option and the special restricted stock grant
(described in Sections 5(b) and (c) hereof) will become fully vested, and (3)
Xx. Xxxxxxxxx will be entitled to continue his participation in the Company's
group health plan(s) at the same benefit level at which he and his covered
dependent(s) participated immediately before the termination of his employment
for the balance remaining in the then current term of this Agreement at the
time of such termination of employment, and, thereafter, for such additional
continuation period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Xx. Xxxxxxxxx
participated prior to the termination of his employment. For purposes of this
Agreement, the term "disability" means the inability of Xx. Xxxxxxxxx to
substantially perform the customary duties and responsibilities of his
employment
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by the Company 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.
(c) Termination by the Company for Cause or Voluntary Termination by Xx.
Xxxxxxxxx. If the Company terminates Xx. Xxxxxxxxx'x employment for "Cause"
(defined below) or if Xx. Xxxxxxxxx terminates his employment without "Good
Reason" (as defined in subsection(d) below) before the end of the then current
term of this Agreement, Xx. Xxxxxxxxx will be entitled to receive his Accrued
Compensation through the date his employment terminates, determined without
regard to pro rata bonus, plus any additional amounts and/or benefits payable
to or in respect of Xx. Xxxxxxxxx under and in accordance with the provisions
of any employee plan, program or arrangement under which Xx. Xxxxxxxxx is
covered immediately prior to his termination (including, without limitation,
Sections 5(b) and (c) hereof), to the extent vested. For purposes of this
Agreement, the Company may terminate Xx. Xxxxxxxxx'x employment for "Cause" if
(1) Xx. Xxxxxxxxx commits a felony involving moral turpitude, or (2) Xx.
Xxxxxxxxx fails or refuses to carry out the duties and responsibilities of his
employment due to his willful neglect or willful misconduct which cannot be
cured or which, if curable, is not cured within 30 days after receipt of
written notice by the Company and a reasonable opportunity to appeal to the
Board (in person or through a representative).
(d) Termination by the Company Without Cause or by Xx. Xxxxxxxxx for Good
Reason. If Xx. Xxxxxxxxx'x employment is terminated by the Company without Cause
or by Xx. Xxxxxxxxx for "Good Reason" (defined below), then Xx. Xxxxxxxxx will
be entitled to receive (1) Accrued Compensation through the termination date;
(2) a single sum payment equal to the salary that would have been payable (at
the then current rate) for a period of three years after the termination date
(or, if shorter, for the balance of the then current term of this Agreement);
(3) continued participation in the Company's group health plan(s) at the same
benefit level at which he and his covered dependent(s) participated immediately
before the termination of his employment for the balance remaining in the then
current term of this Agreement and, thereafter, for such additional continuation
period as may be available under COBRA or under any post-retirement group health
plan or arrangement in which Xx. Xxxxxxxxx participated prior to the termination
of his employment; and (4) accelerated vesting of the Initial Option and of the
restricted stock grant described in subsections (b) and (c) of Section 5. For
the purposes of this Agreement, Xx. Xxxxxxxxx may terminate his employment for
"Good Reason" if
(A) the Company materially diminishes Xx. Xxxxxxxxx'x duties,
responsibilities or employment conditions in a manner which is
inconsistent with the provisions hereof or with his status as Chief
Executive Officer of the Company (as described in Section 3 hereof) or
which has or reasonably can be expected to have a material adverse
effect on Xx. Xxxxxxxxx'x status or authority within the Company; or
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(B) the Company fails to perform or breaches its obligations under any
other material provision of this Agreement and does not correct such failure or
breach (if correctable) within 30 days following notice thereof by Xx. Xxxxxxxxx
to the Company.
(e) Termination Without Cause Following a Change in Control. If a Change in
Control (defined in Schedule B) occurs and if, within two years after the date
on which the Change in Control occurs, Xx. Xxxxxxxxx'x employment is terminated
by the Company without Cause or by Xx. Xxxxxxxxx for Good Reason, then Xx.
Xxxxxxxxx will be entitled to receive (1) Accrued Compensation through the
termination date; (2) a single sum payment equal to 2.99 times the sum of his
then current annual salary rate and target bonus; (3) continued participation in
the Company's group health plan(s) at the same benefit level at which he and his
covered dependent(s) participated immediately before the termination of his
employment for a period of one year after such termination or, if longer, until
the third anniversary of the Change in Control, and, thereafter, for such
additional continuation period as may be available under COBRA or under any
post-retirement group health plan or arrangement in which Xx. Xxxxxxxxx
participated prior to the termination of his employment; (4) continuing accrual
of benefits under the Company's SERP for a period of one year after such
termination or, if longer, the third anniversary of the Change in Control; and
(5) accelerated vesting of the Initial Option and the special restricted stock
grant (described at subsections (b) and (c) of Section 5.
8. Restrictive Covenants.
(a) Nondisclosure of Confidential Information. Xx. Xxxxxxxxx acknowledges
that, during the course of his employment hereunder, he will have access to
confidential and proprietary information, documents and other materials relating
to the Company which are not generally known to persons outside the Company
(whether conceived or developed by Xx. Xxxxxxxxx or others) and confidential
information, documents and other materials entrusted to the Company by third
parties, including, without limitation, financial information, trade secrets,
techniques, know-how, marketing and other business plans, data, strategies and
forecasts, and the substance of arrangements and agreements with customers,
suppliers and others (collectively, "Confidential Information"). Information
known by Xx. Xxxxxxxxx prior to his employment with the Company will not be
considered to be Confidential Information hereunder. Any Confidential
Information conceived or developed by Xx. Xxxxxxxxx during the period of his
employment will be the exclusive property of the Company. Except as specifically
authorized by the Company, Xx. Xxxxxxxxx will not (during or after his
employment hereunder) disclose Confidential Information to any third person,
firm or entity or use Confidential Information for his own purposes or for the
benefit of any third person, firm or entity other than (1) as may be legally
required in response to any summons, order or subpoena issued by a court or
governmental agency, or (2) Confidential Information which is or becomes
available to the general public through no act or failure to act by Xx.
Xxxxxxxxx.
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(b) Company Documents. Upon the termination of his employment, Xx.
Xxxxxxxxx will deliver to the Company all documents in whatever form and other
tangible property containing Confidential Information which are then in his
possession or control.
(c) Non-Solicitation. During employment and for a period of one year
after the termination of his employment, Xx. Xxxxxxxxx will not, directly or
indirectly, solicit, induce or otherwise attempt to influence any employee of
the Company or any subsidiary or other affiliate thereof to leave employment
therewith.
(d) Remedies. Xx. Xxxxxxxxx acknowledges and agrees that damages in
an action at law for breach of any of the provisions of this Section will be
difficult to determine and will not afford a full and adequate remedy and,
therefore, agrees that the Company, in addition to seeking damages in an action
at law, may seek specific performance and such equitable or other remedies as
may be available for breach of this Section, including, without limitation, the
issuance of a temporary or permanent injunction, without the necessity of a
bond. Except as otherwise provided in this Section 8, the provisions of this
subsection (d) shall not be construed as a waiver by Xx. Xxxxxxxxx of any rights
which Xx. Xxxxxxxxx may have to offer defenses to any request made by the
Company for injunctive relief.
(e) Survival. The obligations set forth in this Section 8 shall
survive the termination of Xx. Xxxxxxxxx'x employment.
9. Litigation Assistance. Xx. Xxxxxxxxx will cooperate with the Company,
during the term of his employment and thereafter (including following Xx.
Xxxxxxxxx'x termination of employment for any reason), by making himself
reasonably available to testify on behalf of the Company or any subsidiary or
affiliate of the Company in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to reasonably assist the Company
or any such subsidiary or affiliate in any such action, suit, or proceeding by
providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company or any
such subsidiary or affiliate, as reasonably requested; provided, however, that
the same does materially interfere with his then current professional
activities. The Company will reimburse Xx. Xxxxxxxxx, on an after-tax basis, for
all expenses reasonably incurred by him in connection with his provision of
testimony or assistance.
10. Resolution of Disputes. Any controversy or claim arising out of or
relating to this Agreement or any breach or asserted breach hereof, other than
an action or claim seeking injunctive relief under Section 8, shall be resolved
by binding arbitration, to be held in St. Louis in accordance with the rules and
procedures of the American Arbitration Association. Judgement upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Pending the resolution of any arbitration or court proceeding, the
Company will continue payment of all amounts and benefits due Xx. Xxxxxxxxx
under this Agreement. All costs and expenses of
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any arbitration or court proceeding (including fees and disbursements of
counsel) shall be borne by the respective party incurring such costs and
expenses, but the Company shall reimburse Xx. Xxxxxxxxx for such reasonable
costs and expenses in the event he substantially prevails in such arbitration
or court proceeding. Notwithstanding the foregoing, following a Change in
Control, all reasonable costs and expenses (including fees and disbursements of
counsel) incurred by Xx. Xxxxxxxxx pursuant to this section shall be paid on
behalf of or reimbursed to Xx. Xxxxxxxxx promptly by the Company; provided,
however, that Xx. Xxxxxxxxx shall repay such amounts to the Company if and to
the extent the arbitrator(s) determine(s) that any of Xx. Xxxxxxxxx'x
litigation assertions or defenses were in bad faith or frivolous.
11. Indemnification. To the extent permitted by its Certificate of
Incorporation and By-laws and subject to applicable law, the Company will
indemnify, defend and hold Xx. Xxxxxxxxx harmless from and against any claim,
liability or expense (including reasonable attorneys' fees) made against or
incurred by Xx. Xxxxxxxxx as a result of his employment with the Company or any
subsidiary or other affiliate of the Company, including service as an officer or
director of the Company or any subsidiary or other affiliate of the Company.
(b) Liability Insurance. The Company will continue and maintain a
directors and officers liability insurance policy covering Xx. Xxxxxxxxx to the
extent the Company provides such coverage for its other senior executive
officers.
12. Assignment: Binding Nature.
(a) General. The services and duties to be performed by Xx. Xxxxxxxxx
hereunder are personal and may not be assigned. This Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns and Xx.
Xxxxxxxxx and his heirs and representatives. The Company may assign this
Agreement to a successor in interest, provided that any such assignee
affirmatively adopts and agrees to fulfill all obligations to Xx. Xxxxxxxxx
hereunder and, except in the case of an assignment to Pulitzer Publishing
Company pursuant to subsection (b) of this Section 12, the Company remains
secondarily liable to Xx. Xxxxxxxxx hereunder.
(b) Effect of Merger Transactions. Upon the closing ("Closing") of the
transactions contemplated by the Agreement and Plan of Merger dated May 25,
1998, by and among Pulitzer Publishing Company, Pulitzer Inc. (a wholly-owned
subsidiary of Pulitzer Publishing Company) and Hearst-Argyle Television Inc.,
the Pulitzer Publishing Company's newspaper operations will be transferred to
Pulitzer Inc., the stock of Pulitzer Inc. will be distributed by the Pulitzer
Publishing Company to its stockholders and the Pulitzer Publishing Company (then
consisting of its broadcasting operations) will be acquired by Hearst-Argyle
Television Inc. If the Closing does not occur, this Agreement will be assigned
to and assumed by Pulitzer Publishing Company, with the result that, unless
clearly inappropriate, all references to the "Company" in this Agreement will
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thereafter be deemed to mean Pulitzer Publishing Company, and all of the
provisions of this Agreement, including, without limitation, the provisions
relating to the position, rights and entitlements of Xx. Xxxxxxxxx, will
thereafter be applied as if Pulitzer Publishing Company and Xx. Xxxxxxxxx were
the original parties thereto. The foregoing provisions of this Section 12(b)
will be inapplicable if the Closing does occur during the term of Xx.
Xxxxxxxxx'x employment under this Agreement.
13. No Impediment to Agreement. Xx. Xxxxxxxxx covenants that except as
otherwise disclosed herein, he is not, as of the date hereof, and will not be,
during the period of his employment hereunder, employed under contract, oral or
written, by any other person, firm or entity, and is not and will not be bound
by the provisions of any other restrictive covenant or confidentiality
agreement, and is not aware of any other circumstance or condition (legal,
health or otherwise) which would constitute an impediment to, or restriction
upon, his ability to enter into this Agreement and to perform the duties and
responsibilities of his employment hereunder.
14. Amendment or Waiver. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by Xx. Xxxxxxxxx and an
authorized officer of the Company. Except as set forth herein, no delay or
omission to exercise any right, power or remedy accruing to any party shall
impair any such right, power or remedy or shall be construed to be a waiver of
or an acquiescence to any breach hereof. No waiver by either party of any breach
by the other party of any condition or provision contained in this Agreement to
be performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Xx. Xxxxxxxxx or an authorized
officer of the Company, as the case may be.
15. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
16. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of Xx. Xxxxxxxxx'x employment to the
extent necessary to the intended preservation of such rights and obligations.
17. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of Delaware without reference to
principles of conflict of laws.
18. Notices. Any notice given to a party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, or express mail to
the recipient at his or its last known address.
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19. Drafting. Each party acknowledges that his or its legal counsel
participated in the preparation of and/or has had ample opportunity to fully
examine this Agreement. The parties therefore stipulate that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement to favor any
party against the other.
20. Entire Agreement. This Agreement contains the entire understanding
and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect thereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first above written.
PULITZER INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Chairman of the Board
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Pulitzer Publishing Company hereby accepts and agrees to the provisions of
Sections 5(b) and (c) and Section 12(b) of the foregoing Employment Agreement
dated December 18, 1998 between Pulitzer Inc. and Xxxxxx X. Xxxxxxxxx.
PULITZER PUBLISHING COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Chairman of the Board
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SCHEDULE A
SUMMARY OF BENEFITS
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Pulitzer Publishing Company currently provides the following employee
benefits to its senior executives. Pulitzer Inc. will provide similar benefits
to its senior executives, including the incoming senior executive.
1. Group Health. Group health benefits are provided through an 80/20 CIGNA
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indemnity plan.(1) Each executive presently pays only $2.48 per month for family
coverage under the group health plan. Retiree medical coverage is available at
slightly higher contribution levels to executives who retire under the
employer's qualified defined benefit pension plan with at least 10 years of
service.
2. Group Dental. Group dental coverage is provided through CIGNA (with two
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alternative plans). Each executive presently pays only $2.44 per month for
family dental coverage.
3. Group Life Insurance. Each senior executive is offered employer-provided
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life insurance coverage equal to 1.5 x annual earnings, subject to maximum
coverage of $250,000. The first $35,000 is provided through the employer's group
term policy; the balance is provided through the employer's group variable
universal policy. A senior executive may purchase additional coverage under the
group universal policy up to a total amount of $2,000,000.
4. Long Term Disability. Each executive is covered by employer-paid LTD
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insurance. The current monthly LTD benefit is 60% of average monthly pay
(including salary and bonus) up to a maximum monthly benefit of $10,000.
5. Qualified Savings Plan. The qualified savings plan is a combination
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401k/profit sharing plan. Senior executives may elect to defer up to 10% of
their annual salary (subject to the applicable IRS limit - currently $10,000).
Employer matching contributions are made at the rate of 50% with respect to the
first 4% of pay contributed by each employee. In addition, employer profit
sharing contributions are made at the rate of $50 per month. Eligible employees
may enter the plan after completing one year of service. Each participant
directs the investment of his/her plan account among available Fidelity mutual
funds.
6. Qualified Defined Benefit Pension Plan. The employer maintains a
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qualified defined benefit pension plan which provides a relatively modest
benefit - 1% of monthly earnings (subject to IRS limits) for the first 25 years
of service. The benefit accrual rate under the qualified defined benefit plan is
significantly lower than the accrual rate under the unqualified SERP (see the
next
___________________
(1) Several HMOs are also available. It is assumed for purposes of this
summary that senior executives will select the indemnity plan.
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paragraph). The benefit payable under the qualified defined benefit plan is
applied as an offset of the benefit otherwise payable under the SERP.
7. SUPPLEMENTAL RETIREMENT PENSION. The SERP is an unfunded, nonqualified
pension plan that provides for the payment of retirement income over and above
the pension benefit provided by the qualified pension plan. In general, the
SERP provides for the payment of an annual benefit starting at age 65 equal to
40% of a participant's average pay (salary and annual incentive bonus) during
the last three years of employment. The SERP benefit accrues ratably over 25
years of service. For example, if an executive retires with 15 years of
service, 60% (15/25) of the maximum SERP benefit will have accrued; i.e., the
annual benefit starting at age 65 will be equal to 24% (60% x 40%) of final
average pay. The benefit payable by the employer under the SERP formula is
offset by amounts payable under the employer's qualified defined benefit plan
and by the value of that portion of a participant's account under the qualified
savings plan which is derived from employer contributions.
8. VACATION AND TIME OFF. In general, vacation time starts at one week
after six months of employment and ranges to five weeks after twenty years. A
more liberal arrangement will be provided for the incoming senior executive. In
addition to vacation, there are ordinarily six holidays during each year, and
there can be as many as four personal days (including one day for an
executive's birthday).
9. RELOCATION BENEFITS. In the case of the incoming senior executive, the
employer will pay all expenses ordinarily associated with a relocation to St.
Louis. These expenses include the cost of packing and moving household goods,
traveling to the new location, interim living expenses during a transition
period, and house hunting trips for the executive and his wife. The executive
would also be entitled to reimbursement for the real estate commission and
other closing costs on the sale of his present home and any points applicable
to a loan executive may take out in purchasing a home in St. Louis. In the
event the executive ends up having to carry two home loans at the same time,
the executive will be entitled to reimbursement for the interest portion on his
old home. If the executive wishes to buy a home in St. Louis before selling his
present home, the employer will make an interest-free bridge loan to the
executive equal to the approximate equity in his present home. If the executive
cannot sell his existing residence within a certain period of time (e.g., 90
days from date of hire), the employer will make arrangements (with a third
party relocation company or otherwise) for the purchase of the executive's
residence at its appraised value. The employer will make a tax gross-up payment
to make the Executive whole for taxes incurred on the relocation payments and
reimbursements. The overall intent is that the incoming senior executive not be
out-of-pocket for move-related expenses.
10. EMPLOYEE STOCK PURCHASE PLAN. The employer maintains a qualified
employee stock purchase plan (under Section 423 of the Code). Subject to annual
limitations imposed by the Internal Revenue Code, this plan permits employees
to purchase employer stock at a 15% discount with money withheld from pay. The
plan operates on the basis of quarterly cycles. At the
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end of each cycle, the amount withheld from pay during that cycle is used to
purchase stock at the discounted price.
11. EMPLOYEE STOCK OPTIONS. Customarily, the compensation committee of the
employer's board of directors grants stock options to senior executives and
other key employees with an exercise price equal to the value of the stock on
the grant date. The options may be designated as "incentive stock options"
under Section 422 of the Internal Revenue Code or as options which do not
qualify as "incentive stock options."
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DRAFT: December 3, 1998
SCHEDULE B
DEFINITION OF CHANGE IN CONTROL
For the purposes of this Employment Agreement, a "Change in Control" shall
be deemed to have occurred if:
(A) any Person (other than the Company, any trustee or other fiduciary
holding securities under any employee benefit plan of the Company, or any
company owned, directly or indirectly, by the stockholders of the Company
immediately prior to the occurrence with respect to which the evaluation is
being made in substantially the same proportions as their ownership of the
common stock of the Company) becomes the Beneficial Owner (except that a
Person shall be deemed to be the Beneficial Owner of all shares that any
such Person has the right to acquire pursuant to any agreement or
arrangement or upon exercise of conversion rights, warrants or options or
otherwise, without regard to the sixty day period referred to in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities;
(B) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (A), (C), or
(D) of this section) whose election by the Board or nomination for election
by the Company's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of the two-year period or whose election or nomination for
election was previously so approved but excluding for this purpose any
such new director whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of
an individual, corporation, partnership, group, associate or other entity
or Person other than the Board, cease for any reason to constitute at least
a majority of the Board;
(C) the consummation of a merger or consolidation of the Company with any
other entity, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving or resulting entity) more
than 50% of the combined voting
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power of the surviving or resulting entity outstanding immediately after
such merger or consolidation; or
(D) the stockholders of the Company approve a plan or agreement for the
sale or disposition of all or substantially all of the consolidated assets
of the Company (other than such a sale or disposition immediately after
which such assets will be owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of
the common stock of the Company immediately prior to such sale or
disposition), in which case the Board shall determine the effective date
of the Change in Control resulting therefrom.
For purposes of the definition of Change in Control, (X) the term "Beneficial
Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the
Exchange Act (including any successor to such Rule); (Y) the term "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time,
or any successor act thereto; and (Z) the term "Person" shall have the meaning
ascribed to such term in section 3(a)(9) of the Exchange Act and used in
sections 13(d) and 14(d) thereof, including "group" as defined in section 13(d)
thereof. Notwithstanding anything to the contrary contained herein, the closing
of the transactions contemplated by the Agreement and Plan of Merger described
in Section 12(b) of the Employment Agreement will not constitute a Change in
Control.
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