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EXHIBIT 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of February 28, 1997 by and between Sunrise Television Corp., a
Delaware corporation (hereinafter, together with its successors, referred to as
the "Company"), and its Subsidiary, STC Broadcasting, Inc., a Delaware
corporation (hereinafter, together with its successors, referred to as "STC"),
on the one hand, and Xxxxxx X. Xxxxx (hereinafter referred to as the
"Executive"), on the other hand.
WHEREAS, pursuant to an Asset Purchase Agreement (as hereinafter
defined) STC, has agreed to acquire (the "Acquisition") television broadcast
stations WEYI, Channel 25, in Saginaw, Michigan; WROC-TV, Channel 8, in
Rochester, New York; and KSBW, Channel 8, in Salinas, California (the foregoing
stations and such other stations as are owned, directly or indirectly, by the
Company, STC, or their Subsidiaries, from time to time, and including
television station WTOV-TV, Channel 9, Steubenville, Ohio, collectively, the
"Stations");
WHEREAS, the Company and STC desire to employ the Executive in an
executive capacity with the Company and STC, and the Executive desires to be
employed by the Company and STC in said capacity; and
WHEREAS, the parties hereto desire to set forth in writing the terms
and conditions of their understandings and agreements.
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises contained herein and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, subject to the
consummation of the Acquisition, the parties hereto hereby agree as follows:
1. Definitions.
(a) Accrued Benefits means (i) all salary earned
or accrued through the date the Executive's employment is terminated,
(ii) reimbursement for any and all monies advanced in connection with
the Executive's employment for reasonable and necessary expenses
incurred by the Executive through the date the Executive's employment
is terminated; and (iii) all other payments and benefits to which the
Executive may be entitled under the terms
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of any applicable compensation arrangement or benefit plan or program
of the Company or STC, including any earned and accrued, but unused
vacation pay.
(b) Act means the Securities Exchange Act of
1934, as amended.
(c) Affiliate has the meaning given such term in
Rule 12b-2 of the Act.
(d) Asset Purchase Agreement means that certain
Asset Purchase Agreement dated as of November 4, 1996, by and among
Xxxxx Television of Michigan, L.P., Xxxxx Television of Michigan
License, L.P., Xxxxx Television of Rochester, L.P., Xxxxx Television
of Rochester License, L.P., Xxxxx Television of Salinas-Monterey,
L.P., Xxxxx Television of Salinas-Monterey License, L.P., as Sellers,
and STC, formerly known as STV Acquisition Company, as Buyer.
(e) Board means, as long as the Company owns all
the capital stock of STC, the board of directors of the Company; in
all other cases, Board means the board of directors of STC.
(f) Cause means (i) the Executive's conviction of
any crime (other than minor traffic offenses and other similar minor
infractions), (ii) the Executive's breach of his obligations under
this Agreement, (iii) the Executive's insubordination or fraud or
dishonesty in connection with his employment, (iv) the Executive's
gross negligence or willful misconduct injurious to the Company, STC,
their Subsidiaries or the Stations, (v) the Executive's refusal to
perform his duties as an employee of the Company or STC for a reason
other than mental or physical disability, (vi) the breach by the
Company, STC, or their Subsidiaries of any financial covenant
contained in any agreement binding on the Company, STC, or their
Subsidiaries that is not waived prior to becoming a default or event
of default under such agreement, (vii) the breach by the Company, STC,
or their Subsidiaries of any covenant (other than a financial
covenant) in any agreement in respect of borrowed money that was
caused by the willful omission or commission of the Executive, or
(viii) the Stations' failure (taken as a group) to meet at least 90%
of their budget on a rolling two year basis, as such budget was
recommended by the Chief Executive Officer of the Company and approved
by the Board and the Partnership. Notwithstanding the above, the
occurrence of
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any of the events specified in clause (ii) above shall not constitute
Cause unless the Company or STC gives the Executive written notice
that such event constitutes Cause, and the Executive thereafter fails
to cure such event within 30 days after receipt of such notice.
(g) Change of Control shall have the meaning
given to such term in the Partnership Agreement.
(h) Class B Interests shall have the meaning
given to such term in the Partnership Agreement.
(i) COBRA means the Consolidated Omnibus
Reconciliation Act of 1985.
(j) DMA means a Designated Market Area as defined
by X.X. Xxxxxxx & Co.
(k) Employment Period means the period during
which the Executive is employed by the Company or STC
(l) Excluded Markets shall mean the following
DMAs: (i) Santa Barbara, California; (ii) Palm Springs, California;
(iii) Anchorage, Alaska; (iv) Fairbanks, Alaska, (v) Utica, New York,
(vi) Elmira, New York; (vii) Watertown, New York; and (ix) Binghamton,
New York.
(m) Excluded Stations means the acquisition,
ownership or investment, after the date hereof, by the Executive or
his Affiliate of up to three (3) television broadcast stations in DMAs
other than the Excluded Markets and those in which the Stations are
located, provided, however, that each opportunity to acquire or invest
in each such station by the Executive or his Affiliate (i) shall have
been presented to the Board in writing prior to such acquisition or
investment by the Executive or his Affiliate, and (ii) the Board shall
have declined in a reasonably prompt manner, in writing, to make such
acquisition or investment on behalf of the Company, STC or their
Subsidiaries.
(n) Good Reason means (i) any material breach by
the Company or STC of this Agreement, or (ii) any significant
reduction, approved by the Board without the Executive's written
consent, in the
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Executive's title, duties or responsibilities other than for Cause.
Notwithstanding the above, the occurrence of any of the events
described above will not constitute Good Reason unless the Executive
gives the Company and STC written notice within 30 days after the
occurrence of any of such events, that such event constitutes Good
Reason, and the Company or STC thereafter fails to cure the event
within 30 days after receipt of such notice.
(o) Xxxxx Muse means Hicks, Muse, Xxxx & Xxxxx
Incorporated, a Delaware corporation, and its Affiliates and its and
their respective officers, directors, and employees (and members of
their respective families and trusts for the primary benefit of such
family members).
(p) Partnership means Sunrise Television
Partners, L.P., a Delaware limited partnership.
(q) Partnership Agreement means the Limited
Partnership Agreement governing the Partnership, as the same may be
amended from time to time in accordance with its terms.
(r) Person means any "person", within the meaning
of Sections 13(d) and 14(d) of the Act, including a "group" as therein
defined.
(s) Subsidiary means, with respect to any Person,
any other Person of which such first Person owns the majority of the
economic interest in such Person or owns or has the power to vote,
directly or indirectly, securities representing a majority of the
votes ordinarily entitled to be cast for the election of directors or
other governing Persons.
2. Term of Employment. Unless earlier terminated in
accordance with the terms of this Agreement, the Executive's Employment Period
shall commence on the date of the consummation of the Acquisition (the
"Employment Date") and shall end upon the fifth anniversary of the Employment
Date; provided, however, that such Employment Period shall be extended for
successive terms of one year each unless either party advises the other, at
least 120 days prior to the end of the initial term or annual extension, as the
case may be, that it will not agree to extend this Agreement.
3. Duties. During the Employment Period, the Executive
(i) shall serve as President and Chief Executive Officer of the Company and
Chief Executive
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Officer of STC, (ii) shall report directly to the Board and to the Chairman of
the Board, (iii) shall, subject to and in accordance with the authority and
direction of the Board and the Chairman of the Board have such authority and
perform in a diligent and competent manner such duties as may be assigned to
him from time to time by the Board and the Chairman of the Board, and (iv)
shall devote his best efforts and such time, attention, knowledge and skill to
the operation of the Stations and to the other business and affairs of the
Company, STC, and their Subsidiaries as shall be necessary to manage and
supervise the Stations and the other business and affairs of the Company, STC
and their Subsidiaries. The Executive shall not, however, be required to
relocate his place of residence.
4. Compensation. During the Employment Period, the
Executive shall be compensated as follows:
(a) the Executive shall receive, at such
intervals and in accordance with such Company or STC policies as may
be in effect from time to time, an annual salary (pro rata for any
partial year) equal to $250,000.00, which salary shall be subject to
appropriate increase, as determined by the sole discretion of the
Board, as additional Stations are acquired by the Company, STC and
their Subsidiaries.
(b) the Executive shall be eligible to receive an
annual bonus for each fiscal year of the Company subsequent to 1996
calculated based upon criteria established by the Board at the
beginning of each fiscal year and adjusted from time to time;
(c) the Executive shall be reimbursed, at such
intervals and in accordance with such Company policies as may be in
effect from time to time, for any and all reasonable and necessary
business expenses incurred by him for the benefit of the Company, STC
and their Subsidiaries, including but not limited to travel expenses
and other expenses as reflected in budgets submitted and approved by
the Board from time to time; and
(d) the Executive shall be included, to the
extent eligible thereunder, in any and all plans providing general
benefits for the Company's or STC's employees (as approved by the
Board and in effect from time to time), including but not limited to,
group life insurance, accidental death and dismemberment insurance,
business travel accident insurance, disability, medical, dental,
pension/savings plans, and supplemental pension/savings
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plans, and shall be provided any and all other benefits and
perquisites made available to other employees of comparable status and
position at the expense of the Company or STC on a comparable basis.
5. Termination of Employment.
(a) All Accrued Benefits to which the Executive
(or his estate or beneficiary) is entitled shall be payable in cash
promptly upon termination of his Employment Period, except as
otherwise specifically provided herein, or under the terms of any
applicable policy, plan or program.
(b) Any termination by the Company or STC, or by the
Executive, of the Employment Period shall be communicated by written
notice of such termination to the Executive, if such notice is
delivered by the Company or STC, and to the Company and STC if such
notice is delivered by the Executive, each in compliance with the
requirements of Paragraph 12 hereinbelow.
(c) If prior to the fourth anniversary of the
Employment Date, the Employment Period is terminated by the Executive
for Good Reason or by the Company or STC for any reason other than
Cause or the Executive's death, permanent disability (as defined in
the Company's or STC's Board-approved disability plan or policy, as in
effect from time to time) or retirement (as defined in the Company's
or STC's Board-approved retirement plan or policy, as in effect from
time to time), then, as his exclusive right and remedy in respect of
such termination:
(i) the Executive shall be entitled to
receive from the Company or STC his Accrued Benefits, except
that, for this purpose, Accrued Benefits shall not include any
entitlement to severance under any Company or STC severance
policy generally applicable to the Company's or STC's salaried
employees;
(ii) the Executive shall receive from the
Company or STC, as long as the Executive does not violate the
provisions of Paragraph 6 hereof and, if such termination is
as a result of a Change of Control pursuant to Paragraph 5(d)
hereof, as long as the Executive continues to abide by his
obligations pursuant to Paragraph 5(d), severance pay equal to
the Executive's then current monthly base
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salary, payable in accordance with the Company's or STC's
regular pay schedule, for 12 months from the date of
termination of employment or until the third anniversary of
the Employment Date, whichever is the longer period; and
(iii) the Executive shall continue to be
covered at the expense of the Company or STC by the same or
equivalent medical, dental, and life insurance coverages as in
effect for the Executive immediately prior to termination of
his employment, until the earlier of (A) the expiration of the
period for which he receives severance pay pursuant to clause
(ii) above or (B) the date the Executive has commenced new
employment and has thereby become eligible for comparable
benefits, subject to the Executive's rights under COBRA.
(d) In the event a Change of Control shall occur
prior to the fourth anniversary of the Employment Date, the Company
(or STC) or the Executive may, at either's option, terminate the
Executive's employment concurrently with such Change of Control, in
which case the Executive shall receive, as his exclusive right and
remedy in respect of such termination, the same benefits as stated in
clauses (i) through (iii) of Paragraph 5(c) hereinabove; provided that
the Executive agrees that he shall cooperate fully with any effort by
the Board to negotiate or enter into a transaction that would result
in a Change of Control, including, without limitation, participating
in meetings with prospective investors, acquirors or others, including
financing sources and legal and other advisors. In addition, the
Executive agrees that for a period of 6 months following a Change of
Control, the Executive will make himself reasonably available, upon
reasonable advance notice, to provide such reasonable transitional
assistance to the Person acquiring the Company or STC and its
Subsidiaries as a result of a Change of Control, as the Person whose
transaction has resulted in a Change of Control shall reasonably
request.
(e) Any amounts payable to the Executive in
installments pursuant to this Paragraph 5 may, at the option of
Company or STC, be paid in a lump sum rather than in installments as
provided above. In any event, all such amounts (whether paid in
installments or in a lump sum) shall be considered severance payments
and be in full and complete satisfaction of the obligations of the
Company or STC to the Executive in connection with the termination of
the Executive.
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(f) Notwithstanding anything else contained
herein, if the Executive voluntarily terminates his employment without
Good Reason, or the Company or STC terminates the Executive for Cause
or the Executive is terminated by reason of death or disability, all
of his rights to severance from the Company or STC (including pursuant
to any plan or policy of the Company or STC) shall terminate
immediately, except the right to payment for Accrued Benefits (other
than severance) in respect of periods prior to such termination.
(g) Notwithstanding anything else contained
herein, the Partnership Agreement shall exclusively govern and control
the vesting and/or forfeiture of the Class B Interests held by
Executive or Executive's Affiliate in the Partnership.
6. Further Obligations of the Executive.
(a) During and following the Executive's employment
by the Company or STC, the Executive shall hold in confidence and not
directly or indirectly disclose or use or copy or make lists of any
confidential information or proprietary data of the Company, STC or
their Subsidiaries except to the extent authorized in writing by the
Board or required by any court or administrative agency, other than to
an employee of the Company, STC or their Subsidiaries or a Person to
whom disclosure is reasonably necessary or appropriate in connection
with the performance by the Executive of duties as an executive of the
Company or STC. Confidential information shall not include any
information known generally to the public. All records, files,
documents and materials, or copies thereof, relating to the Company's,
STC's or their Subsidiaries' business which the Executive shall
prepare, or use, or come into contact with, shall be and remain the
sole property of the Company, STC, or their Subsidiaries, as the case
may be, and shall be promptly returned by the Executive to the owner
upon termination of the Executive's employment with the Company and
STC.
(b) Except with the Board's prior written
approval, during the Employment Period and for two years (or one year,
if Xxxxx Muse and its Affiliates cease to own, directly or indirectly,
any of the Stations) after the termination of the Employment Period or
during any time the Executive is receiving severance payments under
this Agreement, the Executive shall not, directly or indirectly:
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(i) solicit, entice, persuade or induce
any employee of the Company, STC or their Subsidiaries to
terminate his employment by the Company, STC or their
Subsidiaries or to become employed by any Person other than
the Company, STC or their Subsidiaries; or
(ii) approach any such employee for any
of the foregoing purposes; or
(iii) authorize, solicit or assist in the
taking of such actions by any third party.
(c) During the Employment Period and for two
years (or one year, if Xxxxx Muse or its Affiliates cease to own,
directly or indirectly, any of the Stations after the termination of
the Employment Period and during any time the Executive is receiving
severance payments under this Agreement, the Executive shall not,
directly or indirectly, engage, participate, make any financial
investment in, or become employed by or render advisory or other
services to or for any Person or other business enterprise
(other than the Company, STC and their Subsidiaries and Affiliates)
having or operating a television station within the DMA of any of the
Stations, other than a television station in the Excluded Markets and
any Excluded Station (any of the foregoing activities being referred
to herein as "Competitive Activities"). The foregoing covenant
respecting Competitive Activities shall not be construed to preclude
the Executive from (i) making any investments (that are non-
attributable interests under the rules, regulations or policies of the
Federal Communications Commission) in the securities of any company,
whether or not engaged in competition with the Company, STC or their
Subsidiaries, to the extent that such securities are actively traded
on a national securities exchange or in the over-the-counter market in
the United States or any foreign securities exchange and such
investment does not exceed one percent of the issued and outstanding
shares of such company or give the Executive the right or power to
control or participate directly in making the policy decisions of such
company, or (ii) during the second year after the termination of the
Employment Period only (to the extent applicable in the event Xxxxx
Muse or its Affiliates continue to own directly or indirectly any of
the Stations), becoming employed by or rendering advisory or other
services to or for any Person or other business enterprise having or
operating a number of television broadcasting stations in a number of
different DMAs, one or more of which are located within the DMA of any
of the Stations, provided that (A) no more than 25% of the broadcast
cash flow generated by such Person or other
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business enterprise is derived from television broadcast stations
located with the DMAs of any of the Stations and (B) the Executive
does not work directly for the television broadcast stations located
within the DMA's of any of the Stations.
(d) If any court determines that any portion of
this Paragraph 6 is invalid or unenforceable, the remainder of this
Paragraph 6 shall not thereby be affected and shall be given full
effect without regard to the invalid provisions. If any court
construes any of the provisions of this Paragraph 6, or any part
thereof, to be unreasonable because of the duration or scope of such
provision, such court shall have the power to reduce the duration or
scope of such provision and to enforce such provision as so reduced.
(e) The Executive hereby acknowledges and agrees
that damages will not be an adequate remedy for the Executive's breach
of any of his covenants contained in this Paragraph 6, and further
agrees that the Company and STC and their Subsidiaries shall be
entitled to obtain appropriate injunctive and/or other equitable
relief for any such breach, without the posting of any bond or other
security.
7. Successors. The Company or STC may assign its rights
under this Agreement to any successor to all or substantially all the assets of
the Company or STC, by merger or otherwise, and may assign or encumber this
Agreement and its rights hereunder as security for indebtedness of the Company
and STC and their Subsidiaries. Any such assignment by the Company or STC
shall remain subject to the Executive's rights under Paragraph 5 hereof. The
rights of Executive under this Agreement may not be assigned or encumbered by
the Executive, voluntarily or involuntarily, during his lifetime, and any such
purported assignment shall be void ab initio. However, all rights of the
Executive under this Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, estates, executors,
administrators, heirs and beneficiaries. All amounts payable to the Executive
hereunder shall be paid, in the event of the Executive's death, to the
Executive's estate, heirs or representatives.
8. Enforcement. The provisions of this Agreement shall
be regarded as divisible, and if any of said provisions or any part thereof are
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby.
9. Amendment. This Agreement may not be amended or
modified at any time except by a written instrument approved by the Board,
consented to in writing by the
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Partnership, and executed by the Company and STC and the Executive; provided,
however, that any attempted amendment or modification without such approval,
consent and execution shall be null and void ab initio and of no effect.
10. Payments Due Under this Agreement. Any payments due
or required to be made pursuant to the terms of this Agreement may be made by
the Company, STC or its Subsidiaries as determined in the sole discretion of
the Board.
11. Withholding. The Company and STC shall be entitled
to withhold from any amounts to be paid to the Executive hereunder any federal,
state, local, or foreign withholding or other taxes or charges which it is from
time to time required to withhold. The Company and STC shall be entitled to
rely on an opinion of counsel if any question as to the amount or requirement
of any such withholding shall arise.
12. Controlling Provision. Notwithstanding any other
provision hereof, as long as STC continues to only own non-voting securities in
Xxxxx Acquisition Company, the Board shall have no authority to direct or
control the management of Xxxxx Acquisition Company or television broadcast
station WTOV-TV, Channel 9, Steubenville, Ohio.
13. Governing Law. This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Texas, without regard to principles of conflicts of law of
Texas or any other jurisdiction.
14. Notice. Notices given pursuant to this Agreement
shall be in writing and shall be deemed given when received and if mailed,
shall be mailed by United States registered or certified mail, return receipt
requested, addressee only, postage prepaid:
If to the Company:
Sunrise Television Corp.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000,
Attention: Xxxxxxxx X. Xxxxxx, Xx.
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If to STC:
STC Broadcasting, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000,
Attention: Xxxxxxxx X. Xxxxxx, Xx.
If to the Executive:
Xxxxxx X. Xxxxx
000 Xx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as the party to be notified shall have given to the
other.
15. No Waiver. No waiver by either party at any time of
any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by the other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at any time.
16. Headings. The headings herein contained are for
reference only and shall not affect the meaning or interpretation of any
provision of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement
in one or more counterparts, each of which shall be deemed one and the same
instrument, as of the day and year first written above.
SUNRISE TELEVISION CORP.
By: /s/ XXXXXXXXX X. XXXXXXXXX
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Xxxxxxxxx X. Xxxxxxxxx
Vice President
STC BROADCASTING, INC.
By: /s/ XXXXXXXXX X. XXXXXXXXX
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Xxxxxxxxx X. Xxxxxxxxx
Vice President
EXECUTIVE:
/s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
Signature Page to Executive Employment Agreement
