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EXHIBIT 10.22
SEVERANCE COMPENSATION AGREEMENT dated as of September 5, 1996,
between LIN Television Corporation, a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxxxx (the "Executive").
WHEREAS the Company currently employs the Executive and has determined
that the Executive's services are important to the stability and continuity of
the management of the Company;
WHEREAS the Company has determined that it is in its best interest to
reinforce and encourage the Executive's continued disinterested attention and
undistracted dedication to the Executive's duties in the potentially disturbing
circumstances of a possible change in control of the Company by providing some
degree of personal financial security; and
WHEREAS to induce the Executive to remain in the employ of the
Company, the Company has determined that it is desirable to pay the Executive
the severance compensation set forth below if the Executive's employment with
the Company terminates in one of the circumstances described below following a
change in control of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, it is agreed upon between the Company
and the Executive as follows;
1. Definitions. In addition to other words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following
meanings:
(a) "Cause" shall mean:
i) the will and continued failure of Executive to
perform substantially Executive's duties with the
Company (other than any such failure resulting from
incapacity due to physical or mental illness), after
a written demand for substantial performance is
delivered to Executive by the Board or an elected
officer of the Company which specifically identifies
the manner in which the Board or the elected officer
believes that Executive has not substantially
performed Executive's duties; or
ii) (A) the conviction of, or plea of nolo contendre to,
a felony or (B) the willful engaging by Executive in
gross misconduct which is materially and demonstrably
injurious to the Company;
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in each case above, after Executive is provided an opportunity
to be heard upon 30 days written notice and a good faith
determination of Cause by at least 3/4 of the Disinterested
Directors
(b) "Change in Control" shall mean any of the following events;
i) any "person" (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the
"Act") and as used in Sections 13(d) and 14(d)
thereof, including a "group" (as defined in Section
13(d) of the Act) but excluding AT&T, the Company,
any subsidiary thereof and any trustee or fiduciary
on behalf of any Company Executive benefit plan)
becomes the "beneficial owner" (as defined in Rule
13d-3 under the Act) of securities of the Company
having at least 25% of the voting power of the
Company's then outstanding securities (unless the
event causing the 25% threshold to be crossed is an
acquisition of securities directly from the Company)
but only if at the time of such person becoming the
beneficial owner of the requisite voting power, AT&T
designees no longer hold a majority of the seats on
the Board of Directors; or
ii) the shareholders of the Company shall approve any
merger or other business combination of the Company,
any sale of all or substantially all of the Company's
assets in one or a series of related transactions or
any combination of the foregoing transactions (the
"Transactions"), other than a Transaction immediately
following which the shareholders of the Company
immediately prior to the Transaction (including
AT&T), any subsidiary thereof and any trustee or
fiduciary on behalf of any Company Executive benefit
plan own greater than 50% of the voting securities of
the surviving company (or its parent) (and, in a sale
of assets, of the purchaser of the assets)
immediately following the Transaction; provided,
however, that a Transaction which would otherwise not
result in a Change in Control because of the
resulting ownership of more than 50% of the voting
securities of the surviving company, its parent, or a
purchaser of the assets will, nonetheless, be deemed
to be a Change in Control but only in connection with
a termination for Good Reason under Section 1(d)(iv);
or
iii) within any 24 month period, the persons who were
directors immediately before the beginning of such
period (the "Disinterested
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Directors") shall cease (for any reason other
than death) to constitute at least a majority
of the Board or the board of directors of a
successor to the Company. For this purpose,
any director who was not a director at the
beginning of such period shall be deemed to
be a Disinterested Director if such director
was elected to the Board by, or on the
recommendation of or with the approval of, at
least two-thirds of the directors who then
qualified as Disinterested Directors (so long
as such director was not nominated by a
person who has entered into an agreement or
threatened to effect a Change of Control).
(c) "Date of Termination" shall mean the date on which a Notice of
Termination is given.
(d) "Good Reason" shall have the following definition:
i) Executive's annual salary or target bonus opportunity is
reduced below the higher of (A) the amount of annual salary or
target bonus opportunity in effect immediately prior to the
Change in Control or (B) the highest amount of annual salary
or target bonus opportunity in effect at any time thereafter;
ii) (A) any failure by the Company to continue in effect or
provide plans or arrangements pursuant to which the Executive
will be entitled to receive grants relating to the securities
of the Company (or any parent company) (including, without
limitation, stock options, stock appreciation rights,
restricted stock or other equity based awards) of the same
type as the Executive was participating in immediately prior
to the Change in Control (hereinafter referred to as
"Securities Plans") or providing substitutes for such
Securities Plans which in the aggregate provide substantially
similar economic benefits; or (B) the taking of any action by
the Company which would adversely effect the Executive's
participation in, or benefits under, any such Securities Plan
or its substitute if in the Aggregate the Executive is not
provided substantially similar economic benefits; provided,
however, that for these purposes, any determination of whether
Good Reason exists under (A) or (B) of this subsection (ii)
because the Executive is or is not provided substantially
similar economic benefits in the aggregate will be made with
due consideration given to such Executive's base salary, other
cash compensation and any other equity based incentive
programs to which the Executive is also entitled to receive,
and not solely on the basis of whether the Executive is or is
not entitled or eligible to receive equity based incentive
compensation;
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iii) Executive's duties and responsibilities or, in the aggregate,
the program of retirement and welfare benefits offered to
Executive are materially and adversely diminished in
comparison to the duties and responsibilities or the program
of benefits, in the aggregate, enjoyed by Executive on the
Effective Date; provided, however, that Good Reason shall not
be deemed to exist solely as a result of changes in
Executive's duties and responsibilities which are directly
caused by the Company's ceasing to be a publicly held company
or its becoming a wholly-owned subsidiary of another company;
iv) in the event of a Transaction that is deemed to be a Change in
Control solely as a result of Section 1(b)(ii) of this
Agreement, Executive is removed from the position he held with
the Company prior to such Transaction (or fails to hold the
comparable position in the parent company following such
Transaction) or his duties or responsibilities are adversely
diminished in a manner that would be Good Reason under Section
1(d)(iii) above;
v) Executive is required to be based at a location more than 50
miles from the location where Executive was based and
performed services on the Effective Date, or if Executive is
required to substantially increase his or her business travel
obligations.
Executive must give notice in writing within 90 days alter the
Executive has knowledge of the event forming the basis of Good
Reason, setting forth the particulars of such event and the
reason why he believes in good faith that Good Reason exists.
The Company shall have 30 days within which to cure such event
if it disagrees with the Executive.
2. Severance Compensation Trigger. Executive will be entitled to
severance compensation as set forth in section 3 ("Severance
Compensation") in the event Executive's employment is terminated
within two years after a Change in Control (i) by the Company without
Cause, or (ii) by Executive within 90 days after Executive has
knowledge of the occurrence of an event constituting Good Reason.
Notwithstanding the foregoing, Executive will not be entitled to
Severance Compensation in the event of a termination of employment on
account of:
(a) Death or Disability (illness or injury preventing Executive
from performing his duties, as the existed immediately prior
to the illness or injury, on a full time basis for 180
consecutive business days);
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(b) Retirement (voluntary late, normal or early retirement under a
pension plan sponsored by the Company, as defined in such
plan); or
(c) Qualified Sale of Business. (the sale of a business unit in
which Executive was employed before such sale and Executive
has been offered employment with the purchaser of such
business unit on substantially the same terms under which he
worked for the Company, including severance protection).
3. Severance Compensation.
(a) In the event of a Severance Compensation Trigger, the
Executive shall be entitled to the Severance Compensation
provided below:
i) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of
Termination, the Company shall pay to the Executive
not later then the tenth day following the Date of
Termination a lump sum severance payment equal to the
sum of:
(x) an amount equal to two times (2x) the
Executive's annual base salary in effect on
the Date of Termination (the "Base Salary"),
(y) an amount equal to two times (2x)
(1) the bonus compensation paid to the
Executive with respect to the last
complete fiscal year, and
(2) the contribution, if any, paid by
the Company for the benefit of the
Executive to any 401(k) Plan in the
last complete fiscal year,
(z) the present value, determined as of the Date
of Termination, of the sum of:
(3) all benefits which have accrued to
the Executive but have not vested
under the LIN Television Corporation
Retirement Plan (the "Retirement
Plan") as of the Date of
Termination, and
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(4) all additional benefits which would
have accrued to the Executive under
the Retirement Plan if the Executive
had continued to be employed by the
Company on the same terms the
Executive was employed on the Date
of Termination from the Xxxx of
Termination to the date 12 months
after the Date of Termination.
For purposes of this Section, the present value of a future
payment shall be calculated by reference to the actuarial
assumptions (including assumptions with respect to interest
rates) in use immediately prior to the Change in Control for
purpose of calculating actuarial equivalents under the
Retirement Plan.
ii) The Company shall arrange to provide the Executive
for a period of 24 months following the Date of
Termination or until the Executive's earlier death,
with life, health, disability and accident insurance
benefits and the package of "executive benefits"
substantially similar to those which the Executive
was receiving immediately prior to the Notice of
Termination, or immediately prior to a Change in
Control, if greater provided however, that Executive
shall be obliged to continue to pay that proportion
of premiums paid by the Executive immediately prior
to the change in control.
iii) The Company shall accelerate the exercise date of all
stock options granted to the Executive under the 199
Stock Incentive Plan and the 1994 Stock Adjustment
Plan (the "Options") which are not exercisable on the
Date of Termination, to the end that such Options
shall be immediately exercisable.
iv) The Executive shall have the right within one year
following the later of the Change in Control or the
exercise of each Option to sell to the Company shares
of Common Stock acquired at any time upon exercise of
an Option at a price equal to the average market
price of the Common Stock for the 30 day period
ending on the date prior to the date of the Change in
Control.
b) If the Severance Compensation under this Section 3, either
alone or together with other payments to the Executive from
the Company, would constitute an "excess parachute payment"
(as defined in Section 280G of the Code), such
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Severance Compensation shall be reduced to the largest amount
that will result in no portion of the payments under this
Section 3 being subject to the excise tax imposed by Section
4999 of the Code or being disallowed as deductions to the
Company under Section 280G of the Code.
4. No Obligation To Mitigate Damages: No Effect on Other Contractual
Rights.
(a) The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by
any compensation earned by the Executive as the result of
employment by another employer after the termination of the
Executive's employment, or otherwise.
(b) The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or
in any way diminish the Executive's existing rights, or rights
which would accrue solely as a result of the passage of time,
under any Benefit Plan, Incentive Plan or Securities Plan,
employment agreement or other contract, plan or arrangement of
the Company.
5. Successors.
(a) The Company will require any successors or assign (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all the business and/or
assets of the Company by agreement in form and substance
satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company
would be required to perform it if no such succession or
assignment had taken place. Any failure of the Company to
obtain such agreement prior to the effectiveness of any such
succession or assignment shall be a material breach of this
Agreement and shall entitle the Executive to terminate the
Executive's employment for Good Reason. As used in this
Agreement, the "Company" shall mean the Company as
hereinbefore defined and any successor or assign to its
business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 5 or which
otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
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(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should
die while any amounts are still payable to the Executive
under, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.
(c) In the event of a liquidation of the Company, the payment
provided for hereunder shall be made before any property or
asset of the Company is distributed to-any holder of common
stock.
6. Employment. The Executive agrees to be bound by the terms and
conditions of this Agreement and to remain in the employ of the
Company during any period following any public announcement by any
person of any proposed transaction or transactions which, if effected,
would result in a Change in Control until a Change in Control has
taken place or, in the opinion of the Board of Directors of the
Company, such person has abandoned or terminated its efforts to effect
a Change in Control. Subject to the foregoing, nothing contained in
this Agreement shall impair or interfere in any way with the right of
the Executive to terminate the Executive's employment or the right of
the Company to terminate the employment of the Executive with or
without cause prior to a Change in Control. Nothing contained in this
Agreement shall be construed as a contract of employment between the
Company and the Executive or as a right of the Executive to continue
in the employ of the Company or as a limitation of the right of the
Company to discharge the Executive with or without cause prior to a
Change in Control.
7. Legal Fees. In the event that any legal action is required to enforce
the Executive's rights under this Agreement, the Executive, if the
Executive is the prevailing party, shall be entitled to recover from
the Company any expenses for attorneys' fees and disbursements
reasonably incurred by the Executive.
8. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
9. Confidentiality: Executive shall not, without the prior written
consent of the Company, divulge, disclose or make accessible to any
other person, partnership, corporation or other entity any
Confidential Information pertaining to the business of the Company,
except (i) while employed by the Company, or (ii) when required by
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law to do so. For these purposes, "Confidential Information" shall
mean non-public information concerning the financial data, strategic
business plans, product development (or other proprietary product
data), customer lists, marketing plans and any other nonpublic,
proprietary and confidential information of the Company and its
subsidiaries that is not otherwise available to the public or has not
become publicly available through any breach of fiduciary duty.
10. Nonsolicitation: For a period of one year following the Executive's
termination of employment, the Executive shall not contact,
communicate with or solicit in any fashion any employee, consultant,
customer or advertiser who, at the time of such termination and at any
time during the preceding twelve-month period was employed by,
employed or otherwise had business dealings with, the Company for the
purpose of causing such employee, consultant, customer or advertiser
(i) to terminate such person's relationship with the Company or (ii)
to be employed by, to employ or otherwise to have business dealings
with any business, whether or not incorporated, in any television
markets served by the Company at the time of termination.
11. Release. As a condition to the receipt of any payments hereunder; the
Executive shall deliver to the Company, in form and substance
reasonably acceptable to the Company, a written release of the
Company, its officers, directors and shareholders from all claims of
whatever nature, other than as arising under the terms hereof or under
any benefit plans of the Company to which the Executive is otherwise
entitled.
12. Notice. For purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage
prepaid. Notice may be given to either party at the present principal
place of business of the Company or such other place as the party to
receive such notice shall notify the other.
13. Modification or Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and the
Company. No waiver by a party hereto at any time of any breach by
another party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or conditions.
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14. Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by any of the parties which are not set forth
expressly in this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LIN TELEVISION CORPORATION, EXECUTIVE,
By: By:
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Title: Title:
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