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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement is executed as of August 12, 1997,
by and between HEARST-ARGYLE TELEVISION, INC., a Delaware corporation
("Hearst-Argyle"), and XXX XXXXXX of 000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxx 00000 ("Employee").
WHEREAS, Employee possesses special, unique and original
ability, and Hearst-Argyle desires to secure Employee's exclusive services for
the period and on the terms hereinafter mentioned, which employment Employee
desires to secure and accept,
NOW, THEREFORE, in consideration of the compensation and the
mutual provisions and conditions herein contained, the parties agree as follows:
FIRST: Hearst-Argyle hereby employs Employee to render
exclusive services to and for Hearst-Argyle as its Chairman and Co-Chief
Executive Officer and Employee agrees to render services to Hearst-Argyle in
such capacities, and shall so serve, subject, however, to such limitations,
instructions, directions, and control as the Board of Directors of Hearst-Argyle
may specify from time to time, during the period beginning on the Commencement
Date, as hereinafter defined, and extending to and terminating on December 31,
2000 (the "Expiration Date") unless terminated earlier in accordance with the
provisions hereof. The Commencement Date shall be the same as the "Effective
Time" (as such term is defined in the Amended and Restated Agreement and Plan of
Merger dated as of March 26, 1997 between The Hearst Corporation and Argyle
Television, Inc.). Employee hereby accepts the aforesaid
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employment and agrees to render his exclusive services hereunder on the terms
and conditions herein set forth.
SECOND: Hearst-Argyle agrees to pay to Employee and he agrees
to accept from Hearst-Argyle, as basic compensation for his services hereunder,
salary at the annual rate of Six Hundred Fifty Thousand Dollars ($650,000)
beginning with the Commencement Date and extending to and terminating on the
Expiration Date, payable in installments in accordance with the prevailing
payroll practices of Hearst-Argyle during the term hereof, but in no event less
frequently than twice a month.
In or about December 1998 and December 1999, Hearst-Argyle
will review Employee's compensation provisions herein contained for the purpose
of determining whether an increase in compensation should be effected in respect
of the period commencing with the 1st day of January, 1999 to December 31, 1999,
and the period January 1, 2000 to the Expiration Date, respectively.
As additional compensation hereunder, Employee shall be
eligible to receive a bonus for each calendar year during the term of this
Agreement (with such bonus to be prorated for the period from the Effective Time
through December 31, 1997), the amount and basis of the bonus to be determined
in accordance with such criteria as shall be established by the Compensation
Committee of the Board of Directors of Hearst-Argyle. It is understood and
agreed that the maximum additional compensation payable in respect of each such
year shall not exceed a sum equal to Seventy Five Percent (75%) of Employee's
base compensation for that year with the "target" bonus equal to 40% of
Employee's base compensation for
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that year, as such maximum and target percentages may be increased in the sole
discretion of the Compensation Committee of the Board of Directors of
Hearst-Argyle. The Compensation Committee may, in its discretion, award any
special bonus to Employee that it deems appropriate, notwithstanding any other
provisions set forth in this Agreement.
In determining the amount of additional compensation to be
paid to Employee hereunder, the books of Hearst-Argyle shall be absolute and
final and shall not be open to dispute by Employee. Hearst-Argyle shall pay the
additional compensation, if any, due hereunder at any time prior to March 31 of
the year following each calendar year during the term of this Agreement.
It is mutually understood and agreed that the additional
compensation hereinbefore provided shall be due and payable only for so long as
Employee shall perform services under this Agreement and, in the event
Employee's employment hereunder or this Agreement shall be terminated for any
cause, or should Hearst-Argyle assign this Agreement in accordance with the
terms of Paragraph SIXTH hereof, Hearst-Argyle shall compute the additional
compensation by limiting the amount thereof to the period commencing with the
first day of the calendar year in which such termination or assignment shall
take effect to and including the date of termination or assignment.
THIRD: To induce Hearst-Argyle to enter into this Agreement
and to pay the compensation herein provided, Employee hereby represents,
warrants and agrees to the following:
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(a) Employee will faithfully and diligently carry out
Employee's duties hereunder.
(b) Employee will work for, and render services to,
Hearst-Argyle exclusively, and that Employee will give and devote to the pursuit
of Employee's duties, exclusive time, best skill, attention and energy, and that
during the term of employment, Employee will not perform any work, render any
services or give any advice, gratuitously or otherwise, for or to any other
person, firm or corporation, which shall be inconsistent in any material respect
with Employee's duties or obligations hereunder, as reasonably determined by
Hearst-Argyle, without the prior consent of Hearst-Argyle in each such instance.
Notwithstanding the foregoing, it is the understanding of the parties hereto
that Employee shall be permitted to serve, and in certain instances to continue
to serve, as a member of the board of directors of other organizations,
including charitable or not-for-profit corporations and profit-making
corporations, but only if such board membership does not interfere or conflict
with Employee's work hereunder in any material respect and such board membership
is approved in advance by Hearst-Argyle, which approval shall not be
unreasonably withheld. Hearst-Argyle hereby approves Employee's continued
service on the Board of Directors of those organizations listed on Exhibit A
hereto.
Should there be a violation or attempted or, threatened
violation of this provision, Hearst-Argyle may apply for and obtain an
injunction to restrain such violation or attempted or threatened violation, to
which injunction Hearst-Argyle shall be entitled as
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a matter of right, Employee conceding that the services contemplated by this
Agreement are special, unique and extraordinary, the loss of which cannot
reasonably or adequately be compensated in damages in an action at law, and that
the right to injunction is necessary for the protection and preservation of the
rights of Hearst-Argyle and to prevent irreparable damage to Hearst-Argyle. Such
injunctive relief shall be in addition to such other rights and remedies as
Hearst-Argyle may have against Employee arising from any breach hereof on
Employee's part.
(c) No impediment, contractual or otherwise, exists which
limits or precludes Employee from entering into this Agreement and rendering
full performance in accordance with the terms and conditions herein provided.
FOURTH: During the period of, and after the expiration of,
this Agreement or after the termination of his employment (whether such
employment is pursuant to the terms of this Agreement or otherwise), Employee
will not use, divulge, sell or deliver to or for any other person, firm or
corporation other than Hearst-Argyle or a successor to, or a parent (direct or
indirect), or an affiliate or subsidiary of, Hearst-Argyle (hereinafter in this
paragraph collectively referred to as "HEARST-ARGYLE") any and all confidential
information and material (statistical or otherwise) relating to HEARST-ARGYLE's
business, including, but not limited to, confidential information and material
concerning broadcasting, magazines, newspapers, cable systems operations, cable
programming, books, syndication, circulation, distribution, marketing,
advertising, customers, authors, employees, literary property and
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rights appertaining thereto, copyrights, trade names, trademarks, financial
information, methods and processes incident to broadcasting, programming,
publication or printing,, and any other secret or confidential information. Upon
the termination of Employee's employment irrespective of the time, manner or
cause of termination, Employee will surrender to HEARST-ARGYLE all lists, books
and records of or in connection with HEARST-ARGYLE's business and all other
property belonging to HEARST-ARGYLE. Should there be a violation or attempted or
threatened violation by Employee of any of the provisions contained in this
Paragraph FOURTH, HEARST-ARGYLE shall be entitled to the same rights and relief
by way of injunction and other remedies as are provided for under subparagraph
(b) of Paragraph THIRD hereof.
FIFTH: Employee's employment hereunder may be terminated by
Hearst-Argyle (a) by reason of a Disability, as hereinafter defined, (b) for
Cause, as hereinafter defined, or (c) Without Cause, as hereinafter defined, all
upon payment of the sums hereinafter set forth. Employee may terminate
Employee's employment hereunder (a) voluntarily, with Good Reason, as
hereinafter defined, or (b) voluntarily, without Good Reason, subject to a
covenant not-to-compete as provided in Paragraph TENTH. In the event of
Employee's death, this Agreement shall terminate and all rights and obligations
of this Agreement shall cease except as otherwise herein provided.
In the event Employee's employment is terminated due to
Employee's death, Employee's legal representative or estate, as the case may be,
shall be entitled to receive any compensation to which
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Employee was entitled, but which Employee had not yet received, at the time of
Employee's death.
(a) For purposes of this Paragraph FOURTH, Disability shall
mean that for a period of one hundred eighty (180) consecutive days, Employee is
unable to fulfill the duties and responsibilities of Chairman and Co-Chief
Executive Officer of Hearst-Argyle because of physical or mental incapacity. If,
as a result of a Disability, Employee shall have been unable to fulfill
Employee's duties and responsibilities, and within thirty (30) days after
written Notice of Termination, as hereinafter defined, is given, Employee shall
not have returned to the performance of Employee's duties hereunder on a
full-time basis, Hearst-Argyle may terminate Employee's employment.
In the event of a termination due to Disability, Employee
shall be entitled to receive compensation through the Date of Termination, as
hereinafter defined. In the event that Employee is otherwise receiving or is
entitled to receive disability benefits at the time Employee's employment is
terminated, nothing herein contained shall be construed to terminate or
otherwise adversely affect Employee's right to receive such benefits.
(b) Employee's employment may be terminated for "Cause" by
Hearst-Argyle. For purposes of this Agreement, "Cause" shall mean (i) conviction
of a felony; (ii) willful gross neglect or willful gross misconduct in the
performance of Employee's duties hereunder; (iii) willful failure to comply with
applicable laws with respect to the conduct of Hearst-Argyle's business,
resulting in material economic harm to Hearst-Argyle; (iv) theft, fraud or
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embezzlement, resulting in substantial gain or personal enrichment, directly or
indirectly, to Employee at Hearst-Argyle's expense; (v) inability to perform the
duties and responsibilities of Employee's office as a result of addiction to
alcohol or drugs, other than drugs legally prescribed or administered by a duly
licensed physician; or (vi) continued willful failure to comply with the
reasonable directions of the Board of Directors which directions have been voted
upon and approved by a majority of such Board and of which Employee has been
made fully aware.
A termination for Cause will be deemed to have occurred as of
the date when there shall have been delivered to Employee a copy of a
resolution, duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board of Directors at a meeting of such Board
called and held for that purpose and any other purpose or purposes (after
reasonable written notice to Employee, and an opportunity for Employee, together
with Employee's counsel, to be heard before the Board), finding that, in the
good faith opinion of the Board, Employee's conduct met the definition of
termination for Cause set forth above.
In the event of a termination for Cause, Employee shall be
entitled to receive compensation through the Date of Termination, as hereinafter
defined.
(c) A termination "Without Cause" shall mean a
termination of employment by Hearst-Argyle other than due to Employee's death
or Disability or for Cause.
In the event of a termination Without Cause, Employee shall be
entitled to receive, in a lump sum payment at the time of
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such termination, an amount equal to Employee's salary provided in Paragraph
SECOND plus an amount equal to Employee's "target" bonus, as if Employee had
remained an employee of Hearst-Argyle for the longer of the duration of the term
of this Agreement or one year (the "Payment Period"). In the event Employee's
employment is terminated Without Cause, Employee shall have no duty to mitigate
damages. Notwithstanding the above, Hearst-Argyle's obligation to pay the
amounts referenced hereinabove shall be conditioned on Employee's signing a
general release in form satisfactory to Hearst-Argyle.
(d) At any time during the term of the Agreement, Employee may
voluntarily terminate Employee's employment for "Good Reason". For purposes of
this Agreement, "Good Reason" shall mean, without Employee's express written
consent, the occurrence of any of the following circumstances: (i) the removal
of Employee from the position of Chairman and Co-Chief Executive Officer of
Hearst-Argyle; (ii) the assignment to Employee of any duties or responsibilities
inconsistent with Employee's status and authority as Chairman and Co-Chief
Executive Officer, or a substantial adverse alteration in the nature or status
of Employee's duties or responsibilities from those in effect at the
commencement of this Agreement, if such assignment or alteration reduces the
duties, responsibilities, importance or scope of Employee's position, (iii) a
reduction of Employee's compensation as set forth in this Agreement; (iv) a
material breach of this Agreement by Hearst-Argyle; or (v) the relocation of the
principal executive offices of Hearst-Argyle or of Employee's principal office
to a location more
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than fifty (50) miles from New York City or the imposition of a requirement that
Employee be based anywhere other than at such principal executive offices.
Employee's right to terminate Employee's employment shall not
be affected by Employee's incapacity due to physical or mental illness.
Employee's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstances constituting Good Reason hereunder.
If Employee desires to terminate Employee's employment for
Good Reason, Employee shall first give Hearst-Argyle Notice of Termination, as
hereinafter defined, and shall allow Hearst-Argyle no less than thirty (30) days
to remedy, cure or rectify the situation giving rise to Employee's Good Reason.
If Employee terminates Employee's employment for Good Reason,
Employee shall receive the same compensation and benefits as if Employee was
terminated by Hearst-Argyle Without Cause.
Any termination of Employee's employment hereunder, whether by
Hearst-Argyle or by Employee, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a Notice
of Termination shall indicate the specific termination provision in this
Agreement relied upon and, if by Hearst-Argyle for Cause or by Employee for Good
Reason, shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for such termination.
"Date of Termination" shall mean (i) if Employee's employment
is terminated by death, the date of Employee's death, (ii) if Employee's
employment is terminated due to Disability,
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thirty (30) days after Notice of Termination is given (provided that Employee
shall not have returned to the performance of Employee's duties on a full-time
basis during such thirty (30) day period), (iii) if Employee's employment is
terminated by Hearst-Argyle Without Cause, the date specified in the Notice of
Termination, which date shall be not less than five (5) nor more than thirty
(30) days from the date Notice of Termination was given, (iv) if Employee's
employment is terminated by Employee for Good Reason, the date specified in the
Notice of Termination which date shall be not less than five (5) nor more than
thirty (30) working days from the expiration of the time to remedy, cure or
rectify the situation giving rise to Employee's Good Reason, and (v) if
Employee's employment is terminated by Hearst-Argyle for Cause, the date
specified in the Notice of Termination.
Except as otherwise set forth in this Agreement, any payments
pursuant to the provisions of this Paragraph FIFTH shall be severance payments
or liquidated damages or both, shall not be subject to any requirements as to
mitigation or offset, except as otherwise specifically provided, and shall not
be in the nature of a penalty. No payment resulting from the termination of
Employee's employment shall adversely affect Employee's entitlement to benefits
under any Hearst-Argyle benefit plan in which Employee was participating at the
time of such termination.
SIXTH: Hearst-Argyle shall have the right to transfer
Employee to any property owned or controlled, directly or indirectly, by it,
or constituting a part of Hearst-Argyle, and should such property be operated
by a successor to, or a subsidiary
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or an affiliate of, Hearst-Argyle, this Agreement shall be assignable by
Hearst-Argyle to such successor or to such subsidiary or affiliate. This right
of transfer shall be subject however to Employee's rights under Paragraph FIFTH
(d)(v). It is further understood that this Agreement and all of the rights and
benefits hereunder are personal to Employee and neither this Agreement nor any
right or interest of Employee herein or arising hereunder shall be subject to
voluntary or involuntary alienation, assignment, hypothecation or transfer by
him.
SEVENTH: Employee will accept any additional office (whether
such be that of director, officer or otherwise) to which Employee may be elected
or appointed in Hearst-Argyle or in any firm, association or corporation which
is a successor to, or a subsidiary or an affiliate of, Hearst-Argyle or in which
Hearst-Argyle holds an interest. In the event of such election or appointment,
Employee agrees to serve without extra compensation.
EIGHTH: Employee covenants and agrees that during the term
hereof and within the two (2) year period immediately following the termination
of this Agreement, regardless of the reason therefor, Employee shall not
solicit, induce, aid or suggest to (i) any employee, (ii) any author, (iii) any
independent contractor or other service provider, or (iv) any customer, agency
or advertiser of Hearst-Argyle to leave such employ, to terminate such
relationship or to cease doing business with Hearst-Argyle. Employee
acknowledges that the terms of this paragraph are reasonable and enforceable and
that should there be a violation or attempted or threatened violation by
Employee of any of the
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provisions contained in this Paragraph EIGHTH, Hearst-Argyle shall be entitled
to the same rights and relief by way of injunction as are provided for under
subparagraph (b) of Paragraph THIRD hereof. In the event that this
non-solicitation covenant shall be deemed by any court of competent
jurisdiction, in any proceedings in which Hearst-Argyle shall be a party, to be
unenforceable because of its duration, scope, or area, it shall be deemed to be
and shall be amended to conform to the scope, period of time and geographical
area which would permit it to be enforced.
NINTH: Upon the termination of Employee's employment by
Hearst-Argyle for Cause or by Employee without Good Reason, Employee agrees
that, without the express approval of Hearst-Argyle, Employee shall not, for a
period which is the lesser of two (2) years or the remaining term of this
Agreement subsequent to such termination, engage in any activity or render
service in any capacity (whether as principal, five percent (5%) shareholder,
employee, consultant or otherwise) for or on behalf of any person or persons if
such activity or service directly competes with the business of Hearst-Argyle.
It is understood and agreed that nothing herein contained shall prevent Employee
from engaging in discussions concerning business arrangements to become
effective upon the expiration of the term of this covenant not to compete. In
the event Hearst-Argyle shall not offer to renew this Agreement, the provisions
of this Paragraph NINTH shall be of no force or effect. Employee acknowledges
that the terms of this paragraph are reasonable and enforceable and that should
there be a violation or attempted or threatened violation by Employee of any of
the
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provisions contained in this Paragraph NINTH, Hearst-Argyle shall be entitled to
the same rights and relief by way of injunction as are provided for under
subparagraph (b) of Paragraph THIRD hereof. In the event that this covenant not
to compete shall be deemed by any court of competent jurisdiction, in any
proceedings in which Hearst-Argyle shall be a party, to be unenforceable because
of its duration, scope, or area, it shall be deemed to be and shall be amended
to conform to the scope, period of time and geographical area which would permit
it to be enforced.
TENTH: Hearst-Argyle and Employee acknowledge that the terms
of this Agreement are confidential and, among other things, constitute trade
secrets, the disclosure of which likely would inure to the material detriment of
Hearst-Argyle's business operations. Except as required by securities laws, FCC
regulations, other regulatory requirements, or court order, Hearst-Argyle and
Employee agree not to disclose any of the terms of this Agreement to any other
person or persons, provided, however, that Employee may make a limited
disclosure to his legal or financial advisors, or to members of his immediate
family, on condition that each such person to whom disclosure is made agrees to
maintain the confidentiality of such information and to refrain from making
further disclosure.
ELEVENTH: It is understood and agreed that this Agreement
shall be interpreted, construed and enforced in accordance with the laws of the
State of Texas' without regard to Texas, conflicts or choice of law rules.
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TWELFTH: It is understood and agreed that this Agreement
supersedes all prior agreements and understandings, if any, between
Hearst-Argyle and Employee. No provision of this Agreement may be waived,
changed or otherwise modified except by a writing signed by the party to be
charged with such waiver, change or modification.
THIRTEENTH: Each and every covenant, provision, term and
clause contained in this Agreement is severable from the others and each such
covenant, provision, term and clause shall be valid and effective,
notwithstanding the invalidity or unenforceability of any other such covenant,
provision, term or clause.
FOURTEENTH: Any notice, request, demand, waiver or consent
required or permitted hereunder shall be in writing and shall be given by
prepaid registered or certified mail, with return receipt requested, addressed
as follows:
If to Hearst-Argyle:
Hearst-Argyle Television, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000,
Attention: Secretary
If to Employee:
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
The date of any such notice and of service thereof shall be
deemed to be the date of mailing. Either party may change its address for the
purpose of notice by giving notice to the other in writing as herein provided.
FIFTEENTH: This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original,
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but all of which together shall constitute one and the same instrument.
SIXTEENTH: Hearst-Argyle and Employee agree that any claim
which either party may have against the other under local, state or federal law
including, but not limited to, matters of discrimination, arising out of the
termination or alleged breach of this Agreement or the terms, conditions or
termination of such employment, will be submitted to mediation and, if mediation
is unsuccessful, to final and binding arbitration in accordance with
Hearst-Argyle's Dispute Settlement Procedure ("Procedure") of which Employee has
received a copy. During the pendency of any claim under this Procedure,
Hearst-Argyle and Employee agree to make no statement orally or in writing
regarding the existence of the claim or the facts forming the basis of such
claim, or any statement orally or in writing which could impair or disparage the
personal or business reputation of Hearst-Argyle or Employee. The Procedure is
hereby incorporated by reference into this Agreement.
IN WITNESS WHEREOF, Hearst-Argyle and Employee have executed
this Agreement as of the date first written above.
HEARST-ARGYLE TELEVISION, INC.
By:/s/ Xxxxx X. Xxxxx
--------------------------------------
EMPLOYEE
By:/s/ Xxx Xxxxxx
--------------------------------------
Xxx Xxxxxx
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EXHIBIT A
1. Tracor
2. Tupperware
3. UDS
4. Xxxx
5. Up with People
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As of August 12, 1997
PERSONAL AND CONFIDENTIAL
Xx. Xxx Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
RE: Employment Agreement --
As of August 12, 1997
------------------------
Dear Xx. Xxxxxx:
In connection with the Employment Agreement dated as of August 12, 1997
between Hearst-Argyle Television, Inc. ("Hearst-Argyle") and you executed
immediately prior to the execution of this letter, you and Hearst-Argyle have
agreed on certain additional matters as set forth below. We have further agreed
that this letter modifies the Employment Agreement and shall be deemed
incorporated into and made a part of the Employment Agreement.
1. Life Insurance. Hearst-Argyle shall purchase a term life
insurance policy on your life providing a $3,000,000 death benefit payable to
the beneficiaries to be selected by you, and will pay the periodic premiums
thereon at competitive rates during the term of the Employment Agreement. In
lieu of purchasing all or part of such life insurance directly, Hearst-Argyle
and you may agree that Hearst-Argyle will pay you an equivalent amount (or a
portion thereof) in order to reimburse you for all or part of annual premiums
for the life insurance that you obtain.
2. Stock Options. Hearst-Argyle shall grant to Employee on or
before the Effective Date of the Employment Agreement an option to purchase
300,000 shares of Series A Common Stock of Hearst-Argyle upon the terms set
forth in the option agreement attached as Exhibit A to this letter. Nothing
contained in this letter, the Employment Agreement, or the option agreement
shall preclude the grant of any additional options to Employee, which grants
shall be made in the discretion of the Board of Directors of Hearst-Argyle.
3. Automobile. During the term of the Employment Agreement,
Hearst-Argyle shall pay or reimburse you for the costs of an automobile. The
automobile shall be of your choice with the maximum monthly payment, subject to
applicable payroll taxes and other deductions, not to exceed $1,000.
4. Vacation. During the term of the Employment Agreement, you
will be entitled to a reasonable paid vacation in accordance with the policies
of Hearst-Argyle then in effect for executives, but in no event shall such
vacation be less than the amount of vacation you are entitled to at present.
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Xx. Xxx Xxxxxx
August 12, 1997
Page -2-
5. Travel and Entertainment. You will be reimbursed for all
reasonable travel and entertainment expenses, including first class air travel
and car service for business-related travel not including normal commutation,
consistent with your position, upon submission of appropriate substantiation.
6. Retirement Planning. You, in your sole discretion, may
defer receipt of some or all of any bonus that you otherwise would be entitled
to receive under the terms of the Employment Agreement and may cause such
deferred bonus to be contributed to a vehicle for deferred compensation
established by Hearst-Argyle for such purpose. Hearst-Argyle, at its own
expense, shall promptly take all steps reasonably necessary to establish such a
vehicle for deferred compensation if so requested by Employee. Nothing contained
herein shall preclude the payment of any special bonus by Hearst-Argyle to any
such deferred compensation vehicle.
7. Tax Preparation. Hearst-Argyle will pay up to currently
$9,000 annually to you, or on your behalf, for the preparation of your annual
tax returns and related tax planning.
8. Disability. If the Employment Agreement is terminated by
Hearst-Argyle by reason of Disability of Employee, Hearst-Argyle shall pay
Employee for the remainder of the original term of the Employment Agreement a
disability benefit such that, when taken together with any group
insurance-funded benefit provided to employees by Hearst-Argyle, Employee
receives a total disability benefit equal to 60% of Employee's then current base
salary, up to a maximum of Twenty-Five Thousand Dollars ($25,000) per month.
9. MER. Employee shall participate in the Medical Expense
Reimbursement plan.
10. Club Membership. Hearst-Argyle shall reimburse Employee or
pay directly the initiation and monthly fees to join and belong to The New York
Athletic Club.
11. Benefits. In addition to the compensation to be paid to
Employee pursuant to the Employment Agreement, Employee shall further be
entitled to participate in any employee benefit programs established from time
to time for non-union employees or executives of Hearst-Argyle and any of its
subsidiaries, to the extent that executives or senior management employee of
Hearst-Argyle or its employees generally are eligible to participate in such
programs.
Please review the enclosed Employment Agreement at your
convenience in order to determine if it is consistent with your
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Xx. Xxx Xxxxxx
August 12, 1997
Page -3-
understanding of our arrangements. Assuming that it is satisfactory and that you
agree with the matters discussed in this letter, please execute all five copies
of the Employment Agreement and return them to me for execution on behalf of
Hearst-Argyle. In addition, please sign the enclosed three copies of this letter
on the signature lines provided and also return them to me.
Sincerely,
HEARST-ARGYLE TELEVISION, INC.
By:/s/ Xxxx X. Xxxxxx
--------------------------------------
Senior Vice President -- Corporate
Developement, Secretary and General
Counsel
Enclosures
ACCEPTED AND AGREED:
By:/s/ Xxx Xxxxxx
----------------------------------
Xxx Xxxxxx
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OPTION AGREEMENT
FOR EMPLOYEES
Option Agreement
under
Hearst-Argyle Television, Inc.
1997 Stock Option Plan
Date of Grant:
Name of Optionee:
Number of Shares:
Price Per Share:
Hearst-Argyle Television, Inc., a Delaware corporation (the "Company"),
hereby grants as of the date specified above (the "Date of Grant") to the
above-named optionee (the "Optionee") an option to purchase from the Company,
for the price per share set forth above, the number of shares of Series A Common
Stock, $0.01 par value per share (the "Stock"), of the Company set forth above
pursuant to the Hearst-Argyle Television, Inc. 1997 Stock Option Plan (the
"Plan"). This option is not intended to be treated as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The terms and conditions of the option granted hereby, to the extent
not controlled by the terms and conditions contained in the Plan, are as
follows:
1. The price at which each share of Stock subject to this option may be
purchased shall be the price set forth above, subject to any adjustments that
may be made pursuant to the terms of the Plan.
2. This option shall vest and become exercisable in accordance with the
provisions set forth in the Vesting Schedule
attached as Appendix A hereto.
3. Except as provided in Section 7 hereof, this option may not be
exercised unless the Optionee is in the employ of the Company or one of its
Subsidiaries at the time of such exercise.
4. The Optionee (or his or her representative, devisees or heirs, as
applicable) may exercise any portion of this option that has become exercisable
in accordance with the terms hereof as to all or any of the shares of Stock then
available for purchase by delivering to the Company written notice specifying:
(i) the number of whole shares of Stock to be purchased
together with payment in full of the aggregate
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option price of such shares, provided that this option may not be
exercised for less than one hundred (100) shares of Stock or the number
of shares of Stock remaining subject to this option, whichever is
smaller;
(ii) the address to which dividends, notices, reports,
etc. are to be sent; and
(iii) the Optionee's social security number.
Payment shall be in cash, or by certified or bank cashier's check payable to the
order of the Company, free from all collection charges, or in such other form as
may be permitted by the Committee. Only one stock certificate will be issued
unless the Optionee otherwise requests in writing. Shares of Stock purchased
upon exercise of the option will be issued in the name of the Optionee. The
Optionee shall not be entitled to any rights as a stockholder of the Company in
respect of any shares of Stock covered by this option until such shares of Stock
shall have been paid for in full and issued to the Optionee.
5. As soon as practicable after the Company receives payment for shares
of Stock covered by this option, it shall deliver to the Optionee a certificate
or certificates representing the shares of Stock so purchased. Such
certificate(s) shall be registered in the name of the Optionee. Such stock
certificate(s) shall carry such appropriate legends, and such written
instructions shall be given to the Company's transfer agent, as may be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act of 1933, any state securities laws or any
other applicable laws.
6. This option is personal to the Optionee and during the Optionee's
lifetime may be exercised only by the Optionee or his or her representative in
the event of the Optionee's Disability. In the event of Optionee's death,
options that remain exercisable under the terms of the Plan and this Option
Agreement may be exercised by the Optionee's devisees or heirs, as applicable.
This option shall not be transferable other than by will or the laws of descent
and distribution.
7. If the Optionee's employment with the Company or any Subsidiary
shall terminate, then the terms and provisions of Section 5(e) of the Plan shall
govern any options that remain unexercised as of the date of such termination.
8. If, prior to the delivery by the Company of all the shares of Stock
with respect to which this option is granted, a Change of Control (as described
in Appendix A attached hereto) shall occur, then this option shall become vested
and exercisable with respect to the shares of Stock as set forth in Appendix A
attached hereto.
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9. This option does not confer on the Optionee any right to continue in
the employ of the Company or any Subsidiary or interfere in any way with the
right of the Company or any Subsidiary to determine the terms of the Optionee's
employment.
10. This option and the terms and conditions herein set forth are
subject in all respects to the terms and conditions of the Plan, which shall be
controlling. All interpretations or determinations of the Committee (or the
Board of Directors, as applicable under the Plan) shall be binding and
conclusive upon the Optionee and his or her legal representatives on any
question arising hereunder.
11. All notices hereunder to the party shall be delivered or mailed to
the following addresses:
If to the Company:
Hearst-Argyle Television, Inc.
------------------------------
New York, New York
---------
Attention: Secretary
If to the Optionee:
--------------------------------------
--------------------------------------
Such addresses for the service of notices may be changed at any time provided
notice of such change is furnished in advance to the other party.
12. This Option Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without application of the
conflict of laws principles thereof.
IN WITNESS WHEREOF, the undersigned have caused this Option
Agreement to be duly executed as of the date first above written.
HEARST-ARGYLE TELEVISION, INC.
By:
----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
OPTIONEE:
-------------------------------------------
Name:
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APPENDIX A
VESTING SCHEDULE
I. Options to acquire [50%] shares of Stock shall automatically become
exercisable under this option on September 1, 2000; provided, however, that in
the event the Employment Agreement between the Company and Optionee dated as of
August 27, 1997 is terminated by the Company "Without Cause" (as defined
therein), (i) on or after September 1, 1998, options to acquire [16 2/3%] shares
shall become exercisable concurrently with such termination or (ii) on or after
September 1, 1999, options to acquire [33 1/3%] shares shall become exercisable
concurrently with such termination.
II. Options to acquire [16 2/3%] shares of Stock shall become exercisable when
the Market Price of the Stock equals $31 per share; options to acquire an
additional [16 2/3%] shares of Stock shall become exercisable when the Market
Price of the Stock equals $37 per share; and, an additional [16 2/3%] shares of
Stock shall become exercisable when the Market Price of the Stock equals $43 per
share. "Market Price" shall mean the price of the Stock as quoted on NASDAQ
National Market, or such other national exchange as the Stock will then be
listed, with such price having been equal to or greater than the applicable
price for a period of 10 consecutive trading days. Once vested, the options
shall not be subject to divesting notwithstanding a change in the Market Price
to below the applicable price. The applicable prices ($31.00, $37.00, and
$43.00) shall be adjusted for a stock split, stock dividend, or other
recapitalization with respect to the Stock.
III. All options that have not otherwise vested shall automatically become
exercisable under this option on September 1, 2006.
IV. In the event that, prior to delivery by the Company of all the shares of
Stock with respect to the Time Vested Options, a Change of Control (as defined
in the Plan) shall occur, then this option shall become vested and exercisable
with respect to all options that are unvested and unexercisable immediately
prior to the date of the Change of Control.
APPENDIX A - Page 1
