EXHIBIT 10.12
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CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the "Agreement") is made and entered
into as of the 3rd day of January, 1997, by and between Argyle Television, Inc..
(the "Company") and Xxxx Xxxxxx ("Employee"). Initially capitalized terms are
defined in Section 2 below.
In consideration for Employee's continued employment, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Change of Control Payment. In the event that following a Change of
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Control:
(i) Employee is terminated without Cause;
(ii) without the prior consent of Employee, Employer materially
diminishes the duties of Employee to a level where Employee's
duties are substantially dissimilar to the duties performed
by persons employed in similar positions with other similar
companies; or,
(iii) the total of employee's annual compensation (base salary and
bonus target) is reduced by 10% or more over any two-year
period following the Change of Control;
then the Company shall, within 10 days following such an event, make the Change
of Control Payment to Employee. The Change of Control Payment shall be subject
to applicable taxes and other amounts required by governmental authorities to be
withheld or deducted. The Change of Control Payment shall be made without any
deduction or offset relating to or otherwise with regard to any concept of
mitigation of loss or mitigation of damages by Employee, and without any
obligation of Employee to seek alternative employment.
2. Definitions.
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"Cause" shall mean that any one or more of the following conditions
exist:
(i) Employee has incurred a Disability;
(ii) Employee has died;
(iii) Employee has been convicted of a crime that is a felony
(other than a traffic or moving violation, such as driving
while intoxicated); or,
(iv) Employee has willfully and materially breached or habitually
neglected the duties that Employee is required to perform to
discharge the duties of the position, or if Employee commits
any material act of fraud or dishonesty during the course of
employment.
"Change of Control" shall mean:
(i) a sale or transfer by the Company or any of its subsidiaries,
of all or substantially all of the consolidated assets of (x)
the Company; (y) all of the subsidiaries; or, (z) the
Employer, to an entity that is not a subsidiary of the
Company;
(ii) within any two-year period, a majority of the Company's Board
of Directors is no longer composed of persons who were
directors at the beginning of such two-year period, unless
the continuing directors, together with the new directors who
were approved by a majority of the prior directors,
constitute a majority of the Board; or,
(iii) the Company adopts a plan of dissolution or liquidation or
liquidates or dissolves
"Change of Control Payment" shall mean the payment, in immediately
available funds, of an amount equal to the difference of (i) twice the sum of
(x) Employee's base salary at the time of the occurrence of an event specified
in clauses (i) - (iii) of Section 1 resulting in such payment, plus (y)
Employee's bonus target for the calendar year in which an event specified in
clauses (i) - (iii) in Section 1 occurs; less (ii) cash compensation received by
Employee from the Company or any of its subsidiaries subsequent to a Change of
Control
Notwithstanding the foregoing, the total of the Change of Control
Payment plus all other payments and non-cash benefits to which Employee may be
entitled (whether pursuant to the terms of this Agreement or otherwise) shall be
reduced to the maximum amount that can be paid to Employee so that the aggregate
present value of all "parachute payments" (as defined in Section 280G of the
Internal Revenue Code of 1986, as amended from time to time [the "Code"]) to
which Employee is entitled does not equal or exceed 300% of Employee's
"annualized includible compensation for the base period" as defined in the Code.
For the purpose of applying the provisions of the above limitation, the Change
of Control Payment shall be reduced first prior to reducing any other payments
or non-cash benefits constituting parachute payments under the Code.
Notwithstanding the foregoing, the Company shall not take into account any
compensation or benefits the payment of which Employee has waived in writing
prior to the payment thereof.
"Company" shall mean Argyle Television, Inc. and its successors by
merger, assignment or otherwise.
"Disability" shall refer to Employee becoming physically or mentally
disabled (as determined in good faith by the Company's Board of Directors) so
that employee is unable to perform Employee's duties for a period of more than
120 consecutive days or more than 180 days in the aggregate during any calendar
year.
"Employer" shall mean Argyle Television Inc., or such other entity
that is either the Company or one of its subsidiaries by which Employee is
employed at the time of the Change of Control.
3. Term. This Agreement shall have a term of two years, and shall
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automatically renew for additional two-year terms unless either party has given
the other party written notice of intent not to renew within 90 days prior to
the end of the then current term; provided, however, that this Agreement shall
automatically renew for a two-year term upon a Change in Control, with such new
two-year term beginning on the date of the Change in Control. Notwithstanding
the foregoing, in the event that Employee's employment with Employer is
terminated for any reason prior to a Change of Control, this Agreement shall
automatically terminate upon such termination of employment.
4. No Change in Employment Relationship. Nothing contained herein
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shall be deemed to change the currently existing employment "at will"
relationship between Employee and Employer, or otherwise to restrict or prohibit
Employer from terminating Employee at any time. Additionally, this Agreement
does not set forth or establish any payment to Employee for "severance" in the
event of termination prior to a Change in Control.
5. Notices. Any notices to be given hereunder by either party to the
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other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested and
shall be deemed delivered upon receipt at the respective addresses set forth
below. Either party may change its address for notice by giving written notice
in accordance with the terms of this Paragraph 5.
(a) If to Employee:
Xxxx Xxxxxx
______________________
______________________
(b) If to Company:
Argyle Television, Inc..
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Secretary
6. General Provisions.
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(a) Law Governing. This Agreement shall be governed by and construed in
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accordance with the Laws of the State of Texas, without application of the
conflict of law principles thereof.
(b) Invalid Provisions. If any provision of this Agreement is held to be
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illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provisions shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of such illegal, invalid or unenforceable provision there
shall be added automatically as a part of this Agreement a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
and still be legal, valid or enforceable.
(c) Entire Agreement. This Agreement sets forth the entire understanding of the
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parties with respect to the subject matter hereof and supersedes all prior
agreements or understandings, whether written or oral, with respect to the
subject matter hereof. No other terms, conditions or warranties, and no
amendments or modifications hereto, shall be binding unless made in writing and
signed by the parties hereof.
(d) Binding Effect; Assignment. This Agreement shall extend to and be binding
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upon and inure to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns. This Agreement may not be assigned by
either the Company or Employee, except that the Company shall assign this
Agreement to any successor to all or a substantial portion of the Company's or
Employer's business or assets, and the Company will require any such successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
expressly 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 had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall entitle
Employee to receive the Change of Control Payment on the date on which such
succession becomes effective.
(e) Titles. Titles of the paragraphs herein are used solely for convenience and
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shall not be used for interpretation or construing any word, clause, paragraph
or provision of this Agreement.
(f) Counterparts. This Agreement may be executed in two or more counterparts,
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each of which shall be deemed an original, but which together shall constitute
one and the same instruments.
The Company and Employee have executed this Agreement as of the date and
year specified in the first paragraph of this Agreement.
ARGYLE TELEVISION, INC.
By:
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Name:
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Title:
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EMPLOYEE
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Xxxx Xxxxxx
