BELO CORP.
CHANGE IN CONTROL SEVERANCE PLAN
EFFECTIVE AS OF OCTOBER 1,
2007,
AS AMENDED JULY 24, 2008 AND MARCH 3, 2009
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4. Effect of a Change in Control on Long-Term
Incentive Compensation Awards
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5. Termination of Employment
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6. Certain Additional Payments by the
Company
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8. No Mitigation or Offset; Enforcement of the
Plan
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9. Insurance and Indemnification
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14. Amendment or Modification
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20. Headings and References
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BELO CORP.
CHANGE IN CONTROL SEVERANCE PLAN
1. Purpose of the Plan . The Board
of Directors (the “ Board ”) of Belo Corp. (the
“ Company ”) recognizes the importance to the
Company and its shareholders of ensuring that the Company and its
subsidiaries have the continued dedication and leadership of the
Company’s management team, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined below). The
Board recognizes that the possibility of a Change in Control and
the uncertainty it may create among management may result in the
departure or distraction of management personnel to the detriment
of the Company and its shareholders. Therefore, the Board has
decided to adopt this Change in Control Severance Plan (the “
Plan ”) in order to encourage the retention of
management and to reduce the level of uncertainty and distraction
that is likely to result from a Change in Control or a potential
Change in Control. The Plan is intended to qualify for purposes of
ERISA (as defined below) as an unfunded welfare plan maintained by
the Company for the purpose of providing benefits for a select
group of management or highly compensated employees exempt from the
reporting and disclosure requirements of ERISA.
2. Definitions . For purposes of
the Plan, the following terms have the meanings set forth
below:
(a) “ Affiliate ” means,
with respect to any specified Person, any other Person that,
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
specified Person.
(b) “ Annual Base Salary
” means a Participant’s annual base salary at the rate
in effect on the Severance Protection Date or such higher rate as
may be in effect at any time after the Severance Protection
Date.
(c) “ Annual Bonus ”
means, except as otherwise expressly provided in
Section 5(b)(ii) and Section 5(b)(iii), the
Participant’s annual incentive pay opportunity at the level
in effect on the Severance Protection Date or such higher level as
may be in effect at any time after the Severance Protection
Date.
(d) “ Average Annual Bonus
Award ” means, as of a Participant’s Termination
Date, the Average Annual Bonus Award payable or actually paid to
the Participant in respect of the three fiscal years preceding such
Participant’s Termination Date; provided ,
however , that (i) if the Participant has not been
employed by the Company or a Subsidiary for a sufficient length of
time to have been eligible for payment of at least one such annual
incentive award, “ Average Annual Bonus Award ”
will then mean the target payout under the then-current annual
incentive plan for the fiscal year in which such
Participant’s Termination Date occurs, (ii) for any
fiscal year during which an annual incentive award that was paid or
is payable to the Participant was prorated because of less than a
full fiscal year of plan participation or employment, such award
will be annualized and (iii) if the Participant was not
employed during any one or more of the three fiscal years
immediately preceding such Participant’s Termination Date or
otherwise was not eligible to receive an annual incentive award for
such fiscal year, the Average Annual Bonus Award will be determined
on the basis of the number of fiscal years during such period with
respect to which the Participant was eligible to receive such an
award.
(e) “ Cause ” means,
with respect to any Participant, the occurrence of any one of the
following:
(i) the Participant is convicted of, or
pleads guilty or nolo contendere to, a felony involving
moral turpitude or that involves misappropriation of the assets of
the Company or a Subsidiary;
(ii) the Participant commits one or more
acts or omissions constituting negligence, fraud or other
misconduct that have a materially detrimental effect on the Company
or a Subsidiary; or
(iii) the Participant willfully commits a
violation of any of the Company’s material policies
(including the Company’s code of business conduct and ethics,
as in effect from time to time) that is materially detrimental to
the best interests of the Company.
For purposes of this Section 2(e), no act
or failure to act on the part of the Participant will be considered
“willful” unless it is done, or omitted to be done, by
the Participant in bad faith or without reasonable belief that the
Participant’s action or omission was in the best interests of
the Company. The termination of employment of the Participant for
Cause will not be effective unless and until there has been
delivered to the Participant a copy of a resolution duly adopted by
the Compensation Committee at a meeting called and held for such
purpose (after reasonable notice is provided to the Participant and
the Participant is given an opportunity, together with counsel, to
be heard before the Compensation Committee), finding that, in the
good faith opinion of the Compensation Committee, the Participant
is guilty of the conduct described in clause (i), (ii) or
(iii) above and specifying the particulars of such conduct in
detail; provided , however , that if the Participant
is the Chief Executive Officer of the Company, the foregoing
determination will be made by the Board (excluding the Participant)
before which the Participant will be entitled to be heard with
counsel.
(f) “
Change in Control ” means the occurrence of any of the
following:
(i) individuals who, as of the Effective
Date, were members of the Board (the “ Incumbent
Directors ”) cease for any reason to constitute at least
a majority of the Board; provided , however , that
any individual becoming a director after the Effective Date whose
election, or nomination for election, by the Company’s
shareholders was approved by a vote of at least a majority of the
Incumbent Directors will be considered as though such individual
were an Incumbent Director, other than any such
individual whose assumption of office after the Effective Date
occurs as a result of an actual or threatened proxy contest with
respect to election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
“person” (as such term is used in Section 13(d) of the
Exchange Act) (each, a “ Person ”), other than
the Board;
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(ii) the consummation of (A) a merger,
consolidation or similar form of corporate transaction involving
the Company (each of the events referred to in this clause
(A) being hereinafter referred to as a “
Reorganization ”) or (B) a sale or other
disposition of all or substantially all the assets of the Company
(a “ Sale ”), unless, immediately following such
Reorganization or Sale, (1) all or substantially all the
individuals and entities who were the “beneficial
owners” (as such term is defined in Rule 13d-3 under the
Exchange Act (or a successor rule thereto)) of shares of the
Company’s common stock or other securities eligible to vote
for the election of the Board outstanding immediately prior to the
consummation of such Reorganization or Sale (such securities, the
“ Company Voting Securities ”) beneficially own,
directly or indirectly, more than 60% of the combined voting power
of the then outstanding voting securities of the corporation or
other entity resulting from such Reorganization or Sale (including
a corporation or other entity that, as a result of such
transaction, owns the Company or all or substantially all the
Company’s assets either directly or through one or more
subsidiaries) (the “ Continuing Entity ”) in
substantially the same proportions as their ownership, immediately
prior to the consummation of such Reorganization or Sale, of the
outstanding Company Voting Securities (excluding any outstanding
voting securities of the Continuing Entity that such beneficial
owners hold immediately following the consummation of the
Reorganization or Sale as a result of their ownership prior to such
consummation of voting securities of any corporation or other
entity involved in or forming part of such Reorganization or Sale
other than the Company or a Subsidiary), (2) no Person
(excluding any employee benefit plan (or related trust) sponsored
or maintained by the Continuing Entity or any corporation or other
entity controlled by the Continuing Entity) beneficially owns,
directly or indirectly, 30% or more of the combined voting power of
the then outstanding voting securities of the Continuing Entity and
(3) at least a majority of the members of the board of
directors or other governing body of the Continuing Entity were
Incumbent Directors at the time of the execution of the definitive
agreement providing for such Reorganization or Sale or, in the
absence of such an agreement, at the time at which approval of the
Board was obtained for such Reorganization or Sale;
(iii) the shareholders of the Company
approve a plan of complete liquidation or dissolution of the
Company; or
(iv) any Person, corporation or other
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 30% or more
of the combined voting power of the Company Voting Securities;
provided , however , that for purposes of this
subparagraph (iv), the following acquisitions will not constitute a
Change in Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company or any Subsidiary,
(C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary,
(D) any acquisition by an underwriter temporarily holding such
Company Voting Securities pursuant to an offering of such
securities or (E) any acquisition pursuant to a Reorganization
or Sale that does not constitute a Change in Control for purposes
of Section 2(f)(ii).
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For purposes of applying the provisions of
Section 2(f)(ii)(B)(2) and Section 2(f)(iv) at any time
on or after the Effective Date, neither Robert W. Decherd nor any
Person holding voting securities of the Continuing Entity or
Company Voting Securities, as applicable, over which Robert W.
Decherd has sole or shared voting power will be considered to be
the beneficial owner of 30% or more of such voting securities or
Company Voting Securities.
(g) “ Code ” means the
Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated thereunder.
(h) “
Compensation Committee ” means the Compensation
Committee of the Board.
(i) “ Disability ” means
the Participant’s absence for a period of 180 consecutive
business days as a result of incapacity due to a physical or mental
condition, illness or injury which is determined to be total and
permanent by a physician mutually acceptable to the Company and the
Participant or the Participant’s legal representative (such
acceptance not to be unreasonably withheld) after such physician
has completed an examination of the Participant.
(j) “
Effective Date ” means October 1,
2007.
(k) “ Exchange Act ”
means the Securities Exchange Act of 1934, as amended from time to
time, or any successor statute thereto.
(l) “ Excise Tax ” means
the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to such
tax.
(m) “ Good Reason ”
means, with respect to any Participant and without the
Participant’s express written consent, the occurrence of any
one or more of the following at any time during the Severance
Protection Period:
(i) the failure to elect or reelect or
otherwise to maintain the Participant in the office or the
position, or a substantially equivalent or better office or
position, of or with the Company or a Subsidiary, which the
Participant held immediately prior to a Change in Control, or the
removal of the Participant as a member of the Board of Directors of
the Company (or any successor to the Company) if the Participant
was a Director of the Company immediately prior to the Change in
Control;
(ii) (A) a significant adverse change in
the nature or scope of the authorities, powers, functions,
responsibilities or duties attached to the position with the
Company and any Subsidiary which the Participant held immediately
prior to the Change in Control, (B) a reduction in the
aggregate of the Participant’s Annual Base Salary or Annual
Bonus received from the Company and any Subsidiary, (C) a
reduction in the Participant’s long-term incentive
compensation opportunity from the level in effect on the Severance
Protection Date or such higher level as may be in effect at any
time after the Severance Protection Date or (D) the
termination or denial of the Participant’s rights to
retirement or welfare benefits or a reduction in the scope or value
of such benefits (other than any such reduction that is generally
applicable to all employees of the Company), and such change,
reduction or termination is not remedied by the Company within ten
business days after receipt by the Company of written notice from
the Participant of such change, reduction or termination, as the
case may be;
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(iii) any change of the Participant’s
principal place of employment to a location more than 50 miles from
the Participant’s principal place of employment immediately
prior to a Change in Control;
(iv) any failure of the Company to pay the
Participant any compensation when due (other than an inadvertent
failure that is remedied within ten business days after receipt of
written notice from the Participant);
(v) the delivery by the Company or any
Subsidiary of a written notice to the Participant of the intent to
terminate the Participant’s employment for any reason, other
than Cause or Disability, regardless of whether such termination is
intended to become effective during or after the Severance
Protection Period; or
(vi) any
failure by the Company to comply with and satisfy
Section 15.
The Participant’s right to terminate
employment for Good Reason will not be affected by the
Participant’s incapacity due to physical or mental illness. A
termination of employment by the Participant for Good Reason for
purposes of the Plan will be effective only if the Participant
gives the Company written notice (“ Notice of Termination
for Good Reason ”) of the termination setting forth in
reasonable detail the specific conduct of the Company that
constitutes Good Reason and the specific provisions of the Plan on
which the Participant relied. Unless the parties agree otherwise, a
termination of employment by the Participant for Good Reason will
be effective on the 30th day following the date when the Notice of
Termination for Good Reason is given, unless the Company elects to
treat such termination as effective as of an earlier date;
provided , however , that so long as an event that
constitutes Good Reason occurs during the Severance Protection
Period and the Participant delivers the Notice of Termination for
Good Reason at any time prior to the expiration of the Severance
Protection Period, the termination of the Participant’s
employment will be deemed to be a resignation for Good Reason
during the Severance Protection Period. If the Company disputes the
existence of Good Reason, the Company will have the burden of proof
to establish that Good Reason does not exist. If the Participant
continues to provide services to the Company after one of the
events giving rise to Good Reason has occurred, the Participant
will not be deemed to have consented to such event or to have
waived the Participant’s right to terminate his or her
employment at any time during the Severance Period for Good Reason
in connection with such event.
(n) “ Payment ” means
any payment, benefit or distribution (or combination thereof) by
the Company, any of its Affiliates or any trust established by the
Company or its Affiliates, to or for the benefit of a Participant,
whether paid, payable, distributed, distributable or provided
pursuant to the Plan or otherwise, including any payment, benefit
or other right that constitutes a “parachute payment”
within the meaning of Section 280G of the Code.
(o) “
Person ” has the meaning set forth in
Section 2(f)(i).
(p) “ Separation from Service
” means a Participant’s separation from service within
the meaning of Section 409A of the Code.
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(q) “ Severance Multiple
” will mean, with respect to any Participant, the number that
corresponds to such Participant’s Tier (as set forth on
Schedule A) as of the Severance Protection Date.
(r) “ Severance Protection
Date ” means the date on which a Change in Control occurs
during the Term, except as otherwise provided in
Section 3(b).
(s) “ Severance Protection
Period ” means, with respect to any Participant, the
period commencing on the Severance Protection Date and ending on
the earlier of (i) the second anniversary of the Severance
Protection Date and (ii) the Participant’s Termination
Date. If a Participant’s Severance Protection Period ends on
the Participant’s Termination Date, the Severance Protection
Period will be deemed to include such Termination Date.
(t) “ Subsidiary ” means
any entity in which the Company, directly or indirectly, possesses
50% or more of the total combined voting power of all classes of
its stock.
(u) “
Term ” has the meaning set forth in
Section 12.
(v) “ Termination Date ”
means the date on which a Participant has a Separation from
Service.
(w) “
Tier ” has the meaning set forth in
Section 3.
(a) Employees in Certain Positions
. Participants in the Plan (“ Participants ”)
are those employees of the Company and its Subsidiaries (other than
an employee who enters into an individual change in control
severance agreement with the Company) who are actively employed by
the Company or a Subsidiary on or following the Effective Date in a
position set forth on Schedule A (each set of positions set
forth on Schedule A is referred to the Plan as a “
Tier ”) and who are designated by the Compensation
Committee as eligible to participate in the Plan. Notwithstanding
the foregoing, if an employee becomes a Participant prior to the
Severance Protection Date but is not actively employed by the
Company or a Subsidiary in a position set forth on Schedule A
immediately prior to the Severance Protection Date, or if an
employee was not employed in a position set forth on
Schedule A prior to the Severance Protection Date but became
employed in such a position following such date as a result of
hiring or promotion, such employee will not be considered a
Participant for any purpose under the Plan unless otherwise
determined by the Compensation Committee.
(b) Employment Rights .
Participation in the Plan does not alter the status of a
Participant as an at-will employee, and nothing the Plan will
reduce or eliminate the right of the Company and its Subsidiaries
to terminate a Participant’s employment at any time for any
reason or the right of a Participant to resign at any time for any
reason. However, any Separation from Service of a Participant or
removal of a Participant from his or her office or position in the
Company or any Subsidiary that follows the commencement of any
discussion with a Person that ultimately results in a Change in
Control will be deemed to be a Separation from Service or removal
of the Participant following the Severance Protection Date;
provided that if the Separation from Service precedes the
Change in Control, then for purposes of determining the timing of
any payments to be made pursuant to Section 5(b), such
payments will be measured from the date of the Change in Control
rather than from the date of the Participant’s Separation
from Service.
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4. Effect of a Change in Control on
Long-Term Incentive Compensation Awards . In the event of a
Change in Control during the Term, notwithstanding any provision to
the contrary in any of the Company’s equity-based,
equity-related or other long-term incentive compensation plans,
practices, policies and programs (including the Company’s
1986 Long Term Incentive Plan, 1995 Executive Compensation Plan,
2000 Executive Compensation Plan and 2004 Executive Compensation
Plan) each as amended or any award agreements thereunder,
(i) all outstanding stock options, stock appreciation rights
and similar rights and awards then held by each Participant that
are unexercisable or otherwise unvested will automatically become
fully vested and immediately exercisable, as the case may be,
(ii) all outstanding equity-based, equity-related and other
long-term incentive awards then held by such Participant that are
subject to performance-based vesting criteria will automatically
become fully vested and earned at a deemed performance level equal
to the greater of the target performance level or the performance
level determined by actual performance through the date ending on
the date of the Change in Control and (iii) all other
outstanding equity-based, equity-related and long-term incentive
awards, to the extent not covered by the foregoing clause
(i) or (ii), then held by such Participant that are unvested
or subject to restrictions or forfeiture will automatically become
fully vested and all restrictions and forfeiture provisions related
thereto will lapse.
5.
Termination of Employment .
(a) Termination by the Company for
Cause; Voluntary Resignation by the Participant without Good
Reason . If, during the Severance Protection Period, a
Participant’s employment is terminated either by the Company
or its Subsidiaries for Cause or, except as otherwise provide in
Section 5(c), by resignation of the Participant without Good
Reason, the Participant will not be entitled to any compensation or
benefits under the Plan other than any payments the Company is at
the time of such termination or resignation obligated to make
pursuant to Section 4 (the “ Accrued Rights
”).
(b) Termination During the Severance
Protection Period by the Company without Cause or by the
Participant for Good Reason .
(i) Release of Claims . If during the
Severan
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