Exhibit 10.5
_________________
CHANGE IN CONTROL AGREEMENT
BETWEEN
DOUGLAS G. KIEL
AND
JOURNAL COMMUNICATIONS, INC.
CHANGE IN CONTROL AGREEMENT
| 1. Certain Definitions |
1 |
| 2.
Change in Control |
1 |
| 3.
Employment Period |
3 |
| 4.
Terms of Employment |
4 |
| (a) Position
and Duties |
4 |
| (b) Compensation |
4 |
| 5.
Termination of Employment |
6 |
| (a) Death
or Disability |
6 |
| (b)
Cause |
6 |
| (c) Good
Reason |
7 |
| 6.
Obligations of the Company upon
Termination |
7 |
(a) Termination
by Executive for Good Reason; Termination by the
Company
Other Than for Cause or Disability |
7 |
| (b) Death
or Disability |
9 |
| (c) Cause;
Other than Good Reason |
9 |
| (d) Expiration
of Employment Period |
9 |
| 7.
Non-exclusivity of Rights |
10 |
| 8.
Full Settlement; No Mitigation |
10 |
| 9.
Costs of Enforcement |
10 |
| 10.
Limitation of Benefits |
10 |
| 11.
Restrictions on Conduct of Executive |
11 |
| 12.
Arbitration |
14 |
| 13.
Successors |
15 |
| 14.
Miscellaneous |
16 |
| (a) Governing
Law |
16 |
| (b) Captions |
16 |
| (c) Amendments |
16 |
| (d) Notices |
16 |
| (e) Severability |
16 |
| (f) Withholding |
16 |
|
|
| (g) Waivers |
16 |
| (h) Status
Before and After Effective Date |
17 |
| 15.
Code Section 409A |
17 |
-ii-
CHANGE IN CONTROL AGREEMENT
AGREEMENT by
and between Journal Communications, Inc., a Wisconsin corporation
(the “Company”) and Douglas G. Kiel
(“Executive”), originally dated as of the 29th day of
January, 2007, as amended and restated as of December 8,
2007.
The Board of
Directors of the Company (the “Board”) has determined
that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of Executive, notwithstanding the possibility, threat or
occurrence of a Change in Control (as defined below) of the
Company. The Board believes it is imperative to diminish the
inevitable distraction of Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
in Control and to encourage Executive’s full attention and
dedication to the Company currently and in the event of any
threatened or pending Change in Control, and to provide Executive
with compensation and benefits arrangements upon a Change in
Control which ensure that the compensation and benefits
expectations of Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE,
IT IS HEREBY AGREED AS FOLLOWS:
1.
Certain Definitions.
(a)
The “Effective Date” shall mean the first date during
the Change in Control Period (as defined in Section l(b)) on which
a Change in Control (as defined in Section 2) occurs. Anything in
this Agreement to the contrary notwithstanding, if
Executive’s employment with the Company is terminated, and if
it is reasonably demonstrated by Executive that such termination of
employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change in Control or (ii)
otherwise arose in connection with or anticipation of a Change in
Control, then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately prior
to the date of such termination of employment.
(b)
The “Change in Control Period” shall mean the period
commencing on the date hereof and ending on the second anniversary
of the date hereof; provided, however , that commencing on
the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary
thereof shall be hereinafter referred to as the “Renewal
Date”), unless previously terminated, the Change in Control
Period shall be automatically extended so as to terminate two years
from such Renewal Date, unless at least 60 days prior to the
Renewal Date the Company shall give notice to Executive that the
Change in Control Period shall not be so extended.
2.
Change in Control For the purposes of this Agreement, a
“Change in Control” shall mean the occurrence of any of
the following events:
| |
(a)
individuals who, on the date of this Agreement, constitute the
Board of Directors of the Company (the “Incumbent
Directors”) cease for any reason to constitute at least a
majority of such Board, provided that any person becoming a
director after the date of this Agreement and whose election or
nomination for election was approved by a vote of at least a
majority of the Incumbent Directors then on the Board shall be an
Incumbent Director; provided, however , that no individual
initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to
the election or removal of directors (“Election
Contest”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any “Person”
(such term for purposes of this definition being as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934 (the
“1934 Act”) and as used in Section 13(d)(3) and
14(d)(2) of the 1934 Act) other than the Board (“Proxy
Contest”), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest, shall be
deemed an Incumbent Director; or |
| |
(b)
any Person becomes a “Beneficial Owner” (such term for
purposes of this definition being as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company’s then outstanding securities eligible to vote for
the election of directors (the “Company Voting
Securities”); provided, however , that for purposes of
this subsection (b), the following acquisitions shall not
constitute a Change in Control: (v) an acquisition directly from
the Company, (w) an acquisition by the Company or a subsidiary of
the Company (a “Subsidiary”), (x) an acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary, (y) an acquisition by a Person who
as of December 31, 2006 was a Beneficial Owner, directly or
indirectly, of 15% or more of the Company Voting Securities, or (z)
an acquisition pursuant to a Non-Qualifying Transaction (as defined
in subsection (d) below); or |
| |
(c)
any Person who as of December 31, 2006 was a Beneficial Owner,
directly or indirectly, of 15% or more of the Company Voting
Securities becomes a Beneficial Owner, directly or indirectly, of
40% or more of the Company Voting Securities; provided, however,
that for purposes of this subsection (c), an acquisition directly
from the Company shall not constitute a Change in Control;
or |
-2-
| |
(d)
the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate transaction
involving the Company or a Subsidiary (a
“Reorganization”), or the sale or other disposition of
all or substantially all of the Company’s assets (a
“Sale”) or the acquisition of assets or stock of
another entity (an “Acquisition”), unless immediately
following such Reorganization, Sale or Acquisition: (A) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding shares of
common stock of the Company (“Company Common Stock”)
and outstanding Company Voting Securities immediately prior to such
Reorganization, Sale or Acquisition beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity resulting
from such Reorganization, Sale or Acquisition (including, without
limitation, an entity which as a result of such transaction owns
the Company or all or substantially all of the Company’s
assets or stock either directly or through one or more
subsidiaries, the “Surviving Entity”) in substantially
the same proportions as their ownership, immediately prior to such
Reorganization, Sale or Acquisition, of the outstanding Company
Common Stock and the outstanding Company Voting Securities, as the
case may be, and (B) no Person (other than (w) any Person who as of
December 31, 2006 is a Beneficial Owner, directly or indirectly, of
15% or more of the Company Voting Securities, (x) the Company or
any Subsidiary of the Company, (y) the Surviving Entity or its
ultimate parent, or (z) any employee benefit plan (or related
trust) sponsored or maintained by any of the foregoing) is the
beneficial owner, directly or indirectly, of 20% or more of the
total common stock or 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the
Surviving Entity, and (C) at least a majority of the members of the
board of directors of the Surviving Entity were Incumbent Directors
at the time of the Board’s approval of the execution of the
initial agreement providing for such Reorganization, Sale or
Acquisition (any Reorganization, Sale or Acquisition which
satisfies all of the criteria specified in (A), (B) and (C) above
shall be deemed to be a “Non-Qualifying Transaction”);
or |
| |
(e)
approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or |
| |
(f)
during such time as Executive’s primary responsibilities are
with the broadcast segment of the Company’s business (the
“Broadcast Group”): the sale of all or substantially
all of the assets of the Broadcast Group to an unrelated entity;
(ii) the sale of all of the outstanding voting securities of an
entity holding all or substantially all of the assets of the
Broadcast Group, currently consisting of Journal Broadcast
Corporation (as such entity may now or hereafter be configured, the
“Broadcast Group Entity”) to an unrelated entity; or
(iii) the merger or consolidation of the Broadcast Group Entity
into an unrelated entity. For purposes of this subsection (f), an
“unrelated entity” is an entity (A) with respect to
which more than fifty percent (50%) of such entity is not owned,
directly or indirectly, by the Company or any of its majority-owned
Subsidiaries immediately prior to the time of the determination of
whether there has occurred a Change in Control; or (B) which is not
an employee benefit plan (or related trust) of the Company or any
of its majority-owned Subsidiaries. |
3.
Employment Period. The Company hereby agrees to continue Executive
in its employ, and Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and
ending on the second anniversary of such date (the
“Employment Period”).
-3-
4.
Terms of Employment.
(a)
Position and Duties.
(i)
During the Employment Period, (A) Executive’s position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 120-day
period immediately preceding the Effective Date and (B)
Executive’s services shall be performed at the location where
Executive was employed immediately preceding the Effective Date or
any office or location less than 35 miles from such
location.
(ii)
During the Employment Period, and excluding any periods of vacation
and sick leave to which Executive is entitled, Executive shall
devote substantially all of his business time, attention and effort
to the business and affairs of the Company and its affiliates and,
to the extent necessary to discharge the responsibilities assigned
to Executive under this Agreement, use Executive’s reasonable
best efforts to carry out such responsibilities faithfully and
efficiently. It shall not be considered a violation of the
foregoing for Executive to serve on corporate, industry, civic or
charitable boards or committees, so long as such activities do not
significantly interfere with the performance of Executive’s
responsibilities as an employee of the Company and its affiliates
in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been
conducted by Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of
Executive’s responsibilities to the Company.
(b) Compensation.
(i)
Base Salary. During the Employment Period, Executive shall receive
an annual base salary (“Annual Base Salary”) at a rate
at least equal to the rate of base salary in effect on the date of
this Agreement or, if greater, on the Effective Date, paid or
payable (including any base salary which has been earned but
deferred) to Executive by the Company and its affiliated companies.
The Annual Base Salary shall be payable in accordance with the
Company’s regular payroll practice for its senior executives,
as in effect from time to time. During the Employment Period, the
Annual Base Salary shall be reviewed for possible increase no more
than 12 months after the last salary increase awarded to Executive
prior to the Effective Date and thereafter at least annually. Any
increase in the Annual Base Salary shall not limit or reduce any
other obligation of the Company under this Agreement. The Annual
Base Salary shall not be reduced after any such increase, and the
term “Annual Base Salary” shall thereafter refer to the
Annual Base Salary as so increased. As used in this Agreement, the
term “affiliated companies” shall include any company
controlled by, controlling or under common control with the
Company.
-4-
(ii)
Annual Bonus. In addition to Annual Base Salary, Executive shall be
provided, for each fiscal year ending during the Employment Period,
an annual bonus opportunity at least equal to Executive’s
highest bonus opportunity under the Company’s Annual
Management Incentive Plan, or any comparable bonus opportunity
under any predecessor or successor plans, for the last full fiscal
year prior to the Effective Date (annualized in the event that
Executive was not employed by the Company for the whole of such
fiscal year).
(iii)
Incentive, Savings and Retirement Plans. Without limiting the
foregoing, during the Employment Period, Executive shall be
entitled to participate in all applicable incentive, savings and
retirement plans, practices, policies and programs applicable
generally to other senior executives of the Company and its
affiliated companies (“Peer Executives”), but in no
event shall such plans, practices, policies and programs provide
Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable,
in the aggregate, than the most favorable of those provided by the
Company and its affiliated companies for Executive under such
plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date
or if more favorable to Executive, those provided generally at any
time after the Effective Date to Peer Executives.
(iv)
Welfare Benefit Plans. During the Employment Period, Executive
and/or Executive’s eligible dependents, as the case may be,
shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and
programs provided by the Company and its affiliated companies
(including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to Peer Executives, but in no event shall such plans,
practices, policies and programs provide Executive with benefits
which are less favorable, in the aggregate, than the most favorable
of such plans, practices, policies and programs in effect for
Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to Executive,
those provided generally at any time after the Effective Date to
Peer Executives.
(v)
Expenses. During the Employment Period, Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses
incurred by Executive in accordance with the most favorable
policies, practices and procedures of the Company and its
affiliated companies in effect for Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to Executive, as in effect generally at any time
thereafter with respect to Peer Executives.
(vi)
Fringe Benefits and Perquisites. During the Employment Period,
Executive shall be entitled to fringe benefits and perquisites in
accordance with the most favorable plans, practices, programs and
policies of the Company and its affiliated companies in effect for
Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to Executive, as
in effect generally at any time thereafter with respect to Peer
Executives.
-5-
(vii)
Vacation. During the Employment Period, Executive shall be entitled
to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated
companies as in effect for Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more
favorable to Executive, as in effect generally at any time
thereafter with respect to Peer Executives.
5.
Termination of Employment.
(a)
Death or Disability. Executive’s employment shall terminate
automatically upon Executive’s death during the Employment
Period. If the Company determines in good faith that the Disability
of Executive has occurred during the Employment Period (pursuant to
the definition of Disability set forth below), it may give to
Executive written notice of its intention to terminate
Executive’s employment. In such event, Executive’s
employment with the Company shall terminate effective on the 30th
day after receipt of such written notice by Executive (the
“Disability Effective Date”), provided that, within the
30 days after such receipt, Executive shall not have returned to
full-time performance of Executive’s duties. For purposes of
this Agreement, “Disability” shall mean the inability
of Executive, as determined by the Board, to perform the essential
functions of his regular duties and responsibilities, with or
without reasonable accommodation, due to a medically determinable
physical or mental illness which has lasted (or can reasonably be
expected to last) for a period of six consecutive months. At the
request of Executive or his personal representative, the
Board’s determination that the Disability of Executive has
occurred shall be certified by two physicians mutually agreed upon
by Executive, or his personal representative, and the Company. If
Executive requests such independent certification of the
Board’s determination and either (i) the Company does not
seek such independent certification, or (ii) the two physicians do
not certify the Board’s determination of Executive’s
Disability, then, Executive’s termination shall be deemed a
termination by the Company without Cause and not a termination by
reason of his Disability.
(b)
Cause. The Company may terminate Executive’s employment
during the Employment Period for Cause or without Cause. For
purposes of this Agreement, a termination shall be considered to be
for “Cause” if it occurs in conjunction with a
determination by the Board that Executive has committed or engaged
in either (i) any act that constitutes, on the part of Executive,
fraud, dishonesty, breach of fiduciary duty, misappropriation,
embezzlement or gross misfeasance of duty; (ii) willful disregard
of published Company policies and procedures or codes of ethics; or
(iii) conduct by Executive in his office with the Company that is
grossly inappropriate and demonstrably likely to lead to material
injury to the Company, as determined by the Board acting reasonably
and in good faith; provided, that in the case of (ii) or (iii)
above, such conduct shall not constitute “Cause” unless
the Board shall have delivered to Executive notice setting forth
with specificity (A) the conduct deemed to qualify as
“Cause”, (B) reasonable action that would remedy such
objection, and (C) a reasonable time (not less than 30 days) within
which Executive may take such remedial action, and Executive shall
not have taken such specified remedial action within the specified
time.
-6-
(c)
Good Reason. Executive’s employment may be terminated by
Executive for Good Reason or without Good Reason. For purposes of
this Agreement, “Good Reason” shall mean:
(i)
the assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement,
or any other action by the Company that results in a material
diminution in Executive’s position, authority, duties or
responsibilities, other than an isolated, insubstantial and
inadvertent action that is not taken in bad faith and is remedied
by the Company promptly after receipt of notice thereof from
Executive;
(ii)
any failure by the Company to comply with any provision of Section
4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure that is not taken in bad faith and is remedied
by the Company promptly after receipt of notice thereof from
Executive;
(iii)
any failure by the Company to comply with and satisfy Section 13(c)
of this Agreement; or
(iv)
|
