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Exhibit
10.2
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CHANGE OF
CONTROL EMPLOYMENT
AGREEMENT
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AGREEMENT, dated as
of the 30th day of November, 2007 (this “Agreement”),
by and between Journal Register Company, a Delaware corporation
(the “Company”), and James W. Hall (the
“Executive”).
WHEREAS, 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 the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined herein).
The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive’s full attention
and dedication to the Company in the event of any threatened or
pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the
Executive will be satisfied and that provide the Executive with
compensation and benefits arrangements that 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:
Section
1. Certain
Definitions .
(a)
“Affiliated Company” means any company controlled by,
controlling or under common control with the Company.
(b) “Change
of Control” means:
(1) The acquisition
by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”),
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A)
the then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined
voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”);
provided,
that,
for purposes of this Section 1(b), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliated Company,
or (iv) any acquisition by any corporation pursuant to a
transaction that complies with Sections 1(b)(3)(A), 1(b)(3)(B) and
1(b)(3)(C);
(2) Individuals
who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided,
that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
shareholders,
was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board;
(3) Consummation of
a reorganization, merger, statutory share exchange or consolidation
or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition
of assets or stock of another entity by the Company or any of its
subsidiaries (each, a “Business Combination”), in each
case unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of 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 corporation resulting from such Business
Combination (including, without limitation, a corporation that, as
a result of such transaction, owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then-outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of
such corporation, except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination;
or
(4) Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
(c) “Change
of Control Period” means the period commencing on the date
hereof and ending on the third 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, the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three
2
years from such
Renewal Date, unless, at least 60 days prior to the Renewal Date,
the Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.
(d)
“Effective Date” means the first date during the Change
of Control Period on which a Change of Control occurs.
Notwithstanding anything in this Agreement to the contrary, if a
Change of Control occurs and if the Executive’s employment
with the Company is terminated prior to the date on which the
Change of Control occurs, and if it is reasonably demonstrated by
the Executive that such termination of employment (1) was at the
request of a third party that has taken steps reasonably calculated
to effect a Change of Control or (2) otherwise arose in connection
with or anticipation of a Change of Control, then “Effective
Date” shall mean the date immediately prior to the date of
such termination of employment.
Section
2. Employment
Period .
The
Company hereby agrees to continue the Executive in its employ,
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second
anniversary of the Effective Date (the “Employment
Period”); provided,
however , that the
Employment Period shall terminate upon the Executive’s
termination of employment for any reason, as provided for in this
Agreement; and provided,
further, that in any event
the Employment Period shall end on the Executive’s 65
th
birthday.
Section
3. Terms of
Employment .
(a)
Position and
Duties .
(1)
During the Employment Period, (A) the 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) the
Executive’s services shall be performed at the office where
the Executive was employed immediately preceding the Effective Date
or at any other location less than 35 miles from such
office.
(2) During the
Employment Period, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive shall
devote the Executive’s full attention and time during normal
business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to
the Executive hereunder, to use the Executive’s best efforts
to perform faithfully and efficiently such responsibilities. It
shall not be a violation of this Agreement for the Executive,
during the Employment Period, to serve on corporate, civic or
charitable boards or committees, deliver lectures, fulfill speaking
engagements or teach at educational institutions and manage
personal investments, so long as such activities do not
significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that, to the extent that any such activities have been
conducted by the 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 the Executive’s responsibilities to the
Company.
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(b)
Compensation
.
(1)
Base
Salary .
During
the Employment Period, the Executive shall receive a base salary
(the “Base Salary”) at an annual rate at least equal to
12 times the highest monthly base salary paid or payable, including
any base salary that has been earned but deferred, to the Executive
by the Affiliated Companies in respect of the 12-month period
immediately preceding the month in which the Effective Date occurs.
The Base Salary shall be paid at such intervals as the Company pays
executive salaries generally. During the Employment Period, the
Base Salary shall be reviewed at least annually for possible
increase effective as of each January 1 during the Employment
Period. Any increase in the Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement.
The Base Salary shall not be reduced after any such increase and
the term “Base Salary” shall refer to the Base Salary
as so increased.
(2)
Annual
Bonus .
In
addition to the Base Salary, the Executive shall be entitled to
earn, for each fiscal year ending during the Employment Period, an
annual bonus (the “Annual Bonus”) based on the
achievement of performance criteria as determined by the Board or
an appropriate committee thereof, and with the target amount of the
Annual Bonus being not less than the target amount in effect
immediately prior to the Effective Date. Any Annual Bonus that is
so earned shall be paid no later than two and a half months after
the end of the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such
Annual Bonus.
(3)
Incentive,
Savings and Retirement Plans .
During
the Employment Period, the Executive shall be entitled to
participate in all cash incentive, equity incentive, savings and
retirement plans, practices, policies, and programs applicable
generally to other senior executives of the Company;
provided,
that
such incentive plans, practices, policies shall provide the
Executive with compensation opportunities at least comparable to
those provided to the Executive immediately before the Effective
Date.
(4)
Welfare
Benefit Plans .
During
the Employment Period, the Executive and/or the Executive’s
family, 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
(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 other senior executives of the Company;
provided,
that
such plans, practices, policies, and programs shall provide the
Executive with aggregate benefits at least comparable to those
provided to the Executive immediately before the Effective
Date.
(5)
Expenses
.
During
the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the policies, practices and procedures
of the Company in effect generally at any time after the Effective
Date with respect to senior executives of the Company;
provided,
that
such policies, practices and
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procedures shall be
no less favorable than those applicable to the Executive
immediately prior to the Effective Date.
(6)
Fringe
Benefits .
During
the Employment Period, the Executive shall be entitled to fringe
benefits which are comparable in the aggregate to those provided
generally at any time after the Effective Date to other senior
executives of the Company; provided,
that
such benefits shall be at least comparable to those provided to the
Executive immediately before the Effective Date.
(7)
Office and
Support Staff .
During
the Employment Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments,
and to exclusive personal secretarial and other assistance, at
least equal to the most favorable of the foregoing provided
generally at any time after the Effective Date with respect to
other senior executives of the Company; provided,
that
such benefits shall be at least comparable to those provided to the
Executive immediately before the Effective Date.
(8)
Vacation
.
During
the Employment Period, the Executive shall be entitled to paid
vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and the Affiliated Companies
as in effect generally at any time after the Effective Date with
respect to other senior executives of the Company;
provided,
that in
no event shall the terms governing the Executive’s vacation
entitlement be less favorable to the Executive than those in effect
immediately prior to the Effective Date.
Section
4. Termination of
Employment .
(a)
Death or
Disability .
The
Executive’s employment shall terminate automatically if the
Executive dies during the Employment Period. If the Company
determines in good faith that the Disability (as defined herein) of
the Executive has occurred during the Employment Period (pursuant
to the definition of “Disability”), it may give to the
Executive written notice in accordance with Section 1
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