Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“ Agreement ”), entered into as of
September 30, 2008, and made effective as of October 6,
2008 (the “ Appointment Date ”), is by and
among, LIN TV Corp., a Delaware corporation (“ Parent
”), and LIN Television Corporation, a Delaware corporation
with its headquarters in Providence, Rhode Island, and a
wholly-owned subsidiary of the Parent (the “ Company
” and, together with Parent, the “ LIN Companies
”), and Richard J. Schmaeling , an individual whose
current residence is 95 Harvard Circle, Princeton, New Jersey 08540
and who anticipates relocating to the greater Providence, Rhode
Island area (the “ Executive ”).
RECITALS :
WHEREAS , the board of directors of Parent (the “
Board of Parent ”) and the board of directors of the
Company, respectively, appointed Executive to the offices of Senior
Vice President Chief Financial Officer of each of the LIN
Companies, which appointment shall become effective on the
Appointment Date;
WHEREAS , each of Parent and the Company desire that the
Company employ Executive as Senior Vice President Chief Financial
Officer of the Company, and Executive desires to be employed by the
Company in such position, in accordance with the terms and subject
to the conditions provided herein;
NOW, THEREFORE,
in consideration of the foregoing
and of the respective covenants and agreements of the parties
herein contained, the parties hereto, intending to be legally bound
hereby, agree as follows:
1.
Employment.
The Company shall
employ Executive and Executive hereby agrees to serve the LIN
Companies on the terms and conditions set forth herein.
2.
Service Period.
The term of this
Agreement and Executive’s employment hereunder (the
“ Service Period
”) shall be
deemed to have commenced as of the Appointment Date and shall
continue thereafter until the effective date of termination
pursuant to the terms and subject to the conditions of this
Agreement. For the avoidance of doubt, Executive’s employment
will be on a continuous basis unless Executive’s employment
is terminated pursuant to Section 8 of this
Agreement.
3.
Position and Duties
. During the Service Period,
Executive shall serve as the Senior Vice President Chief Financial
Officer of each of the LIN Companies, reporting to the President
and CEO of each of the LIN Companies and, subject to the LIN
Companies’ respective Certificates of Incorporation and
By-Laws, shall have such authority and duties as may be granted or
assigned from time to time by the President and CEO of the LIN
Companies, which such duties shall initially include direct reports
in the Controllership, Financial Planning and Budgeting, Tax,
Information Technology and Human Resources areas.
4.
Attention and Effort.
Executive
covenants and agrees, at all times during the Service Period, to
devote his full business-time efforts, energies and skills to his
duties as
contemplated by
Section 3 above, to serve each of the LIN Companies diligently
and to the best of Executive’s ability and at all times to
act in compliance with the rules, regulations, policies and
procedures of the LIN Companies as shall be in effect from time to
time. Executive further covenants and agrees that he will not,
directly or indirectly, engage or participate in any other
business, profession or occupation for compensation or otherwise at
any time during the Service Period which conflicts with the
business of the LIN Companies, without the prior written consent of
the Board of Parent; provided, that nothing herein shall preclude
Executive from accepting appointment to or continuing to serve on
any board of directors or trustees of any charitable or
not-for-profit organization or from managing his personal,
financial or legal affairs; provided, in each case, and in the
aggregate, that such activities do not materially conflict or
interfere with the performance of Executive’s duties
hereunder or conflict with Sections 10, 11 or 12 of this Agreement
in any material respect.
5.
Compensation and Other
Benefits.
(a)
During the
Service Period, Executive shall be paid by the Company an annual
base salary in an amount equal to Three Hundred Twenty Five
Thousand Dollars ($325,000) (the “ Base Salary ”), payable in
accordance with the Company’s normal payroll practices. The
Base Salary shall be reviewed by the Compensation Committee of the
Board of Parent no less often than once each calendar year and may
be increased, but not decreased, based on such a
review.
(b)
Solely with
respect to the portion of the Service Period, if applicable,
commencing on January 1, 2009, Executive shall be eligible to
receive, in addition to the Base Salary described above, an annual
bonus payment (a “ Performance Bonus ”) in an amount up to
One Hundred Fifty Thousand Dollars ($150,000) for such year (a
“ Performance Bonus
Amount ”) to be determined by
December 31, 2009, and thereafter, the last day of each
calendar year during the Service Period, or as soon thereafter as
practicable, but in no event later than March 15 of the
subsequent calendar year, as follows:
(i)
Executive shall
be eligible to receive a bonus payment in an amount up to 25% of
the Performance Bonus Amount, which bonus payment, if any, shall be
determined in the sole discretion of the President and CEO of the
LIN Companies and the Compensation Committee, based upon such
factors as each may determine to be relevant, which may include the
performance of the LIN Companies and Executive, general business
conditions, and the relative achievement by Executive or the LIN
Companies of any goals established by the President and CEO, the
Board of Parent or the Compensation Committee.
(ii)
Executive shall
be eligible to receive a bonus payment calculated as set forth in
this paragraph (ii) using a baseline bonus amount equal to
seventy-five percent (75%) of the Performance Bonus Amount (the
“ Results Bonus Base
Amount ”). The amount of the
bonus awarded to Executive, if any, under this paragraph
(ii) (the “ Results Bonus ”) shall be an amount
calculated as a percentage of the Results Bonus Base Amount (the
“ Results Bonus
Percentage ”). The Results Bonus
Percentage shall be the percentage set forth on Schedule
5(b)(ii)(A) hereto that corresponds to the respective
percentages by which Parent has achieved the EBITDA and revenue
targets established by the Board of Parent for the applicable year,
as determined by the Compensation Committee of the Board of Parent
(the “ Budget
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Target ”). The parties
acknowledge and agree that for convenience of reference Schedule
5(b)(ii)(B) shows for illustrative purposes the amount of
the Results Bonus corresponding to each Results Bonus Percentage
reflected on Schedule 5(b)(ii)(A) , and the parties further
acknowledge that such figures shall be subject to adjustment in the
event of any change to the Results Bonus Base Amount and, in the
event of any conflict between Schedules 5(b)(ii)(A)
and 5(b)(ii)(B) , Schedule 5(b)(ii)(A)
shall control.
(iii)
With respect to
the portion of the calendar year 2008 beginning on the Appointment
Date and ending on December 31, 2008, Executive shall receive
a Performance Bonus in the fixed amount of Thirty Five Thousand
Dollars ($35,000).
6.
Benefits and Expenses.
Executive shall
receive from the Company such other benefits as may be granted to
senior management of the Company generally, including health,
dental, life and disability insurance and vacation benefits. In
addition, Executive shall be provided with an automobile allowance
in accordance with the Company’s then-current plan. The
Company shall reimburse Executive for all reasonable travel,
entertainment and other expenses which Executive may incur in
regard to the business of Company or Parent, in accordance with and
subject to the limitations of the Company’s standard
practices and policies and Executive’s presentation of such
documents and records as Company shall require to substantiate such
expenses. Executive shall be entitled to the same vacation benefits
as are generally available to other senior executives of the
Company, but in no event less than three (3) weeks during each
one-year period during the Service Period.
7.
Incentive Equity.
Parent shall
grant to Executive an option (the “ Option Grant ”), as of the
Appointment Date, to purchase 100,000 shares of Parent’s
Class A Common Stock, par value $0.01 per share pursuant to
the terms and subject to the conditions of the LIN TV Corp. Amended
and Restated 2002 Stock Plan (the “ Option Plan ”) and as further
evidenced by that certain Nonqualified Stock Option Letter
Agreement, dated on or about the date hereof, by and between Parent
and Executive (the “Option Agreement ”). The Option Grant
shall be on the terms and conditions of the Option Plan and the
Option Agreement; provided, however, that (a) for
purposes of the Option Grant, and notwithstanding anything to the
contrary contained in the Option Agreement, the term
“Cause” shall have the meaning ascribed to such term in
this Agreement; and (b) in the event of a Change in Control
(as hereinafter defined in Section 24) (and notwithstanding
the definition of such term in the Option Agreement) the vesting of
the Option Grant shall accelerate and shall be deemed fully vested
as of such Change in Control. For the avoidance of doubt, the
vesting of the Option Grant shall not accelerate in the event of
any termination of this Agreement, including upon a termination
Without Cause or with Good Reason; provided, however, that
if Executive is able to demonstrate that (i) he was terminated
by the LIN Companies Without Cause in anticipation of a Change in
Control and (ii) such anticipated Change in Control occurs,
then Executive will be deemed for purposes of the Option Grant, to
have remained employed through the consummation of the Change in
Control, and the vesting of the Option Grant shall accelerate as
described in the preceding sentence.
8.
Termination.
This Agreement
and the employment of Executive hereunder may be terminated as
follows:
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(a)
By the LIN
Companies for “Cause.” Subject to such other terms
of this Agreement, the LIN Companies may terminate this Agreement
and the employment of Executive hereunder for “
Cause ” by action of the
Board of Parent if the Executive:
(i)
has been
convicted of, or entered a pleading of guilty or nolo
contendre (or its equivalent in the applicable jurisdiction) to
any criminal offense (whether or not in connection with the
performance by Executive of his obligations and duties under this
Agreement), excluding offenses under road traffic laws, or
misdemeanor offenses, that are subject only to a fine or
non-custodial penalty;
(ii)
has committed an
act or omission involving dishonesty or fraud;
(iii)
has willfully
refused or willfully failed to perform his obligations and duties
under this Agreement or the duties properly assigned to him in
accordance with the terms and conditions of this Agreement, and
Executive has the physical capacity to perform such obligations or
duties; or
(iv)
has engaged in
gross negligence or willful misconduct with respect to any of the
LIN Companies or any of their affiliates or
subsidiaries.
(b)
By the LIN
Companies “Without Cause.” The LIN Companies may
terminate this Agreement and the employment of Executive hereunder
at any time, in Parent’s sole discretion, for any reason
whatsoever or for no reason, which termination shall constitute a
termination “ Without
Cause .”
(c)
By Executive
for Good Reason. Executive may terminate this
Agreement and his employment hereunder in the event of any of the
following (each of which shall constitute “
Good Reason ”) and the LIN
Companies shall have failed to have reasonably remedied such
condition within thirty (30) days following written notice from
Executive setting forth in reasonable detail the condition giving
rise to such Good Reason:
(i)
either of the LIN
Companies fails to perform its respective obligations or breaches
any of its covenants or warranties under this
Agreement;
(ii)
the relocation of
Executive’s primary office to a location that is more than
thirty-five (35) miles from both of (A) the Company’s
headquarters in Rhode Island, unless such office is moved closer to
Executive’s primary residence at the time of such relocation,
and (B) Executive’s residence at the time of such
relocation; or
(iii)
the Board of
Parent or the board of directors of the Company approves, without
Executive’s consent or for reasons other than those set forth
in Section 8(a), (A) a reduction in Executive’s
Base Salary or the Performance Bonus Amount, or (B) the
assignment to Executive of any duties inconsistent in any material
respect with, or effect a material diminution of, Executive’s
duties, titles, offices, or responsibilities (including
direct-reporting responsibilities) with the Parent or the Company,
or any demotion of Executive from, or any failure to reelect or
reappoint Executive to any of such positions (except in connection
with the termination of Executive’s employment for disability
or Cause or as a result of
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Executive’s death);
provided, however, that with respect to the foregoing clause
(B) if subsequent to a Change in Control (as hereinafter
defined in Section 24), Executive maintains over the business
of the Company substantially the same authority and responsibility
with respect thereto that he held prior to such Change in Control,
the requirement that the Executive report to officers or the board
of parent companies, or a change in the title of Executive, shall
not of itself constitute “Good Reason.”
(d)
By Executive
Without Good Reason. Executive may terminate this
Agreement and his employment hereunder at any time, for any reason,
upon giving to the LIN Companies thirty (30) days’ written
notice of termination of this Agreement and Executive’s
employment hereunder pursuant to this
Section 8(d) (“ Notice of Resignation ”), during which notice
period Executive’s employment and performance of services
will continue; provided, however, that Parent may, upon
notice to Executive and without reducing Executive’s
compensation during such period, excuse Executive from any or all
of his duties during such period. The effective date of the
termination of Executive’s employment hereunder shall be the
date specified in the Notice of Resignation delivered in accordance
with this Section 8(d).
(e)
Automatic
Termination Upon Death or Disability. This Agreement and
Executive’s employment hereunder shall terminate
automatically upon the death or “total disability” of
Executive. The term “ total disability ” as used herein shall
mean Executive’s inability, with or without reasonable
accommodations, to perform the duties of Executive contemplated by
Section 3 hereof for a period of, or periods aggregating, six
(6) months in any twelve (12) month period as a result of
physical or mental illness, loss of legal capacity or any other
cause beyond Executive’s control, unless Executive is granted
a leave of absence by the Board of Parent. All determinations as to
whether Executive has suffered total disability due to physical or
mental illness, loss of capacity or any other medical cause shall
be made by a physician who is mutually agreed upon by Executive and
a majority of the members of the Nominating and Corporate
Governance Committee of the Board of Parent. Executive and the LIN
Companies hereby acknowledge that Executive’s ability to
perform the duties set forth in Section 3 hereof is of the
essence of this Agreement. Termination under this
Section 8(e) shall be deemed to be effective (i) as
of the time of Executive’s death or (ii) immediately
upon determination of Executive’s total disability, as
defined above, by a physician mutually agreeable to Executive and
the Board of Parent.
9.
Severance for Termination Without
Cause or Resignation With Good Reason .
(a) Subject to the terms and
conditions of this Section 9 set forth below, solely in the
event that this Agreement and Executive’s employment
hereunder is terminated (y) by the LIN Companies Without Cause
pursuant to the terms and subject to the conditions of
Section 8(b) hereof; or (z) by Executive with Good
Reason pursuant to the terms and subject to the conditions of
Section 8(c) hereof, then:
(i)
The Company shall
pay to Executive a severance payment (the “
Severance Payment
”) in an
amount equal to the sum of (A) Executive’s Base Salary
in effect at the time of such termination and (B) the
aggregate amount, if any, of the Performance Bonus most recently
awarded to Executive pursuant to Section 5(b) prior to
such termination;
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provided,
however, that if such termination
occurs prior to the award of Executive’s initial Performance
Bonus under this Agreement (or the determination that no such award
shall be made), the payment under this clause (B) shall be the
maximum applicable Performance Bonus that would otherwise be due
had Executive remained employed with the Company. The Severance
Payment shall be due and payable in twenty six (26) substantially
equal bi-weekly payments following such termination; provided,
however, that the payment of the portion of the Severance
Payment comprised of any Performance Bonus based upon the
determination of the achievement of certain results may be deferred
as necessary until the Company has made the necessary
determinations.
(ii)
In addition,
during the twelve-month period following a termination giving rise
to the Severance Payment, the Company shall continue to pay the
employer’s normal portion of the costs of Executive’s
health and dental insurance premiums in an amount consistent with
that paid on the date of termination, provided that Executive
chooses to participate in COBRA or a similar health insurance
continuation program and provides the Company with proof of such
participation. If Executive chooses to receive COBRA coverage from
the Company’s group health plans during this twelve-month
period, such coverage shall count toward the maximum coverage
period permitted under such plan.
(b) The payment of the Severance
Payment and the provision of the benefits described in this
Section 9 are expressly contingent on Executive’s
execution of a standard severance and release agreement containing
only a release of any and all claims by him against the LIN
Companies and all predecessors, successors, affiliates and
subsidiaries thereof, except for claims relating to (i) the
Severance Payment and other post-employment payments and benefits
due pursuant to the terms and subject to the conditions of this
Agreement; (ii) claims for benefits under the employee benefit
plans of the LIN Companies in which Executive participates, and
(iii) claims for indemnification or insurance, if applicable,
arising following his employment. Notwithstanding anything to the
contrary contained herein, Employer retains the right to terminate
the initiation or continuation of the Severance Payment and other
benefits described in this Section 9 and to recover from
Executive any and all amounts previously paid (as well as to pursue
any other remedies available at law or in equity) if it discovers
that Executive engaged in any fraud, theft, embezzlement, serious
or substantial misconduct materially injuring the LIN
Companies’ reputation, or gross negligence while employed by
the Company or if Executive materially breaches this Agreement,
including any breach by Executive of his obligations and covenants
under Sections 10, 11, or 12 hereof.
(c) Subject to such adjustments
as may be necessary in accordance with the
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