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EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of
February 21, 2007 (the "Effective Date"), between News America
Incorporated, a Delaware corporation (the "Company"), and Roger
Ailes (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Company
pursuant to the terms of an employment agreement between the
Company and the Executive dated as of August 15, 2005 (the
"Prior Agreement");
WHEREAS, the Company desires to continue such employment
relationship and enter into this Agreement, which will supersede
the Prior Agreement and set forth the terms and conditions under
which the Executive will continue to serve the Company, its parent,
News Corporation, and its affiliates;
WHEREAS, the Company and the Executive agreed under the Prior
Agreement to negotiate an alternative structure to replace the "New
Duties Incentive Compensation" in Section 3(d) thereof if
either the Company or the Executive desired to do so and the
Company and the Executive hereby agree to postpone any possible
renegotiation of an alternative structure until after
December 31, 2007, at the earliest; and
WHEREAS, the Executive wishes to continue his employment with
the Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
agreements hereinafter contained, the parties hereto agree as
follows:
1. Duties . The Company agrees to employ the Executive as
Chairman and
Chief Executive Officer of Fox News Channel (the
"News Channel") and Fox Business Channel (the "Business Channel"),
as Chairman of Fox Television Stations ("FTS") and Twentieth
Television ("TT"), and as Editor-in-Chief of Fox News.com, and the
Executive agrees to accept such employment for the Term of
Employment as hereinafter defined. During the Term of Employment,
the Executive, subject to the provisions of this Agreement, shall
have the title and the duties of Chairman and Chief Executive
Officer of the News Channel and the Business Channel, Chairman of
FTS and TT, and Editor-in-Chief of Fox News.com.
In performing his duties hereunder, the Executive shall report
directly to the Chairman and Chief Executive Officer and President
and Chief Operating Officer of News Corporation. In conformity with
budgets approved by the Chief Executive Officer of News
Corporation, the Executive shall have the authority and perform
such duties for (i) the News Channel and Business Channel as
shall be consistent with the authority and duties of a chairman and
chief executive officer including the right to hire and fire
employees (including an executive assistant) and (ii) FTS and
TT as shall be consistent with the authority and duties of a
chairman. Executive’s duties will include direction of
affiliate sales and advertising sales (subject to coordinating such
activities with similar activities conducted by other Fox
Television entities) and content and format of the News Channel and
Business Channel and Fox News.com. In connection with performing
his duties under this Agreement, the Executive shall be a Senior
Advisor to the Chairman and Chief Executive Officer and President
and Chief Operating Officer of News Corporation on television and
all broadcast, cable news, business news and internet matters.
During the Term of Employment, subject to the provisions of
Section 6(d) hereof, the Executive shall devote all of his
business time and attention and give his best efforts and skill
to
furthering the business and interests of the
Company. If requested, Executive agrees to serve without additional
compensation as a director and/or committee member of the News
Channel, the Business Channel, FTS, TT and any other subsidiaries
and affiliates of News Corporation.
In his capacities under this Agreement, including as a director,
Executive shall be indemnified, defended and held harmless for any
and all claims as against the Company and Executive and will be
insured under News Corporation’s Directors and Officers
Liability Insurance Policy. This insurance and/or indemnification
will include the provision of legal representation and the payment
of damages.
2. Term . "Term of Employment" as used herein shall mean
the period commencing on the date hereof and ending on
August 14, 2010, provided, however, if the Term of Employment
is terminated earlier, as hereinafter set forth, the Term of
Employment shall mean the period from the date hereof through the
effective date of such earlier termination.
3. Compensation .
(a) Base Salary and Minimum Bonus . As compensation for
his services, Executive shall be paid, and agrees to accept, a base
salary at an annual rate of $5,000,000 (the "Base Salary"), to be
paid in the same manner as other senior executives of the Company
are paid. If the Executive is employed on June 30,
2007, June 30, 2008, June 30, 2009 and
June 30, 2010, on each such date the Executive shall be
entitled to a minimum bonus of $1,000,000 ("Minimum Bonus"), and,
other than the "Special" Bonuses provided under Section 3(b)
and (c) hereof, any additional bonus in excess of the Minimum
Bonus shall be in the sole discretion of the Company. The payments
to be made to the Executive pursuant to this Agreement shall be
subject to deductions as shall be required to be withheld by
applicable law and regulations.
(b) Special Bonus .
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(i)
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Executive shall be entitled to receive from the
Company a special bonus (the "Special Bonus") based on the earnings
before interest, taxes, depreciation and amortization of the News
Channel, as determined by the Company consistent with past practice
(excluding the expensing or employee stock options and/or grants)
applied in accordance with the Company’s normal practice and
policies ("EBITDA") in accordance with the following terms and
conditions:
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(A)
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Special Bonus Schedule
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Fiscal Year
Ended June 30
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High End
Special Bonus
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$
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3,000,000
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$
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4,500,000
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$
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5,500,000
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$
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6,500,000
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For each fiscal year during the Term of
Employment, the Compensation Committee of News Corporation (the
"Compensation Committee") shall establish a high end EBITDA for the
News Channel ("High End EBITDA") and a low end EBITDA for the News
Channel ("Low End EBITDA") which shall be communicated to the
Executive upon determination. Such determination for any fiscal
year during the Term of Employment shall be made no later than (but
may be made at any time before) the first quarter of the fiscal
year for which the goal applies.
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(B)
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If the EBITDA of the News Channel for any fiscal
year during the Term of Employment is not less than the High End
EBITDA, then Executive shall be entitled to receive a Special Bonus
equal to the High End Special Bonus for such fiscal
year.
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(C)
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If the EBITDA for fiscal year 2007 during the
Term of Employment is equal to or greater than the Low End EBITDA
but less than the High End EBITDA, then Executive shall be entitled
to receive a Special Bonus equal to $1.8 million plus the product
of (1) a fraction, the numerator of which is the amount by
which the EBITDA for such fiscal year exceeds the Low End EBITDA
for such fiscal year and the denominator of which is the High End
EBITDA less the Low End EBITDA for fiscal year 2007, multiplied by
(2) the sum of the High End Special Bonus minus $1.8
million.
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(D)
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If the EBITDA for fiscal year 2008 during the
Term of Employment is equal to or greater than the Low End EBITDA
but less than the High End EBITDA, then Executive shall be entitled
to receive a Special Bonus equal to $2.5 million plus the product
of (1) a fraction, the numerator of which is the amount by
which the EBITDA for such fiscal year exceeds the Low End EBITDA
for such fiscal year and the denominator of which is the High End
EBITDA less the Low End EBITDA for fiscal year 2008, multiplied by
(2) the sum of the High End Special Bonus minus $2.5
million.
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(E)
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If the EBITDA for fiscal year 2009 during the
Term of
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Employment is equal to or greater than the Low
End EBITDA but less than the High End EBITDA, then Executive shall
be entitled to receive a Special Bonus equal to $2.8 million plus
the product of (1) a fraction, the numerator of which is the
amount by which the EBITDA for such fiscal year exceeds the Low End
EBITDA for such fiscal year and the denominator of which is the
High End EBITDA less the Low End EBITDA for fiscal year 2009,
multiplied by (2) the sum of the High End Special Bonus minus
$2.8 million.
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(F)
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If the EBITDA for fiscal year 2010 during the
Term of Employment is equal to or greater than the Low End EBITDA
but less than the High End EBITDA, then Executive shall be entitled
to receive a Special Bonus equal to $3.1 million plus the product
of (1) a fraction, the numerator of which is the amount by
which the EBITDA for such fiscal year exceeds the Low End EBITDA
for such fiscal year and the denominator of which is the High End
EBITDA less the Low End EBITDA for fiscal year 2010, multiplied by
(2) the sum of the High End Special Bonus minus $3.1
million.
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(G)
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If the EBITDA for any fiscal year during the Term
of Employment is not equal to or greater than the Low End EBITDA,
then Executive shall not be entitled to receive a Special Bonus for
such fiscal year.
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(H)
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The Special Bonus, if any, shall be payable
within twenty days after the determination of EBITDA for the fiscal
year then ended and shall be in addition to, and not in lieu of, or
considered an advance in respect of, any other bonus that Executive
may be entitled to receive pursuant to this Agreement.
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(ii)
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If, during the Term of the Employment, the News
Channel commences or acquires another business, is involved in a
reorganization, or any similar event occurs which has the effect of
changing in a material respect the EBITDA of the News Channel as
calculated under this Agreement , Executive and the Company will
agree to adjustments in the amount and in the manner in which the
EBITDA of the News Channel is calculated.
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(c) Signing Bonus . Under the terms and
conditions of the Prior Agreement, the Executive received 333,333
Restricted Stock Units (the "Bonus RSUs"). Twenty percent
(20%) of the Bonus RSUs vested on August 15, 2006 and
twenty percent (20%) of the Bonus RSUs shall vest on each of
August 15, 2007, August 15, 2008, August 15,
2009 and August 15, 2010. At the Company’s discretion,
settlement for any of the vested Bonus RSUs shall be in shares of
News Corporation’s Class A Common Stock (the "Common
Stock") or in cash equal to the fair market value of the shares of
Common Stock subject to the vested Bonus RSUs or a combination of
cash and shares of Common Stock. Notwithstanding anything to the
contrary contained herein (capitalized terms not already defined
shall have the meanings set forth in Section 7 hereof) any
unpaid Bonus RSUs shall be paid within 15 business days of the
Executive’s death, disability or termination of the
Executive’s employment by the Company without Cause. The
Bonus RSUs shall be granted under, and in accordance with the terms
of, News Corporation’s 2005 Long-Term Incentive Plan, except
as otherwise stated herein.
(d) New Duties Incentive Compensation .
Under this agreement, Executive has agreed to undertake new duties.
In recognition the Company shall provide incentive compensation
under the following terms: The Executive shall be entitled to
receive shares of Common Stock (the "Bonus Stock") at such time
that each of the following events occur: (i) 333,333 shares
upon the earlier of (A) when the Business Channel launches and
is available to no fewer than 30,000,000 cable and satellite
subscribers or (B) when the fair market value of the Business
Channel (the "Business Channel Fair Market Value"), as determined
by an investment banking firm upon the launch of the Business
Channel and thereafter as requested by the Executive (but no more
than two times in any calendar year after the date of launch),
equals or exceeds the cumulative net cash (including operating
expenses and capital expenditures) invested by the Company in the
Business Channel, as set forth in the Company’s books and
records in accordance with United States generally accepted
accounting principles (the "Business Channel Cost"); provided
however that if the Company instructs Executive to incur operating
expenses or make capital expenditures in excess of those set forth
in the Business Channel’s budget and business plan, such
operating expenses or capital expenditures will be excluded from
the Business Channel Cost for purposes of this Agreement, and, for
purposes of this clause (i)(B), the investment banking firm will
only consider valuations of cable channels of comparable size in
determining the Business Channel Fair Market Value; and
(ii) 333,333 shares when the Business Channel Fair Market
Value equals or exceeds two times the Business Channel Cost. In the
event that Executive’s employment is terminated by the
Company due to death, disability or without Cause, then the
Business Channel Fair Market Value shall be determined as of
the
date of termination to determine whether
Executive is entitled to receive the Bonus Stock as provided in
clause (ii) of the preceding sentence. If, as of
December 31, 2007, the Business Channel is not launched, then
Executive and the Company agree to negotiate in good faith an
alternative structure to replace the "New Duties Incentive
Compensation" Bonus w
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