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Exhibit
10.1
CHANGE
OF CONTROL EMPLOYMENT AGREEMENT
AGREEMENT,
dated as of the __ day of October, 2007 (this
“Agreement”), by and between Journal Register
Company, a Delaware corporation (the “Company”),
and Scott Wright (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 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 65th 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.
(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 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
dur
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