This Employment
Agreement (this “ Agreement ”), entered
into as of February 22, 2007, and made effective as of
September 6, 2006, 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 Scott
Blumenthal , an individual residing in the state of Rhode
Island (the “ Executive ”).
Whereas , on
September 6, 2006 (the “ Appointment Date
”), 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 Executive Vice
President Television of each of the LIN Companies;
Whereas , each
of Parent and the Company desire that the Company employ Executive
as Executive Vice President Television 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.
3. Position and Duties . During the Service Period,
Executive shall serve as the Executive Vice President Television 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.
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 Seventy Five Thousand Dollars ($375,000) (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) Executive shall be eligible to receive, in
addition to the Base Salary described above, an annual bonus
payment (a “ Performance Bonus ”) to be
determined by December 31 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; which
Performance Bonus payment (if any), shall be determined as
follows:
(i) With
respect to the portion of calendar year 2006 prior to the
Appointment Date, Executive shall be eligible to receive a
Performance Bonus in an amount up to One Hundred Fifty-Eight
Thousand Dollars ($158,000), which amount shall be prorated to
reflect the portion of the calendar year between January 1 and the
Appointment Date. The Performance Bonus payment determined pursuant
to this paragraph (i), if any, shall be determined in the
discretion of the President and CEO of the LIN Companies and the
Compensation Committee of the Board of Parent (the “
Compensation Committee ”) based upon those bonus
criteria established with respect to Executive’s performance
and goals prior to the Appointment Date.
(ii) With
respect to the portion of calendar year 2006 beginning on the
Appointment Date and ending on December 31, 2006, Executive
shall be eligible to receive a Performance Bonus in an amount up to
Two Hundred Thousand Dollars ($200,000) (the “ Performance
Bonus Amount ”), which Performance Bonus Amount shall be
prorated to reflect the portion of the calendar year beginning on
the Appointment Date and ending on December 31, 2006. The
bonus payment determined pursuant to this paragraph (ii), if any,
shall be determined in the discretion of the President and CEO of
the LIN Companies and the Compensation Committee based upon those
bonus criteria established with respect to Executive’s
performance and goals prior to the Appointment Date.
(iii) With
respect to each calendar year during the Service Period beginning
on January 1, 2007, if applicable, Executive shall be eligible
to receive a Performance Bonus as follows:
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(A) 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.
(B) Executive
shall be eligible to receive a bonus payment calculated as set
forth in this paragraph (B) 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 (B)
(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
Exhibit 5(b)-1 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 Target ”). The
parties acknowledge and agree that for convenience of reference
Exhibit 5(b)-2 shows for illustrative purposes the amount of
the Results Bonus corresponding to each Results Bonus Percentage
reflected on Exhibit 5(b)-1 , 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 Exhibits 5(b)-1 and
5(b)-2 , Exhibit 5(b)-1 shall
control.
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.
7. Incentive Equity. The parties acknowledge that as
of the Appointment Date, Parent granted to Executive an option (the
“ Option Grant ”) to purchase 200,000 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 September 6,
2006, 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
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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:
(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
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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 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 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 .
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(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; 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
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 Compensation Committee 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 ot
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