Exhibit
10.16
EMPLOYMENT
AGREEMENT
AGREEMENT entered into as of March 9, 2008, by
and between MEREDITH CORPORATION, an Iowa corporation (the
"Company"), and JACK GRIFFIN ("Griffin"), to become effective March
6, 2008 (“Effective Date”).
WITNESSETH:
WHEREAS, Griffin has been employed by the
Company as President, Meredith Publishing Group; and
WHEREAS, the Company wishes to continue to
employ Griffin pursuant to the terms and conditions hereof, and in
order to induce Griffin to enter into this agreement (the
"Agreement") and to secure the benefits to accrue from his
performance hereunder is willing to undertake the obligations
assigned to it herein; and
WHEREAS, Griffin is willing to continue his
employment with the Company under the terms hereof and to enter
into the Agreement;
NOW THEREFORE, in consideration of the premises
and mutual covenants contained herein and for other good and
valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1.
Position; Duties; Responsibilities .
1.1 Meredith
shall employ Griffin in New York, New York, as President, Meredith
Publishing Group, reporting to Steve Lacy (or his successor, if
applicable). While employed hereunder, Griffin shall
have such responsibility and authority as has historically attached
to being President of Meredith Publishing Group.
1.2 During
the course of his employment, Griffin agrees to devote his full
time and attention and give his best efforts and skills to
furthering the business and interests of the Company, which,
subject to the mutual agreement of Griffin and Steve Lacy (or his
successor, if applicable), which shall not be unreasonably
withheld, may include Griffin volunteering his time and efforts on
behalf of charitable, civic, professional organizations and boards
of other corporations.
2.
Term .
The term of employment under this Agreement
shall commence as of March 6, 2008, and shall continue through June
30, 2011, unless sooner terminated in accordance with this
Agreement, and thereafter as herein provided. Griffin's term of
employment shall automatically renew for subsequent one (1) year
terms, the first of which would begin on July 1, 2011, subject to
the terms of this Agreement unless either party gives written
notice six (6) months or more prior to the expiration of the then
existing term of its decision not to renew (the "Term").
In the event this Agreement expires at the end
of the Term, as extended if applicable, after the Company has
delivered a Non-Renewal Notice to Griffin, such termination of
Griffin’s employment with the Company will be treated for all
purposes hereunder as a termination of employment by the Company
Without Cause pursuant to Section 9.4.
3.
Base Salary .
3.1 The
Company shall pay Griffin a base salary at the annual rate of Seven
Hundred Twenty-Five Thousand Dollars ($725,000) ("Base Salary"),
beginning on the Effective Date and continuing through June 30,
2009, payable in accordance with the standard payroll practices of
the Company.
3.2 It
is understood that the Base Salary is to be Griffin's minimum
annual compensation during the Term. The Base Salary may increase
beginning July 1, 2009 at the discretion of the Compensation
Committee of the Company's Board of Directors ("Compensation
Committee"). Base Salary shall include all such
increased amounts, and, if increased, Base Salary shall not
thereafter be decreased.
4.
Long-Term Incentive Plans .
During the Term of this Agreement, Griffin shall
be eligible to participate in all long-term incentive plans,
including, without limitation, stock incentive plans adopted by the
Company and in effect (collectively, "Long-Term Incentive Plans"),
at levels of awards to be granted by the Compensation Committee
commensurate with the level of Griffin's responsibilities and
performance thereof. At its regular August 2008 meeting,
the Compensation Committee, in the exercise of its discretion,
shall approve an award to Griffin of: (a) 50,000 non-qualified
stock options with a three (3) year cliff vesting schedule and a
strike price equal to the fair market value of Meredith common
stock on the date of such award, and (b) 7,500 Restricted Stock
Units of Meredith common stock with a three (3) year cliff vesting
schedule.
5.
Bonus .
5.1 During
the Term of this Agreement, Griffin shall be eligible to
participate in the Meredith Management Incentive Plan (or any
successor or replacement annual incentive plan of the Company)
("MIP"), for such periods as it continues in effect, subject to the
terms of the MIP, and to the discretion vested in the Compensation
Committee under the MIP; provided, however, that the percentage of
Base Salary payable as a target bonus under the MIP shall not be
less than eighty percent (80%) (actual Company financial results
may result in an actual bonus paid to Griffin equal to less than or
more than eighty percent (80%) of Base Salary).
5.2 The
MIP bonus pursuant to this Section 5.1 shall be paid to Griffin in
conformance with the Company's normal MIP bonus pay policies
following the end of the respective fiscal year. For the purpose of
Section 5.1, MIP bonuses paid with respect to the fiscal year shall
include payments made outside of the fiscal year but for such
fiscal year and shall exclude payments made in the fiscal year that
are for another fiscal year.
5.3 For
each year during the term of this Agreement, Griffin will receive
an annual Stay Bonus ("Stay Bonus") of Seventy-Five Thousand
Dollars ($75,000) less applicable withholdings and deductions, to
be payable in twelve (12) equal installments of Six Thousand Two
Hundred Fifty Dollars ($6,250) on the first regular payday of each
month, thereafter conditioned on Griffin's continuing employment
with Meredith on each such payday.
6.
Short-Term Disability .
During any period of short-term disability, the
Company will continue to pay to Griffin the Base Salary throughout
the period of short-term disability, but in no event beyond the end
of Term. In addition, Griffin will continue to receive
all rights and benefits under the benefit plans and programs of the
Company in which Griffin is a participant as determined in
accordance with the terms of such plans and programs, and Griffin
shall be eligible to receive the benefit of his target MIP and Stay
Bonuses for the initial year in which the short-term disability
occurs without reduction for the period of short-term
disability. In the event of Griffin's death during a
period of short-term disability, the provisions of Section 9.1
shall apply. For the purposes of this Agreement, short-term
disability shall be defined as the incapacitation of Griffin by
reason of sickness, accident or other physical or mental disability
which continues for a period not to exceed the fifth month
anniversary of the date of the cause or onset of such
incapacitation. All benefits provided under this Section
6 shall be in replacement of and not in addition to benefits
payable under the Company’s short-term and long-term
disability plan(s), except to the extent such disability plan(s)
provide greater benefits than the disability benefits provided
under this Agreement, in which case the applicable disability
plan(s) would supersede the applicable provisions of this
Agreement. In the event Griffin is determined to be
permanently disabled (as determined under Section 9.2), the
provisions of Section 9.2 shall apply.
7.
Employee Benefit Plans .
7.1 During
the Term of this Agreement and subject to all eligibility
requirements, and to the extent permitted by law, Griffin will have
the opportunity to participate in all employee benefit plans and
programs generally available to the Company's employees in
accordance with the provisions thereof as in effect from time to
time, including, without limitation, medical coverage, group life
insurance, holidays and vacations, Meredith Savings and Investment
Plan (401k) and the Meredith Employees' Retirement Income Plan, but
not including the Company's short-term and long-term disability
plans, except to the extent that such disability plans provide
greater benefits than the disability benefits provided under this
Agreement, in which case the applicable disability plan would
supersede the applicable provisions of this Agreement.
7.2 In
addition to benefits described in Section 7.1 during the Term of
this Agreement, Griffin shall also receive or participate in, to
the extent permitted by law, the various perquisites and plans
generally available to officers of the Company in accordance with
the provisions thereof as in effect from time to time including,
without limitation, the following perquisites to the extent the
Company continues to offer them: an automobile or automobile
allowance, tax and estate planning, and executive life insurance
(if insurable). Griffin shall also be reimbursed for the regular
annual dues for the Yale Club and the New York Athletic Club and
for the initiation fees and regular annual dues at a mutually
agreed upon country club incurred by Griffin in furtherance of the
Company's business. All such reimbursements or in-kind
benefits shall be payable by the Company on or before the last day
of Griffin’s taxable year following the taxable year in which
the expense was incurred. The expenses paid or in-kind
benefits provided by the Company during any taxable year of Griffin
will not affect the expenses paid or in-kind benefits provided by
the Company in another taxable year. This right to
reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit. In addition, Griffin shall
participate in the Meredith Replacement Benefit Plan and the
Meredith Supplemental Benefit Plan.
8.
Expense Reimbursements .
During Griffin's employment with the Company,
Griffin will be entitled to receive reimbursement by the Company
for all reasonable, out-of-pocket expenses incurred by him (in
accordance with policies and procedures established by the
Company), in connection with his performing services hereunder,
provided Griffin properly accounts therefor. All such
reimbursements shall be payable by the Company on or before the
last day of Griffin’s taxable year following the taxable year
in which the expense was incurred. The expenses paid by the Company
during any taxable year of Griffin will not affect the expenses
paid by the Company in another taxable year. This right
to reimbursement is not subject to liquidation or exchange for
another benefit.
9.
Consequences of Termination of Employment .
9.1
Death . In the event of the death of Griffin during the Term
of this Agreement or during the period when payments are being made
pursuant to Sections 6 or 9.2, this Agreement shall terminate and
all obligations to Griffin shall cease as of the date of death
except that, (a) the Company will pay to the legal representative
of his estate in substantially equal installments the Base Salary
and Stay Bonus under Section 5.3 until the end of the month of the
first anniversary of Griffin's death (but not beyond June 30, 2011)
with each installment treated as a separate “payment”
for purposes of Section 409A of the Code, such that any payment
that would otherwise be payable within 2 ½ months after
Griffin’s taxable year in which his employment with the
Company is terminated or, if later, within 2 ½ months after
the end of the Company’s taxable year in which
Griffin’s employment with the Company is terminated (the
“Short Term Deferral Period”) is exempt from Section
409A of the Code, and (b) all rights and benefits of Griffin under
the benefit plans and programs of the Company in which Griffin is a
participant, will be provided as determined in accordance with the
terms and provisions of such plans and programs. Any MIP bonus (or
amounts in lieu thereof) pursuant to Section 5, payable for the
fiscal year in which Griffin's death occurs, shall be determined by
the Compensation Committee at its meeting following the end of such
fiscal year pro rata to the date of death and promptly paid to
Griffin's estate. All awards of restricted stock, stock options and
any other benefits under the Long-Term Incentive Plans shall be
handled in accordance with the terms of the relevant plan and
agreements entered into between Griffin and the Company with
respect to such awards.
9.2
Disability . If Griffin shall become permanently
incapacitated by reasons of sickness, accident or other physical or
mental disability, as such incapacitation is certified by a
physician chosen by the Company and reasonably acceptable to
Griffin (if he is then able to exercise sound judgment), and shall
therefore be unable to perform any substantial gainful activity,
then the employment of Griffin hereunder and this Agreement may be
terminated by Griffin or the Company upon thirty (30) days' written
notice to the other party following such certification. Should
Griffin not acquiesce (or should he be unable to acquiesce) in the
selection of the certifying doctor, a doctor chosen by Griffin (or
if he is not then able to exercise sound judgment, by his spouse or
personal representative) and reasonably acceptable to the Company
shall be required to concur in the medical determination of
incapacitation, failing which the two doctors shall designate a
third doctor whose decision shall be determinative as of the end of
the calendar month in which such concurrence or third-doctor
decision, as the case may be, is made. After the final
certification is made and the 30-day written notice is provided,
the Company shall pay to Griffin, at such times as Base Salary
provided for in Section 3 of this Agreement would normally be paid,
100% of Base Salary for the first twelve months following such
termination, 75% of Base Salary for the next twelve-month period
and 50% of Base Salary for the remaining period of what would have
constituted the current Term of employment but for termination by
reason of disability (but in no event beyond June 30, 2011) with
each installment treated as a separate “payment” for
purposes of Section 409A of the Code, such that any payment that
would otherwise be payable during the Short Term Deferral Period is
exempt from Section 409A of the Code. Following the termination
pursuant to this Section 9.2, the Company shall pay or provide to
Griffin such other rights and benefits of participation under the
employee benefit plans and programs of the Company to the extent
that such continued participation is not otherwise prohibited by
applicable law or by the express terms and provisions of such plans
and programs. Furthermore, nothing contained in this Section 9.2
shall preclude Griffin from receiving the benefit of his target MIP
bonus and Stay Bonus for the initial year in which a short-term
disability occurs pursuant to the provisions of Section 6. All
benefits provided under this Section 9.2 shall be in replacement of
and not in addition to benefits payable under the Company's
short-term and long-term disability plans, except to the extent
such disability plans provide greater benefits than the disability
benefits provided under this Agreement, in which case the
applicable disability plan(s) would supersede the applicable
provisions of this Agreement. All awards of restricted stock, stock
options and any other benefits under the Long-Term Incentive Plans
shall be handled in accordance with the terms of the relevant plan
and agreements entered into between Griffin and the Company with
respect to such awards.
9.3
Due Cause . The Company may terminate Griffin's
employment, remove him as an officer of the Company and terminate
this Agreement at any time for Due Cause. In the event of such
termination for Due Cause, Griffin shall continue to receive Base
Salary and Stay Bonus payments provided for in this Agreement only
through the date of such termination for Due
Cause. Griffin shall be entitled to no further benefits
under this Agreement, except that any rights and benefits Griffin
may have under the employee benefit plans and programs of the
Company, in which Griffin is a participant, shall be determined in
accordance with the terms and provisions of such plans and
programs. Griffin understands and agrees that in the event of the
termination of employment, removal as an officer and termination of
this Agreement pursuant to this Section 9.3: (a) All awards of
restricted stock, stock options and any other benefits under the
Long-Term Incentive Plans shall be handled in accordance with the
terms of the relevant plan and agreements entered into between
Griffin and the Company with respect to such awards and (b) the
Company shall have no further obligation to pay any bonus to
Griffin under the terms of the MIP or this Agreement, but that the
obligations of Griffin under Section 10 shall remain in full force
and effect. The term “Due Cause” shall mean (i) the
willful and continued failure of Griffin to attempt to perform
substantially his duties with the Company (other than any such
failure resulting from Disability), after a demand for substantial
performance is delivered to Griffin, which specifically identifies
the manner in which Griffin has not attempted to substantially
perform his duties and for those matters which are subject to cure,
a ten (10) day notice to cure is provided, or (ii) the engaging by
Griffin in willful misconduct which is materially injurious to the
Company, monetarily or otherwise. For purposes of this
definition, no act, or failure to act, on the part of Griffin shall
be considered “willful” unless it is done, or omitted
to be done, by Griffin in bad faith and without reasonable belief
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