Exhibit 10.7
Tribune Company
Transitional Compensation Plan
for Executive Employees
Tribune Company, by resolution of
its Board of Directors, adopted the Tribune Company Transitional
Compensation Plan for Executive Employees (the “Plan”)
on December 9, 1985, to attract and retain executives of
outstanding competence and to provide additional assurance that
they will remain with Tribune Company and its subsidiaries on a
long-term basis. The following provisions constitute an amendment
and restatement of the Plan effective as of July 19,
2006.
1.
Participation
. Any full-time, key executive employee of Tribune
Company or of any of its subsidiaries shall be eligible to
participate in the Plan in one of three separate tiers, if at the
time his employment terminates he has been designated by the
Committee as being covered by the Plan within a specific tier, and
such designation has not been revoked; provided, however, that no
revocation of such designation shall be effective if made: (a) on
the day of, or within 36 months after, occurrence of a
“Change in Control,” as such term is hereinafter
defined; or (b) prior to a Change in Control, but at the request of
any third party participating in or causing the Change in Control;
or (c) otherwise in connection with or in anticipation of a Change
in Control.
For the purposes of the Plan, the
term “subsidiary” shall mean any corporation, more than
50 percent of the outstanding, voting stock in which is owned by
Tribune Company or by a subsidiary.
2.
Administration
. The Plan shall be administered by the
Compensation & Organization Committee of the Board of Directors
of Tribune Company (the “Committee”) or by a successor
committee. The Committee shall have the authority to make rules and
regulations governing the administration of the Plan, to designate
executive employees to be covered by the Plan, to revoke such
designations, and to make all other determinations or decisions,
and to take such actions, as may be necessary or advisable for the
administration of the Plan. The Committee’s determinations
need not be uniform, and may be made selectively among eligible
employees, whether or not they are similarly situated.
3.
Eligibility for Transitional
Compensation . An executive who is a Participant in the Plan
shall be eligible to receive transitional compensation, in the
amounts and at the times described in paragraph 5, if:
(a)
His employment with the Company and
all of its subsidiaries is terminated:
(i)
On the day of, or within 36 months
(24 months in the case of Tier II Participants and 18 months in the
case of Tier III Participants) after, occurrence of a “Change
in Control,” as such term is hereinafter defined;
(ii)
Prior to a Change in Control, but at
the request of any third party participating in or causing the
Change in Control; or
(iii)
Otherwise in connection with or in
anticipation of a Change in Control; and
(b)
The Participant’s termination of employment was
not:
(i)
On account of his death;
(ii)
On account of a physical or mental
condition that would entitle him to long-term disability benefits
under the Tribune Company Long Term Disability Plan, as then in
effect (whether or not he is actually a Participant in such
plan);
(iii)
For conduct involving dishonesty or
willful misconduct which, in either case, is detrimental in a
significant way to the business of Tribune Company or any of its
subsidiaries; or
(iv)
On account of the employee’s
voluntary resignation; provided that a resignation shall not be
considered to be “voluntary” for the purposes of the
Plan in the following situations: (x) if the resignation by Tribune
Company’s Chairman & Chief Executive Officer or a
Participant designated as a Tier I Participant as of December 13,
1994, occurs during the 30-day period immediately following the
first anniversary of the Change in Control (i.e., this provision is
not available for Tier II or Tier III Participants or other Tier I
Participants); or (y) if the resignation occurs under the
circumstances described in paragraph 14(a) of the Plan; or (z) if,
subsequent to the Change in Control and prior to such resignation,
there has been a reduction in the nature or scope of the
Participant’s authority or duties, a reduction in the
Participant’s compensation or benefits or a change in the
city in which he is required to perform his duties.
4.
Change in
Control . For the purposes of the Plan, a “Change in
Control” shall mean:
(a)
The acquisition, other than from
Tribune Company, by any person, entity, or “group”
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the “Exchange Act”)),
excluding for this purpose the Company, the Robert R. McCormick
Tribune Foundation, the Cantigny Foundation, (or any
charitable trust, foundation, organization, or similar entity or
entities succeeding to one or both of those Foundations or any
substantial part thereof) and any employee benefit plan or trust of
Tribune Company or its subsidiaries, of beneficial ownership
(within the
2
meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20 percent or more of either the then
outstanding shares of common stock or the combined voting power of
Tribune Company’s then outstanding voting securities entitled
to vote generally in the election of directors;
(b)
Individuals who, as of January 1,
2005, constitute the Board of Directors of Tribune Company (as of
January 1, 2005 the “Incumbent Board” and, generally,
the “Board”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a
director subsequent to the date hereof whose election, or
nomination for election, by the shareholders of Tribune Company was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the members of the Board of Tribune
Company, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be considered as though
such person were a member of the Incumbent Board; or
(c)
Consummation of a reorganization,
merger, consolidation or other transaction involving Tribune
Company, in each case, with respect to which persons who were the
shareholders of Tribune Company immediately prior to such
reorganization, merger, consolidation or other transaction do not,
immediately thereafter, own, directly or indirectly, 50% or more of
the combined voting power of the then outstanding securities
entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company, or a liquidation or
dissolution of Tribune Company, or the sale of all or substantially
all of the assets of Tribune Company.
5.
Amount and Payment of
Transitional Compensation . A Participant who is eligible for transitional
compensation shall receive:
(a)
Subject to paragraph 6, a lump-sum
cash payment, payable within 30 calendar days after the date on
which his employment terminates, in an amount equal to the sum
of:
(i)
For Tier I Participants, three (3)
multiplied by the sum of (x) the Participant’s highest annual
rate of Base Salary in effect within the three years prior to or
upon the effective date of termination and (y) two hundred percent
(200%) of the Participant’s target bonus payable for the year
in which the Change in Control occurs under the Tribune Company
Incentive Compensation Plan (As Amended and Restated Effective May
12, 2004), as now or hereafter amended, or any replacement or
successor plan;
3
(ii)
For Tier II Participants, two (2)
multiplied by the sum of (x)
