AGREEMENT
This Agreement made and entered into this 27th day of December, 1995, by
and between Outlet Communications, Inc., a Delaware corporation ("Outlet") and
James G. Babb of Charlotte, North Carolina ("Employee").
W I T N E S S E T H:
WHEREAS, Outlet and Employee entered into an Employment Agreement dated
January 1, 1993, as amended (the "Employment Agreement"); and
WHEREAS, Outlet entered into a Merger Agreement with National Broadcasting
Company, Inc., a Delaware corporation ("NBC") and CO Acquisition Corporation,
a Delaware corporation, dated August 2, 1995 (the "Merger Agreement"); and
WHEREAS, Employee has requested that Outlet accelerate unconditionally the
vesting of certain stock options heretofore granted to him by Outlet and the
unconditional payment to him of certain monies which would otherwise be due to
him under the Employment Agreement upon consummation of the merger contemplated
by the Merger Agreement (the "Acceleration Actions"); and
WHEREAS, Outlet is willing to take the Acceleration Actions subject to
Employee entering into this Agreement; and
WHEREAS, pursuant to Section 5.02 of the Merger Agreement the consent of
NBC is required for Outlet to take the Acceleration Actions; and
WHEREAS, NBC is willing to give its consent provided that Employee and
Outlet enter into this Agreement.
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NOW, THEREFORE, in consideration of the promises and agreements herein
contained, and in consideration of the Acceleration Actions, and for other good
and valuable consideration, the receipt whereof and sufficiency of which are
hereby acknowledged, Outlet and Employee, intending to be legally bound agree as
follows:
1. Outlet and Employee have agreed upon the basis for Outlet's
withholding of federal, state and local taxes with respect to the payments and
benefits to be provided in respect of Employee under the Employment Agreement
and pursuant to the Acceleration Actions. If the Internal Revenue Service, or
any other federal, state or local taxing authority (a "Taxing Authority") should
assert that Outlet has not fully satisfied its tax withholding obligations with
respect to any payments or benefits in respect of Employee payable under the
Employment Agreement or arising out of the Acceleration Actions (the
"Withholding Obligations"), including, without limitation, any withholding
pursuant to subtitle C or D of the Internal Revenue Code of 1986, as amended,
and Outlet, in accordance with this Agreement, ultimately makes any payment to
satisfy all or a portion of such asserted Withholding Obligations, Employee
shall promptly, and in any event within sixty (60) days after receiving notice
of such payment by Outlet, make a cash payment to Outlet in an amount equal to
the portion of such payment by Outlet which represents taxes required to be
withheld in respect of Employee with respect to any payments or benefits
payable pursuant to the Employee Agreement or the Acceleration Actions together
with the portion which represents interest thereon
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up to the date on which Outlet first receives a revenue agent's report or other
formal written notice from such Taxing Authority asserting a claim for unpaid
Withholding Obligations excluding, however, any portion which represents
interest with respect to periods on or after receipt of such formal notice or
penalties for failure to withhold.
2. If Outlet shall receive any notice (including, without limitation, a
revenue agent's report) from a Taxing Authority that Outlet has not fully
satisfied the Withholding Obligations, Outlet shall promptly provide Employee
with a copy of the notice from such Taxing Authority and thereafter Employee
shall have the right to participate in any negotiations or proceedings with
respect to the Withholding Obligations at Employee's sole cost and expense.
Employee agrees to cooperate with Outlet in any such proceeding and to provide
such information as Outlet shall from time to time reasonably require. Outlet
shall make available to Employee all notices relating to or regarding the
Withholding Obligations or matters related thereto from any Taxing Authority and
shall permit Employee and his counsel to participate in any formal or informal
proceedings before such Taxing Authority. All decisions as to how to respond to
the Taxing Authority's assertion of Withholding Obligations, including without
limitation whether or not to challenge such assertion through administrative or
legal proceedings and whether or not to settle with the Taxing Authority, shall
be entirely within the discretion of Outlet; provided,
however, that neither Outlet nor any Affiliate shall, without the consent of
Employee, take a position or settle a claim with respect
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to the Withholding Obligations that is inconsistent with the position Outlet or
such Affiliate takes in any contemporaneous dispute with the same Taxing
Authority with respect to any other item of income or deduction arising out of
the payments and benefits in respect of Employee; nor shall Outlet, without the
consent of Employee, settle any claim for Withholding Obligations if such
settlement is a condition to, or in any way a part of, the settlement of any
claim with such Taxing Authority involving an Affiliate, unless such claim
involves substantially the same issue. For purposes of the Agreement the term
"Affiliate" means any person directly or indirectly controlling, or controlled
by, or under direct or indirect common control with Outlet.
3. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered, mailed or transmitted, and shall be effective upon receipt,
if delivered personally, mailed by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses (or
at such other address for a party as shall be specified by like changes of
address) or sent by electronic transmission to the telecopier number specified
below:
(a) If to Outlet:
Outlet Communications, Inc.
Attention: Chief Executive Officer
23 Kenney Drive
Cranston, Rhode Island 02920
Fax No.: (401) 455-9227
with copies to:
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National Broadcasting Company, Inc.
30 Rockefeller Center
New York, New York 10112
Attention: Senior Vice President and
Chief Financial Officer
Fax No.: (212) 246-5430
(b) If to the Employee:
James G. Babb
901 Edgehill Road
Charlotte, North Carolina 28207
Fax No.: (704) 347-5280
4. This Agreement shall be binding upon and shall inure to the benefit of
the parties and their respective successors and assigns.
5. This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware without regard to its choice of law provisions.
6. This Agreement may be executed in several counterparts, each of which
shall be deemed to be original, but all of which taken together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, Outlet and Employee have caused this Agreement to be
executed as of the date first above written.
Outlet Communications, Inc.
By:/s/ James G. Babb
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Chairman, President & CEO
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James G. Babb
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