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EXHIBIT 10(e)
CHIEF EXECUTIVE OFFICER
ANNUAL INCENTIVE PLAN
OF
SAGA COMMUNICATIONS, INC.
ARTICLE I
PURPOSE
1.1 ESTABLISHMENT AND PURPOSE. SAGA Communications, Inc. (the "Company")
hereby establishes the Chief Executive Officer Annual Incentive Plan of
SAGA Communications (the "Plan"), effective as of January 1, 2000. The
purpose of the Plan is to further the interests of the Company's
shareholders by establishing and providing performance-based incentives
to the Chief Executive Officer of the Company.
1.2 APPLICABILITY OF PLAN. The provisions of this Plan are applicable only
to the Chief Executive Officer of the Company.
ARTICLE II
DEFINITIONS
2.1 DEFINITIONS. Wherever used in the Plan, the following words and phrases
shall have the meaning set forth below, unless the context plainly
requires a different meaning:
a) "Administrator" means the Compensation Committee.
b) "Beneficiary" means the person or persons designated by the
Chief Executive Officer in accordance with Section 6.7.
c) "Board" means the Board of Directors of the Company.
d) "Cause" means "for cause" as defined in paragraph 11 of the
employment agreement entered into by the Chief Executive
Officer and the Company; provided, however, that "Cause" shall
not exist unless the notice and potential redress process
described in such employment agreement have been completed.
e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
f) "Committee" means the Compensation Committee, and with respect
to the administration of the Plan, whose members shall satisfy
the definition of "outside directors" as identified in Code
Section 162(m)(4)(C) and as defined in Treasury Regulation
Section 162-27(e)(3).
g) "Company" means SAGA Communications, Inc.
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h) "Disability" means "disability" as that term is described in
paragraph 10 of the employment agreement entered into by the
Chief Executive Officer and the Company.
i) "Effective Date" means January 1, 2000.
j) "Fiscal Year" means the 12-month period beginning January 1
and ending on the following December 31st.
k) "Incentive Award" means the amount payable pursuant to the
Plan with respect to a Fiscal Year, based on the level of
achievement of the Performance Goals established for the
Performance Measures selected by the Committee for such Fiscal
Year.
l) "Performance Goal" means, with respect to a specific
Performance Measure, the level at which credit will be given
to the Chief Executive Officer for purposes of determining a
payment from the Plan for a Fiscal Year.
m) "Performance Measure" means each measure identified in Section
4.1.
n) "Plan" means the Chief Executive Officer Annual Incentive Plan
of Saga Communications, Inc., and any amendment thereto.
o) "Retirement" means "retirement" as such or similar term is
defined in the qualified defined contribution plan sponsored
by the Company.
ARTICLE III
ADMINISTRATION
3.1 GENERAL. The Administrator shall be the Committee, or such other person
or persons designated by the Board. Except as otherwise specifically
provided in the Plan, the Administrator shall be responsible for the
administration of the Plan.
3.2 ADMINISTRATIVE RULES. The Administrator may adopt such rules of
procedure as it deems desirable for the conduct of its affairs, except
to the extent that such rules conflict with the provisions of the Plan.
3.3 DUTIES. The Administrator shall have the following rights, powers and
duties:
(a) The decision of the Administrator in matters within its
jurisdiction shall be final, binding and conclusive upon the
Chief Executive Officer and upon any other person affected by
such decision, subject to the claims procedure hereinafter set
forth.
(b) The Administrator shall have the duty and authority to
interpret and construe the provisions of the Plan, to decide
any question which may arise regarding the rights of the Chief
Executive Officer and his beneficiary(ies), and the amounts of
their respective interests, to adopt such rules and to
exercise such powers as the Administrator may deem necessary
for the administration of the Plan, and to exercise any other
rights, powers or privileges granted to the Administrator by
the terms of the Plan.
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(c) The Administrator shall have the authority to appoint
individuals, including employees of the Company, to provide
appropriate support and day-to-day administration and advice
to the Administrator in the fulfillment of the duties of the
Administrator.
(d) The Administrator shall maintain full and complete records of
its decisions. Its records shall contain all relevant data
pertaining to the Chief Executive Officer and his rights and
duties under the Plan. The Administrator shall have the duty
to maintain Account records of the participant in the Plan.
(e) The Administrator shall periodically report to the Board with
respect to the status of the Plan.
3.4 FEES. No fee or compensation shall be paid to any person for services
as the Administrator. No individual who is an employee of the Company
and is appointed by the Administrator pursuant to Section 3.3(c) shall
receive additional compensation in fulfilling the duties assigned to
that individual. Any non-employee of the Company who provides services
to the Administrator pursuant to Section 3.3(c) shall receive fees for
such services as negotiated by and between the Company and such
non-employee.
ARTICLE IV
PERFORMANCE MEASURES AND GOALS
4.1 PERFORMANCE MEASURES. The Committee shall select, for each Fiscal Year
for which the Committee determines that the Chief Executive Officer
shall have the opportunity to achieve an Incentive Award, the
Performance Measure or Measures by which such Incentive Award shall be
determined. The Performance Measures from which the Committee may
select are as follows:
Earnings Per Share Net Revenue Growth
Broadcast Cash Flow Free Cash Flow
After-tax Cash Flow Annual Net Revenue
4.2 PERFORMANCE GOALS. The Committee shall assign, for each Fiscal Year for
which the Committee determines that the Chief Executive Officer shall
have the opportunity to achieve an Incentive Award, the specific goal
that must be achieved for each Performance Measure.
4.3 COMBINATION OF PERFORMANCE MEASURES AND PERFORMANCE GOALS. The
Committee shall determine in writing the combination of Performance
Measures, their respective Performance Goals, and the weighting to be
assigned to each Performance Measure, in determining the level of
performance that must be achieved for the Chief Executive Officer to
receive an Incentive Award for a specific Fiscal Year. The Committee
shall make reasonable efforts to satisfy the requirements of this
Section 4.3 within ninety (90) days after the beginning of the Fiscal
Year to which the Performance Measures and Goals relate; provided,
however, that if the Committee satisfies the requirement of this
Section 4.3 after such ninety (90) day period, the provisions of this
Plan shall continue to apply with respect to the determination of the
Incentive Award for such Fiscal Year.
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4.4 ESTABLISHMENT OF A CORPORATE PERFORMANCE TRIGGER. The Committee in
satisfying the provisions of this Article IV with respect to any Fiscal
Year shall establish a Performance Measure and related Goal (or
combination of Measures and related Goals) that must be satisfied prior
to determining whether any Incentive Award is to be payable for such
Fiscal Year, which shall be set forth in writing in the manner
described in Section 4.3.
ARTICLE V
INCENTIVE AWARDS
5.1 ESTABLISHING POTENTIAL INCENTIVE AWARD OPPORTUNITIES. The Committee
shall establish, at the same time as the Performance Measures and Goals
are established as described in Article IV with respect to a specific
Fiscal Year, the following items:
a) The amount of Incentive Award which will be paid if the
applicable Performance Goal (or combination of Goals) is
achieved;
b) The minimum level of Performance Goal (or combination of
Performance Goals) achievement which must occur for any
Incentive Award to be paid, and the amount that would be paid
for such level of achievement; and
c) The maximum amount of any Incentive Award which will be paid
with respect to achieving a Performance Goal (or combination
of Performance Goals), and the amount that would be paid such
level of achievement;
provided, however, that the maximum Incentive Award for any Fiscal Year
cannot exceed five hundred percent (500%) of annual base salary payable
for such year.
These items shall be set forth in writing consistent with the
provisions of Section 4.3.
5.2 DETERMINING ACTUAL INCENTIVE AWARD. The Committee shall determine
whether any Incentive Award is payable for a Fiscal Year, based on a
determination of the actual results relating to the Performance Goals
and Measures selected for that Fiscal Year. The Committee may rely on
any such information, including but not limited to the financial
statements developed with respect to such Fiscal Year, in making such
determination. For purposes of making the determination under this
Section 5.2, the Committee shall use its best judgment in applying any
actual corporate result that is not equal to the specific Goal (or
combination of Goals) established for a Performance Measure, but which
otherwise would result in an Incentive Award being payable.
The Committee shall have the authority, once such determination is
made, to decrease any Incentive Award otherwise payable for a Fiscal
Year, but in no event shall the Committee have the authority to
increase any such Incentive Award. In making this determination, the
Committee may take into account events, including but not limited to
changes in corporate structure or accounting procedures, that occur
during a Fiscal Year which, in the judgment of the Committee, makes
comparison of actual corporate performance with a Performance Goal (or
Goals) impossible or inconsistent with the objectives of the Company
and the Plan.
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The Committee shall set forth in writing the determination required
under this Section 5.2.
5.3 AUTHORIZING PAYMENT OF INCENTIVE AWARD. The Committee shall authorize
payment of any Incentive Award for a Fiscal Year after or commensurate
with the determination under Section 5.2. Notwithstanding the
foregoing, if the Chief Executive Officer separates from employment
with the Company on account of death or Disability, or as a result of
Retirement, during a Fiscal Year for which the Committee had previously
determined that an Incentive Award could be earned by the Chief
Executive Officer, the Committee shall authorize payment of any
Incentive Award that is determined to be payable, reduced by a
fraction, the numerator of which is the number of whole months
(rounding to the nearest whole month based on the number of days
actually employed in the month the separation occurs) in which the
separation from employment occurs, and the denominator of which is
twelve (12).
5.4 FORM OF PAYMENT OF INCENTIVE AWARD. Unless otherwise determined by the
Committee, the Chief Executive Officer shall receive the Incentive
Award for a Fiscal Year in one or more lump sum cash payments within a
reasonable period of time after the determination described in Sections
5.2 and 5.3 with respect to such Incentive Award.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 TERM OF PLAN. The Plan shall be effective as of the Effective Date, and
shall continue in effect until terminated pursuant to Section 6.3.
6.2 AMENDMENT. The Company reserves the right to amend the Plan in any
manner that it deems advisable by a resolution of the Committee;
provided, however, that (a) any such amendment, to the extent
determined necessary by the Committee, shall be subject to approval by
Company shareholders consistent with the requirements of Code Section
162(m) and the regulations thereunder, and (b) no amendment may
adversely affect outstanding awards without the consent of the Chief
Executive Officer.
6.3 TERMINATION. The Company reserves the right to terminate the Plan at
any time; provided, however, that no termination may adversely affect
outstanding awards without the consent of the Chief Executive Officer.
6.4 NO ASSIGNMENT. The Chief Executive Officer shall not have the power to
pledge, transfer, assign, anticipate, mortgage or otherwise encumber or
dispose of in advance any interest in amounts payable hereunder or any
of the payments provided for herein, nor shall any interest in amounts
payable hereunder or in any payments be subject to seizure for payments
of any debts, judgments, alimony or separate maintenance, or be reached
or transferred by operation of law in the event of bankruptcy,
insolvency or otherwise.
6.5 NO IMPLIED RIGHTS. Neither the Chief Executive Officer nor any other
individual shall have any rights and privileges with respect to any
amounts that may become payable pursuant to the Plan.
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6.6 CONTINUED EMPLOYMENT NOT PRESUMED. Nothing in the Plan or any document
describing it shall give any individual the right to continue in
employment with the Company or affect the right of the Company to
terminate the employment of any such individual.
6.7 DESIGNATION OF BENEFICIARY. The Chief Executive Officer, by filing the
prescribed form with the Committee, may designate one or more
beneficiaries and successor beneficiaries who shall receive any
Incentive Award determined payable, but not paid, in accordance with
the terms of the Plan in the event of the Chief Executive Officer's
death. In the event the Chief Executive Officer does not file a form
designating one or more beneficiaries, or no designated beneficiary
survives the Chief Executive Officer, the amounts shall be paid to or
for the benefit of the Chief Executive Officer's estate.
6.8 INCAPACITY. If any person to whom a benefit is payable under the Plan
is an infant or if the Committee determines that any person to whom
such benefit is payable is incompetent by reason of physical or mental
disability, the Committee may cause the payments becoming due to such
person to be made to another for his benefit. Payments made pursuant to
this Section shall, as to such payment, operate as a complete discharge
of the Plan, the Company, the Board and the Committee.
6.9 SUCCESSORS AND ASSIGNS. The provisions of the Plan are binding upon and
inure to the benefit of the Company, its respective successors and
assigns, and the Chief Executive Officer, his beneficiaries, heirs,
legal representatives and assigns.
6.10 GOVERNING LAW. The Plan shall be subject to and construed in accordance
with the laws of the State of Michigan, unless otherwise pre-empted by
federal law.
6.11 SEVERABILITY. If any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect
the remaining provisions of the Plan, but the Plan shall be construed
and enforced as if such illegal or invalid provision had never been
included herein.
6.12 NOTIFICATION OF ADDRESSES. The Chief Executive Officer and each
beneficiary shall file with the Committee, from time to time, in
writing, the post office address of the Chief Executive Officer, the
post office address of each beneficiary, and each change of post office
address. Any communication, statement or notice addressed to the last
post office address filed with the Committee (or if no such address was
filed with the Committee, then to the last post office address of the
Chief Executive Officer or beneficiary as shown on the Company's
records) shall be binding on the Chief Executive Officer and each
beneficiary for all purposes of the Plan and neither the Committee nor
the Company shall be obligated to search for or ascertain the
whereabouts of any Chief Executive Officer or beneficiary.
6.13 BONDING. The Committee and all agents and advisors employed by it shall
not be required to be bonded.
IN WITNESS WHEREOF, the Committee has caused this Plan to be adopted effective
as of January 1, 2000.
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