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EXHIBIT 10.24
SEVERANCE COMPENSATION AGREEMENT dated as of September 5, 1996, between LIN
Television Corporation, a Delaware corporation (the "Company"), and Gary R.
Chapman (the "Executive").
WHEREAS the Company currently employs the Executive and has determined
that the Executive's services are important to the stability and continuity of
the management of the Company;
WHEREAS the Company has determined that it is in its best interest to
reinforce and encourage the Executive's continued disinterested attention and
undistracted dedication to the Executive's duties in the potentially disturbing
circumstances of a possible change in control of the Company by providing some
degree of personal financial security; and
WHEREAS to induce the Executive to remain in the employ of the Company,
the Company has determined that it is desirable to pay the Executive the
severance compensation set forth below if the Executive's employment with the
Company terminates in one of the circumstances described below following a
change in control of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, it is agreed upon between the Company and the
Executive as follows:
I. DEFINITIONS. In addition to other words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following
meanings:
A. "Cause" shall mean:
1. the willful and continued failure of Executive to perform
substantially Executive's duties with the Company (other
than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for
substantial performance is delivered to Executive by the
Board or an elected officer of the Company which
specifically identifies the manner in which the Board or
the elected officer believes that Executive has not
substantially performed Executive's duties; or
2. (A) the conviction of, or plea of nolo contendere to, a
felony or (B) the willful engaging by Executive in gross
misconduct which is materially and demonstrably injurious
to the Company;
in each case above, after Executive is provided an opportunity to
be heard upon 30 days written notice and a good faith determination
of Cause by at least 3/4 of the Disinterested Directors.
B. "Change in Control" shall mean any of the following events:
1. any "person" (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Act") and
as used in Sections 13(d) and 14(d) thereof, including a
"group" (as defined in Section 13(d) of the Act) but
excluding AT&T the Company, any subsidiary thereof and any
trustee or fiduciary on behalf of any Company Executive
benefit plan) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act) of securities of the Company
having at least 25% of the voting power of the Company's
then outstanding securities (unless the event causing the
25% threshold to be crossed is an acquisition of
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securities directly from the Company) but only if at the time
of such person becoming the beneficial owner of the requisite
voting power, AT&T designees no longer hold a majority of the
seats on the Board of Directors; or
2. the shareholders of the Company shall approve any merger
or other business combination of the Company, any sale of
all or substantially all of the Company's assets in one or
a series of related transactions or any combination of the
foregoing transactions (the "TRANSACTIONS"), other than a
Transaction immediately following which the shareholders of
the Company immediately prior to the Transaction (including
AT&T), any subsidiary thereof and any trustee or fiduciary
on behalf of any Company Executive benefit plan own greater
than 50% of the voting securities of the surviving company
(or its parent) (and, in a sale of assets, of the purchaser
of the assets) immediately following the Transaction;
provided, however, that a Transaction which would otherwise
not result in a Change in Control because of the resulting
ownership of more than 50% of the voting securities of the
surviving company, its parent, or a purchaser of the assets
will, nonetheless, be deemed to be a Change in Control but
only in connection with a termination for Good Reason under
Section 1(d)(iv); or
3. within any 24 month period, the persons who were directors
immediately before the beginning of such period (the
"DISINTERESTED DIRECTORS") shall cease (for any reason
other than death) to constitute at least a majority of the
Board or the board of directors of a successor to the
Company. For this purpose, any director who was not a
director at the beginning of such period shall be deemed to
be a Disinterested Director if such director was elected to
the Board by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then
qualified as Disinterested Directors (so long as such
director was not nominated by a person who has entered into
an agreement or threatened to effect a Change of Control).
C. "Date of Termination" shall mean the date on which a Notice of
Termination is given.
D. "Good Reason" shall have the following definition:
1. Executive's annual salary or target bonus opportunity is
reduced below the higher of (A) the amount of annual salary or
target bonus opportunity in effect immediately prior to the
Change in Control or (B) the highest amount of annual salary
or target bonus opportunity in effect at any time thereafter;
2. (A) any failure by the Company to continue in effect or
provide plans or arrangements pursuant to which the
Executive will be entitled to receive grants relating to
the securities of the Company (or any parent company)
(including, without limitation, stock options, stock
appreciation rights, restricted stock or other equity based
awards) of the same type as the Executive was participating
in immediately prior to the Change in Control (hereinafter
referred to as "Securities Plans") or providing substitutes
for such Securities Plans which in the aggregate provide
substantially similar economic benefits; or (B) the taking
of any action by the Company which would adversely effect
the Executive's participation in, or benefits under, any
such Securities Plan or its substitute if in the Aggregate
the Executive is not provided substantially similar
economic benefits; provided, however, that for these
purposes, any determination of whether Good Reason exists
under (A) or (B) of this subsection (ii) because the
Executive is or is not provided substantially similar
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economic benefits in the aggregate will be made with due
consideration given to such Executive's base salary, other
cash compensation and any other equity based incentive
programs to which the Executive is also entitled to
receive, and not solely on the basis of whether the
Executive is or is not entitled or eligible to receive
equity based incentive compensation;
3. the assignment to Executive of any duties inconsistent
with, or a diminution of, Executive's duties, titles,
offices, responsibilities or status from those of Executive
with the Company, or any removal of Executive from or any
failure to reelect or reappoint Executive to any of such
positions, including as a Director, except in connection
with the termination of Executive's employment for
disability, retirement or Cause or as a result of
Executive's death;
4. in the event of a Transaction that is deemed to be a
Change in Control solely as a result of Section 1(b)(ii) of
this Agreement, Executive is removed from the position he
held with the Company prior to such Transaction (or fails
to hold the comparable position in the parent company
following such Transaction) or his duties or
responsibilities are adversely diminished in a manner that
would be Good Reason under Section 1(d)(iii) above;
5. Executive is required to be based at a location more than 50
miles from the location where Executive was based and
performed services on the Effective Date, or if Executive is
required to substantially increase on a regularly recurring
basis his or her business travel obligations.
Executive must give notice in writing within 90 days after the
Executive has knowledge of the event forming the basis of Good
Reason, setting forth the particulars of such event and the reason
why he believes in good faith that Good Reason exists. The Company
shall have 30 days within which to cure such event if it disagrees
with the Executive.
II. SEVERANCE COMPENSATION TRIGGER. Executive will be entitled to severance
compensation as set forth in section 3 ("Severance Compensation") in the
event Executive's employment is terminated within two years after a Change
in Control (i) by the Company without Cause, or (ii) by Executive within
90 days after Executive has knowledge of the occurrence of an event
constituting Good Reason.
Notwithstanding the foregoing, Executive will not be entitled to
Severance Compensation in the event of a termination of employment on
account of:
A. DEATH or DISABILITY (illness or injury preventing Executive from
performing his duties, as they existed immediately prior to the
illness or injury, on a full time basis for 180 consecutive
business days);
B. RETIREMENT (voluntary late, normal or early retirement under a
pension plan sponsored by the Company, as defined in such plan);
or
C. QUALIFIED SALE OF BUSINESS (the sale of a business unit in which
Executive was employed before such sale and Executive has been
offered employment with the purchaser of such business unit on
substantially the same terms under which he worked for the Company,
including severance protection).
III. Severance Compensation.
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A. In the event of a Severance Compensation Trigger, the Executive
shall be entitled to the Severance Compensation provided below:
1. In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, the Company
shall pay to the Executive not later then the tenth day
following the Date of Termination a lump sum severance payment
equal to the sum of:
(x) an amount equal to two times (2x) the Executive's annual
base salary in effect on the Date of Termination (the
"Base Salary"),
(y) an amount equal to two times (2x)
(1) an additional sum of $150,000 in lieu of bonus,
and
(2) the contribution, if any, paid by the Company
for the benefit of the Executive to any 401(k)
Plan in the last complete fiscal year,
(z) the present value, determined as of the Date of
Termination, of the sum of :
(3) all benefits which have accrued to the Executive
but have not vested under the LIN Television
Corporation Retirement Plan (the "Retirement
Plan") as of the Date of Termination, and
(4) all additional benefits which would have accrued
to the Executive under the Retirement Plan if the
Executive had continued to be employed by the
Company on the same terms the Executive was
employed on the Date of Termination from the Date
of Termination to the date 12 months after the
Date of Termination.
For purposes of this Section, the present value of a future
payment shall be calculated by reference to the actuarial
assumptions (including assumptions with respect to interest
rates) in use immediately prior to the Change in Control for
purpose of calculating actuarial equivalents under the
Retirement Plan.
2. The Company shall arrange to provide the Executive for a
period of 24 months following the Date of Termination or
until the Executive's earlier death, with life, health,
disability and accident insurance benefits and the package
of "Executive benefits" substantially similar to those
which the Executive was receiving immediately prior to the
Notice of Termination, or immediately prior to a Change in
Control, if greater provided however, that Executive shall
be obliged to continue to pay that proportion of premiums
paid by the Executive immediately prior to the change in
control.
3. The Company shall accelerate the exercise date of all stock
options granted to the Executive under the 1994 Stock
Incentive Plan and the 1994 Stock Adjustment Plan (the
"Options") which are not exercisable on the Date of
Termination, to the end that such Options shall be immediately
exercisable.
4. The Executive shall have the right within one year following
the later of the Change in Control or the exercise of each
Option to sell to the Company shares of Common Stock acquired
at any time upon exercise of an Option at a price equal to the
average market price of the Common Stock for the 30 day period
ending on the date prior to the date of the Change in Control.
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B. If the Severance Compensation under this Section 3, either alone
or together with other payments to the Executive from the
Company, would constitute an "excess parachute payment" (as
defined in Section 280G of the Code), such Severance Compensation
shall be reduced to the largest amount that will result in no
portion of the payments under this Section 3 being subject to the
excise tax imposed by Section 4999 of the Code or being
disallowed as deductions to the Company under Section 280G of the
Code.
IV. No Obligation To Mitigate Damages; No Effect on Other Contractual
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Rights.
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A. The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation
earned by the Executive as the result of employment by another
employer after the termination of the Executive's employment, or
otherwise.
B. The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any
way diminish the Executive's existing rights, or rights which would
accrue solely as a result of the passage of time, under any Benefit
Plan, Incentive Plan or Securities Plan, employment agreement or
other contract, plan or arrangement of the Company.
V. Successors.
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A. The Company will require any successors or assign (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all the business and/or assets
of the Company by agreement in form and substance satisfactory to
the Executive, expressly, absolutely and unconditionally to
assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform
it if no such succession or assignment had taken place. Any
failure of the Company to obtain such agreement prior to the
effectiveness of any such succession or assignment shall be a
material breach of this Agreement and shall entitle the Executive
to terminate the Executive's employment for Good Reason. As used
in this Agreement, the "Company" shall mean the Company as
hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 5 or which otherwise
becomes bound by all the terms and provisions of this Agreement
by operation of law.
B. This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, divisees and
legatees. If the Executive should die while any amounts are
still payable to the Executive under, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive's devisee, legatee, or
other designee or, if there be no such designee, to the
Executive's estate.
C. In the event of a liquidation of the Company, the payment
provided for hereunder shall be made before any property or asset
of the Company is distributed to any holder of common stock.
VI. EMPLOYMENT. The Executive agrees to be bound by the terms and conditions
of this Agreement and to remain in the employ of the Company during any
period following any public announcement by any person of any proposed
transaction or transactions which, if effected, would result in a Change
in Control until a Change in Control has taken place or, in the opinion
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of the Board of Directors of the Company, such person has abandoned or
terminated its efforts to effect a Change in Control. Subject to the
foregoing, nothing contained in this Agreement shall impair or interfere
in any way with the right of the Executive to terminate the Executive's
employment or the right of the Company to terminate the employment of the
Executive with or without cause prior to a Change in Control. Nothing
contained in this Agreement shall be construed as a contract of employment
between the Company and the Executive or as a right of the Executive to
continue in the employ of the Company or as a limitation of the right of
the Company to discharge the Executive with or without cause prior to a
Change in Control.
VII. LEGAL FEES. In the event that any legal action is required to enforce the
Executive's rights under this Agreement, the Executive, if the Executive
is the prevailing party, shall be entitled to recover from the Company any
expenses for attorneys' fees and disbursements reasonably incurred by the
Executive.
VIII. CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
IX. CONFIDENTIALITY: Executive shall not, without the prior written consent of
the Company, divulge, disclose or make accessible to any other person,
partnership, corporation or other entity any Confidential Information
pertaining to the business of the Company, except (i) while employed by
the Company, or (ii) when required by law to do so. For these purposes,
"Confidential Information" shall mean non-public information concerning
the financial data, strategic business plans, product development (or
other proprietary product data), customer lists, marketing plans and any
other non-public, proprietary and confidential information of the Company
and its subsidiaries that is not otherwise available to the public or has
not become publicly available through any breach of fiduciary duty.
X. NONSOLICITATION: For a period of one year following the Executive's
termination of employment, the Executive shall not contact, communicate
with or solicit in any fashion any employee, consultant, customer or
advertiser who, at the time of such termination and at any time during the
preceding twelve-month period was employed by, employed or otherwise had
business dealings with, the Company for the purpose of causing such
employee, consultant, customer or advertiser (i) to terminate such
person's relationship with the Company or (ii) to be employed by, to
employ or otherwise to have business dealings with any business, whether
or not incorporated, in any markets served by the Company at the time of
termination.
XI. RELEASE. As a condition to the receipt of any payments hereunder, the
Executive shall deliver to the Company, in form and substance reasonably
acceptable to the Company, a written release of the Company, its officers,
directors and shareholders from all claims of whatever nature, other than
as arising under the terms hereof or under any benefit plans of the
Company to which the Executive is otherwise entitled.
XII. NOTICE. For purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid. Notice
may be given to either party at the present principal place of business of
the Company or such other place as the party to receive such notice shall
notify the other.
XIII. MODIFICATION OR WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and the Company. No
waiver by a party hereto at any time of any breach by another party hereto
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions.
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XIV. ENTIRE AGREEMENT. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by any of the parties which are not set forth expressly in this
Agreement.
XV. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LIN TELEVISION CORPORATION, EXECUTIVE,
By /s/ Peter E. Maloney Name /s/ Gary R. Chapman
Title Vice-President-Finance