1996 LONG-TERM INCENTIVE PLAN
of
SINCLAIR BROADCAST GROUP, INC.
1. OBJECTIVES. This 1996 Long-Term Incentive Plan of Sinclair
Broadcast Group, Inc. (the "Plan") is adopted by Sinclair Broadcast Group, Inc.,
a Maryland corporation (the "Company"), to reward key individuals for making
major contributions to the success of the Company and its Subsidiaries (as
hereinafter defined). These objectives are to be accomplished by making Awards
(as hereinafter defined) under the Plan and thereby providing Participants (as
hereinafter defined) with a proprietary interest in the growth and performance
of the Company and its Subsidiaries.
2. DEFINITIONS. As used herein, the terms set forth below
shall have the following respective meanings:
"Authorized Officer" means the Chairman of the Board or the
Chief Executive Officer of the Company or a Subsidiary (or any other senior
officer of the Company or a Subsidiary to whom either of them shall delegate the
authority to execute any Award Agreement).
"Award" means the grant of any Option, SAR, Stock Award, Cash
Award or Performance Award, whether granted singly, in combination or in tandem,
to a Participant pursuant to such applicable terms, conditions and limitations
as the Committee may establish in order to fulfill the objectives of the Plan.
"Award Agreement" means a written agreement between the
Company and a Participant setting forth the terms, conditions and limitations
applicable to an Award.
"Board" means the Board of Directors of the Company.
"Cash Award" means an award denominated in cash.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Company" has the meaning specified in paragraph 1 hereof.
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"Committee" means the Compensation Committee of the Board or
such ether committee of the Board as is designated by the Board to administer
the Plan.
"Common Stock" means the Class A Common Stock, par value $.01
per share, of the Company.
"Dividend Equivalents" means, with respect to shares of
Restricted Stock that are to be issued at the end of the Restriction Period, an
amount equal to all dividends and other distributions (or the economic
equivalent thereof) which are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.
"Effective Date" means the date upon which this Plan shall be
adopted and made effective in accordance with Section 17 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported, (ii)
if shares of Common Stock are not so listed but are quoted on the NASDAQ
National Market, the mean between the highest and lowest sales price per share
of Common Stock reported by the NASDAQ National Market on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported or (iii) if the Common Stock
is not so listed or quoted, the mean between the closing bid and asked price on
that date, or, if there are no quotations available for such date, on the last
preceding date on which such quotations shall be available, as reported by the
NASDAQ Stock Market, or, if not reported by the NASDAQ Stock Market, by the
National Quotation Bureau Incorporated.
"Incentive Option" means an Option that is intended to comply
with the requirements set forth in Section 422 of the Code.
"Nonqualified Stock Option" means an Option that is not an
Incentive Option.
"Option" means a right to purchase a specified number of
shares of Common Stock at a specified price.
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"Participant" means an employee of or an individual otherwise
performing services for or on behalf of, the Company or any of its Subsidiaries,
and to whom an Award has been made under this Plan.
"Performance Award" means an award made pursuant to this Plan
to a Participant that is subject to the attainment of one or more Performance
Goals.
"Performance Goal" means a standard established by the
Committee to determine in whole or in part whether a Performance Award shall be
earned.
"Plan" has the meaning specified in Section 1 hereof.
"Restricted Stock" means any Common Stock that is restricted
or subject to forfeiture provisions.
"Restriction Period" means a period of time beginning as of
the date upon which an Award of Restricted Stock is made pursuant to this Plan
and ending as of the date upon which the Common Stock subject to such Award is
no longer restricted or subject to forfeiture provisions.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, or any successor rule.
"SAR" means a right to receive a payment, in cash or Common
Stock, equal to the excess of the Fair Market Value or other specified valuation
of a specified number of shares of Common Stock on the date the right is
exercised over a specified strike price (in each case, as determined by the
Committee).
"Stock Award" means an award in the form of shares of Common
Stock or units denominated in shares of Common Stock.
"Subsidiary" means (a) in the case of a corporation, any
corporation of which the Company directly or indirectly owns shares representing
more than 50% of the combined voting power of the shares of all classes or
series of capital stock of such corporation which have the right to vote
generally on matters submitted to a vote of the stockholders of such corporation
and (b) in the case of a partnership or other business entity not organized as a
corporation, any such business entity of which the Company directly or
indirectly owns more than 50% of the voting, capital or profits interests
(whether in the form of partnership interests, membership interests or
otherwise).
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3. ELIGIBILITY. Individuals eligible for an Award under
this Plan are those whose performance, in the judgment of the Committee, can
have an effect on the success of the Company and its Subsidiaries.
4. COMMON STOCK AVAILABLE FOR AWARDS. Subject to the
provisions of Section 13 hereof, there shall be available for Awards under this
Plan granted wholly or partly in Common Stock (including rights or options which
may be exercised for or settled in Common Stock) an aggregate of 2,073,673
shares of Common Stock. The number of shares of Common Stock that are the
subject of Awards under this Plan that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner such
that all or some of the shares covered by an Award are not issued to a
Participant or are exchanged for Awards that do not involve Common Stock, shall
again immediately become available for Awards hereunder. The Committee may from
time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate. The Board and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that
shares of Common Stock are available for issuance pursuant to Awards.
5. ADMINISTRATION.
(a) This Plan shall be administered by the Committee. The
Committee shall consist of at least two members of the Board who meet the
requirements of the definition of "disinterested person" in Rule 16b-
3(d)(3) promulgated under the Exchange Act, or any successor rule.
(b) Subject to the provisions hereof, the Committee shall
have full and exclusive power and authority to administer this Plan and to
take all actions which are specifically contemplated hereby or are
necessary or appropriate in connection with the administration hereof The
Committee shall also have full and exclusive power to interpret this Plan
and to adopt such rules, regulations and guidelines for carrying out this
Plan as it may deem necessary or proper, all of which powers shall be
exercised in the best interests of the Company and in keeping with the
objectives of this Plan. The Committee may, in its discretion, provide for
the extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any
restrictions contained in an Award, waive any restriction or other
provision of this Plan or an Award or otherwise amend or modify an Award in
any manner that is either (i) not adverse to the Participant to whom such
Award was granted or (ii) consented to by such Participant. The Committee
may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent
the
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Committee deems necessary or desirable to carry it into effect. Any
decision of the Committee in the interpretation and administration of this
Plan shall lie within its sole and absolute discretion and shall be final
conclusive and binding on all parties concerned.
(c) No member of the Committee or officer of the Company to
whom the Committee has delegated authority in accordance with the
provisions of Section 6 of this Plan shall be liable for anything done or
omitted to be done by him or her, by any member of the Committee or by any
officer of the Company in connection with the performance of any duties
under this Plan, except for his or her own willful misconduct or as
expressly provided by statute.
6. DELEGATION OF AUTHORITY. The Committee may delegate its
duties under this Plan pursuant to such conditions or limitations as the
Committee may establish, except that the Committee may not delegate to any
person the authority to grant Awards to, or take other action with respect to,
Participants who are (a) subject to Section 16 of the Exchange Act or (b) not
employees of the Company or any of its Subsidiaries.
7. AWARDS.
(a) The Committee shall determine the type or types of
Awards to be made under this Plan and shall designate from time to time the
individuals who are to be the recipients of such Awards. Each Award shall
be embodied in an Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee in its
sole discretion and shall be signed by the Participant to whom the Award is
made and by an Authorized Officer (other than the Participant) for and on
behalf of the Company. Awards may consist of those listed in this Section
7(a) and may be granted singly, in combination or in tandem. Awards may
also be made in combination or in tandem with, in replacement of, or as
alternatives to, grants or rights under this Plan or any other plan of the
Company or any of its Subsidiaries, including the plan of any acquired
entity. An Award may provide for the grant or issuance of additional,
replacement or alternative Awards upon the occurrence of specified events,
including the exercise of the original Award granted to a Participant. All
or part of an Award may be subject to conditions established by the
Committee, which may include, but are not limited to, continuous service
with the Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attainment of specified growth
rates and other comparable measurements of performance.
(i) STOCK OPTION. An Award may be in the form of
an Option. An Option awarded pursuant to this Plan may consist of
an Incentive Option or a Nonqualified Option. The price at which
shares of Common
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stock may be purchased upon the exercise of an Incentive Option
shall be not less than the Fair Market Value of the Common Stock
on the date of grant. The price at which shares of Common Stock
may be purchased upon the exercise of a Nonqualified Option shall
be not less than 50% of the Fair Market Value of the Common Stock
on the date of grant. Subject to the foregoing provisions, the
terms, conditions and limitations applicable to any Options
awarded pursuant to this Plan, including the term of any Options
and the date or dates upon which they become exercisable, shall
be determined by the Committee.
(ii) STOCK APPRECIATION RIGHT. An Award may be in
the form of an SAR. The terms, conditions and limitations
applicable to any SARs awarded pursuant to this Plan, including
the term of any SARs and the date or dates upon which they become
exercisable, shall be determined by the Committee.
(iii) STOCK AWARD. An Award may be in the form of a
Stock Award. The terms, conditions and limitations applicable to
any Stock Awards granted pursuant to this Plan shall be
determined by the Committee.
(iv) CASH AWARD. An Award may be in the form of a
Cash Award. The terms, conditions and limitations applicable to
any Cash Awards granted pursuant to this Plan shall be determined
by the Committee.
(v) PERFORMANCE AWARD. Without limiting the type
or number of Awards that may be made under the other provisions
of this Plan, an Award may be in the form of a Performance Award.
A Performance Award shall be paid, vested or otherwise
deliverable solely on account of the attainment of one or more
pre-established, objective Performance Goals established by the
Committee prior to the earlier to occur of (A) 90 days after the
commencement of the period of service to which the Performance
Goal relates and (B) the elapse of 25% of the period of service
(as scheduled in good faith at the time the goal is established),
and in any event while the outcome is substantially uncertain. A
Performance Goal is objective if a third party having knowledge
of the relevant facts could determine whether the goal is met.
Such a Performance Goal may be based on one or more business
criteria that apply to the individual, one or more business units
of the Company, or the Company as a whole, and may include one or
more of the following: revenue, cash flow, net income, stock
price, market share, earnings per share, return on equity, return
on assets or
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decrease in costs. Unless otherwise stated such a Performance
Goal need not be based upon an increase or positive result under
a particular business criterion and could include, for example,
maintaining the status quo or limiting economic losses (measured,
in each case, by reference to specific business criteria). In
interpreting Plan provisions applicable to Performance Goals and
Performance Awards, it is the intent of the Plan to conform with
the standards of Section 162(m) of the Code and Treasury
Regulations ss. 1.162-27(e)(2)(i), and the Committee in
establishing such goals and interpreting the Plan shall be guided
by such provisions. Prior to the payment of any compensation
based on the achievement of Performance Goals, the Committee must
certify in writing to the Board that applicable Performance Goals
and any of the material terms thereof were, in fact, satisfied.
Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Performance Awards made pursuant to
this Plan shall be determined by the Committee.
(b) Notwithstanding anything to the contrary contained in
this Plan, the following limitations shall apply to any Awards made
hereunder:
(i) no Participant may be granted, during any
calendar year, Awards consisting of Options or SARs that are
exercisable for more than the remainder of 1,500,000 shares of
Common Stock less, if any, the number of shares of Common Stock
underlying existing Options or SARs granted to such Participant
under the Plan;
(ii) no Participant may be granted, during any
calendar year, Awards consisting of shares of Common Stock or
units denominated in such shares (other than any Awards
consisting of Options or SARs) covering or relating to more than
20,000 shares of Common Stock (the limitation set forth in this
clause (ii), together with the limitation set forth in clause (i)
above, being hereinafter collectively referred to as the "Stock
Based Awards Limitations"); and
(iii) no Participant may be granted Awards
consisting of cash or in any other form permitted under this Plan
(other than Awards consisting of Options or SARS or otherwise
consisting of shares of Common Stock or units denominated in such
shares) in respect of any calendar year having a value determined
on the date of grant in excess of $300,000.
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8. PAYMENT OF AWARDS.
(a) GENERAL. Payment of Awards may be made in the form of
cash or Common Stock, or a combination thereof, and may include such
restrictions as the Committee shall determine, including, in the case of
Common Stock, restrictions on transfer and forfeiture provisions, if
payment of an Award is made in the form of Restricted Stock, the Award
Agreement relating to such shares shall specify whether they are to be
issued at the beginning or end of the Restriction Period. In the event that
shares of Restricted Stock are to be issued at the beginning of the
Restriction Period, the certificates evidencing such shares (to the extent
that such shares are so evidenced) shall contain appropriate legends and
restrictions that describe the terms and conditions of the restrictions
applicable thereto. In the event that shares of Restricted Stock are to be
issued at the end of the Restricted Period, the right to receive such
shares shall be evidenced by book entry registration or in such other
manner as the Committee may determine.
(b) DEFERRAL. With the approval of the Committee, payments
in respect of Awards may be deferred, either in the form of installments or
a future lump sum payment. The Committee may permit selected Participants
to elect to defer payments of some or all types of Awards in accordance
with procedures established by the Committee. Any deferred payment of an
Award, whether elected by the Participant or specified by the Award
Agreement or by the Committee, may be forfeited if and to the extent that
the Award Agreement so provides.
(c) DIVIDENDS AND INTEREST. Rights to dividends or Dividend
Equivalents may be extended to and made part of any Award consisting of
shares of Common Stock or units denominated in shares of Common Stock,
subject to such terms, conditions and restrictions as the Committee may
establish. The Committee may also establish rules and procedures for the
crediting of interest on deferred cash payments and Dividend Equivalents
for Awards consisting of shares of Common Stock or units denominated in
shares of Common Stock.
(d) SUBSTITUTION OF AWARDS. At the discretion of the
Committee, a Participant may be offered an election to substitute an Award
for another Award or Awards of the same or different type.
9. STOCK OPTION EXERCISE. The price at which shares of
Common Stock may be purchased under an Option shall be paid in full at the time
of exercise in cash or, if elected by the optionee, the optionee may purchase
such shares by means of tendering Common Stock or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise,
or any combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards.
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If permitted by the Committee, payment may be made by successive exercises by a
Participant. The Committee may provide for loans from the Company to a
Participant to permit the exercise or purchase of Awards and may provide for
procedures to permit the exercise or purchase of such Awards by use of the
proceeds to be received from the sale of Common Stock issuable pursuant to an
Award. Unless otherwise provided in the applicable Award Agreement, in the event
shares of Restricted Stock are tendered as consideration for the exercise of an
Option, a number of the shares issued upon the exercise of the Option, equal to
the number of shares of Restricted Stock used as consideration therefor, shall
be subject to the same restrictions as the Restricted Stock so submitted as well
as any additional restrictions that may be imposed by the Committee.
10. TAX WITHHOLDING. The Company shall have the right to
deduct applicable taxes from any Award payment and withhold, at the time of
delivery or vesting of cash or shares of Common Stock under this Plan, an
appropriate amount of cash or number of shares of Common Stock or a combination
thereof for payment of taxes required by law or to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. The Committee may also permit withholding to be
satisfied by the transfer to the Company of shares of Common Stock theretofore
owned by the holder of the Award with respect to which withholding is required.
If shares of Common Stock are used to Satisfy tax withholding, such shares shall
be valued based on the Fair Market Value when the tax withholding is required to
be made.
11. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (a) no amendment or alteration that would impair
the rights of any Participant under any Award previously granted to such
Participant shall be made without the consent of such Participant and (b) no
amendment or alteration shall be effective prior to approval by the stockholders
of the Company to the extent such approval is then required pursuant to Rule
16b-3 in order to preserve the applicability of any exemption provided by such
rule to any Award then outstanding (unless the holder of such Award consents) or
to the extent stockholder approval is otherwise required by applicable legal
requirements.
12. ASSIGNABILITY. Unless otherwise determined by the
Committee and provided in the Award Agreement, no Award or any other benefit
under this Plan constituting a derivative security within the meaning of Rule
16a-1(c) under the Exchange Act shall be assignable or otherwise transferable
except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder. The Committee
may prescribe and include in applicable Award Agreements other restrictions on
transfer. Any attempted assignment of an Award or any other benefit under this
Plan in violation of this paragraph 12 shall be null and void.
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13. ADJUSTMENTS.
(a) The existence of outstanding Awards shall not affect in
any manner the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the capital stock of the Company or its business or any
merger or consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock (whether or not such issue is prior to,
on a parity with or junior to the Common Stock) or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding of any
kind, whether or not of a character similar to that of the acts or
proceedings enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock, declaration of a dividend payable in
shares of Common Stock or other stock split, then (i) the number of shares
of Common Stock reserved under this Plan, (ii) the number of shares of
Common Stock covered by outstanding Awards in the form of Common Stock or
units denominated in Common Stock, (iii) the exercise or other price in
respect of such Awards and (iv) the appropriate Fair Market Value and other
price determinations for such Awards shall each be proportionately adjusted
by the Board to reflect such transaction. In the event of any other
recapitalization or capital reorganization of the Company, any
consolidation or merger of the Company with another corporation or entity,
the adoption by the Company of any plan of exchange affecting the Common
Stock or any distribution to holders of Common Stock of securities or
property (other than normal cash dividends or dividends payable in Common
Stock), the Board shall make appropriate adjustments to (i) the number of
shares of Common Stock covered by Awards in the form of Common Stock or
units denominated in Common Stock, (ii) the exercise or other price in
respect of such Awards and (iii) the appropriate Fair Market Value and
other price determinations for such Awards to give effect to such
transaction; provided that such adjustments shall only be such as are
necessary to maintain the proportionate interest of the holders of the
Awards and preserve, without exceeding, the value of such Awards. In the
event of a corporate merger, consolidation, acquisition of property or
stock separation, reorganization or liquidation, the Board shall be
authorized to issue or assume Awards by means of substitution of new
Awards, as appropriate, for previously issued Awards or an assumption of
previously issued Awards as part of such adjustment.
14. RESTRICTIONS. Unless otherwise agreed to by the Company,
no Common Stock or other form of payment shall be issued with respect to any
Award unless
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the Company shall be satisfied based on the advice of its counsel that such
issuance will be in compliance with applicable federal and state securities
laws. It is the intent of the Company that this Plan comply with Rule 16b-3 with
respect to persons subject to Section 16 of the Exchange Act unless otherwise
provided herein or in an Award Agreement, that any ambiguities or
inconsistencies in the construction of this Plan be interpreted to give effect
to such intention, and that if any provision of this Plan is found not to be in
compliance with Rule 16b-3, such provision shall be null and void to the extent
required to permit this Plan to comply with Rule 16b-3. Certificates evidencing
shares of Common Stock certificates delivered under this Plan (to the extent
that such shares are so evidenced) may be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any securities exchange or transaction reporting system upon which the Common
Stock is then listed or to which it is admitted for quotation and any applicable
federal and state securities law. The Committee may cause a legend or legends to
be placed upon such certificates (if any) to make appropriate reference to such
restrictions.
15. UNFUNDED PLAN. Insofar as it provides for Awards of cash,
Common Stock or rights thereto, this Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to cash, Common Stock or rights thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The Company shall
not be required to segregate any assets that may at any time be represented by
cash, Common Stock or rights thereto, nor shall this Plan be construed as
providing for such segregation, nor shall the Company, the Board or the
Committee be deemed to be a trustee of any cash, Common Stock or rights thereto
to be granted under this Plan. Any liability or obligation of the Company to any
Participant with respect to an Award of cash, Common Stock or rights thereto
under this Plan shall be based solely upon any contractual obligations that may
be created by this Plan and any Award Agreement, and no such liability or
obligation of the Company shall be deemed to be secured by any pledge or other
encumbrance on any property of the Company. Neither the Company nor the Board
nor the Committee shall be required to give any security or bond for the
performance of any obligation that may be created by this Plan.
16. GOVERNING LAW. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Maryland.
17. EFFECTIVENESS. This Plan shall become effective as of the
date set forth in the resolutions of the Board approving and adopting this Plan;
provided, however, that the effectiveness of this Plan is expressly conditioned
upon (a) the approval of this Plan by the Board and the Compensation Committee
of the Company and (b) the approval
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of this Plan by the holders of common stock of the Company of all classes,
voting together as a single class.
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SINCLAIR BROADCAST GROUP, INC.
FORM OF STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of this _____ day of ________________, 1996, (the "Option Date"), between
Sinclair Broadcast Group, Inc., a Maryland corporation (the "Company"), and
__________________ (the "Optionee").
RECITALS
WHEREAS, the Company has adopted the 1996 Long-Term Incentive Plan of
Sinclair Broadcast Group, Inc. (the "Plan") to reward certain key individuals
for making major contributions to the Company and its subsidiaries by enabling
them to acquire shares of Class A Common Stock, par value $.01 per share
("Common Stock"), of the Company;
WHEREAS, the Company and River City Broadcasting, L.P., a Delaware
limited partnership ("RCB") have entered into an Asset Purchase Agreement (the
"Purchase Agreement") dated as of even date herewith, pursuant to which RCB has
agreed to sell, and the Company has agreed to purchase, certain assets used or
held for use by RCB in connection with the operation of substantially all of
RCB's owned and operated radio and television stations (the "River City
Acquisition");
WHEREAS, in connection with the River City Acquisition, the Company
desires Optionee to become an employee of Sinclair Communications, Inc., a
Maryland corporation and wholly owned subsidiary of the Company ("SCI") and the
Optionee and SCI will, on or prior to the Closing (as defined in the Purchase
Agreement and hereinafter referred to as the "First Closing"), execute an
Employment Agreement (the "Employment Agreement"), and
WHEREAS, as part of its inducement to the Optionee to enter into the
Employment Agreement, the Company desires to grant the Optionee an option to
purchase shares of Common Stock pursuant to the Plan and upon the terms and
subject to the conditions hereinafter set forth;
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing premises, the parties
to this Agreement agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth in
this Agreement, the Company hereby grants to the Optionee an option (the
"Option") to purchase from the Company up to but not exceeding in the aggregate
______ shares of Common Stock at a price per share ("Exercise Price") equal to
the average of the closing share prices of the Common Stock as reported on the
NASDAQ National Market for the 21 trading days consisting of the
Option Date and each of the ten trading days immediately prior to such date and
each of the ten trading days immediately following such date, but in no event
less than $21.00 per share, such number of shares and such price per share being
subject to adjustment as provided in Section 13 of the Plan.
2. RELATIONSHIP TO PLAN. The Option is issued in accordance with and
subject to all of the terms, conditions and provisions of the Plan, as amended
from time to time, and administrative interpretations thereunder, if any, which
have been adopted by the Committee thereunder and are in effect on the date
hereof. Except as defined herein or otherwise stated, capitalized terms shall
have the same meanings ascribed to them under the Plan.
3. EXERCISE SCHEDULES. The Option shall become exercisable with respect
to 25% of the aggregate number of shares of Common Stock subject to the Option
immediately upon the occurrence of the First Closing. On the first anniversary
of the First Closing, the Option shall become exercisable with respect to an
additional 25% of the aggregate number of shares of Common Stock subject to the
Option. On the second anniversary of the First Closing, the Option shall become
exercisable with respect to the remaining balance of the aggregate number of
shares subject to the Option.
4. TERMINATION OF OPTION. The Option hereby granted shall terminate and
be of no force and effect with respect to any shares of Common Stock not
previously purchased by the Optionee upon the first to occur of:
(a) the tenth anniversary of the First Closing;
(b) with respect to the exercisable portion of the Option,
the expiration of (i) 90 days following the termination of Optionee's employment
under the Employment Agreement for reasons other than death, Disability (as
defined in the Employment Agreement) or "for cause" (as defined in the
Employment Agreement), or (ii) the first anniversary of termination of
Optionee's employment under the Employment Agreement by reason of death or
Disability; or
(c) with respect to both the exercisable and the
unexercisable portion of the Option, the date of the Optionee's termination of
Optionee's employment under the Employment Agreement for cause.
5. EXERCISE OF OPTION. Subject to the limitations herein and in the
Plan, the Option may be exercised with respect to the shares of Common Stock
then exercisable, in whole or in part, at any time on or prior to the tenth
anniversary of the First Closing, regardless of the Optionee's service status,
by written notice to the Company at its principal executive office, which notice
shall (a) specify the number of shares with respect to which the Option is being
exercised and the purchase price to be paid therefor; (b) if the person
exercising this Option is not the Optionee himself, contain or be accompanied by
satisfactory evidence of such person's
2
right to exercise this Option; and (c) be accompanied by payment in full of the
purchase price in cash or by a certified or cashier's check to the order of the
Company.
6. TRANSFERABILITY. The Option shall not be transferable except by will
or by the laws of descent and distribution. During the Optionee's lifetime, the
Option may be exercised only by the Optionee. No assignment or transfer of the
Option, whether voluntary or involuntary, by operation of law or otherwise,
except a transfer by will or by the laws of descent or distribution, shall vest
in the assignee or transferee any interest or right whatsoever in the Option.
7. NO RIGHTS AS STOCKHOLDER. The Optionee shall not have any rights as
a stockholder of the Company with respect to any of the shares subject to the
Option, except to the extent that such shares shall have been purchased and
transferred to him.
8. NO RIGHT TO EMPLOYMENT. The Option shall not confer on the Optionee
any right to continue in the service of the Company or any of its subsidiaries
or affect the right of the Company or any subsidiary to terminate Optionee's
employment at any time; and nothing contained in this Agreement shall be deemed
a waiver or modification of any provision contained in any agreement between the
Optionee and the Company or any parent or subsidiary thereof. This Option shall
not affect the right of the Company or any parent or subsidiary thereof to
reclassify, recapitalize, or otherwise change its capital or debt structure or
to merge, consolidate, convey any or all of its assets, dissolve, liquidate,
wind up, or otherwise reorganize.
9. DISSOLUTION OR MERGER. Upon the dissolution or liquidation of the
Company, a merger or consolidation in which the Company is not the surviving
corporation, or a transaction in which another individual or entity becomes the
owner of 50% or more of the total combined voting power of all classes of stock
of the Company, the unexercised portion of this Option shall terminate, but the
Optionee shall have the right to exercise the unexpired and unexercised portion
of this Option, whether exercisable or unexercisable, immediately prior to such
event.
10. WITHHOLDING FOR TAX PURPOSES. Any amount of Common Stock that is
payable or transferable to the Optionee hereunder may be reduced by any amount
or amounts which the Company is required to withhold under the then applicable
provisions of the Internal Revenue Code of 1986, as amended, or its successors,
or any other federal, state or local tax withholding requirement. If the
Optionee does not elect to satisfy withholding requirements in this fashion, the
issuance of the shares of Common Stock payable or transferable to the Optionee
hereunder shall be contingent upon the Optionee's satisfaction of any
withholding obligations that may apply and the Optionee's presentation of
evidence satisfactory to the Board that such withholding obligations have been
satisfied.
11. NOTICE. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder will be deemed to be
delivered on the date that it is personally delivered, or, whether actually
received or not, on the third business day after it is deposited in
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the United States mail, certified or registered, postage prepaid, addressed to
the person who is to receive it at the address that such person has heretofore
specified by written notice delivered in accordance herewith. The Company or
Optionee may change, at any time and from time to time, by written notice to the
other, the address that it or he had therefore specified for receiving notices.
Until changed in accordance herewith, the Company and the Optionee specify their
respective addresses as set forth below:
Company:
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Attention: Chief Executive Officer
with copy to:
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street
Suite 1100
Baltimore, Maryland 21202-1053
Attention: Steven A. Thomas, Esq.
Optionee:
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Optionee's address as listed in the personnel records of the
Company or SCI as of the First Closing, unless the Company or SCI shall have
received written notification of Optionee's change of address.
12. AMENDMENT. Notwithstanding any other provision hereof, this
Agreement may not be supplemented or amended from time to time without the
consent of the Optionee.
13. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Maryland applicable to
agreements made and to be performed entirely in Maryland.
14. COUNTERPARTS. This Agreement may be executed in multiple
counterparts. The Company and the Optionee may sign any number of copies of this
Agreement. Each signed copy shall be an original, but all of them together
represent the same agreement.
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IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the date first above written.
SINCLAIR BROADCAST GROUP, INC.
By:_______________________________
OPTIONEE:
__________________________________
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