EXHIBIT 10.13

 

PULITZER INC.

EXECUTIVE TRANSITION AGREEMENT

WITH TERRANCE C.Z. EGGER

 

AGREEMENT made as of the 1st day of January, 2002, by and between PULITZER INC.
(“Company”) and TERRANCE C.Z. EGGER (“Executive”).

 

1. Background. Company maintains a transition/severance program for eligible
executive employees. The program is administered by the Compensation Committee
of Company’s Board of Directors (“Committee”). The Committee has designated
Executive as eligible to participate in the program, subject to the terms and
conditions of this Agreement.

 

2. Certain Defined Terms. The following terms shall have the following meanings
when used in this Agreement.

 

(a) “Accrued Compensation” means, as of any date, (1) the unpaid amount, if any,
of Executive’s previously earned base salary or commissions, (2) the unpaid
amount, if any, of Executive’s accrued bonus for the preceding year, and (3)
additional entitlements of Executive, if any, under the terms of any employee
plan, program or arrangement of Company or an Affiliate (other than this
Agreement).

 

(b) “Affiliate” means an entity at least 50% of the voting, capital or profits
interests of which are owned directly or indirectly by Company.

 

(c) “Benefit Continuation Coverage” means continuing group health and group life
insurance coverage for Executive and, where applicable, Executive’s covered
spouse and covered eligible dependents for a specified period following the
termination of Executive’s employment with Company and its Affiliates at the
same benefit and contribution levels in effect immediately prior to such
termination of employment. If such continued coverage is not permitted by the
applicable plan or by applicable law, the Executive will be entitled to cash
payments sufficient to reimburse Executive and/or Executive’s covered spouse and
covered eligible dependents, on an after tax basis, for the reasonable cost of
comparable individual or other replacement coverage through the end of such
period. The period of Benefit Continuation Coverage will be subject to early
termination if and when the Executive becomes entitled to comparable coverage
from another employer. The group health part of Benefit Continuation Coverage
will be in addition to and not in lieu of COBRA continuation coverage.

 

(d) “Board” means the Board of Directors of Company.

 

(e) “Cause” means (1) the commission of a felony involving moral turpitude, (2)
the willful and repeated failure or refusal to carry out the material
responsibilities of Executive’s employment with Company or an Affiliate, or (3)
any other willful misconduct or pattern of behavior which has had or is
reasonably likely to have a significant adverse effect on Company or an
Affiliate, all as determined by the Board acting in its sole discretion.
Notwithstanding the preceding sentence, if there is a written employment
agreement then in effect between Executive and Company or an Affiliate that
defines the term “cause” (or a term of like import) in a similar context, then
the term Cause, as used in such context herein, shall have the meaning ascribed
to such term under Executive’s employment agreement.

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(f) “Change in Control” means the occurrence of any of the following after
January 1, 2002:

 

(i) any person (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”)) becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 40% or more of the combined voting power of the then
outstanding voting securities of Company, other than (1) a person who is the
beneficial owner of shares of Class B Common Stock of Company, or (2) as a
result of inheritance;

 

(ii) a consolidation, merger or reorganization involving Company, unless (1) the
stockholders of Company immediately before such consolidation, merger or
reorganization own, directly or indirectly, at least a majority of the combined
voting power of the outstanding voting securities of the corporation resulting
from such consolidation, merger or reorganization, (2) individuals who were
members of the Board immediately prior to the execution of the agreement
providing for such consolidation, merger or reorganization constitute a majority
of the board of directors of the surviving corporation or of a corporation
directly or indirectly beneficially owning a majority of the voting securities
of the surviving corporation, and (3) no person beneficially owns more than 40%
of the combined voting power of the then outstanding voting securities of the
surviving corporation (other than a person who is (A) Company or a subsidiary of
Company, (B) an employee benefit plan maintained by Company, the surviving
corporation or any subsidiary, or (C) the beneficial owner of 40% or more of the
combined voting power of the outstanding voting securities of Company
immediately prior to such consolidation, merger or reorganization);

 

(iii) individuals who, as of January 1, 2002, constitute the entire Board (the
“Incumbent Board”) cease for any reason to constitute a majority of the Board,
provided that any individual becoming a director subsequent to January 1, 2002
whose election, or nomination for election by Company’s stockholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board;

 

(iv) approval by the stockholders of Company of a complete liquidation or
dissolution of Company, or a sale or other disposition of all or substantially
all of the assets of Company (other than to an entity described in (f)(ii)
above; or

 

(v) any other event or transaction which the Board, acting in its discretion and
with a view toward carrying out the purposes of the Plan, designates is a Change
in Control.

 

Notwithstanding the foregoing, if there is a written employment or other
agreement then in effect between Executive and Company or an Affiliate that
defines the term “change in control” or a

 

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term of like import in a similar context, then, for the purposes of applying the
provisions hereof, the term Change in Control, as used in such context herein,
shall have the meaning ascribed to such term under such agreement.

 

(g) “Code” means the Internal Revenue Code of 1986, as amended.

 

(h) “Committee” means the Compensation Committee of the Board.

 

(i) “Company” means Pulitzer Inc., a Delaware corporation, and any successor
thereto.

 

(j) “Disability” means the inability of Executive to substantially perform the
customary duties and responsibilities of Executive’s employment with Company or
an Affiliate for a period of at least 120 consecutive days by reason of a
physical or mental incapacity which is expected to result in death or last
indefinitely.

 

(k) “Good Reason” means the occurrence of any of the following without the
written consent of Executive: (1) a material diminution by Company or an
Affiliate of Executive’s duties or responsibilities in a manner which is
inconsistent with Executive’s position or which has or is reasonably likely to
have a material adverse effect on Executive’s status or authority; (2) a
material diminution of Executive’s working conditions (including, without
limitation, relocation by more than 50 miles of Executive’s principal place of
business); or (3) a reduction by Company or an Affiliate of Executive’s rate of
salary or annual incentive opportunity or a breach by Company or any of its
Affiliates of a material provision of any written employment or other agreement
with Executive which is not corrected within 15 days following notice thereof by
Executive to Company. Notwithstanding the preceding sentence, if there is a
written employment agreement then in effect between Executive and Company or an
Affiliate that defines the term “good reason” (or a term of like import) in a
similar context, then, for the purpose of applying the provisions hereof, the
term Good Reason as used in such similar context herein, shall have the meaning
ascribed to that term under such employment agreement.

 

(l) “Pro Rata Bonus” means Executive’s target bonus under Company’s executive
incentive compensation plan for the fiscal year of the Company in which
Executive’s employment is terminated (or, if greater, the actual bonus earned by
Executive under that plan for the preceding year) multiplied by a fraction, the
numerator of which is the number of days from the beginning of the fiscal year
through the termination date, and the denominator of which is the total number
of days in the fiscal year.

 

(m) “Salary & Bonus” means, as of the effective date of the termination of
Executive’s employment with Company and its Affiliates, the sum of: (1)
Executive’s highest annual rate of salary at any time during the preceding 24
months, and (2) Executive’s average annual bonus under Company’s executive
incentive compensation plan for the preceding three fiscal years (or such lesser
number of full fiscal years of Executive’s employment with Company and/or an
Affiliate). If Executive’s employment terminates during the same fiscal year of
Company in which such employment begins, then the bonus component of Executive’s
Salary & Bonus will be Executive’s annualized target bonus for such year.

 

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3. General Severance Protection - No Change in Control. Subject to the
provisions hereof, including, without limitation, Section 7 (relating to
non-duplication of payments and benefits provided under other agreements and
arrangements) and Section 8 (relating to the execution and delivery of a release
as a condition of Executive’s (or a beneficiary’s) entitlement to payments and
benefits hereunder), upon the termination of Executive’s employment with Company
and its Affiliates, other than a termination of employment in conjunction with a
Change in Control to which Section 4 applies, Executive (or Executive’s
beneficiary, as the case may be) will be entitled to receive the applicable
severance payments and benefits set forth in this Section.

 

(a) Termination by Company without Cause or by Executive for Good Reason. If
Executive’s employment is terminated by Company or an Affiliate without Cause or
by the Executive for Good Reason, then Executive shall be entitled to receive
the following payments and benefits:

 

(i) Accrued Compensation;

 

(ii) Pro Rata Bonus;

 

(iii) 1.5 times Salary & Bonus, which amount shall be payable to Executive in
equal monthly (or, at the option of the Committee, more frequent) installments;

 

(iv) Benefit Continuation Coverage for 18 months; and

 

(v) Accelerated vesting of outstanding Company stock options.

 

(b) Disability or Death. If Executive’s employment is terminated by Company or
an Affiliate due to Executive’s Disability or if Executive’s employment
terminates by reason of death, then Executive (or Executive’s beneficiary) shall
be entitled to receive the following payments and benefits:

 

(i) Accrued Compensation;

 

(ii) Pro Rata Bonus;

 

(iii) Benefit Continuation Coverage for 18 months (exclusive of life insurance
if Executive is deceased); and

 

(iv) Accelerated vesting of outstanding Company stock options.

 

(c) Termination by Company for Cause or by Executive without Good Reason. If
Company or an Affiliate terminates Executive’s employment for Cause or if
Executive terminates such employment for any reason (other than death), then
Executive shall be entitled to receive any Accrued Compensation, subject to set
off for amounts owed by Executive to Company or an Affiliate, and nothing more.

 

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4. Termination in Conjunction with a Change in Control. Subject to the
provisions hereof, including, without limitation, Section 7 (relating to
non-duplication of payments and benefits provided under other agreements and
arrangements), and Section 8 (relating to execution and delivery of a general
release as a condition of Executive’s entitlement to payments and benefits
hereunder), upon the termination of Executive’s employment with Company and its
Affiliates in conjunction with a Change in Control, Executive (or Executive’s
beneficiary, as the case may be) will be entitled to receive the applicable
severance payments and benefits set forth in this Section. For the purposes
hereof, a termination of employment is in conjunction with a Change in Control
if (and only if) it occurs during the period beginning on the date of the
definitive agreement pursuant to which the Change in Control is consummated and
ending on the second anniversary of the date of the Change in Control. If
Executive is entitled to receive payments and benefits under Section 3 (due to a
termination of employment not in conjunction with a Change in Control) and if,
by reason of a subsequent Change in Control, Executive’s termination of
employment is deemed to be in conjunction with the Change in Control, then, in
order to avoid duplication, the payments and benefits to which Executive is
entitled under this Section upon and following the Change in Control will be
reduced by the payments and benefits which Executive received under Section 3,
and no further payments will be made under Section 3.

 

(a) Termination by Company or an Affiliate without Cause or by Executive for
Good Reason. If Executive’s employment is terminated by Company or an Affiliate
without Cause or by Executive for Good Reason, then Executive shall be entitled
to receive the following payments and benefits:

 

(i) Accrued Compensation;

 

(ii) Pro Rata Bonus;

 

(iii) an amount equal to 2 times Salary & Bonus, which amount shall be payable
in a lump sum in cash within 10 business days following the date of Executive’s
termination of employment or, if later, the date of the Change in Control;

 

(iv) Benefit Continuation Coverage for a period of 24 months; and

 

(v) Credit for two additional years of service under Company’s Supplemental
Executive Benefit Pension Plan (SERP).

 

(b) Disability or Death. If Executive’s employment is terminated by Company or
an Affiliate due to Executive’s Disability, or if Executive’s employment
terminates by reason of death, then Executive (or Executive’s beneficiary) shall
be entitled to receive the following payments and benefits:

 

(i) Accrued Compensation;

 

(ii) Pro Rata Cash Bonus; and

 

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(iii) Benefit Continuation Coverage for 24 months (exclusive of life insurance
if Executive is deceased).

 

(c) Termination by Company or an Affiliate for Cause or by Executive without
Good Reason. If Executive’s employment is terminated by Company or an Affiliate
for Cause or, subject to Section 4(d) below, if Executive terminates his
employment for any reason (other than death or Good Reason), then Executive
shall be entitled to receive Accrued Compensation through the date of
termination, subject to set off for amounts owed by Executive to Company or an
Affiliate, and nothing more.

 

(d) Voluntary Termination Window. Executive may voluntarily terminate his
employment with Company and its Affiliates at any time during the 13th month
following a Change in Control. If Executive does so, he will be entitled to the
following payments and benefits:

 

(i) Accrued Compensation;

 

(ii) Pro Rata Bonus; and

 

(iii) an amount equal to one year’s Salary & Bonus, payable in a lump sum cash
payment within 10 business days following the date of Executive’s termination of
employment. This subsection (d) will not apply if, under the circumstances, any
other subsection of this Section 4 applies to the termination of Executive’s
employment during the voluntary termination window period afforded by this
subsection.

 

5. Effect of a Change in Control on Options and Other Equity-Based Awards. All
outstanding Company stock options and other Company equity-based awards held by
Executive shall become fully vested immediately before the occurrence of a
Change in Control if (a) Executive is then still employed by Company or an
Affiliate; or (b) Executive is entitled to payments and benefits under Section
4(a) as a result of the termination of employment during the pre-Change in
Control severance protection period described in Section 4. If Executive becomes
vested in a stock option or other equity-based award pursuant to part (b) of the
preceding sentence, then, before the Change in Control, Company will either
reinstate the option or other award to the extent it would otherwise not be
vested, or make a cash payment to Executive equal to the intrinsic value of the
non-vested portion of the option or other award based upon the then value per
share of Company’s Common Stock. The vesting and other terms and conditions of
Executive’s stock options and other equity-based awards will continue to govern
except as otherwise specifically provided by this Section 5.

 

6. Excise Tax Gross-up Payment. If Executive is entitled to receive payments and
benefits under this Agreement pursuant to Section 4 and/or Section 5, and if,
when combined with the payments and benefits Executive is entitled to receive
under any other plan, program or arrangement of Company or an Affiliate,
Executive would be subject to excise tax under Section 4999 of the Code, then
Company shall make additional payments to Executive so that, on an after-tax
basis, Executive is placed in the same economic position in which he would have
been

 

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if no excise tax were payable by him and no payments were required to be made to
him under this Section 6.

 

7. Effect of Other Agreements. Notwithstanding the provisions hereof, the
post-termination payment and benefit provisions of Executive’s written
employment or other agreement with Company or an Affiliate in force at the
termination of Executive’s employment (if any) will apply in lieu of the
provisions hereof if and to the extent that, with respect to Executive’s
termination of employment, the provisions of such employment or other agreement
would provide greater payments or benefits to Executive (or to Executive’s
covered dependents or beneficiaries). If any termination or severance payments
or benefits are made or provided to Executive by Company or any or its
Affiliates pursuant to a written employment or other agreement with Company or
an Affiliate, such payments and benefits shall reduce the amount of the
comparable payments and benefits payable hereunder. This Section is intended to
provide Executive with the most favorable treatment and, at the same time, avoid
duplication of payments or benefits, and it will be construed and interpreted
accordingly.

 

8. Release of Claims. Notwithstanding anything herein to the contrary, the
Committee or the Board may condition severance payments or benefits otherwise
payable under this Agreement upon the execution and delivery by Executive (or
Executive’s beneficiary) of a general release in favor of Company, its
Affiliates and their officers, directors and employees, in such form as the
Board or the Committee may specify; provided, however, that no such release will
be required as a condition of Executive’s (or the beneficiary’s) entitlement to
Accrued Compensation. Any payment or benefit that is so conditioned may be
deferred until the expiration of the seven day revocation period prescribed by
the Age Discrimination in Employment Act of 1967, as amended, or any similar
revocation period in effect on the effective date of the termination of
Executive’s employment.

 

9. No Duty to Mitigate. Except as otherwise specifically provided herein,
Executive’s entitlement to payments or benefits hereunder is not subject to
mitigation or a duty to mitigate by Executive.

 

10. Amendment and Termination. The Board may terminate or amend this Agreement
and the Committee may amend this Agreement, provided, however, that, no such
action which would have the effect of reducing or diminishing Executive’s
entitlements under this Agreement shall be effective (a) if Executive’s
employment terminates before or within six months after the date Executive is
furnished with written notice that such action has been taken, and/or (b) prior
to the second anniversary of a Change in Control if such action is taken (1) on
the day of or subsequent to the Change in Control, (2) prior to the Change in
Control, at the request of a third party participating directly or indirectly in
the Change in Control, or (3) otherwise in connection with or in anticipation of
the Change in Control (as determined by the Committee, in its discretion).

 

11. Interpretation and Administration. This Agreement shall be administered by
the Committee, acting in its sole and absolute discretion. The Committee shall
have full power and authority to interpret, construe and apply, and to take such
actions as it deems necessary or appropriate in order to carry out, the
provisions of this Agreement. The decision of the

 

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Committee as to any disputed question relating to this Agreement shall be final
and conclusive on all persons.

 

12. Successors and Beneficiaries.

 

(a) Successors and Assigns of Company. Company shall require any successor or
assignee, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all the business or assets of Company,
expressly and unconditionally to assume and agree to perform or cause to be
performed Company’s obligations under this Agreement. In any such event, the
term “Company,” as used herein shall mean Company, as defined in Section 1
hereof, and any such successor or assignee.

 

(b) Executive’s Beneficiary. For the purposes hereof, Executive’s beneficiary
will be the person or persons designated as such in a written beneficiary
designation filed with the Committee, which may be revoked or revised in the
same manner at any time prior to Executive’s death. In the absence of a properly
filed written beneficiary designation or if no designated beneficiary survives
Executive, Executive’s estate will be deemed to be the beneficiary hereunder.

 

13. Nonassignability. With the exception of Executive’s beneficiary designation,
neither Executive nor Executive’s beneficiary may pledge, transfer or assign in
any way the right to receive payments or benefits hereunder, and any attempted
pledge, transfer or assignment shall be void and of no force or effect.

 

14. Legal Fees to Enforce Rights after a Change in Control. If, following a
Change in Control, Company fails to comply with any of its obligations under
this Agreement or Company takes any action to declare this Agreement void or
unenforceable or institutes any litigation or other legal action designed to
deny, diminish or to recover from Executive (or Executive’s beneficiary) the
payments and benefits intended to be provided, then Executive (or Executive’s
beneficiary, as the case may be) shall be entitled to select and retain counsel
at the expense of Company to represent Executive (or Executive’s beneficiary) in
connection with the good faith initiation or defense of any litigation or other
legal action, whether by or against Company or any director, officer,
stockholder or other person affiliated with Company or any successor thereto in
any jurisdiction.

 

15. Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between Executive and Company or any of its
Affiliates. Nothing contained herein shall be deemed to give Executive a right
to be retained in the employ or other service of Company or any of its
Affiliates or to interfere with the right of Company or any of its Affiliates to
terminate Executive’s employment at any time.

 

16. Governing Law. This Agreement shall be governed by the laws of the State of
Delaware, excluding its conflict of law rules.

 

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17. Withholding. Company and its Affiliates may withhold from any and all
amounts payable under this Agreement such federal, state and local taxes as may
be required to be withheld pursuant to applicable.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

PULITZER INC.

By:   /s/    ROBERT C. WOODWORTH            

Name:

  Robert C. Woodworth    

Title:

  Chief Executive Officer

 

/s/    TERRANCE C.Z. EGGER         Terrance C.Z. Egger

 

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SUMMARY OF SEVERANCE PROTECTIONS

FOR TERRANCE C.Z. EGGER

UNDER EXECUTIVE TRANSITION AGREEMENT*

 

NATURE OF TERMINATION

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TERMINATION
NOT IN CONJUNCTION WITH A
CHANGE IN CONTROL

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TERMINATION IN CONJUNCTION
WITH A CHANGE IN CONTROL

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Termination by Pulitzer

  

•      ACCRUED COMPENSATION

  

•      ACCRUED COMPENSATION

WITHOUT CAUSE or by

  

•      PRO RATA BONUS for year of termination

  

•      PRO RATA BONUS for year of termination

Executive for GOOD REASON

  

•      1.5 x SALARY & BONUS, payable monthly

  

•      2 x SALARY & BONUS, paid in a lump

    

•      BENEFIT CONTINUATION COVERAGE for 18 months

  

•      BENEFIT CONTINUATION COVERAGE for 2 years

    

•      Accelerated vesting of Company stock options

  

•      2 additional years of service credit under SERP

         

•      Accelerated vesting of Company stock options

         

•      Full 280G golden parachute excise tax gross-up

Voluntary termination by

Executive during 13th

month following a CHANGE

IN CONTROL

   N/A   

•      ACCRUED COMPENSATION

       

•      PRO RATA BONUS

       

•      One year’s SALARY & BONUS, payable in a lump sum

           

DISABILITY or Death

  

•      ACCRUED COMPENSATION

  

•      ACCRUED COMPENSATION

    

•      PRO RATA BONUS for year of termination/death

  

•      PRO RATA BONUS for year of termination/death

    

•      BENEFIT CONTINUATION COVERAGE for 18 months

  

•      BENEFIT CONTINUATION COVERAGE for 2 years

    

•      Accelerated vesting of Company stock options

  

•      Accelerated vesting of Company stock options

Termination by Pulitzer for CAUSE or voluntary termination by Executive (other
than during permitted window

period)

   ACCRUED COMPENSATION only    ACCRUED COMPENSATION only

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* This chart is based upon the provisions of an Executive Transition Agreement
(“Agreement”) between the above-named Executive and Pulitzer Inc. dated as of
January 1, 2002. This chart is only a summary of the basic severance components
contained in the Agreement and is not part of the Agreement itself. Executive’s
rights under the Agreement will be determined solely by its terms and conditions
and without regard to the contents of this chart. The capitalized terms in this
chart appearing in bold and italics are defined terms under and shall have the
meanings set forth in the Agreement.