**Exhibit 10.1**

September 2, 2003 

 

Mr. Robert Bateman 

Fisher Communications, Inc. 

100 Fourth Avenue North, Suite 440 

Seattle, WA 98109 

 

Dear Robert: 

 

Fisher Communications, Inc. (the “Corporation”) expects that your contribution to the growth and success of the Corporation will be significant. In thisconnection, the Board of Directors of the Corporation (the “Board”) recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control may exist and that such possibility, and the uncertainty andquestions which it may raise among management, may result in the distraction of management personnel to the detriment of the Corporation and its shareholders. 

 

Accordingly, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of theCorporation’s management, including you, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a change in control of the Corporation. 

 

The Corporation agrees that, notwithstanding your status as an at-will employee, you willreceive the severance benefits set forth in this letter agreement (“Agreement”) in accordance with the circumstances described below. 

 

1. Term of Agreement. This Agreement will commence on the date hereof and shall continue in effect until January 15, 2004, or until the terminationof your employment, whichever shall occur first. As long as you remain employed by the Corporation, this Agreement shall automatically renew for consecutive one-year periods unless terminated by the Corporation on not less than thirty (30)days’ notice. Notwithstanding the above, the following apply: 

 

(a) The Corporation may not terminate this Agreement following a Potential Change of Control (as defined in Section 2(b) hereof) unless the Board makes a good faith determination that the risk of the associated Change in Control (as definedin Section 2(a) hereof) has terminated. 

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September 2, 2003 

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(b) Upon a Change in Control, this Agreement shall automatically terminate on the second anniversary ofthe date of the Change in Control, prior to which time this Agreement may not be terminated by the Corporation, except as provided herein. 

 

(c) Neither your death nor the termination of this Agreement shall effect the payment of any benefits under Section 4(d), provided your right to receivesuch benefits arose prior to the earlier of (i) your death or (ii) the termination of this Agreement. 

 

(d) Section 11 shall survive the termination of this Agreement. 

 

2. Change in Control and Potential Change in Control. 

 

(a) For purposes of this Agreement, a “Change in Control” shall mean a change in control of a nature that would be required to be reported inresponse to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the Corporation is then subject to such reporting requirement; provided, that,without limitation, such a change in control shall be deemed to have occurred if: 

 

(i) any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (a “Person”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directlyor indirectly, of securities of the Corporation (not including in the amount of the securities beneficially owned by such person any such securities acquired directly from the Corporation or its affiliates) representing twenty percent (20%) or moreof the combined voting power of the Corporation’s then outstanding voting securities; provided, however, that for purposes of this Agreement the term “Person” shall not include (A) the Corporation or any of its subsidiaries, (B) atrustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned,directly or indirectly, by the shareholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation; and provided, further, however, that for purposes of this paragraph (i), there shall be excluded anyPerson who becomes such a beneficial owner in connection with an Excluded Transaction (as defined in paragraph (iii) below); or 

 

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the datehereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest including, but not limited 

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September 2, 2003 

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to, a consent solicitation, relating to the election of directors of the Corporation) whose appointment or election by the Board or nomination for electionby the Corporation’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for electionwas previously so approved or recommended; or 

 

(iii) there isconsummated a merger or consolidation of the Corporation or any direct or indirect subsidiary thereof with any other corporation, other than a merger or consolidation which would result in the voting securities of the Corporation outstandingimmediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving corporation or any parent thereof) at least fifty percent (50%) of the combined voting power of thevoting securities of the entity surviving the merger or consolidation (or the parent of such surviving entity) immediately after such merger or consolidation (an “Excluded Transaction”), or the shareholders of the Corporation approve aplan of complete liquidation of the Corporation, or there is consummated the sale or other disposition, in one or more related transactions, of at least the lesser of seventy percent (70%) of the fair market value of Corporation’s gross assetsor ninety percent (90%) of the fair market value of the Corporation’s net assets, as measured on the date hereof. 

 

(b) For purposes of this Agreement, a “Potential Change in Control” shall be deemed to have occurred, if: 

 

(i) the Corporation enters into an agreement, the consummation of whichwould result in the occurrence of a Change in Control; 

 

(ii)any Person (including the Corporation) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or 

 

(iii) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control hasoccurred. 

 

3. Termination Following a Change in Control orPotential Change in Control. If any of the events described in Section 2(a) hereof constituting a Change in Control shall have occurred, you shall be entitled to the benefits provided in Section 4(d) hereof upon the termination of youremployment during the term of this Agreement unless such termination is (i) because of your death or Disability (as defined in Section 3(a)), (ii) by the Corporation for Cause, or (iii) by you other than for Good Reason. You shall also be entitledto the benefits provided in Section 4(d) hereof if your employment is terminated prior to a Change in Control, if such termination is other than (i) because of your death or Disability, (ii) by the 

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September 2, 2003 

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Corporation for Cause, or (iii) due to your voluntary resignation, unless such resignation is for Good Reason, and you reasonably demonstrate that suchtermination was at the request of or as a result of actions by a third party who has taken steps reasonably calculated to effect a Change in Control, you shall be entitled to the benefits provided in Section 4(d) hereof. With respect to theforegoing, the following definitions apply: 

 

(a)Disability. If prior to your retirement and while in the employ of the Corporation, you are incapacitated due to physical or mental illness that in the opinion of a licensed physician renders you totally and permanently incapable ofperforming your assigned duties with the Corporation, and as a result of such incapacitation you are absent from the full-time performance of your duties with the Corporation for six (6) consecutive months, the Corporation may terminate youremployment for “Disability.” 

 

(b) Cause.Termination by the Corporation of your employment for “Cause” shall mean termination upon (i) the willful and continued failure by you to substantially perform your duties with the Corporation (other than any such failure resulting fromtermination by you for Good Reason or any such failure resulting from your incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to you that specifically identifies the manner in which theCorporation believes that you have not substantially performed your duties, and you have failed to resume substantial performance of your duties on a continuous basis within fourteen (14) days of receiving such demand, (ii) the willful engaging byyou in conduct which is demonstrably and materially injurious to the Corporation, monetarily or otherwise, including, but not limited to, any breach of the confidentiality obligations you have in connection with this Agreement, a Change in Controlor a Potential Change in Control, or (iii) your conviction of a felony or conviction of a misdemeanor which impairs your ability substantially to perform your duties with the Corporation. For purposes of this Subsection, no act, or failure to act,on your part shall be deemed “willful” unless done, or omitted to be done. by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Corporation. 

 

(c) Good Reason. For purposes of this Agreement, “GoodReason” shall mean, without your express written consent, the occurrence after a Change in Control, or after and at the request of or as a result of actions by a third party who has taken steps reasonably calculated to effect a Change inControl (each an “Applicable Event”), of any one or more of the following: 

 

(i) the assignment to you of duties (other than those reasonably necessary to address the Applicable Event) inconsistent with your position immediately prior to the Applicable Event or a reduction or alteration in thenature of your position, duties, status or responsibilities from those in effect immediately prior to the Applicable Event; 

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September 2, 2003 

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(ii) a reduction by the Corporation in your annualized and monthly or semi-monthly rate of base salary(“Base Salary”) as in effect on the date hereof or as the same shall be increased from time to time prior to a Change in Control; 

 

(iii) the Corporation’s requiring you to be based at a location in excess of fifty (50) miles from the location where you are based immediatelyprior to the Applicable Event; 

 

(iv) the failure by theCorporation to continue, substantially as in effect immediately prior to the Applicable Event, all of the Corporation’s employee benefit, incentive compensation, bonus, stock option and stock award plans, programs, policies, practices orarrangements in which you participate (or substantially equivalent successor plans, programs, policies, practices or arrangements) or the failure by the Corporation to continue your participation therein on substantially the same basis, both interms of the amount of benefits provided and the level of your participation relative to other participants, as existed immediately prior to the Applicable Event; 

 

(v) the failure of the Corporation to obtain an agreement from any successor to the Corporation to assume and agree toperform this Agreement, as contemplated in Section 5 hereof; and 

 

(vi) any purported termination by the Corporation of your employment that is not effected pursuant to a Notice of Termination satisfying the requirements of subparagraph (d) below, and for purposes of this Agreement, no such purportedtermination shall be effective. 

 

Your right to terminate your employmentpursuant to this Subsection shall not be affected by your incapacity due to physical or mental illness. Your continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reasonhereunder. 

 

(d) Notice of Termination. Any terminationby the Corporation for Cause or for Disability or by you for Good Reason shall be communicated by Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice whichshall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

 

(e) Date of Termination. “Date ofTermination” shall mean the date specified in the Notice of Termination, when such a notice is required, or in any other case upon ceasing to perform services to the Corporation; provided, however, that if within thirty (30) days after anyNotice of Termination one party notifies the other party that a dispute 

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exists concerning the termination, the Date of Termination shall be the date finally determined to be the Date of Termination in an arbitration award thathas been confirmed or enforced by a final, non-appealable judgment of a court of competent jurisdiction. 

 

4. Compensation Upon Termination or During Disability. After an Applicable Event has occurred, if, during the term of this Agreement, youremployment is terminated or you are in a period of Disability the following shall be applicable: 

 

(a) During any period that you fail to perform your full-time duties with the Corporation as a result of incapacity due to physical or mental illness,your total compensation, including your Base Salary, bonus and any benefits, will continue unaffected until either you return to the full-time performance of your duties or your employment is terminated pursuant to Section 3(a) hereof. In the eventyou return to the full-time performance of your duties, you shall continue to receive your full Base Salary and bonus plus all other amounts to which you are entitled under any compensation or other employee benefit plan of the Corporation withoutinterruption. In the event your employment is terminated pursuant to Section 3(a) hereof, your benefits shall be determined in accordance with the Corporation’s retirement, insurance and other applicable programs and plans then in effect.

 

(b) If your employment shall be terminated by the Corporationfor Cause or by you other than for Good Reason, the Corporation shall pay you your full Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given or on the Date of Termination if no Notice ofTermination is required hereunder, plus all other amounts to which you are entitled under any compensation or benefit plan of the Corporation at the time such payments are due, and, except as otherwise required by law, the Corporation shall have nofurther obligations to you under this Agreement. 

 

(c) If youremployment terminates by reason of your death, your benefits shall be determined in accordance with the Corporation’s retirement, survivor’s benefits, insurance and other applicable programs and plans then in effect. 

 

(d) If your employment by the Corporation is either terminated by theCorporation (other than for Cause or Disability) or terminated by you for Good Reason you shall be entitled to the following benefits: 

 

(i) Accrued Compensation and Benefits. The Corporation shall provide you: 

 

(A) the compensation, reimbursements and benefits accrued through the Date of Termination to the extent not theretoforeprovided; 

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(B) a lump sum cash amount equal to the value of your unused vacation days accrued through the Date ofTermination; and 

 

(C) your normal post-terminationcompensation and benefits under the Corporation’s retirement, insurance and other compensation and benefit plans as in effect immediately prior to the Date of Termination, or if more favorable to you, immediately prior to the Applicable Event.

 

(ii) Lump Sum Severance Payment. The Corporation shallprovide to you a severance payment in the form of a cash lump sum distribution equal to your annual Base Salary. 

 

(iii) Continuation of Health Care Benefits. Subject to the benefits offset described below, you will be eligible to continue participation in theCorporation’s group health care benefits pursuant to COBRA for up to eighteen (18) months (or longer if applicable under the COBRA regulations) following the Date of Separation. The health care benefits for which you will be eligible will be inaccordance with the written plan documents in effect from time to time governing the plans provided to active employees of the Corporation. These benefits will be provided at a cost, which the Corporation agrees to pay for a period of twelve (12)months from the Date of Separation, that is no greater than the amount paid for such health care benefits by active employees who participate in such plans. The benefits otherwise receivable by you pursuant to this paragraph (iii) shall be reducedto the extent you receive similar coverage under any other group health coverage (as an employee or otherwise). For the purpose of complying with the terms of this offset, you are obligated to report to the Corporation the amount of any suchbenefits which you receive. 

 

(iv) Timing. The paymentsprovided for in this paragraph (d) shall be made not later than the fifteenth day following the Date of Termination. 

 

5. Successors; Binding Agreement. 

 

(a) The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially allof the business and/or assets of the Corporation or of any division or subsidiary thereof employing you to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required toperform it if no such succession had taken place. Failure of the Corporation to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from theCorporation in the same amount and on the same terms as you would be entitled hereunder if you terminate your employment for Good Reason following an Applicable Event, except that for purposes of implementing the foregoing, the date on which anysuch succession becomes effective shall be deemed the Date of Termination. 

Mr. Robert Bateman 

September 2, 2003 

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(b) This Agreement shall inure to the benefit of and be enforceable by your personal or legalrepresentatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise providedherein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate. 

 

6. Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreementshall 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, addressed to the respective addresses set forth on the first page of thisAgreement. 

 

7. Miscellaneous. No provision of thisAgreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be specifically designated by the Board. The validity, interpretation, construction andperformance of this Agreement shall be governed by the laws of the State of Washington. 

 

8. Confidentiality. You agree that, except (i) with the prior written consent of the Corporation, (ii) in connection with review by retained legal or financial counsel, and (iii) as required by law, you andyour permitted representatives will at all times keep confidential and not divulge, furnish or make accessible to anyone any confidential information or knowledge related to this Agreement or the terms herein. You agree that this Agreement and theterms herein are deemed confidential information. Breach of this provision shall constitute a breach of this Agreement, and this Agreement shall terminate immediately and automatically upon such breach. 

 

9. Validity. The invalidity or unenforceability of any provision ofthis Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

 

10. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which togetherwill constitute one and the same instrument. 

 

11. Claims andArbitration. The parties shall resolve any dispute arising out of or relating to this Agreement by final and binding arbitration by a single neutral arbitrator located in Seattle, Washington. 

 

(a) To commence an arbitration arising under this Agreement, either you orthe Corporation shall serve upon the other, a demand for arbitration, specifying in reasonable 

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detail the basis for the demand and any relief sought. Within ten (10) days after a receiving party receives a demand for arbitration, the receiving partyshall serve upon the demanding party a response, specifying in reasonable detail the party’ defenses to the claims asserted, and identifying in reasonable detail any counterclaims asserted or counter-relief sought. The demanding party shallrespond to any counterclaim or request for counter-relief within five (5) days, specifying in reasonable detail any defenses it asserts. 

 

(b) Within fifteen (15) days after the service of a response to the initial demand or, if applicable, to the counterclaim, you and the Corporation shallselect the arbitrator who will resolve the dispute. You and the Corporation shall select an arbitrator with no current or past attorney-client or business relationship with either party or either party’s attorney, but with experience inexecutive compensation. If you and the Corporation cannot agree on an arbitrator within such fifteen (15) days, then the demanding party must petition a state or federal court in King County, Washington to identify an arbitrator, and the arbitratoridentified by such court will administer the dispute resolution process in accordance with the terms of this Section 11. 

 

(c) The parties shall self-administer the arbitration. The arbitrator shall not charge a filing fee, administrative fee, or any other fee beyond his orher usual hourly rate plus applicable costs, nor shall a third party act as administrator. You and the Corporation shall bear the fees of the arbitrator equally and in no event shall the arbitrator’s fee be shifted to one party, regardless ofoutcome. The American Arbitration Association’s expedited rules for commercial arbitrations shall govern the arbitration, except as modified to be consistent with the terms of this clause. You and the Corporation may conduct only the followingdiscovery: a maximum of two (2) one-day (1-day) (no more than seven (7) hours) depositions; ten (10) interrogatories; ten (10) requests for production of documents; and ten (10) requests for admission per party. The arbitration hearing will occur nolater than ninety (90) days after service of the initial demand for arbitration. Each party shall have a maximum of two (2) seven-hour (7-hour) days to present its case at the arbitration hearing, including opening arid closing arguments and allexaminations. The arbitrator shall render his or her final decision within ten (10) days after the conclusion of the arbitration hearing and, in so doing, shall follow the substantive law of the state of Washington. The parties expressly agree that,other than for manifest disregard of the law, the arbitrator’s decision shall be final and non-appealable; judgment upon the arbitration may be entered and enforced in any court with jurisdiction over the parties. 

 

(d) If the arbitrator determines that either you or the Corporationsubstantially prevailed on all of the claims or defenses at the arbitration, then the arbitrator shall award to the substantially prevailing party reasonable costs and attorney fees incurred in the arbitration. Costs awarded shall not include feespaid to the arbitrator or to experts retained in connection with the arbitration. 

Mr. Robert Bateman 

September 2, 2003 

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12. Entire Agreement. This Agreement supersedes any other agreement or understanding between theparties hereto with respect to the issues that are the subject matter of this Agreement. 

 

13. Effective Date. This Agreement shall become effective as of the date set forth above. If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation theenclosed copy of this letter which will then constitute our agreement on this subject. 

 

Sincerely,

FISHER COMMUNICATIONS, INC.

By
 
    /s/ William W. Krippaehne Jr.
  
William W. Krippaehne Jr.,
  
President and Chief Executive Officer

 

Agreed to this    15th     day of     September            , 2003 

 

By
 
/s/ Robert C. Bateman
  
ROBERT BATEMAN