Document:

exv10w5

 

EXHIBIT 10.5

FOURTH AMENDMENT TO SEVERANCE COMPENSATION AGREEMENT

     This Fourth Amendment to Severance Compensation Agreement (this “Fourth Amendment”),
dated as of the 1st day of July, 2005, is by and between LIN Television Corporation, a Delaware
corporation (the “Company”), and Peter E. Maloney (the “Executive”).

W I T N E S S E T H:

     WHEREAS, the Company and Executive are parties to that certain Severance Compensation
Agreement, dated as of September 5, 1996, as amended on October 1, 1999, August 30, 2000, and
October 1, 2002 (the “Agreement”).

     WHEREAS, the Company believes it is in its best interest to reinforce and encourage
Executive’s continued disinterested attention and undistracted dedication in the potentially
disturbing circumstances of a possible change in control of the Company; and

WHEREAS, the parties desire to amend the Agreement upon the terms contained herein;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
Company and Executive each agree as follows:

     1. Definitions. Capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Severance Agreement.

     2. Amendment to Paragraph (iii) of Definition of Good Reason. Paragraph (iii) of the
definition of the term “Good Reason” in Section 1(d) of the Agreement shall be deleted in its
entirety and the following shall be inserted in lieu thereof and shall constitute the new paragraph
(iii) of the definition of “Good Reason” for purposes of the Agreement:

Executive’s duties, authority and responsibilities or, in the aggregate, the program
of retirement and welfare benefits offered to Executive, are materially and adversely
diminished, in comparison to the duties, authority, and responsibilities or the
program of benefits, in the aggregate, enjoyed by Executive as of (A) the time
immediately prior to a Hicks Muse Change in Control or (B) if prior to a Hicks Muse
Change in Control, as of July 1, 2005, or Executive is demoted from the position that
he held as of (Y) the time immediately prior to such Hicks Muse Change in Control or
(Z) if prior to a Hicks Muse Change in Control, as of July 1, 2005; provided,
however, that if, subsequent to a Hicks Muse Change in Control, the Executive
maintains the same duties, authority and responsibility that he held prior to such
Hicks Muse Change in Control, the requirement that the Executive

 

 

report to officers or the board of parent companies shall not of itself constitute
“Good Reason” unless such officers or board take actions that materially and
adversely interfere with the business decisions of Executive with respect to those
business matters otherwise subject to his duties, authority and responsibilities;

     3. Amendment to Paragraph (iv) of Definition of Good Reason. Paragraph (iv) of the definition
of the term “Good Reason” in Section 1(d) of the Agreement shall be deleted in its entirety and, in
order to maintain the sequential numbering of the paragraphs in such definition, the following
shall be inserted in lieu thereof and shall constitute the new paragraph (iv) of the definition of
“Good Reason” for purposes of the Agreement: “[Reserved.]”

     4. Amendment to Section 2 of the Agreement. Section 2 of the Agreement shall be deleted in its
entirety and the following shall be inserted in lieu thereof and shall constitute the new Section 2
of the Agreement:

Severance Compensation Trigger. Executive shall be entitled to severance
compensation as set forth in Section 3 hereof (“Severance Compensation”) in the event
that Executive’s employment is terminated within the “Extension Period” (as defined
below) (i) by the Company without Cause, or (ii) by Executive within 90 days after
Executive has knowledge of the occurrence of an event constituting Good Reason
(clauses (i) or (ii), a “Severance Compensation Trigger”). The “Extension Period”
shall be defined as that certain period commencing on the date of the Agreement and
ending on the date that is three (3) years following a Hicks Muse Change in Control.

Notwithstanding the foregoing, for purposes of this Section 2, the following events
shall not be deemed to be a termination “by the Company without Cause” that would
Executive otherwise constitute a Severance Compensation Trigger:

(a) Termination of Executive’s employment by reason of Executive’s death or
disability (including, without limitation, illness or injury preventing Executive
from performing his duties, as they existed immediately prior to the illness or
injury, of a full-time basis for 180 consecutive business days); or

(b) Termination of Executive’s employment by reason of Executive’s retirement
(including, without limitation, Executive’s voluntary late, normal or early
retirement under a pension plan sponsored by the Company, as defined in such
plan).

 

 

     5. Amendment to Section 3(a)(i) of the Agreement. Section 3(a)(i) of the Agreement shall be
shall be deleted in its entirety and the following shall be inserted in lieu thereof and shall
constitute the new Section 3(a)(i) of the Agreement:

i) In lieu of any further salary or bonus payments to the Executive for
periods subsequent to the Date of Termination, the Company shall pay to
the Executive not later than the tenth day following the Date of
Termination a lump sum severance payment equal to the sum of:

(x) amount equal to three times (3x) the Executive’s annual base salary in
effect on the Date of Termination (the “Base Salary”);

(y) an amount equal to three times (3x):

(1) the amount of the highest bonus compensation paid to the
Executive with respect to the last three complete fiscal years,
and

(2) the contribution, if any, paid by the Company for the benefit
of the Executive to any 401(k) Plan in the last complete fiscal
year,

(z) the present value, determined as of the Date of Termination, of the
sum of:

(1) all benefits which have accrued to the Executive but have
not vested under the LIN Television Corporation Retirement Plan
(the “Retirement Plan”) as of the Date of Termination, and

(2) all additional benefits which would have accrued to the
Executive under the Retirement Plan if the employee had continued
to be employed by the Company on the same terms the Executive was
employed on as of the Date of Termination from such Date of
Termination to the date 12 months after the Date of Termination.

For purposes of this Section, the present value of a future payment shall
be calculated by reference to the actuarial assumptions (including
assumptions with respect to interest rates) in use immediately prior to
the Hicks Muse Change in Control for purposes of calculating actuarial
equivalents under the Retirement Plan.

 

 

     6. Amendment to Section 3(a)(ii) of the Agreement. Section 3(a)(ii) of the Agreement shall be
shall be deleted in its entirety and the following shall be inserted in lieu thereof and shall
constitute the new Section 3(a)(ii) of the Agreement:

The Company shall provide the Executive for a period commencing on the Date of
Termination and ending on the earlier of the third anniversary of the Date of
Termination or the Executive’s death (the “Benefits Period”), life, health,
disability and accident insurance benefits and the package of “Executive benefits”
substantially similar, individually and in the aggregate, to those which the
Executive was receiving immediately prior to the Notice of Termination, or
immediately prior to a Hicks Muse Change in Control, if greater, including without
limitation, transfer of title of a company automobile, medical, dental, vision, life
and pension benefits, as if Executive were continuing as an employee of the Company
during the Benefits Period, provided, however, that with respect to the provision of
insurance benefits during the Benefits Period, Executive shall be obligated to
continue to pay that proportion of premiums paid by the Executive immediately prior
to such Notice of Termination or Hicks Muse Change in Control, as applicable. The
Company shall apply the statutory health care continuation coverage (“COBRA”)
provisions as if the Executive were a full-time employee of the Company during the
Benefits Period, with the result that (y) the Executive’s spouse and dependents shall
be eligible for continued health insurance coverage that is in all respects
equivalent to COBRA coverage (“COBRA-Equivalent Coverage”) if an event occurs during
the Benefits Period that would have been a “qualifying event” under COBRA had the
Executive been an employee of the Company, and (z) the Executive and the Executive’s
spouse and dependents shall be eligible for COBRA-Equivalent coverage at the
expiration of the Benefits Period and for a period of three years thereafter as if
the Executive’s employment with the Company had terminated on the last day of the
Benefits Period.

     7. Amendment to Section 3(a)(iii) of the Agreement. Section 3(a)(iii) of the Agreement shall
be shall be deleted in its entirety and the following shall be inserted in lieu thereof and shall
constitute the new Section 3(a)(iii) of the Agreement:

With respect to all stock options and stock awards granted to the Executive under the
1998 Stock Option Plan, the 1998 Substitute Stock Option Plan, the 1998 Phantom Stock
Plan, and the Amended and Restated 2002 Stock Plan of LIN TV (collectively, the
“Options and Awards”) which are not otherwise exercisable or vested on the Date of
Termination, such Options and Awards shall be deemed vested and exercisable
immediately as of the Date of Termination.

     8. Amendment to Section 3(b) of the Agreement. Section 3(b) of the Agreement shall be shall be
deleted in its entirety and the following shall be inserted in lieu thereof and shall constitute
the new Section 3(b) of the Agreement:

 

 

(b) Notwithstanding anything to the contrary contained herein:

     (i) If the Severance Compensation under this Section 3, either alone or together
with other payments to the Executive from the Company (or any portion of such
aggregate payment) would constitute an “excess parachute payment” (as defined in
Section 280G of the Code), such Severance Compensation shall be increased by a
payment sufficient to restore the Executive to the same after-tax position the
Executive would have been in if the excise tax had not been imposed.

     (ii) If Executive is a “Specified Employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code, or any successor thereto or as such may be amended
hereafter (“Section 409A”), to the extent necessary to satisfy the requirements of
Section 409A, any portion of the Severance Compensation under this Section 3 that
shall constitute deferred compensation within the meaning of Section 409A shall not
be due and payable to Executive until the date that is six (6) months after the Date
of Termination.

     9. Joinder of LIN TV for Purposes of Section 3(a)(iii) of the Agreement. By executing this
Fourth Amendment, LIN TV agrees to be, and shall be deemed to be, a party to, and be bound by, the
Agreement for purposes of Section 3(a)(iii) of the Agreement (as amended by this Fourth Amendment).

     10. Reaffirmation of the Severance Agreement. Except as expressly provided herein, the
Agreement is not amended, modified or affected by this Fourth Amendment, and the Agreement and the
rights and obligations of the parties hereto thereunder are hereby ratified and confirmed by the
parties in all respects.

     11. Counterparts. This Fourth Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together will constitute one and the same
instrument.

[The remainder of this page has been left blank intentionally.]

 

 

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

	 	 	 
	LIN Television Corporation

By:

Denise M. Parent

Vice President-Deputy General Counsel

	 	 Executive

By:

Peter E. Maloney

For purposes of Section 9 of this Fourth Amendment (and

Section 3(a)(iii) of the Agreement):

LIN TV Corp.

By:

Denise M. Parent

Vice President-Deputy General Counselexv10w6

 

EXHIBIT 10.6

FORM OF OPTION AGREEMENT

LIN TV CORP.

NONQUALIFIED STOCK OPTION LETTER AGREEMENT

TO: Employee

You have been selected by LIN TV Corp. (the “Company”) to receive nonqualified options under the
Company’s Amended and Restated 2002 Stock Plan (the “Plan”) to purchase                      shares of the
Company’s Class A common stock, $.01 par value per share (the “Common Stock”). The exercise price
per share of these options is $13.855. Capitalized terms not otherwise defined herein shall have
the meanings set forth in the Plan.

The terms of the options are as set forth in the Plan and in this Letter Agreement. The most
important of the terms set forth in the Plan are summarized as follows:

Term: The term of the options is ten years from date of grant (the “Final Exercise Date”), unless
sooner terminated.

Payment for Shares: The options may be exercised by the delivery of written notice of exercise
accompanied by:

	1.	 	Cash, personal check (unless, at the time of exercise, the Committee determines otherwise),
bank-certified check or cashier’s check;
	 
	2.	 	Unless the Committee, in its sole discretion, determines otherwise, shares of the Company’s
capital stock held by you for a period of at least six months having a fair market value at
the time of exercise, as determined in good faith by the Committee, equal to the exercise
price; or
	 
	3.	 	While the stock is publicly traded, unless the Committee in its sole discretion determines
otherwise, through a “cashless exercise” arranged by a broker designated by the Committee.

Withholding Taxes: As a condition to the exercise of the options, you shall make such arrangements
as the Company may require for the satisfaction of any federal, state or local withholding tax
obligations that may arise in connection with such exercise. The Company shall have the right to
retain without notice sufficient shares of stock to satisfy the withholding obligation.

Termination: In the event of your termination of employment, all unvested options will immediately
be cancelled. You will have the following period of time after such termination of employment to
exercise your vested options (any vested options not

 

 

exercised by such applicable date will then be cancelled):

	•	 	Voluntary termination: 60 days
	 
	•	 	Disability (as defined in the Plan) or death: 365 days
	 
	•	 	Termination for Cause: Immediate forfeiture as of the date of termination

The 60 or 365-day periods referred to above shall not extend beyond the Final Exercise Date.

Vesting: Unless accelerated in accordance with the Plan, the options shall vest and become
exercisable according to the following schedule:

	 	 	 	 	 	 	 
	Date on and After Which	 	 	 	Portion of Total Option
	Option is Exercisable	 	 	 	That Becomes Exercisable
	July 1, 2006

	 	 
	 	 	25	%
	July 1, 2007

	 	 	 	 	25	%
	July 1, 2008

	 	 	 	 	25	%
	July 1, 2009

	 	 	 	 	25	%

The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all shares of Common Stock for which it is vested until the earlier of the
Final Exercise Date or the termination of the option as described under the heading “Termination”
above.

Provisions of the Plan: This option is subject to the provisions of the Plan, a copy of which is
furnished to you with this Letter Agreement.

Change of Control: In the event of a Change of Control, the Plan’s Committee may declare that any
or all non-vested options will be immediately exercisable or accelerated to a faster vesting
schedule.

Arbitration: As a condition of the Company’s grant of options to you, you agree that all disputes
between you and the Company shall be resolved by final and binding arbitration in accordance with
the provisions of this section. This agreement to arbitrate shall remain in effect after
termination of this Agreement with respect to any disputes arising out of events occurring during
the term hereof or arising out of or relating to this Agreement, or disputes arising out of or
relating to your employment or termination thereof. A party intending to assert a claim must
serve, by hand delivery or a form of mail that requires a signed return receipt, a written demand
for arbitration on the other party. The demand, if against the Company, must be served on a Vice
President or higher-level officer of the Company. The demand must describe the basis of the claim
with reasonable specificity and the remedy requested. The demand must be received by the person
served within the time limitation set forth below. The arbitration shall be conducted in
accordance with the then-prevailing Employment Dispute Resolution Rules of the American Arbitration
Association. The situs of the arbitration shall be Providence, Rhode Island. Notwithstanding the
foregoing, the following discovery

 

 

limitations shall apply to the arbitration proceeding: each party may take the deposition of one
individual only and any expert witness designated by the other party; both parties shall have the
right to subpoena witnesses and documents, but additional discovery may be had only if the
arbitrator so orders after determining there is a substantial need for the information.
Notwithstanding any longer statutes of limitation provided by law, no claim of any nature
whatsoever may be brought by either party against the other, in arbitration or otherwise, unless a
written demand for arbitration is served on the other party within thirty (30) days after the claim
accrued; i.e., within thirty (30) days from the date on which the act or event (or failure to act)
on which the claim is based occurred. The arbitrator shall be authorized to award such relief as
is available under the applicable state or federal law on which the claim is based.

[Signature Page Follows]

 

 

LIN Television Corporation

Nonqualified Stock Option Letter Agreement

[ Signature Page ]

	 	 	 	 	 
	 

	 	 	 	Acknowledged and accepted:
	 	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Print Name:
	 	Employee
	 
	 	 	 	 
	 

	 	Station:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Social Security #:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Home Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	E-mail Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 

	 	 	 
	Approved:
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	Gary R. Chapman
	 	 
	Chairman, President & CEO
	 	 

					
	 	 	 	 	 
	 
	 	Option Summary	 	 
	 
	Options granted
	 	 	 	#
	Date of Grant
	 	 	 	July 1, 2005
	Vesting Schedule
	 	 	 	4 years, 25% per year
	Exercise Price
	 	 	 	$13.855

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