<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM 10 - Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 333-9529
---------------------------
BENEDEK COMMUNICATIONS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------------
DELAWARE 36-4076007
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
------------------------
STEWART SQUARE, SUITE 210
308 WEST STATE STREET, ROCKFORD, ILLINOIS 61101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANTS' TELEPHONE NUMBER, INCLUDING AREA CODE: (815) 987-5350
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes No X
---- -----
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 7,030,000 shares of common
stock, $0.01 par value, were outstanding at August 19, 1996.
-1-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION
FORM 10-Q TABLE OF CONTENTS
ITEM
NUMBER
PART I- FINANCIAL STATEMENTS
<TABLE>
<S> <C> <C>
Item 1. FINANCIAL STATEMENTS
Introductory Comments............................................. 3
Benedek Communications Corporation and Subsidiary
Consolidated Balance Sheets as of December 31, 1995
and June 30, 1996............................................ 4
Consolidated Statements of Operations for the Three Months and
Six Months Ended June 30, 1995 and 1996..................... 5
Consolidated Statement of Stockholder's Deficit for the Six
Months Ended June 30, 1996.................................. 6
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1995 and 1996...................................... 7
Notes to consolidated financial statements...................... 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS........................... 15
PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8K................................. 22
SIGNATURES................................................................ 25
</TABLE>
-2-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Introductory Comments:
The Financial Statements included herein have been prepared by Benedek
Communications Corporation ("the Company") without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations.
-3-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash and cash equivalents............................................ $ 9,668,331 $ 5,691,476
Accounts receivable, net............................................. 12,529,696 20,812,960
Due from sellers..................................................... -- 1,799,144
Current portion of program broadcast rights.......................... 1,575,324 2,605,440
Prepaid expenses..................................................... 576,697 1,377,192
----------- -----------
TOTAL CURRENT ASSETS...................................... 24,350,048 32,286,212
----------- -----------
Property and Equipment.................................................. 20,035,715 91,197,864
----------- -----------
Intangible Assets....................................................... 60,420,617 359,759,417
----------- -----------
Other Assets:
Program broadcast rights, less current portion....................... 687,321 2,521,725
Deferred loan costs.................................................. 5,625,261 13,211,447
Other................................................................ 3,334,359 760,537
----------- -----------
9,646,941 16,493,709
----------- -----------
$114,453,321 $ 499,737,202
=========== ===========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities
Current maturities of notes and leases payable....................... $ 318,077 $ 6,295,564
Current maturities of program broadcast rights payable .............. 2,042,643 3,282,547
Deferred revenue..................................................... 500,000 694,668
Accounts payable and accrued expenses................................ 7,824,297 13,904,094
----------- -----------
TOTAL CURRENT LIABILITIES................................. 10,685,017 24,176,873
----------- -----------
Long-Term Obligations:
Notes and capital leases payable..................................... 135,448,947 348,279,540
Program broadcast rights payable..................................... 632,443 1,866,061
Deferred revenue..................................................... 4,250,000 4,515,933
Deferred income taxes................................................ -- 58,559,983
----------- -----------
140,331,390 413,221,517
----------- -----------
Senior Redeemable Preferred Stock....................................... -- 51,654,094
----------- -----------
Junior Redeemable Preferred Stock....................................... -- 45,237,600
----------- -----------
Stockholder's Deficit:
Common stock......................................................... 1,046,500 70,030
Additional paid-in capital........................................... 2,758,178 (32,874,841)
Accumulated deficit.................................................. (38,886,615) (1,748,071)
----------- -----------
(35,081,937) (34,552,882)
Less 30.24 shares held in treasury................................... 1,481,149 --
----------- -----------
(36,563,086) (34,552,882)
----------- -----------
$114,453,321 $499,737,202
=========== ===========
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues .................... $ 13,909,076 $ 18,432,157 $ 24,058,657 $ 30,115,028
------------ ------------ ------------ ------------
Operating expenses:
Selling, technical and
program expenses ........ 5,631,023 8,003,457 10,044,707 13,541,029
General and administrative ... 1,898,257 2,683,156 3,791,915 4,693,851
Depreciation and amortization 1,268,398 2,708,863 2,124,505 4,069,293
Corporate .................... 354,503 591,542 697,759 1,087,434
------------ ------------ ------------ ------------
9,152,181 13,987,018 16,658,886 23,391,607
------------ ------------ ------------ ------------
OPERATING INCOME ........ 4,756,895 4,445,139 7,399,771 6,723,421
------------ ------------ ------------ ------------
FINANCIAL INCOME (EXPENSE)
Interest expense:
Cash interest ......... (4,121,671) (5,635,708) (7,099,895) (8,879,980)
Other interest ........ (151,881) (216,071) (337,006) (1,098,513)
------------ ------------ ------------ ------------
(4,273,552) (5,851,779) (7,436,901) (9,978,493)
Interest income ............ 72,786 106,586 209,692 212,433
------------ ------------ ------------ ------------
(4,200,766) (5,745,193) (7,227,209) (9,766,060)
------------ ------------ ------------ ------------
NET INCOME (LOSS) BEFORE
INCOME TAXES AND
EXTRAORDINARY ITEM ... 556,129 (1,300,054) 172,562 (3,042,639)
Income taxes .................... -- -- -- --
------------ ------------ ------------ ------------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM ... 556,129 (1,300,054) 172,562 (3,042,639)
Extraordinary item:
Gain on early extinguishment
of debt ...................... -- -- 6,863,762 --
------------ ------------ ------------ ------------
NET INCOME (LOSS) ....... $ 556,129 $ (1,300,054) $ 7,036,324 $ (3,042,639)
============ ============ ============ ============
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDER'S DEFICIT
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED TREASURY
STOCK CAPITAL DEFICIT STOCK TOTAL
------ ---------- ----------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995......... $ 1,046,500 $ 2,758,178 $ (38,886,615) $ (1,481,149) $ (36,563,086)
Allocation of proceeds from sale
of redeemable senior preferred
stock to initial warrants......... -- 9,000,000 -- -- 9,000,000
Exchange of common stock for
common stock of subsidiary........ (976,470) (504,679) -- 1,481,149 --
Financing costs related to the
sale of redeemable preferred stock... -- (3,055,463) -- -- (3,055,463)
Reclassification of accumulated
deficit due to change in income
tax status........................ -- (41,072,877) 41,072,877 -- --
Dividends payable on redeemable
preferred stock................... -- -- (891,694) -- (891,694)
Net (loss)........................... -- -- (3,042,639) -- (3,042,639)
----------- ------------ ------------ ------------ --------------
BALANCE AT JUNE 30, 1996............. $ 70,030 $ (32,874,841) $ (1,748,071) $ -- $ (34,552,882)
=========== ============ ============ ============ ==============
</TABLE>
-6-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) ..................................................... $ 7,036,324 $ (3,042,639)
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities:
Amortization of program broadcast rights ........................... 1,081,647 1,302,515
Depreciation and amortization ...................................... 1,345,668 2,701,736
(Gain) on early extinguishment of debt ............................. (6,863,762) --
Amortization of intangibles and deferred loan costs ............... 1,101,504 1,719,984
Amortization of note discount ...................................... -- 753,517
(Gain) on sale of property and equipment .......................... (17,357) (7,428)
Payment of deferred and contingent interest ........................ (4,405,746) --
Payment of prepayment premiums ..................................... (2,748,896) --
Other .............................................................. 31,691 --
Change in assets and liabilities, net of effects of station acquisitions:
Receivables ........................................................ (1,574,109) 2,631,367
Due from sellers ................................................... -- 863,371
Prepaid expenses ................................................... (204,103) (232,727)
Payments on program broadcast rights payable ....................... (1,037,876) (1,185,741)
Accounts payable and accrued expenses .............................. 4,861,661 2,316,000
Deferred income .................................................... -- (261,810)
Contingent and deferred interest payable ........................... 567,533 --
----------- -----------
Net cash provided by (used in) operating activities ........... (825,821) 7,558,145
----------- -----------
Cash Flows From Investing Activities
Purchase of property and equipment ................................. (556,992) (1,250,886)
Proceeds from sale of equipment .................................... 25,502 10,300
Payment for acquisition of stations, net of cash ................... (26,683,772) (321,542,152)
Reimbursement for equipment purchases .............................. -- 79,198
Purchase of securities ............................................. -- (651,535)
Payment of acquisition costs ...................................... -- (316,528)
Other .............................................................. 2,587 (1,729)
----------- -----------
Net cash (used in) investing activities ....................... (27,212,675) (323,673,332)
----------- -----------
Cash Flows From Financing Activities
Principal payments on notes, including capital lease payables ......... (96,170,752) (53,226)
Proceeds from issuance of redeemable preferred stock .................. -- 105,000,000
Proceeds from long term borrowing ..................................... 135,000,000 218,178,200
Payment of debt acquisition costs ..................................... (5,586,680) (10,986,642)
----------- -----------
Net cash provided by financing activities .................... 33,242,568 312,138,332
----------- -----------
Net increase (decrease) in cash and cash equivalents .......... 5,204,072 (3,976,855)
Cash and cash equivalents:
Beginning ............................................................. 4,617,242 9,668,331
----------- -----------
Ending ................................................................ $ 9,821,314 $ 5,691,476
=========== ===========
</TABLE>
-7-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
----- ----
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information
Cash payments for interest ............................................ $ 5,995,139 $ 8,049,422
=========== ===========
Supplemental Schedule of Noncash Investing and Financing
Activities
Acquisition of program broadcast rights ............................ $ 712,095 $ 368,751
Note payable and capital lease obligation
incurred for purchase of equipment ................................ 197,288 44,100
Equipment acquired by barter transactions .......................... 162,685 38,719
Dividends accrued on redeemable preferred stock .................... 891,694 --
=========== ===========
Acquisitions of stations
Cash purchase price ................................................ $ 26,683,772 $321,542,152
=========== ===========
Net working capital, acquired, net of cash $535,810 ................ $ 10,061,537 $ --
Property and equipment acquired at fair market value ............... 6,500,000 72,533,059
Intangible assets acquired ......................................... 22,313,385 301,026,581
Deferred income taxes assumed ...................................... (58,872,778) --
Other, net ......................................................... (129,613) 19,112
28,683,772 324,767,511
Less: Application of deposit ...................................... (2,000,000) (3,225,359)
----------- -----------
$ 26,683,772 $321,542,152
=========== ===========
</TABLE>
-8-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
Nature of Business: Benedek Communications Corporation (the Company)
was formed on April 10, 1996. The Company is a holding company that derives its
operating income and cash flow from its subsidiary, Benedek Broadcasting
Corporation (Benedek Broadcasting) which owns and operates twenty-two television
stations located throughout the United States. These stations operate under
network affiliation contracts, which provide programs to the affiliated stations
and the stations sell commercial time during the programs to national, regional
and local advertisers. The networks also sell commercial time during the
programs to national advertisers. Credit arrangements are determined on an
individual customer basis.
NATURE OF PRESENTATION: The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiary Benedek
Broadcasting. The accounts of Benedek License Corporation (BLC), a wholly owned
subsidiary of Benedek Broadcasting, are included in the financial statements of
Benedek Broadcasting. All significant intercompany items and transactions have
been eliminated in the consolidated financial statements. Since Benedek
Broadcasting and the Company have identical stock ownership, these financial
statements include the operating results of Benedek Broadcasting accounted for
in a manner similar to that of a pooling-of-interests method of accounting. The
financial statements include all adjustments, consisting of normal and recurring
adjustments, which are considered necessary in the opinion of management for the
fair presentation of the financial position as of June 30, 1996 and the results
of operations and cash flows for the six months ended June 30, 1995 and 1996.
These financial statements do not include all the information and footnotes
required by generally accepted accounting principles.
Operating results for the three and six month periods ended June 30,
1995 and 1996 and for the fiscal year ended 1995 are not necessarily indicative
of the results that may be expected for the fiscal year ended December 31, 1996.
(NOTE B) - ACQUISITIONS AND CONTRIBUTION OF CAPITAL
The Company was formed by the sole stockholder of Benedek Broadcasting.
On June 6, 1996, two acquisition agreements entered into during 1995 by Benedek
Broadcasting were consummated. These agreements were to acquire (i) the assets
of the television broadcasting division of Stauffer Communications, Inc., which
owned five television stations (the "Stauffer Stations") for a total purchase
price of $54,500,000 and (ii) all the issued and outstanding capital stock of
Brissette Broadcasting Corporation ("Brissette") which owned and operated eight
television stations for a purchase price of $270,000,000. At the closing of
these acquisitions, the sole stockholder of Benedek Broadcasting contributed all
of the outstanding shares of common stock of Benedek Broadcasting to the Company
in exchange for the issuance to him all of the outstanding shares of common
stock of the Company.
The pro forma results of operations for the three months ended June 30,
1995 and 1996 and the six months ended June 30, 1995 and 1996 assuming the
acquisitions had taken place on January 1, 1995 are as follows:
-9-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE B) - ACQUISITIONS AND CONTRIBUTION OF CAPITAL - (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue................... $ 32,261,688 $ 32,275,757 $ 59,753,871 $ 59,894,169
Operating expenses............ 24,665,748 26,258,925 49,087,596 51,630,526
Financial expenses............ 9,042,482 9,332,957 18,912,181 19,058,439
------------- -------------- --------------- -------------
(Loss) before extra-
ordinary item........... (1,446,542) (3,316,125) (8,245,906) (10,794,796)
Extraordinary item............ -- -- 6,863,762 --
------------- -------------- --------------- -------------
Net (loss)................. $ (1,446,542) $ (3,316,125) (1,382,144) $(10,794,796)
============= ============== =============== =============
Broadcast cash flow.......... $ 14,864,911 $ 13,180,847 $ 24,994,055 $ 22,809,568
============= ============== =============== =============
</TABLE>
(NOTE C) - REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES
Concurrent with the acquisitions described in Note (B) the Company
entered into the following financing transactions, the net proceeds of which
were contributed to Benedek Broadcasting.
(1) The Company sold 60,000 Units in a private placement, which
generated proceeds of $60,000,000. Each Unit consists of (i) ten
shares of Exchangeable Senior Preferred Stock (ii) ten Initial
Warrants, and (iii) 14.8 Contingent Warrants.
(i) Exchangeable Redeemable Senior Preferred Stock - The
Company issued 600,000 shares of 15% Exchangeable
Redeemable Senior Preferred Stock due 2007, with an
initial liquidation preference equal to the proceeds
received of $60,000,000. Of these proceeds, $9,000,000 was
allocated to the initial warrants described in (ii).
Dividends are payable to holders of the outstanding shares
at the rate of 15% per annum of the then effective
liquidation preference per share, payable quarterly
beginning July 1, 1996 and accruing from June 6, 1996. The
Company has the option to pay dividends on any dividend
payment date occurring on or before July 1, 2001 either in
cash or by adding such dividends to the then effective
liquidation preference. The Company also has the option to
immediately redeem these shares, in whole or in part, at
predetermined redemption prices. The Company is required
to redeem the outstanding shares on July 1, 2007 at a
redemption price equal to 100% of the then effective
liquidation preference plus any accrued and unpaid
dividends to the date of redemption. The Exchangeable
Redeemable Senior Preferred Stock is exchangeable into
debentures at the Company's option, subject to certain
conditions, in whole on any scheduled dividend payment
date. If the Company does not comply with certain
obligations with respect to the registration of these
securities with the Securities and Exchange Commission,
additional cash dividends will accrue on each share at a
rate of 0.50% per annum until the effective date of
registration.
(ii) Initial Warrants - The Company issued 600,000 Initial
Warrants each of which entitles the holder thereof to
purchase one share of Class A Common Stock at a price of
$0.01 per share. The value of the warrants at date of
issuance was $9,000,000 which was allocated to paid-in
capital and is being amortized at a rate of 15% per annum
through July 1, 2007, the mandatory redemption date of the
Exchangeable Redeemable Senior Preferred Stock.
Accordingly, this amount is being accreted to the
Exchangeable Redeemable Senior Preferred Stock on the same
basis.
-10-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE C) - REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES - (CONTINUED)
(iii) Contingent Warrants - The Company issued 888,000
Contingent Warrants, each warrant to acquire one share of
Class A Common Stock at an exercise price of $0.01 per
share. The Contingent Warrants were issued to an escrow
agent and are not outstanding. The Contingent Warrants are
not separable from the Exchangeable Redeemable Senior
Preferred Stock and will not be delivered out of escrow
unless the Exchangeable Redeemable Senior Preferred Stock
is not redeemed on or prior to a specified future date.
Since it is management's intention to redeem the
Exchangeable Redeemable Senior Preferred Stock prior to
any release of the Contingent Warrants from escrow, no
allocation of the proceeds was made to the Contingent
Warrants.
(2) Seller Junior Discount Preferred Stock - The Company issued 450,000
shares of Seller Junior Discount Preferred Stock due 2008 with an
aggregate liquidation preference equal to the proceeds of
$45,000,000. Dividends are payable to the holders of the Seller
Junior Discount Preferred Stock at 7.92% per annum until the fith
anniversary of the issuance thereof and thereafter at increasing
rates up to 18%. Since the Company intends to redeem the
Seller Junior Discount Preferred Stock prior to the fifth
anniversary, dividends are being accrued at the initial rate. The
dividends on the Seller Junior Discount Preferred Stock are
cumulative from date of issuance. Until the fifth anniversary of
the issuance thereof, dividend payments on the Seller
Junior Discount Preferred Stock may not be made in cash and
instead will be added automatically to the liquidation preference
and as a result will be deemed paid in full and will not
accumulate. The Seller Junior Discount Preferred Stock is subject
to mandatory redemption in whole on July 1, 2008 and the Company
has the option to redeem these shares in whole or in part at a
price equal to the sum of the liquidation value per share plus an
amount equal to all accumulated and unpaid dividends per share to
the date of redemption.
(3) 13 1/4% Senior Subordinated Discount Notes due 2006 - The Company
issued Senior Subordinated Discount Notes with a principal amount
of $170,000,000. These Notes were issued at a discount of
$79,821,800 which generated gross proceeds of $90,178,200. The
Notes mature on May 15, 2006 and yield 13.25% per annum with no
cash interest accruing prior to May 15, 2001. Thereafter, cash
interest will accrue until maturity payable semi-annually,
commencing November 15, 2001. On or after May 15, 2000, the Notes
are redeemable at the option of the Company, in whole or in part,
at predetermined redemption prices and under specified conditions.
The Notes are subordinated to all Senior Debt of the Company.
These Notes contain various restrictive covenants, all of which the
Company was in compliance with at June 30, 1996.
-11-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE C) - REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES - (CONTINUED)
The following table summarizes these activities as follows:
<TABLE>
<CAPTION>
Exchangeable
Redeemable Seller 13 1/4%
Senior Junior Discount Senior
Preferred Initial Preferred Subordinated
Stock Warrants Stock Discount Notes
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Issuance of preferred stock............................. $51,000,000 $ 9,000,000 $45,000,000 $ --
Issuance of senior subordinated
discount notes....................................... -- -- -- 90,178,200
Accrued dividends ...................................... 654,094 -- 237,600 --
Amortization of note discount .......................... -- -- -- 753,517
----------- ----------- ----------- -----------
Balance at June 30, 1996................................ $51,654,094 $ 9,000,000 $45,237,600 $90,931,717
=========== =========== ========== ===========
</TABLE>
Since the Company derives all of its operating income and cash flow
from Benedek Broadcasting, the Company's ability to pay its obligations
including (i) interest on and principal of the senior subordinated discount
notes (ii) redemption of and cash dividends on the exchangeable preferred stock
and (iii) redemption of and cash dividends on the seller junior discount
preferred stock will be dependent primarily upon receiving dividends and other
payments on advances from Benedek Broadcasting. Benedek Broadcasting is a
separate and distinct legal entity and has no obligation, contingent or
otherwise, to pay any amounts to the Company or to make funds available to the
Company for debt service or any other obligation.
(NOTE D) - LONG TERM DEBT
As part of the financing transactions described in Note C, on June 6,
1996, Benedek Broadcasting entered into a new credit agreement which includes
two Term Loan Facilities consisting of (i) a Series A Facility of $70,000,000
at a fluctuating rate per annum (currently 8.5%) and (ii) a Series B Facility of
$58,000,000 at a fluctuating rate per annum (currently 9.0%). The Term Loan
Facilities provide for quarterly principal payments until final maturity (except
in the first year during which principal payments will be on a semi-annual
basis). The Series A Facility and the Series B Facility will mature five years
and six and one-half years, respectively, after the closing. Benedek
Broadcasting will be required to make scheduled aggregate amortization payments
on the Series A and Series B Facilities, as follows: during the first year
after closing, $6.0 million; during the second year after closing, $11.0
million; during the third year after closing, $14.5 million; during the
fourth year after closing, $16.0 million; during the fifth year after closing,
$27.5 million; during the sixth year after closing, $15.0 million; and during
the first half of the seventh year after closing, $38.0 million.
The credit agreement also includes a Revolving Credit Facility of
$15,000,000, which bears interest at a customary base rate plus a spread. There
were no borrowings on the revolver as of June 30, 1996.
The Term Loan Facilities and the Revolving Credit Facility are
guaranteed by the Company and are secured by certain of the Company's and
Benedek Broadcasting's present and future property and assets. The Term Loan
Facilities are also guaranteed by BLC and secured by all of the stock of BLC.
The Term Loan Facilities contain various restrictive covenants and requires
compliance with certain financial ratios and covenants. The Company was in
compliance with these covenants at June 30, 1996.
-12-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE D) - LONG TERM DEBT - (CONTINUED)
During 1995, Benedek Broadcasting issued $135,000,000 of 11 7/8% Senior
Secured Notes due 2005 (the "Senior Secured Notes"). The net proceeds of the
Senior Secured Notes were used, together with available cash, to (i) refinance
certain indebtedness, (ii) finance the acquisition of WTVY-TV and (iii) pay fees
and expenses in connection with the offering. The Senior Secured Notes have been
registered with the Securities and Exchange Commission in a registration
statement declared effective in November 1995.
The Senior Secured Notes bear interest at the rate of 11 7/8% payable
semiannually on March 1 and September 1 of each year and mature in March 2005.
The Senior Secured Notes may be redeemed by Benedek Broadcasting in whole or in
part after March 1, 2000 subject to certain prepayment premiums. The Senior
Secured Notes contain various restrictive covenants relating to prepayment
premiums. The Senior Secured Notes contain various restrictive covenants
relating to limitations on dividends, transactions with affiliates, further
issuance of debt, and sales of assets, among others. Benedek Broadcasting was in
complinace with these covenants at June 30, 1996.
The Senior Secured Notes are collateralized by Benedek Broadcasting's
100% interest in BLC, certain agreements and contract rights related to the
stations which includes network affiliation agreements and certain general
intangibles.
Notes payable consist of the following:
<TABLE>
<CAPTION>
JUNE 30,
1996
----------------
<S> <C>
Senior Secured Notes ............. $135,000,000
Term loan Series A ............... 70,000,000
Term loan Series B ............... 58,000,000
Senior Subordinated Discount Notes 90,931,717
Capital leases and other ......... 643,387
------------
354,575,104
Less current maturities .......... 6,295,564
------------
$348,279,540
============
</TABLE>
(NOTE E) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS
Prior to the consummation of the acquisitions and the related
financing, Benedek Broadcasting, with the consent of its stockholder, elected to
be taxed under sections of federal and state income tax law, which provided
that, in lieu of corporation income taxes, the stockholder separately account
for Benedek Broadcasting's income, deductions, losses and credits. Due to the
structure of the financing for the acquisitions, the election to be taxed as an
'S' corporation automatically terminated and Benedek Broadcasting became subject
to federal and state income taxes. As a result, Benedek Broadcasting recorded a
net deferred tax asset of approximately $3,550,000 which was offset by a
valuation allowance of the same amount.
-13-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE E) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS - (CONTINUED)
Under the provision of Statement of Financial Accounting Standards
(SFAS) No. 109, the deferred tax assets and liabilities, resulting principally
from the acquisitions explained in Note B consist of the following components:
<TABLE>
<CAPTION>
JUNE 30,
1996
<S> <C>
Deferred tax assets:
Loss Carryforwards ......... $ 2,365,600
Nondeductible allowances and
other ................... 976,400
Network agreememt .......... 1,800,000
Original issue discount .... 312,795
------------
5,454,795
------------
Deferred tax liabilities:
Property and equipment ..... 15,898,378
Intangibles ................ 48,116,400
------------
64,014,778
------------
Net deferred tax liability .... $(58,559,983)
============
</TABLE>
At June 30, 1996 a valuation allowance has not been established since
in the opinion of management, it is more likely than not that the deferred tax
assets, including the net deferred tax asset which resulted from the change in
tax status of Benedek Broadcasting, will be realized.
Under the provisions of the Internal Revenue Code, Benedek Broadcasting
has approximately $5,900,000 of actual net operating loss carryforwards
available to offset future tax liabilities of Benedek Broadcasting.
(NOTE F) - COMMON STOCK AND OTHER SECURITIES
Common stock consists of the following numbers of shares.
<TABLE>
<CAPTION>
Authorized Issued Outstanding
<S> <C> <C> <C>
Class A common $.01 par value........ 25,000,000 -- --
Class B common $.01 par value........ 25,000,000 7,030,000 7,030,000
</TABLE>
In addition, the Board of Directors of the Company has authorized 2,500,000
shares of preferred stock, 1,050,000 of which have been issued as described in
Note C above.
-14-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The operating revenues of the Company are derived primarily from the
sale of advertising time and, to a lesser extent, from compensation paid by the
networks for broadcasting network programming and from barter transactions for
goods and services. Revenue depends on the ability of the Company to provide
popular programming which attracts audiences in the demographic groups targeted
by advertisers, thereby allowing the Company to sell advertising time at
satisfactory rates. Revenue also depends significantly on factors such as the
national and local economy and the level of local competition.
Approximately 56.9% of the gross revenues of the Company in the six
months ended June 30, 1996 was generated from local and regional advertising,
which is sold primarily by its television station's sales staff, and the
remainder of the advertising revenues is comprised primarily of national
advertising, which is sold by national sales representatives retained by the
Company. The Company generally pays commissions to advertising agencies on
local, regional and national advertising and to national sales representatives
on national advertising. Net revenues reflect deductions from gross revenues for
commissions payable to advertising agencies and national sales representatives.
Local/regional advertising and national advertising constitute the
largest categories of the Company's operating revenues and represent
approximately 84.1% of gross revenues for the six months ended June 30, 1996 as
compared to 87.4% for the six months ended June 30, 1995. Although relatively
constant as a total percentage of gross revenues, the mix of advertising revenue
can vary depending on the level of political advertising revenue. Excluding
political advertising revenue, the percentage of gross revenues attributable to
local/regional advertising and national advertising of the Company was 86.2% for
the six months ended June 30, 1996 as compared to 88.1% for the six months ended
June 30, 1995. The decrease was the result of an increase in network
compensation of $1.0 million or 72.1%, representing 7.1% of gross revenues
(excluding political advertising revenues) for the six months ended June 30,
1996 as compared to 5.0% of gross revenues (excluding political advertising
revenues) for the six months ended June 30, 1995. For the six months ended June
30, 1996, the Company reported net revenues of $30.1 million compared to net
revenues of $24.1 million for the six months ended June 30, 1995. The Company
had a net loss of $3.0 million for the six months ended June 30, 1996 compared
to a net income of $7.0 million (after an extraordinary gain of $6.9 million)
for the six months ended June 30, 1995. Operating cash flow for the six months
ended June 30, 1996 was $10.9 million as compared to $9.6 million for the six
months ended June 30, 1995.
In December 1995, the Company entered into new long-term affiliation
agreements with CBS effective retroactive to July 1, 1995. In connection with
such arrangements, CBS paid the Company bonus payments of $2.5 million in the
fourth quarter of 1995 and $2.5 million in the first quarter of 1996. These
payments will be recognized as revenue by the Company at the rate of $0.5
million per year over the ten-year term of the affiliation agreements. In
connection with these payments, the Company also agreed with CBS that, upon the
consummation of the acquisition of the Brissette and Stauffer Stations (the
"Acquired Stations"), the terms of the affiliation agreements for the Acquired
Stations which are CBS affiliates would be extended through 2005.
The Company's primary operating expenses are employee compensation,
programming and depreciation and amortization. Changes in compensation expense
result primarily from adjustments to fixed salaries based on employee
performance and inflation and, to a lesser extent, from changes in sales
commissions paid based on levels of advertising revenues. Programming expense
consists primarily of amortization of program rights. The Company purchases
first run and off-network syndicated programming on an ongoing basis and has a
policy of closely matching payments for and amortization of program rights in
each period. A network-affiliated station receives approximately two-thirds of
its required daily programming from the network at no cost. Depreciation and
amortization expense has generally declined from period to period as assets
acquired at the time of the acquisition of a station are fully depreciated.
However, for the six months ended June 30, 1996, depreciation and amortization
increased $1.9 million due to the acquisition of the Acquired Stations. Barter
expense generally offsets barter revenue and reflects the fair market value of
goods and services received.The Company's operating expenses (excluding
depreciation and amortization) have remained fairly constant and represent
approximately 64.2% of net revenues for the six months ended June 30, 1996 as
compared to 60.4% of net revenues for the six months ended June 30, 1995.
-15-
<PAGE>
<PAGE>
On March 31, 1995, the Company acquired for a cash purchase price of
$28.7 million substantially all of the assets (excluding cash and accounts
receivable) of the Dothan Station which is the CBS affiliate serving both
Dothan, Alabama and Panama City, Florida.
On June 6, 1996, the Company acquired substantially all of the
broadcast television assets (including working capital of approximately $1.6
million) of Stauffer Communications, Inc. (the "Stauffer Stations") consisting
of five principal broadcast television stations and four satellite broadcast
television stations for a purchase price of $54.5 million. The principal
stations acquired by the Company were KCOY-TV, Santa Maria, California; WIBW-TV,
Topeka, Kansas; KMIZ-TV, Columbia, Missouri; KGWC-TV. Casper, Wyoming; and
KGWN-TV, Cheyenne, Wyoming. KGWC-TV operates two satellite stations, KGWL-TV,
Lander, Wyoming, and KGWR-TV, Rock Springs, Wyoming, both of which rebroadcast
the programming of KGWC-TV. KGWN-TV operates two satellite stations, KSTF-TV,
Scottsbluff, Nebraska and KTVS-TV, Sterling, Colorado, both of which rebroadcast
the programming of KGWN-TV. All of the Stauffer Stations are affiliated with
CBS, except for KMIZ-TV, Columbia, Missouri, which is affiliated with ABC.
On June 6, 1996, the Company acquired all of the capital stock of
Brissette Broadcasting Corporation ("Brissette") for $270.0 million in cash and
preferred stock. All of the outstanding indebtedness of Brissette was paid in
full by the sellers at the closing. Pursuant to the Brissette purchase
agreement, at the closing Brissette was required to have working capital of at
least $8.8 million and any amount in excess thereof was to be paid to the
sellers. By acquiring all of the capital stock of Brissette, the Company
acquired eight network-affiliated television stations including WMTV-TV, the NBC
affiliate serving Madison, Wisconsin; WWLP-TV, the NBC affiliate serving
Springfield, Massachusetts; WILX-TV, the NBC affiliate serving Lansing,
Michigan; WHOI-TV, the ABC affiliate serving Peoria, Illinois; WSAW-TV, the CBS
affiliate serving Wausau, Wisconsin; WTRF-TV, the CBS affiliate serving
Wheeling, West Virginia and Steubenville, Ohio; KAUZ-TV, the CBS affiliate
serving Wichita Falls, Texas; and KOSA-TV, the CBS affiliate serving Odessa,
Texas. Of the $270.0 million paid for the capital stock of Brissette, $225.0
million was paid in cash and $45.0 million was paid by the issuance to General
Electric Capital Corporation ("GECC") and Mr. Paul Brissette of the junior
preferred stock of the Company.
The Company has included operating and broadcast cash flow data because
such data is used by certain investors to measure a company's ability to service
debt. Operating cash flow is defined as operating income before financial income
as derived from statements of operations plus depreciation and amortization,
amortization of program broadcast rights and noncash compensation less cash
payments for program broadcast rights. Broadcast cash flow is defined as
operating cash flow less corporate expenses. Operating cash flow is used to pay
principal and interest on long-term debt and to fund capital expenditures.
Operating cash flow does not purport to represent cash provided by operating
activities as reflected in the Company's Consolidated Financial Statements, is
not a measure of financial performance under generally accepted accounting
principles and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with generally accepted
accounting principles.
The historical results of operations and operating data include the
results of operations of the Acquired Stations only from the closing date of
June 6, 1996.
-16-
<PAGE>
<PAGE>
The following table sets forth certain operating data for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1995 1996 1995 1996
---------------------- ----------------------- ---------------------- ----------------------
% of Net % of Net % of Net % of Net
$ Revenue $ Revenue $ Revenue $ Revenue
- -------- - -------- - -------- - --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Local/regional ...... $ 9,530 68.5 % $ 12,006 65.1 % $ 16,431 68.3 % $ 19,559 64.9 %
National ............ 4,255 30.6 5,918 32.1 7,692 32.0 9,355 31.1
Political ........... 206 1.5 404 2.2 221 0.9 849 2.8
Network ............. 773 5.5 1,400 7.6 1,378 5.7 2,372 7.9
Barter .............. 875 6.3 1,014 5.5 1,362 5.7 1,603 5.3
Other ............... 263 1.9 363 2.0 506 2.1 638 2.1
---------------------------------------------------------------------------------------------------
Gross revenues ......... $ 15,902 114.3 % $ 21,105 114.5 % $ 27,590 114.7 % $ 34,376 114.1 %
Agency/national
commissions ..... 1,993 14.3 2,673 14.5 3,531 14.7 4,261 14.1
---------------------------------------------------------------------------------------------------
Net revenue ............ $ 13,909 100.0 % $ 18,432 100.0 % $ 24,059 100.0 % $ 30,115 100.0 %
---------------------------------------------------------------------------------------------------
Operating Expenses:
Compensation and
payroll taxes $ 3,976 28.6 % $ 5,793 31.5 % $ 7,362 30.6 % $ 9,881 32.8 %
Amortization of
program rights 571 4.1 705 3.8 1,082 4.5 1,302 4.3
Depreciation and
amortization . 1,268 9.1 2,709 14.7 2,124 8.8 4,069 13.6
Corporate expenses .. 355 2.6 591 3.2 698 2.9 1,087 3.6
Barter .............. 603 4.3 781 4.2 1,037 4.3 1,275 4.2
Other ............... 2,379 17.1 3,408 18.5 4,356 18.1 5,778 19.2
---------------------------------------------------------------------------------------------------
$ 9,152 65.8 % 13,987 75.9 % $ 16,659 69.2 % $ 23,392 77.8 %
---------------------------------------------------------------------------------------------------
Operating Income ....... $ 4,757 34.2 % $ 4,445 24.1 % $ 7,400 30.8 % $ 6,723 22.3 %
Financial expenses, net (4,201) (30.2) (5,745) (31.2)% (7,227) (30.1) (9,766) (32.4)
---------------------------------------------------------------------------------------------------
Net income (loss)
before extra items .. $ 556 4.0 % $ (1,300) (7.1)% $ 173 0.7 % $ (3,043) (10.1)%
===================================================================================================
Broadcast cash flow .... $ 6,342 $ 7,787 $ 10,266 $ 11,995
Broadcast cash flow
margin .............. 45.6% 42.2% 42.7% 39.8%
Operating cash flow .... $ 5,987 $ 7,196 $ 9,568 $ 10,908
Operating cash flow
margin ............... 43.0% 39.0% 39.8% 36.2%
</TABLE>
-17-
<PAGE>
<PAGE>
The following table sets forth certain pro forma operating data (in thousands)
as if the acquisitions of the Brissette and Stauffer Stations and the Dothan
Station had been consummated at the beginning of the periods set forth below
based on their respective historical results without adjustment:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues .................. $32,262 $32,276 $59,754 $59,894
Operating expenses(1) ......... 17,397 19,095 34,760 37,085
Broadcast cash flow ........... $14,865 $13,181 $24,994 $22,810
======= ======= ======= =======
Broadcast cash flow margin .... 46.1% 40.8% 41.8% 38.1%
======= ======= ======= =======
</TABLE>
(1) Operating expenses as presented are based upon operating expenses determined
in accordance with generally accepted accounting principles adjusted to
eliminate depreciation and amortization, corporate expenses and amortization
of program rights and to add payments for program broadcast rights.
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Net revenues for the three months ended June 30, 1996 increased $4.5
million or 32.5% to $18.4 million from $13.9 million for the three months ended
June 30, 1995 primarily as a result of the acquisition on June 6, 1996 of the
Acquired Stations which increased net revenue by $5.0 million. On a proforma
basis, giving effect to the acquisition ("Same Station") net revenues for the
three months ended June 30, 1996 remained flat from the three months ended June
30, 1995. On a Same Station basis, political advertising revenue for the three
months ended June 30, 1996 increased by $0.4 million to $0.7 million. Gross
revenues on a Same Station basis excluding political advertising revenue
decreased $0.3 million or 0.7% from the three months ended June 30, 1995.
Operating expenses for the three months ended June 30, 1996 increased
$4.8 million or 52.8% to $14.0 million from $9.2 million for the three months
ended June 30, 1995. Of the increase in operating expenses, $2.7 million was
attributable to the acquisition of the Acquired Stations. As a percentage of net
revenues, operating expenses increased to 75.9% from 65.8% in the three months
ended June 30, 1995, primarily as a result of an increase of $1.4 million in
depreciation and amortization expense. On a Same Station basis, operating
expenses for the three months ended June 30, 1996 increased $1.6 million or 6.5%
from the three months ended June 30, 1995. Operating expenses as a percentage of
net revenues on a Same Station basis increased from 76.5% for the three months
ended June 30, 1995 to 81.4% in the three months ended June 30, 1996.
Operating income for the three months ended June 30, 1996 decreased
$0.3 million or 6.5% to $4.4 million from $4.7 million for the three months
ended June 30, 1995.
Financial (expenses), net for the three months ended June 30, 1996
increased $1.5 million or 36.8% to $5.7 million from $4.2 million in the three
months ended June 30, 1995, due to the Company's higher debt level following the
offering of the Senior Secured Notes in March 1995.
Net loss for the three months ended June 30, 1996 was $1.3 million as
compared to net income of $0.6 million for the three months ended June 30, 1995.
Broadcast cash flow for the three months ended June 30, 1996 increased
$1.5 million or 23.8% to $7.8 million from $6.3 million for the three months
ended June 30, 1995 primarily as a result of the acquisition of the Acquired
Stations. As a percentage of net revenues, broadcast cash flow margin decreased
to 42.2% for the three months ended June 30, 1996 from 45.6% for the three
months ended June 30, 1995. On a Same Station basis, broadcast cash flow for the
three months ended June 30, 1996 decreased $1.7 million or 11.3% to $13.2
million from $14.7 million for the three months ended June 30, 1995. As a
percentage of net revenues, broadcast cash flow margin decreased to 40.8% for
the three months ended June 30, 1996 from 46.1% for the three months ended June
30, 1995. The decrease in broadcast cash flow and broadcast cash flow margin for
the three month period ended June 30, 1996 was primarily related to an increase
in operating expenses used in determining broadcast cash flow. Such expenses
increased by $1.3 million or 12.8% at the Acquired Stations for the three months
ended June 30, 1996 from the comparable period in 1995 and by $0.4 million or
5.4% at the Company's previously owned stations.
-18-
<PAGE>
<PAGE>
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Net revenues for the six months ended June 30, 1996 increased $6.1
million or 25.2% to $30.1 million from $24.0 million for the six months ended
June 30, 1995 primarily as a result of the acquisition on June 6, 1996 of the
Acquired Stations which increased net revenue by $5.0 million. On a Same Station
basis, net revenues for the six months ended June 30, 1996 increased $0.1
million or 0.2% from the six months ended June 30, 1995. Political advertising
revenue for the six months ended June 30, 1996 increased by $1.3 million to $1.6
million. Gross revenues on a Same Station basis excluding political advertising
revenue decreased $1.0 million or 1.5% from the six months ended June 30, 1995.
Operating expenses for the six months ended June 30, 1996 increased
$6.7 million or 40.4% to $23.4 million from $16.7 million for the six months
ended June 30, 1995. As a percentage of net revenues, operating expenses
increased to 77.8% from 69.2% in the six months ended June 30, 1995, as a result
of the acquisition of the Acquired Stations. On a Same Station basis, operating
expenses for the six months ended June 30, 1996 increased $2.5 million or 5.2%
from the six months ended June 30, 1995. Operating expenses as a percentage of
net revenues on a Same Station basis increased from 82.1% for the six months
ended June 30, 1995 to 86.2% in the six months ended June 30, 1996.
Operating income for the six months ended June 30, 1996 decreased $0.7
million or 9.1% to $6.7 million from $7.4 million for the six months ended June
30, 1995.
Financial (expenses), net for the six months ended June 30, 1996
increased $2.5 million or 35.1% to $9.8 million from $7.2 million in the six
months ended June 30, 1995 due to the Company's higher debt level following the
offering of the Senior Secured Notes in March 1995.
Net loss for the six months ended June 30, 1996 was $3.0 million as
compared to net income of $7.0 million for the six months ended June 30, 1995
primarily as a result of an extraordinary gain of $6.9 million on the early
extinguishment of debt.
Broadcast cash flow for the six months ended June 30, 1996 increased
$1.7 million or 16.9% to $12.0 million from $10.3 million for the six months
ended June 30, 1995 primarily as a result of the acquisition on June 6, 1996 of
the Acquired Stations. As a percentage of net revenues, broadcast cash flow
margin decreased to 39.8% for the six months ended June 30, 1996 from 42.7% for
the six months ended June 30, 1995. On a Same Station basis, broadcast cash flow
for the six months ended June 30, 1996 decreased $2.2 million or 8.6% to $22.9
million from $25.0 million for the six months ended June 30, 1995. As a
percentage of net revenues, broadcast cash flow margin decreased to 38.1% for
the six months ended June 30, 1996 from 41.8% for the six months ended June 30,
1995.
The decrease in broadcast cash flow and broadcast cast flow margin for
the six month period ended June 30, 1996 was primarily related to an increase in
operating expense used in determining broadcast cash flow. Such expenses
increased by $2.2 million or 11.2% at the Acquired Stations for the six month
period ended June 30, 1996 from the comparable period in 1995, while such
operating expenses at the Company's previously owned stations remained flat.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source of liquidity
for the Company and were $7.6 million for the six months ended June 30, 1996
compared to $(0.8) million for the six months ended June 30, 1995. For the six
months ended June 30, 1996 cash flows from operating activities included $2.5
million from the bonus payment from CBS. For the six months ended June 30, 1995
cash flows from operating activities primarily resulted from the refinancing of
substantially all of the Company's existing long-term debt in March 1995 and the
payment of $4.4 million of deferred and contingent interest and $2.7 million of
prepayment premiums. In addition, cash used by operations included $6.9 million
of noncash gain on early extinguishment of debt.
Cash Flows from Investing Activities were $(323.7) million for the six
months ended June 30, 1996, compared to $(27.2) million for the six months ended
June 30, 1995. For the six months ended June 30, 1996, cash flows from investing
activities primarily resulted from the payment of $321.5 million for the
acquired Stations. For the six months ended June 30, 1995 cash flows used in
investing activities included $26.7 million paid to acquire the Dothan Station.
Cash Flows from Financing Activities were $312.1 million for the six
months ended June 30, 1996 compared to $33.2 million for the six months ended
June 30, 1995. For the six months ended June 30, 1996 cash flows from financing
activities resulted from the proceeds of financing acquisitions. For the six
months ended June 30, 1995 cash flows from financing activities primarily
resulted from the issuance in March 1995 of $135.0 million of the Company's
Senior Secured Notes to refinance existing indebtedness and finance the
acquisition of the Dothan Station, offset by $96.0 million of principal payments
on existing indebtedness.
-19-
<PAGE>
<PAGE>
THE FINANCING PLAN
The Company, together with its subsidiary Benedek Broadcasting,
implemented a financing plan in order to finance the acquisitions of the
Acquired Stations and to pay fees and expenses related thereto. The financing
plan consisted of (i) the offer and sale by the Company of the Senior
Subordinated Discount Notes to generate gross proceeds of $90.2 million, (ii)
the offer and sale by the Company of units consisting of Exchangeable Redeemable
Senior Preferred Stock and warrants to generate gross proceeds of $60.0 million,
(iii) Benedek Broadcasting borrowing $128.0 million pursuant to the Term Loan
Facilities of the Credit Agreement and (iv) the Company issuing an aggregate of
$45.0 million initial liquidation preference of Seller Junior Discount
Preferred Stock to GECC and Mr. Paul Brissette. Benedek Broadcasting also has
available to it $15.0 million under the Revolving Credit Facility of the Credit
Agreement.
The Company believes that the financing plan will provide for a
long-term financing structure that will allow management to concentrate its
efforts on maximizing results of operations. The Company anticipates that
operating cash flow of Benedek Broadcasting will be sufficient to finance the
operating requirements of its stations, debt service requirements and presently
anticipated capital expenditures. The Company anticipates that substantial
capital expenditures may be required at a number of the stations acquired in
June 1996.
The Senior Subordinated Discount Notes do not bear interest until May
15, 2001, and the Company will not be obligated to pay cash interest on the
Notes until November 15, 2001. In addition, for all dividend payment dates with
respect to the Exchangeable Redeemable Senior Preferred Stock and interest
payment dates with respect to the Exchange Debentures through and including July
1, 2001, the Company may, at its option, pay dividends by adding the amount
thereof to the then effective liquidation preference of the Exchangeable
Redeemable Senior Preferred Stock or pay interest on the Exchange Debentures by
issuing additional Exchange Debentures. For all dividend payment dates with
respect to the Seller Junior Discount Preferred Stock prior to October 1, 2001,
the Company is required to pay such dividends by adding the amount thereof to
the then effective liquidation preference of the Seller Junior Discount
Preferred Stock. In order for the Company to meet its debt service obligations
and pay required dividends after May 15, 2001 with respect to the Notes, after
July 1, 2001 with respect to the Exchangeable Preferred Stock or Exchangeable
Debentures, as the case may be, and from and after October 1, 2001 with respect
to the Seller Junior Discount Preferred Stock, the Company will need to
substantially increase broadcast cash flow at its stations.
In order to repay the Senior Subordinated Discount Notes and the Senior
Secured Notes at maturity, the Company will need to refinance all or a portion
of such Notes. The Company's ability to refinance the Senior Subordinated
Discount Notes and the Senior Secured Notes will depend upon the Company's
operating performance, as well as prevailing economic and market conditions,
levels of interest rates, refinancing costs and other factors, many of which are
beyond the Company's control.
The Company is a holding company that will derive all of its operating
income and cash flow from its sole subsidiary, Benedek Broadcasting, the common
stock of which, together with all other assets of the Company, have been pledged
to secure the Company's senior guarantee of all indebtedness of Benedek
Broadcasting outstanding under the Credit Agreement and in respect of the Senior
Secured Notes. As a holding company, the Company's ability to pay its
obligations, including its obligation to pay interest on and principal of the
Notes, whether at maturity, upon a Change of Control or otherwise, will be
dependent primarily upon receiving dividends and other payments or advances from
Benedek Broadcasting. Benedek Broadcasting is a separate and distinct legal
entity and has no obligation, contingent or otherwise, to pay any amounts to the
Company or to make funds available to the Company for debt service or any other
obligation. Although the Credit Agreement does not limit the ability of Benedek
Broadcasting to pay dividends or make other payments to the Company, the Senior
Secured Note Indenture does contain such limitations. However, after giving
effect to the financing plan, as of June 30, 1996, Benedek Broadcasting could
have distributed approximately $188.5 million to the Company under such
limitations.
-20-
<PAGE>
<PAGE>
The Credit Agreement entered into by Benedek Broadcasting as part of
the financing plan includes Term Loan Facilities and a Revolving Credit
Facility. The Term Loan Facilities consist of (i) Series A Facility of $70.0
million and (ii) Series B Facility of $58.0 million. The Term Loan Facilities
provide for quarterly amortization until final maturity (except in the first
year during which amortization will be on a semiannual basis). The Series A
Facility will mature five years and the Series B Facility will mature six and
one-half years after the closing. Benedek Broadcasting will be required to make
scheduled amortization payments on the Term Loan Facilities, on an aggregate
basis for Series A and Series B Facilities, as follows: during the first year
after closing, $6.0 million; during the second year after closing, $11.0
million; during the third year after closing, $14.5 million; during the fourth
year after closing, $16.0 million; during the fifth year after closing, $27.5
million; during the sixth year after closing, $15.0 million; and during the
first half of the seventh year after closing, $38.0 million.
In addition, Benedek Broadcasting will be required to make prepayments
on the Term Loan Facilities under certain circumstances, including upon certain
asset sales and issuance of debt or equity securities. Benedek Broadcasting will
also be required to make prepayments on the Term Loan Facilities in an amount
equal to 50% of Benedek Broadcasting's excess cash flow (as defined). These
mandatory prepayments will be applied to prepay, on a pro rata basis, the Series
A and Series B Facilities. The Series A Facility bears interest, at Benedek
Broadcasting's option, at a base rate plus a spread or at a Eurodollar rate plus
a spread. The Series B Facility bears interest, at Benedek Broadcasting's
option, at a base rate plus a spread or at a Eurodollar rate plus a spread. The
margins above the base rate and the Eurodollar rate at which the Term Loan
Facilities and Revolving Credit Facility will bear interest are subject to
reductions at such times as certain leverage ratio performance tests are met.
Benedek Broadcasting will have the ability, subject to a borrowing base
and compliance with certain covenants and conditions, to borrow up to an
additional $15.0 million for general corporate purposes pursuant to the
revolving credit facility. The revolving credit facility has a term of five
years and is fully revolving until final maturity. The revolving credit facility
bears interest, at Benedek Broadcasting's option, at a base rate plus a spread
or at a Eurodollar rate plus a spread.
The Term Loan Facilities and the revolving credit facility are secured
by certain of Benedek Broadcasting's present and future property and assets. The
Term Loan Facilities are also guaranteed by BLC and will be secured by all of
the stock of BLC.
The Term Loan Facilities and the revolving credit facility contain
certain financial covenants, including, but not limited to, covenants related to
cash interest coverage, fixed charge coverage, bank debt/operating cash flow
ratio, total debt/operating cash flow ratio and minimum operating cash flow. In
addition, the Term Loan Facilities and the revolving credit facility contain
other affirmative and negative covenants relating to (among other things) liens,
payments on other debt, restricted junior payments (excluding distributions from
Benedek Broadcasting to the Company) transactions with affiliates, mergers and
acquisitions, sales of assets, leases, guarantees and investments. The Term Loan
Facilities and the revolving credit facility contain customary events of default
for highly-leveraged financings, including certain changes in ownership or
control of Benedek Broadcasting or the Company.
SEASONALITY
Net revenues and operating cash flow of the Company are generally
higher during the fourth quarter of each year, primarily due to increased
expenditures by advertisers in anticipation of holiday season consumer spending
and an increase in viewership during this period, and, to a lesser extent,
during the second quarter of each year.
EMERGING ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock Based Compensation' in
October 1995, which establishes financial accounting and reporting standards for
stock based employee compensation plans, including stock purchase plans, stock
options, restricted stock, and stock appreciation rights. The Company has
elected to continue accounting for stock based compensation under Accounting
Principles Board Opinion No. 25. The disclosure requirements of SFAS No. 123
will be effective for the Company's financial statements beginning in 1996.
Management does not believe that the implementation of SFAS 123 will have a
material effect on its consolidated financial statements.
-21-
<PAGE>
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits
- ------- -----------------------
<S> <C>
3.1 - Certificate of Incorporation of the Registrant, incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement
on Form S-4, File No. 333-09529, filed on August 2, 1996 (the "S-4
Registration Statement").
3.2 - By-laws of the Registrant, incorporated by reference to Exhibit 3.2
to the S-4 Registration Statement.
3.3 - Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of 15.0%
Exchangeable Redeemable Senior Preferred Stock Due 2007 and
Qualifications, Limitations and Restrictions thereof, incorporated
by reference to Exhibit 3.3 to the S-4 Registration Statement.
3.4 - Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Series C Junior
Discount Preferred Stock and Qualifications, Limitations and
Restrictions thereof, incorporated by reference to Exhibit 3.4 to
the S-4 Registration Statement.
4.1 - Indenture dated as of May 15, 1996 between the Registrant and
United States Trust Company of New York, relating to the 13 1/4%
Senior Subordinated Discount Notes due 2006, incorporated by
reference to Exhibit 4.1 to the S-4 Registration Statement.
4.2 - Form of 13 1/4% Senior Subordinated Discount Note due 2006
(included in Exhibit 4.1 hereof), incorporated by reference to
Exhibit 4.2 to the S-4 Registration Statement.
4.3 - Indenture dated as of March 1, 1995 between Benedek Broadcasting
Corporation ("Benedek Broadcasting") and The Bank of New York,
relating to the 11 7/8% Senior Secured Notes due 2005 of Benedek
Broadcasting, incorporated by reference to Exhibit 4.3 to the S-4
Registration Statement.
4.4 - Form of 11 7/8% Senior Secured Note due 2005 of Benedek
Broadcasting (included in Exhibit 4.3 hereof), incorporated by
reference to Exhibit 4.4 to the S-4 Registration Statement.
4.5 - Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of 15.0%
Exchangeable Redeemable Senior Preferred Stock Due 2007 and
Qualifications, Limitations and Restrictions thereof (filed as
Exhibit 3.3 hereof), incorporated by reference to Exhibit 4.5 to
the S-4 Registration Statement.
4.6 - Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Series C Junior
Discount Preferred Stock and Qualifications, Limitations and
Restrictions thereof (filed as Exhibit 3.4 hereof), incorporated by
reference to Exhibit 4.6 to the S-4 Registration Statement.
</TABLE>
-22-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
4.7 - Warrant Agreement dated as of June 5, 1996 between the Registrant
and IBJ Schroder Bank & Trust Company with respect to Class A
Common Stock of the Registrant, incorporated by reference to
Exhibit 4.7 to the S-4 Registration Statement.
10.1 - Purchase Agreement dated May 30, 1996 between the Registrant and
Goldman, Sachs & Co., incorporated by reference to Exhibit 10.1 to
the S-4 Registration Statement.
10.2 - Exchange and Registration Rights Agreement dated May 30, 1996
between the Registrant and Goldman, Sachs & Co. with respect to the
13 1/4% Senior Subordinated Discount Notes, due 2006, of the
Registrant, incorporated by reference to Exhibit 10.2 to the S-4
Registration Statement.
10.3 - Placement Agreement dated June 5, 1996 among the Registrant,
Goldman, Sachs & Co. and BT Securities Corporation, incorporated by
reference to Exhibit 10.3 to the S-4 Registration Statement.
10.4 - Exchange and Registration Rights Agreement dated June 5, 1996
among the Registrant, Goldman, Sachs & Co. and BT Securities
Corporation with respect to the 15.0% Exchangeable Redeemable
Senior Preferred Stock due 2007 of the Registrant, incorporated by
reference to Exhibit 10.4 to the S-4 Registration Statement.
10.5 - Warrant Agreement dated as of June 5, 1996 between the Registrant
and IBJ Schroder Bank & Trust Company (filed as Exhibit 4.7
hereof), incorporated by reference to Exhibit 10.5 to the S-4
Registration Statement.
10.6 - Contingent Warrant Escrow Agreement dated June 5, 1996 between
the Registrant and IBJ Schroder Bank & Trust Company, incorporated
by reference to Exhibit 10.6 to the S-4 Registration Statement.
10.7 - Common Stock Registration Rights Agreement dated as of June 5,
1996 among the Registrant, Goldman, Sachs & Co. and BT Securities
Corporation, incorporated by reference to Exhibit 10.7 to the S-4
Registration Statement.
10.8 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Broadcasting, the Lenders listed therein, Pearl Street
L.P., Goldman, Sachs & Co. and Canadian Imperial Bank of Commerce,
New York Agency, incorporated by reference to Exhibit 10.8 to the
S-4 Registration Statement.
10.9 - Guaranty dated as of June 6, 1996 by the Registrant in favor of
Canadian Imperial Bank of Commerce, New York Agency, incorporated
by reference to Exhibit 10.9 to the S-4 Registration Statement.
10.10- Pledge Agreement dated as of June 6, 1996 between the Registrant
and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.10 to the S-4 Registration
Statement.
10.11- Security Agreement dated as of June 6, 1996 between the
Registrant and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.11 to the S-4 Registration
Statement.
</TABLE>
-23-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
10.12 - Collateral Account Agreement dated as of June 6, 1996 between the
Registrant and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.12 to the S-4 Registration
Statement.
10.13 - Third Party Account Agreement dated as of June 6, 1996 among the
Registrant, AMCORE Bank, N.A., Rockford and Canadian Imperial Bank
of Commerce, New York Agency, incorporated by reference to Exhibit
10.13 to the S-4 Registration Statement.
10.14 - Form of Indemnity Agreement between the Registrant and each of
its executive officers and directors, incorporated by reference to
Exhibit 10.14 to the S-4 Registration Statement.
10.15 - Option Agreement dated as of June 6, 1996 between the Registrant
and K. James Yager, incorporated by reference to Exhibit 10.15 to
the S-4 Registration Statement.
*10.16 - Employment Agreement dated as of June 6, 1996 between the
Registrant and A. Richard Benedek.
*10.17 - Employment Agreement dated as of June 6, 1996 between the
Registrant and K. James Yager.
*10.18 - Employment Agreement dated as of March 8, 1996 between the
Registrant and Douglas E. Gealy.
*10.19 - Employment Agreement dated as of June 6, 1996 between the
Registrant and Ronald L. Lindwall.
*10.20 - Employment Agreement dated as of June 6, 1996 between the
Registrant and Terrance F. Hurley.
*27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
</TABLE>
- ------------------
* Filed herewith
(b) Reports on Form 8-K
None.
-24-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BENEDEK COMMUNICATIONS CORPORATION
(Registrant)
/S/ RONALD L. LINDWALL
-----------------------------------------------------
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
Date: August 19, 1996
-25-
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- -------------------
<S> <C> <C>
3.1 - Certificate of Incorporation of the Registrant, incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement
on Form S-4, File No. 333-09529, filed on August 2, 1996 (the "S-4
Registration Statement").
3.2 - By-laws of the Registrant, incorporated by reference to Exhibit 3.2
to the S-4 Registration Statement.
3.3 - Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of 15.0%
Exchangeable Redeemable Senior Preferred Stock Due 2007 and
Qualifications, Limitations and Restrictions thereof, incorporated
by reference to Exhibit 3.3 to the S-4 Registration Statement.
3.4 - Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Series C Junior
Discount Preferred Stock and Qualifications, Limitations and
Restrictions thereof, incorporated by reference to Exhibit 3.4 to
the S-4 Registration Statement.
4.1 - Indenture dated as of May 15, 1996 between the Registrant and
United States Trust Company of New York, relating to the 13 1/4%
Senior Subordinated Discount Notes due 2006, incorporated by
reference to Exhibit 4.1 to the S-4 Registration Statement.
4.2 - Form of 13 1/4% Senior Subordinated Discount Note due 2006
(included in Exhibit 4.1 hereof), incorporated by reference to
Exhibit 4.2 to the S-4 Registration Statement.
4.3 - Indenture dated as of March 1, 1995 between Benedek Broadcasting
Corporation ("Benedek Broadcasting") and The Bank of New York,
relating to the 11 7/8% Senior Secured Notes due 2005 of Benedek
Broadcasting, incorporated by reference to Exhibit 4.3 to the S-4
Registration Statement.
4.4 - Form of 11 7/8% Senior Secured Note due 2005 of Benedek
Broadcasting (included in Exhibit 4.3 hereof), incorporated by
reference to Exhibit 4.4 to the S-4 Registration Statement.
4.5 - Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of 15.0%
Exchangeable Redeemable Senior Preferred Stock Due 2007 and
Qualifications, Limitations and Restrictions thereof (filed as
Exhibit 3.3 hereof), incorporated by reference to Exhibit 4.5 to
the S-4 Registration Statement.
4.6 - Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Series C Junior
Discount Preferred Stock and Qualifications, Limitations and
Restrictions thereof (filed as Exhibit 3.4 hereof), incorporated by
reference to Exhibit 4.6 to the S-4 Registration Statement.
</TABLE>
-26-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- -------------------
<S> <C> <C>
4.7 - Warrant Agreement dated as of June 5, 1996 between the Registrant
and IBJ Schroder Bank & Trust Company with respect to Class A
Common Stock of the Registrant, incorporated by reference to
Exhibit 4.7 to the S-4 Registration Statement.
10.1 - Purchase Agreement dated May 30, 1996 between the Registrant and
Goldman, Sachs & Co., incorporated by reference to Exhibit 10.1 to
the S-4 Registration Statement.
10.2 - Exchange and Registration Rights Agreement dated May 30, 1996
between the Registrant and Goldman, Sachs & Co. with respect to the
13 1/4% Senior Subordinated Discount Notes, due 2006, of the
Registrant, incorporated by reference to Exhibit 10.2 to the S-4
Registration Statement.
10.3 - Placement Agreement dated June 5, 1996 among the Registrant,
Goldman, Sachs & Co. and BT Securities Corporation, incorporated by
reference to Exhibit 10.3 to the S-4 Registration Statement.
10.4 - Exchange and Registration Rights Agreement dated June 5, 1996
among the Registrant, Goldman, Sachs & Co. and BT Securities
Corporation with respect to the 15.0% Exchangeable Redeemable
Senior Preferred Stock due 2007 of the Registrant, incorporated by
reference to Exhibit 10.4 to the S-4 Registration Statement.
10.5 - Warrant Agreement dated as of June 5, 1996 between the Registrant
and IBJ Schroder Bank & Trust Company (filed as Exhibit 4.7
hereof), incorporated by reference to Exhibit 10.5 to the S-4
Registration Statement.
10.6 - Contingent Warrant Escrow Agreement dated June 5, 1996 between
the Registrant and IBJ Schroder Bank & Trust Company, incorporated
by reference to Exhibit 10.6 to the S-4 Registration Statement.
10.7 - Common Stock Registration Rights Agreement dated as of June 5,
1996 among the Registrant, Goldman, Sachs & Co. and BT Securities
Corporation, incorporated by reference to Exhibit 10.7 to the S-4
Registration Statement.
10.8 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Broadcasting, the Lenders listed therein, Pearl Street
L.P., Goldman, Sachs & Co. and Canadian Imperial Bank of Commerce,
New York Agency, incorporated by reference to Exhibit 10.8 to the
S-4 Registration Statement.
10.9 - Guaranty dated as of June 6, 1996 by the Registrant in favor of
Canadian Imperial Bank of Commerce, New York Agency, incorporated
by reference to Exhibit 10.9 to the S-4 Registration Statement.
10.10 - Pledge Agreement dated as of June 6, 1996 between the Registrant
and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.10 to the S-4 Registration
Statement.
10.11 - Security Agreement dated as of June 6, 1996 between the Registrant
and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.11 to the S-4 Registration
Statement.
</TABLE>
-27-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- -------------------
<S> <C> <C>
10.12 - Collateral Account Agreement dated as of June 6, 1996 between the
Registrant and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.12 to the S-4 Registration
Statement.
10.13 - Third Party Account Agreement dated as of June 6, 1996 among the
Registrant, AMCORE Bank, N.A., Rockford and Canadian Imperial Bank
of Commerce, New York Agency, incorporated by reference to Exhibit
10.13 to the S-4 Registration Statement.
10.14 - Form of Indemnity Agreement between the Registrant and each of
its executive officers and directors, incorporated by reference to
Exhibit 10.14 to the S-4 Registration Statement.
10.15 - Option Agreement dated as of June 6, 1996 between the Registrant
and K. James Yager, incorporated by reference to Exhibit 10.15 to
the S-4 Registration Statement.
*10.16 - Employment Agreement dated as of June 6, 1996 between the
Registrant and A. Richard Benedek.
*10.17 - Employment Agreement dated as of June 6, 1996 between the
Registrant and K. James Yager.
*10.18 - Employment Agreement dated as of March 8, 1996 between the
Registrant and Douglas E. Gealy.
*10.19 - Employment Agreement dated as of June 6, 1996 between the
Registrant and Ronald L. Lindwall.
*10.20 - Employment Agreement dated as of June 6, 1996 between the
Registrant and Terrance F. Hurley.
*27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
</TABLE>
- ------------------
* Filed herewith
-28-
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and A.
RICHARD BENEDEK, residing at 211 Central Park West, New York, New York 10024
(hereinafter called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Chief Executive
Officer to perform such supervisory or executive duties on behalf of the Company
as the Board of Directors of the Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote substantially
all of his business time and his attention, knowledge and skills, faithfully,
diligently and to the best of his ability, in furtherance of the business of the
Company, will perform the duties of the Company's Chief Executive Officer,
subject, at all times, to the direction and control of the Board of Directors of
the Company. Executive shall at all times be subject to, observe and carry out
such rules, regulations, policies, directions and restrictions as the Board of
Directors of the Company shall from time to time establish. During the period of
Executive's employment hereunder, Executive shall not be entitled to additional
compensation for serving in any office of the Company or any of its subsidiaries
to which he is elected.
3. Term. Executive shall be employed for a term of four years commencing as
of the 1st day of June, 1996, and ending on the 31st day of May, 2000. After the
expiration of the term, the employment of the Executive shall continue "at will"
until terminated for any reason by either Executive or the Company upon 90 days'
prior written notice.
4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Base Salary. A base salary at the rate of $525,000 (the "Initial
Base Salary") per annum during 1996 and such amount not less than the Initial
Base Salary as the Company and Executive may agree upon as to each year
thereafter. The Company shall pay Executive the base salary in accordance with
the Company's normal payroll practices. Executive shall also be eligible to
receive a bonus in respect of each fiscal year of the term of this Agreement in
such amount as the Company may determine.
-1-
<PAGE>
<PAGE>
4.2 Additional Benefits. Executive shall also be entitled to
participate, to the extent he is eligible under the terms and conditions
thereof, in any pension, profit-sharing, retirement, hospitalization, insurance,
medical service, or other employee benefit plan generally available to the
executives of the Company which may be in effect from time to time during the
period of his employment hereunder, it being understood that the Company shall
pay the entire cost of any health insurance or disability insurance maintained
by the Company for Executive in accordance with the Company's policies generally
in effect. Except for such health insurance and disability insurance, the
Company shall be under no obligation to institute or continue the existence of
any such employee benefit plan and may from time to time amend, modify or
terminate any such employee benefit plan.
4.3 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time. Executive's employment by the
Company in any year is not a precondition to Executive's entitlement to vacation
time in the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 Executive shall not, during the full term of this Agreement, for
himself or on behalf of any other person, partnership, corporation or entity,
directly or indirectly, or by action in concert with others, own, manage,
operate, join, control, participate in, invest in, or otherwise be connected
with, in any manner, whether as an officer, director, employee, partner,
investor or otherwise, any business entity which is engaged in any business in
which the Company or any of its subsidiaries is currently engaged or is engaged
at the time of termination of Executive's employment hereunder. Nothing herein
contained shall be deemed to prohibit Executive from investing his funds in
securities of a company if the securities of such company are listed for trading
on a national stock exchange or traded in the over-the-counter market and
Executive's holdings therein represent less than one (1%) percent of the total
number of shares or principal amount of other securities of such company
outstanding.
6.2 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales,
-2-
<PAGE>
<PAGE>
business and affairs, and he shall not, at any time hereafter, use, disclose or
divulge any such information, knowledge or data to any person, firm or
corporation other than to the Company or its designees or except as may
otherwise be required in connection with the business and affairs of the
Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
11. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
-3-
<PAGE>
<PAGE>
12. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
211 Central Park West
New York, New York 10024
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 12. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
13. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
14. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of New York and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
16. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement
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which can be effected without such illegal clause, paragraph or part shall
nevertheless remain in full force and effect. If, in the opinion of any court,
any clause, paragraph or part of this Agreement is unreasonable or
unenforceable, such court shall have the right, power and authority to excise or
modify such provisions, or portions thereof, of this Agreement as to the court
shall not be reasonable or enforceable and to enforce the remainder of such
clause, paragraph or part as so excised or modified.
17. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
18. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
---------------------------
/s/ A. Richard Benedek
---------------------------
A. Richard Benedek
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and K. JAMES
YAGER, residing at 6767 Woodcrest Parkway, Rockford, Illinois 61109 (hereinafter
called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its President and
Chief Operating Officer to perform such supervisory or executive duties on
behalf of the Company as the Chief Executive Officer or Board of Directors of
the Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the Chief Executive Officer and the Board of Directors
of the Company. Executive shall at all times be subject to, observe and carry
out such rules, regulations, policies, directions and restrictions as the
Company shall from time to time establish. During the period of his employment
hereunder, Executive shall not, without the written approval of the Board of
Directors first had and obtained in each instance, directly or indirectly accept
employment or compensation from or perform services of any nature for, any
business enterprise other than the Company and its subsidiaries. During the
period of Executive's employment hereunder, Executive shall not be entitled to
additional compensation for serving in any office of the Company or any of its
subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of four years commencing as
of the 1st day of June, 1996, and ending on the 31st day of May 2000, unless his
employment is terminated prior to the expiration of said term pursuant to the
provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
Executive or the Company upon 90 days' prior written notice.
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4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Salary. A base salary at the rate of $400,000 (the "Initial Base
Salary") per annum during 1996 and such amount not less than the Initial Base
Salary as the Company and Executive may agree upon as to each year thereafter.
The Company shall pay Executive the base salary in accordance with the Company's
normal payroll practices. Executive shall also be eligible to receive a bonus in
respect of each fiscal year of the term of this Agreement in such amount as the
Company may determine.
4.2 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club and
such civic organizations as the Company and Executive may agree upon, and (iii)
reimburse Executive for costs incurred in connection with a telephone and fax
machine located in his home. Executive shall also be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any
pension, profit-sharing, retirement, hospitalization, insurance, medical
service, or other employee benefit plan generally available to the executives of
the Company which may be in effect from time to time during the period of his
employment hereunder, it being understood that the Company shall pay the entire
cost of any health insurance or disability insurance maintained by the Company
for Executive in accordance with the Company's policies generally in effect.
Except for such health insurance and disability insurance, the Company shall be
under no obligation to institute or continue the existence of any such employee
benefit plan and may from time to time amend, modify or terminate any such
employee benefit plan.
4.3 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company. Executive's employment
by the Company in any year is not a precondition to Executive's entitlement to
vacation time in the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 Executive shall not, during the full term of this Agreement, for
himself or on behalf of any other person, partnership, corporation or entity,
directly or indirectly, or by action in concert with others, own, manage,
operate, join, control, participate in, invest in, or otherwise be connected
with, in any manner, whether as an officer, director, employee, partner,
investor or otherwise, any business entity which is engaged in any business in
which the Company or any of its subsidiaries is currently engaged or is engaged
during the period of Executive's employment hereunder. Nothing herein contained
shall be deemed to prohibit Executive from investing his funds in securities of
a company if
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the securities of such company are listed for trading on a national stock
exchange or traded in the over-the-counter market and Executive's holdings
therein represent less than one (1%) percent of the total number of shares or
principal amount of other securities of such company outstanding.
6.2 Executive shall not, during the full term of this Agreement and
for a period of one year thereafter, for himself or on behalf of any other
person, partnership, corporation or entity, directly or indirectly, or by action
in concert with others (a) solicit, induce, or encourage any person known to him
to be an employee of the Company or any affiliate of the Company to terminate
his or her employment or other contractual relationship with the Company or any
of its affiliates; (b) solicit, induce or encourage any person known by him to
have a contractual relationship with the Company to discontinue, terminate,
cancel or refrain from entering into any contractual relationship with the
Company or any of its affiliates; or (c) in any way solicit or attempt to
solicit the business or patronage of any person, firm, corporation, partnership,
association or other entity, whose business the Company has enjoyed during
Executive's tenure with the Company ("customers") or otherwise induce such
customers of the Company to reduce, terminate, restrict or otherwise alter their
business relationships with the Company in any fashion.
6.3 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such information, knowledge or
data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and
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injunctive relief as may be available to restrain Executive and any business,
firm, partnership, individual, corporation or entity participating in such
breach or threatened breach from the violation of the provisions hereof. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Termination.
10.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of Executive's
death during the term of this Agreement, the Company shall pay to Executive's
surviving spouse, if any, or if Executive does not have a surviving spouse, to
his then living children, if any, in equal shares, a monthly payment in an
aggregate amount equal to Executive's then current monthly Base Salary for a
period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the Base Salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
10.2 Without Cause. If the Company shall terminate Executive's
employment other than for "cause", as provided in Paragraph above, Executive
shall be entitled to receive, as damages, and as his sole and exclusive right
and remedy on account of such termination, the base salary to which he would
otherwise have been entitled under this Agreement throughout the remaining
portion of the term. Executive shall also be entitled to receive any approved
unreimbursed business expenses and other employee benefits (as described above)
to the date of termination. Amounts payable by the Company under this Paragraph
10.2 shall be payable when and as the same would otherwise have been payable
under the terms hereof and shall be subject to Executive's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) earned by Executive on account of other
employment during the unexpired portion of the term of this Agreement (without
regard to when such compensation is paid) shall be applied in reduction of the
Company's obligations hereunder. Executive shall not otherwise be entitled to
receive any further salary, bonus,
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expenses, benefits or other compensation hereunder. The willful and material
breach by the Company of any of its material obligations under this Agreement,
which breach is not fully cured promptly upon written notice to the Company
shall, at Executive's election, constitute a termination of this Agreement by
the Company without cause pursuant to the provisions of this Paragraph 10.2.
11. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
12. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
13. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
6767 Woodcrest Parkway
Rockford, Illinois 61109
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 13. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
14. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain
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employed pursuant to the provisions hereof by any successor of the Company,
whether by merger, consolidation, acquisition of all or substantially all of the
business or assets, or otherwise, and the Company shall have the right to assign
this Agreement to any such successor in interest. This Agreement shall be
binding upon Executive, his heirs, executors and administrators and upon the
Company, its successors and assigns.
15. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
17. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement which can be effected without such illegal
clause, paragraph or part shall nevertheless remain in full force and effect.
If, in the opinion of any court, any clause, paragraph or part of this Agreement
is unreasonable or unenforceable, such court shall have the right, power and
authority to excise or modify such provisions, or portions thereof, of this
Agreement as to the court shall not be reasonable or enforceable and to enforce
the remainder of such clause, paragraph or part as so excised or modified.
18. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
19. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ A. Richard Benedek
------------------------
/s/ K. James Yager
----------------------------
K. James Yager
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<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 8 day of March, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and DOUGLAS
E. GEALY, residing at 7125 Bluffstream Court, Columbus, Ohio 43235(hereinafter
called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as an Executive Vice
President to perform such supervisory or executive duties on behalf of the
Company as the President, Chief Executive Officer or Board of Directors of the
Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the President, Chief Executive Officer and the Board of
Directors of the Company. Executive may render his services in Columbus, Ohio
but will do such traveling as may be reasonably required of him in the
performance of his duties and will be available at the Company's executive
offices in Rockford, Illinois and at the Company's other facilities at such
times as may be required by the Company. The Company acknowledges that Executive
resides with his family in Columbus, Ohio and that Executive will not be
required to relocate to Rockford, Illinois. If during the term of this Agreement
Executive desires to relocate his family to Rockford, Illinois, the Company
shall reimburse Executive for the cost of such relocation in accordance with the
Company's existing relocation policy, a copy of which is annexed hereto as
Exhibit A. Executive shall at all times be subject to, observe and carry out
such rules, regulations, policies, directions and restrictions as the Company
shall from time to time establish. During the period of his employment
hereunder, Executive shall not, without the written approval of the Board of
Directors first had and obtained in each instance, directly or indirectly accept
employment or compensation from or perform services of any nature for, any
business enterprise other than the Company and its subsidiaries. During the
period of Executive's employment hereunder, Executive shall not be entitled to
additional compensation for serving in any office of the Company or any of its
subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of three years commencing
as of the 1st day of May, 1996, and ending on the 30th day of April 1999, unless
his employment is terminated prior to the expiration of said term pursuant to
the provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
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Executive or the Company upon 90 days' prior written notice.
4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Base Salary. A base salary ("Base Salary") at the rate of $235,000
per annum during the first year of the term of this Agreement, $260,000 per
annum during the second year of the term of this Agreement and $285,000 per
annum during the third year of the term of this Agreement. The Company shall pay
Executive the Base Salary in accordance with the Company's normal payroll
practices.
4.2 Performance Bonus. Executive shall be eligible to receive a
performance bonus in respect of each fiscal year during the term of this
Agreement in an amount equal to up to 20% of the Base Salary in effect at the
end of such fiscal year. One-half of such performance bonus shall be determined
based upon the achievement of performance goals established by the Company at or
prior to the beginning of such fiscal year (except for the 1996 fiscal year, the
performance goals for which shall be established by the Company prior to the
commencement of Executive's employment hereunder); and the balance of the
performance bonus shall be determined in the sole discretion of the Company.
4.3 Stock Options and/or Stock Appreciation Rights. Executive shall be
eligible to receive stock options and/or stock appreciation rights in accordance
with the terms of any plan therefor adopted by the Company. Executive
acknowledges that the Company does not currently maintain any such plan and is
under no obligation to institute or continue the existence of any such plan and
may from time to time amend, modify or terminate any such plan.
4.4 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club, and
(iii) reimburse Executive for costs incurred in connection with a telephone and
fax machine located in his home. Executive shall also be entitled to
participate, to the extent he is eligible under the terms and conditions
thereof, in any pension, profit-sharing, retirement, hospitalization, insurance,
medical service, or other employee benefit plan generally available to the
executives of the Company which may be in effect from time to time during the
period of his employment hereunder, it being understood that the Company shall
pay the entire cost of any health insurance or disability insurance maintained
by the Company for Executive in accordance with the Company's policies generally
in effect. Except for such health insurance and disability insurance, the
Company shall be under no obligation to institute or continue the existence of
any such employee benefit plan and may from time to time amend, modify or
terminate any such employee benefit plan.
4.5 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company and with the prior
approval of the President of the Company. Executive's employment by the Company
in any year is not a precondition to Executive's entitlement to vacation time in
the year subsequent thereto.
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5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company (including without limitation the cost
of travel to and from his home in Columbus, Ohio to any of the Company's
facilities), upon the submission to the Company of appropriate vouchers
therefor, provided that such expenses shall in all events be incurred in
accordance with and within applicable limits under the Company's expense
reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 In consideration of the Company's entering into this Agreement,
Executive agrees that during the period of his employment hereunder, he will not
(i) directly or indirectly own, manage, operate, join, control, participate in,
invest in, or otherwise be connected with, in any manner, whether as an officer,
director, employee, partner, investor or otherwise, any business entity which is
engaged in any business in which the Company or any of its subsidiaries is
currently engaged or is engaged at the time of termination of Executive's
employment hereunder, or (ii) for himself or on behalf of any other person,
partnership, corporation or entity, call on any customer of the Company for the
purpose of soliciting, diverting or taking away any customer from the Company.
Nothing herein contained shall be deemed to prohibit Executive from investing
his funds in securities of a company if the securities of such company are
listed for trading on a national stock exchange or traded in the
over-the-counter market and Executive's holdings therein represent less than one
(1%) percent of the total number of shares or principal amount of other
securities of such company outstanding.
6.2 Executive shall not, during the full term of his employment by the
Company and for a period of one year thereafter, for himself or on behalf of any
other person, partnership, corporation or entity, directly or indirectly, or by
action in concert with others (a) solicit, induce, or encourage any person known
to him to be an employee of the Company or any affiliate of the Company to
terminate his or her employment or other contractual relationship with the
Company or any of its affiliates; (b) solicit, induce or encourage any person
known by him to have a contractual relationship with the Company to discontinue,
terminate, cancel or refrain from entering into any contractual relationship
with the Company or any of its affiliates; (c) directly or indirectly own,
manage, operate, join, control, participate in, invest in, or otherwise be
connected with, in any manner, whether as an officer, director, employee,
partner, investor or otherwise, any business entity which owns, manages,
operates, controls or is otherwise connected with, in any manner, a television
station in any designated market area (as defined by Nielsen) then served by a
television station then owned by the Company or any of its affiliates; or (d) in
any way solicit or attempt to solicit the business or patronage of any person,
firm, corporation, partnership, association or other entity, whose business the
Company has enjoyed during Executive's tenure with the Company ("customers") or
otherwise induce such customers of the Company to reduce, terminate, restrict or
otherwise alter their business relationships with the Company in any fashion.
6.3 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions
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shall be deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the same valid
and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such information, knowledge or
data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Termination.
10.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of
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Executive's death during the term of this Agreement, the Company shall pay to
Executive's surviving spouse, if any, or if Executive does not have a surviving
spouse, to his then living children, if any, in equal shares, a monthly payment
in an aggregate amount equal to Executive's then current monthly Base Salary for
a period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the Base Salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
10.2 Without Cause. If the Company shall terminate Executive's
employment other than for "cause", as provided in Paragraph above, Executive
shall be entitled to receive, as damages, and as his sole and exclusive right
and remedy on account of such termination, the base salary to which he would
otherwise have been entitled under this Agreement throughout the remaining
portion of the term. Executive shall also be entitled to receive any approved
unreimbursed business expenses and other employee benefits (as described above)
to the date of termination. Amounts payable by the Company under this Paragraph
10.2 shall be payable when and as the same would otherwise have been payable
under the terms hereof and shall be subject to Executive's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) earned by Executive on account of other
employment during the unexpired portion of the term of this Agreement (without
regard to when such compensation is paid) shall be applied in reduction of the
Company's obligations hereunder. Executive shall not otherwise be entitled to
receive any further salary, bonus, expenses, benefits or other compensation
hereunder. The willful and material breach by the Company of any of its material
obligations under this Agreement, which breach is not fully cured promptly upon
written notice to the Company shall, at Executive's election, constitute a
termination of this Agreement by the Company without cause pursuant to the
provisions of this Paragraph 10.2.
11. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
12. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
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<PAGE>
13. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
7125 Bluffstream Court
Columbus, Ohio 43235
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 13. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
14. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
15. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
17. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement
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which can be effected without such illegal clause, paragraph or part shall
nevertheless remain in full force and effect. If, in the opinion of any court,
any clause, paragraph or part of this Agreement is unreasonable or
unenforceable, such court shall have the right, power and authority to excise or
modify such provisions, or portions thereof, of this Agreement as to the court
shall not be reasonable or enforceable and to enforce the remainder of such
clause, paragraph or part as so excised or modified.
18. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
19. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
----------------------------
/s/ Douglas E. Gealy
----------------------------
Douglas E. Gealy
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and RONALD
L. LINDWALL, residing at 4815 Crested Butte, Rockford, Illinois 61114
(hereinafter called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Senior Vice
President-Finance and Chief Financial Officer to perform such supervisory or
executive duties on behalf of the Company as the President, Chief Executive
Officer or Board of Directors of the Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the President, Chief Executive Officer and the Board of
Directors of the Company. Executive shall at all times be subject to, observe
and carry out such rules, regulations, policies, directions and restrictions as
the Company shall from time to time establish. During the period of his
employment hereunder, Executive shall not, without the written approval of the
Board of Directors first had and obtained in each instance, directly or
indirectly accept employment or compensation from or perform services of any
nature for, any business enterprise other than the Company and its subsidiaries.
During the period of Executive's employment hereunder, Executive shall not be
entitled to additional compensation for serving in any office of the Company or
any of its subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of three years commencing
as of the 1st day of June, 1996, and ending on the 31st day of May 1999, unless
his employment is terminated prior to the expiration of said term pursuant to
the provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
Executive or the Company upon 90 days' prior written notice.
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4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Salary. A base salary at the rate of $150,000 (the "Initial Base
Salary") per annum during 1996 and such amount not less than the Initial Base
Salary as the Company and Executive may agree as to each year thereafter. The
Company shall pay Executive the base salary in accordance with the Company's
normal payroll practices. Executive shall also be eligible to receive a bonus in
respect of each fiscal year of the term of this Agreement in such amount as the
Company may define.
4.2 Stock Options and/or Stock Appreciation Rights. Executive shall be
eligible to receive stock options and/or stock appreciation rights in accordance
with the terms of any plan therefor adopted by the Company. Executive
acknowledges that the Company does not currently maintain any such plan and is
under no obligation to institute or continue the existence of any such plan and
may from time to time amend, modify or terminate any such plan.
4.3 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club and
such civic organizations as the Company and Executive may agree upon, and (iii)
reimburse Executive for costs incurred in connection with a telephone and fax
machine located in his home. Executive shall also be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any
pension, profit-sharing, retirement, hospitalization, insurance, medical
service, or other employee benefit plan generally available to the executives of
the Company which may be in effect from time to time during the period of his
employment hereunder, it being understood that the Company shall pay the entire
cost of any health insurance or disability insurance maintained by the Company
for Executive in accordance with the Company's policies generally in effect.
Except for such health insurance and disability insurance, the Company shall be
under no obligation to institute or continue the existence of any such employee
benefit plan and may from time to time amend, modify or terminate any such
employee benefit plan.
4.4 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company and with the prior
approval of the President of the Company. Executive's employment by the Company
in any year is not a precondition to Executive's entitlement to vacation time in
the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such
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information, knowledge or data to any person, firm or corporation other than to
the Company or its designees or except as may otherwise be required in
connection with the business and affairs of the Company.
7. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
8. Termination.
8.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of Executive's
death during the term of this Agreement, the Company shall pay to Executive's
surviving spouse, if any, or if Executive does not have a surviving spouse, to
his then living children, if any, in equal shares, a monthly payment in an
aggregate amount equal to Executive's then current monthly base salary for a
period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the base salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
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8.2 Without Cause.
8.2.1 If the Company shall terminate Executive's employment other than
(i) pursuant to Paragraph 8.2.2 or (ii) for "cause" as provided in Paragraph 8.1
above, Executive shall be entitled to receive, as damages, and as his sole and
exclusive right and remedy on account of such termination, the base salary to
which he would otherwise have been entitled under this Agreement throughout the
remaining portion of the term. Executive shall also be entitled to receive any
approved unreimbursed business expenses and other employee benefits (as
described above) to the date of termination. The willful and material breach by
the Company of any of its material obligations under this Agreement, which
breach is not fully cured promptly upon written notice to the Company shall, at
Executive's election, constitute a termination of this Agreement by the Company
without cause pursuant to the provisions of this Paragraph 8.2.1.
8.2.2 In addition to any other rights and remedies provided by law or
in this Agreement, at any time prior to a Change of Control (as defined in the
Indenture dated as of March 1, 1995 with respect to the Company's outstanding
11 7/8% Senior Secured Notes) the Company may terminate Executive's employment
hereunder without cause upon six months' written notice. If the Company shall
terminate Executive's employment pursuant to this Paragraph 8.2.2, Executive
shall be entitled to receive, as damages, and as his sole and exclusive right
and remedy on account of such termination, the base salary to which he would
otherwise have been entitled under this Agreement through the effective date of
termination. Executive shall also be entitled to receive any approved
unreimbursed business expenses and other employee benefits (as described above)
to the date of termination.
8.2.3 Amounts payable by the Company under this Paragraph 8.2 shall be
payable when and as the same would otherwise have been payable under the terms
hereof and shall be subject to Executive's duty to mitigate his damages by using
reasonable efforts to seek other comparable employment. Compensation (in
whatever form) earned by Executive on account of other employment during the
unexpired portion of the term of this Agreement or through the effective date of
termination, as the case may be (without regard to when such compensation is
paid), shall be applied in reduction of the Company's obligations hereunder.
Executive shall not otherwise be entitled to receive any further salary, bonus,
expenses, benefits or other compensation hereunder.
9. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
10. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
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<PAGE>
11. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
4815 Crested Butte
Rockford, Illinois 61114
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 11. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
12. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
13. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
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14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
15. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement which can be effected without such illegal
clause, paragraph or part shall nevertheless remain in full force and effect.
If, in the opinion of any court, any clause, paragraph or part of this Agreement
is unreasonable or unenforceable, such court shall have the right, power and
authority to excise or modify such provisions, or portions thereof, of this
Agreement as to the court shall not be reasonable or enforceable and to enforce
the remainder of such clause, paragraph or part as so excised or modified.
16. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
17. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
----------------------------
/s/ Ronald L. Lindwall
-----------------------------
Ronald L. Lindwall
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<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and TERRANCE
F. HURLEY, residing at 3531 East 1st Street, Duluth, Minnesota 55804
(hereinafter called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Senior Vice
President to perform such supervisory or executive duties on behalf of the
Company as the President, Chief Executive Officer or Board of Directors of the
Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the President, Chief Executive Officer and the Board of
Directors of the Company. Executive shall at all times be subject to, observe
and carry out such rules, regulations, policies, directions and restrictions as
the Company shall from time to time establish. During the period of his
employment hereunder, Executive shall not, without the written approval of the
Board of Directors first had and obtained in each instance, directly or
indirectly accept employment or compensation from or perform services of any
nature for, any business enterprise other than the Company and its subsidiaries.
During the period of Executive's employment hereunder, Executive shall not be
entitled to additional compensation for serving in any office of the Company or
any of its subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of three years commencing
as of the 1st day of June, 1996, and ending on the 31st day of May 1999, unless
his employment is terminated prior to the expiration of said term pursuant to
the provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
Executive or the Company upon 90 days' prior written notice.
4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Salary. A base salary at the rate of $150,000 (the "Initial Base
Salary") per annum during 1996 and such amount not less than the Initial Base
Salary as the Company and Executive may agree upon as to each year thereafter.
The Company shall pay Executive the base salary
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in accordance with the Company's normal payroll practices. Executive shall also
be eligible to receive a bonus in respect of each fiscal year of the term of
this Agreement in such amount as the Company may define.
4.2 Stock Options and/or Stock Appreciation Rights. Executive shall be
eligible to receive stock options and/or stock appreciation rights in accordance
with the terms of any plan therefor adopted by the Company. Executive
acknowledges that the Company does not currently maintain any such plan and is
under no obligation to institute or continue the existence of any such plan and
may from time to time amend, modify or terminate any such plan.
4.3 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club and
such civic organizations as the Company and Executive may agree upon, and (iii)
reimburse Executive for costs incurred in connection with a telephone and fax
machine located in his home. Executive shall also be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any
pension, profit-sharing, retirement, hospitalization, insurance, medical
service, or other employee benefit plan generally available to the executives of
the Company which may be in effect from time to time during the period of his
employment hereunder, it being understood that the Company shall pay the entire
cost of any health insurance or disability insurance maintained by the Company
for Executive in accordance with the Company's policies generally in effect.
Except for such health insurance and disability insurance, the Company shall be
under no obligation to institute or continue the existence of any such employee
benefit plan and may from time to time amend, modify or terminate any such
employee benefit plan.
4.4 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company and with the prior
approval of the President of the Company. Executive's employment by the Company
in any year is not a precondition to Executive's entitlement to vacation time in
the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 In consideration of the Company's entering into this Agreement,
Executive agrees that during the period of his employment hereunder, he will not
(i) directly or indirectly own, manage, operate, join, control, participate in,
invest in, or otherwise be connected with, in any manner, whether as an officer,
director, employee, partner, investor or otherwise, any business entity which is
engaged in any business in which the Company or any of its subsidiaries is
currently engaged or is engaged at any time during the period of Executive's
employment hereunder, or (ii) for himself or on behalf of any other person,
partnership, corporation or entity, call on any customer of the Company for
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the purpose of soliciting, diverting or taking away any customer from the
Company. Nothing herein contained shall be deemed to prohibit Executive from
investing his funds in securities of a company if the securities of such company
are listed for trading on a national stock exchange or traded in the
over-the-counter market and Executive's holdings therein represent less than one
(1%) percent of the total number of shares or principal amount of other
securities of such company outstanding.
6.2 Executive shall not, during the full term of this Agreement and
for a period of one year thereafter, for himself or on behalf of any other
person, partnership, corporation or entity, directly or indirectly, or by action
in concert with others (a) solicit, induce, or encourage any person known to him
to be an employee of the Company or any affiliate of the Company to terminate
his or her employment or other contractual relationship with the Company or any
of its affiliates; (b) solicit, induce or encourage any person known by him to
have a contractual relationship with the Company to discontinue, terminate,
cancel or refrain from entering into any contractual relationship with the
Company or any of its affiliates; (c) directly or indirectly own, manage,
operate, join, control, participate in, invest in, or otherwise be connected
with, in any manner, whether as an officer, director, employee, partner,
investor or otherwise, any business entity which owns, manages, operates,
controls or is otherwise connected with, in any manner, a television station in
any designated market area (as defined by Nielsen) then served by a television
station then owned by the Company or any of its affiliates; or (d) in any way
solicit or attempt to solicit the business or patronage of any person, firm,
corporation, partnership, association or other entity, whose business the
Company has enjoyed during Executive's tenure with the Company ("customers") or
otherwise induce such customers of the Company to reduce, terminate, restrict or
otherwise alter their business relationships with the Company in any fashion.
6.3 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such information, knowledge or
data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii)
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<PAGE>
<PAGE>
give the Company all assistance it reasonably requires, including the giving of
testimony in any suit, action or proceeding, in order to obtain, maintain and
protect the Company's right therein and thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Termination.
10.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of Executive's
death during the term of this Agreement, the Company shall pay to Executive's
surviving spouse, if any, or if Executive does not have a surviving spouse, to
his then living children, if any, in equal shares, a monthly payment in an
aggregate amount equal to Executive's then current monthly base salary for a
period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the base salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
10.2 Without Cause.
10.2.1 If the Company shall terminate Executive's employment
other than (i) pursuant to Paragraph 10.2.2 or (ii) for "cause" as provided in
Paragraph 10.1 above, Executive shall be entitled to receive, as damages, and as
his sole and exclusive right and remedy on account of such
-4-
<PAGE>
<PAGE>
termination, the base salary to which he would otherwise have been entitled
under this Agreement throughout the remaining portion of the term. Executive
shall also be entitled to receive any approved unreimbursed business expenses
and other employee benefits (as described above) to the date of termination. The
willful and material breach by the Company of any of its material obligations
under this Agreement, which breach is not fully cured promptly upon written
notice to the Company shall, at Executive's election, constitute a termination
of this Agreement by the Company without cause pursuant to the provisions of
this Paragraph 10.2.1.
10.2.2 In addition to any other rights and remedies provided by
law or in this Agreement, at any time prior to a Change of Control (as defined
in the Indenture dated as of March 1, 1995 with respect to the Company's
outstanding 11 7/8% Senior Secured Notes) the Company may terminate Executive's
employment hereunder without cause upon six months' written notice. If the
Company shall terminate Executive's employment pursuant to this Paragraph
10.2.2, Executive shall be entitled to receive, as damages, and as his sole and
exclusive right and remedy on account of such termination, the base salary to
which he would otherwise have been entitled under this Agreement through the
effective date of termination. Executive shall also be entitled to receive any
approved unreimbursed business expenses and other employee benefits (as
described above) to the date of termination.
10.2.3 Amounts payable by the Company under this Paragraph 10.2
shall be payable when and as the same would otherwise have been payable under
the terms hereof and shall be subject to Executive's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) earned by Executive on account of other
employment during the unexpired portion of the term of this Agreement or through
the effective date of termination, as the case may be (without regard to when
such compensation is paid), shall be applied in reduction of the Company's
obligations hereunder. Executive shall not otherwise be entitled to receive any
further salary, bonus, expenses, benefits or other compensation hereunder.
11. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
12. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
-5-
<PAGE>
<PAGE>
13. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
3531 East 1st Street
Duluth, Minnesota 55804
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 13. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
14. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
15. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
17. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement
-6-
<PAGE>
<PAGE>
which can be effected without such illegal clause, paragraph or part shall
nevertheless remain in full force and effect. If, in the opinion of any court,
any clause, paragraph or part of this Agreement is unreasonable or
unenforceable, such court shall have the right, power and authority to excise or
modify such provisions, or portions thereof, of this Agreement as to the court
shall not be reasonable or enforceable and to enforce the remainder of such
clause, paragraph or part as so excised or modified.
18. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
19. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
----------------------------
/s/ Terrance F. Hurley
---------------------------
Terrance F. Hurley
-7-
<PAGE>
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<NAME> BENEDEK COMMUNICATIONS CORPORATION
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