Sample Business Contracts

Stock Option Agreement - Sinclair Broadcast Group Inc. and Barry Baker

Sponsored Links

                         SINCLAIR BROADCAST GROUP, INC.

                             STOCK OPTION AGREEMENT

                  THIS STOCK OPTION  AGREEMENT  (this  "Agreement")  is made and
entered  into as of April  10,  1996,  (the  "Option  date"),  between  Sinclair
Broadcast Group, Inc., a Maryland  corporation (the "Company"),  and Barry Baker
(the "Optionee").


                  WHEREAS,  the Company has adopted the 1996 Long-Term Incentive
Plan of  Sinclair  Broadcast  Group,  Inc.  (the  "Plan") to reward  certain key
individuals for making major  contributions  to the Company and its subsidiaries
by enabling them to acquire shares of Class A Common Stock,  part value $.01 per
share ("Common Stock"), of the Company;

                  WHEREAS,  the  Optionee  and  the  Company  have  executed  an
Employment Agreement (the "Employment Agreement") of even date herewith, and

                  WHEREAS,  as part of its  inducement  to the Optionee to enter
into the  Employment  Agreement,  the Company  desires to grant the  Optionee an
option to  purchase  shares of Common  Stock  pursuant  to the Plan and upon the
terms and subject to the conditions hereinafter set forth:


                  NOW,  THEREFORE,  in consideration of the foregoing  premises,
the parties to this Agreement agree as follows:

                  1. Grant of Option.  Subject to the terms and  conditions  set
forth in this  Agreement,  the Company  hereby  grants to the Optionee an option
(the  "Option")  to  purchase  from the Company up to but not  exceeding  in the
aggregate  1,382,435  shares  of Common  Stock at a price  per share  ("Exercise
Price")  equal to the average of the closing share prices of the Common Stock as
reported on the NASDAQ National Market for the 21 trading days consisting of the
Option Date and each of the ten trading days immediately  prior to such date and
each of the ten trading days  immediately  following  such date, but in no event
less than $21.00 per share, such number of shares and such price per share being
subject to adjustment  as provided in Section 13 of the Plan.  The Company shall
not (a)  purchase,  or take any actions  designed or intended to  influence  the
price of,  Common Stock during such period,  (b) permit any Smith Family  Member
(hereinafter  defined) to purchase,  or take any actions designed or intended to
influence the price of, Common Stock during such period, or (c) ask or encourage
any of its affiliates,  associates or any other person to purchase,  or take any
action  designed or intended to influence the price of, Common Stock during such

provided,  however,  that nothing  contained in this Section  shall be deemed to
prohibit the Company from acting in the normal course of business to communicate
with  financial  analysts  or  otherwise  educate the market on the terms of the
River City Acquisition (as defined in the Employment Agreement.) For purposes of
this Agreement,  "Smith Family Member" means David D. Smith, Frederick G. Smith,
J.  Duncan  Smith and  Robert  E.  Smith  and any of their  respective  parents,
grandparents,  children, grandchildren,  aunts, uncles, nephews, nieces or first
cousins and any trust or other  entity  which any such person  individually,  or
collectively with another person or persons, controls.

                  2. Company Covenants. The Company represents that the Plan has
been  adopted by the Board of  Directors  of the  Company  and the  Compensation
Committee  thereof.  The Company  agrees to  recommend  approval  and to solicit
proxies for the  approval  of the Plan by  Sinclair's  stockholders  at the next
meeting of the Company's  stockholders,  to be held no later than June 30, 1996,
such that upon such  approval,  grants of options under the Plan will be treated
as  exempt  purchases  under  Rule  16b-3  issued  by  the  Securities  Exchange
Commission  pursuant to Section 16 of the Exchange  Act. The Company shall cause
the Common Stock  issuable  upon  exercise of the Option to be  registered  in a
shelf registration statement pursuant to the Securities Act of 1933, as amended,
and all other  applicable  federal  securities laws and state securities or blue
sky laws, shall cause such securities to be approved for quotation on the NASDAQ
National   Market,   and  shall  bear  all  expenses  in  connection  with  such
registration, quotation and compliance.

                  3.  Relationship  to Plan.  The Option is issued in accordance
with and subject to all of the terms,  conditions and provisions of the Plan, as
amended from time to time, and  administrative  interpretations  thereunder,  if
any,  which have been adopted by the Committee  thereunder  and are in effect on
the date hereof. Except as defined herein or otherwise stated, capitalized terms
shall have the same meanings ascribed to them under the Plan.

                  4.  Vesting and Exercise Schedules.

                           (a) The Option shall be vested with respect to 50% of
                  the aggregate  number of shares of Common Stock subject to the
                  Option  immediately  upon the occurrence of the First Closing,
                  (as  defined  in  the  Employment  Agreement).  On  the  first
                  anniversary of the First  Closing,  the Option shall vest with
                  respect to an additional 25% of the aggregate number of shares
                  of  Common  Stock  subject  to  the  Option.   On  the  second
                  anniversary of the First  Closing,  the Option shall vest with
                  respect to the remaining  balance of the  aggregate  number of
                  shares subject to the Option.

                           (b) The  Option  shall  immediately  vest and  become
                  fully  exercisable,  irrespective of the limitations set forth
                  in subparagraph (a) above, in the event of:

                                    (i)     the Optionee's death;


                                    (ii)    the  Optionee's  Disability (as such
                                            term is defined  in Section  10.2 of
                                            the Employment Agreement);

                                    (iii)   the  termination  of  the  Agreement
                                            Term (as  defined in the  Employment
                                            Agreement), by the Company, not "for
                                            cause"  (as  defined in Section 9 of
                                            the Employment Agreement); or

                                    (iv)    the  termination  of  the  Agreement
                                            Term,   by  Optionee,   pursuant  to
                                            Section  10.3.1  of  the  Employment

                           (c) If the Agreement  Term is  terminated  (i) by the
                  Company, "for cause" (as defined therein) or (ii) by Optionee,
                  pursuant to Section  10.3.3 of the Employment  Agreement,  the
                  Option  shall  terminate  and be of no force and  effect  with
                  respect to any  shares of Common  Stock as to which the Option
                  has not previously vested.

                  5. Termination of Option.  Unless earlier terminated  pursuant
to Section 4 hereof,  the Option shall  terminate  and be of no force and effect
with  respect  to any shares of Common  Stock not  previously  purchased  by the
Optionee on the tenth anniversary of the First Closing.

                  6.  Exercise  of  Option.  The Option  may be  exercised  with
respect to the shares of Common Stock then vested,  in whole or in part,  at any
time on or prior to the tenth  anniversary of the First  Closing,  regardless of
the Optionee's service status, by written notice to the Company at its principal
executive  office,  which  notice  shall (a)  specify  the number of shares with
respect to which the Option is being exercised and the purchase price to be paid
therefor;  (b) if the person exercising this Option is not the Optionee himself;
contain or be  accompanied  by  satisfactory  evidence of such person's right to
exercise this Option;  and (c) be accompanied by payment in full of the purchase
price in cash or by a certified cashier's check to the order of the Company.

                  7.  Transferability.  The  Option  shall  not be  transferable
except by will or by the laws of descent and distribution. During the Optionee's
lifetime,  the Option may be exercised  only by the  Optionee.  No assignment or
transfer of the Option, whether voluntary or involuntary, by operation of law or
otherwise,  except a transfer by will or by the laws of descent or distribution,
shall vest in the assignee or transferee any interest or right whatsoever in the

                  8.  Certain  Payments.  Anything  in  this  Agreement  to  the
contrary  notwithstanding,  in the event it shall be determined that any payment
or  distribution  by the Company to or for the benefit of the Optionee  (whether
paid or payable or  distributed or  distributable  pursuant to the terms of this
Agreement,  but determined without regard to any Gross-Up Payment required under
this  Section 8) (a  "Payment")  would be  subject to the excise tax  imposed by
Section 4999 of the Internal  Revenue Code of 1986, as amended (the "Code"),  or
any  interest or penalties  are  incurred by the  Optionee  with respect to such
excise tax (such excise tax, together with any such interest and penalties,  are
hereinafter collectively referred to as the "Excise Tax"), then the Optionee


shall be entitled to receive an additional payment (a "Gross-Up  Payment") in an
amount  such that after  payment by the  Optionee  of all income  taxes (and any
interest and penalties imposed with respect  thereto),  but excluding any Excise
Tax imposed upon the  Gross-Up  Payment,  the Optionee  retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

                  9. No Rights as  Stockholder.  The Optionee shall not have any
rights as a stockholder of the Company with respect to any of the shares subject
to the Option,  except to the extent that such shares shall have been  purchased
and transferred to him.

                  10. No Right to Employment. The Option shall not confer on the
Optionee  any right to  continue  in the  service  of the  Company or any of its
subsidiaries  or affect the right of the Company or any  subsidiary to terminate
Optionee's employment at any time; and nothing contained in this Agreement shall
be deemed a waiver or modification  of any provision  contained in any agreement
between the Optionee and the Company or any parent or subsidiary  thereof . This
Option  shall not  affect the right of the  Company or any parent or  subsidiary
thereof to  reclassify,  recapitalize,  or otherwise  change its capital or debt
structure or to merge,  consolidate,  convey any or all of its assets, dissolve,
liquidate, wind up, or otherwise reorganize.

                  11. Dissolution or Merger. Upon the dissolution or liquidation
of the  Company,  a merger  or  consolidation  in which the  Company  is not the
surviving  corporation,  or a transaction in which another  individual or entity
becomes  the  owner of 50% or more of the  total  combined  voting  power of all
classes of stock of the Company,  the  unexercised  portion of this Option shall
terminate,  but the Optionee  shall have the right to exercise the unexpired and
unexercised  portion of this Option,  whether  vested or  unvested,  immediately
prior to such event.

                  12.  Withholding for Tax Purposes.  Any amount of Common Stock
that is payable or transferable to the Optionee  hereunder may be reduced by any
amount or amounts  which the  Company is  required  to  withhold  under the then
applicable  provisions of the Internal Revenue Code of 1986, as amended,  or its
successors, or any other federal, state or local tax withholding requirement. If
the Optionee does not elect to satisfy withholding requirements in this fashion,
the  issuance  of the  shares of Common  Stock  payable or  transferable  to the
Optionee  hereunder shall be contingent upon the Optionee's  satisfaction of any
withholding  obligations  that may  apply  and the  Optionee's  presentation  of
evidence  satisfactory to the Board that such withholding  obligations have been

                  13.  Notice.  Whenever  any notice is  required  or  permitted
hereunder,  such notice must be in writing and  personally  delivered or sent by
mail. Any notice required or permitted to be delivered  hereunder will be deemed
to be  delivered  on the  date  that it is  personally  delivered,  or,  whether
actually received or not, on the third business day after it is deposited in the
United States mail, certified or registered,  postage prepaid,  addressed to the
person who is to  receive it at the  address  that such  person has  theretofore
specified by written  notice  delivered in accordance  herewith.  The Company or
Optionee may change, at any time and from time to time, by written notice to the
other, the address that it or he had therefore specified



for receiving notices. Until changed in accordance herewith, the Company and the
Optionee specify their respective addresses as set forth below:


                  Sinclair Broadcasting Group, Inc.
                  2000 West 41st Street
                  Baltimore, Maryland 21211
                  Attention:  Chief Executive Officer

                  with copy to:

                  Thomas & Libowitz, P.A.
                  The USF&G Tower
                  100 Light Street
                  Suite 1100
                  Baltimore, Maryland 21202-1053
                  Attention:  Steve A. Thomas, Esq.


                  Barry Baker
                  River City Broadcasting, L.P.
                  1215 Cole Street
                  St. Louis, Missouri 63106-3897

                  with a copy to:

                  Baker & Botts, L.L.P.
                  2001 Ross Avenue
                  Dallas, Texas 75201-2980
                  Attention:  Andrew M. Baker, Esq.

                  14.  Amendment.  Notwithstanding  any other provision  hereof,
this Agreement may not be  supplemented or amended from time to time without the
consent of the Optionee.

                  15.  Governing  Law. This  Agreement  shall be governed by and
construed  and  enforced  in  accordance  with the laws of the State of Maryland
applicable to agreements made and to be performed entirely in Maryland.

                  16.  Counterparts.  This Agreement may be executed in multiple
counterparts.  The  Company and  Optionee  may sign any number of copies of this
Agreement.  Each  signed  copy shall be an  original,  but all of them  together
represent the same agreement.


                  IN WITNESS  WHEREOF,  the Company and the Optionee have caused
this Agreement to be executed as of the date first above written.

                                            SINCLAIR BROADCAST GROUP, INC.

                                            By:  /s/ David D. Smith
                                                     David D. Smith
                                                     Chief Executive Officer


                                            By: /s/ Barry Baker
                                                     Barry Baker