EXHIBIT 10.3
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1999, by and between Clear Channel
Communications, Inc., a Texas corporation (the
Company), and Xxxxxxx Xxxx (Executive).
IN CONSIDERATION of the premises and the mutual covenants set forth below,
the parties hereby agree as follows:
1. Employment. The Company hereby agrees to continue to employ Executive as
the Executive Vice President and Chief Financial Officer of the Company, and
Executive hereby accepts such continued employment, on the terms and conditions
hereinafter set forth.
2. Term. The period of employment of Executive by the Company under this
Agreement (the Employment Period) shall commence on October 1, 1999 (the
Commencement Date) and shall continue through the seventh anniversary thereof;
provided, that, the Employment Period shall automatically be extended for one
(1) additional day each day during the Employment Period unless either party
gives written notice not to extend this Agreement. The Employment Period may be
sooner terminated by either party in accordance with Section 6 of this
Agreement.
3. Position and Duties. During the Employment Period, Executive shall serve
as Executive Vice President and Chief Financial Officer of the Company, and
shall report solely and directly to the Companys Chairman and Chief Executive
Officer and Board of Directors of the Company (the Board). Executive shall
have those powers and duties normally associated with the position of Executive
Vice President and Chief Financial Officer of entities comparable to the Company
and such other powers and duties as may be prescribed by the Board; provided
that, such other powers and duties are consistent with Executives position as
Executive Vice President and Chief Financial Officer of the Company. Executive
shall devote as much of his working time, attention and energies during normal
business hours (other than absences due to illness or vacation) to
satisfactorily perform his duties for the Company. Notwithstanding the above,
Executive shall be permitted, to the extent such activities do not substantially
interfere with the performance by Executive of his duties and responsibilities
hereunder to (i) manage Executives personal, financial and legal affairs, (ii)
to serve on civic or charitable boards or committees (it being expressly
understood and agreed that Executives continuing to serve on any such board
and/or committees on which Executive is serving, or with which Executive is
otherwise associated, as of the Commencement Date shall be deemed not to
interfere with the performance by Executive of his duties and responsibilities
under this Agreement) and (iii) deliver lectures or fulfill speaking
engagements. During the Employment Period, Executive shall also serve as a
director of the Company. If X. Xxxxx Xxxx ceases to serve as Chairman and Chief
Executive Officer of the Company at any time during the Employment Period by
reason of his death or incapacity, it is the intention of the Board, that either
Xxxx Xxxx or Xxxxxxx Xxxx shall be appointed as the Chairman and Chief Executive
Officer of the Company and the Board, subject only to its fiduciary duties to
the Company and its stockholders and applicable law, shall take all action
necessary to carry out such intention.
4. Place of Performance. The principal place of employment of Executive
shall be at the Companys principal executive offices in San Antonio, Texas.
5. Compensation and Related Matters.
(a) Base Salary and Bonus. During the Employment Period, the Company shall
pay Executive a base salary at the rate of not less than $325,000 per year
(Base Salary). Executives Base Salary shall be paid in approximately equal
installments in accordance with the Companys customary payroll practices. The
Compensation Committee of the Board (the Committee) shall review Executives
Base Salary for increase (but not decrease) no less frequently than annually and
consistent with the compensation practices and guidelines of the Company. If
Executives Base Salary is increased by the Company, such increased Base Salary
shall then constitute the Base Salary for all purposes of this Agreement. In
addition to Base Salary, Executive shall be paid an annual bonus (the Bonus)
as provided for under the annual incentive plan maintained by the Company and/or
as the Committee so determines.
(b) Expenses. The Company shall promptly reimburse Executive for all
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Companys policies and
procedures now in force or as such policies and procedures may be modified with
respect to all senior executive officers of the Company. In addition, during the
Employment Period, Executive shall be entitled to, at the sole expense of the
Company, the use of an automobile appropriate to his position and no less
favorable than the automobile provided immediately prior to the date of this
Agreement.
(c) Vacation. Executive shall be entitled to the number of weeks of paid
vacation per year that he was eligible for immediately prior to the date of this
Agreement, but in no event less than four (4) weeks annually. Unused vacation
may be carried forward from year to year. In addition to vacation, Executive
shall be entitled to the number of sick days and personal days per year that
other senior executive officers of the Company with similar tenor are entitled
under the Companys policies.
(d) Services Furnished. During the Employment Period, the Company shall
furnish Executive, with office space, stenographic and secretarial assistance
and such other facilities and services no less favorable than those that he was
receiving immediately prior to the date of this Agreement or, if better, as
provided to other senior executive officers of the Company (other than the
Chairman and Chief Executive Officer).
(e) Welfare, Pension and Incentive Benefit Plans. During the Employment
Period, Executive (and his spouse and dependents to the extent provided therein)
shall be entitled to participate in and be covered under all the welfare benefit
plans or programs maintained by the Company from time to time for the benefit of
its senior executives (other than benefits maintained exclusively for the
Chairman and Chief Executive Officer) including, without limitation, all
medical, hospitalization, dental, disability, accidental death and dismemberment
and travel accident insurance plans and programs. The Company shall at all times
provide to Executive (and his spouse and dependents to the extent provided under
the applicable plans or programs) (subject to modifications affecting all senior
executive officers) the same type and levels of participation and benefits as
are being provided to other senior executives (and their spouses and dependents
to the extent provided under the applicable plans or programs) (other than
benefits maintained exclusively for the Chairman and Chief Executive Officer) on
the Commencement Date. In addition, during the Employment Period, Executive
shall be eligible to participate in all pension, retirement, savings and other
employee benefit plans and programs maintained from time to time by the Company
for the benefit of its senior executives.
(f) Stock Options.
(i) During each calendar year of the Employment Period occurring after
December 31, 1999, the Committee shall cause the Company to grant Executive a
stock option to acquire at least 50,000 shares of the Companys common stock
(each, an Option and collectively the Options) at such time(s) as the
Company has historically granted stock options to its senior executive officers
during the year; provided, that, such grants shall be made by at least December
31 of each calendar year occurring after December 31, 1999. Notwithstanding the
foregoing, unless otherwise waived by Executive in his sole discretion,
Executive shall receive no less than the number of Options granted during any
prior year of employment. In addition, to the extent necessary to carry out the
intended terms of this paragraph (f)(i), such number of options shall be
adjusted as is necessary to take into account any change in the common stock of
the Company in a manner consistent with adjustments made to other option holders
of the Company.
(ii) All Options described in paragraph (i) above shall be granted subject
to the following terms and conditions: (A) except as provided below, the Options
shall be granted under and subject to the Companys stock option plan; (B) the
exercise price per share of each Option shall be equal to the last reported sale
price of the Companys common stock on the New York Stock Exchange (or such
other principal trading market for the Companys common stock) at the close of
the trading day immediately preceding the date as of which the grant is made;
(C) each Option shall be vested and exercisable as determined by the Committee;
(D) each Option shall be exercisable for the ten (10) year period following the
date of grant whether or not Executive is then employed; and (E) each Option
shall be evidenced by, and subject to, a stock option agreement whose terms and
conditions are consistent with the terms hereof.
6. Termination. Executives employment hereunder may be terminated during
the Employment Period under the following circumstances:
(a) Death. Executives employment hereunder shall terminate upon his death.
(b) Disability. If, as a result of Executives incapacity due to physical
or mental illness, Executive shall have been substantially unable to perform his
duties hereunder for an entire period of six (6) consecutive months, and within
thirty (30) days after written Notice of Termination is given after such six (6)
month period, Executive shall not have returned to the substantial performance
of his duties on a full-time basis, the Company shall have the right to
terminate Executives employment hereunder for Disability, and such
termination in and of itself shall not be, nor shall it be deemed to be, a
breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executives
employment for Cause, and such termination in and of itself shall not be, nor
shall it be deemed to be, a breach of this Agreement. For purposes of this
Agreement, the Company shall have Cause to terminate Executives employment
upon Executives:
(i) final conviction of a felony involving moral turpitude; or
(ii) willful misconduct that is materially and demonstrably injurious
economically to the Company.
For purposes of this Section 6(c), no act, or failure to act, by Executive shall
be considered willful unless committed in bad faith and without a reasonable
belief that the act or omission was in the best interests of the Company or any
entity in control of, controlled by or under common control with the Company
(Affiliates) thereof. Cause shall not exist under paragraph (ii) unless and
until the Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after reasonable (but in no event less than
thirty (30) days) notice to Executive and an opportunity for Executive, together
with his counsel, to be heard before the Board), finding that in the good faith
opinion of the Board, Executive was guilty of the conduct set forth in paragraph
(ii) and specifying the particulars thereof in detail. This Section 6(c) shall
not prevent Executive from challenging in any arbitration or court of competent
jurisdiction the Boards determination that Cause exists or that Executive has
failed to cure any act (or failure to act) that purportedly formed the basis for
the Boards determination.
(d) Good Reason. Executive may terminate his employment for Good Reason
anytime after Executive has actual knowledge of the occurrence, without the
written consent of Executive, of one of the following events:
(i) (A) any change in the duties or responsibilities (including reporting
responsibilities) of Executive that is inconsistent in any adverse respect with
Executives position(s), duties, responsibilities or status with the Company
immediately prior to such change (including any diminution of such duties or
responsibilities) or (B) an adverse change in Executives titles or offices
(including, membership on the Board) with the Company;
(ii) a reduction in Executives Base Salary or Bonus opportunity;
(iii) (A) any requirement that Executive travel on Company business to an
extent substantially greater than the travel obligations of Executive
immediately prior to the date of this Agreement or (B) the relocation of the
Companys principal executive offices or Executives own office location to a
location more than fifteen (15) miles from their location immediately prior to
the date hereof;
(iv) the failure of the Company or any Affiliate to continue in effect any
material employee benefit plan, compensation plan, welfare benefit plan or
fringe benefit plan in which Executive is participating immediately prior to the
date of this Agreement or the taking of any action by the Company or any
Affiliate which would adversely affect Executives participation in or reduce
Executives benefits under any such plan, unless Executive is permitted to
participate in other plans providing Executive with substantially equivalent
benefits;
(v) any refusal by the Company or any Affiliate to continue to permit
Executive to engage in activities not directly related to the business of the
Company which Executive was permitted to engage in prior to the date of this
Agreement;
(vi) any purported termination of Executives employment for Cause which is
not effected pursuant to the procedures of Section 6(c) (and for purposes of
this Agreement, no such purported termination shall be effective);
(vii) the Companys or any Affiliates failure to provide in all material
respects the indemnification set forth in Section 11 of this Agreement;
(viii) a Change in Control of the Company; provided, that, the transaction
contemplated by the Company and AMFM, Inc. shall not be deemed to be a Change in
Control for purposes of this clause (viii);
(ix) the failure of the Company to obtain the assumption agreement from any
successor as contemplated in Section 13(a);
(x) the Company or any Affiliate providing Executive the notice not to
renew the Employment Period as contemplated by Section 2 hereof;
(xi) any time that neither X. Xxxxx Xxxx, Xxxx Xxxx nor Xxxxxxx Xxxx is the
Chairman and Chief Executive Officer of the Company;
(xii) any other breach of a material provision of this Agreement by the
Company or any Affiliate.
For purposes of clauses (i) through (vii) and (xii) above, an isolated,
insubstantial and inadvertent action taken in good faith and which is remedied
by the Company within ten (10) days after receipt of notice thereof given by
Executive shall not constitute Good Reason. Executives right to terminate
employment for Good Reason shall not be affected by Executives incapacity due
to mental or physical illness and Executives continued employment shall not
constitute consent to, or a waiver of rights with respect to, any event or
condition constituting Good Reason.
(e) Without Cause. The Company shall have the right to terminate
Executives employment hereunder without Cause by providing Executive with a
Notice of Termination at least thirty (30) days prior to such termination, and
such termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement. Notwithstanding any other provision of this Agreement
to the contrary, in the event that Executives employment is terminated by the
Company without Cause within six (6) months prior to the date that, or on or one
(1) year after the date that, X. Xxxxx Xxxx or Xxxx Xxxx is no longer the
Chairman and Chief Executive Officer of the Company for any reason, then
Executive shall automatically be deemed to have terminated his employment for
Good Reason under Section 6(d)(xi) and the Severance Multiple (as defined below)
shall be fourteen (14) and the Company shall make all of the payments due under
Section 8(a) of this Agreement to Executive, off-set only by amounts, if any,
already paid under Section 8(a).
(f) Without Good Reason. Executive shall have the right to terminate his
employment hereunder without Good Reason by providing the Company with a Notice
of Termination at least thirty (30) days prior to such termination, and such
termination shall not in and of itself be, nor shall it be deemed to be, a
breach of this Agreement.
For purposes of this Agreement, a Change in Control of the Company means
the occurrence of one of the following events:
(1) individuals who, on the Commencement Date, constitute the Board (the
Incumbent Directors) cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director subsequent to the
Commencement Date whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the Board (either
by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without objection to such
nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies by or on
behalf of any person other than the Board shall be an Incumbent Director;
(2) any person (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the Exchange Act) and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after the Commencement
Date, a beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Companys then outstanding securities eligible
to vote for the election of the Board (the Company Voting Securities);
provided, however, that an event described in this paragraph (2) shall not be
deemed to be a Change in Control if any of following becomes such a beneficial
owner: (A) the Company or any majority-owned subsidiary (provided, that this
exclusion applies solely to the ownership levels of the Company or the
majority-owned subsidiary), (B) any tax-qualified, broad-based employee benefit
plan sponsored or maintained by the Company or any majority-owned subsidiary,
(C) any underwriter temporarily holding securities pursuant to an offering of
such securities, (D) any person pursuant to a Non-Qualifying Transaction (as
defined in paragraph (3)), or (E) Executive or any group of persons including
Executive (or any entity controlled by Executive or any group of persons
including Executive).
(3) the approval by the shareholders of the Company of a merger,
consolidation, share exchange or similar form of transaction involving the
Company or any of its subsidiaries, or the sale of all or substantially all of
the Companys assets (a Business Transaction), unless immediately following
such Business Transaction (i) more than 65% of the total voting power of the
entity resulting from such Business Transaction or the entity acquiring the
Companys assets in such Business Transaction (the Surviving Corporation) is
beneficially owned, directly or indirectly, by the Companys shareholders
immediately prior to any such Business Transaction, and (ii) no person (other
than the persons set forth in clauses (A), (B), or (C) of paragraph (2) above or
any tax-qualified, broad-based employee benefit plan of the Surviving
Corporation or its Affiliates) beneficially owns, directly or indirectly, 20% or
more of the total voting power of the Surviving Corporation (a Non-Qualifying
Transaction); or
(4) Board approval of a liquidation or dissolution of the Company, unless
the voting common equity interests of an ongoing entity (other than a
liquidating trust) are beneficially owned, directly or indirectly, by the
Companys shareholders in substantially the same proportions as such
shareholders owned the Companys outstanding voting common equity interests
immediately prior to such liquidation and such ongoing entity assumes all
existing obligations of the Company to Executive under this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment by the
Company or by Executive during the Employment Period (other than termination
pursuant to Section 6(a)) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 14. For purposes of this
Agreement, a Notice of Termination shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executives employment under the provision so
indicated.
(b) Date of Termination. Date of Termination shall mean (i) if
Executives employment is terminated by his death, the date of his death, (ii)
if Executives employment is terminated pursuant to Section 6(b), thirty (30)
days after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a full-time basis
during such thirty (30) day period), and (iii) if Executives employment is
terminated for any other reason, the date on which a Notice of Termination is
given or any later date (within thirty (30) days after the giving of such
notice) set forth in such Notice of Termination.
8. Compensation Upon Termination or During Disability. In the event
Executive is disabled or his employment terminates during the Employment Period,
the Company shall provide Executive with the payments and benefits set forth
below. Executive acknowledges and agrees that the payments set forth in this
Section 8 constitute liquidated damages for termination of his employment during
the Employment Period.
(a) Termination By Company without Cause or By Executive for Good Reason.
If Executives employment is terminated by the Company without Cause or by
Executive for Good Reason:
(i) within five (5) days following such termination, the Company shall pay
to Executive (A) his Base Salary, Bonus and accrued vacation pay through the
Date of Termination, as soon as practicable following the Date of Termination,
and (B) a lump-sum cash payment equal to seven (7) times (the Severance
Multiple) the sum of Executives Base Salary and highest Bonus paid to
Executive in the three year period preceding such termination (including, for
this purpose, any and all bonuses paid to Executive prior to the date of this
Agreement); provided, that, for purposes of this Section 8(a)(i), Executives
Bonus shall be deemed to be no less than $1,000,000; provided, further, that, if
Executive terminates his employment for the Good Reason event (whether or not in
conjunction with any other Good Reason event) set forth in Section 6(d)(xi) (or
is deemed to have terminated his employment under Section 6(d)(xi) in accordance
with Section 6(e) of this Agreement), the Severance Multiple shall be equal to
fourteen (14); and
(ii) the Company shall maintain in full force and effect, for the continued
benefit of Executive, his spouse and his dependents for a period of seven (7)
years following the Date of Termination the medical, hospitalization, dental,
and life insurance programs in which Executive, his spouse and his dependents
were participating immediately prior to the Date of Termination at the level in
effect and upon substantially the same terms and conditions (including without
limitation contributions required by Executive for such benefits) as existed
immediately prior to the Date of Termination; provided, that, if Executive, his
spouse or his dependents cannot continue to participate in the Company programs
providing such benefits, the Company shall arrange to provide Executive, his
spouse and his dependents with the economic equivalent of such benefits which
they otherwise would have been entitled to receive under such plans and programs
(Continued Benefits), provided, that, such Continued Benefits shall terminate
on the date or dates Executive receives equivalent coverage and benefits,
without waiting period or pre-existing condition limitations, under the plans
and programs of a subsequent employer (such coverage and benefits to be
determined on a coverage-by-coverage or benefit-by-benefit, basis); and
(iii) the Company shall reimburse Executive pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iv) Executive shall be entitled to any other rights, compensation and/or
benefits as may be due to Executive in accordance with the terms and provisions
of any agreements, plans or programs of the Company; and
(v) As of the Date of Termination, Executive shall be granted a stock
option to acquire 1,000,000 shares of the Companys common stock (Termination
Option) under the following conditions, (A) except as provided below, the
Termination Option shall be granted under and subject to the Companys stock
option plan; (B) the exercise price per share of the Termination Option shall be
equal to the last reported sale price of the Companys common stock on the New
York Stock Exchange (or such other principal trading market for the Companys
common stock) at the close of the trading day immediately preceding the Date of
Termination; (C) the Termination Option shall be 100% vested and exercisable on
the date of grant; (D) the Termination Option shall be exercisable for the ten
(10) year period following the Date of Termination whether or not Executive is
still providing services to the Company; and (E) each Option shall be evidenced
by, and subject to, a stock option agreement whose terms and conditions are
consistent with the terms hereof; provided, that, if Executive terminates his
employment for the Good Reason event (whether or not in conjunction with any
other Good Reason event) set forth in Section 6(d)(xi) (or is deemed to have
terminated his employment under Section 6(d)(xi) in accordance with Section 6(e)
of this Agreement), the number of Termination Options Executive shall receive
shall be equal to 2,000,000. In addition, to the extent necessary to carry out
the intended terms of this paragraph (a)(v), such number of Termination Options
shall be adjusted as is necessary to take into account any change in the common
stock of the Company in a manner consistent with adjustments made to other
option holders of the Company. The Company shall take all action necessary such
that the shares of common stock issuable upon exercise of the Termination
Options (and all other shares of common stock held by Executive) are registered
on Form S-4 or Form S-8 (or any successor or other appropriate forms).
(vi) Notwithstanding the terms or conditions of any stock option, stock
appreciation right or similar agreements between the Company and Executive to
the contrary, and for purposes thereof, such agreements shall be deemed to be
amended in accordance with this Section 8(a)(vi) if need be as of the Date of
Termination and neither the Company, the Board nor the Committee shall take or
assert any position contrary to the foregoing, Executive shall vest, as of the
Date of Termination, in all rights under such agreements (i.e., stock options
that would otherwise vest after the Date of Termination) and thereafter shall be
permitted to exercise any and all such rights until the end of the term of such
awards (regardless of any termination of employment restrictions therein
contained) and restricted stock held by Executive shall become immediately
vested as of the Date of Termination; and
(vii) Executive shall be paid a lump sum payment equal to the amount of
compensation or contributions (as the case may be) by the Company that Executive
would have been entitled to receive (assuming he would have received the maximum
amount payable or contributable under each plan or arrangement for any year)
under any plan or arrangement he was then participating (or entitled to
participate in) for a seven (7) year period following the Date of Termination;
and
(viii) Any and all insurance benefits or policies for the benefit of
Executive shall become the sole property of Executive and, to the extent
applicable, all of the Companys rights therein (including repayment of
premiums) shall be forfeited by the Company and, to the extent not already made,
the Company shall make all contributions or payments required of such policies
for the year of termination; and
(ix) Any amount payable under this Section 8(a) shall also include an
additional cash payment which shall equal any and all federal, state and local
taxes due upon the provision of any such benefits or payments thereunder (other
than taxes due under the operation of Section 4999 of the Code which Section of
the Code is addressed in Section 8(e) hereof and, if applicable, shall work in
conjunction with this Section 8(a)(ix)), which shall be payable to Executive
within five (5) business days following his Date of Termination and such
additional payment shall be grossed-up for any additional taxes due thereon (and
any taxes thereon, etc.) in a manner consistent with the manner set forth in
Section 8(e) of this Agreement, whether or not such Section 8(e) is applicable.
(b) Cause or By Executive Without Good Reason. If Executives employment is
terminated by the Company for Cause or by Executive (other than for Good
Reason):
(i) the Company shall pay Executive his Base Salary, Bonus and his accrued
vacation pay through the Date of Termination, as soon as practicable following
the Date of Termination; and
(ii) the Company shall reimburse Executive pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive shall be entitled to any other rights, compensation and/or
benefits as may be due to Executive in accordance with the terms and provisions
of any agreements, plans or programs of the Company.
(c) Disability. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
(Disability Period), Executive shall continue to receive his full Base Salary
set forth in Section 5(a) until his employment is terminated pursuant to Section
6(b). In the event Executives employment is terminated for Disability pursuant
to Section 6(b):
(i) the Company shall pay to Executive (A) his Base Salary, Bonus and
accrued vacation pay through the Date of Termination, as soon as practicable
following the Date of Termination, and (B) continued Base Salary (as provided
for in Section 5(a)) and Continued Benefits for seven (7) years; and
(ii) the Company shall reimburse Executive pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive shall be entitled to any other rights, compensation and/or
benefits as may be due to Executive in accordance with the terms and provisions
of any agreements, plans or programs of the Company; and
(iv) Executive shall be paid the amount of compensation or contributions
(as the case may be) by the Company that Executive would have been entitled to
receive (assuming he would have received the maximum amount payable or
contributable under each plan or arrangement for any year) under any plan or
arrangement he was then participating (or entitled to participate in) for a
seven (7) year period following the Date of Termination.
(d) Death. If Executives employment is terminated by his death:
(i) the Company shall pay in a lump sum to Executives beneficiary, legal
representatives or estate, as the case may be, Executives Base Salary, Bonus
and accrued vacation pay through the Date of Termination and $1,000,000 (which
may be paid through insurance) and shall provide Executives spouse and
dependents with Continued Benefits for seven (7) year; and
(ii) the Company shall reimburse Executives beneficiary, legal
representatives, or estate, as the case may be, pursuant to Section 5 for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executives beneficiary, legal representatives or estate, as the case
may be, shall be entitled to any other rights, compensation and benefits as may
be due to any such persons or estate in accordance with the terms and provisions
of any agreements, plans or programs of the Company; and
(iv) Executives beneficiary, legal representatives or estate, as the case
may be shall be paid the amount of compensation or contributions (as the case
may be) by the Company that Executive would have been entitled to receive
(assuming he would have received the maximum amount payable or contributable
under each plan or arrangement for any year) under any plan or arrangement he
was then participating (or entitled to participate in) for a seven (7) year
period following the Date of Termination.
(e) Additional Payments. (i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment, award,
benefit or distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company or any entity which effectuates a Change in Control
(or other change in ownership) to or for the benefit of Executive (the
Payments) would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties are incurred by Executive 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 Company
shall pay to Executive an additional payment (a Gross-Up Payment) in an amount
such that after payment by Executive of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y)
the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in Executives adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made. For purposes of determining the amount of the
Gross-Up Payment, Executive shall be deemed to (A) pay federal income taxes at
the highest marginal rates of federal income taxes at the highest marginal rate
of taxation for the calendar year in which the Gross-Up Payment is to be made,
(B) pay applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes and (C) have otherwise allowable
deductions for federal income tax purposes at least equal to those which could
be disallowed because of the inclusion of the Gross-Up Payment in Executives
adjusted gross income.
(ii) Subject to the provisions of Section 8(e)(i), all determinations
required to be made under this Section 8(e), including whether and when a
Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determinations, shall be made by
a nationally recognized public accounting firm that is selected by Executive
(the Accounting Firm) which shall provide detailed supporting calculations
both to the Company and Executive within fifteen (15) business days of the
receipt of notice from the Company or Executive that there has been a Payment,
or such earlier time as is requested by the Company or Executive (collectively,
the Determination). All fees and expenses of the Accounting Firm shall be
borne solely by the Company and the Company shall enter into any agreement
requested by the Accounting Firm in connection with the performance of the
services hereunder. The Gross-Up Payment under this Section 8(e) with respect to
any Payments made to Executive shall be made no later than thirty (30) days
following such Payment. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall furnish Executive with a written opinion to such
effect, and to the effect that failure to report the Excise Tax, if any, on
Executives applicable federal income tax return should not result in the
imposition of a negligence or similar penalty.
(iii) As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the Determination, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made
(Underpayment) or Gross-Up Payments are made by the Company which should not
have been made (Overpayment), consistent with the calculations required to be
made hereunder. In the event that Executive thereafter is required to make
payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the
benefit of Executive. In the event the amount of the Gross-Up Payment exceeds
the amount necessary to reimburse Executive for his Excise Tax, the Accounting
Firm shall determine the amount of the Overpayment that has been made and any
such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by Executive (to the extent he
has received a refund if the applicable Excise Tax has been paid to the Internal
Revenue Service) to or for the benefit of the Company. Executive shall
cooperate, to the extent his expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contest or disputes
with the Internal Revenue Service in connection with the Excise Tax.
9. Mitigation. Executive shall not be required to mitigate amounts payable
under this Agreement by seeking other employment or otherwise, and there shall
be no offset against amounts due Executive under this Agreement on account of
subsequent employment except as specifically provided herein. Additionally,
amounts owed to Executive under this Agreement shall not be offset by any claims
the Company may have against Executive and the Companys obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder, shall not be affected by any other circumstances, including, without
limitation, any counterclaim, recoupment, defense or other right which the
Company may have against Executive or others.
10. Restrictive Covenants.
(a) Confidential Information. Executive shall hold in a fiduciary capacity
for the benefit of the Company all trade secrets and confidential information,
knowledge or data relating to the Company and its businesses and investments,
which shall have been obtained by Executive during Executives employment by the
Company and which is not generally available public knowledge (other than by
acts by Executive in violation of this Agreement). Except as may be required or
appropriate in connection with his carrying out his duties under this Agreement,
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or any legal process, or as is necessary in
connection with any adversarial proceeding against the Company (in which case
Executive shall use his reasonable best efforts in cooperating with the Company
in obtaining a protective order against disclosure by a court of competent
jurisdiction), communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company or on behalf of the Company in the furtherance of its business or to
perform duties hereunder.
(b) Non-Solicitation.Executive hereby agrees, in consideration of his
employment hereunder and in view of the confidential position to be held by
Executive hereunder, that after his termination of employment in which he is
entitled to the benefits set forth in Section 8(a) hereof and through the second
anniversary thereof, Executive shall not directly or indirectly induce any
employee of the Company to terminate such employment or to become employed by
any other radio broadcasting station.
(c) Non-Competition. Executive hereby agrees, in consideration of his
employment hereunder and in view of the confidential position to be held by
Executive hereunder, that after his termination of employment in which he is
entitled to the benefits set forth in Section 8(a) hereof and through the second
anniversary thereof, he shall not be employed by or perform activities on behalf
of, or have an ownership interest in, any person, firm, corporation or other
entity, or in connection with any business enterprise, that is directly or
indirectly engaged in any of the radio, television, or related business
activities in which the Company and its subsidiaries have significant
involvement (other than direct or beneficial ownership of up to five percent
(5%) of any entity whether or not in the same or competing business.
(e) Blue Pencil. The parties hereby acknowledge that the restrictions in
this Section 10 have been specifically negotiated and agreed to by the parties
hereto and are limited only to those restrictions necessary to protect the
Company and its subsidiaries from unfair competition. The parties hereby agree
that if the scope or enforceability of any provision, paragraph or subparagraph
of this Section 10 is in any way disputed at any time, and should a court find
that such restrictions are overly broad, the court may modify and enforce the
covenant to the extent that it believes to be reasonable under the
circumstances. Each provision, paragraph and subparagraph of this Section 10 is
separable from every other provision, paragraph, and subparagraph and
constitutes a separate and distinct covenant. Executive acknowledges that the
Company operates in major, medium and small sized markets throughout the United
States and North America and that the effect of Section 10(c) may be to prevent
him from working in a competitive business after his termination of employment
hereunder.
(f) Remedies. Executive hereby expressly acknowledges that any breach or
threatened breach by Executive of any of the terms set forth in Section 10 of
this Agreement may result in significant and continuing injury to the Company,
the monetary value of which would be impossible to establish. Therefore,
Executive agrees that the Company shall be entitled to apply for injunctive
relief in a court of appropriate jurisdiction.
11. Indemnification.
(a) General. The Company agrees that if Executive is made a party or a
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a Proceeding), by reason of the
fact that Executive is or was a trustee, director or officer of the Company or
any subsidiary of the Company or is or was serving at the request of the Company
or any subsidiary as a trustee, director, officer, member, employee or agent of
another corporation or a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a trustee, director, officer, member, employee or agent while
serving as a trustee, director, officer, member, employee or agent, Executive
shall be indemnified and held harmless by the Company to the fullest extent
authorized by Texas law, as the same exists or may hereafter be amended, against
all Expenses incurred or suffered by Executive in connection therewith, and such
indemnification shall continue as to Executive even if Executive has ceased to
be an officer, director, trustee or agent, or is no longer employed by the
Company and shall inure to the benefit of his heirs, executors and
administrators.
(b) Expenses. As used in this Agreement, the term Expenses shall include,
without limitation, damages, losses, judgments, liabilities, fines, penalties,
excise taxes, settlements, and costs, attorneys fees, accountants fees, and
disbursements and costs of attachment or similar bonds, investigations, and any
expenses of establishing a right to indemnification under this Agreement.
(c) Enforcement. If a claim or request under this Agreement is not paid by
the Company or on its behalf, within thirty (30) days after a written claim or
request has been received by the Company, Executive may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim or
request and if successful in whole or in part, Executive shall be entitled to be
paid also the expenses of prosecuting such suit. All obligations for
indemnification hereunder shall be subject to, and paid in accordance with,
applicable Texas law.
(d) Partial Indemnification. If Executive is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of any
Expenses, but not, however, for the total amount thereof, the Company, shall
nevertheless indemnify Executive for the portion of such Expenses to which
Executive is entitled.
(e) Advances of Expenses. Expenses incurred by Executive in connection with
any Proceeding shall be paid by the Company in advance upon request of Executive
that the Company pay such Expenses; but, only in the event that Executive shall
have delivered in writing to the Company (i) an undertaking to reimburse the
Company for Expenses with respect to which Executive is not entitled to
indemnification and (ii) an affirmation of his good faith belief that the
standard of conduct necessary for indemnification by the Company has been met.
(f) Notice of Claim. Executive shall give to the Company notice of any
claim made against him for which indemnification will or could be sought under
this Agreement. In addition, Executive shall give the Company such information
and cooperation as it may reasonably require and as shall be within Executives
power and at such times and places as are convenient for Executive.
(g) Defense of Claim. With respect to any Proceeding as to which Executive
notifies the Company of the commencement thereof:
(i) The Company will be entitled to participate therein at its own expense;
and
(ii) Except as otherwise provided below, to the extent that it may wish,
the Company will be entitled to assume the defense thereof, with counsel
reasonably satisfactory to Executive, which in the Companys sole discretion may
be regular counsel to the Company and may be counsel to other officers and
directors of the Company or any subsidiary. Executive also shall have the right
to employ his own counsel in such action, suit or proceeding if he reasonably
concludes that failure to do so would involve a conflict of interest between the
Company and Executive, and under such circumstances the fees and expenses of
such counsel shall be at the expense of the Company.
(iii) The Company shall not be liable to indemnify Executive under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. The Company shall not settle any action or claim in
any manner which would impose any penalty or limitation on Executive without
Executives written consent. Neither the Company nor Executive will unreasonably
withhold or delay their consent to any proposed settlement.
(h) Non-exclusivity. The right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in this Section 11 shall not be exclusive of any other right which
Executive may have or hereafter may acquire under any statute, provision of the
declaration of trust or certificate of incorporation or by-laws of the Company
or any subsidiary, agreement, vote of shareholders or disinterested directors or
trustees or otherwise.
12. Arbitration. Except as provided for in Section 10 of this Agreement, if
any contest or dispute arises between the parties with respect to this
Agreement, such contest or dispute shall be submitted to binding arbitration for
resolution in San Antonio, Texas in accordance with the rules and procedures of
the Employment Dispute Resolution Rules of the American Arbitration Association
then in effect. The decision of the arbitrator shall be final and binding on
both parties, and any court of competent jurisdiction may enter judgment upon
the award. The Company shall pay all expenses relating to such arbitration,
including, but not limited to, Executives legal fees and expenses, regardless
of outcome.
13. Successors; Binding Agreement.
(a) Companys Successors. No rights or obligations of the Company under
this Agreement may be assigned or transferred except that the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
Company shall mean the Company as herein before defined and any successor to
its business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 13 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(b) Executives Successors. No rights or obligations of Executive under
this Agreement may be assigned or transferred by Executive other than his rights
to payments or benefits hereunder, which may be transferred only by will or the
laws of descent and distribution. Upon Executives death, this Agreement and all
rights of Executive hereunder shall inure to the benefit of and be enforceable
by Executives beneficiary or beneficiaries, personal or legal representatives,
or estate, to the extent any such person succeeds to Executives interests under
this Agreement. Executive shall be entitled to select and change a beneficiary
or beneficiaries to receive any benefit or compensation payable hereunder
following Executives death by giving the Company written notice thereof. In the
event of Executives death or a judicial determination of his incompetence,
reference in this Agreement to Executive shall be deemed, where appropriate, to
refer to his beneficiary(ies), estate or other legal representative(s). If
Executive should die following his Date of Termination while any amounts would
still be payable to him hereunder if he had continued to live, all such amounts
unless otherwise provided herein shall be paid in accordance with the terms of
this Agreement to such person or persons so appointed in writing by Executive,
or otherwise to his legal representatives or estate.
14. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered either personally or by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Executive:
Xxxxxxx Xxxx
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
If to the Company:
Clear Channel Communications, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx
Attention: Xxxxxxx Xxxxxxx
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be amended,
modified, or waived unless such amendment or modification is agreed to in
writing signed by Executive and by a duly authorized officer of the Company, and
such waiver is set forth in writing and signed by the party to be charged. No
waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The respective rights and obligations of the
parties hereunder of this Agreement shall survive Executives termination of
employment and the termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts of law
principles.
16. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
18. Entire Agreement. Except as other provided herein, this Agreement sets
forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersede all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in
respect of such subject matter. Except as other provided herein, any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.
20. Withholding. All payments hereunder shall be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
21. Noncontravention. The Company represents that the Company is not
prevented from entering into, or performing this Agreement by the terms of any
law, order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a material
adverse effect on the Companys ability to enter into or perform this Agreement.
22. Section Headings. The section headings in this Employment Agreement are
for convenience of reference only, and they form no part of this Agreement and
shall not affect its interpretation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/Xxxx Xxxx
Name: Xxxx Xxxx
Title: President
/s/Xxxxxxx Xxxx
Xxxxxxx Xxxx
