SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.38
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
WHEREAS, Clear Channel Outdoor Holdings, Inc. (“Company”) and Xxxxxxxxxxx Xxxxxxx Xxxxxxxxxx (“Employee”) entered into an Employment Agreement effective January 24, 2012 (the “Agreement”);
WHEREAS, the parties entered into a First Amendment to Employment Agreement effective March 2, 2015 (the “First Amendment");
WHEREAS, the parties acknowledge Employee had the right to trigger Termination By Employee For Good Reason pursuant to Section 8(d) of the Agreement as a result of the change in position and duties related to the First Amendment, but the parties have agreed to continue employment; and
WHEREAS, the parties desire to amend the Agreement and First Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, the parties enter into this Second Amendment to Employment Agreement (the “Second Amendment”).
1. This Second Amendment is effective December 11, 2015 (“Effective Date”).
2. Section 1 (Term of Employment) of the Agreement is deleted in its entirety and replaced as follows:
This Agreement commences on January 24, 2012 (the “Effective Date”) and shall continue until December 31, 2017 (the “Initial Term”). On December 31, 2017 and on each annual anniversary thereof, the term of this Agreement shall be automatically extended for successive one-year periods, unless either party hereto elects not to extend this Agreement by giving written notice to the other party at least ninety (90) days prior to any such renewal date. Notwithstanding the foregoing, Employee’s employment hereunder may be earlier terminated in accordance with Section 8 hereof. The period of time between the Effective Date and the termination of Employee’s employment hereunder shall be referred to herein as the “Employment Period.”
3. Section 3(c) (Annual Bonus) is deleted in its entirety and replaced as follows:
(c) Annual Bonus. Eligibility for an annual cash bonus (the "Annual Bonus") is based on financial and performance criteria established by the Company and approved in the annual budget, and will be paid no later than March 15 each calendar year following the calendar year in which the Annual Bonus was earned. For calendar year 2012 and each calendar year thereafter during the Employment Period, Employee's target bonus (the "Target Bonus") shall be no less than One Million Dollars ($1,000,000.00), and Company will review and consider increases to the Target Bonus at Company’s sole discretion. Employee shall have an opportunity to earn up to 200% of such Target Bonus, in any event subject to meeting applicable performance goals as set forth in this Section 3(c). For the year ending December 31, 2012, Employee's Annual Bonus will be earned based on the achievement of goals established with respect to the following performance criteria (i) 50% based on the achievement of an OIBDAN target for Clear Channel International approved by the Board, (ii) 20% based on the achievement of an OIBDAN target for Clear Channel Outdoor - Americas approved by the Board, and (iii) 30% based on the achievement of to be agreed upon MBO targets. For subsequent years, Employee's Annual Bonus will be earned based on the
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achievement of goals established by the Compensation Committee of the Board (the "Committee") with respect to the following performance criteria: (x) 70% based on the achievement of targeted levels of OIBDAN by Clear Channel International and (y) 30% based on the achievement of specified MBO targets.
The payment of any Annual Bonus shall be subject to Section 19 and shall be within the Short-Term Deferral period under Section 409A (as defined in Section 19) and applicable regulations and net of any applicable withholding tax or other deductions required by law or Company benefit plans.
4. A new Section 3(e) (Sale Bonus) is inserted as follows and subsequent subsections are renumbered accordingly:
(e) Sale Bonus. Upon the consummation of the disposition of the European assets of Clear Channel International, Employee shall be considered for a gross lump sum cash payment in an amount determined by Company in its sole discretion.
5. A new Section 3(h) (Annual Long Term Incentive) is inserted as follows and subsequent subsections are renumbered accordingly:
(h) Annual Long Term Incentive. Beginning in 2016, Employee will be eligible for additional Long Term Incentive opportunities, the allocation of such award between stock options and restricted shares of Class A common stock of Clear Channel Outdoor Holdings, Inc. (“CCOH”) to be determined by the Compensation Committee of CCOH, consistent with other comparable positions pursuant to the terms of the award agreement(s), taking into consideration demonstrated performance and potential, and subject to approval by Employee’s Manager and the Board of Directors or the Compensation Committee of CCOH, as applicable.
6. Section 8(d)(ii) (subsection within Termination By Employee for Good Reason) is deleted in its entirety and replaced as follows:
(ii) a material change in Employee’s titles, duties or authorities; provided that for purposes of this sub-clause (ii), Employee shall not have “Good Reason” to terminate if, after a restructuring or reorganization of the Company or a sale or spinoff of all or a portion of the Company’s operations, Employee continues as Chief Executive Officer of Clear Channel International (or any of its successors);
7. The following provisions relating to the Payment and Equity will apply so long as Employee's employment has not ended prior to March 1, 2016.
In exchange for the payments and benefits Employee would have received or otherwise been entitled had he elected to terminate his employment with Company for “Good Reason” pursuant to Section 8(d) of the Agreement as a result of the change in position and duties related to the First Amendment, which for purposes of award agreements previously provided to Employee equated to Grantee’s employment being terminated by Grantee for Good Reason, the parties agree as follows:
Payment. Employee shall receive a payment equivalent to the amount of the Severance Payment he would have otherwise received in accordance with the terms of Section 9(d) and (f) of the Agreement except, however, that instead of being paid in equal monthly installments for a period of twelve (12) months, it shall be paid in two (2) annual installments, as follows: (i) the first installment of $1,100,000.00 shall be paid on March 1, 2016; and (ii) the second installment of $1,100,000.00 shall be paid on March 1, 2017 ('the Payment').
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Save where the Employee's employment has ended by termination by Employee without Good Reason (in accordance with section 8(e) of the Agreement), should Employee’s employment end prior to receipt of any portion of the Payment to which he is entitled as a result of this Second Amendment (which the parties agree shall be construed to require a “separation from services” as defined in section 1.409(A)-1(h) of the Treasury Regulations), he shall receive any unpaid portion on a date determined by Company within thirty (30) days of his last day of employment. For the avoidance of doubt, Employee shall receive such unpaid portion(s) in the event that Employee's employment has ended as a result of a restructuring or reorganization of the Company or a sale or spinoff of all or a portion of the Company’s operations and Employee continues as Chief Executive Officer of Clear Channel International (or any of its successors).
If Employee's employment terminates prior to March 1, 2016 and the Employee is not entitled to the Payment in accordance with the above provisions, Employee shall remain entitled to receive compensation, if any, in accordance with Sections 8 and 9 of the Agreement (Section 8(d)(ii) applying as amended by the Second Amendment).
Equity. On March 1, 2016, Employee shall be entitled to vesting of one-half of any then unvested restricted stock units, and on March 1, 2017, vesting of the other half of such restricted stock units. Save where the Employee's employment has ended by termination by Employee without Good Reason (in accordance with section 8(e) of the Agreement), should Employee’s employment end prior to vesting of such restricted stock units, any unvested restricted stock units shall automatically vest on his last day of employment. An amended award agreement is attached hereto as Exhibit A.
For the avoidance of doubt, even if Employee's employment terminates on or after March 1, 2016, notwithstanding any payments made or stock vested in accordance with the provisions set out in this section 7, Sections 8 and 9 of the Agreement shall remain in full force and effect and Employee will remain entitled to compensation on termination in accordance with those terms.
8. This Second Amendment represents the complete and total understanding of the parties with respect to the content thereof, and cannot be modified or altered except if done so in writing, and executed by all parties. All other provisions of the Agreement and First Amendment shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment on the date written below and upon full execution by all parties, this Agreement shall be effective as set forth in Section 1 above.
EMPLOYEE:
_____________________________________ Date: _________________________
Xxxxxxxxxxx Xxxxxxx Xxxxxxxxxx
COMPANY:
_____________________________________ Date: _________________________
Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
APPROVED & PREPARED BY: LW/tg
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Exhibit A
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