EMPLOYMENT AGREEMENT
Exhibit 10.1
This Agreement (“Agreement”) is entered into by and between Xxx Xxxxxxxx
(“Employee”) and Westwood One, Inc. (the “Company”).
1. Employment. The Company hereby employs Employee, and Employee accepts such employment, and
agrees to devote Employee’s full time and efforts to the interests of the Company upon the terms
and conditions hereinafter set forth.
2. Term of Employment. Subject to the provisions for termination hereinafter provided,
Employee’s term of employment by the Company shall commence on September 17, 2008 (the
“Effective Date”) and shall continue in effect until the second anniversary thereof (the
“Term”). If the Company desires not to extend this Agreement, it shall deliver written
notice to Employee on or prior to the 90th day immediately preceding the expiration of
the Term of its intention to terminate this Agreement effective on the last day of the Term.
Unless otherwise terminated pursuant hereto, if Employee continues to be employed by the Company
after the Term, then Employee’s employment shall be deemed to continue until such time as either
party shall deliver written notice to the other party and this Agreement shall terminate thirty
(30) days after the giving of such notice. The period from the Effective Date through the date of
termination is hereinafter referred to as the “Employment Period”.
3. Services to be Rendered by Employee.
(a) During the Employment Period, Employee shall serve as Executive Vice President and Chief
Financial Officer. Employee shall report directly to the Chief Executive Officer and Chair of the
Audit Committee. Employee shall perform such duties as from time to time may be delegated to
Employee and will continue to perform duties as requested by the Chief Executive Officer and Chair
of the Audit Committee. Employee shall devote all of Employee’s professional time, energy and
ability to the proper and efficient conduct of the Company’s business; provided,
however, that the foregoing shall not prevent Employee from engaging in the activities set
forth on Appendix I attached this Agreement (the “Approved Activities”) in
accordance with the terms and conditions set forth therein, so long as the Approved Activities do
not, individually or in the aggregate, interfere or conflict with Employee’s performance of his
duties hereunder. Employee hereby agrees that he shall promptly comply with the reasonable request
made by any of the Chief Executive Officer, the Board of Directors (the “Board”), the
Compensation Committee of the Board (the “Compensation Committee”), the Chair of the Audit
Committee or any designee of any of the foregoing, which may be made at any time during the
Employment Period upon reasonable written notice, to cease performing all or a portion of the
Approved Activities to the extent that such requesting party reasonably determines that such
Approved Activities or portion thereof interferes or conflicts with Employee’s performance of his
duties hereunder. Employee shall observe and comply with all reasonable lawful directions and
instructions by and on the part of the Chief Executive Officer, the Board or their designee and
endeavor to promote the interests of the Company and not at any time do anything which may cause or
tend to be likely to cause any loss or damage to the Company in business, reputation or otherwise.
Employee shall be based out of the Company’s Xxxxxx City office; provided, however, Employee shall
spend a minimum of two (2) weeks per month at the Company’s New York City office.
(b) The Company may from time to time call on Employee to perform services related to the
business of developing and broadcasting network and syndicated radio programming and traffic, news,
sports and weather reports, which may include (in the Company’s sole discretion) contributing to
the day-to-day management and operation of such business, soliciting
Sponsors and Affiliates (as such terms are defined in Section 11 hereof) or dealing with their
accounts or other activities related to the Company’s business, as reasonably requested from time
to time by the Chief Executive Officer, the President, the Board or their designee.
(c) Employee acknowledges that Employee will have and owe fiduciary duties to the Company and
its shareholders including, without limitation, the duties of care, confidentiality and loyalty.
Without limiting the foregoing, effective as of the Effective Date Employee hereby represents,
warrants and covenants to the Company that he (i) shall at all times during the Employment Period
act in the best interests of the Company, (ii) shall at all times during the Employment Period act
in the best interests of the Company’s shareholders viewed for this purpose as a single entity
without regard to the interests, desires or wishes of any single shareholder, including without
limitation, the interests, desires or wishes of Gores Radio Holdings, LLC (together with its
affiliates, “Gores”), (iii) shall not, nor shall any of his immediate family members, at
any time during the Employment Period act, directly or indirectly, as an agent or representative
of, or otherwise perform services in any other capacity for, Gores, (iv) shall not, nor shall any
of his immediate family members, at any time during the Employment Period make, directly or
indirectly, any investments or contributions in the Funds (as such term is defined in Appendix II
attached to this Agreement) that are not required of the other limited partners who previously
elected to become participants in the Funds on the same terms and conditions set forth in such
agreements that govern the applicable funds (as in effect immediately prior to the Effective Date)
and (v) shall not, nor shall any of his immediate family members, at any time during the Employment
Period receive or accept from Gores, or during the Employment Period enter into any agreement or
promise (written or unwritten) to receive from Gores at any time following the Employment Period,
in each case directly or indirectly, any compensation, remuneration, benefits, amounts or any other
item of any value; provided, however, the foregoing shall not prohibit Employee
from receiving or holding the amounts and rights set forth on Appendix II attached to this
Agreement in accordance with the terms and conditions set forth therein.
(d) EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED A COPY OF THE COMPANY’S SEXUAL HARASSMENT
POLICIES AND PROCEDURES, CODE OF ETHICS AND CODE OF CONDUCT, AND UNDERSTANDS AND AGREES TO ABIDE BY
SUCH POLICIES.
4. Compensation.
(a) Base Salary. For the services to be rendered by Employee during the Employment Period,
the Company shall pay Employee, and Employee agrees to accept a monthly base salary (the “Base
Salary”) of $50,000 for the Employment Period, payable in accordance with the Company’s normal
payroll practices. Employee shall be eligible for annual increases in his Base Salary in an amount
of up to five percent (5%), in the sole and absolute discretion of the Compensation Committee or
its designee.
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(b) Discretionary Bonus. Employee shall be eligible for an annual discretionary bonus target
valued at up to $400,000 for each of calendar years 2008 (pro-rated for 2008), 2009 and 2010
(pro-rated for the period from January 1, 2010 to the last day of the Term) in the sole and
absolute discretion of the Compensation Committee or its designee. The Company may use Employee’s
and the Company’s achievement of financial goals as general guidelines to determine Employee’s
eligibility for a discretionary bonus. Any cash component of any bonus will be payable in
accordance with the Company’s normal payroll practices in the year following the year for which it
is earned, but no later than the date the majority of “Comparable Employees” (as defined below) are
paid, but in no event later than April 30 of the calendar year subsequent to which such bonus is
earned. Employee shall not be eligible for any bonus for a calendar year, pro-rated or
otherwise, if Employee is not an Employee of the Company: (i) at the end of the applicable calendar
year (except, in the case of the pro-rated bonus for 2010 for which Employee must remain employed
only through the last day of the Term; such bonus, the “2010 Pro Rata Bonus”) or (ii) if
Employee has materially breached this Agreement, which breach remains uncured in accordance with
Section 6(a) hereof.
(c) Equity Compensation. Company management hereby agrees that prior to the Effective Date,
it shall recommend that the Compensation Committee grant Employee on the date soonest practicable
and legally permissible on or after the Effective Date an award of equity compensation of stock
options to purchase 600,000 shares of Company common stock to vest in three equal installments on
each anniversary of the Effective Date, subject to the terms and conditions of the Company’s
applicable equity compensation plan pursuant to which such stock option grant is made (such award,
the “2008 Signing Award”). The exercise price of such stock options will be the closing
price of the Company’s common stock on the date of grant by the Compensation Committee.
(d) Equity Awards. Beginning in calendar year 2010, Employee shall be eligible for such
future grants of equity compensation recommended by Company management, subject to the approval of
and in the sole and absolute discretion of the Compensation Committee or its designee. All equity
compensation granted to Employee, including such awards made pursuant to Sections 4(c) and 4(d)
hereof, shall be granted subject to the terms and conditions of the Company’s equity compensation
plan, and using such form award as the Compensation Committee has approved for grants to Company
employees.
(e) Benefits. During the Employment Period, Employee shall accrue vacation on a monthly basis
and at a rate of four (4) weeks per year (pro-rated for partial years). Except as expressly set
forth herein, any vacation time shall be subject to prevailing practice and/or policies of the
Company in regard to vacations for its employees. Employee shall be entitled to participate in all
benefits plans that may be established by the Company for employees that report directly to the
Chief Executive Officer (such employees, “Comparable Employees”), subject to the terms and
conditions of such plans, provided that in the event that Employee shall have elected COBRA
coverage with his prior employer, the Company shall reimburse Employee for any such COBRA payments
made by him during the first 90 days of the Term.
(f) Signing Bonus. In addition to the other amounts due hereunder, Company agrees to pay
Employee within 30 days of the Effective Date, the amount of $15,000 as a signing bonus.
(g) Total Compensation. Employee agrees and acknowledges by his signature hereto that the
compensation set forth in this Section 4 constitutes all of the compensation payable to Employee
for his services hereunder and that no other compensation shall be due to Employee hereunder.
5. Expenses. Subject to compliance by Employee with such policies regarding expenses and
expense reimbursement as may be adopted from time to time by the Company, the Company shall
reimburse Employee, or cause Employee to be reimbursed, in cash for all reasonable expenses in
accordance with the Company’s reimbursement policy as in effect from time to time.
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6. Termination of Employment.
(a) During the Employment Period, the Company shall have the right to terminate the employment
of Employee hereunder immediately by giving notice thereof to Employee if any of the following has
occurred, which notice shall state the circumstances or events constituting Cause (each, a
“Cause Event”); provided, that, in the case of clauses (i) through (iii) of
this Section 6(a), Employee shall be given a reasonable opportunity to cure, but in no event more
than ten (10) business days, to the extent such act or failure to act is curable:
| (i) | if Employee has (A) failed, refused or habitually has neglected to
carry out or to perform the reasonable duties required of Employee hereunder or
otherwise materially breached any provision of this Agreement (other than Section
7, 8 or 10 hereof, which are governed by Section 6(a)(iii) hereof), (B) willfully
breached any statutory or common law duty, including any fiduciary duty owed to
the Company; (C) breached Section 3(c) or 3(d) of this Agreement; or (D) violated
any of the Company’s internal policies or procedures. |
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| (ii) | if Employee is convicted of, or enters into a plea of nolo
contendere or guilty to, a felony or a crime involving moral turpitude, or
if Employee has willfully engaged in conduct which would injure the reputation of
the Company in any material respect or otherwise adversely affect its interests in
any material respect if Employee were retained as an employee of the Company; |
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| (iii) | if Employee breaches any of the provisions of Section 7 or 10 hereof
or breaches in any material respect either Section 8 or any of the terms or
obligations of any other non-competition and/or confidentiality agreements entered
into between Employee and the Company, or the Company’s Related Entities, if any; |
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| (iv) | if Employee commits an act of fraud, misrepresentation or dishonesty
related to his employment with the Company, or steals or embezzles assets of the
Company; or |
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| (v) | if Employee engages in a conflict of interest or self-dealing. |
For purposes of this Section 6(a), no act or failure to act on the part of Employee shall be
considered “willful” unless it is done, or omitted to be done, by Employee in bad faith or without
a reasonable basis for belief that such act or failure to act is in the best interests of the
Company.
(b) Employee’s employment with the Company shall automatically terminate (without notice to
Employee’s estate) upon the death of Employee. Employee’s employment with the Company may be
terminated upon ten (10) day’s prior written notice by the Company to Employee upon Employee’s
Disability. For purposes of this Agreement, the term “Disability” means Employee’s inability, by
reason of physical disability or other incapacity (as may be defined in applicable disability
insurance policies), to carry out or to perform the duties required of Employee hereunder for a
continuous period of 90 days or for a non-continuous period of 180 days in the aggregate in any
365-day period; provided, however, that Employee’s compensation during any period
in which Employee is unable to perform the duties required of Employee hereunder shall be reduced
in accordance with the Company’s policies and by any disability payments (excluding any
reimbursements for medical expenses and the like) which Employee is entitled to receive under group
or other disability insurance policies of the Company during such period.
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(c) In the event of any termination of Employee’s employment by the Company other than
pursuant to Section 6(a) or 6(b) (provided that the benefit described in clause (ii) below shall
not be paid in the event of a termination of employment by the Company upon a Cause Event),
Employee (or Employee’s estate, as the case may be) shall be entitled to receive (i) the Base
Salary herein provided prorated to the date of termination paid in accordance with the Company’s
normal payroll practices, (ii) subject to the terms of Section 4(b) hereof, any annual
discretionary bonus earned for any completed calendar year immediately preceding the date of
termination, but not yet paid (except in the case of a termination by the Company other than
pursuant to Section 6(a) or 6(b) in calendar year 2010 in which case the terms of Section 6(d)
hereof relating to the 2010 Pro Rata Bonus shall apply); (iii) subject to the terms of Section 5
hereof, reimbursement for any business expenses properly incurred and paid prior to and including
the date of termination; (iv) Employee’s then current entitlement, if any, under the Company’s
employee benefit plans and programs, including payment for any accrued and unused vacation paid or
provided in accordance with the terms and conditions of the applicable plan or program; and (v) no
other compensation. The parties agree that the payments set forth in this Section 6(c) constitute
all of Company’s obligations, monetary or otherwise, to Employee under the terms of this Agreement
in the event of Employee’s termination pursuant to Section 6(a) or 6(b). Additionally, if Employee
is terminated pursuant to Section 6(a), notwithstanding Section 6(c)(iii) above, all of Employee’s
equity compensation (including, without limitation, any granted pursuant to this Agreement or
otherwise), vested and unvested, shall terminate and expire, except in the case of vested stock
options which Employee has exercised prior to the date of termination (for the avoidance of doubt,
all vested equity compensation (except for stock options which have been exercised) shall be
forfeited in the event of a termination pursuant to Section 6(a)). Notwithstanding the foregoing,
in the case of a termination pursuant to Sections 6(d) or 6(e), additional payments shall be due as
expressly set forth below.
(d) The Company may terminate Employee’s employment hereunder during the Term effective at any
time upon written notice to Employee. In the event that during the Term: (I) the Company
terminates Employee’s employment other than pursuant to Section 6(a) or 6(b) during the first year
of the Term or (II) Employee is terminated other than pursuant to Section 6(a) or 6(b) in
connection with a “Change in Control” (as defined in Section 11), subject in all cases to
Employee’s executing and providing to the Company within 60 days following the date of termination
a fully effective waiver and general release substantially in the form attached as Exhibit
A hereto, which may be modified for changes in law and for consistency with the Company’s
standard form required for other senior officers of the Company from time to time which the Company
shall provide to the Employee within seven (7) days following the effective date of termination:
(x) the Company shall pay Employee: (A) the lesser of (the lesser of (i) or (ii), the
“Termination Amount”): (i) remaining Base Salary due to Employee through the end of the
Term, to be paid in equal payments over the remainder of the Term on a schedule that mirrors the
Company’s then effective payroll practices and (ii) one times the annual Base Salary to be paid
in equal installments over a one-year period on a schedule that mirrors the Company’s then
effective payroll practices and (B) the 2010 Pro Rata Bonus to the extent such termination occurs
in calendar year 2010, payable in accordance with the timing set forth in Section 4(b) hereof;
provided, however, that in the case the six-month delay set forth in Section 17(b)
shall apply to the Termination Amount to the extent it exceeds the Separation Pay Limit (as defined
in Section 17(b)) and that to the extent the Termination Amount does not exceed the Separation Pay
Limit, the first payment of the Termination Amount shall be made on the first Company payroll date
on or after the 60th day after the date of termination, which first payment shall
include payment of any amounts that would otherwise be due prior
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thereto; (y) if Employee is terminated prior
to the first anniversary of the Effective Date, one third (1/3) of the 2008
Signing Award shall vest effective on the date of termination and shall be exercisable for the
longer of: (i) the date of termination through the
first anniversary of the Effective Date and (ii) ninety (90) days from the date of
termination; and (z) if Employee is terminated upon or within twenty-four (24) months following a
Change in Control (as defined below) of the Company, all outstanding equity awards held by Employee
shall become fully vested and immediately exercisable and shall remain exercisable in accordance
with the terms and conditions of the applicable equity plan and award agreements under which they
were granted. For the avoidance of doubt, it is understood and agreed that notwithstanding
anything contained herein to the contrary, Employee shall have no duty to mitigate in the event
that Company exercises its rights pursuant to this Section 6(d). Notwithstanding the foregoing, if
either (I) the Company terminates Employee’s employment other than pursuant to Section 6(a) or 6(b)
during the second year of the Term, or (II) Employee elects to terminate his employment for Good
Reason as expressly described in Section 6(e) below, instead of the Termination Amount set forth in
clause (x) above, the Company shall pay Employee: (A) one times the annual Base Salary to be paid
in equal installments over the one-year period on a schedule that mirrors the Company’s then
effective payroll practices if Employee is terminated at any time during the second year of the
Term and (B) the 2010 Pro Rata Bonus to the extent such termination occurs in calendar year 2010,
payable in accordance with the timing set forth in Section 4(b) hereof; provided,
however, that in the case of (i) or (ii) the six-month delay set forth in Section 17(b)
shall apply to such amounts to the extent they exceed the Separation Pay Limit (as defined in
Section 17(b)) and that to the extent the Termination Amount does not exceed the Separation Pay
Limit, the first payment of the Termination Amount shall be made on the first Company payroll date
on or after the 60th day after the date of termination, which first payment shall
include payment of any amounts that would otherwise be due prior thereto. For the avoidance of
doubt, clause (z) shall also apply to such termination to the extent applicable.
(e) Provided the Company has not notified Employee that he is being terminated pursuant to
Sections 6(a) and 6(b) hereof, Employee may terminate his employment hereunder effective at any
time upon written notice to the Company for Good Reason, provided such notice is given to
the Company within thirty (30) days after the triggering event and such event is not cured by the
Company within 30 days after its receipt of such notice. For purposes hereof, “Good Reason” shall
mean the occurrence of one of the following: (i) a material diminution in Employee’s authority or
responsibilities; or (ii) a material diminution in Employee’s Base Salary.
(f) In addition, in the event of a termination by the Company other than pursuant to Sections
6(a) and 6(b) hereof, subject to Employee’s (x) timely election of continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) with respect
to the Company’s group health insurance plans in which Employee participated immediately prior to
the date of termination (“COBRA Continuation Coverage”), and (y) continued payment of
premiums for such plans at the active employee rate (excluding, for purposes of calculating cost,
an employee’s ability to pay premiums with pre-tax dollars), the Company shall provide COBRA
Continuation Coverage for Employee until the earliest of: (I) twelve (12) months from the date of
termination, (II) Employee ceasing to be eligible under COBRA, and (III) Employee becoming eligible
for coverage under the health insurance plan of a subsequent employer. For the avoidance of doubt,
it is understood and agreed that notwithstanding anything contained herein to the contrary,
Employee shall have no duty to mitigate in the event that Company exercises its rights pursuant to
this Section 6(f).
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7. No Conflict of Interest; Proper Conduct. (a) (x) During the Term and in any event, not
less than ninety (90) days after the Employment Period if Employee is terminated pursuant to
Sections 6(a) or 6(b) or (y) during the Employment Period and for an additional period equal to the
time period during which Employee is paid severance by the Company after the Employment Period if
Employee is terminated pursuant to Sections 6(d) or 6(e) (notwithstanding the foregoing, such
period
described in this Section 7(a)(y) shall not be less than ninety (90) days nor greater than one
(1) year), Employee will not, directly or indirectly, either individually or as a stockholder
(except as a stockholder of less than one percent (1%) of the issued and outstanding stock of a
publicly-held corporation whose gross assets exceed $100,000,000), investor, officer, director,
member, employee, agent, trustee, associate or consultant of any Person:
| (i) | compete with the Company in any business in competition with that then carried on
by the Company and/or its Related Entities; |
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| (ii) | engage in or carry on any Restricted Activity; |
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| (iii) | employ or offer to employ or solicit employment of any employee or consultant of
the Company or its Related Entities; or |
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| (iv) | solicit (or assist or encourage to solicit), divert or attempt to divert any
business, patronage or customer (including known prospects) of the Company or its
Related Entities to Employee or a competitor or rival of the Company or its Related
Entities. |
(b) Employee further agrees that he shall not, without the Company’s prior written consent,
engage in any activity during the Employment Period that would conflict with, interfere with,
impede or hamper the performance of Employee’s duties for the Company or would otherwise be
prejudicial to the Company’s business interests. Employee shall not commit any act or become
involved in any situation or occurrence that, in the Company’s reasonable judgment, could tend to
bring Employee or the Company into public disrepute, contempt, scandal or ridicule, could provoke,
insult or offend the community or any group or class thereof, or could reflect unfavorably upon the
Company or any of its Sponsors or Affiliates. Employee shall comply with all applicable laws and
regulations governing the Company and its business, including without limitation, regulations
promulgated by the Federal Communications Commission or any other regulatory agency. The parties
hereto agree that the remedy at law for any breach of Employee’s obligations under this Section 7
or Section 8 (Confidential Information and the Results of Services) of this Agreement would be
inadequate and that any enforcing party shall be entitled to injunctive or other equitable relief
(without bond or undertaking) in any proceeding which may be brought to enforce any provisions of
this Section 7 or Section 8. Resort to such equitable relief, however, shall not constitute a
waiver of any other rights or remedies which the Company may have.
8. Confidential Information and the Results of Services. Employee acknowledges that the
Company has established a valuable and extensive trade in the services it provides, which has been
developed at considerable expense to the Company, and expects to divulge to Employee certain
confidential information and trade secrets relating to the Company’s business, provide information
relating to the Company’s customer base and otherwise provide Employee with the ability to injure
the Company’s goodwill unless certain reasonable restrictions are imposed upon Employee which are
contained in this Section 8. Employee agrees that, by virtue of the special knowledge that
Employee has received and will receive from the Company, and the relationship of trust and
confidence between Employee and the Company, Employee has or will have certain information and
knowledge of the operations of the Company that are confidential and proprietary in nature,
including, without limitation, information about Affiliates and Sponsors. Employee agrees that
during the Employment Period and thereafter, Employee will not make use of or disclose, without the
prior consent of the Company, Confidential Information relating to the Company or any of its
Related Entities (including, without limitation, its Sponsor lists, its Affiliate/station lists,
its technical systems, its contracts, its methods of operation, its business plans and
opportunities, its strategic plans and its
trade secrets), and further, that Employee will return to the Company all written materials in
Employee’s possession embodying such Confidential Information.
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9. Work for Hire. Employee agrees that any ideas, concepts, discoveries, techniques, patents,
copyrights, trademarks or computer programs relating to the business or operations of the Company
and its Related Entities which are developed or discovered by Employee, solely or jointly with
others, during the Employment Period, shall be deemed to have been made within the scope of
Employee’s employment and therefore constitute works for hire and shall automatically upon their
creation become the exclusive property of the Company. Employee agrees to promptly notify and
fully disclose the existence of such works to the Company. To the extent such items are not works
for hire under applicable law, Employee assigns them and any and all intangible proprietary rights
relating thereto to the Company in their entirety and agrees to execute any and all documents
necessary or desired by the Company to reflect the Company’s ownership thereof.
10. Communications Act of 1934. Employee represents and warrants that neither Employee nor,
to the best of Employee’s knowledge, information and belief, any other individual, has accepted or
agreed to accept, or has paid or provided or agreed to pay or provide, any money, service or any
other valuable consideration, as defined in Section 507 of the Communications Act of 1934, as
amended, for the broadcast of any matter contained in programs. Employee further represents and
warrants that during the Employment Period Employee shall comply with all legal requirements set
forth herein.
11. Certain Definitions. As used in this Agreement, the following capitalized terms have the
meanings indicated:
Affiliates. Any Person with whom the Company has or had a contract or other arrangement to
provide network and/or syndicated radio programming.
Change in Control. Such meaning set forth in the Company’s 2005 Equity Compensation Plan, as
may be amended from time to time (the “Equity Plan”), provided, however,
that for purposes of this Agreement and the benefits to which Employee would be entitled under
Section 12 of the Equity Plan, clause (i) of said definition shall be modified to read as follows:
“(i) the acquisition by any Person (as hereinafter defined) of 50% or more of the outstanding
Shares (the “Outstanding Company Stock”) (other than an acquisition by the Company or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any Person that controls,
is controlled by or is under common control within the Company or other than a Non-Qualifying
Business Combination (as defined below));”
Confidential
Information. Information obtained by Employee during the Employment Period which
concerns the affairs of the Company or its Related Entities and which the Company has requested be
held in confidence or could reasonably be expected to desire to be held in confidence, or the
disclosure of which would likely be embarrassing, detrimental or disadvantageous to the Company or
its Related Entities and including the terms of this Agreement. Confidential Information shall
include the information described in Section 8 as well as works for hire as described in Section 9
hereof, however, it shall not include information which Employee can demonstrate to be: (i)
information that is at the time of receipt by Employee in the public domain, known to Employee or
is otherwise generally known in the industry or subsequently enters the public domain or becomes
generally known in the industry through no fault of Employee or (ii) information that at any time
is received in good faith by Employee from a third party which was lawfully in possession of the
same and had the right to disclose the same. Notwithstanding any provision to the contrary
contained
herein, the terms of this Agreement may be disclosed to Employee’s legal, financial and tax
advisors and any members of Employee’s immediate family, which for purposes hereof shall include
Employee’s spouse, parents, children, siblings, grandparents, grandchildren, mother-in-law and
father-in-law.
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Person. Any individual, corporation, partnership, joint venture, limited liability
partnership or limited liability company, trust, unincorporated organization, association or other
entity.
Related Entity or Related Entities. Any Person that directly or indirectly controls, is
controlled by, or is under common control with the Company (or its successor or assign), including
but not limited to Westwood One Radio Networks, Inc., Westwood One Radio, Inc., Metro Networks
Communications, Inc. and Metro Network Communications, Limited Partnership. As used in this
definition, the term “control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Restricted
Activities. Any of the following: (i) providing services to a traffic, news,
sports, weather or other information report gathering or broadcast service or to a radio network or
syndicator, or any direct competitor of the Company or its Related Entities; (ii) soliciting
Sponsors and dealing with accounts with respect to the immediately preceding clause (i); (iii)
soliciting Affiliates to enter into any contract or arrangement with any Person to provide the
information set forth in clause (i); or (iv) forming or providing operational assistance to any
business or a division of any business engaged in the foregoing activities.
Sponsor(s). Any and all client advertisers of the Company (including its subsidiaries and
Affiliates) including without limitation advertisers whose commercial material is to be, is or was
incorporated in any one or more of the Company’s programs or announcements, live or recorded,
broadcast over the facilities of the Company, by the Company, or pursuant to an arrangement with an
affiliated station, broadcaster or transmitter of the Company’s programming.
12. Choice of Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
13. Arbitration. The parties hereby agree that any and all claims or controversies relating
to Employee’s employment with the Company, or termination thereof, including but not limited to
claims for breach of contract, tort, unlawful discrimination or harassment (including any claims
arising under Title VII, the Americans with Disabilities Act, and the Age Discrimination in
Employment Act), and any violation of any local, state or federal law (“Arbitrable
Claims”), except for any equitable relief sought by a party, shall be resolved by arbitration
in accordance with the then applicable JAMS Employment Arbitration Rules And Procedures. However,
claims under applicable workers’ compensation laws or the National Labor Relations Act shall not be
subject to arbitration. Arbitration under this Agreement shall be the exclusive remedy for all
Arbitrable Claims and shall be final and binding on all parties. Unless the parties mutually agree
otherwise, the arbitrator shall be selected from a panel provided by JAMS and the arbitration shall
be held in New York County, New York. Any court having jurisdiction thereof may enter judgment on
the award rendered by the arbitrator(s). THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY OF ANY MATTERS SUBJECT TO ARBITRATION UNDER THIS
AGREEMENT. The prevailing party in any arbitration brought under the terms hereof, shall be
entitled to request reimbursement of reasonable attorney’s fees and expenses.
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14. Assignment. The rights of the Company hereunder may, without the consent of Employee, be
assigned by the Company to any Related Entity (provided such is accompanied by a guarantee from
Company) or successor of the Company or any entity which acquires all or substantially all of the
Company’s assets. Except as provided in the preceding sentence, the Company may not assign all or
any of its rights, duties or obligations hereunder without the prior written consent of Employee.
This Agreement is not assignable by Employee.
15. Merger or Reorganization. In the event of any merger, consolidation, dissolution or
reorganization of the Company (including but not limited to any reorganization where the Company is
not the surviving or resulting entity), or any transfer of all or substantially all of the assets
of the Company, the provisions of this Agreement shall inure to the benefit of and shall be binding
upon the surviving or resulting partnership or the corporation (or other entity) or person(s) to
which such assets shall be transferred.
16. Remedies. Except as it may elect otherwise, the Company shall have all rights, powers or
remedies provided by law or equity for breach of this Agreement available to it, it being
understood and agreed that no one of them shall be considered as exclusive of the others or as
exclusive of any other rights, powers and remedies allowed by law. The exercise or partial
exercise of any right, power or remedy shall neither constitute the election thereof nor the waiver
of any other right, power or remedy. Without limiting the generality of the foregoing, Employee
agrees that, in addition to all other rights and remedies available at law or in equity, the
Company shall be entitled to enforcement of this Agreement in accordance with the principles of
equity (without bond or undertaking), the remedy at law being hereby agreed and acknowledged by
Employee to be inadequate.
17. Section 409A of the Code.
(a) Although the Company does not guarantee the tax treatment of any particular payment or
benefit, it is intended that the provisions of this Agreement provide for payments or benefits that
either comply with, or are exempt from, Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations and guidance promulgated thereunder (collectively
“Code Section 409A”), and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under Code Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any amounts or benefits upon or following
a termination of employment unless such termination is also a “separation from service” within the
meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references
to a “termination,” “termination of employment” or like terms shall mean “separation from service.”
If Employee is deemed on the date of termination of his employment to be a “specified employee”,
within the meaning of that term under Code Section 409A(a)(2)(B) and using the identification
methodology selected by the Company from time to time, or if none, the default methodology, then
with regard to any payment or the providing of any benefit made subject to this
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Section 17(b), to
the extent required to be delayed in compliance with Code Section 409A(a)(2)(B) and to the extent
such payment and benefits exceed the Separation Pay Limit (as defined herein) , such payment or
benefit shall not be made or provided prior to the earlier of (i) the expiration of the six-month
period measured from the date of Employee’s “separation from service” and (ii) the date of
Employee’s death. On the first day of the seventh month following the date of Employee’s
“separation from service” or, if earlier, on the date of his death, all payments delayed pursuant
to this Section 17(b) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to Employee in a lump sum,
and any remaining payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein. For purposes of this
Agreement, the “Separation Pay Limit” means two times the lesser of: (i) Employee’s
annualized compensation based on Employee’s annual rate of pay for Employee’s taxable year
preceding the taxable year in which Employee’s termination of employment occurs; and (ii) the
maximum amount that may be taken into account under a tax-qualified plan pursuant to Code Section
401(a)(17) for the year in which Employee terminates employment.
(c) If under this Agreement, an amount is to be paid in two or more installments, for purposes
of Code Section 409A, each installment shall be treated as a separate payment.
(d) To the extent any reimbursement of costs and expenses provided for under this Agreement
constitutes taxable income to Employee for Federal income tax purposes, all such reimbursements
shall be made no later than December 31 of the calendar year next following the calendar year in
which the expenses to be reimbursed are incurred.
18. Indemnification. The Company hereby agrees to indemnify Employee and hold Employee
harmless to the extent provided under the By-Laws of the Company.
19. Survival. The provisions contained in Sections 7 through 19 shall survive the termination
or expiration of the Employment Period and the Employee’s employment with the Company and shall be
fully enforceable thereafter.
20. Legal Fees. The Company will reimburse Employee in an amount up to $10,000 for the
reasonable attorneys’ fees (based on non-premium, standard rates for time actually billed) incurred
by him in connection with the current negotiation and preparation of this Agreement.
21. Miscellaneous. This Agreement supersedes all prior understandings and agreements between
the parties (including the Company’s Related Entities) with respect to the subject matter hereof.
This Agreement contains the entire agreement of the parties with respect to the subject matter
covered hereby and may be amended, waived or terminated only by an instrument in writing executed
by both parties hereto. This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, executors, successors and permitted assigns. All notices,
requests, demands and other communications permitted or required hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered or delivered by registered or
certified mail, or overnight courier to such address listed below the parties’ respective signature
lines or to such other address as notified in writing by the parties; provided, that, notices to
the Company shall be addressed to the attention of the “Chief Executive Officer”, with a copy to
the “General Counsel”. Any provision hereof prohibited by or unenforceable under any applicable
law of any jurisdiction shall as to such jurisdiction be deemed ineffective and deleted herefrom
without affecting any other provision of this Agreement. No provision of this Agreement shall be
interpreted against any party because such party drafted such provision. Submission of this
Agreement to Employee, or Employee’s agents or attorneys, for examination or signature does not
constitute or imply an offer of employment, and this Agreement shall have no binding effect until
execution hereof by both the Company and Employee. If either party waives a breach of this
Agreement by the other party, that waiver will not operate or be construed as a waiver of any
subsequent breaches. This Agreement may
be executed in counterparts, including via facsimile or PDF, which together shall constitute
but one and the same agreement.
(Remainder of page is intentionally left blank.)
-11-
IN WITNESS WHEREOF, this Agreement is EXECUTED as of the 16th day of September 2008 to be
EFFECTIVE FOR ALL PURPOSES as of the Effective Date.
| “COMPANY” | ||||||
| WESTWOOD ONE, INC. | ||||||
| By: | /s/ Xxxxxx F.X. Xxxxxx | |||||
| Name: | Xxxxxx F.X. Xxxxxx | |||||
| Title: | CEO | |||||
| Address: | 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx Xxx Xxxx, XX 00000 |
|||||
| “EMPLOYEE” | ||||||
| /s/ Xxx Xxxxxxxx | ||||||
| Xxx Xxxxxxxx Address: |
||||||
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EXHIBIT A
FORM OF RELEASE
For good and valuable consideration received in connection with my termination of employment with
Westwood One, Inc., a Delaware corporation (the “Company”), pursuant to Section 6 of my
employment agreement with the Company dated September 16, 2008 (the “Employment
Agreement”), I, Xxx Xxxxxxxx, do hereby release and forever discharge and covenant not to xxx
the Company, the Related Entities (as defined in the Employment Agreement) and their respective
subsidiaries and affiliates and their respective directors, members, partners, officers, managers,
employees, agents, stockholders, successors and assigns (both individually and in their official
capacities) and its and their predecessors or successors (collectively, the “Releasees”),
from any and all actions, causes of action, covenants, contracts, claims, demands, suits, and
liabilities whatsoever, which I ever had or now have or which I or any of my heirs, executors,
administrators and assigns hereafter can, shall or may have by reason of or relating to my
employment with the Company as of the effective date of this general release (this “General
Release”).
By signing this General Release, I am providing a complete waiver of all claims against the
Releasees that may have arisen, whether known or unknown, up until the effective date of this
General Release. This includes, but is not limited to, claims based on Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967
(including the Older Workers Benefit Protection Act) (the “ADEA”), the Americans With
Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave
Act, the Employee Retirement Income Security Act of 1974 (“ERISA”) (except as to claims
pertaining to vested benefits under employee benefit plans covered by ERISA and maintained by the
Releasees), and all applicable amendments to the foregoing acts and laws, or any common law, public
policy, contract (whether oral or written, express or implied) or tort law, and any other local,
state or Federal law, regulation or ordinance having any bearing whatsoever on the terms and
conditions of my employment. This General Release shall not, however, constitute a waiver of: (i)
my rights under any employee benefit plan currently maintained by the Company; (ii) my rights under
the Employment Agreement intended to survive my termination of employment; (iii) my rights under
the Company’s certificate of incorporation, By-Laws, insurance policies or other written agreements
with respect to indemnification; or (iv) any claims to enforce rights arising under the ADEA or
other civil rights statute after the effective date of this General Release. I hereby reaffirm my
obligations under Sections 7 through 11 of the Employment Agreement, and understand that such
provisions shall be fully enforceable in accordance with the terms and conditions of the Employment
Agreement following my termination of employment with the Company.
I further agree, promise and covenant that, to the maximum extent permitted by law neither, I,
nor any person, organization, or other entity acting on my behalf has or will file, charge, claim,
xxx, or cause or permit to be filed, charged or claimed, any action for damages or other relief
(including injunctive, declaratory, monetary or other relief) against the Releasees involving any
matter occurring in the past up to the date of this General Release, or involving or based upon any
claims, demands, causes of action, obligations, damages or liabilities which are the subject of
this General Release. This General Release shall not affect my rights under the Older Workers
Benefit Protection Act to have a judicial determination of the validity of this General Release and
does not purport to limit any right I may have to file a charge under the ADEA or other civil
rights statute or to participate in an investigation or proceeding conducted by the Equal
Employment Opportunity Commission or other investigative agency. This General Release does,
however, waive and release any right to recover damages under the ADEA or other civil rights
statute.
-13-
I have been given twenty-one (21) days to review this General Release and have been given the
opportunity to consult with legal counsel, and I am signing this General Release knowingly,
voluntarily and with full understanding of its terms and effects, and I voluntarily accept the
consideration under Section 6 of the Employment Agreement for the purpose of making full and final
settlement of all claims referred to above. If I have signed this General Release prior to the
expiration of the twenty-one (21) day period, I have done so voluntarily. I also understand that I
have seven (7) days after executing to revoke this General Release, and that this General Release
will not become effective if I exercise my right to revoke my signature within seven (7) days of
execution. I understand and acknowledge that my right to receive the consideration under Section 6
of the Employment Agreement, however, is conditioned upon my execution and non-revocation of this
General Release.
Upon the receipt of reasonable notice from the Company (including the Company’s outside
counsel), I agree to respond and provide information with regard to matters in which I had
knowledge as a result of my employment with the Company, and provide reasonable assistance to the
Company and its Related Entities and their respective representatives in defense of any claims that
may be made against the Company or any of its Related Entities, and assist the Company and its
Related Entities in the prosecution of any claims that may be made by the Company or any of its
Related Entities, to the extent that such claims may relate to the period of my employment with the
Company. I further agree to promptly inform the Company if I become aware of any lawsuits
involving such claims that may be filed or threatened against the Company or any of its Related
Entities. I also agree to promptly inform the Company (to the extent I am legally permitted to do
so) if I am asked to assist in any investigation of the Company or any of its Related Entities or
its or their actions, regardless of whether a lawsuit or other proceeding has then been filed with
respect to such investigation, and shall not do so unless legally required.
I acknowledge that I have not relied on any representations or statements not set forth in
this General Release.
This General Release will be governed by and construed in accordance with the laws of the
State of New York, without regard to the choice of law principles thereof. If any provision in
this General Release is held invalid or unenforceable for any reason, the remaining provisions
shall be construed as if the invalid or unenforceable provision had not been included.
IN WITNESS WHEREOF, I have executed this General Release on this
_____
day of
, 20
_____.
-14-
APPENDIX I
Approved Activities
Subject to the terms and conditions of this Appendix I, Employee may serve as an independent
director on the boards of directors of the following companies:
| 1. | Dot Hill Systems Corp. |
|
| 2. | CompuDyne Corporation |
|
| 3. | [Intentionally omitted.] |
Employee’s service on the foregoing boards of directors (i) shall be performed solely as an
independent director and not as a Gores-appointed director, (ii) must be performed solely on behalf
of the subject company, and (iii) must not be performed on behalf of, or subject to the direction
of, Gores. In addition, any compensation or remuneration that Employee is entitled to receive with
respect to his service on the foregoing boards of directors shall (x) be no more than the same
compensation or remuneration paid to other independent directors on the applicable board of
directors who are not Gores-appointed directors and (y) shall be paid to Employee directly by the
subject company, and for the avoidance of doubt, shall in no event be paid by or through Gores.
Prior to the Effective Date, Employee shall have resigned as Chairman of the Board of Directors of
CompuDyne Corporation.
-15-
APPENDIX II
Subject to the terms and conditions of this Appendix II, Employee may receive or hold the amounts
and rights set forth below:
1. Annual non-discretionary 2008 bonus from Gores which shall be paid only if Gores determines to
award executive bonuses to senior executives of Gores for the 2008 calendar year and which bonus,
if awarded, will be paid at the same time such other bonuses are paid. Such bonus, if paid, is
based solely on the period Xx. Xxxxxxxx was employed by Gores from January 1, 2008 through the
Effective Date.
2. Carried Interest solely to the extent granted to Employee prior to the Effective Date by Gores
for his prior service to Gores in Fund I and Fund II (the “Funds”); provided that (i) the Carried
Interest shall continue to vest after the Effective Date consistent with and to the extent set
forth in the terms and conditions of the agreements that govern such Carried Interest (as in effect
immediately prior to the Effective Date), (ii) Employee’s rights with respect to the Carried
Interest shall be the same as any other party who has the right to receive such Carried Interest,
(iii) on and following the Effective Date, Employee does not have the right or ability to influence
the Funds and (iv) the percentage which constitutes Employee’s Carried Interest in the Funds shall
not increase after the Effective Date.
3. Co-investment in the Funds as a limited partner, which investment was made available to
Employee prior to the Effective Date by Gores; provided, that (i) any such investment by Employee
is made on, and is subject to, the same terms and conditions as those applicable to the other
limited partners who previously elected to become participants in the Funds, and (ii) with respect
to Employee any such investment is a passive investment and, following any such investment,
Employee has no right or ability to influence Gores or any entity that sponsors, operates or
manages the Funds.
-16-
