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EXHIBIT 10.18.2
THE SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO AN OPTION TO
REPURCHASE AND A RIGHT OF FIRST REFUSAL PROVIDED UNDER THE PROVISIONS OF THE
COMPANY'S 1996 STOCK OPTION PLAN AND THIS AGREEMENT IS ENTERED INTO PURSUANT
THERETO. A COPY OF SUCH PLAN IS AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY
AT ITS PRINCIPAL EXECUTIVE OFFICES.
CAPSTAR BROADCASTING PARTNERS, INC.
1996 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR KEY EMPLOYEES
February 20, 1997
Re: Grant of Stock Option
Dear [See Schedule I attached hereto]
The Board of Directors Capstar Broadcasting Partners, Inc. (the
"Company") has adopted the Company's 1996 Stock Option Plan (the "Plan") for
certain individuals, directors and key employees of the Company and its Related
Entities. A copy of the Plan is being furnished to you concurrently with the
execution of this Option Agreement and shall be deemed a part of this Option
Agreement as if fully set forth herein. Unless the context otherwise requires,
all terms defined in the Plan shall have the same meaning when used herein.
1. The Grant.
Subject to the conditions set forth below, the Company hereby grants to
you, effective as of [See Schedule I attached hereto] ("Grant Date"), as a
matter of separate inducement and not in lieu of any salary or other
compensation for your services, the right and option to purchase (the
"Option"), in accordance with the terms and conditions set forth herein and in
the Plan, an aggregate of [See Schedule I attached hereto] shares of Common
Stock of the Company (the "Option Shares"), at the Exercise Price (as
hereinafter defined). As used herein, the term "Exercise Price" shall mean a
price equal to [See Schedule I attached hereto] per share, subject to the
adjustments and limitations set forth herein and in the Plan. The Option
granted hereunder is intended to constitute a Non-Qualified Option within the
meaning of the Plan; however, you should consult with your tax advisor
concerning the proper reporting of any federal or state tax liability that may
arise as a result of the grant or exercise of the Option.
2. Exercise.
(a) For purposes of this Option Agreement, the Option
Shares shall be deemed "Nonvested Shares" unless and until they have become
"Vested Shares." Except as otherwise provided in Section 3, the Option Shares
shall become "Vested Shares" with respect to 20% of the Option Shares, on the
first anniversary of the Grant Date, and 1/60th of the Option Shares shall vest
on the last day of each calendar month thereafter, so that all of the Option
Shares shall be vested 60 months after the Grant Date, provided that
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vesting shall cease upon your ceasing to be an employee of the Company or a
Related Entity as expressly provided in Section 3 hereof.
(b) Subject to the relevant provisions and limitations
contained herein and in the Plan, you may exercise the Option to purchase all
or a portion of the applicable number of Vested Shares at any time prior to
the termination of the Option pursuant to this Option Agreement. In no event
shall you be entitled to exercise the Option for any Nonvested Shares or for a
fraction of a Vested Share.
(c) The unexercised portion of the Option, if any, will
automatically, and without notice, terminate and become null and void upon the
expiration of six (6) years from the Grant Date.
(d) Any exercise by you of the Option shall be in writing
addressed to the Secretary of the Company at its principal place of business
(a copy of the form of exercise to be used will be available upon written
request to the Secretary), and shall be accompanied by a certified or bank
check payable to the order of the Company in the full amount of the Exercise
Price of the shares so purchased, or in such other manner as described in the
Plan and approved by the Committee.
The terms and provisions of the employment agreement, if any, between
you and the Company or any Related Entity (the "Employment Agreement") that
relate to or affect the Option are incorporated herein by reference.
Notwithstanding the foregoing provisions of this Section 2, in the event of any
conflict or inconsistency between the terms and conditions of this Section 2
and the terms and conditions of the Employment Agreement, the terms and
conditions of the Employment Agreement shall be controlling.
3. Termination of Employment.
Upon the termination of your employment with the Company or any Related
Entity, you may, until the earlier of (x) 30 days from the date of such
termination or (y) the expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of the Vested Shares which
you were entitled to purchase immediately prior to such termination and,
thereafter, the Option shall, to the extent not previously exercised,
automatically terminate and become null and void, provided that:
(a) in the case of termination of your employment with the
Company or any Related Entity due to death, your estate
(or any Person who acquired the right to exercise such
Option by bequest or inheritance or otherwise by
reason of your death) may, until the earlier of (x)
the 181st day after the date of death or (y) the
expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of
the Vested Shares which you were entitled to purchase
immediately prior to the time of your death;
(b) in the case of termination of your employment with the
Company or any Related Entity due to Disability, you
or your legal representative may, until the earlier of
(x) the 181st day after the date your employment was
terminated or (y) the expiration of the Option in
accordance with its terms, exercise the Option with
respect to all or any part of the Vested Shares which
you were entitled to purchase immediately prior to the
time of such termination;
(c) in the case of termination of your employment with the
Company or any Related Entity for Good Cause (as
determined by the Committee in its sole judgment in
accordance with the Plan and this Agreement), then you
shall immediately forfeit your rights under the Option
except as to those Option Shares already purchased.
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Notwithstanding the foregoing provisions of this Section 3, in the
event of any conflict or inconsistency between the terms and conditions of this
Section 3 and the terms and conditions of the Employment Agreement, the terms
and conditions of the Employment Agreement shall be controlling.
4. Transferability.
Except as provided in Section 7 hereof, the Option and any rights or
interests therein are not assignable or transferable by you except by will or
the laws of descent and distribution, and during your lifetime, the Option
shall be exercisable only by you or, in the event that a legal representative
has been appointed in connection with your Disability, such legal
representative. Any Option Shares received upon exercise of this Option are
subject to the Company's Right of First Refusal (as defined in the Plan).
To assure the enforceability of the Company's rights under this Section
4 in regard to the Right of First Refusal, each certificate or instrument
representing Common Stock or an Option held by you shall bear a conspicuous
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
FIRST REFUSAL PROVIDED UNDER THE PROVISIONS OF THE COMPANY'S 1996 STOCK OPTION
PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO PURSUANT THERETO. A COPY OF
SUCH OPTION PLAN AND OPTION AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
5. Registration.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable state
securities laws to permit exercise of the option or to issue any Common Stock
in violation of the Securities Act or any applicable state securities laws.
You (or in the event of your death or, in the event a legal representative has
been appointed in connection with your Disability, the Person exercising the
Option) shall, as a condition to your right to exercise the Option, deliver to
the Company an agreement or certificate containing such representations,
warranties and covenants as the Company may deem necessary or appropriate to
ensure that the issuance of the Option Shares pursuant to such exercise is not
required to be registered under the Securities Act or any applicable state
securities laws.
Certificates for Option Shares, when issued, shall have substantially
the following legend, or statements of other applicable restrictions, endorsed
thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE
SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE
AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH OFFER, SALE,
PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR
STATE LAWS.
The foregoing legend may not be required for Option Shares issued
pursuant to an effective, registration statement under the Securities Act and
in accordance with applicable state securities laws.
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6. Withholding Taxes.
By acceptance hereof, you hereby (i) agree to reimburse the Company or
any Related Entity by which you are employed for any federal, state or local
taxes required by any government to be withheld or otherwise deducted by such
corporation in respect of your exercise of all or a portion of the Option, (ii)
authorize the Company or any Related Entity by which you are employed to
withhold from any cash compensation paid to you or on your behalf, an amount
sufficient to discharge any federal, state and local taxes imposed on the
Company, or the Related Entity by which you are employed, and which otherwise
has not been reimbursed by you, in respect of your exercise of all or a portion
of the Option, and (iii) agree that the Company may, in its discretion, hold
the stock certificate to which you are entitled upon exercise of the Option as
security for the payment of the aforementioned withholding tax liability, until
cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise which
is equal to the amount to be withheld.
7. Purchase Option.
(a) If (i) your employment with the Company or a Related
Entity terminates for any reason at any time or (ii) a Change of Control
occurs, the Company and/or its designees) shall have the option (the "Purchase
Option") to purchase, and if the option is exercised, you (or your executor or
the administrator of your estate or the Person who acquired the right to
exercise the Option by bequest or inheritance in the event of your death, or
your legal representative in the event of your incapacity (hereinafter,
collectively with such optionee, the "Grantor")) shall sell to the Company
and/or its assignee(s), all or any portion (at the Company's option) of the
Option Shares and/or the Option held by the Grantor (such Option Shares and
Option collectively being referred to as the "Purchasable Shares"), subject to
the Company's compliance with the conditions hereinafter set forth.
(b) The Company shall give notice in writing to the Grantor
of the exercise of the Purchase Option within one (1) year from the date of the
termination of your employment or engagement or such Change of Control. Such
notice shall state the number of Purchasable Shares to be purchased and the
determination of the Board of Directors of the Fair Market Value per share of
such Purchasable Shares. If no notice is given within the time limit specified
above, the Purchase Option shall terminate.
(c) The purchase price to be paid for the Purchasable
Shares purchased pursuant to the Purchase Option shall be, in the case of any
Option Shares, the Fair Market Value per share times the number of shares being
purchased, and in the case of the Option, the Fair Market Value per share times
the number of Vested Shares subject to such Option which are being purchased,
less the applicable per share Exercise Price. The purchase price shall be paid
in cash. The closing of such purchase shall take place at the Company's
principal executive offices within ten (10) days after the purchase price has
been determined. At such closing, the Grantor shall deliver or shall cause to
be delivered to the purchasers) the certificates or instruments evidencing the
Purchasable Shares being purchased, duly endorsed (or accompanied by duly
executed stock powers) and otherwise in good form for delivery, against payment
of the purchase price by check of the purchasers). In the event that,
notwithstanding the foregoing, the Grantor shall have failed to obtain the
release of any pledge or other encumbrance on any Purchasable Shares by or upon
the scheduled closing date, at the option of the purchasers) the closing shall
nevertheless occur on such scheduled closing date, with the cash purchase price
being reduced to the extent of all unpaid indebtedness for which such
Purchasable Shares are then pledged or encumbered.
(d) To assure the enforceability of the Company's rights
under this Section 7, each certificate or instrument representing Option Shares
subject to this Option Agreement shall bear a conspicuous legend in
substantially the following form:
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE COMPANY'S
1996 STOCK OPTION PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO
PURSUANT THERETO. A COPY OF SUCH OPTION PLAN AND OPTION AGREEMENT ARE
AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
(e) The Company's rights under this Section 7 shall
terminate upon the consummation of a Qualifying Public Offering
8. Consent to Approved Sale.
If the Board and the holders of a majority of the Common Stock then
outstanding approve the Sale of the Company to an independent third party (the
"Approved Sale"), you shall consent to and raise no objections against the
Approved Sale, and if the Approved Sale is structured as a sale of capital
stock, you shall agree to sell all of your Option Shares and rights to acquire
Option Shares on the terms and conditions approved by the Board of Directors
and the holders of a majority of the Common Stock then outstanding. You shall
take all necessary and desirable actions in connection with the consummation of
the Approved Sale. For purposes of this Section 8, an "independent third
party" is any person who does not own in excess of 5% of the Common Stock on a
fully-diluted basis, who is not controlling, controlled by or under common
control with any such 5% owner of the Common Stock and who is not the spouse,
ancestor, descendant (by birth or adoption) or descendent of a grandparent of
any such 5% owner of the Common Stock. If the Company or the holders of the
Company's securities enter into any negotiation or transaction for which Rule
506 (or any similar rule then in effect) promulgated pursuant to the Securities
Act may be available with respect to such negotiation or transaction (including
a merger, consolidation or other reorganization), you shall, at the request of
the Company, appoint a purchaser representative (as such term is defined in
Rule 501 promulgated pursuant to the Securities Act) reasonably acceptable to
the Company. If you appoint the purchaser representative designated by the
Company, the Company will pay the fees of such purchaser representative, but if
you decline to appoint the purchaser representative designated by the Company
you shall appoint another purchaser representative (reasonably acceptable to
the Company), and you shall be responsible for the fees of the purchaser
representative so appointed.
9. Adjustments.
In the event that, by reason of any merger, consolidation, combination,
liquidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares or
other like change in capital structure of the Company (collectively, a
"Reorganization"), the Common Stock is substituted, combined, or changed into
any cash, property, or other securities, or the shares of Common Stock are
changed into a greater or lesser number of shares of Common Stock, the number
and/or kind of shares and/or interests subject to an Option and the per share
price or value thereof shall be appropriately adjusted by the Committee to give
appropriate effect to such Reorganization, such that the Option shall
thereafter be exercisable for such securities, cash, and/or other property as
would have been received in respect of the Option Shares subject to the Option
had the Option been exercised in full immediately prior to such event. Any
fractional shares or interests resulting from such adjustment shall be
eliminated.
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10. Miscellaneous.
(a) This Option Agreement is subject to all the terms,
conditions, limitations and restrictions contained in the Plan. In the event
of any conflict or inconsistency between the terms hereof and the terms of the
Plan, the terms of the Plan shall be controlling.
(b) This Option Agreement is not a contract of employment
and the terms of your employment shall not be affected by, or construed to be
affected by, this Option Agreement, except to the extent specifically provided
herein. Nothing herein shall impose, or be construed as imposing, any
obligation (i) on the part of the Company or any Related Entity to continue
your employment, or (ii) on your part to remain in the employ of the Company or
any Related Entity.
(c) This Option Agreement may be amended as provided in
Section 19 of the Plan.
[Remainder of page intentionally left blank]
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Please indicate your acceptance of all the terms and conditions of the
Option and the Plan by signing and returning a copy of this Option Agreement.
Very truly yours,
CAPSTAR BROADCASTING PARTNERS, INC.
By:
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Xxxx X. Xxxxx
Chief Financial Officer and
Executive Vice President
ACCEPTED:
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Signature of Optionee
[See Schedule I attached hereto]
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Name of Optionee (Please Print)
Date: February 20, 1997
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SCHEDULE I
NAME GRANT DATE EXERCISE PRICE/SHARE OPTION SHARES
---- ---------- -------------------- -------------
Xxxxx X. Xxxxxx 02/20/97 $1.10 1,500,000
Xxxxx X. Xxxx 11/26/96 1.00 420,880
R. Xxxxxx Xxxxx 02/20/97 1.10 395,455
Xxxxxxx X. Xxxxxxxx, Xx. 02/20/97 1.10 395,455
Xxxx X. Xxxxx 02/20/97 1.10 395,455
