EXHIBIT 10.15 - Employment Agreement
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT, dated effective as of March 10, 2005, by and between Clear
Channel Communications, Inc., a Texas corporation (the "Company"), and Xxxx Xxxx
("Executive").
WHEREAS, the Company and the Executive previously entered into that
certain Employment Agreement dated as of October 1, 1999 (the "Existing
Agreement"); and
WHEREAS, the Company and the Executive desire to amend and restate the
terms of the Existing Agreement between the Company and the Executive;
NOW THEREFORE, IN CONSIDERATION of the premises and the mutual covenants
set forth below, the parties hereby agree to amend and restate the Existing
Agreement as follows:
1. Employment. The Company hereby agrees to continue to employ
Executive as the President and Chief Executive 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 March 10, 2005 (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 President and Chief Executive Officer of the Company, and shall
report solely and directly to the Company's Chairman and the Board of Directors
of the Company (the "Board"). Executive shall have those powers and duties
normally associated with the position of President and Chief Executive 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 Executive's position as President and Chief Executive 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 Executive's personal, financial and
legal affairs, (ii) to serve on civic or charitable boards or committees (it
being expressly understood and agreed that Executive's 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 of the Board 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 of 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 Company's 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 $350,000
per year ("Base Salary"). Executive's Base Salary shall be paid in approximately
equal installments in accordance with the Company's customary payroll practices.
The Compensation Committee of the Board (the "Committee") shall review
Executive's Base Salary for increase (but not decrease) no less frequently than
annually and consistent with the compensation practices and guidelines of the
Company. If Executive's 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 Company's 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 Company's 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).
(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
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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)
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) 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, 2004, the Committee shall cause the Company to
grant Executive a stock option to acquire at least 50,000 shares of the
Company's 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, 2004.
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 Company's stock
option plan; (B) the exercise price per share of each Option shall be equal to
the last reported sale price of the Company's common stock on the New York Stock
Exchange (or such other principal trading market for the Company's 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. Executive's employment hereunder may be terminated
during the Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate
upon his death.
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(b) Disability. If, as a result of Executive's 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 Executive's 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
Executive's 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 Executive's
employment upon Executive's:
(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 members of the Board who are determined to be
"independent" (as determined applying the Company's criteria for Board member
independence disclosed in the most recent proxy statement or, if no such
criteria are in force, as determined applying the listing standards of the New
York Stock Exchange) 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
Board's determination that Cause exists or that Executive has failed to cure any
act (or failure to act) that purportedly formed the basis for the Board's
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 Executive's 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 Executive's titles or offices (including,
membership on the Board) with the Company;
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(ii) a reduction in Executive's 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 Company's principal executive offices or
Executive's 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 Executive's participation in or reduce Executive's 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 Executive's 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 Company's or any Affiliate's 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;
(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 the office of Chairman of the Board
is held by someone other than X. Xxxxx Xxxx, Xxxx Xxxx or Xxxxxxx Xxxx;
(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. Executive's right to
terminate employment for Good Reason shall not be affected by Executive's
incapacity due to mental or physical illness and Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any event or condition
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constituting Good Reason. Executive's right to terminate employment for Good
Reason shall be extinguished upon termination of Executive's employment for
Cause pursuant to Section 6(c) of this Agreement.
(e) Without Cause. The Company shall have the right to
terminate Executive's 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.
(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
Company's 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).
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(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 Company's 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 Company's assets in such Business
Transaction (the "Surviving Corporation") is beneficially owned, directly
or indirectly, by the Company's 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 Company's shareholders in substantially the same
proportions as such shareholders owned the Company's 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 Executive's
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 Executive's employment under the
provision so indicated.
(b) Date of Termination. "Date of Termination" shall mean (i)
if Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's 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 Executive's 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.
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(a) Termination By Company without Cause or By Executive for
Good Reason. If Executive's 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 Executive's 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), Executive's Bonus shall be
deemed to be no less than $1,000,000; 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, in Executive's sole discretion, either:
(A) a stock option to acquire 1,000,000 shares of
the Company's common stock ("Termination Option") under the following
conditions, (1) except as provided below, the Termination Option shall be
granted under and subject to the Company's stock option plan, if available
and to the extent that the Executive would be eligible for a grant
thereunder; (2) the exercise price per share of the Termination Option
shall be equal to the last reported sale price of the Company's common
stock on
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the New York Stock Exchange (or such other principal trading market for
the Company's common stock) at the close of the trading day immediately
preceding the Date of Termination; (3) the Termination Option shall be
100% vested and exercisable on the date of grant; (4) 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 (5) each Termination Option shall be evidenced by, and
subject to, a stock option agreement whose terms and conditions are
consistent with the terms hereof; or
(B) the number of shares of the Company's common
stock ("Restricted Stock") equal to: (1) the number of shares of the
Company's common stock purchasable upon exercise of the Termination
Option, divided by (2) the number (rounded to four decimal places)
computed by dividing: (x) the last reported sale price of the Company's
common stock on the New York Stock Exchange (or such other principal
trading market for the Company's common stock) at the close of the trading
day immediately preceding the Date of Termination, by (y) the value of
each Termination Option as determined by the Company in accordance with
GAAP using the Black-Scholes model. The Restricted Stock will be issued
under the following conditions (i) except as provided below, the
Restricted Stock shall be granted under and subject to one of the
Company's stock incentive plans, if available and to the extent that the
Executive would be eligible for a grant thereunder; (ii) the Restricted
Stock shall be 100% vested and shall not be subject to any restrictions
following the Date of Termination; (iii) Executive will be entitled to the
Restricted Stock whether or not Executive is still providing services to
the Company; and (iv) each Restricted Stock grant shall be evidenced by,
and subject to, a restricted stock agreement with terms and conditions
that are consistent with the terms hereof.
(vi) To the extent necessary to carry out the intended
terms of paragraph 8(a)(v), the number of shares of the Company's common
stock that may be acquired pursuant to the Termination Option or the
number of shares of Restricted Stock, as the case may be, 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 or holders of restricted stock grants. To the extent a
stock option plan or a stock incentive plan is not available or the
Executive is not eligible to receive grants thereunder as specified in
paragraph 8(v)(A)(1) or 8(v)(B)(i) of this Agreement, as applicable, the
Company will grant the Termination Option or issue common stock to the
Executive in accordance with this Agreement and on terms no less favorable
than those provided under such plans. The Company shall take all action
necessary such that all shares of the Company's common stock issued as
Restricted Stock hereunder or issuable upon exercise of the Termination
Option (and all other shares of common stock held by Executive) are
registered on Form S-3 or Form S-8 (or any successor or other appropriate
form).
(vii) 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
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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
(viii) 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
(ix) 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 Company's 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
(x) 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 Executive's
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.
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(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 Executive's 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 Executive's employment is terminated by his
death:
(i) the Company shall pay in a lump sum to Executive's
beneficiary, legal representatives or estate, as the case may be,
Executive's 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 Executive's spouse and dependents with Continued Benefits
for seven (7) year; and
(ii) the Company shall reimburse Executive's
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) Executive's 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) Executive's 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
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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 Executive's 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 Executive's
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
Executive's 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
12
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 Company's 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
Executive's 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
13
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
14
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
Executive's 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 Company's sole discretion may be regular counsel
15
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
Executive's 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, Executive's legal fees and
expenses, regardless of outcome.
13. Successors; Binding Agreement.
(a) Company's 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) Executive's 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 Executive's death, this Agreement
and all rights of Executive hereunder shall inure to the
16
benefit of and be enforceable by Executive's beneficiary or beneficiaries,
personal or legal representatives, or estate, to the extent any such person
succeeds to Executive's 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 Executive's death by giving
the Company written notice thereof. In the event of Executive's 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:
Xxxx Xxxx
000 Xxxx Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
If to the Company:
Clear Channel Communications, Inc.
000 Xxxx Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Secretary
and
Clear Channel Communications, Inc.
000 Xxxx Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: General Counsel
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx
Attention: J. Xxxxxxx Xxxxxx, Xx.
17
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 Executive's 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.
19. Withholding. All payments hereunder shall be subject to any
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.
20. 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 Company's ability to enter into or perform this Agreement.
21. 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.
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ XXXX X. XXXXXXXX
---------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman of the Compensation Committee
/s/ XXXX XXXX
---------------------------------------------
Xxxx Xxxx
19
