EXHIBIT 10.18
FLCC HOLDINGS, INC.
C/O FORSTMANN LITTLE & CO.
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
April 10, 2002
Xx. Xxxxxxxx X. Xxxxxx
Xxxxx and Associates, LLC
Rio Bravo Limited, LLC
00 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Dear Xx. Xxxxxx:
This letter confirms our agreement as to your employment status and
certain related matters with FLCC Holdings, Inc. (the "Company") and its
subsidiaries (together with the Company, "Citadel"). Reference is made to (i)
the Stockholder's Agreement, dated as of June 26, 2001 (the "Rio Bravo
Agreement"), between the Company, Xxxxxxxx X. Xxxxxx, Rio Bravo Enterprise
Associates, L.P., a Georgia limited partnership ("Rio Bravo Enterprise"), and
Rio Bravo, Inc., a Wyoming corporation ("Rio Bravo"), and (ii) the Stockholder's
Agreement, dated as of June 26, 2001, between the Company, Xxxxxxxx X. Xxxxxx,
Xxxxx X. Xxxxxxx, D. Xxxxxx Xxxxxxxx, Xxxxx and Associates, LLC, a Nevada
limited liability company ("Xxxxx"), Rio Bravo Enterprise, and Rio Bravo (the
"Xxxxx Agreement" and, together with the Rio Bravo Agreement, the "Stockholder's
Agreements"). Capitalized terms used but not otherwise defined in this letter
agreement shall have the meanings given to them in the Stockholder's Agreements.
Upon acceptance by you, the following will constitute our agreement with respect
to the matters set forth in this letter agreement.
1. REPURCHASE OF SHARES. At the Closing (as defined below), the
Company shall purchase all of the shares of Class B Common Stock of the Company
(the "Shares") held by you, Rio Bravo Limited, LLC ("Rio Bravo Limited") (as
transferee of the Shares acquired by Rio Bravo Enterprise) and Xxxxx (each, a
"Seller" and, collectively, the "Sellers") for an aggregate purchase price equal
to $12,999,938 in cash (the "Purchase Price"). Each Seller hereby acknowledges
that it has good and unencumbered title to the Shares held by it, free and clear
of all liens, security
interests, encumbrances and adverse claims of any kind and nature (collectively,
"Liens") (other than those in favor of the Company under the Stockholder's
Agreements), and that, upon delivery of the Shares and payment therefor pursuant
hereto, good and valid title to the Shares shall pass to the Company.
2. CLOSING OF PURCHASE OF SHARES. The closing of the purchase of the
Shares pursuant to paragraph 1 of this letter agreement (the "Closing") shall
take place on April 23, 2002, at the offices of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., local time. At
the Closing, (a) each Seller shall sell, convey, transfer, assign and deliver to
the Company all right, title and interest in and to the Shares held by such
Seller, and take such other actions as may be reasonably required to consummate
the transactions contemplated by paragraph 1 of this letter agreement, and (b)
the Company shall deliver the Purchase Price by wire transfer to an account
designated by the Sellers, and take such other actions as may be reasonably
required to consummate the transactions contemplated by paragraph 1 of this
letter agreement.
3. SALE OF AIRPLANE. Simultaneously herewith, the Company and Xxxxxx
Aviation, LLC, an Arizona limited liability company, are entering into the
agreement attached hereto as EXHIBIT A relating to the purchase of Citadel's
Falcon Jet 20-5 Series F airplane (the "Aircraft") for an aggregate purchase
price of $4 million (the "Airplane Purchase Price"). The closing of the purchase
of the Aircraft (the "Aircraft Closing") shall occur simultaneously with the
Closing and shall take place at the offices of the Company. At the Aircraft
Closing, you shall deliver to the Company the Airplane Purchase Price by wire
transfer to an account designated by the Company, and the Company shall deliver
to you title to the Aircraft, free and clear of any Liens. Each party shall bear
its own expenses in connection with the sale of the Aircraft to you.
4. RESIGNATIONS. Effective upon the Closing, you shall be deemed to
have resigned from the Board of Directors of the Company and all subsidiaries of
which you are a director, and from all positions as an officer and employee of
the Company and its subsidiaries that you hold at such time. At the Closing, you
shall deliver to Citadel the written resignations of Messrs. Xxxxxx and Xxxxxxxx
from the Board of Directors of the Company effective at the Closing.
5. SALARY AND BENEFITS. At the Closing, you shall receive a lump-sum
cash payment (subject to any applicable withholding taxes) equal to the total
salary to which you would have been entitled for the period from January 1, 2002
through December 31, 2002 assuming your annual compensation is $600,000 and
after giving effect to any amounts previously paid to you in respect of such
period prior to the Closing. In addition, at the Closing, the Company shall
convey to you all of its rights,
title to and interest in the personal and other property set forth on Schedule A
hereto (subject to any applicable withholding taxes). You shall be entitled to
continue to participate, pursuant to COBRA, on the same terms as you are
currently participating, in the Company's medical and health benefits plans for
eighteen months (or such longer period as required by law) following the
Closing, and the Company shall pay all of your COBRA premiums through December
31, 2002. Following the Closing, the Company shall, in accordance with the
provisions of the Company's 401(k) plan, take all steps reasonably necessary to
effect a "roll over" of your 401(k) account to a new account designated by you.
During the 60-day period following the date of this letter agreement, the
Company shall make available to you the administrative services of Xxxxxxx
Xxxxxxxxx, to assist you, on an as-needed basis, to ensure an orderly
transition, subject to the performance by her of her usual and customary duties
on behalf of the Company. You acknowledge and agree that, from and after the
Closing, you are not and shall not be entitled to any other salary, benefits or
compensation from the Company.
6. TERMINATION OF AGREEMENTS; RELEASES. Effective upon the Closing,
(i) the Stockholder's Agreements and your employment agreement with Citadel
Communications Corporation and Citadel Broadcasting Company, dated as of June
28, 1996 (the "Employment Agreement"), shall be terminated and of no further
force and effect, and (ii) you, Rio Bravo Enterprise and Rio Bravo Limited shall
have no rights or obligations whatsoever under the Registration Rights
Agreement. You, Rio Bravo, Rio Bravo Enterprise, Rio Bravo Limited and Xxxxx and
their respective present and former subsidiaries, affiliates, managing members,
successors and assigns, on the one hand (the "Xxxxxx Affiliates," which for the
avoidance of doubt shall not include Xxxxx X. Xxxxxxx or D. Xxxxxx Xxxxxxxx),
and Citadel and Forstmann Little & Co. and their present and former
subsidiaries, partners, affiliates, officers, employees, agents, attorneys,
successors and assigns, on the other (collectively, the "Citadel Affiliates"),
do hereby forever and fully release, acquit, waive, relinquish, discharge and
exonerate the other from and against any and all actions or causes of actions,
suits, debts, contracts, agreements, promises, liabilities, claims, demands,
damages, covenants, warranties, injuries to both person and property, sums of
money, controversies, accounts, liens, losses or costs and expenses, of every
kind and nature whatsoever, known or unknown, fixed or contingent, foreseen or
unforeseen, in respect of, arising out of, based upon or relating to the
Stockholder's Agreements, the Employment Agreement, the Registration Rights
Agreement, your employment with Citadel and all Citadel Affiliates or your
termination of your employment with Citadel and all Citadel Affiliates,
including, without limitation, any claims under the federal Age Discrimination
in Employment Act, as amended, and any similar or analogous state statute.
Notwithstanding the foregoing, nothing in this paragraph 6 shall be deemed to
modify or terminate in any respect (i) any rights to indemnification under
Citadel's charter, bylaws, any applicable state corporate statute or Section 6.5
of the Agreement
and Plan of Merger by and between Citadel Communications Corporation and the
Company, dated as of January 15, 2001, to which you would otherwise be entitled
as an officer and/or director of Citadel or (ii) any rights you have under this
letter agreement; and without limiting the generality of subclause (i) above,
you shall continue to have the benefit of any directors' and officers' insurance
coverage maintained by Citadel for periods when you served as an officer and/or
director thereof.
7. VOLUNTARY AGREEMENT; ATTORNEY CONSULTATION. You represent that
you have carefully read this letter agreement, that you know and understand the
contents of this letter agreement, that you are executing this letter agreement
knowingly and voluntarily as your own free act and deed, that the terms of this
letter agreement including, but not limited to, those of paragraph 6 are totally
satisfactory and thoroughly understood by you, and that you are entering into
this letter agreement without fraud, duress or coercion.
You acknowledge that you have been advised to consult with, and have
been advised by, an attorney in connection with the negotiation and execution of
this letter agreement, and have had such time as is required under 29 U.S.C. ss.
626(f) to consider this letter agreement. You acknowledge that this letter
agreement hereby provides for a period of seven (7) days following the date
hereof to revoke your acceptance of the terms of paragraph 6, and paragraph 6
shall not be effective until a period of seven days has elapsed after the date
hereof and during which seven day period you have not revoked your acceptance of
such paragraph. If you revoke your acceptance of the terms of paragraph 6, this
letter agreement shall not be effective or enforceable and shall be void and of
no force and effect.
8. CERTAIN AGREEMENTS. You agree that, from and after the Closing,
neither you nor any Xxxxxx Affiliate controlled by you shall (a) publish or make
any disparaging statements about any Citadel Affiliate, or (b) disclose or
furnish to any other Person any Confidential or Proprietary Information, the
terms of or the transactions contemplated by this letter agreement or the
financial condition of Citadel, except as is required by law and except for
information which (x) is or becomes publicly available other than as a result of
a disclosure by you, your representatives or such Xxxxxx Affiliates, or (y) is
or becomes available to you or such Xxxxxx Affiliates on a nonconfidential basis
from a source which, to the best of your knowledge, is not prohibited from
disclosing such information to you or such Xxxxxx Affiliates by a legal,
contractual or fiduciary obligation to the Citadel Affiliates. Notwithstanding
anything contained herein to the contrary, you and the Xxxxxx Affiliates shall
have the right to disclose any such information (i) to your or their financial,
legal and accounting advisors and to any sources of financing so long as such
persons agree to abide by the terms of paragraph 8 and (ii) in any Xxxxxx
Affiliate's financial
statements and the related notes thereto to the extent required (as determined
in the reasonable discretion of you and your advisors) by applicable accounting
principles. You also agree that, for the period commencing on the date of the
Closing and ending on December 31, 2002, neither you nor any Xxxxxx Affiliate
controlled by you shall engage in any Competitive Activity (as defined below).
In addition, for a period of two years following the Closing, neither you nor
any Xxxxxx Affiliate controlled by you shall directly or indirectly solicit for
employment, including without limitation recommending to any other Person the
solicitation for employment of, any employee of any Citadel Affiliate (other
than Xxxxx Xxxxxx and Xxxxx XxXxxxx, the pilots of the Aircraft).
For purposes of this letter agreement, "Competitive Activity" shall
mean engaging in any of the following activities: (i) serving as a director of
any Competitor; (ii) directly or indirectly (X) controlling any Competitor or
(Y) owning any equity or debt interests in any Competitor (other than equity or
debt interests which are publicly traded and do not exceed 2% of the particular
class of interests then outstanding) (it being understood that, if any such
interests in any Competitor are owned by an investment vehicle or other entity
in which you own an equity interest, a portion of the interests in such
Competitor owned by such entity shall be attributed to you, such portion
determined by applying the percentage of the equity interest in such entity
owned by you to the interests in such Competitor owned by such entity); (iii)
directly or indirectly soliciting, diverting, taking away, appropriating or
otherwise interfering with any of the customers or suppliers of the Company or
any Affiliate of the Company (other than customers or suppliers in the
Nashville, Tennessee market, if such actions are taken solely in connection with
the acquisition or operation of a Radio Broadcasting Business in such market);
or (iv) employment by (including serving as an officer or director of), or
providing consulting services to, any Competitor; PROVIDED, HOWEVER, that if the
Competitor has more than one discrete and readily distinguishable part of its
business, employment by or providing consulting services to any Competitor shall
be Competitive Activity only if (1) your employment duties are at or involving
the part of the Competitor's business that competes with any of the businesses
conducted by the Company or any of its subsidiaries (the "Competing
Operations"), including serving in a capacity where any person at the Competing
Operations reports to you, or (2) the consulting services are provided to or
involve the Competing Operations.
For purposes of this letter agreement, "Competitor" shall mean any
Person that is engaged in owning, operating or acquiring directly or indirectly
(through a corporation, trust, partnership or other Person) a Radio Broadcasting
Business that operates in the same market as and competes directly or indirectly
with a Radio Broadcasting Business which is owned or operated by the Company or
any of its subsidiaries (a "Company Radio Business"); PROVIDED, HOWEVER, that
the foregoing
shall not be deemed to include any Person that operates a Radio Broadcasting
Business solely in the Nashville, Tennessee market and/or competes with a
Company Radio Business solely in such market.
The Company agrees that, from and after the Closing, it shall not, and
it shall use its best efforts to cause its officers and directors to not, (a)
publish or make any disparaging statements about you, any Xxxxxx Affiliates
controlled by you or any of their directors, officers or employees, or (b)
disclose or furnish to any other Person the terms of or the transactions
contemplated by this letter agreement, except as is required by law and except
for information which (x) is or becomes publicly available other than as a
result of a disclosure by the Citadel Affiliates or their representatives, or
(y) is or becomes available to the Citadel Affiliates on a nonconfidential basis
from a source which, to the best of the Company's knowledge, is not prohibited
from disclosing such information to the Citadel Affiliates by a legal,
contractual or fiduciary obligation to you or such Xxxxxx Affiliates.
Notwithstanding anything contained herein to the contrary, Citadel shall have
the right to disclose any such information (i) to its financial, legal and
accounting advisors and to any sources of financing so long as such persons
agree to abide by the terms of paragraph 8 and (ii) in its financial statements
and the related notes thereto to the extent required (as determined in the
reasonable discretion of Citadel and its advisors) by applicable accounting
principles. Simultaneously herewith, Forstmann Little & Co. is delivering to you
a letter pursuant to which it is agreeing to the covenants contained in this
paragraph as they would apply to Forstmann Little & Co.
9. CERTAIN REPRESENTATIONS. Each of the Sellers represents and
warrants to Citadel and Forstmann Little & Co., and Citadel represents to each
of the Sellers, that as of the date hereof and as of the Closing (a) such Person
has all requisite power and authority to enter into and perform all of its
obligations under this letter agreement (including, without limitation, the
termination of the Stockholder's Agreements), (b) this letter agreement
represents a valid and binding agreement on such Person's part, (c) no document
or instrument of any kind to which such Person is party or by which it may be
bound would be violated by this letter agreement or the consummation of the
transactions contemplated hereby; and (d) except for any filings or consents as
may be required by the Federal Aviation Administration in connection with the
sale of the Aircraft or by the Federal Communications Commission, such Person
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any third party or any government or governmental agency
in order to consummate the transactions contemplated hereby.
10. PUBLICITY. You and the Company shall consult with each other
before issuing any press release with respect to this letter agreement or the
transactions contemplated hereby and neither party shall issue any such press
release or make any
such public statement without the prior consent of the other, which consent
shall not be unreasonably withheld; PROVIDED, HOWEVER, that a party may, without
the prior consent of the other party, issue such press release or make such
public statement as may upon the advice of counsel be required by law if it has
used all reasonable efforts to consult with the other party prior thereto.
11. MISCELLANEOUS. Sections 6.2 through 6.11 and Section 6.14 of the
Stockholder's Agreements are incorporated herein by reference; PROVIDED,
HOWEVER, that the provisions of Section 6.6(b) are hereby modified to provide
that any notices to you, Rio Bravo Limited or Xxxxx shall be sent to the
following address:
00 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Very truly yours,
FLCC HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
Agreed to and accepted, as of
the date first above written:
/s/ Xxxxxxxx X. Xxxxxx
----------------------
Xxxxxxxx X. Xxxxxx
RIO BRAVO LIMITED, LLC
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Manager
XXXXX AND ASSOCIATES, LLC
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Manager
