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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into effective
as of February 14, 1996, between Chancellor Holdings Corp., a Delaware
Corporation ("Holdings"), Chancellor Broadcasting Company, a Delaware
corporation ("Company/Employer"), Chancellor Radio Broadcasting Company, a
Delaware corporation (the "Broadcasting Subsidiary"), and Xxxxxx X. Xxxxxx (the
"Employee").
W I T N E S S E T H:
WHEREAS, Holdings, Company/Employer and the Broadcasting Subsidiary
(collectively, the "Company") are engaged in the ownership and/or operation of
radio broadcast stations WUBE-AM, WUBE-FM, WKYN-AM and WYGY-FM in the
Cincinnati, Ohio market; KTCJ-AM, KTCZ-FM, KDWB-FM, KEEY-FM and KFAN-AM in the
Minneapolis-St. Xxxx, Minnesota market; WOCL-FM, WXXL-FM, WOMX-FM, WJHM-FM in
the Orlando, Florida market; WWSW-FM and WWSW-AM in the Pittsburgh, Pennsylvania
market; WALK-AM/FM, WBLI-FM, WBAB-FM, WHFM-FM, and WGBB-AM in the
Nassau-Suffolk Counties, New York Market and WFOX-FM in the Atlanta, Georgia
market (collectively, the "Stations");
WHEREAS, the Company desires to employ the Employee in an executive
capacity to assume supervisory responsibilities of the Stations;
WHEREAS, the Employee desires to be employed by the Company in said
capacity;
WHEREAS, the Employee is currently employed by the Company pursuant to
an employment agreement which the parties hereto desire to supersede by the
execution and delivery of this Agreement; and
WHEREAS, the parties hereto desire to set forth in writing the terms
and conditions of their understandings and agreements.
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises contained herein and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. EMPLOYMENT PERIOD. Unless earlier terminated in accordance with
the terms of this Agreement, the period of the Employee's employment under this
Agreement (the "Employment Period") shall commence on February 14, 1996 (the
"Employment Date") and shall end upon the earlier of (a) the termination of
this Agreement in accordance with Section 6 below, and (b) December 31, 2000.
2. DUTIES. (a) The Employee shall serve as a Senior Vice
President of the Company and as Regional Manager of the Stations. The Employee
shall diligently devote his working time, attention, knowledge and skills solely
to the business and interest of the Company and shall discharge the duties and
assume the responsibilities assigned to him from time to time by the Chief
Executive Officer and Board of Directors of Company (it being specifically
understood
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that such duties and responsibilities may from time to time relate to the
operations of broadcast stations other than the stations that are owned by the
Company or its Affiliates (as hereinafter defined)). Notwithstanding any
additional duties assigned to the Employee relating to the operations of other
broadcast stations owned by the Company or its Affiliates, the Company hereby
agrees that in connection with such additional duties, the Employee will not be
required without his consent to move to a location other than the Cincinnati,
Ohio area.
(b) The Company shall be entitled to all of the benefits,
profits or other issues arising from or incident to all work, services and
advice of the Employee. The Employee shall not during the term hereof be
interested, directly or indirectly without the written consent of the Company,
which consent shall not be unreasonably withheld, in any manner, as a partner,
officer, director, stockholder, advisor, investor, creditor or employee, or in
any other capacity, in any broadcast station, cable television operator, or
daily newspaper; provided, however, that nothing contained herein shall be
deemed or prevent the Employee from investing his personal funds in the capital
stock or other securities of a corporation whose stock or securities are
publicly owned or are regularly traded on any public exchange, provided he does
not own more than two percent (2%) thereof.
(c) During the term of this Agreement, Employee shall notify
Company within 24 hours of any written solicitation of Employee for employment.
Further, during the term of this Agreement, Employee will not enter into nor
engage in negotiations for agreements, whether oral or written, relating to
employment, consulting or affiliation and/or any other arrangements with or for
any radio, television or cable broadcast station or broadcast company located in
the markets in which the Company owns or operates a radio station.
3. COMPENSATION. As compensation for the Employee's services as
set forth in Section 2 hereof, the Company hereby agrees to pay the Employee,
and the Employee agrees to accept:
(a) a base salary (the "Base Salary"), payable in accordance
with the Company's payroll policies, at an annual rate of Three hundred
Seventy-Five Thousand Dollars ($375,000), prorated for the period from February
14, 1996 through December 31, 1996. On December 31, 1996, and on each December
31 thereafter during the term of this Agreement (each an "adjustment Date"), the
Base Salary for the next succeeding year shall be increased not less than three
percent but not more than five percent over the amount of the Base Salary in
effect for the year ended on such Adjustment Date, as determined by the Chief
Executive Officer and Board of Directors of the Company;
(b) an annual bonus of 50% of the Employee's Base Salary
(the "Broadcast Cash Flow Bonus") for each fiscal year of the Company subsequent
to 1995, based on the Stations achieving the broadcast cash flow projections
published in the Financial Projections Book dated December 11, 1996 and outlined
in Exhibit A attached hereto and incorporated by reference herein or otherwise
established by the Board of Directors of the Company (the "BCF Projections"), it
being understood that the Employee shall be entitled to receive within 20 days
after the end of each fiscal quarter in which the Stations achieve the BCF
Projections therefor, as payment against the Broadcast Cash Flow Bonus for the
fiscal year in which such fiscal quarter occurred, an amount equaling one-eight
of the maximum possible Broadcast Cash Flow Bonus for such fiscal year, with the
remaining amount of the Broadcast Cash Flow Bonus, if any, to be paid within 60
days
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after the end of such fiscal year. EMPLOYEE shall receive an annual bonus of
40% of the EMPLOYEE's Base Salary for each fiscal year of the Company
subsequent to 1995, based on the Stations achieving 97.5% of the BCF
Projections. The BCF Projections will be adjusted to reflect acquisitions or
dispositions of stations under the supervision of the Employee, and the
stations under the supervision of the Employee after any such acquisition or
disposition shall be deemed thereafter to be the Stations for all purposes of
this Agreement. In the event the Stations do not achieve in any fiscal year at
least 97.5% of the BCF Projections therefor but the consolidated broadcast cash
flow projection for the Company set forth in Exhibit A or otherwise established
for such year by the Board of Directors of the Company (the "Consolidated BCF
Projection") is achieved, the Chief Executive Officer, subject to the authority
of the Board of Directors of the Company, may elect to pay the Broadcast Cash
Flow Bonus to the Employee.
(c) an annual bonus for each fiscal year equaling 10% of
the amount by which the aggregate broadcast cash flow for the Stations exceeds
the aggregate BCF Projections for the Stations for such fiscal year, provided,
however that at the discretion of the Chief Executive Officer and the Board of
Directors of the Company, the Company may decline to pay such a bonus for any
fiscal year if the Company fails to achieve the Consolidated BCF Projection for
such fiscal year.
4. BENEFITS. (a) The Company shall provide the benefits to
the Employee set forth below, which benefits may be modified from time to time,
at the sole discretion of the Company, e.g., the Company may select a different
health care provider with competitive rates, provided that comparable benefits
are offered to the Employee in place of the benefits which are modified.
(b) The Company shall provide the Employee, and keep in
full force and effect, a term life insurance policy with a face amount of Two
Hundred Fifty Thousand Dollars ($250,000.00) without cost to Employee except,
Employee shall be solely responsible for the payment of any federal and/or
state taxes that be levied as a result of the Company furnishing said policy,
and the Employee, his estate and heirs shall indemnify and hold harmless the
Company from any and all taxes related thereto. The Employee shall have the
privilege of designating the beneficiary thereof and may change the beneficiary
thereof by written notice to the Company and shall further have any other
rights or ownership provided by said policy subject to the rules and
regulations of the issuing insurance company. Upon termination of this
Agreement, the Company shall assign said policy to the Employee without cost
to the Employee, provided that the Employee shall pay all premiums and other
costs relating to such policy from the date of such assignment.
(c) The Company shall provide the Employee and his
immediate family major medical coverage and, if the Employee qualifies,
disability insurance in an annual amount of One Hundred Twenty-Five Thousand
Dollars ($125,000.00). If the Company is notified that the Employee does not
qualify for such disability insurance, the Company will give the Employee
written notice within five (5) working days after the Company is so notified.
(d) The Employee shall be reimbursed for all reasonable and
necessary business expenses for travel (which shall be deemed to include first
class air travel) and entertainment in connection with the Company's business;
provided, however, that no reimbursement shall be made for any expenses unless
they are evidenced by valid receipts and documents and are properly
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deductible, to the extent such expenses are deductible for federal income tax
purposes, and are consistent with the Company's policies as established from
time to time. In the event that the Company shall determine in its sole
discretion that certain categories of expenses which have been previously
reimbursable will no longer be reimbursable then, in that event, the Company
shall provide the Employee with thirty (30) days written notice of same;
provided, however, that any such unreimbursable expenses incurred by the
Employee prior to the effective date of the notice will nevertheless be
reimbursed by the Company.
(e) In addition, the Company will provide the Employee with use of
an automobile with a value of up to Sixty Thousand Dollars ($60,000.00) and
shall reimburse the Employee for taxes associated with said automobile.
(f) The Employee shall be given four (4) weeks paid vacation each
calendar year, as well as personal leave, holiday leave and sick leave in
accordance with the general practice of the Company. Said vacation shall not be
taken for four (4) continuous weeks, but must be taken in accordance with the
Company's policies, as in effect from time to time.
(g) The Company shall provide the Employee with a membership at a
tennis, fitness or business lunch club, or similar facility, the use of which
shall be for business purposes and the annual dues of which shall not exceed
Seventy Five Hundred Dollars ($7,500.00). The Company shall have the right to
approve such membership in advance and shall thereafter pay the cost and
expenses of such membership. The Employee's membership in said club shall
automatically terminate upon the termination of his employment for any reason.
(h) The Employee shall be entitled to participate in the Company's
Stock Option Plan in accordance with the terms thereof and, at the discretion
of the Board of Directors of the Company, shall be granted awards thereunder
from time to time.
5. DEATH OR DISABILITY. This Agreement shall terminate immediately
upon the Employee's death. In the event the Employee shall become Disabled (as
hereinafter defined), the Company shall have the right to terminate this
Agreement as of a date not less than ten (10) days from the date of written
notice to the Employee or his personal representative, and the Employee or his
personal representative shall be entitled to receive the Employee's earned
salary and earned bonus, if any, at the rates provided in Section 3 of this
Agreement, through the end of the month in which such termination occurs. The
Employee shall be deemed to have become 'Disabled' if because of ill health,
physical or mental Disability (as hereinafter defined) or for other causes
beyond his control he shall have been unable to perform his duties hereunder for
a period of twelve (12) consecutive weeks or for a cumulative total of four (4)
months in a calendar year. 'Disability' shall mean physical or mental impairment
of the Employee which results in the inability of the Employee to engage in his
regular duties in the same fashion and to the same extent as others occupying
the same position in the radio industry. Disability shall be established by a
written certification by a medical doctor agreed to by the Company and the
Employee. In the absence of such an agreement, the Company and the Employee
shall each nominate a qualified medical doctor and these two doctors shall
select a third qualified medical doctor, which third doctor shall make the
determination as to the Disability of the Employee.
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6. TERMINATION OF EMPLOYMENT. (a) The Employment Period may be
terminated at any time by the Company by written notice to the Employee.
Notwithstanding anything to the contrary contained herein, if such termination
is with Cause (as hereinafter defined), all of the Employee's rights to
compensation and other rights under Sections 3, 4 and 5 above shall terminate
upon such termination, except the right to payment for amounts accrued in
respect of periods prior to such termination, which amounts, if any, shall be
paid in a lump sum. If such termination is without Cause, the Company shall pay
to the Employee, in a lump sum, an amount equal to (i) any amounts accrued in
respect of period prior to such termination including but not limited to salary
and all bonuses plus (ii) his aggregate Base Salary for two years from the date
of termination. Termination "For Cause" is defined as follows:
* Employee materially breaches the Agreement, after receipt of
written notice by Employer, and Employee's failure to commence
to cure within 30 days and to complete cure within 60 days, or
such longer time as Employer may specify.
* Employee is convicted of a felony under federal, state or local
laws.
* If Employer reasonably determines, upon written notice and
following a hearing by a court of competent jurisdiction or by
arbitration, that Employee has violated rules or policies of the
Federal Communications Commission (FCC) or any applicable law
which may jeopardize the Station's FCC license and
authorizations.
* Employee is intoxicated or uses, possesses, sells, trades in,
delivers, or is under the influence of any illegal drug while
performing duties for Employer or on premises of Employer.
* Employee commits any act involving moral turpitude under federal,
state or local laws, or which might reflect unfavorably upon the
Employer, the Station, the sponsors, if any, of their advertising
agencies, if any, or otherwise injure the success of the
programs.
(b) The Employment Period may be terminated at any time by the
Employee for Good Reason (as hereinafter defined) by written notice to the
Company, "Good Reason" shall mean (i) any change in the Employee's functions,
duties or responsibilities from his position on the Employment Date without the
Employee's consent if such change would (x) reduce the Employee's functions,
duties or responsibilities from those in effect on the Employment Date of the
date of amendment, whichever is applicable, to a level that is not commensurate
with those of an executive in the Employee's position prior to such change (it
being understood that the reassignment of any of the Employee's functions,
duties, or responsibilities to one or more other persons who report directly or
indirectly to the Employee shall not be considered a reduction of the
Employee's functions, duties or responsibilities, or (y) cause the Employee's
position with the Company to become one of lesser importance or scope or (ii)
any material breach of this Agreement by the Company which is not cured within
30 days after written notice from the Employee to the Company. If the
Employment Period is terminated by the Employee for Good Reason, the Company
shall pay to the Employee, in monthly installments equal to the Employee's
monthly Base Salary at the time of termination, the same amount the Employee
would have been
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paid had the Company terminated his employment without cause. If the Employee
voluntarily terminates his employment without Good Reason, all his rights to
compensation and other rights under Sections 3, 4 and 5 shall terminate
immediately, except the right to payment for amounts accrued in respect of
periods prior to such termination.
(c) Any amounts payable to the Employee in installments
pursuant to this Section 6 may, at the option of Company, be paid in a lump sum
rather than in installments as provided above. In any event, all such amounts
(whether paid in installments or in a lump sum) shall be considered severance
payments and be in full and complete satisfaction of the obligations of the
Company to the Employee in connection with the termination of the Employee. For
purposes of this Agreement, the Employee's right to bonus payment shall accrue
in accordance with paragraph 3 herein. During the period any payments are being
made to the Employee pursuant to this Section 6, the Employee shall be entitled
to continue to participate in all employee benefit plans available to employees
of the Company generally and to continuation of any perquisites provided to the
Employee by the Company at the time of termination (except that the Employee
will be required to return the automobile provided by the Company hereto within
30 days of the Employee's termination).
7. COVENANT NOT TO COMPLETE. (a) The Employee does hereby agree,
subject to the provision set forth in Section 2(b) of this Agreement, that he
shall not during the term of this Agreement or any extension hereof and for a
period of six (6) months after expiration or termination of his employment with
the Company be directly or indirectly employed or retained by, own, manage,
invest, lend money to, guarantee the obligation of, participate in, associate
with, advise, or be connected in any manner as an officer, stockholder,
employee, partner, director, consultant, advisor, investor or creditor of, any
broadcast station in competition with the Company or licensed to or whole
transmitter is located within any community or Metro Survey Area (as defined by
Arbitron) of any of the Stations or any other radio stations owned by the
Company or its affiliates where the Employee is working day-to-day at said
stations or supervising said stations at the time of such termination of
employment.
(b) In the event any provision herein shall be deemed
invalid or unenforceable in any respect by any court or other tribunal of
competent jurisdiction as to any one or more periods of time, geographical
areas, business or activities, the remaining provisions shall not thereby by
effected but shall remain in full force and effect, and this Agreement shall be
deemed to be amended without further action by the parties hereto to the extent
necessary to render it valid and enforceable, all as determined by such court
or tribunal.
(c) The Employee further acknowledges and agrees that in
the event of a breach or threatened breach of the covenants in this Section 7,
the Company shall be entitled to request from a court of competent jurisdiction
the entry of a temporary restraining order upon notice to the Employee, as well
as the entry of a preliminary and permanent injunction. Said right to an
injunction shall be in addition to and not in limitation of any other right or
remedies the Company may have for damages or otherwise.
(d) In addition, during the term of this Agreement and for
a period of one (1) year after expiration or termination, regardless of whether
terminated with or without cause, either by Employer or Employee, Employee
agrees he shall not directly or indirectly solicit,
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attempt to solicit, induce or attempt to induce any officer, full-time or
part-time Employee or consultant of Employer to terminate their employment with
Employer or (directly or indirectly employ, hire, retain or) assist in the
employing, hiring or retaining or be associated in any manner in any business
with a person who within one (1) year prior to such employment, hiring or
retainer was employed or connected with in any manner, the Employer or any of
its stations.
8. CONFIDENTIAL INFORMATION AND TRADE SECRETS. (a) The Employee
acknowledges that during the course of his regular duties, he will have access
to confidential information and trade secrets of the Company and its
subsidiaries, including, but not limited to financial information, data
relating to formats, promotions, hiring plans, market studies, concepts,
strategies, methods of doing business and other "know how" ("Confidential
Information"), which the Employee acknowledges to be a valuable trade asset of
the Company; provided, it is understood that common general practices in the
radio industry and knowledge in the public domain shall not be considered
Confidential Information. The Employee shall not at any time during the term of
this Agreement or at any time after termination of employment for any reason,
directly or indirectly, use for himself or others, or divulge to others any
Confidential Information or other data of the Company obtained as a result of
his employment.
(h) In the event the covenant set forth in this Section 8
is violated, the Company shall be entitled to injunctive relief to prevent the
continued violation of this provision.
9. TRADE NAME, TRADEMARKS AND COPYRIGHTS. The Employees shall at
no time during or after the termination of his employment have or claim to have
any right, title or interest in any trade name, trademark, service xxxx,
copyright, mailing or circulation lists, manuscripts, artwork, or character
name belonging to or used or to be used by the Company or any of its other
employees, it being the intention of this Agreement that the Employee shall, and
hereby does, recognize that the Company now has and retains, and hereafter may
have and retain, the sole and exclusive right in any and all such trade names,
trademarks, service marks, copyrights, character names, and other material and
matter referred to in this Section 9.
10. PUBLIC STATEMENT. The Employee agrees not to directly or
indirectly publish, circulate, utter or disseminate, or cause to be publicized,
circulated, uttered or disseminated, in any manner of by any means whatsoever,
to any person or person whomsoever, any statements, comments or material
whatsoever, which could or would, in any manner whatsoever, either reflect
unfavorable on the reputation of the Company or harm, damage or impair the
business or operation of the Company unless required by law of by a valid order
of a court of competent jurisdiction. Sections 8 through 10 of this Agreement
shall apply whether this Agreement is terminated by the Company, the Employee,
or upon its expiration.
11. FREEDOM TO CONTRACT. The Employee represents and warrants that
he has the right to negotiate and enter into this Agreement and that this
Agreement does not breach, interfere with or conflict with any other
contractual agreement, covenant not to compete, option, right of first refusal
or other existing business relationship.
12. INDEMNITY. The Company shall indemnify the Employee in his
capacity as an officer of the Company in accordance with Article Ninth of the
Second Restated Certificate of Incorporation of Holdings as in effect on the
Employment Date.
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13. ASSIGNMENT. The obligations and rights of the Employee under
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the Company, and the Company may, at its option, assign this
Agreement to the purchaser of all or substantially all of the assets of the
Company or the Stations, subject to the Agreement Regarding Change in Control
to become a part of this Agreement.
14. SEVERABILITY. The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or enforceability of
any other term or provision of this Agreement, and this Agreement shall be
construed in all other respects as if the invalid or unenforceable term or
provision were omitted.
15. WAIVER. A waiver by either party of any term or condition of
this Agreement in any instance shall not be construed as a waiver of any other
term or condition. All remedies, rights and obligations contained in this
Agreement shall be cumulative, and none of them shall be in limitation of any
other remedy, right or obligation of either party.
16. APPLICABLE LAW. This Agreement shall be construed in accordance
with the laws of the State of Texas and is subject to the terms of licenses now
and hereafter held by the Company and all applicable federal, state and
municipal laws, ordinances and regulations now and hereafter in force.
17. HEADINGS. The headings used in this Agreement are used for
reference purposes only and are not deemed controlling with respect to the
contents hereof.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall for all purposes be deemed to be
an original.
19. ENTIRE AGREEMENT. This Agreement including the Exhibits
referenced herein and attached hereto sets forth the entire understanding of
the parties with respect to the Company's employment of the Employee and
supersedes all previous agreements and understandings with respect to such
matter, and it may not be changed except by a written document executed by all
of the parties hereto.
20. BINDING EFFECT. The terms of this agreement shall be binding
upon and inure to the benefit of and shall be enforceable by the parties'
respective successors, assigns, heirs, beneficiaries and personal
representatives.
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21. NOTICES. Any notices to be given hereunder by either party to
the other shall be in writing and shall be deemed given when personally
delivered or five (5) days after having been mailed by Federal Express or other
overnight mail service, or by certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Company, Holdings or the Broadcasting Subsidiary:
c/o Chancellor Broadcasting Company
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx
With a copy to:
Xxxxxxx Xxxxxxxxx, Esq.
Xxxxxxxxx & Associates, P.A.
0 XX 0 Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxxx
Weil, Gotshal & Xxxxxx, L.L.P.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to the Employee:
Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
With a copy to:
Cyd Xxxx Xxxx, Esq.
2840 Xxxx Xxxxx Tower
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
22. ATTORNEY'S FEES. In the event any action at law or in equity is
necessary to enforce or interpret the terms of this AGREEMENT, the prevailing
part shall be entitled to receive reasonable attorneys fees, expenses and
costs, in addition to any other relief to which the party may be entitled, for
both the trial and appellate levels.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
CHANCELLOR HOLDINGS CORP.
By: /s/ XXXXXX XXXXXX
----------------------------
Xxxxxx Xxxxxx
President
CHANCELLOR BROADCASTING COMPANY
By: /s/ XXXXXX XXXXXX
----------------------------
Xxxxxx Xxxxxx
President
CHANCELLOR RADIO BROADCASTING
COMPANY
By: /s/ XXXXXX XXXXXX
----------------------------
Xxxxxx Xxxxxx
President
/s/ XXXXXX X. XXXXXX
--------------------------------
Xxxxxx X. Xxxxxx
