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Exhibit 10.5
FORM OF
CITADEL COMMUNICATIONS CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
This Option Agreement is made and entered into by and between CITADEL
COMMUNICATIONS CORPORATION, a Nevada corporation ("Company") and
________________________ ("Employee"), effective as of the 21st day of
February, 1994.
The Company has elected to provide an incentive to encourage
key employees and officers of the Company and its wholly-owned subsidiaries to
remain in the employment of such companies and to enhance the ability of the
Company and its subsidiaries to attract new employees whose services are
considered unusually valuable by providing an opportunity to have a proprietary
interest in the success of the Company. The Company believes that the granting
of the Option herein described to Employee is consistent with the foregoing
goals. The Company and Employee desire to enter into an Agreement reflecting
the terms and conditions of the Option granted to Employee.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions hereinafter set forth and for other good and valuable consideration,
the Company and Employee agree as follows:
1. Grant of Option. The Company hereby grants to Employee the
right and option (the "Option") to purchase an aggregate of __________ shares
(such number being subject to adjustment as provided in Paragraph 10 hereof) of
the Class A Common Stock of the Company (the "Stock") on the terms and
conditions herein set forth. This Option may be exercised in whole or in part
and from time to time as hereinafter provided.
2. Purchase Price. The price at which Employee shall be
entitled to purchase the Stock covered by the Option shall be $11.6363 per
share.
3. Term of Option. The Option hereby granted shall remain in
force and effect for a period of ten (10) years from February 21, 1994 (the
"Date of Grant"), through and including the normal close of business of the
Company on February 21, 2004 (the "Expiration Date"), subject to earlier
termination as provided in Paragraphs 7, 8, 9, 10 and 18 hereof.
4. Exercise of Option. The Option may be exercised by
Employee with respect to the shares specified below beginning on the dates
specified below and ending on the Expiration Date as to all or any part of the
shares covered hereby by delivery to the Company of written notice of exercise
and payment of the purchase price, and by execution of a Stock Transfer
Agreement in the form attached hereto as Exhibit A (or in such similar form as
the Company may hereafter require), as provided in Paragraphs 5 and 6 hereof.
The Option shall vest and become exercisable as of the dates specified below:
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(i) February 21, 1995, with respect to one-fifth (1/5) of the shares of
the Stock subject to the Option;
(ii) February 21, 1996, with respect to one-fifth (1/5) of the shares of
Stock subject to the Option;
(iii) February 21, 1997, with respect to one-fifth (1/5) of the shares of
the Stock subject to the Option;
(iv) February 21, 1998, with respect to one-fifth (1/5) of the shares of
the Stock subject to the Option;
(v) February 21, 1999, with respect to the remaining one-fifth (1/5) of
the shares of the Stock subject to the Option.
The Option shall cease to be exercisable as to any share when
Employee exercises the Option and purchases the share or when the Option lapses
as provided in Paragraph 3.
In the event of a public tender for all or any portion of the
Stock of the Company, or in the event that a proposal to merge, consolidate, or
otherwise combine with another company is submitted for shareholder approval,
the Committee (as defined in Paragraph 14) may in its sole discretion declare
the Option immediately exercisable even if the original date for the exercise
of the Option, as set forth in the first paragraph of this Paragraph 4, has not
yet passed.
5. Method of Exercising Option. Subject to the terms and
conditions of this Option Agreement, the Option may be exercised by timely
delivery to the Company of (i) written notice, which notice shall be effective
on the date received by the Company (the "Effective Date"), and (ii) execution
and delivery by Employee (or another permitted person or persons other than
Employee pursuant to Paragraph 8 hereof) to Company, contemporaneously with the
written notice described in the next sentence, of a Stock Transfer Restriction
Agreement in the form attached hereto as Exhibit A (or in such similar form as
the Company may hereafter require). The written notice pursuant to subparagraph
(i) of this Paragraph shall state Employee's election to exercise the Option,
the number of shares in respect of which an election to exercise has been made,
the method of payment elected, the exact name or names in which the shares will
be registered and Employee's Social Security number. Such notice shall be
signed by Employee and shall be accompanied by payment of the purchase price of
such shares. In the event the Option shall be exercised by a person or persons
other than Employee pursuant to Paragraph 8 hereof, such notice shall be signed
by such other person or persons and shall be accompanied by proof acceptable to
the Company of the legal right of such person or persons to exercise the
Option. All shares delivered by the Company upon exercise of the Option as
provided herein shall be fully paid and nonassessable upon delivery.
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6. Method of Payment for Options. Upon the exercise of all or
any part of an Option, the option price shall be payable in full by check, or,
in the event the Company is at the time of exercise a reporting Company under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in shares
of Stock owned by Employee to the extent permitted by law, or in any
combination thereof at the election of Employee. Payment of the option price
with shares of Stock owned by Employee, to the extent permitted under this
Agreement, shall be made by assigning and delivering such shares to the
Company. The shares shall be valued at Fair Market Value on the exercise date
of the Option. For purposes of this Agreement, the "Fair Market Value" of the
Stock as of any date shall be the average of the closing bid and asked prices
for the Stock as reported on the NASDAQ National Market System (or on any
national securities exchange on which the Stock is then listed) for the date
or, if no prices are so reported for that date, such prices on the next
preceding date for which closing bid and asked prices were reported.
In the event the Company becomes a reporting Company under
the Exchange Act, Employee may also pay on the option price, to the extent
permitted by applicable law, and subject to the approval of the Committee to
the extent required by Rule 16b-3(e)(2)(ii) of the Exchange Act, by directing
the Company to withhold from the shares of Stock that would otherwise be issued
upon exercise of the Option that number of shares having a Fair Market Value on
the exercise date equal to the option price. If Employee elects to exercise all
or any part of his or her Option by directing the Company to withhold shares
subject to the exercised Option, Employee must notify the Company in writing of
his or her intent to do so. In such case, the number of shares of Stock
received by Employee shall be determined pursuant to the following formula:
Number of Shares Fair Market Value - Purchase
Number = as to which the on Exercise Date Price
of Shares Option is to be ------------------------------------
Received Exercised X Fair Market Value on
Exercise Date
To the extent permitted under this Agreement, if Employee
elects to pay for all or part of the shares purchased upon the exercise of the
Option in Stock, a share certificate or certificates, together with a duly
executed stock power authorizing the transfer of such shares of the Company,
shall be delivered to the Company with the notice of exercise. Should the
number of such shares delivered for credit against the purchase price have a
Fair Market Value less than the full purchase price, the Company will issue to
Employee a new share certificate representing the number of shares in excess of
the nearest whole number of shares having a Fair Market Value not in excess of
the amount required to pay the full purchase price. No fractional shares shall
be accepted in payment or be reissued by the Company under this provision.
7. Termination of Employee. In the event that the employment
of Employee is terminated, either by Employee or by Company, for any reason
other than death of Employee, including a termination with or without cause,
any unexercised Option shall
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lapse and terminate on the effective date of the Employee's termination unless
the Committee elects, in its sole and absolute discretion, to allow the
Employee to exercise it for a period of 90 days following his termination. In
no event shall the Option, or any part thereof, be exercisable after the
Expiration Date.
8. Death of Employee. In the event of the death of Employee
within a period during which the Option, or any part thereof, could have been
exercised by Employee (the "Option Period"), the Option shall lapse unless it
is exercised within the Option Period, and in no event later than ninety (90)
days after the date of Employee's death, by Employee's legal representative or
representatives or by the person or persons entitled to do so under Employee's
last will and testament or if Employee fails to make a testamentary disposition
of such Option or shall die intestate, by the person or persons entitled to
receive such Option under the applicable laws of descent and distribution. An
Option may be exercised following the death of Employee only if the Option was
exercisable by Employee immediately prior to his death. In no event shall the
Option, or any part thereof, be exercisable after the Expiration Date. The
Company shall have the right to require evidence satisfactory to it of the
rights of any person or persons seeking to exercise the Option under this
Paragraph 8 to exercise the Option.
9. Nontransferability. The Option granted by this Agreement
shall be exercisable only during the term of the Option provided in Paragraph 3
hereof and, except as provided in Paragraphs 7 and 8 above, only by Employee
during his lifetime and while an employee of the Company. No Option granted by
this Agreement shall be transferable by Employee other than by will or pursuant
to applicable laws of descent and distribution. The Option, and any rights and
privileges in connection therewith, shall not be transferred, assigned, pledged
or hypothecated by Employee, or by any other person or persons, in any way,
whether by operation of law, or otherwise, and shall not be subject to
execution, attachment, garnishment or similar process. In the event of such an
occurrence, the Option shall automatically be terminated and shall thereafter
be null and void.
10. Adjustment in Number of Shares and Option Price. In the
event a stock dividend is declared upon the Stock, the remaining shares of
Stock then subject to this Option shall be adjusted proportionately without any
change in the aggregate purchase price therefor. In the event the Stock shall
be changed into or exchanged for a different number or class of shares of stock
of the Company or of another corporation, whether through reorganization,
recapitalization, stock split, combination of shares, merger or consolidation,
there shall be substituted for each such remaining share of Stock then subject
to this Option the number and class of shares of stock into which each
outstanding share of Stock shall be so exchanged, all without any change in the
aggregate purchase price for the shares then subject to the Option.
Subject to any required action by the stockholders, if the
Company shall be the surviving or resulting corporation in any merger or
consolidation, the Option granted hereunder shall pertain to and apply to the
securities or rights to which a holder of the
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number of shares of Stock subject to the Option would have been entitled; but a
dissolution or liquidation of the Company, or a merger or consolidation in
which the Company is not the surviving or resulting corporation, shall, in the
sole discretion of the Committee:
(a) Cause the Option outstanding hereunder to
terminate as of the date specified by the Committee, except
that the surviving or resulting corporation, in its absolute
and uncontrolled discretion, may tender an option to purchase
its shares or exercise such rights on terms and conditions,
as to the number of shares and rights and otherwise, which
shall substantially preserve the rights and benefits of the
Option then outstanding hereunder; or
(b) Give Employee the right to exercise this Option
prior to the occurrence of the event otherwise terminating
the Option over such period as the Committee, in its sole and
absolute discretion, shall determine.
11. Delivery of Shares. No shares of Stock shall be delivered
upon exercise of the Option unless and until (i) the purchase price shall have
been paid in full in the manner herein provided; (ii) applicable taxes required
to be withheld have been paid or withheld in full; (iii) approval of any
governmental authority required in connection with the Option, or the issuance
of shares thereunder; has been received by the Company; (iv) Employee has
complied with all terms and conditions of this Agreement; and (v) if required
by the Committee, Employee has delivered to the Committee an Investment Letter
in form and content satisfactory to the Company as provided in Paragraph 12
hereof.
12. Securities Act. The Company shall have the right, but not
the obligation, to cause the shares of Stock issuable upon exercise of the
Option to be registered under the appropriate rules and regulations of the
Securities and Exchange Commission.
The Company shall not be required to deliver any shares of
Stock pursuant to the exercise of all or any part of the Option if, in the
opinion of counsel for the Company, such issuance would violate the Securities
Act of 1933, as amended (the "Securities Act") or any other applicable federal
or state securities laws or regulations. The Company may require that Employee,
prior to the issuance of any such shares pursuant to exercise of the Option,
sign and deliver to the Company a written statement ("Investment Letter")
stating (i) that Employee is acquiring the shares for investment and not with a
view to the sale or distribution thereof; (ii) that Employee will not sell any
shares received upon exercise of the Option or any other shares of the Company
that Employee may then own or thereafter acquire except either (a) through a
broker on a national securities exchange or (b) with the prior written approval
of the Company; and (iii) containing such other terms and conditions as counsel
for the Company may reasonably require to assure compliance with the Securities
Act or other applicable federal or state securities laws and regulations. Such
Investment Letter shall be in form and content acceptable to the Committee in
its sole discretion.
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If shares of Stock or other securities issuable pursuant to
the exercise of the Option have not been registered under the Securities of
1933 or other applicable federal or state securities laws or regulations, the
certificates representing such shares shall bear a legend restricting the
transferability thereof, such legend to be substantially in the following form:
The Securities evidenced by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or
qualified under any applicable state securities laws. They
have been acquired for investment and not with a view to
distribution thereof within the meaning of the Act and
regulations thereunder. They may not be sold or otherwise
transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws
covering such transaction involving said securities or (b)
this Corporation receives an opinion of legal counsel for the
holder of these securities (concurred in by legal counsel for
this Corporation) stating that such transaction is exempt
from registration or this Corporation otherwise satisfies
itself that such transaction is exempt from resolution.
The sale, transfer, assignment or encumbrance of the shares
represented by this certificate is restricted by the
provisions of that certain Agreement dated February 21, 1994
and a Stock Transfer Restriction Agreement dated December
___, 1994. The Corporation will mail to any shareholder a
copy of such Agreement within five days after receipt of
written request therefor.
13. Federal and State Taxes. Upon exercise of the Option, or
any part thereof, Employee may incur certain liabilities for federal, state or
local taxes and the Company may be required by law to withhold such taxes for
payment to taxing authorities. Upon determination by the Company of the amount
of taxes required to be withheld, if any, with respect to the shares to be
issued pursuant to the exercise of the Option, Employee shall pay to the
Company by check by authorizing the Company to withhold from monies owing by
the Company to Employee or in shares of Stock owned by Employee an amount equal
to the amount of any taxes which the Company is required to withhold with
respect to such Stock.
In the event the Company becomes a reporting Company under
the Exchange Act, Employee may pay taxes with shares of stock owned by
Employee. Payment of taxes with shares of Stock owned by Employee shall be
made by assigning and delivering such shares to the Company. Such shares shall
be valued at Fair Market Value on the business day coinciding with or
immediately preceding the date on which such shares are assigned or
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delivered. Except as otherwise provided by law, any taxes which are required to
be withheld with respect to an exercised Option may also be paid by Employee
directing the Company to withhold from the shares of Stock that would otherwise
be issued pursuant to the Option, that number of shares having a Fair Market
Value on the date the Option is exercised (the "Applicable Date") equal to the
taxes due. In the event of such an election, Employee shall notify the Company
in writing of his intent to do so and shall receive the number of shares of
Stock determined pursuant to the following formula.
Number Number of Fair Market Value - Taxes
of Shares Subject X on Applicable Date Due
Shares to Award -------------------------------------
Fair Market Value on
Applicable Date
Authorization of Employee to the Company to withhold taxes
pursuant to this Paragraph 13 shall be in form and content acceptable to the
Company. Payment or authorization to withhold taxes by Employee shall be
completed prior to the delivery of any shares pursuant to this Option
Agreement. An authorization to withhold taxes pursuant to this provision shall
be irrevocable unless and until the tax liability of Employee has been fully
paid.
14. Administration. This Agreement shall in all respects be
administered by the Compensation Committee of the Board of Directors of the
Company (the "Committee"). The Committee shall have the sole and complete
discretion with respect to all matters under this Agreement and decisions of
the majority of the Committee with respect to this Agreement shall be final and
binding upon Employee and the Company.
15. Continuation of Employment. This Agreement shall not be
construed to confer upon Employee any right to continue in the employ of the
Company and shall not limit the right of the Company, in its sole discretion,
to terminate the employment of Employee at any time.
16. Obligation to Exercise. Employee shall have no obligation
to exercise any option granted by this Agreement.
17. Governing Law. This Agreement shall be interpreted and
administered under the laws of the State of Nevada.
18. Amendment and Termination. Except as otherwise provided
in this Agreement, this Agreement may be amended or terminated only by a
written agreement executed by the Company and Employee. The Company may amend
or terminate this Agreement without the written consent of Employee to the
extent necessary to comply with applicable federal or state securities or other
laws.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed by its officers thereunto duly authorized, and Employee has
hereunto set his (her) hand as of the day and year first above written.
CITADEL COMMUNICATIONS CORPORATION
By: __________________________________
Its: __________________________________
__________________________________
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