EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 1st day of
January 1997 (the "Effective Date") by and between PREMIERE RADIO NETWORKS,
INC., a California corporation with an office for the conduct of its business at
00000 Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 (the "Company"), and
XXXXXX X. XXXXXXXX, an individual residing at 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx, 00000 (the "Executive").
In consideration of the mutual covenants and agreements herein set forth,
the parties hereto agree as follows:
1. EMPLOYMENT AND ACCEPTANCE; TERM.
(a) TERM. The Company hereby employs the Executive, and the
Executive agrees to be employed by the Company, for a term (the "Term")
commencing on the Effective Date and continuing for the period up and through
December 31, 1998.
(b) OPTION TERM. The company shall have an option (the "Option
Term") exercisable in its sole discretion to extend the term of this Agreement
for a term of one (1) year (the "Option Term") beyond the Initial Term by
written notification of such extension to the Executive at any time prior to
October 1, 1998.
(c) EXTENSION. The Company will advise the Executive at least three
(3) months prior to the expiration of the Option Term if the Option shall have
been exercised, or whether or not the Company intends to negotiate to extend the
term of this Agreement. If the Company does not exercise the Option, or if the
parties do not agree to extend the term of this Agreement prior to one month
before expiration of the Option Term, the Executive may seek other employment.
If the Company does not exercise the Option or the parties hereto do not agree
to extend the term of this Agreement upon expiration of the Option Term, if any,
Executive will be entitled to severance pay equal to one month's compensation
for each year of employment.
2. DUTIES.
(a) OFFICES. During the term of this Agreement, the Executive shall
be employed as the Vice President/Finance and Chief Financial Officer of the
Company and shall perform such duties and responsibilities as shall be
reasonably assigned to the Executive by the Chairman of the Board of the
Company, or which are from time to time assigned to or vested in him by the
Company's Board of Directors (the "Board"), and which are customarily incident
to the position of Vice President/Finance and Chief Financial
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Officer of a publicly traded independent creator, producer and distributor of
network radio programming and services.
(b) EXCLUSIVITY. The Executive shall devote substantially all of his
business time, labor, skill and energy to the business and affairs of the
Company and to the duties and responsibilities specified in Section 2(a) of this
Agreement; PROVIDED, HOWEVER, that the Executive may engage in other
activities such as charitable, educational, religious and similar types of
activities, to the extent that such activities do not prohibit or prevent the
performance of the Executive's duties under this Agreement, or inhibit or
conflict in any material way with the business of the Company.
(c) NON-COMPETITION. The Executive covenants and agrees that for so
long as he is actively employed by the Company he shall inform the Company of
each business opportunity related to the businesses of the Company of which he
becomes aware, and that he will not, directly or indirectly, exploit any such
opportunity for his own account, nor will he render any services to any other
person or business, or acquire any interest of any type in any other business,
which is in competition with the Company; PROVIDED, HOWEVER, that the foregoing
shall not be deemed to prohibit the Executive from acquiring, solely as an
investment, (i) up to 10% of any securities of a partnership, trust, corporation
or other entity so long as he remains a passive investor in such entity and such
entity is not, directly or indirectly, in competition with the Company, or (ii)
up to 5% of any securities of any publicly traded partnership, trust,
corporation or other entity provided he remains a passive investor in such
entity.
(d) LOCATION. The Executive shall be employed in the Los Angeles
Area. Should Company desire to change the location of Executive's employment,
the Company and Executive, at that time, shall endeavor to reach a mutually
agreed-upon amendment to this Agreement, if any.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company shall, during the continuance of the
Executive's employment hereunder, pay to the Executive, and the Executive agrees
to accept, in consideration of his services, a salary (the "Base Salary") at the
rate of $109,000 during the Term hereof, payable in accordance with the
Company's normal payroll practices.
(b) BENEFITS. During the Term of this Agreement, the Executive shall
be entitled to participate in all group insurance, hospitalization, medical,
health and accident, profit-sharing, disability or similar plans or programs of
the Company, the Company's 401(k) Plan, and the Company shall pay to the
Executive a non-accountable automobile allowance in the amount of $500.00 per
month. Furthermore, the Company shall reimburse Executive for his monthly
health and dental plan premiums for Executive and his family, shall provide
Executive with a personal life insurance policy in the minimum face
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amount of $250,000, and shall provide Executive with disability coverage with a
minimum monthly disability benefit of $4,000.
(c) DEDUCTIONS. The Company shall deduct from the Base Salary and
all other cash amounts payable by the Company under the provisions of this
Agreement to the Executive, or, if applicable, to his estate, legal
representatives or other beneficiary designated in writing by the Executive (a
"designee"), all social security taxes, all federal, state and municipal taxes
and all other charges and deductions which now or hereafter are imposed by law
as charges on the compensation of the Executive or charges on cash benefits
payable by the Company hereunder to his estate, legal representatives or
designee.
(d) BONUS. The Executive shall be entitled to receive an annual
incentive bonus (the "Bonus") during the continuance of the Executive's
employment hereunder in an amount to be determined by the Board or its
designees. The Bonus shall be payable within a reasonable period of time not to
exceed ninety (90) days following the end of each twelve-month term of this
Agreement. In addition, Company shall pay Executive quarterly bonus payments of
$7,750 ($31,000 per annum), payable within fifteen (15) days of the end of each
calender quarter.
(e) OPTIONS. The Executive shall be entitled to receive employee
stock options in an amount to be determined by the Board or its designees.
4. REIMBURSEMENT OF CERTAIN EXPENSES; APPROVAL OF EXPENDITURES. The
Company shall reimburse the Executive, upon production of detailed accounts
and vouchers or other reasonable evidence of payment by the Executive, all in
accordance with the Company's regular procedures in effect from time to time
and in form suitable to establish the validity of such expenses for tax
purposes, all ordinary, reasonable and necessary travel, entertainment and
other expenses as shall be incurred by him in the performance of his duties
hereunder, including up to Two Thousand Five Hundred Dollars ($2,500.00) in
professional and/or educational expenses.
5. VACATION. The Executive shall be entitled to paid vacation time at
the rate of not less than two (2) weeks per calendar year during the term of his
employment hereunder.
6. INSURANCE. The Executive agrees to submit himself, for physical
examination by any physician designated by the Board as required or advisable in
connection with the obtaining of any keyman insurance policy or similar coverage
which the Company may wish to obtain. The cost and expenses for such medical
examinations and any such insurance shall be borne by the Company.
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7. CONFIDENTIAL INFORMATION. All records, papers, models, programs and
other documents and those kept or made by the Executive relating to the business
or affairs of the Company and/or its clients or customers shall be and remain
the property of the Company, and to the extent available shall be delivered by
the Executive to the Company as required by the Board and, in any event, upon
the expiration or earlier termination of the Executive's employment by the
Company.
8. INDEMNIFICATION. The Company shall indemnify the Executive and
his legal representatives to the fullest extent permitted by the laws of the
State of California (or the State of Delaware if the Company shall have been so
reincorporated), and the Executive shall be entitled to the protection of such
insurance policies which the Company hereby agrees to maintain for the benefit
of its directors and officers, against all costs, charges or expenses whatsoever
incurred or sustained by him or his legal representatives in connection with any
action, suit or proceeding to which he or his legal representatives may be made
by reason of him being or having been an officer of the Company, or because of
actions taken purportedly on behalf of the Company. The Company shall, upon
request by the Executive, promptly advance or pay any amount for costs, charges
or expenses (including, but not limited to, legal fees and expenses incurred by
counsel retained by the Executive) in respect of his right to indemnification
hereunder, subject to a later determination as to the Executive's ultimate right
to receive such payment.
9. TERMINATION OF EXECUTIVE'S EMPLOYMENT. Notwithstanding the provisions
of Section 1 hereof, this Agreement may be terminated prior to the expiration of
the Term by the Board, in the name and on behalf of the Company, upon the
happening of any of the following events: (i) upon the death of the Executive;
(ii) upon the-Total Disability of the Executive; or (iii) upon the occurrence of
any material beach of any material covenant of the Executive contained in this
Agreement and the continuation of such breach for a period of thirty (30) days
following written notice by the company to the Executive of such breach, or in
the event of willful malfeasance in the performance of his duties hereunder
having a material adverse effect on the business of the Company.
10. CONSEQUENCES OF TERMINATION OF THIS AGREEMENT.
(a) DEATH. In the event that this Agreement is terminated in
accordance with clause (I) of Section 10 above, the Executive's estate, legal
representatives or designee shall be entitled to receive, in full satisfaction
of all obligations due to the Executive from the Company hereunder, the
following sums:
(I) all accrued but unpaid Base Salary and any unpaid Bonus in
respect of a fiscal year ended prior to the Executive's death.
(b) BREACH. In the event that this Agreement is terminated in
accordance with clause (iii) of Section 10 above, the Executive shall be
entitled to receive
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all accrued but unpaid Base Salary through the date of termination, and upon
payment of said sum the Company shall have no further obligations or liabilities
to the Executive hereunder.
11. CHANGE OF CONTROL.
(a) In the event that a "Change of Control" (as hereinafter defined)
of the Company occurs during the Term of this Agreement and within one year
thereafter the employment of Executive is either terminated for reasons other
than those set forth in Section 9, or the Executive voluntarily terminates his
employment within 60 days after the diminution of his responsibilities: (1) if
Executive so resigns, then the Company will pay Executive $140,000 upon the
effectiveness of Executive's resignation; and (2) if Executive is so terminated,
the Company will provide Executive with a combination of notice and severance
pay equal to at least $140,000. Following the expiration of any notice period,
on the effective date of Executive's termination, the Company will pay to the
Executive the balance of such $140,000 in a lump sum payment. During any notice
period, the Executive shall have the right to seek other employment including
the right to do so during regular business hours, provided that such job search
does not materially interfere in Executive's material duties for the Company.
(b) "Change of Control" for the purposes of this Agreement shall mean
any change of control which is required to be reported to the Securities and
Exchange Commission or if (i.) any person or entity acquires or controls thirty
percent (30%) or more of the Company's outstanding voting securities, or (ii.)
During any period of two consecutive years the persons who were directors of the
Company immediately prior to such period cease to constitute a majority of the
Board of Directors of the Company.
12. ASSIGNABILITY. This Agreement and the rights and obligations of the
parties hereunder may not be assigned by either party for any reason without the
prior written consent of the other party.
13. ARBITRATION OF DISPUTES. Any dispute or controversy between the
parties relating to or arising out of this Agreement or any amendment or
modification hereof shall be determined by arbitration in Los Angeles,
California by and pursuant to the rules then prevailing of the American
Arbitration Association. The arbitration award shall be final and binding upon
the parties and judgment may be entered thereon by any court of competent
jurisdiction. The service of any notice, process, motion or other document in
connection with any arbitration under this Agreement or the enforcement of
any arbitration award hereunder may be effectuated either by personal
service upon a party or by certified mail duly addressed to him or his
executors, administrators, personal representatives, next of kin, successors or
assigns, at the last known address or addresses of such party of parties. If
the Executive is the prevailing party on any issue in any such arbitration
proceeding, he
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shall be entitled to recover from the Company any actual expenses for attorney's
fees and disbursements incurred by him.
14. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of California applicable to contracts
executed in and to be performed solely within the State of California.
15. ABILITY TO FULFILL OBLIGATIONS. Neither the Company nor the Executive
is a party to or bound by any agreement which would be violated by the terms of
this Agreement.
16. NOTICE. Any notice, direction or instruction required or permitted to
be given hereunder shall be given in writing and may be given by telex,
telegram, facsimile transmission or similar method if confirmed by mail as
herein provided; by mail if sent postage prepaid by registered mail, return
receipt requested; or by hand delivery to any party at the address of the party
first above set forth. If notice, direction or instruction is given by telex,
telegram or facsimile transmission or similar method or by hand delivery, it
shall be deemed to have been given or made on the day on which it was given, and
if mailed, shall be deemed to have been given or made on the third business day
following the day after which it was mailed. My party may, from time to time,
by like notice give notice of any change of address and in such event, the
address of such party shall be deemed to be changed accordingly.
17. FURTHER ASSURANCES. The parties hereto agree that, after the execution
of this Agreement, they will make, do, execute or cause or permit to be made,
done or executed all such further and other lawful acts, deeds, things, devices,
conveyances and assurances in law whatsoever as may be required to carry out the
true intention and to give full force and effect to this Agreement.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous oral and prior written agreements and
understandings. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof or in effect among the parties. No custom
or trade usage, nor course of conduct among the parties, shall be relied upon to
vary the terms hereof. This Agreement may not be amended, and no provision
hereof shall be waived, except by a writing signed by all of the parties to this
agreement which states that it is intended to amend or waive a provision of
this Agreement. Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not be construed as an
agreement to waiver any rights or fail to act in any other instance, whether or
not similar.
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19. SEVERABILITY. Should any provision of this Agreement be unenforceable
or prohibited by any applicable law, this Agreement shall be considered
divisible as to such provision which shall be inoperative, and the remainder of
this Agreement shall be valid and binding as though such provision were not
included herein.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.
21. HEADINGS. All headings in this Agreement are for convenience only and
will not affect the meaning of any provision hereof.
22. SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 8, 9 and
11 shall, to the extent applicable, continue in full force and effect
notwithstanding the expiration or earlier termination of this Agreement or of
the Executive's employment in accordance with the terms of this Agreement.
23. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall inure to the benefit of, and be binding upon, the Company and
any corporation with which the Company merges or consolidates, and upon the
Executive and his executors, administrators, heirs and legal representatives.
IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by a duly authorized officer as
of the day and year first above written.
PREMIERE RADIO NETWORKS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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