INDEMNIFICATION AGREEMENT
Exhibit
10.1
INDEMNIFICATION
AGREEMENT, dated as of April 10, 2006, by and among Citadel Broadcasting
Corporation, a Delaware corporation (the “Company”),
Citadel Broadcasting Company, a Nevada corporation and a wholly-owned subsidiary
of the Company, (the “Subsidiary”)
and
the director of the Company whose name appears on the signature page of this
Agreement (“Indemnitee”).
RECITALS
A. Highly
competent persons are becoming more reluctant to serve publicly-held
corporations as directors or officers or in other capacities unless they are
provided with reasonable protection through insurance or indemnification against
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporations.
B. The
Board
of Directors of the Company (the “Board”)
has
determined that the Company should act to assure its directors and officers
that
there will be increased certainty of such protection in the future.
C. It
is
reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify such persons to the fullest extent permitted by applicable
law so that they will serve or continue to serve the Company free from undue
concern that they will not be so indemnified.
D. Indemnitee
is willing to serve, to continue to serve and to take on additional service
for
or on behalf of the Company and/or the Subsidiary on the condition that
Indemnitee be so indemnified.
E. In
consideration of the benefits received and to be received by the Company and/or
the Subsidiary in connection with actions taken and to be taken by the Board
and
by the officers of the Company, the Company and the Subsidiary have determined
that it is in their best interests for the reasons set forth above to be a
party
to this Agreement and to provide indemnification to the directors and officers
of the Company in connection with their service to and activities on behalf
of
the Company and the Subsidiary.
F. The
Subsidiary acknowledges that for purposes of this Agreement the directors and
officers of the Company who enter into this Agreement are serving in such
capacities at the request of the Subsidiary.
G. The
Subsidiary further acknowledges that such directors and officers are willing
to
serve, to continue to serve and to take on additional service for or on behalf
of the Company, thereby benefiting the Subsidiary, on the condition that the
Subsidiary enter into, and provide indemnification pursuant to, this
Agreement.
AGREEMENT
In
consideration of the premises and the covenants contained herein, the Company,
Subsidiary and Indemnitee do hereby covenant and agree as follows:
1. Definitions.
(a) For
purposes of this Agreement:
(i) “Affiliate”
shall
mean any corporation, partnership, joint venture, trust or other enterprise
in
respect of which Indemnitee is or was or will be serving as a director or
officer directly or indirectly at the request of the Company or the Subsidiary,
and including, but not limited to, service with respect to an employee benefit
plan.
(ii) “Disinterested
Director”
shall
mean a director of the Company who is not or was not a party to the Proceeding
in respect of which indemnification is being sought by Indemnitee.
(iii) “Expenses”
shall
include all attorneys’ fees and costs, retainers, court costs, transcripts, fees
of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses incurred in connection with asserting or defending
claims.
(iv) “fines”
shall
include any excise taxes assessed on Indemnitee with respect to any employee
benefit plan.
(v) “Independent
Counsel”
shall
mean a law firm or lawyer that neither is presently nor in the past year has
been retained to represent: (i) the Company, the Subsidiary or Indemnitee in
any
matter material to any such party or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder in any matter material
to
such other party. Notwithstanding the foregoing, the term “Independent Counsel”
shall not include any firm or person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing any of the Company, the Subsidiary or Indemnitee in an action
to
determine Indemnitee’s right to indemnification under this Agreement. All
Expenses of the Independent Counsel incurred in connection with acting pursuant
to this Agreement shall be borne by the Company.
(vi) “Losses”
shall
mean all expenses, liabilities, losses and claims (including attorneys’ fees,
judgments, fines, excise taxes under the Employee Retirement Income Security
Act
of 1974, as amended from time to time, penalties and amounts to be paid in
settlement) incurred in connection with any Proceeding.
(vii) “Proceeding”
shall
include any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing
or
any other proceeding, whether civil, criminal, administrative or
investigative.
(b) For
purposes of this Agreement, a person who acted in good faith and in a manner
such person reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in
a
manner “not opposed to the best interests of the Company” as referred to in this
Agreement; the term “serving at the request of the Company or the Subsidiary”
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and references to the “Company” or the
“Subsidiary” shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify Indemnitee in its capacity as a
director, officer, or employee or agent, so that Indemnitee shall stand in
the
same position under this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
2. Service
by Indemnitee.
Indemnitee agrees to begin or continue to serve the Company or any Affiliate
as
a director and/or officer.
Notwithstanding anything contained herein, this Agreement shall not create
a
contract of employment between the Company or the Subsidiary and Indemnitee,
and
the termination of Indemnitee’s relationship with the Company or the Subsidiary
or an Affiliate by either party hereto shall not be restricted by this
Agreement.
3. Indemnification.
The
Company and Subsidiary jointly and severally agree to indemnify Indemnitee
for,
and hold Indemnitee harmless from and against, any Losses or Expenses at any
time incurred by or assessed against Indemnitee arising out of or in connection
with the service of Indemnitee as a director or officer of the Company or of
an
Affiliate (collectively referred to as an “Officer or Director of the Company”)
to the fullest extent permitted by the laws of the State of Delaware in effect
on the date hereof or as such laws may from time to time hereafter be amended
to
increase the scope of such permitted indemnification. Without diminishing the
scope of the indemnification provided by this Section, the rights of
indemnification of Indemnitee provided hereunder shall include but shall not
be
limited to those rights set forth hereinafter.
4. Action
or Proceeding Other Than an Action by or in the Right of the Company or the
Subsidiary. Indemnitee
shall be entitled to the indemnification rights provided herein if Indemnitee
is
a person who was or is made a party or is threatened to be made a party to
or is
involved (including, without limitation, as a witness) in any Proceeding (other
than an action by or in the right of the Indemnitee (unless approved in advance
in writing by the Company’s Board of Directors), the Company or the Subsidiary,
as the case may be) by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or any other entity which Indemnitee is
or
was or will be serving at the request of the Company or the Subsidiary, as
the
case may be, or (b) anything done or not done by Indemnitee in any such
capacity.
5. Actions
by or in the Right of the Company.
Indemnitee shall be entitled to the indemnification rights provided herein
if
Indemnitee is a person who was or is a party or is threatened to be made a
party
to or is involved (including, without limitation, as a witness) in any
Proceeding brought by or in the right of the Company or the Subsidiary to
procure a judgment in its favor by reason of (a) the fact that Indemnitee is
or
was an Officer or Director of the Company or any Affiliate, or (b) anything
done
or not done by Indemnitee in any such capacity. Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses incurred or suffered
by Indemnitee or on Indemnitee’s behalf in connection with the defense or
settlement of any Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests
of
the Company or the Subsidiary. Notwithstanding the foregoing provisions of
this
Section, no such indemnification shall be made in respect of any claim, issue
or
matter as to which Delaware law expressly prohibits such indemnification by
reason of an adjudication of liability of Indemnitee to the Company or the
Subsidiary unless and only to the extent that the Court of Chancery of the
State
of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such Losses and Expenses which the Court of Chancery
or such other court shall deem proper.
6. Indemnification
for Losses and Expenses of Party Who is Wholly or Partly
Successful.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been wholly successful on the merits or otherwise in any
Proceeding referred to in Sections 3, 4 or 5 hereof on any claim, issue or
matter therein, Indemnitee shall be indemnified against all Losses and Expenses
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on
the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company and the Subsidiary jointly and severally
agree to indemnify Indemnitee to the maximum extent permitted by law against
all
Losses and Expenses incurred by Indemnitee in connection with each successfully
resolved claim, issue or matter. In any review or Proceeding to determine the
extent of indemnification, the Company shall bear the burden of proving any
lack
of success and which amounts sought in indemnity are allocable to claims, issues
or matters which were not successfully resolved. For purposes of this Section
and without limitation, the termination of any such claim, issue or matter
by
dismissal with or without prejudice shall be deemed to be a successful
resolution as to such claim, issue or matter.
7. Payment
for Expenses of a Witness.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of the fact that Indemnitee is or was an Officer or
Director of the Company or any Affiliate, as the case may be, a witness in
any
Proceeding, the Company and the Subsidiary jointly and severally agree to pay
to
Indemnitee all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.
8. Advancement
of Expenses and Costs.
All
Expenses incurred by or on behalf of Indemnitee (or reasonably expected by
Indemnitee to be incurred by Indemnitee within three months) in connection
with
any Proceeding shall be paid by the Company or the Subsidiary in advance of
the
final disposition of such Proceeding within twenty days after the receipt by
the
Company or the Subsidiary of a statement or statements from Indemnitee
requesting from time to time such advance or advances, whether or not a
determination to indemnify has been made under Section 9. Indemnitee’s
entitlement to such advancement of Expenses shall include those incurred in
connection with any Proceeding by Indemnitee seeking an adjudication or award
in
arbitration pursuant to this Agreement. The financial ability of Indemnitee
to
repay an advance shall not be a prerequisite to the making of such advance.
Such
statement or statements shall reasonably evidence such Expenses incurred (or
reasonably expected to be incurred) by Indemnitee in connection therewith and
shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of
this Agreement.
9. Procedure
for Determination of Entitlement to Indemnification.
(a) When
seeking indemnification under this Agreement (which shall not include in any
case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company and the
Subsidiary. Determination of Indemnitee’s entitlement to indemnification shall
be made promptly, but in no event later than 60 days after receipt by the
Company and the Subsidiary of Indemnitee’s written request for indemnification.
The Secretary of the Company shall, promptly upon receipt of Indemnitee’s
request for indemnification, advise the Board that Indemnitee has made such
request for indemnification.
(b) The
entitlement of Indemnitee to indemnification under this Agreement shall be
determined, with respect to a person who is a director or officer at the time
of
such determination, in the specific case (1) by the Board of Directors by a
majority vote of the Disinterested Directors, even though less than a quorum,
or
(2) by a committee of the Disinterested Directors designated by majority vote
of
the Disinterested Directors, even though less than a quorum, or (3) if there
are
no Disinterested Directors, or if such Disinterested Directors so direct, by
Independent Counsel, or (4) by the stockholders. The entitlement of the
Indemnitee to indemnification shall be determined with respect to any person
who
is not a director or officer at the time of such determination by any means
reasonably determined by the Company.
(c) In
the
event the determination of entitlement is to be made by Independent Counsel,
such Independent Counsel shall be selected by the Board and the Board of
Directors of the Subsidiary and approved by Indemnitee. Upon failure of the
Board and the Board of Directors of the Subsidiary to so select such Independent
Counsel or upon failure of Indemnitee to so approve, such Independent Counsel
shall be selected by the American Arbitration Association of New York, New
York
or such other person as such Association shall designate to make such
selection.
(d) If
a
determination is made pursuant to Section 9(b) is that Indemnitee is not
entitled to indemnification to the full extent of Indemnitee’s request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.
(e) If
a
determination with respect to entitlement to indemnification shall not have
been
made within 60 days after receipt by the Company and the Subsidiary of such
request, the requisite determination of entitlement to indemnification shall
be
deemed to have been made and Indemnitee shall be absolutely entitled to such
indemnification, absent (i) misrepresentation by Indemnitee of a material fact
in the request for indemnification or (ii) a final judicial determination that
all or any part of such indemnification is expressly prohibited by
law.
(f) The
termination of any Proceeding by judgment, order, settlement or conviction,
or
upon a plea of nolo
contendere
or its
equivalent, shall not, of itself, adversely affect the rights of Indemnitee
to
indemnification hereunder except as may be specifically provided herein, or
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or the Subsidiary, as the case may be, or create a
presumption that (with respect to any criminal action or proceeding) Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was
unlawful.
(g) For
purposes of any determination of good faith hereunder, Indemnitee shall be
deemed to have acted in good faith if in taking such action Indemnitee relied
on
the records or books of account of the Company or an Affiliate, including
financial statements, or on information supplied to Indemnitee by the officers
of the Company or an Affiliate in the course of their duties, or on the advice
of legal counsel for the Company or an Affiliate or on information or records
given or reports made to the Company or an Affiliate by an independent certified
public accountant or by an appraiser or other expert selected with reasonable
care to the Company or an Affiliate. The Company shall have the burden of
establishing the absence of good faith. The provisions of this Section 9(g)
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.
(h) The
knowledge and/or actions, or failure to act, of any other director, officer,
agent or employee of the Company or an Affiliate shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under this
Agreement.
10. Remedies
in Cases of Determination Not to Indemnify or to Advance
Expenses.
(a) In
the
event that (i) a determination is made that Indemnitee is not entitled to
indemnification hereunder, (ii) advances are not made pursuant to Section 8
hereof or (iii) payment has not been timely made following a determination
of
entitlement to indemnification pursuant to Section 9 hereof, Indemnitee shall
be
entitled to seek a final adjudication either through an arbitration proceeding
or in an appropriate court of the State of Delaware or any other court of
competent jurisdiction of Indemnitee’s entitlement to such indemnification or
advance.
(b) In
the
event a determination has been made in accordance with the procedures set forth
in Section 9 hereof, in whole or in part, that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration referred to in Section
10(a) shall be de novo and Indemnitee shall not be prejudiced by reason of
any
such prior determination that Indemnitee is not entitled to indemnification,
and
the Company shall bear the burdens of proof specified in Sections 6 and 9 hereof
in such proceeding.
(c) If
a
determination is made or deemed to have been made pursuant to the terms of
Section 9 or 10 hereof that Indemnitee is entitled to indemnification, the
Company and the Subsidiary shall be bound by such determination in any judicial
proceeding or arbitration in the absence of
(i) a
misrepresentation of a material fact by Indemnitee or (ii) a final judicial
determination that all or any part of such indemnification is expressly
prohibited by law.
(d) To
the
extent deemed appropriate by the court, interest shall be paid by the Company
or
the Subsidiary, or both, to Indemnitee at a reasonable interest rate for amounts
which the Company or the Subsidiary, or both, indemnifies or is obliged to
indemnify Indemnitee for the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advancement of any Expenses)
and
ending with the date on which such payment is made to Indemnitee by the Company
or the Subsidiary, or both.
11. Expenses
Incurred by Indemnitee to Enforce this Agreement.
All
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee’s request for indemnification hereunder shall be
jointly and severally borne by the Company and the Subsidiary In the event
that
Indemnitee is a party to or intervenes in any proceeding in which the validity
or enforceability of this Agreement is at issue or seeks an adjudication to
enforce Indemnitee’s rights under, or to recover damages for breach of, this
Agreement, Indemnitee, if Indemnitee prevails in whole in such action, shall
be
entitled to recover from the Company and the Subsidiary, and shall be jointly
and severally indemnified by the Company and the Subsidiary against, any
Expenses incurred by Indemnitee. If it is determined that Indemnitee is entitled
to indemnification for part (but not all) of the indemnification so requested,
Expenses incurred in seeking enforcement of such partial indemnification shall
be reasonably prorated among the claims, issues or matters for which Indemnitee
is entitled to indemnification and for claims, issues or matters for which
Indemnitee is not so entitled.
12. Non-Exclusivity.
The
rights of indemnification and to receive advances as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at
any
time be entitled under any law, certificate of incorporation, by-law, other
agreement, vote of stockholders or resolution of directors or otherwise, both
as
to action in Indemnitee’s official capacity and as to action in another capacity
while holding such office. To the extent Indemnitee would be prejudiced thereby,
no amendment, alteration, rescission or replacement of this Agreement or any
provision hereof shall be effective as to Indemnitee with respect to any action
taken or omitted by such Indemnitee in Indemnitee’s position with the Company or
an Affiliate or any other entity which Indemnitee is or was serving at the
request of the Company or the Subsidiary prior to such amendment, alteration,
rescission or replacement.
13. Duration
of Agreement.
This
Agreement shall apply to any claim asserted and any Losses and Expenses incurred
in connection with any claim asserted on or after the effective date of this
Agreement and shall continue until and terminate upon the later of: (a) ten
years after Indemnitee has ceased to occupy any of the positions or have any
of
the relationships described in Section 3, 4 or 5 hereof; or (b) one year after
the final termination of all pending or threatened Proceedings of the kind
described herein with respect to Indemnitee. This Agreement shall be binding
upon the Company and the Subsidiary and their respective successors and assigns
and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns,
heirs, devisee, executors, administrators or other legal
representatives.
14. Maintenance
of D&O Insurance.
(a) The
Company and the Subsidiary each hereby covenants and agrees with Indemnitee
that, so long as Indemnitee shall continue to serve as an Officer or Director
of
the Company and thereafter so long as Indemnitee shall be subject to any
possible claim or threatened, pending or completed Proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee was an Officer
or Director of the Company or any other entity which Indemnitee was serving
at
the request of the Company or the Subsidiary, the Company and the Subsidiary
shall maintain in full force and effect (i) the directors’ and officers’
liability insurance issued by the insurer and having the policy amount and
deductible as currently in effect with respect to directors and officers of
the
Company or any of its subsidiaries and (ii) any replacement or substitute
policies issued by one or more reputable insurers providing in all respects
coverage at least comparable to and in the same amount as that currently
provided under such existing policy (collectively, “D&O
Insurance”).
(b) In
all
policies of D&O Insurance, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company’s directors or officers most
favorably insured by such policy.
(c) Notwithstanding
anything to the contrary set forth in above, the Company and the Subsidiary
shall have no obligation to maintain D&O Insurance if the Company and the
Subsidiary determine in good faith that such insurance is not reasonably
available, the premium cost for such insurance is disproportionate to the amount
of coverage provided or the coverage provided by such insurance is limited
by
exclusions so as to provide an insufficient benefit.
15. Severability.
Should
any part, term or condition hereof be declared illegal or unenforceable or
in
conflict with any other law, the validity of the remaining portions or
provisions hereof shall not be affected thereby, and the illegal or
unenforceable portions hereof shall be and hereby are redrafted to conform
with
applicable law, while leaving the remaining portions hereof intact.
16. Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
document.
17. Headings.
Section
headings are for convenience only and do not control or affect meaning or
interpretation of any terms or provisions hereof.
18. Modification
and Waiver.
No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto.
19. No
Duplicative Payment.
The
Company and the Subsidiary shall not be liable under this Agreement to make
any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment (net of Expenses
incurred in collecting such payment) under any insurance policy, contract,
agreement or otherwise.
20. Notices.
All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing (including telecopier or similar writing) and
shall be deemed to have been given at the time when mailed, enclosed in a
registered or certified postpaid envelope, in any general or branch office
of
the United States Postal Service, or sent by Federal Express or other similar
overnight courier service, addressed to the address of the parties stated below
or to such changed address as such party may have fixed by notice or, if given
by telecopier, when such telecopy is transmitted and the appropriate answerback
is received.
(a) If
to
Indemnitee, to the address appearing on the signature page hereof.
(b) If
to the
Company or the Subsidiary to:
Citadel
Broadcasting Corporation
City
Center West,
Suite 400
0000
Xxxx Xxxx Xxxx
Xxxx.
Xxx
Xxxxx, Xxxxxx
00000
Attention:
Secretary
21. Governing
Law.
The
parties agree that this Agreement shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of Delaware without
regard to its conflicts of law rules.
22. Entire
Agreement.
Subject
to the provisions of Section 12 hereof, this Agreement constitutes the entire
understanding between the parties and supersedes all proposals, commitments,
writings, negotiations and understandings, oral and written, and all other
communications between the parties relating to the subject matter hereof. This
Agreement may not be amended or otherwise modified except in writing duly
executed by all of the parties. A waiver by any party of any breach or violation
of this Agreement shall not be deemed or construed as a waiver of any subsequent
breach or violation thereof.
IN
WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.
CITADEL
BROADCASTING CORPORATION
CITADEL
BROADCASTING COMPANY
By: /s/
Xxxxx
Xxxxxxx
Xxxxx
Xxxxxxx, Chief Executive Officer, of each of
the
above
listed entities
INDEMNITEE
By: /s/
Xxxxx X.
Xxxxx
Xxxxx
X.
Xxxxx
c/o
Community Health Systems
0000
Xxxxxxxx Xxx
Xxxxxxxxx,
XX 00000
