EXHIBIT 10.56(A)
FIRST AMENDMENT TO
EMPLOYMENT AND STOCK OPTION AGREEMENT
This First Amendment to the Employment and Stock Option Agreement (this
"Amendment"), is made and entered into as of the 1/st/ day of January, 1999 by
and between Radio One, Inc., a Delaware corporation (the "Corporation"), Xxxx
Xxxxxxxxx Xxxxx (the "Employee"), Radio One of Atlanta, Inc. ("ROA") and Xxxxxx
X. Xxxxxxx, III ("Xxxxxxx"). The Corporation, the Employee, ROA and Xxxxxxx are
referred to collectively herein as the "Parties" and each individually as a
"Party".
WHEREAS, on December 8, 1997, the Corporation and the Employee (with the
acknowledgment of ROA) entered into an Employment and Stock Option Agreement
(the "Employment Agreement");
WHEREAS, pursuant to Section 12 of the Employment Agreement, ROA granted to
Employee certain options to purchase Common Stock of ROA;
WHEREAS, as of the date of the Employment Agreement and at all times since,
ROA has been subject to certain financial covenants preventing the issuance by
ROA of additional shares Common Stock of ROA in satisfaction of the options
granted to the Employee under the Employment Agreement;
WHEREAS, the Parties agreed that, due to such restrictive financial
covenants and notwithstanding anything to the contrary in the Employment
Agreement, the options held by the Employee would entitle the Employee to
purchase Common Stock of ROA held by Xxxxxxx (the "Understanding") and the
Parties have at all times operated in accordance with such Understanding;
WHEREAS, the Parties desire to amend the Employment Agreement in order to
document the terms and conditions of the Understanding and to modify certain
other provisions of the Employment Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized Terms. Capitalized terms used herein without definition shall
have the meanings assigned to such terms in the Employment Agreement.
2. Effective Date. The terms contained in this Amendment shall be given
effect as if made on the date of the Employment Agreement.
3. Amendment to Section 3 (Compensation) of the Employment Agreement. Section
3 of the Employment Agreement is hereby amended by deleting the existing
first sentence in its entirety and replacing it with the following:
The Corporation shall pay to the Employee base compensation at an
annual rate of Two Hundred Thousand Dollars ($200,000) per annum for
calendar year 1998 and
Two Hundred Twenty Thousand Dollars ($220,000) per annum for calendar
year 1999, payable in equal bi-weekly installments.
4. Amendments to Section 12(a) (Stock Option Provisions; Grant and Terms of
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Options) of the Employment Agreement.
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(a) Section 12(a) of the Employment Agreement is hereby amended by
deleting the existing first sentence in its entirety and replacing it
with the following:
Xxxxxx X. Xxxxxxx, III, the President and a shareholder of ROA
("Xxxxxxx"), hereby grants to the Employee, under the terms and
conditions described in subsections (i) and (ii) below, certain
incentive options to purchase from him an aggregate of Seven
Hundred (700) shares of Class A Common Stock of ROA, together
with any securities which may be issued with respect thereto or
in substitution therefor (the "ROA Common Stock").
(b) Section 12(a)(ii) (Performance Options) of the Employment Agreement is
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hereby amended by inserting, after the first sentence, the following new
sentence:
Notwithstanding the foregoing, the Corporation may, in its sole
discretion, accelerate the vesting of all or any portion of the
Performance Options.
(c) Section 12(a)(iii) of the Employment Agreement is hereby amended by
deleting the existing first sentence in its entirety and replacing it
with the following:
The "Performance Option Exercise Date" with respect to any
single vesting of Performance Options shall mean (A) the date
on which the Corporation supplied Employee with an accounting
indicating a twelve (12) month Cash Flow sufficient to permit
such vesting of Performance Options, or (B) such earlier date
as the Corporation, in its sole discretion, may determine.
5. Amendment to Section 12(b) (Stock Option Provisions; Exercise of Options)
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of the Employment Agreement. Section 12(b) of the Employment Agreement is
hereby amended by adding as a new third subsection the following:
(iii) Within five days after receipt by the Corporation of a notice
of exercise pursuant to Section 12(b) above, the Corporation
shall send a copy of such notice of exercise to Xxxxxxx. Within
five days after receipt thereof, Xxxxxxx shall send to ROA a
Notice of Conversion of Class B Common Stock, in the form
attached hereto as Exhibit A, and a Notice of Transfer of Class
A Common Stock, in the form attached hereto as Exhibit B, and
shall supply copies of such documents to the Corporation.
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6. Amendment to Section 12(c) (Stock Option Provisions; Closing) of the
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Employment Agreement. Section 12(c) of the Employment Agreement is hereby
amended by deleting the existing second sentence in its entirety and
replacing it with the following:
On each Closing Date: (i) the Employee shall execute a certificate
addressed to the Corporation stating that she has exercised her option
and has no further rights under such option, (ii) the Employee shall
pay to Xxxxxxx either in cash, or by certified or cashier's check the
aggregate option price, which shall be determined by multiplying the
Per Share Option Price by the number of Option Shares being purchased,
and (iii) Xxxxxxx shall deliver to the Employee certificates
representing the Option Shares purchased.
7. Amendment to Section 12(g) (Stock Option Provisions; Effect of Termination
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of the Employee's Employment on Stock Option) of the Employment Agreement.
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(a) Section 12(g) of the Employment Agreement is hereby amended by deleting
the existing first sentence in its entirety and replacing it with the
following:
The Employee does hereby agree that any ROA Common Stock owned
by Employee issued upon exercise of the options granted
hereunder shall not be sold, except (i) to the Corporation or
ROA, as the Corporation may elect, in accordance with the
provisions of this Section 12(g), or (ii) to the Corporation in
accordance with the terms of an agreement pursuant to which the
Corporation acquires all of the capital stock of ROA in
exchange for cash and/or capital stock of the Corporation
(b) Section 12(g) of the Employment Agreement is further amended hereby by
adding, as a new last sentence to the first paragraph, the following:
In no event shall Put Stock be deemed to include any capital
stock of the Corporation acquired by the Employee in exchange
for shares of ROA Common Stock as contemplated by this Section
12(g).
8. Addition of new Section 12(h) (Assumption of Take-Back Rights and
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Obligations by Xxxxxxx) to Section 12 of the Employment Agreement. Section
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12 of the Employment Agreement is hereby amended by adding, as new
subsection 12(h), the following:
(h) Assumption of Take-Back Rights and Obligations by Xxxxxxx.
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Xxxxxxx shall have the right, in his sole discretion, to assume
the take-back and repurchase rights and obligations of the
Corporation and/or ROA pursuant to Section 12(a)(i)(B) and
Section 12(g) of this Agreement (the "Repurchase Rights") in
lieu of exercise of such rights by the Corporation or ROA. In
the event Xxxxxxx elects to assume the Repurchase Rights,
Xxxxxxx shall send written notice of such election to the
Corporation and ROA, and the Corporation, within five days
after receipt of such notice of election, shall provide a copy
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of such notice to Employee. Xxxxxxx may rescind any election to
assume the Repurchase Rights at any time, whereupon the
Corporation and/or ROA shall be entitled to exercise the
Repurchase Rights in accordance with the provisions of this
Employment Agreement.
9. Addition of new Section 12(i) (Withholding Tax on Options) to Section 12 of
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the Employment Agreement. Section 12 of the Employment Agreement is hereby
amended by adding, as new subsection 12(i), the following:
(h) Withholding Tax Requirements. It shall be a condition of the
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purchase of any option that the Employee make appropriate
payment or other provision acceptable to the Corporation or ROA
(as applicable, the "Withholding Entity") with respect to any
withholding tax requirement arising from such exercise.
(i) The amount of withholding tax required, if any, with
respect to any option exercise (the "Withholding Amount")
shall be determined by the Treasurer or other appropriate
officer of the Withholding Entity, and the Employee shall
furnish such information and make such representations as
such officer requires to make such determination.
(ii) Withholding Procedure. If the Withholding Entity
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determines that withholding tax is required with respect
to any option exercise, the Withholding Entity shall
notify the Employee of the Withholding Amount, and the
Employee shall pay to the Withholding Entity, either in
cash or by certified cashier's check, an amount not less
than the Withholding Amount and the Withholding Entity
shall remit such Withholding Amount to the appropriate
taxing authority or authorities.
(iii) Payment of Withholding Amount by Promissory Note. In lieu
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of requiring payment in cash or by cashier's check, the
Withholding Entity may, in its sole discretion, permit
payment of the Withholding Amount due with respect to any
option exercise to be made by delivery to the Withholding
Entity of a full recourse promissory note of the
Employee, in a form substantially similar to the form
attached hereto as Exhibit C (with such changes or
additions thereto as the Withholding Entity deems
necessary and appropriate), or by the delivery of such
other document(s) that the Withholding Entity deems
sufficient and appropriate.
10. Miscellaneous Provisions.
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(a) Binding Nature of Agreement. The terms, conditions and promises
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contained in this Amendment shall be binding upon and shall inure to the
benefit of each of the parties hereto, their heirs, personal
representatives, or successors and assigns.
(b) Counterparts. This Amendment may be executed in more than one
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copy, any one of which shall be deemed a duplicate original and all of
which shall constitute one and the same agreement.
(c) Notices. All notices, consents, approvals and other
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communications given or made pursuant hereto shall be in writing and shall
be (A) delivered personally against receipt thereof, (B) by overnight
courier or (C) by registered or certified mail (postage prepaid, return
receipt requested), in each case to the parties at the following addresses
(or at such other address for a Party as shall be specified by like
notice): (W) if to the Corporation, to 0000 Xxxxxxxx Xxxxxx Xxxxxxx,
Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx (X) if
to ROA, in care of Radio One, Inc., 0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx; (Y) if to
Xxxxxxx, to Radio One, Inc., 0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000; and (Z) if to Xxxx Xxxxxxxxx Xxxxx, 0000 Xxxxxxx
Xxx, Xxxxxxx, Xxxxxxx 00000. All such notices, consents, approvals and
other communications shall be deemed to have been given on the date of
receipt if delivered personally or by overnight courier or the second day
following posting if transmitted by mail.
(e) No Waiver. No term or condition of this Amendment shall be deemed
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to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Amendment, except by written
instrument of the Party charged with such waiver or estoppel. No such
written waiver shall be deemed a continuing waiver unless specifically
stated therein, and each waiver shall operate only as to the specific term
or condition waived and shall not constitute a waiver of such term or
condition for the future or as to any fact other than that specifically
waived.
(f) Governing Law. This Amendment has been executed and delivered
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within the District of Columbia and shall be governed by and construed in
accordance with the laws of the District of Columbia (without regard to the
principles of conflicts of laws thereof).
(g) Entire Agreement. This Amendment and the Employment Agreement
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constitute the entire agreement between the parties hereto and supersede
all prior agreements, understandings and arrangements, both oral and
written, between the parties hereto with respect to the subject matter
hereof. This Amendment may not be modified in any way unless in a writing
signed by all of the parties hereto.
[signature page to follow]
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IN WITNESS WHEREOF, this First Amendment to Employment and Stock Option
Agreement has been executed by the parties on the day and year first above
written.
RADIO ONE, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx, III
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Xxxxxx X. Xxxxxxx, III
President
EMPLOYEE
/s/ Xxxx Xxxxxxxxx Xxxxx
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Xxxx Xxxxxxxxx Xxxxx
RADIO ONE OF ATLANTA, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx, III
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Xxxxxx X. Xxxxxxx, III
President
/s/ Xxxxxx X. Xxxxxxx, III
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Xxxxxx X. Xxxxxxx, III, individually
EXHIBIT A
NOTICE OF CONVERSION
OF CLASS B COMMON STOCK
[Secretary]
Radio One of Atlanta, Inc.
c/o Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Dear [Secretary]:
This letter shall serve as a Conversion Notice pursuant to Article IV, Part
B, Section 8 of the Amended and Restated Certificate of Incorporation of Radio
One of Atlanta, Inc. (the "Company").
Please convert ____ of the ______ shares represented by the enclosed
Certificate Number __ from Class B Common Stock to Class A Common Stock of the
Company. Please issue in my name the following certificates: (i) a certificate
representing ____ shares of Class A Common Stock and (ii) a certificate
representing the remaining ______shares of Class B Common Stock.
Thank you for your prompt attention to this matter.
Very truly yours,
______________________________
Xxxxxx X. Xxxxxxx, III
A-1
EXHIBIT B
NOTICE OF TRANSFER
OF CLASS A COMMON STOCK
[Secretary]
Radio One of Atlanta, Inc.
c/o Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Dear [Secretary]:
This letter shall serve as notice of transfer of the ___ shares of Class A
Common Stock represented by the enclosed Certificate Number __ from the
undersigned to Xxxx Xxxxxxxxx Xxxxx. Please issue a new certificate to Xx. Xxxxx
representing such 400 shares of Class A Common Stock, and deliver it to her by
overnight courier at the following address:
Xxxx Xxxxxxxxx Xxxxx
0000 Xxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Thank you for your prompt attention to this matter.
Very truly yours,
______________________________
Xxxxxx X. Xxxxxxx, III
B-1
EXHIBIT C
PROMISSORY NOTE
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U.S. $_____________ [Date]
Lanham, Maryland
FOR VALUE RECEIVED, Xxxx Xxxxxxxxx Xxxxx ("Maker"), individual
residing at 0000 Xxxxxxx Xxx, Xxxxxxx, XX 3039, hereby unconditionally promises
to pay to the order of [Radio One, Inc.]/[Radio One of Atlanta, Inc.] (the
"Company"), a corporation organized under the laws of the State of Delaware with
officers at 0000 Xxxxxxxx Xxxxxx Xxxxxxx, 0/xx/ Xxxxx, Xxxxxx, Xxxxxxxx 00000 or
at such other address as the Company shall designate in writing to Maker, the
initial principal sum of ______________________($___________) in accordance with
the following terms and conditions:
1. Payment of the principal sum and any and all accrued interest
shall be paid in full upon demand. If at any time, the Company
demands payment from Maker, maker shall have 90 days to repay the
principal sum and any and all accrued interest in full. If Maker
fails to pay the principal sum and any and all accrued interest
in full when due, interest will accrue from such date on the
outstanding principal and any and all accrued interest at the
annual rate of 7 percent compounded until paid in full.
2. This note shall accrue interest monthly at the annual rate of
5.56% (based on a 360 day year) for the term of the Note. If the
Note is prepaid at any time prior to the end of a given month,
the additional interest accrued during that month will be added
to the amount outstanding at the end of the previous month and
will be the amount due at the date the Note is to be prepaid.
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3. This acceptance of this Note by the Company is being extended to
Maker as part of her compensation for services to be rendered as
Chief Operating Officer of the Company and is to be repaid in
full within 30 days upon termination of Maker's employment with
the Company or any affiliate of the Company.
4. All payments hereunder shall be made in lawful currency of the
United States and shall be applied first to cost of collection,
if any, second to interest, if any, and then to principal.
5. Upon failure of Maker to make the payments specified in
Paragraphs 1 or 2 hereof when due, Maker shall be deemed to be in
default, and the Company shall be entitled to institute legal
action to collect the outstanding principal and interest.
6. This Note may be prepaid in whole or in part at any time without
premium or penalty.
7. Maker (a) waives presentment, demand, protests and notice of
presentment, notice of protest and notice of dishonor of this
debt, (b) agrees that the holder hereof, at any time or times,
without notice to Maker or her consent, may grant extensions, for
the payment of any principal or interest due hereon, but in no
event shall any such extension constitute a waiver of any right
of the holder beyond the extension granted, and (c) agrees that
this Note shall be binding upon Maker.
8. If the Company institutes a lawsuit or other formal legal
proceeding to enforce its rights hereunder upon Maker's default
in making the payments required hereunder, Maker promises to pay
the Company all reasonable costs of collection, including
reasonable attorneys' fees.
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9. In the event any one or more of the provisions contained in this
Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Note, and this Note shall be construed as if such invalid,
illegal or unenforceable provision had never been contained
herein.
10. This Note shall be interpreted in accordance with the laws of the
State of Maryland without regard to conflict of laws provisions.
MAKER
______________________________
Xxxx Xxxxxxxxx Xxxxx
Pay to the order of
_________________________________
[RADIO ONE, INC.]/[RADIO ONE OF ATLANTA, INC.]
By:______________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
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