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EXHIBIT 10.18.1
THE SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO AN
OPTION TO REPURCHASE AND A RIGHT OF FIRST REFUSAL PROVIDED UNDER THE
PROVISIONS OF THE COMPANY'S 1997 STOCK OPTION PLAN AND THIS AGREEMENT
ENTERED INTO PURSUANT THERETO. A COPY OF SUCH PLAN IS AVAILABLE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
CAPSTAR BROADCASTING CORPORATION
1997 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
June 20, 1997
Address
Re: Grant of Stock Option
Dear [SEE SCHEDULE I ATTACHED HERETO]:
The Board of Directors of Capstar Broadcasting Corporation (the
"Company") has adopted the Company's 1997 Stock Option Plan (the "Plan") for
certain individuals, directors and key employees of the Company and its Related
Entities. A copy of the Plan is being furnished to you concurrently with the
execution of this Option Agreement and shall be deemed a part of this Option
Agreement as if fully set forth herein. Unless the context otherwise requires,
all terms defined in the Plan shall have the same meaning when used herein.
1. The Grant.
Subject to the conditions set forth below, the Company hereby grants
to you, effective as of [SEE SCHEDULE I ATTACHED HERETO] (the "Grant Date"), as
a matter of separate inducement and not in lieu of any salary or other
compensation for your services, the right and option to purchase (the
"Option"), in accordance with the terms and conditions set forth herein and in
the Plan, an aggregate of [SEE SCHEDULE I ATTACHED HERETO] shares of Common
Stock of the Company (the "Option Shares"), at the Exercise Price (as
hereinafter defined). As used herein, the term "Exercise Price" shall mean a
price equal to [SEE SCHEDULE I ATTACHED HERETO] per share, subject to the
adjustments and limitations set forth herein and in the Plan. The Option
granted hereunder is intended to constitute an Incentive Option within the
meaning of the Plan; however, you should consult with your tax advisor
concerning the proper reporting of any federal or state tax liability that may
arise as a result of the grant or exercise of the Option.
2. Exercise.
(a) For purposes of this Option Agreement, the Option
Shares shall be deemed "Nonvested Shares" unless and until they have become
"Vested Shares." Except as otherwise
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provided in Section 3, the Option Shares shall become "Vested Shares" with
respect to 20% of the Option Shares, on the first anniversary of the Grant
Date, and 1/60th of the Option Shares shall vest on the last day of each
calendar month thereafter, so that all of the Option Shares shall be vested 60
months after the Grant Date, provided that vesting shall cease upon your
ceasing to be an employee of the Company or a Related Entity as expressly
provided in Section 3 hereof.
(b) Subject to the relevant provisions and limitations
contained herein and in the Plan, you may exercise the Option to purchase all
or a portion of the applicable number of Vested Shares at any time prior to the
termination of the Option pursuant to this Option Agreement. In no event shall
you be entitled to exercise the Option for any Nonvested Shares or for a
fraction of a Vested Share.
(c) The unexercised portion of the Option, if any, will
automatically, and without notice, terminate and become null and void upon the
expiration of six (6) years from the Grant Date; provided, however, if on the
Grant Date you own stock of the Company, or any Related Entity, possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Related Entity, such Option shall become null and
void upon the expiration of five (5) years from the Grant Date.
(d) Any exercise by you of the Option shall be in writing
addressed to the Secretary of the Company at its principal place of business (a
copy of the form of exercise to be used will be available upon written request
to the Secretary), and shall be accompanied by a certified or bank check
payable to the order of the Company in the full amount of the Exercise Price of
the shares so purchased, or in such other manner as described in the Plan and
approved by the Committee.
The terms and provisions of the employment agreement, if any, between
you and the Company or any Related Entity (the "Employment Agreement") that
relate to or affect the Option are incorporated herein by reference.
Notwithstanding the foregoing provisions of this Section 2, in the event of any
conflict or inconsistency between the terms and conditions of this Section 2
and the terms and conditions of the Employment Agreement, the terms and
conditions of the Employment Agreement shall be controlling.
3. Termination of Employment.
Upon the termination of your employment with the Company or any
Related Entity, you may, until the earlier of (x) 30 days from the date of such
termination or (y) the expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of the Vested Shares which
you were entitled to purchase immediately prior to such termination and,
thereafter, the Option shall, to the extent not previously exercised,
automatically terminate and become null and void, provided that:
(a) in the case of termination of your employment with
the Company or any Related Entity due to death, your estate (or any Person who
acquired the right to exercise such Option by bequest or inheritance or
otherwise by reason of your death) may, until the earlier of (x) the 181st day
after the date of death or (y) the expiration of the Option in accordance with
its terms,
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exercise the Option with respect to all or any part of the Vested Shares which
you were entitled to purchase immediately prior to the time of your death;
(b) in the case of termination of your employment with
the Company or any Related Entity due to Disability, you or your legal
representative may, until the earlier of (x) the 181st day after the date your
employment was terminated or (y) the expiration of the Option in accordance
with its terms, exercise the Option with respect to all or any part of the
Vested Shares which you were entitled to purchase immediately prior to the time
of such termination;
(c) in the case of termination of your employment with
the Company or any Related Entity (i) for Good Cause (as determined by the
Committee in its sole judgment in accordance with the Plan and this Agreement),
then you shall immediately forfeit your rights under the Option except as to
those Option Shares already purchased.
Notwithstanding the foregoing provisions of this Section 3, in the
event of any conflict or inconsistency between the terms and conditions of this
Section 3 and the terms and conditions of the Employment Agreement, the terms
and conditions of the Employment Agreement shall be controlling.
4. Transferability.
Except as provided in Section 7 hereof, the Option and any rights or
interests therein are not assignable or transferable by you except by will or
the laws of descent and distribution, and during your lifetime, the Option
shall be exercisable only by you or, in the event that a legal representative
has been appointed in connection with your Disability, such legal
representative. Any Option Shares received upon exercise of this Option are
subject to the Company's Right of First Refusal (as defined in the Plan).
To assure the enforceability of the Company's rights under this
Section 4 in regard to the Right of First Refusal, each certificate or
instrument representing Common Stock or an Option held by you shall bear a
conspicuous legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
FIRST REFUSAL PROVIDED UNDER THE PROVISIONS OF THE COMPANY'S 1997
STOCK OPTION PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO PURSUANT
THERETO. A COPY OF SUCH OPTION PLAN AND OPTION AGREEMENT ARE
AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
5. Registration.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable state
securities laws to permit exercise of the Option or to issue any Common Stock
in violation of the Securities Act or any applicable state securities laws.
You (or in the event of your death or, in the event a legal representative has
been appointed in connection with
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your Disability, the Person exercising the Option) shall, as a condition to
your right to exercise the Option, deliver to the Company an agreement or
certificate containing such representations, warranties and covenants as the
Company may deem necessary or appropriate to ensure that the issuance of the
Option Shares pursuant to such exercise is not required to be registered under
the Securities Act or any applicable state securities laws.
Certificates for Option Shares, when issued, shall have substantially
the following legend, or statements of other applicable restrictions, endorsed
thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF
PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION
OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
The foregoing legend may not be required for Option Shares issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.
6. Withholding Taxes.
By acceptance hereof, you hereby (i) agree to reimburse the Company or
any Related Entity by which you are employed for any federal, state or local
taxes required by any government to be withheld or otherwise deducted by such
corporation in respect of your exercise of all or a portion of the Option, (ii)
authorize the Company or any Related Entity by which you are employed to
withhold from any cash compensation paid to you or on your behalf, an amount
sufficient to discharge any federal, state and local taxes imposed on the
Company, or the Related Entity by which you are employed, and which otherwise
has not been reimbursed by you, in respect of your exercise of all or a portion
of the Option, and (iii) agree that the Company may, in its discretion, hold
the stock certificate to which you are entitled upon exercise of the Option as
security for the payment of the aforementioned withholding tax liability, until
cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise which
is equal to the amount to be withheld.
7. Purchase Option.
(a) If (i) your employment with the Company or a Related
Entity terminates for any reason at any time or (ii) a Change of Control
occurs, the Company and/or its designees) shall have the option (the "Purchase
Option") to purchase, and if the option is exercised, you (or your executor or
the administrator of your estate or the Person who acquired the right to
exercise the
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Option by bequest or inheritance in the event of your death, or your legal
representative in the event of your incapacity (hereinafter, collectively with
such optionee, the "Grantor")) shall sell to the Company and/or its
assignee(s), all or any portion (at the Company's option) of the Option Shares
and/or the Option held by the Grantor (such Option Shares and Option
collectively being referred to as the "Purchasable Shares"), subject to the
Company's compliance with the conditions hereinafter set forth.
(b) The Company shall give notice in writing to the
Grantor of the exercise of the Purchase Option within one (1) year from the
date of the termination of your employment or engagement or such Change of
Control. Such notice shall state the number of Purchasable Shares to be
purchased and the determination of the Board of Directors of the Fair Market
Value per share of such Purchasable Shares. If no notice is given within the
time limit specified above, the Purchase Option shall terminate.
(c) The purchase price to be paid for the Purchasable
Shares purchased pursuant to the Purchase Option shall be, in the case of any
Option Shares, the Fait Market Value per share times the number of shares being
purchased, and in the case of the Option, the Fair Market Value per share times
the number of Vested Shares subject to such Option which are being purchased,
less the applicable per share Exercise Price. The purchase price shall be paid
in cash. The closing of such purchase shall take place at the Company's
principal executive offices within ten (10) days after the purchase price has
been determined. At such closing, the Grantor shall deliver or shall cause to
be delivered to the purchasers) the certificates or instruments evidencing the
Purchasable Shares being purchased, duly endorsed (or accompanied by duly
executed stock powers) and otherwise in good form for delivery, against payment
of the purchase price by check of the purchasers). In the event that,
notwithstanding the foregoing, the Grantor shall have failed to obtain the
release of any pledge or other encumbrance on any Purchasable Shares by or upon
the scheduled closing date, at the option of the purchasers) the closing shall
nevertheless occur on such scheduled closing date, with the cash purchase price
being reduced to the extent of all unpaid indebtedness for which such
Purchasable Shares are then pledged or encumbered.
(d) To assure the enforceability of the Company's rights
under this Section 7, each certificate or instrument representing Option Shares
subject to this Option Agreement shall bear a conspicuous legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION TO
REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE COMPANY'S 1997 STOCK
OPTION PLAN AND A STOCK OPTION AGREEMENT ENTERED INTO PURSUANT
THERETO. A COPY OF SUCH OPTION PLAN AND OPTION AGREEMENT ARE
AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
(e) The Company's rights under this Section 7 shall
terminate upon the consummation of a Qualifying Public Offering (as defined in
the Plan).
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8. Consent to Approved Sale.
If the Board and the holders of a majority of the Common Stock then
outstanding approve the Sale of the Company to an independent third party (the
"Approved Sale"), you shall consent to and raise no objections against the
Approved Sale, and if the Approved Sale is structured as a sale of capital
stock, you shall agree to sell all of your Option Shares and rights to acquire
Option Shares on the terms and conditions approved by the Board of Directors
and the holders of a majority of the Common Stock then outstanding. You shall
take all necessary and desirable actions in connection with the consummation of
the Approved Sale. For purposes of this Section 8, an "independent third
party" is any person who does not own in excess of 5% of the Common Stock on a
fully-diluted basis, who is not controlling, controlled by or under common
control with any such 5% owner of the Common Stock and who is not the spouse,
ancestor, descendant (by birth or adoption) or descendent of a grandparent of
any such 5% owner of the Common Stock. If the Company or the holders of the
Company's securities enter into any negotiation or transaction for which Rule
506 (or any similar rule then in effect) promulgated pursuant to the Securities
Act may be available with respect to such negotiation or transaction (including
a merger, consolidation or other reorganization), you shall, at the request of
the Company, appoint a purchaser representative (as such term is defined in
Rule 501 promulgated pursuant to the Securities Act) reasonably acceptable to
the Company. If you appoint the purchaser representative designated by the
Company, the Company will pay the fees of such purchaser representative, but if
you decline to appoint the purchaser representative designated by the Company
you shall appoint another purchaser representative (reasonably acceptable to
the Company), and you shall be responsible for the fees of the purchaser
representative so appointed.
9. Adjustments. In the event that, by reason of any merger,
consolidation, combination, liquidation, reorganization, recapitalization,
stock dividend, stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares or other like change in capital structure of the
Company (collectively, a "Reorganization"), the Common Stock is substituted,
combined, or changed into any cash, property, or other securities, or the
shares of Common Stock are changed into a greater or lesser number of shares of
Common Stock, the number and/or kind of shares and/or interests subject to an
Option and the per share price or value thereof shall be appropriately adjusted
by the Committee to give appropriate effect to such Reorganization, such that
the Option shall thereafter be exercisable for such securities, cash, and/or
other property as would have been received in respect of the Option Shares
subject to the Option had the Option been exercised in full immediately prior
to such event. Any fractional shares or interests resulting from such
adjustment shall be eliminated. Notwithstanding the foregoing, (i) each such
adjustment shall comply with the rules of Section 424(a) of the Code, and (ii)
in no event shall any adjustment be made which would render the Option not to
be an "incentive stock option" for purposes of Section 422 of the Code.
10. Miscellaneous.
(a) This Option Agreement is subject to all the terms,
conditions, limitations and restrictions contained in the Plan. In the event
of any conflict or inconsistency between the terms hereof and the terms of the
Plan, the terms of the Plan shall be controlling.
(b) This Option Agreement is not a contract of employment
and the terms of your employment shall not be affected by, or construed to be
affected by, this Option Agreement, except
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to the extent specifically provided herein. Nothing herein shall impose, or be
construed as imposing, any obligation (i) on the part of the Company or any
Related Entity to continue your employment, or (ii) on your part to remain in
the employ of the Company or any Related Entity.
(c) This Option Agreement may be amended as provided in
Section 19 of the Plan.
[Remainder of page intentionally left blank]
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Please indicate your acceptance of all the terms and conditions of the
Option and the Plan by signing and returning a copy of this Option Agreement.
Very truly yours,
CAPSTAR BROADCASTING
CORPORATION
By:
--------------------------
Name:
------------------------
Title:
-----------------------
ACCEPTED:
--------------------------------
Signature of Optionee
[SEE SCHEDULE I ATTACHED HERETO]
--------------------------------
Name of Optionee (Please Print)
Date: June 20, 1997
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SCHEDULE I
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Name Grant Date Option Shares Exercise Price/Share
----- ---------- ------------- --------------------
Xxxxx X. Xxxx* 11/26/96 300,000 $1.00
Xxx Xxxxxx* 10/16/96 294,700 1.00
Xxxxxxx Xx Xxxx* 10/16/96 205,800 1.00
Xxxx Xxxxxxxx* 11/26/96 113,820 1.00
Xxxxx Xxxxx* Various 75,000 Various
Xxxxxx Xxxxxxxx* Various 100,000 Various
Xxxxx Xxxxxxxxx* 11/26/96 243,600 1.00
Xxxx Xxxxx* 11/26/96 205,800 1.00
Xxxx Xxxxxx* 11/26/96 190,960 1.00
R. Xxxxxx Xxxxx 02/20/97 454,545 1.10
Xxxxxxx X. Xxxxxxxx, Xx. 02/20/97 454,545 1.10
Xxxx X. Xxxxx 02/20/97 454,545 1.10
Xxxxx Xxxxxx 02/20/97 10,000 1.10
Xxxxx Check* 11/18/96 54,820 1.00
Xxxx Xxxxxxxxx* 11/18/96 54,880 1.00
Xxxx Xxxxxxxxx 02/20/97 10,000 1.10
Xxxxx Xxxxxx* 11/18/96 31,300 1.00
Xxx Xxxxxxxxx* 11/18/96 31,300 1.00
Xxxxx Xxx 02/20/97 10,000 1.10
Xxxx Xxxx* 11/18/96 41,300 1.00
Xxxx Xxxxxxx* 11/18/96 68,600 1.00
Xxxx Xxxxxx* 11/18/96 34,250 1.00
Xxxx XxXxxxxx* 02/03/97 27,400 1.00
Xxxx Xxxxxxx* 11/18/96 41,300 1.00
Xxxx Xxxxxx* 11/18/96 57,450 1.00
Xxxxxxx Xxxxxxxxxx* 11/18/96 68,600 1.00
Kabir Master* 11/18/96 27,400 1.00
Xxxxx Xxxxxx* 11/18/96 27,400 1.00
Xxxxx Xxxxxx* 11/18/96 57,450 1.00
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Name Grant Date Option Shares Exercise Price/Share
---- ---------- ------------- --------------------
Xxxxx Xxxxxxxxxx* 11/18/96 27,400 $1.00
Xxxxx Xxxxxx* 11/18/96 68,600 1.00
Xxxxxx Xxxxxx 02/20/97 20,000 1.10
Xxxxxxx Xxxxx* 11/18/96 34,250 1.00
Xxxx Xxxxxx* 11/18/96 57,450 1.00
Xxxx XxXxxxxx 02/20/97 50,000 1.10
Xxxxx Xxxxxxxx 02/20/97 50,000 1.10
Xxxx Xxxxxx 02/20/97 50,000 1.10
Xxxxxxx Xxxxxxxxxx 02/20/97 40,000 1.10
Xxxx Xxxx 02/20/97 30,000 1.10
Xxxxx Xxxxxx 02/20/97 30,000 1.10
Xxxx Xxxxxxx 02/20/97 10,000 1.10
Xxxx Xxxx 02/20/97 10,000 1.10
Xxxxx Bebo 02/20/97 5,000 1.10
Xxxx Xxxxxx 02/20/97 5,000 1.10
Xxxxx Xxxxxx* 11/18/96 41,300 1.00
*Such Option Agreements provide that the option shares shall vest in three
equal, consecutive installments, commencing on the first anniversary of the
grant date.
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