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EXHIBIT 10.45
EXECUTION COPY
EMPLOYMENT AGREEMENT
BETWEEN
CHANCELLOR MEDIA CORPORATION
AND
XXXXXXX X. XXXXXX
This Employment Agreement (this "Agreement") is made and
entered into this 29th day of April, 1998 (the "Execution Date"), to be
effective as of June 1, 1998 (the "Effective Date"), between Chancellor Media
Corporation, a Delaware corporation (the "Company"), and Chancellor Media
Corporation of Los Angeles, a Delaware corporation ("Los Angeles") and Xxxxxxx
X. Xxxxxx (the "Executive"), residing at 0000 Xxxxxx Xxxxx Xxxx., Xxxxxx, Xxxxx
00000.
W I T N E S S E T H:
WHEREAS, the Company has a need for executive management
services; and
WHEREAS, the Executive is qualified and willing to render such
services to the Company; and
WHEREAS, the parties hereto desire to enter into an employment
agreement for the services of the Executive, on the terms and conditions as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and obligations hereinafter set forth, the parties agree as
follows:
1. DEFINITIONS
The following terms used in this Agreement shall have the
meaning specified below unless the context clearly indicates the contrary:
"Annual Bonus" shall mean the annual incentive bonus payable
to the Executive described in Section 4.
"Average Bonus" shall mean the greater of (a) (i) the total of
the Annual Bonuses paid hereunder with respect to the Employment Term, divided
by (ii) the length of such portion of the Employment Term in years (including
fractions) as falls on or prior to the last December 31 thereof and (b) Two
Million Dollars ($2,000,000).
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"Base Salary" shall mean the annual base salary payable to the
Executive at the rate set forth in Section 4.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean the Executive's (a) habitual neglect of his
material duties or failure to perform his material obligations under this
Agreement, (b) refusal or failure to follow lawful directives of the Board, (c)
commission of an act of fraud, theft or embezzlement, or (d) conviction of a
felony or other crime involving moral turpitude; provided, however, that the
Company shall give the Executive written notice of any actions alleged to
constitute Cause under subsections (a) and (b) above, and the Executive shall
have a reasonable opportunity (as specified by the Compensation Committee) to
cure any such alleged Cause.
"Change in Control" shall mean (a) the sale, lease or other
transfer of all or substantially all of the assets of the Company to any person
or group (as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended); (b) the adoption by the stockholders of the Company
of a plan relating to the liquidation or dissolution of the Company; (c) the
merger or consolidation of the Company with or into another entity or the
merger of another entity into the Company or any subsidiary thereof with the
effect that immediately after such transaction the stockholders of the Company
immediately prior to such transaction (or their Related Parties) hold less than
fifty percent (50%) of the total voting power of all securities generally
entitled to vote in the election of directors, managers or trustees of the
entity surviving such merger or consolidation; (d) the acquisition by any
person or group of more than fifty percent (50%) of the voting power of all
securities of the Company generally entitled to vote in the election of
directors of the Company; or (e) the majority of the Board is composed of
members who (i) have served less than twelve (12) months and (ii) were not
approved by a majority of the Board at the time of their election or
appointment.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Stock" shall mean $0.01 par value common stock of the
Company.
"Compensation Committee" shall mean the Compensation Committee
of the Board.
"Consumer Price Index" shall mean the Consumer Price Index for
All Urban Consumers (1982-84=100) for all cities as reported by the United
States Bureau of Labor Statistics.
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"Contract Year" shall mean each twelve (12) consecutive month
period during the Employment Term, which begins on the Effective Date and each
annual anniversary thereof.
"Employment Inducements" shall mean any compensation,
including, without limitation, signing bonuses and stock options, that are paid
or granted to other senior officers of the Company in connection with such
officers' initial hiring by the Company, or in connection with the extension of
the term of such senior officers' employment agreements with the Company.
"Employment Term" shall mean the period beginning on the
Effective Date and ending on the close of business on the effective date of the
Executive's termination of employment with the Company.
"Excise Tax" shall mean the taxes imposed by Code Section
4999.
"Expiration Date" shall have the meaning ascribed to such term
in Section 2.
"Good Reason" shall mean (a) the Company's material breach of
any provision hereof, (b) any adverse change in the Executive's job
responsibilities, duties, functions, status, offices, title, perquisites or
support staff, (c) relocation of the Executive's regular work address without
his consent, (d) the Executive's failure, at any time, to be permitted to serve
as a member of the Board or (e) a Change in Control, provided, however, that
the Executive shall give the Company written notice of any actions (other than
those set out in subsections (c) (only as it relates to a location outside of
the Dallas/Fort Worth area), (d) or (e) above) alleged to constitute Good
Reason and the Company shall have a reasonable opportunity to cure any such
alleged Good Reason.
"Option Agreement" shall mean the agreement between the
Executive and the Company pursuant to which any Option is granted to the
Executive.
"Option Plan" shall mean the 1998 Chancellor Media Corporation
Stock Option Plan, as amended from time to time, and any successor thereto,
subject to obtaining stockholder's approval of the Option Plan (which will be
submitted to the Company's stockholders at the 1998 annual meeting of
stockholders with the recommendation of the Board).
"MCC" shall have the meaning ascribed to such term in Section
3(c)(ii).
"Options" shall mean the non-qualified stock options to be
granted to the Executive hereunder.
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"Permanent Disability" shall mean the Executive's inability to
perform the duties contemplated by this Agreement by reason of a physical or
mental disability or infirmity which has continued for more than ninety (90)
working days (excluding vacation) in any twelve (12) consecutive month period
as determined by the Board. The Executive agrees to submit such medical
evidence regarding such disability or infirmity as is reasonably requested by
the Board.
"Related Parties" shall mean with respect to any person (a)
the spouse and lineal ascendants and descendants of such person, and any
sibling of any of such persons and (b) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or persons
beneficially holding an eighty percent (80%) or more controlling interest of
which consist of persons referred to in subsection (a) above.
"Termination of Employment" shall mean the first to occur of
the following events:
(a) the date of death of the Executive;
(b) the effective date specified in the Company's
written notice to the Executive of the termination of his employment
as a result of his Permanent Disability, which effective date shall
not be earlier than the ninety-first (91st) working day (excluding
vacation) following the commencement of the Executive's inability to
perform his duties hereunder;
(c) the effective date specified in the Company's
written notice to the Executive of the Company's termination of his
employment without Cause;
(d) the effective date specified in the Company's
written notice to the Executive of the Company's termination of his
employment for Cause;
(e) the effective date specified in the
Executive's written notice to the Company of the Executive's
termination of his employment for Good Reason;
(f) the effective date specified in the
Executive's written notice to the Company of the Executive's
termination of his employment without Good Reason; and
(g) the date the Executive's employment
terminates pursuant to Section 2.
"Termination without Cause" shall mean a termination by the
Company of the Executive's employment without Cause.
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2. EMPLOYMENT
The Executive's Employment Term shall become effective and
begin as of the Effective Date hereof, and shall continue until the close of
business on the fifth (5th) anniversary of the Effective Date (the "Expiration
Date"), unless the Executive's employment is earlier terminated pursuant to a
Termination of Employment. The Executive will serve the Company subject to the
general supervision, advice and direction of the Board and upon the terms and
conditions set forth in this Agreement.
3. TITLE AND DUTIES
(a) The Executive's job title shall be President and
Chief Executive Officer of the Company. During the Employment Term the
Executive shall have such authority and duties as are usual and customary for
such position, and shall perform such other services and duties as the Board
may from time to time designate consistent with such position, including,
without limitation, general charge of the Company's business and the strategic
direction of the Company's business, subject to the direction and control of
the Board. Throughout the Employment Term, the Company shall also nominate the
Executive to serve as a member of the Board and upon such nomination Executive
shall agree to so serve.
(b) The Executive shall report solely to the Board. All
senior officers of the Company shall report directly or indirectly through
other senior officers, to the Executive, and the Executive shall be responsible
for reviewing the performance of other senior officers of the Company, and
shall from time to time advise the Board of his recommendations for any
adjustments to the salaries of and bonus payments to such officers. The
Executive shall be responsible for and, subject to discussion with and
ratification by the Board, have the authority to enter into, employment
contracts on behalf of the Company with other executives of the Company.
(c) The Executive shall devote his best efforts and such
business time to the business affairs of the Company as may be reasonably
necessary for the discharge of his duties as President and Chief Executive
Officer. The Executive may not engage in any other venture which is directly
or indirectly in conflict or competition with the then existing business of the
Company, nor may the Executive accept employment with any other individual or
other entity; provided, however, the Executive may devote reasonable time and
attention to:
(i) serving as a director of, or member of a
committee of the directors of, any not-for-profit organization or
engaging in other charitable or community activities;
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(ii) serving as (A) Chairman, President and
Chief Executive Officer of Marcus Cable Company, L.P., and any of its
affiliated companies ("MCC") and (B) an officer, director and
stockholder of Marcus Cable Properties, Inc., the ultimate general
partner of MCC; provided, however, the Executive shall no longer serve
as President and Chief Executive Officer of MCC following the earlier
to occur of (i) six (6) months after the Execution Date (subject to an
additional six (6) month extension at the reasonable discretion of the
Chairman of the Board), or (ii) a replacement President and Chief
Executive Officer of MCC is appointed; and
(iii) serving as a member of the board of
directors (or other governing body) of MCC (or any successor entity)
and other corporations and organizations, so long as such activities
do not interfere unreasonably with the Executive's duties hereunder.
4. COMPENSATION AND BENEFITS
(a) Base Compensation. Subject to Section 4(c) hereof,
during the Employment Term, the Company shall pay the Executive, in
installments according to the Company's regular payroll practice, Base Salary
at the annual rate of One Million One Hundred Twenty-Five Thousand Dollars
($1,125,000) for the first (1st) Contract Year; and for each subsequent
Contract Year an amount equal to the product of
(i) the Base Salary for the immediately
preceding Contract Year; and
(ii) the ratio of the Consumer Price Index for
the last complete calendar month in such preceding Contract Year to
the Consumer Price Index for the same month in the year preceding such
preceding Contract Year.
(b) Annual Incentive Bonus. Subject to Section 4(c)
hereof, the Executive shall be entitled to an Annual Bonus for each calendar
year of which he is employed hereunder on the last day thereof and also for the
calendar year, if any, in which this contract expires pursuant to Section 2.
Such Annual Bonus for any such calendar year shall be as determined by the
Compensation Committee in its reasonable discretion; provided, however, the
Annual Bonus shall in no event be less than Two Million Dollars ($2,000,000)
nor greater than Four Million Dollars ($4,000,000); provided, further, the
Annual Bonus for any partial calendar year shall be adjusted pro rata for the
portion of the calendar year contained within the Employment Term. The
Executive's Annual Bonus earned with respect to each calendar year shall be
paid at the same time as annual incentive bonuses with respect to that calendar
year
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are paid to other senior executives of the Company generally, but in no event
later than March 31 of the following calendar year.
(c) Agreed Salary Adjustment. Notwithstanding the
provisions of Sections 4(a) and 4(b) hereinabove, in the event any other
employee of the Company shall be paid total gross cash compensation (exclusive
of Employment Inducements) in any calendar year after the Execution Date that
is greater than eighty percent (80%) of the total gross cash compensation in
such calendar year paid to the Executive pursuant to Sections 4(a) and 4(b)
hereinabove (the "Agreed Ratio"), the amounts paid to the Executive pursuant to
Sections 4(a) and 4(b) hereinabove, shall be increased so that such employee's
total gross cash compensation does not exceed the Agreed Ratio.
(d) Stock Options.
(i) On the Execution Date hereof the Executive
shall be granted Options to purchase One Million Two Hundred Fifty
Thousand (1,250,000) shares of Common Stock.
(ii) All Options described in paragraph (i)
shall be granted subject to the following terms and conditions: (A)
the Options shall be granted under and subject to the Option Plan; (B)
the exercise price of the Options shall be $42.125 per share (the
price per share at the close of trading on April 28, 1998); (C)
one-half of the Options under paragraph (i) shall be vested on the
date of grant, and one-half of the Options under paragraph (i) shall
be vested on the eighteenth (18th) month anniversary of the date of the
grant; (D) each Option shall be exercisable for the ten (10) year
period following the date of the grant, subject, however, to such
approval by the shareholders of the Company as is sufficient to
satisfy the requirements for listing of the Common Stock on the Nasdaq
National Market System; and (E) each Option shall be evidenced by, and
subject to, an Option Agreement.
(iii) Subject to paragraph (vi) hereinbelow, on
each annual anniversary of the Effective Date hereof on which the
Executive remains employed hereunder, the Executive shall be granted
Options to purchase Two Hundred Thousand (200,000) shares of Common
Stock. In the event the Executive's employment hereunder is
terminated by the Company without Cause or by the Executive for Good
Reason prior to the Expiration Date, the Executive shall be granted,
as of the date of such Termination of Employment, a number of Options
equal to One Million (1,000,000) minus the number of Options
previously granted pursuant to the immediately preceding sentence. If
the Employment Term continues beyond the Expiration Date, the
Compensation Committee shall have the discretion to grant additional
Options to the Executive with respect to such continued employment.
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(iv) All Options described in paragraph (iii)
shall be granted subject to the following terms and conditions: (A)
the Options shall be granted under and subject to the Option Plan; (B)
the exercise price of the Options shall be the last reported sale
price of the Common Stock on the Nasdaq National Market System (or
other principal trading market for the Common Stock) at the close of
the trading day immediately preceding the date as of which the grant
is made; (C) each Option shall be vested on the date of grant; (D)
each Option shall be exercisable for the ten (10) year period
following the date of the grant subject, however, to such approval by
the shareholders of the Company as is sufficient to satisfy the
requirements for listing of the Common Stock on the Nasdaq National
Market System; and (E) each Option shall be evidenced by, and subject
to, an Option Agreement.
(v) The Option Agreements shall specify that
the Options shall remain exercisable for the periods described in
paragraphs (ii) and (iv) above notwithstanding any Termination of
Employment.
(vi) Notwithstanding the provisions of paragraph
(iii) hereinabove, in the event any other employee of the Company
shall be granted Options (exclusive of Employment Inducements) in any
calendar year that are greater than eighty percent (80%) of the total
Options in such calendar year granted to the Executive (the "Agreed
Option Ratio"), the Options granted to the Executive pursuant to
paragraph (iii) hereinabove, shall be increased so that the grant of
such Options (exclusive of Employment Inducements) to such other
employee does not exceed the Agreed Option Ratio.
(e) Vacation. During each complete twelve (12) month
period of the Employment Term, the Executive shall be entitled to no fewer than
four (4) weeks of paid vacation (unless, based on his length of service with
the Company and his position with the Company, the Executive is entitled to a
greater number of weeks of paid vacation under the Company's generally
applicable vacation policy, as determined by the Compensation Committee).
(f) Employee Benefit Plans. During the Employment Term,
the Executive shall be entitled to participate in all pension, profit sharing
and other retirement plans, all incentive compensation plans and all group
health, hospitalization and disability insurance plans and other employee
welfare benefit plans (in the case of any group health, hospitalization and
disability plans and other employee welfare benefit plans currently provided to
the Executive by MCC, after the Executive no longer participates in such plan
or plans) in which other senior executives of the Company may participate, on
terms and conditions no less favorable than those which apply to such other
senior executives of the Company.
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(g) Company Payment of Health Benefit Coverage. During
the Employment Term, the Company shall pay the amount of premiums or other cost
incurred for coverage of the Executive and his eligible spouse and dependent
family members under the applicable Company health benefits arrangement
(consistent with the terms of such arrangement).
(h) Life Insurance Policy. In addition to the insurance
coverage contemplated by Section 4(f), during the Employment Term the Company
shall maintain in effect term life insurance coverage for the Executive with a
death benefit of at least Five Hundred Thousand Dollars ($500,000), subject to
the Executive's insurability at standard rates and with the beneficiary or
beneficiaries thereof designated by the Executive. Notwithstanding Section 9 of
this Agreement, such life insurance policy or policies may be assigned to a
trust for the benefit of any beneficiary designated by the Executive.
(i) Automobile and Parking Allowance. During the
Employment Term, the Company shall (A) after the Executive no longer has use of
any automobile provided by MCC, (i) provide the Executive with the use of a
luxury automobile selected by the Executive with a retail sales price of not
more than One Hundred Thousand Dollars ($100,000), which automobile may be
traded, in Executive's discretion, every two (2) years during the Employment
Term, and (ii) pay all insurance and all other expenses related to the business
operation of such automobile, and (B) provide the Executive with a parking
space at the Executive's offices maintained in Dallas County, Texas.
(j) Use of Company Aircraft. During the Employment Term,
the Company shall provide the Executive with (i) priority use of aircraft
operated by or for the Company which shall be equal to or better than the
quality of a Gulfstream III airplane (the "Company Aircraft"), for all business
uses, and (ii) subject at all times to the Company's priority for business
purposes, unlimited priority use of the Company Aircraft for personal use at
the then most favorable applicable hourly charge being charged to other users
of the Company Aircraft.
(k) Office Facilities. As soon as practicable after the
Effective Date, and at all times during the Employment Term, the Company shall
(to the extent practicable) provide the Executive with office space in the same
building as the offices of Hicks, Muse, Xxxx & Xxxxx Incorporated, or, if such
office space is not available, in a comparable location of the Executive's
choosing. Such office space shall be of a layout and include furnishings that
are similar to offices utilized by presidents and chief executive officers of
comparable companies in the area, and shall include private bathroom
facilities.
(l) Execution Bonus. Within fifteen (15) days after the
execution and delivery of this Agreement, the Company shall pay to the
Executive a one-time execution bonus in the gross amount of One Million Dollars
($1,000,000).
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(m) Other Benefits. During the Employment Term, the
Company shall provide the Executive with, or pay or reimburse the Executive
for:
(i) the cost incurred for membership of the
Executive in a metropolitan lunch club of the Executive's choosing,
and for membership of the Executive and his spouse and dependent
family members in the athletic club of the Executive's choosing and in
the country club of the Executive's choosing.
(ii) the actual cost for year-round personal
security services that are, in the Executive's reasonable judgment,
necessary or desirable to ensure the safety and security of the
Executive and the Executive's family.
(iii) the actual cost of annual preparation of
the Executive's federal income tax returns.
(iv) the actual cost of two (2) secretaries or
assistants at an aggregate annual gross salary for both such persons
of approximately One Hundred Twenty Seven Thousand Dollars ($127,000)
and one (1) personal accountant at a gross salary of approximately
Sixty-One Thousand Dollars ($61,000), subject in all cases to annual
salary increases consistent with those available to the other members
of the Company's support staff.
5. REIMBURSEMENT OF EXPENSES
In addition to the compensation provided for under Section 4
hereof, upon submission of proper vouchers, the Company will pay or reimburse
the Executive for all normal and reasonable travel and entertainment expenses
incurred by the Executive during the Employment Term in connection with the
Executive's responsibilities to the Company. The Company shall also reimburse
the Executive for all reasonable attorneys' fees incurred in connection with
the negotiation and execution of this Agreement.
6. TERMINATION BENEFITS
(a) Upon the termination of the Executive's employment
with the Company for any reason, the Company shall provide the Executive (or,
in the case of his death, his estate or other legal representative), any Annual
Bonus earned but not yet paid with respect to the preceding calendar year, all
benefits due him under the Company's benefits plans and policies for his
services rendered to the Company prior to the date of such termination
(according to the terms of such plans and policies), and, not later than ninety
(90) days after
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such termination, in a lump sum, all Base Salary earned through the date of
such termination. The Executive shall be entitled to the payments and benefits
described below only as each is applicable to such termination of employment.
(b) In the event that the Executive's employment
hereunder is terminated by the Company without Cause or by the Executive for
Good Reason (but not by reason of expiration or non-renewal of this Agreement),
and subject to the last sentence of this subsection (b), the Company shall make
a one-time cash payment to the Executive in a gross amount such that the net
payments retained by the Executive after payment of any applicable Excise Tax
with respect to such payment, and the payment of any income taxes on the amount
over Six Million Two Hundred Fifty Thousand Dollars ($6,250,000) that is so
grossed-up and paid to the Executive on account of any applicable Excise Tax,
shall equal Six Million Two Hundred Fifty Thousand Dollars ($6,250,000). Such
payment shall be made at the time of any such termination without Cause or
within thirty (30) days of any such resignation for Good Reason. Such payment
shall be in full satisfaction of all obligations of the Company to the
Executive hereunder (other than those obligations set forth in subsection (a))
and shall be conditioned on the Executive giving a general release of the
Company and affiliates in the form used generally by the Company in the case of
the termination of employment of senior executives.
(c) Notwithstanding the provisions of Section 6(b)
hereinabove, in the event the Company shall at any time after the Execution
Date agree to pay cash termination benefits to any other employee of the
Company that are greater than eighty percent (80%) of the cash termination
benefits agreed to be paid to the Executive pursuant to Section 6(b)
hereinabove (the "Agreed Termination Ratio"), the amounts agreed to be paid to
the Executive pursuant to Section 6(b) hereinabove, shall be increased so that
such employee's cash termination benefits do not exceed the Agreed Termination
Ratio.
(d) (i) In the event that the Executive elects to
terminate his employment hereunder other than for Good Reason, the
Company, in consideration for the Executive's agreement in Section
7(b), shall continue to pay him his Base Salary as set forth in
Section 4(a) through the fifth (5th) anniversary of the Effective
Date.
(ii) In addition, in such event, the Company
may, by written notice to the Executive given no later than fifteen
(15) days following his termination of employment, elect to require
the Executive to observe the provisions of Section 7(c) hereof. In
such event, the Company shall, on the last day of each calendar year
through December 31, 2003 make a payment to him equal to the product
of his Average Bonus and the fraction of such calendar year which
precedes the Expiration Date.
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(e) In the event that the Executive's employment is
terminated by reason of expiration or non-renewal of this Agreement the Company
shall make a (1) one-time cash payment to the Executive equal to two (2) times
the amount of his annual Base Salary payable for the Contract Year ending on
(or in which falls) the date of Termination of Employment. Such payment shall
be made at the time of such Termination of Employment. Such payment shall be
in full satisfaction of all obligations of the Company to the Executive
hereunder (other than those obligations set forth in subsection (a)) and shall
be conditioned on the Executive giving a general release of the Company and
affiliates in the form used generally by the Company in the case of the
termination of employment of senior executives.
(f) In the event of any Termination of Employment, the
Executive shall not be required to seek other employment to mitigate damages,
and any income earned by the Executive from other employment or self-employment
shall not be offset against any obligations of the Company to the Executive
under this Agreement.
7. PROTECTED INFORMATION; PROHIBITED SOLICITATION
(a) The Executive hereby recognizes and acknowledges that
during the course of his employment by the Company, the Company will furnish,
disclose or make available to the Executive confidential or proprietary
information related to the Company's business, including, without limitation,
customer lists, ideas and formatting and programming concepts and plans, that
such confidential or proprietary information has been developed and will be
developed through the Company's expenditure of substantial time and money, and
that all such confidential information could be used by the Executive and
others to compete with the Company. The Executive hereby agrees that all such
confidential or proprietary information shall constitute trade secrets, and
further agrees to use such confidential or proprietary information only for the
purpose of carrying out his duties with the Company and not to disclose such
information unless required to do so by subpoena or other legal process. No
information otherwise in the public domain (other than by an act of the
Executive in violation hereof) shall be considered confidential.
The Executive further agrees that all memoranda, notices,
files, records and other documents concerning the business of the Company, made
or compiled by the Executive during the period of his employment or made
available to him, shall be the Company's property and shall be delivered to the
Company upon its request therefor and in any event upon the termination of the
Executive's employment with the Company, provided, however, that the Executive
shall be permitted to retain copies of personal correspondence generated or
received by him during the Employment Term, subject to the use restrictions of
this Section 7(a).
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(b) The Executive hereby agrees, in consideration of his
employment hereunder and in view of the confidential position to be held by the
Executive hereunder, that after any Termination of Employment, and through the
Expiration Date the Executive will not directly or indirectly induce any
employee of any of the Protected Companies (as defined below) to terminate such
employment or to become employed by any other radio broadcasting station.
(c) Should the Company make the election set forth in
Section 6(d)(ii), the Executive further agrees that, from and after the
Termination of Employment and through the Expiration Date, he shall not be
employed by or perform activities on behalf of, or have an ownership interest
in, (i) any radio or television broadcasting station serving the same "Area of
Dominant Influence" (as reported by Arbitron) as any of the radio or television
broadcasting stations owned by the Company or its subsidiaries or affiliates,
or the subsidiaries or affiliates of the Company's direct or indirect
stockholders (collectively the "Protected Companies"), or (ii) any person,
firm, corporation or other entity, or in connection with any business
enterprise, that is directly or indirectly engaged in any of the business
activities in which the Protected Companies have significant involvement
(collectively, the "Competing Business Areas"), in each case at the effective
time of such Termination of Employment (other than beneficial ownership of up
to five percent (5%) of the outstanding voting stock of a publicly traded
company that owns such a competitor); provided, however, the foregoing shall
not prohibit the Executive from being employed by or performing activities on
behalf of, or having an ownership interest in, any entity that principally is
in the business of owning or operating cable television systems or otherwise
providing multi-channel video service, two-way return interactive high speed
data service, or telephony service.
(d) The restrictions in this Section 7, to the extent
applicable, shall survive the termination of this Agreement and shall be in
addition to any restrictions imposed upon the Executive by statute or at common
law.
(e) The parties hereby acknowledge that the restrictions
in this Section 7 have been specifically negotiated and agreed to by the
parties hereto and are limited only to those restrictions necessary to protect
the Protected Companies from unfair competition. The parties hereby agree that
if the scope or enforceability of any provision, paragraph or subparagraph of
this Section 7 is in any way disputed at any time, and should a court find that
such restrictions are overly broad, the court may modify and enforce the
covenant to the extent that it believes to be reasonable under the
circumstances. Each provision, paragraph and subparagraph of this Section 7 is
separable from every other provision, paragraph, and subparagraph and
constitutes a separate and distinct covenant. The Executive acknowledges that
the Protected Companies operate in major and medium sized markets throughout
the United States and that the effect of Section 7(c) may be to prevent him
from working in the Competing Business Areas after his termination of
employment hereunder.
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8. INJUNCTIVE RELIEF
The Executive hereby expressly acknowledges that any breach or
threatened breach by the Executive of any of the terms set forth in Section 7
of this Agreement may result in significant and continuing injury to the
Company, the monetary value of which would be impossible to establish.
Therefore, the Executive agrees that the Company shall be entitled to apply for
injunctive relief in a court of appropriate jurisdiction. The provisions of
this Section 8 shall survive the Employment Term.
9. PARTIES BENEFITED; ASSIGNMENTS
This Agreement shall be binding upon the Executive, his heirs
and his personal representative or representatives, and upon the Company and
Los Angeles and their respective successors and assigns. Neither this
Agreement nor any rights or obligations hereunder may be assigned by the
Executive, other than by will or by the laws of descent and distribution.
10. NOTICES
Any notice required or permitted by this Agreement shall be in
writing, sent by registered or certified mail, return receipt requested,
addressed to the Board and the Company at its then principal office, or to the
Executive at the address set forth in the preamble, as the case may be, or to
such other address or addresses as any party hereto may from time to time
specify in writing for the purpose in a notice given to the other parties in
compliance with this Section 10. Notices shall be deemed given when received.
11. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES.
12. INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES
The Company shall indemnify the Executive to the fullest
extent permitted by the laws of the State of Delaware, as in effect at the time
of the subject act or omission, and shall advance to the Executive reasonable
attorneys' fees and expenses as such fees and
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expenses are incurred (subject to an undertaking from the Executive to repay
such advances if it shall be finally determined by a judicial decision which is
not subject to further appeal that the Executive was not entitled to the
reimbursement of such fees and expenses) and he will be entitled to the
protection of any insurance policies the Company may elect to maintain
generally for the benefit of its directors and officers ("Directors and
Officers Insurance") against all costs, charges and expenses incurred or
sustained by him in connection with any action, suit or proceeding to which he
may be made a party by reason of his being or having been a director, officer
or employee of the Company or any of its subsidiaries or his serving or having
served any other enterprise as a director, officer or employee at the request
of the Company (other than any dispute, claim or controversy arising under or
relating to this Agreement). The Company covenants to maintain during the
Employment Term for the benefit of the Executive (in his capacity as an officer
and director of the Company) Directors and Officers Insurance providing
benefits to the Executive no less favorable, taken as a whole, than the
benefits provided to the Executive by the Directors and Officers Insurance
maintained by the Company on the date hereof; provided, however, that the Board
may elect to terminate Directors and Officers Insurance for all officers and
directors, including the Executive, if the Board determines in good faith that
such insurance is not available or is available only at unreasonable expense.
13. REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE
The Executive represents and warrants to the Company that (a)
the Executive is under no contractual or other restriction which is
inconsistent with the execution of this Agreement, the performance of his
duties hereunder or the other rights of Company hereunder, and (b) the
Executive is under no physical or mental disability that would hinder the
performance of his duties under this Agreement.
14. DISPUTES
Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall, at the election and
upon written demand of either the Executive or the Company, be finally
determined and settled by arbitration in the city of the Company's headquarters
in accordance with the rules and procedures of the American Arbitration
Association, and judgment upon the award may be entered in any court having
jurisdiction thereof. The Company shall pay the costs and expenses of such
arbitration and the fees of the Executive's counsel and experts unless the
finder of fact determines that the Company is the prevailing party in such
arbitration.
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15. FACILITY OF PAYMENT
All cash payments to be made by the Company to or on behalf of
the Executive hereunder shall be an obligation of and made by Los Angeles.
16. MISCELLANEOUS
The provisions of this Agreement shall survive the termination
of the Executive's employment with the Company. This Agreement contains the
entire agreement of the parties relating to the subject matter hereof. This
Agreement supersedes any prior written or oral agreements or understandings
between the parties relating to the subject matter hereof. No modification or
amendment of this Agreement shall be valid unless in writing and signed by or
on behalf of the parties hereto. A waiver of the breach of any term or
condition of this Agreement shall not be deemed to constitute a waiver of any
subsequent breach of the same or any other term or condition. This Agreement
is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules and regulations. If any
provision of this Agreement, or the application thereof to any person or
circumstance, shall, for any reason and to any extent, be held invalid or
unenforceable, such invalidity and unenforceability shall not affect the
remaining provisions hereof and the application of such provisions to other
persons or circumstances, all of which shall be enforced to the greatest extent
permitted by law. The compensation provided to the Executive pursuant to this
Agreement shall be subject to any withholdings and deductions required by any
applicable tax laws. Any amounts payable under this Agreement to the Executive
after the death of the Executive shall be paid to the Executive's estate or
legal representative. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above.
CHANCELLOR MEDIA CORPORATION
CHANCELLOR MEDIA CORPORATION OF
LOS ANGELES
By:
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Xxxxxx X. Xxxxx
Chairman of the Board
Interim President and Chief Executive Officer
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Xxxxxxx X. Xxxxxx
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