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Exhibit 10.03
December 28, 1992
TO: Xxxxx X. Xxxxx
FROM: Xxxxxx X. Xxxxx
RE: Terms of Employment
This will confirm the agreement which we have reached
regarding the terms of your employment as Vice President-Operations and Chief
Financial officer at Entercom effective October 1, 1992.
We have agreed that commencing October 1, 1992 you will be
compensated as follows:
1. Your weekly salary will be $2,876.71 (annual rate of
$150,000.00). Effective as of October 1, 1993 your weekly salary will be
increased to $3356.16 (annual rate of $175,000.00) and effective as of October
1, 1994 your weekly salary will be increased to $3,835.62 (annual rate of
$200,000.00).
2. in addition to the salary set forth in 1 above, we have
agreed that you will be paid an incentive bonus based on increases in the real
cash flow of the Company. The formula set out below attempts to do this but it
cannot anticipate significant changes in the Company's accounting methods which
may occur subsequent to the date of this letter. Therefore in the event of a
significant change in the Company's accounting methods that would result in a
significant deviation from the stated purpose of the incentive then we have
agreed to equitably adjust the formula set forth below so that after reflecting
such accounting change the formula reflects the principle that the incentive is
to be based on changes in real cash flow. Changes in the Company's accounting
methods which have occurred prior to the date of this letter have already been
considered and are fully reflected in the formula. The formula to which we have
agreed is that you will be paid incentive compensation equal to 1.0% of the
excess of the Company's annual Adjusted Net Income (as defined below) over the
XXX Xxxx (as defined below) using an October 1 to September 30 fiscal year,
beginning with the fiscal year commencing October 1, 1992. Such incentive shall
be paid on the first regular payroll date for the corporate office which occurs
after the December 31st following the end of the fiscal year in question. In the
event of a termination of your employment, the incentive payable under this
paragraph 2 for the year of termination shall be the portion of the incentive
that would have been payable for the entire fiscal year in which the termination
occurs which is computed by multiplying the incentive for such entire fiscal
year by a fraction in which the numerator is the number of days from the start
of such fiscal year to the date of termination and the denominator is 365.
3. For purposes of this agreement the following definitions
shall be applicable.
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(a) For the fiscal year ending 9/30/93 the "ANI
Base" shall be $1,080,594.00, the amount of
the adjusted net income for the fiscal year
ending 9/30/92. For each subsequent fiscal
year the "ANI Base" shall be increased by a
percentage equal to the percentage increase
in the CPI-U for September of that year
compared to the CPI-U for September one year
earlier.
(b) "Normal Capital Replacements" in the fiscal
year ending 9/30/92 shall mean $56,552.22
for each station owned and operated by the
Company (i.e. 11 x $56,552.22 - $622.077.75
total for FYE 9/30/92). This per station
amount will be increased each fiscal year
thereafter in accordance with increases in
the CPI-U for the preceding one year period
(September to September) and shall also be
adjusted for any changes in the number of
stations owned and operated by the Company.
(c) "Pro Forma Taxable Income (Loss)" shall mean
the net income of the Company as shown on
the audited financial statements of the
Company for the fiscal year in question
adjusted for book vs. tax permanent
differences but not adjusted for book vs.
tax timing differences. For example, 20% of
certain travel and entertainment expenses
are not deductible expenses for tax purposes
and are a book vs. tax permanent difference.
Therefore the net income of the Company must
be increased by the non-deductible portion
of such expenses in computing "Pro Forma
Taxable Income." On the other hand the
difference between book depreciation
(computed an a straight line basis) and tax
depreciation (computed on an accelerated
basis) is a book vs. tax timing difference
and is not to be used as an adjustment to
net income of the Company in computing "Pro
Forma Taxable Income." All such book vs. tax
differences (both permanent and timing
differences) are identified on the Company's
Federal Income Tax Return. In the event that
the Company files an amended tax return
which changes the tax treatment of any such
book vs. tax difference from a timing
difference to a permanent difference or vice
versa, then the effect of such change on the
Pro Forma Taxable Income for the amended
year shall be added (or subtracted as the
case may be) from the Pro Forma Taxable
Income of the year in which such amended tax
return is filed.
(d) "Shareholders Tax Obligation (Benefit)"
shall mean the amount, for any fiscal year
in which the Company is taxed as a
Subchapter S corporation, which is computed
by multiplying the Pro Forma
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Taxable Income or Loss of the Company by the
higher of the combined maximum income tax
rates (federal, state and local) applicable
to a shareholder or shareholders resident in
Lower Merion Township, Pennsylvania or to a
shareholder or shareholders holding at least
25% of the Company's capital stock who
reside in any other jurisdiction as of the
end of the calendar year in which the
Company's fiscal year ends. In the event
that there is Pro Forma Taxable Income the
resultant number is the Shareholders
Subchapter S Tax Obligation. In the event
that there is a Pro Forma Taxable Loss the
resultant number is the Shareholders
Subchapter S Tax Benefit.
(e) "Adjusted Net Income" shall mean net income
of the Company as shown on the audited
financial statements of the Company for the
fiscal year in question plus charges or
expenses for depreciation or amortization
(exclusive of amortization of format change
expenses) less Normal Capital Replacements
(as defined above) and, so long as the
Company is taxed as a Subchapter S
corporation, less the Shareholders
Subchapter S Tax Obligation or plus the
Shareholders Subchapter S Tax Benefit (as
defined above) as the case may be.
4. You will be provided with the use of a Company vehicle (to
be selected by the Company) and insurance thereon. You will be responsible for
gas for the automobile. The Company will be responsible for repairs and
maintenance (including oil).
5. You will be entitled to medical insurance for yourself and
your dependents and to life insurance, vacation and other benefits available to
officers of the Company in accordance with Company policy. You will also be
eligible to participate in the Entercom Officers Profit Sharing Plan in
accordance with the terms of the Plan.
6. It is understood and agreed that your position is one of
executive authority involving the exercise of discretion in matters affecting
the vital interests of the Company, including the existence and degree of
profitability of the enterprise and the maintenance and renewal of its principal
assets, its FCC broadcast licenses. It is therefore essential that the
relationship at all times be one of complete confidence and mutual understanding
with respect to policies and goals. Accordingly it is expressly understood that
nothing herein shall be construed as altering the "at will" nature of your
employment and either party retains the right to terminate this agreement at any
time either for good cause or solely for the convenience of either party
provided that, except where there is good cause for said termination, each party
agrees to give at least thirty (30) days' notice in advance of said termination.
If you give notice of termination, the Company may at its option waive such
notice and accept your termination effective at any time prior to the expiration
of the notice period.
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Memo to: Xxxxx Xxxxx
From: Xxx Xxxxx
Date: December 1, 1996
Re: Modification to Employment Agreement
This will confirm that we have agreed to modify your Entercom
employment agreement dated December 28, 1992. Effective October 1, 1996, your
current annual salary of $250,000, as last adjusted on October 1, 1995, will be
increased annually effective on October 1 of each year commencing October 1,
1996. The increase shall be a percentage equal to the percentage increase in the
Consumer Price Index for All Urban Consumers (CPI-U), as published by the U.S.
Department of Labor for the immediately preceding August, compared to the CPI-U
for the month of August one year earlier.
Please confirm your agreement to the above by signing and
returning the enclosed copy of this memo.
Accepted and Agreed:
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Date: 2/11/97
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7. In addition it is understood and agreed that for the one year period
following the termination of your employment with the Company you will not,
without the express prior written permission of the Company, employ, offer to
employ, counsel a third party to employ, or participate in any manner in the
recommendation, recruitment or solicitation of the employment of any person who
was an employee of the Company on the date of the termination of your employment
or at any time within the 90 days prior thereto. In the event that any such
person shall be employed in a position under your direct or indirect supervision
within such one year period without the Company's express prior written
permission, it shall be conclusively presumed that this restriction has been
violated.
Please confirm your agreement to the foregoing by signing and
returning the enclosed copy of this memo.
Very truly yours,
/s/ Xxxxxx X. Field
Xxxxxx X. Field
As agreed
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Date 5/18/93
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