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EXHIBIT 10.53
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EXECUTION COPY
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AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN
CHANCELLOR MEDIA CORPORATION
AND
XXXXXXX X. XXXXXX
This Amended and Restated Employment Agreement (this
"Agreement") is made and entered into this 1st day of October, 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 and the Executive entered into an
Employment Agreement between the Company and the Executive on April 29, 1998
(the "Original Execution Date"), to be effective as of June 1, 1998 (the
"Original Employment Agreement"); and
WHEREAS, the Company and the Executive desire to modify and
clarify certain provisions of such Original Employment Agreement by amending and
restating the Original Employment 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).
"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.
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"Capstar" shall mean Capstar Broadcasting Corporation, a
Delaware corporation.
"Capstar Merger" shall mean the proposed merger of the Company
with and into a subsidiary of Capstar, subsequent to which Capstar will change
its name to Chancellor Media Corporation.
"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) directly and indirectly
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 direct and indirect
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.
"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.
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"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.
"MCC" shall have the meaning ascribed to such term in Section
3(c)(ii).
"New Chancellor" shall mean, from and after the consummation
of the Capstar Merger, Chancellor Media Corporation, a Delaware corporation, as
successor by name change to Capstar.
"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.
"Options" shall mean the non-qualified stock options to be
granted to the Executive hereunder.
"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.
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"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.
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.
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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;
(ii) serving as (A) Chairman, President and
Chief Executive Officer of Marcus Cable Company, L.L.C., 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 Original 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.
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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 subject to increase 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
; provided, however, that in no event shall the Base Salary in any subsequent
Contract Year be less than the Base Salary in the immediately 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 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 Original 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 Original Execution Date hereof
the Executive shall be granted Options to purchase One Million Two
Hundred Fifty Thousand (1,250,000) shares of Common Stock.
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(ii) All Options described in paragraph (i)
above 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 if and to the extent that a Termination of Employment has not
occurred, provided that in the event of a Termination of Employment by
the Executive for Good Reason or a Termination of Employment by the
Company other than for Cause, all such Options shall vest and become
exercisable on the date of such Termination of Employment; (D) each
Option shall be exercisable for the ten (10) year period following the
date of the grant; and (E) each Option shall be evidenced by, and
subject to, an Option Agreement.
(iii) Subject to paragraph (vi) hereinbelow,
on the Effective Date and each of the first four anniversaries thereof
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.
(iv) All Options described in paragraph
(iii) above 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 issued on the
Effective Date shall be $41.50 (the price per share at the close of
trading on June 1, 1998) and all other options described in paragraph
(iii) shall have an exercise price equal to 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; provided, however, that with respect to any Options the grant of
which is accelerated because the Executive's employment is terminated
either by the Company or the Executive as a result of a Change in
Control, the exercise price of such Options shall be the lower of (x)
the exercise price equal to the average last reported sale price in the
Nasdaq National Market System (or other principal trading market for
the Common Stock) for the 30 trading days prior to the ten trading days
ending at the close of the trading day immediately preceding the date
any announcement of such Change in Control is made and (y) an exercise
price equal to 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
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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; and (E) each Option
shall be evidenced by, and subject to, an Option Agreement.
(v) The Option Agreements shall specify that
such 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.
(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.
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(i) Automobile and Parking Allowance. During the Employment
Term, the Company shall (A) (i) either provide the Executive with, or pay or
reimburse the Executive for his purchase or lease 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 IVSP 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. During each calendar year during which the Executive is employed by
the Company the first $100,000 of personal use aircraft charges will not be paid
by the Executive but will be included as income to Executive on Executive's
annual W-2 Wage Tax Statement from the Company. The foregoing $100,000 amount
shall be pro-rated for any calendar year during which the Executive is employed
only for a portion of such calendar year.
(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.
Notwithstanding anything to the contrary in this Agreement, upon termination of
Executive's employment hereunder, Executive shall have the option to purchase
any or all of his office furnishings at their cost, net of any depreciation
through Executive's termination date.
(l) Execution Bonus. Within fifteen (15) days after the
execution and delivery of the Original Employment Agreement, the Company shall
pay to the Executive a one-time execution bonus in the gross amount of One
Million Dollars ($1,000,000).
(m) Other Benefits. During the Employment Term, the Company
shall provide the Executive with, or pay or reimburse the Executive for:
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(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.
(n) Most Favored Benefits. If the Company shall provide
employment related benefits (including, without limitation, benefits of the type
referred to by clauses (a) through (k) and clause (m) of this Section 4) in an
aggregate amount greater than or on more favorable terms and conditions (on an
aggregate basis) as are granted to any other senior executive of the Company,
the Executive shall be provided such benefits in substantially comparable amount
and/or under the substantially comparable terms and conditions, as applicable,
on an aggregate basis.
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 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
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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 Sections 4(d) and 6(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 Original
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 his Average Bonus, and on the last
day of the calendar year which includes the Expiration Date
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.
(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
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Sections 4(d) and 6(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).
(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
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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.
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
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of descent and distribution. From and after consummation of the Capstar Merger,
all rights and obligations of the Company under this Agreement shall be assigned
to and assumed by the New Chancellor. The consummation of the Capstar Merger
shall not constitute a Change in Control.
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 Texas, 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 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.
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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.
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: /s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
Chairman of the Board
/s/ XXXXXXX X. XXXXXX
--------------------------------------------
Xxxxxxx X. Xxxxxx
