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EXHIBIT 10.70
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement is made and entered into this
18th day of May, 1999, to be effective as of March 15, 1999 (the "Effective
Date"), between Chancellor Media Corporation, a Delaware corporation (the
"Company"), Chancellor Media Corporation of Los Angeles, a Delaware corporation
("Los Angeles") and Xxxxx X. xx Xxxxxx (the "Executive"), residing at 0000
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Company, Los Angeles and the Executive are parties to an
Employment Agreement dated October 1, 1998 (the "Employment Agreement"); and
WHEREAS, the Company, Los Angeles and the Executive desire to amend
the Employment Agreement in certain respects;
WHEREAS, all capitalized terms used herein without definition shall
have the meaning assigned to such terms in the Employment Agreement;
NOW, THEREFORE, the parties hereby agree to amend the Employment
Agreement as follows:
1. As of the Effective Date, Section 1 of the Employment Agreement
is hereby amended as follows:
(a) The reference to, and definition of, "Options" in Section 1
is hereby amended in whole to read as follows:
""Options" shall mean the non-qualified stock options to be granted to
the Executive pursuant to Section 4(c) hereof.";
(b) The reference to, and definition of, "Option Plan" is hereby
amended in whole to read as follows:
""Option Plan" shall mean the Chancellor Media Corporation 1999 Stock
Option Plan, as amended from time to time, and any successor
thereto.";
(c) The reference to, and definition of, "Option Agreement" is
hereby amended in whole to read as follows:
""Option Agreement" shall mean the form of Non-Qualified Stock Option
Agreement attached hereto as Exhibit A to be entered into between the
Executive and the Company pursuant to which an Option is granted to
the Executive.";
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(d) The following defined terms shall be inserted in Section 1 of
the Employment Agreement in their correct alphabetical order:
"Contract Payments" shall have the meaning ascribed to such term in
Section 18.
"Gross-Up Payment" shall have the meaning ascribed to such term in
Section 18.
"Other Payments" shall have the meaning ascribed to such term in
Section 18.
"Payments" shall have the meaning ascribed to such term in Section 18.
2. As of the Effective Date, the first sentence of Section 3(a) of
the Employment Agreement is hereby amended in whole to read as follows:
"The Executive's job titles shall be Vice-Chairman of the Company and
President and Chief Executive Officer of Chancellor Radio and Outdoor
Division."
3. As of the Effective Date, Sections 4(a), 4(b) and 4(c) of the
Employment Agreement are hereby amended in whole to read as follows:
"(a) Base Compensation. 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 Nine
Hundred Fifty Thousand Dollars ($950,000) for the portion of the
Contract Year beginning March 15, 1999; and subject to increase for
each subsequent Contract Year an amount equal to the product of
(i) the Base Salary in effect at the end of 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 for any
subsequent Contract Year be less than the Base Salary in effect at the
end of the immediately preceding Contract Year.
(b) Annual Incentive Bonus. The Executive shall be entitled to an
Annual Bonus for each calendar year during which he is employed
hereunder, with the amount of each such Annual
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Bonus to be determined by, and to be in the sole discretion of,
the Compensation Committee, as recommended by the Chief Executive
Officer of the Company. The Executive's Annual Bonus awarded by the
Compensation Committee 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) Stock Options. The Executive has been granted Options, as of
April 9, 1999, to purchase One Million (1,000,000) shares of Common
Stock at an exercise price of $46.63. Such Options shall have the
terms set forth in, and shall be subject to, the Option Agreement and
the Option Plan; provided, however, that if the Option Plan is not
approved by the stockholders of the Company at the first annual
stockholders' meeting after the date of grant, stock options or other
equity incentives shall be provided to the Executive on mutually
satisfactory terms that are no less favorable than the provisions of
the Option Agreement and the Option Plan."
4. As of the Effective Date, a new Section 18 shall be inserted
following Section 17 of the Employment Agreement, which shall read as follows:
"18. GROSS-UP FOR CERTAIN TAXES
(a) In the event that any part of any payment or benefit received
(including, without limitation, acceleration of vesting of stock
options) pursuant to the terms of this Agreement or the Option
Agreement (the "Contract Payments") or any part of any payment or
benefit received or to be received by the Executive or for the
Executive's benefit pursuant to any other plan, arrangement or
agreement of the Company or any affiliate ("Other Payments" and,
together with the Contract Payments, the "Payments") would be subject
to the Excise Tax determined as provided below, the Company shall pay
to the Executive, at the time specified in Section 18(b) below, an
additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of the Excise Tax on the
Payments and any federal, state and local income tax and the Excise
Tax on the Gross-Up Payment, and any interest, penalties or additions
to tax payable by the Executive with respect thereto, shall be equal
to the total present value (using the applicable federal rate as
defined in Section 1274(d) of the Code in such calculation) of the
Payments at the time such Payments are to be made. For purposes of
determining whether any of the Payments will be subject to the Excise
Tax and the amounts of such Excise Tax, (1) the total
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amount of the Payments shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject to the Excise Tax, except to the
extent that, in the opinion of independent counsel selected by the
Company and reasonably acceptable to the Executive ("Independent
Counsel"), a Payment (in whole or in part) does not constitute a
"parachute payment" within the meaning of Section 280G(b)(2) of the
Code, or such "excess parachute payments" (in whole or in part) are
not subject to the Excise Tax, (2) the amount of the Payments that
shall be treated as subject to the Excise Tax shall be equal to the
lesser of (A) the total amount of the Payments or (B) the amount of
"excess parachute payments" within the meaning of Section 280G(b)(1)
of the Code (after applying clause (1) hereof), and (3) the value of
any noncash benefits or any deferred payment or benefit shall be
determined by Independent Counsel in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rates of federal
income taxation applicable to individuals in the calendar year in
which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rates of taxation applicable to
individuals as are in effect in the state and locality of the
Executive's residence in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income
taxes that can be obtained from deduction of such state and local
taxes, taking into account any limitations applicable to individuals
subject to federal income tax at the highest marginal rates.
(b) The Gross-Up Payments provided for in Section 18(a) hereof
shall be made upon the earlier of (i) the payment to the Executive of
any Payment or (ii) the imposition upon the Executive or payment by
the Executive of any Excise Tax.
(c) If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding or the opinion of
Independent Counsel that the Excise Tax is less than the amount taken
into account under Section 18(a) hereof, the Executive shall repay to
the Company within thirty (30) days of the Executive's receipt of
notice of such final determination or opinion the portion of the
Gross-Up Payment attributable to such reduction (plus the portion of
the Gross-Up Payment attributable to the Excise Tax and federal, state
and local income tax imposed on the Gross-Up Payment being repaid by
the Executive if such repayment results in a reduction in Excise Tax
or a federal, state and local income tax
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deduction) plus any interest received by the Executive on the amount
of such repayment. If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or
the opinion of Independent Counsel that the Excise Tax exceeds the
amount taken into account hereunder (including by reason of any
payment the existence or amount of which cannot be determined at the
time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess within thirty (30) days of
the Company's receipt of notice of such final determination or
opinion.
(d) In the event of any change in, or further interpretation of,
Sections 280G or 4999 of the Code and the regulations promulgated
thereunder, the Executive shall be entitled, by written notice to the
Company, to request an opinion of Independent Counsel regarding the
application of such change or interpretation to any of the foregoing,
and the Company shall use its best efforts to cause such opinion to be
rendered as promptly as practicable. All fees and expenses of
Independent Counsel incurred in connection with this agreement shall
be borne by the Company."
5. As to the remaining 640,000 Options that as of the Effective Date
were to be granted to the Executive pursuant to Section 4(c) of the Employment
Agreement, the grant of all such Options were accelerated as of April 9, 1999
(the "Accelerated Options"). Such Accelerated Options shall have an exercise
price of $46.63 and one-quarter of such Accelerated Options shall vest on each
of April 17, 1999, 2000, 2001 and 2002, 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 Accelerated Options
shall vest and become exercisable on the date of such Termination of
Employment. Except as modified by the preceding sentence, such Accelerated
Options shall remain subject to the terms and conditions set forth in Section
4(c) of the Employment Agreement.
6. Except as modified hereby, all of the terms of the Employment
Agreement shall remain in full force and effect.
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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 and Chief Executive Officer
/s/ XXXXX X. XX XXXXXX
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Xxxxx X. xx Xxxxxx
