EXHIBIT 10.56
EMPLOYMENT AND STOCK OPTION AGREEMENT
-------------------------------------
THIS EMPLOYMENT AND STOCK OPTION AGREEMENT (this "Agreement"), is made and
entered into this 1st day of January, 1998 by and between RADIO ONE, INC., a
Delaware corporation (hereinafter referred to as the "Corporation") and XXXX
XXXXXXXXX XXXXX (hereinafter referred to as the "Employee").
RECITALS:
--------
R-1 The Corporation is a corporation existing under the laws of Delaware,
whose principal business is to own and manage, directly and through subsidiaries
and affiliates, certain radio stations (collectively, together with radio
stations acquired and/or managed after the date hereof, the "Radio Stations").
Certain of the Radio Stations are in Philadelphia, Pennsylvania, Washington,
D.C. and Baltimore, Maryland and are owned by the Corporation. One Radio Station
managed by the Corporation is located in Fayetteville, Georgia and is owned by
Radio One of Atlanta, Inc. ("ROA").
R-3 The Corporation desires to hire and employ the Employee and the
Employee desires to be hired and employed by the Corporation.
R-4 The Corporation and Employee desire to enter into this Agreement to
set forth certain terms and conditions, including certain stock option
provisions, which will govern the employment relationship.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the Employee,
intending to be legally bound, do hereby mutually agree as follows:
1. Term of Employment. The Corporation does hereby hire and employ the
------------------
Employee in the capacity and at the compensation set forth below. The term of
the employment hereunder shall commence on the date hereof (the "Employment
Commencement Date") and shall continue until December 31, 1999 (the "Term
Expiration Date") or such other date mutually approved in writing by the
Corporation and the Employee. The Employee hereby accepts this employment for
the term of employment.
2. Duties of Employee. The Corporation hereby employs the Employee as
------------------
the Chief Operating Officer of the Corporation, which duties shall include
serving as General Manager of WHTA-FM in Atlanta, Georgia and of WTHA-FM in
Roswell, Georgia, and the Employee agrees to perform the functions of the Chief
Operating Officer of the Company, General Manager of WHTA-FM and General Manager
of WTHA-FM and to perform such other duties as are customary in such capacities.
The Employee agrees to reside in the Atlanta area and to devote her full and
best efforts, energies and abilities to the service of the Corporation, WHTA-FM
and WTHA-FM on a full time basis. The Corporation agrees that Employee shall
remain in Atlanta and shall not be required to relocate during the term of this
Agreement.
3. Compensation. The Corporation shall pay to the Employee base
------------
compensation at an annual rate of Two Hundred Thousand Dollars ($200,000.00) per
annum payable in equal semi-monthly installments. In addition, except as
provided in Section 6 hereof, the Corporation shall pay Employee an annual cash
bonus in the maximum amount of Fifty Thousand Dollars ($50,000.00) for each of
calendar year 1998 (the "1998 Bonus") and calendar year 1999 (the "1999 Bonus").
The 1998 Bonus and the 1999 Bonus shall be payable in the event aggregate
broadcast cash flow for the Stations for the applicable calendar year exceeds
the target set by the Corporation for such calendar year. The foregoing
compensation shall be in addition to the special entitlements set forth in
Section 12 concerning stock options.
4. Benefits and Leave. Employee shall be entitled to three (3) weeks of
------------------
vacation in each of calendar years 1998 and 1999. The Employee shall be entitled
to such benefits as are granted to other similarly situated employees and/or
executives of the Corporation.
5. Expenses. The Corporation shall reimburse the Employee for all
--------
reasonable and necessary business expenses incurred by her in the performance of
her duties hereunder, in accordance with the Corporation's policies and
procedures, and provided they are vouchered in a form satisfactory to the
Internal Revenue Service for the deduction of such expenses and are approved by
the Chief Executive Officer of the Corporation.
6. Termination.
-----------
(a) Termination by the Corporation.
------------------------------
(i) Disability. Upon the Permanent Disability of the Employee,
----------
the Corporation may terminate the Employee's employment immediately by written
notice. "Permanent Disability" shall mean any ailment, injury or other medical,
physical or other condition which (1) is covered by Employer's disability
insurance and (2) prevents the Employee from performing her duties in
substantially the manner as prior to such disability for (A) a continuous period
of six (6) months, and further the Employee fails to obtain a bona fide medical
opinion from a physician mutually acceptable to the Corporation and the Employee
during said six (6) month period certifying that such disability will not, in
reasonable medical certainty, last for more than six (6) additional months or
(B) a continuous period of twelve (12) months.
(ii) Death. The Employee's employment shall terminate
-----
immediately upon her death. If the Employee dies during the term of her
employment, the Corporation shall pay to (A) the Employee's spouse or (B) the
Executors under the Employee's Last Will and Testament duly admitted to probate
within one (1) year of her death, or (C) the Employee's heirs at law, the base
compensation which otherwise would be payable to the Employee under Section 3
hereof for a period of three (3) months after the date on which the death
occurs.
(iii) Termination with Cause. The Employee's employment may
----------------------
be terminated at any time upon written notice for Cause. For the purposes of
this Agreement, "Cause" is defined as: (A) acts of criminal conduct or moral
turpitude; (B) refusal to follow the reasonable instructions or directions of
her superiors, including but not limited to Xxxxxx Xxxxxxx, or the board
2
of directors of the Corporation; (C) willful and substantial neglect of, or
action contrary to, material duties regularly associated with her position at
the time of employment; (D) alcohol or drug usage interfering with the
performance of material duties regularly associated with her position at the
time of employment.
(iv) Termination Without Cause. The Employee's employment may be
-------------------------
terminated, without any cause whatsoever, by the Corporation providing Employee
with twelve (12) months' written notice. At the Corporation's sole option, the
Corporation may substitute, in lieu of all or any portion of such twelve (12)
month notice period, payment of the base compensation which otherwise would be
payable to the Employee under Section 3 hereof during such period, and
continuation of all benefits for which Employee is eligible during such period.
(b) Termination by the Employee.
---------------------------
(i) Termination upon a Change in Control. The Employee shall
------------------------------------
have the right to terminate her employment in the event of a transaction with
one or more independent third parties pursuant to which such party or parties
(A) acquire, whether by merger, consolidation or transfer or issuance of capital
stock, capital stock of the Corporation (or any surviving or resulting
corporation) possessing the voting power to elect a majority of the board of
directors of the Corporation (or such surviving or resulting corporation) or (B)
acquire all or substantially all of the Corporation's assets determined on a
consolidated basis. Termination under the terms of this Section 6(b)(i) shall be
considered a Termination Without Cause by the Corporation pursuant to Section
6(a)(iv) of this Agreement, and Employee shall be entitled to all rights
contained therein.
(ii) Termination without Cause. Except as provided in Section
-------------------------
6(b)(i), Employee may not terminate her employment prior to the end of the term
of this Agreement for any reason unless Employee shall provide the Corporation
with twelve (12) months' written notice. During the period between the giving of
the termination notice referred to in the preceding sentence and the termination
of Employee's employment with the Corporation, all of the terms and conditions
of this Agreement shall apply, provided that the Corporation may terminate
Employee's employment at any time after receipt of the Employee's termination
notice by paying Employee's base compensation, including continuation of all
benefits for which Employee is eligible, for the remainder of such twelve (12)
month notice period. In the event that Employee breaches this provision and
terminates her employment, the Corporation would suffer considerable damage and
shall be entitled to recover such damage through all remedies available in law
or in equity.
(c) Pro-Ration of Bonus upon Termination. Anything to the contrary in
------------------------------------
this Agreement notwithstanding, any bonus payable to Employee pursuant to
Section 3 hereof shall be pro-rated (i) in the case of termination pursuant to
Section 6(a)(i), (iii) or (iv) or Section 6(b)(i) or (ii), through the last day
of Employee's employment hereunder, and (ii) in the case of termination pursuant
to Section 6(a)(ii), through the date of death.
3
7. Covenant Not to Compete.
-----------------------
(a) During the Restriction Period, Employee shall not work in a
management capacity for any radio station or entity that owns and/or operates
any radio stations within fifty (50) miles of the service area of any radio
station owned or operated by the Corporation or ROA or any of their affiliates.
"Restriction Period" shall mean any period for which the Corporation is
obligated hereunder, or has made an election hereunder, to pay base salary after
termination of the Employee's employment; provided, however, that the
Restriction Period may not exceed six (6) months. This Section 7(a) is not
intended to prevent Employee from obtaining the benefit of Section 13 of this
Agreement. Employee specifically agrees that this Section 7 shall survive
despite the termination of Employee's employment with the Corporation.
(b) The Employee acknowledges that the terms of this Section 7 are
necessary for the protection of the Corporation's interests and are reasonable
in respect of subject matter, time and area, and that the Corporation has been
induced to enter into this Agreement in part due to the representation by the
Employee as set forth above and further that the Employee will abide by said
terms.
8. Solicitation of Employees. The Employee agrees that during the term
-------------------------
of her employment, and for a period of six (6) consecutive months after
termination of such employment, she shall not, except in the course of her
duties hereunder, directly or indirectly, induce or attempt to induce or
otherwise counsel, advise or encourage any person to leave the employ of the
Corporation, ROA or any of their affiliates. Employee specifically agrees that
this Section 8 shall survive despite the termination of Employee's employment
with the Corporation.
9. Confidential Information. The Employee shall not at any time during
------------------------
or after her employment with the Corporation disclose or use, directly or
indirectly, any Confidential or Proprietary Information of the Corporation, ROA
or any of their affiliates, except only to the extent required to perform her
duties and responsibilities under this Agreement. For the purposes of this
Agreement, "Confidential or Proprietary Information" shall mean all information
disclosed to the Employee, or known by her as a consequence of or through her
employment with the Corporation, where such information is not generally known
in the trade or industry, and where such information refers or relates in any
manner whatsoever to the business activities, processes, services or products of
the Corporation, ROA or any of their affiliates. Such information includes, but
is not limited to, business and development plans (whether contemplated,
initiated or completed), development sites, business contacts, methods of
operation, results of analysis, customer lists (including advertising contacts),
business forecasts, financial data, costs, revenues, and similar information.
Upon termination of this Agreement, the Employee shall immediately return to the
Corporation all of its property and Confidential and Proprietary Information.
Employee specifically agrees that all this Section 9 shall survive despite the
termination of Employee's employment with the Corporation.
10. Business Opportunities. During the term of her employment, the
----------------------
Employee shall promptly disclose to the Corporation each business opportunity of
a type which, based upon its prospects and relationship to the business of the
Corporation, ROA or any of their affiliates, the
4
Corporation might reasonably and consider pursuing. The Corporation or its
affiliates shall have the exclusive right to participate in or undertake any
such opportunity on its own behalf without any involvement by the Employee.
Employee's obligations pursuant to this Section 10 are not intended to enlarge
Employee's fiduciary duties to the Corporation as an Employee of the Corporation
and as a shareholder of the Corporation.
11. No Assignment or Delegation. The Employee acknowledges that the
---------------------------
services to be rendered by her are unique and personal. Accordingly, the
Employee may not assign any of her rights nor delegate any of her duties under
this Agreement.
12. Stock Option Provisions.
-----------------------
(a) Grant and Terms of Options. ROA hereby grants to the Employee,
--------------------------
under the terms and conditions described in subsections (i) and (ii) below,
certain incentive options to purchase an aggregate of Seven Hundred (700) shares
of Class A Common Stock of ROA, together with any securities which may be issued
with respect thereto or in substitution therefor (the "ROA Common Stock"). The
shares of the ROA Common Stock purchasable under the options described below are
referred to as the "Option Shares" and the price payable for each ROA Option
Share shall be One Dollar ($1.00) (the "Per Share Option Price"). All options
granted hereunder, vested or unvested, not previously exercised (i) shall expire
and be forfeited in the event Employee shall cease to be an Employee of the
Corporation, and (ii) if not exercised or deemed exercised in connection with an
ROA Sale, shall expire upon the consummation of the first ROA Sale occurring
after the date hereof. "ROA Sale" shall mean a transaction with one or more
independent third parties pursuant to which such party or parties (A) acquire,
whether by merger, consolidation or transfer or issuance of capital stock,
capital stock of ROA (or any surviving or resulting corporation) possessing the
voting power to elect a majority of the board of directors of ROA (or such
surviving or resulting corporation) or (B) acquire all or substantially all of
ROA's assets determined on a consolidated basis.
(i) Employment Options.
------------------
(A) Grant. The Corporation hereby grants an option to Employee for Four
-----
Hundred (400) of the Option Shares (the "Employment Option"), which shall
vest and become exercisable on the Employment Option Exercise Date. The
"Employment Option Exercise Date" shall be the date this Agreement is fully
executed.
(B) Take-Back Rights. The Option Shares purchased pursuant to the
----------------
Employment Option shall be subject to the following take-back rights in
addition to and not in substitution for the provisions of Section 12(g). If
the Employee's employment terminates, for any reason or for no reason at
all, (1) before July 3, 1998, the Employee agrees to sell and the
Corporation agrees to purchase, on the date Employee's employment
terminates, at the Per Share Option Price, Two Hundred (200) Option Shares
(2) before July 3, 1999, the Employee agrees to sell and the Corporation
agrees to purchase , on the date Employee's employment terminates, at the
Per Share Option Price, One Hundred (100) Option Shares. This provision
shall secure this Agreement.
5
(ii) Performance Options. The Corporation hereby grants an option to
-------------------
Employee for Three Hundred (300) of the Option Shares (the "Performance
Options") to the Employee, which shall vest and become exercisable as described
below.
(A) On the first date prior the fifth anniversary of the date hereof upon
which ROA's Cash Flow (as hereinafter defined) for the prior twelve (12)
month period equals or exceeds Two Million Dollars ($2,000,000.00), One
Hundred (100) of the Performance Options shall vest and become exercisable
on the applicable Performance Option Exercise Date as set forth in
subsection (b) hereof.
(B) On the first date prior the fifth anniversary of the date hereof upon
which ROA's Cash Flow for the prior twelve (12) month period equals or
exceeds Three Million Five Hundred Dollars ($3,500,000.00), Two Hundred
(100) of the Performance Options, less the number of Performance Options as
shall have vested pursuant to subsection (A), above, shall vest and become
exercisable on the applicable Performance Option Exercise Date as set forth
in subsection (b) hereof.
(C) On the first date prior the fifth anniversary of the date hereof upon
which ROA's Cash Flow for the prior twelve (12) month period equals or
exceeds Five Million Dollars ($5,000,000.00), Three Hundred (300) of the
Performance Options, less the number of Performance Options as shall have
vested pursuant to subsections (A) and (B), above, shall vest and become
exercisable on the applicable Performance Option Exercise Date as set forth
in subsection (b) hereof.
(iii) The "Performance Option Exercise Date" with respect to any
single vesting of Performance Options shall mean the date on which the
Corporation supplied Employee with an accounting indicating a twelve (12) month
Cash Flow sufficient to permit such vesting of Performance Options. "Cash Flow"
shall mean ROA's annual earnings before (i) interest expenses (excluding
interest on any unsecured current liabilities), (ii) tax expenses for federal
and state income taxes, (iii) depreciation expense and (iv) amortization
expense, calculated in accordance with generally accepted accounting principles.
The Corporation shall make available to the Employee the Cash Flow accounting,
including the basis for such accounting, on a regular basis.
(b) Exercise of Options.
-------------------
(i) The Employee may exercise vested Employment Options or
Performance Options, in whole but not in part, by sending written notice
thereof, in accordance with the terms of Section 15(c) of this Agreement, to the
Corporation at any time after the applicable Employment Option Exercise Date or
Performance Option Exercise Date. Each of the options is independent of any
other option. The exercise or failure to exercise any option shall have no
effect on any other option.
(ii) Each written notice given pursuant to this Section shall set
forth the number of Option Shares which the Employee desires to purchase and the
date on which payment for and delivery of the certificates representing such
Option Shares will take place, which date shall
6
be at least fifteen (15) days and not more than thirty (30) days after the
Employee's written notice was duly given.
(c) Closing. The closing on the purchase of any option shall take
-------
place at the offices of the Corporation or such other location as is mutually
acceptable to the Corporation and Employee on the date set forth in the
Employee's written notice (each such date being a "Closing Date"). On each
Closing Date: (i) the Employee shall execute a certificate addressed to the
Corporation stating that she has exercised her option and has no further rights
under such option, (ii) the Employee shall pay to the Corporation either in
cash, or by certified or cashier's check the aggregate option price, which shall
be determined by multiplying the Per Share Option Price by the number of Option
Shares being purchased, and (iii) the Corporation shall deliver to the Employee
certificates representing the Option Shares purchased. On the first Closing
Date, the Employee shall execute a Joinder to the Investors' Shareholders
Agreement, dated as of March 31, 1997, by and among ROA and the holders of
capital stock of ROA named therein.
(d) Protection Against Dilution.
---------------------------
(i) In the event ROA shall at any time change, by subdivision or
combination in any manner, or by making a stock dividend, the number of
outstanding shares of ROA Common Stock into a different number of shares, with
or without par value:
(A) The number of shares of ROA Common Stock which
immediately prior to the record date for such change the Employee is entitled to
purchase pursuant to the options shall be increased or decreased in a direct
proportion to the increase or decrease, respectively, in the number of shares of
ROA Common Stock outstanding immediately prior to such record date, and
(B) The Per Share Option Price in effect immediately prior
to such record date shall be increased or decreased in inverse proportion to
such increase or decrease in the number of such shares outstanding immediately
prior to such record date.
(ii) In the event of any distribution by ROA in respect of its
common stock of cash, property or securities, any capital reorganization, any
reclassification of the common stock of ROA (other than a cash dividend as part
of a normal dividend program or a change in par value or as a result of a stock
dividend, subdivision, split-up or combination of shares), or the consolidation
or merger of ROA with or into another person, or of the sale or other
disposition of all or substantially all of the properties of the Corporation as
an entirety to any other person, the Employee shall thereafter be entitled to
purchase the kind and number of shares of stock or cash, other securities or
property of ROA, or of the corporation resulting from such consolidation or
surviving such merger or to which such properties and assets shall have been
sold or otherwise disposed, receivable upon such distribution, reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition, by
a holder of the number of shares of ROA Common Stock which the options entitle
the Employee to purchase immediately prior to the record date for such
distribution, reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition; and in any such case appropriate adjustments
shall be made in the application of the
7
provisions herein set forth with respect to the rights and interests thereafter
of the Employee to the end that the provisions set forth herein shall thereafter
be applicable, as nearly as reasonably may be, in relation to any shares or
other property thereafter purchasable upon the exercise of an option. The
provisions of this Section 12(d) shall similarly apply to successive
distributions, reorganizations, reclassifications, consolidations, mergers,
sales or other dispositions.
(iii) The anti-dilution provisions of this Section shall not
apply to (i) the issuance of additional ROA Common Stock, warrants or options by
ROA for business purposes. For example, ROA may issue additional ROA Common
Stock, warrants or options in order to raise equity so long as the Employee and
all other existing shareholders, warrantholders and option holders are diluted
in the same proportion.
(e) No Transferability. No option described herein is transferable
------------------
or assignable. The Option Shares purchased pursuant to the options may not be
sold except pursuant to Section 12(g) of this Agreement.
(f) Endorsements on Common Stock Certificates. Each certificate
-----------------------------------------
evidencing any Common Stock which relates in whole or in part to an option shall
bear conspicuously legends in substantially the following form:
THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED UNDER THE TERMS OF AN EMPLOYMENT AND STOCK
OPTION AGREEMENT DATED AS OF NOVEMBER 16, 1997.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND CERTAIN RESTRICTIONS ON THE VOTING OF SUCH
SECURITIES CONTAINED IN THE INVESTORS' SHAREHOLDERS
AGREEMENT, DATED AS OF MARCH 31, 1997, AMONG THE ISSUER OF
SUCH SECURITIES (THE "COMPANY") AND THE COMPANY'S
STOCKHOLDERS. A COPY OF SUCH INVESTORS' SHAREHOLDERS
AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY
TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
(g) Effect of Termination of the Employee's Employment on Option
------------------------------------------------------------
Stock. The Employee does hereby agree that any ROA Common Stock owned by the
-----
Employee issued upon exercise of the options granted hereunder shall not be
sold, except to the Corporation or ROA, as the Corporation may elect, in
accordance with the provisions of this Section 12(g). The Corporation and the
Employee do hereby agree that upon the earlier of (i) the termination of the
Employee's employment with the Corporation or (ii) the termination of the
Employee's employment pursuant to Section 6(a)(iii)(B) or Section 6(b)(ii)
hereof, the Corporation or ROA shall have the right, but not the obligation, to
repurchase under the terms and conditions set forth in Section 12(g)(i), in
whole or in part, any shares of ROA Common Stock previously issued to the
Employee upon the
8
exercise of an option (the Common Stock to be so repurchased by the Corporation
or ROA being referred to in this Section 12(g) as the "Call Stock"). The
Corporation and the Employee do further agree that upon the termination of the
Employee's employment pursuant to Section 6(a)(iii)(A), (C) or (D) hereof, the
Corporation or ROA shall have the right but not the obligation, to repurchase
under the terms and conditions set forth in Section 12(g)(ii), in whole or in
part, any shares of ROA Common Stock previously issued to the Employee upon the
exercise of an option (the Common Stock to be so repurchased by the Corporation
being referred to in this Section 12(g) as the "For Cause Call Stock"). The
Corporation and the Employee do further hereby agree that upon the earlier of
(i) the termination of the Employee's employment with the Corporation or (ii)
the termination of Employee's employment pursuant to Section 6(a)(i), (ii), or
(iv) or Section 6(b)(i) hereof, the Employee shall have the right, but not the
obligation, to require the Corporation to repurchase under the terms and
conditions set forth in Sections 12(g)(iii), in whole or in part, any shares of
ROA Common Stock previously issued to the Employee upon the exercise of an
Option (the ROA Common Stock to be so repurchased by the Corporation being
referred to in this Section 12(g) as the "Put Stock").
(i) Call Stock Terms and Conditions.
-------------------------------
(A) The per share price payable by the Corporation or ROA
for each share of Call Stock shall be the per share "Fair Market Value" of ROA
as a going concern. The notice required by Section 12(g)(i)(B) hereof shall set
forth a proposed Fair Market Value of ROA. If within thirty (30) days after the
giving of the notice required by Section 12(g)(i)(B), the Corporation and the
Employee agree upon the Fair Market Value of ROA, then the Fair Market Value
shall be as so agreed. If the Corporation and the Employee do not, within thirty
(30) days after the giving of such notice, agree as to the Fair Market Value of
ROA, then the Employee shall, by notice to the Corporation, appoint one
reputable independent appraiser, and the Corporation shall, by notice to the
Employee, appoint one reputable independent appraiser, both experienced in the
appraisal of companies in the radio broadcasting business. If either party shall
fail to appoint such an appraiser within fourteen (14) days after the expiration
of such 30-day period, then the appraiser appointed by the party who does
appoint an appraiser shall make the appraisal of the Fair Market Value of ROA
and such appraisal shall govern. If two appraisers are appointed, each appraiser
shall be engaged under terms requiring them to render a report within thirty
(30) days after the date of the engagement. If the two appraisals differ by no
more than twenty percent (20%) of the larger amount, they shall be averaged and
the result shall be the Fair Market Value of ROA. If the two appraisals differ
by more than twenty percent (20%) of the larger amount, the two appraisers shall
promptly select a third appraiser experienced in the appraisal of companies in
the radio broadcasting business (who shall not have access to any other prior
appraisals) under terms requiring the third appraiser to render a report within
thirty (30) days. After the third appraiser's report is rendered, the two
appraisals which are closest to each other shall be averaged, and the result
shall be the Fair Market Value of ROA. All appraisal reports shall be rendered
in writing, documented in the manner then customary for similar appraisals, and
shall be signed by the appraiser(s). Per share calculations shall assume that
all rights, warrants, and options to purchase ROA's Common Stock at prices below
the price so determined, have been exercised. All costs of appraisals, legal
fees, and travel expenses shall be borne by the Corporation; nothing herein
shall preclude the Corporation from reasonably contesting such costs with the
appraisers.
9
(B) The Corporation or ROA shall exercise the right granted
herein by written notice to the Employee, specifying a proposed Fair Market
Value of ROA, the date (the "Call Closing") on which the repurchase of the Call
Stock shall take place (which date shall be within ninety (90) days after such
notice is given), the place of repurchase, the number of shares of ROA Common
Stock to be repurchased and the method of payment, either in cash, by certified
or cashier's check, or by notes. If payment for the Call Stock is made in notes,
the notes shall mature on the fifth anniversary of the Call Closing, and shall
be amortized in five equal annual payments of principal plus accrued interest at
the rate of NationsBank, N.A., a national banking association, or its
successors, as its prime rate. The Corporation or ROA may in such notice require
any Put Closing (as hereinafter defined) then pending to be rescheduled to the
date of the Call Closing; provided that such Put Closing shall not be deferred
for longer than fifteen (15) days.
(C) At the Call Closing, the Employee shall surrender the
Call Stock to the Corporation or ROA against payment by the Corporation of the
purchase price of the Call Stock as provided for in Section 12(g)(i)(B), and
delivery, if applicable, by the Corporation or ROA to the Employee of new
certificates of ROA registered in the Employee's name, representing those shares
of ROA Common Stock owned by the Employee and not repurchased by the Corporation
or ROA.
(D) Anything in this Section 12(g)(i) to the contrary
notwithstanding, the Corporation or ROA shall not repurchase any shares of the
Call Stock except out of funds legally available therefor and if such repurchase
does not conflict with or violate any term or condition of any agreement or
contract to which the Corporation or ROA is a party or subject to.
(ii) For Cause Call Stock Terms and Conditions.
-----------------------------------------
(A) The per share price payable by the Corporation or ROA
for each share of For Cause Call Stock shall be the lesser of per share book
value of ROA or One Hundred Dollars ($100.00) per share.
(B) The Corporation or ROA shall exercise the rights
granted herein by written notice to the Employee, specifying the date (the "For
Cause Call Closing") on which the repurchase of the For Cause Call Stock shall
take place (which date shall be within ninety (90) days after such notice is
given), the place of repurchase and the number of shares of ROA Common Stock.
(C) At the For Cause Call Closing, the Employee shall
surrender the For Cause Call Stock to the Corporation or ROA, against payment by
the Corporation or ROA of the purchase price of For Cause Call Stock (which
shall be paid either in cash, or by certified or cashier's check) and delivery,
if applicable, by the Corporation or ROA to the Employee of new certificates of
common stock registered in the Employee's name, representing those shares of the
Corporation or ROA, Common Stock owned by the Employee and not repurchased by
the Corporation or ROA.
10
(D) Anything in this Section 12(g)(ii) notwithstanding, the
Corporation or ROA shall not repurchase any shares of the For Cause Call Stock
except out of funds legally available therefor and if such repurchase does not
conflict with or violate any term or condition of any agreement or contract to
which the Corporation or ROA is a party or subject to.
(iii) Put Stock Terms and Conditions.
------------------------------
(A) The per share price payable by the Corporation or ROA
for each share of Put Stock shall be the per share Fair Market Value of ROA as a
going concern. Within thirty (30) days of receiving the notice required by
Section 12(g)(iii)(B) hereof, the Corporation shall provide Employee with a
proposed Fair Market Value of ROA. If within thirty (30) days after the giving
of the notice required by Section 12(g)(iii)(B), the Corporation and the
Employee agree upon the Fair Market Value of ROA, then the Fair Market Value
shall be as so agreed. If the Corporation and the Employee do not, within thirty
(30) days after the giving of such notice, agree as to the Fair Market Value of
ROA, then the appraisal method set forth in Section 12(g)(i)(A) shall be used to
determine the Fair Market Value of ROA.
(B) The exercise of the right granted under this Section
12(g)(iii) shall be made by the Employee giving written notice to the
Corporation, which notice shall specify a proposed Fair Market Value of ROA, the
number of shares of Put Stock the Corporation shall be required to repurchase
from the Employee, the place of repurchase, and the date (the "Put Closing") on
which the repurchase of the Put Stock shall take place (which date shall be
within ninety (90) days after such notice is given).
(C) At each Put Closing the Employee shall surrender the
Put Stock against payment by the Corporation or ROA of the repurchase price for
the Put Stock. The repurchase price may be paid either in cash, by certified or
cashier's check or by notes. If payment for the Put Stock is made in notes, the
notes shall mature on the fifth anniversary of the Put Closing, and shall be
amortized in five equal annual payments of principal plus accrued interest at
the rate of interest per annum then published or otherwise publicly announced by
NationsBank, N.A., a national banking association, or its successors, as its
prime rate. The Corporation or ROA shall deliver to the Employee, if applicable,
certificates of common stock registered in the Employee's name, representing
those shares of ROA Common Stock owned by the Employee and not repurchased by
the Corporation or ROA.
(D) The Employee shall retain all its rights, benefits, and
privileges relating to the Put Stock until such time as full payment in cash,
certified check or notes shall have been received by the Employee, whereupon the
Put Stock shall vest in and be the property of the Corporation or ROA.
(E) The Corporation shall take such actions as may be
necessary or advisable to enable it to purchase lawfully the Put Stock. The
Corporation shall not be required to take any action which would violate any
agency requirement nor make any such repurchase except out of funds legally
available therefor or repurchase the Put Stock if such repurchase conflicts with
11
or violates any term or condition of any agreement or contract to which the
Corporation or ROA is a party or subject to.
13. Ownership of Events Created by Employee. Employee shall retain
---------------------------------------
ownership of Event Ideas (as defined below) created by her while employed by the
Corporation. The Corporation and ROA and each of their affiliates shall be
entitled to a perpetual license for the use of such Event Ideas and no
additional compensation shall be due Employee in respect of such license. Event
Ideas shall mean major events such as the Peoples Expo and For Sisters Only
developed by Employee and not previously developed or used by the Corporation or
ROA or any of their affiliates prior to the date of this Agreement and shall not
include promotions or other marketing programs used by the Corporation, ROA or
any of their affiliates.
14. Enforceability.
--------------
(a) With respect to any provision of this Agreement finally
determined by a court of competent jurisdiction to be unenforceable, the parties
hereto agree that such court shall have jurisdiction to reform this Agreement or
any provision thereof so that it is enforceable to the maximum extent permitted
by law, and the parties agree to abide by such court's determination. If any
provision of this Agreement cannot be reformed, such provision shall be deemed
to be severed from this Agreement, but every other provision of this Agreement
shall remain in full force and effect.
(b) The Employee agrees that in the event of her breach of Sections 7
through 12 of this Agreement, the remedies available at law to the Corporation
would be inadequate and that, in addition to, but without limitation to any
other remedies available by law or equity, including damages, the Corporation
shall be entitled to appropriate equitable remedies, including specific
performance and injunctive relief and that the Corporation shall be entitled to
recover all costs and expenses of any action, including reasonable attorneys'
fees, incurred by the Corporation as a result of any breach of the terms of
Section 7 through 12 of this Agreement.
15. Miscellaneous Provisions.
------------------------
(a) Binding Nature of Agreement. The terms, conditions and promises
---------------------------
contained in this Agreement shall be binding upon and shall inure to the benefit
of each of the parties hereto, their heirs, personal representatives, or
successors and assigns.
(b) Counterparts. This Agreement may be executed in more than one
------------
copy, any one of which shall be deemed a duplicate original and all of which
shall constitute one and the same agreement.
(c) Notices. All notices, consents, approvals and other
-------
communications given or made pursuant hereto shall be in writing and shall be
(A) delivered personally against receipt thereof, (B) by overnight courier or
(C) by registered or certified mail (postage prepaid, return receipt requested),
in each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (X) if to the Corporation, to
5900 Princess Garden
00
Xxxxxxx, Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx and
(Y) if to the Employee, to Xxxx Xxxxxxxxx Xxxxx, 0000 Xxxxxxx Xxx, Xxxxxxx,
Xxxxxxx 00000. All such notices, consents, approvals and other communications
shall be deemed to have been given on the date of receipt if delivered
personally or by overnight courier or the second day following posting if
transmitted by mail.
(d) Headings. The headings contained herein are for reference
--------
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
(e) No Waiver. No term or condition of this Agreement shall be
---------
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any fact
other than that specifically waived.
(f) Withholding. The Corporation may withhold from any compensation
-----------
or benefit payable under this Agreement all federal, state and local taxes as
shall be required to be withheld by law, regulation or ruling.
(g) Governing Law. This Agreement has been executed and delivered
-------------
within the District of Columbia and shall be governed by and construed in
accordance with the laws of the District of Columbia (without regard to the
principles of conflicts of laws thereof).
(h) Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties hereto and supersedes all prior agreements,
understandings and arrangements, both oral and written, between the parties
hereto with respect to employment, equity ownership, rights to acquire equity
and all other subject matter hereof. This Agreement may not be modified in any
way unless in a writing signed by all of the parties hereto.
[signature page to follow]
13
IN WITNESS WHEREOF, this Agreement has not been executed by the parties on
the day and year first above written.
CORPORATION:
RADIO ONE, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
President
EMPLOYEE:
/s/ Xxxx Xxxxxxxxx Xxxxx
------------------------------
Xxxx Xxxxxxxxx Xxxxx
Solely for the purpose of acknowledging
provisions of Section 12:
RADIO ONE OF ATLANTA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx
President
