Employment Agreement - Clear Channel Communications Inc. and Mark Mays
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1999, by and between Clear
Channel Communications, Inc., a Texas corporation (the Company), and Mark Mays
(Executive).
IN CONSIDERATION of the premises and the mutual covenants set
forth below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to continue to employ
Executive as the President and Chief Operating Officer of the Company, and
Executive hereby accepts such continued employment, on the terms and conditions
hereinafter set forth.
2. Term. The period of employment of Executive by the Company
under this Agreement (the Employment Period) shall commence on October 1, 1999
(the Commencement Date) and shall continue through the seventh anniversary
thereof; provided, that, the Employment Period shall automatically be extended
for one (1) additional day each day during the Employment Period unless either
party gives written notice not to extend this Agreement. The Employment Period
may be sooner terminated by either party in accordance with Section 6 of this
Agreement.
3. Position and Duties. During the Employment Period,
Executive shall serve as President and Chief Operating Officer of the Company,
and shall report solely and directly to the Companys Chairman and Chief
Executive Officer and Board of Directors of the Company (the Board). Executive
shall have those powers and duties normally associated with the position of
President and Chief Operating Officer of entities comparable to the Company and
such other powers and duties as may be prescribed by the Board; provided that,
such other powers and duties are consistent with Executives position as
President and Chief Operating Officer of the Company. Executive shall devote as
much of his working time, attention and energies during normal business hours
(other than absences due to illness or vacation) to satisfactorily perform his
duties for the Company. Notwithstanding the above, Executive shall be permitted,
to the extent such activities do not substantially interfere with the
performance by Executive of his duties and responsibilities hereunder to (i)
manage Executives personal, financial and legal affairs, (ii) to serve on civic
or charitable boards or committees (it being expressly understood and agreed
that Executives continuing to serve on any such board and/or committees on
which Executive is serving, or with which Executive is otherwise associated, as
of the Commencement Date shall be deemed not to interfere with the performance
by Executive of his duties and responsibilities under this Agreement) and (iii)
deliver lectures or fulfill speaking engagements. During the Employment Period,
Executive shall also serve as a director of the Company. If L. Lowry Mays ceases
to serve as Chairman and Chief Executive Officer of the Company at any time
during the Employment Period by reason of his death or incapacity, it is the
intention of the Board, that either Mark Mays or Randall Mays shall be appointed
as the Chairman and Chief Executive Officer of the Company and the Board,
subject only to its fiduciary duties to the Company and its stockholders and
applicable law, shall take all action necessary to carry out such intention.
4. Place of Performance. The principal place of employment of
Executive shall be at the Companys principal executive offices in San Antonio,
Texas.
5. Compensation and Related Matters.
(a) Base Salary and Bonus. During the Employment Period, the Company
shall pay Executive a base salary at the rate of not less than $350,000 per
year (Base Salary). Executives Base Salary shall be paid in
approximately equal installments in accordance with the Companys customary
payroll practices. The Compensation Committee of the Board (the
Committee) shall review Executives Base Salary for increase (but not
decrease) no less frequently than annually and consistent with the
compensation practices and guidelines of the Company. If Executives Base
Salary is increased by the Company, such increased Base Salary shall then
constitute the Base Salary for all purposes of this Agreement. In addition
to Base Salary, Executive shall be paid an annual bonus (the Bonus) as
provided for under the annual incentive plan maintained by the Company
and/or as the Committee so determines.
(b) Expenses. The Company shall promptly reimburse Executive for all
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Companys policies and
procedures now in force or as such policies and procedures may be modified
with respect to all senior executive officers of the Company. In addition,
during the Employment Period, Executive shall be entitled to, at the sole
expense of the Company, the use of an automobile appropriate to his
position and no less favorable than the automobile provided immediately
prior to the date of this Agreement.
(c) Vacation. Executive shall be entitled to the number of weeks of
paid vacation per year that he was eligible for immediately prior to the
date of this Agreement, but in no event less than four (4) weeks annually.
Unused vacation may be carried forward from year to year. In addition to
vacation, Executive shall be entitled to the number of sick days and
personal days per year that other senior executive officers of the Company
with similar tenor are entitled under the Companys policies.
(d) Services Furnished. During the Employment Period, the Company
shall furnish Executive, with office space, stenographic and secretarial
assistance and such other facilities and services no less favorable than
those that he was receiving immediately prior to the date of this Agreement
or, if better, as provided to other senior executive officers of the
Company (other than the Chairman and Chief Executive Officer).
(e) Welfare, Pension and Incentive Benefit Plans. During the
Employment Period, Executive (and his spouse and dependents to the extent
provided therein) shall be entitled to participate in and be covered under
all the welfare benefit plans or programs maintained by the Company from
time to time for the benefit of its senior executives (other than benefits
maintained exclusively for the Chairman and Chief Executive Officer)
including, without limitation, all medical, hospitalization, dental,
disability, accidental death and dismemberment and travel accident
insurance plans and programs. The Company shall at all times provide to
Executive (and his spouse and dependents to the extent provided under the
applicable plans or programs) (subject to modifications affecting all
senior executive officers) the same type and levels of participation and
benefits as are being provided to other senior executives (and their
spouses and dependents to the extent provided under the applicable plans or
programs) (other than benefits maintained exclusively for the Chairman and
Chief Executive Officer) on the Commencement Date. In addition, during the
Employment Period, Executive shall be eligible to participate in all
pension, retirement, savings and other employee benefit plans and programs
maintained from time to time by the Company for the benefit of its senior
executives.
(f) Stock Options.
(i) During each calendar year of the Employment Period occurring after
December 31, 1999, the Committee shall cause the Company to grant Executive
a stock option to acquire at least 50,000 shares of the Companys common
stock (each, an Option and collectively the Options) at such time(s) as
the Company has historically granted stock options to its senior executive
officers during the year; provided, that, such grants shall be made by at
least December 31 of each calendar year occurring after December 31, 1999.
Notwithstanding the foregoing, unless otherwise waived by Executive in his
sole discretion, Executive shall receive no less than the number of Options
granted during any prior year of employment. In addition, to the extent
necessary to carry out the intended terms of this paragraph (f)(i), such
number of options shall be adjusted as is necessary to take into account
any change in the common stock of the Company in a manner consistent with
adjustments made to other option holders of the Company.
(ii) All Options described in paragraph (i) above shall be granted
subject to the following terms and conditions: (A) except as provided
below, the Options shall be granted under and subject to the Companys
stock option plan; (B) the exercise price per share of each Option shall be
equal to the last reported sale price of the Companys common stock on the
New York Stock Exchange (or such other principal trading market for the
Companys common stock) at the close of the trading day immediately
preceding the date as of which the grant is made; (C) each Option shall be
vested and exercisable as determined by the Committee; (D) each Option
shall be exercisable for the ten (10) year period following the date of
grant whether or not Executive is then employed; and (E) each Option shall
be evidenced by, and subject to, a stock option agreement whose terms and
conditions are consistent with the terms hereof.
6. Termination. Executives employment hereunder may be
terminated during the Employment Period under the following circumstances:
(a) Death. Executives employment hereunder shall terminate upon his
death.
(b) Disability. If, as a result of Executives incapacity due to
physical or mental illness, Executive shall have been substantially unable
to perform his duties hereunder for an entire period of six (6) consecutive
months, and within thirty (30) days after written Notice of Termination is
given after such six (6) month period, Executive shall not have returned to
the substantial performance of his duties on a full-time basis, the Company
shall have the right to terminate Executives employment hereunder for
Disability, and such termination in and of itself shall not be, nor shall
it be deemed to be, a breach of this Agreement.
(c) Cause. The Company shall have the right to terminate Executives
employment for Cause, and such termination in and of itself shall not be,
nor shall it be deemed to be, a breach of this Agreement. For purposes of
this Agreement, the Company shall have Cause to terminate Executives
employment upon Executives:
(i) final conviction of a felony involving moral turpitude; or
(ii) willful misconduct that is materially and demonstrably injurious
economically to the Company.
For purposes of this Section 6(c), no act, or failure to act, by Executive shall
be considered willful unless committed in bad faith and without a reasonable
belief that the act or omission was in the best interests of the Company or any
entity in control of, controlled by or under common control with the Company
(Affiliates) thereof. Cause shall not exist under paragraph (ii) unless and
until the Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after reasonable (but in no event less than
thirty (30) days) notice to Executive and an opportunity for Executive, together
with his counsel, to be heard before the Board), finding that in the good faith
opinion of the Board, Executive was guilty of the conduct set forth in paragraph
(ii) and specifying the particulars thereof in detail. This Section 6(c) shall
not prevent Executive from challenging in any arbitration or court of competent
jurisdiction the Boards determination that Cause exists or that Executive has
failed to cure any act (or failure to act) that purportedly formed the basis for
the Boards determination.
(d) Good Reason. Executive may terminate his employment for Good
Reason anytime after Executive has actual knowledge of the occurrence,
without the written consent of Executive, of one of the following events:
(i) (A) any change in the duties or responsibilities (including
reporting responsibilities) of Executive that is inconsistent in any
adverse respect with Executives position(s), duties, responsibilities or
status with the Company immediately prior to such change (including any
diminution of such duties or responsibilities) or (B) an adverse change in
Executives titles or offices (including, membership on the Board) with the
Company;
(ii) a reduction in Executives Base Salary or Bonus opportunity;
(iii) (A) any requirement that Executive travel on Company business to
an extent substantially greater than the travel obligations of Executive
immediately prior to the date of this Agreement or (B) the relocation of
the Companys principal executive offices or Executives own office
location to a location more than fifteen (15) miles from their location
immediately prior to the date hereof;
(iv) the failure of the Company or any Affiliate to continue in effect
any material employee benefit plan, compensation plan, welfare benefit plan
or fringe benefit plan in which Executive is participating immediately
prior to the date of this Agreement or the taking of any action by the
Company or any Affiliate which would adversely affect Executives
participation in or reduce Executives benefits under any such plan, unless
Executive is permitted to participate in other plans providing Executive
with substantially equivalent benefits;
(v) any refusal by the Company or any Affiliate to continue to permit
Executive to engage in activities not directly related to the business of
the Company which Executive was permitted to engage in prior to the date of
this Agreement;
(vi) any purported termination of Executives employment for Cause
which is not effected pursuant to the procedures of Section 6(c) (and for
purposes of this Agreement, no such purported termination shall be
effective);
(vii) the Companys or any Affiliates failure to provide in all
material respects the indemnification set forth in Section 11 of this
Agreement;
(viii) a Change in Control of the Company; provided, that, the
transaction contemplated by the Company and AMFM, Inc. shall not be deemed
to be a Change in Control for purposes of this clause (viii);
(ix) the failure of the Company to obtain the assumption agreement
from any successor as contemplated in Section 13(a);
(x) the Company or any Affiliate providing Executive the notice not to
renew the Employment Period as contemplated by Section 2 hereof;
(xi) any time that neither L. Lowry Mays, Mark Mays nor Randall Mays
is the Chairman and Chief Executive Officer of the Company;
(xii) any other breach of a material provision of this Agreement by
the Company or any Affiliate.
For purposes of clauses (i) through (vii) and (xii) above, an
isolated, insubstantial and inadvertent action taken in good faith and
which is remedied by the Company within ten (10) days after receipt of
notice thereof given by Executive shall not constitute Good Reason.
Executives right to terminate employment for Good Reason shall not be
affected by Executives incapacity due to mental or physical illness and
Executives continued employment shall not constitute consent to, or a
waiver of rights with respect to, any event or condition constituting Good
Reason.
(e) Without Cause. The Company shall have the right to terminate
Executives employment hereunder without Cause by providing Executive with
a Notice of Termination at least thirty (30) days prior to such
termination, and such termination shall not in and of itself be, nor shall
it be deemed to be, a breach of this Agreement. Notwithstanding any other
provision of this Agreement to the contrary, in the event that Executives
employment is terminated by the Company without Cause within six (6) months
prior to the date that, or on or one (1) year after the date that, L. Lowry
Mays or Randall Mays is no longer the Chairman and Chief Executive Officer
of the Company for any reason, then Executive shall automatically be deemed
to have terminated his employment for Good Reason under Section 6(d)(xi)
and the Severance Multiple (as defined below) shall be fourteen (14) and
the Company shall make all of the payments due under Section 8(a) of this
Agreement to Executive, off-set only by amounts, if any, already paid under
Section 8(a).
(f) Without Good Reason. Executive shall have the right to terminate
his employment hereunder without Good Reason by providing the Company with
a Notice of Termination at least thirty (30) days prior to such
termination, and such termination shall not in and of itself be, nor shall
it be deemed to be, a breach of this Agreement.
For purposes of this Agreement, a Change in Control of the Company
means the occurrence of one of the following events:
(1) individuals who, on the Commencement Date, constitute the Board
(the Incumbent Directors) cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to the Commencement Date whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of
the proxy statement of the Company in which such person is named as a
nominee for director, without objection to such nomination) shall be an
Incumbent Director; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be an Incumbent Director;
(2) any person (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the Exchange Act) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes, after
the Commencement Date, a beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Companys then
outstanding securities eligible to vote for the election of the Board (the
Company Voting Securities); provided, however, that an event described in
this paragraph (2) shall not be deemed to be a Change in Control if any of
following becomes such a beneficial owner: (A) the Company or any
majority-owned subsidiary (provided, that this exclusion applies solely to
the ownership levels of the Company or the majority-owned subsidiary), (B)
any tax-qualified, broad-based employee benefit plan sponsored or
maintained by the Company or any majority-owned subsidiary, (C) any
underwriter temporarily holding securities pursuant to an offering of such
securities, (D) any person pursuant to a Non-Qualifying Transaction (as
defined in paragraph (3)), or (E) Executive or any group of persons
including Executive (or any entity controlled by Executive or any group of
persons including Executive).
(3) the approval by the shareholders of the Company
of a merger, consolidation, share exchange or similar form of
transaction involving the Company or any of its subsidiaries, or the
sale of all or substantially all of the Companys assets (a Business
Transaction), unless immediately following such Business Transaction
(i) more than 65% of the total voting power of the entity resulting
from such Business Transaction or the entity acquiring the Companys
assets in such Business Transaction (the Surviving Corporation) is
beneficially owned, directly or indirectly, by the Companys
shareholders immediately prior to any such Business Transaction, and
(ii) no person (other than the persons set forth in clauses (A), (B),
or (C) of paragraph (2) above or any tax-qualified, broad-based
employee benefit plan of the Surviving Corporation or its Affiliates)
beneficially owns, directly or indirectly, 20% or more of the total
voting power of the Surviving Corporation (a Non-Qualifying
Transaction); or
(4) Board approval of a liquidation or dissolution of
the Company, unless the voting common equity interests of an ongoing
entity (other than a liquidating trust) are beneficially owned,
directly or indirectly, by the Companys shareholders in substantially
the same proportions as such shareholders owned the Companys
outstanding voting common equity interests immediately prior to such
liquidation and such ongoing entity assumes all existing obligations of
the Company to Executive under this Agreement.
7. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment
by the Company or by Executive during the Employment Period (other than
termination pursuant to Section 6(a)) shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section
14. For purposes of this Agreement, a Notice of Termination shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executives
employment under the provision so indicated.
(b) Date of Termination. Date of Termination shall mean (i) if
Executives employment is terminated by his death, the date of his death,
(ii) if Executives employment is terminated pursuant to Section 6(b),
thirty (30) days after Notice of Termination (provided that Executive shall
not have returned to the substantial performance of his duties on a
full-time basis during such thirty (30) day period), and (iii) if
Executives employment is terminated for any other reason, the date on
which a Notice of Termination is given or any later date (within thirty
(30) days after the giving of such notice) set forth in such Notice of
Termination.
8. Compensation Upon Termination or During Disability. In the
event Executive is disabled or his employment terminates during the Employment
Period, the Company shall provide Executive with the payments and benefits set
forth below. Executive acknowledges and agrees that the payments set forth in
this Section 8 constitute liquidated damages for termination of his employment
during the Employment Period.
(a) Termination By Company without Cause or By Executive for Good
Reason. If Executives employment is terminated by the Company without
Cause or by Executive for Good Reason:
(i) within five (5) days following such termination,
the Company shall pay to Executive (A) his Base Salary, Bonus and
accrued vacation pay through the Date of Termination, as soon as
practicable following the Date of Termination, and (B) a lump-sum cash
payment equal to seven (7) times (the Severance Multiple) the sum of
Executives Base Salary and highest Bonus paid to Executive in the
three year period preceding such termination (including, for this
purpose, any and all bonuses paid to Executive prior to the date of
this Agreement); provided, that, for purposes of this Section 8(a)(i),
Executives Bonus shall be deemed to be no less than $1,000,000;
provided, further, that, if Executive terminates his employment for the
Good Reason event (whether or not in conjunction with any other Good
Reason event) set forth in Section 6(d)(xi) (or is deemed to have
terminated his employment under Section 6(d)(xi) in accordance with
Section 6(e) of this Agreement), the Severance Multiple shall be equal
to fourteen (14); and
(ii) the Company shall maintain in full force and
effect, for the continued benefit of Executive, his spouse and his
dependents for a period of seven (7) years following the Date of
Termination the medical, hospitalization, dental, and life insurance
programs in which Executive, his spouse and his dependents were
participating immediately prior to the Date of Termination at the level
in effect and upon substantially the same terms and conditions
(including without limitation contributions required by Executive for
such benefits) as existed immediately prior to the Date of Termination;
provided, that, if Executive, his spouse or his dependents cannot
continue to participate in the Company programs providing such
benefits, the Company shall arrange to provide Executive, his spouse
and his dependents with the economic equivalent of such benefits which
they otherwise would have been entitled to receive under such plans and
programs (Continued Benefits), provided, that, such Continued
Benefits shall terminate on the date or dates Executive receives
equivalent coverage and benefits, without waiting period or
pre-existing condition limitations, under the plans and programs of a
subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit, basis); and
(iii) the Company shall reimburse Executive pursuant
to Section 5 for reasonable expenses incurred, but not paid prior to
such termination of employment; and
(iv) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in accordance
with the terms and provisions of any agreements, plans or programs of
the Company; and
(v) As of the Date of Termination, Executive shall be
granted a stock option to acquire 1,000,000 shares of the Companys
common stock (Termination Option) under the following conditions, (A)
except as provided below, the Termination Option shall be granted under
and subject to the Companys stock option plan; (B) the exercise price
per share of the Termination Option shall be equal to the last reported
sale price of the Companys common stock on the New York Stock Exchange
(or such other principal trading market for the Companys common stock)
at the close of the trading day immediately preceding the Date of
Termination; (C) the Termination Option shall be 100% vested and
exercisable on the date of grant; (D) the Termination Option shall be
exercisable for the ten (10) year period following the Date of
Termination whether or not Executive is still providing services to the
Company; and (E) each Option shall be evidenced by, and subject to, a
stock option agreement whose terms and conditions are consistent with
the terms hereof; provided, that, if Executive terminates his
employment for the Good Reason event (whether or not in conjunction
with any other Good Reason event) set forth in Section 6(d)(xi) (or is
deemed to have terminated his employment under Section 6(d)(xi) in
accordance with Section 6(e) of this Agreement), the number of
Termination Options Executive shall receive shall be equal to
2,000,000. In addition, to the extent necessary to carry out the
intended terms of this paragraph (a)(v), such number of Termination
Options shall be adjusted as is necessary to take into account any
change in the common stock of the Company in a manner consistent with
adjustments made to other option holders of the Company. The Company
shall take all action necessary such that the shares of common stock
issuable upon exercise of the Termination Options (and all other shares
of common stock held by Executive) are registered on Form S-4 or Form
S-8 (or any successor or other appropriate forms).
(vi) Notwithstanding the terms or conditions of any
stock option, stock appreciation right or similar agreements between
the Company and Executive to the contrary, and for purposes thereof,
such agreements shall be deemed to be amended in accordance with this
Section 8(a)(vi) if need be as of the Date of Termination and neither
the Company, the Board nor the Committee shall take or assert any
position contrary to the foregoing, Executive shall vest, as of the
Date of Termination, in all rights under such agreements (i.e., stock
options that would otherwise vest after the Date of Termination) and
thereafter shall be permitted to exercise any and all such rights until
the end of the term of such awards (regardless of any termination of
employment restrictions therein contained) and restricted stock held by
Executive shall become immediately vested as of the Date of
Termination; and
(vii) Executive shall be paid a lump sum payment
equal to the amount of compensation or contributions (as the case may
be) by the Company that Executive would have been entitled to receive
(assuming he would have received the maximum amount payable or
contributable under each plan or arrangement for any year) under any
plan or arrangement he was then participating (or entitled to
participate in) for a seven (7) year period following the Date of
Termination; and
(viii) Any and all insurance benefits or policies for
the benefit of Executive shall become the sole property of Executive
and, to the extent applicable, all of the Companys rights therein
(including repayment of premiums) shall be forfeited by the Company
and, to the extent not already made, the Company shall make all
contributions or payments required of such policies for the year of
termination; and
(ix) Any amount payable under this Section 8(a) shall
also include an additional cash payment which shall equal any and all
federal, state and local taxes due upon the provision of any such
benefits or payments thereunder (other than taxes due under the
operation of Section 4999 of the Code which Section of the Code is
addressed in Section 8(e) hereof and, if applicable, shall work in
conjunction with this Section 8(a)(ix)), which shall be payable to
Executive within five (5) business days following his Date of
Termination and such additional payment shall be grossed-up for any
additional taxes due thereon (and any taxes thereon, etc.) in a manner
consistent with the manner set forth in Section 8(e) of this Agreement,
whether or not such Section 8(e) is applicable.
(b) Cause or By Executive Without Good Reason. If Executives
employment is terminated by the Company for Cause or by Executive (other
than for Good Reason):
(i) the Company shall pay Executive his Base Salary,
Bonus and his accrued vacation pay through the Date of Termination, as
soon as practicable following the Date of Termination; and
(ii) the Company shall reimburse Executive pursuant
to Section 5 for reasonable expenses incurred, but not paid prior to
such termination of employment; and
(iii) Executive shall be entitled to any other
rights, compensation and/or benefits as may be due to Executive in
accordance with the terms and provisions of any agreements, plans or
programs of the Company.
(c) Disability. During any period that Executive fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness (Disability Period), Executive shall continue to receive his full Base
Salary set forth in Section 5(a) until his employment is terminated pursuant to
Section 6(b). In the event Executives employment is terminated for Disability
pursuant to Section 6(b):
(i) the Company shall pay to Executive (A) his Base
Salary, Bonus and accrued vacation pay through the Date of Termination,
as soon as practicable following the Date of Termination, and (B)
continued Base Salary (as provided for in Section 5(a)) and Continued
Benefits for seven (7) years; and
(ii) the Company shall reimburse Executive pursuant
to Section 5 for reasonable expenses incurred, but not paid prior to
such termination of employment; and
(iii) Executive shall be entitled to any other
rights, compensation and/or benefits as may be due to Executive in
accordance with the terms and provisions of any agreements, plans or
programs of the Company; and
(iv) Executive shall be paid the amount of
compensation or contributions (as the case may be) by the Company that
Executive would have been entitled to receive (assuming he would have
received the maximum amount payable or contributable under each plan or
arrangement for any year) under any plan or arrangement he was then
participating (or entitled to participate in) for a seven (7) year
period following the Date of Termination.
(d) Death. If Executives employment is terminated by his
death:
(i) the Company shall pay in a lump sum to
Executives beneficiary, legal representatives or estate, as the case
may be, Executives Base Salary, Bonus and accrued vacation pay through
the Date of Termination and $1,000,000 (which may be paid through
insurance) and shall provide Executives spouse and dependents with
Continued Benefits for seven (7) year; and
(ii) the Company shall reimburse Executives
beneficiary, legal representatives, or estate, as the case may be,
pursuant to Section 5 for reasonable expenses incurred, but not paid
prior to such termination of employment; and
(iii) Executives beneficiary, legal representatives
or estate, as the case may be, shall be entitled to any other rights,
compensation and benefits as may be due to any such persons or estate
in accordance with the terms and provisions of any agreements, plans or
programs of the Company; and
(iv) Executives beneficiary, legal representatives
or estate, as the case may be shall be paid the amount of compensation
or contributions (as the case may be) by the Company that Executive
would have been entitled to receive (assuming he would have received
the maximum amount payable or contributable under each plan or
arrangement for any year) under any plan or arrangement he was then
participating (or entitled to participate in) for a seven (7) year
period following the Date of Termination.
(e) Additional Payments. (i) Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any
payment, award, benefit or distribution (or any acceleration of any
payment, award, benefit or distribution) by the Company or any entity which
effectuates a Change in Control (or other change in ownership) to or for
the benefit of Executive (the Payments) would be subject to the excise
tax imposed by Section 4999 of the Code, or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the Excise Tax), then the Company shall pay to Executive
an additional payment (a Gross-Up Payment) in an amount such that after
payment by Executive of all taxes (including any Excise Tax) imposed upon
the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the sum of (x) the Excise Tax imposed upon the Payments and (y)
the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in Executives adjusted gross income and the highest
applicable marginal rate of federal income taxation for the calendar year
in which the Gross-Up Payment is to be made. For purposes of determining
the amount of the Gross-Up Payment, Executive shall be deemed to (A) pay
federal income taxes at the highest marginal rates of federal income taxes
at the highest marginal rate of taxation for the calendar year in which the
Gross-Up Payment is to be made, (B) pay applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state
and local taxes and (C) have otherwise allowable deductions for federal
income tax purposes at least equal to those which could be disallowed
because of the inclusion of the Gross-Up Payment in Executives adjusted
gross income.
(ii) Subject to the provisions of Section 8(e)(i), all
determinations required to be made under this Section 8(e), including
whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determinations, shall be made by a nationally recognized public
accounting firm that is selected by Executive (the Accounting Firm)
which shall provide detailed supporting calculations both to the
Company and Executive within fifteen (15) business days of the receipt
of notice from the Company or Executive that there has been a Payment,
or such earlier time as is requested by the Company or Executive
(collectively, the Determination). All fees and expenses of the
Accounting Firm shall be borne solely by the Company and the Company
shall enter into any agreement requested by the Accounting Firm in
connection with the performance of the services hereunder. The
Gross-Up Payment under this Section 8(e) with respect to any Payments
made to Executive shall be made no later than thirty (30) days
following such Payment. If the Accounting Firm determines that no
Excise Tax is payable by Executive, it shall furnish Executive with a
written opinion to such effect, and to the effect that failure to
report the Excise Tax, if any, on Executives applicable federal
income tax return should not result in the imposition of a negligence
or similar penalty.
(iii) As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the Determination, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made (Underpayment) or Gross-Up Payments
are made by the Company which should not have been made
(Overpayment), consistent with the calculations required to be made
hereunder. In the event that Executive thereafter is required to make
payment of any Excise Tax or additional Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment (together with interest at the rate provided
in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the
Company to or for the benefit of Executive. In the event the amount of
the Gross-Up Payment exceeds the amount necessary to reimburse
Executive for his Excise Tax, the Accounting Firm shall determine the
amount of the Overpayment that has been made and any such Overpayment
(together with interest at the rate provided in Section 1274(b)(2) of
the Code) shall be promptly paid by Executive (to the extent he has
received a refund if the applicable Excise Tax has been paid to the
Internal Revenue Service) to or for the benefit of the Company.
Executive shall cooperate, to the extent his expenses are reimbursed
by the Company, with any reasonable requests by the Company in
connection with any contest or disputes with the Internal Revenue
Service in connection with the Excise Tax.
9. Mitigation. Executive shall not be required to mitigate
amounts payable under this Agreement by seeking other employment or otherwise,
and there shall be no offset against amounts due Executive under this Agreement
on account of subsequent employment except as specifically provided herein.
Additionally, amounts owed to Executive under this Agreement shall not be offset
by any claims the Company may have against Executive and the Companys
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder, shall not be affected by any other
circumstances, including, without limitation, any counterclaim, recoupment,
defense or other right which the Company may have against Executive or others.
10. Restrictive Covenants.
(a) Confidential Information. Executive shall hold in a fiduciary
capacity for the benefit of the Company all trade secrets and
confidential information, knowledge or data relating to the Company
and its businesses and investments, which shall have been obtained by
Executive during Executives employment by the Company and which is
not generally available public knowledge (other than by acts by
Executive in violation of this Agreement). Except as may be required
or appropriate in connection with his carrying out his duties under
this Agreement, Executive shall not, without the prior written consent
of the Company or as may otherwise be required by law or any legal
process, or as is necessary in connection with any adversarial
proceeding against the Company (in which case Executive shall use his
reasonable best efforts in cooperating with the Company in obtaining a
protective order against disclosure by a court of competent
jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Company and
those designated by the Company or on behalf of the Company in the
furtherance of its business or to perform duties hereunder.
(b) Non-Solicitation.Executive hereby agrees, in consideration of
his employment hereunder and in view of the confidential position to
be held by Executive hereunder, that after his termination of
employment in which he is entitled to the benefits set forth in
Section 8(a) hereof and through the second anniversary thereof,
Executive shall not directly or indirectly induce any employee of the
Company to terminate such employment or to become employed by any
other radio broadcasting station.
(c) Non-Competition. Executive hereby agrees, in consideration of
his employment hereunder and in view of the confidential position to
be held by Executive hereunder, that after his termination of
employment in which he is entitled to the benefits set forth in
Section 8(a) hereof and through the second anniversary thereof, he
shall not be employed by or perform activities on behalf of, or have
an ownership interest in, any person, firm, corporation or other
entity, or in connection with any business enterprise, that is
directly or indirectly engaged in any of the radio, television, or
related business activities in which the Company and its subsidiaries
have significant involvement (other than direct or beneficial
ownership of up to five percent (5%) of any entity whether or not in
the same or competing business.
(e) Blue Pencil. The parties hereby acknowledge that the
restrictions in this Section 10 have been specifically negotiated and
agreed to by the parties hereto and are limited only to those
restrictions necessary to protect the Company and its subsidiaries
from unfair competition. The parties hereby agree that if the scope or
enforceability of any provision, paragraph or subparagraph of this
Section 10 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 10 is separable from every other provision, paragraph,
and subparagraph and constitutes a separate and distinct covenant.
Executive acknowledges that the Company operates in major, medium and
small sized markets throughout the United States and North America and
that the effect of Section 10(c) may be to prevent him from working in
a competitive business after his termination of employment hereunder.
(f) Remedies. Executive hereby expressly acknowledges that any
breach or threatened breach by Executive of any of the terms set forth
in Section 10 of this Agreement may result in significant and
continuing injury to the Company, the monetary value of which would be
impossible to establish. Therefore, Executive agrees that the Company
shall be entitled to apply for injunctive relief in a court of
appropriate jurisdiction.
11. Indemnification.
(a) General. The Company agrees that if Executive is made a party
or a threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a
Proceeding), by reason of the fact that Executive is or was a
trustee, director or officer of the Company or any subsidiary of the
Company or is or was serving at the request of the Company or any
subsidiary as a trustee, director, officer, member, employee or agent
of another corporation or a partnership, joint venture, trust or other
enterprise, including, without limitation, service with respect to
employee benefit plans, whether or not the basis of such Proceeding is
alleged action in an official capacity as a trustee, director,
officer, member, employee or agent while serving as a trustee,
director, officer, member, employee or agent, Executive shall be
indemnified and held harmless by the Company to the fullest extent
authorized by Texas law, as the same exists or may hereafter be
amended, against all Expenses incurred or suffered by Executive in
connection therewith, and such indemnification shall continue as to
Executive even if Executive has ceased to be an officer, director,
trustee or agent, or is no longer employed by the Company and shall
inure to the benefit of his heirs, executors and administrators.
(b) Expenses. As used in this Agreement, the term Expenses
shall include, without limitation, damages, losses, judgments,
liabilities, fines, penalties, excise taxes, settlements, and costs,
attorneys fees, accountants fees, and disbursements and costs of
attachment or similar bonds, investigations, and any expenses of
establishing a right to indemnification under this Agreement.
(c) Enforcement. If a claim or request under this Agreement is
not paid by the Company or on its behalf, within thirty (30) days
after a written claim or request has been received by the Company,
Executive may at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim or request and if successful in
whole or in part, Executive shall be entitled to be paid also the
expenses of prosecuting such suit. All obligations for indemnification
hereunder shall be subject to, and paid in accordance with, applicable
Texas law.
(d) Partial Indemnification. If Executive is entitled under any
provision of this Agreement to indemnification by the Company for some
or a portion of any Expenses, but not, however, for the total amount
thereof, the Company, shall nevertheless indemnify Executive for the
portion of such Expenses to which Executive is entitled.
(e) Advances of Expenses. Expenses incurred by Executive in
connection with any Proceeding shall be paid by the Company in advance
upon request of Executive that the Company pay such Expenses; but,
only in the event that Executive shall have delivered in writing to
the Company (i) an undertaking to reimburse the Company for Expenses
with respect to which Executive is not entitled to indemnification and
(ii) an affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the Company has been met.
(f) Notice of Claim. Executive shall give to the Company notice
of any claim made against him for which indemnification will or could
be sought under this Agreement. In addition, Executive shall give the
Company such information and cooperation as it may reasonably require
and as shall be within Executives power and at such times and places
as are convenient for Executive.
(g) Defense of Claim. With respect to any Proceeding as to which
Executive notifies the Company of the commencement thereof:
(i) The Company will be entitled to participate therein at its
own expense; and
(ii) Except as otherwise provided below, to the
extent that it may wish, the Company will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to Executive,
which in the Companys sole discretion may be regular counsel to the
Company and may be counsel to other officers and directors of the
Company or any subsidiary. Executive also shall have the right to
employ his own counsel in such action, suit or proceeding if he
reasonably concludes that failure to do so would involve a conflict of
interest between the Company and Executive, and under such
circumstances the fees and expenses of such counsel shall be at the
expense of the Company.
(iii) The Company shall not be liable to indemnify
Executive under this Agreement for any amounts paid in settlement of
any action or claim effected without its written consent. The Company
shall not settle any action or claim in any manner which would impose
any penalty or limitation on Executive without Executives written
consent. Neither the Company nor Executive will unreasonably withhold
or delay their consent to any proposed settlement.
(h) Non-exclusivity. The right to indemnification and the payment
of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Section 11 shall not be exclusive of any
other right which Executive may have or hereafter may acquire under
any statute, provision of the declaration of trust or certificate of
incorporation or by-laws of the Company or any subsidiary, agreement,
vote of shareholders or disinterested directors or trustees or
otherwise.
12. Arbitration. Except as provided for in Section 10 of this
Agreement, if any contest or dispute arises between the parties with respect to
this Agreement, such contest or dispute shall be submitted to binding
arbitration for resolution in San Antonio, Texas in accordance with the rules
and procedures of the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect. The decision of the arbitrator shall be
final and binding on both parties, and any court of competent jurisdiction may
enter judgment upon the award. The Company shall pay all expenses relating to
such arbitration, including, but not limited to, Executives legal fees and
expenses, regardless of outcome.
13. Successors; Binding Agreement.
(a) Companys Successors. No rights or obligations of the
Company under this Agreement may be assigned or transferred except that the
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, Company shall mean the Company as herein before defined and any
successor to its business and/or assets (by merger, purchase or otherwise) which
executes and delivers the agreement provided for in this Section 13 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) Executives Successors. No rights or obligations of
Executive under this Agreement may be assigned or transferred by Executive other
than his rights to payments or benefits hereunder, which may be transferred only
by will or the laws of descent and distribution. Upon Executives death, this
Agreement and all rights of Executive hereunder shall inure to the benefit of
and be enforceable by Executives beneficiary or beneficiaries, personal or
legal representatives, or estate, to the extent any such person succeeds to
Executives interests under this Agreement. Executive shall be entitled to
select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following Executives death by giving the Company
written notice thereof. In the event of Executives death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or
other legal representative(s). If Executive should die following his Date of
Termination while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts unless otherwise provided herein shall be
paid in accordance with the terms of this Agreement to such person or persons so
appointed in writing by Executive, or otherwise to his legal representatives or
estate.
14. Notice. For the purposes of this Agreement, notices,
demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered either
personally or by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to Executive:
Mark Mays
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
If to the Company:
Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Chief Executive Officer
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue
Suite 4100
Dallas, Texas
Attention: Michael Dillard
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
15. Miscellaneous. No provisions of this Agreement may be
amended, modified, or waived unless such amendment or modification is agreed to
in writing signed by Executive and by a duly authorized officer of the Company,
and such waiver is set forth in writing and signed by the party to be charged.
No waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The respective rights and obligations of the
parties hereunder of this Agreement shall survive Executives termination of
employment and the termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts of law
principles.
16. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
17. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
18.Entire Agreement. Except as other provided herein, this Agreement sets forth
the entire agreement of the parties hereto in respect of the subject matter
contained herein and supersede all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in
respect of such subject matter. Except as other provided herein, any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.
20. Withholding. All payments hereunder shall be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
21. Noncontravention. The Company represents that the Company is not prevented
from entering into, or performing this Agreement by the terms of any law, order,
rule or regulation, its by-laws or declaration of trust, or any agreement to
which it is a party, other than which would not have a material adverse effect
on the Companys ability to enter into or perform this Agreement.
22. Section Headings. The section headings in this Employment Agreement are for
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/Randall Mays
Name: Randall Mays
Title: Vice President
/s/Mark Mays
Mark Mays