EXHIBIT 10.03.04
DEFERRED COMPENSATION AGREEMENT
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THIS AGREEMENT is made and entered into this 7th day of November, 1991, by
and between SALEM COMMUNICATIONS, a California corporation, hereinafter referred
to as the "Company" and ERIC HALVORSON, hereinafter referred to as "Employee".
W I T N E S S E T H
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WHEREAS,the Employee is currently employed by the Company and has
heretofore been a valuable employee of the Company; and
WHEREAS, the Company desires to provide for the payment of deferred
compensation to the Employee or to his designated beneficiary or beneficiaries
following the termination of his employment with the Company, as consideration
for assuring the retention of his services; and
WHEREAS, the Employee understands and accepts the terms and conditions with
respect to the payment of deferred compensation and desires that such agreement
be reduced to written form.
NOW, THEREFORE, the Company and the Employee, in consideration of the
mutual promises hereinafter set forth, do hereby promise and agree as follows:
ARTICLE I
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DEFERRED COMPENSATION
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1.1. Definitions. For purposes of this Agreement, the following terms
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shall have the following meanings:
(a) Total Compensation Earned. The term "Total Compensation Earned"
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shall mean the base salary and bonus paid during a fiscal year with respect
to such fiscal year. "Total Compensation Earned" shall also include any
bonus paid with respect to such fiscal year on or before March 15 of the
following fiscal year and the contribution by Employee to the 401(K) Plan
with respect to such fiscal year.
(b) Covered Compensation. The term "Covered Compensation" shall mean
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an amount equal to the average (i.e. arithmatic mean) Total Compensation
Earned by the Employee for the three (3) fiscal years for which he received
the highest total Compensation Earned among the fiscal years consisting of
(i) the fiscal year in or as of which the termination of his employment
becomes effective, and (ii) all preceding fiscal years during which
Employee was employed by the Company.
(c) Discounted Compensation. The term "Discounted Compensation" shall
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mean the aggregate amount of deferred compensation which would have been
paid to Employee under Section 1.2(a), below, if he had remained employed
by the Company to age sixty (60) (and assuming no compensation increase
would have been granted between the date of termination and age 60),
discounted at eight percent (8%) per annum to the present value of such
amount as of the date of termination of employment. In determining present
value, the monthly payments that would have begun at age sixty (60) shall
first be discounted to their present value at age sixty (60), and this
amount shall be further discounted to its present value as of the date of
termination of employment.
(d) 401K Plan. The term "401K Plan" shall mean the 401(K) Profit
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Sharing Plan of the Company as may be in effect from time to time.
(e) Termination for Cause. The term "Termination for Cause" shall
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mean the termination of Employee's employment with the Company pursuant to
a determination by the Company's Board of Directors (excluding Employee, if
he is a member of the Company's Board of Directors) that Employee, after
fair warning, has been consistently and inadequately performing his duties
hereunder or has engaged in conduct materially injurious to the Company.
(f) Disability. The term "Disability" shall mean the inability of
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Employee to render his customary services on behalf of the Company by
reason of physical or mental illness or incapacity for continuing period of
one hundred eighty (180) days or for an aggregate of one hundred eighty
(180) days in any continuous period of three hundred sixty-five days. If
there is any dispute as to whether Employee is or was unable to perform his
customary services for the Company, such dispute shall be submitted to a
licensed physician agreed upon by the parties or, if the parties are unable
to agree, appointed by the President of the Medical Society of Milwaukee
County, Wisconsin, at the request of either party. Employee shall promptly
submit to such examinations and provide such information as any such
physician may request, and the determination of such physician as to
Employee's physical or mental condition shall be binding and conclusive.
(g) Employment Agreement. The term "Employment Agreement" shall mean
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the Employment Agreement between the Company and Employee dated November 7,
1991.
1.2. Benefits. Following termination of his employment with the Company
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(unless termination is a Termination for Cause, in which event Employee shall be
entitled to no amounts under this Agreement), Employee shall be entitled to the
following benefits:
(a) Termination After Age 60. If Employee's employment with the
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Company terminates for any reason on or after the date Employee attains age
sixty (60), Employee shall be entitled to receive each year, for ten (10)
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consecutive years, benefits in an amount equal to fifty percent (50%) of
Employee's Covered Compensation, with such amounts to be paid in equal
monthly installments commencing thirty (30) days after the date of
termination of employment.
(b) Termination Before Age 60. If Employee's employment with the
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Company terminates for any reason prior to the date Employee attains age
sixty (60), the following shall apply:
(i) If termination occurs by reason of death or Disability at any
time prior to the date Employees attains age sixty (60), or if
termination occurs for any reason after the expiration of the term of
the Employment Agreement, Employee shall be entitled to receive an
amount equal to the Discounted Compensation. The aggregate amount of
Discounted Compensation shall be paid, until exhausted, in monthly
installments commencing thirty (30) days after the date of
termination, with such installments to be equal to Employee's monthly
salary immediately preceding his termination.
(ii) If the Company terminates Employee's employment prior to
expiration of the term of the Employment Agreement, Employee shall be
entitled to receive an amount equal to the Discounted Compensation;
provided that the calculation of Discounted Compensatoin shall be
based on an assumed termination date coinciding with the last day of
the term of Employee's employment under the Employment Agreement, and
the Covered Compensation used in determining Discounted Compensation
shall be based on the three (3) highest years of compensation paid to
Employee during the seven (7) year term of his Employment Agreement,
whether or not such payments are made prior to or after termination of
employment. The aggregate amount of Discounted Compensatoin shall be
paid, until exhausted, in monthly installments commencing thirty (30)
days after the expiration of the seven (7) year term of employment
under the Employment Agreement, with such installments to be equal to
the monthly salary payable to Employee in the last year of the seven
(7) year term of the Employment Agreement.
(c) Payment on Death. In the event any payment under this Agreement
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is to be made by reason of Employee's death, or if Employee dies after he
has otherwise become entitled to receive payments hereunder, the Company
shall make the payments to which Employee would otherwise be entitled to
such beneficiary as Employee may have last designated in writing to the
Secretary of the Company. If on beneficiary designation has been made, or
if any designated beneficiary shall have predeceased Employee, such
payments shall be made to Employee's estate. If any designated beneficiary
should survive Employee but die before payment of all amounts due
hereunder, such amounts
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shall, unless Employee shall have designated otherwise, be paid to such
beneficiary's estate.
ARTICLE II
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ACCRUALS REMAIN PROPERTY OF COMPANY
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Any amounts accruing to Employee hereunder shall remain solely the property
of the Company and subject to the claims of its creditors, and no assets of the
Company shall be segregated or subject to any trusts for the Employee's benefit
by reason of this Agreement. Neither the Employee nor his designated
beneficiary or beneficiaries shall have any interest in any fund or in any
general or any specific asset or assets of the Company by reason of the amount
credited to Employee hereunder other than the contractual rights provided in
this Agreement. Nothing contained herein shall be construed to require the
Company to establish any deferred compensation account in the Employee's name or
on his behalf or to accrue any amounts for his benefit hereunder.
ARTICLE III
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BENEFICIARY
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If the Employee's employment with the Company is terminated by reason of
his death, or if he dies after termination of his employment but prior to
receiving all of the deferred compensation payable to him hereunder, the amounts
that would otherwise be payable to him under this Agreement shall be distributed
to such beneficiary or beneficiaries that the Employee may have last designated
in writing to the Secretary of the Company. All beneficiary designations shall
be made in such form and such manner as may from time to time be prescribed by
the Board of Directors of the Company. Employee may from time to time revoke or
change any beneficiary designation on file with the Company. If there is no
effective beneficiary designation on file with the Company at the time of the
death of the Employee or if any designated beneficiary shall predecease the
Employee, the distribution of amounts otherwise payable to the Employee under
this Agreement shall be made to the personal representative of the Employee's
estate. If any designated beneficiary should survive the Employee but shall die
before payment of all amounts payable pursuant to this Agreement, such payment
shall, unless the Employee shall have designated otherwise, be made to such
beneficiary's estate. The Company shall have no responsibility with respect to
the validity of any beneficiary designation made by the Employee if it acts
thereon in good faith.
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ARTICLE IV
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COMPETENCE PRESUMED
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Every person receiving or claiming payments under this Agreement shall be
conclusively presumed to be mentally competent until the date that the Company
receives a written notice in a form and in a manner acceptable to the Company
that such person is incompetent and that a guardian, conservator, or other
person legally vested with the interest of his estate has been appointed. In
the event a guardian or conservator of the estate of any person receiving or
claiming payments under this Agreement shall be applied by a court of competent
jurisdiction, payments under this Agreement may be made to such guardian or
conservator provided that the proper proof of appointment and continuing
qualification is furnished in a form and manner acceptable to the Company. Any
such payments so made shall be a complete discharge of any liability of the
Company therefor.
ARTICLE V
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MISCELLANEOUS
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5.1. Notices. Any notices required or permitted to be given under this
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Agreement shall be sufficient if in writing and is sent by registered or
certified mail or personally delivered to the residence of Employee or the legal
representative of his estate or to the principal office of the Company directed
to the attention of the Board of Directors, as the case may be.
5.2. Waiver of Breach. The waiver by Company or Employee of any breach of
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any provision of this Agreement by the other shall not be deemed a waiver of any
subsequent breach.
5.3. Assignment. This Agreement shall not be assignable by the Company
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without the written consent of Employee except that if Company shall merge or
consolidate with or into or transfer substantially all of its assets, including
goodwill, to another corporation or other form of business organization, this
Agreement shall be binding upon and inure to the benefit of the successor of
Company resulting from such merger, consolidation or transfer. Neither Employee
nor his beneficiaries may assign, pledge or encumber his interest in this
Agreement or any part thereof without the written consent of Company.
5.4. Governing Law. This Agreement and all questions arising in
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connection therewith shall be governed by the laws of the State of Wisconsin.
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5.5. Arbitration. Any dispute or controversy arising under or relating to
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the application or interpretation of this Agreement shall be determined by
arbitration in Milwaukee, Wisconsin according to the rules then obtaining of the
American Arbitration Association for the resolution of commercial disputes and
the decision so rendered shall be binding and conclusive upon Employee and
Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY:
SALEM COMMUNICATIONS CORPORATION
By: /s/ Edward G. Altsinger III
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EDWARD G. ALTSINGER III, President
EMPLOYEE:
By: /s/ Eric Halvorson
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ERIC HALVORSON
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