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Exhibit 10.26
CITADEL COMMUNICATIONS CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
This Option Agreement is made and entered into by and between CITADEL
COMMUNICATIONS CORPORATION, a Nevada corporation ("Company") and
__________________________________ ("Employee"), effective as of the 1st day of
January 1996.
The Company has elected to provide an incentive to encourage key
employees and officers of the Company and its wholly-owned subsidiaries to
remain in the employment of such companies and to enhance the ability of the
Company and its subsidiaries to attract new employees whose services are
considered unusually valuable by providing an opportunity to have a proprietary
interest in the success of the Company. The Company believes that the granting
of the Option herein described to Employee is consistent with the foregoing
goals. The Company and Employee desire to enter into an Agreement reflecting the
terms and conditions of the Option granted to Employee.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and for other good and valuable consideration, the Company
and Employee agree as follows:
1. Grant of Option. The Company hereby grants to Employee the right and
option (the "Option") to purchase an aggregate of __________ Thousand
(__________) shares (such number being subject to adjustment as provided in
Paragraph 10 hereof) of the Class A Common Stock of the Company (the "Stock") on
the terms and conditions herein set forth. This Option may be exercised in whole
or in part and from time to time as hereinafter provided.
2. Purchase Price. The price at which Employee shall be entitled to
purchase the Stock covered by the Option shall be $12.00 per share.
3. Term of Option. The Option hereby granted shall remain in force and
effect for a period of ten (10) years from January 1, 1996 (the "Date of
Grant"), through and including the normal close of business of the Company on
January 1, 2006 (the "Expiration Date"), subject to earlier termination as
provided in Paragraphs 7, 8, 9, 10 and 18 hereof.
4. Exercise of Option. The Option may be exercised by Employee with
respect to the shares specified below beginning on the dates specified below and
ending on the Expiration Date as to all or any part of the shares covered hereby
by delivery to the Company of written notice of exercise and payment of the
purchase price, as provided in Paragraphs 5 and 6 hereof. The Option shall vest
and become exercisable as of the dates specified below:
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(i) January 1, 1997, with respect to one-fifth (1/5) of the
shares of the Stock subject to the Option;
(ii) January 1, 1998, with respect to one-fifth (1/5) of the
shares of Stock subject to the Option;
(iii) January 1, 1999, with respect to one-fifth (1/5) of the
shares of the Stock subject to the Option;
(iv) January 1, 2000, with respect to one-fifth (1/5) of the
shares of the Stock subject to the Option; and
(v) January 1, 2001, with respect to the remaining one fifth
(1/5) of the shares of the Stock subject to the Option.
The Option shall cease to be exercisable as to any share when Employee
exercises the Option and purchases the share or when the Option lapses as
provided in Paragraph 3.
In the event of a public tender for all or any portion of the Stock of
the Company, or in the event that a proposal to merge, consolidate, or otherwise
combine with another company is submitted for shareholder approval, the
Committee (as defined in Paragraph 14) may in its sole discretion declare the
Option immediately exercisable even if the original date for the exercise of the
Option, as set forth in the first paragraph of this Paragraph 4, has not yet
passed.
5. Method of Exercising Option; Stock Subject to Second Amended and
Restated Stockholders Agreement. Subject to the terms and conditions of this
Option Agreement, the Option may be exercised by timely delivery to the Company
of written notice, which notice shall state Employee's election to exercise the
Option, the number of shares in respect of which an election to exercise has
been made, the method of payment elected, the exact name or names in which the
shares will be registered and Employee's Social Security number. Such written
notice shall be effective on the date received by the Company (the "Effective
Date"). Such notice shall be signed by Employee and shall be accompanied by
payment of the purchase price of such shares. In the event the Option shall be
exercised by a person or persons other than Employee pursuant to Paragraph 8
hereof, such notice shall be signed by such other person or persons and shall be
accompanied by proof acceptable to the Company of the legal right of such person
or persons to exercise the Option. All shares delivered by the Company upon
exercise of the Option as provided herein shall be fully paid and nonassessable
upon delivery.
By accepting the options granted under this Agreement, you further
agree to be bound as a member of Management to Sections 3 and 6 of the Second
Amended and Restated Stockholders Agreement, dated as of June 28, 1996 among the
Company and certain other parties (the "Stockholders Agreement"), as amended
from time to time, which provisions
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thereto, among other things, require you to consent to and sell any stock or
options owned by you as of the date of this Agreement, and any stock or options
acquired by you on or after the date of this Agreement, whether or not vested
now or as of the date of sale, in any Approved Sale (as that term is defined in
the Stockholders Agreement).
6. Method of Payment for Options. Upon the exercise of all or any part
of an Option, the option price shall be payable in full by check, or, in the
event the Company is at the time of exercise a reporting Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in shares of
Stock owned by Employee to the extent permitted by law, or in any combination
thereof at the election of Employee. Payment of the option price with shares of
Stock owned by Employee, to the extent permitted under this Agreement, shall be
made by assigning and delivering such shares to the Company. The shares shall be
valued at Fair Market Value on the exercise date of the Option. For purposes of
this Agreement, the "Fair Market Value" of the Stock as of any date shall be the
average of the closing bid and asked prices for the Stock as reported on the
NASDAQ National Market System (or on any national securities exchange on which
the Stock is then listed) for the date or, if no prices are so reported for that
date, such prices on the next preceding date for which closing bid and asked
prices were reported.
In the event the Company becomes a reporting Company under the Exchange
Act, Employee may also pay the option price, to the extent permitted by
applicable law, and subject to the approval of the Committee to the extent
required by Rule 16b3(e)(2)(ii) of the Exchange Act, by directing the Company to
withhold from the shares of Stock that would otherwise be issued upon exercise
of the Option that number of shares having a Fair Market Value on the exercise
date equal to the option price. If Employee elects to exercise all of any part
of his or her Option by directing the Company to withhold shares subject to the
exercised Option, Employee must notify the Company in writing of his or her
intent to do so. In such case, the number of shares of Stock received by
Employee shall be determined pursuant to the following formula:
Fair Market Value - Purchase
Number of Shares on Exercise Date Price
Number = as to which the x -------------------------------------------------
of Shares Option is to be Fair Market Value on
Received Exercised Exercise Date
To the extent permitted under this Agreement, if Employee elects to pay
for all or part of the shares purchased upon the exercise of the Option in
Stock, a share certificate or certificates, together with a duly executed stock
power authorizing the transfer of such shares to the Company, shall be delivered
to the Company with the notice of exercise. Should the number of such shares
delivered for credit against the purchase price have a Fair Market Value less
than the full purchase price, Employee shall pay the difference between the Fair
Market Value of the Stock to be conveyed to the Company and the full purchase
price by check. Should the share certificate delivered be for a number of shares
in excess of that number to be conveyed to the Company for credit against the
full purchase price, the
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Company will issue to Employee a new share certificate representing the number
of shares in excess of the nearest whole number of shares having a Fair Market
Value not in excess of the amount required to pay the full purchase price. No
fractional shares shall be accepted in payment or be reissued by the Company
under this provision.
7. Termination of Employee. In the event that the employment of
Employee is terminated, either by Employee or by Company, for any reason other
than death of Employee, including a termination with or without cause, any
unexercised Option shall lapse and terminate on the effective date of the
Employee's termination unless the Committee elects, in its sole and absolute
discretion, to allow the Employee to exercise it for a period of 90 days
following his termination. In no event shall the Option, or any part thereof, be
exercisable after the Expiration Date.
8. Death of Employee. In the event of the death of Employee within a
period during which the Option, or any part thereof, could have been exercised
by Employee (the "Option Period"), the Option shall lapse unless it is exercised
within the Option Period, and in no event later than ninety (90) days after the
date of Employee's death, by Employee's legal representative or representatives
or by the person or persons entitled to do so under Employee's last will and
testament or if Employee fails to make a testamentary disposition of such Option
or shall die intestate, by the person or persons entitled to receive such Option
under the applicable laws of descent and distribution. An Option may be
exercised following the death of Employee only if the Option was exercisable by
Employee immediately prior to his death. In no event shall the Option, or any
part thereof, be exercisable after the Expiration Date. The Company shall have
the right to require evidence satisfactory to it of the rights of any person or
persons seeking to exercise the Option under this Paragraph 8 to exercise the
Option.
9. Nontransferability. The Option granted by this Agreement shall be
exercisable only during the term of the Option provided in Paragraph 3 hereof
and, except as provided in Paragraphs 7 and 8 above, only by Employee during his
lifetime and while an employee of the Company. No Option granted by this
Agreement shall be transferable by Employee other than by will or pursuant to
applicable laws of descent and distribution. The Option, and any rights and
privileges in connection therewith, shall not be transferred, assigned, pledged
or hypothecated by Employee, or by any other person or persons, in any way,
whether by operation of law, or otherwise, and shall not be subject to
execution, attachment, garnishment or similar process. In the event of such an
occurrence, the Option shall automatically be terminated and shall thereafter be
null and void.
10. Adjustments in Number of Shares and Option Price. In the event a
stock dividend is declared upon the Stock, the remaining shares of Stock then
subject to this Option shall be adjusted proportionately without any change in
the aggregate purchase price therefor. In the event the Stock shall be changed
into or exchanged for a different number or class of shares of stock of the
Company or of another corporation, whether through reorganization,
recapitalization, stock split, combination of shares, merger or consolidation,
there shall be
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substituted for each such remaining share of Stock then subject to this Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option.
Subject to any required action by the stockholders, if the Company
shall be the surviving or resulting corporation in any merger or consolidation,
the Option granted hereunder shall pertain to and apply to the securities or
rights to which a holder of the number of shares of Stock subject to the Option
would have been entitled; but a dissolution or liquidation of the Company, or a
merger or consolidation in which the Company is not the surviving or resulting
corporation, shall, in the sole discretion of the Committee:
(a) Cause the Option outstanding hereunder to terminate as of
the date specified by the Committee, except that the surviving or
resulting corporation, in its absolute and uncontrolled discretion, may
tender an option to purchase its shares or exercise such rights on
terms and conditions, as to the number of shares and rights and
otherwise, which shall substantially preserve the rights and benefits
of the Option then outstanding hereunder; or
(b) Give Employee the right to exercise this Option prior to
the occurrence of the event otherwise terminating the Option over such
period as the Committee, in its sole and absolute discretion, shall
determine.
11. Delivery of Shares. No shares of Stock shall be delivered upon
exercise of the Option unless and until (i) the purchase price shall have been
paid in full in the manner herein provided; (ii) applicable taxes required to be
withheld have been paid or withheld in full; (iii) approval of any governmental
authority required in connection with the Option, or the issuance of shares
thereunder, has been received by the Company; (iv) Employee has complied with
all terms and conditions of this Agreement; and (v) if required by the
Committee, Employee has delivered to the Committee an Investment Letter in form
and content satisfactory to the Company as provided in Paragraph 12 hereof.
12. Securities Act. The Company shall have the right, but not the
obligation, to cause the shares of Stock issuable upon exercise of the Option to
be registered under the appropriate rules and regulations of the Securities and
Exchange Commission.
The Company shall not be required to deliver any shares of Stock
pursuant to the exercise of all or any part of the Option if, in the opinion of
counsel for the Company, such issuance would violate the Securities Act of 1933
(the "Securities Act") or any other applicable federal or state securities laws
or regulations. The Company may require that Employee, prior to the issuance of
any such shares pursuant to exercise of the Option, sign and deliver to the
Company a written statement ("Investment Letter") stating (i) that Employee is
acquiring the shares for investment and not with a view to the sale or
distribution thereof; (ii) that Employee will not sell any shares received upon
exercise of the Option or any other shares of the Company that Employee may then
own or thereafter
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acquire except either (a) through a broker on a national securities exchange or
(b) with the prior written approval of the Company; and (iii) containing such
other terms and conditions as counsel for the Company may reasonably require to
assure compliance with the Securities Act or other applicable federal or state
securities laws and regulations. Such Investment Letter shall be in form and
content acceptable to the Committee in its sole discretion.
If shares of Stock or other securities issuable pursuant to the
exercise of the Option have not been registered under the Securities Act of 1933
or other applicable federal or state securities laws or regulations, the
certificates representing such shares shall bear a legend restricting the
transferability thereof, such legend to be substantially in the following form:
The Securities evidenced by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or
qualified under any applicable state securities laws. They
have been acquired for investment and not with a view to
distribution thereof within the meaning of the Act and
regulations thereunder. They may not be sold or otherwise
transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws
covering such transaction involving said securities or (b)
this Corporation receives an opinion of legal counsel for the
holder of these securities (concurred in by legal counsel for
this Corporation) stating that such transaction is exempt from
registration or this Corporation otherwise satisfies itself
that such transaction is exempt from resolution.
The sale, transfer, assignment or encumbrance of the shares
represented by this certificate is restricted by the
provisions of that certain Second Amended and Restated
Stockholders Agreement, dated as of June 28, 1996. The
Corporation will mail to any shareholder a copy of such
Agreement within five days after receipt of written request
therefor.
13. Federal and State Taxes. Upon exercise of the Option, or any part
thereof, Employee may incur certain liabilities for federal, state or local
taxes and the Company may be required by law to withhold such taxes for payment
to taxing authorities. Upon determination by the Company of the amount of taxes
required to be withheld, if any, with respect to the shares to be issued
pursuant to the exercise of the Option, Employee shall pay to the Company by
check by authorizing the Company to withhold from monies owing by the Company to
Employee or in shares of Stock owned by Employee an amount equal to the amount
of any taxes which the Company is required to withhold with respect to such
Stock.
In the event the Company becomes a reporting Company under the Exchange
Act, Employee may pay taxes with shares of stock owned by Employee. Payment of
taxes with
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shares of Stock owned by Employee shall be made by assigning and delivering such
shares to the Company. Such shares shall be valued at Fair Market Value on the
business day coinciding with or immediately preceding the date on which such
shares are assigned or delivered. Except as otherwise provided by law, any taxes
which are required to be withheld with respect to an exercised Option may also
be paid by Employee directing the Company to withhold from the shares of Stock
that would otherwise be issued pursuant to the Option, that number of shares
having a Fair Market Value on the date the Option is exercised (the "Applicable
Date") equal to the taxes due. In the event of such an election, Employee shall
notify the Company in writing of his intent to do so and shall receive the
number of shares of Stock determined pursuant to the following formula.
Fair Market Value Taxes
Number = Number of x on Applicable Date Due
of Shares Subject -----------------------------------------
Shares to Award Fair Market Value on
Applicable Date
Authorization of Employee to the Company to withhold taxes pursuant to
this Paragraph 13 shall be in form and content acceptable to the Company.
Payment or authorization to withhold taxes by Employee shall be completed prior
to the delivery of any shares pursuant to this Option Agreement. An
authorization to withhold taxes pursuant to this provision shall be irrevocable
unless and until the tax liability of Employee has been fully paid.
14. Administration. This Agreement shall in all respects be
administered by the Compensation Committee of the Board of Directors of the
Company (the "Committee"). The Committee shall have the sole and complete
discretion with respect to all matters under this Agreement and decisions of the
majority of the Committee with respect to this Agreement shall be final and
binding upon Employee and the Company.
15. Continuation of Employment. This Agreement shall not be construed
to confer upon Employee any right to continue in the employ of the Company and
shall not limit the right of the Company, in its sole discretion, to terminate
the employment of Employee at any time.
16. Obligation to Exercise. Employee shall have no obligation to
exercise any option granted by this Agreement.
17. Governing Law. This Agreement shall be interpreted and administered
under the laws of the State of Nevada.
18. Amendment and Termination. Except as otherwise provided in this
Agreement, this Agreement may be amended or terminated only by a written
agreement executed by the Company and Employee. The Company may amend or
terminate this
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Agreement without the written consent of Employee to the extent necessary to
comply with applicable federal or state securities or other laws.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers "hereunto duly authorized, and Employee has hereunto
set his (her) hand as of the day and year first above written.
CITADEL COMMUNICATIONS
CORPORATION
By_______________________________________
Its____________________________________
ACCEPTANCE AND AGREED:
_______________________________________
The undersigned, as spouse of the grantee identified above, hereby confirms that
the community property of grantee identified above and of the undersigned is
subject to and bound by the agreement set forth above.
_______________________________________
Spouse of the grantee identified above
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