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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into effective
as of the 1st day of January, 1997, by and between PAUL D. STONE, an individual
("EXECUTIVE"), and CAPSTAR BROADCASTING PARTNERS, INC. (the "COMPANY").
In consideration of the covenants and conditions contained herein, the
Company and Executive agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive, and Executive
hereby accepts such employment. During the term of this Agreement, Executive
shall serve as Chief Financial Officer and Executive Vice President of the
Company. Executive shall serve under the direction of the Company's Chairman of
the Board (the "CHAIRMAN") and Board of Directors (the "BOARD"), devoting his
full working time and attention to performing such duties as the Chairman of
the Board may specify, working diligently, faithfully, loyally, and to the best
of his ability, experience and talent, to help accomplish the goals of the
Company, as set forth by the Chairman and the Board.
2. TERM OF AGREEMENT. The term of this Agreement shall commence on
January 1, 1997 and continue until December 31, 2001, unless sooner terminated
or renewed in accordance with this Agreement. This Agreement shall
automatically renew for successive one (1) year terms unless either party gives
the other written notice of its intention not to so renew at least ninety (90)
days prior to the date this Agreement would otherwise expire.
3. LOCATION OF SERVICES. Executive's services under this Agreement
shall be performed primarily at the Company's headquarters in Austin, Texas.
4. COMPENSATION.
4.1 BASE SALARY. The Company shall pay Executive an annual Base
Salary (herein so called) of $200,000. The Base Salary shall be paid bi-monthly
in accordance with the customary payroll practices of the Company from time to
time in effect. No less frequently than annually, the Board shall review
Executive's Base Salary and increase it as it deems appropriate. However, the
Company agrees that, at a minimum, the Base Salary will be increased annually
by an amount equal to the percentage increase, if any, in the Consumer Price
Index (as published by the United States Department of Labor with respect to
the Austin, Texas metropolitan area) during the preceding calendar year.
4.2 BONUS. Executive shall be entitled to receive such annual cash
bonuses as the Board may determine. The extent to which Executive will be
entitled to an annual cash bonus will be based upon two factors: first, and
most importantly, individual job performance; and secondly, the attainment by
the Company of reasonable broadcast cash flow projections established annually
by the Board.
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5. BENEFITS.
5.1 GENERAL. Executive shall be entitled to all fringe benefits and
perquisites that the Company may make available from time to time for all
senior executive employees. Without limitation, such fringe benefits and
perquisites shall include those available under any health and benefits
package, life insurance and disability programs, and participation in any
incentive, stock option and employee benefits plan or program designed for
senior executive employees. Executive shall be entitled to paid vacation in
accordance with the Company's standard employment policies and practices for
senior executive employees. Executive shall receive such additional fringe
benefits, if any, as the Board shall determine.
5.2 BUSINESS EXPENSES. The Company shall reimburse Executive for
all reasonable expenses incurred by Executive in the performance of Executive's
duties, subject to compliance with the expense reimbursement policies
established by the Company.
5.3 AUTOMOBILE ALLOWANCE. Executive shall furnish his own
automobile in the performance of services required by him under this Agreement,
and the Company shall pay Executive $850 per month as an automobile allowance.
5.4 RELOCATION EXPENSES. The Company shall pay the reasonable
expenses incurred by Executive in (a) commuting from Dallas to Austin until the
earlier of (i) December 31, 1997, or (ii) the date on which Executive relocates
his family to Austin, and (b) relocating his family from Dallas to Austin.
5.5 COUNTRY CLUB. The Company shall pay (a) the initiation fee (up
to $15,000) for Executive to join a country club in the Austin, Texas area, and
(b) Executive's regular monthly dues at such club.
5.6 STOCK OPTIONS. The Company will grant to Executive tax
qualified incentive stock options to purchase that number of shares of common
stock of the Company which is equal to or greater than 60% of the total number
of shares covered by options issued to its Chairman, R. Steven Hicks, under the
Company's initial stock option plan.
5.7 TERMINATION OF BENEFITS. Except as may be provided in any
separate agreement between the Company and Executive, all unvested benefits
provided under this Section 5 shall terminate concurrently with termination of
Executive's employment hereunder for any reason whatsoever. Nothing herein
shall vest any rights in any profit sharing or bonus plans, general expense or
automotive reimbursements, and similar fringe benefits which the Company may
provide, if any, beyond the date on which Executive's employment is terminated
for any reason.
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6. TERMINATION OF EMPLOYMENT.
6.1 TERMINATION FOR CAUSE. Notwithstanding any other provision of
this Agreement, Executive's employment with the Company may be terminated for
cause at any time by the Company, upon reasonable notice to Executive. For
purposes of this Agreement, "cause" shall mean Executive's (a) gross or
habitual failure to perform Executive's obligations pursuant to the terms of
this Agreement and such performance failure is not corrected within thirty (30)
days after written notice thereof by the Board to Executive; or (b) conduct
amounting to fraud or dishonesty against the Company; or (c) a conviction or
plea of guilty or nolo contendere to a felony or a crime involving dishonesty
against the Company.
6.2 TERMINATION WITHOUT CAUSE. The Company may terminate
Executive's employment under this Agreement without cause at any time upon
written notice to Executive.
6.3 TERMINATION FOR DEATH OR DISABILITY. Employment hereunder shall
automatically terminate upon Executive's death or disability. Disability, for
purposes of this Agreement, shall mean a physical or mental disability that
renders it impossible or impracticable for Executive to perform his duties
under this Agreement at the level he is capable of performing them at the date
of this Agreement for a continuous period of ninety (90) days or more.
6.4 VOLUNTARY TERMINATION. Executive may terminate this Agreement
upon thirty (30) days' written notice to the Company; provided, however, that
if prior notice is given, the Company may, at its sole discretion upon receipt
of such notice, require Executive to terminate at any time in advance of the
proposed termination date so long as the Company pays Executive salary for at
least one (1) month after such termination notice by Executive is received by
the Company.
7. POST-TERMINATION COMPENSATION.
7.1 TERMINATION BY THE COMPANY FOR CAUSE. Notwithstanding any other
provision of this Agreement to the contrary, if Executive's employment is
terminated for cause pursuant to Section 6.1, the Company shall make no further
salary payments except those earned prior to the date of termination and shall
make no further bonus payments.
7.2 TERMINATION BY THE COMPANY WITHOUT CAUSE. If the Company
terminates this Agreement without cause as defined in Section 6.2 hereof, then
(a) all of Executive's stock options shall immediately vest, and (b) the
Company shall pay Executive severance pay equal to twenty-four (24) months'
Base Salary. The payment described in this Section 7.2 shall be made to the
Executive in a lump sum within thirty (30) days after such termination without
any obligation on Executive's part to render services and without regard to
whether he receives compensation from any other source after the effective date
of the termination of Executive's employment, and such payment is in full
settlement of all of the obligations of the Company hereunder.
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7.3 TERMINATION BY EXECUTIVE'S DEATH OR DISABILITY. If employment
shall terminate by reason of Executive's death or disability, the Company shall
pay Executive or Executive's estate severance equal to twelve (12) months' Base
Salary, payable in a lump sum within thirty (30) days after such termination.
7.4 VOLUNTARY TERMINATION. If Executive terminates this Agreement,
the Company shall make no further salary payments except those earned prior to
the date of termination and shall make no further bonus payments.
8. NONCOMPETITION. Until one (1) year after termination of Executive's
employment with the Company, Executive shall not (a) either directly or
indirectly, carry on, engage in or have any interest in any business that
competes with the Company, excepting ownership by Executive of no more than one
percent (1%) of the publicly traded common stock of any corporation, (b)
without the express written consent of the Company, accept employment with, or
in any other manner agree to provide, for compensation, services for any other
person or entity that competes with the Company, or (c) materially disrupt,
damage, impair or interfere with the business of the Company, whether by way of
interfering with or soliciting its employees, disrupting its relationship with
customers, agents, representatives or vendors, or otherwise. The parties hereto
specifically acknowledge and agree that the remedy at law for any breach of
this Section 8 will be adequate and that the Company, in addition to any other
relief available to it, shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damage.
9. CONFIDENTIALITY. Executive agrees that he shall not, during his
employment with the Company or any time after the termination of this
employment with the Company, use or disclose to any third party, other than
during the proper performance of this duties hereunder, any of the trade
secrets, confidential dealings, or other confidential information concerning
the business, finances, transactions, or affairs of the Company.
10. INDEMNIFICATION. The Company will indemnify, defend and hold
Executive harmless from and against any and all loss, liability, cost and
expense (including attorneys' fees and court costs) arising out of or relating
to activities of Executive performed within the scope of Executive's employment
hereunder, excluding Executive's gross negligence or willful misconduct.
11. ARBITRATION. Either the Company or Executive may require that any
dispute under this Agreement be submitted to arbitration pursuant to this
Section 11. To the extent the provisions of this Section 11 vary from or are
inconsistent with the Commercial Arbitration Rules of the American Arbitration
Association or any other arbitration tribunal, the provisions of this Section
11 shall govern. All arbitrations shall occur at a location in Austin, Texas
chosen by the arbitrators and shall be conducted pursuant to the Commercial
Arbitration Rules of the American Arbitration Association (or any successor
organization, of if no such successor organization exists, then from an
organization composed of persons of similar professional qualifications). The
party desiring arbitration shall give notice that effect to the other party and
simultaneously therewith also shall give notice to the director of the Dallas,
Texas regional office of the American Arbitration Association
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(or any successor organization, or if no such successor organization exists,
then to an organization composed of persons of similar professional
qualifications), requesting such organization to select, as soon as possible
but in any event within the next thirty (30) days, three (3) arbitrators with,
if reasonably possible, recognized expertise in the subject matter of the
arbitration. At the request of either party, the arbitrators shall authorize
the service of subpoenas for the production of documents or attendance of
witnesses. Within thirty (30) days after their appointment, the arbitrators so
chosen shall hold a hearing at which each party may submit evidence, be heard
and cross-examine witnesses, with each party having at least ten (10) days
advance notice of the hearing. The hearing shall be conducted such that each of
the Company and Executive shall have reasonably adequate time to present oral
evidence or argument, but either party may present whatever written evidence it
deems appropriate prior to the hearing (with copies of any such written
evidence being sent to the other party). In the event of the failure, refusal
or inability of any arbitrator to act, a new arbitrator shall be appointed in
his stead, which appointment shall be made in the same manner as hereinbefore
provided. The decision of the arbitrators so chosen shall be given within a
period of thirty (30) days after the conclusion of such hearing, and shall be
accompanied by conclusions of law and findings of fact. The decision in which
any two arbitrators so appointed and acting hereunder concur shall in all cases
be binding and conclusive upon the parties and shall be the basis for a
judgment entered in any court of competent jurisdiction. The fees and expenses
of arbitration under this Section 11 shall be apportioned to the Company and
Executive in such a manner as decided by the arbitrators. The Company and
Executive may at any time by mutual written agreement discontinue arbitration
proceedings and themselves agree upon any such matter submitted to arbitration.
12. POWER AND AUTHORITY. Each party executing this Agreement hereby
covenants, represents and warrants that such party has full power and authority
to execute this Agreement, that no other consents or approvals of any other
third parties are required or necessary for this Agreement to be so binding and
that this Agreement shall be fully enforceable in accordance with its terms.
13. HEIRS, ADMINISTRATORS AND SUCCESSORS. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and be binding upon, the
heirs, administrators and successors of each of the parties hereto.
14. NONASSIGNABILITY. The Company may assign the benefit of this
Agreement to any successor in interest that results from a merger,
reorganization or acquisition. Otherwise, no party to this Agreement may assign
any right hereunder or delegate any duty hereunder without the written consent
of the other party affected by such assignment or delegation.
15. NO ORAL MODIFICATION. This Agreement may only be changed or
modified and any provisions hereof may only be waived in or by a writing signed
by a party against whom enforcement of any waiver, change or modification is
sought.
16. GOVERNING LAW. This Agreement shall be deemed to be a contract
made under, and shall be construed in accordance with, the laws of the State of
Texas.
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17. SEVERABILITY. If any portion of this Agreement shall be held
illegal, unenforceable, void or voidable by any court, each of the remaining
terms hereof shall nevertheless remain in full force and effect as a separate
contract.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding of the parties pertaining to the matters set forth herein,
and all prior agreements, understandings or representations are hereby
terminated and canceled in their entirety and are of no further force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above indicated.
COMPANY:
CAPSTAR BROADCASTING PARTNERS, INC.
By: /s/ R. STEVEN HICKS
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R. Steven Hicks
Chairman/CEO
EXECUTIVE:
/s/ PAUL D. STONE
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Paul D. Stone
Address: 1002 Forestwood Lane
Coppell, Texas 75019
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