1
EXHIBIT 10.48
EMPLOYMENT AGREEMENT
BETWEEN
CHANCELLOR MEDIA CORPORATION
AND
JAMES E. DE CASTRO
This Employment Agreement (this "Agreement") is made and
entered into on May 18, 1998, to be effective as of April 17, 1998 (the
"Effective Date"), between Chancellor Media Corporation, a Delaware corporation
(the "Company"), Chancellor Media Corporation of Los Angeles, a Delaware
corporation ("Los Angeles") and James E. de Castro (the "Executive"), residing
at 1025 Seneca Road, Wilmette, Illinois 60091.
W I T N E S S E T H:
WHEREAS, the Company, Los Angeles and the Executive are
parties to an existing Employment Agreement dated as of September 4, 1997 (the
"Prior Employment Agreement"); and
WHEREAS, in connection with certain management changes at the
Company, the Company and the Executive desire to amend and restate in its
entirety the Prior Employment Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and obligations hereinafter set forth, the parties agree as
follows:
1. DEFINITIONS
The following terms used in this Agreement shall have the
meaning specified below unless the context clearly indicates the contrary:
"Annual Bonus" shall mean the annual incentive bonus payable
to the Executive described in Section 4.
"Average Bonus" shall mean the greater of (a) (i) the total of
the Annual Bonuses paid hereunder with respect to the Employment Term, divided
by (ii) the length of such portion of the Employment Term in years (including
fractions) as falls on or prior to the last December 31 thereof and (b) One
Million Six Hundred Thousand Dollars ($1,600,000).
"Base Salary" shall mean the annual base salary payable to the
Executive at the rate set forth in Section 4.
2
"Board" shall mean the Board of Directors of the Company.
"Broadcast Cash Flow" for any accounting period shall mean
station operating income for such accounting period for the stations owned or
operated by the Company as of the last day of such accounting period on a
consolidated basis excluding depreciation, amortization and corporate, general
and administrative expenses, calculated in a manner consistent with the
presentation of "broadcast cash flow" in the Company's periodic reports filed
with the Securities Exchange Commission.
"Broadcast Cash Flow Target" for any accounting period shall
mean one hundred five percent (105%) of the station operating income for the
corresponding accounting period falling twelve months earlier on a consolidated
basis, excluding depreciation, amortization and corporate, general and
administrative expenses, calculated in a manner consistent with the presentation
of "broadcast cash flow" in the Company's periodic reports filed with the
Securities Exchange Commission, with respect to the stations owned or operated
by the Company as of the last day of the accounting period for which the
Broadcast Cash Flow Target is calculated.
"Cause" shall mean the Executive's (a) habitual neglect of his
material duties or failure to perform his material obligations under this
Agreement, (b) refusal or failure to follow lawful directives of the Board, (c)
commission of an act of fraud, theft or embezzlement, or (d) conviction of a
felony or other crime involving moral turpitude; provided, however, that the
Company shall give the Executive written notice of any actions alleged to
constitute Cause under subsections (a) and (b) above, and the Executive shall
have a reasonable opportunity (as specified by the Compensation Committee) to
cure any such alleged Cause.
"Change in Control" shall mean (a) the sale, lease or other
transfer of all or substantially all of the assets of the Company to any person
or group (as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended); (b) the adoption by the stockholders of the Company of
a plan relating to the liquidation or dissolution of the Company; (c) the merger
or consolidation of the Company with or into another entity or the merger of
another entity into the Company or any subsidiary thereof with the effect that
immediately after such transaction the stockholders of the Company immediately
prior to such transaction (or their Related Parties) hold less than fifty
percent (50%) of the total voting power of all securities generally entitled to
vote in the election of directors, managers or trustees of the entity surviving
such merger or consolidation; (d) the acquisition by any person or group of more
than fifty percent (50%) of the voting power of all securities of the Company
generally entitled to vote in the election of directors of the Company; or (e)
the majority of the Board is composed of members who (i) have served less than
twelve (12) months and (ii) were not approved by a majority of the Board at the
time of their election or appointment.
2
3
"Change in Operations" shall mean a change in the business
operating strategies of the Company (e.g. material cost controls or other
material restrictions on the Company's ability to increase its gross revenues)
which are imposed upon the Executive without his consent, and, in his reasonable
judgement, are fundamentally different from the business operating strategies in
effect at the Company on the Effective Date; provided, however, any expansion of
the Company's business into other media businesses, including, without
limitation, radio stations in small- or medium-sized markets, television,
outdoor advertising, and international media opportunities, shall not constitute
a Change in Operations. Any dispute as to whether a Change of Operations has
occurred shall be resolved pursuant to Section 14.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Stock" shall mean $0.01 par value common stock of the
Company.
"Compensation Committee" shall mean the Compensation Committee
of the Board.
"Consumer Price Index" shall mean the Consumer Price Index for
All Urban Consumers (1982-84=100) for all cities as reported by the United
States Bureau of Labor Statistics.
"Contract Year" shall mean each twelve (12) consecutive month
period during the Employment Term which begins on the Effective Date and each
annual anniversary thereof.
"Employment Inducements" shall mean any compensation,
including, without limitation, signing bonuses and stock options, that are paid
or granted to senior officers of the Company in connection with such officers'
initial hiring by the Company, or in connection with any amendments to or
extensions of the term of such senior officers' employment agreements with the
Company.
"Employment Term" shall mean the period beginning on the
Effective Date and ending on the close of business on the effective date of the
Executive's termination of employment with the Company.
"Excise Tax" shall mean the taxes imposed by Code Section
4999.
"Expiration Date" shall have the meaning ascribed to such term
in Section 2.
3
4
"Good Reason" shall mean (a) the Company's material breach of
any provision hereof, (b) the Executive no longer directly reporting to Jeffrey
A. Marcus or Thomas O. Hicks, (c) any adverse change in the Executive's job
responsibilities, duties, functions, status, offices, title, perquisites or
support staff, (d) relocation of the Executive's regular work address by more
than ten (10) miles without his consent, (e) a Change in Operations, (f) the
Executive's failure, at any time, to be permitted to serve as a member of the
Board or (g) a Change in Control; provided, however, that the Executive shall
give the Company written notice of any actions (other than those set out in
subsections (e) or (g) above) alleged to constitute Good Reason and the Company
shall have a reasonable opportunity to cure any such alleged Good Reason.
"Option Agreement" shall mean the agreement between the
Executive and the Company pursuant to which any Option is granted to the
Executive.
"Option Plan" shall mean the 1998 Chancellor Media Corporation
Non-Qualified Stock Option Plan, as amended from time to time, and any successor
thereto, subject to obtaining stockholder's approval of the Option Plan (which
will be submitted to the Company's stockholders at the 1998 annual meeting of
stockholders with the recommendation of the Board).
"Options" shall mean the non-qualified stock options to be
granted to the Executive hereunder.
"Permanent Disability" shall mean the Executive's inability to
perform the duties contemplated by this Agreement by reason of a physical or
mental disability or infirmity which has continued for more than ninety (90)
working days (excluding vacation) in any twelve (12) consecutive month period as
determined by the Board. The Executive agrees to submit such medical evidence
regarding such disability or infirmity as is reasonably requested by the Board.
"Prior Employment Agreement" shall be as defined in the
Recitals to this Agreement.
"Related Parties" shall mean with respect to any person (a)
the spouse and lineal ascendants and descendants of such person, and any sibling
of any of such persons and (b) any trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or persons
beneficially holding an eighty percent (80%) or more controlling interest of
which consist of persons referred to in subsection (a) above.
"Termination of Employment" shall mean the first to occur of
the following events:
4
5
(a) the date of death of the Executive;
(b) the effective date specified in the Company's
written notice to the Executive of the termination of his employment as
a result of his Permanent Disability, which effective date shall not be
earlier than the ninety-first (91st) working day (excluding vacation)
following the commencement of the Executive's inability to perform his
duties hereunder;
(c) the effective date specified in the Company's
written notice to the Executive of the Company's termination of his
employment without Cause;
(d) the effective date specified in the Company's
written notice to the Executive of the Company's termination of his
employment for Cause;
(e) the effective date specified in the Executive's
written notice to the Company of the Executive's termination of his
employment for Good Reason;
(f) the effective date specified in the Executive's
written notice to the Company of the Executive's termination of his
employment without Good Reason; and
(g) the date the Executive's employment terminates
pursuant to Section 2.
"Termination without Cause" shall mean a termination by the
Company of the Executive's employment without Cause.
2. EMPLOYMENT
The Company agrees to continue the employment of the Executive, and the
Executive agrees to continue to provide services to the Company from the date of
this Agreement until the close of business on the fifth (5th) anniversary of the
Effective Date (the "Expiration Date"), unless the Executive's employment is
earlier terminated pursuant to a Termination of Employment. The Executive will
serve the Company subject to the general supervision, advice and direction of
the Board and the Chief Executive Officer and upon the terms and conditions set
forth in this Agreement.
5
6
3. TITLE AND DUTIES
(a) The Executive's job title shall be Senior Vice-President
and Chief Operating Officer of the Company. During the Employment Term the
Executive shall have primary executive authority over the Company's operations
in radio in all markets and such other authority and duties as are usual and
customary for such position, and shall perform such additional services and
duties as the Board may from time to time designate consistent with such
position. Throughout the Employment Term, the Company shall also nominate the
Executive to serve as a member of the Board and upon such nomination Executive
shall agree to so serve.
(b) The Executive shall report solely to the Chief Executive
Officer of the Company. All other senior radio operating executives of the
Company shall report directly to the Executive, and the Executive shall be
responsible for reviewing the performance of such senior radio operating
executives of the Company.
(c) The Executive shall devote his full business time and best
efforts to the business affairs of the Company; however, the Executive may
devote reasonable time and attention to:
(i) serving as a director of, or member of a
committee of the directors of, any not-for-profit organization or
engaging in other charitable or community activities; and
(ii) serving as a director of, or member of a
committee of the directors of, the corporations or organizations for
which the Executive presently serves in such capacity, and such other
corporations and organizations that the Board may from time to time
approve in the future.
4. COMPENSATION AND BENEFITS
(a) Base Compensation. During the Employment Term, the Company
shall pay the Executive, in installments according to the Company's regular
payroll practice, Base Salary at the annual rate of Nine Hundred Thousand
Dollars ($900,000) for the first (1st) Contract Year; and for each subsequent
Contract Year an amount equal to the product of
(i) the Base Salary for the immediately
preceding Contract Year; and
6
7
(ii) the ratio of the Consumer Price Index for
the last complete calendar month in such preceding Contract Year to the
Consumer Price Index for the same month in the year preceding such
preceding Contract Year.
(b) Annual Incentive Bonus. The Executive shall be entitled to
an Annual Bonus for each calendar year during which he is employed hereunder.
Such Annual Bonus for any such calendar year shall be equal to five percent (5%)
of the excess, if any, of Broadcast Cash Flow for the portion of such calendar
year during which the Executive is employed over the Broadcast Cash Flow Target
for such portion of such calendar year, but in no event more than Three Million
Dollars ($3,000,000) in any calendar year or, for the calendar year, if any, in
which this contract terminates, the product of Three Million Dollars
($3,000,000) and the fraction of such calendar year which precedes the date of
such termination. The Executive's Annual Bonus earned with respect to each
calendar year shall be paid at the same time as annual incentive bonuses with
respect to that calendar year are paid to other senior executives of the Company
generally, but in no event later than March 31 of the following calendar year.
(c) Stock Options.
(i) On the Effective Date and each of the
first four (4) anniversaries thereof on which the Executive remains
employed hereunder, the Executive shall be granted an Option to
purchase One Hundred Sixty Thousand (160,000) shares of Common Stock.
In the event the Executive's employment hereunder is terminated by the
Company without Cause or by the Executive for Good Reason prior to the
Expiration Date, the Executive shall be granted, as of the date of such
Termination of Employment, a number of Options equal to Eight Hundred
Thousand (800,000) minus the number of Options previously granted
pursuant to the immediately preceding sentence.
(ii) All Options described in paragraph (i)
shall be granted subject to the following terms and conditions: (A) the
Options shall be granted under and subject to the Option Plan; (B) the
exercise price of the Options shall be the last reported sale price of
the Common Stock on the Nasdaq National Market System (or other
principal trading market for the 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 on the date of grant; (D) each
Option shall be exercisable for the ten (10) year period following the
date of grant, subject, however, to such approval by the shareholders
of the Company as is sufficient to satisfy the requirements for listing
of the Common Stock on the Nasdaq National Market System; (E) each
Option shall be evidenced by, and subject to, an Option Agreement; and
(F) the number of shares granted shall be subject to adjustment for any
subsequent stock splits.
7
8
(iii) The Option Agreements shall specify that
the Options shall remain exercisable for the periods described in
paragraph (ii) above notwithstanding any Termination of Employment.
(d) Vacation. During each complete twelve (12) month period of
the Employment Term, the Executive shall be entitled to no fewer than four (4)
weeks of paid vacation (unless, based on his length of service with the Company
and his position with the Company, the Executive is entitled to a greater number
of weeks of paid vacation under the Company's generally applicable vacation
policy, as determined by the Compensation Committee).
(e) Employee Benefit Plans. During the Employment Term, the
Executive shall be entitled to participate in all pension, profit sharing and
other retirement plans, all incentive compensation plans and all group health,
hospitalization and disability insurance plans and other employee welfare
benefit plans in which other senior executives of the Company may participate on
terms and conditions no less favorable than those which apply to such other
senior executives of the Company.
(f) Company Payment of Health Benefit Coverage. During the
Employment Term, the Company shall pay the amount of premiums or other cost
incurred for coverage of the Executive and his eligible spouse and dependent
family members under the applicable Company health benefits arrangement
(consistent with the terms of such arrangement).
(g) Life Insurance Policy. In addition to the insurance
coverage contemplated by Section 4(e), during the Employment Term the Company
shall maintain in effect term life insurance coverage for the Executive with a
death benefit of at least Five Hundred Thousand Dollars ($500,000), subject to
the Executive's insurability at standard rates and with the beneficiary or
beneficiaries thereof designated by the Executive. Notwithstanding Section 9 of
this Agreement, such life insurance policy or policies may be assigned to a
trust for the benefit of any beneficiary designated by the Executive.
(h) Automobile and Parking Allowance; Other Benefits.
(i) During the Employment Term, the Company
shall either provide the Executive with, or pay or reimburse the
Executive for (A) his purchase or lease of an automobile of the size
and class of the Executive's current Company-provided automobile; and
(B) parking space at the Company's corporate office maintained in
Chicago, Illinois
(ii) During the Employment Term, the Company
shall provide the Executive with, or pay or reimburse the Executive
for, the cost incurred for
8
9
membership of the Executive and his spouse and dependent family members
in the athletic club of Executive's choosing and in the country club of
Executive's choosing.
(i) Most Favored Benefits. If the Company shall provide
employment related benefits (including, without limitation, benefits of the type
referred to by clauses (a) through (h) of this Section 4) in an aggregate amount
greater than or on more favorable terms and conditions (on an aggregate basis)
as are granted to any other senior executive of the Company (except for
Employment Inducements and benefits provided to the Chief Executive Officer of
the Company), the Executive shall be provided such benefits in substantially
comparable amount and/or under the substantially comparable terms and
conditions, as applicable, on an aggregate basis.
(j) Execution Bonuses. The Executive shall be paid or granted,
as the case may be, the following Employment Inducements in connection with the
execution of this Agreement, and in lieu of any and all rights under the Prior
Employment Agreement:
(i) Within fifteen (15) days after the
execution and delivery of this Agreement, the Company shall pay to the
Executive a one-time execution bonus in the gross amount of One Million
Dollars ($1,000,000).
(ii) Within thirty (30) days after the
execution and delivery of this Agreement, the Company shall make a
one-time cash payment to the Executive in a gross amount such that the
net payments retained by the Executive after payment of any Excise Tax
with respect to such payment shall equal Five Million Dollars
($5,000,000).
(iii) The Executive shall be granted an option
to purchase Eight Hundred Thousand (800,000) shares of Common Stock
(collectively, the "Execution Options"), subject to the following terms
and conditions: (A) the Execution Options shall be granted under and
subject to the Option Plan; (B) the exercise price of the Execution
Options shall be $42.125 per share (the price per share at the close of
trading on April 28, 1998); (C) the Executive Options shall be vested
on the date of grant; (D) each Executive Option shall be exercisable
for the ten (10) year period following the date of grant; and (E) each
Executive Option shall be evidenced by, and subject to, an Option
Agreement.
5. REIMBURSEMENT OF EXPENSES
In addition to the compensation provided for under Section 4
hereof, upon submission of proper vouchers, the Company will pay or reimburse
the Executive for all
9
10
normal and reasonable travel and entertainment expenses incurred by the
Executive during the Employment Term in connection with the Executive's
responsibilities to the Company.
6. TERMINATION BENEFITS
(a) Upon the termination of the Executive's employment with
the Company for any reason, the Company shall provide the Executive (or, in the
case of his death, his estate or other legal representative), (i) any Annual
Bonus earned but not yet paid with respect to the preceding calendar year, (ii)
all benefits due him under the Company's benefits plans and policies for his
services rendered to the Company prior to the date of such termination
(according to the terms of such plans and policies), (iii) not later than ninety
(90) days after such termination, in a lump sum, all Base Salary earned through
the date of such termination, and (iv) not later than ninety (90) days after
such termination, in a lump sum, any Annual Bonus earned with respect to that
portion of the calendar year prior to such termination..
(b) In the event that the Executive's employment hereunder is
terminated by the Company without Cause or by the Executive for Good Reason (but
not by reason of expiration or non-renewal of this Agreement), and subject to
the last sentence of this subsection (b), the Company shall make a one-time cash
payment to the Executive in a gross amount such that the net payments retained
by the Executive after payment of any applicable Excise Tax with respect to such
payment shall equal Five Million Dollars ($5,000,000). Such payment shall be
made at the time of any such termination without Cause or within thirty (30)
days of any such resignation for Good Reason. Such payment shall be in full
satisfaction of all obligations of the Company to Executive hereunder (other
than those obligations set forth in subsection (a)) and shall be conditioned on
Executive giving a general release of the Company and affiliates in the form
used generally by the Company in the case of the termination of employment of
senior executives.
(c) (i) In the event that the Executive elects to terminate
his employment hereunder other than for Good Reason, the Company, in
consideration for the Executive's agreement in Section 7(b), shall
continue to pay him his Base Salary as set forth in Section 4(a)
through the fifth (5th) anniversary of the Effective Date.
(ii) In addition, in such event, the Company may, by
written notice to the Executive given no later than fifteen (15) days
following his termination of employment, elect to require the Executive
to observe the provisions of Section 7(c) hereof. In such event, the
Company shall, on the last day of each calendar year through December
31, 2002 make a payment to him
10
11
equal to his Average Bonus, and on the last day of the calendar year
ending December 31, 2003 make a payment to him equal to the product of
his Average Bonus and the fraction of such calendar year which precedes
the Expiration Date.
(d) In the event that the Executive's employment is terminated
by reason of expiration or non-renewal of this Agreement the Company shall make
a (1) one time cash payment to the Executive equal to two (2) times the amount
of his annual Base Salary payable for the Contract Year ending on (or in which
falls) the date of Termination of Employment. Such payment shall be made at the
time of such Termination of Employment. Such payment shall be in full
satisfaction of all obligations of the Company to the Executive hereunder (other
than those obligations set forth in subsection (a)) and shall be conditioned on
the Executive giving a general release of the Company and affiliates in the form
used generally by the Company in the case of the termination of employment of
senior executives.
(e) In the event of any Termination of Employment, the
Executive shall not be required to seek other employment to mitigate damages,
and any income earned by the Executive from other employment or self-employment
shall not be offset against any obligations of the Company to the Executive
under this Agreement.
7. PROTECTED INFORMATION; PROHIBITED SOLICITATION
(a) The Executive hereby recognizes and acknowledges that
during the course of his employment by the Company, the Company will furnish,
disclose or make available to the Executive confidential or proprietary
information related to the Company's business, including, without limitation,
customer lists, ideas and formatting and programming concepts and plans, that
such confidential or proprietary information has been developed and will be
developed through the Company's expenditure of substantial time and money, and
that all such confidential information could be used by the Executive and others
to compete with the Company. The Executive hereby agrees that all such
confidential or proprietary information shall constitute trade secrets, and
further agrees to use such confidential or proprietary information only for the
purpose of carrying out his duties with the Company and not to disclose such
information unless required to do so by subpoena or other legal process. No
information otherwise in the public domain (other than by an act of the
Executive in violation hereof) shall be considered confidential.
The Executive further agrees that all memoranda, notices,
files, records and other documents concerning the business of the Company, made
or compiled by the Executive during the period of his employment or made
available to him, shall be the Company's property and shall be delivered to the
Company upon its request therefor and in any event upon the termination of the
Executive's employment with the Company, provided, however, that the
11
12
Executive shall be permitted to retain copies of personal correspondence
generated or received by him during the Employment Term, subject to the use
restrictions of this Section 7(a).
(b) The Executive hereby agrees, in consideration of his
employment hereunder and in view of the confidential position to be held by the
Executive hereunder, that after any Termination of Employment, and through the
Expiration Date the Executive will not directly or indirectly induce any
employee of any of the Protected Companies (as defined below) to terminate such
employment or to become employed by any other radio broadcasting station.
(c) Should the Company make the election set forth in Section
6(c)(ii), the Executive further agrees that, from and after the Termination of
Employment and through the Expiration Date, he shall not be employed by or
perform activities on behalf of, or have an ownership interest in, (i) any radio
or television broadcasting station serving the same "Area of Dominant Influence"
(as reported by Arbitron) as any of the radio or television broadcasting
stations owned by the Company or its subsidiaries or affiliates, or the
subsidiaries or affiliates of any of the Company's direct or indirect
stockholders owning more than twenty percent (20%) of the Company (collectively
the "Protected Companies"), or (ii) 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, outdoor advertising or
related business activities in which the Company and its subsidiaries or the
Protected Companies have significant involvement (collectively, the "Competing
Business Areas"), in each case at the effective time of such Termination of
Employment (other than beneficial ownership of up to five percent (5%) of the
outstanding voting stock of a publicly traded company that owns such a
competitor).
(d) The restrictions in this Section 7, to the extent
applicable, shall survive the termination of this Agreement and shall be in
addition to any restrictions imposed upon the Executive by statute or at common
law.
(e) The parties hereby acknowledge that the restrictions in
this Section 7 have been specifically negotiated and agreed to by the parties
hereto and are limited only to those restrictions necessary to protect the
Protected Companies from unfair competition. The parties hereby agree that if
the scope or enforceability of any provision, paragraph or subparagraph of this
Section 7 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 7 is separable from every
other provision, paragraph, and subparagraph and constitutes a separate and
distinct covenant. The Executive acknowledges that the Protected Companies
operate in major and medium sized markets throughout the
12
13
United States and that the effect of Section 7(c) may be to prevent him from
working in the Competing Business Areas after his termination of employment
hereunder.
8. INJUNCTIVE RELIEF
The Executive hereby expressly acknowledges that any breach or
threatened breach by the Executive of any of the terms set forth in Section 7 of
this Agreement may result in significant and continuing injury to the Company,
the monetary value of which would be impossible to establish. Therefore, the
Executive agrees that the Company shall be entitled to apply for injunctive
relief in a court of appropriate jurisdiction. The provisions of this Section 8
shall survive the Employment Term.
9. PARTIES BENEFITED; ASSIGNMENTS
This Agreement shall be binding upon the Executive, his heirs
and his personal representative or representatives, and upon the Company and Los
Angeles and their respective successors and assigns. Neither this Agreement nor
any rights or obligations hereunder may be assigned by the Executive, other than
by will or by the laws of descent and distribution.
10. NOTICES
Any notice required or permitted by this Agreement shall be in
writing, sent by registered or certified mail, return receipt requested,
addressed to the Board and the Company at its then principal office, or to the
Executive at the address set forth in the preamble, as the case may be, or to
such other address or addresses as any party hereto may from time to time
specify in writing for the purpose in a notice given to the other parties in
compliance with this Section 10. Notices shall be deemed given when received.
11. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
13
14
12. INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES
The Company shall indemnify the Executive to the fullest
extent permitted by the laws of the State of Delaware, as in effect at the time
of the subject act or omission, and shall advance to the Executive reasonable
attorneys' fees and expenses as such fees and expenses are incurred (subject to
an undertaking from the Executive to repay such advances if it shall be finally
determined by a judicial decision which is not subject to further appeal that
the Executive was not entitled to the reimbursement of such fees and expenses)
and he will be entitled to the protection of any insurance policies the Company
may elect to maintain generally for the benefit of its directors and officers
("Directors and Officers Insurance") against all costs, charges and expenses
incurred or sustained by him in connection with any action, suit or proceeding
to which he may be made a party by reason of his being or having been a
director, officer or employee of the Company or any of its subsidiaries or his
serving or having served any other enterprise as a director, officer or employee
at the request of the Company (other than any dispute, claim or controversy
arising under or relating to this Agreement). The Company covenants to maintain
during the Employment Term for the benefit of the Executive (in his capacity as
an officer and director of the Company) Directors and Officers Insurance
providing benefits to the Executive no less favorable, taken as a whole, than
the benefits provided to the Executive by the Directors and Officers Insurance
maintained by the Company on the date hereof; provided, however, that the Board
may elect to terminate Directors and Officers Insurance for all officers and
directors, including the Executive, if the Board determines in good faith that
such insurance is not available or is available only at unreasonable expense.
13. REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE
The Executive represents and warrants to the Company that (a)
the Executive is under no contractual or other restriction which is inconsistent
with the execution of this Agreement, the performance of his duties hereunder or
the other rights of Company hereunder, and (b) the Executive is under no
physical or mental disability that would hinder the performance of his duties
under this Agreement.
14. DISPUTES
Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall, at the election and upon
written demand of either the Executive or the Company, be finally determined and
settled by arbitration in the city of the Company's headquarters in accordance
with the rules and procedures of the American Arbitration Association, and
judgment upon the award may be entered in any court having
14
15
jurisdiction thereof. The Company shall pay the costs and expenses of such
arbitration and the fees of the Executive's counsel and experts unless the
finder of fact determines that the Company is the prevailing party in such
arbitration.
15. FACILITY OF PAYMENT
All cash payments to be made by the Company to or on behalf of
the Executive hereunder shall be an obligation of and made by Los Angeles.
16. PRIOR EMPLOYMENT AGREEMENT
This Agreement shall supersede and replace in its entirety the
Prior Employment Agreement and, except as specifically described herein, all of
the Executive's and the Company's rights and obligations under the Prior
Employment Agreement are extinguished upon the effectiveness of this Agreement,
and the Executive acknowledges and agrees that he shall have no rights under the
Prior Employment Agreement, including, without limitation, any rights under
Section 6 of the Prior Employment Agreement. The Executive hereby withdraws any
and all termination notices previously delivered in connection with the Prior
Employment Agreement.
17. MISCELLANEOUS
The provisions of this Agreement shall survive the termination
of the Executive's employment with the Company. This Agreement contains the
entire agreement of the parties relating to the subject matter hereof. This
Agreement supersedes any prior written or oral agreements or understandings
between the parties relating to the subject matter hereof. No modification or
amendment of this Agreement shall be valid unless in writing and signed by or on
behalf of the parties hereto. A waiver of the breach of any term or condition of
this Agreement shall not be deemed to constitute a waiver of any subsequent
breach of the same or any other term or condition. This Agreement is intended to
be performed in accordance with, and only to the extent permitted by, all
applicable laws, ordinances, rules and regulations. If any provision of this
Agreement, or the application thereof to any person or circumstance, shall, for
any reason and to any extent, be held invalid or unenforceable, such invalidity
and unenforceability shall not affect the remaining provisions hereof and the
application of such provisions to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The compensation
provided to the Executive pursuant to this Agreement shall be subject to any
withholdings and deductions required by any applicable tax laws. Any amounts
payable under this Agreement to the Executive after the death of the
15
16
Executive shall be paid to the Executive's estate or legal representative. The
headings in this Agreement are inserted for convenience of reference only and
shall not be a part of or control or affect the meaning of any provision hereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
16
17
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above.
CHANCELLOR MEDIA CORPORATION
CHANCELLOR MEDIA CORPORATION OF
LOS ANGELES
By: /s/ THOMAS O. HICKS
------------------------------------
Thomas O. Hicks
Chairman of the Board
Interim President and Chief Executive Officer
/s/ JAMES E. DE CASTRO
---------------------------------------
James E. de Castro
17