SECURITIES
AND EXCHANGE
COMMISSION
Washington,
D.C.
20549
FORM
8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF
THE SECURITIES EXCHANGE ACT OF
1934
Date
of Report: April 16, 2008 (Date
of earliest event reported)
Commission
File No.:
0-25969
RADIO
ONE, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of
incorporation
or organization)
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52-1166660
(I.R.S.
Employer Identification No.)
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5900
Princess Garden Parkway,
7th
Floor
Lanham,
Maryland 20706
(Address
of principal executive offices)
(301) 306-1111
Registrant’s
telephone number, including area code
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
1.01.
Entry Into Material
Definitive
Agreement
On April 16, 2008, Radio One, Inc. (the “Company”) executed
employment agreements (together, the “Employment Agreements”) with Catherine L.
Hughes, the Company’s Founder, and Alfred C. Liggins, III, the Company’s Chief
Executive Officer and President. The Company also executed an
amendment (the “Vilardo Amendment”) to the employment agreement of Linda J.
Vilardo, the Company’s Chief Administrative Officer.
Hughes
Employment
Agreement
The Hughes Employment Agreement is a three year agreement that provides for
an
annual base salary of $750,000 that may be increased in the discretion of
the
compensation committee. Ms. Hughes is also eligible for an annual
incentive bonus to be awarded in the sole discretion of the compensation
committee, up to a maximum of $250,000. The Company will grant to Ms.
Hughes options to purchase 600,000 shares of Class D common stock of the
Company. Such options will vest ratably over the initial term of the
agreement. The Company will also grant Ms. Hughes 150,000 shares of
Class D common stock of the Company, subject to vesting and transfer
restrictions. These shares will vest ratably over the initial term of
the agreement. All restricted stock vests upon a change of
control. Ms. Hughes will receive standard retirement, welfare and
fringe benefits, as well as vehicle and wireless communication allowances
and
financial manager services.
Upon
termination without cause or for good reason within two years following a
change
of control Ms. Hughes will receive an amount equal to three times the sum
of (1)
her annual base salary and (2) the average of her last three annual incentive
bonus payments, in a cash lump sum within five days of such termination,
a
pro-rated annual bonus for the year of termination, and continued welfare
benefits for three years.
Liggins
Employment
Agreement
The
Liggins Employment Agreement is also a three year agreement and provides
for an
annual base salary of $980,000 that may be increased in the discretion of
the
compensation committee. Mr. Liggins is also eligible for an annual
incentive bonus comprised of two parts -- 50% based on achievement of
pre-established individual and Company performance goals (as determined by
compensation committee in consultation with Mr. Liggins), and 50% determined
by
the compensation committee. The annual incentive award may not in the
aggregate exceed annual base salary. Mr. Liggins will also receive a
$1,000,000 “signing bonus” payable in cash within 60 days and subject to
reduction, payment in installments or delay necessitated by Company credit
agreements. This payment is intended to serve as a retroactive
compensation adjustment as it was determined that Mr. Liggins was underpaid
for
the last three years.
Mr. Liggins will also receive a make whole bonus of $4,800,000, payable in
cash
within 60 days and subject to reduction, payment in installments or delay
necessitated by Company credit agreements. The make-whole is
intended to compensate Mr. Liggins for losses associated with his past
employment contract.
In
recognition of his contributions in founding TV One, LLC (“TV One”), Mr. Liggins
will be eligible to receive an amount equal to eight percent (8%) of any
proceeds from distributions or other liquidity events in excess of the return
of
the Company’s aggregate investment in TV One (the “TV One
Award”). The Company’s obligation to pay the TV One Award will be
triggered (i) only after the Company’s recovery of the aggregate amount of its
capital contribution in TV One and (ii) only upon actual receipt of (A)
distributions of cash or marketable securities or (B) proceeds from a liquidity
event with respect to the Company’s membership interest in TV One.
The
Company will grant to Mr. Liggins options to purchase 1,150,000 shares of
Class
D common stock of the Company. Such options will vest ratably over
the initial term of the agreement. The Company will also grant Mr.
Liggins 300,000 shares of Class D common stock of the Company, subject to
vesting and transfer restrictions. These shares will vest ratably
over the initial term of the agreement. All restricted stock vests
upon a change of control. Mr. Liggins will receive standard
retirement, welfare and fringe benefits, as well as vehicle and wireless
communication allowances and financial manager services.
Upon
termination without cause or for good reason within two years following a
change
of control Mr. Liggins will receive an amount equal to three times the sum
of
(1) his annual base salary and (2) the average of his last three annual
incentive bonus payments, in a cash lump sum within five days of such
termination, a pro-rated annual bonus for the year of termination, and continued
welfare benefits for three years.
Vilardo
Amendment
Pursuant
to the Vilardo Amendment, the Company and Ms. Vilardo agreed that any payments
which may become due to the Ms. Vilardo in connection with her termination
of
employment and which may be subject to Internal Revenue Code Section 409A
and implementing regulations (the “409A Rules”), will be delayed for a six-month
period as necessary to enable such payments to be made without incurring
excise
taxes and/or penalties under the 409A Rules. The Vilardo Amendment also makes
certain other revisions to ensure administrative compliance with the 409A
Rules.
Copies
of the Employment Agreements and the Vilardo Amendment are attached to this
report on Form 8-K as Exhibits 10.1, 10.2 and 10.3 and the foregoing summaries
of their material terms are qualified in their entirety by reference to the
actual terms of the Employment Agreements and the Vilardo
Amendment.
Statements
in this Form 8-K which are other than historical facts are intended to be
“forward-looking statements” within the meaning of the Securities Exchange Act
of 1934, the Private Securities Litigation Reform Act of 1995 and other related
laws. While the Company believes such statements are reasonable, the
actual results and effects could differ materially from those currently
anticipated. In providing forward-looking statements, the Company is not
undertaking any duty or obligation to update these statements publicly as
a
result of new information, future events or otherwise.
ITEM
9.01.
Financial Statements
and
Exhibits.
(c) Exhibits
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Exhibit
Number
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Description
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10.1
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Employment
Agreement dated as of April 16, 2008 between Radio One, Inc. and
Catherine
L. Hughes
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10.2
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Employment
Agreement dated as of April 16, 2008 between Radio One, Inc. and
Alfred C.
Liggins, III
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10.3
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First
Amendment dated April 16, 2008 to the Amended and Restated Employment
Agreement between Radio One, Inc. and Linda J. Vilardo dated as
of October
31, 2000
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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RADIO
ONE, INC.
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/s/
Peter D. Thompson
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April
18, 2008
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Peter
D. Thompson
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Executive
Vice President and Chief Financial Officer
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EMPLOYMENT
AGREEMENT
BETWEEN
RADIO
ONE, INC.
AND
CATHERINE
L. HUGHES
Dated
as of April 16, 2008
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of
April 16, 2008, is made by and between Radio One, Inc., a Delaware corporation
(the “Company”), and
Catherine L. Hughes (the “Executive”).
In
consideration of the premises and mutual covenants herein contained, the Company
and the Executive hereby agree as follows:
1. Definitions.
“Affiliate”
shall
mean any
Person directly or indirectly controlling, controlled by, or under common
control with, the Company.
“Annual
Base Salary” shall
mean the annual base salary as described in Section 5.1 hereof.
“Annual
Incentive” shall have
the meaning set forth in Section 5.2 hereof.
“Board”
shall
mean the board
of directors of the Company.
“Cause”
shall
mean (i) the
commission by the Executive of a felony, fraud, embezzlement or an act of
serious, criminal moral turpitude which, in case of any of the foregoing, in
the
good faith judgment of the Board, is likely to cause material harm to the
business of the Company and the Company Affiliates, taken as a whole, provided, that in the absence
of a conviction or plea of nolo contendere, the Company
will have the burden of proving the commission of such act by clear and
convincing evidence, (ii) the commission of an act by the Executive constituting
material financial dishonesty against the Company or any Company Affiliate,
provided, that in the
absence of a conviction or plea of nolo contendere, the Company
will have the burden of proving the commission of such act by a preponderance
of
the evidence, (iii) the repeated refusal by the Executive to use her reasonable
and diligent efforts to follow the lawful and reasonable directives (in light
of
the terms of this Agreement) of the Board with respect to a matter or matters
within the control of the Executive, or (iv) the Executive’s willful gross
neglect in carrying out her material duties and responsibilities under this
Agreement, provided,
that unless the Board reasonably determines that a breach described in clause
(iii) or (iv) is not curable, the Executive will, subject to the following
proviso, be given written notice of such breach and will be given an opportunity
to cure such breach to the reasonable satisfaction of the Board within thirty
(30) days of receipt of such written notice, and, provided further, that the
Executive only will be entitled to cure two such defaults during the Term of
Employment.
“Change
of Control” shall be
deemed to have occurred in the event of a transaction or series of related
transactions pursuant to which any Person or group (as such term is defined
in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of Persons
(a) acquires, whether by merger, consolidation or transfer or issuance of
capital stock, capital stock of the Company (or any surviving or resulting
company), which together with stock held by such Person or group, constitutes
more than 50% of the voting power of the stock of the Company (or any surviving
or resulting company) or (b) acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such Person
or
Persons) assets from the Company that have a total gross fair market value
equal
to or more than 50% of the total gross fair market value of all of the assets
of
the Company immediately before such acquisition or acquisitions. For
purposes herein, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets. For purposes of
Section 6, a Change of Control shall not occur unless such transaction
constitutes a “change in ownership of a corporation”, a “change in effective
control of a corporation”, or a “change in ownership of a substantial portion of
a corporation’s assets” under Section 409A of the Code and the regulations
promulgated thereunder. Notwithstanding the foregoing, a Change of
Control shall not be deemed to have occurred if following a transaction, the
Executive and/or Alfred C. Liggins, III retain more than fifty percent (50%)
of
the voting power of the stock of the Company (or any surviving or resulting
company).
“Class
D Common Stock” shall
mean the Company’s class D common stock, par value $.001 per share.
“COBRA”
shall
mean the
requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of
similar state law.
“Code”
shall
mean the Internal
Revenue Code of 1986, as amended.
“Commencement
Date” shall have
the meaning set forth in Section 3 hereof.
“Common
Stock” shall mean all
classes of the Company’s common stock and any capital stock of the Company
distributed after the date of this Agreement with respect to shares of the
Company’s common stock by way of dividend, distribution, stock split, exchange,
conversion, merger, consolidation, reorganization or other
recapitalization.
“Company
Affiliate” shall mean
any Subsidiary of the Company.
“Compensation
Committee” shall mean
the
compensation committee of the Board.
“Competing
Business” shall
have the meaning set forth in Section 10.1 hereof.
“Competing
Market” shall have
the meaning set forth in Section 10.1 hereof.
“Confidential
Information”
shall have the meaning set forth in Section 8 hereof.
“Date
of Termination” shall
mean the date on which the Executive’s employment with the Company actually
terminates.
“Disability”
shall
mean the
Executive’s inability to render the services required under this Agreement by
reason of a physical or mental disability for ninety (90) days, which need
not
be consecutive, during any twelve (12) consecutive month period, and the
effective date of such Disability shall be the day next following such ninetieth
(90th)
day. A determination of Disability will be made by a physician
satisfactory to both the Executive and the Company; provided that if the
Executive and the Company cannot agree as to a physician, then each will select
a physician and such physicians shall together select a third physician, whose
determination as to Disability shall be completed within ten (10) days of the
date on which the disagreement between the Executive and the Company arose
and
the decision of such third physician will be final and binding on the Executive
and the Company. The Executive and the Company shall have the right
to present to such physician such information and arguments as each deems
appropriate, including the opinion of other physicians.
“ERISA”
shall
mean the
Employee Retirement Income Security Act of 1974, as amended.
“Fair
Market Value” shall mean
the closing price of a share of Common Stock on the applicable
date.
“Good
Reason” shall be deemed
to exist if, without the express written consent of the Executive, (a) the
Executive’s rate of Annual Base Salary (as provided in Section 5.1 of this
Agreement), including any increases, is reduced, (b) the Executive suffers
a
substantial reduction in her title, duties or responsibilities, (c) the Company
fails to pay the Executive’s Annual Base Salary when due or to pay any other
material amount due to the Executive hereunder within five (5) days of written
notice from the Executive, (d) the Company materially breaches this Agreement
(other than a breach described in the preceding clause (c)) and fails to correct
such breach within thirty (30) days after receiving the Executive’s demand that
it remedy the breach, or (e) the Company fails to obtain a satisfactory written
agreement from any successor to assume and agree to perform this Agreement,
which successor the Executive reasonably concludes is capable of performing
the
Company’s financial obligations under this Agreement.
“Initial
Restricted
Stock” shall have
the meaning set forth in Section 5.11(a) hereof.
“Limited
Amount” shall have
the meaning set forth in Section 6.6(a) hereof.
“Noncompete
Period” shall have
the meaning set forth in Section 10.1 hereof.
“Notice
of Termination” shall
have the meaning set forth in Section 6.5 hereof.
“Options”
shall
have the
meaning set forth in Section 5.10 hereof.
“Option
Shares” shall have the
meaning set forth in Section 5.10 hereof.
“Person”
shall
mean any
natural or legal person including any individual, partnership, joint venture,
corporation, association, joint stock company, limited liability company, trust,
unincorporated organization or government or any department or agency or
political subdivision thereof.
“Section
6.1 Severance Period”
shall have the meaning set forth in Section 6.1(a)(i) hereof.
“Section
6.2 Severance Period”
shall have the meaning set forth in Section 6.2(a)(v) hereof.
“Subsidiary”
shall
mean, with
respect to any Person, a corporation of which the securities having a majority
of the voting power in electing directors are, at the time of determination,
owned by such Person, directly or through one or more Subsidiaries.
“Term
of Employment” shall
have the meaning set forth in Section 3 hereof.
“Transfer”
shall
mean a sale,
transfer, assignment, pledge, hypothecation, mortgage or other disposition
(whether with or without consideration and whether voluntarily or involuntarily
or by operation of law) of any interest in any Option Shares or Common Stock;
except that a transfer or assignment to any trust established and maintained
for
the benefit of the Executive shall not be deemed a Transfer hereunder; provided, that such trust
agrees in writing to be bound by any transfer restrictions set forth
herein.
“Vehicle
Allowance” shall have
the meaning set forth in Section 5.7 hereof.
“Withholding
Amount” shall
have the meaning set forth in Section 5.11(b) hereof.
“Work
Product” shall have the
meaning set forth in Section 9 hereof.
2. Employment. During
the Term of Employment, subject to the terms and provisions set forth in this
Agreement, the Company shall employ the Executive as the Founder of the Company,
and the Executive hereby accepts such employment.
3. Term
of Employment. The
initial term of employment under this Agreement shall commence as of the date
hereof (the “Commencement
Date”) and, unless earlier terminated by the Company or the Executive
under Section 6 of this Agreement, shall continue until April 15, 2011 (the
“Term of
Employment”). Thereafter, the Term of Employment will be
extended automatically for additional one (1) year periods, unless either party
provides written notice of its/his intention not to renew to the other party
at
least sixty (60) days before the expiration of the initial or any renewal term
of this Agreement, as applicable.
4. Positions,
Responsibilities and Duties.
4.1 Duties. During
the Term of Employment, the Executive, as the Founder of the Company, shall
be
responsible, subject to the direction of the Board, for strategic leadership,
guidance, and promotion of the Company and for such other duties and functions
of a senior executive nature, commensurate with her founding status, title,
responsibility and remuneration as may be directed from time to time by the
Board. The Executive
shall report solely to the Board.
4.2 Attention
to Duties and Responsibilities. During
the Term of Employment, the Executive shall devote substantially all of her
business time to the business and affairs of the Company and shall use her
best
efforts, ability and fidelity to perform faithfully and efficiently her duties
and responsibilities.
5. Compensation
and Other
Awards.
5.1 Annual
Base Salary. Commencing
on the Commencement Date, as compensation for the services to be provided by
the
Executive under this Agreement, the Company shall pay the Executive an annual
base salary of Seven-Hundred Fifty Thousand Dollars ($750,000.00) (the “Annual Base
Salary”). The Executive’s Annual Base Salary shall be reviewed
by the Compensation Committee annually, and may be increased (but not decreased)
as the Compensation Committee determines appropriate. In making such
determination, the Compensation Committee may take into account: the salaries
of
chief executive officers of companies that are similar in nature and scope
to
the businesses conducted by the Company at such time; the Company’s financial
position and cash flow; and/or the impact of any such increase on the Company’s
loan covenants. Such Annual Base Salary shall be payable to the
Executive in equal installments at least twice per month in accordance with
the
Company’s regular payroll practice.
5.2 Annual
Incentive Compensation. With
respect to each calendar year ending during the Term of Employment, the
Executive shall have the opportunity to earn an annual incentive cash payment
(the “Annual
Incentive”) up to a maximum of Two-Hundred Fifty Thousand Dollars
($250,000). The Annual Incentive shall be determined by the
Compensation Committee in its sole discretion. The Annual Incentive
shall be due and payable by the Company on or before March 15 of the year
immediately following the year for which such Annual Incentive is
awarded.
5.2 Retirement
and Savings Plans. During
the Term of Employment and to the extent eligible, the Executive shall be
entitled to participate in all pension, retirement, savings and other employee
benefit plans and programs applicable to peer executives of the
Company.
5.4 Welfare
Benefit Plans and Perquisites. During
the Term of Employment and to the extent eligible, the Executive, the
Executive’s spouse, if any, and the Executive’s eligible dependents, if any,
shall be entitled to participate in and be covered by all welfare benefit plans
and programs, if any, and shall be entitled to receive such perquisites and
fringe benefits, if any, generally applicable to executives of the
Company.
5.5 Expense
Reimbursement. During
the Term of Employment, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
performing her duties and responsibilities hereunder in accordance with the
policies and procedures of the Company as in effect at the time the expense
was
incurred, as the same may be changed prospectively from time to
time. The amount of expenses eligible for reimbursement during any
calendar year shall not affect the expenses eligible for reimbursement in any
other calendar year, and the reimbursement of an eligible expense shall be
made
as soon as practicable after the Executive submits the request for such
reimbursement, but not later than December 31 following the calendar year in
which the expense was incurred.
5.6 Vacation
Benefits. During
the Term of Employment, the Executive shall be entitled to four (4) weeks paid
vacation annually to be taken at such times which do not materially interfere
with the operations of the Company. Any vacation not used by the
Executive during any calendar year during the Term of Employment shall
accumulate to the extent permitted by and in accordance with the Company policy
then in effect.
5.7 Vehicle
Allowance. During
the Term of Employment, (i) the Executive shall be entitled to use of an
automobile leased by the Company and (ii) the Company shall pay the cost of
any
and all applicable insurance coverage therefor and any other operating expenses
related to such automobile (the benefits provided in (i) and (ii) shall be
collectively referred to as the “Vehicle
Allowance”). The Executive acknowledges that the Company will
impute income to the Executive based on the portion of the Vehicle Allowance
that does not constitute an ordinary and necessary business expense of the
Company. During the Term of Employment, the monthly cost to the
Company of such Vehicle Allowance shall be at least equal to the monthly amount
being paid by the Company for the Executive’s automobile lease and applicable
insurance and operating expenses on the date of this Agreement. Upon
expiration of the Company’s lease, the Executive shall have the right to
purchase such vehicle in accordance with the terms of the Company’s lease
agreement for such vehicle.
5.8 Wireless
Communications Allowance. During
the Term of Employment, the Executive shall be entitled to use of a wireless
telephone and/or other wireless communications devices with all equipment and
service costs thereof to be borne by the Company.
5.9 Financial
Manager. During
the Term of Employment, the Company shall make available to the Executive the
services of a financial manager. The Executive acknowledges that the
Company will impute income to the Executive based on the services provided
by
the financial manager.
5.10 Stock
Options. Effective
as of the next monthly grant date under the Company’s equity compensation
policy following the Commencement Date, the Company shall grant to
the Executive options to purchase six hundred thousand (600,000) shares of
Class
D Common Stock (the “Options,” and the shares of
Class D Common Stock obtainable upon exercise of such Options, the “Option
Shares”). Notwithstanding the foregoing, Executive agrees that
the Options grant may be deferred until the month following the next monthly
grant (or to successive months) if, in the Compensation Committee’s sole
discretion, such a deferral is deemed necessary to comply with insider trading
rules and regulations. Except as set forth in this Section 5.10, all
terms and conditions of such Options (and such Option Shares) shall be set
forth
in the Company’s equity compensation plan and such documentation as the Company
may prescribe.
(a) The
price payable by the Executive for each Option Share shall be the Fair Market
Value of each Option Share on the date of grant as set forth in the option
agreement.
(b) The
Options to purchase Option Shares shall vest in accordance with the following
schedule:
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Vesting
Date
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Vested
Percentage of Options to Purchase Option
Shares
|
|||
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April
15, 2009
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33 1/3 | % | ||
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April
15, 2010
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66 2/3 | % | ||
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April
15, 2011
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100 | % | ||
(c) Notwithstanding
any other provision contained herein, upon a Change of Control, all of the
Executive’s Options shall become fully and immediately exercisable.
(d) Upon
termination of the Executive’s employment hereunder, any then unexercisable
Option shall expire and be immediately forfeited. The Executive’s
right to exercise any exercisable Option following termination of her employment
shall be governed in accordance with the terms of the Company’s equity
compensation plan; provided,
however, that if the Executive’s employment terminates for any reason
other than her death or Disability, any exercisable Option shall not also expire
and be forfeited until the ninetieth (90th)
day
following such termination.
(e) All
unexercised Options to acquire Option Shares shall expire on the tenth
anniversary of their respective dates of grant.
5.11 Restricted
Stock Awards.
(a) Effective
as of the next monthly grant date under the Company’s equity compensation policy
following the Commencement Date, the Company shall grant to the Executive one
hundred fifty thousand (150,000) shares of Class D Common Stock (in the
aggregate, the “Initial
Restricted Stock”) subject to certain vesting and transfer restrictions
set forth in this Section 5.11, the equity compensation plan and such
documentation as the Company may prescribe. Notwithstanding the
foregoing, Executive agrees that the Initial Restricted Stock grant may be
deferred until the month following the next monthly grant (or to successive
months) if, in the Compensation Committee’s sole discretion, such a deferral is
deemed necessary to comply with insider trading rules and
regulations. The Compensation Committee also may, in its sole
discretion, award additional shares of Class D Common Stock, subject to vesting
and transfer restrictions, to the Executive during each or any year occurring
during the Term of Employment, based upon the attainment of certain Company
performance goals during any such year. Such performance goals shall
be determined by the Compensation Committee in consultation with the Executive,
and shall be communicated to the Executive in writing as soon as reasonably
practicable following the Compensation Committee’s determination. The
Compensation Committee shall determine whether and to what extent the applicable
performance goals have been achieved. Any such additional grant of
restricted stock shall be subject to such terms and conditions as may be set
forth in the Company’s equity compensation plan and such documentation as the
Company may prescribe.
(b) The
Executive shall be responsible for the payment of any withholding tax
requirement arising from the vesting of the awards described in Section
5.11(a). The amount of withholding tax required with respect to the
Initial Restricted Stock award (the “Withholding Amount”) shall be
determined by the Chief Financial Officer, Controller or other appropriate
officer of the Company, and the Executive shall furnish such information and
make such representations as such officer requires to make such
determination. The Company shall notify the Executive of the
Withholding Amount and the Executive shall pay such Withholding Amount to the
Company, in cash, by certified cashier’s check, or by delivery of shares of
Company Common Stock owned by the Executive having a Fair Market Value equal
to
the Withholding Amount (which may include shares otherwise issuable to the
Executive upon vesting of the award). The Company shall remit the
Withholding Amount to the appropriate taxing authority or
authorities.
(c) The
Initial Restricted Stock shall vest in accordance with the following vesting
schedule:
|
Vesting
Date
|
Vested
Percentage of Shares of Initial Restricted
Stock
|
|||
|
April
15, 2009
|
33 1/3 | % | ||
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April
15, 2010
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66 2/3 | % | ||
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April
15, 2011
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100 | % | ||
Subsequent
awards described in Section 5.11(a) shall vest in accordance with the terms
of
the Company’s equity compensation plan and such documentation as the Company may
prescribe.
(d) The
Executive shall be entitled to receive, whether in the form of cash or stock,
dividends declared on any unvested Class D Common Stock granted pursuant to
this
Section 5.11 which shall be paid to the Executive on the date such dividends
are
paid to other holders of Class D Common Stock.
(e) Notwithstanding
any other provision contained herein, upon a Change of Control, all of the
Executive’s unvested Initial Restricted Stock and all unvested shares of other
awards granted under Section 5.11(a) shall immediately become fully
vested.
(f) During
the Term of Employment, the Executive may not Transfer any unvested Initial
Restricted Stock, or any unvested shares of other awards granted under Section
5.11(a). Any Transfer or attempted Transfer of any such unvested
share in violation of this Section 5.11(f) shall be null and void, and the
Company shall not record such Transfer on its books or treat any purported
transferee of such unvested share as the owner of such security for any
purpose.
6. Termination. The
Executive’s employment hereunder (and the Term of Employment) may be terminated
under the following circumstances:
6.1 Termination
by the Company Without
Cause or by Executive for Good Reason.
(a) Subject
to Section 6.2, in the event that the Company terminates the Executive’s
employment without Cause (which shall include a termination at the end of the
Term of Employment by reason of the Company’s non-renewal of the Agreement
pursuant to Section 3), or if the Executive terminates her employment for Good
Reason in accordance with Section 6.1(c) below, the Executive shall only be
entitled to:
(i) the
continuation of the Annual Base Salary at the rate then in effect (as provided
in Section 5.1 of this Agreement) on the Date of Termination for a period of
twelve (12) months commencing on such Date of Termination (the “Section 6.1 Severance
Period”);
(ii) subject
to the provisions of Section 5.2, a portion of the Annual Incentive for the
year
in which the Date of Termination occurs, determined by dividing the number
of
days in the calendar year through the Date of Termination by three hundred
sixty-five (365) and multiplying such fraction by the Annual Incentive which
the
Compensation Committee in good faith determines Executive would have earned
if
she had remained employed by the Company for the entire calendar year, taking
into account the Executive’s length of service and contribution towards the
Company’s business during the year in which the Date of Termination
occurs;
(iii) any
Annual Base Salary accrued to the Date of Termination, and any Annual Incentive
relating to a prior year actually earned but not yet paid as of the Date of
Termination;
(iv) reimbursement
for all expenses (under Section 5.5 of this Agreement) incurred as of the Date
of Termination, but not yet paid as of the Date of Termination;
(v) to
the extent applicable, and as so permitted by applicable law, the continuation
of the Executive’s welfare benefits (as described in Section 5.4 of this
Agreement) at the level in effect on the Date of Termination during the Section
6.1 Severance Period or beyond as the law requires, and any other compensation
and benefits as may be provided in accordance with the terms and provisions
of
applicable plans and programs, if any, generally applicable to executives of
the
Company or specifically applicable to the Executive; provided,
that, that the Company shall
provide the Executive with group health continuation coverage for the Executive
and her dependents during such Section 6.1 Severance Period on the same terms
and conditions as applicable to active employees, and such period of coverage
shall run concurrently with the COBRA continuation coverage period; provided further, that, in
the event that the Executive becomes eligible for comparable group health
coverage provided by a subsequent employer, the coverage provided pursuant
to
this Section 6.1(a)(v) shall cease;
(vi) such
rights as the Executive may have under any other written agreement between
the
Company and the Executive which is currently in effect or under any employee
benefit plan or program of the Company (including rights to equity
compensation).
(b) Subject
to Section 6.6, the amounts owed under Section 6.1(a)(i) shall be payable in
equal bi-weekly installments from the Date of Termination through the expiration
of the Section 6.1 Severance Period. Each such installment shall be
treated as a separate payment for purposes of Section 409A of the
Code. The amounts owed under Section 6.1(a)(ii) shall be payable, if
at all, at the same time as the Annual Incentive normally would be paid under
Section 5.2 for the calendar year in which the Date of Termination
occurs. The amounts owed under Section 6.1(a)(iii) shall be paid
within fifteen (15) days of the Date of Termination. The amounts owed
under Section 6.1(a)(iv), unless otherwise expressly specified herein, shall
be
paid in accordance with the plan, programs, policies and procedures of the
Company in effect at the time the applicable expenses are
incurred. The amounts owed under Section 6.1(a)(v) shall be payable
in accordance with the terms of the applicable plans and
programs. The amounts owed under Section 6.1(a)(vi) shall be paid in
accordance with the applicable agreements, plans, and programs.
(c) Upon
thirty (30) days’ prior written notice to the Board, the Executive may terminate
her employment under this Agreement for Good Reason and such notification shall
specify the act, or acts, on the basis of which the Executive has found Good
Reason, provided, that
such
notice must be
provided by the Executive to the Board no later than ninety (90) days following
the Executive’s knowledge of the initial existence of the circumstances that
constitute Good Reason. The Board shall then be provided the
opportunity, within thirty (30) days of its receipt of such notification, to
meet with the Executive to discuss such act or acts. If the Executive
does not rescind her termination of employment at such meeting, the Executive’s
employment by the Company shall be terminated for Good Reason pursuant to this
Section 6.1, and the Executive shall receive the benefits provided under Section
6.1(a) hereof.
6.2 Termination
in Connection with a
Change of Control.
(a) In
the event (x) the Company terminates the Executive’s employment without Cause
(which shall include a termination at the end of the Term of Employment by
reason of the Company’s non-renewal of the Agreement pursuant to Section 3) or
the Executive terminates her employment for Good Reason, and (y) such
termination occurs within two years following a Change of Control, the Executive
shall only be entitled to:
(i) an
amount equal to three times (3x) the sum of (x) the Annual Base Salary at the
rate then in effect (as provided in Section 5.1 of this Agreement) on the Date
of Termination (or, if greater, the date immediately preceding the Change in
Control) and (y) the average of the last three Annual Incentive payments (or,
if
the Executive has received fewer than three Annual Incentive Payments, the
average of all such Annual Incentive Payments);
(ii) subject
to the provisions of Section 5.2, a portion of the Annual Incentive for the
year
in which the Date of Termination occurs, determined by dividing the number
of
days in the calendar year through the Date of Termination by three hundred
sixty-five (365) and multiplying such fraction by the Annual Incentive which
the
Compensation Committee in good faith determines Executive would have earned
if
she had remained employed by the Company for the entire calendar year, taking
into account the Executive’s length of service and contribution towards the
Company’s business during the year in which the Date of Termination
occurs;
(iii) any
Annual Base Salary accrued to the Date of Termination and any Annual Incentive
relating to a prior year actually earned but not yet paid as of the Date of
Termination;
(iv) reimbursement
for all expenses (under Section 5.5 of this Agreement) incurred as of the Date
of Termination, but not yet paid as of the Date of Termination;
(v) to
the extent applicable, and as so permitted by applicable law, the continuation
of the Executive’s welfare benefits (as described in Section 5.4 of this
Agreement) at the level in effect on the Date of Termination for a period of
three (3) years commencing on the Date of Termination (the “Section 6.2 Severance
Period”) or
beyond as the law requires, and any other compensation and benefits as may
be
provided in accordance with the terms and provisions of applicable plans and
programs, if any, generally applicable to executives of the Company or
specifically applicable to the Executive, provided,
that, the Company shall
provide the Executive with group health continuation coverage for the Executive
and her dependents during such Section 6.2 Severance Period on the same terms
and conditions as applicable to active employees; and such period of coverage
shall run concurrently with the COBRA continuation coverage period; provided further, that, in
the event that the Executive becomes eligible for comparable group health
coverage provided by a subsequent employer, the coverage provided pursuant
to
this Section 6.2(a)(v) shall cease; and
(vi) such
rights as the Executive may have under any other written agreement between
the
Company and the Executive which is then currently in effect or under any
employee benefit plan or program of the Company (including rights to equity
compensation).
(vii) Notwithstanding
any other provision contained herein, in the event (x) the Company terminates
the Executive’s employment without Cause (including, without limitation, by
reason of the Company’s non-renewal of the Agreement pursuant to Section 3) or
the Executive terminates her employment for Good Reason, and (y) such
termination occurs within six (6) months preceding a Change of Control, the
Executive shall only be entitled to the payments and benefits set forth in
Section 6.1(a); provided,
however, that (a) upon the date of the Change of Control, any payments
which have not yet been made to the Executive pursuant to Section 6.1(a)(i)
shall be paid to the Executive in a lump sum within five (5) business days
following the date of the Change of Control; (b) the Executive shall be entitled
to an additional lump sum payment in the amount of the sum of (1) and (2),
where
(1) equals two times (2x) the Annual Base Salary at the rate in effect on the
Date of Termination, and (2) equals three times (3x) the average of the last
three Annual Incentive payments (or, if the Executive has received fewer than
three Annual Incentive Payments, the average of all such Annual Incentive
Payments), which shall be paid within ten (10) days following the date of the
Change in Control; and (c) the Company shall provide the Executive with group
health coverage for the Executive and her dependents during the Section 6.2
Severance Period on the same terms and conditions as applicable to active
employees and such period of coverage shall run concurrently with the COBRA
continuation coverage period; provided, that, in the event
that the Executive becomes eligible for group health coverage provided by a
subsequent employer, the coverage provided pursuant to this Section 6.2(a)(vii)
shall cease.
(b) Subject
to Section 6.6, the amounts owed under Section 6.2(a)(i) shall be payable to
the
Executive in a single lump sum within five (5) business days following the
Date
of Termination. The amounts owed under Section 6.2(a)(ii) shall be
payable, if at all, at the same time as the Annual Incentive normally would
be
paid under Section 5.2 for the calendar year in which the Date of Termination
occurs. The amounts owed under Section 6.2(a)(iii) shall be paid
within fifteen (15) days of the Date of Termination. The amounts owed
under Section 6.2(a)(iv), unless otherwise expressly specified herein, shall
be
paid in accordance with the plans, programs, policies and procedures of the
Company in effect at the time the applicable expenses were
incurred. The amounts owed under Section 6.2(a)(v) shall be payable
in accordance with the terms of the applicable plans and
programs. The amounts owed under Section 6.2(a)(vi) shall be paid in
accordance with the applicable agreements, plans, and programs.
6.3 Termination
Due to Death or
Disability, by the Company for Cause or by Executive without Good
Reason.
(a) In
the event of the Executive’s death, or a termination of the Executive’s
employment under this Agreement by either the Company or the Executive due
to
Disability, or the termination by the Company of the Executive’s employment
under this Agreement for Cause in accordance with Section 6.3(c) below, or
if
the Executive terminates her employment with the Company without Good Reason
in
accordance with Section 6.3(d) below (which shall be deemed to include a
termination at the end of the Term of Employment by reason of the Executive’s
non-renewal of the Agreement pursuant to Section 3), the Term of Employment
shall end and, notwithstanding Section 5 hereof, the Executive, her estate
or
other legal representative, as the case may be, shall only be entitled
to:
(i) any
Annual Base Salary accrued to the Date of Termination, and any Annual
Incentive relating to a prior year actually earned but not yet paid as of the
Date of Termination;
(ii) subject
to the provisions of Section 5.2, a portion of the Annual Incentive for the
year
in which the Date of Termination occurs, determined by dividing the number
of
days in the calendar year through the Date of Termination by three hundred
sixty-five (365) and multiplying such fraction by the Annual Incentive which
the
Compensation Committee in good faith determines Executive would have earned
if
she had remained employed by the Company for the entire calendar year, taking
into account the Executive’s length of service and contribution towards the
Company’s business during the year in which the Date of Termination
occurs;
(iii) reimbursement
for all expenses (under Section 5.5 of this Agreement) incurred as of the Date
of Termination, but not yet paid as of the Date of Termination;
(iv) any
other compensation and benefits as may be provided in accordance with the terms
and provisions of applicable plans and programs, if any, generally applicable
to
executives of the Company or specifically applicable to the Executive;
and
(v) such
rights as the Executive may have under any other written agreement between
the
Company and the Executive which is currently in effect or employee benefit
plan
or program of the Company (including rights to equity
compensation).
(b) The
amounts owed under Section 6.3(a)(i) shall be paid within fifteen (15) days
of
the Date of Termination. The amounts owed under Section 6.3(a)(ii)
shall be payable, if at all, at the same time as the Annual Incentive normally
would be paid under Section 5.2 for the calendar year in which the Date of
Termination occurs. The amounts owed under Section 6.3(a)(iii),
unless otherwise expressly specified herein, shall be paid in accordance with
the policies and procedures of the Company in effect at the time the applicable
expenses were incurred. The amounts owed under Section 6.3(a)(iv)
shall be payable in accordance with the terms of the applicable plans and
programs. The amounts owed under Section 6.3(a)(v) shall be paid in
accordance with the applicable plan, program, or agreement.
(c) The
Company may terminate the Executive for Cause. In each case, the
existence of Cause must be confirmed by the Board prior to any termination
therefor. In the event of such a confirmation, the Company shall
notify the Executive that the Company intends to terminate the Executive’s
employment for Cause under this Section 6.3. Such notification shall
specify the act, or acts, on the basis of which the Board has so confirmed
the
existence of Cause.
(d) Upon
sixty (60) days’ prior written notice to the Board, the Executive may terminate
her employment under this Agreement without Good Reason.
6.4 No
Mitigation; No Offset. In
the event of any termination of employment, the Executive shall be under no
obligation to seek other employment and there shall be no offset against any
amounts due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that the Executive may
obtain. Any amounts due under this Section 6 are in the nature of
severance payments, or liquidated damages, or both, and are not in the nature
of
a penalty.
6.5 Notice
of Termination. Any
termination of the Executive’s employment under this Section 6 shall be
communicated by a notice of termination (the “Notice of Termination”) to
the other party hereto given in accordance with Section 12.4 of this
Agreement. Such notice shall (a) indicate the specific termination
provision in this Agreement relied upon, (b) set forth in reasonable detail
the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and (c) if the
termination date is other than the date of receipt of such notice, specify
the
date on which the Executive’s employment is to be terminated (which date shall
not be earlier than the date on which such notice is actually
received).
6.6 Compliance
With Section 409A. Notwithstanding
any provision of this Agreement to the contrary, if as of the Date of
Termination, the Executive is or is deemed to be a specified employee within
the
meaning of Section 409A(a)(2)(B)(i) of the Code, the following rules shall
apply:
(a) To
the extent that any amounts described in Section 6 in the aggregate do not
exceed the limits set forth in Section 402(g)(1)(B) of the Code (the “Limited Amount”) in the
calendar year in which the Date of Termination occurs, such amount shall be
payable in accordance with Section 6.1(b) or 6.2(b), as applicable.
(b) In
the event that deferral of the commencement of any other payments or benefits
otherwise payable pursuant to this Agreement is necessary in order to prevent
any accelerated or additional tax under Section 409A of the Code, the Company
shall defer commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid
or
provided to the Executive), and any payments or benefits that would otherwise
be
paid to the Executive during the six-month period following her Date of
Termination shall be accumulated and paid to the Executive in a single cash
lump
sum (without interest) within ten (10) days following the first business day
of
the seventh month following the Date of Termination.
7. Insurance
7.1 . The
Company will insure the Executive, for the duration of her employment, and
thereafter in respect of her acts and omissions occurring during such
employment, under a contract of directors’ and officers’ liability insurance to
the same extent as any such insurance insures members of the Board.
8. Confidential
Information. The
Executive acknowledges that the confidential or proprietary information obtained
by her while employed by the Company concerning the business or affairs of
the
Company or any Affiliate of the Company (“Confidential Information”) is
the property of the Company or such Affiliate, as the case may
be. For purposes of this Agreement, the term “Confidential Information”
does not include
information that the Executive can demonstrate (a) was in the
Executive’s possession prior to first being employed by the Company, provided, that such
information is not known by the Executive to be subject to another
confidentiality agreement with, or other obligation of secrecy to, the Company
or another party, (b) is generally available to the public and became generally
available to the public other than as a result of a disclosure in violation
of
this Agreement, (c) became available to the Executive on a non-confidential
basis from a third party, provided, that such third
party is not known by the Executive to be bound by a confidentiality agreement
with, or other obligation of secrecy to, the Company or another party or is
otherwise prohibited from providing such information to the Executive by a
contractual, legal or fiduciary obligation or (d) the Executive is required
to
disclose pursuant to applicable law or regulation (as to which information,
the
Executive will provide the Company with prior notice of such requirement and,
if
practicable, an opportunity to obtain an appropriate protective
order). The Executive agrees that she will not during the Term of
Employment and for the two-year period following the Term of Employment,
willfully disclose Confidential Information to any Person (other than employees
of the Company or any Subsidiary thereof or any other Person expressly
authorized by the Board to receive Confidential Information or otherwise as
required in the course of her duties during the Term of Employment) or use
for
her own account any Confidential Information without the prior written consent
of the Board. The Executive shall deliver to the Company at the
termination of the Term of Employment, or at any other time the Board may
request in writing, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof) containing
Confidential Information or Work Product which she may then possess or have
under her control. The Company shall, upon the Executive’s request,
provide to the Executive a copy of such documents as may be reasonably necessary
for the Executive to defend herself in any third party shareholder disputes,
and
which shall otherwise remain subject to the provisions of this Section
8.
9. Work
Product. The
Executive agrees that all inventions, innovations, improvements, developments,
methods, designs, analyses, reports and all similar or related information
which
relate to the Company’s or its Subsidiaries’ actual business, research and
development or existing products or services and which are conceived, developed
or made by the Executive while employed with the Company (“Work Product”) belong to the
Company or such Subsidiary. Upon the written request of the Board,
the Executive will promptly disclose such Work Product to the Board and perform
all actions reasonably requested by the Board (whether during or after the
Term
of Employment) to establish and confirm such ownership.
10. Noncompete,
Non-Solicitation.
10.1 Non-Compete. The
Executive
acknowledges that in the course of her employment with the Company she will
become familiar with the trade secrets and other confidential information of
the
Company and the Subsidiaries of the Company and that her services will be of
special, unique and extraordinary value to the Company. Therefore,
the Executive agrees that, during the Term of Employment and for an additional
period (the “Noncompete
Period”) equal to one (1) year thereafter, she shall not directly or
indirectly own, manage, control, participate in, consult with, or render
services for any “Competing Business” (as defined below) in any “Competing
Market” (as defined below). For purposes of this section, a “Competing Business”
is any enterprise or
individual engaged (or after Executive’s
arrival, that becomes engaged) in the production, sale or distribution of
content via cable television, the world wide web, radio or other media used
by
the Company to distribute content as of the Date of Termination that (i)
principally targets African-American audiences or (ii) creates, maintains or
operates entertainment or social services aimed at African-American consumers
or
users. A division or subsidiary of a diversified business will be
treated as a Competing Business only if (i) the diversified business falls
within the preceding sentence and (ii) the Executive directly provides services
to that division or subsidiary as her primary employment within the diversified
business. A “Competing Market” is a
geographic market in which the Company or any Company Affiliate has, on or
before the Date of Termination, (i) commenced material operations or (ii)
determined before such date to commence such material operations and committed
substantial resources to either determining the feasibility of such commencement
or actually commencing such operations. The Company agrees that any
businesses arising out of or related to the Executive’s current ownership of and
interest in Music One, Inc. are expressly excluded from the intended scope
of
this provision and thus not Competing Businesses. Nothing herein
shall prohibit the Executive from being a passive owner of not more than 4.9%
of
the outstanding stock of any class of a corporation which is publicly traded,
so
long as the Executive has no active participation in the business of such
corporation. Notwithstanding the foregoing, if Executive’s employment
terminates without Cause or for Good Reason, the Noncompete Period shall be
limited to the Term of Employment.
10.2 Non-Solicit.
During the
Noncompete Period, the Executive shall not directly or indirectly through
another Person (i) induce or attempt to induce any employee of the Company
or
any Subsidiary of the Company (other than Alfred C. Liggins, III) to leave
the
employ of such Person; (ii) hire any individual who was an executive of the
Company or its Subsidiaries, a general, station or regional manager of the
Company or its Subsidiaries, or a radio personality employed by the Company
or
its Subsidiaries at any time during the Term of Employment (other than Alfred
C.
Liggins, III and individuals who have not been employed by the Company or a
Subsidiary of the Company for a period of at least one (1) year prior to
employment by the Executive directly or indirectly through another Person);
or
(iii) induce or attempt to induce any customer, supplier, licensee or other
Person having a business relationship with the Company or any Subsidiary of
the
Company to cease doing business with the Company or such Subsidiary of the
Company, or interfere materially with the relationship between any such
customer, supplier, licensee or other Person having a business relationship
with
the Company or any Subsidiary of the Company.
10.3 Acknowledgements.
(a) The
Executive agrees and acknowledges that the type and scope of restrictions
described in this Section 10 are fair and reasonable and that the restrictions
are designed to protect the legitimate interests of the Company and not to
prevent her from earning a living. If, however, at the time of
enforcement of this Section 10, a court shall hold that the duration, scope
or
area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area reasonable
under such circumstances shall be substituted for the stated duration, scope
or
area and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by
law.
(b) The
Executive acknowledges and agrees that the Executive’s breach of Section 8 or
Section 10 of this Agreement will cause substantial and irreparable harm to
the
Company, and therefore, in the event of any such breach, in addition to such
other remedies that may be available, the Company shall be entitled to equitable
relief, including specific performance and injunctive relief.
(c) In
the event that the Executive’s employment terminates for whatever reason, the
Executive hereby grants consent to notification by the Company to the
Executive’s new employer concerning the Executive’s obligations under Sections 8
and 10 of this Agreement.
(d) In
the event that legal action is deemed necessary by the Company to enforce the
provisions of Section 8 or Section 10 of this Agreement, the time period for
all
covenants and restrictions contained in Sections 8 and 10 shall be tolled during
such time as the litigation is pending.
11. Successors.
11.1 Executive. This
Agreement is personal to the Executive and, without the prior express written
consent of the Company, shall not be assignable by the Executive, except that
the Executive’s rights to receive any compensation or benefits under this
Agreement may be transferred or assigned pursuant to testamentary disposition,
intestate succession or pursuant to a qualified domestic relations
order. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s heirs, beneficiaries and/or legal
representatives.
11.2 The
Company. This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns, provided, that the Company
may only transfer or assign this Agreement with the Executive’s prior written
consent (which consent shall be deemed given if the Executive consented to
the
underlying transaction).
12. Miscellaneous.
12.1 Applicable
Law, Forum and Jurisdiction. The
corporate law of the State of Delaware will govern all questions concerning
the
relative rights of the Company and its stockholders, and all questions
concerning the construction, validity and interpretation of this Agreement
shall
be governed by and construed in accordance with the internal laws of the State
of Delaware. The parties agree that all actions or proceedings
arising in connection with this Agreement shall be conducted in the State of
Delaware and each party agrees to submit to the jurisdiction of the state and
federal courts of the State of Delaware for actions arising out of this
Agreement.
12.2 Legal
Fees. The
Company shall pay the reasonable legal fees (based on actual time charges and
disbursements of counsel) incurred by the Executive in negotiating and entering
into this Agreement, up to a maximum of Twenty-Five Thousand Dollars
($25,000).
12.3 Amendments/Waiver. This
Agreement may not be amended or modified other than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives. No waiver by any party to this Agreement of any
breach of any term, provision or condition of this Agreement by the other party
shall be deemed a waiver of a similar or dissimilar term, provision or condition
at the same time, or any prior or subsequent time.
12.4 Notices. All
notices, waivers and other communications hereunder shall be in writing and
shall be given by hand-delivery to the other party, by facsimile (with
appropriate confirmation of transmission), by reputable overnight courier,
or by
registered or certified mail, return receipt requested, postage prepaid, and
shall be deemed delivered when actually delivered by hand, upon receipt of
confirmation of facsimile transmission, three (3) days after mailing, or one
day
after dispatch by overnight courier, addressed as follows:
If
to the Executive:
Ms.
Catherine L. Hughes
[at
the last known address on file with the Company]
If
to the Company:
Radio
One, Inc.
5900
Princess Garden Parkway, 7th
Floor
Lanham,
MD 20706
Attention: General
Counsel
Facsimile: 301-306-9638
or
to such other address as either party shall have furnished to the other in
writing in accordance herewith.
12.5 Withholding. Notwithstanding
anything else to the contrary herein, the Company may withhold from any amounts
payable under this Agreement such taxes as shall be required to be withheld
pursuant to any applicable law or regulation. Where amounts are
payable to the Executive pursuant to this Agreement both in cash and in a form
other than cash, the Company may, at its option and upon prior notice to the
Executive, withhold from such cash payments, or withhold from such payments
in a
form other than cash, or withhold from both.
12.6 Severability. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby: (a) such provision will be fully severable; (b) this Agreement will
be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by
the
illegal, invalid or unenforceable provision or by its severance herefrom; and
(d) in lieu of such illegal, invalid or unenforceable provision, there will
be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as shall be agreed upon by the Company and the Executive.
12.7 Captions;
Section References. The
captions of this Agreement are not part of the provisions hereof and shall
have
no force or effect. All references to sections of statutes,
regulations or rules shall be deemed to be references to any successor
sections.
12.8 No
Company Setoff. The
Company’s
obligation to pay the Executive the amounts provided and to make the
arrangements provided hereunder shall not be subject to setoff, counterclaim,
or
recoupment of amounts owed by the Executive to the Company or its
Affiliates.
12.9 Entire
Agreement. This
Agreement contains the entire agreement between the parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between
the
parties with respect thereto.
12.10 Counterparts. This
Agreement may be executed in separate counterparts, each of which is deemed
to
be an original and all of which taken together constitute one and the same
agreement.
12.11 Representation. The
Executive represents and warrants that the performance of the Executive’s duties
and obligations under this Agreement will not violate any agreement between
the
Executive and any other Person.
12.12 Further
Assurances. The
parties shall, with reasonable diligence, do all things and provide all
reasonable assurances as may be required to complete the transactions
contemplated by this Agreement, and each party shall provide such further
documents or instructions required by any other party as may be reasonably
necessary or desirable to give effect to this Agreement and carry out its
provisions.
12.13 Survivorship. The
respective rights and obligations of the parties under this Agreement shall
survive any termination of this Agreement or the Executive’s employment
hereunder for any reason to the extent necessary for the intended preservation
of such rights and obligations.
[END
OF PAGE]
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Executive has hereunto set her hand, and the Company has
caused this Employment Agreement to be executed in its name and on its behalf
by
its authorized representative, all as of the day and year first above
written.
RADIO
ONE, INC.,
a
Delaware corporation
By: /s/
Peter
D.
Thompson
Name:
Peter D. Thompson
Title:
Chief Financial
Officer
EXECUTIVE:
/s/
Catherine
L. Hughes
Catherine
L.
Hughes
EMPLOYMENT
AGREEMENT
BETWEEN
RADIO
ONE, INC.
AND
ALFRED
C. LIGGINS, III
Dated
as of April 16, 2008
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of
April 16, 2008, is made by and between Radio One, Inc., a Delaware corporation
(the “Company”), and
Alfred C. Liggins, III (the “Executive”).
In
consideration of the premises and mutual covenants herein contained, the Company
and the Executive hereby agree as follows:
1. Definitions.
“Affiliate”
shall
mean any
Person directly or indirectly controlling, controlled by, or under common
control with, the Company.
“Annual
Base Salary” shall
mean the annual base salary as described in Section 5.1 hereof.
“Annual
Incentive” shall have
the meaning set forth in Section 5.2 hereof.
“Board”
shall
mean the board
of directors of the Company.
“Cause”
shall
mean (i) the
commission by the Executive of a felony, fraud, embezzlement or an act of
serious, criminal moral turpitude which, in case of any of the foregoing, in
the
good faith judgment of the Board, is likely to cause material harm to the
business of the Company and the Company Affiliates, taken as a whole, provided, that in the absence
of a conviction or plea of nolo contendere, the Company
will have the burden of proving the commission of such act by clear and
convincing evidence, (ii) the commission of an act by the Executive constituting
material financial dishonesty against the Company or any Company Affiliate,
provided, that in the
absence of a conviction or plea of nolo contendere, the Company
will have the burden of proving the commission of such act by a preponderance
of
the evidence, (iii) the repeated refusal by the Executive to use his reasonable
and diligent efforts to follow the lawful and reasonable directives (in light
of
the terms of this Agreement) of the Board with respect to a matter or matters
within the control of the Executive, or (iv) the Executive’s willful gross
neglect in carrying out his material duties and responsibilities under this
Agreement, provided,
that unless the Board reasonably determines that a breach described in clause
(iii) or (iv) is not curable, the Executive will, subject to the following
proviso, be given written notice of such breach and will be given an opportunity
to cure such breach to the reasonable satisfaction of the Board within thirty
(30) days of receipt of such written notice, and, provided further, that the
Executive only will be entitled to cure two such defaults during the Term of
Employment.
“Change
of Control” shall be
deemed to have occurred in the event of a transaction or series of related
transactions pursuant to which any Person or group (as such term is defined
in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of Persons
(a) acquires, whether by merger, consolidation or transfer or issuance of
capital stock, capital stock of the Company (or any surviving or resulting
company), which together with stock held by such Person or group, constitutes
more than 50% of the voting power of the stock of the Company (or any surviving
or resulting company) or (b) acquires (or has acquired during the twelve (12)
month period ending on the date of the most recent acquisition by such Person
or
Persons) assets from the Company that have a total gross fair market value
equal
to or more than 50% of the total gross fair market value of all of the assets
of
the Company immediately before such acquisition or acquisitions. For
purposes herein, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets. For purposes of
Section 6, a Change of Control shall not occur unless such transaction
constitutes a “change in ownership of a corporation”, a “change in effective
control of a corporation”, or a “change in ownership of a substantial portion of
a corporation’s assets” under Section 409A of the Code and the regulations
promulgated thereunder. Notwithstanding the foregoing, a Change of
Control shall not be deemed to have occurred if following a transaction, the
Executive and/or Catherine L. Hughes retain more than fifty percent (50%) of
the
voting power of the stock of the Company (or any surviving or resulting
company).
“Class
D Common Stock” shall
mean the Company’s class D common stock, par value $.001 per share.
“COBRA”
shall
mean the
requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and of
similar state law.
“Code”
shall
mean the Internal
Revenue Code of 1986, as amended.
“Commencement
Date” shall have
the meaning set forth in Section 3 hereof.
“Common
Stock” shall mean all
classes of the Company’s common stock and any capital stock of the Company
distributed after the date of this Agreement with respect to shares of the
Company’s common stock by way of dividend, distribution, stock split, exchange,
conversion, merger, consolidation, reorganization or other
recapitalization.
“Company
Affiliate” shall mean
any Subsidiary of the Company.
“Compensation
Committee” shall mean
the
compensation committee of the Board.
“Competing
Business” shall
have the meaning set forth in Section 10.1 hereof.
“Competing
Market” shall have
the meaning set forth in Section 10.1 hereof.
“Confidential
Information”
shall have the meaning set forth in Section 8 hereof.
“Date
of Termination” shall
mean the date on which the Executive’s employment with the Company actually
terminates.
“Disability”
shall
mean the
Executive’s inability to render the services required under this Agreement by
reason of a physical or mental disability for ninety (90) days, which need
not
be consecutive, during any twelve (12) consecutive month period, and the
effective date of such Disability shall be the day next following such ninetieth
(90th)
day. A determination of Disability will be made by a physician
satisfactory to both the Executive and the Company; provided that if the
Executive and the Company cannot agree as to a physician, then each will select
a physician and such physicians shall together select a third physician, whose
determination as to Disability shall be completed within ten (10) days of the
date on which the disagreement between the Executive and the Company arose
and
the decision of such third physician will be final and binding on the Executive
and the Company. The Executive and the Company shall have the right
to present to such physician such information and arguments as each deems
appropriate, including the opinion of other physicians.
“ERISA”
shall
mean the
Employee Retirement Income Security Act of 1974, as amended.
“Fair
Market Value” shall mean
the closing price of a share of Common Stock on the applicable
date.
“Good
Reason” shall be deemed
to exist if, without the express written consent of the Executive, (a) the
Executive’s rate of Annual Base Salary (as provided in Section 5.1 of this
Agreement), including any increases, is reduced, (b) the Executive suffers
a
substantial reduction in his title, duties or responsibilities, (c) the Company
fails to pay the Executive’s Annual Base Salary when due or to pay any other
material amount due to the Executive hereunder within five (5) days of written
notice from the Executive, (d) the Company materially breaches this Agreement
(other than a breach described in the preceding clause (c)) and fails to correct
such breach within thirty (30) days after receiving the Executive’s demand that
it remedy the breach, or (e) the Company fails to obtain a satisfactory written
agreement from any successor to assume and agree to perform this Agreement,
which successor the Executive reasonably concludes is capable of performing
the
Company’s financial obligations under this Agreement.
“Initial
Restricted Stock” shall have
the meaning set forth in Section 5.15(a) hereof.
“Limited
Amount” shall have
the meaning set forth in Section 6.6(a) hereof.
“Make-Whole
Payment” shall
have the meaning set forth in Section 5.4 hereof.
“Noncompete
Period” shall have
the meaning set forth in Section 10.1 hereof.
“Notice
of Termination” shall
have the meaning set forth in Section 6.5 hereof.
“Options”
shall
have the
meaning set forth in Section 5.14 hereof.
“Option
Shares” shall have the
meaning set forth in Section 5.14 hereof.
“Person”
shall
mean any
natural or legal person including any individual, partnership, joint venture,
corporation, association, joint stock company, limited liability company, trust,
unincorporated organization or government or any department or agency or
political subdivision thereof.
“Section
6.1 Severance Period”
shall have the meaning set forth in Section 6.1(a)(i) hereof.
“Section
6.2 Severance Period”
shall have the meaning set forth in Section 6.2(a)(v) hereof.
“Signing
Bonus” shall have the
meaning set forth in Section 5.3 hereof.
“Subsidiary”
shall
mean, with
respect to any Person, a corporation of which the securities having a majority
of the voting power in electing directors are, at the time of determination,
owned by such Person, directly or through one or more Subsidiaries.
“Term
of Employment” shall
have the meaning set forth in Section 3 hereof.
“Transfer”
shall
mean a sale,
transfer, assignment, pledge, hypothecation, mortgage or other disposition
(whether with or without consideration and whether voluntarily or involuntarily
or by operation of law) of any interest in any Option Shares or Common Stock;
except that a transfer or assignment to any trust established and maintained
for
the benefit of the Executive shall not be deemed a Transfer hereunder; provided, that such trust
agrees in writing to be bound by any transfer restrictions set forth
herein.
“TV
One Award” shall have the
meaning set forth in Section 5.5(a) hereof.
“Vehicle
Allowance” shall have
the meaning set forth in Section 5.10 hereof.
“Withholding
Amount” shall
have the meaning set forth in Section 5.15(b) hereof.
“Work
Product” shall have the
meaning set forth in Section 9 hereof.
2. Employment. During
the Term of Employment, subject to the terms and provisions set forth in this
Agreement, the Company shall employ the Executive as the Chief Executive Officer
and President of the Company, and the Executive hereby accepts such
employment.
3. Term
of Employment. The
initial term of employment under this Agreement shall commence as of the date
hereof (the “Commencement
Date”) and, unless earlier terminated by the Company or the Executive
under Section 6 of this Agreement, shall continue until April 15, 2011 (the
“Term of
Employment”). Thereafter, the Term of Employment will be
extended automatically for additional one (1) year periods, unless either party
provides written notice of its/his intention not to renew to the other party
at
least sixty (60) days before the expiration of the initial or any renewal term
of this Agreement, as applicable.
4. Positions,
Responsibilities and Duties.
4.1 Duties. During
the Term of Employment, the Executive, as the Chief Executive Officer and
President of the Company, shall be responsible, subject to the direction of
the
Board, for identifying acquisition opportunities for the Company and providing
strategic guidance, leadership and direction to the management team of the
Company and for such other duties and functions of a senior executive nature,
commensurate with his title, responsibility and remuneration as may be directed
from time to time by the Board. The Executive shall report
solely to the Board.
4.2 Attention
to Duties and Responsibilities. During
the Term of Employment, the Executive shall devote substantially all of his
business time to the business and affairs of the Company and shall use his
best
efforts, ability and fidelity to perform faithfully and efficiently his duties
and responsibilities.
5. Compensation
and Other
Awards.
5.1 Annual
Base Salary. Commencing
on the Commencement Date, as compensation for the services to be provided by
the
Executive under this Agreement, the Company shall pay the Executive an annual
base salary of Nine-Hundred Eighty Thousand Dollars ($980,000.00) (the “Annual Base
Salary”). The Executive’s Annual Base Salary shall be reviewed
by the Compensation Committee annually, and may be increased (but not decreased)
as the Compensation Committee determines appropriate. In making such
determination, the Compensation Committee may take into account: the salaries
of
chief executive officers of companies that are similar in nature and scope
to
the businesses conducted by the Company at such time; the Company’s financial
position and cash flow; and/or the impact of any such increase on the Company’s
loan covenants. Such Annual Base Salary shall be payable to the
Executive in equal installments at least twice per month in accordance with
the
Company’s regular payroll practice.
5.2 Annual
Incentive Compensation. With
respect to each calendar year ending during the Term of Employment, the
Executive shall have the opportunity to earn an annual incentive cash payment
(the “Annual
Incentive”) of one hundred percent (100%) of the Annual Base
Salary. Fifty percent (50%) of the Annual Incentive shall be
determined by the Compensation Committee in its sole discretion, and fifty
percent (50%) of the Annual Incentive shall be based upon the attainment of
certain Executive and Company performance goals. The applicable
performance goals shall be determined by the Compensation Committee, in
consultation with the Executive, and shall be communicated to the Executive
in
writing as soon as reasonably practicable following the Compensation Committee’s
determination; provided, however,
that with respect to
calendar year 2009 and each subsequent calendar year during the Term of
Employment, the performance goals shall be established in writing no later
than
ninety (90) days following the beginning of the calendar year. The
Compensation Committee shall determine whether and to what extent the applicable
performance goals have been achieved and the amount of the Annual Incentive,
if
any. The Annual Incentive shall be due and payable by the Company on
or before March 15 of the year immediately following the year for which such
Annual Incentive is awarded.
5.3 Retroactive
Compensation. In
recognition of the fact that the Executive was underpaid and was not employed
pursuant to the terms of an employment contract for the last three (3) years,
and in order to appropriately adjust the Executive’s compensation retroactively,
the Company shall make a one-time lump sum cash payment (the “Signing Bonus”) to the
Executive equal to One Million Dollars ($1,000,000), less appropriate tax
withholdings. Such Signing Bonus shall be paid within sixty (60) days
of the Commencement Date. Notwithstanding the foregoing, the Signing
Bonus shall be paid in installments or delayed (but not later than March 15,
2009) to the extent necessary or appropriate for the Company to (a) maintain
its
covenants under any loan, credit or financing arrangement, including maintenance
of such covenants taking into consideration any pro forma results stemming
from
any business initiatives of the Company or (b) meet its cash flow
needs.
5.4 Make-Whole
Payment. In
recognition of the Executive’s dedication and loyalty and to compensate him for
real losses associated with his prior employment contract in which he did not
receive a retention bonus or loan forgiveness from the Company, the Company
shall make a one-time cash payment (the “Make-Whole Payment”) to the
Executive equal to Four Million Eight Hundred Thousand Dollars ($4,800,000),
less appropriate tax withholdings. Such Make-Whole Payment shall be
paid in a lump sum within sixty (60) days of the Commencement
Date. Notwithstanding the foregoing, the Make-Whole Payment shall be
paid in installments or delayed (but not later than March 15, 2009) to the
extent necessary or appropriate for the Company to (a) maintain its covenants
under any loan, credit or financing arrangement, including maintenance of such
covenants taking into consideration any pro forma results stemming from any
business initiatives of the Company or (b) meet its cash flow
needs.
5.5 TV
One Award/Internet Strategies.
(a) In
recognition of his contributions in founding TV One LLC (“TV One”) on behalf of
the Company, the Executive shall be eligible to receive an amount equal to
eight
percent (8%) of any proceeds from distributions or other liquidity events in
excess of the return of the Company’s aggregate investment in TV One (the “TV One
Award”). The Company’s obligation to pay the TV One Award
shall be triggered (i) only after the Company’s recovery of the aggregate amount
of its capital contribution in TV One and (ii) only upon actual receipt of
(A)
distributions of cash or marketable securities or (B) proceeds from a liquidity
event with respect to the Company’s membership interest in TV
One. The Executive’s eligibility to receive the TV One Award shall
survive a Change of Control and/or Executive’s termination of employment;
provided, however, that in the event of either a termination for Cause or
termination by Executive without Good Reason, the Executive’s rights hereunder
to the TV One Award shall automatically extinguish and cease in their
entirety. As soon as practicable after the date hereof, the parties
shall enter into agreements evidencing the TV One Award.
(b) The
Company and the Executive agree to negotiate in good faith to determine whether
the Executive should be entitled to any interest in, or additional compensation
for, the development and success of an internet strategy, any such award to
be
made at the sole discretion of the Compensation Committee.
5.6 Retirement
and Savings Plans. During
the Term of Employment and to the extent eligible, the Executive shall be
entitled to participate in all pension, retirement, savings and other employee
benefit plans and programs applicable to peer executives of the
Company.
5.7 Welfare
Benefit Plans and Perquisites. During
the Term of Employment and to the extent eligible, the Executive, the
Executive’s spouse, if any, and the Executive’s eligible dependents, if any,
shall be entitled to participate in and be covered by all welfare benefit plans
and programs, if any, and shall be entitled to receive such perquisites and
fringe benefits, if any, generally applicable to executives of the
Company.
5.8 Expense
Reimbursement. During
the Term of Employment, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
performing his duties and responsibilities hereunder in accordance with the
policies and procedures of the Company as in effect at the time the expense
was
incurred, as the same may be changed prospectively from time to
time. The amount of expenses eligible for reimbursement during any
calendar year shall not affect the expenses eligible for reimbursement in any
other calendar year, and the reimbursement of an eligible expense shall be
made
as soon as practicable after the Executive submits the request for such
reimbursement, but not later than December 31 following the calendar year in
which the expense was incurred.
5.9 Vacation
Benefits. During
the Term of Employment, the Executive shall be entitled to four (4) weeks paid
vacation annually to be taken at such times which do not materially interfere
with the operations of the Company. Any vacation not used by the
Executive during any calendar year during the Term of Employment shall
accumulate to the extent permitted by and in accordance with the Company policy
then in effect.
5.10 Vehicle
Allowance. During
the Term of Employment, (i) the Executive shall be entitled to use of an
automobile leased by the Company and (ii) the Company shall pay the cost of
any
and all applicable insurance coverage therefor and any other operating expenses
related to such automobile (the benefits provided in (i) and (ii) shall be
collectively referred to as the “Vehicle
Allowance”). The Executive acknowledges that the Company will
impute income to the Executive based on the portion of the Vehicle Allowance
that does not constitute an ordinary and necessary business expense of the
Company. During the Term of Employment, the monthly cost to the
Company of such Vehicle Allowance shall be at least equal to the monthly amount
being paid by the Company for the Executive’s automobile lease and applicable
insurance and operating expenses on the date of this Agreement. Upon
expiration of the Company’s lease, the Executive shall have the right to
purchase such vehicle in accordance with the terms of the Company’s lease
agreement for such vehicle.
5.11 Wireless
Communications Allowance. During
the Term of Employment, the Executive shall be entitled to use of a wireless
telephone and/or other wireless communications devices with all equipment and
service costs thereof to be borne by the Company.
5.12 Personal
Assistant. During
the Term of Employment, the Company shall make available to the Executive the
services of a full-time personal assistant. The Executive
acknowledges that the Company will impute income to the Executive based on
the
portion of the cost of the personal assistant’s services that does not
constitute an ordinary and necessary business expense of the
Company.
5.13 Financial
Manager. During
the Term of Employment, the Company shall make available to the Executive the
services of a financial manager. The Executive acknowledges that the
Company will impute income to the Executive based on the services provided
by
the financial manager.
5.14 Stock
Options. Effective
as of the next monthly grant date under the Company’s equity compensation
policy following the Commencement Date, the Company shall grant to
the Executive options to purchase one million one hundred fifty thousand
(1,150,000) shares of Class D Common Stock (the “Options,” and the shares of
Class D Common Stock obtainable upon exercise of such Options, the “Option
Shares”). Notwithstanding the foregoing, Executive agrees that
the Options grant may be deferred until the month following the next monthly
grant (or to successive months) if, in the Compensation Committee’s sole
discretion, such a deferral is deemed necessary to comply with insider trading
rules and regulations. Except as set forth in this Section 5.14, all
terms and conditions of such Options (and such Option Shares) shall be set
forth
in the Company’s equity compensation plan and such documentation as the Company
may prescribe.
(a) The
price payable by the Executive for each Option Share shall be the Fair Market
Value of each Option Share on the date of grant as set forth in the option
agreement.
(b) The
Options to purchase Option Shares shall vest in accordance with the following
schedule:
|
Vesting
Date
|
Vested
Percentage of Options to Purchase Option
Shares
|
|||
|
April
15, 2009
|
33 1/3 | % | ||
|
April
15, 2010
|
66 2/3 | % | ||
|
April
15, 2011
|
100 | % | ||
(c) Notwithstanding
any other provision contained herein, upon a Change of Control, all of the
Executive’s Options shall become fully and immediately exercisable.
(d) Upon
termination of the Executive’s employment hereunder, any then unexercisable
Option shall expire and be immediately forfeited. The Executive’s
right to exercise any exercisable Option following termination of his employment
shall be governed in accordance with the terms of the Company’s equity
compensation plan; provided,
however, that if the Executive’s employment terminates for any reason
other than his death or Disability, any exercisable Option shall not also expire
and be forfeited until the ninetieth (90th)
day
following such termination.
(e) All
unexercised Options to acquire Option Shares shall expire on the tenth
anniversary of their respective dates of grant.
5.15 Restricted
Stock Awards.
(a) Effective
as of the next monthly grant date under the Company’s equity compensation policy
following the Commencement Date, the Company shall grant to the Executive three
hundred thousand (300,000) shares of Class D Common Stock (in the aggregate,
the
“Initial Restricted
Stock”) subject to certain vesting and transfer restrictions set forth in
this Section 5.15, the equity compensation plan and such documentation as the
Company may prescribe. Notwithstanding the foregoing, Executive
agrees that the Initial Restricted Stock grant may be deferred until the month
following the next monthly grant (or to successive months) if, in the
Compensation Committee’s sole discretion, such a deferral is deemed necessary to
comply with insider trading rules and regulations. The Compensation
Committee also may, in its sole discretion, award additional shares of Class
D
Common Stock, subject to vesting and transfer restrictions, to the Executive
during each or any year occurring during the Term of Employment, based upon
the
attainment of certain Company performance goals during any such
year. Such performance goals shall be determined by the Compensation
Committee in consultation with the Executive, and shall be communicated to
the
Executive in writing as soon as reasonably practicable following the
Compensation Committee’s determination. The Compensation Committee
shall determine whether and to what extent the applicable performance goals
have
been achieved. Any such additional grant of restricted stock shall be
subject to such terms and conditions as may be set forth in the Company’s equity
compensation plan and such documentation as the Company may
prescribe.
(b) The
Executive shall be responsible for the payment of any withholding tax
requirement arising from the vesting of the awards described in Section
5.15(a). The amount of withholding tax required with respect to the
Initial Restricted Stock award (the “Withholding Amount”) shall be
determined by the Chief Financial Officer, Controller or other appropriate
officer of the Company, and the Executive shall furnish such information and
make such representations as such officer requires to make such
determination. The Company shall notify the Executive of the
Withholding Amount and the Executive shall pay such Withholding Amount to the
Company, in cash, by certified cashier’s check, or by delivery of shares of
Company Common Stock owned by the Executive having a Fair Market Value equal
to
the Withholding Amount (which may include shares otherwise issuable to the
Executive upon vesting of the award). The Company shall remit the
Withholding Amount to the appropriate taxing authority or
authorities.
(c) The
Initial Restricted Stock shall vest in accordance with the following vesting
schedule:
|
Vesting
Date
|
Vested
Percentage of Shares of Initial Restricted
Stock
|
|||
|
April
15, 2009
|
33 1/3 | % | ||
|
April
15, 2010
|
66 2/3 | % | ||
|
April
15, 2011
|
100 | % | ||
Subsequent
awards described in Section 5.15(a) shall vest in accordance with the terms
of
the Company’s equity compensation plan and such documentation as the Company may
prescribe.
(d) The
Executive shall be entitled to receive, whether in the form of cash or stock,
dividends declared on any unvested Class D Common Stock granted pursuant to
this
Section 5.15 which shall be paid to the Executive on the date such dividends
are
paid to other holders of Class D Common Stock.
(e) Notwithstanding
any other provision contained herein, upon a Change of Control, all of the
Executive’s unvested Initial Restricted Stock and all unvested shares of other
awards granted under Section 5.15(a) shall immediately become fully
vested.
(f) During
the Term of Employment, the Executive may not Transfer any unvested Initial
Restricted Stock, or any unvested shares of other awards granted under Section
5.15(a). Any Transfer or attempted Transfer of any such unvested
share in violation of this Section 5.15(f) shall be null and void, and the
Company shall not record such Transfer on its books or treat any purported
transferee of such unvested share as the owner of such security for any
purpose.
6. Termination. The
Executive’s employment hereunder (and the Term of Employment) may be terminated
under the following circumstances:
6.1 Termination
by the Company Without
Cause or by Executive for Good Reason.
(a) Subject
to Section 6.2, in the event that the Company terminates the Executive’s
employment without Cause (which shall include a termination at the end of the
Term of Employment by reason of the Company’s non-renewal of the Agreement
pursuant to Section 3), or if the Executive terminates his employment for Good
Reason in accordance with Section 6.1(c) below, the Executive shall only be
entitled to:
(i) the
continuation of the Annual Base Salary at the rate then in effect (as provided
in Section 5.1 of this Agreement) on the Date of Termination for a period of
twelve (12) months commencing on such Date of Termination (the “Section 6.1 Severance
Period”);
(ii) subject
to the provisions of Section 5.2, a portion of the Annual Incentive for the
year
in which the Date of Termination occurs, determined by dividing the number
of
days in the calendar year through the Date of Termination by three hundred
sixty-five (365) and multiplying such fraction by the Annual Incentive which
the
Executive would have earned if he had remained employed by the Company for
the
entire calendar year; provided, however,
that the
discretionary portion of the Annual Incentive shall be determined in good faith
by the Compensation Committee taking into account the Executive’s length of
service and contribution towards the Company’s business during the year in which
the Date of Termination occurs;
(iii) any
Annual Base Salary accrued to the Date of Termination, and any Annual Incentive
relating to a prior year actually earned but not yet paid as of the Date of
Termination;
(iv) reimbursement
for all expenses (under Section 5.8 of this Agreement) incurred as of the Date
of Termination, but not yet paid as of the Date of Termination;
(v) to
the extent applicable, and as so permitted by applicable law, the continuation
of the Executive’s welfare benefits (as described in Section 5.7 of this
Agreement) at the level in effect on the Date of Termination during the Section
6.1 Severance Period or beyond as the law requires, and any other compensation
and benefits as may be provided in accordance with the terms and provisions
of
applicable plans and programs, if any, generally applicable to executives of
the
Company or specifically applicable to the Executive; provided,
that, that the Company shall
provide the Executive with group health continuation coverage for the Executive
and his dependents during such Section 6.1 Severance Period on the same terms
and conditions as applicable to active employees, and such period of coverage
shall run concurrently with the COBRA continuation coverage period; provided further, that, in
the event that the Executive becomes eligible for comparable group health
coverage provided by a subsequent employer, the coverage provided pursuant
to
this Section 6.1(a)(v) shall cease;
(vi) such
rights as the Executive may have under any other written agreement between
the
Company and the Executive which is currently in effect or under any employee
benefit plan or program of the Company (including rights to equity
compensation).
For the avoidance of doubt, in the event that amounts payable pursuant to
Sections 5.3 and 5.4 herein have not yet been paid to the Executive on the
Date
of Termination, the Executive shall receive such amounts in accordance with
Sections 5.3 and 5.4.
(b) Subject
to Section 6.6, the amounts owed under Section 6.1(a)(i) shall be payable in
equal bi-weekly installments from the Date of Termination through the expiration
of the Section 6.1 Severance Period. Each such installment shall be
treated as a separate payment for purposes of Section 409A of the
Code. The amounts owed under Section 6.1(a)(ii) shall be payable, if
at all, at the same time as the Annual Incentive normally would be paid under
Section 5.2 for the calendar year in which the Date of Termination
occurs. The amounts owed under Section 6.1(a)(iii) shall be paid
within fifteen (15) days of the Date of Termination. The amounts owed
under Section 6.1(a)(iv), unless otherwise expressly specified herein, shall
be
paid in accordance with the plan, programs, policies and procedures of the
Company in effect at the time the applicable expenses are
incurred. The amounts owed under Section 6.1(a)(v) shall be payable
in accordance with the terms of the applicable plans and
programs. The amounts owed under Section 6.1(a)(vi) shall be paid in
accordance with the applicable agreements, plans, and programs.
(c) Upon
thirty (30) days’ prior written notice to the Board, the Executive may terminate
his employment under this Agreement for Good Reason and such notification shall
specify the act, or acts, on the basis of which the Executive has found Good
Reason, provided, that
such
notice must be
provided by the Executive to the Board no later than ninety (90) days following
the Executive’s knowledge of the initial existence of the circumstances that
constitute Good Reason. The Board shall then be provided the
opportunity, within thirty (30) days of its receipt of such notification, to
meet with the Executive to discuss such act or acts. If the Executive
does not rescind his termination of employment at such meeting, the Executive’s
employment by the Company shall be terminated for Good Reason pursuant to this
Section 6.1, and the Executive shall receive the benefits provided under Section
6.1(a) hereof.
6.2 Termination
in Connection with a
Change of Control.
(a) In
the event (x) the Company terminates the Executive’s employment without Cause
(which shall include a termination at the end of the Term of Employment by
reason of the Company’s non-renewal of the Agreement pursuant to Section 3) or
the Executive terminates his employment for Good Reason, and (y) such
termination occurs within two years following a Change of Control, the Executive
shall only be entitled to:
(i) an
amount equal to three times (3x) the sum of (x) the Annual Base Salary at the
rate then in effect (as provided in Section 5.1 of this Agreement) on the Date
of Termination (or, if greater, the date immediately preceding the Change in
Control) and (y) the average of the last three Annual Incentive payments (or,
if
the Executive has received fewer than three Annual Incentive Payments, the
average of all such Annual Incentive Payments);
(ii) subject
to the provisions of Section 5.2, a portion of the Annual Incentive for the
year
in which the Date of Termination occurs, determined by dividing the number
of
days in the calendar year through the Date of Termination by three hundred
sixty-five (365) and multiplying such fraction by the Annual Incentive which
the
Executive would have earned if he had remained employed by the Company for
the
entire calendar year; provided, however,
that the
discretionary portion of the Annual Incentive shall be determined in good faith
by the Compensation Committee taking into account the Executive’s length of
service and contribution towards the Company’s business during the year in which
the Date of Termination occurs;
(iii) any
Annual Base Salary accrued to the Date of Termination and any Annual Incentive
relating to a prior year actually earned but not yet paid as of the Date of
Termination;
(iv) reimbursement
for all expenses (under Section 5.8 of this Agreement) incurred as of the Date
of Termination, but not yet paid as of the Date of Termination;
(v) to
the extent applicable, and as so permitted by applicable law, the continuation
of the Executive’s welfare benefits (as described in Section 5.7 of this
Agreement) at the level in effect on the Date of Termination for a period of
three (3) years commencing on the Date of Termination (the “Section 6.2 Severance
Period”) or
beyond as the law requires, and any other compensation and benefits as may
be
provided in accordance with the terms and provisions of applicable plans and
programs, if any, generally applicable to executives of the Company or
specifically applicable to the Executive, provided,
that, the Company shall
provide the Executive with group health continuation coverage for the Executive
and his dependents during such Section 6.2 Severance Period on the same terms
and conditions as applicable to active employees; and such period of coverage
shall run concurrently with the COBRA continuation coverage period; provided further, that, in
the event that the Executive becomes eligible for comparable group health
coverage provided by a subsequent employer, the coverage provided pursuant
to
this Section 6.2(a)(v) shall cease; and
(vi) such
rights as the Executive may have under any other written agreement between
the
Company and the Executive which is then currently in effect or under any
employee benefit plan or program of the Company (including rights to equity
compensation).
For
the avoidance of doubt, in the event that amounts payable pursuant to Sections
5.3 and 5.4 herein have not yet been paid to the Executive on the Date of
Termination, the Executive shall receive such amounts in accordance with
Sections 5.3 and 5.4.
(vii) Notwithstanding
any other provision contained herein, in the event (x) the Company terminates
the Executive’s employment without Cause (including, without limitation, by
reason of the Company’s non-renewal of the Agreement pursuant to Section 3) or
the Executive terminates his employment for Good Reason, and (y) such
termination occurs within six (6) months preceding a Change of Control, the
Executive shall only be entitled to the payments and benefits set forth in
Section 6.1(a); provided,
however, that (a) upon the date of the Change of Control, any payments
which have not yet been made to the Executive pursuant to Section 6.1(a)(i)
shall be paid to the Executive in a lump sum within five (5) business days
following the date of the Change of Control; (b) the Executive shall be entitled
to an additional lump sum payment in the amount of the sum of (1) and (2),
where
(1) equals two times (2x) the Annual Base Salary at the rate in effect on the
Date of Termination, and (2) equals three times (3x) the average of the last
three Annual Incentive payments (or, if the Executive has received fewer than
three Annual Incentive Payments, the average of all such Annual Incentive
Payments), which shall be paid within ten (10) days following the date of the
Change in Control; and (c) the Company shall provide the Executive with group
health coverage for the Executive and his dependents during the Section 6.2
Severance Period on the same terms and conditions as applicable to active
employees and such period of coverage shall run concurrently with the COBRA
continuation coverage period; provided, that, in the event
that the Executive becomes eligible for group health coverage provided by a
subsequent employer, the coverage provided pursuant to this Section 6.2(a)(vii)
shall cease.
(b) Subject
to Section 6.6, the amounts owed under Section 6.2(a)(i) shall be payable to
the
Executive in a single lump sum within five (5) business days following the
Date
of Termination. The amounts owed under Section 6.2(a)(ii) shall be
payable, if at all, at the same time as the Annual Incentive normally would
be
paid under Section 5.2 for the calendar year in which the Date of Termination
occurs. The amounts owed under Section 6.2(a)(iii) shall be paid
within fifteen (15) days of the Date of Termination. The amounts owed
under Section 6.2(a)(iv), unless otherwise expressly specified herein, shall
be
paid in accordance with the plans, programs, policies and procedures of the
Company in effect at the time the applicable expenses were
incurred. The amounts owed under Section 6.2(a)(v) shall be payable
in accordance with the terms of the applicable plans and
programs. The amounts owed under Section 6.2(a)(vi) shall be paid in
accordance with the applicable agreements, plans, and programs.
6.3 Termination
Due to Death or
Disability, by the Company for Cause or by Executive without Good
Reason.
(a) In
the event of the Executive’s death, or a termination of the Executive’s
employment under this Agreement by either the Company or the Executive due
to
Disability, or the termination by the Company of the Executive’s employment
under this Agreement for Cause in accordance with Section 6.3(c) below, or
if
the Executive terminates his employment with the Company without Good Reason
in
accordance with Section 6.3(d) below (which shall be deemed to include a
termination at the end of the Term of Employment by reason of the Executive’s
non-renewal of the Agreement pursuant to Section 3), the Term of Employment
shall end and, notwithstanding Section 5 hereof, the Executive, his estate
or
other legal representative, as the case may be, shall only be entitled
to:
(i) any
Annual Base Salary accrued to the Date of Termination, and any Annual
Incentive relating to a prior year actually earned but not yet paid as of the
Date of Termination;
(ii) subject
to the provisions of Section 5.2, a portion of the Annual Incentive for the
year
in which the Date of Termination occurs, determined by dividing the number
of
days in the calendar year through the Date of Termination by three hundred
sixty-five (365) and multiplying such fraction by the Annual Incentive which
the
Executive would have earned if he had remained employed by the Company for
the
entire calendar year;
provided, however, that the
discretionary portion of the Annual Incentive shall be determined in good faith
by the Compensation Committee taking into account the Executive’s length of
service and contribution towards the Company’s business during the year in which
the Date of Termination occurs;
(iii) reimbursement
for all expenses (under Section 5.8 of this Agreement) incurred as of the Date
of Termination, but not yet paid as of the Date of Termination;
(iv) any
other compensation and benefits as may be provided in accordance with the terms
and provisions of applicable plans and programs, if any, generally applicable
to
executives of the Company or specifically applicable to the Executive;
and
(v) such
rights as the Executive may have under any other written agreement between
the
Company and the Executive which is currently in effect or employee benefit
plan
or program of the Company (including rights to equity
compensation).
For
the avoidance of doubt, in the event that amounts payable pursuant to Sections
5.3 and 5.4 herein have not yet been paid to the Executive on the Date of
Termination, the Executive shall receive such amounts in accordance with
Sections 5.3 and 5.4.
(b) The
amounts owed under Section 6.3(a)(i) shall be paid within fifteen (15) days
of
the Date of Termination. The amounts owed under Section 6.3(a)(ii)
shall be payable, if at all, at the same time as the Annual Incentive normally
would be paid under Section 5.2 for the calendar year in which the Date of
Termination occurs. The amounts owed under Section 6.3(a)(iii),
unless otherwise expressly specified herein, shall be paid in accordance with
the policies and procedures of the Company in effect at the time the applicable
expenses were incurred. The amounts owed under Section 6.3(a)(iv)
shall be payable in accordance with the terms of the applicable plans and
programs. The amounts owed under Section 6.3(a)(v) shall be paid in
accordance with the applicable plan, program, or agreement.
(c) The
Company may terminate the Executive for Cause. In each case, the
existence of Cause must be confirmed by the Board prior to any termination
therefor. In the event of such a confirmation, the Company shall
notify the Executive that the Company intends to terminate the Executive’s
employment for Cause under this Section 6.3. Such notification shall
specify the act, or acts, on the basis of which the Board has so confirmed
the
existence of Cause.
(d) Upon
sixty (60) days’ prior written notice to the Board, the Executive may terminate
his employment under this Agreement without Good Reason.
6.4 No
Mitigation; No Offset. In
the event of any termination of employment, the Executive shall be under no
obligation to seek other employment and there shall be no offset against any
amounts due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that the Executive may
obtain. Any amounts due under this Section 6 are in the nature of
severance payments, or liquidated damages, or both, and are not in the nature
of
a penalty.
6.5 Notice
of Termination. Any
termination of the Executive’s employment under this Section 6 shall be
communicated by a notice of termination (the “Notice of Termination”) to
the other party hereto given in accordance with Section 12.4 of this
Agreement. Such notice shall (a) indicate the specific termination
provision in this Agreement relied upon, (b) set forth in reasonable detail
the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and (c) if the
termination date is other than the date of receipt of such notice, specify
the
date on which the Executive’s employment is to be terminated (which date shall
not be earlier than the date on which such notice is actually
received).
6.6 Compliance
With Section 409A. Notwithstanding
any provision of this Agreement to the contrary, if as of the Date of
Termination, the Executive is or is deemed to be a specified employee within
the
meaning of Section 409A(a)(2)(B)(i) of the Code, the following rules shall
apply:
(a) To
the extent that any amounts described in Section 6 in the aggregate do not
exceed the limits set forth in Section 402(g)(1)(B) of the Code (the “Limited Amount”) in the
calendar year in which the Date of Termination occurs, such amount shall be
payable in accordance with Section 6.1(b) or 6.2(b), as applicable.
(b) In
the event that deferral of the commencement of any other payments or benefits
otherwise payable pursuant to this Agreement is necessary in order to prevent
any accelerated or additional tax under Section 409A of the Code, the Company
shall defer commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid
or
provided to the Executive), and any payments or benefits that would otherwise
be
paid to the Executive during the six-month period following his Date of
Termination shall be accumulated and paid to the Executive in a single cash
lump
sum (without interest) within ten (10) days following the first business day
of
the seventh month following the Date of Termination.
7. Insurance
7.1 . The
Company will insure the Executive, for the duration of his employment, and
thereafter in respect of his acts and omissions occurring during such
employment, under a contract of directors’ and officers’ liability insurance to
the same extent as any such insurance insures members of the Board.
8. Confidential
Information. The
Executive acknowledges that the confidential or proprietary information obtained
by him while employed by the Company concerning the business or affairs of
the
Company or any Affiliate of the Company (“Confidential Information”) is
the property of the Company or such Affiliate, as the case may
be. For purposes of this Agreement, the term “Confidential Information”
does not include
information that the Executive can demonstrate (a) was in the
Executive’s possession prior to first being employed by the Company, provided, that such
information is not known by the Executive to be subject to another
confidentiality agreement with, or other obligation of secrecy to, the Company
or another party, (b) is generally available to the public and became generally
available to the public other than as a result of a disclosure in violation
of
this Agreement, (c) became available to the Executive on a non-confidential
basis from a third party, provided, that such third
party is not known by the Executive to be bound by a confidentiality agreement
with, or other obligation of secrecy to, the Company or another party or is
otherwise prohibited from providing such information to the Executive by a
contractual, legal or fiduciary obligation or (d) the Executive is required
to
disclose pursuant to applicable law or regulation (as to which information,
the
Executive will provide the Company with prior notice of such requirement and,
if
practicable, an opportunity to obtain an appropriate protective
order). The Executive agrees that he will not during the Term of
Employment and for the two-year period following the Term of Employment,
willfully disclose Confidential Information to any Person (other than employees
of the Company or any Subsidiary thereof or any other Person expressly
authorized by the Board to receive Confidential Information or otherwise as
required in the course of his duties during the Term of Employment) or use
for
his own account any Confidential Information without the prior written consent
of the Board. The Executive shall deliver to the Company at the
termination of the Term of Employment, or at any other time the Board may
request in writing, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof) containing
Confidential Information or Work Product which he may then possess or have
under
his control. The Company shall, upon the Executive’s request, provide
to the Executive a copy of such documents as may be reasonably necessary for
the
Executive to defend himself in any third party shareholder disputes, and which
shall otherwise remain subject to the provisions of this Section 8.
9. Work
Product. The
Executive agrees that all inventions, innovations, improvements, developments,
methods, designs, analyses, reports and all similar or related information
which
relate to the Company’s or its Subsidiaries’ actual business, research and
development or existing products or services and which are conceived, developed
or made by the Executive while employed with the Company (“Work Product”) belong to the
Company or such Subsidiary. Upon the written request of the Board,
the Executive will promptly disclose such Work Product to the Board and perform
all actions reasonably requested by the Board (whether during or after the
Term
of Employment) to establish and confirm such ownership.
10. Noncompete,
Non-Solicitation.
10.1 Non-Compete. The
Executive
acknowledges that in the course of his employment with the Company he will
become familiar with the trade secrets and other confidential information of
the
Company and the Subsidiaries of the Company and that his services will be of
special, unique and extraordinary value to the Company. Therefore,
the Executive agrees that, during the Term of Employment and for an additional
period (the “Noncompete
Period”) equal to one (1) year thereafter, he shall not directly or
indirectly own, manage, control, participate in, consult with, or render
services for any “Competing Business” (as defined below) in any “Competing
Market” (as defined below). For purposes of this section, a “Competing Business”
is any enterprise or
individual engaged (or after Executive’s
arrival, that becomes engaged) in the production, sale or distribution of
content via cable television, the world wide web, radio or other media used
by
the Company to distribute content as of the Date of Termination that (i)
principally targets African-American audiences or (ii) creates, maintains or
operates entertainment or social services aimed at African-American consumers
or
users. A division or subsidiary of a diversified business will be
treated as a Competing Business only if (i) the diversified business falls
within the preceding sentence and (ii) the Executive directly provides services
to that division or subsidiary as his primary employment within the diversified
business. A “Competing Market” is a
geographic market in which the Company or any Company Affiliate has, on or
before the Date of Termination, (i) commenced material operations or (ii)
determined before such date to commence such material operations and committed
substantial resources to either determining the feasibility of such commencement
or actually commencing such operations. The Company agrees that any
businesses arising out of or related to the Executive’s current ownership of and
interest in Music One, Inc. are expressly excluded from the intended scope
of
this provision and thus not Competing Businesses. Nothing herein
shall prohibit the Executive from being a passive owner of not more than 4.9%
of
the outstanding stock of any class of a corporation which is publicly traded,
so
long as the Executive has no active participation in the business of such
corporation. Notwithstanding the foregoing, if Executive’s employment
terminates without Cause or for Good Reason, the Noncompete Period shall be
limited to the Term of Employment.
10.2 Non-Solicit.
During the
Noncompete Period, the Executive shall not directly or indirectly through
another Person (i) induce or attempt to induce any employee of the Company
or
any Subsidiary of the Company (other than Catherine Hughes) to leave the employ
of such Person; (ii) hire any individual who was an executive of the Company
or
its Subsidiaries, a general, station or regional manager of the Company or
its
Subsidiaries, or a radio personality employed by the Company or its Subsidiaries
at any time during the Term of Employment (other than Catherine Hughes and
individuals who have not been employed by the Company or a Subsidiary of the
Company for a period of at least one (1) year prior to employment by the
Executive directly or indirectly through another Person); or (iii) induce or
attempt to induce any customer, supplier, licensee or other Person having a
business relationship with the Company or any Subsidiary of the Company to
cease
doing business with the Company or such Subsidiary of the Company, or interfere
materially with the relationship between any such customer, supplier, licensee
or other Person having a business relationship with the Company or any
Subsidiary of the Company.
10.3 Acknowledgements.
(a) The
Executive agrees and acknowledges that the type and scope of restrictions
described in this Section 10 are fair and reasonable and that the restrictions
are designed to protect the legitimate interests of the Company and not to
prevent him from earning a living. If, however, at the time of
enforcement of this Section 10, a court shall hold that the duration, scope
or
area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area reasonable
under such circumstances shall be substituted for the stated duration, scope
or
area and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by
law.
(b) The
Executive acknowledges and agrees that the Executive’s breach of Section 8 or
Section 10 of this Agreement will cause substantial and irreparable harm to
the
Company, and therefore, in the event of any such breach, in addition to such
other remedies that may be available, the Company shall be entitled to equitable
relief, including specific performance and injunctive relief.
(c) In
the event that the Executive’s employment terminates for whatever reason, the
Executive hereby grants consent to notification by the Company to the
Executive’s new employer concerning the Executive’s obligations under Sections 8
and 10 of this Agreement.
(d) In
the event that legal action is deemed necessary by the Company to enforce the
provisions of Section 8 or Section 10 of this Agreement, the time period for
all
covenants and restrictions contained in Sections 8 and 10 shall be tolled during
such time as the litigation is pending.
11. Successors.
11.1 Executive. This
Agreement is personal to the Executive and, without the prior express written
consent of the Company, shall not be assignable by the Executive, except that
the Executive’s rights to receive any compensation or benefits under this
Agreement may be transferred or assigned pursuant to testamentary disposition,
intestate succession or pursuant to a qualified domestic relations
order. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s heirs, beneficiaries and/or legal
representatives.
11.2 The
Company. This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns, provided, that the Company
may only transfer or assign this Agreement with the Executive’s prior written
consent (which consent shall be deemed given if the Executive consented to
the
underlying transaction).
12. Miscellaneous.
12.1 Applicable
Law, Forum and Jurisdiction. The
corporate law of the State of Delaware will govern all questions concerning
the
relative rights of the Company and its stockholders, and all questions
concerning the construction, validity and interpretation of this Agreement
shall
be governed by and construed in accordance with the internal laws of the State
of Delaware. The parties agree that all actions or proceedings
arising in connection with this Agreement shall be conducted in the State of
Delaware and each party agrees to submit to the jurisdiction of the state and
federal courts of the State of Delaware for actions arising out of this
Agreement.
12.2 Legal
Fees. The
Company shall pay the reasonable legal fees (based on actual time charges and
disbursements of counsel) incurred by the Executive in negotiating and entering
into this Agreement, up to a maximum of Twenty-Five Thousand Dollars
($25,000).
12.3 Amendments/Waiver. This
Agreement may not be amended or modified other than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives. No waiver by any party to this Agreement of any
breach of any term, provision or condition of this Agreement by the other party
shall be deemed a waiver of a similar or dissimilar term, provision or condition
at the same time, or any prior or subsequent time.
12.4 Notices. All
notices, waivers and other communications hereunder shall be in writing and
shall be given by hand-delivery to the other party, by facsimile (with
appropriate confirmation of transmission), by reputable overnight courier,
or by
registered or certified mail, return receipt requested, postage prepaid, and
shall be deemed delivered when actually delivered by hand, upon receipt of
confirmation of facsimile transmission, three (3) days after mailing, or one
day
after dispatch by overnight courier, addressed as follows:
If
to the Executive:
Mr.
Alfred C. Liggins
[at
the last known address on file with the Company]
If
to the Company:
Radio
One, Inc.
5900
Princess Garden Parkway, 7th
Floor
Lanham,
MD 20706
Attention:
General Counsel
Facsimile: 301-306-9638
or
to such other address as either party shall have furnished to the other in
writing in accordance herewith.
12.5 Withholding. Notwithstanding
anything else to the contrary herein, the Company may withhold from any amounts
payable under this Agreement such taxes as shall be required to be withheld
pursuant to any applicable law or regulation. Where amounts are
payable to the Executive pursuant to this Agreement both in cash and in a form
other than cash, the Company may, at its option and upon prior notice to the
Executive, withhold from such cash payments, or withhold from such payments
in a
form other than cash, or withhold from both.
12.6 Severability. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under any present or future law, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby: (a) such provision will be fully severable; (b) this Agreement will
be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof; (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by
the
illegal, invalid or unenforceable provision or by its severance herefrom; and
(d) in lieu of such illegal, invalid or unenforceable provision, there will
be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as shall be agreed upon by the Company and the Executive.
12.7 Captions;
Section References. The
captions of this Agreement are not part of the provisions hereof and shall
have
no force or effect. All references to sections of statutes,
regulations or rules shall be deemed to be references to any successor
sections.
12.8 No
Company Setoff. The
Company’s
obligation to pay the Executive the amounts provided and to make the
arrangements provided hereunder shall not be subject to setoff, counterclaim,
or
recoupment of amounts owed by the Executive to the Company or its
Affiliates.
12.9 Entire
Agreement. This
Agreement contains the entire agreement between the parties concerning the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral, between
the
parties with respect thereto.
12.10 Counterparts. This
Agreement may be executed in separate counterparts, each of which is deemed
to
be an original and all of which taken together constitute one and the same
agreement.
12.11 Representation. The
Executive represents and warrants that the performance of the Executive’s duties
and obligations under this Agreement will not violate any agreement between
the
Executive and any other Person.
12.12 Further
Assurances. The
parties shall, with reasonable diligence, do all things and provide all
reasonable assurances as may be required to complete the transactions
contemplated by this Agreement, and each party shall provide such further
documents or instructions required by any other party as may be reasonably
necessary or desirable to give effect to this Agreement and carry out its
provisions.
12.13 Survivorship. The
respective rights and obligations of the parties under this Agreement shall
survive any termination of this Agreement or the Executive’s employment
hereunder for any reason to the extent necessary for the intended preservation
of such rights and obligations.
[END
OF PAGE]
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Executive has hereunto set his hand, and the Company has
caused this Employment Agreement to be executed in its name and on its behalf
by
its authorized representative, all as of the day and year first above
written.
RADIO
ONE, INC.,
a
Delaware corporation
By: /s/
Peter
D.
Thompson
Name:
Peter D. Thompson
Title:
Chief Financial
Officer
EXECUTIVE:
/s/
Alfred C. Lggins
III
Alfred C. Liggins III
Alfred C. Liggins III
FIRST
AMENDMENT TO THE
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
BETWEEN
RADIO ONE, INC. AND
LINDA
J. VILARDO
This
First Amendment (the “Amendment”)
is made to the Amended and Restated Employment Agreement Between Radio One,
Inc.
(the “Company”) and Linda J. Vilardo (the “Executive”), dated October 31, 2000
(the “Agreement”), effective as of the latest date set forth below.
WHEREAS,
the Executive has
been employed by the Company as its General Counsel and Vice President and
currently serves as the Company’s Chief Administrative Officer and Vice
President; and
WHEREAS,
Section 409A of the
Internal Revenue Code of 1986 (the “Code”) which was enacted effective January
1, 2005, imposes new requirements regarding the federal income tax treatment
of
nonqualified deferred compensation; and
WHEREAS,
final regulations
under Code Section 409A were published by the Internal Revenue Service (“IRS”)
in April 2007 and transition period guidance issued by the IRS allows this
Amendment to be adopted no later than December 31, 2008 in order to bring the
Agreement into compliance with new Code Section 409A;
WHEREAS,
Section 14.2 of the
Agreement provides that the Agreement may be amended by a written agreement
executed by the Company and the Executive;
NOW
THEREFORE, in
consideration of the premises and mutual covenants herein contained, the Company
and the Executive hereby agree to amend the Agreement as provided
below:
1.
The definition of “Disability” set forth in Section 1 of the Agreement is hereby
amended to read as follows:
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“Disability”
shall mean the Executive:
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(a)
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is
unable to engage in any substantial gainful activity by reason of
any
medically determinable physical or mental impairment which can be
expected
to result in death, or last for a continuous period of not less than
12
months;
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(b)
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by
reason of any medically determinable physical or mental impairment
which
can be expected to result in death, or last for a continuous period
of not
less than 12 months, is receiving income replacement benefits for
a period
of not less than three months under an accident and health plan covering
employees of the Company; or
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(c)
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is
determined to be totally disabled by the Social Security Administration.
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2.
The definition of “Good Reason” set forth in Section 1 of the Agreement is
hereby amended to read as follows:
“Good Reason” shall be deemed to exist if, without the express written consent
of the Executive, there is:
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(a)
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a
material diminution in the Executive’s rate of Annual Base Salary (as
provided in Section 5.1 of this Agreement, including any increases);
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(b)
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a
material diminution in the Executive’s authority, duties or
responsibilities;
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(c)
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a
material diminution in the authority, duties or responsibilities
of the
supervisor to whom the Executive is required to report, including
a
requirement that the Executive report to a corporate officer or employee
instead of reporting directly to the Board of Directors;
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(d)
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a
material diminution in the budget over which the Executive retains
authority;
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(e)
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a
material change in the geographic location at which the Executive
must
perform services;
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(f)
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any
other action or inaction that constitutes a material breach by the
Company
of this Agreement, including, but not limited to:
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(i)
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the
Company’s failure to pay the Executive’s Annual Base Salary when due or to
pay any other material amount due to the Executive hereunder within
five
(5) days of written notice from the Executive, provided, however,
that the
Company shall have thirty (30) days after receiving the Executive’s notice
to remedy the breach; and
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(ii)
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the
Company’s failure to obtain a satisfactory written agreement from any
successor to assume and agree to perform this Agreement, which successor
the Executive reasonably concludes is capable of performing the Company’s
financial obligations under this Agreement.
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3. Section
5.2(b) is hereby amended to read as follows:
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(b)
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If
the Executive has remained in the full-time and continuous employ
(subject
to vacation and sick time in accordance with this Agreement and the
policies of the Company then in effect) of the Company from the
Commencement Date through and including the end of the Extended Term,
then
the Company shall pay the Executive a bonus (the “Extended Term Retention
Bonus”) in an amount equal to Two Million Five Thousand Dollars
($2,005,000). The Extended Term Retention Bonus awarded to the
Employee hereunder, if any, shall be due and payable on the earlier
of (i)
November 1, 2008, and (ii) the termination of the Executive’s employment
pursuant to Section 6 hereto, provided however, that the payment
shall be
delayed until the first day of the seventh month following such
termination of employment, but only to the extent that such delay
is
necessary in order to avoid penalties under Code Section 409A with
respect
to payments to a Specified Employee, as defined in Treasury Regulations
Section 1.409A-1(i) upon Separation from Service, as defined in Treasury
Regulations Section 1.409A-1(h).
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4. Section
6.1(a)(iv) is hereby amended as follows:
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(iv)
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to
the extent applicable, and as so permitted by applicable law, the
continuation of the Executive’s welfare benefits (as described in Section
5.4 of this Agreement) at the level in effect on the Date of Termination
during the Section 6.1 Severance Period or beyond as the law requires,
and
any other compensation and benefits as may be provided in accordance
with
the terms and provisions of applicable plans and programs, if any,
generally applicable to executives of the Company or specifically
applicable to the Executive, provided, that, if the Company is not
able to
provide continuing coverage under any such welfare benefit plan or
program
following the Executive’s termination, the Company shall provide
substantially similar (A) non-taxable medical benefits insurance
coverage;
(B) disability insurance coverage; and (C) death benefit only life
insurance coverage outside of the Company’s policy or program during such
Section 6.1 Severance Period, and, provided further, that the Company
shall pay all premiums for COBRA group health care continuation coverage
for the Executive and her dependents during such Section 6.1 Severance
Period.
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5.
Section 6.1(b) is hereby amended as follows:
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(b)
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(i)
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Subject
to Section 6.1(b)(ii) below, all amounts owed under Section 6.1(a)
shall
be paid at the time described in this Section 6.1(b)(i). The amounts
owed
under Section 6.1(a)(i) shall be payable in equal bi-weekly installments
from the Date of Termination through the expiration of the Section
6.1
Severance Period. The amounts owed under Section 6.1(a)(ii) shall
be paid
within fifteen (15) days after the Date of Termination. The amounts
owed
under Section 6.1(a)(iii), unless otherwise expressly specified herein,
shall be paid in accordance with the policies and procedures of the
Company in effect at the time the applicable expenses were incurred.
The
amounts owed under Section 6.1(a)(iv) shall be payable in accordance
with
the terms of the applicable plans and programs, except any coverage
provided under plans outside of the Company’s regular employee benefit
plan programs must provide for no gap in coverage for the Executive
between the Company’s regular coverage and the separate coverage required
by Section 6.1(a)(iv). The amounts owed under Section 6.1(a)(v)
shall be paid within sixty (60) days after the Date of Termination.
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(ii)
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Notwithstanding
Section 6.1(b)(i), to the extent any amount required to be paid under
Section 6.1(a) is treated as deferred compensation under Code Section
409A, payment of such amount shall be delayed until the first day
of the
seventh month following the Date of Termination, but only to the
extent
that such delay is necessary in order to avoid penalties under Code
Section 409A with respect to payments to a Specified Employee, as
defined
in Treasury Regulations Section 1.409A-1(i) upon Separation from
Service,
as defined in Treasury Regulations Section 1.409A-1(h).
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6.
Section 6.1(c) is hereby amended as follows:
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(c)
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At
any time during the six (6) month period immediately following a
Change in
Control, the Executive may, in her sole discretion and upon thirty
(30)
days’ prior written notice to the Board, terminate her employment under
this Agreement and receive the benefits provided under Section 6.1(a)
hereof at the time described in Section 6.1(b) hereof; provided,
however,
that payment of any benefits that are treated as deferred compensation
under Code Section 409A shall be delayed until the first day of the
seventh month following the Date of Termination, but only to the
extent
that such delay is necessary in order to avoid penalties under Code
Section 409A with respect to payments to a Specified Employee, as
defined
in Treasury Regulations Section 1.409A-1(i) upon Separation from
Service,
as defined in Treasury Regulations Section 1.409A-1(h).
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7. Section
6.2(a)(iv) is hereby amended as follows:
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(iv)
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to
the extent applicable, and as so permitted by applicable law, the
continuation of the Executive’s welfare benefits (as described in Section
5.4 of this Agreement) at the level in effect on the Date of Termination
during the Section 6.2 Severance Period or beyond as the law requires,
and
any other compensation and benefits as may be provided in accordance
with
the terms and provisions of applicable plans and programs, if any,
generally applicable to executives of the Company or specifically
applicable to the Executive, provided, that, if the Company is not
able to
provide continuing coverage under any such welfare benefit plan or
program
following the Executive’s termination, the Company shall provide
substantially similar (A) non-taxable medical benefits insurance
coverage;
(B) disability insurance coverage; and (C) death benefit only life
insurance coverage outside of the Company’s policy or program during such
Section 6.2 Severance Period, and, provided further, that the Company
shall pay all premiums for COBRA group health care continuation coverage
for the Executive and her dependents during such Section 6.2 Severance
Period.
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8.
Section 6.2(b) is hereby amended as follows:
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(b)
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(i)
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Subject
to Section 6.2(b)(ii) below, all amounts owed under Section 6.2(a)
shall
be paid at the time described in this Section 6.2(b)(i). The amounts
owed
under Section 6.2(a)(i) shall be payable in equal bi-weekly installments
from the Date of Termination through the expiration of the Section
6.2
Severance Period. The amounts owed under Section 6.2(a)(ii) shall
be paid
within fifteen (15) days after the Date of Termination. The amounts
owed
under Section 6.2(a)(iii), unless otherwise expressly specified herein,
shall be paid in accordance with the policies and procedures of the
Company in effect at the time the applicable expenses were incurred.
The
amounts owed under Section 6.2(a)(iv) shall be payable in accordance
with
the terms of the applicable plans and programs, except any coverage
provided under plans outside of the Company’s regular employee benefit
plan programs must provide for no gap in coverage for the Executive
between the Company’s regular coverage and the separate coverage required
by Section 6.2(a)(iv). The amounts owed under Section 6.2(a)(v)
shall be paid within sixty (60) days after the Date of Termination.
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(ii)
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Notwithstanding
Section 6.2(b)(i), to the extent any amount required to be paid under
Section 6.2(a) is treated as deferred compensation under Code Section
409A, payment of such amount shall be delayed until the first day
of the
seventh month following the Date of Termination, but only to the
extent
that such delay is necessary in order to avoid penalties under Code
Section 409A with respect to payments to a Specified Employee, as
defined
in Treasury Regulations Section 1.409A-1(i) upon Separation from
Service,
as defined in Treasury Regulations Section 1.409A-1(h).
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9.
Section 6.2(c) is hereby amended to read as follows:
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(c)
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Within
ninety (90) days after the initial occurrence of an event that is
deemed
to constitute Good Reason for the Executive to terminate her employment
under this Agreement, the Executive must provide written notice to
the
Board informing them of the existence of such condition. The effective
date of such termination must be not earlier than thirty (30) days
after
the date the notice is delivered to the Board and not later than
two years
following the initial existence of the condition. The Board shall
be
provided the opportunity, within thirty (30) days of its receipt
of the
notice to remedy such condition, including, but not limited to, meeting
with the Executive to discuss the situation. If the Executive does
not
rescind her termination of employment within the 30 day cure period,
the
Executive’s employment with the Company shall be terminated for Good
Reason, subject to the Company’s right to seek arbitration of the
existence of Good Reason as provided in Section 11 of this Agreement,
and
the Executive shall receive the benefits provided under Section 6.2(a)
hereof. The Company agrees that the Executive’s continuation of
her employment during the initial six-month period following the
occurrence of a Good Reason shall not constitute a waiver of her
rights to
resign for Good Reason, which shall be preserved during such period.
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10.
Section 6.3(b) is hereby amended as follows:
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(b)
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(i)
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Subject
to Section 6.3(b)(ii) below, all amounts owed under Section 6.3(a)
shall
be paid at the time described in this Section 6.3(b)(i). The amounts
owed
under Section 6.3(a)(i) shall be paid within fifteen (15) days after
the
Date of Termination. The amounts owed under Section 6.3(a)(ii), unless
otherwise expressly specified herein, shall be paid in accordance
with the
policies and procedures of the Company in effect at the time the
applicable expenses were incurred. The amounts owed under Section
6.3(a)(iii) shall be payable in accordance with the terms of the
applicable plans and programs. The amounts owed under Section 6.3(a)(iv)
shall be paid within sixty (60) days after the Date of Termination.
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(ii)
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Notwithstanding
Section 6.3(b)(i), to the extent any amount required to be paid under
Section 6.3(a) is treated as deferred compensation under Code Section
409A, payment of such amount shall be delayed until the first day
of the
seventh month following the Date of Termination, but only to the
extent
that such delay is necessary in order to avoid penalties under Code
Section 409A with respect to payments to a Specified Employee, as
defined
in Treasury Regulations Section 1.409A-1(i) upon Separation from
Service,
as defined in Treasury Regulations Section 1.409A-1(h).
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IN
WITNESS WHEREOF, the
Executive and the Company have caused this Amendment to be executed as of the
latest date set forth below.
RADIO ONE, INC.
_________________________
By:_/s/
Alfred C. Liggins III
__________
Date
Alfred C. Liggins, III
Chief Executive Officer & President
EXECUTIVE
_________________________
___ /s/ Linda J.
Vilardo_____________
Date
Linda J. Vilardo