Exhibit 10.7
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
AGREEMENT, dated effective as of
July 28, 2008, by and between BT Triple Crown Merger Co., Inc
(“MergerSub”, together with its successors, the
“Company”), CC Media Holdings, Inc.
(“Holdings”) and L. Lowry Mays
(“Executive”).
WHEREAS, Clear Channel
Communications, Inc., a Texas corporation and the Executive
previously entered into that certain Employment Agreement dated as
of March 10, 2005 (the “Existing Agreement”);
and
WHEREAS, Clear Channel
Communications, Inc. has entered into an Agreement and Plan of
Merger dated as of November 16, 2006, and amended on
April 18, 2007, May 17, 2007 and May 13, 2008
(the “Merger Agreement”), pursuant to which, on the
terms and subject to the conditions set forth therein, MergerSub
shall merge within and into Clear Channel Communications, Inc.,
with Clear Channel Communications, Inc. surviving such merger at
and after the Effective Time (as defined in the Merger Agreement),
and Holdings shall, on the date of consummation of the transactions
contemplated under the Merger Agreement, be the ultimate parent
holding company of the Company; and
WHEREAS, the Company and the
Executive desire to amend and restate the terms of the Existing
Agreement between the Company and the Executive, to be effective as
of the Effective Time; and
NOW THEREFORE, IN CONSIDERATION of
the premises and the mutual covenants set forth below, the parties
hereby amend and restate the Existing Agreement effective as of the
Effective Time as follows:
1. Employment . The Company
hereby agrees to continue to employ Executive as the Chairman
Emeritus, and Executive hereby accepts such continued employment,
on the terms and conditions hereinafter set forth.
2. Term . The period of
employment of Executive by the Company under this Agreement (the
“Employment Period”) shall commence on the date upon
which the Effective Time occurs (the “Effective Date”)
and shall have an original term of five (5) years (the
“Original Term”). The Employment Period shall
automatically be extended thereafter for successive terms of one
(1) year each. The Employment Period may be sooner terminated
by either party in accordance with Section 6 of this
Agreement.
3. Position and Duties .
During the Employment Period, Executive shall serve as Chairman
Emeritus of the Company and of Holdings, and shall report solely
and directly to the Board of Directors (the “Board”) of
Holdings. Executive’s duties shall be limited to assisting
the Board of the Company and the Board of Holdings with the overall
strategic direction of the Company, as and to the extent requested
by the Board of Holdings. Executive shall devote as much of his
working time, attention and energies during normal business hours
(other than absences due to illness or vacation) as is reasonably
necessary to satisfactorily perform his duties for the Company.
Notwithstanding the above, Executive shall be permitted, to the
extent such
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activities do not substantially interfere with
the performance by Executive of his duties and responsibilities
hereunder or violate Section 10 hereof, to (i) manage
Executive’s personal, financial and legal affairs,
(ii) serve on civic or charitable boards or committees or on
the Board of Directors of Live Nation Inc. and its committees (it
being expressly understood and agreed that Executive’s
continuing to serve on any such boards and/or committees on which
Executive is serving, or with which Executive is otherwise
associated, as of the Effective Date shall be deemed not to
interfere with the performance by Executive of his duties and
responsibilities under this Agreement), (iii) deliver lectures
or fulfill speaking engagements; and (iv) engage in any other
activity that is not in violation of Section 10 hereof;
provided such activities do not conflict with the interests of the
Company or its Affiliates or otherwise interfere (other than to a
de minimis extent), individually or in the aggregate, with the
performance of the Executive’s duties hereunder.
4. Place of Performance . The
principal place of employment of Executive shall be at the
Company’s principal executive offices in San Antonio,
Texas.
5. Compensation and Related
Matters .
(a) Base Salary
and Bonus . During the Employment Period, the Company shall pay
Executive a base salary at the rate of Two Hundred Fifty Thousand
Dollars ($250,000) per year (“Base Salary”).
Executive’s Base Salary shall be paid in approximately equal
installments in accordance with the Company’s customary
payroll practices. In addition to Base Salary, Executive shall be
eligible to receive an annual bonus (the “Performance
Bonus”). The amount of the Performance Bonus shall be
determined by the Board of Holdings (which may act through its
Compensation Committee) in its sole discretion, provided, however,
that in any year during the Employment Period in which the Company
achieves at least eighty percent (80%) of the budgeted OIBDAN
for the given year (the “Target OIBDAN”) as set forth
in the Management Plan previously presented to the Sponsor
Group 1 (as defined in the Stockholders
Agreement, dated as of July 29, 2008, by and among the
Mergerco, Holdings, the Executive, and other stockholders of
Holdings) and consistent with the requirements of
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”), to the extent applicable, such
Performance Bonus shall be no less than One Million Dollars
($1,000,000). The Management Plan will be subject to equitable
adjustment by the Compensation Committee of Holdings to take into
account material acquisitions, dispositions and other material
extraordinary events; provided, that the parties hereto will use
their reasonable best efforts to facilitate the payment of the
bonuses hereunder on a basis that is consistent with such payment
qualifying for the performance-based compensation exception under
Section 162(m) of the Code and the regulations thereunder. If
the Company does not achieve the Target OIBDAN in any given year,
the amount of the Performance Bonus, if any, shall be determined by
the Board of Holdings in its sole discretion. The Performance
Bonus, if any, shall be payable in one lump sum between
January 1 and March 15 of the year following the year for
which the Performance Bonus was earned.
(b) Expenses . The Company
shall promptly reimburse Executive for all
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Presented on
May 17, 2007.
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reasonable business expenses upon
the presentation of reasonably itemized statements of such
expenses, in accordance with the Company’s policies and
procedures now in force or as such policies and procedures may be
modified generally with respect to senior executive officers of the
Company.
(c) Vacation . Executive
shall be entitled to the number of weeks of paid vacation per year
that he was eligible for immediately prior to the date of this
Agreement, but in no event less than four (4) weeks annually.
Unused vacation may be carried forward from year to year. Vacation
shall otherwise be governed by the policies of the Company, as in
effect from time to time. In addition to vacation, Executive shall
be entitled to the number of sick days and personal days per year
that other senior executive officers of the Company with similar
tenure are entitled to under the Company’s
policies.
(d) Services Furnished .
During the Employment Period, the Company shall furnish Executive
with office space, stenographic and secretarial assistance and such
other facilities and services no less favorable than what he was
receiving immediately prior to the date of this Agreement (
i . e ., one full-time assistant and one part-time
bookkeeper and office space for them). The Company shall also
furnish office space for up to two (2) additional people, to
be designated by Executive; provided, however, that such
individuals shall not be on the Company’s payroll and shall
not perform services of any kind for the Company or any of its
Affiliates and the Company shall have no liability for federal,
state or local taxes related to the performance of such
individuals’ services.
(e) Welfare, Pension and
Incentive Benefit Plans . During the Employment Period,
Executive (and his spouse and dependents to the extent provided)
shall be entitled to participate in and be covered under all the
welfare benefit plans or programs maintained by the Company from
time to time for the benefit of its senior executive officers,
including, without limitation, all medical, hospitalization,
dental, disability, accidental death and dismemberment and travel
accident insurance plans and programs. During the Employment
Period, the Company shall provide to Executive (and his spouse and
dependents to the extent provided under the applicable plans and
programs) the same type and substantially equivalent levels of
participation and employee benefits (except severance pay plans
and, except with the express consent of the Board of Holdings,
incentive bonus programs other than as explicitly set forth in
Section 5(a) hereof) as are being provided to other senior
executives (and their spouses and dependents to the extent provided
under the applicable plans or programs) on the Effective Date,
subject to modifications affecting all senior executive
officers.
(f) Other Perquisites .
During the Employment Period, Executive shall be entitled to
receive, in the same level and amount as received on
November 16, 2006:
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(i)
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the use of an
automobile appropriate to his position;
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(ii)
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reimbursement
for the full amount of annual dues for membership in one social
dining club; and
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(iii)
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use of a Company-provided
aircraft for personal travel, in accordance with Company policy as
in effect on November 16, 2006;
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provided, however, Executive shall
be entitled to continued use of such aircraft on that same basis
for ten (10) years following the Effective Date, regardless of
whether Executive remains employed by the Company.
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6. Termination .
Executive’s employment hereunder may be terminated under the
following circumstances:
(a) Death . During the
Employment Period, Executive’s employment hereunder shall
terminate upon his death.
(b) Disability . Following
the Original Term, if, as a result of Executive’s incapacity
due to physical or mental illness, Executive shall have been
substantially unable to perform his duties hereunder
notwithstanding the provision of reasonable accommodation for a
period of six (6) consecutive months, and within thirty
(30) days after written Notice of Termination is given after
such six (6) month period Executive shall not have returned to
the substantial performance of his duties on a full-time basis, the
Company shall have the right to terminate Executive’s
employment hereunder for “Disability”, and such
termination in and of itself shall not be, nor shall it be deemed
to be, a breach of this Agreement.
(c) By Executive. During the
Employment Period, Executive shall have the right to terminate his
employment by providing the Company with a Notice of Termination at
least thirty (30) days prior to such termination, and such
termination shall not in and of itself be, nor shall it be deemed
to be, a breach of this Agreement. In the event of termination
pursuant to this Section 6(c), the Board of the Company may
elect to waive the period of notice, or any portion thereof, and,
if the Board so elects, the Company will pay Executive his Base
Salary for the initial thirty (30) days of the notice period
or for any lesser remaining portion of such period, payable in
accordance with the regular payroll practices of the
Company.
(d) By the Company For
Extraordinary Cause . During the Original Term, in addition to
termination in accordance with Section 6(a) hereof, the
Company shall have the right to terminate Executive’s
employment only for Extraordinary Cause, by providing Executive
with a Notice of Termination, and such termination in and of itself
shall not be, nor shall it be deemed to be, a breach of this
Agreement. For purposes of this Agreement, the Company shall have
“Extraordinary Cause” to terminate Executive’s
employment upon Executive’s:
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(i)
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conviction of a
felony or other crime involving moral turpitude; or
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(ii)
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willful
misconduct that is materially and demonstrably injurious to the
Company.
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For purposes of this Section 6(d),
no act, or failure to act, by Executive shall be considered
“willful” unless committed in bad faith and without a
reasonable belief that the act or omission was in the best
interests of the Company or any entity in control of, controlled by
or under common control with the Company (“Affiliates”)
thereof. For the avoidance of doubt,
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“Affiliates” shall include Holdings.
Extraordinary Cause shall not exist under paragraph
(ii) unless and until the Company has delivered to Executive a
copy of a resolution duly adopted by a majority of the members of
the Board of the Company at a meeting of the Board called and held
for such purpose (after reasonable (but in no event less than
thirty (30) days) notice to Executive and an opportunity for
Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board,
Executive was guilty of the conduct set forth in paragraph
(ii) and specifying the particulars thereof in detail;
provided that at least a majority of the members of the Board of
Holdings has determined prior to such meeting that Cause exists.
This Section 6(d) shall not prevent Executive from challenging
in any arbitration or court of competent jurisdiction the
Board’s determination that Extraordinary Cause exists or that
Executive has failed to cure any act (or failure to act) that
purportedly formed the basis for the Board’s
determination.
(e) By the Company Following the
Original Term. Following the Original Term, the Company shall
have the right to terminate Executive’s employment with or
without Extraordinary Cause by providing Executive with a Notice of
Termination, and such termination shall not in and of itself be,
nor shall it be deemed to be, a breach of this
Agreement.
7. Termination Procedure
.
(a) Notice of Termination .
Any termination of Executive’s employment during the
Employment Period (other than termination pursuant to
Section 6(a)) shall be communicated by written Notice of
Termination to the other party hereto in accordance with
Section 14. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which indicates the specific
termination provision in this Agreement relied upon and sets forth
in reasonable detail the facts and circumstances claimed to provide
a basis for termination of Executive’s employment under the
provision so indicated.
(b) Date of Termination .
“Date of Termination” shall mean (i) if
Executive’s employment is terminated by his death, the date
of his death, (ii) if Executive’s employment is
terminated pursuant to Section 6(b), thirty (30) days
after Notice of Termination (provided that Executive shall not have
returned to the substantial performance of his duties on a
full-time basis during such thirty (30) day period), and
(iii) if Executive’s employment is terminated for any
other reason, the date on which a Notice of Termination is given or
any later date set forth in such Notice of Termination.
8. Compensation Upon
Termination . In the event Executive’s employment
terminates during the Employment Period, the Company shall provide
Executive with the payments and benefits set forth
below:
(a) Extraordinary Cause or By
Executive . If Executive’s employment is terminated by
the Company for Extraordinary Cause or by Executive, the Company
shall pay Executive his Base Salary, Bonus and unused vacation pay
accrued or prorated through the Date of Termination, and shall
reimburse Executive pursuant to Section 5(b) for reasonable
business expenses incurred but not paid prior to such termination
of employment (together, “Final Compensation”). The
Base Salary and vacation pay components of Final Compensation shall
be paid in a lump sum as soon as practicable
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following the Date of Termination,
but in no event later than two and a half months following the end
of the taxable year including the Date of Termination. The Bonus
component of Final Compensation shall be calculated by multiplying
the amount of the Performance Bonus Executive would have earned had
he remained employed for the full year (if any) by a fraction, the
numerator of which is the number of days during such year that
Executive was employed and the denominator of which is 365, and
shall be paid at the time bonuses for the year in which the Date of
Termination occurs are paid to executives of the Company generally,
but in no event later than two and a half months following the end
of the taxable year in which the Date of Termination occurs. The
Company shall have no further obligation to Executive upon such
termination under this Agreement.
(b) Death . If
Executive’s employment is terminated by his death, the
Company shall pay Final Compensation to Executive’s
beneficiary, legal representatives or estate, as the case may be,
at the time and in the manner set forth in Section 8(a)
hereof. The Company shall have no further obligation to Executive
upon such termination under this Agreement.
(c) Termination By the Company
Without Extraordinary Cause Following the Original Term . If,
following the Original Term, the Company terminates
Executive’s employment without Extraordinary
Cause:
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(i)
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the Company
shall pay Executive the Final Compensation at the time and in the
manner set forth in Section 8(a) hereof, except that Executive
shall not receive the Bonus component of Final
Compensation;
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(ii)
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provided that Executive signs and
returns to the Company a timely and effective release of claims in
the form attached hereto as Exhibit A (by the deadline
specified therein (any such release submitted by such deadline, the
“Executive Release of Claims”)) and delivering it to
the Company within thirty (30) days of the date of his
separation from service, the Company shall pay Executive a lump-sum
cash payment equivalent to any Base Salary and Performance Bonus to
which he would otherwise have been entitled had he remained
employed for the remainder of the then-current term. Following the
Company’s receipt of a timely and effective Release of
Claims, the Company and Holdings shall execute a release of claims
in favor of Executive substantially in the form attached hereto as
Exhibit B (the “Company Release of Claims”). Any
Base Salary to which Executive is entitled to hereunder shall be
paid within ninety (90) days following the Date of
Termination, and any Performance Bonus to which Executive is
entitled hereunder shall be paid at the time bonuses for the year
in which termination occurs are paid to executives of the Company
generally, but in no event later than two and a half months
following the end of the taxable year including the Date of
Termination. The Executive Release of Claims required for
this
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benefit creates legally binding
obligations on Executive and the Company and its Affiliates
therefore advise Executive to seek the advice of an attorney before
signing it; and
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(iii)
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the Company
shall maintain in full force and effect, for the continued benefit
of the Executive and his eligible dependents, for a period of five
(5) years following the Date of Termination the medical and
hospitalization insurance programs in which the Executive and his
dependents were participating immediately prior to the Date of
Termination, at the level in effect and upon substantially the same
terms and conditions (including without limitation contributions
required by Executive for such benefits) as existed immediately
prior to the Date of Termination; provided, that if
Execut
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