This Agreement (“ Agreement
”) is entered into by and between Andrew Hersam (“
Employee ”) and Westwood One, Inc. (the “
Company ”).
1. Employment. The Company hereby employs Employee, and
Employee accepts such employment, and agrees to devote
Employee’s full time and efforts to the interests of the
Company upon the terms and conditions hereinafter set
forth.
2. Term of Employment.
Subject to the provisions for
termination hereinafter provided, Employee’s term of
employment by the Company shall commence on May 12, 2008 (the
“ Effective Date ”) and shall continue in effect
until the second anniversary thereof (the “ Term
”). If the Company desires not to extend this Agreement, it
shall deliver written notice to Employee on or prior to the
90 th
day immediately preceding the
expiration of the Term of its intention to terminate this Agreement
effective on the last day of the Term. Unless otherwise terminated
pursuant hereto, if Employee continues to be employed by the
Company after the Term, then Employee’s employment shall be
deemed to continue until such time as either party shall deliver
written notice to the other party and this Agreement shall
terminate thirty (30) days after the giving of such notice.
The period from the Effective Date through the date of termination
is hereinafter referred to as the “ Employment Period
”.
3. Services
to be Rendered by Employee.
(a) During the Employment Period, Employee
shall serve as Executive Vice President, Chief Revenue Officer.
Employee shall perform such duties as from time to time may be
delegated to Employee and will continue to perform duties as
requested by the CEO of the Company. Employee shall devote all of
Employee’s professional time, energy and ability to the
proper and efficient conduct of the Company’s business.
Employee shall observe and comply with all reasonable lawful
directions and instructions by and on the part of the Chief
Executive Officer, the Board of Directors (the “Board”)
or their designee and endeavor to promote the interests of the
Company and not at any time do anything which may cause or tend to
be likely to cause any loss or damage to the Company in business,
reputation or otherwise. Employee shall report directly to the
Chief Executive Officer and shall be based out of the
Company’s New York City offices.
(b) The Company may from time to time call
on Employee to perform services related to the business of
developing and broadcasting network and syndicated radio
programming and traffic, news, sports and weather reports, which
may include (in the Company’s sole discretion) contributing
to the day-to-day management and operation of such business,
soliciting Sponsors and Affiliates (as such terms are defined in
Section 11 hereof) or dealing with their accounts or other
activities related to the Company’s business, as reasonably
requested from time to time by the Chief Executive Officer, the
President, the Board of Directors or their designee.
(c) Employee acknowledges that Employee
will have and owe fiduciary duties to the Company and its
shareholders including, without limitation, the duties of care,
confidentiality and loyalty.
(d) EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE
HAS RECEIVED A COPY OF THE COMPANY’S SEXUAL HARASSMENT
POLICIES AND PROCEDURES, CODE OF ETHICS AND CODE OF CONDUCT, AND
UNDERSTANDS AND AGREES TO ABIDE BY SUCH POLICIES.
(a) Base Salary. For the services
to be rendered by Employee during the Employment Period, the
Company shall pay Employee, and Employee agrees to accept a monthly
base salary (the “ Base Salary ”) of $35,416.67
for the Employment Period, payable in accordance with the
Company’s normal payroll practices. Employee shall be
eligible for annual increases in his Base Salary in an amount of up
to five percent (5%), in the sole and absolute discretion of the
Compensation Committee or their designee.
(b) Discretionary Bonus. Employee
shall be eligible for an annual discretionary bonus valued at up to
$385,000 for each of calendar years 2008 and 2009, each in the sole
and absolute discretion of the Board of Directors or its
Compensation Committee or their designee, provided, however, that
Employee shall receive a minimum discretionary bonus valued at no
less than $192,500 for calendar year 2008 (such amount, the “
2008 Guaranteed Bonus ”). The Company may use
Employee’s and the Company’s achievement of financial
goals as general guidelines to determine Employee’s
eligibility for a discretionary bonus. Any cash component of any
bonus will be payable in accordance with the Company’s normal
payroll practices and no later than (i) April 30, 2009
(in the case of the bonus for 2008) and (ii) April 30,
2010 (in the case of the bonus for 2009). Employee shall not be
eligible for any bonus for a calendar year, pro-rated or otherwise,
if Employee is not an Employee of the Company: (i) at the end
of the applicable calendar year; (ii) at the time such bonus
is to be paid, or (iii) if Employee has materially breached
this Agreement, which breach remains uncured in accordance with
Section 6(a) hereof.
(c) Equity Compensation. Company
management hereby agrees that prior to the Effective Date, it shall
recommend that the Compensation Committee grant Employee on the
Effective Date an award of equity compensation of stock options to
purchase 300,000 shares of Company common stock to vest in three
equal installments on each anniversary of the Effective Date,
subject to the terms and conditions of the Company’s equity
compensation plan (such award, the “ 2008 Signing
Award ”). The exercise price of such stock options will
be the closing price of the Company’s common stock on the
date of grant by the Compensation Committee (i.e., the Effective
Date).
(d) Equity Awards. Employee shall
be eligible for such future grants of equity compensation
recommended by Company management, subject to the approval of and
in the sole and absolute discretion of the Board of Directors or
its Compensation Committee or their designee. All equity
compensation granted to Employee, including such awards made
pursuant to Sections 4(c) and 4(d) hereof, shall be granted subject
to the terms and conditions of the Company’s equity
compensation plan, and using such form award as the Compensation
Committee has approved for grants to Company employees.
(e) Benefits. During the Employment
Period, Employee shall accrue vacation on a monthly basis and at a
rate of four (4) weeks per year (pro-rated for partial years).
Except as expressly set forth herein, any vacation time shall be
subject to prevailing practice and/or policies of the Company in
regard to vacations for its employees. Employee shall be entitled
to participate in all benefits plans that may be established by the
Company for employees that report directly to the CEO (such
employees, “ Comparable Employees ”), subject to
the terms and conditions of such plans.
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(f) Total Compensation. Employee
agrees and acknowledges by his signature hereto that the
compensation set forth in this Section 4 constitutes all of
the compensation payable to Employee for his services hereunder and
that no other compensation shall be due to Employee
hereunder.
(g) Signing Bonus. In addition to
other amounts due hereunder, Company agrees to pay to Employee
within 30 days of the Effective Date, the amount of $17,500 as
a signing bonus.
5. Expenses. Subject to compliance by Employee with such
policies regarding expenses and expense reimbursement as may be
adopted from time to time by the Company, the Company shall
reimburse Employee, or cause Employee to be reimbursed, in cash for
all reasonable expenses.
6.
Termination of Employment.
(a) During the Employment Period, the
Company shall have the right to terminate the employment of
Employee hereunder immediately by giving notice thereof to Employee
if any of the following has occurred, which notice shall state the
circumstances or events constituting Cause; provided, that, in the
case of clauses (i) through (iv) of this
Section 6(a), Employee shall be given a reasonable opportunity
to cure, but in no event more than ten (10) business days, to
the extent such act or failure to act is curable:
(i) if
Employee has (A) failed, refused or habitually has neglected
to carry out or to perform the reasonable duties required of
Employee hereunder or otherwise breached any provision of this
Agreement (other than Sections 7, 8 or 10 hereof, which are
governed by Section 6(a)(iv) hereof), (B) willfully
breached any statutory or common law duty; (C) breached
Section 3(c) or 3(d) of this Agreement; or (D) violated any of
the Company’s internal policies or procedures.
(ii) if
Employee is convicted of a felony or a crime involving moral
turpitude, or enters into a plea of nolo contendere
or guilty to, a felony or a crime involving moral turpitude, or if
Employee has willfully engaged in conduct which would injure the
reputation of the Company in any material respect or otherwise
adversely affect its interests in any material respect if Employee
were retained as an employee of the Company;
(iii) if
Employee becomes unable by reason of physical disability or other
incapacity (as may be defined in applicable disability insurance
policies) to carry out or to perform the duties required of
Employee hereunder for a continuous period of ninety (90) days
or for a non-continuous period of one hundred twenty
(120) days in the aggregate in any twelve (12)-month period;
provided , however , that Employee’s
compensation during any period in which Employee is unable to
perform the duties required of Employee hereunder shall be reduced
in accordance with the Company’s policies and by any
disability payments (excluding any reimbursements for medical
expenses and the like) which Employee is entitled to receive under
group or other disability insurance policies of the Company during
such period;
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(iv) if
Employee breaches any of the provisions of Sections 7, 8 or 10
hereof or breaches any of the terms or obligations of any other
confidentiality agreements entered into between Employee and the
Company, or the Company’s Related Entities, if
any;
(v) if
Employee commits an act of fraud, misrepresentation or dishonesty
related to his employment with the Company, or steals or embezzles
assets of the Company; or
(vi) if
Employee engages in a conflict of interest or
self-dealing.
(b) Employee’s employment with the
Company shall automatically terminate (without notice to
Employee’s estate) upon the death or loss of legal capacity
of Employee.
(c) In the event of any termination of
employment pursuant to Section 6, Employee (or
Employee’s estate, as the case may be) shall be entitled to
receive (i) any accrued but unpaid Base Salary prorated to the
date of such termination, (ii) Employee’s then current
entitlement, if any, under the Company’s employee benefit
plans and programs, including payment for any accrued and unused
vacation and any vested portion of the equity compensation
previously awarded to Employee and (iii) no other
compensation. The parties agree that the payments set forth in this
Section 6(c) constitute all of Company’s obligations,
monetary or otherwise, to Employee under the terms of this
Agreement in the event of Employee’s termination pursuant to
Section 6(a) or 6(b). Additionally, if Employee is terminated
pursuant to Section 6(a), all of Employee’s equity
compensation (including, without limitation, any granted pursuant
to this employment agreement or otherwise), vested and unvested,
shall terminate and expire, except in the case of vested stock
options which Employee has exercised prior to the date of
termination (for the avoidance of doubt, all vested equity
compensation (except for stock options which have been exercised)
shall be forfeited in the event of a termination pursuant to
Section 6(a)). Notwithstanding the foregoing, in the case of a
termination pursuant to Sections 6(d) or 6(e), additional payments
shall be due as expressly set forth below.
(d) The Company may terminate
Employee’s employment hereunder during the Term effective at
any time upon written notice to Employee. In the event that:
(I) the Company terminates Employee’s employment other
than pursuant to Section 6(a) or 6(b); (II) Employee is
terminated in connection with a “Change of Control” or
(III) Employee elects to terminate his employment for Good
Reason as expressly described in Section 6(e) below, subject in all
cases to Employee’s executing and not revoking a waiver and
general release substantially in the form attached as
Exhibit A hereto, which may be modified for changes in
law and for consistency with the Company’s standard form
required for other senior officers of the Company from time to time
(the “ Release ”): (x) the Company shall
pay Employee one times the annual Base Salary (the “
Termination Amount ”) to be paid in equal installments
over the one-year period on a schedule that mirrors the
Company’s then effective payroll practices; provided,
however, that in the case the six-month delay set forth in Section
17(b) shall apply to such amounts to the extent they exceed the
Separation Pay Limit (as defined in Section 17(b)); and
(y) if Employee is terminated in the first year of the Term,
1/3 of the 2008 Signing Award shall vest effective on the date of
termination. For the avoidance of doubt, it is understood and
agreed that notwithstanding anything contained herein to the
contrary, Employee shall have no duty to mitigate in the event that
Company exercises its rights pursuant to this
Section 6(d).
(e) Provided the Company has not notified
Employee that he is being terminated pursuant to Sections 6(a) and
6(b) hereof, Employee may terminate his employment hereunder
effective at any time upon written notice to the Company for Good
Reason provided such notice is given to the Company within thirty
(30) days after the triggering event. For purposes hereof,
“Good Reason” shall mean that a material portion of
Employee’s duties are withdrawn or significantly
diminished.
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(f) The Company shall provide the Release
to Employee within seven (7) business days following the date
of termination. In order to receive the payments and benefits under
Section 6(d) or 6(e), Employee shall be required to sign the
Release within 21 or 45 days after the date it is provided to
him, as required by applicable law, and not revoke it within the
seven day period following the date on which it is signed. All
payments delayed pursuant to the foregoing, except to the extent
delayed pursuant to Section 17(b), shall be paid to Employee
in a lump sum on the first Company payroll date on or following the
sixtieth (60 th )
day after the date of termination, and any remaining payments due
under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.
7. No Conflict of Interest; Proper
Conduct. (a)
(x) During the Term and in any event, not less than ninety
(90) days after the Employment Period if Employee is
terminated pursuant to Sections 6(a) or 6(b) or (y) during the
Employment Period and for an additional period equal to the time
period during which Employee is paid severance by the Company after
the Employment Period if Employee is terminated pursuant to
Sections 6(d) or 6(e) (notwithstanding the foregoing, such period
described in this Section 7(a)(y) shall not be less than
ninety (90) days nor greater than one (1) year), Employee
will not, directly or indirectly, either individually or as a
stockholder (except as a stockholder of less than one percent (1%)
of the issued and outstanding stock of a publicly-held corporation
whose gross assets exceed $100,000,000), investor, officer,
director, member, employee, agent, trustee, associate or consultant
of any Person:
(i) compete with the Company in any
business in competition with that then carried on by the Company
and/or its Related Entities;
(ii) engage in or carry on any Restricted
Activity;
(iii) employ or offer to employ or solicit
employment of any employee or consultant of the Company or its
Related Entities; or
(iv) solicit (or assist or encourage to
solicit), divert or attempt to divert any business, patronage or
customer (including known prospects) of the Company or its Related
Entities to Employee or a competitor or rival of the Company or its
Related Entities.
(b) Employee further agrees that it shall
not, without the Company’s prior written consent, engage in
any activity during the Employment Period that would conflict with,
interfere with, impede or hamper the performance of
Employee’s duties for
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