Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (“Agreement”) is made and entered
into as of the 18th day of April 2006, by and between LBI Media,
Inc., a California corporation (the “Company”), and
Bill Keenan (the “Employee”).
WHEREAS, Company and Employee both desire to enter into
an employment relationship and believe it to be in their mutual
interest to set forth in writing all the terms and conditions
thereof; and
WHEREAS , this Agreement shall govern the employment
relationship between the parties from and after the date stated
above and supersedes and negates all previous agreements made
between the parties, whether written or oral, relating to
Employee’s employment with the Company;
NOW, THEREFORE
, in consideration of the foregoing,
and the mutual promises and covenants contained below, the parties
agree as follows:
I. EMPLOYMENT
.
A. POSITION . The
Company hereby engages Employee on an exclusive basis to render
personal services as Chief Financial Officer of the Company, LBI
Holdings I, Inc. (which may be merged with Liberman Broadcasting,
Inc. (as so merged, “LBI”)) and their respective
subsidiaries (collectively the “LBI Entities). Employee shall
perform such duties and have such responsibilities related to his
position as Chief Financial Officer as assigned from time to time
by the Company. Such duties and responsibilities shall in any event
include, without limitation, overall responsibility and supervision
of the LBI Entities’ corporate finance, accounting, tax,
control and any other financial matters. Without limiting the
generality of the foregoing, such duties and responsibilities shall
include without limitation (a) managing the LBI
Entities’ accounting department (including internal
controls), (b) raising capital, (c) managing
relationships with the LBI Entities’ creditors and other
investment banks, commercial banks and lending institutions, and
insurers, (d) interacting with financial analysts and rating
agencies, (e) managing cash, (f) budgeting,
(g) overseeing the LBI Entities’ audits,
(h) overseeing and adhering to all Securities and Exchange
Commission (“SEC”) reporting obligations,
(i)
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overseeing and adhering to all other reporting
obligations to other government agencies and to creditors,
(j) overseeing and managing investor relations,
(k) overseeing insurance, risk management and litigation for
the LBI Entities, (l) overseeing and managing human resources
for the LBI Entities, and (m) any other duties and
responsibilities as assigned from time to time by the Chief
Executive Officer, President, Executive Vice President or the Board
of Directors of the Company. Employee hereby accepts such
employment and agrees to devote his full employment energies,
interest, abilities and time to the performance of Employee’s
duties to the Company. Employee shall promptly and faithfully
comply with all the rules and regulations of applicable
governmental regulatory agencies and with the reasonable
instructions, directions, requests, rules and regulations of the
Company in connection with the performance of Employee’s
duties.
B. TERM . The initial
term of employment under this Agreement shall be for a period
commencing on May 3, 2006 and continuing, subject to the
provisions of this Agreement, through May 2, 2009.
C. OPTION TO EXTEND .
Unless this Agreement has been otherwise terminated pursuant to the
terms of this Agreement, the Company shall have two
(2) irrevocable options to extend this Agreement for two
(2) additional periods of one (1) year each under the
terms and conditions set forth herein, the first such period
commencing May 2, 2009. The options will be exercised
automatically by the Company unless written notice that the
Agreement will not be extended is given to Employee by Company at
least fifteen (15) days prior to the expiration of the initial
term or any renewal term.
D. EXCLUSIVE NATURE OF
SERVICES . During the term of this Agreement, including any
option term, Employee’s services shall be exclusive in the
field of electronic communication (including, without limitation,
all forms of radio and television).
II. COMPENSATION
.
A. SALARY . During the
initial term of this Agreement, the Company shall pay to Employee a
salary at the rate of Two Hundred Fifty Thousand Dollars
($250,000.00) per annum (less taxes and required withholdings).
Employee’s salary shall be paid periodically in accordance
with the Company’s normal payroll practices.
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1. Employee shall receive an annual
performance review on or close to each anniversary of the
commencement date of his employment, at which time the Company
shall consider increases to Employee’s salary. Any increase
shall be in the discretion of the Company.
B. BONUS . Each twelve
(12) month period during the term of this Agreement (including
any option terms), the first such period to commence on May 3,
2006, Employee shall be eligible to receive any and/or all of the
following bonuses so long as Employee (i) has remained in the
position of Chief Financial Officer for the entire applicable
twelve (12) month period; and (ii) has performed fully
all material obligations hereunder (provided, however, that under
no circumstances shall Employee receive more than Sixty Thousand
Dollars ($60,000.00) as a bonus under this provision for any single
twelve (12) month period):
1. In the event that Employee has
remained in the position of Chief Financial Officer for the entire
applicable twelve (12) month period, and has performed fully
all material obligations under this Agreement, Company shall pay to
Employee a bonus in the amount of Twenty Thousand Dollars
($20,000).
2. In addition to the bonus set
forth in Section II.B.(1) above, at the sole discretion of the
Company’s President, Company also may pay to Employee a
discretionary bonus at the end of the applicable twelve
(12) month period. The President of the Company shall
determine, in his sole discretion, the amount of this discretionary
bonus, if any, however, in no event shall that amount exceed Twenty
Thousand Dollars ($20,000).
3. In addition to the bonuses set
forth in Sections II.B.(1) and II.B.(2) above, if any, in the event
that (i) the Company meets in all material respects its
financial budgets for the applicable twelve (12) month period,
as presented to the Company’s lending institutions and
analysts; (ii) the audits of the books of the LBI Entities for
the calendar year ending during the applicable twelve
(12) month period were completed without any material concerns
(as determined in the sole discretion of the Company’s
President); and (iii) the Company meets all of its SEC
reporting requirements for and/or during the applicable twelve
(12) month period in a timely manner, the Company will pay to
Employee a bonus in the amount of Twenty Thousand Dollars
($20,000).
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Employee’s interest in any and
all bonuses under this Section II.B shall not vest until the date
upon which the Company would be obligated to tender payment for the
particular bonus. Any bonuses earned under this section shall be
paid to Employee within 30 days of the close of the applicable 12
month period for which the bonus is calculated. In the event
Employee contends that any bonus has not been properly paid under
this Agreement, Employee shall give written notice to the Company,
and Company shall have thirty (30) days to cure any defect in
Employee’s bonus payment.
Notwithstanding anything to the
contrary above (including Section II.B(2) above), if and to the
extent required under stock exchange rules or law, following an
initial public offering of the common stock of LBI, the
Employee’s bonus shall be determined by a compensation
committee or in such other manner as the Company determines
satisfies such applicable rules or laws.
C. HEALTH INSURANCE .
During the term of this Agreement, the Company shall pay all
necessary premiums for Employee and his dependents to participate
in any medical insurance plan and dental insurance plan that may
then be available to employees of the Company. Currently, the group
health plan for the Company’s employees is provided by Blue
Shield. The Company reserves the right to change the insurance
carrier and the level and amount of insurance benefits available to
employees of the Company, and reserves the right to terminate said
benefits at any time.
D. EXPENSES . The
Company shall reimburse Employee, pursuant to the Company’s
expense policies, for reasonable expenses incurred in the
performance of Employee’s duties as Chief Financial Officer.
Such expenses may include reasonable business client entertainment
expenses. Any question about the reasonableness of an expense shall
be resolved by the Company’s President in his/her sole
discretion.
E. STOCK OPTIONS . If
during the term of this Agreement (including any option terms) LBI
closes the sale and issuance of shares of common stock of LBI in an
underwritten
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public offering, pursuant to an effective
registration statement under the Securities Act of 1933, as
amended, Employee will receive a non-statutory stock option grant
to purchase shares of LBI’s Class A Common Stock with
(1) an exercise price per share equal to the offering price of
LBI’s Class A Common Stock in connection with such
public offering, and (2) for a number of shares such that the
aggregate exercise price of all shares subject to such option is
$400,000. The exercise price shall be determined without any
discount from the stated offering price. Such initial grant shall
be made one business day prior to such public offering. The option
will vest in three equal annual installments on the third, fourth
and fifth anniversaries of the date of the grant (33 1/3% on each
of the third, fourth and fifth anniversaries of the date of the
grant). The stock option shall have a 10-year term.
The foregoing grant will be made by
the Company pursuant to and subject to the terms of any stock
option incentive plan that the Company or LBI may choose to adopt.
The terms and conditions of such plan are subject to change from
time to time. The stock option grant will be evidenced by
shareholder agreement(s) that will be provided to Employee.
Notwithstanding any provision to the contrary in this Agreement,
all options that are not vested shall immediately expire upon the
termination of Employee’s employment with Company for any
reason (including, but not limited to, Company’s failure to
exercise its option to extend the term of the Agreement pursuant to
Section I.C) ), and any options not exercised before the
termination of Employee for Cause (as defined below) shall be
immediately forfeited, regardless of whether such options were
previously vested.
F. OTHER BENEFITS .
Employee shall be entitled during the term of this Agreement,
including option terms, to participate in benefit plans or policies
generally applicable to employees of the Company, including but not
limited to, all retirement, deferred compensation and similar plans
and programs generally available to other employees of the Company
as in effect from time to time, subject to any legally required
restrictions specified in such plans and programs.
III. TERMINATION PRIOR TO
EXPIRATION OF AGREEMENT .
A. DIS
