Exhibit 10.4
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is entered into as of October 11,
2005 and shall be effective as of August 1, 2005, by and
between Entravision Communications Corporation, a Delaware
corporation (together with its successors and assigns permitted
under the Agreement, the “Company”), and Walter F.
Ulloa (the “Executive”) with reference to the following
facts:
WHEREAS, the Executive has been
employed pursuant to the terms of that certain Employment Agreement
by and between the Company and the Executive dated as of
August 1, 2000 (the “Original
Agreement”).
WHEREAS, the term of the Original
Agreement has expired.
WHEREAS, the Company and the
Executive desire to enter into this Agreement to provide for the
Executive’s continued employment by the Company, upon the
terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Employment . The Company
hereby agrees to the Executive’s employment, and the
Executive hereby accepts such employment and agrees to perform his
duties and responsibilities in accordance with the terms and
conditions hereinafter set forth.
a. Employment Term . The term
of the Executive’s employment under this Agreement shall
commence as of August 1, 2005 (the “Effective
Date”) and shall continue until December 31, 2010,
unless earlier terminated in accordance with Section 4 or
Section 5 hereof. The period commencing as of the Effective
Date and ending on December 31, 2010, or such later date to
which the term of the Executive’s employment under the
Agreement shall have been extended is hereinafter referred to as
the “Employment Term.”
b. Duties and
Responsibilities . The Executive shall serve as Chairman and
Chief Executive Officer of the Company. During the Employment Term,
the Executive shall perform all duties and accept all
responsibilities incident to such position or other appropriate
duties as may be assigned to him by the Company’s Board of
Directors (the “Board”). Except to attend to those
business interests of the Executive set forth on Schedule
1.b. attached hereto and incorporated herein by this reference,
the Executive shall devote his full productive time and best
efforts to the performance of his duties and responsibilities under
this Section 1.b.
c. Base Salary . For all of
the services rendered by the Executive hereunder for the first
calendar year following the Effective Date, the Company shall pay
the Executive an annual base salary (“Base Salary”) of
Eight Hundred Thousand Dollars ($800,000), payable in installments
at such times as the Company shall pay its other senior level
executives (but in any event no less often than monthly). The
Executive’s Base Salary shall be reviewed annually prior to
each of the first five (5) anniversaries of the Effective Date
and, in the discretion of the Compensation Committee
(“Compensation Committee”) of the Board, the
Executive’s Base Salary may be increased. In reviewing
increases in the Executive’s Base Salary, the
Compensation Committee shall
consider factors including, but not limited to, the market for
executives with skills and experience similar to those of the
Executive, performance considerations, and the nature and extent of
salary increases given to other employees of the Company during the
prior year. In no event shall the Executive’s Base Salary be
decreased to an amount less than Eight Hundred Thousand Dollars
($800,000) per annum.
d. Annual Bonus . In addition
to the Base Salary provided for in Section 1.c. above, the
Executive shall be eligible for an annual bonus (“Annual
Bonus”) calculated as follows:
(i) For the calendar year ending
December 31, 2005,
(A) an amount no less than fifty
percent (50%) and up to and including seventy-five percent
(75%) of the Executive’s then-current Base Salary, or
such lesser amount as the Executive may request in his sole
discretion, if the total Company annual growth rate of earnings
before interest, taxes, depreciation and amortization as computed
in accordance with generally accepted accounting principles
(“EBITDA”) (pro forma as defined by the Compensation
Committee) meets or exceeds no less than ten percent (10%) and
up to and including fourteen percent (14%) over the previous
calendar year, with the Executive’s Annual Bonus being
prorated between the minimum and maximum Annual Bonus percentages
set forth above for EBITDA (and pro forma) increases greater than
ten percent (10%) but less than fourteen percent
(14%) over the previous calendar year,
plus
(B) any amount awarded to the
Executive in the discretion of the Compensation Committee pursuant
to Section 1.d.(iii) below.
(ii) For each calendar year during
the Employment Term ending after December 31, 2005,
(A) an amount calculated pursuant to
Section 1.d.(i)(A) above, unless the Compensation Committee
shall have, in its discretion, established modified criteria for
the calculation of the Executive’s Annual Bonus for any of
such calendar years, in which case, in an amount calculated
pursuant to such modified criteria, or such lesser amount as the
Executive may request in his sole discretion, and, in any case,
plus
(B) any amount awarded to the
Executive in the discretion of the Compensation Committee pursuant
to Section 1.d.(iii) below.
(iii) Up to twenty-five percent
(25%) of the Executive’s then-current Base Salary, or
such lesser amount as the Executive may request in his sole
discretion, based upon the discretion of the Compensation
Committee, taking into account achievement of operating and
financial performance goals and the increase in stockholder
value.
The Annual Bonus for any partial calendar year
within the Employment Term shall be prorated and the EBITDA growth
targets shall be adjusted proportionately. The Annual Bonus will be
payable promptly after the issuance of the Company’s year-end
audited financial statements.
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e. Stock Options . The
Executive shall be eligible for grants of stock options, restricted
stock and other equity incentives pursuant to the Entravision
Communications Corporation 2004 Equity Incentive Plan (or any
successor plan thereto) on the same terms applicable to the
Company’s other executive officers.
f. Automobile Allowance .
During the Employment Term, the Executive shall be entitled to
receive a One Thousand Five Hundred Dollars ($1,500) monthly
automobile allowance, payable monthly in advance, which shall
include all costs attendant to the use of the automobile,
including, without limitation, liability and property insurance
coverage, costs of maintenance and fuel. Notwithstanding the
foregoing, the amount of the monthly automobile allowance shall be
reviewed by the Company annually.
g. Benefit Coverages . During
the Employment Term, the Company shall provide medical and dental
coverage for the Executive and the Executive’s dependents at
no cost to the Executive. During such Employment Term, the
Executive shall also be entitled to participate in all employee
pension and welfare benefit plans and programs made available to
the Company’s senior level executives as a group or to its
employees generally, as such plans or programs may be in effect
from time to time (the “Benefit Coverages”), including,
without limitation, pension, profit sharing, savings and other
retirement plans or programs, short-term and long- term disability
and life insurance plans, accidental death and dismemberment
protection and travel accident insurance.
h. Reimbursement of Expenses;
Vacation; Residence . The Executive shall be provided with full
and prompt reimbursement of expenses related to his employment by
the Company (including mobile telephone usage) on a basis no less
favorable than that which may be authorized from time to time by
the Board, in its sole discretion, for senior level executives as a
group, and entitled to not less than four (4) weeks vacation
per year and holidays in accordance with the Company’s normal
personnel policies. The Executive currently resides in the Los
Angeles, California area, and the Company agrees that he shall not
be required to relocate his residence from that area without his
prior written consent (which may be withheld in his sole
discretion), or from any other area to which he may voluntarily
move with the Company’s prior written consent, during the
Employment Term.
i. Tax Withholding . The
Company may withhold from any compensation or other benefits
payable under this Agreement all federal, state, city or other
taxes as shall be required pursuant to any law or governmental
regulation or ruling.
j. Life Insurance . The
Company may obtain a “key man” term life insurance
policy, or policies, on the life of the Executive in face amounts
to be determined by the Company. The Company shall be the owner and
beneficiary of such life insurance policy; provided, however,
Executive may designate personal beneficiary(ies) for up to fifty
percent (50%) of the proceeds of such life insurance policy
and upon the termination of the Executive’s employment with
the Company for any reason, the Company shall, upon the
Executive’s request, assign such life insurance to the
Executive, subject to the Executive’s option to maintain such
life insurance after the Employment Term. The Executive agrees to
submit to a physical examination at any reasonable time requested
by the Company for the purpose of obtaining life
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insurance on the life of the
Executive; provided, however, that the Company shall bear the
entire cost of such examination.
2. Indemnification; Insurance
. The Company shall indemnify the Executive to the fullest extent
allowed by applicable law pursuant to that certain Indemnification
Agreement dated as of August 1, 2000 by and between the
Company and the Executive, as the same may be amended from time to
time. The Executive shall be covered by the Company’s
directors’ and officers’ liability insurance policy, if
any.
3. Proprietary Information;
Non-Compete .
a. Confidential Information .
The Executive recognizes and acknowledges that by reason of his
employment by and service to the Company during and, if applicable,
after the Employment Term, he has had and will continue to have
access to certain confidential and proprietary information relating
to the Company’s business (“Confidential
Information”). The Executive covenants that he will not,
unless expressly authorized in writing by the Company, at any time
during the course of his employment divulge or disclose any
Confidential Information to any person, firm or corporation except
in connection with the performance of his duties for the Company
and in a manner consistent with the Company’s policies
regarding Confidential Information. The Executive also covenants
that at any time after the termination of such employment, directly
or indirectly, he will not divulge or disclose any Confidential
Information to any person, firm or corporation, unless such
information is in the public domain through no fault of the
Executive or except when required to do so by law. All written
Confidential Information (including, without limitation, in any
computer or other electronic format) which comes into the
Executive’s possession during the course of his employment
shall remain the property of the Company. Except as required in the
performance of the Executive’s duties for the Company, or
unless expressly authorized in writing by the Company, the
Executive shall not remove any written Confidential Information
from the Company’s premises, except in connection with the
performance of his duties for the Company and in a manner
consistent with the Company’s policies regarding Confidential
Information. Upon termination of the Executive’s employment,
the Executive agrees immediately to return to the Company all
written Confidential Information in his possession.
b. Non-Compete;
Non-Solicitation . Except for those existing business
activities set forth on Schedule 1.b. attached hereto, the
Executive shall not engage in, independently or with others, any
business activity of any type or description that is in competition
with the Company. Notwithstanding the foregoing, the Executive may
own securities of publicly traded or private companies competitive
with the business of the Company so long as such shares do not
constitute five percent (5%) or more of the outstanding
securities of any such company. The Executive further agrees that
for as long as this Agreement remains in effect and for a period of
twelve (12) months after the termination of this Agreement by
the Company or by the Executive, in each case for any reason
whatsoever or for no reason whatsoever, the Executive will not
induce or attempt to induce, directly or indirectly, any person to
leave his or her employment with the Company.
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4. Termination . The
Employment Term shall terminate upon the occurrence of any one of
the following events:
a. Disability . The Company
may terminate the Employment Term if the Executive is unable
substantially to perform his duties and responsibilities hereunder
to the full extent required by the Company by reason of illness,
injury or incapacity for six (6) consecutive months, or for
more than six (6) months in the aggregate during any period of
twelve (12) calendar months. In the event of such termination,
the Company shall pay the Executive his Base Salary through the
date of such termination. In addition, the Executive shall be
entitled to the following: (i) a pro rata Annual Bonus for the
year of termination; (ii) any other amounts earned, accrued or
owing but not yet paid under Section 1 above;
(iii) continued participation for the remaining Employment
Term in those Benefit Coverages in which he was participating on
the date of termination which, by their terms, permit a
former
