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Exhibit 10.14
Execution Copy
This EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "
Agreement "), dated as of March 29, 2007, by and
between Broadcasting Media Partners, Inc. (formerly known as
Umbrella Holdings, LLC), a Delaware corporation (the "
Company "), and Andrew Hobson (the " Executive
").
WHEREAS, the Company desires that Executive continue his
employment with the Company on the closing of the transactions (the
" Effective Date ") contemplated by that Agreement and Plan
of Merger by and among the Company, Umbrella Acquisition, Inc., and
Univision Communications Inc., a Delaware corporation, dated as of
June 26, 2006 (the " Merger Agreement ") upon the terms
and conditions hereinafter set forth; and
WHEREAS, the Company desires to be assured that the confidential
information and goodwill of the Company will be preserved for the
exclusive benefit of the Company and that, in consideration of the
compensation, benefits and continued employment of Executive
hereunder, Executive will not be employed with any competitor of
the Company for a limited period following Executive’s
termination of employment with the Company;
NOW, THEREFORE, in consideration of such employment and the
mutual covenants and promises herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Executive agree as
follows:
1. Employment . The Company hereby agrees to
employ Executive, and Executive hereby agrees to accept employment
with the Company, upon the terms and conditions contained in this
Agreement. Executive’s employment with the Company shall
continue, subject to earlier termination of such employment
pursuant to the terms hereof, until the fifth anniversary of the
Effective Date (the " Initial Term "). On the fifth
anniversary of the Effective Date and on each anniversary thereof,
the term of the Agreement shall be automatically extended for an
additional twelve-month period (the Initial Term, together with any
extension, the " Employment Period "). Either the Company or
Executive may elect to terminate the automatic extension of the
Employment Period by giving written notice of such election to the
other party not less than six (6) months prior to the end of
the then current Employment Period.
2. Duties . During the Employment Period,
Executive shall serve on a full-time basis and perform services in
a capacity and in a manner consistent with Executive’s
position as Senior Executive Vice President, Chief Strategic
Officer and Chief Financial Officer of the Company.
Executive’s duties and responsibilities shall include those
duties and responsibilities commensurate with his positions and
reasonably assigned to him from time to time by the Company’s
Board of Directors (the " Board "). Executive shall devote
his entire business time, attention and energies (excepting
vacation time, holidays, sick days and periods of disability) and
use his reasonable best efforts in his employment with the Company;
provided , however , that this Section 2
shall not be interpreted as prohibiting Executive from managing his
personal affairs or engaging in charitable or civic activities, or,
with the written consent of the Board, serving as a director of or
providing services to another business or enterprise (whether
engaged in for profit or not; provided, however, with respect to
for profit businesses, the Executive shall be limited to serving as
a director or managing a passive investment), so long as such
activities do not materially interfere with the performance of
Executive’s duties and responsibilities hereunder. Executive
may continue to serve on the Board of Directors of the Los Angeles
Philharmonic Association consistent with his level of activities to
date with respect to such organization.
3. Compensation .
3.1 Base Salary .
(a) In consideration of the services rendered by the Executive
under this Agreement, the Company shall pay the Executive a base
salary (the " Base Salary ") at an annual rate of $935,000
during his employment. Executive’s Base Salary shall
automatically increase by 5% on each anniversary of the Effective
Date during the Initial Term.
(b) The Base Salary shall be paid in such installments and at
such times as the Company pays its regularly salaried executives
and shall be subject to all necessary withholding taxes, FICA
contributions and similar deductions.
3.2 Bonus . During the Employment Period, the Executive
shall be eligible to receive an annual bonus (the " Annual
Bonus ") with respect to each fiscal year of the Company, with
a maximum bonus set at 200% of annual Base Salary paid for such
fiscal year. The Executive’s Annual Bonus shall be 100% of
the Executive’s annual Base Salary paid for a fiscal year if
the Company’s Adjusted EBITDA (as defined below) is equal to
the amount of projected EBITDA set forth for such year in the
Company’s financing projections provided to the banks in
January 2007, which are attached, along with worksheets underlying
such projections, hereto as Exhibit A . The
Executive’s Annual Bonus shall be 200% of the
Executive’s annual Base Salary paid for a fiscal year if the
Company’s Adjusted EBITDA (as defined below) is equal to the
projected EBITDA set forth for such year in the Confidential
Information Memorandum, which, along with worksheets underlying
such projections, are attached hereto as Exhibit B . In
determining whether the Annual Bonus is earned, the actual results
of the Company, as determined in accordance with U.S. generally
accepted accounting principles, shall be subject to pro forma
adjustments as described in Exhibit C (" Adjusted
EBITDA "). In the event actual performance for any applicable
fiscal year falls between the thresholds set forth in the second
and third sentences of this Section 3.2 , then the
applicable bonus percentage shall be adjusted accordingly using a
straight line method of interpolation. In the event that the
Company engages in certain restructuring activities, including,
without limitation, any mergers or divestitures, the Company and
Executive shall cooperate in good faith to reset the bonus
parameters, as appropriate, to take into account such activities in
a manner intended to make any amount of Annual Bonus neither easier
nor more difficult to attain. The Annual Bonus in respect of any
fiscal year shall be payable in accordance with Company practice,
but in case no later than seventy-five (75) days following the
end of such fiscal year.
3.3 Equity Grant .
(a) Restricted Stock Units . On the Effective Date,
Executive shall be granted restricted stock units representing
shares of Preferred Stock of Broadcast Media Partners Holdings,
Inc., and shares of Class L Common Stock and Class A Common
Stock of the
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Company, having an aggregate fair market value
(which shall be equal to the same cost per share for such stock as
that paid on the Effective Date by "Sponsors" (as defined below))
of $3 million on such date (" RSUs "), in the same
proportion as the classes of such stock are being purchased by the
Sponsors on the Effective Date. The terms of the RSU grant are set
forth in the award agreement attached as Exhibit D
hereto.
For purposes of this Agreement, "Sponsors" shall mean the
"principal investors" as defined in the Stockholders Agreement by
and among the Company, Broadcast Media Partners Holdings, Inc.,
Umbrella Acquisition, Inc. and Certain Stockholders of the Company,
dated as of March 29, 2007, as amended from time to time.
(b) Equity Investment . As of the Effective Date (or if
later, such date on which the payments set forth in
Section 3.4 are made), Executive shall invest $7
million in the securities of the Company as follows: approximately
$2,778,186 to purchase restricted shares of the Company’s
Class A Common Stock (the " Restricted Shares ") and
$4,221,814 to purchase shares of Preferred Stock of Broadcast Media
Partners Holdings, Inc., and shares of Class L Common Stock and
Class A Common Stock of the Company (the " Purchased
Shares "), at the same cost per share and, as to the Purchased
Shares, in the same proportion as being purchased by the Sponsors
on the Effective Date. The Restricted Shares shall initially
represent 0.75% of the fully diluted appreciation in the aggregate
value of the Class L Common Stock and the Class A Common Stock
(excluding preferences) of the Company as of the Effective Date.
The terms of the Restricted Shares are set forth in the award
agreement attached as Exhibit E hereto. Executive may,
instead of purchasing the Purchased Shares himself, cause the
Purchased Shares to be purchased by one or more trusts, the sole
beneficiaries of which are Executive and/or members of his
family.
3.4 Change in Control Payment . The Executive shall be
entitled to receive from the rabbi trust funding the obligations
under the Univision Communications, Inc. Change in Control
Severance Plan and Change in Control Retention Plan a cash payment
of $8,415,000 and a cash payment of a pro rata bonus equal to
$1,870,000 multiplied by a fraction, the numerator of which is the
number of days in 2007 preceding and including the Effective Date
and the denominator of which is 365, each of such payments to be
paid on the Effective Date or the day after, less applicable tax
withholding. Further, Executive shall be entitled to receive a cash
payment on the Effective Date or the day after, equal to $5,437,500
in exchange for the cancellation of Executive’s 150,000
restricted stock units granted on May 18, 2006 pursuant to the
Company’s Change in Control Retention Plan, subject to
applicable tax withholding. In exchange for the payments and
benefits described in this Section 3.4 , Executive
shall execute and deliver to the Company a release waiving his
rights to any benefit or payment under the Company’s Change
in Control Severance Plan and Change in Control Retention Plan and
consenting to the termination of such plans with respect to
Executive in a form as set forth in Exhibit F ; provided,
however, that Executive shall be entitled to and shall not waive or
release his rights with respect to (i) the parachute gross up
protection set forth in Section 4 of the Change in Control
Severance Plan and (ii) reimbursement for all reasonable legal
fees and expenses incurred in seeking to obtain or enforce any
right or benefit set forth in Section 4 of the Change in
Control Severance Plan (other than any such fees and expenses
incurred in pursuing any claim determined by an arbitrator or by a
court of competent jurisdiction to be frivolous or not to have been
brought in good faith).
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Executive shall also take all other actions
required under the terms of the Trust Agreement, dated
February 5, 2007, by and between Univision Communications,
Inc., a Delaware corporation, or any successor thereto and United
States Trust Company, National Association (the " Trustee ")
to waive his rights to any payments or benefits under the
Company’s Change in Control Severance Plan and Change in
Control Retention Plans, other than the amounts described in this
Section 3.4 .
3.5 Vacation . Beginning on the Effective Date, Executive
shall be entitled to twenty (20) annual paid vacation days
(provided that the number of such days shall be adjusted on a
pro-rata basis for the 2007 calendar year), which shall accrue and
be useable by Executive in accordance with Company policy, as may
be in effect from time to time. Executive shall be entitled to
carry over the forty (40) vacation days he has accrued and
unused as of the Effective Date (the " Frozen Vacation Days
") over the course of the Employment Period; provided that
Executive shall not be able to use more than 10 Frozen Vacation
Days in any calendar year. Any unused Frozen Vacation Days shall be
paid to Executive upon his termination of employment in accordance
with Section 5 and any accrued and unused vacation days
(other than the Frozen Vacation Days) shall be paid to Executive
upon his termination of employment, in accordance with Company
policy as in effect at the time of termination, in accordance with
Section 5 .
3.6 Benefits . During the term of Executive’s
employment under this Agreement, Executive shall be entitled to
participate in any benefit plans, including medical, disability and
life insurance (but excluding any severance or bonus plans unless
specifically referenced in this Agreement) offered by the Company
as in effect from time to time (collectively, " Benefit
Plans "), on the same basis as those made available to the
senior executive officers of the Company, including the CEO of the
Company and his direct reports, generally, to the extent Executive
may be eligible to do so under the terms of any such Benefit Plan.
Executive understands that any such Benefit Plans may be terminated
or amended from time to time by the Company in its discretion.
3.7 Perquisites . During the Employment Period, the
Company shall pay for and provide for the Executive (i) term
life insurance coverage in an amount of $3 million,
(ii) long-term disability benefits of $561,000 per year,
(iii) a reasonable annual vehicle allowance,
(iv) reimbursement for the cost of an annual physical
examination and (v) first class air travel and hotel (when
traveling for business purposes).
3.8 Relocation . Executive has been requested by the
Company to relocate to the New York City metropolitan area. In
connection with such relocation, the Company will (i) no later
than 30 days after being requested by Executive in writing (or such
later time as may be requested by Executive) buy from Executive,
Executive’s home in Los Angeles, California at a price equal
to cost (including the cost of all renovations made since Executive
purchased the home), but no more than $9.6 million, subject to
appropriate documentation to verify such cost and (ii) pay
Executive the amount received by the Company in connection with the
Company’s sale of the home to the extent such amount is in
excess of what the Company paid Executive for his home hereunder.
If the Company buys Executive’s house as described above, the
Company
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will determine the manner and terms on which the
house is subsequently offered for resale. The Company will pay all
reasonable costs (including a tax gross-up for this benefit)
associated with Executive’s relocation to the greater New
York City metropolitan area and take all commercially reasonable
actions requested by Executive to facilitate his move and purchase
of a new home. In the event of a "Protected Termination" (as
defined below) following Executive’s relocation to the New
York City metropolitan area, the Company shall provide Executive
reasonable and customary relocation assistance, consistent with his
status as a senior executive officer, in connection with any
relocation by Executive, or in the event of his death, his
immediate family, to Southern California following such
termination; provided that the Company will not have the obligation
to purchase Executive’s home.
(a) Protected Termination . For purposes of this
Agreement, "Protected Termination" shall mean termination of
Executive’s employment:
(i) due to Executive’s death or "Permanent Disability" (as
defined in Section 4.2 );
(ii) by Executive upon resignation for "Good Reason" (as defined
in Section 5.5 ); and
(iii) by the Company without "Cause" (as defined in
Section 5.4 ).
4. Termination . Executive’s employment
hereunder may be terminated as follows:
4.1 Automatically in the event of the death of Executive;
4.2 At the option of the Company, by written notice to Executive
or his personal representative in the event of the Permanent
Disability of Executive. As used herein, the term " Permanent
Disability " shall mean a physical or mental incapacity or
disability which renders Executive unable to perform his material
duties for a period of 180 days in any twelve-month period;
4.3 At the option of the Company for Cause, on prior written
notice to the Executive in accordance with Section 5.4
;
4.4 At the option of the Company, on thirty (30) days prior
written notice to Executive, without Cause (provided that the
Company may require Executive to not perform any duties during such
notice period);
4.5 At the option of Executive, at any time without Good Reason,
on sixty (60) days prior written notice to the Company; or
4.6 At the option of Executive for Good Reason, on prior written
notice to the Company in accordance with Section 5.5
.
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5. Severance Payments .
5.1 Death or Permanent Disability . Upon the termination
of Executive’s employment due to death or Permanent
Disability, Executive or his legal representatives shall be
entitled to receive an amount equal to Base Salary payable through
the date of termination and any unpaid Annual Bonus in respect of
any fiscal year ended prior to the date of such termination.
Executive or his legal representatives shall also be entitled to
any unused Frozen Vacation Day pay, any accelerated vesting or
other benefits with respect to any of Executive’s equity
awards, as provided under the terms of the applicable equity plans
and award agreements and any accrued and unpaid vacation (other
than the Frozen Vacation Day pay) or other benefits which may be
owing in accordance with the Company’s policies.
5.2 Termination Without Cause, by Executive for Good Reason
or by Nonrenewal of Agreement . If Executive’s employment
is terminated at any time during the Employment Period by the
Company without Cause, by Executive for Good Reason or if the
Executive’s employment is terminated hereunder at the end of
the Employment Period as a result of non-renewal of this Agreement
by the Company prior to Executive’s attainment of age 65,
Executive shall be entitled to an amount equal to (i) his Base
Salary through the date of termination and any unpaid Annual Bonus
in respect of any fiscal year ended prior to the date of such
termination plus (ii) two (2) times the sum of
(A) his annual Base Salary in effect at the time of such
termination plus (B) the Annual Bonus earned for the fiscal
year preceding the fiscal year including the date of termination
(the " Severance Bonus ") (and for this purpose, if
Executive is terminated prior to the end of first fiscal year of
the Company ending following the Effective Date, such Annual Bonus
shall be deemed to be $1,870,000), payable in accordance with the
usual payroll policies in effect at the Company as if Executive
continued to be employed, plus (iii) a pro rata Annual Bonus,
if any, for the fiscal year in which such termination occurs, equal
to the Severance Bonus multiplied by a fraction, the numerator of
which is the number of days in such calendar year through the date
of such termination and the denominator of which is 365, which,
solely with respect to this clause (iii), shall be payable no later
than ten (10) days following such termination. Executive shall
also be entitled to (i) any accelerated or continued vesting
or payment with respect to his equity awards as provided in the
applicable equity plan or award agreement, (ii) two
(2) years of continued life insurance and group medical
coverage for Executive and eligible dependents upon the same terms
as provided to senior executive officers of the Company and at the
same coverage levels as in effect immediately prior to such
termination of employment, provided that such continued life
insurance and group medical coverage shall cease upon Executive
becoming employed by another employer and eligible for life
insurance and/or medical coverage with such other employer,
(iii) any unused Frozen Vacation Day pay and (iv) any
accrued and unpaid vacation pay (other than any unused Frozen
Vacation Day pay) or any other benefits which may be owing in
accordance with the Company’s policies.
5.3 Termination for Cause or by Executive without Good
Reason . Except for Base Salary through the day on which
Executive’s employment was terminated, any unused Frozen
Vacation Day pay and any accrued and unpaid vacation pay (other
than the Frozen Vacation Day pay) or any other vested benefits
which may be owing in accordance with the Company’s policies
or applicable law, Executive shall not be entitled to receive
severance after the last date of employment with the Company upon
the termination of Executive’s employment hereunder by the
Company for Cause pursuant to Section 4.3 , or upon
Executive’s termination of his employment hereunder pursuant
to Section 4.5 .
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5.4 Cause Defined . For purposes of this
Agreement, the term " Cause " shall mean:
(a) Executive’s willful failure to perform his services
hereunder in any material way or willful, material breach of
fiduciary duty;
(b) Executive’s conviction of (or pleading guilty or
nolo contendere in respect of) a felony (other than driving
while intoxicated) or any lesser, willful, material offense
involving dishonesty, moral turpitude or the Company’s or its
affiliates property; and
(c) material willful misconduct or willful material breach by
Executive of any of the provisions of this Agreement;
provided , that , in each case, any proposed
termination for Cause requires notice from the Board to the
Executive, within 90 days after the Board has knowledge of specific
facts and circumstances constituting "Cause", stating such specific
facts and circumstances and Executive shall have a reasonable
opportunity to cure such circumstances (if curable) within 90 days
after any such notice.
5.5 Good Reason Defined . For purposes of this Agreement,
the term " Good Reason " shall mean, without
Executive’s written consent:
(a)
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