EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE
EMPLOYMENT AGREEMENT (this “Agreement”), effective
as of January 1, 2006 by and between REGENT COMMUNICATIONS,
INC. , a Delaware corporation (the “Company”), and
WILLIAM L. STAKELIN (“Employee”).
WHEREAS ,
the Company is engaged in the business, either directly or through
affiliates, of owning and operating radio broadcasting stations
(the “Business”), with principal offices in Covington,
Kentucky. For purposes of this Agreement, the term
“Company” shall include the Company, its subsidiaries,
affiliates, and assignees and any successors in interest of the
Company and its subsidiaries and/or affiliates.
WHEREAS ,
Employee has been actively engaged in the radio broadcasting
business since 1958 and has extensive knowledge and a unique
understanding of the operation of the Business.
WHEREAS ,
the Company desires to employ Employee, and Employee desires to be
employed by the Company, as President and Chief Executive Officer
of the Company.
NOW,
THEREFORE , in consideration of the foregoing, the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
1.1
Engagement of Employee . The Company agrees to employ
Employee and Employee agrees to accept employment as the President
and Chief Executive Officer of the Company, all in accordance with
the terms and conditions of this Agreement. Any prior agreements or
understandings with respect to Employee’s employment with the
Company are canceled as of the date hereof, other than any
incentive awards granted to Employee prior to the date hereof,
benefit plans in which Employee is eligible for participation and
any Company policies to which Employee is subject.
(a) During
the Employment Period, Employee will serve as the Company’s
President and Chief Executive Officer, and will have such
responsibilities, duties and authority as customarily held by
executives in such a position in comparable companies, and will
render services of an executive and administrative character, and
act in such other executive capacity for the Company, as the
Company’s board of directors (the “Board”) shall
from time to time direct. Employee shall devote his reasonable best
efforts, energies and abilities to the business and affairs of the
Company. Employee shall perform the duties and carry out the
responsibilities assigned to him, to the best of his ability, in a
diligent, trustworthy and businesslike manner for the purpose
of
advancing the
business of the Company and in a manner he reasonably believes to
be in and not opposed to the best interests of the
Company.
(b) Employee
acknowledges that his duties and responsibilities will require his
concentrated business efforts and agrees that during the Employment
Period he will not engage directly or indirectly in any other
business activity or have any business pursuits or interests which
materially interfere or conflict with the performance of
Employee’s duties hereunder or which compete directly with
the Company; provided, however, nothing in this Section 1.2
shall be deemed to prohibit Employee from investing in the stock of
any competing corporation listed on a national securities exchange
or traded in the over-the-counter market, but only if his
associates (as such term is defined in Regulation 14A
promulgated under the Securities Exchange Act of 1934, as in effect
on the date hereof), collectively, do not own more than an
aggregate of three percent of the stock of such corporation. In
addition, Employee may serve on boards of directors during the
Employment Period and volunteer his service to charitable, business
and other public service agencies, clubs or organizations so long
as such board or other service does not materially interfere or
conflict with the performance of Employee’s duties hereunder
and so long as such activities are not rendered for a competitor of
the Company. Any and all fees or remuneration paid to Employee in
consideration of work and services performed outside the scope of
Employee’s employment hereunder shall inure to the benefit of
Employee.
(c) The
parties hereto agree that none of Employee’s duties hereunder
shall require him to, and Employee agrees that he will not without
the consent of the Board, which consent shall not be unreasonably
withheld, change his personal residence from the Greater
Cincinnati, Ohio SMSA Area.
1.3
Employment Period . Employee’s employment under
this Agreement shall begin effective on January 1, 2006 and
shall continue through and until December 31, 2008 (the
“Employment Period”). Notwithstanding anything to the
contrary contained herein, the Employment Period is subject to
termination pursuant to Section 1.4 and Section 1.5
below.
1.4
Termination by the Company . The Company has the
right to terminate Employee’s employment under this
Agreement, by notice to Employee in writing at any time,
(i) for “Cause,” (ii) without Cause for any
or no reason, and (iii) due to the Disability of Employee. Any
such termination shall be effective upon the date of service of
such notice pursuant to Section 14. This Agreement shall
terminate automatically upon Employee’s death.
“Cause”
as used herein means the occurrence of any of the following
events:
(a) the
determination by the Board in the exercise of its reasonable
judgment that Employee has committed an act or acts constituting
(i) a crime involving moral turpitude, dishonesty or theft,
(ii) dishonesty or disloyalty with respect to the Company, or
(iii) fraud;
(b) the
determination by the Board in the exercise of its reasonable
judgment that Employee has committed an act that indicates alcohol
or drug abuse by Employee that adversely affects his performance
hereunder;
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(c) a
material breach by Employee of any of the terms and conditions of
Sections 3 or 4 of this Agreement; or
(d) Employee’s
gross negligence, habitual neglect, or intentional misconduct in
the performance of his duties hereunder.
Employee shall be
deemed to have a “Disability” for purposes of this
Agreement if Employee shall be unable, by reason of illness or
physical or mental incapacity or disability (from any cause or
causes whatsoever), to perform Employee’s essential job
functions hereunder, whether with or without reasonable
accommodation by the Company, in substantially the manner and to
the extent required hereunder prior to the commencement of such
Disability, for a total period of 90 days in any 180-day
period. In the event Employee shall be under a Disability, the
Company shall have the right to terminate Employee’s
employment hereunder during the continuance of such Disability upon
at least thirty (30) days prior written notice to Employee.
Such determination shall not be arbitrary or unreasonable, and the
Board shall take into consideration the opinion of Employee’s
personal physician, if reasonably available, as well as applicable
provisions of the Americans with Disabilities Act, but such
determination by the Board, if not arbitrary or unreasonable, shall
be final and binding on the parties hereto.
1.5
Termination by Employee . Employee has the right to
terminate his employment under this Agreement for any or no reason,
upon ninety (90) days prior written notice to the
Company.
1.6
Board of Directors and Resignation . Throughout the
Employment Period, the Company agrees to seek to cause Employee to
be elected to the Board. Unless by virtue of his beneficial
ownership of voting stock of the Company he has voting control over
a number of shares sufficient to assure his election to the Board,
upon the termination of Employee’s employment with the
Company for any reason, Employee shall be deemed to have
automatically resigned from any position he may then hold on the
Board. Such resignation shall be deemed effective immediately
without the requirement that a written resignation be
delivered.
1.7
Indemnity . The Company shall indemnify Employee and
hold him harmless to the fullest extent permissible under
applicable law for all acts or decisions made by him in good faith
while performing services for the Company. The Company shall also
use its best efforts to obtain coverage for him under any insurance
policy obtained during the term of this Agreement covering the
other officers and directors of the Company against
lawsuits.
2.
Compensation and Benefits .
2.1
Base Compensation . During the Employment Period,
commencing on January 1, 2006 the Company will pay Employee an
annual base salary of $330,171.36 plus an amount equal to the
percentage increase in the Consumer Price Index – All Items
during the period January 1, 2005 through December 31,
2005 (the “Base Salary”), per annum, payable in
accordance with the Company’s regular payroll policy for
senior executive salaried employees. At least once every twelve
(12) months, the Board and/or the Board’s Compensation
Committee shall perform an annual review of Employee’s Base
Salary based on Employee’s performance of his duties and
the
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Company’s
other compensation policies and make such increase thereto as it
deems appropriate, provided that at each such twelve-month interval
the Base Salary shall be increased from its level during the prior
twelve-month period at least by a percentage no less than the
percentage increase in the Consumer Price Index — All Items
during such prior twelve-month period. Upon termination of the
Employment Period, the Base Salary for any partial year will be
prorated based on the number of days elapsed in such year during
which the Employment Period had continued.
2.2
Senior Management Plan Bonus . Within seventy five
(75) days following the end of each fiscal year, the Board
and/or the Board’s Compensation Committee, as part of its
annual review of Employee’s performance, shall consider in
its sole discretion the merits of a bonus to Employee pursuant to
and in accordance with the Regent Communications, Inc. Senior
Management Bonus Plan, and in the event a bonus is warranted, shall
cause the Company to award to Employee a bonus (the “Senior
Management Plan Bonus”) for such year. The target amount of
the Senior Management Plan Bonus is eighty percent (80%) of the
Employee’s current Base Salary, subject to adjustments by the
Board and/or the Board’s Compensation Committee in its
reasonable judgment.
2.3
Stock Options and Other Equity-Based Incentives . It
is agreed that, in addition to and not in lieu of Senior Management
Plan Bonuses, the Company will, in January of each year and on such
terms and conditions as the Board and/or the Board’s
Compensation Committee shall deem appropriate, in its sole
discretion, grant to Employee pursuant to the Company’s 2005
Incentive Compensation Plan, or any other incentive compensation
plans as may be adopted by the Company from time to time,
restricted stock, stock options or other equity-based incentives
and/or grant to Employee pursuant to the Company’s 1998
Management Stock Option Plan qualified and/or non-qualified options
to acquire common stock of the Company. For purposes of this
Agreement, the term “options” shall be deemed to mean
stock options and any other equity-based incentives including, but
not limited to, restricted stock, stock units, stock appreciation
rights and similar instruments.
2.4
Benefits . In addition to the Base Salary, any Senior
Management Plan Bonus and any restricted stock, stock options or
other equity-based incentives payable or granted to Employee
hereunder, Employee will be entitled to the following benefits
during the Employment Period:
(a) payments
of premiums for hospitalization, disability, life and health
insurance, to the extent offered by the Company, and in amounts
consistent with Company policy, for all key management employees,
as reasonably determined by the Board;
(b) up
to four (4) weeks paid vacation each year with salary,
provided that unused vacation time shall not be carried over to
subsequent years;
(c) reimbursement
for reasonable, ordinary and necessary out-of-pocket business
expenses incurred by Employee in the performance of his duties,
subject to the Company’s policies in effect from time to time
with respect to travel, entertainment and other expenses, including
without limitation, requirements with respect to reporting and
documentation of such expenses;
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(d) use
of an automobile at the Company’s expense which shall include
expenses for parking in the area of the Company’s offices and
for comprehensive insurance coverage for the automobile;
and
(e) other
benefit arrangements and perquisites, including a 401(k) or similar
tax deferral plan, to the extent made generally available by the
Company to its executives and key management employees.
2.5
Taxes, etc . All compensation payable to Employee
hereunder is stated in gross amount and shall be subject to all
applicable withholding taxes, other normal payroll and any other
amounts required by law to be withheld.
2.6
Compensation After Termination .
(a) If
the Employment Period is terminated (i) by the Company without
Cause; (ii) by reason of Employee’s Disability; or
(iii) through expiration of the Employment Period or death of
Employee, then, (1) all shares of the Company’s capital
stock beneficially owned by the Employee may, at the
Company’s election, be repurchased by the Company for cash
equal to the fair market value thereof at the effective date of
termination (with the cash payment in full made promptly after a
termination pursuant to this Section 2.6(a)(i) or 2.6(a)(iii)
and with the cash payment made in three equal consecutive annual
installments beginning on the date of termination pursuant to this
Section 2.6(a)(ii)); (2) except as otherwise provided in
the specific terms of the option agreement or grant, all unvested
options to purchase stock of the Company held by Employee shall
cease and terminate as of the date of termination, and all vested
but unexercised options to purchase stock of the Company held by
Employee may, at the Company’s election, be repurchased by
the Company (according to the same payment terms as apply to shares
of the Company’s capital stock) for an amount constituting
the excess of fair market value of the shares subject to the
options over the exercise price of the options, if any, and if
there is no such excess, then such options may be repurchased by
the Company for one hundred dollars ($100) in the aggregate;
whereupon, the Company shall have no further obligations hereunder
or otherwise with respect to Employee’s employment from and
after the termination or expiration date (except for the unpaid
installments and payment of Employee’s current Base Salary
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