The following is
an agreement (the “Agreement”) by and between Terry S.
Jacobs (“Executive”) and Regent Communications, Inc., a
Delaware corporation (“Company”) regarding
Executive’s retirement from the Company. Company and
Executive are sometime referred to collectively as the
“parties” and individually as a
“party.”
A. Executive
is employed by Company as Chairman and Chief Executive Officer
pursuant to an Executive Employment Agreement (the
“Employment Agreement”) effective as of January 1,
2004; and
B. Executive
has announced his intention to retire from the Company;
and
C. Executive
and Company have reached an agreement with respect to all matters
related to Executive’s retirement and cessation of employment
by Company.
NOW, THEREFORE, in
consideration of the mutual promises contained in this Agreement,
Company and Executive agree as follows:
1.
Retirement Date . Executive’s last day of employment
by Company will be September 1, 2005 (the “Retirement
Date”). Executive hereby resigns his position as Chairman and
Chief Executive Officer of the Company and, except as provided in
Section 8, all other positions that he holds with Company and
any of its subsidiaries and their affiliates, effective as of the
Retirement Date.
2.
Employment Agreement . Executive and Company agree that
effective as of the Retirement Date the Employment Agreement shall
be superseded by this Agreement and have no further force or effect
except for those restrictive covenants that by their terms survive
termination and continue in effect, consisting of Section 3.1
(Non-Competition), Section 3.2 (Non-Solicitation),
Section 4.1 (Non-Inducement), Section 4.2
(Non-Disclosure), Section 6 (Remedies) and Section 17
(Additional Obligations) (the “Surviving Covenants”)
provided that the restrictions imposed upon Employee in
Sections 3.1, 3.2 and 4.1 of the Employment Agreement shall
apply for a period of one year following the Retirement Date.
Executive expressly agrees to abide by all such Surviving
Covenants, which are incorporated herein by reference, for the
periods specified in the Employment Agreement except as modified in
this Section 2, and further agrees that Company shall be
entitled to the remedies for a breach or threatened breach of the
Surviving Covenants as provided for in the Employment Agreement.
Notwithstanding Section 4.1 of the Employment Agreement, the
Company agrees that the Executive shall be permitted to hire after
the Retirement Date his current administrative
assistant.
3.
Separation Payments and Benefits . Provided that Executive
fulfills his obligations as set forth in this Agreement, and
provided further that on or after the Retirement Date Executive has
signed a General Release substantially in the form and substance as
set forth
in
Exhibit A, which General Release has been delivered to Company
and, by its terms, has become effective, Company agrees as
follows:
(i)
Company will pay Executive the amount
that was payable pursuant to section 2.6(c)(i) of the Employment
Agreement; that is, his current base salary for the period
commencing on the day following the Retirement Date and continuing
through and until August 31, 2006 as severance pay.
(ii)
Company will also pay Executive his
current base salary for the period commencing September 1,
2006 and continuing through and until December 31, 2006 as
severance pay.
(iii)
The amounts under (i) and
(ii) above shall be payable in regular installments in
accordance with Company’s general payroll practices for
salaried employees.
(b)
Annual Bonus . The Company
will pay Executive a bonus of $156,000. Said bonus will be paid to
Executive in cash immediately upon the effective date of the
General Release provided that the effective date of the General
Release is on or before March 15, 2006. If the effective date
of the General Release is after March 15, 2006, then the bonus
will be paid at a later date to the extent required by
Section 409A of the Internal Revenue Code of 1986, as amended.
The Company and Executive agree that no other bonuses shall be
awarded to Executive for the year ending December 31,
2005.
(c)
Stock Options . Executive
currently has options to purchase additional shares of common stock
of the Company which have been granted to him pursuant to the terms
of the Company’s 1998 Management Stock Option Plan (the
“Plan”). The Company will accelerate the vesting of all
such unvested options as of the Retirement Date and that all such
options granted to Executive pursuant to the Plan shall remain in
full force and effect in accordance with the terms thereof. In
addition, notwithstanding anything to the contrary in the Plan or
in any grant or option with respect to the time period within which
Executive must exercise the option following the cessation or
termination of employment, Executive shall have the right to
exercise any such option during the stated term of the grant or
option. Executive agrees that Company has not made, and that he is
not relying upon, any representation by Company regarding the tax
consequences of the provisions set forth in this Agreement and/or
the exercise of any option.
(d)
Life Insurance . Executive
may purchase from Company any life insurance policy or policies
which the Company obtained on the life of Executive by paying to
Company an amount equal to the actual premiums thereon previously
paid by Company. In the event that Executive wishes to purchase
such policy or policies, he shall notify and pay the Company the
required amount on or before the Retirement Date.
(e)
Post Retirement Benefits .
For a period of twelve (12) months following the Retirement
Date (the “Continuation Period”) the Company shall, at
its expense and in accordance with the means described below,
continue on behalf of Executive and his dependents and
beneficiaries (to the same extent provided to the dependents and
beneficiaries prior to Executive’s retirement) the life
insurance, medical, dental, and hospitalization benefits
provided
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(i) to
Executive by the Company at any time within ninety (90) days
preceding such retirement, or (ii) to other similarly situated
executives who continue in the employ of the Company during the
Continuation Period. The coverage and benefits (including
deductibles and costs) provided in this Section 3(e) during the
Continuation Period shall be no less favorable to Executive and his
dependents and beneficiaries, than the most favorable of such
coverages and benefits set forth in clauses (i) and
(ii) above. The Company’s obligation hereunder with
respect to the foregoing benefits shall be limited to the extent
that Executive obtains any such benefits pursuant to a subsequent
employer’s benefit plans, in which case the Company may
reduce the coverage of any benefits it is required to provide
Executive hereunder as long s the aggregate coverages and benefits
of the combined benefit plans are no less favorable to Executive
than the coverages and benefits required to be provided hereunder.
This Section 3(e) shall not be interpreted so as to limit any
benefits to which Executive or his dependents or beneficiaries may
be entitled under any of the Company’s employee benefit
plans, programs or practices following the cessation of
Executive’s employment, including without limitation,
qualified and nonqualified retirement plans, retiree medical life
insurance benefits. With respect to the continuation of medical and
dental coverage for Executive and his dependents as provided
herein, beginning on the Retirement Date, Executive shall be
eligible to elect COBRA continuation coverage under the group
medical and dental plan in which Executive was enrolled immediately
prior to the Retirement Date. If Executive elects COBRA
continuation coverage, upon submission by Executive of an
appropriate receipt of the applicable premium payment, Company
shall immediately reimburse Executive for the cost of continuation
coverage during the Continuation Period and Executive shall be
responsible for any and all premiums for the remaining continuation
coverage. Executive’s Continuation Period shall count toward
the period during which the Company must offer COBRA continuation
coverage to Executive and his beneficiaries.
(f)
Purchase of Shares .
Notwithstanding any provision in the Employment Agreement to the
contrary, Company shall not exercise its right to repurchase from
Executive all, or any, shares of the Company’s common stock,
or any stock options to acquire common stock, beneficially owned by
Executive as of the Retirement Date. The Company has agreed to
purchase up to a maximum of 200,000 shares of the Company’s
common stock owned by Executive that Executive offers to sell to
Company at any time prior to the Retirement Date at fair market
value, as defined in the Employment Agreement, as of the Retirement
Date. Any such repurchase shall be consummated promptly following
the Retirement Date, subject to any blackout periods then in effect
with respect to the Company’s directors and executive
officers.
(g)
Computer; Personal Property .
The Company shall provide or purchase for Executive a computer with
a capacity and features comparable to the computer Executive has
been furnished by Company in connection with his position as
Chairman and Chief Executive Officer. Executive agrees that he will
not transfer to or install on such computer any Company-licensed
programs or Company-related files and information. Company will
provide Executive reasonable assistance in removing his personal
property (including office furniture) from Company’s
executive offices on or before the Retirement Date at a date and
time mutually agreed upon, and the Company will pay the reasonable
moving expenses of Executive in moving such property.
(h)
Expenses . The Company will
reimburse Executive for all reasonable business expenses incurred
by Executive in accordance with Company policy through
the
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Retirement Date
upon submission of a final expense report. The Company will pay
Executive’s reasonable attorneys fees in connection with the
review and execution of this Agreement in an amount not to exceed
$3,500.
(i)
Deferred Compensation Plan.
The Company will pay Executive his account balance under the Regent
Communications, Inc. Deferred Compensation Plan (“DCP”)
as of December 31, 2004 which is $76,086.08 in accordance with
the terms of the DCP. The remainder of Executive’s account
balance under the DCP shall be paid in accordance with the terms of
the DCP or at a later date to the extent required by
Section 409A of the Internal Revenue Code of 1986, as
amended.
4.
Indemnification . The Company shall indemnify and defend
Executive from and against all claims and causes of action which
arose prior to the Retirement Date asserted against Executive by
third parties by reason of his actions or omissions as an executive
officer of the Company to the extent permitted by law, the
Company’s Certificate of Incorporation or Bylaws. For a
period of four (4) years following the Retirement Date,
Company affirms that it will not cancel any coverage for Executive
that exists under any director and officer liability insurance
policy maintained by the Company and will not discriminate against
Executive vis-à-vis other officers and former officers in any
purchase or renewal of any such policy or any purchase of an
extended reporting period under a policy that is not
renewed.
5.
Executive’s Obligations . In consideration of the
payments and benefits provided in Section 3 above, Executive
will:
(a)
transfer his responsibilities as
Chairman and Chief Executive Officer before the Retirement Date in
an appropriate manner and take such actions as are necessary to
assure a smooth transition;
(b)
not represent or bind the Company or
enter into any agreement on behalf of the Company at any time
without the prior approval of another executive officer of the
Company or the Company’s Board of Directors;
(c)
return to the Company on or before
his Retirement Date his Company credit card(s), identification
card, and office keys;
(d)
return to the Company on or before
the Retirement Date, all other Company property a
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