<PAGE> 1
As filed with the Securities and Exchange Commission on July 27, 1998
Registration No. 333-
===============================================================================
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CAPSTAR BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 74-2833106
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 CONGRESS AVENUE, SUITE 1400
AUSTIN, TEXAS 78701
(Address, including ZIP code, of registrant's
principal executive offices)
WARRANT DATED APRIL 1, 1998, ENTITLING R. STEVEN HICKS TO PURCHASE 930,000
SHARES OF CLASS C COMMON STOCK, PAR VALUE $.01 PER SHARE ("CLASS C COMMON
STOCK"), OF CAPSTAR BROADCASTING CORPORATION (THE "REGISTRANT")
WARRANT DATED APRIL 1, 1998, ENTITLING R. STEVEN HICKS TO PURCHASE 255,317
SHARES OF CLASS C COMMON STOCK
WARRANT DATED APRIL 1, 1998, ENTITLING R. STEVEN HICKS TO PURCHASE 323,120
SHARES OF CLASS C COMMON STOCK
WARRANT DATED APRIL 1, 1998, ENTITLING R. STEVEN HICKS TO PURCHASE 187,969
SHARES OF CLASS C COMMON STOCK
WARRANT DATED APRIL 1, 1998, ENTITLING R. STEVEN HICKS TO PURCHASE 500,000
SHARES OF CLASS C COMMON STOCK
WARRANT DATED APRIL 1, 1998, ENTITLING WILLIAM S. BANOWSKY, JR. TO PURCHASE
150,000 SHARES OF CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
("CLASS A COMMON STOCK"), OF THE REGISTRANT
WARRANT DATED APRIL 1, 1998, ENTITLING PAUL D. STONE TO PURCHASE 150,000 SHARES
OF CLASS A COMMON STOCK
WARRANT DATED JULY 5, 1998, ENTITLING D. GEOFFREY ARMSTRONG TO PURCHASE 200,000
SHARES OF CLASS A COMMON STOCK
(Full title of the plans)
R. STEVEN HICKS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CAPSTAR BROADCASTING CORPORATION
600 CONGRESS AVENUE, SUITE 1400
AUSTIN, TEXAS 78701
(Name, address, including ZIP code, of agent for service)
(512) 340-7800
(Telephone number, including area code, of agent for service of process)
Copy to:
MICHAEL D. WORTLEY
VINSON & ELKINS L.L.P.
3700 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
<TABLE>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount to be offering price aggregate Amount of
to be registered registered(1)(2) per share (2)(3) offering price (2)(3) registration fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock 2,696,406 shares $14.00 $7,000,000 $2,065
- --------------------------------------------------------------------------------------------------------------------
Class C Common Stock 2,196,406 shares $15.20057 $33,386,624 $9,850
====================================================================================================================
</TABLE>
(1) If, as a result of stock splits, stock dividends or similar
transactions, the number of securities purported to be registered on
this Registration Statement changes, the provisions of Rule 416 shall
apply to this Registration Statement, and this Registration Statement
shall be deemed to cover the additional securities resulting from the
split of, or dividend on, the securities covered by this Registration
Statement.
(2) The number of shares of Class A Common Stock includes 2,196,406 shares
that are issuable, for no additional consideration, upon conversion of
the shares of Class C Common Stock that are issuable upon exercise of
certain of the warrants. In accordance with Rule 457(i), no filing fee
is required to be paid on the 2,196,406 shares of Class A Common Stock.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rules 457(h) and 457(i), using the exercise price with
respect to 500,000 shares of Class A Common Stock and 2,196,406 shares
of Class C Common Stock subject to the warrants.
===============================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information called for in Part I of Form
S-8 will be provided to the holders of the warrants with respect to which this
Registration Statement on Form S-8 (this "Registration Statement") relates. Such
information is not being filed with or included in this Registration Statement
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission by
Capstar Broadcasting Corporation (the "Registrant" or the "Company"), are hereby
incorporated by reference into this Registration Statement.
(a) Prospectus, dated May 26, 1998, filed pursuant to Rule
424(b) of the Rules and Regulations of the Commission under
the Securities Act of 1933, as amended (the "Securities Act"),
on May 26, 1998; and
(b) The description of the Company's Class A Common Stock, par
value $.01 per share, and Class C Common Stock, par value $.01
per share, contained in Item 1 of the Registration Statement
on Form 8-A filed with the Commission on May 11, 1998.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the date of this Registration Statement and before
the filing of a post-effective amendment to this Registration Statement which
indicates that all shares of Class A Common Stock and Class C Common Stock
offered hereunder have been sold or that deregisters all such shares then
remaining unsold shall be deemed to be incorporated herein by reference and to
be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Eight of the Certificate of Incorporation of the Registrant
provides that the Registrant shall indemnify its officers and directors to the
maximum extent allowed by the Delaware General Corporation Law. Pursuant to
Section 145 of the Delaware General Corporation Law, the Registrant generally
has the power to indemnify its current and former directors against expenses and
liabilities incurred by them in connection with any suit to which they are, or
are threatened to be made, a party by reason of their serving in those positions
so long as they acted in good faith and in a manner they reasonably believed to
be in, or not opposed to, the best interests of the Registrant, and with respect
to any criminal action, so long as they had no reasonable cause to believe their
conduct was unlawful. With respect to suits by or in the right of the
Registrant, however, indemnification is generally limited to attorneys' fees and
other expenses and is not available if the person is adjudged to be liable to
the Registrant, unless the court determines that indemnification is appropriate.
The statute expressly provides that the power to indemnify authorized
2
<PAGE> 3
thereby is not exclusive of any rights granted under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise. The Registrant also
has the power to purchase and maintain insurance for its directors and officers
and has purchased a policy providing such insurance.
Article Nine of the Certificate of Incorporation provides that no
director of the Registrant will be personally liable to the Registrant or any of
its stockholders for monetary damages arising from the director's breach of
fiduciary duty as a director. However, this does not apply with respect to any
action in which the director would be liable (i) for any breach of the
director's duty of loyalty to the Registrant or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
The preceding discussion of the Registrant's Amended and Restated
Certificate of Incorporation and Section 145 of the Delaware General Corporation
Law is not intended to be exhaustive and is qualified in its entirety by the
Amended and Restated Certificate of Incorporation and Section 145 of the
Delaware General Corporation Law.
The Registrant has entered into indemnification agreements with the
Registrant's directors and officers. Pursuant to such agreements, the Registrant
will, to the extent permitted by applicable law, indemnify such persons against
all expenses, judgments, fines and penalties incurred in connection with the
defense or settlement of any actions brought against them by reason of the fact
that they were directors or officers of the Registrant or assumed certain
responsibilities at the direction of the Registrant.
The form of Underwriting Agreement and Subscription Agreement included
as Exhibits 1.1 and 1.2, respectively, to the Registrant's Registration
Statement on Form S-1 filed under the Securities Act on March 27, 1998
(Commission File No. 333-48819) provides for indemnification of the Registrant
and certain controlling persons under certain circumstances, including
indemnification for liabilities under the Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 3.1 of the
Company's Registration Statement on Form S-1, Commission File
No. 333-48819).
4.2 Amended and Restated By-Laws of the Company (incorporated
by reference to Exhibit 3.2 of the Company's Registration
Statement on Form S-1, Commission File No. 333-48819).
5.1* Opinion of Vinson & Elkins L.L.P.
23.1* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- the Company.
23.2* Consent of Ernst & Young LLP, Independent Public
Auditors -- Commodore Media, Inc., Southern Star
Communications, Inc., formerly known as Osborn Communications
Corporation, and SFX Broadcasting, Inc.
23.3* Consent of PricewaterhouseCoopers LLP, Independent
Accountants -- Benchmark Communications.
23.4* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Community Pacific Broadcasting Company, L.P.
3
<PAGE> 4
23.5* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Midcontinent Broadcasting Co. of Wisconsin, Inc.
23.6* Consent of PricewaterhouseCoopers LLP, Independent Accountants
-- Point Communications Limited Partnership.
23.7* Consent of Arthur Andersen LLP, Independent Auditors -- Ameron
Broadcasting, Inc.
23.8* Consent of Arthur Andersen LLP, Independent Auditors --
Patterson Broadcasting, Inc.
23.9* Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
24.1* Power of Attorney of officers and directors of the
Company (included on signature page).
99.1 Amended and Restated Warrant dated April 1, 1998, issued to R.
Steven Hicks for 930,000 shares of Class C Common Stock
(incorporated by reference to Exhibit 10.6 of the Company's
Current Report on Form 8-K, dated May 29, 1998, Commission
File No. 333-48819).
99.2 Amended and Restated Warrant dated April 1, 1998, issued to R.
Steven Hicks for 255,317 shares of Class C Common Stock
(incorporated by reference to Exhibit 10.7 of the Company's
Current Report on Form 8-K, dated May 29, 1998, Commission
File No. 333-48819).
99.3 Amended and Restated Warrant dated April 1, 1998, issued to R.
Steven Hicks for 323,120 shares of Class C Common Stock
(incorporated by reference to Exhibit 10.8 of the Company's
Current Report on Form 8-K, dated May 29, 1998, Commission
File No. 333-48819).
99.4 Warrant dated April 1, 1998, issued to R. Steven Hicks for
187,969 shares of Class C Common Stock (incorporated by
reference to Exhibit 10.9 of the Company's Current Report on
Form 8-K, dated May 29, 1998, Commission File No. 333-48819).
99.5 Warrant dated April 1, 1998, issued to R. Steven Hicks for
500,000 shares of Class C Common Stock (incorporated by
reference to Exhibit 10.10 of the Company's Current Report on
Form 8-K, dated May 29, 1998, Commission File No. 333-48819).
99.6 Warrant dated April 1, 1998, issued to William S. Banowsky Jr.
for 150,000 shares of Class A Common Stock (incorporated by
reference to Exhibit 10.12 of the Company's Current Report on
Form 8-K, dated May 29, 1998, Commission File No. 333-48819).
99.7 Warrant dated April 1, 1998, issued to Paul D. Stone for
150,000 shares of Class A Common Stock (incorporated by
reference to Exhibit 10.11 of the Company's Current Report on
Form 8-K, dated May 29, 1998, Commission File No. 333-48819).
99.8* Warrant dated July 5, 1998, issued to D. Geoffrey Armstrong
for 200,000 shares of Class A Common Stock.
- -------------------------
* Filed herewith.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
4
<PAGE> 5
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
2. That, for any purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Austin, State of Texas, on July 23, 1998.
CAPSTAR BROADCASTING CORPORATION
(Registrant)
By: /s/ R. Steven Hicks
--------------------------------------
R. Steven Hicks
President and Chief Executive Officer
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of Capstar Broadcasting Corporation, a Delaware corporation, which is
filing a Registration Statement on Form S-8 with the Securities and Exchange
Commission, Washington, D.C. 20549 under the provisions of the Securities Act of
1933 (the "Securities Act") hereby constitute and appoint R. Steven Hicks and
William S. Banowsky, Jr., and each of them, the individual's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the person and in his or her name, place and stead, in any
and all capacities, to sign such Registration Statement and any or all
amendments, including post-effective amendments, to the Registration Statement,
including any registration statement for the same offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act, and all
other documents in connection therewith to be filed with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in fact as agents or any of them, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/ R. Steven Hicks President and Chief Executive July 23, 1998
- -------------------------------------
R. Steven Hicks Officer (Principal Executive
Officer)
/s/ Paul D. Stone Executive Vice President and July 23, 1998
- -------------------------------------
Paul D. Stone Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ Thomas O. Hicks Chairman of the Board July 23, 1998
- -------------------------------------
Thomas O. Hicks
/s/ Michael J. Levitt Director July 23, 1998
- -------------------------------------
Michael J. Levitt
/s/ Eric C. Neuman Director July 23, 1998
- -------------------------------------
Eric C. Neuman
/s/ Lawrence D. Stuart, Jr. Director July 23, 1998
- -------------------------------------
Lawrence D. Stuart, Jr.
/s/ R. Gerald Turner Director July 15, 1998
- -------------------------------------
R. Gerald Turner
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBITS
- -------------------------------------------------------------------------------
4.1 - Amended and Restated Certificate of
Incorporation of the Company (incorporated
by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-1, Commission
File No. 333-48819).
4.2 - Amended and Restated By-Laws of the Company
(incorporated by reference to -- Exhibit 3.2
of the Company's Registration Statement on Form
S-1, Commission File No. 333-48819).
5.1* - Opinion of Vinson & Elkins L.L.P.
23.1* - Consent of PricewaterhouseCoopers LLP, Independent
Accountants -- the Company.
23.2* - Consent of Ernst & Young LLP, Independent Public
Auditors -- Commodore Media, Inc., Southern Star
Communications, Inc., formerly known as
Osborn Communications Corporation, and SFX
Broadcasting, Inc.
23.3* - Consent of PricewaterhouseCoopers LLP, Independent
Accountants -- Benchmark Communications.
23.4* - Consent of PricewaterhouseCoopers LLP, Independent
Accountants -- Community Pacific Broadcasting
Company, L.P.
23.5* - Consent of PricewaterhouseCoopers LLP, Independent
Accountants -- Midcontinent Broadcasting Co. of
Wisconsin, Inc.
23.6* - Consent of PricewaterhouseCoopers LLP,
Independent Accountants -- Point
Communications Limited Partnership.
23.7* - Consent of Arthur Andersen LLP, Independent
Auditors -- Ameron Broadcasting, Inc.
23.8* - Consent of Arthur Andersen LLP, Independent
Auditors -- Patterson Broadcasting, Inc.
23.9* - Consent of Vinson & Elkins L.L.P.
(included in Exhibit 5.1).
24.1* - Power of Attorney of officers and directors of
the Company (included on -- signature page).
99.1 - Amended and Restated Warrant dated April 1, 1998,
issued to R. Steven Hicks -- for 930,000 shares
of Class C Common Stock (incorporated by reference
to Exhibit 10.6 of the Company's Current Report
on Form 8-K, dated May 29, 1998, Commission File
No. 333-48819).
99.2 - Amended and Restated Warrant dated April 1, 1998,
issued to R. Steven Hicks -- for 255,317 shares of
Class C Common Stock (incorporated by reference to
Exhibit 10.7 of the Company's Current Report on
Form 8-K, dated May 29, 1998, Commission File
No. 333-48819).
7
<PAGE> 8
99.3 - Amended and Restated Warrant dated April 1, 1998,
issued to R.Steven Hicks -- for 323,120 shares of
Class C Common Stock (incorporated by reference to
Exhibit 10.8 of the Company's Current Report on
Form 8-K, dated May 29, 1998, Commission File No.
333-48819).
99.4 - Warrant dated April 1, 1998, issued to R. Steven
Hicks for 187,969 shares of -- Class C Common Stock
(incorporated by reference to Exhibit 10.9 of the
Company's Current Report on Form 8-K, dated
May 29, 1998, Commission File No. 333-48819).
99.5 - Warrant dated April 1, 1998, issued to R. Steven
Hicks for 500,000 shares of -- Class C Common Stock
(incorporated by reference to Exhibit 10.10 of the
Company's Current Report on Form 8-K, dated
May 29, 1998, Commission File No. 333-48819).
99.6 - Warrant dated April 1, 1998, issued to
William S. Banowsky Jr. for 150,000 shares of Class
A Common Stock (incorporated by reference to Exhibit
10.12 of the Company's Current Report on Form 8-K,
dated May 29, 1998, Commission File No. 333-48819).
99.7 - Warrant dated April 1, 1998, issued to Paul D. Stone
for 150,000 shares of -- Class A Common Stock
(incorporated by reference to Exhibit 10.11 of the
Company's Current Report on Form 8-K, dated
May 29, 1998, Commission File No. 333-48819).
99.8* - Warrant dated July 5, 1998, issued to D. Geoffrey
Armstrong for 200,000 shares of Class A Common Stock.
- -------------------------
* Filed herewith.
8
<PAGE> 1
EXHIBIT 5.1
[VINSON&ELKINS LEADERHEAD]
July 27, 1998
Capstar Broadcasting Corporation
600 Congress Avenue, Suite 1400
Austin, Texas 78701
Dear Sirs:
We have acted as counsel to Capstar Broadcasting Corporation, a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933 (the "Securities Act") of the offer and sale of an
aggregate of 2,696,406 shares of Class A Common Stock, par value $.01 per share
("Class A Common Stock"), and 2,196,406 shares of Class C Common Stock, par
value $.01 per share (collectively with the Class A Common Stock, the "Common
Stock"), of the Company that may be issued pursuant to the warrants originally
issued to R. Steven Hicks, William S. Banowsky, Jr., Paul D. Stone and D.
Geoffrey Armstrong, respectively (collectively, the "Warrants"), as that number
may be adjusted from time to time pursuant to the provisions of the Warrants.
Unless otherwise defined herein, terms having their initial letters capitalized
have the meanings ascribed to them in the Warrants.
In reaching the opinion set forth herein, we have reviewed such
agreements, certificates of public officials and officers of the Company,
records, documents and matters of law that we deemed relevant.
Based upon and subject to the foregoing, and subject further to the
assumptions, exceptions, and qualifications hereinafter stated, we express the
opinion that each share of Common Stock, when issued in accordance with the
terms of the Warrants, will be legally issued, fully paid and non-assessable.
The opinion expressed above is subject to the following
assumptions, exceptions and qualifications:
(a) We have assumed that (i) all information contained in all
documents reviewed by us is true and correct, (ii) all signatures on all
documents reviewed by us are genuine, (iii) all documents submitted to us as
originals are true and complete, (iv) all documents submitted
<PAGE> 2
Capstar Broadcasting Corporation
July 27, 1998
Page 2
to us as copies are true and complete copies of the originals thereof, and (v)
each natural person signing any document reviewed by us had the legal capacity
to do so.
(b) We have also assumed that the Company will receive the full
amount and type of consideration (as specified in the Warrants) for each of the
shares of Common Stock upon issuance in accordance with the terms of the
Warrants, that such consideration will be in cash, personal property, or
services already performed, that such consideration will equal or exceed the par
value per share of Common Stock, and that appropriate certificates evidencing
the shares of Common Stock issued in accordance with the terms of the Warrants
will be properly executed upon such issuance.
The opinion expressed above is limited to the laws of the State of
Texas, the Delaware General Corporation Law, and the federal laws of the United
States of America.
This opinion may be filed as an exhibit to a registration statement
filed under the Securities Act. In giving this consent, we do not thereby admit
that we come into the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated March 26, 1998, on our audits of the
consolidated financial statements of Capstar Broadcasting Corporation and
Subsidiaries as of December 31, 1996 and 1997, and for each of the three years
in the period ended December 31, 1997.
PRICE WATERHOUSE COOPERS LLP
/s/ PricewaterhouseCoopers LLP
Austin, Texas
July 22, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference of our reports dated (i) February
10, 1997 with respect to the consolidated financial statements of Commodore
Media, Inc. and Subsidiaries, (ii) February 3, 1997 with respect to the
consolidated financial statements of Southern Star Communications Inc., formerly
known as Osborn Communications Corporation, and (iii) March 5, 1998, except for
Notes 2 and 14 as to which the date is April 27, 1998, with respect to the
consolidated financial statements of SFX Broadcasting, Inc. and Subsidiaries, in
the Registration Statement of Capstar Broadcasting Corporation on Form S-8
pertaining to 2,496,406 warrants dated April 1, 1998 and 200,000 warrants dated
July 5, 1998.
/s/ Ernst & Young LLP
New York, New York
July 22, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 8, 1997, on our audits of the
consolidated financial statements of Benchmark Communications Radio Limited
partnership as of December 31, 1995 and 1996, and for each of the three years in
the period ended December 31, 1996.
/s/ PricewaterhouseCoopers LLP
Dallas, Texas
July 22, 1998
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 13, 1997, on our audit of the
consolidated financial statements of Community Pacific Broadcasting Company L.P.
as of December 31, 1996 and for the year then ended.
/s/ PricewaterhouseCoopers LLP
San Jose, California
July 22, 1998
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 3, 1997 on our audit of the
consolidated financial statements of Midcontinent Broadcasting Co. of Wisconsin,
Inc. as of December 31, 1996 and for the year then ended.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
July 22, 1998
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 3, 1997, on our audit of the
consolidated financial statements of Point Communications Limited Partnership as
of December 31, 1996 and for the year then ended.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
July 22, 1998
<PAGE> 1
EXHIBIT 23.7
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated May 14, 1997, on
the financial statements of Ameron Broadcasting, Inc. included in the Capstar
Broadcasting Corporation Prospectus dated May 26, 1998.
/s/ Arthur Andersen LLP
St. Louis, Missouri
July 22, 1998
<PAGE> 1
EXHIBIT 23.8
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 20, 1998, on the financial statements of Patterson Broadcasting, Inc. and
subsidiaries, included in or made part of Capstar Broadcasting Corporation's
Registration Statement on Form S-1 (File No. 333-48819), as amended on May 26,
1998, and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
July 22, 1998
<PAGE> 1
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL IN
REASONABLY ACCEPTABLE FORM AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY
THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER
ANY SUCH LAWS. THE OFFERING OF THIS SECURITY HAS NOT BEEN REVIEWED OR APPROVED
BY ANY STATE'S SECURITIES ADMINISTRATOR. THIS WARRANT AND THE SHARES OF COMMON
STOCK PURCHASABLE HEREUNDER ARE ALSO SUBJECT TO A STOCKHOLDERS AGREEMENT, DATED
AS OF JULY 8, 1997, AS AMENDED, BY AND AMONG THE COMPANY AND THE OTHER PARTIES
LISTED THEREIN, COPIES OF WHICH ARE ON FILE WITH THE COMPANY AND WILL BE
FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.
Dated: July 5, 1998
WARRANT
To Purchase 200,000 Shares of Class A Common Stock
CAPSTAR BROADCASTING CORPORATION
EXPIRING MAY 31, 2003
THIS IS TO CERTIFY THAT, for value received, D. Geoffrey Armstrong, or
registered assigns as a holder (the "Holder") of this Warrant (the "Warrant")
is entitled to purchase from the Company (as hereinafter defined) at the place
where the Warrant Agency (as hereinafter defined) is located, at the Exercise
Price (as hereinafter defined), 200,000 shares (the "Warrant Shares") of Class
A Common Stock, par value $.01 per share (the "Common Stock"), of the Company,
subject to adjustment and upon the terms and conditions as hereinafter
provided.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1 Method of Exercise. To exercise this Warrant in whole or in part,
the Holder shall deliver to the Company, at the Warrant Agency, (a) this
Warrant, (b) a written notice, in substantially the form of the Subscription
Notice attached hereto as Annex A, of such Holder's election to exercise this
Warrant, which notice shall specify (i) the number of shares of Common Stock to
be purchased under the Warrant, (ii) the denominations of the share certificate
or certificates desired, and (iii) the name or names in which such certificates
are to the registered, (c) if the Common Stock to be received upon the exercise
of this Warrant has not been registered under the Securities Act, a written
certification in substantially the form of the Certification attached hereto as
Annex B, and (d) payment of the Exercise Price with respect to such shares.
Such payment may be made, at the option of the Holder, by cash, money order,
certified or bank cashier's check or wire transfer.
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The Company shall, as promptly as practicable and in any event within
five Business Days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in said
notice. The share certificate or certificates so delivered shall be in such
denominations as may be specified in such notice or, if such notice shall not
specify denominations, shall be in the amount of the number of shares of Common
Stock for which the Warrant is being exercised, and shall be issued in the name
of the Holder or such other name or names as shall be designated in such
notice. Such certificate or certificates shall be deemed to have been issued,
and such Holder or any other Person so designated to be named therein shall be
deemed for all purposes to have become a holder of record of such shares, as of
the date the aforementioned notice is received by the Company. If this Warrant
shall have been exercised only in part, the Company shall, at the time of
delivery of the certificate or certificates, deliver to the Holder a new
Warrant evidencing the rights to purchase the remaining shares of Common Stock
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or, at the request of the Holder, appropriate
notation may be made on this Warrant which shall then be returned to the
Holder. The Company shall pay all expenses, taxes (if any) and other charges
payable in connection with the preparation, issuance and delivery of share
certificates and a new Warrant, except that, if share certificates or a new
Warrant shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Holder at the time of delivering the
aforementioned notice of exercise or promptly upon receipt of a written request
of the Company for payment.
1.2 Shares To Be Fully Paid and Nonassessable. All shares of Common
Stock issued upon the exercise of this Warrant shall be validly issued, fully
paid and nonassessable and free from all preemptive rights of any stockholder,
and from all taxes.
1.3 No Fractional Shares To Be Issued. The Company shall not be
required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the Company
shall pay to the Holder, in cash, an amount equal to such fraction of the Fair
Market Value per share of Common Stock of the Company on the Business Day
immediately prior to the date of such exercise.
1.4 Share Legend. Each certificate for shares of Common Stock issued
upon exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
"This security has not been registered under the Securities Act of
1933, as amended, or under the securities laws of any state or other
jurisdiction and may not be sold, offered for sale or otherwise
transferred unless registered or qualified under said Act and
applicable state securities laws or unless the Company receives an
opinion of counsel in reasonably acceptable form and scope reasonably
satisfactory to the Company that registration, qualification or other
such actions are not required under any such laws. The offering of
this security has not been reviewed or approved by any state
securities administrator.
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Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act) shall also bear such legend unless, in the opinion of
counsel selected by the holder of such certificate and reasonably acceptable to
the Company, the securities represented thereby are no longer subject to
restrictions on resale under the Securities Act.
1.5 Reservation; Authorization. The Company has reserved and will keep
available for issuance upon exercise of this Warrant the total number of shares
of Common Stock deliverable upon exercise of this Warrant from time to time
outstanding. The issuance of such shares has been duly and validly authorized
and, when issued and sold in accordance with this Warrant, such shares will be
duly and validly issued, fully paid and nonassessable.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1 Warrant Agency. At any time after a public offering of Common
Stock registered under the Securities Act, the Company may promptly appoint and
thereafter maintain, at its own expense, an agency in New York, New York, which
agency may be the Company's then existing transfer agent (the "Warrant
Agency"), for certain purposes specified herein, and shall give prompt notice
of such appointment (and appointment of any successor Warrant Agency) to the
Holder. Until an independent Warrant Agency is so appointed, the Company shall
perform the obligations of the Warrant Agency provided herein at its address as
specified on the signature page hereto or such other address as the Company
shall specify by notice to the Holder.
2.2 Ownership of Warrant. The Company may deem and treat the Person in
whose name this Warrant is registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any
Person other than the Warrant Agency) for all purposes and shall not be
affected by any notice to the contrary, until presentation of this Warrant for
registration of transfer as provided in this Article II.
2.3 Transfer of Warrant. The Company agrees to maintain at the Warrant
Agency books for the registration of transfers of the Warrants, and transfer of
this Warrant and all rights hereunder shall be registered, in whole or in part,
on such books, upon surrender of this Warrant at the Warrant Agency, together
with a written assignment of this Warrant duly executed by the Holder or his
duly authorized agent or attorney, with (unless the Holder is the original
Holder or another institutional investor) signatures guaranteed by a bank or
trust company or a broker or dealer registered with the NASD, and funds
sufficient to pay any transfer taxes payable upon such transfer. Upon surrender
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in the instrument
of assignment, and this Warrant shall promptly be canceled. The Warrant Agency
shall not be required to register any transfers if the Holder fails to furnish
to the Company, after a request therefor, an opinion of counsel (who may be an
employee of such Holder) reasonably satisfactory to the Company that such
transfer is exempt from the registration requirements of the Securities Act and
applicable blue sky laws.
2.4 Division of Warrant. This Warrant may be divided upon surrender
hereof to the Warrant Agency, together with a written notice specifying the
names and denominations in which
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the new Warrants are to be issued, signed by the Holder. Subject to compliance
with Section 2.3 as to any transfer which may be involved in the division, the
Company shall execute and deliver new Warrants in exchange for the Warrant or
Warrants to be divided in accordance with such notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of shares of
Common Stock as provided for in such lost, stolen, destroyed or mutilated
Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of this Warrant and the
Common Stock issuable hereunder.
ARTICLE III
CERTAIN RIGHTS
3.1 Exercise.
(a) Except as otherwise provided in Sections 3.2 and 3.3, the
Warrant Shares shall become "Vested Warrant Shares" with respect to 20% of the
Warrant Shares on the first anniversary of the date of this Warrant, and 1/60th
of the Warrant Shares shall vest and become Vested Warrant Shares on the last
day of each calendar month thereafter, so that all of the Warrant Shares shall
be vested and become Vested Warrant Shares 60 months after the date of this
Warrant.
(b) Except as otherwise provided in Sections 3.2 and 3.3,
this Warrant shall become exercisable to acquire Vested Warrant Shares at any
time or from time to time after the date on which the average Fair Market Value
of the Common Stock, calculated on a daily basis (when added to any cash
consideration attributable to any prior Capital Reorganization), equals or
exceeds $60.00 per share (the "Exercisability Value") for a period of 180
consecutive days (excluding non- Business Days for purposes of calculating the
average Fair Market Value during such 180-day period) during the period from
(and including) April 1, 1998 through (and including) May 31, 2003. Upon the
completion of a Common Stock Reorganization, the Exercisability Value shall be
adjusted, effective immediately after the record date at which the holders of
shares of Common Stock are determined for purposes of such Common Stock
Reorganization, to a dollar amount determined by multiplying the Exercisability
Value in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding on
such record date before giving effect to such Common Stock Reorganization and
the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such Common Stock Reorganization.
(c) Notwithstanding clauses (a) and (b), the Warrant Shares
shall become Vested Warrant Shares, and this Warrant shall become exercisable,
immediately preceding the consummation of a Sale of the Company.
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(d) Except as otherwise provided in Section 3.2, the
unexercised portion of this Warrant, if any, will automatically, and without
notice, terminate and become null and void at 5:00 p.m., Dallas, Texas time, on
the later to occur of May 31, 2003 or the 90th day after this Warrant becomes
exercisable.
3.2 Termination of Employment. Notwithstanding Section 3.1:
(a) Upon the termination of the Initial Holder's employment
with the Company or any Related Entity due to the Initial Holder's death, the
Warrant Shares shall become Vested Warrant Shares on the Date of Termination.
If this Warrant has become exercisable on or before the Date of Termination,
then the Holder (or, in the case of the Initial Holder, the Holder's estate or
any person who acquired the right to exercise this Warrant by bequest or
inheritance or otherwise by reason of the Holder's death) may, until the
earlier to occur of 5:00 p.m., Dallas, Texas time, on May 31, 2003 or the first
anniversary of the Date of Termination, exercise this Warrant with respect to
all or any part of the Vested Warrant Shares; provided, however, that in no
event will the Holder (or, in the case of the Initial Holder, the Holder's
estate or any person who acquired the right to exercise this Warrant by bequest
or inheritance or otherwise by reason of the Holder's death) have less than 90
days after the Date of Termination to exercise this Warrant. If this Warrant
has not become exercisable on or before the Date of Termination, then (i) this
Warrant shall remain in full force and effect until May 31, 2003 and (ii) if
this Warrant becomes exercisable on or before May 31, 2003, then the Holder
(or, in the case of the Initial Holder, the Holder's estate or any person who
acquired the right to exercise this Warrant by bequest or inheritance or
otherwise by reason of the Holder's death) may, until the earlier to occur of
5:00 p.m., Dallas, Texas time, on May 31, 2003 or the first anniversary of the
date on which this Warrant becomes exercisable, exercise this Warrant with
respect to all or any part of the Vested Warrant Shares; provided, however,
that in no event will the Holder (or, in the case of the Initial Holder, the
Holder's estate or any person who acquired the right to exercise this Warrant
by bequest or inheritance or otherwise by reason of the Holder's death) have
less than 90 days to exercise this Warrant.
(b) Upon the termination of the Initial Holder's employment
with the Company or any Related Entity due to the Initial Holder's Disability,
the Warrant Shares shall become Vested Warrant Shares on the Date of
Termination. If this Warrant has become exercisable on or before the Date of
Termination, then the Holder (or, in the case of the Initial Holder, the
Holder's legal representatives) may, until the earlier to occur of 5:00 p.m.,
Dallas, Texas time, on May 31, 2003 or the first anniversary of the Date of
Termination, exercise this Warrant with respect to all or any part of the
Vested Warrant Shares; provided, however, that in no event will the Holder (or,
in the case of the Initial Holder, the Holder's legal representatives) have
less than 90 days after the Date of Termination to exercise this Warrant. If
this Warrant has not become exercisable on or before the Date of Termination,
then (i) this Warrant shall remain in full force and effect until May 31, 2003
and (ii) if this Warrant becomes exercisable on or before May 31, 2003, then
the Holder (or, in the case of the Initial Holder, the Holder's legal
representatives) may, until the earlier to occur of 5:00 p.m., Dallas, Texas
time, on May 31, 2003 or the first anniversary of the date on which this
Warrant becomes exercisable, exercise this Warrant with respect to all or any
part of the Vested Warrant Shares; provided, however, that in no event will the
Holder (or, in the case of the Initial Holder, the Holder's legal
representatives) have less than 90 days to exercise this Warrant.
(c) Upon the termination of the Initial Holder's employment
with the Company or any Related Entity due to the Initial Holder's termination
of employment for Cause or the Initial
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Holder's resignation for other than Good Reason, the Holder shall forfeit all
of the Holder's rights under this Warrant, except as to those Warrant Shares
already purchased, and this Warrant shall automatically, and without notice,
terminate and become null and void at 5:00 p.m., Dallas, Texas time, on the
Date of Termination.
(d) Upon the termination of the Initial Holder's employment
with the Company or any Related Entity due to the Initial Holder's termination
of employment without Cause or the Initial Holder's resignation for Good Reason
and, in either case, without a Board Determination, the Warrant Shares shall
become Vested Warrant Shares on the Date of Termination. If this Warrant has
become exercisable on or before the Date of Termination, then the Holder may,
until the earlier to occur of 5:00 p.m., Dallas, Texas time, on May 31, 2003 or
the 90th day after the Date of Termination, exercise this Warrant with respect
to all or any part of the Vested Warrant Shares; provided, however, that in no
event will the Holder have less than 90 days after the Date of Termination to
exercise this Warrant. If this Warrant has not become exercisable on or before
the Date of Termination, then (i) this Warrant shall remain in full force and
effect until May 31, 2003 and (ii) if this Warrant becomes exercisable on or
before May 31, 2003, then the Holder may, until the earlier to occur of 5:00
p.m., Dallas, Texas time, on May 31, 2003 or the 90th day after the date on
which this Warrant becomes exercisable, exercise this Warrant with respect to
all or any part of the Vested Warrant Shares; provided, however, that in no
event will the Holder have less than 90 days to exercise this Warrant.
(e) Upon the termination of the Initial Holder's employment
with the Company or any Related Entity due to the Initial Holder's termination
of employment without Cause or the Initial Holder's resignation for Good Reason
and, in either case, with a Board Determination, no additional Warrant Shares
shall vest after the Date of Termination. If this Warrant has become
exercisable on or before the Date of Termination, then the Holder may, until
the earlier to occur of 5:00 p.m., Dallas, Texas time, on May 31, 2003 or the
30th day after the Date of Termination, exercise this Warrant with respect to
all or any part of the Vested Warrant Shares; provided, however, that in no
event will the Holder have less than 30 days after the Date of Termination to
exercise this Warrant. If this Warrant has not become exercisable on or before
the Date of Termination, then (i) this Warrant shall remain in full force and
effect until May 31, 2003, and (ii) if this Warrant becomes exercisable on or
before May 31, 2003, then the Holder may, until the earlier to occur of 5:00
p.m., Dallas, Texas time, on May 31, 2003 or the 30th day after the date on
which this Warrant becomes exercisable, exercise this Warrant with respect to
all or any part of the Vested Warrant Shares; provided, however, that in no
event will the Holder have less than 30 days to exercise this Warrant.
(f) If, pursuant to Section 3.3, this Warrant shall terminate
earlier than provided for in this Section 3.2, then the provisions of Section
3.3 shall prevail.
3.3 Termination of Warrant. Notwithstanding any provision of this
Warrant to the contrary, this Warrant shall expire and no longer be exercisable
upon either (a) the consummation of a Sale of the Company or (b) the
consummation of a Capital Reorganization in which (i) the stockholders of the
Company receive only cash consideration for each share of common stock of the
Company held by such stockholder that is less (when added to any cash
consideration attributable to any prior Capital Reorganization) than the
Qualifying Cash Consideration, (ii) a majority of directors of the purchaser or
surviving entity in such Capital Reorganization consists of persons who are not
Continuing Directors, and (iii) such purchaser or surviving entity is not a
member of the
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HMC Group. The Company shall give the Holder reasonable prior notice of the
consummation of a Capital Reorganization. Appropriate per share adjustments
shall be made to take into account, on a comparable per share basis, any cash
consideration attributable to any prior Capital Reorganization.
3.4 Stockholders Agreement. This Warrant and the Common Stock issuable
upon exercise of this Warrant is subject to a Stockholders Agreement dated as
of July 8, 1997, as amended, by and among the Company and the other parties
listed therein (the "Stockholders Agreement"). The Company shall keep a copy of
the Stockholders Agreement, and any amendments thereto, at the Warrant Agency
and shall furnish copies thereof to the Holder upon request.
3.5 Notice of Fair Market Value. Upon each determination of Fair
Market Value hereunder (other than a determination relating solely to setting
the value of fractional shares), the Company shall promptly give notice thereof
to the Holder.
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1 Adjustments Generally. The Exercise Price and the number of shares
of Common Stock (or other securities or property) issuable upon exercise of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events, as provided in this Article IV.
4.2 Common Stock Reorganization. If the Company shall after the date
of issuance of this Warrant subdivide its outstanding shares of Common Stock
into a greater number of shares or consolidate its outstanding shares of Common
Stock into a smaller number of shares (any such event being called a "Common
Stock Reorganization"), then (a) the Exercise Price shall be adjusted,
effective immediately after the record date at which the holders of shares of
Common Stock are determined for purposes of such Common Stock Reorganization,
to a price determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date before giving
effect to such Common Stock Reorganization and the denominator of which shall
be the number of shares of Common Stock outstanding after giving effect to such
Common Stock Reorganization, and (b) the number of shares of Common Stock
subject to purchase upon exercise of this Warrant shall be adjusted, effective
at such time, to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Common Stock
Reorganization by a fraction, the numerator of which shall be the number of
shares outstanding after giving effect to such Common Stock Reorganization and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately before such Common Stock Reorganization.
4.3 Capital Reorganization. If after the date of issuance of this
Warrant there shall be any consolidation or merger to which the Company is a
party (whether or not the Company is the surviving entity), other than a
consolidation or a merger in which the Company is a continuing corporation and
which does not result in any reclassification of, or change (other than a
Common Stock Reorganization or a change in par value), in, outstanding shares
of Common Stock, or any sale, assignment, lease, exchange, conveyance or other
transfer (in one transaction or series of related transactions) of the property
of the Company as an entirety or substantially as an entirety or all or
substantially all of the outstanding equity securities of the Company to any
person or group of related
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persons for the purposes of Section 13(d) of the Exchange Act (any such event
being called a "Capital Reorganization"), then, effective upon the effective
date of such Capital Reorganization, the Holder shall have the right to
purchase, upon exercise of this Warrant, the kind and amount of shares of stock
and other securities and property (including cash) which the Holder would have
owned or have been entitled to receive after such Capital Reorganization if
this Warrant had been exercised immediately prior to such Capital
Reorganization. As a condition to effecting any Capital Reorganization, the
Company or the successor or surviving corporation, as the case may be, shall
execute and deliver to the Holder an agreement as to the Holder's rights in
accordance with this Section 4.3, providing for subsequent adjustments as
nearly equivalent as may be practicable to the adjustments provided for in this
Article IV. The provisions of this Section 4.3 shall similarly apply to
successive Capital Reorganizations.
4.4 Certain Other Events. If any event occurs after the date of
issuance of this Warrant as to which the foregoing provisions of this Article
IV are not strictly applicable or, if strictly applicable, would not, in the
good faith judgment of the Board of Directors of the Company (the "Board"),
fairly protect the purchase rights of the Holder in accordance with the
essential intent and principles of such provisions, then the Board shall make
such adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board, to protect such purchase rights as aforesaid.
4.5 Adjustment Rules. (a) Any adjustments pursuant to this Article IV
shall be made successively whenever an event referred to herein shall occur.
(b) If the Company shall set a record date to determine the holders of
shares of Common Stock for purposes of a Common Stock Reorganization or Capital
Reorganization, and shall legally abandon such action prior to effecting such
action, then no adjustment shall be made pursuant to this Article IV in respect
of such action.
(c) No adjustment in the amount of shares purchasable upon exercise of
this Warrant or in the Exercise Price shall be made hereunder unless such
adjustment increases or decreases such amount or price by one percent or more,
but any such lesser adjustment shall be carried forward and shall be made at
the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall serve to adjust such amount or price
by one percent or more.
(d) No adjustment in the Exercise Price shall be made hereunder if
such adjustment would reduce the exercise price to an amount below par value of
the Common Stock, which par value shall initially be $.01 per share of Common
Stock.
4.6 Notice of Adjustment. The Company shall give the Holder reasonable
notice of the record date or effective date, as the case may be, of any action
which requires or might require an adjustment or readjustment pursuant to this
Article IV. Such notice shall describe such event in reasonable detail and
specify the record date or effective date, as the case may be, and, if
determinable, the required adjustment and the computation thereof. If the
required adjustment is not determinable at the time of such notice, the Company
shall give reasonable notice to the Holder of such adjustment and computation
promptly after such adjustment becomes determinable.
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ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"Affiliate", means, with respect to any Person, any Person who,
directly or indirectly, controls, is controlled by or is under common control
with that Person.
"Board Determination" shall have the meaning set forth in Section 3(b)
of the Employment Agreement.
"Business Day" shall mean (a) if any class of common stock of the
Company is listed or admitted to trading on a national securities exchange, a
day on which the principal national securities exchange on which such class of
common stock of the Company is listed or admitted to trading is open for
business or (b) if no class of common stock of the Company is so listed or
admitted to trading, a day on which the New York Stock Exchange is open for
business.
"Capital Reorganization" shall have the meaning set forth in Section
4.3.
"Cause" shall have the meaning set fort in Section 3(b) of the
Employment Agreement.
"Closing Price" with respect to any security on any day means (a) if
such security is listed or admitted for trading on a national securities
exchange, the reported last sales price regular way or, if no such reported
sale occurs on such day, the average of the closing bid and asked prices
regular way on such day, in each case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such class of security is listed or
admitted to trading, or (b) if such security is not listed or admitted to
trading on any national securities exchange, the last quoted sales price, or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market on such day as reported by NASDAQ or any comparable
system then in use or, if not so reported, as reported by any New York Stock
Exchange member firm reasonably selected by the Company for such purpose.
"Common Stock" shall have the meaning set forth in the first paragraph
of this Warrant.
"Common Stock Reorganization" shall have the meaning set forth in
Section 4.2.
"Company" shall mean Capstar Broadcasting Corporation, a Delaware
corporation, or any entity which is the continuing corporation of a
consolidation of merger to which the Company is a party or to which the Company
sells or conveys the property of the Company as an entirety or substantially as
an entirety.
"Continuing Director" means, as of the date of determination, any
person who (i) was a member of the Board immediately prior to the date of
determination or (ii) is a designee or member of the HMC Group.
"Date of Termination" shall have the meaning set forth in Section 3(e)
of the Employment Agreement.
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"Disability" shall have the meaning set forth in Section 3(a) of the
Employment Agreement.
"Employment Agreement" means that certain Executive Employment
Agreement dated as of July 5, 1998, by and between Capstar Employee Management
Company, Inc. and the Initial Holder, a copy of which is attached as Annex C
hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any similar or successor federal statute, and the rules and regulations of
the Securities and Exchange Commission (or its successor) thereunder, all as
the same shall be in effect at the time.
"Exercisability Value" shall have the meaning set forth in Section
3.1(b).
"Exercise Price" means a per share price of $14.00.
"Fair Market Value" means the fair market value of the business or
property in question, as determined in good faith by the Board; provided,
however, that the Fair Market Value of any security for which a Closing Price
is available shall be the Market Price of such security.
"Good Reason" shall have the meaning set forth in Section 3(c) of the
Employment Agreement.
"Holder" shall have the meaning set forth in the first paragraph of
this Warrant. The term Holders shall refer to all Holders of Warrants.
"HMC Group" means HMTF and its Affiliates and its and their respective
officers, directors, and employees (and members of their respective families
(other than R. Steven Hicks) and trusts for the primary benefit of such family
members).
"HMTF" means Hicks, Muse, Tate & Furst Incorporated.
"Initial Holder" means D. Geoffrey Armstrong.
"IPO Offering Price" means the initial public offering price per share
of Common Stock in a Qualified IPO, prior to deducting any underwriters'
discounts and commissions from such offering price.
"Market Price", with respect to any security on any day, means the
average of the daily Closing Prices of a share or unit of such security for the
20 consecutive Business Days ending on the most recent Business Day for which a
Closing Price is available; provided, however, that for purposes of determining
Fair Market Value as used in Section 3.1(b), "Market Price" means the daily
Closing Price of a share of Common Stock on the date of determination; provided
further, however, that in the event that, in the case of Common Stock, the
Market Price is determined following the announcement by the Company of any
subdivision, combination or reclassification of Common Stock or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the Market Price shall be appropriately adjusted to reflect the current
market price per share equivalent of Common Stock.
"NASD" means The National Association of Securities Dealers, Inc.
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<PAGE> 11
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"Person" or "person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof.
"Qualified IPO"means a firm commitment underwritten public offering of
Common Stock for cash pursuant to a registration statement under the Securities
Act where the aggregate proceeds to the Company prior to deducting any
underwriters' discounts and commissions from such offering and any similar
prior public offerings exceed $200 million.
"Qualifying Cash Consideration" means cash consideration for each
share of common stock of the Company received pursuant to a Capital
Reorganization that equals or exceeds the lesser of (i) the Exercisability
Value or (ii) the greater of (A) the Exercise Price compounded at an annual
rate of 30% for the period from April 3, 1998 to the end of the calendar month
immediately preceding the consummation of such Capital Reorganization or (B) a
per share amount equal to the IPO Offering Price compounded at an annual rate
of 20% for the period from the date on which a Qualified IPO is consummated to
the end of the calendar month immediately preceding the consummation of such
Capital Reorganization.
"Related Entity" means any direct or indirect subsidiary of the
Company now existing or hereafter formed or acquired, any entity that directly
or indirectly owns the outstanding capital stock of the Company, and any entity
that issues equity securities to or at the direction of the Holder upon
exercise of this Warrant.
"Sale of the Company" means a Capital Reorganization in which (i) the
stockholders of the Company receive cash consideration for each share of common
stock of the Company held by such stockholder that (when added to any cash
consideration attributable to any prior Capital Reorganization) equals or
exceeds the Qualifying Cash Consideration, (ii) a majority of directors of the
purchaser or surviving entity in such Capital Reorganization consists of
persons who are not Continuing Directors, and (iii) such purchaser or surviving
entity is not a member of the HMC Group. Appropriate per share adjustments
shall be made to take into account, on a comparable per share basis, any cash
consideration attributable to any prior Capital Reorganization.
"Securities Act" shall mean the Securities Act of 1933 and any similar
or successor federal statute, and the rules and regulations of the Securities
and Exchange Commission (or its successor) thereunder, all as the same shall be
in effect at the time.
"Stockholders Agreement" shall have the meaning set forth in Section
3.4.
"Vested Warrant Shares" shall have the meaning set forth in Section
3.1 (a).
"Warrant Agency" shall have the meaning set forth in Section 2.1.
"Warrant" shall have the meaning set forth in the first paragraph of
this Warrant. The term Warrants shall refer to the Warrants resulting in any
subdivision of this Warrant.
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<PAGE> 12
"Warrant Shares" shall have the meaning set forth in the first
paragraph of this Warrant.
ARTICLE VI
MISCELLANEOUS
6.1 Notices. All notices, requests, consents and other communications
provided for herein shall be in writing and shall be effective upon delivery in
person, faxed or telecopied, or mailed by certified or registered mail, return
receipt requested, postage pre-paid, to the addresses specified on the
signature pages hereto or, in any case, at such other address or addresses as
shall have been furnished in writing to the Company (in the case of a Holder)
or to the Holder (in the case of the Company) in accordance with the provisions
of this paragraph.
6.2 Waivers; Amendments. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and Holders who collectively hold
Warrants to purchase a majority of the Common Stock subject to purchase upon
exercise of such Warrants at the time outstanding.
Any such amendment, modification or waiver effected pursuant to this
Section shall be binding upon the Holders, upon each future Holder thereof and
upon the Company. In the event of any such amendment, modification or waiver
the Company shall give prompt notice thereof to all Holders and, if
appropriate, notation thereof shall be made on all Warrants thereafter
surrendered for registration of transfer or exchange.
No notice or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
6.3 Governing Law. This Warrant shall be construed in accordance with
and governed by the laws of the State of Delaware.
6.4 Severability. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality or enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
6.5 Section Headings. The sections headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
6.6 No Rights as Stockholder. This Warrant shall not entitle the Holder
to any rights as a stockholder of the Company.
12
<PAGE> 13
6.7 Employment Agreement. In the event of any conflict or
inconsistency between the terms and conditions of this Warrant and the terms
and conditions of the Employment Agreement, the terms and conditions of this
Warrant shall be controlling.
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<PAGE> 14
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized,
effective as of the day and year first above written.
CAPSTAR BROADCASTING CORPORATION
By: /s/ WILLIAM S. BANOWSKY, JR.
-------------------------------------
William S. Banowsky, Jr.
Executive Vice President
Address: 600 Congress Avenue
Suite 1400
Austin, Texas 78701
ACCEPTED AND AGREED TO:
/s/ D. GEOFFREY ARMSTRONG
- --------------------------
Name: D.Geoffrey Armstrong
Address: 600 Congress Avenue
Suite 1400
Austin, Texas 78701
<PAGE> 15
ANNEX A
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
TO CAPSTAR BROADCASTING CORPORATION:
The undersigned hereby irrevocably elects to exercise the attached
Warrant and to purchase thereunder _________ shares of Common Stock in payment
of an Exercise Price in an amount equal to $__________.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated:
-------------------, ------
-----------------------------------
Note: The above signature should
correspond exactly with the
name on the face of the
attached Warrant or with the
name of the assignee appearing
in the assignment form below.
<PAGE> 16
ANNEX B
CERTIFICATION
The undersigned hereby certifies to Capstar Broadcasting Corporation
that he, she or it is:
a. an "accredited investor" as that term is defined in
Regulation D promulgated pursuant to the Securities
Act or any successor regulation, as such provisions
may be in effect on the date hereof, and is an
"accredited investor" pursuant to Section of such
provision; and
b. is knowledgeable, sophisticated and experienced in
business and financial matters and in securities
similar to the Common Stock; is aware of the
limitation on the transfer of the Common Stock
imposed by applicable securities laws and any
limitations on transfer imposed by contracts with the
Company or others; and has had access to, or been
furnished with, all information about the Common
Stock and the Company deemed necessary to conclude
that he, she or it has the ability to bear the
economic risk of the investment in the Common Stock
and to afford the complete loss of such investment.
IN WITNESS WHEREOF, the undersigned has executed this CERTIFICATION
this _____ day of ________________, _____.
For Individuals: For Entities:
- ------------------ ---------------------------------
Signature Printed Name of Entity
- ------------------ By:
Printed Name -----------------------------
Name:
------------------------
Title:
-----------------------
<PAGE> 17
ANNEX C
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into July 5, 1998, by and between Capstar Broadcasting Corporation, a
Delaware corporation (together with its successors and assigns permitted
hereunder, the "Company"), D. Geoffrey Armstrong (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the bests interests of the Company and its stockholders
to employ the Executive on the terms and conditions set forth herein.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT PERIOD. Subject to Section 3, the Company hereby agrees
to employ the Executive, and the Executive hereby agrees to be employed by the
Company, in accordance with the terms and provisions of this Agreement, for the
period commencing on September 1, 1998 and ending on December 31, 2001 (the
"Employment Period"); provided, however, that commencing on December 31, 2001
and on each anniversary of such date occurring thereafter, the Employment Period
shall automatically be extended for one additional year unless at least six
months prior to the ensuing expiration date (but no more than 12 months prior to
such expiration date), the Company or the Executive shall have given written
notice that it or he, as applicable, does not wish to extend this Agreement (a
"Non-Renewal Notice"). Notwithstanding the foregoing, it shall be a condition to
the obligations of the parties hereunder that the merger of a subsidiary of the
Company with and into SFX Broadcasting, Inc. shall have occurred. The term
"Employment Period", as utilized in this Agreement, shall refer to the
Employment Period as so automatically extended.
2. TERMS OF EMPLOYMENT.
(a) Position and Duties.
(i) During the term of the Executive's employment,
the Executive shall serve as Executive Vice President and the Chief Operating
Officer of the Company and, in so doing, shall report to the Chief Executive
Officer. The Executive shall have (A) supervision and control over, and
responsibility for, the day-to-day operations of the radio broadcasting stations
owned by the Company and its subsidiaries, (B) such other powers and duties
(including holding officer positions with the Company and one or more
subsidiaries of the Company), as may from time to time be prescribed by the
Board, and (C) such other powers and duties as are reasonable and customary for
an Executive Vice President and the Chief Operating Officer of an enterprise
comparable to the Company.
(ii) During the term of the Executive's employment,
and excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote substantially all of his business time
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's
<PAGE> 18
reasonable best efforts to perform faithfully, effectively and efficiently such
responsibilities. During the term of Executive's employment it shall not be a
violation of this Agreement for the Executive to (1) serve on corporate, civic
or charitable boards or committees, (2) deliver lectures or fulfill speaking
engagements and (3) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement.
(b) Compensation.
(i) Base Salary. During the term of the Executive's
employment, the Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid in accordance with the customary payroll practices
of the Company, at least equal to $300,000. Commencing on January 1, 1999, and
on each subsequent January 1 as long as the Executive remains an employee of the
Company (each such January 1 being herein referred to as an "Adjustment Date"),
the Annual Base Salary of the Executive shall be increased by an amount equal to
five percent (5%) of the then current Annual Base Salary or such greater amount
as the Board in its discretion may determine appropriate. The result of such
increase to the then current Annual Base Salary shall constitute the Executive's
Annual Base Salary commencing on the Adjustment Date then at hand and continuing
until the next Adjustment Date. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive under this
Agreement. The term Annual Base Salary as utilized in this Agreement shall refer
to Annual Base Salary as so increased.
(ii) Bonuses. The Executive shall be entitled to
receive an annual performance bonus in the amount equal to $100,000 (prorated
for any partial years) or such greater amount as the Board in its discretion may
determine appropriate.
(iii) Incentive, Savings and Retirement Plans. During
the term of the Executive's employment, the Executive shall be entitled to
participate in all incentive, savings and retirement plans, practices, policies
and programs applicable generally to other executives of the Company
("Investment Plans").
(iv) Welfare Benefit Plans. During the term of the
Executive's employment, the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs ("Welfare Plans")
provided by the Company (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent applicable
generally to other executives of the Company.
(v) Automobile Allowance. During the term of the
Executive's employment, the Executive shall be entitled to receive a monthly
automobile allowance equal to $1,200, which shall be paid monthly in accordance
with the customary practices of the Company.
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(vi) Perquisites. During the term of the Executive's
employment, the Executive shall be entitled to receive (in addition to the
benefits described above) such perquisites and fringe benefits appertaining to
his position in accordance with any practice established by the Board.
(vii) Expenses. During the term of the Executive's
employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable employment expenses incurred by the Executive in accordance with
the policies, practices and procedures of the Company.
(viii) Vacation and Holidays. During the term of the
Executive's employment, the Executive shall be entitled to paid vacation and
paid holidays in accordance with the plans, policies, programs and practices of
the Company for its executive officers.
(ix) Stock Options; Warrants. In addition to any
benefits the Executive may receive pursuant to paragraph 2(b)(iii), as may be
determined appropriate by the Board, the Company may, from time to time, grant
Executive stock options (the "Executive Options") exercisable for shares of
capital stock of the Company and subject to the terms of this Agreement, such
Executive Options shall have such terms and provisions as may be determined
appropriate by the Board. Any such Executive Options will be granted under the
Company's 1997 Stock Option Plan or a successor plan of the Company (the "Stock
Option Plan"). Contemporaneously with the execution and delivery of this
Agreement, the Company is issuing to the Executive stock purchase warrants for
the purchase of an aggregate of 200,000 shares of Class A Common Stock of the
Company ("Warrants") having an exercise price of $14.00 per share.
(x) Country Club. During the term of the Executive's
employment, the Company shall pay (1) the initiation fee (up to $25,000) for the
Executive to join a country club in the Austin, Texas area, and (2) the
Executive's regular monthly dues at such club.
3. TERMINATION OF EMPLOYMENT.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may give
to the Executive written notice in accordance with Section 11(b) of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the Executive's inability to
perform his duties and obligations hereunder for a period of 180 consecutive
days due to mental or physical incapacity as determined by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement as to acceptability not to be
withheld unreasonably).
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<PAGE> 20
(b) Cause or Board Termination. The Company may terminate the
Executive's employment during the Employment Period for Cause or without Cause.
For purposes of this Agreement, "Cause" shall mean (i) a breach by the Executive
of the Executive's obligations under Section 2(a) (other than as a result of
physical or mental incapacity) which constitutes a continued material
nonperformance by the Executive of his obligations and duties thereunder, as
reasonably determined by the Board, and which is not remedied within 30 days
after receipt of written notice from the Company specifying such breach, (ii)
commission by the Executive of an act of fraud upon, or willful misconduct
toward, the Company, as reasonably determined by a majority of the disinterested
members of the Board (neither the Executive nor members of his family being
deemed disinterested for this purpose) after a hearing by the Board following
ten days' notice to the Executive of such hearing, (iii) a material breach by
the Executive of Section 6 or Section 9, (iv) the conviction of the Executive of
any felony (or a plea of nolo contendere thereto); or (v) the failure of the
Executive to carry out, or comply with, in any material respect any directive of
the Board consistent with the terms of this Agreement, which is not remedied
within 30 days after receipt of written notice from the Company specifying such
failure. The refusal by the Executive, for any reason or no reason, to submit to
any drug, intelligence or other form of test (including a polygraph test) shall
not constitute "Cause" herein. For purposes of this Agreement, a "Board
Determination" shall mean a determination by the Board (which is evidenced by
one or more written resolutions to such effect) (i) to terminate the Executive's
employment during the Employment Period based upon the Board's dissatisfaction
with the manner in which the Executive has performed his obligations and duties
under Section 2(a) and (ii) that Cause does not exist as a basis for such
termination. For purposes of this Agreement, "without Cause" shall mean a
termination by the Company of the Executive's employment during the Employment
Period pursuant to a Board Determination or for any other reason other than a
termination based upon Cause, death or Disability.
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason or without Good
Reason; provided, however, that the Executive agrees not to terminate his
employment for Good Reason unless (i) the Executive has given the Company at
least 30 days' prior written notice of his intent to terminate his employment
for Good Reason, which notice shall specify the facts and circumstances
constituting Good Reason, and (ii) the Company has not remedied such facts and
circumstances constituting Good Reason within such 30-day period. For purposes
of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a), expressly including any
requirement that the Executive report to any officer of the Company other than
R. Steven Hicks, or any other action by the Company which results in a material
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive (without limiting the foregoing, the Company and
the Executive agree that the delegation of the authority, duties or
responsibilities of the Executive to another person or persons, including any
committee, shall be deemed to be an action by the Company which results in a
material diminution in the Executive's position, authority, duties, or
responsibilities as
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<PAGE> 21
contemplated by Section 2(a)), provided, however, that Good Reason may not be
asserted by the Executive under this clause (i) of Section 3(c) after a
Non-Renewal Notice has been given by either the Company or the Executive;
(ii) any termination or material reduction of a
material benefit under any Investment Plan or Welfare Plan in which the
Executive participates unless (1) there is substituted a comparable benefit that
is economically substantially equivalent to the terminated or reduced benefit
prior to such termination or reduction or (2) benefits under such Investment
Plan or Welfare Plan are terminated or reduced with respect to all employees
previously granted benefits thereunder;
(iii) any failure by the Company to comply with any
of the provisions of Section 2(b), other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iv) any failure by the Company to comply with and
satisfy Section 8(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 8(c);
(v) the relocation or transfer of the Executive's
principal office to a location more than 20 miles from the Company's current
executive offices as such are maintained on the date hereof in the city of
Austin, Texas;
(vi) the failure of the Executive to be elected or
appointed to serve as a member of the Board (including the Board of Directors of
any successor or assign of the Company) or the removal of the Executive from the
Board without Cause; or
(vii) without limiting the generality of the
foregoing, any material breach by the Company or any of its subsidiaries or
other affiliates (as defined below) of (1) this Agreement or (2) any other
agreement between the Executive and the Company or any such subsidiary or other
affiliate.
As used in this Agreement, "affiliate" means, with respect to a person,
any other person controlling, controlled by or under common control with the
first person; the term "control," and correlative terms, means the power,
whether by contract, equity ownership or otherwise, to direct the policies or
management of a person; and "person" means an individual, partnership,
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
(d) Notice of Termination. Any termination by the Company for
Cause or without Cause, or by the Executive for Good Reason or without Good
Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 11(b). For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in
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<PAGE> 22
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall not be
more than 15 days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason or without Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein pursuant to Section
3(d), as the case may be, (ii) if the Executive's employment is terminated by
the Company other than for Cause, the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the date of death of the Executive
or the Disability Effective Date, as the case may be.
4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) Good Reason; Other Than for Cause, Death or Disability.
If, during the Employment Period, the Company shall terminate the Executive's
employment other than for either Cause or Disability or the Executive shall
terminate his employment for Good Reason, and the termination of the Executive's
employment in any case is not due to his death or Disability:
(i) The Company shall pay to the Executive in a lump
sum in cash within ten days after the Date of Termination the aggregate of the
following amounts: (1) the sum of the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid and any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay ("Accrued Obligations"); (2) the
sum of two times the Executive's then current Annual Base Salary; and (3) any
amount arising from Executive's participation in, or benefits under, any
Investment Plans ("Accrued Investments"), which amounts shall be payable in
accordance with the terms and conditions of such Investment Plans.
(ii) At the Executive's election, the Company shall
reimburse Executive for, or pay on behalf of Executive, the cost of the monthly
premiums paid by or allocable to Executive for medical and dental insurance
coverage for Executive pursuant to the continuation coverage requirements of
Section 4980B(f) of the Internal Revenue Code of 1986, as amended (the "Code").
The consideration payable to Executive under this subsection (a)(ii) shall
continue until the earlier of (A) the date which is 18 months after the Date of
Termination, or, if shorter, until the end of the maximum required period for
which continuation coverage is required to be offered under Code Section
4980B(f)(2)(B), or (B) the date Executive has commenced new employment and has
thereby become eligible for comparable medical benefits.
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<PAGE> 23
(iii) Notwithstanding the terms or conditions of any
Executive Option or any similar stock option, stock appreciation right or
similar agreements between the Company and the Executive, the Executive shall
vest, as of the Date of Termination, in all rights under such agreements (i.e.,
Executive Options that would otherwise vest after the Date of Termination,
excluding the Warrants, the vesting and exercisability of which shall be subject
to the express terms of the Warrants) and thereafter shall be permitted to
exercise any and all such rights until the earlier to occur of (x) the
expiration of such Executive Option, stock option, stock appreciation right or
similar agreement pursuant to its terms or (y) 5:00 p.m., Dallas, Texas time, on
the 90th day after the Date of Termination; provided, however, the provisions of
this clause (iii) of this Section 4(a) shall not apply to a termination of the
Executive's employment during the Employment Period that is made by the Company
pursuant to a Board Determination.
(b) Death or Disability. If the Executive's employment is
terminated by reason of the Executive's death or Disability during the
Employment Period, the Company shall pay to his legal representatives (i) in a
lump sum in cash within ten days after the Date of Termination the aggregate of
the following amounts: (A) an amount equal to the Executive's then current
Annual Base Salary; and (B) the Accrued Obligations; and (ii) the Accrued
Investments which shall be payable in accordance with the terms and conditions
of the Investment Plans. In addition, at the option of the Executive's family,
the Company agrees to reimburse Executive's family for, or pay on behalf of
Executive's family, the cost of the monthly premiums allocable to Executive's
family for medical and dental insurance coverage provided for Executive's family
with respect to the Company's group health plan pursuant to the continuation
coverage requirements of Section 4980B(f) of the Code, for a period of 12 months
after the Date of Termination. Further, notwithstanding the terms or conditions
of any Executive Options, stock option, stock appreciation right or similar
agreements between the Company and the Executive, the Executive shall vest, as
of the Date of Termination, in all rights under such agreements (i.e., Executive
Options, stock options that would otherwise vest after the Date of Termination)
and thereafter his legal representatives shall be permitted to exercise any and
all such rights until the earlier to occur of (x) the expiration of such
Executive Option, stock option, stock appreciation right or similar agreement
pursuant to its terms or (y) the first anniversary of the Date of Termination.
The Company shall have no further payment obligations to the Executive or his
legal representatives under this Agreement.
(c) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated by the Company for Cause or by the Executive
without Good Reason during the Employment Period, the Company shall have no
further payment obligations to the Executive other than for payment of Accrued
Obligations, Accrued Investments (which shall be payable in accordance with the
terms and conditions of the Investment Plans), and the continuance of benefits
under the Welfare Plans to the Date of Termination.
5. FULL SETTLEMENT, MITIGATION. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment. Neither the Executive nor the Company shall be liable
to the other party for any damages in addition to the amounts payable under
Section
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<PAGE> 24
4 arising out of the termination of the Executive's employment prior to the end
of the Employment Period; provided, however, that the Company shall be entitled
to seek damages for any breach of Sections 6, 7 or 9 or criminal misconduct.
6. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company and their
affiliates have trade, business and financial secrets and other confidential and
proprietary information (collectively, the "Confidential Information"). As
defined herein, Confidential Information shall not include (i) information that
is generally known to other persons or entities who can obtain economic value
from its disclosure or use and (ii) information required to be disclosed by the
Executive pursuant to a subpoena or court order, or pursuant to a requirement of
a governmental agency or law of the United States of America or a state thereof
or any governmental or political subdivision thereof; provided, however, that
the Executive shall take all reasonable steps to prohibit disclosure pursuant to
subsection (ii) above.
(b) The Executive agrees (i) to hold such Confidential
Information in confidence and (ii) not to release such information to any person
(other than Company employees and other persons to whom the Company has
authorized the Executive to disclose such information and then only to the
extent that such Company employees and other persons authorized by the Company
have a need for such knowledge).
(c) The Executive further agrees not to use any Confidential
Information for the benefit of any person or entity other than the Company.
7. SURRENDER OF MATERIALS UPON TERMINATION. Upon any termination of the
Executive's employment, the Executive shall immediately return to the Company
all copies, in whatever form, of any and all Confidential Information and other
properties of the Company and their affiliates which are in the Executive's
possession, custody or control.
8. SUCCESSORS.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken
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place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. NON-COMPETITION.
(a) The term of Non-Competition (herein so called) shall be
for a term beginning on the date hereof and continuing until (i) if this
Agreement is terminated during the Employment Period by either the Company or
the Executive for any reason, the first anniversary of the Date of Termination
or (ii) if the Employment Period expires by reason of a Non-Renewal Notice, the
last day of the Employment Period. If this Agreement is terminated by the
Executive for Good Reason prior to the beginning of the Employment Period the
Executive shall not be bound by the provisions of this Section 9.
(b) During the term of Non-Competition, the Executive will not
(other than for the benefit of the Company pursuant to this Agreement) directly
or indirectly, individually or as an officer, director, employee, shareholder,
consultant, contractor, partner, joint venturer, agent, equity owner or in any
capacity whatsoever, (i) engage in any radio broadcasting business that
transmits a primary or city-grade signal within a Metro Survey Area (as
currently defined by The Arbitron Company in its Radio Markets Reports) in which
a station directly operated by the Company transmits a primary or city-grade
signal (1), with respect to the term of Non-Competition that is during the
Executive's employment, during such term of employment, and (2), with respect to
the term of Non-Competition that is after the term of the Executive's
employment, on the Date of Termination (all such areas being collectively called
the "Geographic Area") (a "Competing Business"), (ii) hire, attempt to hire, or
contact or solicit with respect to hiring any employee of the Company, or (iii)
divert or take away any customers or suppliers of the Company in the Geographic
Area. Notwithstanding the foregoing, the Company agrees that none of the
following shall constitute a violation by Executive of this Section 6; (A)
ownership by the Executive of less than five percent of the outstanding voting
securities of any publicly traded company that is a Competing Business so long
as the Executive does not otherwise participate in such competing business in
any way prohibited by the preceding sentence, (B) Executive serving in the
capacity of director of SFX Entertainment, Inc., or (C) ownership of less than a
5% voting or equity interest in Resource Media, Phoenix. As used in this Section
9(b) (and in Section 6), "Company" shall include the Company and any of its
subsidiaries.
(c) During the term of Non-Competition, the Executive will not
use the Executive's access to, knowledge of, or application of Confidential
Information to perform any duty for any Competing Business; it being understood
and agreed to that this Section 9(c) shall be in addition to and not be
construed as a limitation upon the covenants in Section 9(b) hereof.
(d) The Executive acknowledges that the geographic boundaries,
scope of prohibited activities, and time duration of the preceding paragraphs
are reasonable in nature and are no broader than are necessary to maintain the
confidentiality and the goodwill of the Company's
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proprietary information, plans and services and to protect the other legitimate
business interests of the Company.
10. EFFECT OF AGREEMENT ON OTHER BENEFITS. The existence of this
Agreement shall not prohibit or restrict the Executive's entitlement to full
participation in the executive compensation, employee benefit and other plans or
programs in which executives of the Company are eligible to participate.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. Whenever the terms
"hereof", "hereby", "herein", or words of similar import are used in this
Agreement they shall be construed as referring to this Agreement in its entirety
rather than to a particular section or provision, unless the context
specifically indicates to the contrary. Any reference to a particular "Section"
or "paragraph" shall be construed as referring to the indicated section or
paragraph of this Agreement unless the context indicates to the contrary. The
use of the term "including" herein shall be construed as meaning "including
without limitation." This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: D. Geoffrey Armstrong
Capstar Broadcasting Corporation
600 Congress Avenue, Suite 1400
Austin, Texas 78701
and
D. Geoffrey Armstrong
4301 Michael's Cove
Austin, Texas 78701
If to the Company: Capstar Broadcasting Corporation
600 Congress Avenue, Suite 1400
Austin, Texas 78701
Attn: William S. Banowsky, Jr.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
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(c) If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
(d) The Company agrees to attempt to obtain and maintain a
director's and officer's liability insurance policy during the term of the
Executive's employment covering the Executive on commercially reasonable terms,
and the amount of coverage shall be reasonable in relation to the Executive's
position and responsibilities hereunder; provided, however, that such coverage
may be reduced or eliminated to the extent that the Company reduces or
eliminates coverage for its directors and executives generally.
(e) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(f) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(g) The Executive acknowledges that money damages would be
both incalculable and an insufficient remedy for a breach of Section 6 or 9 by
the Executive and that any such breach would cause the Company irreparable harm.
Accordingly, the Company, in addition to any other remedies at law or in equity
it may have, shall be entitled, without the requirement of posting of bond or
other security, to equitable relief, including injunctive relief and specific
performance, in connection with a breach of Section 6 or 9 by the Executive.
(h) The provisions of this Agreement constitute the complete
understanding and agreement between the parties with respect to the subject
matter hereof.
(i) This Agreement may be executed in two or more
counterparts.
(j) In the event any dispute or controversy arises under this
Agreement and is not resolved by mutual written agreement between the Executive
and the Company within 30 days after notice of the dispute is first given, then,
upon the written request of the Executive or the Company, such dispute or
controversy shall be submitted to arbitration to be conducted in accordance with
the rules of the American Arbitration Association. Judgment may be entered
thereon and the results of
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the arbitration will be binding and conclusive on the parties hereto. Any
arbitrator's award or finding or any judgment or verdict thereon will be final
and unappealable. All parties agree that venue for arbitration will be in
Austin, Texas, and that any arbitration commenced in any other venue will be
transferred to Austin, Texas, upon the written request of any party to this
Agreement. All arbitrations will have three individuals acting as arbitrators:
one arbitrator will be selected by the Executive, one arbitrator will be
selected by the Company, and the two arbitrators so selected will select a third
arbitrator. Any arbitrator selected by a party will not be affiliated,
associated or related to the party selecting that arbitrator in any matter
whatsoever. The decision of the majority of the arbitrators will be binding on
all parties. The Company shall be responsible for paying its own and the
Executive's attorneys fees, costs and other expenses pertaining to any such
arbitration and enforcement regardless of whether an arbitrator's award or
finding or any judgment or verdict thereon is entered against the Executive. The
Company shall promptly (and in no event after ten days following its receipt
from the Executive of each written request therefor) reimburse the Executive for
his reasonable attorneys fees, costs and other expenses pertaining to any such
arbitration and the enforcement thereof.
(k) Sections 6 and 9 of this Agreement shall survive the
termination of this Agreement.
(l) The Company agrees to reimburse the Executive for the
reasonable fees and expenses of Executive's counsel incurred in connection with
the negotiation of this Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
EXECUTIVE
/s/ D. Geoffrey Armstrong
--------------------------------------------
D. Geoffrey Armstrong
CAPSTAR BROADCASTING CORPORATION
/s/ R. Steven Hicks
--------------------------------------------
By: R. Steven Hicks
Title: President and Chief Executive Officer
