<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 5, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHANCELLOR MEDIA CORPORATION
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
Delaware 75-2247099
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
</TABLE>
433 East Las Colinas Boulevard
Irving, Texas 75309
(Address, Including Zip Code, and Telephone Number,
including Area Code, of Registrant's Principal Executive Offices)
Scott K. Ginsburg
Chief Executive Officer
433 East Las Colinas Boulevard
Irving, Texas 75309
(972) 869-9020
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent for Service)
Chancellor Broadcasting Company Stock Award Plan
Chancellor Holdings Corp. 1994 Director Stock Option Plan
Stock Option Grant Letter dated September 30, 1995 to Steven Dinetz, Stock
Option Grant Letter dated September 30, 1995 to Eric W. Neumann, Stock Option
Grant Letter dated September 30, 1995 to Marvin Dinetz, Stock Option Grant
Letter dated February 14, 1997 to Carl E. Hirsch
(Full Title of Plan)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered (1) Per Share (2) Offering Price (2) Registration Fee
<S> <C> <C> <C> <C>
Common Stock, 1,760,284 $8.25 to $40.42 $32,566,764.00 $9,868.72
$.01 Par Value
</TABLE>
<PAGE> 2
(1) Of the shares of Common Stock, $.01 par value per share
("Common Stock"), of Chancellor Media Corporation (the "Company" or
"Registrant," which was formerly known as Evergreen Media Corporation) being
registered hereby, 756,274 shares (the "Plan Shares") relate to the Chancellor
Broadcasting Company Stock Award Plan (the "Plan"); 30,302 shares (the
"Director Plan Shares") relate to shares issuable upon exercise of options
granted under the Chancellor Holdings Corp. 1994 Director Stock Option Plan
(the "Director Plan"), under which, 12,121 shares relate to shares issuable
upon exercise of options granted under the Stock Option Grant Letter dated
October 12, 1994 to Jeffrey A. Marcus; 12,121 shares relate to shares issuable
upon exercise of options granted under the Stock Option Grant Letter dated
October 12, 1994 to John H. Massey; 6,060 shares relate to shares issuable
upon exercise of options granted under the Stock Option Grant Letter dated
February 9, 1996 to Matrice Ellis-Kirk (the Marcus, Massey and Ellis-Kirk Stock
Option Grant Letters, collectively, the "Director Letters"); 784,842 shares
relate to shares issuable upon exercise of options granted under the Stock
Option Grant Letter dated September 30, 1995 to Steven Dinetz; 80,455 shares
relate to shares issuable upon exercise of options granted under the Stock
Option Grant Letter dated September 30, 1995 to Eric W. Neumann; 40,228 shares
relate to shares issuable upon exercise of options granted under the Stock
Option Grant Letter dated September 30, 1995 to Marvin Dinetz; 68,183 shares
relate to shares issuable upon exercise of options granted under the Stock
Option Grant Letter dated February 14, 1997 to Carl E. Hirsch (the foregoing
option letters, collectively, the "Management Options" and the foregoing shares
issuable thereunder, collectively, the "Management Option Shares").
(2) For purposes of computing the registration fee only. Pursuant
to Rule 457(h) under the Securities Act of 1933, the Proposed Maximum Aggregate
Offering Price Per Share is based upon: (i) with respect to the Plan Shares,
the actual price at which the options may be exercised; (ii) with respect to
the Director Plan Shares, the actual price at which the options may be
exercised, as set forth in the Director Letters; and (iii) with respect to the
Management Option Shares, the actual price at which the options may be
exercised, as set forth in the Management Options.
PART I
ITEM 1. PLAN INFORMATION.
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in this
Registration Statement:
(a) The Company's Annual Report on Form 10-K (File No.
000-21570) for the year ended December 31, 1996, filed pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which contains audited financial statements for the year ended December 31,
1996.
(b) The Annual Report of Chancellor Broadcasting Company
("Chancellor Broadcasting") on Form 10-K (File No. 000-27726) for the year
ended December 31, 1996, as amended on Form 10-K/A, filed pursuant to Section
13(a) of the Exchange Act, which contains audited financial statements for the
year ended December 31, 1996.
(c) The Annual Report of Chancellor Radio Broadcasting
Company on Form 10-K (File No. 33-80534) for the year ended December 31, 1996,
as amended on Form 10-K/A, filed pursuant to Section 13(a) of the
<PAGE> 3
Exchange Act, which contains audited financial statements for the year ended
December 31, 1996.
(d) All other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by the Annual Report referred to in (a) above.
(e) The description of the Company's Common Stock contained
in the sections entitled "Description of the Surviving Corporation Capital
Stock -- Common Stock" and "General Comparison of Stockholders' Rights" of the
Joint Proxy Statement/Prospectus of the Company and Chancellor Broadcasting
contained in the Company's Registration Statement on Form S-4 filed with the
Commission on August 1, 1997 (File No. 333-32677).
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold are incorporated by reference in this
Registration Statement and are a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not required to be filed with this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a
Delaware corporation to indemnify any person who is, or is threatened to be
made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal administrative or investigative (other than
an action by or in the right of such corporation) by reason of the fact that
such person is or was an officer or director of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee or
agent of another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A Delaware corporation
may indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to
be liable for negligence or misconduct in the performance of his duty to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which he actually and reasonably incurred in
connection therewith.
The Amended and Restated Certificate of Incorporation of the
Company ("Amended and Restated Certificate of Incorporation") provides that the
Company shall indemnify any Person who was, is, or is threatened to be made a
party to a proceeding (as hereinafter defined) by reason of the fact that he or
she (i) is or was a director, officer, employee or agent of the Company, or
(ii) is or was serving at the request of the Company as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, or similar functionary
of another foreign or domestic Company, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
<PAGE> 4
fullest extent permitted under the General Law of the State of Delaware, as
the same exists or may hereafter be amended. Such right shall be a contract
right and as such shall run to the benefit of any director or officer who is
elected and accepts the position of director or officer of the Company or
elects to continue to serve as a director or officer of the Company while the
Article Ninth of the Amended and Restated Certificate of Incorporation is in
effect. Any repeal or amendment of the Article Ninth of the Amended and
Restated Certificate of Incorporation shall be prospective only and shall not
limit the rights of any such director or officer or the obligations of the
Company with respect to any claim arising from or related to the services of
such director or officer in any of the foregoing capacities prior to any such
repeal or amendment to the Article Ninth of the Amended and Restated
Certificate of Incorporation. Such right shall include the right to be paid by
the Company expenses incurred in investigating or defending any such proceeding
in advance of its final disposition to the maximum extent permitted under the
General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended. To the extent that a director, officer, employee or
agent of the Company shall be successful on the merits or otherwise in defense
of any proceeding, or in defense of any claim, issue, or matter therein, he or
she shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Company within sixty (60) days after a written claim has been received by the
Company, the claimant may at any time thereafter bring suit against the Company
to recover the unpaid amount of the claim, and if successful in whole or in
part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense is not permitted under the
General Corporation Law of the State of Delaware, but the burden of proving
such defense shall be on the Company. None of (i) the failure of the Company
(including its board of directors or any committee thereof, independent legal
counsel, or stockholders) to have made its determination prior to the
commencement of such action that indemnification of, or advancement of costs of
defense to, the claimant is permissible in the circumstances, (ii) an actual
determination by the Company (including its board of directors or any committee
thereof, independent legal counsel, or stockholders) that such indemnification
or advancement is not permissible, or (iii) the termination of any proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall be a defense to the action or create a presumption
that such indemnification or advancement is not permissible. In the event of
the death of any Person having a right of indemnification under the foregoing
provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators, and personal representatives. The rights conferred
above shall not be exclusive of any other right which any Person may have or
hereafter acquire under any statute, bylaw, resolution of stockholders or
directors, agreement, or otherwise.
The Company may additionally indemnify any employee or agent
of the Company to the fullest extent permitted by law.
Without limiting the generality of the foregoing, to the
extent permitted by then applicable law, the grant of mandatory indemnification
pursuant to the Article Ninth of the Amended and Restated Certificate of
Incorporation shall extend to proceedings involving the negligence of such
Person.
The Amended and Restated Certificate of Incorporation also
provides that the Board of Directors may authorize, by a vote of a majority of
a quorum of the Board of Directors, the Company to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the Company as
a director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic Company, partnership, joint
venture, sole proprietorship, trust, employee benefit plan, or other enterprise
against any liability asserted against him or her and incurred by him or her in
any such capacity, or arising out of his or her status as such, whether or not
the Company would have the power to indemnify him or her against such liability
under the provisions of the Article Ninth of the Amended and Restated
Certificate of Incorporation.
The term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
<PAGE> 5
The Amended and Restated Certificate of Incorporation also
provides that a director of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability (i) for any breach of the director's duty
of loyalty to the Company 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 General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or amendment of the Article Tenth of the
Amended and Restated Certificate of Incorporation by the stockholders of the
Company shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Company arising from
an act or omission occurring prior to the time of such repeal or amendment. In
addition to the circumstances in which a director of the Company is not
personally liable as set forth in the Article Tenth of the Amended and Restated
Certificate of Incorporation, a director shall not be liable to the Company or
its stockholders to such further extent as permitted by any law hereafter
enacted, including without limitation any subsequent amendment to the General
Corporation Law of the State of Delaware.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.20 Amended and Restated Certificate of Incorporation of
Chancellor Media Corporation (incorporated by reference to Exhibit 2.3 to the
Company's Registration Statement on Form 8-A, filed on September 3, 1997).
4.21 Amended and Restated Bylaws of Chancellor Media
Corporation (incorporated by reference to Exhibit 2.4 to the Company's
Registration Statement on Form 8-A, filed on September 3, 1997).
*4.22 Chancellor Broadcasting Company Stock Award Plan.
*4.23 Chancellor Holdings Corp. 1994 Director Stock Option
Plan.
*4.24 Stock Option Grant Letter dated September 30, 1995 from
Chancellor Corporation to Steven Dinetz.
*4.25 Stock Option Grant Letter dated September 30, 1995 from
Chancellor Corporation to Eric W. Neumann.
*4.26 Stock Option Grant Letter dated September 30, 1995 from
Chancellor Corporation to Marvin Dinetz.
*4.27 Stock Option Grant Letter dated February 14, 1997 from
Chancellor Broadcasting Company to Carl E. Hirsch.
*5.1 Opinion of Latham & Watkins.
*23.1 Consent of Latham & Watkins (included as part of their
opinion listed as Exhibit 5.1).
*23.2 Consent of KPMG Peat Marwick LLP, independent
accountants.
*23.3 Consent of KPMG Peat Marwick LLP, independent
accountants.
*23.4 Consent of Price Waterhouse LLP, independent
accountants.
*23.5 Consent of Arthur Andersen LLP, independent
accountants.
*23.6 Consent of Coopers & Lybrand L.L.P., independent
accountants.
<PAGE> 6
*23.7 Consent of Coopers & Lybrand L.L.P., independent
accountants.
*23.8 Consent of Coopers & Lybrand L.L.P., independent
accountants.
*23.9 Consent of Price Waterhouse LLP, independent
accountants.
*24.1 Power of Attorney (page 7).
* Filed herewith.
ITEM 9. UNDERTAKINGS.
The Company hereby agrees to furnish supplementally a copy of
any omitted schedule or exhibit to the Commission upon request.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective
amendment to this Registration Statement to
include any material information with respect
to the plan of distribution not previously
disclosed in this Registration Statement or
any material change to such information in
this Registration Statement.
(2) That, for the 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.
The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act
that is incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 of 1933 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 of 1933 and will be governed by the final
adjudication of such issue.
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
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 Dallas, State of Texas, on this 5th day of
September, 1997.
CHANCELLOR MEDIA CORPORATION
By: /s/ Matthew E. Devine
-----------------------------------------
Matthew E. Devine
Chief Financial Officer and Secretary
Each person whose signature to this Registration Statement
appears below hereby appoints each of Scott K. Ginsburg and Matthew E. Devine
as his attorney-in-fact to sign on his behalf individually and in the capacity
stated below and to file all post-effective amendments to this Registration
Statement, which amendments may make such changes in and additions to this
Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Scott K. Ginsburg Chief Executive Officer and Director September 5, 1997
- ---------------------------------- (Principal Executive Officer of the
Scott K. Ginsburg Registrant)
/s/ Matthew E. Devine Chief Financial Officer September 5, 1997
- ---------------------------------- (Principal Financial and
Matthew E. Devine Accounting Officer of the
Registrant)
/s/ Thomas O. Hicks Chairman of the Board and Director September 5, 1997
- ----------------------------------
Thomas O. Hicks
/s/ Lawrence D. Stuart, Jr. Director September 5, 1997
- ----------------------------------
Lawrence D. Stuart, Jr.
/s/ Eric C. Neuman Director September 5, 1997
- ----------------------------------
Eric C. Neuman
/s/ John H. Massey Director September 5, 1997
- ----------------------------------
John H. Massey
/s/ Jeffrey A. Marcus Director September 5, 1997
- ----------------------------------
Jeffrey A. Marcus
/s/ Thomas J. Hodson Director September 5, 1997
- ----------------------------------
Thomas J. Hodson
/s/ James E. de Castro Director September 5, 1997
- ----------------------------------
James E. de Castro
/s/ Steven Dinetz Director September 5, 1997
- ----------------------------------
Steven Dinetz
/s/ Perry J. Lewis Director September 5, 1997
- ----------------------------------
Perry J. Lewis
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
No. Description Page
- --------- ----------- ------------
<S> <C> <C>
4.20 Amended and Restated Certificate of Incorporation of Chancellor Media
Corporation (incorporated by reference to Exhibit 2.3 to the Company's
Registration Statement on Form 8-A, filed on September 3, 1997).
4.21 Amended and Restated Bylaws of Chancellor Media Corporation (incorporated by
reference to Exhibit to the Company's Registration Statement on Form 8-A,
filed on September 3, 1997).
*4.22 Chancellor Broadcasting Company Stock Award Plan.
*4.23 Chancellor Holdings Corp. 1994 Director Stock Option Plan.
*4.24 Stock Option Grant Letter dated September 30, 1995 to Steven Dinetz.
*4.25 Stock Option Grant Letter dated September 30, 1995 to Eric W. Neumann.
*4.26 Stock Option Grant Letter dated September 30, 1995 to Marvin Dinetz.
*4.27 Stock Option Grant Letter dated February 14, 1997 to Carl E. Hirsch.
*5.1 Opinion of Latham & Watkins.
*23.1 Consent of Latham & Watkins (included as part of their opinion listed as
Exhibit 5.1).
*23.2 Consent of KPMG Peat Marwick LLP, independent accountants.
*23.3 Consent of KPMG Peat Marwick LLP, independent accountants.
*23.4 Consent of Price Waterhouse LLP, independent accountants.
*23.5 Consent of Arthur Andersen LLP, independent accountants.
*23.6 Consent of Coopers & Lybrand L.L.P., independent accountants.
*23.7 Consent of Coopers & Lybrand L.L.P., independent accountants.
*23.8 Consent of Coopers & Lybrand L.L.P., independent accountants.
*23.9 Consent of Price Waterhouse LLP, independent accountants.
*24.1 Power of Attorney (page 7).
</TABLE>
*Filed herewith
<PAGE> 1
EXHIBIT 4.22
CHANCELLOR BROADCASTING COMPANY STOCK AWARD PLAN
1. PURPOSE
The Chancellor Broadcasting Company Stock Award Plan (the "Plan") is
intended to provide incentives which will attract, retain and motivate eligible
persons whose present and potential contribution are important to the success
of Chancellor Broadcasting Company (the "Company"). These eligible persons
will be offered an opportunity to participate in the Company's future
performance by providing them opportunities to acquire shares of the Class A
Common Stock, par value $.0l per share, of the Company ("Class A Common Stock")
through awards of stock options, restricted stock and stock bonuses ("Stock
Awards"). In addition, the Plan is intended to assist in aligning the interests
of the Company's officers and key employees to those of its
stockholders.
2. TERM
The Plan shall be effective as of the date it is approved by the Company's
stockholders (the "Effective Date"). The Plan shall terminate on the tenth
anniversary of the Effective Date, unless terminated by the Board of Directors
of the Company (the "Board") pursuant to Section 18 below prior to such date.
3. ADMINISTRATION
(a) The Plan shall be administered by the Company's Compensation Committee
(the "Committee") appointed by the Board from among its members, which shall be
comprised of not less than two nonemployee members of the Board ("Nonemployee
Directors") each of whom qualifies as (i) a "disinterested person" within the
meaning of Rule 16b-3 (or any successor rule) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and (ii) an 'outside
director' within the meaning of Section 162(m)(4)(C)(i) of the Internal Revenue
Code of 1986, as amended (the "Code") and the regulations promulgated
thereunder; provided, however, that prior to the effectiveness under the
Exchange Act of a registration statement filed by the Company with the
Securities and Exchange Commission, the Committee may be comprised of any two
members of the Board or may be the entire Board. The Committee is authorized,
subject to the provisions of the Plan, to establish such rules and regulations
as it deems necessary for the proper administration of the Plan and to make
such determinations and interpretations and to take such action in connection
with the Plan and any Stock Awards granted hereunder as it deems necessary or
advisable. All determinations and interpretations made by the Committee shall
be binding and conclusive on all participants and their legal representatives.
No member of the Board, no member of the Committee and no employee of the
Company shall be liable for any act or failure to act hereunder, except in
circumstances involving his or her bad faith, gross negligence or willful
misconduct, or for any act or failure to act hereunder by any other member or
employee or by any agent to whom duties in connection with the administration
of this Plan have been delegated. The Company shall indemnify members of the
Committee and any agent of the Committee who is an employee of
<PAGE> 2
the Company, a subsidiary or an affiliate against any and all liabilities or
expenses to which they may be subjected by reason of any act or failure to act
with respect to their duties on behalf of the Plan, except in circumstances
involving such person's bad faith, gross negligence or willful misconduct.
(b) The Committee may delegate to one or more of its members, or to one
or more agents, such administrative duties as it may deem advisable, and the
Committee, or any person to whom it has delegated duties as aforesaid, may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. The Committee may employ
such legal or other counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation
received from any such counsel, consultant or agent. Expenses incurred by the
Committee in the engagement of such counsel, consultant or agent shall be paid
by the Company, or the subsidiary or affiliate whose employees have benefited
from the Plan, as determined by the Committee.
4. PARTICIPANTS
Participants shall consist of such officers and key employees of the
Company and its subsidiaries and affiliates as the Committee in its sole
discretion determines to be significantly responsible for the success and future
growth and profitability of the Company and whom the Committee may designate
from time to time to receive Stock Awards under the Plan. Nonemployee Directors
shall also participate in the Plan, but only to the extent provided in Section
9 below. Designation of a participant in any year shall not require the
Committee to designate such person to receive a Stock Award in any other year
or, once designated, to receive the same type or amount of Stock Award as
granted to the participant in any other year. The Committee shall consider
such factors as it deems pertinent in selecting participants and in determining
the type and amount of their respective Stock Awards.
5. TYPE OF STOCK AWARDS
Stock Awards under the Plan may be granted in any one or a combination of
Stock Options, (ii) Restricted Stock and (iii) Stock Bonuses. Stock Awards
shall be evidenced by agreements (which need not be identical) in such forms as
the Committee may from time to time approve; provided, however, that in the
event of any conflict between the provisions of the Plan and any such
agreements, the provisions of the Plan shall prevail.
6. COMMON STOCK AVAILABLE UNDER THE PLAN
The aggregate number of shares of Class A Common Stock that may be subject
to Stock Awards granted under this Plan shall be 916,456 shares of Class A
Common Stock, which may be authorized and unissued or treasury shares, subject
to any adjustments made in accordance with Section 11 below. The maximum number
of shares of Class A Common Stock with respect to which Stock Awards may be
granted to any individual participant under the Plan shall be (i) 500,000
shares in any fiscal year and (ii) an aggregate of 500,000 shares over the life
of the Plan. Any shares of Class A Common Stock subject to a Stock Option
which for any reason is canceled or terminated without having been exercised,
any shares subject to other Stock
2
<PAGE> 3
Awards which are forfeited, or any shares delivered to the Company as part of
full payment for the exercise of a Stock Option shall again be available for
Stock Awards under the Plan, to the extent permitted by Rule 16b-3 under the
Exchange Act regarding the availability of such shares.
7. STOCK OPTIONS
(a) In General. Stock Options shall consist of awards from the Company
that shall enable the holder to purchase a specific number of shares of Class A
Common Stock, at set terms and at a fixed purchase price. Stock Options may be
(i) "incentive stock options" ("Incentive Stock Options'), as such term is used
in Section 422 of the Code, or (ii) stock options which do not constitute
Incentive Stock Options ("Nonqualified Stock Options"). The Committee shall
have the authority to grant to any participant one or more Incentive Stock
Options, Nonqualified Stock Options, or both types of Stock Options. Each Stock
Option shall be subject to such terms and conditions consistent with the Plan
as the Committee may impose from time to time, subject to the below limitations.
(b) Exercise Price. Each Stock Option granted hereunder shall have such
per-share exercise price as the Committee may determine on the date of grant;
provided, however, that the per-share exercise price shall not be less than 100
percent of Fair Market Value, meaning the closing price of the Class A Common
Stock on the date of grant (or on the last preceding trading date if Class A
Common Stock was not traded on such date) if the Class A Common Stock is readily
tradable on a national securities exchange or other market system. If the Class
A Common Stock is not readily tradable, Fair Market Value shall mean the amount
determined in good faith by the Committee as the fair market value of the Class
A Common Stock.
(c) Vesting. The Committee shall, in its sole discretion, determine a
vesting schedule upon which each Stock Option shall become exercisable and
remain exercisable; provided, however, that if the Committee does not determine
such vesting schedule, such Stock Option shall become exercisable as follows:
20 percent on the first anniversary of the date of grant and the remaining 80
percent shall vest pro rata on a monthly basis over the four-year period
following the first anniversary of the date of grant.
(d) Payment of Exercise Price. The option exercise price may be paid in
cash or, in the discretion of the Committee, by the delivery of shares of Class
A Common Stock of the Company then owned by the participant, or by a combination
of these methods. In the discretion of the Committee, payment may also be made
by delivering a properly executed exercise notice to the Company together with
a copy of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the exercise price. To
facilitate the foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms. The Committee may prescribe any
other method of paying the exercise price that it determines to be consistent
with applicable law and the purpose of the Plan, including, without limitation,
in lieu of the exercise of a Stock Option by delivery of shares of Class A
Common Stock of the Company then owned by a participant, providing the Company
with a notarized statement attesting to the number of shares owned, where upon
verification by the Company, the Company would issue to the participant only
the number of incremental shares to
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<PAGE> 4
which the participant is entitled upon exercise of the Stock Option. The
Committee may, at the time of grant, provide for the grant of a subsequent
Restoration Stock Option if the exercise price is paid for by delivering
previously owned shares of Class A Common Stock of the Company. Restoration
Stock Options (i) may be granted in respect of no more than the number of
shares of Class A Common Stock tendered in exercising the predecessor Stock
Option, (ii) shall have an exercise price equal to 100 percent of Fair Market
Value on the date the Restoration Stock Option is granted, and (iii) may have
an exercise period that does not extend beyond the remaining term of the
predecessor Stock Option. In determining which methods a participant may
utilize to pay the exercise price, the Committee may consider such factors as
it determines are appropriate.
(e) Term of Stock Option. Stock Options granted under the Plan shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee; provided, however, that no Stock Option
shall be exercisable later than ten years after the date it is granted except
in the event of a participant's death, in which case, the exercise period of
such participant's Stock Options may be extended by the Committee in its sole
discretion beyond such period but no later than one year after the
participant's death.
(f) Limitations on Incentive Stock Options. Incentive Stock Options may
be granted only to participants who are employees of the Company or one of its
subsidiaries (within the meaning of Section 424(f) of the Code) on the date of
grant. The aggregate market value (determined as of the time the option is
granted) of the Class A Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a participant during any calendar
year (under all option plans of the Company and of any parent corporation or
subsidiary corporation (as defined in Sections 424(e) and (f) of the Code,
respectively)) shall not exceed $100,000. For purposes of the preceding
sentence, Incentive Stock Options shall be taken into account in the order in
which they are granted. Incentive Stock Options may not be granted to any
participant who, at the time of grant, owns stock possessing (after the
application of the attribution rules of Section 424(d) of the Code) more than
10 percent of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation of the Company, unless the
option price is fixed at not less than 110 percent of Fair Market Value of the
Class A Common Stock on the date of grant and the exercise of such option is
prohibited by its terms after the expiration of five years from the date of
grant of such option.
(g) Post-Employment Exercises. Following a participant's termination of
employment other than a termination of employment due to death, Stock Options
granted hereunder shall be exercisable only for the three-month period following
the date of termination of employment; provided, however, that in the event a
participant's employment is terminated for cause, all Stock Options held by
such participant shall immediately be cancelled as of the date of termination
of employment for cause. The Committee may, in its sole discretion, extend the
post-employment exercise period beyond the three-month period, so long as the
post-employment exercise period ends prior to the original option expiration
date. In addition, the Committee may, at the time of grant and in its sole
discretion, subject the exercise of any Stock Option after termination of
employment to the satisfaction of the conditions precedent that the participant
neither (i) competes with, or takes other employment with or renders services
to a
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<PAGE> 5
competitor of, the Company, its subsidiaries or affiliates without the written
consent of the Company, nor (ii) conducts himself or herself in a manner
adversely affecting the Company.
8. OTHER STOCK AWARDS
The Committee may, in its sole discretion, grant Stock Awards in the form
of Restricted Stock or Stock Bonuses (which may include mandatory payment of
bonus incentive compensation in stock) consisting of Class A Common Stock issued
or transferred to participants with or without other payments therefor as
additional compensation for services to the Company. Such Stock Awards may be
subject to such terms and conditions as the Committee determines appropriate,
including, without limitation, restrictions on the sale or other disposition of
such shares, the right of the Company to reacquire such shares for no
consideration upon termination of the participant's employment within specified
periods, and conditions requiring that the shares be earned in whole or in part
upon the achievement of performance goals established by the Committee over a
designated period of time. Such performance goals shall be based on any one or
combination of the following financial measures: revenues, income, cash flow,
earnings per share, return on assets, and return on equity. The Committee may
require the participant to deliver a duly signed stock power, endorsed in
blank, relating to the Class A Common Stock covered by such an Award. The
Committee may also require that the stock certificates evidencing such shares
be held in custody or bear restrictive legends until the restrictions thereon
shall have lapsed. The Committee shall determine whether the participant shall
have, with respect to the shares of Class A Common Stock subject to a Stock
Award, all of the rights of a holder of shares of Class A Common Stock of the
Company, including the right to receive dividends and to vote the shares.
9. NONEMPLOYEE DIRECTOR FORMULA AWARDS
(a) After the Effective Date, a Nonemployee Director who (i) was not a
Nonemployee Director as of the Effective Date and (ii) does not represent an
investor who owns more than 10 percent of the Class A Common Stock automatically
shall be granted an option to purchase 5,000 shares of Class A Common Stock on
the date he or she first becomes a member of the Board (an "Initial Nonemployee
Director Stock Option").
(b) Each Initial Nonemployee Director Stock Option shall (i) be fully
exercisable on the date of grant, (ii) be granted with an exercise price equal
to 100 percent of Fair Market Value and (iii) expire on the tenth anniversary
of the date of grant.
(c) If a Nonemployee Director ceases to be a director of the Company for
any reason other than due to death or disability, each Initial Nonemployee
Director Stock Option shall remain exercisable only for the three-month period
following the date the Nonemployee Director ceases to be a director of the
Company.
(d) The agreements accompanying the formula awards made under this
Section 9 may contain additional restrictions or limitations not inconsistent
with the provisions of the Plan.
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<PAGE> 6
10. FOREIGN OPTIONS AND RIGHTS
The Committee may grant Stock Awards to individual participants who are
subject to the tax laws of nations other than the United States, which Stock
Awards may have terms and conditions as determined by the Committee as
necessary to comply with applicable foreign laws. The Committee may take any
action which it deems advisable to obtain approval of such Stock Awards by the
appropriate foreign governmental entity; provided, however, that no such Stock
Awards may be granted pursuant to this Section 10 and no action may be taken
which would result in a violation of the Exchange Act, the Code or any other
applicable law.
11. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL
(a) If there shall be any change in the Class A Common Stock of the
Company, through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, split up, spinoff, combination of
shares, exchange of shares, dividend in kind or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, an adjustment shall be made to each outstanding Stock Award to
reflect such change or distribution. In the case of Restricted Stock or Stock
Bonuses, the number of shares of Class A Common Stock shall be appropriately
adjusted, and in the case of Stock Options, both the number of underlying shares
and the exercise price shall be appropriately adjusted. Such adjustments shall
be made successively each time any such change or distribution occurs. In
addition, in the event of any such change or distribution, in order to prevent
dilution or enlargement of participants' rights under the Plan, the Committee
shall have authority to adjust, in an equitable manner, the number and kind of
shares that may be issued under the Plan, the number and kind of shares subject
to outstanding Stock Awards, the exercise price applicable to outstanding Stock
Options, and the Fair Market Value of the Class A Common Stock and other value
determinations applicable to outstanding Stock Awards. Appropriate adjustments
may also be made by the Committee in the terms of any Stock Awards under the
Plan to reflect such changes or distributions and to modify any other terms of
outstanding Stock Awards on an equitable basis, including modifications of
performance targets and changes in the length of performance periods. In
addition, the Committee is authorized to make adjustments to the terms and
conditions of, and the criteria included in, Stock Awards in recognition of
unusual or nonrecurring events affecting the Company or the financial statements
of the Company, or in response to changes in applicable laws, regulations, or
accounting principles. Notwithstanding the foregoing, (i) each such adjustment
with respect to an Incentive Stock Option shall comply with the rules of Section
424(a) of the Code and (ii) in no event shall any adjustment be made which would
render any Incentive Stock Option granted hereunder other than an incentive
stock option for purposes of Section 422 of the Code.
(b) Notwithstanding anything herein to the contrary, if there is a Change
in Control of the Company, all then outstanding Restricted Stock shall
immediately become transferable and all outstanding Stock Options shall become
immediately exercisable. For purposes of this Section 11(b), a "Change in
Control' of the Company shall be deemed to have occurred upon any of the
following events:
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<PAGE> 7
(1) A change in control of the direction and administration of the
Company's business of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A (Rule 14a-101) promulgated under the
Exchange Act; or
(2) During any period of two consecutive years, the individuals who
at the beginning of such period constitute the Board or any individuals who
would be "Continuing Directors" (as hereinafter defined) cease for any reason
to constitute at least a majority thereof, or
(3) The Company's Class A Common Stock shall cease to be publicly
traded; or
(4) The Board shall approve a sale of all or substantially all of
the assets of the Company, and such transaction shall have been consummated; or
(5) The Board shall approve any merger, consolidation, or like
business combination or reorganization of the Company, the consummation of which
would result in the occurrence of any event described in Section 11 (b)(2) or
11 (b)(3) above, and such transaction shall have been consummated.
Notwithstanding the foregoing, (i) any spin-off of a division or subsidiary of
the Company to its stockholders or (ii) any event listed in this Section
11(b)(1) through Section 11(b)(5) that the Board determines is not to be
regarded as a Change in Control of the Company, shall not constitute a Change
in Control of the Company. For purposes of this Section 11 (b), "Continuing
Directors" shall mean (x) the directors of the Company in office on the
Effective Date and (y) any successor to any such director and any additional
director who after the Effective Date was nominated or selected by a majority
of the Continuing Directors in office at the time of his or her nomination or
selection.
(c) The Committee may, in its sole discretion, determine that, upon the
occurrence of a Change in Control of the Company, each Stock Option outstanding
hereunder shall terminate within a specified number of days after notice to the
holder, and such holder shall receive, with respect to each share of Class A
Common Stock subject to such Stock Option, an amount equal to the excess of the
Fair Market Value of such shares of Class A Common Stock immediately prior to
the occurrence of such Change in Control over the exercise price per share of
such Stock Option; such amount to be payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction) or in a
combination thereof, as the Committee, in its discretion, shall determine. The
provisions contained in the preceding sentence shall be inapplicable to a Stock
Option granted within six months before the occurrence of a Change in Control
if the holder of such Stock Option is subject to the reporting requirements of
Section 16(a) of the Exchange Act and no exception from liability under Section
16(b) of the Exchange Act is otherwise available to such holder.
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<PAGE> 8
12. NONTRANSFERABILITY
Each Stock Award granted under the Plan to a participant shall not be
transferable otherwise than by will or the laws of descent and distribution,
and shall be exercisable, during the participant's lifetime, only by the
participant. In the event of the death of a Participant, each Stock Option
theretofore granted to him or her shall be exercisable during such period after
his or her death as the Committee shall in its discretion set forth in such
option or right on the date of grant and then only by the executor or
administrator of the estate of the deceased participant or the person or persons
to whom the deceased participant's rights under the Stock Option shall pass by
will or the laws of descent and distribution.
13. OTHER PROVISIONS
The award of any Stock Award under the Plan may also be subject to such
other provisions (whether or not applicable to the Stock Award awarded to any
other participant) as the Committee determines appropriate, including, without
limitation, for the installment purchase of Class A Common Stock under Stock
Options, to assist the participant in financing the acquisition of Class A
Common Stock, for the forfeiture of, or restrictions on resale or other
disposition of, Class A Common Stock acquired under any form of Stock Award,
for the acceleration of exercisability or vesting of Stock Awards in the event
of a Change in Control of the Company, for the payment of the value of Stock
Awards to participants in the event of a Change in Control of the Company, or
to comply with federal and state securities laws, or understandings or
conditions as to the participant's employment in addition to those specifically
provided for under the Plan.
14. WITHHOLDING
All payments or distributions of Stock Awards made pursuant to the Plan
shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Class A Common Stock pursuant to the Plan, it may
require the recipient to remit to it or to the corporation that employs such
recipients an amount sufficient to satisfy such tax withholding requirements
prior to the delivery of any certificates for such Class A Common Stock. In
lieu thereof, the Company or the employing corporation shall have the right to
withhold the amount of such taxes from any other sums due or to become due from
such corporation to the recipient as the Committee shall prescribe. The
Committee may, in its discretion and subject to such rules as it may adopt
(including any as may be required to satisfy applicable tax and/or non-tax
regulatory requirements), permit an optionee or award or right holder to pay all
or a portion of the federal, state and local withholding taxes arising in
connection with any Stock Award consisting of shares of Class A Common Stock by
electing to have the Company withhold shares of Class A Common Stock having a
Fair Market Value equal to the amount of tax to be withheld, such tax calculated
at rates required by statute or regulation.
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<PAGE> 9
15. TENURE
A participant's right, if any, to continue to serve the Company or any of
its subsidiaries as an officer, employee, or otherwise, shall not be enlarged
or otherwise affected by his or her designation as a participant under the
Plan.
16. UNFUNDED PLAN
Participants shall have no right, title, or interest whatsoever in or to
any investments which the Company may make to aid it in meeting its obligations
under the Plan. Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind, or
a fiduciary relationship between the Company and any participant, beneficiary,
legal representative or any other person. To the extent that any person
acquires a right to receive payments from the Company under the Plan, such
right shall be no greater than the right of an unsecured general creditor of
the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and
no segregation of assets shall be made to assure payment of such amounts except
as expressly set forth in the Plan. The Plan is not intended to be subject to
the Employee Retirement Income Security Act of 1974, as amended.
17. NO FRACTIONAL SHARES
No fractional shares of Class A Common Stock shall be issued or delivered
pursuant to the Plan or any Stock Award. The Committee shall determine whether
cash, or Stock Awards, or other property shall be issued or paid in lieu of
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
18. AMENDMENT AND TERMINATION
The terms and conditions applicable to any Stock Award granted after the
Effective Date may be amended or modified by mutual agreement between the
Company and the participant or such other persons as may then have an interest
therein. Also, by mutual agreement between the Company and a participant
hereunder, under this Plan or under any other present or future plan of the
Company, Stock Awards may be granted to such participant in substitution and
exchange for, and in cancellation of, any Stock Awards previously granted such
participant under this Plan, or any other present or future plan of the Company.
The Board may amend the Plan from time to time or suspend or terminate the Plan
at any time. However, no action authorized by this Section 18 shall reduce the
amount of any existing Stock Award or change the terms and conditions thereof
without the participant's consent. No amendment of the Plan shall, without
approval of the stockholders of the Company, (i) materially increase the total
number of shares which may be issued under the Plan; (ii) materially increase
the amount or type of Stock Awards that may be granted under the Plan; or (iii)
materially modify the requirements as to eligibility for Stock Awards under the
Plan; provided, however, that no amendment may be made without approval of the
stockholders of the Company if the amendment shall disqualify any Incentive
Stock Options granted hereunder. In addition, the provisions of Section 9
above, regarding Nonemployee Director formula awards, shall not be amended more
than once every six
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<PAGE> 10
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974 or the rules thereunder.
19. GOVERNING LAW
This Plan, Stock Awards granted hereunder and actions taken in connection
herewith shall be governed and construed in accordance with the laws of the
State of Texas without reference to principles of conflict of laws.
20. COMPLIANCE WITH RULE 16B-3
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 (or its successors) promulgated under the Exchange Act.
To the extent any provision of the Plan or action by the Committee fails to
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
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<PAGE> 1
EXHIBIT 4.23
CHANCELLOR HOLDINGS CORP.
1994 DIRECTOR STOCK OPTION PLAN
1. Purpose.
Chancellor Holdings Corp., a Delaware corporation (herein, together
with its successors, referred to as the "Company"), by means of this 1994
Director Stock Option Plan (the "Plan"), desires to afford certain non-employee
directors of the Company who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company.
The stock options described in Section 6 (the "Options"), and the
shares of Common Stock (as hereinafter defined) acquired pursuant to the
exercise of such Options are a matter of separate inducement and are not in
lieu of any salary or ocher compensation for services.
2. Administration.
The Plan shall be administered by the Option Committee, or any
successor thereto, of the Board of Directors of the Company (the "Board of
Directors"), or by any other committee appointed by the Board of Directors to
administer this Plan (the "Committee"); provided, the entire Board of Directors
may act as the Committee if it chooses to do so. The number of individuals
that shall constitute the 'Committee shall be determined from time to time by a
majority of all the members of the Board of Directors, and, unless that
majority of the Board of Directors determines otherwise, shall be no less than
two individuals. A majority of the Committee shall constitute a quorum (or if
the Committee consists of only two members, then both members shall constitute
a quorum), and subject to the provisions of Section 5, the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the
Committee. Whenever the Company shall have a class of equity securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), each member of the Committee shall be required to
be a "disinterested person" within the meaning of Rule 16b-3, as amended ("Rule
16b-3"), or other applicable rules under Section 16(b) of the Exchange Act and
the Committee shall administer the Plan so as to Comply at all times with the
Exchange Act.
The members of the Committee shall serve at the pleasure of the Board
of Directors, which shall have the power, at any time and from time to time, to
remove members from or add members of the Committee. Removal from the
committee may be with or without cause. Any individual serving as a member of
the Committee shall have the right to resign from membership in the Committee
by written notice to the Board of Directors. The Board of Directors, and not
the remaining members of the Committee, shall have the power and authority to
fill vacancies on the Committee, however caused. The Board of Directors shall
promptly fill any vacancy that causes the number of members of the Committee to
be below
<PAGE> 2
two or, if the Company has a class of equity securities registered pursuant to
Section 12 of the Exchange Act, any other number that Rule 16b-3 may require
from time to time.
3. Shares Available.
Subject to the adjustments provided in Section 8, the maximum
aggregate number of shares of nonvoting stock, par value $0.01 per share, of
the Company ("Common Stock") which may be granted for all purposes under the
Plan shall be 480,000 shares. If, for any reason, any shares as to which
Options have been granted cease to be subject to purchase thereunder, including
the expiration of such option, the termination of such option prior to
exercise, or the forfeiture of such Option, such shares shall thereafter be
available for grants to such individual or other individuals under the Plan.
Options granted under the Plan may be fulfilled in accordance with the terms of
the Plan with (i) authorized and unissued shares of the Common Stock, (ii)
issued shares of such Common Stock held in the Company's treasury, or (iii)
issued shares of Common Stock reacquired by the Company in each situation as
the Board of Directors or the committee may determine from time to time in its
sole discretion.
4. Eligibility and Bases of Participation.
Grants of Non-Qualified Options (as hereinafter defined) may be made
under the Plan subject to and in accordance with Section 6, to Director
Participants. As used herein, the term "Director Participants" shall mean any
individual who is not an employee of the Company and serves as a member of the
Board of Directors.
5. Authority of Committee.
Subject to and not inconsistent with the express provisions of the
Plan, the Internal Revenue Code Of 1986, as amended (the "Code"), and, if
applicable, Rule 16b-3, the Committee shall have plenary authority to:
a. determine the restrictions to be applicable to Options and
all other terms and provisions thereof (which need not be
identical);
b. require, as a condition to the granting of any Option,
that the person receiving such Option agree not to sell or
otherwise dispose of such Option, any Common Stock
acquired pursuant to such Option, or any other "derivative
security" (as defined by Rule 16a-l(c) under the Exchange
Act) for a period of six months following the later of (i)
the date of the grant of such Option or (ii) the date when
the exercise price of such Option is fixed it such
exercise price is not fixed at the date of grant of such
Option, or for such other period as the Committee may
determine;
c. provide an arrangement through registered broker-dealers
whereby temporary financing may be made available to an
optionee by the broker-dealer, under the rules and
regulations of the Board of Governors of the
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<PAGE> 3
Federal Reserve, for the purpose of assisting the optionee
in the exercise of an Option, such authority to include
the payment by the Company of the commissions of the
broker-dealer;
d. provide the establishment of procedures for an optionee
(i) to have withheld from the total number of shares of
Common Stock to be acquired upon the exercise of an Option
that number of shares having a Fair Market Value (as
defined in Section 14) which, together with such cash as
shall be paid in respect of fractional shares, shall equal
the Option exercise price, and (ii) to exercise a portion
of an option by delivering that number of shares of Common
Stock already owned by such optionee having an aggregate
Fair Market Value which shall equal the partial Option
exercise price and to deliver the shares thus acquired by
such optionee in payment of shares to be received pursuant
to the exercise of additional portions of such Option, the
effect of which shall be that such optionee can in
sequence utilize such newly acquired shares in payment of
the exercise price of the entire Option, together with
such cash as shall be paid in respect of fractional
shares;
e. provide (in accordance with Section 11 or otherwise) the
establishment of a procedure whereby a number of shares of
Common Stock or other securities may be withheld from the
total number of shares of Common Stock or other securities
to be issued upon exercise of an Option to meet the
obligation of withholding for income, social security and
other taxes incurred by an optionee upon such exercise or
required to be withheld by the Company in connection with
such exercise;
f. prescribe, amend, modify and rescind rules and regulations
relating to the Plan;
g. make all determinations permitted or deemed necessary,
appropriate or advisable for the administration of the
Plan, interpret any Plan or option provision, perform all
other acts, exercise all other powers, and establish any
other procedures determined by the Committee to be
necessary, appropriate, or advisable in administering the
Plan or for the conduct of the Committee's business. Any
act of the Committee, including interpretations of the
provisions of the Plan or any Option and determinations
under the Plan or any option shall be final, conclusive
and binding on all parties.
The Committee may delegate to one or more of its members, or to one or
more agents. such administrative duties as it may deem advisable, and the
Committee or any Person to whom it has delegated duties as aforesaid may employ
one or more Persons to render advice with respect to any responsibility the
Committee or such Person may have under the Plan; provided, however, that
whenever the Company has a class of equity securities registered under Section
12
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<PAGE> 4
of the Exchange Act, the Committee may not delegate any duties to a member of
the Board of Directors who, if elected to serve on the Committee, would not
qualify as a "disinterested person" to administer the Plan as contemplated by
Rule 16b-3, as amended, or other applicable rules under the Exchange Act. The
Committee may employ attorneys, consultants, accountants, or other Persons and
the Committee, the Company, and its officers and directors shall be entitled to
rely upon the advice, opinions, or valuations of any such Persons. No member
or agent of thin Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan and
all members and agents of the Committee shall be fully protected by the Company
in respect of any such action, determination or interpretation.
6. Stock Option Grants to Director Participants.
Subject to the express provisions of this Plan, each person upon his
initial election to the Board of Directors shall be granted a non-qualified
stock option (options which do not qualify under Section 422 of the Code) (the
"NonQualified Option") to purchase a number of shares of Common Stock equal to
the number of shares of Common Stock acquired by purchase by such person upon
his initial election to the Board of Directors (which such purchase option
shall be made available to all Director Participants upon their election);
provided, however, in no event shall such person be granted an Option to
purchase more shares of Common Stock having a Fair Market Value at the date of
grant exceeding $100,000. The terms and conditions of the Options granted
under this Section 6 shall be determined from time to time by the Committee;
provided, however, that the options granted under this Section 6 shall be
subject to all terms and provisions of the Plan, including the following:
a. Option Exercise Price. The Committee shall establish the
Option exercise price at the time any Non-Qualified Option
is granted at such amount as the Committee shall
determine, subject to the following limitation. The
Option exercise price for each share purchasable under any
Option granted hereunder shall be such amount as the
Committee shall, in its best judgment, determine to be not
less than the greater of (i) the par value per share of
such stock and (ii) one hundred percent of the Fair Market
Value pet share at the date such Option is granted. The
Option exercise price shall be subject to adjustment in
accordance with the provisions of Section 8 of the Plan.
b. Payment. The price per share of Common Stock with respect
to each Option exercise shall be payable at the time of
such exercise. Such price shall be payable in cash or by
any other means acceptable to the Committee, including
delivery to the company of shares of Common Stock owned by
the optionee or by the delivery or withholding of shares
pursuant to a procedure created pursuant to Section 5.d of
the Plan. Shares delivered to or withheld by the Company
in payment of the Option exercise price shall be valued at
the Fair Market Value of the Common Stock on the day
preceding the date of the exercise of the Option.
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<PAGE> 5
c. Exercisability of Stock Option. Subject to Section 7,
each Option shall be exercisable in one or more
installments as the Committee may determine at the time of
the grant. No Option shall be exercisable after the
expiration of ten years from the date of grant of the
Option, unless otherwise expressly provided in such
Option.
d. Death. In the event of the death of a Director
Participant, the estate of such person, or a person who
acquired the right to exercise such Option by bequest or
inheritance or by reason of the death of the optionee,
shall have the right to exercise such Option in accordance
with its terms, at any time and from time to time within
one year after the date of death unless a longer or
shorter period is expressly provided in such Option or
established by the Committee pursuant to Section 7 (but in
no event after the expiration date of such Option).
e. Disability. If a Director Participant's service as a
director of the Company terminates because of his
Disability, such optionee or his legal representative
shall have the right to exercise the Option in accordance
with its terms at any time and from time to time within
one year after the date of the optionee's termination
unless a longer or shorter period is expressly provided in
such Option or established by the Committee pursuant to
Section 7 (but not after the expiration of the Option).
f. Other Termination of Relationship. If a Director
Participant's service as a director of the Company
terminates for any reason other than those specified in
subsections 6(d) and (e) above, such optionee shall have
the right to exercise his Option in accordance with its
terms within 30 days after the date of such termination,
unless a longer or shorter period is expressly provided in
such Option or established by the Committee pursuant to
Section 7 (but not after the expiration date of the
Option); provided, that, if the optionee is removed from
office for cause by action of the stockholders in
accordance with the by-laws of the Company and the General
Corporation Law of the State of Delaware or if such
optionee voluntarily terminates his service without the
consent of the Company, then such optionee shall
immediately forfeit his rights under his Option except as
to the shares of stock already purchased.
7. Change of Control.
If a Change of Control shall occur, or if the Company shall enter into
an agreement providing for a Change of Control, the Committee may declare any
or all Options outstanding under the Plan to be exercisable in full at such
time or times as the Committee shall determine, notwithstanding the express
provisions of such Options. Each option accelerated by the
5
<PAGE> 6
Committee in connection with a Change of Control pursuant to the preceding
sentence shall. terminate, notwithstanding any express provision thereof or any
other provision of the Plan, on such date (not later than the stated expiration
date) as the Committee shall determine.
8. Adjustment of Shares.
Unless otherwise expressly provided in a particular Option, in the
event that, by reason of any merger, consolidation, combination, liquidation,
reorganization, recapitalization, stock dividend, stock split, split-up, split-
off, spin-off, combination of shares, exchange of shares or other like change
in capital structure of the Company (collectively, a "Reorganization"), the
Common Stock is substituted, combined, or changed into any cash, property, or
other securities, or the shares of Common Stock are changed into a greater or
lesser number of shares of Common Stock, the number and/or kind of shares
and/or interests subject to an Option and the per share price or value thereof
shall be appropriately adjusted by the Committee to give appropriate effect of
such Reorganization. Any fractional shares or interests resulting from such
adjustment shall be eliminated.
In the event the Company is not the surviving entity of a
Reorganization and, following such Reorganization, any optionee will hold
Options issued pursuant to this Plan which have not been exercised, cancelled,
or terminated in connection therewith, the Company shall cause such Options to
be assumed (or cancelled and replacement Options issued) by the surviving
entity.
9. Assignment of Transfer.
No Option granted under the Plan or any rights or interests therein
shall be assignable or transferable by an optionee except by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code and during the lifetime of an optionee, Options granted
to him or her hereunder shall be exercisable only by the optionee or, in the
event that a legal representative or guardian has been appointed for an
optionee, such legal guardian or representative.
10. Compliance with Securities Laws.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable state
securities law to permit exercise of any Option or to issue any Common Stock in
violation of the Securities Act or any applicable state securities law. Each
optionee (or, in the event of his death or, in the event a legal representative
has been appointed in connection with his Disability, the person exercising the
Option) shall, as a condition to his right to exercise any Option, deliver to
the Company an agreement or certificate containing such representations,
warranties and covenants as the Company may deem necessary or appropriate to
ensure that the issuance of shares of Common Stock pursuant to such exercise is
not required to be registered under the Securities Act or any applicable state
securities law.
Certificates for shares of Common Stock, when issued, shall have
substantially the following legend, or statements of other applicable
restrictions, endorsed thereon, and may not be immediately transferable:
6
<PAGE> 7
THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED
FOR SALE, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE
DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN
THE DISCRETION OF THE ISSUER, MAY INCLUDE AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER)
THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER
DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL
OR STATE LAWS.
11. Withholding Taxes.
By acceptance of the Option, the optionee will be deemed to (i)
authorize the Company to withhold from a Director Participant's salary or any
cash compensation paid to such Director Participant an amount sufficient to
discharge any federal, state, and local taxes imposed on the Company, and which
otherwise has not been reimbursed by the Director Participant, in respect of
the Director Participant's exercise of all or a portion of the Option; and (ii)
agree that the Company may, in its discretion, hold the stock certificate to
which the Director Participant is entitled upon exercise of the Option as
security for the payment of the aforementioned withholding tax liability, until
cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by remaining shares issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise which
is equal to the amount to be withheld.
12. Costs and Expenses.
The costs and expenses of administering the Plan shall be borne by the
Company and shall not be charged against any Option.
13. Funding of Plan.
The Plan shall be unfunded. The Company shall not be required to make
any segregation of assets to assure the payment of any Option under the Plan.
14. Definitions.
In addition to the terms specifically defined elsewhere in the Plan,
as used in the Plan, the following terms shall have the respective meanings
indicated:
a. "Affiliate" shall mean, as to any Person, a Person that
directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such Person.
7
<PAGE> 8
b. "Board of Directors" shall have the meaning set forth in
Section 2 hereof.
c. "Broadcasting" means Chancellor Broadcasting Company, a
Delaware corporation and a wholly owned subsidiary of the
Company.
d. "Change of Control" shall mean the first to occur of the
following events: (i) any sale, exchange, or other
transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of
the Company or Broadcasting to any Person or group of
related Persons for purposes of Section 13(d) of the
Exchange Act (a "Group"), other than to Hicks, Muse & Co.
Incorporated or any of its Affiliates or their employees,
officers, and directors (the "HMC Group''); (ii) a
majority of the Board of Directors of the Company or
Broadcasting shall consist of Persons who are not
Continuing Directors; or (iii) the acquisition by any
person or Group (other than the HMC Group or Dinetz) of
the power, directly or indirectly, to vote or direct the
voting of securities having more than 50% of the ordinary
voting power for the election of directors of the Company
or Broadcasting.
e. "Code" shall have the meaning set forth in Section 5
hereof.
f. "Committee" shall have the meaning set forth in Section 2
hereof.
g. "Common Stock" shall have the meaning set forth in Section
3 hereof.
h. "Company" shall have the meaning set forth in Section 1
hereof.
i. "Continuing Director" shall mean, as of the date of
determination, any Person who (i) was a member of the
Board of Directors of the Company or Broadcasting on the
date of adoption of this Plan, (ii) was nominated for
election or elected to the Board of Directors of the
Company or Broadcasting with the affirmative vote of a
majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or
election, or (iii) is a member of the HMC Group.
j. "Dinetz" means Steven Dinetz, the President and Chief
Executive Officer of the Company.
k. "Disability" shall mean permanent disability as defined
under the appropriate provisions of the long-term
disability plan maintained for the benefit of employees of
the Company who are regularly employed on a salaried basis
unless another meaning shall be agreed to in writing by
the Committee and the optionee.
l. "Exchange Act" shall have the meaning set forth in Section
2 hereof.
8
<PAGE> 9
m. "Fair Market Value" shall, as it relates to the Common
Stock, mean the average of the high and low prices of such
Common Stock as reported on the principal national
securities exchange on which the shares of Common Stock
are then listed on the date specified herein, or if there
were no sales on such date, on the next preceding day on
which there were sales, or if such Common Stock is not
listed on a national securities exchange, the last
reported bid price in the over-the-counter Market, or if
such shares are not traded in the over-the-counter market,
the per share cash price for which all of the outstanding
Common Stock could be sold to a willing purchaser in an
arms length transaction (without regard to minority
discount, absence of liquidity, or transfer restrictions
imposed by any applicable law or agreement) at the date of
the event giving rise to a need for a determination.
Except as may be otherwise expressly provided in a
particular Option, Fair Market Value shall be determined
in good faith by the Committee.
n. The term "including" when used herein shall mean
"including, but not limited to".
o. "Non-Qualified Options" shall have the meaning set forth
in Section 6 hereof.
p. "Options" shall have the meaning set forth in Section 1
hereof.
q. "Plan" shall have the meaning set forth in Section 1
hereof.
r. "Reorganization" shall have the meaning set forth in
Section 8 hereof.
s. "Rule 16b-3" shall have the meaning set forth in Section 2
hereof.
15. Amendment of Plan.
The Board of Directors shall have the right to amend, modify, suspend
or terminate the Plan at any time; provided, that the provisions of Section 6
may not be amended more than once every six months, other than to comply with
changes to the Code, ERISA, or the rules thereunder. The Board of Directors
shall be authorized to amend the Plan and the Options granted thereunder to
comply with Rule 16b-2 (or any successor rule) under the Exchange Act. No
amendment, modification, suspension or termination of the Plan shall alter
impair any Options previously granted under the Plan, without the consent of
the holder thereof.
16. Effective Date.
The Plan shall become effective on the date on which it is approved by
the Board of Directors of the Company and shall be void retroactively
if not approved by the stockholders of the Company within twelve
months of the date of approval by the Board of Directors.
9
<PAGE> 1
EXHIBIT 4.24
CHANCELLOR CORPORATION
12655 N. Central Expressway, Suite 321
Dallas, Texas 75243
September 30, 1995
Mr. Steven Dinetz
President and Chief Executive Officer
Chancellor Corporation
12655 N. Central Expressway, Suite 321
Dallas, Texas 75243
Re: Consolidation Amendment and Restatement of Stock Options
Granted January 10, 1994 and October 12, 1994
Dear Mr. Dinetz:
This letter consolidates, amends and restates the terms and
conditions set forth in (i) the grants made by Chancellor Corporation, a
Delaware corporation (the "Company"), to you (the "Grantee") on January 10,
1994 of options to purchase shares of Nonvoting Stock, $0.01 par value per
share (the "Stock"), of the Company and (ii) the 6 grants made by the Company
to the Grantee on October 12, 1994 of options to purchase shares of Stock of
the Company. The purpose of this consolidated, amended and restated grant
agreement is to continue to provide the Grantee an opportunity to purchase
shares of Stock in return for assisting the Company in meeting or exceeding its
financial objectives.
The 9 stock option grants made by the Company to the Grantee on
January 10, 1994 and October 12, 1994 were for an aggregate 5,976,415
underlying shares of Stock. These 7 stock option grants are hereby consolidated
and amended and restated as follows:
1. Grant of Options
The Company hereby grants to the Grantee, as a matter of separate
inducement and not in lieu of any salary or other compensation for his
services, the right and option to purchase (the "Option"), in accordance with
the terms and conditions set forth in this agreement, an aggregate of 5,179,912
shares of Stock (the "Option Shares") at a price (the "Exercise Price") of (i)
$1.25 per share in cash with respect to 2,925,333 shares of Stock and (ii)
$1.40 in cash with respect to 2,254,579 shares of Stock, all subject to the
terms and conditions set forth herein.
The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). The Company
<PAGE> 2
shall at all times have reserved for issuance a sufficient number of shares of
Stock to permit the Grantee to acquire the Option Shares on the terms and
conditions provided herein.
2. Vesting and Exercise
(a) For purposes of this agreement, the Option Shares shall
become exercisable ("Vested Shares") as set forth below:
The Option Shares with an Exercise Price of $1.25 are subject to the
following vesting schedule:
<TABLE>
<S> <C>
585,066 exercisable on and after January 10, 1995
585,066 exercisable on and after January 10, 1996
585,066 exercisable on and after January 10, 1997
585,066 exercisable on and after January 10, 1998
585,069 exercisable on and after January 10, 1999
</TABLE>
The Option Shares with an Exercise Price of $1.40 are subject to the
following vesting schedule:
<TABLE>
<S> <C>
450,915 exercisable on and after October 12, 1995
450,915 exercisable on and after October 12, 1996
450,915 exercisable on and after October 12, 1997
450,915 exercisable on and after October 12, 1998
450,919 exercisable on and after October 12, 1999
</TABLE>
provided that, with respect to all Option Shares, except as otherwise provided
in Section 2(b) or Section 3 below, the Grantee is an employee of the Company
on each such date.
(b) In addition, the Board of Directors of the Company may, in
its sole discretion, accelerate the vesting schedule set forth in paragraph (a)
above.
(c) Subject to the relevant provisions and limitations contained
herein, the Grantee may exercise the Option to purchase all or a portion of the
applicable number of Vested Shares at any time prior to the termination of the
Option pursuant to this agreement. In no event shall the Grantee be entitled to
exercise the Option for any unvested shares or for a fraction of a Vested
Share. Unless earlier terminated in accordance with this agreement, the Option
Shares with an Exercise Price of $1.25 shall automatically terminate and become
null and void on January 10, 2004 and the Option Shares with an Exercise Price
of $1.40 shall automatically terminate and become null and void on October 12,
2004.
(d) Any exercise by the Grantee of the Option shall be in
writing addressed to the corporate secretary of the Company at its principal
place of business and shall (i) state the number of shares of Stock being
purchased pursuant to such exercise and (ii) be accompanied by payment of the
full amount of the aggregate Exercise Price of the shares so purchased.
Notwithstanding the foregoing, with the consent of the Company's Compensation
<PAGE> 3
Committee the Grantee may pay all or a portion of the aggregate Exercise Price
of the shares to be purchased by delivery to the Company of shares of Stock
having a Fair Market Value (as defined below) equal to such aggregate Exercise
Price or by the withholding from the number of shares of Stock (or, pursuant to
Section 7(a) below, other securities or property) receivable upon such exercise
of the Option of a number of shares of Stock (or such other securities or
property) having a Fair Market Value equal to such aggregate Exercise Price (it
being understood that such withholding shall be taken first from any cash to be
received by the Grantee upon exercise of the Option).
3. Termination of Employment; Change of Control
(a) Upon termination of the Grantee's employment with the
Company (including any subsidiary corporation) for Cause (as defined below) or
Financial Cause (as defined below), or if the Grantee shall terminate his
employment with the Company (including any subsidiary corporation) without Good
Reason (as defined below), the Grantee's interest in the Option shall
automatically terminate and become null and void on the 30th day following the
date of such termination, and the Grantee shall not be able to exercise the
Option for any Vested Shares thereafter.
(b) If the Grantee shall die while in the employ of the Company
(including any subsidiary corporation), all Option Shares shall immediately
become Vested Shares and the Grantee's legal representative, or the person, if
any, who acquired the Grantee's interest in the Option by bequest or
inheritance, may, not later than 1 year from the date of the Grantee's death,
exercise the Option, to the extent not previously exercised.
(c) If the Grantee's employment with the Company is terminated
because he is unable to discharge his duties under his existing or future
employment arrangement with the Company (including any subsidiary corporation)
for a period of 6 consecutive months, or for a total of 6 months in any
12-month period, by reason of physical or mental illness, injury or incapacity,
all Option Shares shall immediately become Vested Shares and the Grantee or his
legal representative may, not later than one (1) year from the date of
termination of the Grantee's employment, exercise the Option, to the extent not
previously exercised.
(d) Upon the termination of the Grantee's employment with the
Company (including any subsidiary corporation) as a result of dismissal without
Cause or Financial Cause, or upon the Employee's voluntary resignation of such
employment for Good Reason, all Option Shares shall immediately become Vested
Shares.
(e) Upon a Change of Control (as defined below), all Option
Shares shall become Vested Shares.
4. Transferability
The Option is not transferable by the Grantee otherwise than by will
or the laws of descent and distribution, and is exercisable, during the
Grantee's lifetime, only by the Grantee. The Option may not be assigned,
transferred (except by will or the laws of descent and
<PAGE> 4
distribution), pledged, or hypothecated in any way (whether by operation of law
or otherwise) and shall not be subject to execution, attachment, or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation, or other
disposition of the Option, contrary to the provisions hereof, and the levy of
any attachment or similar proceeding upon the Option, shall be null and void
and without effect.
5. Registration
Unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
issuance of the Option Shares (and, if required, there is available for
delivery a prospectus meeting the requirements of Section 10(a)(3) of the
Securities Act), the Grantee will, upon the exercise of the Option in
accordance with the terms and conditions hereof, deliver to the Company a
certificate pursuant to which the Grantee (i) represents and warrants to the
Company that the Optionee is an "accredited investor" within the meaning of the
rules and regulations under the Securities Act and that the Option Shares then
being purchased by the Grantee pursuant to the Option are being acquired for
investment only and not with a view to the resale or distribution thereof; (ii)
acknowledges and confirms that the Option Shares purchased may not be sold
unless registered for sale under the Securities Act or pursuant to an exemption
from such registration (in which case an opinion of counsel satisfactory to the
Company shall be supplied to the Company by the Grantee prior to the
consummation of such sale to the effect that such sale is exempt from
registration under the Securities Act); and (iii) agrees that the certificates
evidencing such Option Shares shall bear a legend to the effect of the
foregoing.
6. Withholding Taxes
By acceptance hereof, the Grantee hereby (i) agrees to reimburse the
Company or any subsidiary corporation by which the Grantee is employed for any
federal, state, or local taxes required by any government to be withheld or
otherwise deducted by such corporation in respect of the Grantee's exercise of
all or a portion of the Option: (ii) authorizes the Company or any subsidiary
corporation by which the Grantee is employed to withhold from any cash
compensation paid to the Grantee or on the Grantee's behalf, an amount
sufficient to discharge any federal, state, and local taxes imposed on the
Company, or the subsidiary corporation by which the Grantee is employed, and
which otherwise has not been reimbursed by the Grantee, in respect of the
Grantee's exercise of all or a portion of the Option; and (iii) agrees that the
Company or any subsidiary corporation by which the Grantee is employed, may, in
its discretion, hold the stock certificate to which the Grantee is entitled
upon exercise of the Option as security for the payment of the aforementioned
withholding tax liability, until cash sufficient to pay that liability has been
accumulated, and may, in its discretion, effect such withholding by retaining
shares issuable upon the exercise of the Option having a Fair Market Value on
the date of exercise which is equal (in the judgment of such corporation) to
the amount to be withheld.
7. Adjustment of Shares and Price
(a) In the event of any change in the outstanding shares of
Stock through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-
<PAGE> 5
up, split off, spin-off, combination of shares, exchange of shares, or other
like change in capital structure of the Company, the Board of Directors of the
Company shall cause an appropriate adjustment to be made to each outstanding
Option Share, and if appropriate, the Exercise Price, such that the Option
shall thereafter be exercisable for such securities, cash, and/or other
property as would have been received in respect of the Option Shares subject to
the Option had the Option been exercised in full immediately prior to such
change, and such an adjustment shall be made successively each time any such
change shall occur. The term "Option Shares" after any such change shall refer
to the securities, cash, and/or property then receivable upon exercise of the
Option.
8. Miscellaneous
This agreement is not a contract of employment and the terms of the
Grantee's employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein.
Nothing herein shall be construed to impose any obligation on the Company or
any parent or subsidiary corporation thereof to continue the Grantee's
employment. This agreement shall be governed by the laws of the State of Texas
(without giving effect to principles of conflict of laws). This agreement may
be amended if such amendment is in writing and signed by the Grantee and an
authorized officer of the Company.
9. Definitions
In addition to the terms specifically defined elsewhere in this
agreement, as used in this agreement, the following terms shall have the
respective meanings indicated:
(a) "Cause" shall mean (i) fraud, dishonesty, unethical practices or
gross misconduct in office on the part of the Grantee, (ii) a material
breach by the Grantee of any of his obligations under his employment
arrangement which is not cured within 30 days after written notice from
the Company to the Grantee, (iii) a material failure to perform the
Grantee's duties as an employee of the Company, the Chancellor
Broadcasting Company or any of their subsidiaries, as determined by the
Board of Directors, which failure is not cured within 60 days after
written notice from the Board of Directors to the Grantee, or (iv)
conviction of the Grantee for fraud, misappropriation, embezzlement or any
felony.
(b) "Change of Control" shall mean the first to occur of the
following events: (i) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company to any Person or group or related Persons
for purposes of Section 13(d) of the Exchange Act (a "Group"), other than
to Hicks, Muse, Tate & Furst Incorporated and any of its affiliates (the
"HM Group"); (ii) a majority of the Board of Directors of the Company
shall consist of Persons who are not Continuing Directors; or (iii) the
acquisition by any Person or Group (other than the HM Group) of the power,
directly or indirectly, to vote or direct the voting of securities having
more than 50% of the ordinary voting power for the election of directors
of the Company.
<PAGE> 6
(c) "Continuing Director" shall mean, as of the date of termination,
any Person who (i) was a member of the Board of Directors of the Company
on the date of this agreement, (ii) was nominated for election or elected
to the Board of Directors of the Company with the affirmative vote of a
majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election, or (iii) is a member
of the HM Group.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(e) "Fair Market Value" shall, as it relates to the Stock, mean the
average of the high and low prices of the Stock as reported on the
principal national securities exchange on which the shares of Stock are
then listed on the date specified herein, or if there were no sales on
such date, on the next preceding day on which there were sales, or if such
Stock is not listed on a national securities exchange, the last reported
bid price in the over-the-counter market, or if such shares are not traded
in the over-the-counter market, the per share cash price for which all of
the outstanding Stock could be sold to a willing purchaser in an arms
length transaction (without regard to minority discount, absence of
liquidity, or transfer restrictions imposed by any applicable law or
agreement) at the date of the event giving rise to a need for a
determination. Except as may be otherwise expressly provided in a
particular Option, Fair Market Value shall be determined in good faith by
the Board of Directors of the Company.
(f) "Financial Cause" shall mean (i) that either (A) the Company, the
Chancellor Broadcasting Company or any of their subsidiaries shall violate
any financial covenant contained in any debt instrument or agreement to
which the Company, the Chancellor Broadcasting Company or any of its
subsidiaries is a party or by which it may be bound or (B) the Grantee
shall act or fail to act with respect to a matter for which the Grantee is
directly responsible, in either case with the result that such violation,
action, or failure to act (x) results in the acceleration of the maturity
of any debt of the Company, the Chancellor Broadcasting Company or any of
their subsidiaries or (y) enables (or, with the giving of notice or lapse
of time or both, would enable) the holder or holders of such debt to
accelerate the maturity thereof and such violation, action or failure to
act remains uncured for a period of 91 consecutive days, or (ii) the
Company or the Chancellor Broadcasting Company shall fail to meet at least
90% of its budgeted operating income, as approved by the Board of
Directors, for two consecutive fiscal years.
(g) "Good Reason" shall mean: (i) any change in the Grantee's
functions, duties or responsibilities from his current position without
the Grantee's consent if such change would (A) reduce the Grantee's
functions, duties, or responsibilities from those currently in effect to a
level that is not commensurate with those of an executive in the Grantee's
position prior to such change (it being understood that the reassignment
of any of the Grantee's functions, duties, or responsibilities (other than
those customarily performed by a chief executive officer of a business of
comparable size and complexity) to one or more other persons who report
directly or indirectly to the Grantee shall not be
<PAGE> 7
considered a reduction of the Grantee's functions, duties or
responsibilities), or (B) cause the Grantee's position with the Company
and the Chancellor Broadcasting Company to become one of lesser importance
or scope; and (ii) any material breach of any employment agreement between
the Grantee and the Company and the Chancellor Broadcasting Company by the
Company or the Chancellor Broadcasting Company which is not cured within
30 days after written notice from the Grantee to the Company and/or the
Chancellor Broadcasting Company.
(h) "Person" shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity.
Please indicate your acceptance of all the terms and conditions of
this consolidated, amended and restated grant agreement by signing and
returning a copy of this letter. This agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement. This
agreement shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
Very truly yours,
CHANCELLOR CORPORATION
By:
-----------------------------
Name: Eric W. Neumann
Title: Senior Vice President
ACCEPTED AND AGREED TO as of the date first above written:
- -----------------------------
STEVEN DINETZ
<PAGE> 1
EXHIBIT 4.25
CHANCELLOR CORPORATION
12655 N. Central Expressway, Suite 321
Dallas, Texas 75243
September 30, 1995
Mr. Eric W. Neumann
Senior Vice President of Finance
12655 N. Central Expressway, Suite 321
Dallas, Texas 75243
Re: Memorialization, Consolidation, Amendment and Restatement
of Stock Options Granted January 10, 1994 and
October 12, 1994
Dear Mr. Neumann:
This letter memorializes and consolidates, and amends and
restates the terms and conditions set forth in (i) the grants made by
Chancellor Corporation, a Delaware corporation (the "Company"), to you (the
"Grantee") on January 10, 1994 of options to purchase shares of Nonvoting
Stock, $0.01 par value per share (the "Stock"), of the Company and (ii) the
grants made by the Company to the Grantee on October 12, 1994 of options to
purchase shares of Stock of the Company. The purpose of these grants was and
is to continue to provide the Grantee an opportunity to purchase shares of
Stock in return for assisting the Company in meeting or exceeding its financial
objectives.
1. Grant of Options
The Company hereby grants to the Grantee, as a matter of
separate inducement and not in lieu of any salary or other compensation for his
services, the right and option to purchase (the "Option"), in accordance with
the terms and conditions set forth in this agreement, an aggregate of 531,002
shares of Stock (the "Option Shares") at a price (the "Exercise Price") of (i)
$1.25 per share in cash with respect to 255,000 shares of Stock and (ii) $1.40
in cash with respect to 276,002 shares of Stock, all subject to the terms and
conditions set forth herein.
The Option is not intended to be an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Company shall at all times have reserved for
issuance a sufficient number of shares of Stock to permit the Grantee to
acquire the Option Shares on the terms and conditions provided herein.
<PAGE> 2
2. Vesting and Exercise
(a) For purposes of this agreement, the Option
Shares shall become exercisable ("Vested Shares") as set forth below:
The Option Shares with an Exercise Price of $1.25 are subject
to the following vesting schedule:
<TABLE>
<S> <C>
51,000 exercisable on and after January 10, 1995
51,000 exercisable on and after January 10, 1996
51,000 exercisable on and after January 10, 1997
51,000 exercisable on and after January 10, 1998
51,000 exercisable on and after January 10, 1999
</TABLE>
The Option Shares with an Exercise Price of $1.40 are subject
to the following vesting schedule:
<TABLE>
<S> <C>
55,200 exercisable on and after October 12, 1995
55,200 exercisable on and after October 12, 1996
55,200 exercisable on and after October 12, 1997
55,200 exercisable on and after October 12, 1998
55,202 exercisable on and after October 12, 1999
</TABLE>
provided that, with respect to all Option Shares, except as otherwise provided
in Section 2(b) or Section 3 below, the Grantee is an employee of the Company
on each such date.
(b) In addition, the Board of Directors of the
Company may, in its sole discretion, accelerate the vesting schedule set forth
in paragraph (a) above.
(c) Subject to the relevant provisions and
limitations contained herein, the Grantee may exercise the Option to purchase
all or a portion of the applicable number of Vested Shares at any time prior to
the termination of the Option pursuant to this agreement. In no event shall
the Grantee be entitled to exercise the Option for any unvested shares or for a
fraction of a Vested Share. Unless earlier terminated in accordance with this
agreement, the Option Shares with an Exercise Price of $1.25 shall
automatically terminate and become null and void on January 10, 2004 and the
Option Shares with an Exercise Price of $1.40 shall automatically terminate and
become null and void on October 12, 2004.
(d) Any exercise by the Grantee of the Option
shall be in writing addressed to the corporate secretary of the Company at its
principal place of business and shall (i) state the number of shares of Stock
being purchased pursuant to such exercise and (ii) be accompanied by payment of
the full amount of the aggregate Exercise Price of the shares so purchased.
Notwithstanding the foregoing, with the consent of the Company's Compensation
Committee the Grantee may pay all or a portion of the aggregate Exercise Price
of the shares to be purchased by delivery to the Company of shares of Stock
having a Fair Market Value (as defined below) equal to such aggregate Exercise
Price or by the withholding from the number of
<PAGE> 3
shares of Stock (or, pursuant to Section 7(a) below, other securities or
property) receivable upon such exercise of the Option of a number of shares of
Stock (or such other securities or property) having a Fair Market Value equal
to such aggregate Exercise Price (it being understood that such withholding
shall be taken first from any cash to be received by the Grantee upon exercise
of the Option).
3. Termination of Employment; Change of Control
(a) Upon termination of the Grantee's employment
with the Company (including any subsidiary corporation) for any reason other
than a termination of employment due to death as described in Section 3(b)
below or a termination of employment due to disability as described in Section
3(c) below, or if the Grantee shall terminate his employment with the Company
(including any subsidiary corporation) for any reason, the Grantee's interest
in the Option shall automatically terminate and become null and void on the
30th day following the date of such termination, and the Grantee shall not be
able to exercise the Option for any Vested Shares thereafter.
(b) If the Grantee shall die while in the employ
of the Company (including any subsidiary corporation), all Option Shares shall
immediately become Vested Shares and the Grantee's legal representative, or the
person, if any, who acquired the Grantee's interest in the Option by bequest or
inheritance, may, not later than 1 year from the date of the Grantee's death,
exercise the Option, to the extent not previously exercised.
(c) If the Grantee's employment with the Company
is terminated because he is unable to discharge his duties under his existing
or future employment arrangement with the Company (including any subsidiary
corporation) for a period of 6 consecutive months, or for a total of 6 months
in any 12-month period, by reason of physical or mental illness, injury or
incapacity, all Option Shares shall immediately become Vested Shares and the
Grantee or his legal representative may, not later than one (1) year from the
date of termination of the Grantee's employment, exercise the Option, to the
extent not previously exercised.
(d) Upon a Change of Control (as defined below),
all Option Shares shall become Vested Shares.
4. Transferability
The Option is not transferable by the Grantee otherwise than
by will or the laws of descent and distribution, and is exercisable, during the
Grantee's lifetime, only by the Grantee. The Option may not be assigned,
transferred (except by will or the laws of descent and distribution), pledged,
or hypothecated in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment, or similar proceeding. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the
Option, contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall be null and void and without effect.
<PAGE> 4
5. Registration
Unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
issuance of the Option Shares (and, if required, there is available for
delivery a prospectus meeting the requirements of Section 10(a)(3) of the
Securities Act), the Grantee will, upon the exercise of the Option in
accordance with the terms and conditions hereof, deliver to the Company a
certificate pursuant to which the Grantee (i) represents and warrants to the
Company that the Optionee is an "accredited investor" within the meaning of the
rules and regulations under the Securities Act and that the Option Shares then
being purchased by the Grantee pursuant to the Option are being acquired for
investment only and not with a view to the resale or distribution thereof; (ii)
acknowledges and confirms that the Option Shares purchased may not be sold
unless registered for sale under the Securities Act or pursuant to an exemption
from such registration (in which case an opinion of counsel satisfactory to the
Company shall be supplied to the Company by the Grantee prior to the
consummation of such sale to the effect that such sale is exempt from
registration under the Securities Act); and (iii) agrees that the certificates
evidencing such Option Shares shall bear a legend to the effect of the
foregoing.
6. Withholding Taxes
By acceptance hereof, the Grantee hereby (i) agrees to
reimburse the Company or any subsidiary corporation by which the Grantee is
employed for any federal, state, or local taxes required by any government to
be withheld or otherwise deducted by such corporation in respect of the
Grantee's exercise of all or a portion of the Option: (ii) authorizes the
Company or any subsidiary corporation by which the Grantee is employed to
withhold from any cash compensation paid to the Grantee or on the Grantee's
behalf, an amount sufficient to discharge any federal, state, and local taxes
imposed on the Company, or the subsidiary corporation by which the Grantee is
employed, and which otherwise has not been reimbursed by the Grantee, in
respect of the Grantee's exercise of all or a portion of the Option; and (iii)
agrees that the Company or any subsidiary corporation by which the Grantee is
employed, may, in its discretion, hold the stock certificate to which the
Grantee is entitled upon exercise of the Option as security for the payment of
the aforementioned withholding tax liability, until cash sufficient to pay that
liability has been accumulated, and may, in its discretion, effect such
withholding by retaining shares issuable upon the exercise of the Option having
a Fair Market Value on the date of exercise which is equal (in the judgment of
such corporation) to the amount to be withheld.
7. Adjustment of Shares and Price
(a) In the event of any change in the outstanding
shares of Stock through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split off, spin-off,
combination of shares, exchange of shares, or other like change in capital
structure of the Company, the Board of Directors of the Company shall cause an
appropriate adjustment to be made to each outstanding Option Share, and if
appropriate, the Exercise Price, such that the Option shall thereafter be
exercisable for such securities, cash, and/or other property as would have been
received in respect of the Option Shares subject to the Option had the Option
<PAGE> 5
been exercised in full immediately prior to such change, and such an adjustment
shall be made successively each time any such change shall occur. The term
"Option Shares" after any such change shall refer to the securities, cash,
and/or property then receivable upon exercise of the Option.
8. Miscellaneous
This agreement is not a contract of employment and the terms
of the Grantee's employment shall not be affected hereby or by any agreement
referred to herein except to the extent specifically so provided herein or
therein. Nothing herein shall be construed to impose any obligation on the
Company or any parent or subsidiary corporation thereof to continue the
Grantee's employment. This agreement shall be governed by the laws of the
State of Texas (without giving effect to principles of conflict of laws). This
agreement may be amended if such amendment is in writing and signed by the
Grantee and an authorized officer of the Company.
9. Definitions
In addition to the terms specifically defined elsewhere in
this agreement, as used in this agreement, the following terms shall have the
respective meanings indicated:
(a) "Change of Control" shall mean the first to occur of
the following events: (i) any sale, lease, exchange, or other transfer
(in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company to any Person or group
or related Persons for purposes of Section 13(d) of the Exchange Act
(a "Group"), other than to Hicks, Muse, Tate & Furst Incorporated and
any of its affiliates (the "HM Group"); (ii) a majority of the Board
of Directors of the Company shall consist of Persons who are not
Continuing Directors; or (iii) the acquisition by any Person or Group
(other than the HM Group) of the power, directly or indirectly, to
vote or direct the voting of securities having more than 50% of the
ordinary voting power for the election of directors of the Company.
(b) "Continuing Director" shall mean, as of the date of
termination, any Person who (i) was a member of the Board of Directors
of the Company on the date of this agreement, (ii) was nominated for
election or elected to the Board of Directors of the Company with the
affirmative vote of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or
election, or (iii) is a member of the HM Group.
(c) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(d) "Fair Market Value" shall, as it relates to the
Stock, mean the average of the high and low prices of the Stock as
reported on the principal national securities exchange on which the
shares of Stock are then listed on the date specified herein, or if
there were no sales on such date, on the next preceding day on which
there were sales, or if such Stock is not listed on a national
securities exchange, the last reported bid price in
<PAGE> 6
the over-the-counter market, or if such shares are not traded in the
over-the-counter market, the per share cash price for which all of the
outstanding Stock could be sold to a willing purchaser in an arms
length transaction (without regard to minority discount, absence of
liquidity, or transfer restrictions imposed by any applicable law or
agreement) at the date of the event giving rise to a need for a
determination. Except as may be otherwise expressly provided in a
particular Option, Fair Market Value shall be determined in good faith
by the Board of Directors of the Company.
(e) "Person" shall mean any person or entity of any
nature whatsoever, specifically including an individual, a firm, a
company, a corporation, a partnership, a trust, or other entity.
Please indicate your acceptance of all the terms and
conditions of this consolidated, amended and restated grant agreement by
signing and returning a copy of this letter. This agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement. This agreement shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.
Very truly yours,
CHANCELLOR CORPORATION
By:
-------------------------
Name: Steven Dinetz
Title: President and Chief Executive Officer
ACCEPTED AND AGREED TO as of
the date first above written:
- -------------------------
ERIC W. NEUMANN
<PAGE> 1
EXHIBIT 4.26
CHANCELLOR CORPORATION
12655 N. Central Expressway, Suite 321
Dallas, Texas 75243
September 30, 1995
Mr. Marvin Dinetz
Chancellor Corporation
12655 N. Central Expressway, Suite 321
Dallas, Texas 75243
Re: Memorialization, Consolidation, Amendment and Restatement
of Stock Options Granted January 10, 1994 and October 12,
1994
Dear Mr. Dinetz:
This letter memorializes and consolidates, amends and restates the
terms and conditions set forth in (i) the grants made by Chancellor
Corporation, a Delaware corporation (the "Company"), to you (the "Grantee") on
January 10, 1994 of options to purchase shares of Nonvoting Stock, $0.01 par
value per share (the "Stock"), of the Company and (ii) the grants made by the
Company to the Grantee on October 12, 1994 of options to purchase shares of
Stock of the Company. The purpose of these grants was and is to continue to
provide the Grantee an opportunity to purchase shares of Stock in return for
assisting the Company in meeting or exceeding its financial objectives.
1. Grant of Options
The Company hereby grants to the Grantee, as a matter of separate
inducement and not in lieu of any salary or other compensation for his
services, the right and option to purchase (the "Option"), in accordance with
the terms and conditions set forth in this agreement, an aggregate of 265,501
shares of Stock (the "Option Shares") at a price (the "Exercise Price") of (i)
$1.25 per share in cash with respect to 127,500 shares of Stock and (ii) $1.40
in cash with respect to 138,001 shares of Stock, all subject to the terms and
conditions set forth herein.
The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). The Company shall at all times have reserved for issuance a sufficient
number of shares of Stock to permit the Grantee to acquire the Option Shares on
the terms and conditions provided herein.
<PAGE> 2
2. Vesting and Exercise
(a) For purposes of this agreement, the Option Shares shall
become exercisable ("Vested Shares") as set forth below:
The Option Shares with an Exercise Price of $1.25 are subject to the
following vesting schedule:
<TABLE>
<S> <C>
25,500 exercisable on and after January 10, 1995
25,500 exercisable on and after January 10, 1996
25,500 exercisable on and after January 10, 1997
25,500 exercisable on and after January 10, 1998
25,500 exercisable on and after January 10, 1999
</TABLE>
The Option Shares with an Exercise Price of $1.40 are subject to the
following vesting schedule:
<TABLE>
<S> <C>
27,600 exercisable on and after October 12, 1995
27,600 exercisable on and after October 12, 1996
27,600 exercisable on and after October 12, 1997
27,600 exercisable on and after October 12, 1998
27,601 exercisable on and after October 12, 1999
</TABLE>
provided that, with respect to all Option Shares, except as otherwise provided
in Section 2(b) or Section 3 below, the Grantee is an employee of the Company
on each such date.
(b) In addition, the Board of Directors of the Company may, in
its sole discretion, accelerate the vesting schedule set forth in paragraph (a)
above.
(c) Subject to the relevant provisions and limitations contained
herein, the Grantee may exercise the Option to purchase all or a portion of the
applicable number of Vested Shares at any time prior to the termination of the
Option pursuant to this agreement. In no event shall the Grantee be entitled to
exercise the Option for any unvested shares or for a fraction of a Vested
Share. Unless earlier terminated in accordance with this agreement, the Option
Shares with an Exercise Price of $1.25 shall automatically terminate and become
null and void on January 10, 2004 and the Option Shares with an Exercise Price
of $1.40 shall automatically terminate and become null and void on October 12,
2004.
(d) Any exercise by the Grantee of the Option shall be in
writing addressed to the corporate secretary of the Company at its principal
place of business and shall (i) state the number of shares of Stock being
purchased pursuant to such exercise and (ii) be accompanied by payment of the
full amount of the aggregate Exercise Price of the shares so purchased.
Notwithstanding the foregoing, with the consent of the Company's Compensation
Committee the Grantee may pay all or a portion of the aggregate Exercise Price
of the shares to be purchased by delivery to the Company of shares of Stock
having a Fair Market Value (as defined below) equal to such aggregate Exercise
Price or by the withholding from the number of
<PAGE> 3
shares of Stock (or, pursuant to Section 7(a) below, other securities or
property) receivable upon such exercise of the Option of a number of shares of
Stock (or such other securities or property) having a Fair Market Value equal
to such aggregate Exercise Price (it being understood that such withholding
shall be taken first from any cash to be received by the Grantee upon exercise
of the Option).
3. Termination of Employment; Change of Control
(a) Upon termination of the Grantee's employment with the
Company (including any subsidiary corporation) for any reason other than a
termination of employment due to death as described in Section 3(b) below or a
termination of employment due to disability as described in Section 3(c) below,
or if the Grantee shall terminate his employment with the Company (including
any subsidiary corporation), the Grantee's interest in the Option shall
automatically terminate and become null and void on the 30th day following the
date of such termination, and the Grantee shall not be able to exercise the
Option for any Vested Shares thereafter.
(b) If the Grantee shall die while in the employ of the Company
(including any subsidiary corporation), all Option Shares shall immediately
become Vested Shares and the Grantee's legal representative, or the person, if
any, who acquired the Grantee's interest in the Option by bequest or
inheritance, may, not later than 1 year from the date of the Grantee's death,
exercise the Option, to the extent not previously exercised.
(c) If the Grantee's employment with the Company is terminated
because he is unable to discharge his duties under his existing or future
employment arrangement with the Company (including any subsidiary corporation)
for a period of 6 consecutive months, or for a total of 6 months in any
12-month period, by reason of physical or mental illness, injury or incapacity,
all Option Shares shall immediately become Vested Shares and the Grantee or his
legal representative may, not later than one (1) year from the date of
termination of the Grantee's employment, exercise the Option, to the extent not
previously exercised.
(d) Upon a Change of Control (as defined below), all Option
Shares shall become Vested Shares.
4. Transferability
The Option is not transferable by the Grantee otherwise than by will
or the laws of descent and distribution, and is exercisable, during the
Grantee's lifetime, only by the Grantee. The Option may not be assigned,
transferred (except by will or the laws of descent and distribution), pledged,
or hypothecated in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment, or similar proceeding. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the
Option, contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall be null and void and without effect.
<PAGE> 4
5. Registration
Unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
issuance of the Option Shares (and, if required, there is available for
delivery a prospectus meeting the requirements of Section 10(a)(3) of the
Securities Act), the Grantee will, upon the exercise of the Option in
accordance with the terms and conditions hereof, deliver to the Company a
certificate pursuant to which the Grantee (i) represents and warrants to the
Company that the Optionee is an "accredited investor" within the meaning of the
rules and regulations under the Securities Act and that the Option Shares then
being purchased by the Grantee pursuant to the Option are being acquired for
investment only and not with a view to the resale or distribution thereof; (ii)
acknowledges and confirms that the Option Shares purchased may not be sold
unless registered for sale under the Securities Act or pursuant to an exemption
from such registration (in which case an opinion of counsel satisfactory to the
Company shall be supplied to the Company by the Grantee prior to the
consummation of such sale to the effect that such sale is exempt from
registration under the Securities Act); and (iii) agrees that the certificates
evidencing such Option Shares shall bear a legend to the effect of the
foregoing.
6. Withholding Taxes
By acceptance hereof, the Grantee hereby (i) agrees to reimburse the
Company or any subsidiary corporation by which the Grantee is employed for any
federal, state, or local taxes required by any government to be withheld or
otherwise deducted by such corporation in respect of the Grantee's exercise of
all or a portion of the Option: (ii) authorizes the Company or any subsidiary
corporation by which the Grantee is employed to withhold from any cash
compensation paid to the Grantee or on the Grantee's behalf, an amount
sufficient to discharge any federal, state, and local taxes imposed on the
Company, or the subsidiary corporation by which the Grantee is employed, and
which otherwise has not been reimbursed by the Grantee, in respect of the
Grantee's exercise of all or a portion of the Option; and (iii) agrees that the
Company or any subsidiary corporation by which the Grantee is employed, may, in
its discretion, hold the stock certificate to which the Grantee is entitled
upon exercise of the Option as security for the payment of the aforementioned
withholding tax liability, until cash sufficient to pay that liability has been
accumulated, and may, in its discretion, effect such withholding by retaining
shares issuable upon the exercise of the Option having a Fair Market Value on
the date of exercise which is equal (in the judgment of such corporation) to
the amount to be withheld.
7. Adjustment of Shares and Price
(a) In the event of any change in the outstanding shares of
Stock through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split off, spin-off, combination of shares,
exchange of shares, or other like change in capital structure of the Company,
the Board of Directors of the Company shall cause an appropriate adjustment to
be made to each outstanding Option Share, and if appropriate, the Exercise
Price, such that the Option shall thereafter be exercisable for such
securities, cash, and/or other property as would have been received in respect
of the Option Shares subject to the Option had the Option
<PAGE> 5
been exercised in full immediately prior to such change, and such an adjustment
shall be made successively each time any such change shall occur. The term
"Option Shares" after any such change shall refer to the securities, cash,
and/or property then receivable upon exercise of the Option.
8. Miscellaneous
This agreement is not a contract of employment and the terms of the
Grantee's employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein.
Nothing herein shall be construed to impose any obligation on the Company or
any parent or subsidiary corporation thereof to continue the Grantee's
employment. This agreement shall be governed by the laws of the State of Texas
(without giving effect to principles of conflict of laws). This agreement may
be amended if such amendment is in writing and signed by the Grantee and an
authorized officer of the Company.
9. Definitions
In addition to the terms specifically defined elsewhere in this
agreement, as used in this agreement, the following terms shall have the
respective meanings indicated:
(a) "Change of Control" shall mean the first to occur of the
following events: (i) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of the assets of the Company to any Person or group or related Persons
for purposes of Section 13(d) of the Exchange Act (a "Group"), other than
to Hicks, Muse, Tate & Furst Incorporated and any of its affiliates (the
"HM Group"); (ii) a majority of the Board of Directors of the Company
shall consist of Persons who are not Continuing Directors; or (iii) the
acquisition by any Person or Group (other than the HM Group) of the power,
directly or indirectly, to vote or direct the voting of securities having
more than 50% of the ordinary voting power for the election of directors
of the Company.
(b) "Continuing Director" shall mean, as of the date of
determination, any Person who (i) was a member of the Board of Directors
of the Company on the date of this agreement, (ii) was nominated for
election or elected to the Board of Directors of the Company with the
affirmative vote of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or
election, or (iii) is a member of the HM Group.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(d) "Fair Market Value" shall, as it relates to the Stock, mean the
average of the high and low prices of the Stock as reported on the
principal national securities exchange on which the shares of Stock are
then listed on the date specified herein, or if there were no sales on
such date, on the next preceding day on which there were sales, or if such
Stock is not listed on a national securities exchange, the last reported
bid price in
<PAGE> 6
the over-the-counter market, or if such shares are not traded in the
over-the-counter market, the per share cash price for which all of the
outstanding Stock could be sold to a willing purchaser in an arms length
transaction (without regard to minority discount, absence of liquidity, or
transfer restrictions imposed by any applicable law or agreement) at the
date of the event giving rise to a need for a determination. Except as may
be otherwise expressly provided in a particular Option, Fair Market Value
shall be determined in good faith by the Board of Directors of the
Company.
(e) "Person" shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity.
Please indicate your acceptance of all the terms and conditions of
this consolidated, amended and restated grant agreement by signing and
returning a copy of this letter. This agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement. This
agreement shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
Very truly yours,
CHANCELLOR CORPORATION
By:
-----------------------------
Name: Steven Dinetz
Title: President and Chief
Executive Officer
ACCEPTED AND AGREED TO as of
the date first above written:
- -----------------------------
MARVIN DINETZ
<PAGE> 1
EXHIBIT 4.27
CHANCELLOR BROADCASTING COMPANY
12655 N. Central Expressway, Suite 405
Dallas, Texas 75243
February 14, 1997
Mr. Carl E. Hirsch
OmniAmerica Communications, Inc.
11111 Santa Monica Blvd., Suite 220
Los Angeles, California 90025
Re: Grant of Non-Qualified Stock Option
Dear Mr. Hirsch:
This letter will set forth the terms of the grant to you (the "Grantee") of an
option to purchase shares of Class A Common Stock, $0.01 par value per share
(the "Stock"), of Chancellor Broadcasting Company, a Delaware corporation
(herein, together with its successors, referred to as the "Company").
1. Grant of Option
The Company hereby grants to the Grantee the right and option to
purchase (the "Option"), in accordance with the terms and conditions set forth
in this agreement, an aggregate of 75,000 shares of Stock (the "Option Shares")
initially at the price of $22.50 per share in cash (the "Exercise Price"), all
subject to the adjustment provisions and limitations set forth herein.
The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). The Company shall at all times have reserved for issuance a
sufficient number of shares of Stock to permit the Grantee to acquire the
Option Shares on the terms and conditions provided herein.
2. Vesting and Exercise
(a) The Option Shares shall be fully vested and
immediately exercisable as of the date hereof.
(b) The Grantee may exercise the Option to purchase all
or a portion of the Option Shares at any time prior to the termination of the
Option pursuant to this agreement. In no event shall the Grantee be entitled
to exercise the Option for a fraction of an Option Share.
<PAGE> 2
(c) Any exercise by the Grantee of the Option shall be in
writing addressed to the Corporate Secretary of the Company at its principal
place of business and shall (i) state the number of shares of Stock being
purchased pursuant to such exercise and (ii) be accompanied by payment of the
full amount of the aggregate Exercise Price of the shares so purchased.
3. Termination
The Option shall cease to exercisable and terminate as of 5:00 P.M.,
Dallas, Texas time on February 14, 2007.
4. Transferability
The Option is not transferable by the Grantee otherwise than by will
or the laws of descent and distribution, and is exercisable, other than upon
Grantee's death or disability, only by the Grantee. The Option shall be
exercisable upon the Grantee's death or disability by the estate, devisee or
legal representative in accordance with the terms of this agreement for a
period of one (1) year following the date of Grantee's death, after which time
the Option shall terminate and become null and void. The Option may not be
assigned, transferred (except by will or the laws of descent and distribution),
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment, or similar proceeding. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition of
the Option, contrary to the provisions hereof, and the levy of any attachment
or similar proceeding upon the Option, shall be null and void and without
effect.
5. Resignation
Unless there is in effect a registration statement under the
Securities Act with respect to the issuance of the Option Shares (and, if
required, there is available for delivery a prospectus meeting the requirements
of Section 10(a)(3) of the Securities Act), the Grantee (or, in the event of
his death, the person exercising the Option) shall, as a condition to his right
to exercise the Option, deliver to the Company an agreement or certificate
containing such representations, warranties, and covenants as the Company may
deem necessary or appropriate to ensure that the issuance of shares of Stock
pursuant to such exercise is not required to be registered under the Securities
Act or any applicable state securities law. It is understood and agreed that
under no circumstances shall the Company be obligated to file any registration
statement under the Securities Act or any applicable state securities law to
permit exercise of the Option or to issue any Stock in violation of the
Securities Act or any applicable state securities law.
6. Withholding Taxes
By acceptance hereof, the Grantee hereby (i) agrees to reimburse the
Company or any subsidiary or parent corporation by which Grantee is employed or
receiving any compensation under any consulting arrangement for any federal,
state, or local taxes required by any government to be withheld or otherwise
deducted by such corporation in respect of the
2
<PAGE> 3
Grantee's exercise of all or a portion of the Option; (ii) authorizes the
Company or any subsidiary or parent corporation by which the Grantee is
employed or receives compensation under any consulting arrangement to withhold
from any cash compensation paid to the Grantee or in the Grantee's behalf, an
amount sufficient to discharge any federal, state, and local taxes imposed on
the Company, or the subsidiary or parent corporation from which the Grantee
receives compensation, and which otherwise has not been reimbursed by the
Grantee, in respect of the Grantee's exercise of all or a portion of the
Option; and (iii) agrees that the Company may, in its discretion, hold the
stock certificate to which Grantee is entitled upon exercise of the Option as
security for the payment of the aforementioned withholding tax liability, until
cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the
exercise of the Option having a fair market value on the date of exercise which
is equal (in the judgment of such corporation) to the amount to be withheld.
7. Adjustment of Shares and Price
In the event of any change in the outstanding shares of Stock (whether
voting or nonvoting) through merger, consolidation, recapitalization, stock
dividend, stock split, split-up, split off, spin-off, combination of shares,
exchange of shares, or other like change in capital structure of the Company
(other than as a result of a proceeding in bankruptcy), the Board of Directors
shall cause an appropriate adjustment to be made to each outstanding Option
Share, and if appropriate, the Exercise Price, such that the Option shall
thereafter be exercisable for such securities, cash, and/or other property as
would have been received in respect of the Option Shares subject to the Option
had the Option been exercised in full immediately prior to such change, and
such an adjustment shall be made successively each time any such change shall
occur. The term "Option Shares" after any such change shall refer to the
securities, cash, and/or property then receivable upon exercise of the Option.
8. Miscellaneous
This agreement shall be governed by the laws of the State of Delaware
(without giving effect to principles of conflicts of laws).
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
3
<PAGE> 4
Please indicate your acceptance of all the terms and conditions of
this agreement by signing and returning a copy of this letter. This agreement
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement. This agreement shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.
Very truly yours,
CHANCELLOR BROADCASTING COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED TO as of
the date first above written.
- -------------------------------
CARL E. HIRSCH
4
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Latham & Watkins]
September 5, 1997
Chancellor Media Corporation
433 East Las Colinas Boulevard
Irving, Texas 75309
Re: Registration Statement on Form S-8 of Chancellor Media Corporation:
Common Stock, par value $.01 per share
Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement"), which you intend to file with the Securities
and Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of (i) 756,274 shares of Common Stock, par
value $.01 per share (the "Plan Shares"), to be issued by Chancellor Media
Corporation (the "Company") under the Chancellor Broadcasting Company Stock
Award Plan ("Plan"), (ii) 30,302 shares of Common Stock, par value $.01 per
share (the "Director Plan Shares"), to be issued by the Company under the
Chancellor Holding Corp. 1994 Director Stock Option Plan ("Director Plan") and
(iii) 973,708 shares of Common Stock, par value $.01 per share (the "Management
Option Shares") to be issued by the Company under each of (a) the Stock Option
Grant Letter dated September 30, 1995 to Steven Dinetz from Chancellor
Corporation, (b) the Stock Option Grant Letter dated September 30, 1995 to Eric
W. Neumann from Chancellor Corporation, (c) the Stock Option Grant Letter dated
September 30, 1995 to Marvin Dinetz from Chancellor Corporation, and (d) the
Stock Option Grant Letter dated February 14, 1997 to Carl E. Hirsch from
Chancellor Broadcasting Company (the foregoing option letters, collectively,
the "Management Options").
We are familiar with the proceedings undertaken in connection with the
assumption by the Company of the obligations of Chancellor Broadcasting Company
in respect of options
<PAGE> 2
September 5, 1997
Page 2
granted pursuant to the Plan, the Director Plan and the Management Options.
Additionally, we have examined such questions of law and fact as we have
considered necessary or appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We are opining herein as to the effect on the subject transaction of
only the General Corporation Law of the State of Delaware and we express no
opinion with respect to the applicability thereto or the effect thereon of any
other laws or as to any matters of municipal law or any other local agencies
within any state.
Subject to the foregoing and in reliance thereon, it is our opinion
that:
(i) upon the exercise of options granted pursuant to the Plan and
subject to the Company completing all actions and proceedings required on its
part to be taken prior to the issuance of the Plan Shares pursuant to the Plan
and the Registration Statement, including, without limitation, collection of
required payment for such shares, and upon such issuance, the Plan Shares will
be validly issued, fully paid and non-assessable;
(ii) upon the exercise of options granted pursuant to the Director
Plan and subject to the Company completing all actions and proceedings required
on its part to be taken prior to the issuance of the Director Plan Shares
pursuant to the Director Plan and the Registration Statement, including, without
limitation, collection of required payment for such shares, and upon such
issuance, the Director Plan Shares will be validly issued, fully paid and
non-assessable; and
(iii) upon the exercise of options granted pursuant to the
Management Options and subject to the Company completing all actions and
proceedings required on its part to be taken prior to the issuance of the
Management Option Shares pursuant to the Management Options and the Registration
Statement, including, without limitation, collection of required payment for
such shares, and upon such issuance, the Management Option Shares will be
validly issued, fully paid and non-assessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Chancellor Media Corporation:
We consent to the incorporation by reference herein of: (a) our report dated
January 31, 1997, except for note 2(c) which is as of February 19, 1997,
relating to the consolidated balance sheets of Evergreen Media Corporation and
subsidiaries as of December 31, 1995 and 1996, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
years in the three-year period ended December 31, 1996, which report appears in
the December 31, 1996 annual report on Form 10-K of Evergreen Media
Corporation, (b) the following financial statements, which financial statements
were included in the Form 8-K dated May 30, 1997 and filed June 4, 1997 by
Evergreen Media Corporation: 1) the balance sheets of KKSF-FM/KDFC-AM (A
Division of the Brown Organization) as of December 31, 1995 and 1996 and the
related statements of earnings and division equity and cash flows for the years
then ended; 2) the combined balance sheets of WMZQ Inc. and Viacom Broadcasting
East, Inc. as of December 31, 1995 and 1996 and the related combined statements
of earnings and cash flows for each of the years in the three-year period ended
December 31, 1996; and 3) the combined balance sheets of Riverside Broadcasting
Co., Inc. and WAXQ Inc. as of December 31, 1995 and 1996 and the related
combined statements of earnings and cash flows for each of the years in the
three-year period ended December 31, 1996, and (c) the following financial
statements, which financial statements were included in the Form 8-K dated June
3, 1997 and filed June 4, 1997 by Chancellor Broadcasting Company: 1) the
balance sheets of WLIT Inc. as of December 31, 1995 and 1996 and the related
statements of earnings and cash flows for each of the years in the three-year
period ended December 31, 1996; 2) the combined balance sheets of KYSR Inc. and
KIBB Inc. as of December 31, 1995 and 1996 and the related combined statements
of operations and cash flows for each of the years in the three-year period
ended December 31, 1996; and 3) the balance sheets of WDRQ Inc. as of December
31, 1995 and 1996 and the related combined statements of earnings and cash
flows for each of the years in the three-year period ended December 31, 1996.
KPMG Peat Marwick LLP
Dallas, Texas
September 4, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Chancellor Media Corporation:
We consent to incorporation by reference herein of our report dated March 28,
1997, relating to the consolidated balance sheets of WDAS-AM/FM (station owned
and operated by Beasley FM Acquisition Corp.) as of December 31, 1996 and the
related combined statements of earnings and station equity and cash flows for
the year ended December 31, 1996, which report appears in the Form 8-K dated
May 30, 1997 and filed June 4, 1997 by Evergreen Media Corporation.
KPMG PEAT MARWICK LLP
St. Petersburg, Florida
September 4, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 (No. 333- ) of Chancellor Media Corporation of our
report dated May 2, 1997, relating to the financial statements of Century
Chicago Broadcasting, L.P., which appears in the Current Report on Form 8-K of
Evergreen Media Corporation dated May 30, 1997 and filed June 4, 1997.
PRICE WATERHOUSE LLP
Chicago, Illinois
September 4, 1997
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of Chancellor Media
Corporation of our report dated May 8, 1997 (and to all references to our Firm)
included in Evergreen Media Corporation's previously filed Form 8-K dated May
30, 1997 and filed June 4, 1997.
ARTHUR ANDERSEN LLP
Chicago, Illinois
September 4, 1997
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Chancellor Media Corporation:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Chancellor Media Corporation of our reports dated February 13,
1997, except for Note 15 as to which the date is February 19, 1997, on our
audits of the consolidated financial statements and financial statement
schedules of Chancellor Broadcasting Company and Subsidiaries as of December
31, 1995 and 1996 and for each of the three years in the period ended December
31, 1996, which reports appear in the Form 10-K dated March 28, 1997 filed by
Chancellor Broadcasting Company.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 4, 1997
<PAGE> 1
EXHIBIT 23.7
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Chancellor Media Corporation:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Chancellor Media Corporation of our reports dated February 13,
1997, except for Note 15 as to which the date is February 19, 1997, on our
audits of the consolidated financial statements and financial statement
schedules of Chancellor Radio Broadcasting Company and Subsidiaries as of
December 31, 1995 and 1996 and for each of the three years in the period ended
December 31, 1996, which reports appear in the Form 10-K dated March 28, 1997
filed by Chancellor Radio Broadcasting Company.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 4, 1997
<PAGE> 1
EXHIBIT 23.8
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Chancellor Media Corporation:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Chancellor Media Corporation of our report dated March 24, 1997, on
our audit of the consolidated financial statements of Trefoil Communications,
Inc. and Subsidiaries for the period January 1, 1996 through February 13, 1996,
which report appears in the Form 10-K dated March 28, 1997 filed by Chancellor
Broadcasting Company.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
September 4, 1997
<PAGE> 1
EXHIBIT 23.9
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Chancellor Media Corporation of our report dated
February 14, 1996 relating to the consolidated financial statements of Trefoil
Communications, Inc., which appears on page F-41 of the 1996 Annual Report on
Form 10-K of Chancellor Broadcasting Company. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page S-10 of such Annual Report on Form 10-K.
PRICE WATERHOUSE LLP
Los Angeles, California
September 4, 1997
