<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 6, 1999
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<S> <C>
CHANCELLOR MEDIA CORPORATION CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
(Exact Name of Registrant as (Exact Name of Registrant as
Specified in Charter) Specified in Charter)
000-21570 333-32259
(Commission File No.) (Commission File No.)
75-2247099 75-2451687
(IRS Employer (IRS Employer
Identification No.) Identification No.)
DELAWARE DELAWARE
(State or Other Jurisdiction (State or Other Jurisdiction
of Incorporation) of Incorporation)
</TABLE>
300 CRESCENT COURT, SUITE 600
DALLAS, TEXAS 75201
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (214) 922-8700
------------------------
<PAGE> 2
ITEM 5. OTHER EVENTS.
On January 7, 1999, Chancellor Media Corporation, a Delaware
corporation (the "Company"), issued a press release announcing the appointment
of Thomas P. McMillin to the position of Chief Financial Officer. Mr. McMillin,
who presently serves as Senior Vice President, will assume the position from
Matthew E. Devine who has resigned. The press release attached hereto as Exhibit
99.1 is incorporated by reference and made a part hereof.
In connection with Mr. Devine's resignation, Mr. Devine, his spouse,
the Company and Chancellor Media Corporation of Los Angeles have entered into an
Agreement dated as of January 6, 1999 (the "Agreement"). Pursuant to such
Agreement, Mr. Devine has resigned as Senior Vice President and Chief Financial
Officer and from any other appointments or positions which he may hold with the
Company or any of its subsidiaries. In addition, the Agreement provides that (a)
Mr. Devine shall receive a one-time cash payment of $2,000,000 net of applicable
employee withholding taxes, and (b) Mr. Devine shall be granted options to
purchase 480,000 shares of common stock of the Company at an exercise price of
$46.125. The Agreement further provides for non-solicitation covenants by Mr.
Devine through April 17, 2000, as well as other mutual releases and other
provisions typically found in an employment termination agreement, but does not
provide for a noncompetition agreement from Mr. Devine. The Agreement attached
hereto as Exhibit 99.2 is incorporated by reference and made a part hereof.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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<CAPTION>
Exhibits.
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<S> <C>
99.1 - Press Release, dated January 7, 1999.
99.2 - Agreement, dated January 6, 1999, among Matthew E.
Devine, Vicki Devine, Chancellor Media Corporation
and Chancellor Media Corporation of Los Angeles.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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<CAPTION>
CHANCELLOR MEDIA CORPORATION CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
<S> <C>
By: /s/ Richard A. B. Gleiner By: /s/ Richard A. B. Gleiner
------------------------------------------- --------------------------------------------
Richard A. B. Gleiner Richard A. B. Gleiner
Senior Vice President and General Counsel Senior Vice President and General Counsel
</TABLE>
Date: January 7, 1999
<PAGE> 4
INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
99.1 Press Release, dated January 7, 1999.
99.2 Agreement, dated January 6, 1999, among Matthew E. Devine, Vicki Devine,
Chancellor Media Corporation and Chancellor Media Corporation of Los Angeles.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
CHANCELLOR MEDIA CORPORATION
FOR IMMEDIATE RELEASE NEWS ANNOUNCEMENT
THOMAS P. MCMILLIN APPOINTED
CHIEF FINANCIAL OFFICER OF CHANCELLOR MEDIA
FOLLOWING RESIGNATION OF MATTHEW E. DEVINE
- DEBORAH R. JACOBSON NAMED SENIOR VICE PRESIDENT OF INVESTOR RELATIONS -
DALLAS, Texas, January 7, 1999 - Chancellor Media Corporation (Nasdaq: AMFM)
announced today the appointment of Thomas P. McMillin, 37, to the position of
Chief Financial Officer. Mr. McMillin, who presently serves as Senior Vice
President, will assume the CFO position from Matthew E. Devine, 50, who has
resigned. Mr. Devine plans to spend more time with his family and to pursue
other business interests. Chancellor also reported that Deborah R. Jacobson, 39,
has been named Senior Vice President of Investor Relations.
Prior to joining Chancellor Media in September 1998, Mr. McMillin served as
Executive Vice President and Chief Financial Officer of Marcus Cable, the
nation's ninth largest cable company, where he was directly responsible for
overseeing all of the corporate development, finance, accounting, regulatory,
planning and information system functions. He joined Marcus Cable in 1994 and
over a four year period, together with other members of the senior management
team, grew the Company more than five-fold through acquisitions. With a customer
base of more than 1.2 million, Marcus Cable was sold in 1998 to Paul G. Allen in
a transaction valued at $2.775 billion. Prior to joining Marcus Cable, Mr.
McMillin worked for seven years in the cable industry with Crown Media, a
subsidiary of Hallmark Cards, Inc., and Cencom Cable Associates in various
finance and corporate development positions. Before entering the cable industry,
Mr. McMillin served for four years with Arthur Andersen & Co., certified public
accountants.
-more-
<PAGE> 2
CHANCELLOR MEDIA CORPORATION, 1/7/99 page 2
Since September 1998, Mr. McMillin has been helping to direct the integration of
Chancellor's 36,000 recently acquired outdoor advertising displays as well as
assisting in the accounting and finance areas.
As Chief Financial Officer, Mr. McMillin will manage all financial and treasury
functions, as well as bank and financial community relationships. He will also
work closely with Chancellor's strategic development group to support the
Company's goals for growth.
Commenting on the executive changes, Jeffrey A. Marcus, President and Chief
Executive Officer of Chancellor Media said, "On behalf of the Company we salute
Matt Devine and honor his past service and accomplishments with Chancellor and
Evergreen Media and wish him well in his future endeavors. And we welcome Tom
McMillin as CFO. In my years of work with him, he has effectively and
successfully addressed issues similar to those faced by Chancellor today,
specifically integrating the Company's tremendous multi-media asset base while
reducing debt. Additionally, Tom has proven to be adept at executing initiatives
which result in enhanced enterprise value."
Deborah Jacobson joins Chancellor Media from LIN Television where she served as
Vice President, Corporate Development and Treasurer since 1995. At LIN, Ms.
Jacobson was responsible for, among other things, all investor relations
activities, developing relationships with leading media analysts and
institutional investors. Prior to LIN, she was Senior Vice President and
division head for the communications, entertainment and publishing lending
division at the Bank of New York.
Commenting on Ms. Jacobson's appointment, Mr. Marcus said, "We are truly excited
to have Deb Jacobson as a member of our management team. Deb is a proven
financial executive and will add invaluable expertise to Chancellor Media."
Mr. Devine commented, "As a co-founder ten years ago of Chancellor's
predecessor,
-more-
<PAGE> 3
CHANCELLOR MEDIA CORPORATION, 1/7/99 page 3
Evergreen Media, I am delighted to have played a key role in the rapid expansion
of Evergreen and Chancellor into what will be the nation's largest radio
operator. I am also proud of the operating performance and value we have been
able to consistently deliver to our shareholders since our initial public
offering. Chancellor Media today has an outstanding asset base and an active
Board of Directors, and I am delighted to be a shareholder in the Company."
James E. de Castro, President, Chancellor Radio Group concluded, "As a close
personal friend of Matt's, I am aware of the incredible effort and sacrifice he
has made to Chancellor and though I will greatly miss him as a professional
associate, I fully respect his decision to devote more time to his family. He
inspired and guided all of us at Chancellor to achieve results which are
consistently among the highest in the industry. I look forward to carrying on
that tradition, as well as my long-term friendship with Matt."
Chancellor Media Corporation is a diversified media company consisting of the
Chancellor Radio Group, Chancellor Outdoor Group, Katz Media (a leading media
representation firm), Chancellor Marketing Group, and the planned Chancellor
Television Group. Reflecting announced transactions, Chancellor Radio Group will
be the nation's largest radio broadcasting entity with over 465 stations in
approximately 105 markets reaching a weekly listener base of over 65 million
people. Through the AMFM Radio Network, Chancellor offers syndicated programming
nationwide. Internationally, Chancellor has acquired Primedia Broadcast Group,
Inc. which owns and operates eight FM radio stations in Puerto Rico. Chancellor
Outdoor Group is the nation's fifth largest outdoor advertising company
operating over 36,000 display faces in 37 states. Chancellor's Katz Media is the
only full-service media representation firm in the United States serving
multiple types of electronic media. Chancellor Marketing Group is a full
service, sales promotion firm developing and integrating marketing programs for
Fortune 1000 companies.
Upon consummation of announced transactions, in addition to radio, outdoor
advertising,
-more-
<PAGE> 4
CHANCELLOR MEDIA CORPORATION, 1/7/99 page 4
media representation and marketing operations, Chancellor will have significant
television operations. Chancellor Television Group, through ownership and local
marketing agreements, will operate 13 network-affiliated television stations in
8 markets.
This news announcement contains certain forward-looking statements that are
based upon current expectations and involve certain risks and uncertainties
within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Key risks are described in Chancellor's reports filed with the U.S. Securities
and Exchange Commission. Readers should note that these statements may be
impacted by several factors, including economic changes and changes in the
broadcasting industry generally and, accordingly, the Company's actual
performance and results may vary from those stated herein and Chancellor
undertakes no obligation to update the information contained herein.
# # #
Contacts: Chancellor Media Corporation
Deborah R. Jacobson
Senior Vice President of Investor Relations
214/922-8700 or 401/457-9403
or
Joseph N. Jaffoni, Stewart A. Lewack
Jaffoni & Collins Incorporated
212/835-8500 or [email protected]
<PAGE> 1
EXHIBIT 99.2
AGREEMENT
Agreement dated as of January 6, 1999 (the "Agreement") between Matthew
E. Devine ("Executive"), Vicki Devine ("Spouse"), Chancellor Media Corporation
(the "Company") and Chancellor Media Corporation of Los Angeles ("Los Angeles").
WHEREAS, the Executive and the Company are parties to an Employment
Agreement, dated as of May 18, 1998, and effective as of April 17, 1998 (the
"Effective Date"), pursuant to which the Company has employed the Executive as
Senior Vice President and Chief Financial Officer of the Company (the
"Employment Agreement");
WHEREAS, the parties desire to terminate the Employment Agreement and
Executive's employment with the Company; and
WHEREAS, the parties desire that certain provisions of the Employment
Agreement remain in full force and effect, as set forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants,
agreements, promises set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
Executive, Spouse, the Company and Los Angeles hereby agree as follows:
1. Termination: The Executive hereby resigns from his employment with
the Company as of the date of this Agreement (the "Termination Date"). Executive
further agrees to and does hereby resign effective as of the Termination Date
from any other appointments or positions which he may hold with the Company or
any of its subsidiaries, including without limitation, his position as an
officer of the Company and each of its subsidiaries. Executive agrees to execute
all further documents which the Company may request of him to effectuate such
resignations.
2. Termination Payment: In connection with such termination of
employment and the execution of this Agreement, as soon as practicable after the
execution and delivery of this Agreement (but not later than one (1) business
day after the date hereof), the Company shall cause to be paid to Executive and
Spouse the one-time cash payment provided for in Section 6(b) of the Employment
Agreement.
3. Grant of Options: In connection with such termination of employment
and the execution of this Agreement, in lieu of all other rights to any grant of
stock options set forth in the Employment Agreement, the Company shall grant to
Executive, effective as of the Termination Date, stock options for 480,000
shares of common stock of the Company, which grant will be made in accordance
with the provisions of Sections 4(c)(ii) and 4(c)(iii) of the Employment
Agreement.
<PAGE> 2
4. Taxes: The cash payments set forth in paragraph 2, together with any
cash payments to be made pursuant to Section 6(a) of the Employment Agreement
(which section shall survive the execution and delivery of this Agreement as
provided in paragraph 14), shall be subject to applicable federal, state and
local withholding taxes. Executive agrees that, TO THE EXTENT THAT ANY
INDIVIDUAL FEDERAL OR STATE TAXES OF ANY KIND MAY BE DUE AS A RESULT OF ANY SUCH
PAYMENT TO EXECUTIVE, EXECUTIVE SHALL BE SOLELY RESPONSIBLE FOR SUCH TAXES AND
WILL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE COMPANY IN THE EVENT THERE IS ANY
CLAIM AGAINST THE COMPANY FOR SUCH TAXES. NOTWITHSTANDING THE FOREGOING, THE
COMPANY SHALL REIMBURSE EXECUTIVE, IF APPLICABLE, FOR THE AMOUNT OF ANY EXCISE
TAX IMPOSED ON EXECUTIVE WITH RESPECT TO THE PAYMENT PROVIDED FOR IN PARAGRAPH
2.
5. General Release and Covenant Not to Sue:
(a) THE EXECUTIVE AND SPOUSE, ON BEHALF OF THEMSELVES, THEIR ATTORNEYS,
HEIRS, EXECUTORS, ADMINISTRATORS AND ASSIGNS (TOGETHER THE "EXECUTIVE PARTIES"),
HEREBY GENERALLY RELEASE AND FOREVER DISCHARGE THE COMPANY, LOS ANGELES AND
THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES AND
AFFILIATES AND THEIR RESPECTIVE PAST AND PRESENT SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES, PRINCIPALS, INSURERS AND ATTORNEYS
(TOGETHER THE "COMPANY PARTIES") FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES,
SUITS, DAMAGES, LOSSES, EXPENSES, ATTORNEYS' FEES, OBLIGATIONS OR CAUSES OF
ACTION, KNOWN OR UNKNOWN OF ANY KIND AND EVERY NATURE WHATSOEVER, AND WHETHER OR
NOT ACCRUED OR MATURED, WHICH ANY OF THEM MAY HAVE, ARISING OUT OF OR RELATING
TO ANY TRANSACTION, DEALING, RELATIONSHIP, CONDUCT, ACT OR OMISSION, OR ANY
OTHER MATTERS OR THINGS OCCURRING OR EXISTING AT ANY TIME PRIOR TO AND INCLUDING
THE TERMINATION DATE (INCLUDING BUT NOT LIMITED TO ANY CLAIM AGAINST THE COMPANY
PARTIES BASED ON, RELATING TO OR ARISING UNDER WRONGFUL DISCHARGE, BREACH OF
CONTRACT (WHETHER ORAL OR WRITTEN), TORT, FRAUD, DEFAMATION, NEGLIGENCE,
PROMISSORY ESTOPPEL, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, ANY
OTHER CIVIL OR HUMAN RIGHTS LAW, THE AGE DISCRIMINATION IN EMPLOYMENT ACT,
AMERICANS WITH DISABILITIES ACT, EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, OR ANY OTHER FEDERAL, STATE OR LOCAL LAW RELATING TO
EMPLOYMENT OR DISCRIMINATION IN EMPLOYMENT) IN ALL CASES ARISING OUT OF OR
RELATING TO EXECUTIVE'S EMPLOYMENT BY THE COMPANY OR INVESTMENT IN THE COMPANY
OR HIS SERVICES AS AN OFFICER OR EMPLOYEE OF THE COMPANY OR ITS SUBSIDIARIES, OR
OTHERWISE RELATING TO THE TERMINATION OF SUCH EMPLOYMENT OR SERVICES; PROVIDED,
HOWEVER, THAT SUCH GENERAL RELEASE WILL NOT LIMIT OR RELEASE (I) EXECUTIVE'S
RIGHTS UNDER THIS AGREEMENT (INCLUDING BUT NOT LIMITED TO SECTION 6(a) OF THE
EMPLOYMENT AGREEMENT AND THE OTHER PROVISIONS OF THE EMPLOYMENT AGREEMENT THAT
ARE INCORPORATED HEREIN), (II) EXECUTIVE'S RIGHTS TO INDEMNIFICATION FROM THE
COMPANY IN RESPECT OF HIS SERVICES AS AN OFFICER OR DIRECTOR OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES AS
2
<PAGE> 3
PROVIDED BY LAW OR THE CERTIFICATES OF INCORPORATION OR BY-LAWS (OR LIKE
CONSTITUTIVE DOCUMENTS) OF THE COMPANY OR ANY SUBSIDIARY THEREOF, OR (III)
EXECUTIVE'S CONTRACTUAL RIGHTS UNDER ANY STOCK OPTION AGREEMENT THAT IS IN
EFFECT WITH RESPECT TO STOCK OPTIONS THAT HAVE BEEN GRANTED TO EXECUTIVE PRIOR
TO THE TERMINATION DATE. THE EXECUTIVE AND SPOUSE, ON BEHALF OF THEMSELVES AND
THE EXECUTIVE PARTIES, HEREBY COVENANT FOREVER NOT TO ASSERT, FILE, PROSECUTE,
COMMENCE, INSTITUTE (OR SPONSOR OR PURPOSELY FACILITATE ANY PERSON IN CONNECTION
WITH THE FOREGOING), ANY COMPLAINT OR LAWSUIT OR ANY LEGAL, EQUITABLE OR
ADMINISTRATIVE PROCEEDING OF ANY NATURE, AGAINST ANY OF THE COMPANY PARTIES IN
CONNECTION WITH ANY MATTER RELEASED IN THIS PARAGRAPH 5, AND REPRESENT AND
WARRANT THAT NO OTHER PERSON OR ENTITY HAS INITIATED OR, TO THE EXTENT WITHIN
HIS CONTROL, WILL INITIATE ANY SUCH PROCEEDING ON THEIR BEHALF.
(b) THE COMPANY, ON ITS OWN BEHALF AND ON BEHALF OF ITS SUBSIDIARIES,
HEREBY GENERALLY RELEASES AND FOREVER DISCHARGES THE EXECUTIVE PARTIES FROM ANY
AND ALL CLAIMS, DEMANDS, LIABILITIES, SUITS, DAMAGES, LOSSES, EXPENSES,
ATTORNEYS' FEES, OBLIGATIONS OR CAUSES OF ACTION, KNOWN OR UNKNOWN OF ANY KIND
AND EVERY NATURE WHATSOEVER, AND WHETHER OR NOT ACCRUED OR MATURED, WHICH ANY OF
THEM MAY HAVE, ARISING OUT OF OR RELATING TO ANY TRANSACTION, DEALING,
RELATIONSHIP, CONDUCT, ACT OR OMISSION, OR ANY OTHER MATTERS OR THINGS OCCURRING
OR EXISTING AT ANY TIME PRIOR TO AND INCLUDING THE TERMINATION DATE (INCLUDING
BUT NOT LIMITED TO ANY CLAIM BASED ON, RELATING TO OR ARISING UNDER BREACH OF
CONTRACT, TORT, FRAUD, DEFAMATION, ANY OTHER CIVIL OR HUMAN RIGHTS LAW, OR ANY
OTHER FEDERAL, STATE OR LOCAL LAW RELATING TO EMPLOYMENT OR DISCRIMINATION IN
EMPLOYMENT) IN ALL CASES ARISING OUT OF OR RELATING TO THE EXECUTIVE'S
EMPLOYMENT BY THE COMPANY OR INVESTMENT IN THE COMPANY OR HIS SERVICES AS AN
OFFICER OR EMPLOYEE OF THE COMPANY OR ITS SUBSIDIARIES, OR OTHERWISE RELATING TO
THE TERMINATION OF SUCH EMPLOYMENT OR SERVICES; PROVIDED, HOWEVER, THAT SUCH
GENERAL RELEASE WILL NOT LIMIT OR RELEASE (I) THE COMPANY'S RIGHTS UNDER THIS
AGREEMENT (INCLUDING BUT NOT LIMITED TO THE PROVISIONS OF THE EMPLOYMENT
AGREEMENT THAT ARE INCORPORATED HEREIN), (II) THE COMPANY'S RIGHTS AGAINST
EXECUTIVE WITH RESPECT TO ANY FRAUDULENT OR CRIMINAL ACTIVITY, (III) THE
COMPANY'S RIGHTS UNDER ANY STOCK OPTION AGREEMENT THAT IS IN EFFECT WITH RESPECT
TO STOCK OPTIONS THAT HAVE BEEN GRANTED TO EXECUTIVE PRIOR TO THE TERMINATION
DATE; OR (IV) THE COMPANY'S RIGHTS AGAINST EXECUTIVE RESPECTING THE REPAYMENT OF
ANY LOAN OWING TO THE COMPANY OR ANY OF ITS SUBSIDIARIES BY EXECUTIVE IN
ACCORDANCE WITH THE TERMS OF SUCH LOAN. THE COMPANY, ON BEHALF OF ITSELF AND THE
COMPANY PARTIES, HEREBY COVENANTS FOREVER NOT TO ASSERT, FILE, PROSECUTE,
COMMENCE, INSTITUTE (OR SPONSOR OR PURPOSELY FACILITATE ANY PERSON IN CONNECTION
WITH THE FOREGOING), ANY COMPLAINT OR LAWSUIT OR ANY LEGAL, EQUITABLE OR
ADMINISTRATIVE PROCEEDING OF ANY NATURE, AGAINST ANY OF THE EXECUTIVE PARTIES IN
CONNECTION WITH ANY MATTER RELEASED IN THIS
3
<PAGE> 4
PARAGRAPH 5, AND REPRESENTS AND WARRANTS THAT NO OTHER PERSON OR ENTITY HAS
INITIATED OR, TO THE EXTENT WITHIN THEIR CONTROL, WILL INITIATE ANY SUCH
PROCEEDING ON THEIR BEHALF.
6. Non-Disparagement:
(a) Executive and Spouse shall not, directly or indirectly, make or
cause to be made and shall cause the officers, directors, employees, agents and
representatives of any entity or person controlled by Executive or Spouse not to
make or cause to be made, any disparaging, denigrating, derogatory or other
negative or false statement orally or in writing to any person or entity about
the Company, any holder of 7 1/2% or more of any class of the Company's voting
stock, its or their respective parents, subsidiaries or affiliates, its or their
respective executive officers or members of its or their Boards of Directors, or
the business strategy or plans, policies, practices or operations of the
Company, of any holder of 7 1/2% or more of any class of the Company's voting
stock, or of its or their respective parents, subsidiaries or affiliates.
(b) The Company and Los Angeles shall not, directly or indirectly, make
or cause to be made and shall cause the officers, directors, employees, agents
and representatives of any entity or person controlled by the Company or Los
Angeles not to make or cause to be made, any disparaging, denigrating,
derogatory or other negative or false statement orally or in writing to any
person or entity about Executive.
7. Standstill: Executive agrees that, for a period of two years from
the date of this Agreement, neither Executive, Spouse nor any of Executive's or
Spouse's affiliates will (or will cause or assist others to), without the prior
written consent of the Company or its Board of Directors: (i) acquire, offer to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
any voting securities or direct or indirect rights to acquire any voting
securities of and issued by, the Company or any parent or subsidiary thereof, or
of any Successor (as defined below), or any assets of the Company or any parent
or subsidiary or division thereof or of any such Successor, which may be
outstanding on the date hereof or subsequently issued during such three year
period (except pursuant to the exercise of stock options already granted, or to
be granted in accordance with this Agreement, to Executive); (ii) make or any in
way participate in, directly or indirectly, any "solicitation" of "proxies" (as
such terms are used in the rules of the Securities Exchange Commission) to vote,
or seek to advise or influence any person or entity with respect to the voting
of, any voting securities of the Company (or any parent or subsidiary thereof);
(iii) make any public announcement with respect to, or submit a proposal for, or
offer of (with or without conditions) any extraordinary transaction involving
the Company (or any parent or subsidiary thereof) or its (or their) securities
or assets; (iv) form join or in any way participate in a "group" (as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) in
connection with any of the foregoing; (v) otherwise act, alone or in concert
with others, to seek control or influence the management, Board of Directors or
policies of the Company (or any parent or subsidiary thereof); (vi) disclose any
intention, plan or arrangement inconsistent with the foregoing; (vii) advise,
assist or encourage any other persons in connection with any
4
<PAGE> 5
of the foregoing, or (viii) contact, discuss, make comments to or otherwise
provide information to any analysts, major stockholders (other than James
DeCastro), reporters or other members of the media respecting the Company (or
its parents or subsidiaries), or its (or their) plans. Executive and Spouse also
agree during such period not to request the Company or any of its
representatives, directly or indirectly, to amend or waive any provision of this
paragraph (including this sentence) or take any action which might require the
Company to make a public announcement regarding the possibility of an
extraordinary transaction involving the Company or its securities or assets.
Notwithstanding the foregoing, Executive and Spouse shall be entitled to receive
and own all securities distributed in respect of, or issued in exchange for any
voting securities owned by them which were not acquired in violation of this
Agreement. As used herein, "Successor" shall mean any entity which in a
transaction succeeds to substantially all of the Company's assets or which
acquires substantially all of its stock so long as, in either case, holders of a
majority of the Company's voting securities immediately prior to such
transaction beneficially own a majority of the voting securities of such entity
immediately thereafter.
8. Cooperation: Executive agrees to cooperate with the Company as
reasonably directed by the Company by responding to questions, depositions,
administrative proceedings and court hearings, executing documents, and
cooperating with the Company and its accountants and legal counsel with respect
to business issues, and/or claims and litigation of which he has personal or
corporate knowledge. Executive further agrees, except as required by subpoena or
other applicable legal process (after the Company has been given reasonable
notice and opportunity to seek relief from such requirement), to maintain, in
strict confidence, any information of which he has knowledge regarding current
and/or future claims, administrative proceedings and litigation. Executive
agrees, except as required by subpoena or other applicable legal process (after
the Company has been given reasonable notice and opportunity to seek relief from
such requirement), not to communicate with any party(ies), their legal counsel
or others adverse to the Company in any such claims, administrative proceedings
or litigation except through the Company's designated legal counsel. Executive
also shall make himself available at reasonable times and upon reasonable notice
to answer questions or provide other information within his possession and
requested by the Company relating to the Company, its subsidiaries and/or their
respective operations in order to facilitate the smooth transition of
Executive's duties to his successor. The Company shall reimburse Executive for
any documented out-of-pocket expenses, including but not limited to reasonable
legal fees, reasonably incurred by Executive in complying with this paragraph 8.
To the extent Executive's services are required pursuant to this paragraph 8 for
any extended period, the Company will pay to Executive a per diem amount
calculated based on Executive's annual base salary in effect immediately prior
to the Termination Date.
9. Mail: The Company may open and answer, and authorize others to open
and answer, all mail, communications, and other correspondence addressed to
Executive relating to the Company, Los Angeles or any of their respective
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subsidiaries or to Executive's employment with the Company, Los Angeles or any
of their respective subsidiaries, and Executive shall promptly refer to the
Company all inquiries, mail, communications, and correspondence received by him
relating to the Company, Los Angeles or any of their respective subsidiaries or
to Executive's employment with the Company, Los Angeles or any of their
respective subsidiaries. If any such mail, communications or correspondence
received by the Company includes any threat of any claim against Executive
personally, the Company shall promptly notify Executive thereof. The Company
will promptly forward to Executive any of Executive's personal mail,
communications or correspondence received by the Company, unopened to the extent
it is reasonably ascertained to be of a personal nature.
10. Notices: Any notice required or permitted by this Agreement shall
be in writing, sent by registered or certified mail, return receipt requested,
addressed to the Board of Directors, the Company and Los Angeles at the
Company's then principal office, or to the Executive at the address set forth on
the signature page hereof, as the case may be, or to such other address or
addresses as any party hereto may from time to time specify in writing for the
purpose in a notice given to the other parties in compliance with this paragraph
10. Notices shall be deemed given when received.
11. Certain Acknowledgments: Executive and Spouse acknowledge that
before entering into this Agreement they have had the opportunity to consult
with any attorney or other advisor of their choice, and have done so, and have
not relied in connection herewith on legal counsel for the Company. Executive
and Spouse acknowledge that they have entered into this Agreement of their own
free will, that no promises or representations have been made to them by any
person to induce them to enter into this Agreement other than the terms
expressly set forth herein.
12. Authorization By The Company: The Company represents and warrants
to Executive that (i) it has the corporate power and authority to enter into
this Agreement and to carry out its respective obligations hereunder; (ii) the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of the Company; and (iii) this Agreement is
a valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, and other laws now or
hereafter in effect relating to the enforcement of creditors' rights generally.
13. Prior Agreements: WITH THE EXCEPTION OF CERTAIN PROVISIONS OF THE
EMPLOYMENT AGREEMENT TO WHICH PARAGRAPH 14 OF THIS AGREEMENT SPECIFICALLY REFERS
AND THE PROVISIONS OF ANY STOCK OPTION AGREEMENT THAT IS IN EFFECT WITH RESPECT
TO STOCK OPTIONS THAT HAVE BEEN GRANTED TO EXECUTIVE ON OR BEFORE THE
TERMINATION DATE, this Agreement integrates the whole of all agreements and
understandings of any sort or character between the parties concerning the
subject matter of this Agreement and any other dealings between the parties, and
supersedes all prior negotiations, discussions, or agreements of any sort
whatsoever relating to the subject matter hereof, or any claims
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<PAGE> 7
that might have ever been made by one party against any opposing party to this
Agreement. There are no representations, agreements, or inducements except as
set forth expressly and specifically in this Agreement. Further, all prior
employment contracts, if any, between the parties are superseded by this
Agreement. THERE ARE NO UNWRITTEN, ORAL, OR VERBAL UNDERSTANDINGS, AGREEMENTS,
OR REPRESENTATIONS OF ANY SORT WHATSOEVER, IT BEING STIPULATED THAT THE RIGHTS
OF THE PARTIES SHALL BE GOVERNED EXCLUSIVELY BY THIS AGREEMENT.
14. Survival of other Employment Agreement Provisions: The provisions
of Employment Agreement Sections 4(a) and 4(b) (insofar as provisions of the
foregoing are applicable with respect to termination benefits to Executive
pursuant to Section 6(a) of the Employment Agreement), 4(c)(ii) and 4(c)(iii)
(insofar as they relate to the stock options to be granted to Executive pursuant
to paragraph 3), 6(a), 6(b), 7(a), 7(b), 7(d), 7(e), 8, 12, 13, 15, 16 and 17
are incorporated herein by reference, shall survive the Termination Date and
shall continue in full force and effect. Except as specifically described
herein, all of Executive's rights and obligations under the Employment Agreement
are extinguished upon the effectiveness of this Agreement. Notwithstanding the
foregoing, (i) the provisions of Section 7(b) of the Employment Agreement will
apply only through the second anniversary of the Effective Date (rather than
through the Expiration Date) and (ii) the parties agree that the Annual Bonus
(as defined in the Employment Agreement) payable to Executive pursuant to
Section 4(b) of the Employment Agreement for 1998 shall be $2,000,000, (iii)
Executive will be reimbursed by the Company for up to $70,000 for his purchase
of an automobile (reduced by any amount previously reimbursed or otherwise paid
by the Company on or after the Effective Date to or on behalf of Executive for
an automobile), (iv) Executive will be paid (in lieu of club dues) an amount
equal to $500 per month (prorated for partial months) for the period from the
Effective Date to the Termination Date, (v) to the extent allowed by law, the
Company will continue to provide health coverage to Executive and his covered
dependents (or, if not so permitted, will reimburse Executive for his COBRA
payments with respect thereto) for a period of six months following the
Termination Date and (vi) the Company will reimburse Executive for reasonable
legal fees in connection with the negotiation of this Agreement.
15. Modification: This Agreement may not be modified or amended except
in writing signed by the parties. No term or condition of this Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A
waiver shall operate only as to the specific term or condition waived and will
not constitute a waiver for the future or act on anything other than that which
is specifically waived.
16. Material Breach.
[Intentionally Omitted.]
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17. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which, together
shall constitute one and the same instrument. Any counterpart of this Agreement
that has attached to it separate signature pages which together contain the
signature of all parties hereto shall for all purposes be deemed a fully
executed original. Facsimile signatures shall constitute original signatures.
18. Successors and Assigns: All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective successors and permitted assigns. Neither this Agreement
nor any rights or obligations hereunder may be assigned by the Executive, other
than by will or the laws of descent or distribution.
19. Severability: All provisions of this Agreement are intended to be
severable. In the event any provision or restriction contained herein is held to
be invalid or unenforceable in any respect, in whole or in part, such finding
shall in no way affect the validity or enforceability of any other provision of
this Agreement. The parties hereto further agree that any such invalid or
unenforceable provision shall be deemed modified so that it shall be enforced to
the greatest extent permissible under law, and to the extent that any court or
arbitrator of competent jurisdiction determines any restriction herein to be
unreasonable in any respect, such court or arbitrator may limit this Agreement
to render it reasonable in the light of the circumstances in which it was
entered into and specifically enforce this Agreement as limited.
20. Indemnification: EXECUTIVE AND SPOUSE AGREE, WARRANT, AND REPRESENT
TO THE COMPANY THAT EXECUTIVE AND SPOUSE HAVE FULL EXPRESS AUTHORITY TO SETTLE
ALL CLAIMS AND DEMANDS THAT ARE THE SUBJECT OF PARAGRAPH 5 OF THIS AGREEMENT AND
THAT NEITHER EXECUTIVE NOR SPOUSE HAS GIVEN OR MADE ANY ASSIGNMENT TO ANYONE,
INCLUDING EXECUTIVE'S OR SPOUSE'S FAMILY OR LEGAL COUNSEL, OF ANY CLAIMS AGAINST
ANY PERSON OR ENTITY ASSOCIATED WITH THE COMPANY OR ANY COMPANY PARTIES. TO THE
EXTENT THAT ANY CLAIM RELATED TO THIS AGREEMENT MAY BE BROUGHT BY PERSONS OR
ENTITIES CLAIMING BY, THROUGH, OR UNDER EXECUTIVE, SPOUSE, THEIR RESPECTIVE
HEIRS, SUCCESSORS, OR ASSIGNS, THEN EXECUTIVE FURTHER AGREES TO INDEMNIFY,
DEFEND, AND HOLD HARMLESS THE COMPANY OR ANY COMPANY PARTY, ITS AGENTS, AND ITS
SUCCESSORS FROM ANY LAWSUIT, JUDGMENT, OR SETTLEMENT ARISING FROM SUCH CLAIMS.
EXECUTIVE AND SPOUSE FURTHER HEREBY ASSIGN TO THE COMPANY ALL CLAIMS AND CAUSES
OF ACTION COVERED BY PARAGRAPH 5.
21. Injunction: Executive and Spouse hereby expressly acknowledge that
any breach or threatened breach by either of them of any of their obligations
set forth in paragraph 6 (Non-Disparagement), paragraph 7 (Standstill), or any
breach or threatened breach by Executive of Sections 7(a) or 7(b) of the
Employment Agreement (the provisions of which shall survive the execution and
delivery of this Agreement and which are incorporated herein), may result in
significant and continuing injury and
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irreparable harm to the Company and Los Angeles, the monetary value of which
would be impossible to establish. Therefore, Executive and Spouse agree that the
Company and Los Angeles shall be entitled to injunctive relief in a court of
appropriate jurisdiction with respect to such provisions. The Company hereby
expressly acknowledges that any breach or threatened breach by it of any of its
obligations set forth in paragraph 6 (Non-Disparagement) may result in
significant and continuing injury and irreparable harm to Executive and Spouse,
the monetary value of which would be impossible to establish. Therefore, the
Company agrees that Executive and Spouse shall be entitled to injunctive relief
in a court of appropriate jurisdiction with respect to such provision.
Attorneys' fees with respect to any action seeking injunctive relief shall be
paid by the party against whom such relief is sought (if such action is
successful) or by the party seeking such relief (if such action is
unsuccessful). The parties further agree that this provision is a material
inducement to each of the parties entering into this Agreement.
22. Facility of Payment: All cash payments to be made by the Company to
or on behalf of Executive hereunder shall be an obligation of and made by Los
Angeles.
23. Choice of Law: This Agreement, including but not limited to the
provisions of the Employment Agreement that are incorporated herein, shall be
governed by and construed in accordance with the laws of the State of New York
(without giving effect to principles of conflict of laws).
24. Return of Documents: Executive agrees that he will return to the
Company, not later than 24 hours following the execution of this Agreement, all
originals and all copies of documents, notes, computer discs, tapes or other
tangible information of any sort which he has in his possession or under his
custody or control that is the property of the Company or any of its
subsidiaries or that relate in any manner to his duties at the Company, which is
not otherwise available to the public, and will not retain any copies of such
matter. The materials required to be returned pursuant to this paragraph 24
shall not include personal correspondence that does not relate to the Company,
its subsidiaries or any of its businesses.
25. No Right to Additional Compensation: Except as expressly provided
in this Agreement, neither the Company, Los Angeles or any of their respective
predecessors, successors, assigns or affiliates shall have any further
obligation to Executive or Spouse in connection with the Employment Agreement or
Executive's employment by the Company, Los Angeles or any of their respective
subsidiaries, including but not limited to severance, compensation (including
but not limited to deferred compensation, employment contracts, stock options,
bonuses and commissions), health insurance, life insurance, disability
insurance, club dues, vehicle allowances, vacation pay, sick pay and any similar
obligations.
26. No Admission: The parties agree that by entering into this
Agreement, no party admits to having engaged in any unlawful, wrongful or
unconscionable conduct, any such conduct being expressly denied.
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27. Construction: The parties agree that this Agreement was negotiated
by the parties and shall not be construed against any party.
28. Arbitration: Except with respect to the provisions of this
Agreement relating to equitable relief, the parties agree to submit to binding
arbitration administered by the American Arbitration Association ("AAA") under
its National Rules for Resolution of Employment Disputes (the "Arbitration") any
and all disputes related to or arising from Executive's employment with the
Company, the Employment Agreement or this Agreement. The Arbitration panel shall
consist of three neutral arbitrators qualified to hear employment/labor matters.
Each party shall be responsible for its respective costs and attorneys' fees
incurred in connection with the Arbitration, and the Arbitration fees shall be
divided equally between the Executive, on the one hand, and the Company and Los
Angeles, on the other hand. The decision of the Arbitration panel shall be
binding on the parties and not subject to appeal. Except to the extent required
by law, the Arbitration result shall be kept confidential.
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IN WITNESS WHEREOF, the Company and Los Angeles have caused this
Agreement to be executed in their respective corporate names by an officer
thereof thereunto duly authorized, and Executive and Spouse have hereunto set
their hands, as of the day and year first above written.
CHANCELLOR MEDIA CORPORATION
CHANCELLOR MEDIA CORPORATION OF LOS ANGELES
By: /s/ Jeffrey A. Marcus
-------------------------------------------------
Name: Jeffrey A. Marcus
-----------------------------------------------
Title: President
----------------------------------------------
/s/ Matthew E. Devine
----------------------------------------------------
MATTHEW E. DEVINE
Address: 3101 Cumberland Court
Colleyville, Texas 76034
/s/ Vicki Devine
----------------------------------------------------
VICKI DEVINE
7
