THIS EMPLOYMENT AGREEMENT (Agreement) is made and enteredinto as of the 18th day of April 2006, by and between LBI Media, Inc., a California corporation (the Company), and Bill Keenan (the Employee).
WHEREAS, Company and Employee both desire to enter into an employment relationship and believe it to be in their mutual interest to set forth in writing all the terms and conditions thereof; and
WHEREAS, this Agreement shall govern the employment relationship between the parties from and after the date stated above and supersedes andnegates all previous agreements made between the parties, whether written or oral, relating to Employees employment with the Company;
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants contained below, the parties agree as follows:
A. POSITION. The Company hereby engages Employee on an exclusive basis to renderpersonal services as Chief Financial Officer of the Company, LBI Holdings I, Inc. (which may be merged with Liberman Broadcasting, Inc. (as so merged, LBI)) and their respective subsidiaries (collectively the LBI Entities).Employee shall perform such duties and have such responsibilities related to his position as Chief Financial Officer as assigned from time to time by the Company. Such duties and responsibilities shall in any event include, without limitation,overall responsibility and supervision of the LBI Entities corporate finance, accounting, tax, control and any other financial matters. Without limiting the generality of the foregoing, such duties and responsibilities shall include withoutlimitation (a) managing the LBI Entities accounting department (including internal controls), (b) raising capital, (c) managing relationships with the LBI Entities creditors and other investment banks, commercial banks andlending institutions, and insurers, (d) interacting with financial analysts and rating agencies, (e) managing cash, (f) budgeting, (g) overseeing the LBI Entities audits, (h) overseeing and adhering to all Securitiesand Exchange Commission (SEC) reporting obligations, (i)
overseeing and adhering to all other reporting obligations to other government agencies and to creditors, (j) overseeing and managing investorrelations, (k) overseeing insurance, risk management and litigation for the LBI Entities, (l) overseeing and managing human resources for the LBI Entities, and (m) any other duties and responsibilities as assigned from time to time bythe Chief Executive Officer, President, Executive Vice President or the Board of Directors of the Company. Employee hereby accepts such employment and agrees to devote his full employment energies, interest, abilities and time to the performance ofEmployees duties to the Company. Employee shall promptly and faithfully comply with all the rules and regulations of applicable governmental regulatory agencies and with the reasonable instructions, directions, requests, rules and regulationsof the Company in connection with the performance of Employees duties.
B. TERM. The initial term of employment underthis Agreement shall be for a period commencing on May 3, 2006 and continuing, subject to the provisions of this Agreement, through May 2, 2009.
C. OPTION TO EXTEND. Unless this Agreement has been otherwise terminated pursuant to the terms of this Agreement, the Company shall have two (2) irrevocable options to extend this Agreement for two(2) additional periods of one (1) year each under the terms and conditions set forth herein, the first such period commencing May 2, 2009. The options will be exercised automatically by the Company unless written notice that theAgreement will not be extended is given to Employee by Company at least fifteen (15) days prior to the expiration of the initial term or any renewal term.
D. EXCLUSIVE NATURE OF SERVICES. During the term of this Agreement, including any option term, Employees services shall be exclusive in the field of electronic communication (including, withoutlimitation, all forms of radio and television).
A. SALARY. During the initial term of this Agreement, the Company shall pay to Employee a salary at the rate of Two Hundred Fifty ThousandDollars ($250,000.00) per annum (less taxes and required withholdings). Employees salary shall be paid periodically in accordance with the Companys normal payroll practices.
1. Employee shall receive an annual performance review on or close to each anniversary of thecommencement date of his employment, at which time the Company shall consider increases to Employees salary. Any increase shall be in the discretion of the Company.
B. BONUS. Each twelve (12) month period during the term of this Agreement (including any option terms), the first such period to commence on May 3, 2006, Employee shall be eligible to receiveany and/or all of the following bonuses so long as Employee (i) has remained in the position of Chief Financial Officer for the entire applicable twelve (12) month period; and (ii) has performed fully all material obligationshereunder (provided, however, that under no circumstances shall Employee receive more than Sixty Thousand Dollars ($60,000.00) as a bonus under this provision for any single twelve (12) month period):
1. In the event that Employee has remained in the position of Chief Financial Officer for the entire applicable twelve (12) month period, and hasperformed fully all material obligations under this Agreement, Company shall pay to Employee a bonus in the amount of Twenty Thousand Dollars ($20,000).
2. In addition to the bonus set forth in Section II.B.(1) above, at the sole discretion of the Companys President, Company also may pay to Employee a discretionary bonus at the end of the applicable twelve(12) month period. The President of the Company shall determine, in his sole discretion, the amount of this discretionary bonus, if any, however, in no event shall that amount exceed Twenty Thousand Dollars ($20,000).
3. In addition to the bonuses set forth in Sections II.B.(1) and II.B.(2) above, if any, in the event that (i) the Company meets in all materialrespects its financial budgets for the applicable twelve (12) month period, as presented to the Companys lending institutions and analysts; (ii) the audits of the books of the LBI Entities for the calendar year ending during theapplicable twelve (12) month period were completed without any material concerns (as determined in the sole discretion of the Companys President); and (iii) the Company meets all of its SEC reporting requirements for and/or duringthe applicable twelve (12) month period in a timely manner, the Company will pay to Employee a bonus in the amount of Twenty Thousand Dollars ($20,000).
Employees interest in any and all bonuses under this Section II.B shall not vest until the dateupon which the Company would be obligated to tender payment for the particular bonus. Any bonuses earned under this section shall be paid to Employee within 30 days of the close of the applicable 12 month period for which the bonus is calculated. Inthe event Employee contends that any bonus has not been properly paid under this Agreement, Employee shall give written notice to the Company, and Company shall have thirty (30) days to cure any defect in Employees bonus payment.
Notwithstanding anything to the contrary above (including Section II.B(2) above), if and to the extent required under stock exchange rulesor law, following an initial public offering of the common stock of LBI, the Employees bonus shall be determined by a compensation committee or in such other manner as the Company determines satisfies such applicable rules or laws.
C. HEALTH INSURANCE. During the term of this Agreement, the Company shall pay all necessary premiums for Employee and hisdependents to participate in any medical insurance plan and dental insurance plan that may then be available to employees of the Company. Currently, the group health plan for the Companys employees is provided by Blue Shield. The Companyreserves the right to change the insurance carrier and the level and amount of insurance benefits available to employees of the Company, and reserves the right to terminate said benefits at any time.
D. EXPENSES. The Company shall reimburse Employee, pursuant to the Companys expense policies, for reasonable expensesincurred in the performance of Employees duties as Chief Financial Officer. Such expenses may include reasonable business client entertainment expenses. Any question about the reasonableness of an expense shall be resolved by theCompanys President in his/her sole discretion.
E. STOCK OPTIONS. If during the term of this Agreement(including any option terms) LBI closes the sale and issuance of shares of common stock of LBI in an underwritten
public offering, pursuant to an effective registration statement under the Securities Act of 1933, as amended, Employee will receive a non-statutory stockoption grant to purchase shares of LBIs Class A Common Stock with (1) an exercise price per share equal to the offering price of LBIs Class A Common Stock in connection with such public offering, and (2) for a numberof shares such that the aggregate exercise price of all shares subject to such option is $400,000. The exercise price shall be determined without any discount from the stated offering price. Such initial grant shall be made one business day prior tosuch public offering. The option will vest in three equal annual installments on the third, fourth and fifth anniversaries of the date of the grant (33 1/3% on each of the third, fourth and fifth anniversaries of the date of the grant). The stockoption shall have a 10-year term.
The foregoing grant will be made by the Company pursuant to and subject to the terms of any stock optionincentive plan that the Company or LBI may choose to adopt. The terms and conditions of such plan are subject to change from time to time. The stock option grant will be evidenced by shareholder agreement(s) that will be provided to Employee.Notwithstanding any provision to the contrary in this Agreement, all options that are not vested shall immediately expire upon the termination of Employees employment with Company for any reason (including, but not limited to, Companysfailure to exercise its option to extend the term of the Agreement pursuant to Section I.C) ), and any options not exercised before the termination of Employee for Cause (as defined below) shall be immediately forfeited, regardless of whether suchoptions were previously vested.
F. OTHER BENEFITS. Employee shall be entitled during the term of thisAgreement, including option terms, to participate in benefit plans or policies generally applicable to employees of the Company, including but not limited to, all retirement, deferred compensation and similar plans and programs generally availableto other employees of the Company as in effect from time to time, subject to any legally required restrictions specified in such plans and programs.
III. TERMINATION PRIOR TO EXPIRATION OF AGREEMENT.
A. DISABILITY. If Employeebecomes disabled due to sickness or accident during the term of this Agreement, including any option terms, and is no longer able to perform the
essential functions of the job with or without reasonable accommodation, and such disability continues for more than eight (8) consecutive weeks, theCompany, in its sole discretion, may either (1) suspend Employees obligation to render services hereunder and the Companys obligation to pay Employee under the terms of this Agreement during the continuation of such disability, or(2) terminate this Agreement immediately. If Employee is terminated as the result of disability, the Company shall not be obligated to make any further payments to Employee hereunder, except amounts due as salary and bonuses earned at the timeof such termination.
B. RESIGNATION OR DEATH. The Employee may resign his position at any time. In the eventof Employees resignation or death during the term of this Agreement, including any option terms, this Agreement shall terminate and the Company shall have no further obligation to Employee or Employees surviving spouse, estate or legalrepresentatives, except amounts due as salary and bonuses earned at the time of such termination.
C. TERMINATION FORCAUSE. The Company may terminate this Agreement at any time for cause as hereinafter defined. Cause shall be determined by the Board of Directors of the Company (the Board) and shall mean any of thefollowing: (1) failure of Employee to perform Employees duties pursuant to this Agreement in a manner or at a level acceptable to the Board, the Companys Chief Executive Officer, the Companys President or the CompanysExecutive Vice President; (2) personal dishonesty by Employee involving Company business; (3) breach of fiduciary duty by Employee to the Company involving personal profit; (4) commission of a felony by Employee which in theCompanys judgment has or may have an adverse affect on the Companys business or reputation; (5) Employees use of any illegal drug, narcotic, or excessive amounts of alcohol (as determined by the Company in its discretion) onCompany property or at a function where Employee is working on behalf of the Company; (6) Employees willful refusal to comply with reasonable requests made of Employee by the Companys Chief Executive Officer, the CompanysPresident or Executive Vice President; (7) a breach by Employee of any material provision of this Agreement; (8) any failure of an audit of the books of the LBI Entities to be completed without any material concerns (as determined in thesole discretion of the Companys Chief Executive Officer or the Companys President), including, without limitation, failure to receive audited annual financial statements and an opinion related thereto that meet the requirements of theCompanys financing documents from
the Companys independent certified public accountants in a timely manner (unless the failure to receive such an opinion is due solely to circumstancesthat occurred prior to the date of this Agreement); (9) failure to meet reporting obligations to the SEC or any applicable financial institution or creditor on a timely basis; or (10) any other matter which would constitute good cause fortermination under applicable law. The finding of cause by the Board shall be final and conclusive. If the Company terminates this Agreement for cause, the Company shall not be obligated to make any further payments to Employee hereunder,except amounts due as salary and bonuses earned at the time of such termination.
D. PUBLIC MORALS. If Employeecommits any act or becomes involved in any situation, or occurrence, which degrades Employee in society, or brings Employee into public disrepute, contempt, scandal or ridicule, or which justifiably shocks, insults or offends the community, or whichreflects negatively upon Employee, the Company, a sponsor or a licensee of the Companys stations, or if publicity is given to any such conduct, commission or involvement on the part of Employee, which occurred previously, the Company shallhave the right to terminate this Agreement immediately.
E. FORCE MAJEURE. In the event that the Companyexercises its options to extend the term of this Agreement, pursuant to Section I.C above, and during any such option term, due to labor disputes, government regulations, or because of the failure of broadcasting facilities due to war or othercalamity (collectively, Force Majeure) the Company in good faith believes it is unable to utilize Employees services, the Company shall have the right upon twenty-four (24) hours prior notice to Employee to suspendEmployees services for the duration of such Force Majeure, or for any part thereof, and no compensation will be paid or accrue to Employee during any such period of suspension; provided that such suspension shall end as soon as such ForceMajeure terminates.
F. TERMINATION WITHOUT CAUSE. The Company may terminate Employees employment at anytime without Cause or Employees disability. In the event the Company terminates Employees employment without Cause or Employees disability during the term of this Agreement, including any option terms, this Agreement shallterminate and the Company shall have no further obligation to Employee or Employees surviving spouse, estate or
legal representatives, except that Company shall (1) pay Employee any amounts due as salary and bonuses earned at the time of such termination, and(2) continue the payment of Employees base salary for a period of six (6) months following such termination.
IV. RIGHTS TOCOMPANY MATERIALS, CONFIDENTIALITY.
A. Employee agrees that all lists, materials, books, files, reports, correspondence, records,communications and other documents and information provided by, prepared by, or made available by any LBI Entity to Employee in connection with his services hereunder (Company Materials) shall be and shall remain the property of theCompany. Upon the termination of employment or the expiration of this Agreement, all Company Materials shall be returned immediately to the Company, and Employee shall not make or retain any copies thereof. All Company Materials and confidentialinformation relating to the Company or its operations shall remain the property of the Company and shall not be disclosed by Employee to any other party. In consideration for employment with the Company and in exchange for the consideration providedfor by this Agreement, Employee specifically agrees that after termination of Employees employment with the Company for any reason, Employee shall not, without the prior written consent of the Company, or as may otherwise be required by law orlegal process, use or communicate or divulge any Company Materials or confidential information, knowledge or data to anyone other than the Company and those specifically designated by it. Employee acknowledges and agrees that, as a condition ofemployment, Employee will be required to execute a stand-alone Confidentiality and Non-Disclosure Agreement, prior to performing any services pursuant to this Agreement.
B. Because damages for any disclosure of Company Materials in violation of the foregoing would be difficult if not impossible to ascertain, Employee hereby agrees that if Employee discloses confidential information inviolation of this Agreement, the Company shall be entitled to an award of the greater of its actual damages or liquidated damages against Employee in the amount of One Hundred Thousand Dollars ($100,000.00); and, in addition, the Company shall beentitled to an award against Employee for the reasonable attorneys fees and costs incurred in enforcing this provision.
V. INJUNCTIVE RELIEF.
A. Employee acknowledges that the services Employee is to render to Company are of a special, peculiar and extraordinary character that gives them a unique value, the loss of which cannot be reasonably or adequatelycompensated for in damages in a legal action. It is further expressly acknowledged and agreed that the Company will or would suffer irreparable injury if Employee were to fail to perform services required under this Agreement and that the Companywould by reason of that injury be entitled to injunctive relief in a court of appropriate jurisdiction in addition to any other rights or remedies which may be available to the Company. Employee further consents and stipulates to the entry of suchinjunctive relief in such a court prohibiting Employee from competing with the Company in violation of this Agreement.
A. Employee promises and agrees that Employee will not, during the term of this Agreement, including any option terms,or for a period of twelve (12) months thereafter, directly or indirectly solicit any employees of the Company having an annual rate of income from the Company of eighteen thousand dollars ($18,000.00) or more, to work for any business,individual, partnership, firm, corporation, or other entity then in competition with the business of the Company or any subsidiary or affiliate of the Company, including, but not limited to, any radio station or television station broadcastingwithin a one hundred fifty (150) mile radius of Los Angeles, California.
B. Because damages for any such solicitation of Companyemployees in violation of the foregoing would be difficult if not impossible to ascertain, Employee hereby agrees that if Employee solicits employees in violation of this Agreement, the Company shall be entitled to an award of the greater of itsactual damages or liquidated damages against Employee in the amount of One Hundred Thousand Dollars ($100,000.00) (per employee solicited or hired); and, in addition, the Company shall be entitled to an award against Employee for the reasonableattorneys fees and costs incurred in enforcing this provision.
VII. SOLICITING CUSTOMERS.
A. Employee promises and agrees that Employee will not, during the term of this Agreement, including any option terms, or for a period of twelve(12) months after termination of this Agreement, influence or attempt to influence customers of the Company, either directly or
indirectly, to divert their business to any individual, partnership, firm, corporation or other similar entity then in competition with the business of theCompany or any subsidiary or affiliate of the Company, including, but not limited to, any radio station or television station broadcasting within a one hundred fifty (150) mile radius of Los Angeles, California.
B. Because damages for any such solicitation of Company customers in violation of the foregoing would be difficult if not impossible to ascertain,Employee hereby agrees that if Employee solicits customers in violation of this Agreement, the Company shall be entitled to an award of the greater of its actual damages or liquidated damages against Employee in the amount of One Hundred Thousand($100,000.00) (per customer solicited); and, in addition, the Company shall be entitled to an award against Employee for the reasonable attorneys fees and costs incurred in enforcing this provision.
Anycontroversy arising out of or relating to this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, or arising out of or relating in any way toEmployees employment or association with any LBI Entity or termination of the same, including, without limiting the generality of the foregoing, any alleged violation of statute, common law or public policy, including, but not limited to, anystate or federal statutory claims, shall be submitted to arbitration in Los Angeles County, California, before a sole arbitrator selected from Judicial Arbitration and Mediation Services, Inc., Los Angeles County, California, or its successor(JAMS), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration Association, and shall be conducted in accordance with the provisions of California Code of Civil Procedure§§ 1280 et seq. as the exclusive forum for the resolution of such dispute; provided, however, that provisional injunctive relief may, but need not, be sought by either party to this Agreement in a court of law while arbitration proceedingsare pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the Arbitrator. The Arbitrator shall be selected by mutual agreement of the parties or, if the parties cannotagree, then by striking from a list of arbitrators supplied by JAMS. Final resolution of any dispute
through arbitration may include any remedy or relief which the Arbitrator deems just and equitable, including any and all remedies provided by applicablestate or federal statutes. At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrators award or decision is based. Any award or reliefgranted by the Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction. The parties acknowledge and agree that they are hereby waiving any rights to trial by jury in anyaction, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement or the provision of services under this Agreement. The Companywill pay the arbitrators fees and arbitration expenses and any other costs associated with the arbitration or arbitration hearing that are unique to arbitration (recognizing that each side bears its own deposition, witness, expert andattorneys fees and other expenses as and to the same extent as if the matter were being heard in court).
A. ENTIRE AGREEMENT; WAIVER; MODIFICATION. This instrument constitutes the entire agreement of the parties hereto andsupersedes and replaces any other written or oral agreement or understanding with respect to the subject matter hereof. This Agreement may only be modified, amended or waived by written instrument executed by both parties. No waiver of a breachhereof shall be deemed to constitute a waiver of a future breach, whether of a similar or a dissimilar nature.
B. RIGHTSCUMULATIVE. The Companys rights under this Agreement are cumulative, and the exercise of one right will not be deemed to preclude the exercise of any other rights; likewise, the Companys rights hereunder are in addition to anyother rights of the Company at law or in equity.
C. COMMUNICATIONS. All notices, requests, demands and other communicationshereunder shall be in writing and shall be deemed to have been duly given if hand-delivered or if mailed by registered or certified mail, postage prepaid, addressed to Employee at Employees address as it appears on the records of the Companyor addressed to the
Company at its principal office at 1845 Empire Avenue, Burbank, California 91504. Either party may change the address at which notice shall be given bywritten notice given in the above manner.
D. SAVINGS CLAUSE. Should any valid federal or state law or final determination ofany administrative agency or court of competent jurisdiction affect any provision of this Agreement, the provision or provisions so affected shall be automatically conformed to the law or determination and otherwise this Agreement shall continue infull force and effect.
E. GOVERNING LAWS. This Agreement shall be governed as to its validity and effect by the laws of theState of California without regard to principles of conflict of laws.
F. CONSTRUCTION. Each party has cooperated in thedrafting and preparation of this Agreement, and therefore, the Agreement shall not be construed against either party on the basis that any particular party was the drafter.
G. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
H. SURVIVAL. Sections IV, V, VI, VII, VIII and IX of this Agreement shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
|LBI MEDIA, INC.|
|By:||Lenard D. Liberman|
|Its:||Executive Vice President|