-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B3EkFdUlzxTwYYoKxpgh1ycbegvyQOoY93Z7AseKCwKZOaVyb0k2WkozFbndgDAm pweCmdA+Rd2nnTca0KJrmw== 0000950134-97-006582.txt : 19970912 0000950134-97-006582.hdr.sgml : 19970912 ACCESSION NUMBER: 0000950134-97-006582 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19970905 EFFECTIVENESS DATE: 19970905 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHANCELLOR MEDIA CORP CENTRAL INDEX KEY: 0000894972 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 752247099 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-35039 FILM NUMBER: 97676200 BUSINESS ADDRESS: STREET 1: 433 EAST LAS COLINAS BLVD STREET 2: STE 1130 CITY: IRVING STATE: TX ZIP: 75039 BUSINESS PHONE: 9728699020 MAIL ADDRESS: STREET 1: 433 E LAS COLINAS STREET 2: STE 1130 CITY: IRVING STATE: TX ZIP: 75039 FORMER COMPANY: FORMER CONFORMED NAME: EVERGREEN MEDIA CORP DATE OF NAME CHANGE: 19930326 S-8 1 FORM S-8 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) Delaware 75-2247099 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
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
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 Common Stock, 1,760,284 $8.25 to $40.42 $32,566,764.00 $9,868.72 $.01 Par Value
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 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 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. 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. 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. 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. 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
8 EXHIBIT INDEX
Sequentially Exhibit Numbered No. Description Page - --------- ----------- ------------ 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).
*Filed herewith EX-4.22 2 CHANCELLOR BROADCASTING COMPANY STOCK AWARD PLAN 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 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 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 3 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 4 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. 5 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: 6 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. 7 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. 8 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 9 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. 10 EX-4.23 3 CHANCELLOR HOLDINGS 1994 DIRECTOR STOCK OPTION 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 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 2 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 3 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. 4 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 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 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 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 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 EX-4.24 4 STOCK OPTION GRANT LETTER TO STEVEN DINETZ 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 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: 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
The Option Shares with an Exercise Price of $1.40 are subject to the following vesting schedule: 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
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 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 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- 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. 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 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 EX-4.25 5 STOCK OPTION GRANT LETTER TO ERIC W. NEUMAN 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. 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: 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
The Option Shares with an Exercise Price of $1.40 are subject to the following vesting schedule: 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
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 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. 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 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 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 EX-4.26 6 STOCK OPTION GRANT LETTER TO MARVIN DINETZ 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. 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: 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
The Option Shares with an Exercise Price of $1.40 are subject to the following vesting schedule: 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
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 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. 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 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 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 EX-4.27 7 STOCK OPTION GRANT LETTER TO CARL M. HIRSCH 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. 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 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 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 EX-5.1 8 OPINION & CONSENT OF LATHAM & WATKINS 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 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 EX-23.2 9 CONSENT OF KPMG PEAT MARWICK LLP 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 EX-23.3 10 CONSENT OF KPMG PEAT MARWICK LLP 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 EX-23.4 11 CONSENT OF PRICE WATERHOUSE LLP 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 EX-23.5 12 CONSENT OF ARTHUR ANDERSEN LLP 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 EX-23.6 13 CONSENT OF COOPERS & LYBRAND L.L.P. 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 EX-23.7 14 CONSENT OF COOPERS & LYBRAND L.L.P. 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 EX-23.8 15 CONSENT OF COOPERS & LYBRAND L.L.P. 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 EX-23.9 16 CONSENT PRICE WATERHOUSE LLP 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 -----END PRIVACY-ENHANCED MESSAGE-----