§18.303PROXY STATEMENTS: STRATEGY & FORMS
ANNEX 5
JACOR COMMUNICATIONS, INC.
1997 NON-EMPLOYEE DIRECTORS STOCK PLAN
Effective April 28, 1997
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 . Establishment of the Plan. On April 28, 1997, the Board of Directors of Jacor
Communications, Inc. (the “Company”) adopted, subject to the approval of stockholders, an
incentive stock plan for members of the Board of Directors known as the “1997 Non-Employee
Directors Stock Plan” (hereinafter referred to as the “Plan”), which permits the grant of
Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Units,
Performance Shares and Stock Units.
1.2.Purpose of the Plan. The purpose of the Plan is to promote the success of the
Company by providing incentives to Directors that will link their personal interests to the long-
term financial success of the Company and to growth in stockholder value. The Plan is designed
to provide flexibility to the Company in its ability to motivate, attract, and retain the services of
Directors upon whose judgment, interest and special effort the successful conduct of the
Company’s operations is largely dependent.
1.3.Duration of the Plan. The Plan commences on April 28, 1997, and shall remain
in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant
to Article 13 herein, until all Shares subject to it shall have been purchased or a cquired according
to the provisions herein. However, in no event may an Award be granted under the Plan on or
after April 28, 2002, which is the fifth (5th) anniversary of the effective date of the Plan.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1. Definitions. Whenever used in the Plan, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter of the word is
capitalized:
(a) “Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units, Performance Shares, or Stock Units.
(b) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3
of the General Rules and Regulations under the Exchange Act.
(c) “Board” or “Board of Directors” means the Board of Directors of the Company.
(d) “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied:
(i) any Person (other than Zell/Chilmark Fund L.P, a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a
corporation owned directly or indirectly by the common stockholders of the
Company in substantially the same proportions as their ownership of Stock
of the Company), is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing 50% or more of the combined
voting power of the Company’s then outstanding securities; or
(ii) during any period of two (2) consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period
constitute the Board and any new director, whose election by the Board or
nomination for election by the Company’s stockholders, was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or
(iii) the stockholders of the Company approve (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or
substantially all the Company’s assets; or (C) a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), at least 50% of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation.
However, in no event shall a Change in Control be deemed to have occurred, with respect
to a Participant, if the Participant is part of a purchasing group which consummates the
Change in Control transaction. The Participant shall be deemed “part of a purchasing
group... “for purposes of the preceding sentence if the Participant is an equity participant
or has agreed to become an equity participant in the purchasing company or group
(except for (i) passive ownership of less than 5% of the voting securities of the
purchasing company or (ii) ownership of equity participation in the purchasing company
or group which is otherwise not deemed to be significant, as determined prior to the
Change in Control by a majority of the nonemployee continuing members of the Board).
(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(f) “Company” means Jacor Communications, Inc., a Delaware corporation, or any successor thereto as provided in Article 15 herein.
(g) “Director” means a member of the Board who is not, and has not been at any time
within the preceding three years, an officer or employee of the Company or any of
its subsidiaries or affiliates.
(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
(i) “Fair Market Value” means the average of the highest price and lowest price at
which the Stock was traded on the relevant date, or on the most recent date on
which the Stock was traded prior to such date, as reported on Nasdaq National
Market.
(j) “Nonqualified Stock Option” or “NQSO” means an option to purchase Stock, which is not intended to satisfy the requirements of Section 422 of the Code,
granted under Article 6 herein.
(k) “Option” means a Nonqualified Stock Option.
(l) “Participant” means a Director who has been granted an Award under the Plan.
(m) “Performance Share” means an Award, designated as a performance share, granted to a Participant pursuant to Article 9 herein.
§18.303PROXY STATEMENTS: STRATEGY & FORMS
(n) “Performance Unit” means an Award, designated as a performance unit, granted
to a Participant pursuant to Article 9 herein.
(o) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is restricted, during which the Participant is subject to a
substantial risk of forfeiture, pursuant to Article 8 herein.
(p) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group”
as defined in Section 13(d) thereof.
(q) “Plan” means this Non-Employee Directors Stock Plan of Jacor Communications, Inc., as herein described and as hereafter from time to time amended.
(r) “Restricted Stock” means an Award of Stock granted to a Participant pursuant to Article 8 herein.
(s) “Stock” or “Shares” means the common stock without par value of the Company.
(t) “Stock Unit” means a derivative interest in Common Stock of the Company which may be converted on the date of grant into cash, or which may be credited
to a bookkeeping account and then paid out on a one-for-one basis into Common
Stock of the Company upon the occurrence of certain Trigger Events (as defined
herein).
(u) “Stock Appreciation Right” or “SAR” means an Award, designated as a Stock appreciation right, granted to a Participant pursuant to Article 7 herein.
(v) “Voting Stock” shall mean securities of any class or classes of stock of a corporation, the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the directors.
2.2. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall i nclude the singular,
and the singular shall include the plural.
2.3.Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaini ng parts of the Plan,
and the Plan shall be construed and enforced as if the illegal or invalid provision ha d not been
included.
ARTICLE 3. ADMINISTRATION
3.1 Authority of Board. The Plan shall be administered by the full Board of
Directors of the Company. Subject to the provisions of the Plan, the Board shall have full powe r
to construe and interpret the Plan; to establish, amend or waive rules and regulati ons for its
administration; to accelerate the exercisability of any Award or the end of a perform ance period
or the termination of any Period of Restriction or any award agreement, or any other inst rument
relating to an Award under the Plan; and (subject to the provisions of Article 13 herein) to amend
the terms and conditions of any outstanding Option, Stock Appreciation Right or other Award to
the extent such terms and conditions are within the discretion of the Board as provided i n the
Plan. Also notwithstanding the foregoing, no action of the Board (other than pursuant to Section
4.3 hereof or Section 9.4 hereof) may, without the consent of the person or persons entitled to
exercise any outstanding Option or Stock Appreciation Right or to receive payment of any other
outstanding Award, adversely affect the rights of such person or persons.
3.2.Selection of Participants. The Board shall have the authority to grant Awards
under the Plan, from time to time, to such Directors as may be selected by it.
3.3.Decisions Binding. All determinations and decisions made by the Board
pursuant to the provisions of the Plan and all related orders or resolutions of the Board shall be
final, conclusive and binding on all persons, including the Company, its stockholders and
Participants and their estates and beneficiaries, and such determinations and deci sions shall not
be reviewable.
3.4.Delegation of Certain Responsibilities. The Board may, in its sole discretion,
delegate to the Board Chair of the Company the administration of the Plan under this Article 3;
provided, however, that no such delegation by the Board to correct errors, omissions or
inconsistencies in the Plan, and the Board may not delegate its authority under this Art icle 3 to
grant Awards to Directors. All authority delegated by the Board under this Section 3.4 shall be
exercised in accordance with the provisions of the Plan and any guidelines for the exercise of
such authority that may from time to time be established by the Board.
3.5.Procedures of the Board. All Awards and other determinations of the Board
shall be made by not less than a majority of its members present at the meeti ng (in person or
otherwise) at which a quorum is present. A majority of the entire Board shall constit ute a quorum
for the transaction of business. Any action required or permitted to be taken at a m eeting of the
Board may be taken without a meeting if a unanimous written consent, which sets forth the
action, is signed by each member of the Board and fried with the minutes for proceedings of the
Board.
3.6.Award Agreements. Each Award under the Plan shall be evidenced by an award
agreement which shall be signed by the Chairman of the Board on behalf of the Board and by the
Participant, and shall contain such terms and conditions as may be approved by the Boa rd. Such
terms and conditions need not be the same in all cases.
3.7.Rule 16b-3 Requirements. Notwithstanding any other provision of the Plan, the
Board may impose such conditions on any Award (including, without limitation, the right of the
Board to limit the time of exercise to specified periods) as may be required to satisfy the
requirements of Rule 16b-3 (or any successor rule), under the Exchange Act (“Rule 16b-3”).
ARTICLE 4. STOCK SUBJECT TO THE PLAN
4.1. Number of Shares. Subject to adjustment as provided in Section 4.3 herein, the
aggregate number of Shares that may be delivered under the Plan at any time shal l not exceed
350,000 Shares of common stock of the Company. Stock delivered under the Plan may consist,
in whole or in part, of authorized and unissued Shares or Shares reacquired by the Company in
the open market. The exercise of a Stock Appreciation Right, whether paid in cash or Stock,
shall be deemed to be an issuance of Stock under the Plan. The payment of Performance Shares,
Performance Units or Stock Units shall not be deemed to constitute an issuance of Stock under
the Plan unless payment is made in Stock, in which case only the number of Shares issued in
payment of the Performance Share, Performance Unit or Stock Unit Award shall constitute an
issuance of Stock under the Plan.
4.2.Lapsed Awards. If any Award (other than Restricted Stock) granted under this
Plan terminates, expires, or lapses for any reason, any Stock subject to such Award again sha ll be
available for the grant of an Award under the Plan, subject to Section 7.2 herein.
4.3.Adjustments in Authorized Shares. In the event of any merger, reorganization,
§18.303PROXY STATEMENTS: STRATEGY & FORMS
consolidation, recapitalization, separation, liquidation, Stock dividend, split-up, share
combination, or other change in the corporate structure of the Company affecting the Stock, such
adjustment shall be made in the number and class of shares which may be delivered unde r the
Plan, and in the number and class of and/or price of shares subject to outstanding Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Shares, Performance Units and
Stock Units granted under the Plan, as may be determined to be appropriate and equita ble by the
Board, in its sole discretion, to prevent dilution or enlargement of rights; and provided tha t the
number of shares subject to any Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include all Directors who
are not also employees of the Company.
5.2.Actual Participation. Subject to the provisions of the Plan, the Board may from
time to time select those Directors to whom Awards shall be granted and determi ne the nature
and amount of each Award. No Director shall have any right to be granted an Award under thi s
Plan even if previously granted an Award.
ARTICLE 6. STOCK OPTIONS
6.1. Grant of Options. Subject to the terms and provisions of the Plan, Options
may be granted to Directors at any time and from time to time as shall be determined by the
Board. The Board shall have the sole discretion, subject to the requirements of the Plan, to
determine the actual number of Shares subject to Options granted to any Participant. Options
granted under the Plan will be NQSOs.
6.2.Option Agreement. Each Option grant shall be evidenced by an Option
agreement that shall specify the Option price, the duration of the Option, the number of Shares to
which the Option pertains, and such other provisions as the Board shall determine.
6.3.Option Price. The purchase price per share of Stock covered by an Option shall
be determined by the Board.
6.4.Duration of Options. Each Option shall expire at such time as the Board shall
determine at the time of grant
6.5.Exercise of Options. Subject to Section 3.7 herein, Options granted under the
Plan shall be exercisable at such times and be subject to such restrictions and c onditions as the
Board shall in each instance approve, which need not be the same for all Participants.
6.6.Payment. Options shall be exercised by the delivery of a written notice to the
Company setting forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. The Option price upon exercise of any Option shall
be payable to the Company in full either (a) in cash or its equivalent, (b) by t endering shares of
previously acquired Stock having a Fair Market Value at the time of exercise equal to the total
Option price, (c) by foregoing compensation under rules established by the Board, or (d) by a
combination of (a), (b), or (c). The proceeds from such a payment shall be added to the gene ral
funds of the Company and shall be used for general corporate purposes. As soon as practicable,
after receipt of written notification and payment, the Company shall deliver t o the Participant
Stock certificates in an appropriate amount based upon the number of Options exercised, issued
in the Participant’s name.
6.7. Restrictions on Stock Transferability. The Board shall impose such restrictions on
any Shares acquired pursuant to the exercise of an Option under the Plan as it may deem
advisable, including, without limitation, restrictions under applicable Federal securiti es law,
under the requirements of any stock exchange upon which such Shares are then listed and under
any blue sky or state securities laws applicable to such Shares.
6.8. Termination of Service Due to Death, Disability, or Retirement. In the event a
Participant dies while serving as a Director, any of such Participant’s outstanding Options shall
become immediately exercisable at any time prior to the expiration date of the Options or within
one year after such date of termination of employment, whichever period is shorter, by suc h
person or persons as shall have acquired the Participant’s rights under the Option pursuant to
Article 10 hereof or by will or by the laws of descent and distribution. In the event a Pa rticipant
is unable to serve as a Director by reason of disability (as defined under the then e stablished
rules of the Company), any of such Participant’s outstanding Options shall become immediatel y
exercisable, at any time prior to the expiration date of the Options or within one year after such
date of termination of service, whichever period is shorter. In the event a Participant retires from
the Board, any of such Participant’s outstanding Options shall become immediately exerc isable
(subject to Section 3.7 herein) at any time prior to the expiration date of the Options.
6.9. Termination of Service for Other Reasons. If a Participant ceases service as a
Director for any reason other than death, disability, retirement or removal, the Parti cipant shall
have the right to exercise such Participant’s outstanding Options within the 90 days after the date
of his termination, but in no event beyond the expiration of the term of the Options and onl y to
the extent that the Participant was entitled to exercise the Options at t he date of his termination
of employment. In its sole discretion, the Board may extend the 90 days to up to one yea r but,
however, in no event beyond the expiration date of the Option.
Notwithstanding anything contained herein, if a Director is removed from service, all of
the Participant’s outstanding Options shall be immediately forfeited back to the Company.
6.10.Nontransferability of Options. No Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or
by the laws of descent and distribution. Further, all Options granted to a Participant unde r the
Plan shall be exercisable during his lifetime only by such Participant.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1. Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, Stock Appreciation Rights may be granted to Participants, at the discretion of the Board, in
any of the following forms:
(a) In lieu of Options;
(b) In addition to Options;
(c) Independent of Options; or
(d) In any combination of (a), (b), or (c).
The Board shall have the sole discretion, subject to the requirements of the Pla n, to determine the
actual number of Shares subject to SARs granted to any Participant.
7.2.Exercise of SARs in Lieu of Options. SARs granted in lieu of Options may be
exercised for all or part of the Shares subject to the related Option upon the surrender of the
§18.303PROXY STATEMENTS: STRATEGY & FORMS
related Options representing the right to purchase an equivalent number of Shares. The SAR m ay
be exercised only with respect to the Shares of Stock for which its related Option is then
exercisable. Option Stock with respect to which the SAR shall have been exercised may not be
subject again to an Award under the Plan.
7.3.Exercise of SARs in Addition to Options. SARs granted in addition to Options
shall be deemed to be exercised upon the exercise of the related Options. The dee med exercise of
SARs granted in addition to Options shall not necessitate a reduction in the number of related
Options.
7.4.Exercise of SARs Independent of Options. Subject to Section 3.7 herein and
Section 7.5 herein, SARs granted independently of Options may be exercised upon whatever
terms and conditions the Board, in its sole discretion, imposes upon the SARs, including, but not
limited to, a corresponding proportional reduction in previously granted Options.
7.5.Payment of SAR Amount. Upon exercise of the SAR, the holder shall be
entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a Share on the date of exercise over the price fixed by the Board at the date of grant (which price shall not be less
than 100% of the market price of a Share on the date of grant) (the Exercise
Price); by
(b) The number of Shares with respect to which the SAR is exercised. 7.6. Form and Timing of Payment. Payment to a Participant, upon SAR exercise,
will be made in cash or stock, at the discretion of the Board, within ten cal endar days of the
exercise.
7.7.Term of SAR. The term of an SAR granted under the Plan shall not exceed ten
years.
7.8.Termination of Service. In the event a Participant ceases service as a Director
by reason of death, disability, retirement, or any other reason, the exercisability of any
outstanding SAR granted in lieu of or in addition to an Option shall terminate in t he same
manner as its related Option as specified under Sections 6.8 and 6.9 herein. The exerc isability of
any outstanding SARs granted independent of Options also shall terminate in the manner
provided under Sections 6.8 and 6.9 hereof.
7.9.Nontransferability of SARS. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or
by the laws of descent and distribution. Further, all SARs granted to a Participant under the Plan
shall be exercisable during his lifetime only by such Participant.
ARTICLE 8. RESTRICTED STOCK
8.1. Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Board, at any time and from time to time, may grant Shares of Restricted Stoc k under the Plan to
such Participants and in such amounts as it shall determine.
8.2.Restricted Stock Agreement. Each Restricted Stock grant shall be evidenced by a
Restricted Stock Agreement that shall specify the Period of Restriction, or periods, the number of
Shares of Restricted Stock granted, and such other provisions as the Board shall determine.
8.3.Transferability. Except as provided in this Article 8, the Shares of Restricted
Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated until the termination of the applicable Period of Restriction or for such period of
time as shall be established by the Board and as shall be specified in the Restricted Stock
Agreement, or upon earlier satisfaction of other conditions (including any performance goals) as
specified by the Board in its sole discretion and set forth in the Restricted Stock Agreement. All
rights with respect to the Restricted Stock granted to a Participant under the Pla n shall be
exercisable during his lifetime only by such Participant.
8.4.Other Restrictions. The Board shall impose such other restrictions on any
Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable i ncluding,
without limitation, restrictions under applicable Federal or state securities la ws, and the Board
may legend certificates representing Restricted Stock to give appropriate notice of such
restrictions.
8.5.Certificate Legend. In addition to any legends placed on certificates pursuant to
Section 8.4 herein, each certificate representing Shares of Restricted Stock grante d pursuant to
the Plan shall bear the following legend:
“The sale or other transfer of the shares of stock represented by this certificate,
whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on
transfer set forth in the Non-Employee Directors Incentive Stock Plan of Jacor
Communications, Inc., in the rules and administrative procedures adopted pursuant to
such Plan, and in a Restricted Stock Agreement dated
. A copy of the Plan, such rules and procedures, and such Restricted
Stock Agreement may be obtained from the Secretary of Jacor Communications, Inc.” 8.6. Removal of Restrictions. Except as otherwise provided in this Article, Shares of
Restricted Stock covered by each Restricted Stock grant made under the Plan sha ll become freely
transferable by the Participant after the last day of the Period of Restriction. Once the Shares are
released from the restrictions, the Participant shall be entitled to have the legend required by
Section 8.5 removed from his Stock certificate.
8.7.Voting Rights. During the Period of Restriction, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares.
8.8.Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be entitled to receive all
dividends and other distributions paid with respect to those Shares while they are so held. If any
such dividends or distributions are paid in Shares, the Shares shall be subject to the sa me
restrictions on transferability as the Shares of Restricted Stock with respect to which they were
paid.
8.9.Termination of Service Due to Retirement. In the event that a Participant ceases
service as a Director of the Company because of normal retirement (as defined under t he then
established rules of the Company), any remaining Period of Restriction applicable to the
Restricted Stock pursuant to Section 8.3 hereof shall automatically terminate a nd, except as
otherwise provided in Section 8.4 the Shares of Restricted Stock shall thereby be free of
restrictions and be freely transferable. In the event that a Participant ceases t o be a Director of the
Company because of early retirement (as defined under the then established rules of the
Company), the Board in its sole discretion may waive the restrictions remaining on any or all
Shares of Restricted Stock pursuant to Section 8.3 herein and add such new restrictions to those
Shares of Restricted Stock as it deems appropriate.
8.10.Termination of Service Due to Death or Disability. In the event a Participant
ceases service as a Director because of death or disability (as defined under the the n established
rules of the Company) during the Period of Restriction, any remaining Period of Restriction
applicable to the Restricted Stock pursuant to Section 8.3 herein shall automatic ally terminate
and, except as otherwise provided in Section 8.4. herein, the shares of Restricted Stock shall
thereby be free of restrictions and be fully transferable.
§18.303PROXY STATEMENTS: STRATEGY & FORMS
8.11.Termination of Service for Other Reasons. In the event that a Participant ceases
service as a Director of the Company for any reason other than for death, disability, or
retirement, as set forth in Sections 8.9 and 8.10 herein, during the Period of Restriction, then any
shares of Restricted Stock still subject to restrictions as of the date of such term ination shall
automatically be forfeited and returned to the Company.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE SHARES AND STOCK UNITS
9.1. Grant of Performance Units, Performance Shares or Stock Units. Subject to the
terms and provisions of the Plan, Performance Units, Performance Shares or Stock Units may be
granted to Participants at any time and from time to time as shall be de termined by the Board.
The Board shall have complete discretion in determining the number of Performance Uni ts,
Performance Shares or Stock Units granted to each Participant.
9.2.Value of Performance Units and Performance Shares. The Board shall set
performance goals over certain periods to be determined in advance by the Board (“Perform ance
Periods”). Prior to each grant of Performance Units or Performance Shares, the Board shall
establish an initial value for each Performance Unit and an initial number of Sha res for each
Performance Share granted to each Participant for that Performance Period. Prior to each grant of
Performance Units or Performance Shares, the Board also shall set the performance goals t hat
will be used to determine the extent to which the Participant receives a payment of the value of
the Performance Units or number of Shares for the Performance Shares awarded for such
Performance Period. These goals will be based on the attainment, by the Company of ce rtain
objective or subjective performance measures, which may include one or more of the following:
broadcast cash flow, total stockholder return, return on equity, return on capital, earnings per
share, market share, stock price, revenues, costs, net income, cash flow and retained earni ngs.
Such performance goals also may be based upon the attainment of specified levels of
performance of the Company under one or more of the measures described above relative to t he
performance of other corporations. With respect to each such performance measure utilized
during a Performance Period, the Board shall assign percentages to various levels of performance
which shall be applied to determine the extent to which the Participant shall receive a payout of
the values of Performance Units and number of Performance Shares awarded.
9.3.Payment of Performance Units and Performance Shares. After a Performance
Period has ended, the holder of a Performance Unit or Performance Share shall be entitle d to
receive the value thereof as determined by the Board. The Board shall make t his determination
by first determining the extent to which the performance goals set pursuant to Sect ion 9.2 have
been met. It will then determine the applicable percentage (which may e xceed 100%) to be
applied to, and will apply such percentage to, the value of Performance Units or number of
Performance Shares to determine the payout to be received by the Participant.
9.4.Value of Stock Units. Subject to the terms and provisions of the Plan, Stock Units
may be granted to Participants at any time and from time to time on such te rms as shall be
determined by the Board. The Board shall have complete discretion in determining the number
of Stock Units granted to each Participant. Each Participant must elect, by com pleting and
signing an Election Form, to either (i) convert all or part of his or her Stock Unit award into cash,
equivalent to the cash value of the Stock Units established by the Board on the date of grant,
receive a cash award for the corresponding number of Stock Units converted to cash, and rece ive
the remaining Stock Units in shares of Common Stock payable upon the occurrence of certain
trigger events set forth on the Participant’s election form in his or her complete discretion
(“Trigger Events”); or (ii) receive his or her entire Stock Unit award in shares of Comm on Stock,
payable upon the occurrence of certain Trigger Events. The terms and conditions of the Trigger
Events may vary by Stock Unit award, by Participant, or both. The Election Form shall be fil ed
with the Secretary of the Company prior to the date on which any Stock Unit award is made.
Such election will be irrevocable as to any Stock Unit award made after delivery of the Election
Form to the Company, and it shall continue in effect until revoked, increased or decre ased
prospectively by Participant prior to the grant of any future Stock Unit award for which the
change is effective.
9.5.Accounting for Stock Units. Any portion of a Participant’s Stock Unit Award
which is not converted to cash as set forth in Section 9.4(i) above shall be credit ed by the
Company to a bookkeeping account to reflect the Company’s liability to that Partic ipant (the
“Stock Unit Account”). Each Stock Unit is credited as a Common Stock equivalent on the date
so credited. Additional stock equivalents may be added to the Stock Unit Account equa l to the
amount of Common Stock that could be purchased with dividends equal to that paid on one sha re
of Common Stock, multiplied by the number of stock equivalents then existing in the Stock Unit
Account, based on the Fair Market Value of the Common Stock on the date a dividend is paid on
the Common Stock. Because the Trigger Events for each Stock Unit award may differ, t he
Company shall establish a separate Stock Unit Account for each separate Stock Unit award.
Upon the occurrence of particular Trigger Events, the holder of a Stock Unit award shall be
entitled to receive a number of shares of Common Stock which corresponds to the number of
Stock Units granted as part of the initial Stock Unit award.
9.6.Board Discretion to Adjust Awards. The Board shall have the authority to
modify, amend or adjust the terms and conditions of any Performance Unit award, Performance
Share award or Stock Unit Award, at any time or from time to time, including but not limited to
the performance goals.
9.7.Form and Timing of Payment. The payment described in Section 9.3 herein
shall be made in cash, Stock, or a combination thereof as determined by the Board, or in the case
of Stock Units, as Selected by the Participant. Payment may be made in a lump sum or
installments as prescribed by the Board. If any payment is to be made on a deferred ba sis, the
Board may provide for the payment of dividend equivalents or interest during the deferral period.
9.8.Termination of Service Due to Death, Disability, or Retirement. In the case of
death, disability, or retirement (each of disability and retirement as defined unde r the established
rules of the Company), the holder of a Performance Unit or Performance Share shall receive a
prorated payment based on the Participant’s number of full months of service during the
Performance Period, further adjusted based on the achievement of the performance goals during
the entire Performance Period, as computed by the Board. Payment shall be made at the time
payments are made to Participants who did not terminate service during the Performance Period.
In the case of Stock Units, all such Stock Units held will immediately vest and be paid as set
forth in the Participant’s Election Form.
9.9.Termination of Service for Other Reasons. In the event that a Participant ceases
to be a Director of the Company for any reason other than death, disability, or retire ment, all
Performance Units and Performance Shares shall be forfeited. In the case of termination othe r
than due to removal, all Stock Units held will immediately vest and be pai d as set forth in the
§18.303PROXY STATEMENTS: STRATEGY & FORMS
Participant’s Election Form. However, in the event of termination due to removal, all Stock
Units held will be forfeited.
9.10.Nontransferability. No Performance Units, Performance Shares or Stock Units
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution until the
termination of the applicable Performance Period or, in the case of Stock Units, vesting and
payment. All rights with respect to Performance Units, Performance Shares and Stock Units
granted to a Participant under the Plan shall be exercisable during his lifetim e only by such
Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively and who may include a t rustee
under a will or living trust) to whom any benefit under the Plan is to be paid in c ase of his death
before he receives any or all of such benefit. Each designation will revoke all prior designations
by the same Participant, shall be in a form prescribed by the Board, and will be effec tive only
when filed by the Participant in writing with the Board during his lifetime. In the a bsence of any
such designation or if all designated beneficiaries predecease the Participant, bene fits remaining
unpaid at the Participant’s death shall be paid to the Participant’s estate.
ARTICLE 11. RIGHTS OF DIRECTORS
11.1. Directorship. Nothing in the Plan shall interfere with or limit in any way the
right of the Board of Directors or stockholders under applicable law to remove any Participant
from the Board at any time, nor confer upon any Participant any right to continue in the service
of the Company.
11.2. Participation. No Director shall have a right to be selected as a Participant, or,
having been so selected, to be selected again as a Participant.
11.3.No Implied Rights; Rights on Termination of Service. Neither the establishment
of the Plan nor any amendment thereof shall be construed as giving any Participant, benefic iary,
or any other person any legal or equitable right unless such right shall be specifically provided
for in the Plan or conferred by specific action of the Board in accordance with the t erms and
provisions of the Plan. Except as expressly provided in this Plan, the Company nor shall not be
required or be liable to make any payment under the Plan.
11.4. No Right to Company Assets. Neither the Participant nor any other person shall
acquire, by reason of the Plan, any right in or title to any assets, funds or property of the
Company whatsoever including, without limiting the generality of the foregoing, any specifi c
funds, assets, or other property, which the Company, in its sole discretion, may set aside i n
anticipation of a liability hereunder. Any benefits which become payable hereunder shal l be paid
from the general assets of the Company. The Participant shall have only a contract ual right to the
amounts, if any, payable hereunder unsecured by any asset of the Company. Nothing contained
in the Plan constitutes a guarantee by the Company that the assets of the Compa ny shall be
sufficient to pay any benefit to any person.
ARTICLE 12. CHANGE IN CONTROL
12.1. Stock Based Awards. Notwithstanding any other provisions of the Plan, in the
event of a Change in Control, all Stock based awards granted under this Plan shall immediately
vest 100% in each Participant, including Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock and Stock Units.
12.2.Performance Based Awards. Notwithstanding any other provisions of the Plan, in
the event of a Change in Control, all performance based awards granted under this Plan shall be
immediately paid out in cash, including Performance Units and Performance Shares. The amount
of the payout shall be based on the higher of: (i) the extent, as determined by the B oard, to which
performance goals, established for the Performance Period then in progress have been met up
through and including the effective date of the Change in Control or (ii) 100% of the val ue on the
date of grant of the Performance Units or number of Performance Shares.
ARTICLE 13. AMENDMENT, MODIFICATION, AND TERMINATION
13.1. Amendment, Modification, and Termination. At any time and from time to time,
the Board may terminate, amend, or modify the Plan, subject to the approval of the st ockholders
of the Company if required by the Code, by the insider trading rules of Section 16 of the
Exchange Act, by any national securities exchange or system on which the Stock is then listed or
reported, or by any regulatory body having jurisdiction with respect hereto.
13.2.Awards Previously Granted. No termination, amendment or modification of the
Plan other than pursuant to Section 4.3 hereof shall in any manner adversely affect any Award
theretofore granted under the Plan, without the written consent of the Participant.
ARTICLE 14. WITHHOLDING
14.1. Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
Federal, state and local taxes (including the Participant’s FICA obligation) requi red by law to be
withheld with respect to any grant, exercise, or payment made under or as a result of this Plan.
14.2.Stock Delivery or Withholding. With respect to withholding required upon the
exercise of Nonqualified Stock Options, or upon the lapse of restrictions on Restricted Stock,
participants may elect, subject to the approval of the Board, to satisfy the wi thholding
requirement, in whole or in part, by tendering to the Company shares of previously acquired
Stock or by having the Company withhold Shares of Stock, in each such case in an amount
having a Fair Market Value equal to the amount required to be withheld to satisfy the tax
withholding obligations described in Section 14.1. The value of the Shares to be tendered or
withheld is to be based on the Fair Market Value of the Stock on the date that t he amount of tax
to be withheld is to be determined. All Stock withholding elections shall be irrevoca ble and made
in writing, signed by the Participant on forms approved by the Board in advance of the day tha t
the transaction becomes taxable.
Stock withholding elections made by Participants who are subject to the short-swing
profit restrictions of Section 16 of the Exchange Act must comply with the additional re strictions
of Section 16 and Rule 16b-3 in making their elections.
ARTICLE 15. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all
or substantially all of the business and/or assets of the Company.
§18.303PROXY STATEMENTS: STRATEGY & FORMS
ARTICLE 16. REQUIREMENTS OF LAW
16.1. Requirements of Law. The granting of Awards and the issuance of Shares of Stock
under this Plan shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may be required.
16.2.Governing Law. The Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of Delaware.
Jacor Communications, Inc. 4/30/97
