Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement (“Agreement”) is entered into by and between Rod Sherwood
(“Employee”) and Westwood One, Inc. (the “Company”).
1. Employment. The Company hereby employs Employee, and Employee accepts such
employment, and agrees to devote Employee’s full time and efforts to the
interests of the Company upon the terms and conditions hereinafter set forth.
2. Term of Employment. Subject to the provisions for termination hereinafter
provided, Employee’s term of employment by the Company shall commence on
September 17, 2008 (the “Effective Date”) and shall continue in effect until the
second anniversary thereof (the “Term”). If the Company desires not to extend
this Agreement, it shall deliver written notice to Employee on or prior to the
90th day immediately preceding the expiration of the Term of its intention to
terminate this Agreement effective on the last day of the Term. Unless otherwise
terminated pursuant hereto, if Employee continues to be employed by the Company
after the Term, then Employee’s employment shall be deemed to continue until
such time as either party shall deliver written notice to the other party and
this Agreement shall terminate thirty (30) days after the giving of such notice.
The period from the Effective Date through the date of termination is
hereinafter referred to as the “Employment Period”.
3. Services to be Rendered by Employee.
(a) During the Employment Period, Employee shall serve as Executive Vice
President and Chief Financial Officer. Employee shall report directly to the
Chief Executive Officer and Chair of the Audit Committee. Employee shall perform
such duties as from time to time may be delegated to Employee and will continue
to perform duties as requested by the Chief Executive Officer and Chair of the
Audit Committee. Employee shall devote all of Employee’s professional time,
energy and ability to the proper and efficient conduct of the Company’s
business; provided, however, that the foregoing shall not prevent Employee from
engaging in the activities set forth on Appendix I attached this Agreement (the
“Approved Activities”) in accordance with the terms and conditions set forth
therein, so long as the Approved Activities do not, individually or in the
aggregate, interfere or conflict with Employee’s performance of his duties
hereunder. Employee hereby agrees that he shall promptly comply with the
reasonable request made by any of the Chief Executive Officer, the Board of
Directors (the “Board”), the Compensation Committee of the Board (the
“Compensation Committee”), the Chair of the Audit Committee or any designee of
any of the foregoing, which may be made at any time during the Employment Period
upon reasonable written notice, to cease performing all or a portion of the
Approved Activities to the extent that such requesting party reasonably
determines that such Approved Activities or portion thereof interferes or
conflicts with Employee’s performance of his duties hereunder. Employee shall
observe and comply with all reasonable lawful directions and instructions by and
on the part of the Chief Executive Officer, the Board or their designee and
endeavor to promote the interests of the Company and not at any time do anything
which may cause or tend to be likely to cause any loss or damage to the Company
in business, reputation or otherwise. Employee shall be based out of the
Company’s Culver City office; provided, however, Employee shall spend a minimum
of two (2) weeks per month at the Company’s New York City office.

 

 

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(b) The Company may from time to time call on Employee to perform services
related to the business of developing and broadcasting network and syndicated
radio programming and traffic, news, sports and weather reports, which may
include (in the Company’s sole discretion) contributing to the day-to-day
management and operation of such business, soliciting Sponsors and Affiliates
(as such terms are defined in Section 11 hereof) or dealing with their accounts
or other activities related to the Company’s business, as reasonably requested
from time to time by the Chief Executive Officer, the President, the Board or
their designee.
(c) Employee acknowledges that Employee will have and owe fiduciary duties to
the Company and its shareholders including, without limitation, the duties of
care, confidentiality and loyalty. Without limiting the foregoing, effective as
of the Effective Date Employee hereby represents, warrants and covenants to the
Company that he (i) shall at all times during the Employment Period act in the
best interests of the Company, (ii) shall at all times during the Employment
Period act in the best interests of the Company’s shareholders viewed for this
purpose as a single entity without regard to the interests, desires or wishes of
any single shareholder, including without limitation, the interests, desires or
wishes of Gores Radio Holdings, LLC (together with its affiliates, “Gores”),
(iii) shall not, nor shall any of his immediate family members, at any time
during the Employment Period act, directly or indirectly, as an agent or
representative of, or otherwise perform services in any other capacity for,
Gores, (iv) shall not, nor shall any of his immediate family members, at any
time during the Employment Period make, directly or indirectly, any investments
or contributions in the Funds (as such term is defined in Appendix II attached
to this Agreement) that are not required of the other limited partners who
previously elected to become participants in the Funds on the same terms and
conditions set forth in such agreements that govern the applicable funds (as in
effect immediately prior to the Effective Date) and (v) shall not, nor shall any
of his immediate family members, at any time during the Employment Period
receive or accept from Gores, or during the Employment Period enter into any
agreement or promise (written or unwritten) to receive from Gores at any time
following the Employment Period, in each case directly or indirectly, any
compensation, remuneration, benefits, amounts or any other item of any value;
provided, however, the foregoing shall not prohibit Employee from receiving or
holding the amounts and rights set forth on Appendix II attached to this
Agreement in accordance with the terms and conditions set forth therein.
(d) EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS RECEIVED A COPY OF THE COMPANY’S
SEXUAL HARASSMENT POLICIES AND PROCEDURES, CODE OF ETHICS AND CODE OF CONDUCT,
AND UNDERSTANDS AND AGREES TO ABIDE BY SUCH POLICIES.
4. Compensation.
(a) Base Salary. For the services to be rendered by Employee during the
Employment Period, the Company shall pay Employee, and Employee agrees to accept
a monthly base salary (the “Base Salary”) of $50,000 for the Employment Period,
payable in accordance with the Company’s normal payroll practices. Employee
shall be eligible for annual increases in his Base Salary in an amount of up to
five percent (5%), in the sole and absolute discretion of the Compensation
Committee or its designee.

 

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(b) Discretionary Bonus. Employee shall be eligible for an annual discretionary
bonus target valued at up to $400,000 for each of calendar years 2008 (pro-rated
for 2008), 2009 and 2010 (pro-rated for the period from January 1, 2010 to the
last day of the Term) in the sole and absolute discretion of the Compensation
Committee or its designee. The Company may use Employee’s and the Company’s
achievement of financial goals as general guidelines to determine Employee’s
eligibility for a discretionary bonus. Any cash component of any bonus will be
payable in accordance with the Company’s normal payroll practices in the year
following the year for which it is earned, but no later than the date the
majority of “Comparable Employees” (as defined below) are paid, but in no event
later than April 30 of the calendar year subsequent to which such bonus is
earned. Employee shall not be eligible for any bonus for a calendar year,
pro-rated or otherwise, if Employee is not an Employee of the Company: (i) at
the end of the applicable calendar year (except, in the case of the pro-rated
bonus for 2010 for which Employee must remain employed only through the last day
of the Term; such bonus, the “2010 Pro Rata Bonus”) or (ii) if Employee has
materially breached this Agreement, which breach remains uncured in accordance
with Section 6(a) hereof.
(c) Equity Compensation. Company management hereby agrees that prior to the
Effective Date, it shall recommend that the Compensation Committee grant
Employee on the date soonest practicable and legally permissible on or after the
Effective Date an award of equity compensation of stock options to purchase
600,000 shares of Company common stock to vest in three equal installments on
each anniversary of the Effective Date, subject to the terms and conditions of
the Company’s applicable equity compensation plan pursuant to which such stock
option grant is made (such award, the “2008 Signing Award”). The exercise price
of such stock options will be the closing price of the Company’s common stock on
the date of grant by the Compensation Committee.
(d) Equity Awards. Beginning in calendar year 2010, Employee shall be eligible
for such future grants of equity compensation recommended by Company management,
subject to the approval of and in the sole and absolute discretion of the
Compensation Committee or its designee. All equity compensation granted to
Employee, including such awards made pursuant to Sections 4(c) and 4(d) hereof,
shall be granted subject to the terms and conditions of the Company’s equity
compensation plan, and using such form award as the Compensation Committee has
approved for grants to Company employees.
(e) Benefits. During the Employment Period, Employee shall accrue vacation on a
monthly basis and at a rate of four (4) weeks per year (pro-rated for partial
years). Except as expressly set forth herein, any vacation time shall be subject
to prevailing practice and/or policies of the Company in regard to vacations for
its employees. Employee shall be entitled to participate in all benefits plans
that may be established by the Company for employees that report directly to the
Chief Executive Officer (such employees, “Comparable Employees”), subject to the
terms and conditions of such plans, provided that in the event that Employee
shall have elected COBRA coverage with his prior employer, the Company shall
reimburse Employee for any such COBRA payments made by him during the first
90 days of the Term.
(f) Signing Bonus. In addition to the other amounts due hereunder, Company
agrees to pay Employee within 30 days of the Effective Date, the amount of
$15,000 as a signing bonus.
(g) Total Compensation. Employee agrees and acknowledges by his signature hereto
that the compensation set forth in this Section 4 constitutes all of the
compensation payable to Employee for his services hereunder and that no other
compensation shall be due to Employee hereunder.
5. Expenses. Subject to compliance by Employee with such policies regarding
expenses and expense reimbursement as may be adopted from time to time by the
Company, the Company shall reimburse Employee, or cause Employee to be
reimbursed, in cash for all reasonable expenses in accordance with the Company’s
reimbursement policy as in effect from time to time.

 

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6. Termination of Employment.
(a) During the Employment Period, the Company shall have the right to terminate
the employment of Employee hereunder immediately by giving notice thereof to
Employee if any of the following has occurred, which notice shall state the
circumstances or events constituting Cause (each, a “Cause Event”); provided,
that, in the case of clauses (i) through (iii) of this Section 6(a), Employee
shall be given a reasonable opportunity to cure, but in no event more than ten
(10) business days, to the extent such act or failure to act is curable:

  (i)  
if Employee has (A) failed, refused or habitually has neglected to carry out or
to perform the reasonable duties required of Employee hereunder or otherwise
materially breached any provision of this Agreement (other than Section 7, 8 or
10 hereof, which are governed by Section 6(a)(iii) hereof), (B) willfully
breached any statutory or common law duty, including any fiduciary duty owed to
the Company; (C) breached Section 3(c) or 3(d) of this Agreement; or
(D) violated any of the Company’s internal policies or procedures.
    (ii)  
if Employee is convicted of, or enters into a plea of nolo contendere or guilty
to, a felony or a crime involving moral turpitude, or if Employee has willfully
engaged in conduct which would injure the reputation of the Company in any
material respect or otherwise adversely affect its interests in any material
respect if Employee were retained as an employee of the Company;
    (iii)  
if Employee breaches any of the provisions of Section 7 or 10 hereof or breaches
in any material respect either Section 8 or any of the terms or obligations of
any other non-competition and/or confidentiality agreements entered into between
Employee and the Company, or the Company’s Related Entities, if any;
    (iv)  
if Employee commits an act of fraud, misrepresentation or dishonesty related to
his employment with the Company, or steals or embezzles assets of the Company;
or
    (v)  
if Employee engages in a conflict of interest or self-dealing.

For purposes of this Section 6(a), no act or failure to act on the part of
Employee shall be considered “willful” unless it is done, or omitted to be done,
by Employee in bad faith or without a reasonable basis for belief that such act
or failure to act is in the best interests of the Company.
(b) Employee’s employment with the Company shall automatically terminate
(without notice to Employee’s estate) upon the death of Employee. Employee’s
employment with the Company may be terminated upon ten (10) day’s prior written
notice by the Company to Employee upon Employee’s Disability. For purposes of
this Agreement, the term “Disability” means Employee’s inability, by reason of
physical disability or other incapacity (as may be defined in applicable
disability insurance policies), to carry out or to perform the duties required
of Employee hereunder for a continuous period of 90 days or for a non-continuous
period of 180 days in the aggregate in any 365-day period; provided, however,
that Employee’s compensation during any period in which Employee is unable to
perform the duties required of Employee hereunder shall be reduced in accordance
with the Company’s policies and by any disability payments (excluding any
reimbursements for medical expenses and the like) which Employee is entitled to
receive under group or other disability insurance policies of the Company during
such period.

 

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(c) In the event of any termination of Employee’s employment by the Company
other than pursuant to Section 6(a) or 6(b) (provided that the benefit described
in clause (ii) below shall not be paid in the event of a termination of
employment by the Company upon a Cause Event), Employee (or Employee’s estate,
as the case may be) shall be entitled to receive (i) the Base Salary herein
provided prorated to the date of termination paid in accordance with the
Company’s normal payroll practices, (ii) subject to the terms of Section 4(b)
hereof, any annual discretionary bonus earned for any completed calendar year
immediately preceding the date of termination, but not yet paid (except in the
case of a termination by the Company other than pursuant to Section 6(a) or 6(b)
in calendar year 2010 in which case the terms of Section 6(d) hereof relating to
the 2010 Pro Rata Bonus shall apply); (iii) subject to the terms of Section 5
hereof, reimbursement for any business expenses properly incurred and paid prior
to and including the date of termination; (iv) Employee’s then current
entitlement, if any, under the Company’s employee benefit plans and programs,
including payment for any accrued and unused vacation paid or provided in
accordance with the terms and conditions of the applicable plan or program; and
(v) no other compensation. The parties agree that the payments set forth in this
Section 6(c) constitute all of Company’s obligations, monetary or otherwise, to
Employee under the terms of this Agreement in the event of Employee’s
termination pursuant to Section 6(a) or 6(b). Additionally, if Employee is
terminated pursuant to Section 6(a), notwithstanding Section 6(c)(iii) above,
all of Employee’s equity compensation (including, without limitation, any
granted pursuant to this Agreement or otherwise), vested and unvested, shall
terminate and expire, except in the case of vested stock options which Employee
has exercised prior to the date of termination (for the avoidance of doubt, all
vested equity compensation (except for stock options which have been exercised)
shall be forfeited in the event of a termination pursuant to Section 6(a)).
Notwithstanding the foregoing, in the case of a termination pursuant to Sections
6(d) or 6(e), additional payments shall be due as expressly set forth below.
(d) The Company may terminate Employee’s employment hereunder during the Term
effective at any time upon written notice to Employee. In the event that during
the Term: (I) the Company terminates Employee’s employment other than pursuant
to Section 6(a) or 6(b) during the first year of the Term or (II) Employee is
terminated other than pursuant to Section 6(a) or 6(b) in connection with a
“Change in Control” (as defined in Section 11), subject in all cases to
Employee’s executing and providing to the Company within 60 days following the
date of termination a fully effective waiver and general release substantially
in the form attached as Exhibit A hereto, which may be modified for changes in
law and for consistency with the Company’s standard form required for other
senior officers of the Company from time to time which the Company shall provide
to the Employee within seven (7) days following the effective date of
termination: (x) the Company shall pay Employee: (A) the lesser of (the lesser
of (i) or (ii), the “Termination Amount”): (i) remaining Base Salary due to
Employee through the end of the Term, to be paid in equal payments over the
remainder of the Term on a schedule that mirrors the Company’s then effective
payroll practices and (ii) one times the annual Base Salary to be paid in equal
installments over a one-year period on a schedule that mirrors the Company’s
then effective payroll practices and (B) the 2010 Pro Rata Bonus to the extent
such termination occurs in calendar year 2010, payable in accordance with the
timing set forth in Section 4(b) hereof; provided, however, that in the case the
six-month delay set forth in Section 17(b) shall apply to the Termination Amount
to the extent it exceeds the Separation Pay Limit (as defined in Section 17(b))
and that to the extent the Termination Amount does not exceed the Separation Pay
Limit, the first payment of the Termination Amount shall be made on the first
Company payroll date on or after the 60th day after the date of termination,
which first payment shall include payment of any amounts that would otherwise be
due prior

 

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thereto; (y) if Employee is terminated prior to the first anniversary of the
Effective Date, one third (1/3) of the 2008 Signing Award shall vest effective
on the date of termination and shall be exercisable for the longer of: (i) the
date of termination through the first anniversary of the Effective Date and
(ii) ninety (90) days from the date of termination; and (z) if Employee is
terminated upon or within twenty-four (24) months following a Change in Control
(as defined below) of the Company, all outstanding equity awards held by
Employee shall become fully vested and immediately exercisable and shall remain
exercisable in accordance with the terms and conditions of the applicable equity
plan and award agreements under which they were granted. For the avoidance of
doubt, it is understood and agreed that notwithstanding anything contained
herein to the contrary, Employee shall have no duty to mitigate in the event
that Company exercises its rights pursuant to this Section 6(d). Notwithstanding
the foregoing, if either (I) the Company terminates Employee’s employment other
than pursuant to Section 6(a) or 6(b) during the second year of the Term, or
(II) Employee elects to terminate his employment for Good Reason as expressly
described in Section 6(e) below, instead of the Termination Amount set forth in
clause (x) above, the Company shall pay Employee: (A) one times the annual Base
Salary to be paid in equal installments over the one-year period on a schedule
that mirrors the Company’s then effective payroll practices if Employee is
terminated at any time during the second year of the Term and (B) the 2010 Pro
Rata Bonus to the extent such termination occurs in calendar year 2010, payable
in accordance with the timing set forth in Section 4(b) hereof; provided,
however, that in the case of (i) or (ii) the six-month delay set forth in
Section 17(b) shall apply to such amounts to the extent they exceed the
Separation Pay Limit (as defined in Section 17(b)) and that to the extent the
Termination Amount does not exceed the Separation Pay Limit, the first payment
of the Termination Amount shall be made on the first Company payroll date on or
after the 60th day after the date of termination, which first payment shall
include payment of any amounts that would otherwise be due prior thereto. For
the avoidance of doubt, clause (z) shall also apply to such termination to the
extent applicable.
(e) Provided the Company has not notified Employee that he is being terminated
pursuant to Sections 6(a) and 6(b) hereof, Employee may terminate his employment
hereunder effective at any time upon written notice to the Company for Good
Reason, provided such notice is given to the Company within thirty (30) days
after the triggering event and such event is not cured by the Company within
30 days after its receipt of such notice. For purposes hereof, “Good Reason”
shall mean the occurrence of one of the following: (i) a material diminution in
Employee’s authority or responsibilities; or (ii) a material diminution in
Employee’s Base Salary.
(f) In addition, in the event of a termination by the Company other than
pursuant to Sections 6(a) and 6(b) hereof, subject to Employee’s (x) timely
election of continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) with respect to the Company’s
group health insurance plans in which Employee participated immediately prior to
the date of termination (“COBRA Continuation Coverage”), and (y) continued
payment of premiums for such plans at the active employee rate (excluding, for
purposes of calculating cost, an employee’s ability to pay premiums with pre-tax
dollars), the Company shall provide COBRA Continuation Coverage for Employee
until the earliest of: (I) twelve (12) months from the date of termination,
(II) Employee ceasing to be eligible under COBRA, and (III) Employee becoming
eligible for coverage under the health insurance plan of a subsequent employer.
For the avoidance of doubt, it is understood and agreed that notwithstanding
anything contained herein to the contrary, Employee shall have no duty to
mitigate in the event that Company exercises its rights pursuant to this
Section 6(f).

 

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7. No Conflict of Interest; Proper Conduct. (a) (x) During the Term and in any
event, not less than ninety (90) days after the Employment Period if Employee is
terminated pursuant to Sections 6(a) or 6(b) or (y) during the Employment Period
and for an additional period equal to the time period during which Employee is
paid severance by the Company after the Employment Period if Employee is
terminated pursuant to Sections 6(d) or 6(e) (notwithstanding the foregoing,
such period described in this Section 7(a)(y) shall not be less than ninety
(90) days nor greater than one (1) year), Employee will not, directly or
indirectly, either individually or as a stockholder (except as a stockholder of
less than one percent (1%) of the issued and outstanding stock of a
publicly-held corporation whose gross assets exceed $100,000,000), investor,
officer, director, member, employee, agent, trustee, associate or consultant of
any Person:

  (i)  
compete with the Company in any business in competition with that then carried
on by the Company and/or its Related Entities;
    (ii)  
engage in or carry on any Restricted Activity;
    (iii)  
employ or offer to employ or solicit employment of any employee or consultant of
the Company or its Related Entities; or
    (iv)  
solicit (or assist or encourage to solicit), divert or attempt to divert any
business, patronage or customer (including known prospects) of the Company or
its Related Entities to Employee or a competitor or rival of the Company or its
Related Entities.

(b) Employee further agrees that he shall not, without the Company’s prior
written consent, engage in any activity during the Employment Period that would
conflict with, interfere with, impede or hamper the performance of Employee’s
duties for the Company or would otherwise be prejudicial to the Company’s
business interests. Employee shall not commit any act or become involved in any
situation or occurrence that, in the Company’s reasonable judgment, could tend
to bring Employee or the Company into public disrepute, contempt, scandal or
ridicule, could provoke, insult or offend the community or any group or class
thereof, or could reflect unfavorably upon the Company or any of its Sponsors or
Affiliates. Employee shall comply with all applicable laws and regulations
governing the Company and its business, including without limitation,
regulations promulgated by the Federal Communications Commission or any other
regulatory agency. The parties hereto agree that the remedy at law for any
breach of Employee’s obligations under this Section 7 or Section 8 (Confidential
Information and the Results of Services) of this Agreement would be inadequate
and that any enforcing party shall be entitled to injunctive or other equitable
relief (without bond or undertaking) in any proceeding which may be brought to
enforce any provisions of this Section 7 or Section 8. Resort to such equitable
relief, however, shall not constitute a waiver of any other rights or remedies
which the Company may have.
8. Confidential Information and the Results of Services. Employee acknowledges
that the Company has established a valuable and extensive trade in the services
it provides, which has been developed at considerable expense to the Company,
and expects to divulge to Employee certain confidential information and trade
secrets relating to the Company’s business, provide information relating to the
Company’s customer base and otherwise provide Employee with the ability to
injure the Company’s goodwill unless certain reasonable restrictions are imposed
upon Employee which are contained in this Section 8. Employee agrees that, by
virtue of the special knowledge that Employee has received and will receive from
the Company, and the relationship of trust and confidence between Employee and
the Company, Employee has or will have certain information and knowledge of the
operations of the Company that are confidential and proprietary in nature,
including, without limitation, information about Affiliates and Sponsors.
Employee agrees that during the Employment Period and thereafter, Employee will
not make use of or disclose, without the prior consent of the Company,
Confidential Information relating to the Company or any of its Related Entities
(including, without limitation, its Sponsor lists, its Affiliate/station lists,
its technical systems, its contracts, its methods of operation, its business
plans and opportunities, its strategic plans and its trade secrets), and
further, that Employee will return to the Company all written materials in
Employee’s possession embodying such Confidential Information.

 

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9. Work for Hire. Employee agrees that any ideas, concepts, discoveries,
techniques, patents, copyrights, trademarks or computer programs relating to the
business or operations of the Company and its Related Entities which are
developed or discovered by Employee, solely or jointly with others, during the
Employment Period, shall be deemed to have been made within the scope of
Employee’s employment and therefore constitute works for hire and shall
automatically upon their creation become the exclusive property of the Company.
Employee agrees to promptly notify and fully disclose the existence of such
works to the Company. To the extent such items are not works for hire under
applicable law, Employee assigns them and any and all intangible proprietary
rights relating thereto to the Company in their entirety and agrees to execute
any and all documents necessary or desired by the Company to reflect the
Company’s ownership thereof.
10. Communications Act of 1934. Employee represents and warrants that neither
Employee nor, to the best of Employee’s knowledge, information and belief, any
other individual, has accepted or agreed to accept, or has paid or provided or
agreed to pay or provide, any money, service or any other valuable
consideration, as defined in Section 507 of the Communications Act of 1934, as
amended, for the broadcast of any matter contained in programs. Employee further
represents and warrants that during the Employment Period Employee shall comply
with all legal requirements set forth herein.
11. Certain Definitions. As used in this Agreement, the following capitalized
terms have the meanings indicated:
Affiliates. Any Person with whom the Company has or had a contract or other
arrangement to provide network and/or syndicated radio programming.
Change in Control. Such meaning set forth in the Company’s 2005 Equity
Compensation Plan, as may be amended from time to time (the “Equity Plan”),
provided, however, that for purposes of this Agreement and the benefits to which
Employee would be entitled under Section 12 of the Equity Plan, clause (i) of
said definition shall be modified to read as follows: “(i) the acquisition by
any Person (as hereinafter defined) of 50% or more of the outstanding Shares
(the “Outstanding Company Stock”) (other than an acquisition by the Company or
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Person that controls, is controlled by or is under common control
within the Company or other than a Non-Qualifying Business Combination (as
defined below));”
Confidential Information. Information obtained by Employee during the Employment
Period which concerns the affairs of the Company or its Related Entities and
which the Company has requested be held in confidence or could reasonably be
expected to desire to be held in confidence, or the disclosure of which would
likely be embarrassing, detrimental or disadvantageous to the Company or its
Related Entities and including the terms of this Agreement. Confidential
Information shall include the information described in Section 8 as well as
works for hire as described in Section 9 hereof, however, it shall not include
information which Employee can demonstrate to be: (i) information that is at the
time of receipt by Employee in the public domain, known to Employee or is
otherwise generally known in the industry or subsequently enters the public
domain or becomes generally known in the industry through no fault of Employee
or (ii) information that at any time is received in good faith by Employee from
a third party which was lawfully in possession of the same and had the right to
disclose the same. Notwithstanding any provision to the contrary contained
herein, the terms of this Agreement may be disclosed to Employee’s legal,
financial and tax advisors and any members of Employee’s immediate family, which
for purposes hereof shall include Employee’s spouse, parents, children,
siblings, grandparents, grandchildren, mother-in-law and father-in-law.

 

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Person. Any individual, corporation, partnership, joint venture, limited
liability partnership or limited liability company, trust, unincorporated
organization, association or other entity.
Related Entity or Related Entities. Any Person that directly or indirectly
controls, is controlled by, or is under common control with the Company (or its
successor or assign), including but not limited to Westwood One Radio Networks,
Inc., Westwood One Radio, Inc., Metro Networks Communications, Inc. and Metro
Network Communications, Limited Partnership. As used in this definition, the
term “control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Restricted Activities. Any of the following: (i) providing services to a
traffic, news, sports, weather or other information report gathering or
broadcast service or to a radio network or syndicator, or any direct competitor
of the Company or its Related Entities; (ii) soliciting Sponsors and dealing
with accounts with respect to the immediately preceding clause (i); (iii)
soliciting Affiliates to enter into any contract or arrangement with any Person
to provide the information set forth in clause (i); or (iv) forming or providing
operational assistance to any business or a division of any business engaged in
the foregoing activities.
Sponsor(s). Any and all client advertisers of the Company (including its
subsidiaries and Affiliates) including without limitation advertisers whose
commercial material is to be, is or was incorporated in any one or more of the
Company’s programs or announcements, live or recorded, broadcast over the
facilities of the Company, by the Company, or pursuant to an arrangement with an
affiliated station, broadcaster or transmitter of the Company’s programming.
12. Choice of Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
13. Arbitration. The parties hereby agree that any and all claims or
controversies relating to Employee’s employment with the Company, or termination
thereof, including but not limited to claims for breach of contract, tort,
unlawful discrimination or harassment (including any claims arising under Title
VII, the Americans with Disabilities Act, and the Age Discrimination in
Employment Act), and any violation of any local, state or federal law
(“Arbitrable Claims”), except for any equitable relief sought by a party, shall
be resolved by arbitration in accordance with the then applicable JAMS
Employment Arbitration Rules And Procedures. However, claims under applicable
workers’ compensation laws or the National Labor Relations Act shall not be
subject to arbitration. Arbitration under this Agreement shall be the exclusive
remedy for all Arbitrable Claims and shall be final and binding on all parties.
Unless the parties mutually agree otherwise, the arbitrator shall be selected
from a panel provided by JAMS and the arbitration shall be held in New York
County, New York. Any court having jurisdiction thereof may enter judgment on
the award rendered by the arbitrator(s). THE PARTIES HEREBY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY OF ANY MATTERS SUBJECT TO ARBITRATION UNDER
THIS AGREEMENT. The prevailing party in any arbitration brought under the terms
hereof, shall be entitled to request reimbursement of reasonable attorney’s fees
and expenses.

 

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14. Assignment. The rights of the Company hereunder may, without the consent of
Employee, be assigned by the Company to any Related Entity (provided such is
accompanied by a guarantee from Company) or successor of the Company or any
entity which acquires all or substantially all of the Company’s assets. Except
as provided in the preceding sentence, the Company may not assign all or any of
its rights, duties or obligations hereunder without the prior written consent of
Employee. This Agreement is not assignable by Employee.
15. Merger or Reorganization. In the event of any merger, consolidation,
dissolution or reorganization of the Company (including but not limited to any
reorganization where the Company is not the surviving or resulting entity), or
any transfer of all or substantially all of the assets of the Company, the
provisions of this Agreement shall inure to the benefit of and shall be binding
upon the surviving or resulting partnership or the corporation (or other entity)
or person(s) to which such assets shall be transferred.
16. Remedies. Except as it may elect otherwise, the Company shall have all
rights, powers or remedies provided by law or equity for breach of this
Agreement available to it, it being understood and agreed that no one of them
shall be considered as exclusive of the others or as exclusive of any other
rights, powers and remedies allowed by law. The exercise or partial exercise of
any right, power or remedy shall neither constitute the election thereof nor the
waiver of any other right, power or remedy. Without limiting the generality of
the foregoing, Employee agrees that, in addition to all other rights and
remedies available at law or in equity, the Company shall be entitled to
enforcement of this Agreement in accordance with the principles of equity
(without bond or undertaking), the remedy at law being hereby agreed and
acknowledged by Employee to be inadequate.
17. Section 409A of the Code.
(a) Although the Company does not guarantee the tax treatment of any particular
payment or benefit, it is intended that the provisions of this Agreement provide
for payments or benefits that either comply with, or are exempt from,
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
the regulations and guidance promulgated thereunder (collectively “Code
Section 409A”), and all provisions of this Agreement shall be construed in a
manner consistent with the requirements for avoiding taxes or penalties under
Code Section 409A.
(b) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” If Employee is deemed on the date of termination
of his employment to be a “specified employee”, within the meaning of that term
under Code Section 409A(a)(2)(B) and using the identification methodology
selected by the Company from time to time, or if none, the default methodology,
then with regard to any payment or the providing of any benefit made subject to
this

 

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Section 17(b), to the extent required to be delayed in compliance with Code
Section 409A(a)(2)(B) and to the extent such payment and benefits exceed the
Separation Pay Limit (as defined herein) , such payment or benefit shall not be
made or provided prior to the earlier of (i) the expiration of the six-month
period measured from the date of Employee’s “separation from service” and
(ii) the date of Employee’s death. On the first day of the seventh month
following the date of Employee’s “separation from service” or, if earlier, on
the date of his death, all payments delayed pursuant to this Section 17(b)
(whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to
Employee in a lump sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal payment dates
specified for them herein. For purposes of this Agreement, the “Separation Pay
Limit” means two times the lesser of: (i) Employee’s annualized compensation
based on Employee’s annual rate of pay for Employee’s taxable year preceding the
taxable year in which Employee’s termination of employment occurs; and (ii) the
maximum amount that may be taken into account under a tax-qualified plan
pursuant to Code Section 401(a)(17) for the year in which Employee terminates
employment.
(c) If under this Agreement, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each installment shall be
treated as a separate payment.
(d) To the extent any reimbursement of costs and expenses provided for under
this Agreement constitutes taxable income to Employee for Federal income tax
purposes, all such reimbursements shall be made no later than December 31 of the
calendar year next following the calendar year in which the expenses to be
reimbursed are incurred.
18. Indemnification. The Company hereby agrees to indemnify Employee and hold
Employee harmless to the extent provided under the By-Laws of the Company.
19. Survival. The provisions contained in Sections 7 through 19 shall survive
the termination or expiration of the Employment Period and the Employee’s
employment with the Company and shall be fully enforceable thereafter.
20. Legal Fees. The Company will reimburse Employee in an amount up to $10,000
for the reasonable attorneys’ fees (based on non-premium, standard rates for
time actually billed) incurred by him in connection with the current negotiation
and preparation of this Agreement.
21. Miscellaneous. This Agreement supersedes all prior understandings and
agreements between the parties (including the Company’s Related Entities) with
respect to the subject matter hereof. This Agreement contains the entire
agreement of the parties with respect to the subject matter covered hereby and
may be amended, waived or terminated only by an instrument in writing executed
by both parties hereto. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, executors, successors and
permitted assigns. All notices, requests, demands and other communications
permitted or required hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or delivered by registered or certified
mail, or overnight courier to such address listed below the parties’ respective
signature lines or to such other address as notified in writing by the parties;
provided, that, notices to the Company shall be addressed to the attention of
the “Chief Executive Officer”, with a copy to the “General Counsel”. Any
provision hereof prohibited by or unenforceable under any applicable law of any
jurisdiction shall as to such jurisdiction be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement. No provision
of this Agreement shall be interpreted against any party because such party
drafted such provision. Submission of this Agreement to Employee, or Employee’s
agents or attorneys, for examination or signature does not constitute or imply
an offer of employment, and this Agreement shall have no binding effect until
execution hereof by both the Company and Employee. If either party waives a
breach of this Agreement by the other party, that waiver will not operate or be
construed as a waiver of any subsequent breaches. This Agreement may be executed
in counterparts, including via facsimile or PDF, which together shall constitute
but one and the same agreement.
(Remainder of page is intentionally left blank.)

 

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IN WITNESS WHEREOF, this Agreement is EXECUTED as of the 16th day of
September 2008 to be EFFECTIVE FOR ALL PURPOSES as of the Effective Date.

                  “COMPANY”
 
                WESTWOOD ONE, INC.
 
                By:   /s/ Thomas F.X. Beusse          
 
      Name:   Thomas F.X. Beusse
 
      Title:   CEO
 
      Address:   40 West 57th Street, 5th Floor
New York, NY 10019
 
                “EMPLOYEE”
 
                /s/ Rod Sherwood           Rod Sherwood
Address:

 

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EXHIBIT A
FORM OF RELEASE
For good and valuable consideration received in connection with my termination
of employment with Westwood One, Inc., a Delaware corporation (the “Company”),
pursuant to Section 6 of my employment agreement with the Company dated
September 16, 2008 (the “Employment Agreement”), I, Rod Sherwood, do hereby
release and forever discharge and covenant not to sue the Company, the Related
Entities (as defined in the Employment Agreement) and their respective
subsidiaries and affiliates and their respective directors, members, partners,
officers, managers, employees, agents, stockholders, successors and assigns
(both individually and in their official capacities) and its and their
predecessors or successors (collectively, the “Releasees”), from any and all
actions, causes of action, covenants, contracts, claims, demands, suits, and
liabilities whatsoever, which I ever had or now have or which I or any of my
heirs, executors, administrators and assigns hereafter can, shall or may have by
reason of or relating to my employment with the Company as of the effective date
of this general release (this “General Release”).
By signing this General Release, I am providing a complete waiver of all claims
against the Releasees that may have arisen, whether known or unknown, up until
the effective date of this General Release. This includes, but is not limited
to, claims based on Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1866, the Age Discrimination in Employment Act of 1967 (including the
Older Workers Benefit Protection Act) (the “ADEA”), the Americans With
Disabilities Act, the Fair Labor Standards Act, the Equal Pay Act, the Family
and Medical Leave Act, the Employee Retirement Income Security Act of 1974
(“ERISA”) (except as to claims pertaining to vested benefits under employee
benefit plans covered by ERISA and maintained by the Releasees), and all
applicable amendments to the foregoing acts and laws, or any common law, public
policy, contract (whether oral or written, express or implied) or tort law, and
any other local, state or Federal law, regulation or ordinance having any
bearing whatsoever on the terms and conditions of my employment. This General
Release shall not, however, constitute a waiver of: (i) my rights under any
employee benefit plan currently maintained by the Company; (ii) my rights under
the Employment Agreement intended to survive my termination of employment;
(iii) my rights under the Company’s certificate of incorporation, By-Laws,
insurance policies or other written agreements with respect to indemnification;
or (iv) any claims to enforce rights arising under the ADEA or other civil
rights statute after the effective date of this General Release. I hereby
reaffirm my obligations under Sections 7 through 11 of the Employment Agreement,
and understand that such provisions shall be fully enforceable in accordance
with the terms and conditions of the Employment Agreement following my
termination of employment with the Company.
I further agree, promise and covenant that, to the maximum extent permitted by
law neither, I, nor any person, organization, or other entity acting on my
behalf has or will file, charge, claim, sue, or cause or permit to be filed,
charged or claimed, any action for damages or other relief (including
injunctive, declaratory, monetary or other relief) against the Releasees
involving any matter occurring in the past up to the date of this General
Release, or involving or based upon any claims, demands, causes of action,
obligations, damages or liabilities which are the subject of this General
Release. This General Release shall not affect my rights under the Older Workers
Benefit Protection Act to have a judicial determination of the validity of this
General Release and does not purport to limit any right I may have to file a
charge under the ADEA or other civil rights statute or to participate in an
investigation or proceeding conducted by the Equal Employment Opportunity
Commission or other investigative agency. This General Release does, however,
waive and release any right to recover damages under the ADEA or other civil
rights statute.

 

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I have been given twenty-one (21) days to review this General Release and have
been given the opportunity to consult with legal counsel, and I am signing this
General Release knowingly, voluntarily and with full understanding of its terms
and effects, and I voluntarily accept the consideration under Section 6 of the
Employment Agreement for the purpose of making full and final settlement of all
claims referred to above. If I have signed this General Release prior to the
expiration of the twenty-one (21) day period, I have done so voluntarily. I also
understand that I have seven (7) days after executing to revoke this General
Release, and that this General Release will not become effective if I exercise
my right to revoke my signature within seven (7) days of execution. I understand
and acknowledge that my right to receive the consideration under Section 6 of
the Employment Agreement, however, is conditioned upon my execution and
non-revocation of this General Release.
Upon the receipt of reasonable notice from the Company (including the Company’s
outside counsel), I agree to respond and provide information with regard to
matters in which I had knowledge as a result of my employment with the Company,
and provide reasonable assistance to the Company and its Related Entities and
their respective representatives in defense of any claims that may be made
against the Company or any of its Related Entities, and assist the Company and
its Related Entities in the prosecution of any claims that may be made by the
Company or any of its Related Entities, to the extent that such claims may
relate to the period of my employment with the Company. I further agree to
promptly inform the Company if I become aware of any lawsuits involving such
claims that may be filed or threatened against the Company or any of its Related
Entities. I also agree to promptly inform the Company (to the extent I am
legally permitted to do so) if I am asked to assist in any investigation of the
Company or any of its Related Entities or its or their actions, regardless of
whether a lawsuit or other proceeding has then been filed with respect to such
investigation, and shall not do so unless legally required.
I acknowledge that I have not relied on any representations or statements not
set forth in this General Release.
This General Release will be governed by and construed in accordance with the
laws of the State of New York, without regard to the choice of law principles
thereof. If any provision in this General Release is held invalid or
unenforceable for any reason, the remaining provisions shall be construed as if
the invalid or unenforceable provision had not been included.
IN WITNESS WHEREOF, I have executed this General Release on this  _____  day of
                    , 20  _____.

     
 
Rod Sherwood
   

 

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APPENDIX I
Approved Activities
Subject to the terms and conditions of this Appendix I, Employee may serve as an
independent director on the boards of directors of the following companies:

1.  
Dot Hill Systems Corp.
  2.  
CompuDyne Corporation
  3.  
[Intentionally omitted.]

Employee’s service on the foregoing boards of directors (i) shall be performed
solely as an independent director and not as a Gores-appointed director,
(ii) must be performed solely on behalf of the subject company, and (iii) must
not be performed on behalf of, or subject to the direction of, Gores. In
addition, any compensation or remuneration that Employee is entitled to receive
with respect to his service on the foregoing boards of directors shall (x) be no
more than the same compensation or remuneration paid to other independent
directors on the applicable board of directors who are not Gores-appointed
directors and (y) shall be paid to Employee directly by the subject company, and
for the avoidance of doubt, shall in no event be paid by or through Gores. Prior
to the Effective Date, Employee shall have resigned as Chairman of the Board of
Directors of CompuDyne Corporation.

 

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APPENDIX II
Subject to the terms and conditions of this Appendix II, Employee may receive or
hold the amounts and rights set forth below:
1. Annual non-discretionary 2008 bonus from Gores which shall be paid only if
Gores determines to award executive bonuses to senior executives of Gores for
the 2008 calendar year and which bonus, if awarded, will be paid at the same
time such other bonuses are paid. Such bonus, if paid, is based solely on the
period Mr. Sherwood was employed by Gores from January 1, 2008 through the
Effective Date.
2. Carried Interest solely to the extent granted to Employee prior to the
Effective Date by Gores for his prior service to Gores in Fund I and Fund II
(the “Funds”); provided that (i) the Carried Interest shall continue to vest
after the Effective Date consistent with and to the extent set forth in the
terms and conditions of the agreements that govern such Carried Interest (as in
effect immediately prior to the Effective Date), (ii) Employee’s rights with
respect to the Carried Interest shall be the same as any other party who has the
right to receive such Carried Interest, (iii) on and following the Effective
Date, Employee does not have the right or ability to influence the Funds and
(iv) the percentage which constitutes Employee’s Carried Interest in the Funds
shall not increase after the Effective Date.
3. Co-investment in the Funds as a limited partner, which investment was made
available to Employee prior to the Effective Date by Gores; provided, that
(i) any such investment by Employee is made on, and is subject to, the same
terms and conditions as those applicable to the other limited partners who
previously elected to become participants in the Funds, and (ii) with respect to
Employee any such investment is a passive investment and, following any such
investment, Employee has no right or ability to influence Gores or any entity
that sponsors, operates or manages the Funds.

 

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