Document:

EX-10.2 AMENDED AND RESTATED STOCK INCENTIVE PLAN

    Exhibit 10.2

 

    Beazer
    Homes USA, Inc.

    

 

    Amended
    and Restated 1999 Stock Incentive Plan

 

    Section 1. —
    Establishment and Purposes

 

    Beazer Homes USA, Inc. hereby establishes the Beazer Homes USA,
    Inc. Amended and Restated 1999 Stock Incentive Plan (the
    “Plan”).

 

    The purposes of the Plan are to promote the interests of Beazer
    Homes USA, Inc. (the “Company”) and its Shareholders
    by aiding the Company in attracting and retaining management
    personnel capable of assuring the future success of the Company,
    to offer such personnel incentives to put forth maximum efforts
    for the success of the Company’s business and to afford
    such personnel an opportunity to acquire a proprietary interest
    in the Company.

 

    Section 2. —
    Definitions

 

    As used in the Plan, the following terms shall have the meanings
    set forth below:

 

    2.1 “Affiliate” shall mean (i) any
    entity that, directly or indirectly through one or more
    intermediaries, is controlled by the Company and (ii) any
    entity in which the Company has a significant equity interest,
    in each case as determined by the Committee.

 

    2.2 “Award” shall mean an Option, Stock
    Appreciation Right, Restricted Stock, Restricted Stock Unit,
    Performance Award, Dividend Equivalent or Other Stock-Based
    Award granted under the Plan.

 

    2.3 “Award Agreement” shall mean any
    written agreement, contract or other instrument or document
    evidencing any Award granted under the Plan.

 

    2.4 “Board” shall mean the Board of
    Directors of the Company.

 

    2.5 “Change in Control” shall mean:
    (i) the acquisition by any individual, entity or group
    (within the meaning of Section 13(d)(3) or 14(d)(2) of the
    Securities Exchange of 1934, as amended (the “Exchange
    Act”)) (a “Person”) of beneficial ownership
    (within the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of 20% or more of either
    (A) the then outstanding Shares (the “Outstanding
    Shares”) or (B) the combined voting power of the then
    outstanding voting securities of the Company entitled to vote
    generally in the election of Directors (the “Outstanding
    Voting Securities”); provided, however, that for
    purposes of this paragraph (i) the following
    acquisitions shall not constitute a Change of Control;
    (1) any acquisition directly from the Company, (2) any
    acquisition by the Company, (3) any acquisition by any
    employee benefit plan (or related trust) sponsored or maintained
    by the Company or any corporation controlled by the Company or
    (4) any acquisition by any corporation pursuant to a
    transaction which complies with clauses (A), (B) and
    (C) of subsection (iii) of this
    Section 2.5; or

 

    (ii) Individuals who, as of the date hereof, constitute the
    Board (the “Incumbent Board”) cease for any reason to
    constitute at least a majority of the Board; provided,
    however, that any individual becoming a Director subsequent
    to the date hereof whose election, or nomination for election by
    the Shareholders, was approved by a vote of at least a majority
    of the Directors then comprising the Incumbent Board shall be
    considered as though such individual was a member of the
    Incumbent Board, but excluding, for this purpose, any such
    individual whose initial assumption of office occurs as a result
    of an actual or threatened election contest with respect to the
    election or removal of Directors or other actual or threatened
    solicitation of proxies or consents by or an behalf of a Person
    other than the Board; or

 

    (iii) Consummation of a reorganization, merger or
    consolidation or sale or other disposition of all or
    substantially all of the assets of the Company (a “Business
    Combination”), in each case, unless, following such
    Business Combination, (A) all or substantially all of the
    individuals and entities who were the beneficial owners,
    respectively, of the Outstanding Shares and the Outstanding
    Voting Securities immediately prior to such Business Combination
    beneficially own, directly or indirectly, more than 50% of,
    respectively, the then

    

    A-1

 

    Outstanding Shares and the combined voting power of the then
    Outstanding Voting Securities entitled to vote generally in the
    election of Directors, as the case may be, of the corporation
    resulting from such Business Combination (including, without
    limitation, a corporation which as a result of such transaction
    owns the Company or all or substantially all of the
    Company’s assets either directly or through one or more
    subsidiaries) in substantially the same proportions as their
    ownership, immediately prior to such Business Combination of the
    Outstanding Company Common Stock and Outstanding Company Voting
    Securities as the case may be, (B) no Person (excluding any
    corporation resulting from such Business Combination or any
    employee benefit plan (or related trust) of the Company or such
    corporation resulting from such Business Combination)
    beneficially owns, directly or indirectly, 20% or more of,
    respectively, the then outstanding shares of common stock of the
    corporation resulting from such Business Combination or the
    combined voting power of the then outstanding voting securities
    of such corporation except to the extent that such ownership
    existed prior to the Business Combination and (C) at least
    a majority of the members of the board of directors of the
    corporation resulting from such Business Combination were
    members of the Incumbent Board at the time of the execution of
    the initial agreement, or of the action of the Board, providing
    for such Business Combination; or

 

    (iv) Approval by the Shareholders of a complete liquidation
    or dissolution of the Company.

 

    2.6 “Code” shall mean the Internal Revenue
    Code of 1986, as amended from time to time and any regulations
    promulgated thereunder.

 

    2.7 “Committee” shall mean the Stock
    Option and Incentive Committee or any other Committee of the
    Board designated by the Board to administer the Plan which shall
    consist of at least two members appointed from time to time by
    the Board. Each Committee member must qualify as an
    “outside director” as defined in the Treasury
    Regulation § 1.162-27(e)(3) (or any successor rule)
    and, to the extent necessary to qualify Awards hereunder for
    exemption from the liability provisions of
    Rule 16b-3,
    a “non-employee director” as defined in Reg.
    § 240.16b-3(b)(3)
    (or any successor rule) of the Securities Exchange Act of 1934.

 

    2.8 “Common Stock” shall mean the common
    stock, $0.01 par value, of the Company.

 

    2.9 “Company” shall mean Beazer Homes USA,
    Inc., a Delaware corporation, and any successor corporation.

 

    2.10 “Director” shall mean a member of the
    Board of Directors of the Company.

 

    2.11 “Disability” shall mean disability as
    defined in Participant’s Award Agreement with the Company.

 

    2.12 “Dividend Equivalent” shall mean any
    right granted under Section 6.4 of the Plan.

 

    2.13 “Eligible Person” shall mean any
    employee, officer, consultant or independent contractor
    providing services to the Company or any Affiliate or a
    Director, in each case, who the Committee determines to be
    eligible.

 

    2.14 “Fair Market Value” shall mean the
    fair market value of any property (including but not limited to
    Shares or other security) determined by a valuation method as
    established by the Committee from time to time. However, that
    for purposes of the Plan, the Fair Market Value of Shares on any
    day on which Shares are traded on the New York Stock Exchange
    (“NYSE”) or any other nationally recognized stock
    exchange or automated quotation system shall be the closing
    price of such Shares as reported by the NYSE or such other
    exchange or quotation system.

 

    2.15 “Incentive Stock Option” shall mean
    an Option granted under Section 6.1 of the Plan that meets
    the requirements of Section 422 of the Code.

 

    2.16 “Non-Qualified Stock Option” shall
    mean an Option granted under Section 6.1 of the Plan that
    is not intended to be an Incentive Stock Option.

 

    2.17 “Option” shall mean an Incentive
    Stock Option or a Non-Qualified Stock Option and shall include
    Restoration Options.

 

    2.18 “Other Stock-Based Award” shall mean
    any right granted under Section 6.6 of Plan.

    

    A-2

 

 

    2.19 “Participant” shall mean an Eligible
    Person who has been granted an Award under the Plan.

 

    2.20 “Performance Award” shall mean any
    right granted under Section 6.5 of the Plan.

 

    2.21 “Person” shall mean any individual,
    corporation, limited liability company, partnership, association
    or trust.

 

    2.22 “Plan” shall mean the Beazer Homes
    USA, Inc. 1999 Stock Incentive Plan, as amended from time to
    time.

 

    2.23 “Restoration Option” shall mean any
    Option granted under Section 6.1(d) of the Plan.

 

    2.24 “Restricted Stock” shall mean any
    Share granted to a Participant under Section 6.3 of the
    Plan.

 

    2.25 “Restricted Stock Unit” shall mean a
    bookkeeping entry representing the right to receive a Share (or
    a cash payment equal to the Fair Market Value of a Share) at
    some future date as granted under Section 6.3 of the Plan.
    A holder of Restricted Stock Units shall not be entitled to
    voting rights on any Shares to which the Restricted Stock Units
    relate.

 

    2.26 “Rule 16b-3”
    shall mean
    Rule 16b-3
    promulgated under the Securities Exchange Act of 1934 as amended
    from time to time and the related regulations.

 

    2.27 “Shares” shall mean shares of Common
    Stock or such other securities or property, as may be the
    subject of Awards pursuant to an adjustment made under
    Section 9.1 of the Plan.

 

    2.28 “Shareholder” shall mean a
    shareholder of the Company.

 

    2.29 “Stock Appreciation Right” shall mean
    any right granted under Section 6.2 of the Plan.

 

    2.30 “Tandem Option” shall mean a
    Non-Qualified Stock Option issued in tandem with a Stock
    Appreciation Right.

 

    2.31 “Termination of Employment” shall
    mean a termination of employment from the Company and all
    Affiliates.

 

    Section 3. —
    Administration

 

    3.1 Power and Authority of the
    Committee.  The Plan shall be administered by
    the Committee. Subject to the express provisions of the Plan and
    to applicable law, the Committee shall have full power and
    authority to: (i) designate Participants;
    (ii) determine the type or types of Awards to be granted to
    each Participant under the Plan, (iii) determine the number
    of Shares to be covered by (or with respect to which payments,
    rights or other matters are to be calculated in connection with)
    each Award, (iv) determine the terms, conditions and
    restrictions of any Award or Award Agreement, (v) amend the
    terms and conditions of any Award or Award Agreement and
    accelerate the exercisability of Options or the lapse of
    restrictions relating to Restricted Stock, Restricted Stock
    Units or other Awards, (vi) accept the surrender of
    outstanding Awards and substitute new Awards,
    (vii) determine whether, to what extent, and under what
    circumstances Awards may be settled or exercised in cash,
    Shares, other securities, other Awards or other property, or
    cancelled, forfeited or suspended, (viii) determine
    whether, to what extent and under what circumstances cash,
    Shares, other securities, other Awards, other property and other
    amounts payable with respect to an Award under the Plan shall be
    deferred either automatically or at the election of the holder
    thereof or the Committee, (ix) interpret and administer the
    Plan and any instrument or agreement relating to, or Award made
    under, the Plan, (x) establish, amend, suspend or waive
    such rules and regulations and appoint such agents as it shall
    deem appropriate for the proper administration of the Plan, and
    (xi) make any other determination and take any other action
    that the Committee deems necessary or desirable for the
    administration of the Plan. Unless otherwise expressly provided
    in the Plan, all designations, determinations, interpretations
    and other decisions under or with respect to the Plan or any
    Award shall be within the sole discretion of the Committee, may
    be made at any time and shall be final, conclusive and binding
    upon any Participant, any holder or beneficiary of any Award and
    any employee of the Company or any Affiliate.

    

    A-3

 

 

    3.2 Delegation.  The Committee may
    delegate its powers and duties under the Plan to one or more
    officers of the Company or any Affiliate or a committee of such
    officers, subject to such terms, conditions and limitations as
    the Committee may establish in its sole discretion.

 

    Section 4. —
    Shares Available for Awards; Annual Limit on Grants

 

    4.1 Shares Available.  Subject to
    adjustments as provided in Section 9.1, the number of
    shares available for the granting of Awards under the Plan shall
    be 7,200,000 of which not more than 2,820,000 Shares shall
    be granted as stock-based Awards, as described in
    Section 6, other than Options and stock-settled Stock
    Appreciation Rights. Shares to be issued under the Plan may be
    either Shares which have been reacquired and are held in
    treasury or Shares which are authorized but unissued. If any
    Shares covered by an Award (or to which an Award relates) are
    not purchased or are forfeited, or if an Award otherwise
    terminates without delivery of any Shares, then the number of
    Shares counted against the aggregate number of Shares available
    under the Plan with respect to such Award, to the extent of any
    such forfeiture or termination, shall again be available for
    granting of Awards under the Plan. Notwithstanding the
    foregoing, the full number of Shares subject to exercised
    stock-settled Stock Appreciation Rights shall count against the
    aggregate Plan Share limitation set forth in this
    Section 4.1 and shall not again be available for granting
    of Awards under the Plan. In addition, Shares withheld to
    satisfy taxes required to be withheld for any Award shall count
    against the Plan Share limitations set forth in this
    Section 4.1 and shall not again be available for granting
    of Awards under the Plan and Shares not issued because the
    holder of any Tandem Option exercises the accompanying Stock
    Appreciation Right shall not be subject to future Award by the
    Committee.

 

    Notwithstanding the foregoing, the number of Shares available
    for granting Incentive Stock Options under the Plan shall not
    exceed 4,200,000, subject to adjustment as provided in
    Section 9.1 of the Plan and Section 422 or 424 of the
    Code or any successor provisions.

 

    4.2 Maximum Annual Awards to an Eligible
    Person.  The maximum number of Shares with
    respect to which Options and Stock Appreciation Rights may be
    issued under the Plan to an Eligible Person in a calendar year
    is 450,000, subject to adjustment as provided in
    Section 9.1 of the Plan. In addition, the maximum number of
    Shares under a Performance Award that may be issued in any
    calendar year is 225,000, subject to adjustment as provided in
    Section 9.1 of the Plan.

 

    4.3 Accounting for Awards.  For
    purposes of this Section 4, if an Award entitles the holder
    thereof to receive or purchase Shares, the number of Shares
    covered by such Award or to which such Award relates shall be
    counted on the date of the grant of such Award against the
    aggregate number of Shares available under the Plan.

 

    Section 5. —
    Participation

 

    Participation in the Plan shall be limited to those Eligible
    Persons selected by the Committee. Awards may be granted to such
    Eligible Persons and for such number of Shares as the Committee
    shall determine, subject to the limitations in Section 4.
    An Award of any type made in any one year to an Eligible Person
    shall neither guarantee nor preclude a further Award of that or
    any other type to such Eligible Person in that year or
    subsequent years other than as provided in Section 4.

 

    In determining which Eligible Persons shall receive an Award and
    the terms of any Award, the Committee may take into account such
    factors as the Committee, in its discretion, shall deem relevant
    (such factors may include the nature of the services rendered by
    the Eligible Person and the Eligible Person’s present and
    potential contributions to the success of the Company).
    Notwithstanding the foregoing, an Incentive Stock Option
    (a) may only be granted to full or part-time employees as
    defined by Section 3401(c) of the Code (including officers
    and directors who are also employees) of the Company and
    (b) shall not be granted to an employee of an Affiliate
    which is not a “subsidiary corporation” of the Company
    (as defined in Section 424(f) of the Code or any successor
    provision).

 

    Section 6. —
    Awards

 

    6.1 Options.  The Committee is
    authorized to grant Options to Participants. Options granted
    shall be subject to the terms and conditions forth in this
    Section 6.1, the other provisions of the Plan, and any
    additional terms and

    

    A-4

 

    conditions as the Committee shall determine (including those
    specified in the Award Agreement) which are not inconsistent
    with the provisions of the Plan.

 

    (a) Exercise Price.  The price per
    Share purchasable under an Option shall be determined by the
    Committee. Such purchase price per share shall not be less than
    100% of the Fair Market Value of a Share on the date of grant of
    such Option (110% in the case of an Incentive Stock Option
    granted to a 10-percent Shareholder as defined in Code
    Section 422(c)(5)). Subject to Section 9.1, in no
    event may the Committee reduce the exercise price of an Option
    after the original grant date.

 

    (b) Option Term.  Subject to the
    provisions of the Plan, the term of each Option shall be
    specified by the Committee. In no event shall an Incentive Stock
    Option be exercisable more than ten years (5 years in the
    case of a 10-percent Shareholder within the meaning of Code
    Section 422(c)(5)) from the date it is granted. Prior to
    the exercise of the Option and delivery of the stock subject to
    the Option, a Participant shall not have any rights to receive
    any dividends or be entitled to any voting rights on any stock
    represented by outstanding Options.

 

    (c) Time and Method of Exercise of
    Options.  The Committee shall determine the
    time or times at which an Option may be exercised in whole or in
    part (provided that all Options granted on or after
    February 20, 2002 shall have a minimum vesting schedule of
    three (3) years (subject to Section 6.1(e)) and the
    method(s) by which and the form(s) in which payment of the
    exercise price may be made or deemed to be made (including,
    without limitation, cash, Shares, other securities, other
    Awards, other property or any combination thereof having a Fair
    Market Value on the exercise date equal to the relevant exercise
    price).

 

    (d) Restoration Options.  The
    Committee may grant Restoration Options, separately or together
    with another Option to an Eligible Person. An Award of
    Restoration Options shall be subject to the terms and conditions
    established by the Committee and any applicable requirements of
    Rule 16b-3
    or any other applicable law. Any such Award is contingent on
    Participant as the Holder of an option (“Original
    Option”) paying the exercise price of the Original Option.
    The Restoration Option would be an Option to purchase at 100%
    Fair Market Value as of the date of exercise of the Original
    Option, a number of Shares not exceeding the sum of (i) the
    number of Shares so provided as consideration upon the exercise
    of the Original Option and (ii) the number of Shares, if
    any, tendered or withheld as payment of the amount to be
    withheld under applicable tax laws in connection with the
    exercise of the Original Option pursuant to the relevant Plan
    provisions or Original Option Award Agreement. The Restoration
    Option may not be exercised until the shares acquired upon
    exercise of the Original Option are held for a period of at
    least one year and the term of the Restoration Option shall not
    extend beyond the term of the Original Option. Restoration
    Options may be granted with respect to Options previously
    granted under the Plan or any other stock option plan of the
    Company, and may be granted in connection with any Option
    granted under the Plan or any other stock option plan of the
    Company at the time of such grant.

 

    (e) Early Termination of
    Option.  The rules regarding the exercise
    and/or
    termination of Options upon a Participant’s Disability,
    death, Termination of Employment or ceasing to be a Director
    will be provided in Participant’s Award Agreement with the
    Company.

 

    (f) Change of Control.  The
    exercise of Options in the event of a Change in Control will be
    treated as provided in Participant’s Award Agreement with
    the Company.

 

    (g) Option Repricing.  No action
    shall be taken, without the approval of the Shareholders, to
    authorize the amendment of any outstanding Option to reduce the
    exercise price of such option. Furthermore, no Option shall be
    cancelled and replaced with an Option having a lower exercise
    price without the approval of the Shareholders. This
    Section 6.1(g) shall not be construed to prohibit the
    adjustments provided for in Section 9.1.

 

    (h) Other Restrictions on Incentive Stock
    Options.  The terms and conditions of any
    Incentive Stock Options granted under this Plan shall comply
    with Code Section 422. The aggregate Fair Market Value
    (determined as of the grant date) of Shares subject to Incentive
    Stock Options exercisable by any Participant in any calendar
    year under this Plan or any other plan of the Company or any
    Affiliate or any related corporation (as defined in the
    applicable regulations under the Code) may not exceed $100,000
    or such higher amount as may be permitted from time to time
    under Section 422 of the Code. To the extent that such
    aggregate Fair Market Value exceeds $100,000 (or, applicable
    higher amount), such Options shall be treated as Options which
    are not Incentive Stock Options.

    

    A-5

 

 

    6.2 Stock Appreciation
    Rights.  Subject to Section 4, the
    Committee is authorized to grant Stock Appreciation Rights to
    Participants. Subject to the terms of the Plan and any
    applicable Award Agreement, a Stock Appreciation Right granted
    under the Plan shall confer upon the holder a right to receive,
    upon exercise of the right related to one Share, an amount in
    cash or Shares with a Fair Market Value, in either case, equal
    to the excess of (i) the Fair Market Value of one Share on
    the date of exercise over (ii) the Fair Market Value of one
    Share on the date of grant of the Stock Appreciation Right.

 

    Subject to the terms of the Plan and any applicable Award
    Agreement, the grant price, term, methods of exercise, methods
    of settlement, and any other terms and conditions of any Stock
    Appreciation Right shall be as determined by the Committee. The
    Committee may impose such conditions or restrictions on the
    exercise of any Stock Appreciation Right as it may deem
    appropriate.

 

    6.3 Restricted Stock and Restricted Stock
    Units.  The Committee is authorized to grant
    Awards of Restricted Stock and Restricted Stock Units to
    Participants under the terms set forth in this Section 6.3,
    the other Plan provisions and with such additional conditions
    and restrictions as the Committee may impose which are not
    inconsistent with provisions of the Plan.

 

    (a) Restrictions.  Shares of
    Restricted Stock and Restricted Stock Units shall be subject to
    such restrictions as the Committee imposes which restrictions
    may lapse separately or in combination at such time or times, in
    such installments or otherwise, as the Committee may deem
    appropriate. The Award Agreement for an Award of Restricted
    Stock or Restricted Stock Units shall specify the applicable
    restrictions on such Shares, if any, the duration of such
    restrictions, and the time or times at which such restrictions
    shall lapse with respect to all or a specified number of shares
    that are part of the Award. In addition, the Committee may
    specify certain performance criteria, the attainment of which
    will accelerate the lapse of the applicable restrictions.
    Notwithstanding the foregoing, the Committee may reduce or
    shorten the duration of any restriction applicable to any shares
    awarded to any Participant under the Plan.

 

    (b) Certificates.  Any Award of
    Restricted Stock may be evidenced in such manner as the
    Committee may deem appropriate, including, but not limited to,
    book-entry registration or issuance of a stock certificate or
    certificates subject to forfeiture if the restrictions do not
    lapse. In the event a stock certificate is issued: (1) the
    certificate shall be registered in the name of Participant and
    shall bear a legend referring to the terms, conditions, and
    restrictions applicable to such Restricted Stock and
    (2) shall be held by the Company. Except as otherwise
    provided by the Committee, during such period of restriction
    Participant shall have all of the rights of a Shareholder,
    including but not limited to the rights to receive dividends (or
    dividend equivalents) and to vote. If shares are issued only
    upon lapse of restrictions, the Committee may provide that
    Participant will be entitled to receive any amounts per share
    pursuant to any dividend or distribution paid by the Company on
    its Common Stock to Shareholder of record after the Award date
    and prior to the issuance of the Shares. In the case of
    Restricted Stock Units, no shares shall be issued at the time
    such Awards are granted.

 

    (c) Forfeiture.  Rules regarding
    the forfeiture of Restricted Stock or Restricted Stock Units
    subject to restrictions upon a Change of Control, or the
    Participant’s Disability, death, Termination of Employment
    or ceasing to be a Director will be determined in accordance
    with Participant’s Award Agreement with the Company.

 

    (d) Lapse of
    Restrictions.  Unrestricted Shares, evidenced
    in such manner as the Committee shall deem appropriate, shall be
    delivered to the holder of Restricted Stock promptly after the
    restrictions on the Restricted Stock have expired, lapsed or
    been waived. After the expiration, lapse or waiver of
    restrictions and the restricted period relating to Restricted
    Stock Units, Shares related to such Restricted Stock Units shall
    be issued and delivered to the holders of the Restricted Stock
    Units in accordance with such terms as may be specified by the
    Committee.

 

    6.4 Dividend Equivalents.  The
    Committee is authorized to grant to Participants Awards of
    Dividend Equivalents under which the holders thereof shall be
    entitled to receive payments (in cash, Shares, other securities,
    other Awards or other property as determined by the Committee,
    in its discretion) equivalent to the amount of cash dividends
    paid by the Company to holders of Shares with respect to the
    number of Shares determined by the Committee. Such amounts shall
    be payable on the date or dates as determined by the Committee,
    and the Committee may provide that such amounts (if any) shall
    be deemed to have been reinvested in additional Shares or
    otherwise

    

    A-6

 

    reinvested. Subject to the terms of the Plan and any applicable
    Award Agreement, such Awards may have such terms and conditions
    as the Committee shall determine.

 

    6.5 Performance Awards.  The
    Committee is authorized to grant Performance Awards to
    Participants. Once established, the Committee shall not have
    discretion to modify the criteria for receiving a Performance
    Award except with respect to any discretion specifically granted
    to the Committee under this Plan. Subject to the terms of the
    Plan and any applicable Award Agreement, a Performance Award
    granted under the Plan may be an Award of Common Stock, Options,
    Stock Appreciation Rights, Restricted Stock, Restricted Stock
    Units (or any other right, the value of which is determined by
    reference to Shares) and such Award may be payable in cash,
    Shares, other securities or other property. The value of such
    Performance Awards shall be determined by the Committee and the
    Performance Awards shall be payable to, or exercisable by,
    Participant, in whole or in part, upon the achievement of the
    performance goals during the applicable measurement period
    specified by the Committee.

 

    (a) Amount of Performance
    Awards.  At the end of the measurement period,
    the Committee shall determine the percentage, if any, of the
    Performance Awards granted to Participant for that measurement
    period that are earned by Participant as his Performance Award.
    That percentage shall be based on the degree to which the
    performance goals for that measurement period are satisfied. The
    formula for determining the correlation between the percentages
    of the Performance Awards earned and the level of performance
    for a measurement period shall be established in writing by the
    Compensation Committee at the time the performance goals are
    determined. Prior to the payment of any Performance Awards, the
    Compensation Committee must certify the degree of attainment of
    the applicable performance goals.

 

    (b) Performance Goals.  Performance
    goals used to compute Performance Awards shall be based on the
    Company’s business planning process and shall be adopted by
    the Committee in writing either (1) prior to the beginning
    of the measurement period to which they apply or (2) not
    later than 90 days after the commencement of the
    measurement period provided that at such time the outcome of the
    performance goals is substantially uncertain. The performance
    goals shall be comprised of one or more of the following
    performance measures: (1) total return to Shareholders,
    (2) cash flow, (3) return on assets, capital, equity
    or sales, (d) stock price, and (e) earnings per share.
    Any such performance goals and the applicable performance
    measures will be determined by the Committee at the time of
    grant and reflected in a written Award Agreement.

 

    (c) Compliance with
    Section 162(m).  All payments under
    Performance Awards will be designed to satisfy the exception
    under Section 162(m) of the Code, and related regulations
    for performance-based compensation, and all Awards hereunder
    shall be subject to the limitations of Section 162(m).

 

    6.6 Other Stock-Based Awards.  The
    Committee is authorized, to the extent permitted under
    Rule 16b-3
    and other applicable law, to grant to Participants such other
    Awards that are denominated or payable in, valued in whole or in
    part by reference to, or otherwise based on or related to,
    Shares (including, without limitation, securities convertible
    into Shares), as are deemed by the Committee to be consistent
    with the purposes of the Plan. Subject to the terms of the Plan
    and any applicable Award Agreement, Shares or other securities
    delivered to Participant pursuant to a purchase right granted
    under this Section 6.6 shall be purchased for such
    consideration, which may be paid by such method or methods and
    in such form or forms, (including, without limitation, cash,
    Shares, other securities, other Awards or other property or any
    combination thereof), as the Committee shall determine, the
    value of which consideration, as established by the Committee,
    shall not be less than 100% of the Fair Market Value of such
    Shares or other securities as of the date such purchase right is
    granted.

 

    6.7 General.

 

    (a) Consideration for
    Awards.  Except in the case of Awards issued
    in connection with compensation that has been deferred or an
    Award issued pursuant to Section 6.6, Awards shall be
    granted for no cash consideration or such minimal cash
    consideration as may be required by applicable law.

 

    (b) Awards May Be Granted Separately or
    Together.  Awards may, in the discretion of
    the Committee, be granted either alone or in addition to, in
    tandem with, or in substitution for, any other Award or any
    award granted under any other plan of the Company or any
    Affiliate. Awards granted in addition to or in tandem with other
    Awards, or in addition to or in tandem with awards granted under
    any other plan of the Company or any Affiliate, may be granted
    either at the same time or at a different time from the grant of
    such other Award or awards.

    

    A-7

 

 

    (c) Forms of Payment Under
    Awards.  Subject to the terms of the Plan and
    of any applicable Award Agreement, payment or transfers to be
    made by the Company or an Affiliate upon the grant, exercise or
    payment of an Award may be made in such form or forms as the
    Committee shall determine (including, without limitation, cash,
    Shares, other securities, other Awards, or other property, or
    any combination thereof), and may be made in a single payment or
    transfer, in installments, or on a deferred basis, in each case
    in accordance with rules and procedures established by the
    Committee. Such rules and procedures may include, without
    limitation, provisions for the payment or crediting of
    reasonable interest on installments or deferred payments or the
    grant or crediting of Dividend Equivalents with respect to
    installment or deferred payments.

 

    (d) Correction of Defects, Omissions, and
    Inconsistencies.  The Committee may correct
    any defect, supply any omission or reconcile any inconsistency
    in the Plan or any Award in the manner and to the extent it
    shall deem desirable to carry the Plan into effect.

 

    (e) Time and Method of
    Exercise.  The Committee shall determine the
    time or times at which Awards granted pursuant to
    Sections 6.2 through 6.6 may be exercised in whole or in
    part ( provided that all such Awards granted after
    February 20, 2002 shall have a minimum vesting schedule of
    three (3) years, except that rules regarding the exercise
    and or termination of Awards upon a Participant’s
    Disability, death, Termination of Employment or ceasing to be a
    Director will be provided in Participant’s Award Agreement
    with the Company).

 

    Section 7. —
    Transferability

 

    7.1 General.  Except as provided in
    Section 7.2, no Award granted under the Plan shall be
    transferable by Participant otherwise than by will or the laws
    of descent and distribution. Any attempted pledge, alienation,
    attachment, assignment or encumbrance of an Award that is not
    specifically authorized in accordance with Section 7.2
    shall be void.

 

    Each Award or right under an Award may be exercised during
    Participant’s lifetime only by Participant, his permitted
    transferee under Section 7.2 or if permissible under
    applicable state law Participant’s guardian or legal
    representative. However, the Committee may permit Participant to
    designate, in the manner specified by the Committee, a
    beneficiary or beneficiaries to exercise the right of
    Participant and receive any property distributable with respect
    to an Award upon the death of Participant.

 

    7.2 Permitted Transfers.  The
    Committee may, in its discretion, authorize all or a portion of
    an Award of Non-Qualified Stock Options or Stock Appreciation
    Rights settled in stock to be granted on terms which permit
    transfer by Participant to a “Family Member” (as
    defined below), provided the transfer is through a gift or a
    domestic relations order. For purposes of this Section 7.2,
    “Family Member” includes any child, stepchild,
    grandchild, parent, stepparent, grandparent, spouse, former
    spouse, sibling,
    mother-in-law,
    father-in-law,
    son-in-law,
    daughter-in-law,
    brother-in-law
    or
    sister-in-law,
    including adoptive relationships, a trust for the exclusive
    benefit of these persons and any other entity owned solely by
    these persons. The Award Agreement pursuant to which such
    Options or Stock Appreciation Rights are granted must be
    approved by the Committee and must expressly provide for
    transferability in a manner consistent with this
    Section 7.2. The terms of any such transferred Award shall
    continue to be applied with respect to Participant, following
    which the Award shall be exercisable by the Transferee only to
    the extent and for the periods that would have applied to
    Participant.

 

    Section 8
    . — Listing and Registration

 

    All certificates for Shares or other securities delivered under
    the Plan pursuant to any Award or the exercise thereof shall be
    subject to such stop transfer orders and other restrictions as
    the Committee may deem advisable under the Plan or the rules,
    regulations and other requirements of the Securities and
    Exchange Commission and any applicable federal or state
    securities laws, and the Committee may cause a legend or legends
    to be placed on any such certificates to make appropriate
    reference to such restrictions. If the Shares or other
    securities are traded on a securities exchange, the Company
    shall not be required to deliver any Shares or other securities
    covered by an Award unless and until such Shares or other
    securities have been admitted for trading on such securities
    exchange.

    

    A-8

 

 

    Section 9. —
    Adjustments; Business Combinations

 

    9.1 Adjustment Upon Corporate
    Transaction.  In the event of
    (a) dividend or other distribution (whether in the form of
    cash, Shares, other securities or other property),
    (b) recapitalization, (c) stock split,
    (d) reverse stock split, (e) reorganization,
    (f) merger, (g) consolidation,
    (h) split-up,
    (i) spin-off, (j) combination, (k) repurchase or
    exchange of Shares or other securities of the Company,
    (l) issuance of warrants or other rights to purchase Shares
    or other securities of the Company or (m) other similar
    corporate transaction or event affects the Shares, the Committee
    may determine that an adjustment would be appropriate in order
    to prevent dilution or enlargement of the benefits or potential
    benefits intended to be made available under the Plan. In this
    event, the Committee shall, in such manner as it may deem
    equitable, adjust any or all of (i) the number, type and
    issuer of Shares (or other securities or other property) which
    thereafter may be made the subject of Awards, (ii) the
    number type and issuer of Shares (or other securities or other
    property) subject to outstanding Awards and (iii) the
    purchase or exercise price with respect to any Award; provided,
    however, that the number of Shares covered by any Award or to
    which such Award relates shall always be a whole number.

 

    9.2 Liability of Survivor.  In the
    event of any corporate reorganization or transaction including
    any event described in Section 9.1, the surviving entity or
    successor corporation shall be bound by the terms and conditions
    of the provisions of this Plan and any Awards issued under this
    Plan.

 

    Section 10. —
    Termination and Modification of the Plan

 

    10.1 General.  Except to the extent
    prohibited by applicable law and unless otherwise expressly
    provided in an Award Agreement or in the Plan, the Plan or an
    Award Agreement may be terminated or modified as specified in
    this Section 10.

 

    10.2 Amendments to the Plan.  The
    Board without further approval of the Shareholders may amend,
    alter, suspend, discontinue or terminate the Plan.
    Notwithstanding the foregoing the Board may condition any
    amendment and provide that no modification shall become
    effective without prior approval of the Shareholders if
    Shareholder approval would be required for:

 

    (i) continued compliance with
    Rule 16b-3
    of the Securities and Exchange Commission;

 

    (ii) compliance with the rules and regulations of the New
    York Stock Exchange or any other securities exchange or the
    National Association of Securities Dealers, Inc. that are
    applicable to the Company;

 

    (iii) the granting of Incentive Stock Options under the
    Plan, or

 

    (iv) continued compliance with Section 162(m) of the
    Code.

 

    The Board may not amend Section 6.1(g) hereof without the
    approval of the Shareholders.

 

    10.3 Amendments to Awards.  Subject
    to Section 6.1(g) hereof, the Committee may amend or modify
    the grant of any outstanding Award in any manner to the extent
    that the Committee would have had the authority to make such
    Award as so modified or amended including, but not limited to, a
    change of the date or dates as of which (a) an Option
    becomes exercisable or (b) Restrictions on Shares are to be
    removed. No modification may be made that would materially
    adversely affect any Award previously made under the Plan
    without the approval of Participant or holder or beneficiary.

 

    10.4 Other Amendment.  The
    Committee shall be authorized to make minor or administrative
    modifications to the Plan and Awards as well as modifications to
    the Plan and Awards that may be dictated by requirements of
    federal or state laws applicable to the Company or that may be
    authorized or made desirable by such laws. The Committee may
    correct any defect, supply any omission or reconcile any
    inconsistency in the Plan or any Award in the manner and to the
    extent it shall deem desirable to continue the operation of the
    Plan.

 

    Section 11. —
    Income Tax Withholding: Tax Bonuses

 

    11.1 Withholding.  In order to
    comply with all applicable federal or state income tax laws or
    regulations, the Committee may take such action as it deems
    appropriate to ensure that all applicable federal, state and
    local payroll, withholding, income or other taxes, which are the
    sole and absolute responsibility of Participant, are withheld or

    

    A-9

 

    collected from such Participant. In order to assist Participant
    in paying all or a portion of the federal, state and local taxes
    to be withheld or collected upon exercise or receipt of (or the
    lapse of restrictions relating to) an Award, the Committee, in
    its discretion and subject to such additional terms and
    conditions as it may adopt, may permit Participant to satisfy
    such tax obligation by (a) electing to have the Company
    withhold a portion of the Shares otherwise to be delivered upon
    exercise or receipt of (or the lapse of restrictions relating
    to) such Award with a Fair Market Value equal to the amount of
    such taxes; (b) delivering to the Committee Shares other
    than Shares issuable upon exercise or receipt of (or the lapse
    of restrictions relating to) such Award with a Fair Market Value
    (on the date the tax is withheld) equal to the amount of such
    taxes or (c) delivering to the Company cash, check (bank
    check, certified check or personal check), money order or wire
    transfer equal to such taxes. Any election to have Shares
    withheld must be made on or before the date that the amount of
    tax to be withheld is determined.

 

    11.2 Tax Bonuses.  The Committee,
    in its discretion, shall have the authority, at the time of
    grant of any Award under this Plan or at any time thereafter, to
    approve cash bonuses to designated Participants to be paid upon
    their exercise or receipt of (or the lapse of restrictions
    relating to) Awards in order to provide funds to pay all or a
    portion of federal and state and local taxes due as a result of
    such exercise or receipt (or the lapse of such restrictions).
    The Committee shall have full authority in its discretion to
    determine the amount of any such tax bonus.

 

    Section 12. —
    General Provisions

 

    12.1 No Rights to Awards.  No
    Eligible Person, Participant or other Person shall have any
    claim to be granted any Award under the Plan, and there is no
    obligation for uniformity of treatment of Eligible Persons,
    Participants or holders or beneficiaries of Awards under the
    Plan. The terms and conditions of Awards need not be the same
    with respect to any Participant or with respect to different
    Participants.

 

    12.2 Award Agreements.  Each
    Eligible Person to whom a grant is made under the Plan shall
    enter into a written agreement with the Company that shall
    contain such provisions, consistent with the provisions of the
    Plan, as may be established by the Committee. No Participant
    will have rights under an Award granted to such Participant
    unless and until an Award Agreement shall have been duly
    executed on behalf of the Company.

 

    12.3 No Limit on Other Compensation
    Arrangements.  Nothing contained in the Plan
    shall prevent the Company or any Affiliate from adopting or
    continuing in effect other or additional compensation
    arrangements, and such arrangements may be either generally
    applicable or applicable only in specific cases.

 

    12.4 No Right to Employment.  The
    grant of an Award shall not be construed as giving Participant
    the right to be retained in the employ of the Company or any
    Affiliate, nor will it affect in any way the right of the
    Company or an Affiliate to terminate such employment at any
    time, with or without cause. In addition, the Company or an
    Affiliate may at any time dismiss Participant from employment
    free from any liability or any claim under the Plan, unless
    otherwise expressly provided in the Plan or in any Award
    Agreement.

 

    12.5 Governing Law.  The validity,
    construction and effect of the Plan or any Award, and any rules
    and regulations relating to the Plan or any Award, shall be
    determined in accordance with applicable federal laws and the
    laws of the State of Georgia.

 

    12.6 Severability.  If any
    provision of the Plan or any Award is or becomes or is deemed to
    be invalid, illegal or unenforceable in any jurisdiction or
    would disqualify the Plan or any Award under any law deemed
    applicable by the Committee, such provisions shall be construed
    or deemed amended to conform to applicable laws, or if it cannot
    be so construed or deemed amended without, in the determination
    of the Committee, materially altering the purpose or intent of
    the Plan or the Award, such provision shall be stricken as to
    such jurisdiction or Award, and the remainder of the Plan or any
    such Award shall remain in full force and effect.

 

    12.7 No Trust or
    Fund Created.  Neither the Plan nor any
    Award shall create or be construed to create a trust or separate
    fund of any kind or a fiduciary relationship between the Company
    or any Affiliate and Participant or any other Person. To the
    extent that any Person acquires a right to receive payments from
    the Company or any Affiliate pursuant to an Award, such right
    shall be no greater than the right of any unsecured general
    creditor of the Company or any Affiliate.

    

    A-10

 

 

    12.8 No Fractional Shares.  No
    fractional Shares shall be issued or delivered pursuant to the
    Plan or any Award, and the Committee shall determine whether
    cash shall be paid in lieu of any fractional Shares or whether
    such fractional Shares or any rights thereto shall be canceled,
    terminated or otherwise eliminated.

 

    12.9 Limitation on Benefits.  With
    respect to persons subject to
    Rule 16b-3,
    transactions under this Plan are intended to comply with all
    applicable conditions of
    Rule 16b-3
    or its successors under such Act. To the extent any provision of
    the Plan or action by the Committee fails to so comply, it shall
    be deemed null and void, to the extent permitted by law and
    deemed advisable by the Committee.

 

    12.10 Headings.  Headings are given
    to the Sections and subsections of the Plan solely as a
    convenience to facilitate reference. Such headings shall not be
    deemed in any way material or relevant to the construction or
    interpretation of the Plan or any provision thereof.

 

    Section 13. —
    Effective Date

 

    The Plan is effective upon the date of adoption by the Board
    subject to approval of Shareholders at the February 3, 2000
    meeting of Shareholders. Unless previously terminated, the Plan
    shall terminate ten years from the effective date.
    Notwithstanding the prior sentence, an Award granted under this
    Plan may have terms or rights which may extend beyond the date
    the Plan terminates and the rights of the Committee under the
    Plan and the Board to amend the Plan may likewise extend beyond
    the date of the Plan’s termination.

 

    Section 14. —
    Exchange Program

 

    Notwithstanding any other provision of the Plan to the contrary,
    including but not limited to Section 6.1(g) hereof, the
    Company, by action of the Committee, may effect an Option and
    stock-settled Stock Appreciation Right (“SSAR”)
    exchange program on the terms set forth herein (the
    “Exchange Program”), to be commenced through an
    exchange offer prior to August 5, 2009, provided that in no
    event may more than one offer to exchange be made for any
    outstanding Option or SSAR. Under any exchange offer, Eligible
    Employees will be offered the opportunity to exchange Eligible
    Options/SSARs (the “Surrendered Awards”) for
    new Restricted Stock (the “New Restricted
    Stock”), as follows: (1) the shares subject to the
    New Restricted Stock shall have a Fair Market Value equal to the
    value (determined using the Black-Scholes option pricing model
    as of a date immediately prior to commencement of any exchange
    offer) of the Surrendered Awards; and (2) the New
    Restricted Stock will vest, subject to Section 6.3(c) of
    the Plan, in two equal annual installments, on the first and
    second anniversaries of the date of grant. Shares subject to
    Surrendered Awards will not be available for granting of Awards
    under the Plan. “Eligible Employees” means
    employees of the Company or any Affiliate other than executive
    officers (as defined in
    Rule 3b-7
    under the Securities Exchange Act of 1934, as amended).
    “Eligible Awards” means any Option or SSAR that
    has an exercise price in excess of $26. Subject to the
    foregoing, the Committee shall be permitted to determine
    additional terms, restrictions or requirements relating to the
    Exchange Program.

 

    IN WITNESS WHEREOF, the undersigned Secretary of the Company
    certifies that the foregoing is the Plan adopted by the Board of
    Directors of the Company as of the second day of November, 1999
    as amended through August 5, 2008.

 

    /s/ Peggy J. Caldwell

    Secretary

    

    A-11EX-10.1 Amended and Restated Employment Agreement

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS
AGREEMENT is entered into, effective this 4th day of August, 2008, by and between
Spanish Broadcasting System, Inc. (the “Company”), a Delaware corporation, and Joseph A. Garcia
(the “Executive”) (hereinafter collectively referred to as “the Parties”).

          WHEREAS, the Executive has been employed by the Company for a number of years in the position
of Chief Financial Officer, most recently pursuant to the terms of a agreement between the Parties
dated December 7, 2000 (the “2000 Agreement”); and

          WHEREAS, the Company has determined that it is in the best interests of the Company and its
shareholders to continue to employ the Executive, and the Executive is willing to serve in the
employ of the Company, for the period set forth herein upon the terms and conditions hereinafter
provided;

          NOW, THEREFORE, in consideration of the foregoing and the respective agreements of the parties
contained herein, the parties hereby agree as follows:

     1.     Term. The initial term of employment under this Agreement will be for three
years, with the period commencing on August 4, 2008 (the “Commencement Date”) and ending
on August 3, 2011 (the “Initial Term”); provided, however, that on the expiration date of the
Initial Term and on each anniversary of such date thereafter the term of employment under this
Agreement will be automatically renewed for an additional year, unless either the Company or the
Executive will have given written notice to the other at least sixty (60) calendar days prior
thereto that the term of employment under this Agreement will not be so renewed (a “Notice of
Non-Renewal”).

     2.     Employment.

     (a)     Position. The Executive will be employed as, and hold the title of, Senior
Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Secretary of
the Company, and will have the duties, powers, and responsibilities as are customary for such
positions. The Executive will be given the authority needed to perform the duties and undertake
the responsibilities assigned to his position. The Executive will report to the Company’s Chief
Executive Officer. Executive Agrees to serve as a member of the Company’s Board of Directors if
elected to such position.

     (b)     Obligations. The Executive shall devote his full business time and attention to
the business and affairs of the Company. During the term of this Agreement, the Executive shall
not engage in any other employment, service or consulting activity without the prior written
approval of the Company’s Chief Executive Officer. The foregoing, however, shall not preclude
the Executive from (i) serving on any corporate, civic or charitable boards or committees on
which the Executive is serving on the Commencement Date, provided those positions are listed in
attached Schedule I, or on which he commences service following the Commencement Date with the
prior written approval of the Company’s Chief Executive Officer, or (ii) managing personal
investments, so long as such clause (i) and (ii) activities do not interfere, in the judgment of
Company’s Chief Executive Officer, with the performance of the Executive’s responsibilities or
otherwise conflict with Executive’s obligations to the Company herein, including the obligations
in Section 9.

     (c)     Location. The Executive shall work from offices in the Miami, Florida
metropolitan area. The Executive agrees to travel as necessary to fulfill the requirements of
his position as Senior Executive Vice President, Chief Financial Officer, Chief Administrative
Officer and Secretary of the Company.

 

 

     3.     Base Salary and Bonus.

     (a)     Base Salary. The Company agrees to pay or cause to be paid to the Executive an
annual base salary at the rate of $525,000, less applicable withholding. This base salary will
be subject to annual review and may be increased from time to time as recommended by the Chief
Executive Officer and approved by the Compensation Committee of the Board of Directors (the
“Compensation Committee”) upon consideration of such factors as the Executive’s responsibilities,
compensation of similar executives within the Company and in other companies, performance of the
Executive, and other pertinent factors. The Executive’s annual rate of base salary, as it may be
increased from time to time, will be hereinafter referred to as the “Base Salary.” Such Base
Salary will be payable in accordance with the Company’s customary practices applicable to its
executives.

     (b)     Bonus. For each fiscal year completed during the Term, the Executive will be
eligible to receive an annual cash bonus (“Annual Bonus”) based upon the Executive’s attainment
of individual and Company performance goals that, taking into account in-put from the Executive,
will be pre-established in good faith by the Company’s Compensation Committee. The annual
performance goals set by the Compensation Committee for the Executive will be reasonable in
comparison to the individual and Company performance goals the Compensation Committee sets for
the Company’s other executive officers, provided that the Executive’s threshold target Annual
Bonus will be no less than $100,000 (the “Threshold Target Annual Bonus”), the target Annual
Bonus will be no less than $200,000 (the “Target Annual Bonus”) and the maximum Annual Bonus
amount for a fiscal year shall not exceed $300,000 (the “Maximum Target Annual Bonus”). The
Threshold Target Annual Bonus will be payable for achievement of minimum specified performance
goals, the Target Annual Bonus will be payable for achievement of specified target performance
goals and the Maximum Annual Target Bonus will be payable for achievement of specified
outstanding performance goals. Notwithstanding the preceding, a zero bonus is possible for
performance that fails to meet the threshold level of performance. Upon approval of the
Compensation Committee, the Annual Bonus (if any) for each fiscal year shall be paid in
accordance with the Company’s customary practices, but in no event more than 75 days following
the end of such fiscal year.

     (c)     Equity Compensation Awards. On the 30th day after the Agreement is executed by
the Parties, the Company will, under the 2006 Omnibus Equity Plan (the “Equity Plan”) grant
Executive 125,000 nonqualified stock options on Company Class A Shares (“Options”). These
Options will have a maximum exercise period of 10 years and an exercise price equal to the Fair
Market Value (as defined under the Equity Plan) of the shares on the date of grant. The Company
will also grant Executive 125,000 Stock Unit Awards under the Equity Plan, subject to
restrictions on vesting (“Stock Units”). Executive will vest in the Options and Stock Units in
three substantially equal annual installments, with the first annual installment vesting on the
date of the grant, and each additional installment vesting on the anniversary of such date in the
next two years. All Stock Units will be settled as soon as practicable after vesting, but in no
event later than 21/2 months after the close of the year in which such Stock Units vest.

     (d)     Employee Benefits. Provided he otherwise satisfies any applicable eligibility
requirements for participation, the Executive will be entitled to participate in the welfare,
retirement, perquisite, and fringe benefit plans, practices, and programs maintained by the
Company and made available to senior executives generally and as may be in effect from time to
time. The Executive’s participation in any such plans, practices and programs for which he
satisfies the applicable eligibility requirements will be on the same basis and terms as are
applicable to senior executives of the Company generally. For the avoidance of doubt, the Company
will pay for the health care coverage for the Executive and his immediate family, which shall
include his spouse and children to the extent eligible under the insurance plan.

2

 

     (e)     Car and Related Expenses. During the term of this Agreement the Company will
provide Executive with a Mercedes S-Class or similar level automobile for his business use, with
a new car (or new car lease) provided following the termination of the lease existing as of the
Commencement Date and will reimburse Executive for the related insurance coverage and associated
reasonable gasoline, oil and other maintenance expenses, provided the Executive provides
appropriate documentation of such insurance, gasoline, oil and other maintenance expenses.
Reimbursement will occur promptly after submission of appropriate documentation, provided no
reimbursement shall be made later than the end of the calendar year following the calendar year
in which the expense was incurred.

     4.     Other Benefits.

     (a)     Expenses. Subject to applicable Company policies, including (without
limitation) the timely submission of appropriate documentation and expense reports, the Executive
will be entitled to receive prompt reimbursement of all expenses reasonably incurred by him in
connection with the performance of his duties hereunder or for promoting, pursuing, or otherwise
furthering the business or interests of the Company. In no event shall a reimbursement be made
later than the end of the calendar year following the year in which the expense was incurred.

     (b)     Vacation. During the Term, the Executive will be eligible for paid vacation in
accordance with the Company’s policies, as may be in effect from time to time, for its senior
executives generally; provided, however, that the Executive will be eligible for no less than
four (4) weeks of paid vacation per year. Executive may rollover up to two (2) weeks of paid
vacation from one year to the next. Executive will be entitled to paid holidays in accordance
with the Company’s policies.

     5.     Termination. Except for a Notice of Non-Renewal, as described in Section 1, the
Executive’s employment hereunder may only be terminated in accordance with the following terms
and conditions:

     (a)     Termination by the Company without Cause. The Company will be entitled to
terminate the Executive’s employment at any time by delivering a Notice of Termination to the
Executive pursuant to Section 5(e); provided, however, that any termination of the Executive’s
employment for Cause shall be governed by the provisions of Section 5(b).

     (b)     Termination by the Company for Cause.

          (i)     The Company may terminate the Executive’s employment hereunder for “Cause” (as defined
below) by delivering to him a Notice of Termination. For purposes of the foregoing, any of the
following shall constitute grounds for terminating the Executive’s employment for Cause: (A) the
Executive’s pleading “guilty” or “no contest” to, or his conviction of, a felony or any crime
involving moral turpitude, (B) his commission of any act of fraud or any act of personal
dishonesty involving the property or assets of the Company intended to result in material
financial enrichment to the Executive or material injury or harm to the Company, including the
Company’s reputation, (C) a material breach by the Executive of any of his other obligations
under this Agreement or any other agreement with the Company, (D) the Executive’s commission of a
material violation of Company policy which would result in an employment termination if committed
by any other employee of the Company, (E) the Executive’s material dereliction of the major
duties, functions and responsibilities of his executive position (other than a failure resulting
from the Executive’s incapacity due to physical or mental illness), (F) a material breach by the
Executive of any of the Executive’s fiduciary obligations as an officer of the Company, (G) the
Executive’s willful and knowing participation in the preparation or release of false or
materially misleading financial statements relating to the Company’s operations and financial
condition or his willful and knowing submission of any false

3

 

or erroneous certification required of him under the Sarbanes-Oxley Act of 2002 or any
securities exchange on which shares of the Company’s Class A and/or Class B common stock are at
the time listed for trading, or (H) the use or disclosure of the confidential and/or proprietary
information of another entity in violation of any written agreement(s) between him and such
entity. However, prior to any termination of the Executive’s employment for Cause based on any
of the reasons specified in clauses (C) through (E) and the delivery of a Notice of Termination
in connection therewith, the Company shall give written notice to the Executive of the actions or
omissions deemed to constitute the grounds for such a termination for Cause, and the Executive
shall have a period of not less than sixty (60) calendar days after the receipt of such notice,
during which period the Executive shall continue to be provided with the compensation and
benefits described in Sections 3 and 4 of this Agreement) in which to cure the specified default
in his performance and thereby avoid Termination under this subsection (b)(i).

          (ii)     In the event the Executive is provided with a Notice of Termination under subsection
(b)(i), the Notice of Termination shall specify a Termination Date that is no earlier than the
third business day following the date of the Notice of Termination, and the Executive will have
three (3) business days following the date of such Notice of Termination to submit a written
request to the Board for a meeting to review the circumstances of his termination. If the
Executive timely submits such a written request to the Board, the Board or a committee of the
Board shall set a meeting whereby the Executive, together with his counsel, shall be permitted to
present any mitigating circumstances or other information as to why he should not be terminated
for Cause, and the Executive’s Termination Date shall be delayed until such meeting has occurred.
Such meeting will be held, at the Company’s option, either on a mutually agreeable date prior to
the Termination Date specified in the Notice of Termination or on a mutually agreeable date
within fifteen (15) calendar days after the Executive’s timely written notice to the Company
requesting such a meeting. Within five (5) business days after such meeting, the Board or
committee of the Board, as applicable, shall deliver written notice to the Executive of its final
determination and, if the termination decision is upheld, the final actual Termination Date.
During the period following the date of the Notice of Termination until the Termination Date or
other resolution of the matter, the Company shall have the option to place the Executive on an
unpaid leave of absence. The rights under this subsection will not be deemed to prejudice the
Executive’s other rights and remedies in any way or give rise to any waiver, estoppel, or other
defense or bar. Without limiting the foregoing sentence and for purposes of clarification, the
failure by the Executive to request a meeting under this subsection, to participate in a meeting
that has been requested, or to present any evidence or argument will not prevent the Executive
from making any claim against the Company, from seeking any legal or equitable remedy, or from
putting forward any evidence or argument at any judicial or arbitral hearing.

     (c)     Termination by the Executive. The Executive may terminate his employment
hereunder for “Good Reason” by delivering to the Company (1) a Preliminary Notice of Good Reason
(as defined below) no later than sixty (60) calendar days following the act or omission which the
Executive sets forth in such notice as grounds for a Good Reason termination, and (2) not earlier
than fourteen (14) calendar days after the delivery of such Preliminary Notice or (if later) the
third business day following the Company’s failure to take appropriate remedial action within the
applicable sixty (60)-day cure period provided below to the Company following the receipt of such
the Preliminary Notice, a Notice of Termination. For purposes of this Agreement, “Good Reason”
means any of the following:

          (i)     a reduction in Base Salary;

          (ii)     a change in the reporting hierarchy such that Executive no longer reports directly to
the Chief Executive Officer of the Company;

4

 

          (iii)     a change in Executive’s title or office without the Executive’s prior written consent;

          (iv)     a material reduction in the scope of the Executive’s duties, responsibilities or
authority, or the repeated reassignment of the Executive’s duties, responsibilities or authority,
and such event has not been rescinded within fifteen (15) business days after Executive notifies
the Company that he objects thereto, provided that Executive notifies the Company within
forty-five (45) days of such event that he objects;

          (v)     the movement by the Company of the Executive’s principal place of employment to a site
that is more than twenty (20) miles from the Company’s principal place of business;

          (vi)     any material breach by the Company of the Agreement that is not cured within fifteen
(15) business days after the Executive notifies the Company that he objects thereto, provided
that Executive notifies the Company within forty-five (45) days of such event that he objects;

     In no event will any acts or omissions of the Company which are not the result of bad faith
and which are cured within sixty (60) days after receipt of written notice from the Executive
identifying in reasonable detail the acts or omissions constituting “Good Reason” (a “Preliminary
Notice of Good Reason”) be deemed to constitute grounds for a Good Reason resignation. A
Preliminary Notice of Good Reason will not, by itself, constitute a Notice of Termination.

     (d)     Termination due to the Executive’s Death or Disability. This Agreement will
terminate upon the death of the Executive. The Company may terminate the Executive’s employment
hereunder if he is unable to perform, with or without reasonable accommodation, the principal
duties and responsibilities of his position with the Company for a period of six (6) consecutive
months or more by reason of any physical or mental injury or impairment; provided, however, that
in the event the Executive is at the time covered under any long-term disability benefit program
in effect for the Company’s executive officers or employees, such termination of the Executive’s
employment shall not occur prior to the date he first becomes eligible to receive benefits under
such program. The termination of the Executive’s employment under such circumstances shall, for
purposes of this Agreement, constitute a termination for “Disability.”

     (e)     Notice of Termination. Any purported termination for Cause by the Company or for
Good Reason by the Executive will be communicated by a written Notice of Termination to the other
at least three (3) business days prior to the Termination Date (as defined below). For purposes
of this Agreement, a “Notice of Termination” will mean a notice which indicates the specific
termination provision in this Agreement relied upon and will, with respect to a termination for
Cause or Good Reason, set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such termination of the Executive’s employment under the provision so
indicated. Any termination by the Company under this Section 5 other than for Cause or by the
Executive without Good Reason will be communicated by a written Notice of Termination to the
other party fourteen (14) calendar days prior to the Termination Date. However, the Company may
elect to pay the Executive in lieu of fourteen (14) calendar days’ written notice. For purposes
of this Agreement, no such purported termination of employment pursuant to this Section 5 will be
effective without such Notice of Termination.

     (f)     Termination Date. “Termination Date” will mean in the case of the Executive’s
death, the date of death; in the case of non-renewal of the Agreement pursuant to Section 1, the
date the Term of the Agreement expires; and in all other cases, the date specified in the Notice
of Termination.

5

 

     6.     Compensation Upon Termination.

     (a)     Except as provided further in this Section 6(a), if the Executive’s employment is
terminated: (i) by the Company for Cause; or (ii) by reason of the Executive’s death or
Disability; or (iii) pursuant to a Notice of Non-Renewal delivered by the Executive; or (iv) by
the Executive by delivery of a written notice of resignation without Good Reason, the Company’s
sole obligations hereunder will be to pay the Executive or his estate on the Termination Date the
following amounts earned hereunder but not paid as of the Termination Date: (i) Base Salary, (ii)
reimbursement for any and all monies advanced or expenses incurred pursuant to Section 4(a)
through the Termination Date, provided the Executive has submitted appropriate documentation for
such expenses, and (iii) the amount of the Executive’s accrued but unpaid vacation time
(together, these amounts will be referred to as the “Accrued Obligations”). In addition to the
Accrued Obligations, in the event the Executive’s employment terminates by reason of the
Executive’s death or Disability, the Executive or his estate will be paid an amount equal to 24
months of his Base Salary, offset, in the event of termination due to Disability by the amount of
any payment received under the Company’s disability policies covering the Executive, which amount
shall be paid in a single lump Sum on the 30th business day following the Executive’s death or
Disability. In the event the Executive’s employment terminates by reason of the Executive’s
death or Disability, the Executive or his estate also will be paid his Annual Bonus, pro-rated
for his actual period of service during the fiscal year in which such termination of employment
occurs and based on actual performance. Such Annual Bonus will be paid at the time such Annual
Bonus would otherwise have been paid. Further, in the event the Executive’s employment
terminates by reason of the Executive’s death or Disability, any unvested stock options will vest
and all of the Executive’s outstanding stock options will remain exercisable for a period of one
year from the date of such termination, provided that in no event shall such options be
exercisable after the expiration of the option term. In addition, any unvested Stock Units will
vest immediately upon such termination and be paid to the Executive or his estate as soon as
practicable after vesting, but in no event later than 21/2 months after the close of the year in
which such vesting occurs. The Executive’s entitlement to any other benefits will be determined
in accordance with the Company’s employee benefit plans then in effect.

     (b)     If the Executive’s employment is terminated prior to a Change in Control (as defined in
Section 6(c)): (i) by the Company for any reason other than for Cause; (ii) by the Executive for
Good Reason, the Executive will, in addition to the Accrued Obligations, be entitled to the
following compensation and benefits from the Company, provided and only if he (1) executes and
delivers to the Company a general release (substantially in the form of attached Exhibit A) which
becomes effective and enforceable in accordance with applicable law and (2) complies with the
restrictive covenants set forth in Sections 9 and 10:

          (i)     an amount equal to the Executive’s Base Salary for the greater of (1) the
remainder of the Term or (2) twenty-four (24) months (the “Severance Period”). One-half (1/2) of
this amount will be paid on the fifth business day following the Termination Date and one-half
(1/2) will be paid in accordance with the Company’s normal payroll practices;

          (ii)     any Annual Bonus earned but unpaid as of the Termination Date, which amount shall be
paid in a single lump sum on the 30th business day following the Termination Date;

          (iii)     except as otherwise provided in (vi), below, continued exercisability of vested stock
options for a period of three months following the Termination Date; provided that in no event
shall such options be exercisable after the expiration of the option term;

6

 

          (iv)     provided the Executive and/or his dependents are eligible and timely elect to continue
their healthcare coverage under the Company’s group health plan pursuant to their rights under
COBRA, continued coverage under such plan at the Company’s expense until the earliest of (A) the
end of the twelve (12)-month period measured from the Termination Date, (B) the date that the
Executive and/or his eligible dependents are no longer eligible for COBRA coverage, and (C) the
date that the Executive becomes eligible for such coverage under the health plan of any new
employer (the Executive agrees to provide the Company with written notice of such eligibility
within ten calendar days);

          (v)     the Executive’s entitlement to any other benefits will be determined in accordance with
the Company’s employee benefit plans then in effect; and.

          (vi)     in the event the Executive’s employment is terminated by the Executive for Good Reason,
all non-vested Options previously granted to Executive shall immediately vest and remain
exercisable for a period of one year following the Termination Date; provided that in no event
shall such options be exercisable after the expiration of the option term, and all non-vested
Stock Units shall vest immediately and be settled as soon as practicable, but in no event later
than 21/2 months after the close of the year in which such vesting occurs.

     (c) If the Executive’s employment is terminated on or before the second anniversary of a
Change in Control (as defined below): (i) by the Company for any reason other than for Cause;
(ii) by the Executive for Good Reason, the Executive will, in addition to the Accrued
Obligations, be entitled to the following compensation and benefits from the Company, provided
and only if he (i) executes and delivers to the Company a general release (substantially in the
form of attached Exhibit A) which becomes effective and enforceable in accordance with applicable
law and (ii) complies with the restrictive covenants set forth in Sections 9 and 10:

          (i)     an amount equal to two times the Executive’s Base Salary in effect on the Termination
Date plus two times the Annual Bonus paid or payable to Executive with respect to the year
preceding such Termination Date, such amount to be paid in equal increments, in accordance with
the Company’s normal payroll practices, for twenty-four (24) months (the “Change in Control
Severance Period”);

          (ii)     All non-vested Options previously granted to Executive shall immediately vest and
remain exercisable for a period of one year following the Termination Date; provided that in no
event shall such options be exercisable after the expiration of the option term;

          (iii)     All non-vested Stock Units shall vest immediately and be and be settled as soon as
practicable, but in no event later than 21/2 months after the close of the year in which such
vesting occurs;

          (iv)     provided the Executive and/or his dependents are eligible and timely elect to continue
their healthcare coverage under the Company’s group health plan pursuant to their rights under
COBRA, continued coverage under such plan at the Company’s expense until the earliest of (A) the
end of the twelve (12)-month period measured from the Termination Date, (B) the date that the
Executive and/or his eligible dependents are no longer eligible for COBRA coverage, and (C) the
date that the Executive becomes eligible for such coverage under the health plan of any new
employer (the Executive agrees to provide the Company with written notice of such eligibility
within ten calendar days); and

          (v)     the Executive’s entitlement to any other benefits will be determined in accordance with
the Company’s employee benefit plans then in effect;

7

 

          Notwithstanding anything contained herein to the contrary, benefits provided to the
Executive under this Section 6(c) shall in no event exceed the maximum benefit amount payable
without triggering the imposition of taxes under Section 4999 of the Internal Revenue Code (the
“Code”). Executive agrees to a reduction of the benefits described under this Section 6(c) as
necessary to prevent such benefits from constituting a parachute payment under Code Section 280G.

     For purposes of this Section 6(c), “Change in Control” means a change of control as defined
under the equity plan.

     (d)     The Executive will not be required to mitigate the amount of any payment provided for in
this Section 6 by seeking other employment or otherwise, and no such payment or benefit will be
eliminated, offset or reduced by the amount of any compensation provided to the Executive in any
subsequent employment.

     7.     Clawback Provision. In the event that the Company is required to prepare an
accounting restatement due to material noncompliance with any financial reporting requirement
under the Federal securities laws, Executive shall reimburse the Company for the amount of any
Annual Bonus or any other incentives paid to Executive based on the financial results that are
materially restated downward.

     8.     Attorneys’ Fees. Promptly following receipt of a statement for professional
services (including, but not limited to tax consultants, advisors, attorneys, compensation
experts, etc.) the Company shall reimburse the Executive for fees and expenses of Executive’s
legal counsel which were incurred in connection with the negotiation and review of this Agreement
up to an amount equal to Seven Thousand, Five Hundred Dollars ($7,500). Payment of any
reimbursement under this Section 8 shall be made to the Executive not later than the end of the
calendar year following the year in which such expenses were incurred.

8

 

     9.     Confidentiality. The Executive hereby acknowledges that the Company may, from
time to time during the Term, disclose to the Executive confidential information pertaining to
the Company’s business, strategic plans, technology or financial affairs. All information, data
and know-how, whether or not in writing, of a private or confidential nature concerning the
Company’s finances and financial reports, employee information and other organizational
information, trade secrets, processes, systems, marketing strategies and future marketing plans,
customer lists, products, prices, fees, costs, technology, formulas, inventions, trade secrets,
know-how, software, marketing methods, plans, personnel, suppliers, competitors, markets, or
other specialized information or proprietary matters , (collectively, “Proprietary Information”)
is and shall remain the sole and exclusive property of the Company and shall not be used or
disclosed by the Executive except to the extent necessary to perform his duties and
responsibilities under this Agreement. All tangible manifestations of such Proprietary
Information (whether written, printed or otherwise reproduced) shall be returned by the Executive
upon the termination of his employment hereunder, and the Executive shall not retain any copies
or excerpts of the returned items. Notwithstanding the preceding, there shall be no obligation
hereunder with respect to information that (i) is generally available to the public on the
Commencement Date or (ii) becomes generally available to the public other than as a result of a
disclosure not otherwise permitted hereunder.

     10.     Restrictive Covenants. At all times during the Executive’s employment with the
Company, and for a period of the longer of (i) one (1) year after the termination of his
employment with the Company, or (ii) the period for which severance payments are made to
Executive, regardless of the reason or cause for such termination, the Executive shall comply
with the following restrictions:

     (a)     The Executive shall not directly or indirectly encourage or solicit any employee,
faculty member, consultant or independent contractor to leave the employment or service of the
Company (or any affiliated company) for any reason or interfere in any other manner with any
employment or service relationships at the time existing between the Company (or any affiliated
company) and its employees, faculty members, consultants and independent contractors.

     (b)     The Executive shall not directly or indirectly solicit any customer, vendor, supplier,
licensor, licensee or other business affiliate of the Company (or any affiliated company) with
respect to products or services competitive with those offered by the Company or directly or
indirectly induce any such person to terminate its existing business relationship with the
Company (or affiliated company) or interfere in any other manner with any existing business
relationship between the Company (or any affiliated company) and any such customer, vendor,
supplier, licensor, licensee or other business affiliate.

     (c)     The Executive shall not, on his own or as an employee, agent, promoter, consultant,
advisor, independent contractor, general partner, officer, director, investor, lender or
guarantor or in any other capacity, directly or indirectly:

          (i)     conduct, engage in, be connected with, have any interest in, or assist any person or
entity engaged in, any business, whether in the United States, any possession of the United
States or any foreign country or territory, that competes with any of the businesses or programs
conducted by the Company in the communications industry for which the Executive provided services
and/or support and/or for which the Executive held supervisory responsibility or oversight during
the period of his employment with the Company (hereafter collectively referred to as the
“Businesses”); or

          (ii)     permit his name to be used in connection with a business which is competitive or
substantially similar to the Businesses.

9

 

     Notwithstanding the foregoing the Executive may own, directly or indirectly, solely as an
investment, up to one percent (1%) of any class of publicly traded securities of any business that
is
competitive or substantially similar to the Businesses shall not be deemed a breach of his
restrictive covenant under this Section 9(c).

     11.     Non-Disclosure/Non-Disparagement. At no time during the term of this Agreement
or thereafter shall Executive disclose Proprietary Information, or disparage the Company, its
employees or its Directors. Notwithstanding the preceding, nothing in this Agreement shall in
any way limit the ability of the Executive to provide information covered by this Agreement to a
Federal government department or agency to assist such entity in the fulfillment of its duties.

     12.     Section 409A. Certain payments contemplated by this Agreement may be “deferred
compensation” for purposes of Section 409A of the Code. Accordingly, the following provisions
shall be in effect for purposes of avoiding or mitigating any adverse tax consequences to the
Executive under Code Section 409A.

     (a)     It is the intent of the parties that the provisions of this Agreement comply with all
applicable requirements of Code Section 409A. If any federal legislation is enacted during the
term of this Agreement which imposes a dollar limit on deferred compensation, then the Executive
will co-operate with the Company in restructuring any items of compensation under this Agreement
that are deemed to be deferred compensation subject to such limitation; provided such
restructuring shall not reduce the dollar amount of any such item or adversely affect the vesting
provisions applicable to such item or otherwise reduce the present value of that item.

     (b)     Notwithstanding any provision to the contrary in this Agreement, no payments or benefits
to which the Executive becomes entitled under Section 6 of this Agreement (other than COBRA
benefits) shall be made or paid to the Executive prior to the earlier of (i) the expiration of
the six (6)-month period measured from the date of his “separation from service” with the Company
(as such term is defined in the final regulations under Section 409A) or (ii) the date of his
death, if the Executive is deemed at the time of such separation from service a “key employee”
within the meaning of that term under Code Section 416(i) and such delayed commencement is
otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).
Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments
deferred pursuant to this subsection 12(b) shall be paid in a lump sum to the Executive, and any
remaining payments due under this Agreement shall be paid in accordance with the normal payment
dates specified for them herein.

     13.     Indemnification. The Executive shall be covered by any policy of liability
insurance which the Company maintains during the Term for its officers and directors (“D&O
Insurance”), to the maximum extent of such coverage provided any other executive officer of the
Company. The Company agrees to provide the Executive with information about all D&O Insurance
maintained during the Term, including proof that such insurance is in place and the terms of
coverage, upon the Executive’s reasonable request. In addition to any rights the Executive may
have under such D&O Insurance, applicable law, or the articles of incorporation and bylaws of the
Company and except as may be prohibited by applicable law, the Company agrees to indemnify,
defend, and hold the Executive harmless from and against any and all claims and/or liability
arising from, as a result of, or in connection with the Executive’s employment by the Company or
any outside appointments and offices held at the Company’s request, except to the extent such
claims or liability are attributable to the Executive’s gross negligence or willful misconduct.

     14.     Injunctive Relief. The Executive expressly agrees that the covenants set forth
in Sections 9 and 10 of this Agreement are reasonable and necessary to protect the Company and
its legitimate business interests, and to prevent the unauthorized dissemination of Proprietary
Information to competitors of the Company. The Executive also agrees that the Company will be
irreparably

10

 

harmed and that damages alone cannot adequately compensate the Company if there is a
violation of Sections 9 or 10 of this Agreement by the Executive, and that injunctive relief
against the Executive is essential for the protection of the Company. Therefore, in the event of
any such breach, it is agreed that, in addition to any other remedies available, the Company
shall be entitled as a matter of right to injunctive relief in any court of competent
jurisdiction, without the necessity of posting a bond, plus the attorneys’ fees and costs
actually incurred for the securing of such relief.

     15.     Survival of Certain Provisions. The provisions of Sections 7, 9, 10, 12 through
21, 23, and 24 will survive any termination of this Agreement.

     16.     Withholdings. Any compensation and/or benefits provided to the Executive by the
Company shall be subject to the Company’s collection of all applicable payroll deductions and
applicable withholding and payroll taxes.

     17.     Successors and Assigns. This Agreement will be binding upon and will inure to
the benefit of the Company, its successors and assigns, and the Company will require any
successor or assign to expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no such succession or
assignment had taken place. The term “the Company” as used herein will include any such
successors and assigns to the Company’s business and/or assets. The term “successors and
assigns” as used herein will mean a corporation or other entity acquiring or otherwise succeeding
to, directly or indirectly, all or substantially all the assets and business of the Company
(including this Agreement) whether by operation of law or otherwise. This Agreement will inure
to the benefit of and be enforceable by the Executive’s legal personal representative.

     18.     Arbitration. Except as otherwise provided in Section 14, any controversy or
claim between the Company or any of its affiliates and the Executive arising out of or relating
to this Agreement or its termination or any other dispute between the parties, whether arising in
tort, contract, or pursuant to a statute, regulation, or ordinance now in existence or which may
in the future be enacted or recognized will be settled and determined by a single arbitrator
whose award will be accepted as final and binding upon the parties. The arbitration shall be
conducted in Miami, Florida and in accordance with the American Arbitration Association (“AAA”)
Employment Arbitration Rules in effect at the time such arbitration is properly initiated. To
the extent that any of the AAA rules or anything in the Agreement conflicts with any arbitration
procedures required by applicable law, the arbitration procedures required by applicable law
shall govern. The costs of the arbitration, including administrative fees and fees charged by
the arbitrator, will be borne by the Company. Each party will bear its or his own travel
expenses and attorneys’ fees: provided, however that the arbitrator (i) shall award attorneys’
fees to the Executive with respect to any claim for breach of this Agreement on which he is the
prevailing party and may award attorneys’ fees to the Executive as otherwise allowed by law and
(ii) may award attorneys’ fees to the Company with respect to any other claim on which it is the
prevailing party and it is determined by the arbitrator that such claim by the Executive was
frivolous in that it presented no colorable arguments for recovery. The arbitration shall be
instead of any civil litigation. The arbitrator’s decision shall be final and binding to the
fullest extent permitted by law and enforceable by any court having jurisdiction thereof.
Judgment upon any award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.

11

 

     19.     Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of Termination) will be in
writing and will be deemed to have been given when personally delivered or on the third business
day following mailing if sent by registered or certified mail, return receipt requested, postage
prepaid, or upon receipt if overnight delivery service is used, addressed as follows:

To the Executive:

To the Company:

2601 S. Bayshore Dr., PHII

Coconut Grove, Florida 33133

With a copy to:

Melanie Montenegro

2601 S. Bayshore Dr., PHII

Coconut Grove, Florida 33133

     20.     Miscellaneous. No provision of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in writing and signed by
the Executive and the Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this Agreement to be
performed by such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or representation, oral
or otherwise, express or implied, with respect to the subject matter hereof has been made by
either party which is not expressly set forth in this Agreement.

     21.     Counterparts. This Agreement may be executed in several counterparts, each of
which will be deemed an original and all of which will constitute but one and the same
instrument. An electronic facsimile of a signature, when delivered by the signing party to the
non-signing party, will have the same force and effect as an original.

     22.     Governing Law. This Agreement will be governed by and construed and enforced in
accordance with the laws of the State of Florida without giving effect to the conflict of law
principles thereof.

     23.     Severability. If any provision of this Agreement as applied to any party or to
any circumstance should be adjudged by a court of competent jurisdiction (or determined by the
arbitrator) to be void or unenforceable for any reason, the invalidity of that provision shall in
no way affect (to the maximum extent permissible by law) the application of such provision under
circumstances different from those adjudicated by the court or determined by the arbitrator, the
application of any other provision of this Agreement, or the enforceability or invalidity of this
Agreement as a whole. Should any provision of this Agreement become or be deemed invalid, illegal
or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage,
then such provision shall be deemed amended to the extent necessary to conform to applicable law
so as to be valid and enforceable or, if such provision cannot be so amended without materially
altering the intention of the parties, then such provision will be stricken, and the remainder of
this Agreement shall continue in full force and effect.

     24.     Entire Agreement. This Agreement shall constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and shall supersede all prior
agreements, if any, understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.

12

 

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

13

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and the Executive has executed this Agreement as of the day and year first above
written.

	 	 	 	 	 
	JOSEPH A. GARCIA	 	SPANISH BROADCASTING SYSTEM, INC.
	 
	 	 	 	 
	/s/ Joseph A. García

	 	By:	 	Raúl Alarcón, Jr. 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:	 	CEO 
	 

	 	 	 	 

14

 

EXHIBIT A

FORM OF GENERAL RELEASE

15

 

GENERAL RELEASE

     This
AGREEMENT is made as of ____________, 200___, by and between _______________ (“Executive”),
and Spanish Broadcasting System, Inc. (the “Company”).

     In consideration for the severance benefits offered by the Company to Executive pursuant to
Section 6 of his Employment Agreement with the Company dated ____________, 2008 (the “Employment
Agreement”), Executive agree as follows:

     1.     Termination of Employment. Executive acknowledges that his employment with the
Company is terminated effective ____________ (the “Termination Date”), and he agrees that he
will not apply for or seek re-employment with the Company, its parent companies, subsidiaries and
affiliates after that date. Executive agrees that he has received and reviewed his final
paycheck and he has received all wages and accrued but unpaid vacation pay earned by him through
the Termination Date.

     2.     Waiver and Release.

          (a)     Except as set forth in Section 2(b), which identifies claims expressly excluded from
this release, Executive hereby releases the Company, all affiliated companies, and their
respective past and present directors, officers, agents, employees, employee benefit plan
fiduciaries and administrators, insurers, stockholders, successors and assigns from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorney fees, damages,
indemnities and obligations of every kind and nature, in law, equity or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, arising from or relating to
Executive’s employment with the Company and the termination of that employment up to the date he
signs this Release, including (without limitation): claims of wrongful discharge, emotional
distress, defamation, fraud, breach of contract, breach of the covenant of good faith and fair
dealing, discrimination or retaliation claims based on sex, age, race, national origin,
disability or any other basis under Title VII of the Civil Rights Act of 1964, as amended, the
Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the Americans with
Disabilities Act, the Equal Pay Act of 1963, as amended, and any similar law of any state or
local governmental entity, claims under the Employee Retirement Income Security Act of 1973, as
amended, any contract claims, tort claims and wage or benefit claims, including (without
limitation) claims for salary, bonuses, commissions, equity awards (including stock grants, stock
options and restricted stock units), vesting acceleration, vacation pay, fringe benefits,
severance pay or any other form of compensation.

          (b)     The only claims that Executive is not waiving and releasing under this Agreement are
claims he may have for (1) unemployment, state disability, worker’s compensation, and/or paid
family leave insurance benefits pursuant to the terms of applicable state law; (2) continuation
of existing participation in Company-sponsored group health benefit plans under the federal law
known as “COBRA” and/or under an applicable state law counterpart(s); (3) any benefits
entitlements that are vested and unpaid as of his termination date pursuant to the terms of a
Company-sponsored benefit plan; (4) any benefits to which he is entitled pursuant to Section 7 of
the Employment Agreement or his rights to indemnification pursuant to Section 13 of the
Employment Agreement, (5) violation of any federal state or local statutory and/or public policy
right or entitlement that, by applicable law, is not waivable; (6) any wrongful act or omission
occurring after the date he executes this Agreement; and (7) any claim relating to the
enforcement of this Agreement under the Age Discrimination in Employment Act of 1963, as amended.
In addition, nothing in this Agreement prevents or prohibits Executive from filing a claim with
the Equal Employment Opportunity Commission (EEOC) or any other government agency that is
responsible for enforcing a law on behalf
of the government and deems such claims not waivable. However, because Executive is hereby
waiving and releasing all claims “for monetary damages and any other form of personal relief”
(per Section 2(a) above), he agrees not to seek or accept any personal forms of relief from the
EEOC, similar government agencies, or any third party.

16

 

          (c)     Executive represents that he has not filed any complaints, charges, claims, grievances,
or lawsuits against the Company and/or any related persons with any local, state or federal
agency or court, or with any other forum.

          (d)     Executive acknowledges that he may discover facts different from or in addition to those
he now knows or believes to be true with respect to the claims, demands, causes of action,
obligations, damages, and liabilities of any nature whatsoever that are the subject of this
Agreement, and he expressly agrees to assume the risk of the possible discovery of additional or
different facts, and agrees that this Agreement shall be and remain in effect in all respects
regardless of such additional or different facts. Executive expressly acknowledges that this
Agreement is intended to include, and does include in its effect, without limitation, all claims
which Executive does not know or suspect to exist in his favor against the Company and/or any
related persons at the moment of execution thereof, and that this Agreement expressly
contemplates extinguishing all such claims.

          (e)     Executive understands and agrees that the Company has no obligation to provide him with
any severance benefits under the Employment Agreement unless he executes this Agreement.
Executive also understands that he has received or will receive, regardless of the execution of
this Agreement, all wages owed to him, together with any accrued but unpaid vacation pay, less
applicable withholdings and deductions, earned through the Termination Date.

          (f)     This Agreement is binding on Executive, his heirs, legal representatives and assigns.

     3.     Cooperation. Executive agrees to cooperate with and assist the Company and its
counsel at any time and in any manner reasonably required by the Company or its counsel (with due
regard for the Executive’s other commitments if he has obtained other employment) in connection
with any litigation or other legal process affecting the Company or in answering questions
concerning any other matter of which Executive has knowledge as result of his employment (other
than any litigation with respect to this Agreement). In the event of such requested cooperation,
the Company shall reimburse Executive for his reasonable out-of-pocket expenses.

     4.     Entire Agreement. This Agreement and the Employment Agreement constitute the
entire understanding and agreement between Executive and the Company in connection with the
matters described, and replaces and cancels all previous agreements and commitments, whether
spoken or written, with respect to such matters. Nothing in this Agreement supersedes or
replaces any of Executive’s obligations under his Employment Agreement that survive termination,
including, but not limited to (i) his (and the Company’s) agreement to arbitrate disputes, (ii)
his restrictive covenants under Section 10 of the Employment Agreement and (iii) his obligations
under Section 9 of the Employment Agreement, his existing Proprietary Information Inventions
Agreement with the Company and any other obligations not to use or disclose Company confidential
and/or proprietary information.

     5.     Modification in Writing. No oral agreement, statement, promise, commitment or
representation shall alter or terminate the provisions of this Agreement. This Agreement cannot
be changed or modified except by written agreement signed by Executive and authorized
representatives of the Company.

17

 

     6.     Governing Law; Jurisdiction. This Agreement shall be governed by and enforced in
accordance with the laws of the State of Florida.

     7.     Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.

     8.     No Admission of Liability. This Agreement does not constitute an admission of
any unlawful discriminatory acts or liability of any kind by the Company or anyone acting under
their supervision or on their behalf. This Agreement may not be used or introduced as evidence
in any legal proceeding, except to enforce or challenge its terms.

     9.     Acknowledgements. Executive is advised to consult with an attorney of his choice
prior to executing this Agreement. By signing below, Executive acknowledges and certifies that
he:

          (a)     has read and understands all of the terms of this Agreement and is not relying on any
representations or statements, written or oral, not set forth in this Agreement;

          (b)     has been provided a consideration period of twenty-one (21) calendar days within which
to decide whether he will execute this Agreement and that no one hurried him into executing this
Agreement;

          (c)     is signing this Agreement knowingly and voluntarily; and

          (d)     has the right to revoke this Agreement within seven (7) days after signing it, by
providing written notice of revocation via certified mail to the Company to the address specified
in the Employment Agreement. Executive’s written notice of revocation must be postmarked on or
before the end of the eighth (8th) calendar day after he has timely signed this Agreement. This
deadline will be extended to the next business day should it fall on a Saturday, Sunday or
holiday recognized by the U.S. Postal Service.

          Because of the revocation period, the Company’s obligations under this Agreement shall not
become effective or enforceable until the eighth (8th) calendar day after the date Executive
signs this Agreement provided he has delivered it to the Company without modification and not
revoked it (the “Effective Date”).

I HAVE READ, UNDERSTAND AND VOLUNTARILY ACCEPT AND AGREE TO THE ABOVE TERMS

_______________

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Date:
	 	 	,	 	20	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Signature
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

18

 

SCHEDULE I

LIST OF EXISTING BOARD MEMBERSHIPS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]