Document:

EX-10.02.06

 Exhibit 10.02.06 

EMPLOYMENT AGREEMENT 
 This Employment Agreement (the “Agreement”) is entered into as of July 1, 2012, by and between Stuart W. Epperson, an individual (“Executive”), and Salem Communications
Holding Corporation, a Delaware corporation (the “Company”). 
 RECITALS 

WHEREAS, the Executive and the Company are parties to an Employment Agreement, dated July 1, 2011 (the “Old Employment
Agreement”); 
 WHEREAS, the Executive and the Company wish to terminate the Old Employment Agreement, effective as of
midnight on June 30, 2012; 
 WHEREAS, the Company desires to employ Executive in the capacity of Chairman of the Board of
the Company on the terms and conditions set forth herein; and 
 WHEREAS, Executive desires to serve in such capacity on behalf
of the Company and to provide to the Company the services described herein on the terms and conditions set forth herein. 
 NOW,
THEREFORE, in consideration of the foregoing recitals, the terms and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and the Company hereby agree as
follows: 
  

	 	1.	Employment by the Company and Term. 

 (a) Duties. Subject to the terms set forth herein, the Company agrees to employ Executive as Chairman of the Board and Executive hereby accepts such employment. As Chairman of the Board, Executive
shall have the authority, functions, duties, powers and responsibilities for Executive’s corporate office and position as set forth in the Company’s Bylaws from time to time and such other authority, functions, duties, powers and
responsibilities as the Board of Directors of the Company (the “Board”) may from time to time prescribe or delegate to Executive, in all cases to be consistent with Executive’s corporate offices and positions. Notwithstanding the
foregoing, the Board may change Executive’s title, corporate office, positions, authority, functions, duties, powers and responsibilities from time to time if it, in its sole discretion, believes such change(s) to be in the best interest of the
Company, provided that in no event shall Executive’s status be of lesser stature than as non-executive Vice Chairman. 
 (b)
Full Time and Best Efforts. During the Term, Executive shall apply, on a full-time basis, all of his skill and experience to the performance of his duties hereunder and shall not, without the prior consent of the Board, devote substantial
amounts of time to outside business activities. The performance of Executive’s duties shall be primarily in Winston-Salem, North Carolina and Jacksonville, Florida, subject to reasonable travel as the performance of his duties in the business
may require. Notwithstanding the foregoing, Executive may devote a reasonable amount of his time to civic, community, charitable or passive investment activities in a manner which is reasonably consistent with his historic practices. 

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 (c) Company Policies. The employment relationship between the parties shall be
governed by the general employment policies and practices of the Company and of its parent, Salem Communications Corporation, a Delaware corporation (“Parent”), including without limitation the policies described in Section 10 of this
Agreement, except that when the terms of this Agreement differ from or are in conflict with the Company’s or Parent’s general employment policies or practices, this Agreement shall control. 

(d) Term. Executive’s term of employment under this Agreement shall commence as of the date hereof (the “Effective
Date”) and, subject to the terms hereof, shall terminate on such date (the “Termination Date”) that is the earlier of: (1) June 30, 2013, or (2) the termination of Executive’s employment pursuant to
Section 4 of this Agreement. The period from the Effective Date until the Termination Date shall be defined herein as the “Term.” 
  

	 	2.	Compensation and Benefits. 

 (a) Cash Salary. Executive shall receive for services to be rendered hereunder an annual base salary (the “Base Salary”), of Two Hundred Fifty Thousand Dollars ($250,000).

 (b) Participation in Benefit Plans. During the Term, Executive shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health and accident, disability, compensation or other plan or program of the Parent or Company now existing or established hereafter to the extent that he is eligible under the general provisions thereof. The
Company may, in its sole discretion and from time to time, amend, eliminate or establish additional benefit programs as it deems appropriate. The availability and terms of such benefit plans shall be set by the Board of Directors of Parent, or its
designated committee, and may change from time-to-time. Executive shall be required to comply with all conditions attendant to coverage by the benefit plans hereunder and shall be entitled to benefits only in accordance with the terms and conditions
of such plans as they may be enumerated from time to time. 
 (c) Perquisites. During the Term, the Company shall provide
Executive with the perquisites and other fringe benefits generally made available to senior executives of the Company and any such other benefits as the Board of Directors of Parent, or its designated committee, may elect to grant from time-to-time
including the following: 
 (1) Automobile Allowance. The Company shall provide Executive, at no cost to Executive, the
use of a company-owned or company-leased vehicle of a cost and quality reasonably acceptable to the Company but, in any event, equal to or exceeding the cost and quality of the vehicle presently used by Executive. The Company shall pay, or reimburse
Executive for, all costs associated with operating, maintaining and insuring such automobile, provided such costs are itemized and presented to the company in writing and in a form as then prescribed by the Company in its policies for the
reimbursement of employee business expenses; 

  
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 (2) Life Insurance. The Company shall provide Executive the death benefit
provided under a split-dollar life insurance policy pursuant to a separate Split Dollar Life Insurance Agreement dated January 10, 2011, and entered into by Executive and the Company; 

(3) Regulatory Filings. The Company shall pay for all governmental and regulatory filings required by Executive solely as a result
of his position as an officer or director of the Company or Parent, including, but not limited to, all Section 16 filings required by Executive. For avoidance of doubt, such filings would include SEC Forms 4 and 5 and Schedule 13G and FCC
ownership reports and transfer applications and would not include other filings required in connection with the sale of company stock by Executive; 
 (4) Regulatory Filings/Fees Associated with Option Exercises. In the event Executive is required to make regulatory filings as a result of his exercise of options granted him by the Company for the
purchase of stock of the Parent, the Company shall pay the cost of such filings, including any filing fee. The benefits provided in this Section 2(c)(4) shall include full reimbursement for any income and employment taxes applicable to such
benefits; 
 (5) Travel and Entertainment Expenses. Reasonable, bona-fide Company-related entertainment and travel
expenses incurred by Executive in accordance with the Employee Handbook, Code of Ethical Conduct, Financial Code of Conduct and other written policies, all as issued by the Company, relating thereto shall be reimbursed or paid by the Company; and,

 (6) Health Benefit. Employer will pay the employee, spouse and dependents portions of the monthly group health care
premiums on behalf of Executive. 
  

	 	3.	Bonuses. 

 In
addition to the other compensation of Executive as set forth herein, and subject to the provisions of Section 4 hereof, Executive shall be eligible for an annual merit bonus in an amount to be determined at the discretion of the Board of
Directors of the Company, which bonus may be paid in cash, options or a combination thereof. 
  

	 	4.	Termination of Employment. 

  

	 	(a)	Termination For Cause. 

(1) Termination; Payment of Accrued Salary. The Board may terminate Executive’s employment with the Company at any time for
cause, immediately upon notice to Executive of the circumstances leading to such termination for cause. In the event that Executive’s employment is terminated for cause, Executive shall receive payment for all accrued salary through the
Termination Date, which in this event shall be the date upon which notice of termination is given. The Company shall have no further obligation to pay severance of any kind nor to make any payment in lieu of notice. 

  
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 (2) Definition of Cause. For the purposes of this Agreement,
“Cause” shall mean, without limitation, the following: (A) the death of Executive; (B) any mental or physical impairment which prevents Executive at any time during the Term from performing the essential functions of his
full duties for a period of 180 days within any 270 day period and Executive thereafter fails to return to work within 10 days of notice by the Company of intention to terminate (“Disability”); (C) continued gross neglect, malfeasance
or gross insubordination in performing duties assigned to Executive; (D) a conviction for a crime involving moral turpitude; (E) an egregious act of dishonesty (including without limitation theft or embezzlement) in connection with
employment, or a malicious action by Executive toward Parent, Company, or their affiliates or related entities (together with Parent, collectively “Affiliates”); (F) a violation of the provisions of Section 6(a) hereof;
(G) a willful breach of this Agreement; (H) disloyalty; and (I) material and repeated failure to carry out reasonably assigned duties or instructions consistent with Executive’s position. 

(b) Termination by Executive. Executive shall have the right, at his election, to terminate his employment with the Company by
notice to the Company to that effect: (1) if the Company shall have failed to substantially perform a material condition or covenant of this Agreement (“Company’s Material Breach”) or (2) if the Company materially reduces or
diminishes Executive’s powers and responsibilities hereunder; provided, however, that a termination under clauses (1) and (2) of this Section 4(b) shall not be effective until Executive shall have given notice to the Company
specifying the claimed breach and, provided such breach is curable, Company fails to correct the claimed breach within 30 days after the receipt of the applicable notice or such longer term as may be reasonably required by the Company due to the
nature of the claimed breach (but within 10 days if the failure to perform is a failure to pay monies when due under the terms of this Agreement). 
 (c) Termination Upon Disability. The Company may terminate Executive’s employment in the event Executive suffers a Disability (as defined in Section 4(a)(2) hereof). After the Termination
Date, which in this event shall be the date upon which notice of termination is given, no further compensation shall be payable under this Agreement except that Executive shall receive the accrued portion of any salary and bonus through the
Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan plus severance equal to 100% of his
then Base Salary for 15 months without offset for any disability payments Executive may receive, payable in equal monthly installments. After the Termination Date, which in this event shall be the date upon which notice of termination is given, any
then unvested or time-vested stock options previously granted to Executive by the Company shall become immediately one hundred percent (100%) vested. 

  
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	 	(d)	Termination Without Cause. 

 (1) Termination Payments. In the event that, during the Term, Executive’s employment is terminated by the Company other than pursuant to Section 4(a) or 4(c), or by Executive pursuant to
Section 4(b), the Company shall pay Executive as severance an amount equal to his then Base Salary for the longer of six months or the remainder of the Term, less standard withholdings for tax and social security purposes, payable in equal
installments over six consecutive months, or, if longer, the number of months remaining in the Term, commencing immediately following termination, in monthly pro rata payments commencing as of the Termination Date, plus the accrued portion of any
bonus through the Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan. 

(e) Benefits Upon Termination. All benefits provided under Section 2(b) hereof shall be extended at the Executive’s
cost, to the extent permitted by the Company’s insurance policies and benefit plans, for six months after Executive’s Termination Date, except (a) as required by law (e.g. COBRA health insurance continuation
election) or (b) in the event of a termination by the Company pursuant to Section 4(a). 
 (f) Termination Upon
Death. If Executive dies prior to the expiration of the Term, the Company shall (1) continue coverage of Executive’s dependents (if any) under all applicable benefit plans or programs of the type listed above in Section 2(b)
herein for a period of 12 months, and (2) pay to Executive’s estate the accrued portion of any salary and bonus through the Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a bonus,
upon such date or over such period of time which is in accordance with the applicable bonus plan. After the Termination Date, which in this event shall be the date of Executive’s death, any then unvested or time-vested stock options previously
granted to Executive by the Company shall become immediately one hundred percent (100%) vested. 
 (g) No Offset.
Executive shall have no duty to mitigate any of his damages or losses and the Company shall not be entitled to reduce or offset any payments owed to Executive hereunder for any reason. 

 

	 	5.	Right of First Refusal on Corporate Opportunities. 

 During the Term, Executive agrees that he shall, prior to exploiting a Corporate Opportunity (hereafter defined) for his own account or for the benefit of an immediate family member’s account, offer
the Company a right of first refusal with respect to such Corporate Opportunity. For purposes of this Section 5, “Corporate Opportunity” shall mean any business opportunity that is in the same or a related business as any of the
businesses in which the Company or any of its Affiliates is involved. The determination as to whether a business opportunity constitutes a Corporate Opportunity shall be made by the Nominating and Corporate Governance Committee of Parent or a
majority of the disinterested and independent members of the Board, and their determination shall be based on an evaluation of: (a) the extent to which the 

  
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Corporate Opportunity is within the Company’s or any of its Affiliates’ existing lines of business or its existing plans to expand; (b) the extent to which the Corporate
Opportunity supplements the Company’s or any of its Affiliates’ existing lines of activity or complements the Company’s or any of its Affiliates’ existing methods of service; (c) whether the Company has available resources
that can be utilized in connection with the Corporate Opportunity; (d) whether the Company is legally or contractually barred from utilizing the Corporate Opportunity; (e) the extent to which utilization of the Corporate Opportunity by
Executive would create conflicts of interest with the Company or any of its Affiliates; and (f) any other factors the Nominating and Corporate Governance Committee or such disinterested and independent Board members deem(s) appropriate under
the circumstances. 
  

	 	6.	Executive’s Obligations. 

 (a) Confidential Information. Executive agrees that, during the Term or at any time thereafter: 
 (1) Executive shall not use for any purpose other than the duly authorized business of Company, or disclose to any third party, any information relating to Company or any of its Affiliates which is
proprietary to Company or any of its Affiliates (“Confidential Information”), including any customer list, contact information, rate schedules, programming, data, plans, intellectual property, trade secret or any written (including in any
electronic form) or oral communication incorporating Confidential Information in any way (except as may be required by law or in the performance of Executive’s duties under this Agreement consistent with Company’s policies) regardless of
whether or not such information has been labeled as “confidential”; and 
 (2) Executive shall comply with any and all
confidentiality obligations of Company to a third party, whether arising under a written agreement or otherwise. 
 (b) Work
For Hire. 
 (1) The results and proceeds of Executive’s services to Company, including, without limitation, any works
of authorship resulting from Executive’s services during Executive’s employment with Company and/or any of its Affiliates and any works in progress resulting from such services, shall be works-made-for-hire and Company shall be deemed the
sole owner of any and all rights of every nature in such works, whether such rights are now known or hereafter defined or discovered, with the right to use the works in perpetuity in any manner Company determines in its sole discretion without any
further payment to Executive. If, for any reason, any of such results and proceeds are not legally deemed a work-made-for-hire and/or there are any rights in such results and proceeds which do not accrue to Company under the preceding sentence, then
Executive hereby irrevocably assigns and agrees to assign any and all of Executive’s right, title and interest thereto, whether now known or hereafter defined or discovered, and Company shall have the right to use the work in perpetuity in any
location and in any manner Company determines in its sole discretion without any further payment to Executive. 

  
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 (2) Executive shall do any and all things which Company may deem useful or desirable to
establish or document Company’s rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright, trademark and/or patent applications, assignments or similar documents and, if Executive is
unavailable or unwilling to execute such documents, Executive hereby irrevocably designates the Chairman of the Board of Directors of Parent or his designee as Executive’s attorney-in-fact with the power to execute such documents on
Executive’s behalf. To the extent Executive has any rights in the results and proceeds of Executive’s services under this Agreement that cannot be assigned as described above, Executive unconditionally and irrevocably waives the
enforcement of such rights. 
 (3) Works-made-for-hire do not include subject matter that meets all of the following criteria:
(A) is conceived, developed and created by Executive on Executive’s own time without using the Company’s or any of its Affiliate’s equipment, supplies or facilities or any trade secrets or confidential information, (B) is
unrelated to the actual or reasonably anticipated business or research and development of Company or any of its Affiliates of which Executive is or becomes aware; and (C) does not result from any work performed by Executive for Company or any
of its Affiliates. 
 (c) Return of Property. All documents, data, recordings, equipment or other property, whether
tangible or intangible, including all information stored in electronic form, obtained or prepared by or for Executive and utilized by Executive in the course of Executive’s employment with Company or any of its Affiliates shall remain the
exclusive property of Company and shall not be removed from the premises of the Company under any circumstances whatsoever without the prior written consent of the Company, except when (and only for the period) necessary to carry out
Executive’s duties hereunder, and if removed shall be immediately returned to the Company upon any termination of his employment and no copies thereof shall be kept by Executive; provided, however, that Executive shall be entitled to retain
documents reasonably related to his prior interest as a shareholder. Upon termination of employment, Executive shall promptly return all property of Company or any of its Affiliates. 

(d) Use of Executive’s Name, Image and Likeness. Company may make use of Executive’s name, photograph, drawing or other
likeness in connection with the advertising or the giving of publicity to Company, Parent or a program broadcast or content provided by Company, Parent or any Affiliates. In such regard, Company may make recordings, transcriptions, videotapes, films
and other reproductions of any and all actions performed by Executive in his or her capacity as an Executive of Company, including without limitation any voice-over or announcing material provided by Executive (collectively “Executive
Performances”). Company shall have the right to broadcast, display, license, assign or use any Executive Performances on a royalty-free basis without additional compensation payable to Executive. 

 

	 	7.	Noninterference. 

While employed by the Company and for a period of two years thereafter, Executive agrees not to interfere with the business of the Company
by directly or indirectly soliciting, attempting to solicit, inducing, or otherwise causing any executive or material employee of the Company or any of its Affiliates to terminate his or her employment in order to become an employee, consultant or
independent contractor to or for any other Company. 

  
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	 	8.	Noncompetition. 

Executive agrees that during the Term and for a period of two years thereafter, he shall not, without the prior consent of the Company,
directly or indirectly, be employed by, be connected with, or have an interest in, as an employee, consultant, officer, director, partner, stockholder or joint venturer, in any person or entity owning, managing, controlling, operating or otherwise
participating or assisting in any business that is in competition with the business of the Company or any of its Affiliates (a) during the Term, in any location, and (b) for the two-year period following the termination of this Agreement,
in any province, state or jurisdiction in which the Company or any of its Affiliates was conducting business at the date of termination of Executive’s employment and continues to do so thereafter; provided, however, that the foregoing shall not
prevent Executive from being a stockholder of less than one percent of the issued and outstanding securities of any class of a corporation listed on a national securities exchange or designated as national market system securities on an interdealer
quotation system by the National Association of Securities Dealers, Inc. Notwithstanding the foregoing, this paragraph shall not operate to limit Executive’s ability to provide non-confidential information to, serve on the board of directors
of, or be employed by any 501(c)(3) organization, including any such organization operating non-commercial radio station(s). 
  

	 	9.	Remedies. 

Executive acknowledges that a breach or threatened breach by Executive of any the provisions of Sections 5, 6, 7 or 8 will result in the
Company and its stockholders suffering irreparable harm which cannot be calculated or fully or adequately compensated by recovery of monetary damages alone. Accordingly, Executive agrees that the Company shall be entitled to interim, interlocutory
and permanent injunctive relief, specific performance and other equitable remedies, in addition to any other relief to which the Company may become entitled should there be such a breach or threatened breach. 

 

	 	10.	Personal Conduct. 

Executive agrees to promptly and faithfully comply with all present and future policies, requirements, directions, requests and rules and
regulations of the Company in connection with the Company’s business, including without limitation the policies and requirements set forth in Parent’s Employee Handbook, Code of Ethical Conduct and Financial Code of Conduct. Executive
further agrees to comply with all laws and regulations pertaining to Executive’s employment with the Company. Executive hereby agrees not to engage in any activity that is in direct conflict with the essential interests of the Company or any of
its Affiliates. Executive hereby acknowledges that nothing set forth in the Employee Handbook, Code of Ethical Conduct or Financial Code of Conduct or any other policy issued by the Company or Parent shall be deemed to create a separate contractual
obligation, guarantee or inducement between Executive and the Company. 

  
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	 	11.	Indemnification. 

The Company shall indemnify Executive to the fullest extent permitted by law, in effect at the time of the subject act or omission, and
shall advance to Executive reasonable attorneys’ fees and expenses as such fees and expenses are incurred (subject to an undertaking from Executive to repay such advances if it shall be finally determined by a judicial decision which is not
subject to further appeal that Executive was not entitled to the reimbursement of such fees and expenses). Executive shall be entitled to the protection of any insurance policies that the Company may elect to maintain generally for the benefit of
its directors and officers against all costs, charges and expenses incurred or sustained by him in connection with any action, suit or proceeding (other than any action, suit or proceeding arising under or relating to this Agreement) to which
Executive may be made a party by reason of his being or having been a director, officer or employee of the Company or any of its Affiliates, or his serving or having served any other enterprise as a director, officer or employee at the request of
the Company. The Company covenants to maintain during Executive’s employment for the benefit of Executive (in his capacity as an officer and director of the Company) Directors’ and Officers’ Insurance providing benefits to Executive
no less favorable, taken as a whole, than the benefits provided to the other senior executives of the Company by the Directors’ and Officers’ Insurance maintained by the Company on the date hereof; provided, however, that the Board may
elect to terminate Directors’ and Officers’ Insurance for all officers and directors, including Executive, if the Board determines in good faith that such insurance is not available or is available only at unreasonable expense. 

 

	 	12.	Miscellaneous. 

(a) Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of (1) personal
delivery (including personal delivery by e-mail or fax), (2) on the first day after mailing by overnight courier, or (3) on the third day after mailing by first class mail, to the recipient at the address indicated below: 

To the Company: 
 Salem Communications Holding Corporation 
 4880 Santa Rosa Road

 Camarillo, California 93012 

Attention: Christopher J. Henderson, Secretary 
 To Executive: 
 Stuart W. Epperson 

3780 Will Scarlet Road 
 Winston-Salem, NC 27104 
 or to such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending party. 

  
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 (b) Severability. If any provision of this Agreement is determined to be invalid
or unenforceable by a court of competent jurisdiction from which no further appeal lies or is taken, that provision shall be deemed to be severed herefrom, and all remaining provisions of this Agreement shall not be affected thereby and shall remain
valid and enforceable. 
 (c) Entire Agreement. This document constitutes the final, complete, and exclusive embodiment of
the entire agreement and understanding between the parties related to the subject matter hereof and supersedes and preempts any prior or contemporaneous understandings, agreements, or representations by or between the parties, written or oral.
Without limiting the generality of the foregoing, except as provided in this Agreement, all understandings and agreements, written or oral, relating to the employment of Executive by the Company or the payment of any compensation or the provision of
any benefit in connection therewith or otherwise, are hereby terminated and shall be of no further force and effect. 
 (d)
Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together shall constitute one and the same agreement. 

(e) Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors and assigns, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the prior written consent of the Company. 

(f) Amendments. No amendments or other modifications to this Agreement may be made except by a writing signed by both parties. No
amendment or waiver of this Agreement requires the consent of any individual, partnership, corporation or other entity not a party to this Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement. 
 (g) Attorneys’ Fees. If any legal proceeding is necessary
to enforce or interpret the terms of this Agreement, or to recover damages for breach therefore, the prevailing party shall be entitled to reasonable attorney’s fees, as well as costs and disbursements, in addition to other relief to which he
or it may be entitled. 
 (h) Choice of Law. All questions concerning the construction, validity and interpretation of
this Agreement shall be governed by the internal law, and not the law of conflicts, of the State of California. 
 (i)
Resolution of Disputes. Company and Executive mutually agree to resolve any and all legal claims arising from or in any way relating to Executive’s employment with Company through mediation or, if mediation does not resolve the claim or
dispute within ten (10) days of notice demanding mediation, by binding arbitration under the Federal Arbitration Act subject to the terms and conditions provided below. Notwithstanding the foregoing, insured workers’ compensation claims
(other than wrongful discharge claims) and claims for unemployment insurance are excluded from arbitration under this Agreement. This Agreement does not prevent the filing of charges with administrative agencies such as the Equal

  
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Employment Opportunity Commission, the National Labor Relations Board, or equivalent state agencies. Arbitration shall be conducted in Ventura County, California in accordance with any of the
following, at Executive’s election: (a) the JAMS® Employment Rules of Procedure, or (b) the rules
of procedure issued by another alternative dispute resolution service mutually acceptable to Executive and Company. Any award issued in accordance with this Section 11(i) shall be rendered as a judgment in any trial court having competent
jurisdiction. Company shall pay the arbitration fees and expenses, less any filing fee amount the Executive would otherwise have to pay to pursue a comparable lawsuit in a United States district court in the jurisdiction where the dispute arises or
state court in the jurisdiction where the dispute arises, whichever is less. All other rights, remedies, exhaustion requirements, statutes of limitations and defenses applicable to claims asserted in a court of law shall apply in the arbitration.
Executive expressly waives any presumption or rule, if any, which requires this Agreement to be construed against the Company. 

(j) Integration. This Agreement comprises the entire understanding of the parties with respect to the subject matter and shall
supersede all other prior written or oral agreements, including without limitation the Old Employment Agreement. 
 {Continued
on the following page.} 

  
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 (k) Survival; Modification of Terms. No change in Executive’s duties or
salary shall affect, alter, or otherwise release Executive from the covenants and agreements contained herein. All post-termination covenants, agreements, representations and warranties made herein by Executive shall survive the expiration or
termination of this Agreement or employment under this Agreement in accordance with their respective terms and conditions. 
 IN
WITNESS WHEREOF, the parties have executed this agreement effective as of the date first written above. 
  

	
	“EXECUTIVE”
	
	/s/Stuart W. Epperson
	Stuart W. Epperson

  

			
	 “COMPANY”
  

SALEM COMMUNICATIONS HOLDING CORPORATION

		
	By:	 	/s/Edward G. Atsinger III
		 	 Edward G. Atsinger III

Chief Executive Officer

 I hereby certify that the terms and conditions of this Employment Agreement have been reviewed and
approved by the Compensation Committee of Salem Communications Corporation. 
  

							
	Date: March 27, 2012	 		 		 	/s/David Davenport
		 		 		 	David Davenport
		 		 		 	 Chairman of the Compensation Committee,
 Salem Communications Corporation

  
 12EX-10.1

 EXHIBIT 10.1 

 
 FY13 Annual Incentive Compensation Plan 

Esterline Technologies Corporation 
  

	1.	Purpose.  Esterline Technologies Corporation (the “Company”) has established this Annual Incentive Plan (“Annual IC Plan” or the
“Plan”) to reward its officers and selected senior managers for prudent decisions and actions that deliver financial results for shareholders in this fiscal year. The Annual IC Plan is designed to reward Participants for successful
achievement of two business performance goals, and to provide incentives for them to achieve outstanding results. 

  

	2.	Annual IC Terms.  The Company established this Annual IC Plan pursuant to its 2004 Equity Incentive Plan, as amended (“2004 Plan”). The terms of a
Participant’s appointment, this document, and the 2004 Plan together constitute the “Annual IC Terms.” Provided, however, that upon shareholder approval of a proposed 2013 Incentive Plan (“2013 Plan”), the 2013 Plan will
automatically and retroactively replace the 2004 Plan in all respects as part of the Annual IC Terms. 

  

	3.	Participation. 

  

	 	a.	Selection.  The Company’s officers and other senior managers employed by the Company’s corporate offices are eligible to participate in this Annual
IC Plan. Appointment to the Plan is effective for a single fiscal year and requires recommendation by the Company’s Chief Executive Officer (“CEO”), and approval by either the Company’s Board of Directors (“the Board”)
or by its Compensation Committee (“the Committee”); provided, however, that the CEO’s appointment may be decided only by the Board, based on Committee recommendation. Esterline’s CEO may also appoint eligible employees to the
Annual IC Plan, provided such employees do not report directly to the CEO. Employees appointed to the Plan are referred to as “Participant(s)”. 

  

	 	b.	Mid-Year Appointments.  Participants may be appointed to the Plan at any time. If appointed after the first fiscal quarter, however, Participants will receive
a pro-rata award for the portion of the fiscal year following their appointment, calculated as provided in section 6 below. 

  

	4.	Performance Goals.  The Plan has two business performance goals for the fiscal year (“Annual IC Goals”), as follows: earnings per share achievement
to budget (“EPS”), weighted at 70% of the Plan’s goals; and adjusted return on sales (“ROS”), weighted at 30% of the Plan’s goals. The numerical values for these goals will be determined by the Company and stated in
Participant appointment letters. 

  

	5.	Plan Awards.  Appointment letters will also establish a Target Award for each Participant, expressed as a percentage of the Participant’s base salary in
effect on the last day of the fiscal year. Participants will earn 100% of their Target Award if the Company achieves Plan Goals. Participants’ actual awards will vary from their Target Awards if the Company performs above or below Plan Goals.
Participants will receive no award if Company results fall short of certain minimum threshold levels. At such thresholds, Participants will earn 25% of their Target Award. Participants will receive up to a maximum of 200% of their Target Award if
Company performance exceeds Plan Goals and reaches certain maximum performance levels. Between the Plan’s threshold and maximum goals, Participants’ awards will increase or decrease from target levels in proportion to the Company’s
incremental achievement. 

  

	6.	Calculations. 

  

	 	a.	Performance Goals.  Esterline will calculate EPS achievement on a fully-diluted basis and before extraordinary items. ROS will be calculated as total
operating profit, minus corporate expenses, divided by total sales, with adjustments (if any) to each such factor to remove the effects of acquisition or divestiture activity. 

 

	 	b.	Pro-rata Awards.  For Participants appointed after the first fiscal quarter, pro-rata award calculations will be based on the portion of the fiscal year
following their appointment, measured in full-month increments and rounded up for months in which a Participant was actively employed under the Plan for 15 days or more, and rounded down for active employment under the Plan of 14 days or less.

	7.	Adjustments.  The Committee may exercise its discretion to ensure Participants receive an equitable award by adjusting: (a) Plan calculations to include
or exclude unusual items, in whole or in part; (b) an individual Participant’s actual award; or (c) the factors used to calculate Plan awards. Such adjustments may be made if unanticipated events occur or unusual business conditions
develop after the beginning of a fiscal year that materially alter earnings or returns, such as significant acquisitions or divestitures. Notwithstanding the forgoing, the Committee may not adjust individual awards for any Participant who is a
covered employee for purposes of Section 162(m) of the Internal Revenue Code of 1986 in such a manner as would increase the amount of compensation otherwise payable to that employee. The maximum range of any individual award adjustments under
(b) above is limited to either 25% of the Participant’s actual award or 25% of the Participant’s Target Award, whichever is greater. The Committee must seek and consider advice from an independent executive compensation expert before
deciding to make either type of adjustment under this section. 

  

	8.	Payment.  Subject to section 9 below, the Company will pay Plan awards within 60 days following fiscal year-end, provided Company auditors have issued an
opinion consistent with the calculations, the Committee has approved the awards, and Participants remain employed through the payment date. 

  

	9.	Employment Status Changes.  Except as otherwise determined by the CEO, Committee, or Board, consistent with the levels of authority outlined in section 3.a.
above: 

  

	 	a.	Suspension, Resignation, or Discharge.  All Participant rights under this Plan will be suspended during any period of suspension from employment. A
Participant’s appointment will automatically end when s/he leaves employment with the Company for any reason other than Retirement, Disability, or death. 

 

	 	b.	Retirement, Disability, or Death.  If a Participant leaves employment before the Plan payment date due to Retirement, Disability, or death, the Company will
pay a pro-rata amount for the months of active employment as a Participant. 

  

	10.	Employment Terms.  Participants’ terms of employment remain unchanged by appointment to this Plan, except as specifically provided in the Annual IC
Terms. Nothing in the appointment process or in the Annual IC Terms guarantees continued employment. Participants remain subject to usual Company policies and practices, and to any other employment agreements, service terms, appointments, or
mandates to which they are otherwise subject. 

  

	11.	Plan Administration & Interpretation.  The Committee administers this Plan. As such it shall consider and decide any issues arising under the Plan,
and shall oversee and approve actual award calculations and payments. Definitions in the 2004 Plan apply to terms used in this Plan unless otherwise defined here. All references to the “Company” include a “Related Company”, as
that term is defined in the 2004 Plan. The Committee’s decisions concerning Plan administration and interpretation are final and binding, except as they might relate to the CEO, in which case the Board has final decision-making authority.

  

	12.	Modification.  The Committee may modify or terminate this Plan at any time, provided it pays Participants on a pro-rata basis for any awards earned prior to
such change. 

  

	13.	Reimbursement.  Plan participation and awards are subject to the Board’s Policy on Reimbursement of Incentive Awards, as it might change from time to
time. 

 Approved by the Committee & Board and issued on their behalf. 

 
   

 
 R. Bradley Lawrence 
 Chairman, President & CEO 
 December 6, 2012 

  
 

 
 FY13 Annual IC Plan 
 Page 2

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