EMPLOYMENT AGREEMENT

Exhibit 10.5

PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of this 18th day of December, 2002, by and between LBI Holdings I, Inc., a California corporation (the “Company”), and Winter Horton (the “Employee”).

WHEREAS, this Agreement shall govern the employment relationship between the parties from and after the date stated above and supersedes and negates all previous agreements made between the parties, whether written or oral, relating to the Employee’s employment with the Company and its wholly-owned subsidiary corporations.

NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants contained below, the parties agree as follows:

1. EMPLOYMENT

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2. COMPENSATION

2.3.1 Vesting.

(a) Time Vesting Portion. That portion of the Maximum Possible Payment which represents [****] percent ([****]%) of the amount (if any) by which the Net Value of the Company as of the applicable date of determination exceeds the Threshold Amount, shall become vested as

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

described below (the “Time Vesting Portion.”). An installment of the Time Vesting Portion representing one-seventh (1/7) of the Time Vesting Portion (i.e., one-seventh (1/7) of [****] percent ([****]%), or approximately [****] percent ([****]%), of the amount (if any) by which the Net Value of the Company as of the applicable date of determination exceeds the Threshold Amount) will become vested on December 31, 2003 (assuming Employee’s continued employment by the Company through such date). The remaining six installments of the Time Vesting Portion will become vested on each December 31, from December 31, 2004 through December 31, 2009 (assuming Employee’s continued employment by the Company on each such December 31). The installment of the Time Vesting Portion which becomes vested on each such December 31 specified above (assuming Employee’s continued employment by the Company) shall be one-seventh (1/7) of the Time Vesting Portion (i.e., one-seventh (1/7) of [****] percent ([****]%), or approximately [****] percent ([****]%), of the amount (if any) by which the Net Value of the Company as of the applicable date of determination exceeds the Threshold Amount).

(b) Performance Vesting Portion. That portion of the Maximum Possible Payment which represents [****] percent ([****]%), of the amount (if any) by which the Net Value of the Company as of the applicable date of determination exceeds the Threshold Amount, shall become vested as described below (the “Performance Vesting Portion.”). Each year an installment of one-seventh (1/7) of the Performance Vesting Portion (i.e., one-seventh (1/7) of [****] percent ([****]%), or approximately [****] percent ([****]%), of the amount (if any) by which the Net Value of the Company as of the applicable date of determination exceeds the Threshold Amount) shall become vested if the Company determines in its sole discretion that certain annual performance goals established by the Company are met. Only if the Company determines in its sole discretion that all of these performance goals are satisfied in a given year will that year’s installment of the Performance Vesting Portion become vested. The Company shall have the sole discretion to establish these performance goals. Such performance goals, as established by the Company, may include objective and/or subjective measures of Employee’s personal performance of his duties as well as objective and/or subjective measures of Company-wide performance goals including, but not limited to, budgetary matters, revenues, and cash flows. The Company agrees to notify Employee following the end of each year whether all of the performance goals were satisfied for such year.

2.3.2 Change in Control. Notwithstanding anything to the contrary herein, if at any time the Company experiences a Change in Control (as defined below) while the Employee is still employed with the Company, the Employee immediately will become vested in the next installment of the Time Vesting Portion. For purposes of this Agreement, “Change in Control” shall mean: (i) any acquisition of the Company by merger or consolidation in which more than fifty percent (50%) of the Company’s

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

outstanding voting securities are transferred to the acquiring entity (other than an entity owned or controlled by the Company or the Liberman Family), (ii) a sale of eighty percent (80%) or more of the assets of the Company (other than to the Liberman Family or an entity they own or control), (iii) the direct sale by the Liberman Family of securities representing more than fifty percent (50%) of the Company’s outstanding voting securities, (iv) the issuance by the Company of equity to new investors representing more than fifty percent (50%) of the voting power of the Company immediately after such issuance, other than through a public offering, or (v) the issuance by the Company of equity through a public offering representing more than thirty-three percent (33%) of the voting power of the Company immediately after such issuance. For purposes of this agreement, an “installment” of the Time Vesting Portion is the increment of the Time Vesting Portion which may become vested on each December 31, from December 31, 2003 through December 31, 2009, as set forth in Section 2.3.1(a).

2.3.3 Determination of Net Value.

(a) Initial Determination. In the event of a Change in Control, the Net Value of the Company shall be determined at the time of such event, unless the Employee and the Company agree otherwise in writing. In the event there is no Change in Control which results in a determination of Net Value of the Company prior to December 31, 2009, the Net Value shall be determined as of December 31, 2009. Such Net Value shall be determined by a nationally-recognized independent appraiser selected by the Company, who shall apply generally accepted appraisal principles, and who shall be instructed to make his appraisal primarily based on the actual sales of similar assets in similar markets as that of the Company at the time of the appraisal; provided that if all or any portion of the Company (including its subsidiaries) has been sold to a third party in a bona-fide sale prior to the appraisal, the appraiser shall be instructed to use the actual sales price in valuing the portion sold. Except for any portion of the Company which was sold, it is intended that the appraisal be primarily based upon the Company’s cash flow as a going concern. All existing liabilities and debt of the Company under generally accepted accounting principles and all of its holding companies and their respective subsidiaries (to the extent such holding companies and subsidiaries are included in the determination of Net Value of the Company), including without limitation, debt to the ultimate shareholders, shall be deducted from the gross appraised value in determining the Company’s Net Value.

For purposes of determining the Net Value of the Company, the following provisions shall govern:

(i) The Net Value of the Company shall be determined on a consolidated basis and shall include the Company and each holding company, subsidiary and affiliated company of the Company which is established by the Liberman Family as an entity owning or operating radio or television stations. The assets and liabilities of any such holding company, subsidiary and affiliated company which is not part of such consolidated group of companies on the date as of which Net Value is

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determined shall be excluded from the calculation of Net Value, except as provided in subsection (ii) below.

(ii) Each appraiser shall add back to the Net Value of the Company the then current fair market value of any assets sold, transferred or distributed by the Company (or any other entity required to be consolidated with the Company for purposes of determining the Net Value of the Company) after the effective date of this Agreement and prior to the date as of which Net Value is determined, to the extent the cash proceeds of such sales, transfers or distributions are distributed to members of the Liberman Family without providing adequate consideration. However, (i) any other cash accumulations from other sources distributed to the Liberman Family in compliance with any loan agreement which the Company (including any of its subsidiaries) may have in place or enter into with one or more financial institutions and (ii) any forgiveness of loans by Company (including any of its subsidiaries) of any of its loans to the Liberman Family shall not be added back in the determination of the Net Value of Company.

(b) Resolution of Dispute Regarding Net Value. If the Employee challenges the determination of the Net Value of the Company by the appraiser, then the Employee, at his expense, may hire a second nationally-recognized appraiser. The appraiser hired by the Employee shall make his determination of the Net Value of the Company according to the procedure and based upon the information which was the basis of the first appraisal set forth in subsection (a), above. If the second appraiser opines that the Net Value of the Company is equal to an amount within five percent of the Net Value determined by the first appraiser, then the average of the two amounts will be used as the Net Value and become final. If the Net Value determined by the second appraiser differs by more than five percent from the Net Value determined by the original appraisal, then the two appraisers shall agree upon a third appraiser. The fees and expenses of the third appraiser shall be paid by the Company. If the third appraiser determines that the Net Value of the Company equals an amount that falls between the amount determined by the first and second appraiser, then the Net Value of the Company shall be the average of the three appraisals. If the value determined by the third appraiser does not fall within the values determined by the first and second appraiser, then the value determined by the first or second appraiser which is closest to the value determined by the third appraiser shall become the final Net Value of the Company. The second and third appraisers shall be required to execute a confidentiality agreement pursuant to which such appraiser shall not disclose to the Employee (except to the extent necessary to substantiate the appraisal), or any other person not designated by the Company to receive confidential information, any confidential information of the Company used in preparing an appraisal. The designation of confidential information for the purposes of this section shall be in the sole discretion of the Board of Directors of the Company, and no confidential information of the Company shall be disclosed to Employee unless (i) Employee executes a confidentiality

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

agreement with the Company and (ii) if the Employee is not currently employed by the Company, the Board of Directors of the Company determines that Employee is not rendering services to any business enterprise competitive with the Company’s business operations.

2.3.4 Payment. In the event that the Employee is eligible to receive any portion of the Maximum Possible Payment, the Company shall pay to the Employee, within 30 days after the date of the event which triggers the determination of Net Value of the Company, an amount equal to the product of the Maximum Possible Payment times the aggregate portion vested (the “Payment Amount”). (As an example for illustrative purposes only, if the Employee were to become fully vested in the Time Vesting Portion but did not become vested in any part of the Performance Vesting Portion, the Company would pay to the Employee [****]% of the amount (if any) by which the Net Value of the Company as of the applicable date of determination exceeded the Threshold Amount.) The Payment Amount shall be, subject to the provisions hereof, made in cash. In the event that the stock of the Company is then capable of being immediately traded on the New York Stock Exchange, the National Association of Securities Dealers Automated Quotation System (NASDAQ) or any other recognized national stock exchange, at the option of the Employee, the payment may be made in the form of cash, or Common Stock of the Company, or a combination thereof. If any portion of the Payment Amount is to be made in stock, the value of each share of stock shall be equal to the closing market price on the day before the issuance. In the event that a cash payment of the full Payment Amount would violate the terms of any loan agreement in effect at the time between the Company (including any of its subsidiaries) and any financial institution, then the following provisions shall be in effect:

(i) The Company shall use reasonable commercial efforts to obtain a waiver from such financial institution to effect the full payment of the Payment Amount in cash.

(ii) If such waiver cannot be obtained, then the Company shall make the Payment Amount in cash to the fullest extent allowable under the existing loan agreement.

(iii) Any remaining balance of the Payment Amount shall be evidenced by the Company’s promissory note payable to the Employee. The note shall bear interest, compounded semi-annually, at 100% of the applicable federal rate. Principal, together with accrued and unpaid interest, shall become payable under the note in five (5) successive equal annual installments, beginning one year after the execution date of the note; provided, however, that if the payment of any such installment (or receiving amounts necessary to make such payment from Company’s subsidiaries) would violate the terms of any loan agreement in effect at the time between the Company (including any of its subsidiaries) and any financial institutions, then the payment of such installment shall be deferred until such time as when the payment of such installment (or receiving amounts necessary to make such payment from Company’s subsidiaries) would no longer violate the terms of any such loan agreement.

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

The provisions of this subsection govern all payments under the Incentive Plan, regardless of the event which triggers the right to payment (including but not limited to any of the events in Section 3 hereof which may trigger a right to payment).

2.3.5 Covenant to Submit to Shareholder Vote. Immediately upon execution of this Agreement, the Company shall submit this Agreement, including the Incentive Plan under which Employee may become entitled to payments hereunder, to its current shareholders for approval in accordance with the applicable disclosure and shareholder approval requirements of Internal Revenue Code Section 280G and the Treasury Regulations thereunder. Unless this Agreement is approved by those shareholders who currently own more than seventy-five percent (75%) of the total voting power of the Company’s outstanding securities, this Agreement shall become null and void. Such shareholder action shall be completed, and the results thereof communicated to Employee, in writing, within ten days of the execution of this Agreement. In the event this Agreement, including the Incentive Plan, is not approved, Employee shall have the right, at Employee’s sole option and discretion, to (a) treat all provisions of this Agreement, with the exception of Section 2.3 as remaining effective, valid, and enforceable, (b) treat this Agreement as null and void as of the date of such negative action by the shareholders, or (c) enter into further negotiations with Company regarding the terms of Employee’s compensation and employment, treating this Agreement as Company’s last formal offer, minus the provisions of Section 2.3.

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

3. TERMINATION.

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(a) Disability, Death or Cause. Upon any termination of employment before December 31, 2009 under Sections 3.1, 3.2 or 3.3, the Company shall not be obligated to make any further payments to the Employee hereunder, except amounts due as salary or bonus for services rendered through the date of termination and/or amounts vested under the Incentive Plan at the time of such termination.

(b) Termination Without Cause; Resignation Occasioned by Breach. Upon any termination of employment before December 31, 2009 by the Company under Section 3.4, or upon any termination of employment before December 31, 2009 by the Employee which was occasioned by the Company’s material breach of this Agreement or unlawful conduct, the Company shall not be obligated to make any further payments to the Employee hereunder, except (i) amounts due as salary or bonus for services rendered through the date of termination, (ii) amounts previously vested under the Incentive Plan at the time of such termination, (iii) if such termination occurs on or after March 31, 2004, the Employee shall become immediately vested in the next installment of the Time Vesting Portion of the Incentive Plan which had not been completed at the time of termination of employment, and (iv) the Employee shall be entitled to severance payments of the Employee’s base salary for one hundred eighty (180) days from the date of termination.

(c) Survival. Notwithstanding the foregoing, the rights and obligations of the parties under Sections 3.7, 4.1, 5.1, 5.2, 6.1 and 7.1 shall survive the termination of this Agreement.

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

4. RIGHTS TO COMPANY MATERIALS, CONFIDENTIALITY.

5. SOLICITING EMPLOYEES.

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

6. SOLICITING CUSTOMERS.

7. MISCELLANEOUS.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

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PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) effective as of the 17th day of May, 2004, is entered into by and between LBI Holdings I, Inc., a California corporation (the “Company”), and Winter Horton (the “Employee”).

RECITALS

WHEREAS, Employee and the Company are parties to that certain Employment Agreement entered into as of December 18, 2002 (the “Agreement”);

WHEREAS, Employee and the Company, in anticipation of the possible initial public offering of the Company’s common stock, desire to amend the Agreement in a manner consistent with such initial public offering.

AGREEMENT

NOW, THEREFORE, in consideration of the promises set forth herein, it is agreed as follows:

1. Section 2.3.3(a) of the Agreement is amended by adding the following to the end of the section:

“Notwithstanding the foregoing, if, at the time of the determination, common shares of the Company are traded on an established securities market, such Net Value shall not be determined by an appraisal, but instead such Net Value shall be the product of the outstanding common shares of the Company, on a fully diluted basis as of such date times the volume-weighted average price per share of the Company in the five days of trading immediately prior to the date of such determination.”

2. Section 2.3.3(b) of the Agreement is amended by adding the following to the end of the section:

“This Section 2.3.3(b) shall not apply if the Net Value is not determined by an appraiser because, at the time of determination, common shares of the Company are traded on an established securities market.”

3. The fourth sentence of the first full paragraph of Section 2.3.4 is revised to read as follows:

“In the event that the stock of the Company is then capable of being immediately traded on the New York Stock Exchange or the National Association of Securities Dealers Automated Quotation System (NASDAQ), or any other recognized national stock exchange, at the option of the Company, the payment may be made in the form of cash, or Common Stock of the Company, or a combination thereof.”

PORTIONS DENOTED WITH [****] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

4. The initial portion of the sixth sentence of the first full paragraph of Section 2.3.4 (which portion ends with a colon) is revised to read as follows:

“In the event that a cash payment of the full Payment Amount would violate the terms of any loan agreement in effect at the time between the Company (including any of its subsidiaries) and any financial institution, and the Company does not make its payment in the form of common stock of the Company, then the following provisions shall be in effect:”

5. This Amendment may not be amended orally, but only by an agreement in writing executed by the party against whom enforcement of such amendment is sought.

6. Employee and the Company acknowledge and agree that there has not been any material breach of the Agreement by the Company as of the date of the execution this Amendment.

7. Employee and the Company acknowledge and agree that the Agreement as amended shall be binding upon any successor to the Company.

8. This Amendment shall be governed as to its validity and effect by the laws of the State of California without regard to principles of conflict of laws.

9. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

IN WITNESS WHEREOF, the parties have entered into this Amendment effective as of the day and year first above written.