Filed by a Party other than the Registrant ☐
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☒ No fee required. ☐ Fee paid previously with preliminary materials. ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
CUMULUS MEDIA INC.
May 2, 2024
May 2, 2024
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29, 2024.
May 2, 2024.
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INFORMATION REGARDING THE ANNUAL MEETING | |
29, 2024.
register in advance. To register, you must obtain a legally valid proxy from your broker, bank or other nominee and present it to our transfer agent, Continental. Once you have received a valid proxy from
2024.
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If your shares are held in “street name” through a bank, broker or other nominee, you should follow the instructions for voting on the form provided by your bank, broker or other nominee. You may submit voting instructions by telephone or through the Internet or, if you received your proxy materials by mail, you may complete and mail a proxy card to your bank, broker or other nominee. If you provide specific voting instructions by telephone, through the Internet or by mail, your bank, broker or other nominee will vote your shares as you have directed.
2024.
the Record Date. Your cooperation in promptly submitting your vote by proxy will help to avoid additional expense.
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PROPOSAL NO. 1: ELECTION OF DIRECTORS | |
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summary is not intended to be an exhaustive list of each director nominee’s skills or contributions to the Board. No individual experience, qualification, or attribute is solely dispositive of becoming a member of our Board.
Berner | Blank | Castro | Farrington | Gillman | Hobson | Kushner | ||||||||
Knowledge, Skills and Experience | ||||||||||||||
Public Company Board Experience | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||
Senior Management Experience | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||
Leadership | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||
Financial | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||
Media/Broadcast | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||
Digital/Technology | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||||||
Accounting | ✓ | ✓ | ✓ | |||||||||||
Human Capital | ✓ | ✓ | ✓ | ✓ | ||||||||||
ESG | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |||||||
Board Tenure | ||||||||||||||
Years of Service | 8 | 5 | 5 | 1 | 5 | 5 | 5 | |||||||
Age | 63 | 72 | 68 | 72 | 59 | 61 | 64 |
| | | Berner | | | Blank | | | Castro | | | Farrington | | | Gillman | | | Hobson | | | Kushner | | |||||||||||||||||||||
Knowledge, Skills and Experience | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Public Company Board Experience | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Senior Management Experience | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Leadership | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Financial | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Media/Broadcast | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Digital/Technology | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Accounting | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | |
Human Capital | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | ✓ | | | | | | ✓ | | | | | | | | | | | | | | |
ESG | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | | | | | ✓ | | |
Board Tenure | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Years of Service | | | | | 9 | | | | | | 6 | | | | | | 6 | | | | | | 2 | | | | | | 6 | | | | | | 6 | | | | | | 6 | | |
Age | | | | | 64 | | | | | | 73 | | | | | | 69 | | | | | | 73 | | | | | | 60 | | | | | | 62 | | | | | | 65 | | |
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| | | Mary G. Berner Ms. Berner has served as Chief Executive Officer since October 2015 and on the Cumulus Board of Directors since May 2015. She was also appointed as our President in March 2016. Under her leadership, the Company has transformed into a multi-platform audio-first media company, reduced total debt by approximately Prior to being appointed as Chief Executive Officer in October 2015, Ms. Berner served as President and Chief Executive Officer of MPA-The Association of Magazine Media, which is the industry association for multi-platform magazine media companies, since September 2012. From 2007 to 2011, she served as Chief Executive Officer of Reader’s Digest Association, a global media and direct marketing company, and a member of the board. Before that, from November 1999 until January 2006, she led Fairchild Publications, | |
| | | | Inc., first as President and Chief Executive Officer and then as President of Fairchild and as an officer of Condé Nast. She has also held leadership roles at Glamour, TV Guide, W, Women’s Wear Daily, Every Day with Rachael Ray, and Allrecipes.com. Ms. Berner serves on numerous industry and not-for-profit boards. Ms. Berner received her Bachelor of Arts degree in History from the College of the Holy Cross (Massachusetts). |
Ms. Berner, who has gained significant operational and strategic knowledge of our Company as President and Chief Executive Officer, has over 30 years of senior executive experience in the media and advertising industry allowing her to add significant strategic perspective to the Board. In addition, her track record of driving growth in the companies she has led, as well as her expertise managing businesses in transition and in highly competitive environments, are important as we position ourselves for future growth and success. | | |||
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| | | Matthew C. Blank Mr. Blank currently serves as a Senior Advisor at The Raine Group. Mr. Blank recently served as Interim CEO of AMC Networks Inc. (NASDAQ: AMCX) from September 2021 to September 2022. He previously served from January 1, 2018 to December 31, 2018, as an advisor to Showtime Networks Inc. (“Showtime”), a subsidiary of CBS Corporation (NYSE: CBS). Prior to that, in 2016 and 2017 he served as Chairman of Showtime, and from 1995 through 2015 he served as Chief Executive Officer of Showtime. From 1993-1995 he was President and Chief Operating Officer of Showtime and from 1988-1992 he served as Executive Vice President of Marketing, Creative Services, and Public Affairs. Prior to his service at Showtime, Mr. Blank served for over 12 years in various roles at Home Box Office, Inc. (“HBO”), a premium television network, leaving HBO as its Senior Vice President of Consumer Marketing. Mr. Blank served on the board of directors of Geeknet, Inc. from 2010 to 2015. Mr. Blank served on the board of the National Cable Television Association from 1994-2017 and was a member of the board of directors of Madison Square Garden Entertainment Corp. from April 2020 to September 2021 and Madison Square Garden Sports Corp. from December 2019 to April 2020 (NYSE: MSG). Mr. Blank currently serves as a director of CuriosityStream Inc. (NASDAQ: CURI) and AMC Networks Inc. (NASDAQ: AMCX). He also currently serves as a trustee of The Harlem Children’s Zone, The Manhattan Theater Club, and The Creative Coalition. Mr. Blank has extensive corporate management experience in the media industry, as evidenced by his senior management positions at AMC Networks, Showtime, and HBO, which will allow him to offer management and operational insight to the Board. In addition, this history and experience contributes to the Board through significant insight into a number of functional areas critical to Cumulus and allows him to bring a unique perspective to his service on the Compensation and Nominating and Governance Committees. | |
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| | | Thomas H. Castro Mr. Castro has served as the President and Chief Executive Officer of El Dorado Capital, LLC, a private equity investment firm, since December 2008. Previously, he was the co-founder and Chief Executive Officer of Border Media Partners, LLC, a radio broadcasting company that primarily targets Hispanic listeners in Texas, from 2002 to 2007 and its Vice Chairman through 2008. Prior to that, Mr. Castro owned and operated other radio stations and founded a company that exported oil field equipment to Mexico. Mr. Castro served on the board of directors of Time Warner Cable, Inc. (“Time Warner”) from 2006 to 2016, where he served on its audit committee. Mr. Castro also previously served on the board of directors of Nielsen Holdings plc (NYSE: NLSN), where he served on its audit committee. Mr. Castro also serves as chairman of the board of directors of the Texas Charter Schools Association and is a board member of the National Board of Teach for America and a trustee of Spellman College. Mr. Castro has significant operating and financial experience as well as an in-depth understanding of the Company’s industry which allows him to bring a valuable perspective to the Board and his significant financial experience makes him particularly suited to serve on the Audit Committee. In addition, through his entrepreneurial experience and community work, Mr. Castro brings an important and unique perspective to the Board. | |
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| | | Deborah A. Farrington Ms. Farrington is a co-founder and President of StarVest Management, Inc., the management company for StarVest Partners, L.P., and since 1999 has been a general partner of StarVest Partners, L.P., a venture capital fund that invests primarily in technology enabled business services and emerging software companies. From 1993 to 1997, Ms. Farrington was President and Chief Executive Officer of Victory Ventures, LLC, a New York-based private equity investment firm. Also, during that period, she was a founding investor and Chairman of the Board of Staffing Resources, Inc., a diversified staffing company. Prior to 1993, Ms. Farrington held management positions with Asian Oceanic Group in Hong Kong and New York, Merrill Lynch & Co. Inc. in Hong Kong, Tokyo and New York, and the Chase Manhattan Bank. In addition, Ms. Farrington currently serves on the board of directors of Ms. Farrington brings extensive financial and corporate management experience to our Board of Directors and her significant financial expertise makes her particularly suited to serve on the Audit Committee. Ms. Farrington has also served as a member of the board of directors of a number of public and private companies and has chaired all major board committees. She therefore brings significant experience in board governance and oversight, as well as a valuable perspective to the Board of Directors. | |
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| | | Joan Hogan Gillman Ms. Gillman served as Executive Vice President of Time Warner, a media, telecom and cable company, and Chief Operating Officer of its Time Warner Cable Media division ($1.1b in revenue), for which she maintained financial and operating responsibility, from September 2006 to June 2016. Prior to her service at Time Warner Cable, Ms. Gillman served in senior executive roles at OpenTV Corporation, a digital television software company; British Interactive Broadcasting Holdings Limited, the pioneering digital TV and interactive services in the U.K; Physicians’ Online Inc., the first Internet Service Provider dedicated to physicians, and served ten years as a staff member to a United States Senator. Ms. Gillman currently serves on the board of directors of Airgain, Inc. (NASDAQ: AIRG) and InterDigital, Inc. (NASDAQ: ICC), having previously served on the board of directors of Centrica PLC (CNA: LN) and BAI Communications. Ms. Gillman is the managing member of the David T. Langrock Foundation and serves on the board of directors of the Jesuit Volunteer Group (JVC) and Staples Tuition Grants. She previously served as chair of the Board of JVC and vice chair of The College of the Holy Cross. Ms. Gillman has substantial corporate governance, management & operational experience as well as expertise in the digital, media, telecom and tech industries which allow her to provide an in-depth understanding of the opportunities, risks & challenges associated with our business, including providing valuable guidance and leadership on the Compensation and Nominating and Governance Committees. | |
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| | | Andrew W. Hobson Mr. Hobson has served as a Partner and the Chief Financial Officer of Innovatus Capital Partners, LLC, a private investment firm, since January 2016. From 1994 to 2015, Mr. Hobson served in various roles at Univision Communications Inc., a media company, including Senior Executive Vice President and Chief Financial Officer from October 2007 through February 2015, during which time he was responsible for all financial aspects of the company. Prior to his employment at Univision, Mr. Hobson served as a Principal at Chartwell Partners LLC from 1990 to 1994. Mr. Hobson also currently serves on the board of directors of Clear Channel Outdoor Holdings, Inc. (NYSE: CCO). Mr. Hobson has significant financial and corporate management experience, including with respect to the media industry. His experience in critical financial analysis and strategic planning brings essential skills and a unique perspective to the Board. | |
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| | | Brian G. Kushner Dr. Kushner has, since 2009, served as a Senior Managing Director at FTI Consulting, Inc. (NYSE: FCN) (“FTI”), a global business advisory firm, where he serves as the leader of the Private Capital Advisory Services practice and as the co-leader of the Technology practice, the Aerospace, Defense and Government Contracting practice and the Activism and M&A Solutions practice. Prior to joining FTI, Dr. Kushner was the co-founder of CXO, L.L.C., a boutique interim and turnaround management consulting firm that was acquired by FTI at the end of 2008. Dr. Kushner has served as the Chief Executive Officer (“CEO”) or interim CEO of over a dozen companies, including as the Acting Chair, President and CEO of Sage Telecom, a telecommunications company; as Managing Member and CEO of DLN Holdings, a defense contractor; and, before Sage, as President and CEO of Pacific Crossing Limited, a trans-Pacific telecommunications company. Dr. Kushner periodically served as Chief Restructuring Officer (or in an analogous position) of companies which elected to utilize bankruptcy proceedings as a part of their financial restructuring process and, as such, he served as an executive officer of various companies which filed bankruptcy petitions under federal law, including, among others, Relativity Media LLC in 2015. Dr. Kushner currently serves on the board of directors of Resideo Technologies, Inc. (NYSE: REZI) and Gibson Brands, Inc. He has previously served on the board of directors of Thryv, Inc. (NASDAQ: THRY), Mudrick Capital Acquisition Corporation (NASDAQ: HYMC), Mudrick Capital Acquisition Corporation II (NASDAQ: MUDS), DevelopOnBox Holding, LLC d/b/a Zodiac Systems, Luxfer Holdings PLC (NYSE: LXFR), Pacific Crossing Limited, Damovo Group, Everyware Global, Inc. (now The Oneida Group), DLN Holdings, LLC and Caribbean Asset Holdings LLC. Dr. Kushner brings extensive financial and corporate management experience to our Board of Directors, as evidenced by the variety of CEO and other senior management positions he has held throughout his career. Dr. Kushner has also served as a member of the board of directors of over a dozen public and private companies, which allows him to leverage his experience for the further benefit of the Company. In addition, Dr. Kushner’s significant financial experience brings essential skills and a unique perspective to his services on the Audit Committee. | |
| | Recommendation of the Board of Directors | | |
| | Your Board of Directors recommends a vote FOR each of the director nominees. | | |
Recommendation of the Board of Directors
Your Board of Directors recommends a vote FOR each of the director nominees.
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NASDAQ DIVERSITY MATRIX FOR THE BOARD OF DIRECTORS | |
Board Size: |
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Total Number of Directors | 7 | |||||||||||||
Gender: | Male | Female | Non- Binary | | Gender Undisclosed | | ||||||||
Number of directors based on gender identity | 4 | 3 | 0 | 0 | ||||||||||
Number of directors who identify in any of the categories below: |
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African American or Black | 0 | 0 | 0 | 0 | ||||||||||
Alaskan Native or American Indian | 0 | 0 | 0 | 0 | ||||||||||
Asian | 0 | 0 | 0 | 0 | ||||||||||
Hispanic or Latin | 1 | 0 | 0 | 0 | ||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||
White | 3 | 3 | 0 | 0 | ||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||||||||
LGBTQ+ | 0 | |||||||||||||
Undisclosed | 0 |
Board Size: | | | | | | | | |||||||||
Total Number of Directors | | | 7 | | | 57% of our Directors are Female or from Ethnically Diverse Backgrounds | | |||||||||
Gender: | | | Male | | | Female | | | Non- Binary | | | Gender Undisclosed | | |||
Number of directors based on gender identity | | | 4 | | | 3 | | | 0 | | | 0 | | |||
Number of directors who identify in any of the categories below: | | |||||||||||||||
African American or Black | | | 0 | | | 0 | | | 0 | | | 0 | | |||
Alaskan Native or American Indian | | | 0 | | | 0 | | | 0 | | | 0 | | |||
Asian | | | 0 | | | 0 | | | 0 | | | 0 | | |||
Hispanic or Latin | | | 1 | | | 0 | | | 0 | | | 0 | | |||
Native Hawaiian or Pacific Islander | | | 0 | | | 0 | | | 0 | | | 0 | | |||
White | | | 3 | | | 3 | | | 0 | | | 0 | | |||
Two or More Races or Ethnicities | | | 0 | | | 0 | | | 0 | | | 0 | | |||
LGBTQ+ | | | 0 | | ||||||||||||
Undisclosed | | | 0 | |
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INFORMATION ABOUT THE BOARD OF DIRECTORS | |
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requirements of the NASDAQ Marketplace Rules.No member of the Audit Committee participated in the preparation of our, or our subsidiaries’, financial statements at any time during the past three years.In addition, our Board of Directors has determined that Dr. Kushner and Ms. Farrington (1) is an “audit committee financial expert,” as such term is defined under the rules of the SEC, and (2) meets the NASDAQ Marketplace Rules’ professional experience requirements.In making such determination,determinations, the Board of Directors took into consideration, among other things, the express provision in Item 407(d) of SEC Regulation S-K that the determination that a person has the attributes of an audit committee financial expert shall not impose any greater responsibility or liability on that person than
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overseeing the Company’s corporate governance practices and procedures and reviewing and recommending to the Board any changes to the documents, policies and procedures in the Company’s corporate governance framework; and
The Nominating and Governance Committee evaluates all candidates based upon, among other factors, a candidate’s financial literacy, knowledge of our industry and other organizations of comparable size, other relevant background experience, judgment, skill, integrity, the interplay of a candidate’s experience with the experience of other Board members, status as a stakeholder, “independence” (for(for purposes of compliance with the rules of the SEC and the NASDAQ Marketplace Rules), and willingness, ability and availability for service. There are no stated minimum criteria for director nominees, although the Nominating and Governance Committee may also consider such other factors as it may deem are in the best interests of us and our stockholders.
For more information on certain skills the Nominating and Governance Committee evaluates and the current director nominees that possess each of those skills, see “Director-Nominee Skills and Expertise.”
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STOCKHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS | |
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CORPORATE CULTURE, SOCIAL RESPONSIBILITY, DIVERSITY AND SUSTAINABILITY | |
potential. In addition, we consistently monitor our cultural progress through frequent survey and feedback mechanisms.
Specifically, we have conducted a bi-annual company-wide, anonymous culture survey since 2016. We provide anonymous results from each survey to all market and business unit managers throughout the 15 organization. The results are used to build on our proven practices, while adjusting where needed to achieve the highest possible levels of employee engagement. Changes made as a result of these surveys have helped enhance our leadership, systems and processes. We also conduct a bi-annual survey of our market managers, who lead our radio station markets. This survey asks more targeted questions as they relate to specific departments. Results from these surveys are provided to the entire Senior Leadership Team and are used to further enhance our human capital initiatives and investments. These surveys include our recent Leadership Principles to assess implementation and impact. In addition, we monitor employee retention and turnover and present detailed data to our Board as part of their oversight of our human capital strategy. | ||
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Prioritizing Diversity, Equity and Inclusion
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partnered with H3C, a leading
held regular
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joined the CEO Action for Diversity & Inclusion and the National Association of Broadcasters (NAB) DEI Committee.
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Additionally, our Audit Committee Chair brings relevant information security experience to our Board in his capacity as co-lead of the Technology, Activism, and Aerospace and Defense practices at a global consulting firm, where he has led numerous projects in cybersecurity.
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| Installation of energy efficient lighting | | Installation of energy efficient HVAC systems and controls | |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | |
Name of Stockholder Matthew C. Blank Thomas H. Castro Deborah A. Farrington Joan Hogan Gillman Andrew Hobson Brian G. Kushner Mary G. Berner Richard S. Denning Francisco J. Lopez-Balboa All current directors and executive officers as a group (12 persons) Blackrock, Inc.(9) Morgan Stanley(10) Zazove Associates, LLC(11)3, 202315, 2024 (unless otherwise noted), by (1) each person known to us to beneficially own more than 5% of any class of our voting common stock, (2) each of our directors and director nominees, and each of our named executive officers (as defined below), and (3) all of our current directors and executive officers as a group. Class A Common Stock(1) Number of
Shares Percentage
of Shares
Outstanding 50,501 (2) * 50,501 (2) * 9,140 (3) * 50,501 (2) * 92,730 (4) * 50,501 (2) * 427,204 (5) 2.4 % 80,739 (6) * 107,478 (7) * 1,143,507 (8) 6.3 % 1,023,872 5.7 % 1,549,190 8.6 % 1,816,631 10.0 % *Indicates less than one percent(1)Each share of Class A common stock entitles its holder to one vote on each matter to be voted upon by stockholders.(2)Includes 2,701 shares of Class A common stock underlying options that are either presently exercisable or will become exercisable within 60 days after March 3, 2023 and 2,154 shares of unvested restricted stock that will vest within 60 days after March 3, 2023.(3)Includes 3,046 shares of unvested restricted stock that will vest within 60 days after March 3, 2023.(4)Includes 5,402 shares of Class A common stock underlying options that are either presently exercisable or will become exercisable within 60 days after March 3, 2023 and 3,887 shares of unvested restricted stock that will vest within 60 days after March 3, 2023.(5)Includes 237,083 shares of Class A common stock underlying options that are either presently exercisable or will become exercisable within 60 days after March 3, 2023.(6)Includes 38,568 shares of Class A common stock underlying options that are either presently exercisable or will become exercisable within 60 days after March 3, 2023.(7)Includes 45,000 shares of Class A common stock underlying options that are either presently exercisable or will become exercisable within 60 days after March 3, 2023 and 7,500 shares of unvested restricted stock that will vest within 60 days after March 3, 2023.(8)Includes 453,408 shares of Class A common stock underlying options that are either presently exercisable or will become exercisable within 60 days after March 3, 2023 and 23,049 shares of unvested restricted stock that will vest within 60 days after March 3, 2023.(9)This information is based in part on a Schedule 13G filed with the SEC on February 3, 2023, by BlackRock, Inc. (“BlackRock”) and its subsidiaries, which stated that BlackRock has sole voting power over 1,003,529 shares and sole dispositive power over 1,023,872 shares. The address of BlackRock is 55 East 52nd Street, New York, NY 10055.(10)This information is based in part on a Schedule 13G/A filed with the SEC on February 9, 2023, by Morgan Stanley and Boston Management and Research, a wholly-owned subsidiary of Morgan Stanley, which stated that Morgan Stanley has shared voting power over 1,541,835 shares and shared dispositive power over
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Name of Stockholder | | | Number of Shares | | | Percentage of Shares Outstanding | | ||||||
Matthew C. Blank | | | | | 72,377(2) | | | | | | * | | |
Thomas H. Castro | | | | | 72,377(2) | | | | | | * | | |
Deborah A. Farrington | | | | | 33,717(2) | | | | | | * | | |
Joan Hogan Gillman | | | | | 72,377(2) | | | | | | * | | |
Andrew Hobson | | | | | 131,687(3) | | | | | | * | | |
Brian G. Kushner | | | | | 72,377(2) | | | | | | * | | |
Mary G. Berner | | | | | 363,343(4) | | | | | | 2.2% | | |
Richard S. Denning | | | | | 78,451(5) | | | | | | * | | |
Francisco J. Lopez-Balboa | | | | | 177,454(6) | | | | | | 1.1% | | |
All current directors and executive officers as a group (12 persons) | | | | | 1,290,955(7) | | | | | | 7.8% | | |
Zazove Associates, LLC(8) | | | | | 2,008,417 | | | | | | 12.2% | | |
Renew Group Private Ltd.(9) | | | | | 1,621,426 | | | | | | 9.8% | | |
Seaport Global Asset Management LLC(10) | | | | | 1,044,481 | | | | | | 6.3% | | |
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For the year ended December 31, 2022,2023, our Chief Executive Officer and our two other most highly compensated executive officers, who we refer to as our named executive officers, were:
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| | | | What We Heard | | | | | | | | Our Perspective/How We Responded | | | | ||
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| | | | A preference for the Company to have a Clawback Policy | | | | | | | Although clawback provisions were previously contained in the Company’s existing incentive or benefit plans, programs or agreements, we adopted a formal Compensation Clawback Policy effective November 1, 2023, that complied with NASDAQ and SEC rules and regulations. We maintain our pre-existing clawback provisions as a supplement to the Compensation Clawback Policy. | | | | | | |
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| | | | A preference for the Company to have ownership guidelines for named executive officers | | | | | | | We established stock ownership guidelines for our named executive officers to promote stock ownership and help ensure alignment with stockholders. Under the Company’s new guidelines, participants are required to hold a number of shares of Class A common stock and certain equivalents that is valued at an amount equal to or greater than, for the CEO, a multiple of 6X of the CEO’s base salary, and, for the other named executive officers, a multiple of 2X of each named executive officer’s base salary. | | | | |||
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| | | | A preference for the Company to have hedging and pledging guidelines for named executive officers | | | | | | | We adopted an anti-hedging and anti-pledging policy that prohibits directors and executive officers from engaging in derivative or hedging transactions involving the Company’s securities or holding the Company’s securities in a margin account or otherwise pledging them as collateral for a loan. | | | |
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| | | | What We Heard | | | | | | | | Our Perspective/How We Responded | | | | ||
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| | | | A preference for cumulative vesting over annual vesting of the Company’s Performance-Based Restricted Stock Units | | | | | | | Given the extreme cyclicality of the radio broadcast industry in which we operate and the challenges related to precisely forecasting market cycles over long time horizons, the Compensation Committee believes that its current approach to assessing performance enables us to set aggressive goals tied to longer-term performance while still enabling the flexibility needed to address the distorting effects that industry cyclicality presents in any given year. As a result, after careful consideration, the Compensation Committee determined to maintain our existing approach to vesting periods for our 2024 performance-based restricted stock unit awards. | | | | |||
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| | | | A preference to use multiple performance metrics for each of our Long-Term Incentive Awards and Annual Quarterly Incentive Plan and/or differentiated performance metrics across our Long-Term Incentive Awards and the Annual Quarterly Incentive Plan | | | | | | | As in previous fiscal years, the Compensation Committee reviewed the use of Adjusted EBITDA as a metric in both the Long-Term Incentive Awards and Annual Quarterly Incentive Plan. After careful consideration, the Compensation Committee continues to believe that Adjusted EBITDA is the most appropriate and important indicator of our operating performance and correlates with increased shareholder value. After review of the feedback from our stockholders, the Compensation committee determined to add Adjusted Controllable Expense, which presents certain costs under management’s control, and digital marketing services revenue as additional performance metrics for the Long-Term Incentive Awards for fiscal year 2024 in addition to Adjusted EBITDA. The Compensation Committee believes that utilizing these three metrics addresses the importance of our annual financial performance. | | | | |||
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| | | | A preference for increased disclosure and clarity with respect to the Company’s dual classes of common stock | | | | | | | We have provided additional disclosure surrounding our dual class structure to clarify the purpose and effect of such structure on page 20 of this proxy statement. | | | | | | |
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Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Options Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||
Mary G. Berner | 2022 | 1,450,000 | — | 2,254,996 | — | 1,772,251 | 2,718 | 5,479,965 | ||||||||||||||||||||||||
President and Chief Executive Officer | 2021 | 1,450,000 | — | 1,977,136 | — | 3,148,301 | — | 6,575,437 | ||||||||||||||||||||||||
Francisco J. Lopez-Balboa | 2022 | 800,000 | — | 1,204,008 | — | 976,116 | 5,500 | 2,985,624 | ||||||||||||||||||||||||
Executive Vice President, Chief Financial Officer | 2021 | 800,000 | — | 1,091,706 | — | 1,735,315 | — | 3,627,022 | ||||||||||||||||||||||||
Richard S. Denning | 2022 | 600,000 | — | 381,500 | — | 353,943 | 9,157 | 1,344,600 | ||||||||||||||||||||||||
Executive Vice President, Secretary and General Counsel | 2021 | 600,000 | — | 307,468 | — | 638,643 | 6,676 | 1,552,787 |
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| Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Options Awards ($) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||||||||||||||
| Mary G. Berner | | | | | 2023 | | | | | | 1,450,000 | | | | | | — | | | | | | 1,691,437 | | | | | | — | | | | | | 1,379,440 | | | | | | 2,719 | | | | | | 4,523,596 | | |
| President and Chief Executive Officer | | | | | 2022 | | | | | | 1,450,000 | | | | | | — | | | | | | 2,254,996 | | | | | | — | | | | | | 1,772,251 | | | | | | 2,718 | | | | | | 5,479,965 | | |
| Francisco J. Lopez-Balboa | | | | | 2023 | | | | | | 800,000 | | | | | | — | | | | | | 840,876 | | | | | | — | | | | | | 769,057 | | | | | | 6,000 | | | | | | 2,415,933 | | |
| Executive Vice President, Chief Financial Officer | | | | | 2022 | | | | | | 800,000 | | | | | | — | | | | | | 1,204,008 | | | | | | — | | | | | | 976,116 | | | | | | 5,500 | | | | | | 2,985,624 | | |
| Richard S. Denning | | | | | 2023 | | | | | | 600,000 | | | | | | — | | | | | | 235,447 | | | | | | — | | | | | | 281,040 | | | | | | 5,542 | | | | | | 1,122,029 | | |
| Executive Vice President, Secretary and General Counsel | | | | | 2022 | | | | | | 600,000 | | | | | | — | | | | | | 381,500 | | | | | | — | | | | | | 353,943 | | | | | | 9,157 | | | | | | 1,344,600 | | |
2022
| | | | | | | | | | | | | | | | ||
| | | | What We Do | | | | | | | | What We Don’t Do | | | | ||
| | | | ☑ Maintain a “clawback” policy that complies with NASDAQ and SEC rules and regulations (new in 2023) | | | | | | | | ☒ Do not provide excise tax gross-ups upon a change in control | | | | | |
| | | | ☑ Maintain anti-hedging and anti-pledging policies (new in 2023) | | | | | | | | ☒ Do not grant equity awards that provide for “single-trigger” vesting upon a change in control | | | | | |
| | | | ☑ Maintain stock ownership guidelines for our named executive officers (new in 2023) | | | | | | | | ☒ Do not reprice stock options without stockholder approval | | | | | |
| | | | ☑ Obtain advice for the Compensation Committee from an external, independent compensation consultant, Frederic W. Cook & Co., Inc. | | | | | | | ☒ Do not provide | | | | | | |
| | | | ☑ Align a significant portion of our executive pay with performance, including by linking a portion of total compensation to achievement of specific performance goals | | | | | | | | | | | | | |
| | | | ☑ Utilize both time-vesting and performance-based equity compensation as part of the Company’s long-term incentive program | | | | | | | | | | | | ||
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☑ | Provide reasonable post-employment and change in control protections | | | | | | | | | | | | | | |||
| | | | ☑ Provide “change in control” vesting on equity awards only on a “double-trigger” basis | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | ||
| | | | Individual or Group | | | | | | | | Multiple of Base Salary | | | | ||
| | | | Chief Executive Officer | | | | | | | | 6X | | | | | |
| | | | Other Named Executive Officers | | | | | | | | 2X | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | ||
| |
| | Element | | | | | | | | Nature | | | | | | | | Description | | | | | |
| | | | Base Salary | | | | | | | | Fixed | | | | | | | | Fixed compensation component payable in cash | | | | | |
| | | | Annual Quarterly Incentive Program (“QIP”) Awards | | | | | | | | Variable | | | | | | | | QIP paid in cash based on performance against annually established goals | | | | | |
| | | | Long-Term Incentive (“LTI”) Awards | | | | | | | | Variable | | | | | | | | LTI equity awards include time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) and cash-based performance units (“CPUs”) | | | | | |
| | | | Retirement and Welfare Benefits | | | | | | | | Fixed | | | | | | | | Retirement | | | | | |
| | | | Severance Compensation | | | | | | | | Fixed | | | | | | | | Reasonable and market-competitive severance protection designed to attract and retain executive talent | | | |
automatically extended to December 31, 20232024, pursuant to its terms. Pursuant to the Berner Employment Agreement, Ms. Berner is entitled to receive an annual base salary of $1,450,000 million, subject to increase.
Key 20222023 Named Executive Officer Compensation Components and Decisions
Name | Stock Awards(1) | |||
Mary G. Berner | $ | 2,254,996 | ||
Francisco J. Lopez-Balboa | $ | 1,204,008 | ||
Richard S. Denning | $ | 381,500 |
27 (1) Reflects the awards of both time-based RSUs and PRSUs. The grant date fair value of time-based RSU awards is calculated in accordance with FASB ASC Topic 718. PRSU awards assume all grants were made in the initial year using the initial year grant date fair value; although performance goals for the second, third and fourth years will be set based upon budget for the applicable performance year. See note 10 of the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2023, for certain assumptions underlying the fair value of awards. The 2023 LTI award consisted of a mix of RSUs, PRSUs and CPUs in |
In order to provide a balance between retention and performance for the executive officers, and to further incentivize them toward the creation of long-term value, 50% of the 2022 LTI award consisted of RSUs, and 50% of the award consisted of PRSUs.
value.
| 2023 PRSU Adjusted EBITDA Goals (in millions) | | |||
| Threshold (90% of Target) 50% Payout | | | Target (100% of Target) 100% Payout | |
| $108,000,000 | | | $120,000,000 | |
substantially similarthe 2023 fiscal year, in evaluating final Adjusted EBITDA for the fiscal year for purposes of the PRSU awards, the CPUs (as defined below) and the 2023 QIP, the Compensation Committee determined that it was appropriate, and in accordance with the terms of the awards, to make adjustments to Adjusted EBITDA for compensation purposes, in light of the Company’s ongoing corporate review and restructuring of various elements of Westwood One’s strategy, operational performance and leadership, in addition to adjustments for the named executive officers. The 2022cost of the compensation related CPUs.
2022 PRSU Adjusted EBITDA Performance Goals (in millions) | ||
Threshold | Target | |
$148,590,000 | $165,100,00 |
As a result of the Company achieving Adjusted EBITDA of $166.0 million for 2022, the 20222023 tranches of the 2020, 2021, 2022 and 2023 PRSUs. However, due to the macro-economic headwinds faced by the Company and their impact, in part, on the overall financial performance of the Company for the full-year 2023, the Compensation Committee determined to limit payouts to 75% of target. As a result, the 2023 tranches of the 2020, 2021, 2022 and 2023 PRSUs were determined to have been earned at 100%75% of target, as illustrated below:
2020-2023 PRSU Award | 2021-2024 PRSU Award | 2022-2025 PRSU Award | ||||||||||||||||||||||||||||||
Name | 2022 Tranche Target PRSUs | 2022 Tranche Earned PRSUs | 2022 Tranche Target PRSUs | 2022 Tranche Earned PRSUs | 2022 Tranche Target PRSUs | 2022 Tranche Earned PRSUs | ||||||||||||||||||||||||||
Mary G. Berner | 11,250 | 11,250 | 12,650 | 12,650 | 27,634 | 27,634 | ||||||||||||||||||||||||||
Francisco J. Lopez-Balboa | 7,500 | 7,500 | 7,000 | 7,000 | 14,755 | 14,755 | ||||||||||||||||||||||||||
Richard S. Denning | 2,000 | 2,000 | 1,950 | 1,950 | 4,675 | 4,675 |
| | | 2020-2023 PRSU Award | | | 2021-2024 PRSU Award | | | 2022-2025 PRSU Award | | | 2023-2026 PRSU Award | | ||||||||||||||||||||||||||||||||||||
| | | 2023 Tranche Target PRSUs | | | 2023 Tranche Earned PRSUs | | | 2023 Tranche Target PRSUs | | | 2023 Tranche Earned PRSUs | | | 2023 Tranche Target PRSUs | | | 2023 Tranche Earned PRSUs | | | 2023 Tranche Target PRSUs | | | 2023 Tranche Earned PRSUs | | ||||||||||||||||||||||||
Mary G. Berner | | | | | 11,250 | | | | | | 8,437 | | | | | | 12,650 | | | | | | 9,487 | | | | | | 27,635 | | | | | | 20,726 | | | | | | 27,856 | | | | | | 20,892 | | |
Francisco J. Lopez-Balboa | | | | | 7,500 | | | | | | 5,625 | | | | | | 7,000 | | | | | | 5,250 | | | | | | 14,755 | | | | | | 11,066 | | | | | | 11,870 | | | | | | 8,902 | | |
Richard S. Denning | | | | | 2,000 | | | | | | 1,500 | | | | | | 1,950 | | | | | | 1,462 | | | | | | 4,675 | | | | | | 3,506 | | | | | | 2,252 | | | | | | 1,689 | | |
2022 Adjusted EBITDA Performance Goals (in millions) | ||
Threshold | Target | |
$148,590,000 | $165,100,00 |
| 2023 Adjusted EBITDA Goals (in millions) | | |||
| Threshold (90% of Target) 50% Payout | | | Target (100% of Target) 100% Payout | |
| $108,000,000 | | | $120,000,000 | |
| | | 2021-2024 CPU Award | | |||||||||
Name | | | 2023 Tranche Target CPUs | | | 2023 Tranche Earned CPUs | | ||||||
Mary G. Berner | | | | $ | 248,300 | | | | | $ | 186,225 | | |
Francisco J. Lopez-Balboa | | | | $ | 135,316 | | | | | $ | 101,487 | | |
Richard S. Denning | | | | $ | 38,644 | | | | | $ | 28,983 | | |
2021-2024 CPU Award | ||||||||
Name | 2022 Tranche Target CPUs | 2022 Tranche Earned CPUs | ||||||
Mary G. Berner | $ | 248,301 | $ | 248,301 | ||||
Francisco J. Lopez-Balboa | $ | 135,315 | $ | 135,315 | ||||
Richard S. Denning | $ | 38,643 | $ | 38,643 |
| | | 2023-2026 CPU Award | | |||||||||
Name | | | 2023 Tranche Target CPUs | | | 2023 Tranche Earned CPUs | | ||||||
Mary G. Berner | | | | $ | 140,953 | | | | | $ | 105,715 | | |
Francisco J. Lopez-Balboa | | | | $ | 90,093 | | | | | $ | 67,570 | | |
Richard S. Denning | | | | $ | 36,076 | | | | | $ | 27,057 | | |
Each of the awards under the 2020 Long-Term Incentive Plandescribed above are subject to clawback provisions that require that such awards be forfeited or repaid to the Company in the event of certain acts of fraud or misconduct that result in a material restatement of the Company’s financial results.
2022 QIP Adjusted EBITDA Performance Goals (in millions) | ||||
Threshold | Target (100% of Target) 100% Payout | Maximum (120% of Target) 200% Payout | ||
$148,590,000 | $165,100,000 | $198,120,000 |
March 2023:
| 2023 QIP Adjusted EBITDA Goals (in millions) | | ||||||
| Threshold (90% of Target) 50% Payout | | | Target (100% of Target) 100% Payout | | | Maximum (120% of Target) 200% Payout | |
| $108,000,000 | | | $120,000,000 | | | $144,000,000 | |
Name | Target Award Opportunity (% of Base Salary) | Target Award Opportunity ($) | ||||||
Mary G. Berner | 100 | % | $ | 1,450,000 | ||||
Francisco J. Lopez-Balboa | 100 | % | $ | 800,000 | ||||
Richard S. Denning | 50 | % | $ | 300,000 |
Name | | | Target Award Opportunity (% of Base Salary) | | | Target Award Opportunity ($) | | ||||||
Mary G. Berner | | | | | 100% | | | | | $ | 1,450,000 | | |
Francisco J. Lopez-Balboa | | | | | 100% | | | | | $ | 800,000 | | |
Richard S. Denning | | | | | 50% | | | | | $ | 300,000 | | |
2023.
2024 LTI Program Changes
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (#) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||
Mary G. Berner | 169,583 | (1) | — | — | 25.70 | 6/5/2023 | — | — | — | — | ||||||||||||||||||||||||||
— | — | 8,400 | (4) | 52,164 | — | — | ||||||||||||||||||||||||||||||
45,000 | (2) | 45,000 | (2) | — | 14.64 | 2/13/2025 | 22,500 | (5) | 139,725 | 22,500 | (6) | 139,725 | ||||||||||||||||||||||||
114,450 | (9) | 710,735 | 37,950 | (10) | 235,670 | |||||||||||||||||||||||||||||||
— | — | — | — | — | 110,539 | (11) | 686,447 | 110,539 | (12) | 686,447 | ||||||||||||||||||||||||||
Francisco J. Lopez-Balboa | 30,000 | (3) | 30,000 | (3) | — | 4.50 | 3/23/2025 | 15,000 | (7) | 93,150 | 15,000 | (8) | 93,150 | |||||||||||||||||||||||
— | — | — | — | — | 63,150 | (9) | 392,162 | 21,000 | (10) | 130,410 | ||||||||||||||||||||||||||
— | — | — | — | — | 59,020 | (11) | 366,514 | 59,020 | (12) | 366,514 | ||||||||||||||||||||||||||
Richard S. Denning | 26,568 | (1) | — | 25.70 | 6/5/2023 | — | — | — | — | |||||||||||||||||||||||||||
— | — | 1,334 | (4) | 8,284 | — | — | ||||||||||||||||||||||||||||||
8,000 | (2) | 8,000 | (2) | — | 14.64 | 2/13/2025 | 4,000 | (5) | 24,840 | 4,000 | (6) | 24,840 | ||||||||||||||||||||||||
— | — | — | — | — | 17,850 | (9) | 110,849 | 5,850 | (10) | 36,329 | ||||||||||||||||||||||||||
— | — | — | — | — | 18,701 | (11) | 116,133 | 18,701 | (12) | 116,133 |
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| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||
| | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested (#) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |||||||||||||||||||||||||||
Mary G. Berner | | | | | 67,500(1) | | | | | | 67,500(1) | | | | | | — | | | | | | 14.64 | | | | | | 2/13/2025 | | | | | | 11,250(3) | | | | | | 59,850 | | | | | | 11,250(4) | | | | | | 59,850 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 76,300(7) | | | | | | 405,916 | | | | | | 25,300(8) | | | | | | 134,596 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 82,905(9) | | | | | | 441,055 | | | | | | 82,905(10) | | | | | | 441,055 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 222,851(11) | | | | | | 1,185,567 | | | | | | 111,425(12) | | | | | | 592,781 | | |
Francisco J. Lopez-Balboa | | | | | 45,000(2) | | | | | | 45,000(2) | | | | | | — | | | | | | 4.50 | | | | | | 3/23/2025 | | | | | | 7,500(5) | | | | | | 39,900 | | | | | | 7,500(6) | | | | | | 39,900 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 42,100(7) | | | | | | 223,972 | | | | | | 14,000(8) | | | | | | 74,480 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 44,265(9) | | | | | | 235,490 | | | | | | 44,265(10) | | | | | | 235,490 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 118,701(11) | | | | | | 631,489 | | | | | | 47,480(12) | | | | | | 252,594 | | |
Richard S. Denning | | | | | 12,000(1) | | | | | | 12,000(1) | | | | | | — | | | | | | 14.64 | | | | | | 2/13/2025 | | | | | | 2,000(3) | | | | | | 10,640 | | | | | | 2,000(4) | | | | | | 10,640 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,900(7) | | | | | | 63,308 | | | | | | 3,900(8) | | | | | | 20,748 | | |
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,026(9) | | | | | | 74,618 | | | | | | 14,026(10) | | | | | | 74,618 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 37,525(11) | | | | | | 199,633 | | | | | | 9,006(12) | | | | | | 47,912 | | |
due to death, or due to disability (as defined for purposes of the applicable awards): (1) 50% of outstanding and unvested CPUs, RSUs and PRSUs will become vested (or 75%, if such termination occurs prior to the first anniversary of the grant date); and (2) unvested options will vest to the extent that they would have vested on the next succeeding annual vesting date. If the officer’s employment is terminated
The
•
if, while employed by or proving services to the Company or its affiliates, the named executive officer engages in activity that constitutes fraud or other intentional misconduct and that activity directly results in any financial restatements; and
As required by new pay versus performance (“PVP”) rules adopted by the SEC in August 2022 and in effect for the first time for this Proxy Statement, the following
| Year (a) | | | Summary Compensation Table (“SCT”) Total for PEO ($)(b)(1) | | | Comp. Actually Paid to PEO ($)(c)(1)(2) | | | Average SCT Total for Non-PEO NEOs ($)(d)(1) | | | Average Comp. Actually Paid to Non-PEO NEOs ($)(e)(1)(2) | | | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(f)(3) | | | Net (Loss) Income ($)(g) | | ||||||||||||||||||
| 2023 | | | | | 4,523,596 | | | | | | 4,342,660 | | | | | | 1,768,981 | | | | | | 1,693,390 | | | | | | 61.01 | | | | | | (117,879,000) | | |
| 2022 | | | | | 5,479,965 | | | | | | 3,298,170 | | | | | | 2,165,112 | | | | | | 1,372,059 | | | | | | 71.22 | | | | | | 16,235,000 | | |
| 2021 | | | | | 6,575,437 | | | | | | 7,472,868 | | | | | | 2,589,905 | | | | | | 2,870,326 | | | | | | 129.01 | | | | | | 17,278,000 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | Item and Value Added (Deducted) | | | | 2023 | | | | 2022 | | | | 2021 | | | | ||
| | | | For Ms. Berner: | | | | | | | | | | | | | | | | ||
| | | | - SCT “Stock Awards” column value | | | | $(1,691,437) | | | | $(2,254,996) | | | | $(1,977,136) | | | | ||
| | | | - SCT “Option Awards” column value | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | + year-end fair value of outstanding equity awards granted in Covered Year | | | | $1,741,300 | | | | $1,372,894 | | | | $2,286,000 | | | | ||
| | | | +/- change in fair value of outstanding equity awards granted in prior years | | | | $(266,577) | | | | $(1,264,032) | | | | $530,480 | | | | ||
| | | | + vesting date fair value of equity awards granted and vested in Covered Year | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | +/- change in fair value of prior-year equity awards vested in Covered Year | | | | $35,778 | | | | $(35,661) | | | | $58,087 | | | | ||
| | | | - prior year-end fair value of prior-year equity awards forfeited in Covered Year | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | + includable dividends/earnings on equity awards during Covered Year | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | For Non-PEO Named Executive Officers (Average): | | | | | | | | | | | | | | | | ||
| | | | - SCT “Stock Awards” column value | | | | $(538,162) | | | | $(792,754) | | | | $(699,587) | | | | ||
| | | | - SCT “Option Awards” column value | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | + year-end fair value of outstanding equity awards granted in Covered Year | | | | $556,421 | | | | $482,647 | | | | $808,875 | | | | ||
| | | | +/- change in fair value of outstanding equity awards granted in prior years | | | | $(96,570) | | | | $(466,664) | | | | $159,073 | | | | ||
| | | | + vesting date fair value of equity awards granted and vested in Covered Year | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | +/- change in fair value of prior-year equity awards vested in Covered Year | | | | $2,720 | | | | $(16,282) | | | | $12,060 | | | | ||
| | | | - prior year-end fair value of prior-year equity awards forfeited in Covered Year | | | | $0 | | | | $0 | | | | $0 | | | | ||
| | | | + includable dividends/earnings on equity awards during Covered Year | | | | $0 | | | | $0 | | | | $0 | | | |
The information in columns (b) and (d) of the PVP Table comes directly from this year’s Summary Compensation Table (or last year’s Summary Compensation Table), without adjustment, calculated in substantially the same manner as required under SEC rules;
As required by the SEC’s PVP rules, we describe the information in columns (c) and (e) of the PVP Table as “compensation actually paid” (or “CAP”) to the applicable PVP NEOs. However, these CAP amounts do not entirely reflect the final compensation that our NEOs actually earned or walked away with for their service in the Covered Years, respectively. Instead, the SEC’s concept of CAP really reflects the SEC’s particular view or formulation of a combination of realized pay (primarily for cash
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As required by the SEC’s PVP rules, we provide information in the PVP Table below about our absolute total shareholder return (“TSR”) results and our U.S. GAAP net income results (the “External Measures”) during the Covered Years.
Pay Versus Performance Table
Year (a) | Summary Compensation Table (“SCT”) Total for PEO ($)(b)(1) | Comp. Actually Paid to PEO ($)(c)(1)(2) | Average SCT Total for Non-PEO NEOs ($)(d)(1) | Average Comp. Actually Paid to Non-PEO NEOs ($)(e)(1)(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(f)(3) | Net Income ($)(g) | ||||||||||||||||||
2022 | 5,479,965 | 3,298,170 | 2,165,112 | 1,372,059 | 71.22 | 16,235,000 | ||||||||||||||||||
2021 | 6,575,437 | 7,472,868 | 2,589,905 | 2,870,326 | 129.01 | 17,278,000 |
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Item and Value Added (Deducted) | 2022 | 2021 | ||||||
For Ms. Berner: |
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- SCT “Stock Awards” column value | $ | (2,254,996 | ) | $ | (1,977,136 | ) | ||
- SCT “Option Awards” column value | $ | 0 | $ | 0 | ||||
+ year-end fair value of outstanding equity awards granted in Covered Year | $ | 1,372,894 | $ | 2,286,000 | ||||
+/- change in fair value of outstanding equity awards granted in prior years | $ | (1,264,032 | ) | $ | 530,480 | |||
+ vesting date fair value of equity awards granted and vested in Covered Year | $ | 0 | $ | 0 | ||||
+/- change in fair value of prior-year equity awards vested in Covered Year | $ | (35,661 | ) | $ | 58,087 | |||
- prior year-end fair value of prior-year equity awards forfeited in Covered Year | $ | 0 | $ | 0 | ||||
+ includable dividends/earnings on equity awards during Covered Year | $ | 0 | $ | 0 |
Item and Value Added (Deducted) | 2022 | 2021 | ||||||
For Non-PEO Named Executive Officers (Average): |
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- SCT “Stock Awards” column value | $ | (792,754 | ) | $ | (699,587 | ) | ||
- SCT “Option Awards” column value | $ | 0 | $ | 0 | ||||
+ year-end fair value of outstanding equity awards granted in Covered Year | $ | 482,647 | $ | 808,875 | ||||
+/- change in fair value of outstanding equity awards granted in prior years | $ | (466,664 | ) | $ | 159,073 | |||
+ vesting date fair value of equity awards granted and vested in Covered Year | $ | 0 | $ | 0 | ||||
+/- change in fair value of prior-year equity awards vested in Covered Year | $ | (16,282 | ) | $ | 12,060 | |||
- prior year-end fair value of prior-year equity awards forfeited in Covered Year | $ | 0 | $ | 0 | ||||
+ includable dividends/earnings on equity awards during Covered Year | $ | 0 | $ | 0 |
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The following charts provide, across the Covered Years, descriptions of the relationships between (1) the CAP for the PEO and the average CAP for our Non-PEO NEOs (in each case as set forth in the PVP Table above) and (2) each of the performance measures set forth in columns (f) and (g) of the PVP Table above.
Securities Authorized for Issuance Under Equity Incentive Plans
The following table sets forth, as of December 31, 2022, the number of securities outstanding under our 2018 Equity and Incentive Compensation Plan and 2020 Long-Term Incentive Plan, the weighted average exercise price of such securities, if applicable, and the number of securities available for grant under these plans:
Plan Category | To be Issued Upon Exercise of Outstanding Options Warrants and Rights (a) | Weighted- Average Exercise Price of Outstanding Options Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) | |||||||||
Equity Compensation Plans Approved by Stockholders | 716,255 | $ | 19.83 | 1,221,412 | ||||||||
Equity Compensation Plans Not Approved by Stockholders | — | — | — | |||||||||
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Total | 716,255 | $ | 19.83 | 1,221,412 | ||||||||
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The following table sets forth amounts paid to our non-employee directors in 2022.2023. Ms. Berner received no additional compensation for her service as a director, and her compensation is disclosed in the “2022“2023 Summary Compensation Table” above.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
David M. Baum(1) | 62,500 | 100,000 | — | — | — | — | 162,500 | |||||||||||||||||||||
Matthew C. Blank | 100,000 | 100,000 | — | — | — | — | 200,000 | |||||||||||||||||||||
Thomas H. Castro | 100,000 | 100,000 | — | — | — | — | 200,000 | |||||||||||||||||||||
Deborah A. Farrington(2) | 36,685 | 75,342 | — | — | — | — | 112,027 | |||||||||||||||||||||
Joan Hogan Gillman | 115,000 | 100,000 | — | — | — | — | 215,000 | |||||||||||||||||||||
Andrew W. Hobson | 149,171 | 180,491 | — | — | — | — | 329,662 | |||||||||||||||||||||
Brian G. Kushner | 125,000 | 100,000 | — | — | — | — | 225,000 |
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Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings | | | All Other Compensation ($) | | | Total ($) | | |||||||||||||||||||||
Matthew C. Blank | | | | | 100,000 | | | | | | 100,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 200,000 | | |
Thomas H. Castro | | | | | 100,000 | | | | | | 100,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 200,000 | | |
Deborah A. Farrington | | | | | 100,000 | | | | | | 100,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 200,000 | | |
Joan Hogan Gillman | | | | | 115,000 | | | | | | 100,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 215,000 | | |
Andrew W. Hobson | | | | | 165,000 | | | | | | 180,491 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 345,491 | | |
Brian G. Kushner | | | | | 125,000 | | | | | | 100,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 225,000 | | |
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AUDIT COMMITTEE REPORT | |
2022.2023. This report shall not be deemed to be incorporated by reference by any general statement incorporating by reference this proxy statement into any filing with the SEC by the Company, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed to be filed with the SEC.2022,2023, the Company’s audited financial statements contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022.2023. The Audit Committee also discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the statement on Auditing Standards No. 16, Communication with Audit Committees, as amended, issued by the Public Company Accounting Oversight Board.2022,2023, filed with the SEC.
Thomas H. Castro
Deborah A. Farrington
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | |
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PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION | |
stockholders.
2023.
| | Recommendation of the Board of Directors | | |
| | Your Board of Directors recommends a vote FOR the advisory approval of the compensation of the Company’s named executive officers as disclosed in this proxy statement. | | |
Recommendation of the Board of Directors
Your Board of Directors recommends a vote FOR the advisory approval of the compensation of the Company’s named executive officers as disclosed in this proxy statement.
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PROPOSAL NO. 3: |
The Dodd-Frank Act also provides stockholders with the right to vote, on an advisory, nonbinding basis, on the frequency with which the Company should include an advisory vote on executive compensation, similar to that in Proposal 2, at future annual meetings of stockholders. This advisory vote is commonly referred to as the “say-when-on-pay” vote. Stockholders may vote for a say-on-pay vote to occur every year, every two years or every three years, or may abstain from voting on the frequency of the say-on-pay vote.
Section 14A of the Securities Exchange Act of 1934 requires that we conduct a stockholder advisory vote of this nature at least once every six years. This proposal provides our stockholders with the opportunity to cast an advisory vote indicating their preference on how often the Company should include a say-on-pay proposal in its proxy materials for future stockholder meetings.
As discussed in Proposal 2, in an advisory vote in 2017, a majority of the Company’s stockholders voted in favor of submission of the say-on-pay vote “every year” and our Board approved this approach. We continue to believe that by providing for a say-on-pay vote every year, stockholders will have the opportunity annually to express their views on the compensation of our named executive officers. An annual vote also complements our goal of creating and implementing a compensation philosophy, objectives, programs and practices that enhance stockholder value, and can maximize accountability and communication.
You may cast your vote on a preferred frequency on which the Company is to hold future advisory stockholder votes to approve the compensation of the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC by selecting your preference of every year, every two years or every three years, or by abstaining from voting.
Although the say-when-on-pay vote is nonbinding, the Board of Directors and the Compensation Committee will consider the results of the say-when-on-pay vote, among other factors, in determining the frequency of future say-on-pay votes. The Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the non-binding option recommended by our stockholders.
Recommendation of the Board of Directors
Your Board of Directors recommends a vote for ONE YEAR as the preferred frequency for future advisory votes on executive compensation as disclosed in this proxy statement.
Overview
We are asking stockholders to approve an amendment and restatement of the Cumulus Media Inc., 2020 Equity and Incentive Compensation Plan. On March 22, 2023, upon recommendation by the Compensation Committee, the Board approved and adopted, subject to the approval of the Company’s stockholders at the annual meeting, the amendment and restatement of the Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan. In this proposal, we refer to the original Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan as the “2020 Plan,” and we refer to the amended and restated Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan as the “Amended 2020 Plan.”
The Company’s stockholders approved the 2020 Plan, which succeeded the Cumulus Media Inc. Long-Term Incentive Plan (the “Predecessor Plan”), at the Company’s 2020 Annual Meeting of Stockholders, and no future awards may be granted under the Predecessor Plan. The 2020 Plan affords the Compensation Committee the ability to design compensatory awards that are responsive to the Company’s needs and includes authorization for a variety of awards designed to advance the interests and long-term success of the Company by encouraging stock ownership among officers and other employees of the Company and its subsidiaries, certain consultants and other service providers to the Company and its subsidiaries, and non-employee directors of the Company. You are being asked to approve the Amended 2020 Plan.
Stockholder approval of the Amended 2020 Plan would primarily make available for awards under the Amended 2020 Plan an additional 700,000 shares of Class A common stock, par value $0.0000001 per share, of the Company (“Class A Shares”), as described below and in the Amended 2020 Plan, with such amount subject to adjustment, including under the share counting rules.
The Board recommends that you vote to approve the Amended 2020 Plan. If the Amended 2020 Plan is approved by stockholders at the annual meeting, it will be effective as of the day of the annual meeting, and future grants will be made on or after such date under the Amended 2020 Plan. If the Amended 2020 Plan is not approved by our stockholders, then it will not become effective, no awards will be granted under the Amended 2020 Plan, and the 2020 Plan will continue in accordance with its terms as previously approved by our stockholders.
The actual text of the Amended 2020 Plan is attached to this proxy statement as Appendix A. The following description of the Amended 2020 Plan is only a summary of its principal terms and provisions and is qualified by reference to the actual text as set forth in Appendix A.
Why We Recommend That You Vote for this Proposal
The Amended 2020 Plan continues to authorize the Compensation Committee to provide cash awards and equity-based compensation in the form of stock options, appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares, performance units, dividend equivalents and certain other awards, including those denominated or payable in, or otherwise based on, Class A Shares, for the purpose of providing our non-employee directors, officers and other employees of the Company and its subsidiaries, and certain consultants and other service providers of the Company and its subsidiaries, incentives and rewards for service and/or performance. Some of the key features of the Amended 2020 Plan that reflect our commitment to effective management of equity and incentive compensation are set forth below.
We believe our future success continues to depend in part on our ability to attract, motivate and retain high quality employees and directors and that the ability to provide equity-based and incentive-based awards under the Amended 2020 Plan is critical to achieving this success. We would be at a severe competitive disadvantage if we could not use share-based awards to recruit and compensate our employees and directors.
The use of Class A Shares as part of our compensation program is also important because equity-based awards continue to be an essential component of our compensation program for key employees, as they help link compensation with long-term stockholder value creation and reward participants based on service and/or performance.
In 2020, Company stockholders approved 2,100,000 Class A Shares, plus the number of Class A Shares that remained available for awards under the Predecessor Plan as of the effective date of the 2020 Plan, to be used for awards under the 2020 Plan. As of March 3, 2023, 649,665 Class A Shares remained available for awards under the 2020 Plan. If the Amended 2020 Plan is not approved, we may be compelled to increase significantly the cash component of our employee and director compensation, which approach may not necessarily align employee and director compensation interests with the investment interests of our stockholders. Replacing equity awards with cash also would increase cash compensation expense and use cash that could be better deployed for other purposes.
The following includes aggregated information regarding our view of the overhang and dilution associated with the Predecessor Plan and the 2020 Plan, and the potential dilution associated with the Amended 2020 Plan. This information is as of March 3, 2023. As of that date, there was a total of 18,414,806 shares of common stock outstanding (“Common Stock”), consisting of approximately 18,102,765 Class A Shares and 312,041 shares of our Class B common stock. Class B common stock is convertible at any time at the option of the holders into Class A common stock on a share-for-share basis.
Class A Shares Subject to Outstanding Awards and Available for Future Awards:
Total Class A Shares subject to outstanding awards considered granted for purposes of FASB ASC Topic 718: 2,123,817 Class A Shares, consisting of 1,177,802 Class A Shares subject to time-based RSUs, 229,760 Class A Shares subject to performance-based RSUs, and 716,255 Class A Shares subject to stock options (outstanding stock options have a weighted average exercise price of $19.83 and a weighted average remaining term of 1.2 years);
Total Class A Shares reserved for awards made, but not yet considered granted for purposes of FASB ASC Topic 718: 392,079 Class A Shares that are reserved for issuance pursuant to performance-based RSUs; and
Total Class A Shares available for future awards under the 2020 Plan, after deducting the shares described above: 649,665 Class A Shares.
Proposed Class A Shares Available for Awards Under the Amended 2020 Plan:
700,000 additional Class A Shares, subject to adjustment, including under the share counting rules of the Amended 2020 Plan.
Based on the closing price on the NASDAQ Global Market for our Class A Shares on March 3, 2023, of $5.06 per share, the aggregate market value as of March 3, 2023, of the additional 700,000 Class A Shares requested under the Amended 2020 Plan was $3,542,000.
In fiscal years 2020, 2021 and 2022, awards were made under the Predecessor Plan (prior to April 30, 2020) and the 2020 Plan covering 819,552 Class A Shares, 772,195 Class A Shares, and 827,553 Class A Shares, respectively. Based on our basic weighted average of Class A Shares outstanding for those three fiscal years of 20,317,064, 20,482,547, and 19,560,257, respectively, for the three-fiscal-year period 2020-2022, our average burn rate, not taking into account forfeitures, was 4.01% (our individual years’ burn rates were 4.03% for fiscal 2020, 3.77% for fiscal 2021, and 4.23% for fiscal 2022). In determining the number of shares to request for approval under the Amended 2020 Plan, our management team worked with our Compensation Committee and its advisors to evaluate a number of factors, including our recent share usage and criteria expected to be utilized by institutional proxy advisory firms in evaluating our proposal for the Amended 2020 Plan.
If the Amended 2020 Plan is approved, we intend to utilize the shares authorized under the Amended 2020 Plan to continue our practice of incentivizing key individuals through equity grants. We currently anticipate that the shares requested in connection with the approval of the Amended 2020 Plan will last for about three years, based on our historic grant rates, new hiring and the approximate current share price, but could last for a different period of time if actual practice does not match recent rates or our share price changes materially. As noted below, our Compensation Committee would retain full discretion under the Amended 2020 Plan to determine the number and amount of awards to be granted under the Amended 2020 Plan, subject to the terms of the Amended 2020 Plan, and future benefits that may be received by participants under the Amended 2020 Plan are not determinable at this time.
We believe that we have demonstrated a commitment to sound equity compensation practices in recent years. We recognize that equity compensation awards dilute stockholders’ equity, so we have carefully managed our equity incentive compensation. Our equity compensation practices are intended to be competitive and consistent with market practices, and we believe our historical share usage has been responsible and mindful of stockholder interests, as described above.
In evaluating this proposal, stockholders should consider all of the information in this proposal and this proxy statement, including Appendix A.
Material Changes From The 2020 Plan
The Amended 2020 Plan (1) increases the number of Class A Shares available for awards under the 2020 Plan by 700,000 shares, (2) correspondingly increases the limit on shares that may be issued or transferred upon the exercise of incentive stock options granted under the 2020 Plan, during its duration (as described below), by 700,000 Class A Shares, (3) includes a provision requiring a minimum one-year vesting period for all awards with limited, customary exceptions, (4) revises the provisions related to the delegation of grant authority under 2020 Plan to better align with recent changes to Delaware law, and (5) extends the term of the 2020 Plan until the 10th anniversary of the date of stockholder approval of the Amended 2020 Plan. The Amended 2020 Plan also makes certain other conforming, clarifying or nonsubstantive changes to the terms of the 2020 Plan to implement the Amended 2020 Plan.
We are not seeking to make any other material changes to the terms of the 2020 Plan.
Other Amended 2020 Plan Highlights
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Subject to adjustment as described in the Amended 2020 Plan, awards under the Amended 2020 Plan are limited to (1) 2,800,000 Class A Shares (2,100,000 of which were originally approved by stockholders at the 2020 annual meeting of stockholders, and 700,000 of which are newly provided for under the Amended 2020 Plan), plus one Class A Share for every Class A Share that remained available for awards pursuant to the Predecessor Plan as of the effective date of the 2020 Plan and the shares that are subject to awards granted under the Predecessor Plan or the 2020 Plan that are added (or added back, as applicable) pursuant to the share counting rules in the Amended 2020 Plan. These shares may be shares of original issuance or treasury shares, or a combination of the two;
The Amended 2020 Plan also provides that, subject as applicable to the adjustment and share counting provisions of the Amended 2020 Plan, the aggregate number of Class A Shares actually issued or transferred upon the exercise of Incentive Stock Options (as defined below) will not exceed 2,800,000 Class A Shares; and
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Class A Shares withheld by us, tendered or otherwise used in payment of the exercise price of a stock option granted under the Amended 2020 Plan or the Predecessor Plan will be added back to the aggregate number of Class A Shares available under the Amended 2020 Plan;
Class A Shares withheld by us, tendered or otherwise used to satisfy tax withholding with respect to stock options or SARs granted under the Amended 2020 Plan or the Predecessor Plan will be added back to the aggregate number of Class A Shares available under the Amended 2020 Plan;
Class A Shares withheld by us, tendered or otherwise used prior to the 10th anniversary of the date of stockholder approval of the Amended 2020 Plan to satisfy tax withholding with respect to awards other than stock options or SARs granted under the Amended 2020 Plan or the Predecessor Plan will be added back to the aggregate number of Class A Shares available under the Amended 2020 Plan;
Class A Shares withheld by us, tendered or otherwise used on or after the 10th anniversary of the date of stockholder approval of the Amended 2020 Plan to satisfy tax withholding with respect to awards other than stock options or SARs will not be added (or added back, as applicable) to the aggregate number of Class A Shares available under the Amended 2020 Plan;
Class A Shares subject to a share-settled SAR that are not actually issued in connection with the settlement of such SAR on exercise will be added back to the aggregate number of Class A Shares available under the Amended 2020 Plan;
Class A Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of stock options will not be added (or added back, as applicable) to the aggregate number of Class A Shares available under the Amended 2020 Plan; and
If a participant elects to give up the right to receive compensation in exchange for Class A Shares based on fair market value, such Class A Shares will not count against the aggregate number of shares available under the Amended 2020 Plan.
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Summary of Other Material Terms of the 2020 Plan
Administration: The Amended 2020 Plan will generally be administered by the Compensation Committee (or its successor), or any other committee of the Board designated by the Board to administer the Amended 2020 Plan. However, at the discretion of the Board, the Amended 2020 Plan may be administered by the Board, including with respect to the administration of any responsibilities and duties held by the Compensation Committee under the Amended 2020 Plan. References to the “Committee” in this proposal generally refer to the Compensation Committee or such other committee designated by the Board, or the Board, as applicable. The Committee may from time to time delegate all or any part of its authority under the Amended 2020 Plan to a subcommittee. Any interpretation, construction and determination by the Committee of any provision of the Amended 2020 Plan, or of any Evidence of Award (as defined below) under the Amended 2020 Plan (or related documents), will be final and conclusive. To the extent permitted by applicable law, the Committee may delegate to one or more of its members or to one or more officers, or to one or more agents or advisors of the Company, such administrative duties or powers as it deems advisable. In addition, the Committee may by resolution, subject to certain restrictions set forth in the Amended 2020 Plan, authorize one or more officers of the Company to authorize the granting or sale of awards under the Amended 2020 Plan on the same basis as the Compensation Committee. However, the Committee may not delegate such authority to officers for awards granted to such officers or any
non-employee directors, certain officers or certain employees who are subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”).
Eligibility: Any person who is selected by the Committee to receive benefits under the Amended 2020 Plan and who is at that time an officer or other employee of the Company or any of its subsidiaries (including a person who has agreed to commence serving in such capacity within 90 days of the date of grant) is eligible to participate in the Amended 2020 Plan. In addition, certain persons, including consultants, who provide services to the Company or any of its subsidiaries that are equivalent to those typically provided by an employee (provided that such persons satisfy the Form S-8 definition of “employee”), and non-employee directors of the Company, may also be selected by the Committee to participate in the Amended 2020 Plan. As of March 3, 2023, there were approximately 35 employees of the Company and its subsidiaries expected to participate in the Amended 2020 Plan out of a total of 3,319 employees. We expect that all of our non-employee directors (of which there were six as of March 3, 2023) will participate in the Amended 2020 Plan. Although approximately 50 consultants were providing services to the Company as of March 3, 2023, we do not currently expect to grant awards to consultants under the Amended 2020 Plan. The basis for participation in the Amended 2020 Plan by eligible persons is the selection of such persons for participation by the Committee (or its proper delegate) in its discretion.
Share Counting: Generally, the aggregate number of Class A Shares available under the Amended 2020 Plan will be reduced by one Class A Share for every one Class A Share subject to an award granted under the Amended 2020 Plan.
Types of Awards Under the Amended 2020 Plan: Pursuant to the Amended 2020 Plan, the Company may grant stock options (including stock options intended to be “incentive stock options” as defined in Section 422 of the Internal Revenue Code of 1986 (the “Code”) (“Incentive Stock Options”)), SARs, restricted stock, RSUs, performance shares, performance units, cash incentive awards, and certain other awards based on or related to our Class A Shares.
Generally, each grant of an award under the Amended 2020 Plan will be evidenced by an award agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee (an “Evidence of Award”), which will contain such terms and conditions as the Committee may determine, consistent with the Amended 2020 Plan. A brief description of the types of awards which may be granted under the Amended 2020 Plan is set forth below.
Stock Options: A stock option is a right to purchase Class A Shares upon exercise of the stock option. Stock options granted to an employee under the Amended 2020 Plan may consist of either an Incentive Stock Option, a non-qualified stock option that is not intended to be an “incentive stock option” under Section 422 of the Code, or a combination of both. Incentive Stock Options may only be granted to employees of the Company or certain of our related corporations. Except with respect to certain awards issued in substitution for, in conversion of, or in connection with an assumption of stock options held by awardees of an entity engaging in a corporate acquisition or merger with us or any of our subsidiaries, stock options must have an exercise price per share that is not less than the fair market value of a Class A Share on the date of grant. The term of a stock option may not extend more than 10 years from the date of grant. The Committee may provide in an Evidence of Award for the automatic exercise of a stock option.
Each grant of a stock option will specify the applicable terms of the stock option, including the number of Class A Shares subject to the stock option and the required period or periods of the participant’s continuous service, if any, before any stock option or portion of a stock option will vest. Stock options may provide for continued vesting or the earlier vesting of the stock options, including in the event of retirement, death, disability or termination of employment or service of the participant or in the event of a Change in Control.
Any grant of stock options may specify management objectives regarding the vesting of the stock options. Each grant will specify whether the consideration to be paid in satisfaction of the exercise price will be payable: (1) in
cash, by check acceptable to the Company, or by wire transfer of immediately available funds; (2) by the actual or constructive transfer to the Company of Class A Shares owned by the participant with a value at the time of exercise that is equal to the total exercise price; (3) subject to any conditions or limitations established by the Committee, by a net exercise arrangement pursuant to which the Company will withhold Class A Shares otherwise issuable upon exercise of a stock option; (4) by a combination of the foregoing methods; or (5) by such other methods as may be approved by the Committee. To the extent permitted by law, any grant may provide for deferred payment of the exercise price from the proceeds of a sale through a bank or broker of some or all of the shares to which the exercise relates. Stock options granted under the Amended 2020 Plan may not provide for dividends or dividend equivalents.
SARs: The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of SARs. A SAR is a right to receive from us an amount equal to 100%, or such lesser percentage as the Committee may determine, of the spread between the base price and the value of our Class A Shares on the date of exercise.
Each grant of SARs will specify the period or periods of continuous service, if any, by the participant with the Company or any subsidiary that is necessary before the SARs or installments of such SARs will become exercisable. SARs may provide for continued vesting or the earlier vesting of such SARs, including in the event of the retirement, death, disability or termination of employment or service of a participant or in the event of a Change in Control. Any grant of SARs may specify management objectives regarding the vesting of such SARs. A SAR may be paid in cash, Class A Shares or any combination of the two.
Except with respect to awards issued in substitution for, in conversion of, or in connection with an assumption of SARs held by awardees of an entity engaging in a corporate acquisition or merger with us or any of our subsidiaries, the base price of a SAR may not be less than the fair market value of a Class A Share on the date of grant. The term of a SAR may not extend more than 10 years from the date of grant. The Committee may provide in an Evidence of Award for the automatic exercise of a SAR. SARs granted under the Amended 2020 Plan may not provide for dividends or dividend equivalents.
Restricted Stock: Restricted stock constitutes an immediate transfer of the ownership of Class A Shares to the participant in consideration of the performance of services, entitling such participant to voting and other ownership rights (subject in particular to certain dividend provisions in the Amended 2020 Plan), subject to the substantial risk of forfeiture and restrictions on transfer determined by the Committee for a period of time determined by the Committee or until certain management objectives specified by the Committee are achieved. Each such grant or sale of restricted stock may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value per Class A Share on the date of grant.
Any grant of restricted stock may specify management objectives regarding the vesting of the restricted stock. Any grant of restricted stock may require that any and all dividends or distributions paid on restricted stock that remains subject to a substantial risk of forfeiture be automatically deferred and/or reinvested in additional restricted stock, which will be subject to the same restrictions as the underlying restricted stock, but any such dividends or other distributions on restricted stock must be deferred until, and paid contingent upon, the vesting of such restricted stock.
Restricted stock may provide for continued vesting or the earlier vesting of such restricted stock, including in the event of retirement, death, disability or termination of employment or service of the participant or a Change in Control.
RSUs: RSUs awarded under the Amended 2020 Plan constitute an agreement by the Company to deliver Class A Shares, cash, or a combination of the two, to the participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include achievement regarding management objectives) during the restriction period as the Committee may specify. Each grant or sale of RSUs
may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value of our Class A Shares on the date of grant.
RSUs may provide for continued vesting or the earlier lapse or other modification of the restriction period, including in the event of retirement, death, disability or termination of employment or service of the participant or in the event of a Change in Control.
During the restriction period applicable to RSUs, the participant will have no right to transfer any rights under the award and will have no rights of ownership in the Class A Shares deliverable upon payment of the RSUs and no right to vote them. Rights to dividend equivalents may be extended to and made part of any RSU award at the discretion of and on the terms determined by the Committee, on a deferred and contingent basis, either in cash or in additional Class A Shares, but dividend equivalents or other distributions on Class A Shares underlying the RSUs will be deferred until and paid contingent upon the vesting of such RSUs. Each grant or sale of RSUs will specify the time and manner of payment of the RSUs that have been earned. An RSU may be paid in cash, Class A Shares or any combination of the two.
Performance Shares, Performance Units, and Cash Incentive Awards,: Performance shares, performance units and cash incentive awards may also be granted to participants under the Amended 2020 Plan. A performance share is a bookkeeping entry that records the equivalent of one Class A Share, and a performance unit is a bookkeeping entry that records a unit equivalent to $1.00 or such other value as determined by the Committee. Each grant will specify the number or amount of performance shares or performance units, or the amount payable with respect to a cash incentive award being awarded, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
Each grant of a cash incentive award, performance shares or performance units will specify management objectives regarding the earning of the award. Each grant will specify the time and manner of payment of performance shares, performance units or a cash incentive award that have been earned.
Any grant of performance shares or performance units may provide for the payment of dividend equivalents in cash or in additional Class A Shares, which dividend equivalents will be subject to deferral and payment on a contingent basis based on the participant’s earning and vesting of the performance shares or performance units, as applicable, with respect to which such dividend equivalents are paid.
The performance period with respect to each cash incentive award or grant of performance shares, performance units or cash incentive award will be a period of time determined by the Committee and within which the management objectives relating to such award are to be achieved. The performance period may be subject to continued vesting or earlier lapse or modification, including in the event of retirement, death, disability or termination of employment or service of the participant or in the event of a Change in Control.
Other Awards: Subject to applicable law and applicable share limits under the Amended 2020 Plan, the Committee may authorize the grant to any participant of Class A Shares or such other awards (“Other Awards”) that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Class A Shares or factors that may influence the value of such Class A Shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Class A Shares, purchase rights for Class A Shares, awards with value and payment contingent upon performance of the Company or specified subsidiaries, affiliates or other business units or any other factors designated by the Committee, and awards valued by reference to the book value of the Class A Shares or the value of securities of, or the performance of the subsidiaries, affiliates or other business units of the Company. The Committee will determine the terms and conditions of any such awards. Class A Shares delivered under such an award in the nature of a purchase right granted under the Amended 2020 Plan will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, Class A Shares, other awards, notes or other property, as the Committee determines.
In addition, the Committee may grant cash awards, as an element of or supplement to any other awards granted under the Amended 2020 Plan. The Committee may also authorize the grant of Class A Shares as a bonus, or may authorize the grant of Other Awards in lieu of obligations of the Company or a subsidiary to pay cash or deliver other property under the Amended 2020 Plan or under other plans or compensatory arrangements, subject to terms determined by the Committee in a manner that complies with Section 409A of the Code.
Other Awards may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such award, including in the event of the retirement, death, disability or termination of employment or service of the participant or in the event of a Change in Control. The Committee may provide for the payment of dividends or dividend equivalents on Other Awards on a deferred and contingent basis, in cash or in additional Class A Shares, based upon the earning and vesting of such awards.
Change in Control: The Amended 2020 Plan includes a definition of “Change in Control.” In general, except as otherwise prescribed by the Compensation Committee in an Evidence of Award made under the Amended 2020 Plan, Change in Control means the occurrence of any of the following events (subject to certain limitations and as further described in the Amended 2020 Plan):
any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock of the Company held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, if any one person, or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a change in control;
any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the Company’s stock possessing 30% or more of the total voting power of the stock of the Company
a majority of members of the Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors before the date of the appointment or election;
the consummation of a merger or consolidation involving the Company or in which Company securities are issued other than a merger or consolidation that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions (for this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets), subject to certain exceptions as described in the Amended 2020 Plan.
Management Objectives: The Amended 2020 Plan generally provides that any of the awards set forth above may be granted subject to the achievement of specified management objectives. Management objectives are defined as the measurable performance objective or objectives established pursuant to the Amended 2020 Plan for participants who have received grants of performance shares, performance units or cash incentive awards or, when so determined by the Committee, stock options, SARs, restricted stock, RSUs, dividend equivalents or Other Awards.
Additionally, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the management objectives unsuitable, the Committee may in its discretion modify such management objectives or the goals or actual levels of achievement regarding the management objectives, in whole or in part, as the Committee deems appropriate and equitable.
Transferability of Awards: Except as otherwise provided by the Committee and subject to the terms of the Amended 2020 Plan with respect to Section 409A of the Code, no stock option, SAR, restricted stock, RSU, performance share, performance unit, cash incentive award, Other Award or dividend equivalents paid with respect to awards made under the Amended 2020 Plan will be transferrable by a participant except by will or the laws of descent and distribution. In no event will any such award granted under the Amended 2020 Plan be transferred for value. Except as otherwise determined by the Committee, stock options and SARs will be exercisable during the participant’s lifetime only by him or her or, in the event of the participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the participant in a fiduciary capacity under state law or court supervision.
The Committee may specify on the grant date that all or part of the Class A Shares that are subject to awards under the Amended 2020 Plan will be subject to further restrictions on transfer, including minimum holding periods.
Adjustments: The Committee will make or provide for such adjustments in: (1) the number of and kind of Class A Shares covered by outstanding stock options, SARs, restricted stock, RSUs, performance shares and performance units granted under the Amended 2020 Plan; (2) if applicable, the number of and kind of Class A Shares covered by Other Awards granted pursuant to the Amended 2020 Plan; (3) the exercise price or base price provided in outstanding stock options and SARs, respectively; (4) cash incentive awards; and (5) other award terms, as the Committee in its sole discretion, exercised in good faith determines to be equitably required in order to prevent dilution or enlargement of the rights of participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company; (b) any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities; or (c) any other corporate transaction or event having an effect similar to any of the foregoing.
In the event of any such transaction or event, or in the event of a Change in Control of the Company, the Committee may provide in substitution for any or all outstanding awards under the Amended 2020 Plan such alternative consideration (including cash), if any, as it may in good faith determine to be equitable under the circumstances and will require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each stock option or SAR with an exercise price or base price, respectively, greater than the consideration offered in connection with any such transaction or event or Change in Control of the Company, the Committee may in its sole discretion elect to cancel such stock option or SAR without any payment to the person holding such stock option or SAR. The Committee will make or provide for such adjustments to the numbers of Class A Shares available under the Amended 2020 Plan and the share limits of the Amended 2020 Plan as the Committee in its sole discretion may in good faith determine to be appropriate to reflect such transaction or event. However, any adjustment to the limit on the number of Class A Shares that may be issued upon exercise of Incentive Stock Options will be made only if and to the extent such adjustment would not cause any stock option intended to qualify as an Incentive Stock Option to fail to so qualify.
Prohibition on Repricing: Except in connection with certain corporate transactions or changes in the capital structure of the Company or in connection with a Change in Control, the terms of outstanding awards may not be amended to (1) reduce the exercise price or base price of outstanding stock options or SARs, respectively, or (2) cancel outstanding “underwater” stock options or SARs (including following a participant’s voluntary
surrender of “underwater” stock options or SARs) in exchange for cash, Other Awards or stock options or SARs with an exercise price or base price, as applicable, that is less than the exercise price or base price of the original stock options or SARs, as applicable, without stockholder approval. The Amended 2020 Plan specifically provides that this provision is intended to prohibit the repricing of “underwater” stock options and SARs and that it may not be amended without approval by our stockholders.
Detrimental Activity and Recapture: Any Evidence of Award may reference a clawback policy of the Company or provide for the cancellation or forfeiture of an award or forfeiture and repayment to us of any gain related to an award, or include other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee or the Board from time to time, or as required by applicable law or any applicable rules or regulations promulgated by the SEC or the Company’s applicable stock exchange. In addition, any Evidence of Award or such clawback policy may provide for cancellation or forfeiture of an award or the forfeiture and repayment of any Class A Shares issued under and/or any other benefit related to an award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the Committee or the Board or under Section 10D of the Securities Exchange Act of 1934 and any applicable rules and regulations promulgated by the SEC or the Company’s applicable stock exchange.
Grants to Non-U.S. Based Participants: In order to facilitate the making of any grant or combination of grants under the Amended 2020 Plan, the Committee may provide for such special terms for awards to participants who are foreign nationals, who are employed by the Company or any of its subsidiaries outside of the United States of America or who provide services to the Company or any of its subsidiaries under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. The Committee may approve such supplements to, or amendments, restatements or alternative versions of, the Amended 2020 Plan (including sub-plans) (to be considered part of the Amended 2020 Plan) as it may consider necessary or appropriate for such purposes, provided that no such special terms, supplements, amendments or restatements will include any provisions that are inconsistent with the terms of the Amended 2020 Plan as then in effect unless the Amended 2020 Plan could have been amended to eliminate such inconsistency without further approval by our stockholders.
Withholding: To the extent the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a participant or other person under the Amended 2020 Plan, and the amounts available to us for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements, in the discretion of the Committee, may include relinquishment of a portion of such benefit. If a participant’s benefit is to be received in the form of Class A Shares, and such participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, we will withhold Class A Shares having a value equal to the amount required to be withheld. When a participant is required to pay the Company an amount required to be withheld under applicable income, employment, tax or other laws, the participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the shares required to be delivered to the participant, Class A Shares having a value equal to the amount required to be withheld or by delivering to us other Class A Shares held by such participant. The Class A Shares used for tax or other withholding will be valued at an amount equal to the fair market value of such Class A Shares on the date the benefit is to be included in the participant’s income. In no event will the fair market value of the Class A Shares to be withheld and delivered pursuant to the Amended 2020 Plan exceed the minimum amount required to be withheld, unless such additional withholding amount is authorized by the Committee. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of Class A Shares acquired upon the exercise of stock options.
No Right to Continued Employment: The Amended 2020 Plan does not confer upon any participant any right with respect to continuance of employment or service with the Company or any of its subsidiaries.
Effective Date of the Amended 2020 Plan: The 2020 Plan became effective on April 30, 2020. The Amended 2020 Plan will become effective on the date it is approved by the Company’s stockholders.
Amendment and Termination of the Amended 2020 Plan: The Board generally may amend the Amended 2020 Plan from time to time in whole or in part. However, if any amendment, for purposes of applicable stock exchange rules (and except as permitted under the adjustment provisions of the Amended 2020 Plan) (1) would materially increase the benefits accruing to participants under the Amended 2020 Plan, (2) would materially increase the number of securities which may be issued under the Amended 2020 Plan, (3) would materially modify the requirements for participation in the Amended 2020 Plan, or (4) must otherwise be approved by our stockholders in order to comply with applicable law or the rules of the NASDAQ Global Market, or, if the Class A Shares are not traded on the NASDAQ Global Market, the principal national securities exchange upon which the Class A Shares are traded or quoted, all as determined by the Board, then such amendment will be subject to stockholder approval and will not be effective unless and until such approval has been obtained.
Further, subject to the Amended 2020 Plan’s prohibition on repricing, the Committee generally may amend the terms of any award prospectively or retroactively. Except in the case of certain adjustments permitted under the Amended 2020 Plan, no such amendment may be made that would materially impair the rights of any participant without his or her consent. If permitted by Section 409A of the Code and subject to certain other limitations set forth in the Amended 2020 Plan, including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances, or in the event of a Change in Control, the Committee may provide for continued vesting or accelerate the vesting of certain awards granted under the Amended 2020 Plan or waive any other limitation or requirement under any such award.
The Board may, in its discretion, terminate the Amended 2020 Plan at any time. Termination of the Amended 2020 Plan will not affect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination. No grant will be made under the Amended 2020 Plan on or after the 10th anniversary of the date stockholders approve the Amended 2020 Plan, but all grants made prior to such date will continue in effect thereafter subject to their terms and the terms of the Amended 2020 Plan.
New Plan Benefits
It is not possible to determine the specific amounts and types of awards that may be awarded in the future under the Amended 2020 Plan because the grant and actual payout of awards under the Amended 2020 Plan are subject to the discretion of the plan administrator.
U.S. Federal Income Tax Consequences
The following is a brief summary of certain of the Federal income tax consequences of certain transactions under the Amended 2020 Plan based on federal income tax laws in effect. This summary, which is presented for the information of stockholders considering how to vote on this proposal and not for Amended 2020 Plan participants, is not intended to be complete and does not describe Federal taxes other than income taxes (such as Medicare and Social Security taxes), or state, local or foreign tax consequences.
Tax Consequences to Participants
Restricted Stock. The recipient of restricted stock generally will be subject to tax at ordinary income rates on the fair market value of the restricted stock (reduced by any amount paid by the recipient for such restricted stock) at such time as the restricted stock is no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code (“Restrictions”). However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the Restrictions) over the purchase price, if any, of such restricted stock. If a Section 83(b) election has not been
made, any dividends received with respect to restricted stock that are subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the recipient.
Performance Shares, Performance Units, and Cash Incentive Awards. No income generally will be recognized upon the grant of performance shares, performance units or cash incentive awards. Upon payment in respect of the earn-out of performance shares, performance units or cash incentive awards, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any unrestricted Class A Shares received.
Nonqualified Stock Options. In general:
no income will be recognized by an optionee at the time a non-qualified stock option is granted;
at the time of exercise of a non-qualified stock option, ordinary income will be recognized by the optionee in an amount equal to the difference between the exercise price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise; and
at the time of sale of shares acquired pursuant to the exercise of a non-qualified stock option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.
Incentive Stock Options. No income generally will be recognized by an optionee upon the grant or exercise of an Incentive Stock Option. If Class A Shares are issued to the optionee pursuant to the exercise of an Incentive Stock Option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the exercise price will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss.
If Class A Shares acquired upon the exercise of an Incentive Stock Option are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.
SARs. No income will be recognized by a participant in connection with the grant of a SAR. When the SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any unrestricted Class A Shares received on the exercise.
RSUs. No income generally will be recognized upon the award of RSUs. The recipient of an RSU award generally will be subject to tax at ordinary income rates on the fair market value of unrestricted Class A Shares on the date that such shares are transferred to the participant under the award (reduced by any amount paid by the participant for such RSUs), and the capital gains/loss holding period for such shares will also commence on such date.
Tax Consequences to the Company and its Subsidiaries
To the extent that a participant recognizes ordinary income in the circumstances described above, the Company or the subsidiary for which the participant performs services will be entitled to a corresponding deduction, provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code and is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Code.
Awards Granted to Certain Persons
The table below shows the number of awards granted under the 2020 Plan to the named executive officers and the other individuals and groups indicated below since its inception through March 3, 2023.
CUMULUS MEDIA INC. 2020 EQUITY AND INCENTIVE COMPENSATION PLAN
Name and Position / Group | Number of Class A Shares Subject to Time- Based RSUs | Number of Class A Shares Subject to Stock Options | Number of Class A Shares Subject to Performance- Based RSUs | |||||||||
Named Executive Officers: | ||||||||||||
Mary G. Berner, President and Chief Executive Officer | 485,990 | — | 272,564 | |||||||||
Francisco J. Lopez-Balboa, Executive Vice President and Chief Financial Officer | 261,921 | — | 134,500 | |||||||||
Richard S. Denning, Executive Vice President, Secretary and General Counsel | 80,026 | — | 35,507 | |||||||||
All current executive officers, as a group | 1,041,552 | — | 542,600 | |||||||||
All current non-employee directors as a group | 223,219 | — | — | |||||||||
Each nominee for election as a director | — | — | — | |||||||||
Each associate of any of the foregoing | — | — | — | |||||||||
Each other person who received at least 5% of all awards | — | — | — | |||||||||
All employees, including all current officers who are not executive officers, as a group | 440,607 | — | 227,980 |
Registration with the SEC
We intend to file a Registration Statement on Form S-8 relating to the issuance of Class A Shares under the Amended 2020 Plan with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the Amended 2020 Plan by our stockholders.
Recommendation of the Board of Directors
Your Board of Directors recommends a vote FOR Proposal 3 to approve the amendment and restatement of the Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan.
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PricewaterhouseCoopers LLP billed us $1,500,000 in the aggregate, for professional services rendered to audit our annual financial statements for the fiscal year ended December 31, 2021, to evaluate the effectiveness of our internal control over financial reporting as of December 31, 2021 and to review the interim financial statements included in our quarterly reports on Form
Audit Related Fees
2022.
2022.
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regularly considers all non-audit fees when reviewing the independence of our independent registered public accounting firm.
| | Recommendation of the Board of Directors | | |
| | Your Board of Directors recommends a vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024. | | |
Recommendation of the Board of Directors
Your Board of Directors recommends a vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2023.
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CODE OF ETHICS | |
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SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE | |
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COMPLIANCE WITH UNIVERSAL PROXY RULES FOR DIRECTOR NOMINATIONS | |
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ANNUAL REPORT | |
20222023, as required to be filed with the SEC, has been provided concurrently with this proxy statement to all stockholders entitled to notice of, and to vote at, the annual meeting. Stockholders may also obtain a copy of the Annual Report on Form 10-K for the fiscal year ended December 31, 20222023, without charge upon written request to: Corporate Secretary, Cumulus Media Inc., 780 Johnson Ferry Road, N.E. Suite 500, Atlanta, Georgia 30342. The proxy statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 20222023, are available at www.cumulusmedia.com.
ANNEX A
CUMULUS MEDIA INC.
2020 EQUITY AND INCENTIVE COMPENSATION PLAN
(Amended and Restated Effective April 26, 2023)
1. Purpose. The purpose of this Plan is to permit award grants to
2. Definitions. As used in this Plan:
(a) “Appreciation Right” means a right granted pursuant to Section 5 of this Plan.
(b) “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of an Appreciation Right.
(c) “Board” means the Board of Directors of the Company.
(d) “Cash Incentive Award” means a cash award granted pursuant to Section 8 of this Plan.
(e) “Change in Control” has the meaning set forth in Section 12 of this Plan.
(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations thereunder, as such law and regulations may be amended from time to time.
(g) “Committee” means the Compensation Committeeof the Board (or its successor(s)), or any other committee of the Board designated by the Board to administer this Plan pursuant to Section 10 of this Plan.
(h) “Common Shares” means the shares of Class A common stock, par value $0.0000001 per share, of the Company or any security into which such Class A common stock may be changed by reason of any transaction or event of the type referred to in Section 11 of this Plan.
(i) “Company” means Cumulus Media Inc., a Delaware corporation, and its successors.
(j) “Date of Grant” means the date provided for by the Committee on which a grant of Option Rights, Appreciation Rights, Performance Shares, Performance Units, Cash Incentive Awards, or other awards contemplated by Section 9 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or other awards contemplated by Section 9 of this Plan, will become effective (which date will not be earlier than the date on which the Committee takes action with respect thereto).
(k) “Director” means a member of the Board.
(l) “Effective Date” means April 30, 2020.
(m) “Evidence of Award” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee that sets forth the terms and conditions of the awards granted under this Plan. An Evidence of Award may be in an electronic medium, may be limited to notation on the books and records of the Company and, unless otherwise determined by the Committee, need not be signed by a representative of the Company or a Participant.
(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(o) “Incentive Stock Option” means an Option Right that is intended to qualify as an “incentive stock option” under Section 422 of the Code or any successor provision.
(p) “Management Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend equivalents or other awards pursuant to this Plan. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the goals or actual levels of achievement regarding the Management Objectives, in whole or in part, as the Committee deems appropriate and equitable.
(q) “Market Value per Share” means, as of any particular date, the closing price of a Common Share as reported for that date on the NASDAQ Global Market or, if the Common Shares are not then listed on the NASDAQ Global Market, on any other national securities exchange on which the Common Shares are listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the Common Shares, then the Market Value per Share shall be the fair market value as determined in good faith by the Committee. The Committee is authorized to adopt another fair market value pricing method provided such method is stated in the applicable Evidence of Award and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.
(r) “Optionee” means the optionee named in an Evidence of Award evidencing an outstanding Option Right.
(s) “Option Price” means the purchase price payable on exercise of an Option Right.
(t) “Option Right” means the right to purchase Common Shares upon exercise of an award granted pursuant to Section 4 of this Plan.
(u) “Participant” means a person who is selected by the Committee to receive benefits under this Plan and who is at the time (i) a non-employee Director, (ii) an officer or other employee of the Company or any Subsidiary, including a person who has agreed to commence serving in such capacity within 90 days of the Date of Grant, or (iii) a person, including a consultant, who provides services to the Company or any Subsidiary that are equivalent to those typically provided by an employee (provided that such person satisfies the Form S-8 definition of an “employee”).
(v) “Performance Period” means, in respect of a Cash Incentive Award, Performance Share or Performance Unit, a period of time established pursuant to Section 8 of this Plan within which the Management Objectives relating to such Cash Incentive Award, Performance Share or Performance Unit are to be achieved.
(w) “Performance Share” means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Section 8 of this Plan.
(x) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of this Plan that records a unit equivalent to $1.00 or such other value as is determined by the Committee.
(y) “Plan” means this Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan, as may be amended or amended and restated from time to time. This Plan was last amended and restated effective April 26, 2023.
(z) “Predecessor Plan” means the Cumulus Media Inc. Long-Term Incentive Plan, including as amended or amended and restated.
(aa) “Restricted Stock” means Common Shares granted or sold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers has expired.
(bb) “Restricted Stock Units” means an award made pursuant to Section 7 of this Plan of the right to receive Common Shares, cash or a combination thereof at the end of a specified period.
(cc) “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan.
(dd) “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the Base Price provided for with respect to the Appreciation Right.
(ee) “Stockholder” means an individual or entity that owns one or more Common Shares.
(ff) “Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which the Company at the time owns or controls, directly or indirectly, more than 50% of the total combined Voting Power represented by all classes of stock issued by such corporation.
(gg) “Voting Power” means, at any time, the combined voting power of the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company or members of the board of directors or similar body in the case of another entity.
3. Shares Available Under this Plan.
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4. Option Rights. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Participants of Option Rights. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number of Common Shares to which it pertains subject to the limitations set forth in Section 3 of this Plan.
(b) Each grant will specify an Option Price per Common Share, which Option Price (except with respect to awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable (i) in cash, by check acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of Common Shares owned by the Optionee having a value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, by the withholding of Common Shares otherwise issuable upon exercise of an Option Right pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the Common Shares so withheld will not be treated as issued and acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee.
(d) To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the Common Shares to which such exercise relates.
(e) Each grant will specify the period or periods of continuous service by the Optionee with the Company or any Subsidiary, if any, that is necessary before any Option Rights or installments thereof will vest. Option Rights may provide for continued vesting or the earlier vesting of such Option Rights, including in the event of the retirement, death, disability or termination of employment or service of a Participant or in the event of a Change in Control.
(f) Any grant of Option Rights may specify Management Objectives regarding the vesting of such rights.
(g) Option Rights granted under this Plan may be (i) options, including Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii) options that are not intended to so qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code.
(h) No Option Right will be exercisable more than 10 years from the Date of Grant. The Committee may provide in any Evidence of Award for the automatic exercise of an Option Right upon such terms and conditions as established by the Committee.
(i) Option Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(j) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
5. Appreciation Rights.
(a) The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to any Participant of Appreciation Rights. An Appreciation Right will be the right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise.
(b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
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(c) Also, regarding Appreciation Rights:
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6. Restricted Stock. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the grant or sale of Restricted Stock to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and
other ownership rights (subject in particular to Section 6(g) of this Plan), but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter described.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Stock covered by such grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of Grant or until achievement of Management Objectives referred to in Section 6(e) of this Plan.
(d) Each such grant or sale will provide that during or after the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Date of Grant (which restrictions may include rights of repurchase or first refusal of the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture while held by any transferee).
(e) Any grant of Restricted Stock may specify Management Objectives regarding the vesting of such Restricted Stock.
(f) Notwithstanding anything to the contrary contained in this Plan, Restricted Stock may provide for continued vesting or the earlier vesting of such Restricted Stock, including in the event of the retirement, death, disability or termination of employment or service of a Participant or in the event of a Change in Control.
(g) Any such grant or sale of Restricted Stock may require that any and all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and/or reinvested in additional Restricted Stock, which will be subject to the same restrictions as the underlying award. For the avoidance of doubt, any such dividends or other distributions on Restricted Stock shall be deferred until, and paid contingent upon, the vesting of such Restricted Stock.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Unless otherwise directed by the Committee, (i) all certificates representing Restricted Stock will be held in custody by the Company until all restrictions thereon will have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares or (ii) all Restricted Stock will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Stock.
7. Restricted Stock Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company to deliver Common Shares or cash, or a combination thereof, to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include achievement regarding Management Objectives) during the Restriction Period as the Committee may specify.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c) Notwithstanding anything to the contrary contained in this Plan, Restricted Stock Units may provide for continued vesting or the earlier lapse or other modification of the Restriction Period, including in the event of
the retirement, death, disability or termination or employment of service of a Participant or in the event of a Change in Control.
(d) During the Restriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the Common Shares deliverable upon payment of the Restricted Stock Units and will have no right to vote them, but the Committee may, at or after the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on a deferred and contingent basis, either in cash or in additional Common Shares; provided, however, that dividend equivalents or other distributions on Common Shares underlying Restricted Stock Units shall be deferred until and paid contingent upon the vesting of such Restricted Stock Units.
(e) Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock Units that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be paid by the Company in Common Shares or cash, or a combination thereof.
(f) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
8. Cash Incentive Awards, Performance Shares and Performance Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a) Each grant will specify the number or amount of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Cash Incentive Award or grant of Performance Shares or Performance Units will be such period of time as will be determined by the Committee, which may be subject to continued vesting or earlier lapse or other modification, including in the event of the retirement, death, disability or termination of employment or service of a Participant or in the event of a Change in Control.
(c) Each grant of a Cash Incentive Award, Performance Shares or Performance Units will specify Management Objectives regarding the earning of the award.
(d) Each grant will specify the time and manner of payment of a Cash Incentive Award, Performance Shares or Performance Units that have been earned. Any grant may specify that the amount payable with respect thereto may be paid by the Company in cash, in Common Shares, in Restricted Stock or Restricted Stock Units or in any combination thereof.
(e) The Committee may, on the Date of Grant of Performance Shares or Performance Units, provide for the payment of dividend equivalents to the holder thereof either in cash or in additional Common Shares, which dividend equivalents shall be subject to deferral and payment on a contingent basis based on the Participant’s earning and vesting of the Performance Shares or Performance Units, as applicable, with respect to which such dividend equivalents are paid.
(f) Each grant of a Cash Incentive Award, Performance Shares or Performance Units will be evidenced by an Evidence of Award. Each Evidence of Award will be subject to this Plan and will contain such other terms and provisions, consistent with this Plan, as the Committee may approve.
9. Other Awards.
(a) Subject to applicable law and the applicable limits set forth in Section 3 of this Plan, the Committee may authorize the grant to any Participant of Common Shares or such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Shares or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Shares, purchase rights for Common Shares, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and awards valued by reference to the book value of the Common Shares or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms and conditions of such awards. Common Shares delivered pursuant to an award in the nature of a purchase right granted under this Section 9 will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, Common Shares, other awards, notes or other property, as the Committee determines.
(b) Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to this Section 9.
(c) The Committee may authorize the grant of Common Shares as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code.
(d) The Committee may, at or after the Date of Grant, authorize the payment of dividends or dividend equivalents on awards granted under this Section 9 on a deferred and contingent basis, either in cash or in additional Common Shares; provided, however, that dividend equivalents or other distributions on Common Shares underlying awards granted under this Section 9 shall be deferred until and paid contingent upon the earning and vesting of such awards.
(e) Each grant of an award under this Section 9 will be evidenced by an Evidence of Award. Each such Evidence of Award will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve, and will specify the time and terms of delivery of the applicable award.
(f) Notwithstanding anything to the contrary contained in this Plan, awards under this Section 9 may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such award, including in the event of the retirement, death, disability or termination of employment or service of a Participant or in the event of a Change in Control.
10. Administration of this Plan.
(a) This Plan will be administered by the Committee; provided, however, that, at the discretion of the Board, this Plan may be administered by the Board, including with respect to the administration of any responsibilities and duties held by the Committee hereunder. The Committee may from time to time delegate all or any part of its authority under this Plan to a subcommittee thereof. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee.
(b) The interpretation and construction by the Committee of any provision of this Plan or of any Evidence of Award (or related documents) and any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee.
(c) To the extent permitted by law, the Committee may delegate to one or more of its members, to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. To the extent permitted by law, and in compliance with any applicable legal requirements, the Committee may, by resolution, authorize one or more officers of the Company to authorize the granting or sale of awards under this Plan on the same basis as the Committee; provided, however, that: (i) the Committee will not delegate such authority to any such officer(s) for awards granted to such officer(s) or any employee who is an officer (for purposes of Section 16 of the Exchange Act), Director, or more than 10% “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined in accordance with Section 16 of the Exchange Act; and (ii) the officer(s) will report periodically to the Committee regarding the nature and scope of the awards granted pursuant to the authority delegated.
11. Adjustments. The Committee shall make or provide for such adjustments in the number of and kind of Common Shares covered by outstanding Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units granted hereunder and, if applicable, in the number of and kind of Common Shares covered by other awards granted pursuant to Section 9 of this Plan, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, respectively, in Cash Incentive Awards, and in other award terms, as the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee may provide in substitution for any or all outstanding awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and shallrequire in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price, respectively, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its sole discretion elect to cancel such Option Right or Appreciation Right without any payment to the person holding such Option Right or Appreciation Right. The Committee shall also make or provide for such adjustments in the numbers of Common Shares specified in Section 3 of this Plan as the Committee in its sole discretion, exercised in good faith, determines is appropriate to reflect any transaction or event described in this Section 11; provided, however, that any such adjustment to the number specified in Section 3(c) of this Plan will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to so qualify.
12. Change in Control. For purposes of this Plan, except as may be otherwise prescribed by the Committee in an Evidence of Award made under this Plan, a “Change in Control” will be deemed to have occurred upon the occurrence (after the Amendment and Restatement Date) of any of the following events:
(a) any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock of the Company held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; provided, if any one person, or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Control;
(b) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) ownership
of the Company’s stock possessing thirty percent (30%) or more of the total voting power of the stock of the Company;
(c) a majority of members of the Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election;
(d) the consummation of a merger or consolidation involving the Company or in which Company securities are issued other than a merger or consolidation that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
(e) any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions (for this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets); provided, however, a transfer of assets by the Company is not treated as a Change in Control if the assets are transferred to (i) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to his/her/its stock, (ii) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (iv) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (iii) hereof.
13. Detrimental Activity and Recapture Provisions. Any Evidence of Award may reference a clawback policy of the Company or provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain related to an award, or include other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee or the Board from time to time or as required by applicable law or any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Shares may be traded. In addition, notwithstanding anything in this Plan to the contrary, any Evidence of Award or such clawback policy may also provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any Common Shares issued under and/or any other benefit related to an award, or include other provisions intended to have a similar effect, including upon such terms and conditions as may be required by the Committee or the Board or under Section 10D of the Exchange Act and/or any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Shares may be traded.
14. Non-U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide services to the Company or any Subsidiary under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including sub-plans) (to be considered a part of this Plan) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or
restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders.
15. Transferability.
(a) Except as otherwise determined by the Committee, and subject to compliance with Section 17(b) of this Plan and Section 409A of the Code, no Option Right, Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award, award contemplated by Section 9 of this Plan or dividend equivalents paid with respect to awards made under this Plan will be transferable by the Participant except by will or the laws of descent and distribution. In no event will any such award granted under this Plan be transferred for value. Where transfer is permitted, references to “Participant” shall be construed, as the Committee deems appropriate, to include any permitted transferee to whom such award is transferred. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law or court supervision.
(b) The Committee may specify on the Date of Grant that part or all of the Common Shares that are (i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or other awards under this Plan or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on transfer, including minimum holding periods.
16. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Common Shares, and such Participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, the Company will withhold Common Shares having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable income, employment, tax or other laws, the Participant may elect, unless otherwise determined by the Committee, to satisfy the obligation, in whole or in part, by having withheld, from the Common Shares required to be delivered to the Participant, Common Shares having a value equal to the amount required to be withheld or by delivering to the Company other Common Shares held by such Participant. The Common Shares used for tax or other withholding will be valued at an amount equal to the fair market value of such Common Shares on the date the benefit is to be included in Participant’s income. In no event will the fair market value of the Common Shares to be withheld and delivered pursuant to this Section 16 exceed the minimum amount required to be withheld, unless such additional withholding amount is authorized by the Committee. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of Common Shares acquired upon the exercise of Option Rights.
17. Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner
consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.
(b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owed by a Participant to the Company or any of its Subsidiaries.
(c) If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the tenth business day of the seventh month after such separation from service.
(d) Solely with respect to any award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such award.
(e) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
18. Amendments.
(a) The Board may at any time and from time to time amend this Plan in whole or in part; provided, however, that if an amendment to this Plan, for purposes of applicable stock exchange rules and except as permitted under Section 11 of this Plan, (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan, or (iv) must otherwise be approved by the Stockholders in order to comply with applicable law or the rules of the NASDAQ Global Market or, if the Common Shares are not traded on the NASDAQ Global Market, the principal national securities exchange upon which the Common Shares are traded or quoted, all as determined by the Board, then, such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained.
(b) Except in connection with a corporate transaction or event described in Section 11 of this Plan or in connection with a Change in Control, the terms of outstanding awards may not be amended to reduce the Option
Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding “underwater” Option Rights or Appreciation Rights (including following a Participant’s voluntary surrender of “underwater” Option Rights or Appreciation Rights) in exchange for cash, other awards or Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without Stockholder approval. This Section 18(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 11 of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 18(b) may not be amended without approval by the Stockholders.
(c) If permitted by Section 409A of the Code, but subject to Section 18(d), including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances, or in the event of a Change in Control, to the extent a Participant holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any dividend equivalents or other awards made pursuant to Section 9 of this Plan subject to any vesting schedule or transfer restriction, or holds Common Shares subject to any transfer restriction imposed pursuant to Section 15(b) of this Plan, the Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such Option Right, Appreciation Right or other award may vest or be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Cash Incentive Awards, Performance Shares or Performance Units will be deemed to have been earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award.
(d) Subject to Section 18(b) of this Plan, the Committee may amend the terms of any award theretofore granted under this Plan prospectively or retroactively. Except for adjustments made pursuant to Section 11 of this Plan, no such amendment will materially impair the rights of any Participant without his or her consent. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any awards outstanding hereunder and not exercised in full on the date of termination.
19. Governing Law. This Plan and all grants and awards and actions taken hereunder will be governed by and construed in accordance with the internal substantive laws of the State of Delaware.
20. Effective Date/Termination. The Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan was effective as of the Effective Date. This 2023 amendment and restatement of the Cumulus Media Inc. 2020 Equity and Incentive Compensation Plan will be effective as of the date on which such amendment and restatement is approved by the Company’s Stockholders (the “Amendment and Restatement Date”). No grants will be made on or after the Effective Date under the Predecessor Plan, provided that outstanding awards granted under the Predecessor Plan continued following the Effective Date. No grant will be made under this Plan on or after the tenth anniversary of the Amendment and Restatement Date, but all grants made prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan. For clarification purposes, the terms and conditions of this Plan shall not apply to or otherwise impact previously granted and outstanding awards under the Predecessor Plan, as applicable (except for purposes of providing for Common Shares under such awards to be added to the aggregate number of Common Shares available under Section 3(a)(i) of this Plan pursuant to the share counting rules of this Plan).
21. Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional Common Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.
(b) This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.
(c) Except with respect to Section 21(e) of this Plan, to the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of this Plan.
(d) No award under this Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or shares thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan.
(e) Absence on leave approved by a duly constituted officer of the Company or any of its Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or awards granted hereunder.
(f) No Participant will have any rights as a Stockholder with respect to any Common Shares subject to awards granted to him or her under this Plan prior to the date as of which he or she is actually recorded as the holder of such Common Shares upon the share records of the Company.
(g) The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
(h) Except with respect to Option Rights and Appreciation Rights, the Committee may permit Participants to elect to defer the issuance of Common Shares under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred issuances and settlements include the crediting of dividend equivalents or interest on the deferral amounts.
(i) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect. Notwithstanding anything in this Plan or an Evidence of Award to the contrary, nothing in this Plan or in an Evidence of Award prevents a Participant from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity a Participant is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.
22. Share-Based Awards in Substitution for Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary:
(a) Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted shares, restricted share units or other share or share-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for
Common Shares substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.
(b) In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under a pre-existing plan previously approved by shareholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for awards made after such acquisition or merger under this Plan; provided, however, that awards using such available shares may not be made after the date awards or grants could have been made under the terms of the pre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.
(c) Any Common Shares that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 22(a) or 22(b) of this Plan will not reduce the Common Shares available for issuance or transfer under this Plan or otherwise count against the limits contained in Section 3 of this Plan. In addition, no Common Shares subject to an award that is granted by, or becomes an obligation of, the Company under Sections 22(a) or 22(b) of this Plan, will be added to the aggregate limit contained in Section 3(a)(i) of this Plan.
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. Vote by Internet - QUICK EASY IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY. Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronicall over the Internet or by telephone must be received by 11:59 p.m., Eastern Time, on April 25, 2023. www. INTENET cstproxyvote. – com proxy Use the card Internet available to vote when your you proxy. access Have the your above website. Follow the prompts to vote your shares. Use PHONE a touch-tone – 1 (866) telephone 894-0536 to vote your proxy. Have Follow your the voting proxy card instructions available to when vote your you call. shares. If Vote you at plan the to Meeting attend the – virtual online general meeting, ber to vote you electronically will need your at the 12 digit general control meeting. num- To https://cstproxy. attend: com/cumulusmedia/2023 MAIL return – it in Mark, the postage-paid sign and date envelope your proxy provided. card and FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED PROXY THE BOARDTABLE OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES LISTED AND “FOR” PROPOSALS 2 AND “ONE YEAR” ON PROPOSAL 3. 1. Election of Directors: FOR all nominees WITHHOLD (1) Mary G. Berner listed to the AUTHORITY left (except as to vote for all (2) Matthew C. Blank marked to the nominees contrary below) listed to the left (3) Thomas H. Castro (4) Deborah A. Farrington (5) Joan Hogan Gillman (6) Andrew W. Hobson (7) Brian G. Kushner (Instruction: To withhold authority to vote for any individual nominee, strike a line through that nominee’s name in the list above) 2. Proposal to approve, on an advisory basis, the compensation paid to the Company’s named executive officers. 3. Proposal to approve, on an advisory basis, the frequency of future advisory shareholder votes on the compensation paid to the Company’s named executive officers. 4. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2023. FOR AGAINST ABSTAIN ONE TWO THREE YEAR YEARS YEARS ABSTAIN FOR AGAINST ABSTAIN CONTROL NUMBER SignatureCONTENTS
The 2023 Annual Meetingsuch.Please markyour voteslike this XCONTROL NUMBERPROXYTHE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES LISTED, “FOR”PROPOSAL 2 AND “FOR” PROPOSAL 3.1. Election of Stockholders of Cumulus Media Inc will be held on April 26, 2023 at 12:30pm ET, virtually viaDirectors:(1) Mary G. Berner(2) Matthew C. Blank(3) Thomas H. Castro(4) Deborah A. Farrington(5) Joan Hogan Gillman(6) Andrew W. Hobson(7) Brian G. KushnerFOR allnomineeslisted to theleft (except asmarked to thecontrary below)WITHHOLDAUTHORITYto vote for allnomineeslisted to the internet at: https://www.cstproxy.com/cumulusmedia/2023. Important Notice Regarding the Internet Availability of Proxy Materialsleft(Instruction: To withhold authority to vote for the Annual Meeting of Stockholders To view the 2023 Proxy Statement, 2022 Annual Report and to Attend the Annual Meeting, please go to: http://www.cstproxy.com/cumulusmedia/2023. ¶any individualnominee, strike a line through that nominee’s name in thelist above) FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED ¶3. Proposal to ratify the appointment ofPricewaterhouseCoopers LLP as theCompany’s independent registeredpublic accounting firm for 2024.PLEASE DO NOT RETURN THE PROXY THISCARDIF YOU ARE VOTING ELECTRONICALLY.INTERNET –www.cstproxyvote.comUse the Internet to vote your proxy. Have yourproxy card available when you access the abovewebsite. Follow the prompts to vote your shares.PHONE – 1 (866) 894-0536Use a touch-tone telephone to vote your proxy.Have your proxy card available when you call.Follow the voting instructions to vote yourshares.Vote at the Meeting –If you plan to attend the virtual online generalmeeting, you will need your 12 digit control numberto vote electronically at the general meeting.To attend:https://cstproxy.com/cumulusmedia/2024MAIL – Mark, sign and date your proxy card andreturn it in the postage-paid envelope provided.Your phone or Internet vote authorizes thenamed proxies to vote your shares in thesame manner as if you marked, signed andreturned your proxy card. Votes submittedelectronically over the Internet or by telephonemust be received by 11:59 p.m., Eastern Time,on May 1, 2024.YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.IMMEDIATE - 24 Hours a Day, 7 Days a Week or by MailVote by Internet - QUICK EASY2. Proposal to approve, on an advisorybasis, the compensation paid to theCompany’s named executive officers.FOR AGAINST ABSTAINFOR AGAINST ABSTAIN