Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
On April 21, 2021, iHeartMedia, Inc. (the “Company”) held its 2021 annual meeting of stockholders (“2021 Annual Meeting”). Following the 2021 Annual Meeting, a vacancy was created on the Company’s Audit Committee, resulting in there being two members of the Audit Committee (the “Vacancy”). Nasdaq Stock Market LLC (“Nasdaq”) Listing Rule (“Nasdaq Rule”) 5605(c)(2)(A) requires that the Company have an Audit Committee composed of three members that satisfy certain criteria for service on the committee. On April 22, 2021, the Company notified Nasdaq of its non-compliance with Nasdaq Rule 5605(c)(2)(A) as a result of the Vacancy and its intent to rely on the cure period provided to the Company by Nasdaq Rule 5605(c)(4)(B). The Company intends to appoint to the Audit Committee a third director who satisfies the criteria for service in Nasdaq Rule 5605(c)(2)(A) in the near term but no later than the earlier of the Company’s next annual meeting of stockholders or one year from the 2021 Annual Meeting.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
At the 2021 Annual Meeting, the Company’s stockholders approved the Company’s 2021 Long-Term Incentive Award Plan (the “2021 Plan”). The 2021 Plan became effective on the date of the 2021 Annual Meeting and has a ten-year term, and replaces the Company’s 2019 Equity Incentive Plan (the “2019 Plan”), which terminated.
The 2021 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock- or cash-based awards. Non-employee directors of the Company and employees and consultants of the Company or any of its subsidiaries are eligible to receive awards under the 2021 Plan.
The 2021 Plan authorizes the issuance of 6,000,000 shares of Class A common stock. Stockholder approval is required to increase the maximum number of shares of common stock which may be issued under the 2021 Plan. However, subject to certain limitations, the following shares will be added to the shares available for issuance under the 2021 Plan (without stockholder approval):
| | • | | Shares covered by awards granted under the 2019 Plan or the 2021 Plan that expire, lapse, terminate, are settled for cash or are repurchased at or below the price paid by the participant for such shares. |
| | • | | Shares tendered by participants to satisfy the tax withholding obligation with respect to a 2021 Plan or 2019 Plan award other than an option or stock appreciation right. |
Shares issued under the 2021 Plan may be authorized but unissued shares, shares purchased on the open market or treasury shares. In no event will more than 6,000,000 shares of Class A common stock be issuable pursuant to the exercise of incentive stock options under the 2021 Plan.
The 2021 Plan will be administered by the Board or committee of the Board as may be determined by the Board from time to time. The administrator of the 2021 Plan (the “Administrator”) will have the authority to determine which service providers receive awards and set the terms and conditions applicable to the award within the confines of the 2021 Plan’s terms. The Administrator will have the authority to make all determinations and interpretations under, and adopt rules and guidelines for the administration of, the 2021 Plan.
The 2021 Plan includes annual limits on awards that may be granted to non-employee directors. The maximum value of all equity, cash-based and other awards granted to a non-employee director as compensation for services as a non-employee director with respect to any calendar year of the Company may not exceed $750,000. In addition, the 2021 Plan contains a minimum vesting requirement, subject to limited exceptions, that awards made pursuant to the 2021 Plan may not vest earlier than the date that is one year following the grant date of the award.
The 2021 Plan also contains provisions with respect to payment of exercise or purchase prices, vesting and expiration of awards, adjustments and treatment of awards upon certain corporate transactions, including stock splits, recapitalizations and mergers, transferability of awards and tax withholding requirements.
