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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 95-3980449 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
40 West 57th Street | 10019 | |
New York, NY | (Zip Code) | |
(Address of principal executive offices) |
Title of each class | Name of each exchange on which registered | |
Common stock, par value $0.01 per share | New York Stock Exchange |
Yesþ Noo
Explanatory Note
This Amendment No. 1 on Form 10-K/A amends our Annual Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on March 14, 2008 (the “Original 10-K”). This amendment replaces the information previously incorporated by reference in Part III of the Original 10-K with the actual text for Part III of Form 10-K.
Except for the information described above, the Company has not modified or updated disclosures provided in the Original 10-K in this Form 10-K/A. Accordingly this Form 10-K/A does not reflect events occurring after the filing of the Original 10-K or modify or update those disclosures affected by subsequent events. Information not affected by this amendment is unchanged and reflects the disclosures made at the time the Original 10-K was filed.
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• | advertiser spending patterns, including the notion that orders are being placed in close proximity to air, limiting visibility of demand; | ||
• | the level of competition for advertising dollars, including by new entrants into the radio advertising sales market, including Google; | ||
• | new competitors or existing competitors with expanded resources, including as a result of consolidation (as described below), NAVTEQ’s purchase of Traffic.com or the proposed merger between XM Satellite Radio and Sirius Satellite Radio; |
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• | lower than anticipated market acceptance of new or existing products; | ||
• | technological changes and innovations; | ||
• | fluctuations in programming costs; | ||
• | shifts in population and other demographics; | ||
• | changes in labor conditions; and | ||
• | changes in governmental regulations and policies and actions of federal and state regulatory bodies. |
• | actual or anticipated fluctuations in our quarterly and annual operating results; | ||
• | changes in expectations as to our future financial performance or changes in financial estimates of securities analysts; | ||
• | success or failure in our operating and growth strategies; and | ||
• | realization of any of the risks described in these risk factors. |
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2007 | High | Low | ||||||
First Quarter | $ | 7.24 | $ | 6.15 | ||||
Second Quarter | 8.16 | 6.48 | ||||||
Third Quarter | 7.17 | 2.32 | ||||||
Fourth Quarter | 3.00 | 1.83 |
2006 | High | Low | ||||||
First Quarter | $ | 16.58 | $ | 10.85 | ||||
Second Quarter | 11.00 | 7.43 | ||||||
Third Quarter | 7.94 | 6.44 | ||||||
Fourth Quarter | 8.40 | 6.50 |
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Number of securities | ||||||||||||
remaining available for | ||||||||||||
future issuance under | ||||||||||||
Number of securities to be | equity compensation | |||||||||||
issued upon exercise of | Weighted average exercise | plans excluding | ||||||||||
outstanding options, | price of outstanding options, | securities reflected in | ||||||||||
Plan Category | warrants and rights | warrants and rights | Column (a) | |||||||||
(a) | (b) | (c) | ||||||||||
(in thousands) | ||||||||||||
Equity compensation plans approved by security holders | ||||||||||||
Options (1) | 3,888 | $ | 21.86 | (2 | ) | |||||||
Warrants (3) | 3,000 | 51.67 | N/A | |||||||||
Restricted Stock Units | 230 | N/A | (2 | ) | ||||||||
Restricted Stock | 950 | N/A | (2 | ) | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 8,068 | |||||||||||
(1) | Options included herein were granted or are available for grant as part of our 1989 and 1999 stock option plans and/or 2005 plan that were approved by our shareholders. The Compensation Committee of the Board of Directors approves periodic option grants to executive officers and other employees based on their contributions to our operations. Among other things, the 2005 Equity Compensation Plan (the “2005 Plan”) provides for the granting of restricted stock and restricted stock units (“RSUs”). A maximum of 9,200 shares of our Common stock is authorized for the issuance of awards under the 2005 Plan. Pursuant to the 2005 Plan beginning on May 19, 2005, the date of our 2005 annual meeting of shareholders, outside directors automatically receive a grant of RSUs equal to $100 in value on the date of each of our annual meeting of shareholders. In 2007, the Company did not hold an annual meeting of shareholders. Accordingly, the Company’s directors received their annual award of RSUs equal to $100 in value in July 2007, instead of February 12, 2008 when the 2007 annual meeting of shareholders was held. Any newly appointed outside director will receive an initial grant of RSUs equal to $150 in value on the date such director is appointed to our Board. Recipients of RSUs are entitled to receive dividend equivalents on the RSUs (subject to vesting) when and if we pay a cash dividend on our Common stock. RSUs awarded to outside directors vest over a three-year period in equal one-third increments on the first, second and third anniversary of the date of the grant, subject to the director’s continued service with us. Directors’ RSUs vest automatically, in full, upon a change in control or upon their retirement, as defined in the 2005 Plan. RSUs are payable to outside directors in shares of our Common stock. For a more complete description of the provisions of the 2005 Plan, refer to our proxy statement in which the 2005 Plan and a summary thereof are included as exhibits, filed with the SEC on April 29, 2005. | |
(2) | A maximum of 9,200 shares of Common stock is authorized for issuance of equity compensation awards under the 2005 Plan. Options, RSUs and restricted stock are deducted from this authorized total, with grants of RSUs, restricted stock, and related dividend equivalents being deducted at the rate of three shares for every one share granted. At December 31, 2007, there were approximately 3,998 authorized shares remaining available for future issuance under the 2005 Plan and 4,382 shares remaining available for future issuance under the 1999 Plan. |
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(3) | Warrants included herein were granted to CBS Radio in conjunction with the Management Agreement, and were approved by our shareholders on May 29, 2002. Of the seven warrants issued to CBS Radio, two warrants to purchase an aggregate of 2,000 shares of Common stock had an exercise price of $43.11 and $48.36, respectively, and were to become exercisable: (A) if the average price of our Common stock reaches a price of $64.67 and $77.38, respectively, for at least 20 out of 30 consecutive trading days for any period throughout the ten year term of the warrants or (B) upon our termination of the Management Agreement under certain circumstances as described in the terms of such warrants. Of the remaining five warrants to purchase an aggregate of 2,500 shares of Common stock, the exercise price for each of the five warrants was equal to $38.87, $44.70, $51.40, $59.11, and $67.98, respectively. The five warrants had a term of 10 years (only if they became exercisable) and became exercisable on January 2, 2005, 2006, 2007, 2008, and 2009, respectively. However, in order for the warrants to become exercisable, the average price of our Common stock for each of the 15 trading days prior to January 2 of such year (commencing on January 2, 2005 with respect to the first 500 warrant tranche and each January 2 thereafter for each of the remaining four warrants) had to be at least equal to both the exercise price of the warrant and 120% of the corresponding prior year 15 day trading average. In the case of the $38.87, $44.70, $51.40 and $59.11 warrants, our average stock price for the 15 trading days prior to January 2 of the respective year did not equal or exceed the required prices, and accordingly, they did not become exercisable. All warrants outstanding as of the closing date of the Master Agreement were cancelled. |
Among Westwood One, Inc., The Dow Jones US Index
And The Dow Jones US Media Index
* | $100 invested on 12/31/02 in stock or index-including reinvestment of dividends. | |
Fiscal year ending December 31. |
CUMULATIVE TOTAL RETURN | 2003 | 2004 | 2005 | 2006 | 2007 | |||||||||||||||
Westwood One, Inc. | 91.57 | 72.08 | 44.32 | 19.90 | 5.63 | |||||||||||||||
Dow Jones US Total Market Index | 130.75 | 146.45 | 155.72 | 179.96 | 190.77 | |||||||||||||||
Dow Jones US Media Industry Index | 131.32 | 133.52 | 118.20 | 149.46 | 130.63 | |||||||||||||||
Westwood One Closing Stock Price | $ | 34.21 | $ | 26.93 | $ | 16.30 | $ | 7.06 | $ | 1.99 |
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Approximate Dollar | ||||||||||||||||
Total Number of | Value of Shares that | |||||||||||||||
Shares Purchased as | May Yet Be Purchased | |||||||||||||||
Part of Publicly | Under the Plans or | |||||||||||||||
Number of Shares | Average Price Paid | Announced Plans or | Programs | |||||||||||||
Period | Purchased in Period | Per Share | Programs | (A) (B) | ||||||||||||
10/1/07 – 10/31/07 | 0 | n/a | 21,001 | $ | 290,490 | |||||||||||
11/1/07 – 11/30/07 | 0 | n/a | 21,001 | $ | 290,490 | |||||||||||
12/1/07 – 12/31/07 | 0 | n/a | 21,001 | $ | 290,490 | |||||||||||
(A) | Represents remaining authorization from the additional $250,000 repurchase authorization approved on February 24, 2004 and the additional $300,000 authorization approved on April 29, 2005. Our existing stock purchase program was publicly announced on September 23, 1999. | |
(B) | Our Board of Directors has suspended all future stock repurchases under the aforementioned plans for the foreseeable future. |
(In thousands except per share data) | 2007 | 2006 | 2005 (1) | 2004(1) | 2003 (1) | |||||||||||||||
OPERATING RESULTS FOR YEAR ENDED DECEMBER 31: | ||||||||||||||||||||
Net Revenue | $ | 451,384 | $ | 512,085 | $ | 557,830 | $ | 562,246 | $ | 539,226 | ||||||||||
Operating and Corporate Costs, Excluding Depreciation and Amortization, Goodwill Impairment and Special Changes | 363,611 | 409,814 | 393,026 | 392,693 | 371,206 | |||||||||||||||
Goodwill Impairment | — | 515,916 | — | — | �� | — | ||||||||||||||
Depreciation and Amortization | 19,840 | 20,756 | 20,826 | 18,429 | 11,513 | |||||||||||||||
Special Changes | 4,626 | 1,579 | — | — | — | |||||||||||||||
Operating (Loss) Income | 63,307 | (435,980 | ) | 143,978 | 151,124 | 156,507 | ||||||||||||||
Net (Loss) Income | $ | 24,368 | $ | (469,453 | ) | $ | 77,886 | $ | 86,955 | $ | 91,983 | |||||||||
(Loss) Income Per Basic Share | ||||||||||||||||||||
Common stock | $ | 0.28 | $ | (5.46 | ) | $ | 0.86 | $ | 0.90 | $ | 0.91 |
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(In thousands except per share data) | 2007 | 2006 | 2005 (1) | 2004(1) | 2003 (1) | |||||||||||||||
Class B stock | $ | 0.02 | $ | 0.26 | $ | 0.24 | $ | — | $ | — | ||||||||||
(Loss) Income Per Diluted Share | ||||||||||||||||||||
Common stock | $ | 0.28 | $ | (5.46 | ) | $ | 0.85 | $ | 0.88 | $ | 0.86 | |||||||||
Class B stock | $ | 0.02 | $ | 0.26 | $ | 0.24 | $ | — | $ | — | ||||||||||
Dividends Declared | ||||||||||||||||||||
Common stock | $ | 0.02 | $ | 0.32 | $ | 0.30 | $ | — | $ | — | ||||||||||
Class B stock | $ | 0.02 | $ | 0.26 | $ | 0.24 | $ | — | $ | — | ||||||||||
BALANCE SHEET DATA AT DECEMBER 31: | ||||||||||||||||||||
Current Assets | $ | 138,154 | $ | 149,222 | $ | 172,245 | $ | 174,346 | $ | 165,495 | ||||||||||
Working Capital | 47,294 | 29,313 | 72,094 | 93,005 | 86,484 | |||||||||||||||
Total Assets | 669,757 | 696,701 | 1,239,646 | 1,262,495 | 1,280,737 | |||||||||||||||
Long-Term Debt | 345,244 | 366,860 | 427,514 | 359,439 | 300,366 | |||||||||||||||
Total Shareholders’ Equity | 227,631 | 202,931 | 704,029 | 800,709 | 859,704 | |||||||||||||||
(1) | Effective January 1, 2006, we adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share Based Payment” (“SFAS 123R”) utilizing the modified retrospective transition alternative. Accordingly, results for years prior to 2006 have been restated to reflect stock based compensation expense in accordance with SFAS 123R. | |
(2) | No cash dividend was paid on our Common stock or Class B stock during 2003 and 2004. In 2005, our Board of Directors declared cash dividends of $0.10 per share for every issued and outstanding share of Common stock and $0.08 per share for every issued and outstanding share of Class B stock on each of April 29, 2005, August 3, 2005 and November 2, 2005. In 2006, our Board of Directors declared cash dividends of $0.10 per share for every issued and outstanding share of Common stock and $0.08 per share for every issued and outstanding share of Class B stock on each of February 2, 2006, April 18, 2006 and August 7, 2006. Our Board of Directors declared a cash dividend of $0.02 per share for every issued and outstanding share of Common stock and $0.016 per share for every issued and outstanding share of Class B stock on November 7, 2006. Our Board of Directors declared cash dividends of $0.02 per share for every issued and outstanding share of Common Stock and $0.016 per share for every issued and outstanding share of Class B stock on March 6, 2007. The payment of dividends is prohibited by the terms of our credit facility, as amended in 2008, and accordingly, we do not plan on paying dividends for the foreseeable future. |
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2007 | 2006 | 2005 | ||||||||||||||||||||||
$ | % of Total | $ | % of Total | $ | % of Total | |||||||||||||||||||
Local/Regional | $ | 232,446 | 51 | % | $ | 265,768 | 52 | % | $ | 300,560 | 54 | % | ||||||||||||
National | 218,938 | 49 | % | 246,317 | 48 | % | 257,270 | 46 | % | |||||||||||||||
Total (1) | $ | 451,384 | 100 | % | $ | 512,085 | 100 | % | $ | 557,830 | 100 | % | ||||||||||||
(1) | As described above, we currently aggregate revenue data based on the type of commercial airtime sold. You should consider that a number of advertisers purchase both local/regional and national commercial airtime when evaluating the relative revenue generated on a local/regional versus national basis. Our objective is to optimize total revenue from those advertisers. |
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2007 | 2006 | 2005 | ||||||||||||||||||||||
$ | % of total | $ | % of total | $ | % of total | |||||||||||||||||||
Programming, production and distribution expenses | $ | 274,645 | 78 | % | $ | 301,562 | 76 | % | $ | 279,364 | 73 | % | ||||||||||||
Selling expenses | 34,237 | 10 | % | 46,814 | 12 | % | 52,089 | 14 | % | |||||||||||||||
Stock-based compensation | 5,386 | 2 | % | 6,345 | 2 | % | 6,721 | 2 | % | |||||||||||||||
Other operating expenses | 36,172 | 10 | % | 40,475 | 10 | % | 40,824 | 11 | % | |||||||||||||||
$ | 350,440 | 100 | % | $ | 395.196 | 100 | % | $ | 378,998 | 100 | % | |||||||||||||
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Payments due by Period | ||||||||||||||||||||
Contractual Obligations (1) | Total | <1 year | 1 – 3 years | 3 – 5 years | >5 years | |||||||||||||||
Long-term Debt (2) | $ | 402,459 | $ | 19,586 | $ | 217,223 | $ | 165,650 | — | |||||||||||
Capital Lease Obligations | 3,520 | 960 | 1,920 | 640 | — | |||||||||||||||
Operating Leases | 43,092 | 6.750 | 12,254 | 9,425 | 14,663 | |||||||||||||||
Other Long-term Obligations | 225,760 | 106,583 | 84,189 | 31,388 | 3,600 | |||||||||||||||
Total Contractual Obligations | $ | 674,831 | $ | 133,879 | $ | 315,586 | $ | 207,103 | $ | 18,263 | ||||||||||
(1) | The above table excludes our FIN 48 reserves and deferred tax liabilities as the future cash flows are uncertain as of December 31, 2007. | |
(2) | Includes the estimated net interest payments on fixed and variable rate debt and related interest rate swaps. Estimated interest payments on floating rate instruments are computed using our interest rate as of December 31, 2007, and borrowings outstanding are assumed to remain at current levels. |
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• | Expiration date of all Station Agreements is extended through March 31, 2017, continuing the provision of commercial inventory and related rights for a period that extends eight years beyond the original expiration date of the Management Agreement. | ||
• | All compensation under Westwood One Affiliation Agreements adjusts either up or down for changes in audience levels (Network only) on Stations (subject to a 3% threshold), as opposed to many of the previous affiliation agreements, under which we paid fixed compensation regardless of fluctuations in audience levels. | ||
• | Compensation under Westwood One Affiliation Agreements also uniformly adjusts either up or down for commercial clearance, including when clearance is affected by preemption of commercials outside the parameters specified in the agreements. For example, Station compensation is subject topro ratadownward adjustment for commercial clearance between 100% and 90%, compensation is reduced significantly for clearance below 90%, and no compensation whatsoever is paid to a Station if it broadcasts 75% or less of the commercial inventory. Many of the existing affiliation agreements are subject to less punitive penalties as commercial clearance levels decrease. | ||
• | We may exercise a termination right with respect to a Westwood One Affiliation Agreement and collect liquidated damages from CBS Radio if the applicable CBS Radio Station fails to achieve commercial clearance of at least 75% for a prolonged period of time as described in the agreements. In general, the previous affiliation agreements did not have liquidated damages clauses. | ||
• | The Station Agreements set forth terms that apply when Stations are sold by CBS Radio, unlike the previous affiliation agreements. For the first 35 Stations sold by CBS Radio, CBS Radio is required to use commercially reasonable efforts to assign the applicable Station Agreements to the buyer for the term of the Station Agreements. If the buyer does not assume the Station Agreements, the Station Agreements may be terminated, however, the commercial inventory must be reallocated by CBS Radio to achieve “Substantially Equivalent Distribution” (as such term is defined in the Station Agreements) among the remaining Stations still owned by CBS Radio for the term of the Station Agreements. In respect of any Station sold by CBS Radio after the first 35 Stations, CBS Radio must cause the buyer to either: (i) assume the Station Agreement for a term extending through the later of December 31, 2014 and the fifth anniversary of the closing of such Station sale (but not beyond March 31, 2017) or (ii) reallocate the inventory to achieve Substantially Equivalent Distribution. |
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• | Under the Station Agreements, Metro Networks Communications, Inc., one of our subsidiaries will be the exclusive source of traffic information on CBS Stations’ analog and HD1 signals, subject to certain exceptions provided in the Station Agreements. | ||
• | Under the proposed CBS Radio transactions, we will pay CBS Radio a maximum annual bonus of $4,000 for commercial clearance under the Westwood One Affiliation Agreements of 95% or higher and no bonus will be earned by CBS Radio if clearances are below 90%. |
• | Extends certain existing non-competition and non-solicitation agreements between CBS Radio and us included in the now-terminated Management Agreement through March 31, 2010 and December 31, 2012, respectively, and sets forth the terms and conditions relating to CBS Radio’s ability to sell ten second sponsorships adjacent to traffic reports through March 31, 2010. | ||
• | Extends our previously-existing right of first refusal to syndicate certain CBS Radio programming through March 31, 2017. | ||
• | Extends certain existing programming agreements between CBS Radio and us through the earlier of their current termination date and March 31, 2017. | ||
• | Provides for the cancellation of all warrants and related registration rights held by CBS. | ||
• | As discussed above, provides for a maximum annual bonus of $4,000 payable to CBS Radio for commercial clearance of 95% or higher and no annual bonus payable to CBS Radio if clearances are below 90%. | ||
• | Provides for a $2,000 payment from CBS Radio to us if commercial clearance in 2008 for CBS’ top ten markets is less than 93.75%. | ||
• | Provides us with a limited right to defer up to $4,000 in payments to CBS Radio on two occasions during the first two years from the Effective Date. | ||
• | Provides for new registration rights for CBS Radio’s existing shares of Company Common stock. | ||
• | Provides for certain confidentiality obligations and related covenants in the event of a change of control where a CBS Radio competitor acquires us or a significant portion of our assets. | ||
• | Includes termination and cross termination provisions, which are substantially similar to the other New Transaction Documents. These termination and cross termination provisions generally provide, among other things, that: |
1. | termination for a payment-related dispute pursuant to the provisions of the Master Agreement is not allowed if the amount in dispute is deposited in escrow; |
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2. | disputes are to be resolved through formal arbitration and the arbitrator shall take into account other appropriate remedies short of termination in deciding whether termination is appropriate; | ||
3. | all other New Transaction Documents (except for the Mutual Release as described below) shall terminate if the Master Agreement is terminated (including any termination of the Master Agreement by either CBS or us, as the non-breaching party, in the event that 15% or more of the Station Agreements measured by revenue or number are terminated or if an arbitrator terminates for material breach all or substantially all of the Station Agreements in any two markets where CBS Radio owns at least four Stations), subject to certain exceptions. |
• | Extend the News Programming Agreement, Trademark License Agreement and TSA through March 31, 2017. | ||
• | Provide us with certain exclusive rights to CBS Radio news programming, and non-exclusive rights to certain CBS Radio trademarks, for domestic AM/FM terrestrial radio broadcast (including HD1 and HD2 channels) in the English language and related simulcast by live internet streaming. | ||
• | Set a fixed annual news programming fee (with fixed annual escalator) related to CBS Radio news programming. | ||
• | Limit the assignability of certain CBS Radio trademarks unless pursuant to a concurrent assignment of the Amended and Restated News Programming Agreement. | ||
• | Clarify and update existing practices related to employees, facilities and equipment at the CBS Radio Broadcast Center located at 524 W. 57th Street in New York City. | ||
• | Include leases of the facilities at 524 W. 57th Street in New York City and 2020 M Street in Washington D.C. through March 31, 2017, and a sublease of the facilities at 2000 M Street in Washington, D.C. through December 30, 2012. | ||
• | Provide for post-termination transition periods at the CBS Radio Broadcast Center in the event we are required to vacate the facility. |
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Committee Assignments | ||||||||||||||||
Nominating | ||||||||||||||||
and | Strategic | |||||||||||||||
Name | Director | Term | Audit | Compensation | Governance | Review | ||||||||||
(I = Independent) | Age | Since | Class | Expires | Committee | Committee | Committee | Committee | ||||||||
Thomas F.X. Beusse | 41 | 2008 | I | 2010 | ||||||||||||
Albert Carnesale (I) | 71 | 2005 | II | 2009 | * | * | ||||||||||
David L. Dennis (I) | 59 | 1994 | II | 2009 | * | ** | ** | |||||||||
Gerald Greenberg (I) | 65 | 1994 | III | 2008 | * | ** | * | * | ||||||||
Grant F. Little, III (I) | 43 | 2006 | II | 2009 | ** | * | ||||||||||
H. Melvin Ming (I) | 63 | 2006 | III | 2008 | * | * | ||||||||||
Norman J. Pattiz | 65 | 1974 | I | 2010 | ||||||||||||
Joseph B. Smith (I) | 80 | 1994 | I | 2010 | * | * |
* | Member | |
** | Chair |
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Named Executive Officer | Position | |
Norman J. Pattiz | Chairman of the Board | |
Thomas F.X. Beusse | Chief Executive Officer and President (as of January 8, 2008) | |
Peter Kosann | Chief Executive Officer and President (through January 8, 2008) | |
Gary J. Yusko | Chief Financial Officer and Principal Accounting Officer (as of July 16, 2007) | |
Andrew Zaref | Executive Vice President and Chief Financial Officer (through July 12, 2007) | |
David Hillman | Chief Administrative Officer (as of July 10, 2007); Executive Vice President, Business Affairs and General Counsel | |
Paul Gregrey | Executive Vice President, Sales, Network Division |
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• | Establish, oversee and recommend to the Board the implementation of overall compensation policies for executive officers as well as for compensation provided to officers and the Chairman of the Board; | ||
• | Review and approve corporate goals and objectives relative to the compensation of executive officers; | ||
• | Review the results of and procedures for the evaluation of other executive officers by the Chief Executive Officer; | ||
• | At the direction of the Board, establish compensation for the Company’s non-employee directors; and | ||
• | Oversee the administration of all qualified and non-qualified employee compensation and benefit plans, including stock incentive plans. |
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Elements of Compensation (1) | ||||||||||||||||
Active 2007 NEOs | Salary | Bonus (2) | Equity Awards (3) | Total Compensation | ||||||||||||
Norman J. Pattiz | $ | 400,000 | — | $ | 36,583 | $ | 436,583 | |||||||||
Chairman of the Board | ||||||||||||||||
Gary J. Yusko | $ | 207,692 | $ | 222,917 | $ | 145,950 | $ | 576,559 | ||||||||
Chief Financial Officer | ||||||||||||||||
David Hillman | $ | 373,846 | $ | 208,333 | $ | 145,950 | $ | 728,129 | ||||||||
Chief Administrative Officer | ||||||||||||||||
Paul Gregrey | $ | 370,050 | $ | 70,769 | $ | 52,542 | $ | 493,361 | ||||||||
EVP — Sales, Network Div. | ||||||||||||||||
Former 2007 NEOs | ||||||||||||||||
Peter Kosann | $ | 625,000 | $ | 150,000 | $ | 0 | $ | 775,000 | ||||||||
Chief Executive Officer | ||||||||||||||||
Andrew Zaref | $ | 270,833 | (4) | $ | 0 | $ | 0 | $ | 270,833 | |||||||
Chief Financial Officer |
(1) | All amounts reported in this table have been rounded to the nearest dollar. Because perquisites arede minimis, such have not been included in the table above. | |
(2) | The amounts listed in the table under “Bonus” above reflect discretionary bonuses awarded in 2008 for 2007 performance. These also include, in the case of Mr. Yusko, a $100,000 signing bonus which will be earned over the first two years of Mr. Yusko’s agreement (or $22,917 from July 16, 2007 to December 31, 2007), in the case of Mr. Hillman, 33,333.36 of a retention bonus paid in 2006 and in the case of Mr. Gregrey, $30,769.20 of a retention bonus paid in 2006 (but in each case earned in 2007) as further described in footnotes 4 and 5 of the Summary Compensation Table. Pursuant to the terms of the Master Agreement between the Company and CBS Radio, the Company is required to reimburse CBS Radio one-half, or $75,000, of Mr. Kosann’s 2007 bonus. | |
(3) | The value listed in the table under “Equity Awards” above contains only the value of the equity awards (in accordance with FAS 123R) granted to the NEOs in March 2008 for 2007 performance and in the case of Mr. Pattiz, options and restricted stock granted in December 2007 pursuant to his employment agreement but not options granted to Mr. Pattiz in January 2008 as such options were not awarded for past performance. This amount is not the same amount disclosed in the Summary Compensation Table. As discussed in footnote 6 to the Summary Compensation Table, the amounts reported in columns (e) and (f) of such table represent the portion of total value ascribed to all stock and option awards, including those made in prior years, that was expensed by the Company in 2007 in accordance with FAS 123R. | |
(4) | Excludes amounts paid to Mr. Zaref after his termination. |
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1. | Mr. Beusse received on his date of hire options to purchase an aggregate of 1,000,000 shares of Company Common Stock; | ||
2. | If Mr. Beusse’s employment is terminated by the Company or by him for good reason upon or within twenty-four months following a change in control other than for a cause event, all of his equity compensation vests and becomes exercisable in full (the terms good reason, cause and change in control are defined in Mr. Beusse’s employment agreement and a summary of such terms is set forth below under the heading entitled “Employment Agreements — Defined Terms: Cause, Good Reason, Change in Control”); | ||
3. | Mr. Beusse is entitled to a severance payment ($1,900,000) that is larger than the severance provided to other NEOs in the event he is terminated other than for a cause event, or for good reason; | ||
4. | Mr. Beusse will receive a 280G gross-up payment in certain instances to indemnify Mr. Beusse for the effect of any excise tax imposed by Section 4999 of the Internal Revenue Code for payments due under Mr. Beusse’s employment agreement that exceed the 280G limitations of the Code. |
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Active 2007 NEOs | Target Bonus (1) | Bonus Paid | % of Target | |||||||||
Norman J. Pattiz, Chairman of the Board | n/a | n/a | n/a | |||||||||
Gary J. Yusko, Chief Financial Officer | $ | 315,000 | $ | 200,000 | (2) | 63.5 | % | |||||
David Hillman, Chief Administrative Officer | $ | 135,000 | $ | 175,000 | 129.6 | % | ||||||
Paul Gregrey, EVP — Sales, Network Div. | $ | 275,000 | $ | 40,000 | 14.5 | % | ||||||
Former 2007 NEOs | ||||||||||||
Peter Kosann, Chief Executive Officer | $ | 600,000 | $ | 150,000 | 25.0 | % | ||||||
Andrew Zaref, Chief Financial Officer | $ | 350,000 | n/a | n/a |
(1) | As set forth in such NEO’s employment agreement. Mr. Pattiz’s employment agreement does not specify a target bonus. While Mr. Zaref’s employment agreement specifies a target bonus, the Committee did not award him a bonus for 2007 as the bonus is discretionary. | |
(2) | As discussed elsewhere in this report, until the termination of the Management Agreement, CBS Radio reimbursed the Company for Mr. Yusko’s salary and bonus. CBS Radio reimbursed the Company for $125,000 of such amount. |
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• | Gary J. Yusko — received in March 2008 a stock option to purchase 175,000 shares of Common Stock | ||
• | David Hillman — received in March 2008 a stock option to purchase 175,000 shares of Common Stock | ||
• | Paul Gregrey — received in March 2008 a stock option to purchase 63,000 shares of Common Stock | ||
• | Norm Pattiz — received 8,333 RSUs and a stock option to purchase 25,000 shares of Common Stock in December 2007 pursuant to his employment agreement (prior to its being amended by Amendment No. 3 in January 2008) |
• | Gary J. Yusko — received 65,000 shares of restricted stock and a stock option to purchase 75,000 shares of Common Stock in July 2007 upon entering into his employment agreement. The restricted stock was issued in two awards, one of which (15,000 shares of restricted stock) was issued with a two-year stock vest. | ||
• | David Hillman — received 15,000 shares of restricted stock with a two-year vesting period in July 2007 upon executing Amendment No. 2 to his employment agreement. | ||
• | Norm Pattiz — received a stock option to purchase 250,000 shares of Common Stock with a three-year vesting period in January 2008 upon executing Amendment No. 3 to his employment agreement, which extended the term of Mr. Pattiz’s employment as Chairman of the Board through June 15, 2009. This helped provide continuity after the termination of CBS Radio as manager of the Company and the changes in the Company’s CEO and CFO in January 2008 and July 2007, respectively. | ||
• | Thomas F.X. Beusse — received stock options to purchase an aggregate of 1,000,000 shares of Common Stock with a three-year vesting period in January 2008 and in connection with entering into his employment agreement as a material inducement for Mr. Beusse to join the Company. Although not a NEO for 2007, Mr. Beusse became the Company’s CEO and President on January 8, 2008. |
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Gerald Greenberg, Chair
David L. Dennis
Joseph B. Smith
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Change in | ||||||||||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||||||||||
and Nonquali- | All | |||||||||||||||||||||||||||||||||||
Non-Equity | fied Deferred | Other | ||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | Compen- | ||||||||||||||||||||||||||||||||
Name and Principal | Salary | Bonus | Awards | �� | Awards | Compensation | Earnings | sation | Total | |||||||||||||||||||||||||||
Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e)(6) | (f)(6) | (g) | (h) | (i)(7) | (j) | |||||||||||||||||||||||||||
OFFICERS: | ||||||||||||||||||||||||||||||||||||
Norman J. Pattiz, | 2007 | $ | 400,000 | — | $ | 112,964 | $ | 286,903 | — | N/A | — | $ | 799,867 | |||||||||||||||||||||||
Chairman of the Board | 2006 | $ | 400,000 | — | $ | 196,409 | $ | 294,384 | — | N/A | — | $ | 890,973 | |||||||||||||||||||||||
Peter Kosann, | 2007 | $ | 625,000 | $ | 150,000 | $ | 268,601 | $ | 681,121 | — | N/A | $ | 12,000 | $ | 1,736,721 | |||||||||||||||||||||
President and CEO (1)(replaced by Mr. Beusse in 2008) | 2006 | $ | 600,000 | $ | 150,000 | $ | 173,034 | $ | 675,955 | — | N/A | $ | 12,000 | $ | 1,610,989 | |||||||||||||||||||||
Gary J. Yusko, CFO(2) | 2007 | $ | 207,692 | $ | 222,917 | $ | 65,453 | $ | 31,522 | — | N/A | — | $ | 527,584 | ||||||||||||||||||||||
as of 7/16/07 | ||||||||||||||||||||||||||||||||||||
Andrew Zaref, | 2007 | $ | 270,833 | $ | 0 | $ | 32,824 | $ | 26,654 | — | N/A | — | $ | 330,312 | ||||||||||||||||||||||
EVP and CFO(3) (Through 7/12/07) | 2006 | $ | 475,000 | $ | 120,000 | $ | 108,126 | $ | 370,238 | — | N/A | — | $ | 1,073,364 | ||||||||||||||||||||||
David Hillman, CAO, | 2007 | $ | 373,846 | $ | 208,333 | $ | 112,156 | $ | 195,828 | — | N/A | — | $ | 890,164 | ||||||||||||||||||||||
EVP Business Affairs and GC(4) | 2006 | $ | 319,231 | $ | 133,333 | $ | 57,110 | $ | 185,639 | — | N/A | — | $ | 695,313 | ||||||||||||||||||||||
Paul Gregrey, | 2007 | $ | 370,050 | $ | 70,769 | $ | 117,547 | $ | 260,853 | — | N/A | — | $ | 819,219 | ||||||||||||||||||||||
EVP - Sales, Network Division(5) | 2006 | $ | 344,237 | $ | 48,269 | $ | 50,097 | $ | 266,190 | — | N/A | — | $ | 708,793 |
(1) | Peter Kosann was employed by CBS Radio pursuant to the terms of the Management Agreement. | |
(2) | Gary J. Yusko became Chief Financial Officer of the Company on July 16, 2007. He received a $100,000 signing bonus at the time he entered into his employment agreement, of which $22,917 was earned in 2007. Such amount is earned over the first two years of his employment ($4,166.67 per month) and any unearned portion must be repaid if Mr. Yusko breaches his employment agreement. | |
(3) | Andrew Zaref earned base salary at an annual rate of $450,000 from January 1, 2006 through June 30, 2006 and $500,000 from July 1, 2006 through December 31, 2007. In April 2007, Mr. Zaref received a discretionary bonus of $120,000 for services rendered in 2006. Until his separation from the Company on July 12, 2007, CBS Radio reimbursed the Company for Mr. Zaref’s salary and bonus. Pursuant to the terms of his employment agreement, the Company is continuing to pay Mr. Zaref’s $500,000 annual salary through the end of the term, June 30, 2009. Pursuant to the terms of the Master Agreement with CBS Radio, the Company is responsible for up to one-half (such portion not to exceed $1,000,000) of the severance payments to Messrs. Zaref and Kosann. |
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(4) | David Hillman earned base salary at an annual rate of $300,000 from January 1, 2006 through March 31, 2006; $325,000 from April 1, 2006 through December 31, 2006; $350,000 from January 1, 2007 through July 15, 2007); and $400,000 from July 16, 2007 through December 31, 2007. In April 2007 and February 2008, Mr. Hillman received a discretionary bonus of $100,000 and $175,000 for services rendered in 2006 and 2007, respectively. He also received a $100,000 retention bonus at the time he entered into the first amendment to his employment agreement effective January 1, 2006, of which $33,333.36 was earned in each of 2006 and 2007. Such amount is earned over the stated three-year term of his initial employment agreement amendment ($2,777.78 per month) and any unearned portion must be repaid if Mr. Hillman leaves the Company prior to the expiration thereof (December 31, 2008). Mr. Hillman’s employment agreement has since been extended to December 31, 2009 which does not impact the retention bonus. | |
(5) | In April 2007 and February 2008, Mr. Gregrey received a discretionary bonus of $17,500 and $40,000 for services rendered in 2006 and 2007, respectively. Mr. Gregrey received a $100,000 retention bonus at the time he entered into his employment agreement, of which $30,769.20 was earned in each of 2006 and 2007. Such amount is earned over the stated term of his employment ($2,564.10 per month) and any unearned portion must be repaid if Mr. Gregrey leaves the Company prior to the expiration thereof. | |
(6) | The amounts reported in columns (e) and (f) represent the portion of total value ascribed to all stock and option awards, including those made in prior years, that was expensed by the Company in 2006 and 2007 in accordance with FAS 123R. In accordance with FAS 123R, the Company expenses the estimated fair value of stock based compensation awards over the related vesting period. In the case of restricted stock and restricted stock units, estimated fair value is calculated as the fair market value of the shares on the date of grant. The estimated fair value of stock options is measured on the date of grant using the Black-Scholes option pricing model. For a more detailed discussion of the assumptions used by the Company in estimating fair value, refer to Note 9 (Equity-Based Compensation) of the Notes to the Consolidated Financial Statements. The vesting terms of the stock awards and option awards reported in the table above are described under the table entitled “Grants of Plan-Based Awards in 2007” which appears below. | |
(7) | Mr. Pattiz receives perquisites which do not exceed $10,000 in the aggregate and accordingly are not described above as permitted by applicable SEC rules. The only perquisites provided by the Company to its other named executive officers in 2006 and 2007 were: (i) for each of Messrs. Kosann and Zaref only parking allowances; (ii) in the case of Mr. Kosann only, a monthly car allowance and (iii) Company “matches” to the contributions made by such individuals to their 401(k) accounts. The Company makes a matching contribution of 25% of all employees’ contributions to their 401(k) Plan in an amount not to exceed 6% of an employee’s salary. Any employee vests in such “Company match” based on his years of service with the Company as follows: 20% for one year of service; 40% for two years of service; 60% for three years of service; 80% for four years of service and 100% for five years of service. Until December 31, 2006, the Company made such matches in Company stock; as of January 1, 2007, the matches are made in cash. None of the perquisites for the Company’s named executive officers exceeded in the aggregate $10,000, except in the case of Mr. Kosann, who received a $500 monthly car allowance and a $500 monthly reimbursement for parking. Accordingly, except for Mr. Kosann, such amounts have not been included above as allowed by applicable SEC rules. Under the terms of his employment agreement, Mr. Pattiz has the right to purchase at any time the Company car he uses at the fair market value as such is reported in the Kelly Blue Book. |
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All | ||||||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock | All Other | |||||||||||||||||||||||||||||||||||||||||||||||
Awards: | Option | Grant | ||||||||||||||||||||||||||||||||||||||||||||||
Number | Awards: | Exercise | Date Fair | |||||||||||||||||||||||||||||||||||||||||||||
of | Number of | or Base | Value of | |||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts Under | Shares | Securities | Price of | Stock and | |||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards | Equity Incentive Plan Awards | of Stock | Underlying | Option | Option | |||||||||||||||||||||||||||||||||||||||||||
Grant | Approval | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Awards | |||||||||||||||||||||||||||||||||||||
Name | Date | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||||||||||||||||
(a) | (b) | (b)(7) | (c) | (d)(8) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l)(9) | ||||||||||||||||||||||||||||||||||||
Pattiz(2) | 12/3/07 | 11/28/05 | 25,000 | $ | 1.87 | $ | 21,000 | |||||||||||||||||||||||||||||||||||||||||
12/3/07 | 11/28/05 | 8,333 | * | $ | 15,583 | |||||||||||||||||||||||||||||||||||||||||||
Kosann(3) | 3/13/07 | 125,000 | $ | 6.17 | $ | 315,625 | ||||||||||||||||||||||||||||||||||||||||||
3/13/07 | 41,667 | $ | 257,085 | |||||||||||||||||||||||||||||||||||||||||||||
Yusko(4) | 7/16/07 | 7/10/07 | 75,000 | $ | 5.92 | $ | 206,700 | |||||||||||||||||||||||||||||||||||||||||
7/16/07 | 7/10/07 | 50,000 | $ | 296,000 | ||||||||||||||||||||||||||||||||||||||||||||
7/16/07 | 7/10/07 | 15,000 | + | $ | 88,800 | |||||||||||||||||||||||||||||||||||||||||||
Zaref(5) | 3/13/07 | 75,000 | $ | 6.17 | $ | 189,375 | ||||||||||||||||||||||||||||||||||||||||||
3/13/07 | 25,000 | $ | 154,250 | |||||||||||||||||||||||||||||||||||||||||||||
Hillman(6) | 3/13/07 | 40,000 | $ | 6.17 | $ | 101,000 | ||||||||||||||||||||||||||||||||||||||||||
3/13/07 | 20,000 | $ | 123,400 | |||||||||||||||||||||||||||||||||||||||||||||
7/10/07 | 15,000+ | $ | 102,000 | |||||||||||||||||||||||||||||||||||||||||||||
Gregrey(6) | 3/13/07 | 39,000 | $ | 240,630 |
(1) | All awards disclosed in the table above vest over three years (including all awards made to Mr. Pattiz) commencing on the first anniversary of the grant date, with the exception of the restricted stock awards (15,000 shares) made to each of Messrs. Yusko and Hillman in July 2007 denoted by a “+” in the table above which vest over two years. Awards with an exercise price noted in column (k) are stock options; the award denoted with an asterisk (*) to Mr. Pattiz is a RSU award and all other awards are shares of restricted stock. | |
(2) | Pursuant to Amendment No. 2 to his employment agreement, effective November 28, 2005, on each December 1 (or subsequent business day if such was not a business day) of his term of employment (from December 1, 2005 through December 3, 2007, since the provision was removed by Amendment No. 3), Mr. Pattiz received an option to purchase 25,000 shares of Common Stock of the Company and 8,333 RSUs (to vest over a three-year period), each pursuant to the terms of the 2005 Plan. Such agreement was approved by the Board on November 28, 2005. | |
(3) | As described elsewhere in this report, Mr. Kosann’s employment with the Company terminated on January 3, 2008. Pursuant to an arrangement between Mr. Kosann, CBS Radio and the Company, which was described in a Form 8-K filed with the SEC on July 10, 2007, certain of Mr. Kosann’s unvested equity compensation vested on March 31, 2008. | |
(4) | On July 16, 2007, Mr. Yusko received 65,000 shares of restricted stock (in two separate awards, one for 15,000 shares and the other for 50,000 shares) and an option to purchase 75,000 shares of Common Stock of the Company in connection with his appointment as CFO on such date. Mr. Yusko’s election was approved by the Board on July 10, 2007. | |
(5) | As described elsewhere in this report, Mr. Zaref’s employment with the Company terminated on July 12, 2007. Any unvested equity compensation awarded to Mr. Zaref was forfeited as of the date of his termination. | |
(6) | March 13, 2007 is the date equity compensation was awarded by the Company to its key employees. On July 10, 2007, Mr. Hillman received 15,000 shares of restricted stock in connection with his appointment as CAO on such date. | |
(7) | With respect to all awards of equity compensation that was approved on a date other than the grant date, the award was approved in advance of the grant date and the grant date of the award was specified in advance at the time of such approval. |
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(8) | While no amount has been disclosed above (in accordance with SEC rules), there are target discretionary bonus amounts set forth in each individual’s employment agreement which are described above in the Compensation Discussion and Analysis under the heading “Discretionary Annual Compensation Bonus.” | |
(9) | The value of the awards disclosed in column (l) represents the total value ascribed to all stock and option awards granted in 2007. In the case of restricted stock and restricted stock units, estimated fair value is calculated as the fair market value of the shares on the date of grant. The estimated fair value of stock options is measured on the date of grant using the Black-Scholes option pricing model. For a more detailed discussion of the assumptions used by the Company in estimating fair value, refer to Note 9 (Equity-Based Compensation) of the Notes to the Consolidated Financial Statements. The vesting terms of the stock awards and option awards are reported below. |
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Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||||||||||||||
Equity | Equity | |||||||||||||||||||||||||||||||||||||||
Incentive | Incentive | |||||||||||||||||||||||||||||||||||||||
Market | Plan | Plan | ||||||||||||||||||||||||||||||||||||||
Value | Awards: | Awards: | ||||||||||||||||||||||||||||||||||||||
Equity | Number | of | Number | Payout | ||||||||||||||||||||||||||||||||||||
Incentive | of | Shares | of | Value of | ||||||||||||||||||||||||||||||||||||
Plan | Shares | or | Unearned | Unearned | ||||||||||||||||||||||||||||||||||||
Number of | Awards: | or Units | Units | Shares, | Shares, | |||||||||||||||||||||||||||||||||||
Number of | Securities | Number of | of | of | Units or | Units or | ||||||||||||||||||||||||||||||||||
Securities | Underlying | Securities | Stock | Stock | Other | Other | ||||||||||||||||||||||||||||||||||
Underlying | Unexercised | Underlying | That | That | Rights | Rights | ||||||||||||||||||||||||||||||||||
Unexercised | Options | Unexercised | Option | Have | Have | That | That | |||||||||||||||||||||||||||||||||
Options | (#) | Unearned | Exercise | Option | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||||||||
(#) | Un- | Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||||||
Name | Grant | Exercisable | exercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||
(a) | Date | (b) | (c) | (d) | (e) | (f) | (g) | (h)(3) | (i) | (j) | ||||||||||||||||||||||||||||||
Pattiz(4) | 4/29/98 | 308,000 | — | — | $ | 14.07 | 04/29/08 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||
3/10/99 | 4,000 | — | — | 12.69 | 03/10/09 | — | — | — | — | |||||||||||||||||||||||||||||||
12/1/03 | 50,000 | — | — | 30.99 | 12/01/13 | — | — | — | — | |||||||||||||||||||||||||||||||
12/1/04 | 50,000 | — | — | 23.16 | 12/01/14 | — | — | — | — | |||||||||||||||||||||||||||||||
12/1/05 | 16,667 | * | 8,333 | — | 18.27 | 12/01/15 | — | — | — | — | ||||||||||||||||||||||||||||||
12/7/05 | 8,333 | * | 4,167 | — | 18.27 | 12/07/15 | — | — | — | — | ||||||||||||||||||||||||||||||
12/1/06 | 8,333 | 16,667 | — | 6.57 | 12/01/16 | — | — | — | — | |||||||||||||||||||||||||||||||
12/1/07 | — | 25,000 | — | 1.87 | 12/03/17 | — | — | — | — | |||||||||||||||||||||||||||||||
8,679 | 17,271 | — | — | |||||||||||||||||||||||||||||||||||||
4,340 | 8,637 | — | — | |||||||||||||||||||||||||||||||||||||
5,587 | 11,119 | — | — | |||||||||||||||||||||||||||||||||||||
8,333 | 16,583 | — | — | |||||||||||||||||||||||||||||||||||||
Kosann | 4/30/99 | 20,000 | — | — | $ | 22.57 | 09/30/09 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||
3/8/00 | 50,000 | — | — | 32.25 | 03/08/10 | — | — | — | — | |||||||||||||||||||||||||||||||
9/28/00 | 15,000 | — | — | 20.25 | 09/28/10 | — | — | — | — | |||||||||||||||||||||||||||||||
9/20/01 | 24,000 | — | — | 21.46 | 09/20/11 | — | — | — | — | |||||||||||||||||||||||||||||||
9/25/02 | 50,000 | — | — | 35.19 | 09/25/12 | — | — | — | — | |||||||||||||||||||||||||||||||
9/30/03 | 60,000 | 15,000 | — | 30.19 | 09/30/13 | — | — | — | — | |||||||||||||||||||||||||||||||
10/5/04 | 45,000 | 30,000 | — | 20.50 | 10/05/14 | — | — | — | — | |||||||||||||||||||||||||||||||
3/14/05 | 20,000 | 30,000 | — | 20.97 | 03/14/15 | — | — | — | — | |||||||||||||||||||||||||||||||
1/3/06 | 31,250 | 93,750 | — | 16.42 | 01/03/16 | — | — | — | — | |||||||||||||||||||||||||||||||
3/13/07 | — | 125,000 | — | 6.17 | 03/13/17 | — | — | — | — | |||||||||||||||||||||||||||||||
35,525 | 64,725 | — | — | |||||||||||||||||||||||||||||||||||||
41,788 | 83,158 | — | — | |||||||||||||||||||||||||||||||||||||
Yusko | 7/16/07 | — | 75,000 | — | $ | 5.92 | 07/16/17 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||
15,000 | 29,850 | |||||||||||||||||||||||||||||||||||||||
50,000 | 99,500 | |||||||||||||||||||||||||||||||||||||||
Zaref | — | — | — | $ | — | — | — | $ | — | — | $ | — | ||||||||||||||||||||||||||||
Hillman | 9/28/00 | 600 | — | — | $ | 20.25 | 09/28/10 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||
9/20/01 | 9,000 | — | — | 21.46 | 09/20/11 | — | — | — | — | |||||||||||||||||||||||||||||||
9/25/02 | 12,000 | — | — | 35.19 | 09/25/12 | — | — | — | — | |||||||||||||||||||||||||||||||
9/30/03 | 9,600 | 2,400 | — | 30.19 | 09/30/13 | — | — | — | — | |||||||||||||||||||||||||||||||
10/5/04 | 18,000 | 12,000 | — | 20.50 | 10/05/14 | — | — | — | — | |||||||||||||||||||||||||||||||
3/14/05 | 10,000 | 15,000 | — | 20.97 | 03/14/15 | — | — | — | — | |||||||||||||||||||||||||||||||
2/10/06 | 8,425 | 25,275 | — | 14.27 | 02/10/16 | — | — | — | — | |||||||||||||||||||||||||||||||
3/13/07 | — | 40,000 | — | 6.17 | 03/13/17 | — | — | — | — | |||||||||||||||||||||||||||||||
13,319 | 26,505 | |||||||||||||||||||||||||||||||||||||||
20,063 | 39,925 | |||||||||||||||||||||||||||||||||||||||
15,000 | 29,850 |
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Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||||||||||||||
Equity | Equity | |||||||||||||||||||||||||||||||||||||||
Incentive | Incentive | |||||||||||||||||||||||||||||||||||||||
Market | Plan | Plan | ||||||||||||||||||||||||||||||||||||||
Value | Awards: | Awards: | ||||||||||||||||||||||||||||||||||||||
Equity | Number | of | Number | Payout | ||||||||||||||||||||||||||||||||||||
Incentive | of | Shares | of | Value of | ||||||||||||||||||||||||||||||||||||
Plan | Shares | or | Unearned | Unearned | ||||||||||||||||||||||||||||||||||||
Number of | Awards: | or Units | Units | Shares, | Shares, | |||||||||||||||||||||||||||||||||||
Number of | Securities | Number of | of | of | Units or | Units or | ||||||||||||||||||||||||||||||||||
Securities | Underlying | Securities | Stock | Stock | Other | Other | ||||||||||||||||||||||||||||||||||
Underlying | Unexercised | Underlying | That | That | Rights | Rights | ||||||||||||||||||||||||||||||||||
Unexercised | Options | Unexercised | Option | Have | Have | That | That | |||||||||||||||||||||||||||||||||
Options | (#) | Unearned | Exercise | Option | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||||||||
(#) | Un- | Options | Price | Expiration | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||||||
Name | Grant | Exercisable | exercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||
(a) | Date | (b) | (c) | (d) | (e) | (f) | (g) | (h)(3) | (i) | (j) | ||||||||||||||||||||||||||||||
Gregrey | 9/30/99 | 12,000 | — | — | $ | 22.57 | 09/30/09 | — | $ | — | — | $ | — | |||||||||||||||||||||||||||
3/8/00 | 30,000 | — | — | 32.25 | 03/08/10 | — | — | — | — | |||||||||||||||||||||||||||||||
2/21/01 | 20,000 | — | — | 22.06 | 02/21/11 | — | — | — | — | |||||||||||||||||||||||||||||||
9/20/01 | 10,000 | — | — | 21.46 | 09/20/11 | — | — | — | — | |||||||||||||||||||||||||||||||
9/25/02 | 35,000 | — | — | 35.19 | 09/25/12 | — | — | — | — | |||||||||||||||||||||||||||||||
9/30/03 | 32,000 | 8,000 | — | 30.19 | 09/30/13 | — | — | — | — | |||||||||||||||||||||||||||||||
10/5/04 | 30,000 | 20,000 | — | 20.50 | 10/05/14 | — | — | — | — | |||||||||||||||||||||||||||||||
5/19/05 | 6,000 | 6,000 | — | 19.93 | 05/19/15 | — | — | — | — | |||||||||||||||||||||||||||||||
2/10/06 | 5,000 | 15,000 | — | 14.27 | 02/10/16 | — | — | — | — | |||||||||||||||||||||||||||||||
11,684 | 23,251 | — | — | |||||||||||||||||||||||||||||||||||||
26,147 | 52,033 | — | — |
(1) | The stock options listed in the table above vest as follows: |
• | All stock options listed in the above table granted prior to January 1, 2005 (i.e., with an expiration date on or before December 31, 2014) were granted pursuant to the terms of the 1999 Plan and are subject to five-year vesting terms in equal installments, commencing on the first anniversary of the date of grant, except in the case of the third and fourth stock option entries for Mr. Pattiz (expiring on December 1, 2013 and December 1, 2014, respectively), which stock options were modified by a letter agreement dated as of May 25, 2005 and vest over three years in equal installments. | ||
• | All stock options listed in the table above with an expiration date on or after May 19, 2015 were granted pursuant to the terms of the 2005 Plan and vest in equal installments over four years (except for Mr. Pattiz’s stock options which have a three-year vesting term) commencing on the first anniversary of the date of grant. | ||
• | All stock options listed in the table above with an expiration date on or after March 13, 2017 were granted pursuant to the terms of the 2005 Plan (except in the case of the stock options awarded in March 2008 which were granted pursuant to the terms of the 1999 Plan as described elsewhere in this report) and vest in equal installments over three years commencing on the first anniversary of the date of grant. |
(2) | All stock awards listed in the above table were granted pursuant to the terms of the 2005 Plan and are subject to four-year vesting terms commencing on the first anniversary of the date of grant, except for: (x) stock awards issued in 2007 and later, all of which have a three-year vesting term and (y) Mr. Yusko’s and Mr. Hillman’s awards of 15,000 shares of restricted stock awarded in July 2007 which have a two-year vesting term. As discussed elsewhere in this report, restricted stock granted on February 10, 2006 had an initial vesting date of January 10, 2007 (11 months after the grant date), with subsequent vesting dates tied to the anniversary of the vesting date. The numbers disclosed in column (g) above include all dividend equivalents that have accrued on such shares. | |
(3) | The value of the awards disclosed in column (h) above is based on a per share closing stock price on the NYSE for the Company’s Common Stock of $1.99 on December 31, 2007 (the last business day of 2007). | |
(4) | The entries for Mr. Pattiz denoted above by an asterisk (*) represent awards made to Mr. Pattiz in December 2005, which although reported in columns (b) and (g) respectively because such shares have vested, the payment of such shares were deferred at the time of their award until termination (as such term is defined in the 2005 Plan). Included in the above table is an award of 4,167 RSUs and options to purchase 12,500 shares of Common Stock of the Company which Mr. Pattiz was awarded on December 7, 2005, which awards are in addition to the awards he received on December 1, 2005 pursuant to the terms of his employment agreement as discussed above and were also automatically deferred until termination. |
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Options Awards | Stock Awards | |||||||||||||||
Number of | Value Realized on | Number of Shares | Value Realized on | |||||||||||||
Shares | Exercise(1) | Acquired on Vesting | Vesting(1) | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
Pattiz | — | — | 2,794 | (1) | $ | 5,225 | (1) | |||||||||
Kosann | — | — | 10,818 | $ | 78,322 | |||||||||||
Zaref | — | — | 12,845 | $ | 90,733 | |||||||||||
Hillman | — | — | 4,440 | $ | 30,725 | |||||||||||
Gregrey | — | — | 3,894 | $ | 26,946 |
(1) | As previously discussed, Mr. Pattiz received two grants of restricted stock in December 2005, which although reported in column (g) of the table entitled “Outstanding Equity Awards at 2007 Fiscal Year-End,” are not reported in the table above because although such shares have vested, such shares have not been acquired by Mr. Pattiz (and thus no value was realized by Mr. Pattiz in 2007) because the receipt of such awards was mandatorily deferred at the time of grant and will not be distributed until Mr. Pattiz’s termination (as such term is defined in the 2005 Plan). If the award had not been deferred, 4,340 shares of restricted stock would have vested in December 2007 and the value of such shares as of December 31, 2007 would have been $8,637 based on a per share closing stock price on the NYSE for the Company’s Common Stock of $1.99 on December 31, 2007 (the last business day of 2007). |
Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||
Contributions | Contributions | Earnings | Withdrawals/ | Balance | ||||||||||||||||
in 2007 | in 2007 | in 2007 | Distributions | at 12/31/07 | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
Pattiz | — | — | $ | (4,641 | ) | — | $ | 25,908 | ||||||||||||
Kosann | — | — | — | — | — | |||||||||||||||
Zaref | — | — | — | — | — | |||||||||||||||
Hillman | — | — | — | — | — | |||||||||||||||
Gregrey | — | — | — | — | — |
(1) | As disclosed above under the heading “Right to Defer; Mandatory Deferral in 2005,” only named executive officers and directors have received RSUs which gives the recipient/participant the right to defer the receipt/payment of the restricted stock underlying such awards. As previously discussed, any RSU awarded in 2005 was automatically deferred by the Company. Beginning in 2006, the decision whether to defer a RSU award was given to participants. Since 2005, no RSU awards have been deferred by any recipient. |
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• | Term expires June 15, 2009; provided, that if the Company does not renew the agreement, Mr. Pattiz will continue as a part-time employee and/or consultant (at the Company’s option) through November 30, 2015; | ||
• | Annual salary of $400,000; | ||
• | Annual grant of an option to purchase 25,000 shares of Common Stock of the Company and 8,333 RSUs on December 1, 2005, December 1, 2006 and December 3, 2007 (such grant right expired on December 3, 2007); | ||
• | In connection with the execution of Amendment 3 to his employment agreement and Mr. Pattiz’s agreement to continue to provide services in connection with the Company’s hiring of a new CEO, Mr. Pattiz received an option to purchase 250,000 shares of Common Stock of the Company that generally will vest in equal one-third increments on January 8, 2009, 2010 and 2011, except in the case of certain termination events as described below (the “2008 Stock Option”); | ||
• | Terminable by Mr. Pattiz upon 90 days’ written notice to the Company (or 30 days in the event of a material breach); Terminable by the Company only in the event of death, permanent and total disability, or for cause upon 90 days’ notice; |
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• | For purposes of Mr. Pattiz’s employment agreement, “cause” is defined as “willful commission of a material act (which first occurs during the term of the agreement) of fraud or gross misconduct having a material adverse effect upon the Company’s business or competition by Mr. Pattiz in violation of his non-compete or fair competition provision which is not cured within a 90-day period”. | ||
• | If Mr. Pattiz is terminated without cause or if Mr. Pattiz terminates his employment due to an adverse change in his title as Chairman, in each case, prior to January 8, 2009, one-third (1/3) of the 2008 Stock Option (i.e., 83,333 shares underlying the stock option) will vest immediately as of the date of such termination and will be exercisable until ninety days following the earlier of Mr. Pattiz’s voluntary termination of service and November 30, 2015. Upon a change in control, the 2008 Stock Option will become fully vested. | ||
• | The Company will continue to engage Mr. Pattiz as a part-time employee and/or consultant (at the Company’s option) through November 30, 2015, or such earlier time as Mr. Pattiz voluntarily terminates his services with the Company (such period, the “Continued Engagement Period”). Mr. Pattiz’s stock options will continue to vest during the Continued Engagement Period; | ||
• | If any remuneration to Mr. Pattiz in any given year would not be deductible under Code Section 162(m) and would result in non-deductible payments of over $1 million in any one year, such excess would be deferred until the first year payment of such excess amount would not result in non-deductible remuneration of over $1 million in such year. | ||
• | Non-compete: the non-competition and unfair competition provisions of Mr. Pattiz’s employment agreement will cease to apply to Mr. Pattiz upon the earlier of: (x) June 15, 2009 and (y) the effective date of Mr. Pattiz’s termination prior to the expiration of the Term (the “Non-Compete End Date”). During the Continued Engagement Period, Mr. Pattiz’s non-solicitation obligations will be limited to prohibit Mr. Pattiz from soliciting, employing, hiring or engaging employees, consultants and voice talent who are providing services to the Company or its related entities on the Non-Compete End Date. |
• | Term expires on January 8, 2011; | ||
• | Annual salary of $700,000; | ||
• | Discretionary annual bonus of up to 100% of his annual salary ($700,000) for each of 2008, 2009 and 2010, as determined by the Compensation Committee, provided that Mr. Beusse will receive a minimum annual bonus of not less than $300,000 for 2008; | ||
• | On January 8, 2008, Beusse received options to purchase an aggregate of 1,000,000 shares of Common Stock of the Company in two grants: 500,000 options were granted under the 2005 Plan, the other 500,000 options were issued outside the 2005 Plan as a “material inducement grant” pursuant to NYSE rules; | ||
• | In each of calendar years 2009 and 2010, Beusse shall receive an option to purchase up to 625,000 shares of Common Stock of the Company based on the achievement of performance goals for the prior calendar year; | ||
• | If Mr. Beusse continues to be employed by the Company after the Term, the agreement is terminable by either party upon 90 days’ written notice; | ||
• | Agreement terminates automatically in the event of death; terminable by the Company immediately upon notice of a cause event or upon ten days’ prior written notice in the event of disability; Terminable by Mr. Beusse upon prior written notice (given within 90 days after the event giving rise to the good reason if Company fails to cure within 30 days) to the Company for good reason. | ||
• | For purposes of Mr. Beusse’s employment agreement, “Good Reason” is: (1) a material diminution in his authority, duties or responsibilities or diminution in title, including loss of his directorship; (2) a material diminution in his base salary; (3) any relocation of his principal place of employment beyond 50 miles of its current location; or (4) any material breach of the Company’s obligations under his employment agreement. |
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• | If terminated by the Company for any reason other than a cause event, or by Mr. Beusse for good reason prior to a change in control, Mr. Beusse will receive, in addition to Accrued Amounts (see next bullet point), continued payment of an amount equal to two times the sum of: (x) his base salary plus (y) $250,000 (i.e.,$1,900,000, in the aggregate), payable in equal periodic installments for two years following his termination; and his minimum 2008 bonus ($300,000) to the extent not already paid as of the date of termination. | ||
• | If terminated for a cause event (with the exception of clause (ii) which shall not apply in such instance), death or disability, or if Mr. Beusse terminates without good reason, Mr. Beusse is entitled solely to the following: (i) his base salary prorated to the date of termination; (ii) any annual bonus earned but not yet paid for any completed full calendar year immediately preceding the date of termination; (iii) reimbursement for any unreimbursed expenses properly incurred through date of termination; and (iv) any present entitlement under employee benefit plans and programs (collectively, “Accrued Amounts”). | ||
• | Non-compete: If Mr. Beusse is terminated, for the Restricted Period, Mr. Beusse may not engage in any Restricted Activity. For Mr. Beusse, the “Restricted Period” is a period equal to: (i) the two year period for which he receives severance if he is terminated for a reason other than for a cause event or good reason (i.e.,for cause, by Employee without good reason, by death or disability) or (ii) one year from the date of termination if Employee is terminated for a reason other than for a cause event or by Employee for good reason. |
• | Term expires July 16, 2010; If Company fails to provide written notice on or prior to January 15, 2010 of its intention to terminate this Agreement effective July 16, 2010, Employee may elect by written notice to the Company delivered no later than January 31, 2010 to extend the Term through and including July 16, 2011; | ||
• | Annual salary of $450,000, $475,000 and $500,000, respectively for each year of the Term (measured from July 16 to July 15 of each year); | ||
• | Discretionary annual bonus valued at up to (i) $315,000 (2007), (ii) $332,500 (2008) and (iii) $350,000 (beginning in 2009), as determined by the Compensation Committee; provided that Mr. Yusko will receive a minimum discretionary bonus valued at not less than $100,000 for 2007; | ||
• | If the Term is extended through July 16, 2011, the annual salary and discretionary bonus shall not be less than the annual salary and discretionary bonus as of July 15, 2010; | ||
• | Mr. Yusko received $100,000 and 15,000 shares of restricted stock (2 year vesting) as a signing bonus; | ||
• | On July 16, 2007, Mr. Yusko received 50,000 shares of restricted stock and an option to purchase 75,000 shares of Common Stock of the Company; | ||
• | Terminable by the Company for cause at any time upon written notice; Terminable automatically upon Mr. Yusko’s death or loss of legal capacity; terminable by Mr. Yusko if a change of control occurs and Mr. Yusko is no longer the Company’s CFO or a material portion of his executive duties are withdrawn or significantly diminished. | ||
• | In the event of termination without cause, Mr. Yusko will receive his base salary for the remainder of the Term and any unvested portion of the equity compensation awarded to Mr. Yusko in July 2007 (i.e., 65,000 shares of restricted stock and 75,000 stock options) would vest immediately upon the effective date of termination. | ||
• | If Mr. Yusko is terminated for cause or upon death or loss of legal capacity, Mr. Yusko shall be entitled to his base salary through the date of termination and any entitlement under Company benefit plans and programs. | ||
• | Non-compete: If Mr. Yusko is terminated, regardless of cause, the Company may elect, in consideration for $200,000 payable in accordance with the Company’s normal payroll practices, that Mr. Yusko not engage in any Restricted Activity, directly or indirectly, for a period of six (6) months from and after the Term. |
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• | Term expires December 31, 2009; | ||
• | Annual salary of $350,000 (through July 15, 2007); $400,000 (effective July 16, 2007); $425,000 (2008) and $450,000 (2009); | ||
• | Retention bonus of $100,000, earned during the period from 1/1/06 to 12/31/08 (subject to repayment in the event of Mr. Hillman’s breach of the employment agreement); | ||
• | Discretionary annual bonus eligibility valued at up to $135,000 (2007) and $150,000 (2008), each in the sole and absolute discretion of the Board of Directors or its Compensation Committee or their designee (none specified for 2009); | ||
• | Management to recommend to the Compensation Committee an equity compensation grant equal to an option to purchase 85,000 shares of Common Stock of the Company (2006) and an option to purchase 75,000 shares of Common Stock of the Company (2007); | ||
• | In connection with his promotion to CAO and execution of the second amendment to his employment agreement, Mr. Hillman received 15,000 shares of restricted stock which will vest in equal one-half increments over a two-year period on July 10, 2008 and 2009; | ||
• | Terminable by the Company for cause at any time upon written notice; Terminable automatically upon Mr. Hillman’s death or loss of legal capacity; | ||
• | If Mr. Hillman continues to be employed by the Company after the Term, the agreement is terminable by either party upon 90 days’ written notice; | ||
• | In the event of termination without cause, Mr. Hillman will receive his base salary for the remainder of the Term and any earned but unpaid discretionary bonus. | ||
• | If Mr. Hillman is terminated for cause or upon death or loss of legal capacity, Mr. Hillman shall be entitled to his base salary through the date of termination and any entitlement under Company benefit plans and programs. | ||
• | Non-compete: If Mr. Hillman is terminated, he may not engage in any Restricted Activity, directly or indirectly, for a period of one year from and after the Term. |
• | Term expires April 1, 2009; | ||
• | Annual salary of $345,050 (2006); $370,050 (2007); $395,050 (2008) and $420,050 (2009); | ||
• | Retention bonus of $100,000, earned during the period from 1/1/06 to 4/1/09 (subject to repayment in the event of Mr. Gregrey’s breach of the employment agreement); | ||
• | Discretionary annual bonus eligibility valued at up to $250,000 in the sole and absolute discretion of the Board of Directors or its Compensation Committee or their designee, subject to a 10% annual increase at the discretion of management and the Board; | ||
• | Management to recommend to the Compensation Committee an equity compensation grant in 2006 equal to an option to purchase 20,000 shares of Common Stock of the Company and 15,000 shares of restricted stock (not specified for future years); | ||
• | If Mr. Gregrey continues to be employed by the Company after the Term, the agreement is terminable by either party upon 30 days’ written notice; | ||
• | In the event of termination without cause, Mr. Gregrey will receive his base salary for the remainder of the Term and any earned but unpaid discretionary bonus. | ||
• | Terminable by the Company for cause at any time upon written notice; Terminable automatically upon Mr. Gregrey’s death or loss of legal capacity; | ||
• | If Mr. Gregrey is terminated for cause or upon death or loss of legal capacity, Mr. Gregrey shall be entitled to his base salary through the date of termination and any entitlement under Company benefit plans and programs. | ||
• | Non-compete: If Mr. Gregrey is terminated, he may not engage in any Restricted Activity, directly or indirectly, for a period of six months from and after the Term. |
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• | Term expires June 30, 2009; | ||
• | Annual salary of $500,000 (effective July 1, 2006 for remainder of Term); | ||
• | Discretionary annual bonus target of $275,000 for 2006 and $350,000 for each calendar year thereafter in the sole and absolute discretion of the Chief Executive Officer, Board of Directors or its Compensation Committee; | ||
• | Management to recommend to the Committee an equity compensation grant equal to 75% of the CEO’s award of equity compensation; | ||
• | Terminable by Mr. Zaref for good reason (which requires 30 days advance notice); Terminable by the Company in the event of death, permanent and total disability or for cause; | ||
• | If Mr. Zaref is terminated for good reason or other than cause, Mr. Zaref will receive his base salary and bonus compensation for the remainder of the Term (bonus compensation forfeitable upon Mr. Zaref’s securing future employment or consulting work); in the case of a good reason termination only, Mr. Zaref will receive medical and dental coverage via COBRA for the Term or until he is eligible for coverage from a third party. In addition, Mr. Zaref is entitled to certain payments if sufficient notice of the Company’s decision not to extend/renew his employment agreement is not provided to Mr. Zaref as further described under “Other” below; | ||
• | CBS Radio reimbursed the Company for Mr. Zaref’s salary and bonus during his employment with the Company under the Management Agreement. |
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Name | Termination Scenario | Amount Payable | Equity Compensation (5) | |||||
Pattiz | Death/Disability (2) | $537,500 | — | |||||
For Cause | Accrued salary/benefits | — | ||||||
Without Cause | $583,333 | — | ||||||
Change in Control (3)(6) | $583,333 | $3,000 - Event of Change; | ||||||
$1,500 - Partial Event of Change; | ||||||||
$146,610 - Change in Control (January 08 award vests; outstanding equity vests upon termination)(6) | ||||||||
Yusko | For Cause; Not Good Reason; | |||||||
Death/Disability | Accrued salary/benefits | — | ||||||
Without Cause | $989,583 | $129,350 (July 07 award vests) | ||||||
Change in Control (4)(6) | $989,583 | $129,350 (July 07 award vests) | ||||||
Hillman | For Cause; Not Good Reason; | |||||||
Death/Disability | Accrued salary/benefits | — | ||||||
Without Cause | $875,000 | — | ||||||
Change in Control (6) | n/a | $96,280 | ||||||
Gregrey | For Cause; Not Good Reason; | |||||||
Death/Disability | Accrued salary/benefits | — | ||||||
Without Cause | $500,062 | — | ||||||
Change in Control (6) | n/a | $75,284 |
(1) | As Mr. Beusse was not a NEO on December 31, 2007, he is not included in the table above. | |
(2) | Only Mr. Pattiz (or his estate) receives a severance payment in excess of accrued salary/benefits in the event of death or disability. | |
(3) | Mr. Pattiz’s agreement also refers to an event of change and partial event of change in which case certain additional provisions apply. The definition of change in control used in Mr. Pattiz’s agreement is listed below. The foregoing table lists amounts that would be payable on December 31, 2007. For purposes hereof, we have assumed the options granted to Mr. Pattiz on 1/8/08 were granted on 12/31/07 and that he is terminated within 24 months of a change in control. | |
(4) | Requires that in connection therewith, Mr. Yusko is no longer the Company’s CFO or a material portion of his executive duties are withdrawn or significantly diminished. | |
(5) | The values ascribed to equity compensation awards and listed in the table above as well as in the paragraphs below relating to payments to NEOs upon different termination events are values from the executive’s perspective, that is to say, stock options only have value if the Company’s stock price increases after the date the stock options are granted, and such value is measured by the increase in the stock price. This is different from the values listed in the compensation tables above (i.e., Summary Compensation Table, Grants of Plan-Based Awards in 2007, Outstanding Equity Awards at 2007 Fiscal Year-End, Options Exercised and Stock Vested) which represent amounts expensed by the Company in accordance with 123R as discussed in the footnotes to such tables. | |
(6) | As described elsewhere in this report, pursuant to the terms of the 2005 Plan, the equity compensation of any employee (including NEOs) terminated within 24 months of a change in control will vest immediately upon his/her termination. Except in the case of Mr. Pattiz, all amounts set forth above are payable only upon a change in control if the NEO is terminated within 24 months of such event. In the case of Mr. Pattiz, his 2008 stock option vests upon a change in control (value = $90,000). |
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• | Mr. Pattiz: In the event of permanent and total disability (including death), Mr. Pattiz (or his estate) will receive his base salary for the following twelve months and 75% of his base salary for the remainder of the term of the agreement. He will continue to receive Company benefits, he will be entitled to exercise his equity compensation as described elsewhere in this report. Assuming Mr. Pattiz had become disabled on December 31, 2007, Mr. Pattiz would be entitled to: (i) 100% of his 2008 base salary, or $400,000, and (ii) 75% of his 2009 base salary through the end of the term (June 15, 2009), or $137,500, for an aggregate payment of $537,500 payable in accordance with the Company’s normal payroll practices. | ||
• | Messrs. Yusko, Hillman and Gregrey. In the event of their death or disability, each of Messrs. Yusko, Hillman and Gregrey (or their estates in the case of death) are entitled to any accrued and unpaid salary and any then entitlement under employee benefit plans and stock options, subject to reduction for any disability payments made under the Company’s policies. |
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• | Mr. Pattiz: no provision regarding termination without cause is included in Mr. Pattiz’s employment agreement, however, the Company estimates the amount payable in such event would be base salary through June 15, 2009 in the aggregate amount of $583,333 payable in accordance with the Company’s normal payroll practices; | ||
• | Mr. Yusko: $989,583 (his base salary through July 15, 2010, the end of the stated Term) payable in accordance with the Company’s normal payroll practices and any unvested portion of the equity compensation awarded to Mr. Yusko in July 2007 (i.e., 65,000 shares of restricted stock and 75,000 stock options) would vest immediately upon the effective date of termination. Assuming a termination without cause occurred on December 31, 2007 (the last business day of the year), the value of the equity compensation payable to Mr. Yusko would be $129,350 (based on a per share closing stock price on the NYSE for the Company’s Common Stock of $1.99 on December 31, 2007). | ||
• | Mr. Hillman: $875,000 (base salary through December 31, 2009, the end of the Term) payable in accordance with the Company’s normal payroll practices; | ||
• | Mr. Gregrey: $500,062 (base salary through April 1, 2009, the end of the Term) payable in accordance with the Company’s normal payroll practices; and | ||
• | Mr. Kosann: $650,000 (base salary through December 31, 2008, the end of the Term) payable in accordance with the regular payroll practices of CBS Radio, so long as Mr. Kosann is ready, willing and able to render exclusive services under his employment agreement during such period. |
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Change in | ||||||||||||||||||||||||||||
Pension value | ||||||||||||||||||||||||||||
Fees | and | |||||||||||||||||||||||||||
Earned or | Option | Non-Equity | Nonqualified | |||||||||||||||||||||||||
Paid in | Stock | Awards | Incentive Plan | Deferred | All Other | |||||||||||||||||||||||
Cash | Awards | ($) | Compensation | Compensation | Compensation | Total | ||||||||||||||||||||||
Name | ($) | ($) | (d) | ($) | Earnings | ($) | ($) | |||||||||||||||||||||
(a) | (b) | (c) (6) | (6)(7) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
Current directors: | ||||||||||||||||||||||||||||
Beusse (1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Carnesale | $ | 66,250 | $ | 101,503 | — | — | — | — | $ | 167,753 | ||||||||||||||||||
Dennis | $ | 163,750 | $ | 50,313 | $ | 53,458 | — | — | — | $ | 267,521 | |||||||||||||||||
Greenberg | $ | 109,375 | $ | 101,960 | $ | 53,458 | — | — | — | $ | 264,793 | |||||||||||||||||
Little | $ | 153,750 | $ | 99,792 | — | — | — | — | $ | 253,542 | ||||||||||||||||||
Ming | $ | 135,000 | $ | 66,563 | — | — | — | — | $ | 201,563 | ||||||||||||||||||
Pattiz (3) | — | — | — | — | — | — | — | |||||||||||||||||||||
Smith | $ | 74,375 | $ | 221,561 | (8) | $ | 53,458 | — | — | — | $ | 349,394 | ||||||||||||||||
Former directors:(4) | ||||||||||||||||||||||||||||
Berger (2) | — | — | — | — | — | — | — | |||||||||||||||||||||
Lerman (2) | — | — | — | — | — | — | — | |||||||||||||||||||||
Former directors and executive officers:(4)(5) | ||||||||||||||||||||||||||||
Hollander (2) | — | — | — | — | — | — | — | |||||||||||||||||||||
Kosann (3) | — | — | — | — | — | — | — |
(1) | Mr. Beusse became a director on January 8, 2008 in connection with his appointment as President and CEO. Mr. Beusse will not receive compensation in addition to that specified in his employment agreement for acting as a director. |
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(2) | As reflected above, as employees of CBS Radio and/or its affiliates, Messrs. Berger and Hollander elected not to receive equity compensation for their services as directors in 2007. Additionally, Mr. Berger and Mr. Hollander elected not to receive cash compensation for their services as directors in 2007. Mr. Lerman received only cash compensation, not equity compensation, for his services as director in 2007. | |
(3) | As employees of the Company, Mr. Kosann did not, and Mr. Pattiz does not, receive compensation in addition to that specified in their employment agreements for acting as directors. Please refer to the summary compensation table above for a description of such individuals’ compensation as employees. | |
(4) | Mr. Lerman resigned from the Board on January 30, 2007, Mr. Hollander on March 30, 2007, Mr. Kosann on January 8, 2008 and Mr. Berger on March 3, 2008. | |
(5) | Each of Messrs. Hollander and Kosann served as executive officers and directors of the Company. | |
(6) | The value of stock awards and option awards reported in columns (c) and (d) above is based on the estimated fair value of the underlying instrument in accordance with FAS 123R, and is recognized over the related vesting period. In the case of restricted stock and restricted stock units, estimated fair value is calculated as the fair market value of the shares on the date of grant. The estimated fair value of options is measured on the date of grant using the Black-Scholes option pricing model. For a more detailed discussion of the assumptions used by the Company in estimating fair value, refer to Note 9 (Equity-Based Compensation) of the Notes to the Consolidated Financial Statements. All stock awards and option awards reported in the table above were issued under the terms of the 2005 Plan and are subject to three-year vesting periods (subject to immediate vesting upon a participant’s termination within the 24-month period following a change in control as described elsewhere in this report). Because the Company’s 2007 annual meeting of shareholders was delayed, the non-employee directors received their annual grant of $100,000 in value of RSUs on July 12, 2007, instead of May 2007. No director elected to defer the receipt of his RSUs granted in July 2007. | |
(7) | As depicted in the chart of the Company’s stock price in the Company’s Form 10-K filed with the SEC, the Company’s stock price has declined significantly in recent years. The value of the option awards reported in column (d) above includes stock options granted in earlier years at much higher stock prices, which is reflected in the expense accrual for such options made in 2007 in accordance with FAS 123R. | |
(8) | The amount set forth for Mr. Smith is significantly greater than that of the other directors because Mr. Smith, age 80, is at an age at which he could retire from the Board. |
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Aggregate Number of Shares Beneficially Owned (1) | ||||||||||||||||
Common Stock | Class B Stock | |||||||||||||||
Name and Address of Beneficial Owner (2) | Number | Percent | Number | Percent | ||||||||||||
CBS Radio Network Inc., a subsidiary of | 16,000,000 | (3) | 15.8 | % | — | — | ||||||||||
CBS Radio Inc. 1515 Broadway New York, NY 10036 | ||||||||||||||||
Gores Radio Holdings, LLC | 14,285,714 | (4) | 14.1 | % | ||||||||||||
10877 Wilshire Boulevard 18th Floor Los Angeles, CA 90024 | ||||||||||||||||
FMR LLC | 5,203,777 | (5) | 5.1 | % | — | — | ||||||||||
82 Devonshire Street Boston, MA 02109 | ||||||||||||||||
Hotchkis and Wiley Capital Management, LLC | 8,659,848 | (6) | 8.5 | % | — | — | ||||||||||
725 S. Figueroa Street, 39th Floor Los Angeles, CA 90017 | ||||||||||||||||
Morgan Stanley & Co. Incorporated | 5,546,632 | (7) | 5.5 | % | — | — | ||||||||||
1585 Broadway New York, NY 10036 | ||||||||||||||||
Barclays Global Investors, N.A. | 5,337,771 | (8) | 5.3 | % | ||||||||||||
45 Fremont Street San Francisco, CA 94105 |
(1) | The persons in the table have sole voting and investment power with respects to all shares of Common Stock and Class B stock, unless otherwise indicated. | |
(2) | Tabular information for such entities is based on information contained in the most recent Schedule 13D/13G filings made available to the Company. | |
(3) | These securities are owned by CBS Radio Network Inc., a wholly-owned subsidiary of CBS Radio Media Corporation, which in turn is a wholly-owned subsidiary of CBS Radio Inc. (“CBS”), which in turn is a wholly-owned subsidiary of CBS Broadcasting, Inc. which in turn is a wholly-owned subsidiary of Westinghouse CBS Holding Company, Inc., which in turn is a wholly-owned subsidiary of CBS Corporation, but may also be deemed to be beneficially owned by: (a) NAIRI, Inc. (“NAIRI”), which owns approximately 76.4% of CBS Corporation’s voting stock, (b) NAIRI’s parent corporation, National Amusements, Inc. (“NAI”), and (c) Sumner M. Redstone, who is the controlling shareholder of NAI. As of March 3, 2008, CBS Radio Network Inc. has shared voting power and shared dispositive power with respect to 16,000,000 shares. Warrants previously held by CBS Radio were cancelled effective March 3, 2008 in connection with the closing of the CBS transactions. | |
(4) | Gores Radio Holdings, LLC (“Gores Radio”) is managed by The Gores Group, LLC. Gores Capital Partners II, L.P. and Gores Co-Invest Partnership II, L.P. (collectively, the “Gores Funds”) are members of Gores Radio. Each of the members of Gores Radio has the right to receive dividends from, or proceeds from, the sale of investments by Gores Radio, including the shares of Common Stock, in accordance with their membership interests in Gores Radio. Gores Capital Advisors II, LLC (“Gores Advisors”) is the general partner of the Gores Funds. Alec E. Gores is the managing member of The Gores Group, LLC. Each of the members of Gores Advisors (including The Gores Group, LLC and its members) has the right to receive dividends from, or proceeds from, the sale of investments by the Gores Entities, including the shares of Common Stock, in accordance with their membership interests in Gores Advisors. Under applicable law, certain of these individuals and their respective spouses may be deemed to be beneficial owners having indirect ownership of the securities owned of record by Gores Radio by virtue of such status. |
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(5) | Of these shares, 5,053,774 are owned by Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC, through one investment company, Fidelity Low Priced Stock Fund. As of December 31, 2007, each of Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, has sole voting power with respect to 0 shares and sole dispositive power with respect to 5,053,774 shares. The remaining 150,003 of these shares are owned by Pyramis Global Advisors, LLC (“PGALLC”), an indirect wholly-owned subsidiary of FMR LLC. As of December 31, 2007, each of Edward C. Johnson 3d and FMR LLC, through its control of PGALLC, has sole voting power with respect to 150,003 shares and sole dispositive power with respect to 150,003 shares. | |
(6) | As of December 31, 2007, Hotchkis and Wiley Capital Management, LLC has sole voting power with respect to 5,216,048 shares and sole dispositive power with respect to 8,659,848 shares. | |
(7) | As of December 31, 2007, Morgan Stanley & Co. Incorporated has sole voting power with respect to 5,546,632 shares and sole dispositive power with respect to 5,546,632 shares. Such securities are beneficially owned by certain operating units of Morgan Stanley and its subsidiaries and affiliates. | |
(8) | Of these shares, 4,338,348 are owned by Barclays Global Investors, N.A. As of December 31, 2007, Barclays Global Investors, N.A. has sole voting power with respect to 4,036,101 shares and sole dispositive power with respect to 4,338,348 shares. The remaining 999,423 of these shares are owned by Barclays Global Fund Advisors, LLC. As of December 31, 2007, Barclays Global Fund Advisors, LLC has sole voting power with respect to 999,423 shares and sole dispositive power with respect to 999,423 shares. |
Aggregate Number of Shares Beneficially Owned (1) | ||||||||||||||||
Common Stock | Class B Stock | |||||||||||||||
Number | Percent | Number | Percent | |||||||||||||
Name of Beneficial Owner | ||||||||||||||||
NAMED EXECUTIVE OFFICERS: | ||||||||||||||||
Norman J. Pattiz (2) | 1,098,127 | * | 291,710 | 99.9 | % | |||||||||||
Thomas Beusse (10) | — | * | — | — | ||||||||||||
Peter Kosann (3) | 464,783 | * | — | — | ||||||||||||
Andrew Zaref (4)(10) | 13,203 | * | — | |||||||||||||
Gary J. Yusko (10)(11) | 65,000 | * | — | |||||||||||||
David Hillman (5) | 143,237 | * | — | |||||||||||||
Paul Gregrey (6) | 237,954 | * | — | |||||||||||||
DIRECTORS AND NOMINEES: (7) | ||||||||||||||||
Albert Carnesale (8) | 7,749 | * | — | — | ||||||||||||
David L. Dennis (9) | 169,959 | * | — | — | ||||||||||||
Gerald Greenberg (9) | 54,000 | * | — | — | ||||||||||||
Grant F. Little, III (8) | 16,783 | * | — | — | ||||||||||||
H. Melvin Ming (8) | 6,682 | * | — | — | ||||||||||||
Joseph B. Smith (9) | 86,749 | * | — | — | ||||||||||||
All Current Directors and Executive Officers as a Group (13 persons) | 2,364,226 | 2.3 | % | 291,710 | 99.9 | % |
* | Represents less than 1% of the Company’s outstanding shares of Common Stock. |
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(1) | The persons in the table have sole voting and investment power with respects to all shares of Common Stock and Class B stock, unless otherwise indicated. The numbers presented above do not include unvested and/or deferred RSUs which have no voting rights until shares are distributed in accordance with their terms. All dividend equivalents on vested RSUs and shares of restricted stock (both vested and unvested) are included in the numbers reported above. | |
(2) | Includes vested and unexercised stock options for 445,333 shares granted under the Company 1989 Stock Incentive Plan (the “1989 Plan”), the Company 1999 Stock Incentive Plan (the “1999 Plan”) and the Company 2005 Equity Compensation Plan (the “2005 Plan”). Includes 2,794 vested RSUs (including dividend equivalents) granted under the 2005 Plan. Also includes 450,000 Common Stock shares pledged by Mr. Pattiz to Merrill, Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) in connection with a prepaid variable forward contract (the “Merrill Contract”) Mr. Pattiz entered into on September 27, 2004 with Merrill Lynch. Under the Merrill Contract, in exchange for a lump-sum cash payment of $7,182,000, Mr. Pattiz agreed to deliver upon the earlier of September 2009 or the termination of the Merrill Contract, a pre-determined number of shares of Company Common Stock pursuant to formulas set forth in the Merrill Contract. Mr. Pattiz may also settle the amount in cash. When Mr. Pattiz entered into the Merrill Contract in September 2004, he converted 411,670 of his shares of Class B stock into Common Stock and pledged the aforementioned 450,000 shares of Company Common Stock. Also includes 200,000 shares of Company common stock held indirectly by the Pattiz Family Trust. Because each share of Class B stock has 50 votes, as opposed to one vote for each share of Common Stock, Mr. Pattiz’s stock holdings represent 15.5% of the total voting power of the Company (taking into account the aggregate number of shares of Common Stock issued to Gores at the First Closing). | |
(3) | Includes 419,000 vested and unexercised options granted under the 1999 Plan and 2005 Plan. Includes 24,889 vested RSUs and 20,894 shares of vested restricted stock (including dividend equivalents) granted under the 2005 Plan. Mr. Kosann forfeited his vested and unexercised options and certain of his unvested RSUs and shares of restricted stock in connection with the termination of his employment. | |
(4) | Includes 6,491 vested RSUs (including dividend equivalents) and 6,373 shares of restricted stock (vested and unvested, including dividend equivalents) granted under the 2005 Plan. Includes 339 shares of Common Stock held in the Company 401(k) account. Mr. Zaref forfeited his vested and unexercised options and his unvested RSUs and shares of restricted stock in connection with the termination of his employment as of July 12, 2007. | |
(5) | Includes 94,383 vested and unexercised options granted under the 1999 Plan and 2005 Plan and 48,341 shares of restricted stock (vested and unvested, including dividend equivalents) granted under the 2005 Plan. Includes 513 shares of Common Stock held in the Company 401(k) account. | |
(6) | Includes 186,200 vested and unexercised options granted under the 1999 Plan and 2005 Plan and 50,833 shares of restricted stock (vested and unvested, including dividend equivalents) granted under the 2005 Plan. Includes 921 shares of Common Stock held in the Company 401(k) account. | |
(7) | Does not include Norman J. Pattiz, Thomas Beusse and Peter Kosann, who are also named executive officers and listed with the other named executive officers. | |
(8) | Represents vested RSUs granted under the 2005 Plan. Does not include deferred and/or unvested RSUs which have no voting rights until shares are distributed in accordance with their terms. | |
(9) | Represents 113,000 (Dennis), 54,000 (Greenberg) and 79,000 (Smith) vested and unexercised stock options granted under the 1989 Plan, the 1999 Plan and/or the 2005 Plan. Includes 7,749 vested RSUs (including dividend equivalents) granted under the 2005 Plan for each of Messrs. Dennis and Smith. Does not include deferred and/or unvested RSUs which have no voting rights until shares are distributed in accordance with their terms. | |
(10) | As noted elsewhere in this report, Mr. Zaref’s employment with the Company was terminated on July 12, 2007 and Mr. Yusko became the Company’s CFO on July 16, 2007. Mr. Kosann’s employment was terminated on January 8, 2008 and Mr. Beusse became the Company’s CEO on January 8, 2008. | |
(11) | Includes 65,000 shares of restricted stock (vested and unvested, including dividend equivalents) granted under the 2005 Plan. |
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(in thousands) | 2007 | 2006 | ||||||
(1) Audit Fees | $ | 1,317 | $ | 1,000 | ||||
(2) Audit-Related Fees | — | — | ||||||
(3) Tax Fees | — | — | ||||||
(4) All Other Fees | — | — |
Gerald Greenberg
H. Melvin Ming
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1,2. | Financial statements and schedules to be filed hereunder are indexed on page F-1 hereof. | ||
3. | Exhibits |
EXHIBIT | ||
NUMBER (A) | DESCRIPTION | |
3.1 | Restated Certificate of Incorporation, as filed on October 25, 2002. (14) | |
3.2 | Bylaws of Registrant as currently in effect. (6) | |
4.1 | Note Purchase Agreement, dated as of December 3, 2002, between Registrant and the noteholders parties thereto. (15) | |
4.1.1 | First Amendment, dated as of February 28, 2008, to Note Purchase Agreement, dated as of December 3, 2002, by and between Registrant and the noteholders parties thereto. (34) | |
10.1 | Employment Agreement, dated April 29, 1998, between Registrant and Norman J. Pattiz. (8) * | |
10.2 | Amendment to Employment Agreement, dated October 27, 2003, between Registrant and Norman J. Pattiz. (16) * | |
10.2.1 | Amendment No. 2 to Employment Agreement, dated November 28, 2005, between Registrant and Norman J. Pattiz (7) * | |
10.2.2 | Amendment No. 3, effective January 8, 2008, to the employment agreement by and between Registrant and Norman Pattiz (30)* | |
10.3 | Form of Indemnification Agreement between Registrant and its directors and executive officers. (1) | |
10.4 | Credit Agreement, dated March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank as Administrative Agent. (16) | |
10.4.1 | Amendment No. 1, dated as of October 31, 2006, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (23) | |
10.4.2 | Amendment No. 2, dated as of January 11, 2008, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (26) | |
10.4.3 | Amendment No. 3, dated as of February 25, 2008, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (13) | |
10.5 | Purchase Agreement, dated as of August 24, 1987, between Registrant and National Broadcasting Company, Inc. (2) | |
10.6 | Agreement and Plan of Merger among Registrant, Copter Acquisition Corp. and Metro Networks, Inc. dated June 1, 1999 (9) | |
10.7 | Amendment No. 1 to the Agreement and Plan Merger, dated as of August 20, 1999, by and among Registrant, Copter Acquisition Corp. and Metro Networks, Inc. (10) | |
10.8 | Employment Agreement, effective May 1, 2003, between Registrant and Paul Gregrey, as amended by Amendment 1 to Employment Agreement, effective January 1, 2006. (35) * | |
10.8.1 | Amendment No. 2 to Employment Agreement, dated May 4, 2007, between Registrant and Paul Gregrey (27)* | |
10.9 | Employment Agreement, effective October 16, 2004, between Registrant and David Hillman, as amended by Amendment No. 1 to Employment Agreement, effective January 1, 2006. (28)* | |
10.9.1 | Amendment No. 2 to the Employment Agreement, effective July 10, 2007, between Registrant and David Hillman. (29)* | |
10.10 | Registrant Amended 1999 Stock Incentive Plan. (22) * | |
10.11 | Amendment to Registrant Amended 1999 Stock Incentive Plan, effective May 25, 2005 (19) * | |
10.12 | Registrant 1989 Stock Incentive Plan. (3) * | |
10.13 | Amendments to Registrant’s Amended 1989 Stock Incentive Plan. (4) (5) * |
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EXHIBIT | ||
NUMBER (A) | DESCRIPTION | |
10.14 | Leases, dated August 9, 1999, between Lefrak SBN LP and Westwood One Radio Networks, Inc. and between Infinity and Westwood One Radio Networks, Inc. relating to New York, New York offices. (11) | |
10.15 | Form of Stock Option Agreement under Registrant’s Amended 1999 Stock Incentive Plan. (17) * | |
10.16 | Employment Agreement, effective January 1, 2004, between Registrant and Andrew Zaref. (18) * | |
10.16.1 | Amendment No. 1 to Employment Agreement, dated as of June 30, 2006, between Registrant and Andrew Zaref (24) * | |
10.17 | Registrant 2005 Equity Compensation Plan (19) * | |
10.18 | Form Amended and Restated Restricted Stock Unit Agreement under Registrant 2005 Equity Compensation Plan for outside directors (20) * | |
10.19 | Form Stock Option Agreement under Registrant 2005 Equity Compensation Plan for directors. (21) * | |
10.20 | Form Stock Option Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (21) * | |
10.21 | Form Restricted Stock Unit Agreement under Registrant 2005 Equity Compensation Plan for non- director participants. (20)* | |
10.22 | Form Restricted Stock Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (20) * | |
10.23 | Employment Agreement, effective as of July 16, 2007, by and between Registrant and Gary Yusko. (29)* | |
10.24 | Master Agreement, dated as of October 2, 2007, by and between Registrant and CBS Radio Inc. (31) | |
10.25 | Employment Agreement, effective as of January 8, 2008, by and between Registrant and Thomas F.X. Beusse. (30)* | |
10.26 | Consent Agreement, dated as of January 8, 2008, made by and among CBS Radio Inc., Registrant, and Thomas F.X. Beusse. (30)* | |
10.27 | Stand-Alone Stock Option Agreement, dated as of January 8, 2008, by and between Registrant and Thomas F.X. Beusse. (30)* | |
10.28 | Letter Agreement, dated February 25, 2008, by and between Registrant and Norman J. Pattiz (32)* | |
10.29 | Purchase Agreement, dated February 25, 2008, between Registrant and Gores Radio Holdings, LLC. (32) | |
10.30 | Registration Rights Agreement, dated March 3, 2008, between Registrant and Gores Radio Holdings, LLC. (33) | |
10.31 | Intercreditor and Collateral Trust Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, the financial institutions that hold the Notes and The Bank of New York, as Collateral Trustee (34) | |
10.32 | Shared Security Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York, as Collateral Trustee (34) | |
10.33 | Shared Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of February 28, 2008, by Registrant, to First American Title Insurance Company, as Trustee, for the benefit of The Bank of New York, as Beneficiary (34) | |
10.34 | Mutual General Release and Covenant Not to Sue, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |
10.35 | Amended and Restated News Programming Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |
10.36 | Amended and Restated Technical Services Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |
10.37 | Amended and Restated Trademark License Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |
10.38 | Amended and Restated Registration Rights Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |
10.39 | Lease for 524 W. 57th Street, dated as of March 3, 2008, by and between Registrant and CBS Broadcasting Inc. (33) | |
10.40 | Form Westwood One Affiliation Agreement, dated February 29, 2008, between Westwood One, Inc. on its behalf and on behalf of its affiliate, Westwood One Radio Networks, Inc. and CBS Radio Inc., on its behalf and on behalf of certain CBS Radio stations (33) | |
10.41 | Form Metro Affiliation Agreement, dated as of February 29, 2008, by and between Metro Networks Communications, Limited Partnership, and CBS Radio Inc., on its behalf and on behalf of certain CBS Radio stations (33) |
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EXHIBIT | ||
NUMBER (A) | DESCRIPTION | |
21 | List of Subsidiaries. + | |
23 | Consent of Independent Registered Public Accounting Firm. + | |
31.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. + | |
31.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. + | |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. *** | |
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. *** |
* | Indicates a management contract or compensatory plan | |
+ | Filed herewith. | |
*** | Furnished herewith. | |
(A) | The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. | |
(1) | Filed as part of Registrant’s September 25, 1986 proxy statement and incorporated herein by reference. | |
(2) | Filed an exhibit to Registrant’s current report on Form 8-K dated September 4, 1987 and incorporated herein by reference. | |
(3) | Filed as part of Registrant’s March 27, 1992 proxy statement and incorporated herein by reference. | |
(4) | Filed as an exhibit to Registrant’s July 20, 1994 proxy statement and incorporated herein by reference. | |
(5) | Filed as an exhibit to Registrant’s April 29, 1996 proxy statement and incorporated herein by reference. | |
(6) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference. | |
(7) | Filed as an exhibit to Registrant’s current report on Form 8-K dated November 28, 2005 and incorporated herein by reference. | |
(8) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference. | |
(9) | Filed as an exhibit to Registrant’s current report on Form 8-K dated June 4, 1999 and incorporated herein by reference. | |
(10) | Filed as an exhibit to Registrant’s current report on Form 8-K dated October 1, 1999 and incorporated herein by reference. | |
(11) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference. | |
(12) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference. | |
(13) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 25, 2008 (filed on February 29, 2008) and incorporated herein by reference. | |
(14) | Filed as an exhibit to Registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2002 and incorporated herein by reference. | |
(15) | Filed as an exhibit to Registrant’s current report on Form 8-K dated December 4, 2002 and incorporated herein by reference. | |
(16) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2003 and incorporated herein by reference. | |
(17) | Filed as an exhibit to Registrant’s current report on Form 8-K dated October 12, 2004 and incorporated herein by reference. | |
(18) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2004 and incorporated herein by reference. | |
(19) | Filed as an exhibit to Company’s current report on Form 8-K, dated May 25, 2005 and incorporated herein by reference. | |
(20) | Filed as an exhibit to Company’s current report of Form 8-K dated March 17, 2006 and incorporated herein by reference. | |
(21) | Filed as an exhibit to Registrant’s current report on Form 8-K dated December 5, 2005 and incorporated herein by reference. | |
(22) | Filed as an exhibit to Registrant’s April 30, 1999 proxy statement and incorporated herein by reference. | |
(23) | Filed as an exhibit to Registrant’s current report on Form 8-K dated November 6, 2006 and incorporated herein by reference. | |
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(24) | Filed as an exhibit to Registrant’s current report on Form 8-K dated June 30, 2006 and incorporated herein by reference. | |
(25) | Filed as an exhibit to Registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2006 and incorporated herein by reference. | |
(26) | Filed as an exhibit to Registrant’s current report on Form 8-K dated January 11, 2008 and incorporated herein by reference. | |
(27) | Filed as an exhibit to Registrant’s current report on Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by reference. | |
(28) | Filed as an exhibit to Registrant’s annual report on Form 10-K/A for the year ended December 31, 2006 and incorporated herein by reference. | |
(29) | Filed as an exhibit to Company’s current report on Form 8-K dated July 10, 2007 and incorporated herein by reference. | |
(30) | Filed as an exhibit to Company’s current report on Form 8-K dated January 8, 2008 and incorporated herein by reference. | |
(31) | Filed as an exhibit to Company’s current report on Form 8-K dated October 2, 2007 and incorporated herein by reference. | |
(32) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 25, 2008 (filed on February 27, 2008) and incorporated herein by reference. | |
(33) | Filed as an exhibit to Registrant’s current report on Form 8-K dated March 3, 2008 and incorporated herein by reference. | |
(34) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 28, 2008 and incorporated herein by reference. | |
(35) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2005 and incorporated herein by reference. | |
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WESTWOOD ONE, INC. | ||||
Date: April 29, 2008 | By: | /S/ GARY J. YUSKO | ||
Gary J. Yusko | ||||
Chief Financial Officer | ||||
Signature | Title | Date | ||
/S/ THOMAS F.X. BEUSSE | Director, President and Chief Executive Officer (Principal Executive Officer) | April 29, 2008 | ||
/S/ GARY J. YUSKO | Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer) | April 29, 2008 | ||
/S/ NORMAN J. PATTIZ | Chairman of the Board of Directors | April 29, 2008 | ||
/S/ ALBERT CARNESALE | Director | April 29, 2008 | ||
/S/ DAVID L. DENNIS | Director | April 29, 2008 | ||
/S/ GERALD GREENBERG | Director | April 29, 2008 | ||
/S/ GRANT F. LITTLE, III | Director | April 29, 2008 | ||
/S/ H MELVIN MING | Director | April 29, 2008 | ||
/S/ JOSEPH B. SMITH | Director | April 29, 2008 |
- 79 -
Table of Contents
AND FINANCIAL STATEMENT SCHEDULE
Page | ||||
1. Consolidated Financial Statements | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
2. Financial Statement Schedule: | ||||
F-28 | ||||
F-1
Table of Contents
New York, New York
March 14, 2008
F-2
Table of Contents
(In thousands, except per share amounts)
December 31 | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 6,187 | $ | 11,528 | ||||
Accounts receivable, net of allowance for doubtful accounts of $3,602 (2007) and $4,387 (2006) | 108,271 | 115,505 | ||||||
Warrants, current portion | 9,706 | 9,706 | ||||||
Prepaid and other assets | 13,990 | 12,483 | ||||||
Total Current Assets | 138,154 | 149,222 | ||||||
PROPERTY AND EQUIPMENT, NET | 33,012 | 37,353 | ||||||
GOODWILL | 464,114 | 464,114 | ||||||
INTANGIBLE ASSETS, NET | 3,443 | 4,225 | ||||||
OTHER ASSETS | 31,034 | 41,787 | ||||||
TOTAL ASSETS | $ | 669,757 | $ | 696,701 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 17,378 | $ | 35,425 | ||||
Amounts payable to related parties | 30,859 | 26,344 | ||||||
Deferred revenue | 5,815 | 8,150 | ||||||
Income taxes payable | 7,246 | 6,149 | ||||||
Accrued expenses and other liabilities | 29,562 | 43,841 | ||||||
Total Current Liabilities | 90,860 | 119,909 | ||||||
LONG-TERM DEBT | 345,244 | 366,860 | ||||||
OTHER LIABILITIES | 6,022 | 7,001 | ||||||
TOTAL LIABILITIES | 442,126 | 493,770 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred stock: authorized 10,000 shares, none outstanding | — | — | ||||||
Common stock, $.01 par value: authorized, 300,000 shares; issued and outstanding, 87,105 (2007) and 86,311 (2006) | 872 | 860 | ||||||
Class B stock, $.01 par value: authorized, 3,000 shares; issued and outstanding, 292 (2007 and 2006) | 3 | 3 | ||||||
Additional paid-in capital | 290,786 | 291,851 | ||||||
Unrealized gain on available for sale securities | 5,955 | 4,570 | ||||||
Accumulated deficit | (69,985 | ) | (94,353 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 227,631 | 202,931 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 669,757 | $ | 696,701 | ||||
F-3
Table of Contents
(In thousands, except per share amounts)
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
NET REVENUE | $ | 451,384 | $ | 512,085 | $ | 557,830 | ||||||
Operating Costs (includes related party expenses of $66,633, $75,514 and $78,388, respectively) | 350,440 | 395,196 | 378,998 | |||||||||
Depreciation and Amortization (includes related party warrant amortization of $9,706, $9,706 and $9,706, respectively) | 19,840 | 20,756 | 20,826 | |||||||||
Goodwill Impairment | — | 515,916 | — | |||||||||
Corporate General and Administrative Expenses (includes related party expenses of $3,394, $3,273 and $2,853, respectively) | 13,171 | 14,618 | 14,028 | |||||||||
Special Charges | 4,626 | 1,579 | — | |||||||||
388,077 | 948,065 | 413,852 | ||||||||||
OPERATING (LOSS) INCOME | 63,307 | (435,980 | ) | 143,978 | ||||||||
Interest Expense | 23,626 | 25,590 | 18,315 | |||||||||
Other Income | (411 | ) | (926 | ) | (1,440 | ) | ||||||
(LOSS) INCOME BEFORE INCOME TAXES | 40,092 | (460,644 | ) | 127,103 | ||||||||
INCOME TAXES | 15,724 | 8,809 | 49,217 | |||||||||
NET (LOSS) INCOME | $ | 24,368 | $ | (469,453 | ) | $ | 77,886 | |||||
EARNINGS (LOSS) PER SHARE: | ||||||||||||
COMMON STOCK | ||||||||||||
BASIC | $ | 0.28 | $ | (5.46 | ) | $ | 0.86 | |||||
DILUTED | $ | 0.28 | $ | (5.46 | ) | $ | 0.85 | |||||
CLASS B STOCK | ||||||||||||
BASIC | $ | 0.02 | $ | 0.26 | $ | 0.24 | ||||||
DILUTED | $ | 0.02 | $ | 0.26 | $ | 0.24 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||||
COMMON STOCK | ||||||||||||
BASIC | 86,112 | 86,013 | 90,714 | |||||||||
DILUTED | 86,426 | 86,013 | 91,519 | |||||||||
CLASS B STOCK | ||||||||||||
BASIC | 292 | 292 | 292 | |||||||||
DILUTED | 292 | 292 | 292 | |||||||||
F-4
Table of Contents
(In thousands)
Unrealized | ||||||||||||||||||||||||||||||||||||||||||||
Additional | Gain on | Total | Other | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Class B Stock | Paid-in | Retained | Available for | Treasury Stock | Shareholders’ | Comprehensive | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Sale Securities | Shares | Amount | Equity | Income Loss | ||||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2004 (restated) | 94,354 | $ | 944 | 292 | $ | 3 | $ | 447,876 | $ | 351,886 | $ | — | $ | — | $ | — | $ | 800,709 | $ | — | ||||||||||||||||||||||||
Net income for 2005 | — | — | — | — | — | 77,886 | — | — | — | 77,886 | 77,886 | |||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 11,686 | — | — | — | — | 11,686 | — | |||||||||||||||||||||||||||||||||
Issuance of common stock under equity based compensation plans | 335 | 3 | — | — | 1,371 | — | — | — | — | 1,374 | — | |||||||||||||||||||||||||||||||||
Excess windfall (shortfall) benefits on stock option exercises | — | — | — | — | 861 | — | — | — | — | 861 | — | |||||||||||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (851 | ) | — | — | — | — | (851 | ) | — | |||||||||||||||||||||||||||||||
Cash dividend paid | — | — | — | — | — | (27,032 | ) | — | — | — | (27,032 | ) | — | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | (8,015 | ) | (160,604 | ) | (160,604 | ) | — | ||||||||||||||||||||||||||||||
Retirement of treasury stock | (8,015 | ) | (80 | ) | — | — | (160,524 | ) | — | — | 8,015 | 160,604 | — | — | ||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2005 (restated) | 86,674 | $ | 867 | 292 | $ | 3 | $ | 300,419 | $ | 402,740 | $ | — | — | $ | — | $ | 704,029 | $ | 77,886 | |||||||||||||||||||||||||
Net loss for 2006 | — | — | — | — | — | (469,453 | ) | — | — | — | (469,453 | ) | (469,453 | ) | ||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 4,570 | — | — | 4,570 | 4,570 | |||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 12,269 | — | — | — | — | 12,269 | — | |||||||||||||||||||||||||||||||||
Issuance of common stock under equity based compensation plans | 387 | 4 | — | — | 388 | — | — | — | — | 392 | — | |||||||||||||||||||||||||||||||||
Excess windfall (shortfall) benefits on stock option exercises | — | — | — | — | (131 | ) | — | — | — | — | (131 | ) | — | |||||||||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (10,351 | ) | — | — | — | — | (10,351 | ) | — | |||||||||||||||||||||||||||||||
Cancellation of warrants | — | — | — | — | 290 | — | — | — | — | 290 | — | |||||||||||||||||||||||||||||||||
Cash dividend paid | — | — | — | — | — | (27,640 | ) | — | — | — | (27,640 | ) | — | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | (750 | ) | (11,044 | ) | (11,044 | ) | — | ||||||||||||||||||||||||||||||
Retirement of treasury stock | (750 | ) | (7 | ) | — | — | (11,037 | ) | — | — | 750 | 11,044 | — | — | ||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2006 | 86,311 | $ | 864 | 292 | $ | 3 | $ | 291,847 | $ | (94,353 | ) | $ | 4,570 | — | $ | — | $ | 202,931 | $ | (464,883 | ) | |||||||||||||||||||||||
Net income for 2007 | — | — | — | — | — | 24,368 | — | — | — | 24,368 | 24,368 | |||||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 1,385 | — | — | 1,385 | 1,385 | |||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 9,606 | — | — | — | — | 9,606 | — | |||||||||||||||||||||||||||||||||
Issuance of common stock under equity based compensation plans | 794 | 8 | — | — | (344 | ) | — | — | — | — | (336 | ) | — | |||||||||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (7,099 | ) | — | — | — | — | (7,099 | ) | — | |||||||||||||||||||||||||||||||
Cancellation of warrants | — | — | — | — | (1,561 | ) | — | — | — | — | (1,561 | ) | — | |||||||||||||||||||||||||||||||
Cash dividend paid | — | — | — | — | (1,663 | ) | — | — | — | (1,663 | ) | — | ||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2007 | 87,105 | $ | 872 | 292 | $ | 3 | $ | 290,786 | $ | (69,985 | ) | $ | 5,955 | — | $ | — | $ | 227,631 | $ | 25,753 | ||||||||||||||||||||||||
F-5
Table of Contents
(In thousands)
Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 24,368 | $ | (469,453 | ) | $ | 77,886 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 19,840 | 20,756 | 20,826 | |||||||||
Goodwill Impairment | — | 515,916 | — | |||||||||
Deferred taxes | (6,480 | ) | (20,546 | ) | (7,451 | ) | ||||||
Non-cash stock compensation | 9,606 | 12,269 | 11,686 | |||||||||
Gain on sale of property | — | — | (1,022 | ) | ||||||||
Amortization of deferred financing costs and other | 481 | 359 | 393 | |||||||||
47,815 | 59,301 | 102,318 | ||||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | 7,234 | 17,278 | 6,830 | |||||||||
Prepaid and other assets | (990 | ) | 6,367 | (6,787 | ) | |||||||
Deferred revenue | (2,335 | ) | (936 | ) | (5,172 | ) | ||||||
Income taxes payable and prepaid income taxes | 1,097 | (15,724 | ) | 16,376 | ||||||||
Accounts payable and accrued expenses and other liabilities | (29,435 | ) | 32,813 | 3,807 | ||||||||
Amounts payable to related parties | 4,515 | 5,152 | 918 | |||||||||
Net Cash Provided By Operating Activities | 27,901 | 104,251 | 118,290 | |||||||||
CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||
Capital expenditures | (5,849 | ) | (5,880 | ) | (4,524 | ) | ||||||
Proceeds from sale of property | — | — | 2,244 | |||||||||
Purchase of loan receivable | — | — | (2,000 | ) | ||||||||
Collection of loan receivable | — | 2,000 | — | |||||||||
Acquisition of companies and other | — | 75 | (181 | ) | ||||||||
Net Cash Used In Investing Activities | (5,849 | ) | (3,805 | ) | (4,461 | ) | ||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||
Issuance of common stock under equity based compensation plans | — | 392 | 3,055 | |||||||||
Borrowings under bank and other long-term obligations | — | — | 70,000 | |||||||||
Debt repayments and payments of capital lease obligations | (25,730 | ) | (60,685 | ) | (642 | ) | ||||||
Dividend payments | (1,663 | ) | (27,640 | ) | (27,032 | ) | ||||||
Repurchase of common stock | — | (11,044 | ) | (160,604 | ) | |||||||
Deferred financing costs | — | (352 | ) | — | ||||||||
Excess windfall tax benefits from stock option exercises | — | 12 | 861 | |||||||||
Net Cash Used in Financing Activities | (27,393 | ) | (99,317 | ) | (114,362 | ) | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | (5,341 | ) | 1,129 | (533 | ) | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 11,528 | 10,399 | 10,932 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 6,187 | $ | 11,528 | $ | 10,399 | ||||||
F-6
Table of Contents
(In thousands except per share amounts)
F-7
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Buildings | 40 years | |
Leasehold Improvements | Shorter of life or lease term | |
Recording, broadcasting and studio equipment | 5 – 10 years | |
Furniture and equipment and other | 3 – 10 years |
F-8
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
F-9
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Net Income (Loss) | $ | 24,368 | $ | (469,453 | ) | $ | 77,886 | |||||
Less: distributed earnings to Common shareholders | 1,658 | 27,565 | 26,962 | |||||||||
Less: distributed earnings to Class B shareholders | 5 | 75 | 70 | |||||||||
Undistributed earnings | $ | 22,705 | $ | (497,093 | ) | $ | 50,854 | |||||
Earnings — Common stock | ||||||||||||
Basic | ||||||||||||
Distributed earnings to Common shareholders | $ | 1,658 | $ | 27,565 | $ | 26,962 | ||||||
Undistributed earnings allocated to Common shareholders | 22,705 | (497,093 | ) | 50,854 | ||||||||
Total Earnings — Common stock, basic | $ | 24,363 | $ | (469,528 | ) | $ | 77,816 | |||||
Diluted | ||||||||||||
Distributed earnings to Common shareholders | $ | 1,658 | $ | 27,565 | $ | 26,962 | ||||||
Distributed earnings to Class B shareholders | 5 | — | 70 | |||||||||
Undistributed earnings allocated to Common shareholders | 22,705 | (497,093 | ) | 50,854 | ||||||||
Total Earnings — Common stock, diluted | $ | 24,368 | $ | (469,528 | ) | $ | 77,886 | |||||
Weighted average Common shares outstanding, basic | 86,112 | 86,013 | 90,714 | |||||||||
Share-based compensation | 22 | — | 513 | |||||||||
Warrants | — | — | — | |||||||||
Weighted average Class B shares | 292 | 292 | ||||||||||
Weighted average Common shares outstanding, diluted | 86,426 | 86,013 | 91,519 | |||||||||
F-10
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Year ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Earnings per Common share, basic | ||||||||||||
Distributed earnings, basic | $ | 0.02 | $ | 0.32 | $ | 0.30 | ||||||
Undistributed earnings — basic | 0.26 | (5.78 | ) | 0.56 | ||||||||
Total | $ | 0.28 | $ | (5.46 | ) | $ | 0.86 | |||||
Earnings per Common share, diluted | ||||||||||||
Distributed earnings, diluted | $ | 0.02 | $ | 0.32 | $ | 0.29 | ||||||
Undistributed earnings — diluted | 0.26 | (5.78 | ) | 0.56 | ||||||||
Total | $ | 0.28 | $ | (5.46 | ) | $ | 0.85 | |||||
Earnings per share — Class B Stock | ||||||||||||
Basic | ||||||||||||
Distributed earnings to Class B shareholders | $ | 5 | $ | 75 | $ | 70 | ||||||
Undistributed earnings allocated to Class B shareholders | — | — | — | |||||||||
Total Earnings per share — Class B Stock, basic | $ | 5 | $ | 75 | $ | 70 | ||||||
Diluted | ||||||||||||
Distributed Earnings to Class B shareholders | 5 | 75 | 70 | |||||||||
Undistributed earnings allocated to Class B shareholders | — | — | — | |||||||||
Total Earnings — Class B Stock, diluted | $ | 5 | $ | 75 | $ | 70 | ||||||
Weighted average Class B shares outstanding, basic | 292 | 292 | 292 | |||||||||
Share-based compensation | — | — | — | |||||||||
Warrants | — | — | ||||||||||
Weighted average Class B shares outstanding, diluted | 292 | 292 | 292 | |||||||||
Earnings per Class B share, basic | ||||||||||||
Distributed earnings, basic | $ | 0.02 | $ | 0.26 | $ | 0.24 | ||||||
Undistributed earnings — basic | — | — | — | |||||||||
Total | $ | 0.02 | $ | 0.26 | $ | 0.24 | ||||||
Earnings per Class B share, diluted | ||||||||||||
Distributed earnings, diluted | $ | 0.02 | $ | 0.26 | $ | 0.24 | ||||||
Undistributed earnings — diluted | — | — | — | |||||||||
Total | $ | 0.02 | $ | 0.26 | $ | 0.24 | ||||||
2007 | 2006 | 2005 | ||||||||||
Options | 6,426 | 6,993 | 8,003 | |||||||||
Restricted Stock | 971 | 326 | — | |||||||||
Restricted Stock Units | 203 | 226 | 101 | |||||||||
Warrants | 3,000 | 3,500 | 4,000 |
F-11
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
• | SFAS No. 154, “Accounting for Changes and Error Corrections”; | ||
• | Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”; | ||
• | FASB Interpretation No. 48, “Account for Uncertainty in Income Taxes”, and interpretation of SFAS No. 109, “Accounting for Income Taxes”. |
F-12
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Nature | 2007 | 2006 | 2005 | |||||||||
Representation Agreement | $ | 27,319 | $ | 27,142 | $ | 25,699 | ||||||
Programming and Affiliations | 39,314 | 48,372 | 52,689 | |||||||||
Management Agreement (excluding warrant amortization) | 3,394 | 3,273 | 2,853 | |||||||||
Warrant Amortization | 9,706 | 9,706 | 9,706 | |||||||||
$ | 79,733 | $ | 88,493 | $ | 90,947 | |||||||
F-13
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
December 31, | ||||||||
2007 | 2006 | |||||||
Property and equipment is recorded at cost and is summarized as follows at: | ||||||||
Land, buildings and improvements | $ | 12,188 | $ | 12,278 | ||||
Recording, broadcasting and studio equipment | 71,090 | 77,927 | ||||||
Furniture and equipment and other | 19,274 | 11,641 | ||||||
102,552 | 101,846 | |||||||
Less: Accumulated depreciation and amortization | 69,540 | 64,493 | ||||||
Property and equipment, net | $ | 33,012 | $ | 37,353 | ||||
F-14
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
2007 | 2006 | |||||||
Balance at January 1, | $ | 464,114 | $ | 982,219 | ||||
Pre-acquisition contingencies related to Income taxes and other | — | (2,189 | ) | |||||
Impairment | — | (515,916 | ) | |||||
$ | 464,114 | $ | 464,114 | |||||
F-15
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
December 31, | ||||||||
2007 | 2006 | |||||||
Revolving Credit Facility/Term Loan | $ | 145,000 | $ | 170,000 | ||||
4.64% Senior Unsecured Notes due on November 30, 2009 | 50,000 | 50,000 | ||||||
5.26% Senior Unsecured Notes due on November 30, 2012 | 150,000 | 150,000 | ||||||
Fair market value of Swap . | 244 | (3,140 | ) | |||||
$ | 345,244 | $ | 366,860 | |||||
F-16
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Year | ||||
2008 | — | |||
2009 | $ | 195,000 | ||
2010 | — | |||
2011 | — | |||
2012 | 150,000 | |||
$ | 345,000 | |||
Interest Rate | ||||||||||||||||
Maturity Dates | Notional Principal Amount | Paid (1) | Received | Variable Rate Index | ||||||||||||
November 2009 | $ | 25,000 | 5.08 | 3.91 | 3 Month LIBOR | |||||||||||
November 2012 | $ | 25,000 | 5.08 | 4.41 | 3 Month LIBOR |
(1) | The interest rate paid at December 31, 2006 was 5.37%. |
F-17
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
December 31, 2007 | December 31, 2006 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Borrowings (Short and Long Term) | $ | 345,000 | $ | 345,732 | $ | 370,000 | $ | 366,860 | ||||||||
Risk management contracts: | ||||||||||||||||
Interest rate swaps | 244 | 244 | (3,140 | ) | (3,140 | ) |
F-18
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
F-19
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
2007 | 2006 | 2005 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||
Outstanding, beginning of year | 6,086 | $ | 23.84 | 7,788 | $ | 25.07 | 7,996 | $ | 24.90 | |||||||||||||||
Granted | 361 | $ | 5.82 | 806 | $ | 13.98 | 624 | $ | 20.25 | |||||||||||||||
Exercised | — | — | (45 | ) | $ | 8.54 | (334 | ) | $ | 9.13 | ||||||||||||||
Cancelled, forfeited or expired | (2,559 | ) | $ | 24.31 | (2,463 | ) | $ | 24.78 | (498 | ) | $ | 26.98 | ||||||||||||
Outstanding, end of year | 3,888 | $ | 21.86 | 6,086 | $ | 23.84 | 7,788 | $ | 25.07 | |||||||||||||||
F-20
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Risk-Free Interest Rate | 4.52 | % | 4.53 | % | 4.0 | % | ||||||
Expected Term | 5.7 | 6.2 | 4.9 | |||||||||
Expected Volatility | 40.12 | % | 45.05 | % | 28.97 | % | ||||||
Expected Dividend Yield | 0.79 | % | 2.80 | % | 1.16 | % |
Remaining | ||||||||||||
Weighted | Weighted | |||||||||||
Average | Average | |||||||||||
Number of | Exercise | Contractual | ||||||||||
Options | Price | Life (In Years) | ||||||||||
Options Outstanding at Exercise Price Ranges of: | ||||||||||||
$1.87-$6.17 | 203 | $ | 5.54 | 9.19 | ||||||||
$6.57-$9.88 | 53 | 7.29 | 8.87 | |||||||||
$10.09-$19.93 | 1,258 | 15.31 | 4.70 | |||||||||
$20.25-$26.96 | 1,190 | 21.32 | 5.38 | |||||||||
$30.19-$38.34 | 1,184 | 32.75 | 4.53 | |||||||||
3,888 | $ | 21.86 | 5.14 | |||||||||
F-21
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
2007 | 2006 | |||||||||||||||
Weighted Avg | Weighted Avg | |||||||||||||||
Grant Date | Grant Date | |||||||||||||||
Fair Value | Fair Value | |||||||||||||||
Shares | Per Share | Shares | Per Share | |||||||||||||
Unvested, beginning of year | 326 | $ | 13.06 | 0 | $ | 0.00 | ||||||||||
Granted | 880 | $ | 6.16 | 353 | $ | 13.15 | ||||||||||
Converted to Common Stock | (76 | ) | $ | 13.28 | 0 | $ | 0.00 | |||||||||
Forfeited | (180 | ) | $ | 8.27 | (27 | ) | $ | 14.16 | ||||||||
Unvested, end of year | 950 | $ | 8.62 | 326 | $ | 13.06 | ||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Weighted Avg | Weighted Avg | Weighted Avg | ||||||||||||||||||||||
Grant Date | Grant Date | Grant Date | ||||||||||||||||||||||
Fair Value | Fair Value | Fair Value | ||||||||||||||||||||||
Shares | Per Share | Shares | Per Share | Shares | Per Share | |||||||||||||||||||
Outstanding, beginning of year | 226 | $ | 13.06 | 101 | $ | 18.07 | 0 | $ | 0.00 | |||||||||||||||
Granted | 115 | $ | 5.63 | 189 | $ | 11.89 | 105 | $ | 18.15 | |||||||||||||||
Dividend equivalents | 1 | $ | 6.87 | 8 | $ | 8.27 | 1 | $ | 19.41 | |||||||||||||||
Converted to Common stock | (71 | ) | $ | 12.40 | (28 | ) | $ | 16.15 | ||||||||||||||||
Forfeited | (41 | ) | $ | 15.12 | (44 | ) | $ | 16.64 | (5 | ) | $ | 16.64 | ||||||||||||
Outstanding, end of year | 230 | $ | 9.15 | 226 | $ | 13.06 | 101 | $ | 18.07 | |||||||||||||||
Vested, end of year | 18 | 15 | 0 | |||||||||||||||||||||
Unvested, end of year | 212 | 211 | 101 | |||||||||||||||||||||
F-22
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Current | ||||||||||||
Federal | $ | 18,466 | $ | 26,304 | $ | 48,682 | ||||||
State | 3,738 | 3,588 | 7,988 | |||||||||
$ | 22,204 | $ | 29,892 | $ | 56,670 | |||||||
Deferred | ||||||||||||
Federal | (5,542 | ) | (18,537 | ) | (6,421 | ) | ||||||
State | (938 | ) | (2,546 | ) | (1,030 | ) | ||||||
(6,480 | ) | (21,083 | ) | (7,451 | ) | |||||||
Income Tax Expense | $ | 15,724 | $ | 8,809 | $ | 49,219 | ||||||
2007 | 2006 | |||||||
Deferred tax liabilities: | ||||||||
Property and equipment | $ | 2,404 | $ | 4,122 | ||||
Investment | 3,709 | 2,876 | ||||||
Other | 488 | 227 | ||||||
Total deferred tax liabilities | $ | 6,601 | $ | 7,225 | ||||
Deferred tax assets: | ||||||||
Goodwill, intangibles and other | 6,673 | 6,249 | ||||||
Allowance for doubtful accounts | 1,321 | 1,665 | ||||||
Deferred Compensation | 1,443 | 1,509 | ||||||
Equity Based Compensation | 11,401 | 15,057 | ||||||
Accrued expenses and other | — | 237 | ||||||
Total deferred tax assets | $ | 20,838 | $ | 24,717 | ||||
Net deferred tax assets | $ | 14,237 | $ | 17,492 | ||||
Net deferred tax asset — current | $ | 1,321 | $ | 1,666 | ||||
Net deferred tax asset — long term | $ | 12,916 | $ | 15,826 | ||||
2007 | 2006 | 2005 | ||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State taxes net of federal benefit | 3.3 | (0.2 | ) | 3.5 | ||||||||
Non-deductible portion of goodwill Impairment | — | (36.6 | ) | — | ||||||||
Other | 0.9 | (0.1 | ) | 0.2 | ||||||||
Effective tax rate | 39.2 | % | (1.9 | %) | 38.7 | % | ||||||
F-23
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Unrecognized | ||||
Tax Benefits | ||||
Balance at January 1, 2007 | $ | 7,513 | ||
Additions for current year tax positions | — | |||
Additions for prior year tax positions | 119 | |||
Settlements | (456 | ) | ||
Reductions related to expiration of statue of limitations | (706 | ) | ||
Balance at December 31, 2007 | $ | 6,470 | ||
Leases | ||||||||||||||||
Year | Capital | Operating | Other | Total | ||||||||||||
2008 | $ | 960 | $ | 6,750 | $ | 106,583 | $ | 114,293 | ||||||||
2009 | 960 | 6,794 | 53,546 | 61,300 | ||||||||||||
2010 | 960 | 5,461 | 30,643 | 37,064 | ||||||||||||
2011 | 640 | 5,008 | 21,955 | 27,603 | ||||||||||||
2012 | 0 | 4,417 | 9,433 | 13,850 | ||||||||||||
Thereafter | 0 | 14,663 | 3,600 | 18,263 | ||||||||||||
$ | 3,520 | $ | 43,093 | $ | 225,760 | $ | 272,373 | |||||||||
F-24
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Cash paid for: | ||||||||||||
Interest | $ | 24,239 | $ | 24,642 | $ | 17,134 | ||||||
Income Taxes | 21,814 | 44,676 | 39,432 |
First | Second | Third | Fourth | For the | ||||||||||||||||
Quarter | Quarter (2) | Quarter (2) | Quarter (2) | Year | ||||||||||||||||
2007 | ||||||||||||||||||||
Net revenue | $ | 113,959 | $ | 111,025 | $ | 108,083 | $ | 118,317 | $ | 451,384 | ||||||||||
Operating income | 7,262 | 16,618 | 19,686 | 19,741 | 63,307 | |||||||||||||||
Net income | 715 | 6,897 | 8,452 | 8,304 | 24,368 | |||||||||||||||
Net income per share: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Common stock | 0.01 | 0.08 | 0.10 | 0.10 | 0.28 | |||||||||||||||
Class B Stock | 0.02 | — | — | — | 0.02 | |||||||||||||||
Diluted | ||||||||||||||||||||
Common stock | 0.01 | 0.08 | 0.10 | 0.10 | 0.28 | |||||||||||||||
Class B Stock | 0.02 | — | — | — | 0.02 | |||||||||||||||
2006 | ||||||||||||||||||||
Net revenue | $ | 125,027 | $ | 134,461 | $ | 118,485 | $ | 134,112 | $ | 512,085 | ||||||||||
Operating (loss) income | (140 | ) | 26,717 | 23,836 | (486,393 | )(1) | (435,980 | ) | ||||||||||||
Net (loss) income | (3,527 | ) | 12,170 | 10,484 | (488,580 | ) | (469,453 | ) | ||||||||||||
Net (loss) income per share: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Common stock | (0.04 | ) | 0.14 | 0.12 | (5.68 | ) | (5.46 | ) | ||||||||||||
Class B Stock | 0.08 | 0.08 | 0.08 | 0.02 | 0.26 | |||||||||||||||
Diluted | ||||||||||||||||||||
Common stock | (0.04 | ) | 0.14 | 0.12 | (5.68 | ) | (5.46 | ) | ||||||||||||
Class B Stock | 0.08 | 0.08 | 0.08 | 0.02 | 0.26 |
(1) | The Company recorded a goodwill impairment charge of $515,916 in the fourth quarter of 2006. | |
(2) | In the third quarter and second quarter of 2007, the Company recorded net adjustments of approximately $1,000 that had the effect of increasing net income and net adjustments of approximately $1,000 that had the effect of reducing net income, respectively. These adjustments were primarily comprised of the reversal of expense accruals offset by predominantly billing/revenue adjustments in the third quarter and overaccruals in the second quarter. In the fourth quarter, the Company recorded an adjustment of approximately $500 that had the effect of increasing net income related to an error in calculating the Company’s health care accrual. It had no impact on the full year results. The Company does not believe these adjustments are material to its Consolidated Financial Statements for the year ended December 31, 2007, any of the quarters in 2007 or any prior period’s consolidated financial statements. As a result, the Company has not restated any prior period amounts. |
F-25
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
• | The Total Debt Ratio covenant will remain at 4.00 to 1 through February 28, 2009; | ||
• | the Revolving Credit Commitments were reduced from $125 million to $75 million; | ||
• | a Mandatory Prepayments covenant was added which provides that twenty percent (20%) of net cash proceeds from any Equity Issuance will be used to prepay the Loans outstanding under the Facility and upon payment in full of the Term Loans and the termination of the Term Loan Commitments, applied to permanently reduce the Revolving Credit Commitments; | ||
• | the general basket permitting the payment of dividends and stock repurchases in an amount of up to $36 million was eliminated from the Restricted Payments covenant; and | ||
• | the Company’s ability to make: (i) $5 million in new Investments (not consisting of Company stock) in Unrestricted Subsidiaries; (ii) loans to officers and directors and (iii) purchases of capital stock of commercial radio businesses were each eliminated from the Investments, Loans and Advances covenant. |
F-26
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
F-27
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except per share amounts)
Allowance for Doubtful Accounts
Balance at | Additions | Deductions | Balance at | |||||||||||||
Beginning of | Charged to Costs | Write-offs and | End of | |||||||||||||
Period | And Expenses | Other Adjustments | Period | |||||||||||||
2007 | $ | 4,387 | $ | 139 | $ | (924 | ) | $ | 3,602 | |||||||
2006 | $ | 2,797 | $ | 2,323 | $ | (733 | ) | $ | 4,387 | |||||||
2005 | $ | 2,566 | $ | 2,031 | $ | (1,800 | ) | $ | 2,797 |
F-28
Table of Contents
Exhibit | ||
No. | Description | |
31.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. + | |
31.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. + | |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *** | |
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *** |
+ | Filed herewith. | |
*** | Furnished herewith. |