EXHIBIT 4.1
CUMULUS MEDIA INC.
2002 STOCK INCENTIVE PLAN
1. OBJECTIVES. The Cumulus Media Inc. 2002 Stock Incentive Plan
is designed to attract and retain certain selected officers, employees,
non-employee directors and consultants whose skills and talents are
important to the Company's operations, and reward them for making major
contributions to the success of the Company. These objectives are
accomplished by making Awards under the Plan, thereby providing
Participants with a proprietary interest in the growth and performance
of the Company.
2. DEFINITIONS.
(a) "Award" shall mean the grant of a Stock Option to a
Participant pursuant to such terms, conditions, performance
requirements, and limitations as the Committee may establish
in order to fulfill the objectives of the Plan.
(b) "Award Agreement" shall mean an agreement between
Cumulus Media Inc. and a Participant that sets forth the
terms, conditions, performance requirements, and limitations
applicable to an Award.
(c) "Board" shall mean the Board of Directors of Cumulus
Media Inc.
(d) "Business Combination" means a reorganization, merger
or consolidation or sale or other disposition of all or
substantially all of the assets of Cumulus Media Inc.
(e) "Cause" shall mean termination of a Participant's
service with the Company for (i) any failure of the
Participant to substantially perform his duties with the
Company (other than by reason of illness) which occurs after
the Company has delivered to the Participant a demand for
performance which specifically identifies the manner in which
the Company believes the Participant has failed to perform his
duties, and the Participant fails to resume performance of his
duties on a continuous basis within 14 days after receiving
such demand, (ii) the commission by the Participant of any
material act of dishonesty or disloyalty involving the Company
or its business, or (iii) the conviction of the Participant of
a felony or misdemeanor which, in the reasonable judgment of
the Committee, is substantially related to the Participant's
position with the Company or substantially impairs the
Participant's ability to perform his duties with the Company.
(f) "Change in Control" shall mean the occurrence of any
of the following events:
(i) The acquisition by any Person of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of
the Voting Power of Cumulus Media Inc.; provided,
however, that for purposes of this subsection (i),
the following acquisitions shall not
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constitute a Change in Control: (A) any acquisition
directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by
the Company, or (D) any acquisition by any Person
pursuant to a transaction which complies with clauses
(A) and (B) of subsection (iii) of this Section 2(f).
(ii) A change in a majority of the members of the
Board occurs: (A) within one year following the
public announcement of an actual or threatened
election contest (as described in Rule 14a-12(c)
promulgated under the Exchange Act) or the filing of
a Schedule 13D or other public announcement
indicating that a Person intends to effect a change
in control of Cumulus Media Inc., (ii) as a result of
the exercise of contractual rights, or (iii) as a
result of a majority of the members of the Board
having been proposed, designated or nominated by a
Person (other than Cumulus Media Inc. through the
Board or a committee of the Board).
(iii) Consummation of a Business Combination
unless, following such Business Combination, (A) no
Person (excluding any entity resulting from such
Business Combination or any employee benefit plan (or
related trust) sponsored or maintained by Cumulus
Media Inc. or such entity resulting from such
Business Combination of either of them) beneficially
owns, directly or indirectly, 35% or more of the
Voting Power of the entity resulting from such
Business Combination, and (B) at least half of the
members of the board of directors of the corporation
resulting from such Business Combination were members
of the Board at the time of the execution of the
initial agreement, or of the action of the Board,
providing for such Business Combination.
(iv) Approval by the stockholders of Cumulus
Media Inc. of a complete liquidation or dissolution
of Cumulus Media Inc.
(v) Such other event as the Board may determine
by express resolution to constitute a Change in
Control for purposes of this Plan.
(g) "Class A Common Stock" shall mean the authorized and
issued or unissued $.01 par value class A common stock of
Cumulus Media Inc.
(h) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(i) "Committee" shall mean the Compensation Committee of
the Board, which shall be comprised of at least two
non-employee directors within the meaning of Rule 16b-3 under
the Exchange Act.
(j) "Company" shall mean Cumulus Media Inc. and its
subsidiaries including subsidiaries of subsidiaries and
partnerships and other business ventures in which
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Cumulus Media Inc. has a significant equity interest, as
determined in the sole discretion of the Committee.
(k) "Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder, as
such law, rules and regulations may be amended from time to
time.
(l) "Fair Market Value" shall mean the closing sale price
of the Class A Common Stock on the Nasdaq National Market as
reported in the Midwest Edition of the Wall Street Journal for
the date in question; provided that, if no sales of Class A
Common Stock were made on said exchange on that date, "Fair
Market Value" shall mean the closing sale price of Class A
Common Stock as reported for the most recent preceding day on
which sales of Class A Common Stock were made on such
exchange, or, failing any such sales, such other price as the
Committee may determine in conformity with pertinent law and
regulations.
(m) "Participant" shall mean any officer or full-time
employee of the Company, or any person who has agreed to
commence serving in any such capacities, as well as any
non-employee director, consultant or other natural person who
provides services to the Company to whom an Award has been
made under the Plan.
(n) "Person" means any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act).
(o) "Plan" shall mean the Cumulus Media Inc. 2002 Stock
Incentive Plan.
(p) "Retirement" shall mean termination of employment or
service with the Company or service as a member of the Board
on or after the attainment of age 65.
(q) "Stock Option" shall mean a grant of a right to
purchase a specified number of shares of Class A Common Stock,
the purchase price of which shall be not less than 100% of the
Fair Market Value on the date of grant. A stock option may be
in the form of a nonqualified stock option or, if the
stockholder approval required under Section 422 of the Code is
obtained, an incentive stock option ("ISO").
(r) "Voting Power" means at any time, the combined voting
power of the then-outstanding securities entitled to vote
generally in the election of directors in the case of the
Company, or members of the board of directors or similar body
in the case of another entity.
3. ELIGIBILITY. Current and prospective employees, non-employee
directors, consultants or other natural persons who provide services to
the Company eligible for an Award under the Plan are those who hold, or
will hold, positions of responsibility and whose performance, in the
judgment of the Committee or the management of the Company (if such
responsibility is delegated pursuant to Section 6 hereof), can have a
significant effect on the success of the Company; provided that at
least a majority of
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shares of Class A Common Stock underlying Stock Options awarded under
the Plan at any time must be, or have been, awarded to employees who
are not officers or directors of the Company.
4. COMMON STOCK AVAILABLE FOR AWARDS. Subject to adjustment as
provided in Section 14 hereof, the number of shares that may be issued
under the Plan for Awards during the term of the Plan is 2,000,000
shares of Class A Common Stock. Any shares subject to an Award which
are used in settlement of tax withholding obligations shall be deemed
not to have been issued for purposes of determining the maximum number
of shares available for issuance under the Plan. Likewise, if any Stock
Option is exercised by tendering shares, either actually or by
attestation, to the Company as full or partial payment for such
exercise under this Plan, only the number of shares issued net of the
shares tendered shall be deemed issued for purposes of determining the
maximum number of shares available for issuance under the Plan. No
individual shall be eligible to receive Awards aggregating more than
500,000 shares of Class A Common Stock reserved under the Plan in any
one calendar year, subject to adjustment as provided in Section 14
hereof. Cumulus Media Inc. shall take whatever actions are necessary to
file required documents with the U.S. Securities and Exchange
Commission and any other appropriate governmental authorities and stock
exchanges to make shares of Class A Common Stock available for issuance
pursuant to Awards.
5. ADMINISTRATION. The Plan shall be administered by the
Committee, which shall have full and exclusive power to interpret the
Plan, to determine which current and prospective employees,
non-employee directors and consultants are Plan Participants (subject
to Section 3 hereof), to grant waivers of Award restrictions, to
determine the provisions of Award Agreements and to adopt such rules,
regulations and guidelines for carrying out the Plan as it may deem
necessary or proper, all of which powers shall be executed in the best
interests of the Company and in keeping with the objectives of the
Plan.
6. DELEGATION OF AUTHORITY. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the
Committee may delegate to the chief executive officer and to other
senior officers of the Company its duties under the Plan pursuant to
such conditions or limitations as the Committee may establish. Any such
delegation may be revoked by the Committee at any time.
7. AWARDS. The Committee shall set forth in the related Award
Agreement the terms, conditions, performance requirements, and
limitations applicable to each Award including, but not limited to,
continuous service with the Company, conditions under which
acceleration of vesting will occur and achievement of specific
business objectives.
8. DEFERRED PAYMENT OF AWARDS. The Committee may permit selected
Participants to elect to defer payment of Awards in accordance with
procedures established by the Committee which are intended to permit
such deferrals to comply with applicable requirements of the Code
including, at the choice of Participants, the capability to make
further deferrals for payment after retirement. Dividends or dividend
equivalent rights may be extended to and made part of any Award
denominated in stock, subject to such
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terms, conditions and restrictions as the Committee may establish. The
Committee may also establish rules and procedures for the crediting of
dividend equivalents for deferred payments denominated in stock.
9. STOCK OPTION EXERCISE. Unless the Award Agreement provides
otherwise, (i) an Award shall become vested, and thereby exercisable,
at the rate of 25% per completed year of the Participant's continuous
service-providing relationship with the Company (including in the case
of a non-employee director, service on the Board) after the grant date
of the Award, and (ii) each Award that is outstanding and unexercised
on the date of a Change in Control shall immediately become fully
vested and exercisable. The price at which shares of Class A Common
Stock may be purchased under a Stock Option shall be paid in full at
the time of the exercise in cash or, if permitted by the Committee, by
means of tendering shares of Class A Common Stock, which have been held
by the Participant for more than six months and have not been used
within the prior six-month period to exercise an option, either
directly or by attestation, valued at the Fair Market Value on the date
of exercise, or any combination thereof.
10. TAX WITHHOLDING. The Company shall have the right to deduct
applicable taxes from any Award payment and withhold, at the time of
delivery or vesting of shares under the Plan, an appropriate number of
shares for payment of taxes (but only the minimum amount required by
law) or to take such other action as may be necessary in the opinion of
the Company to satisfy all obligations for withholding of such taxes.
The Company may defer making delivery with respect to Class A Common
Stock issuable pursuant to an Award hereunder until arrangements
satisfactory to it have been made with respect to any such withholding
obligation. If Class A Common Stock is used to satisfy tax withholding,
such stock shall be valued based on the Fair Market Value when the tax
withholding is required to be made.
11. AMENDMENT OR TERMINATION OF THE PLAN. The Board may, at any
time, but only with unanimous consent or approval and to the extent
permitted by applicable law or the requirements of the Nasdaq National
Market, amend or terminate the Plan; provided, however, that:
(a) subject to Section 14 hereof, no amendment or
termination may, in the absence of written consent to the
change by the affected Participant (or, if the Participant is
not then living, the affected beneficiary), adversely affect
the rights of any Participant or beneficiary under any Award
granted under the Plan prior to the date such amendment is
adopted by the Board; and
(b) without further approval of the shareholders of the
Company, no amendment shall increase the number of shares of
Class A Common Stock which may be delivered pursuant to Awards
hereunder, except for increases resulting from the operation
of Section 14 hereof.
12. TERMINATION OF SERVICE. If the service-providing relationship
of a Participant terminates, or a non-employee director no longer
serves on the Board, other than pursuant to paragraphs (a) through (c)
of this Section 12, all unvested Awards shall immediately
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terminate and all vested but unexercised, deferred or unpaid Awards
shall terminate 90 days after such termination of service, unless the
Award Agreement provides otherwise, and during such 90 day period shall
be exercisable only to the extent provided in the Award Agreement. If
the status of a Participant's relationship with the Company changes
(e.g., from a consultant to an employee or vice versa), it will not be
a termination of the service-providing relationship. Notwithstanding
the foregoing, if a Participant's service is terminated for Cause, to
the extent the Award is not effectively exercised or has not vested
prior to such termination, it shall lapse or be forfeited to the
Company immediately upon termination. In all events, an Award will not
be exercisable after the end of its term as set forth in the Award
Agreement.
(a) Retirement. When a Participant's employment or
service terminates as a result of Retirement, or early
retirement with the consent of the Committee, the Committee
(in the form of an Award Agreement or otherwise) may permit
Awards to continue in effect beyond the date of Retirement, or
early retirement, and/or the exercisability and vesting of any
Award may be accelerated.
(b) Resignation in the Best Interests of the Company.
When a Participant resigns from the Company or the Board and,
in the judgment of the Committee, the acceleration and/or
continuation of outstanding Awards would be in the best
interests of the Company, the Committee may (i) authorize,
where appropriate, the acceleration and/or continuation of all
or any part of Awards granted prior to such termination and
(ii) permit the exercise, vesting and payment of such Awards
for such period as may be set forth in the applicable Award
Agreement.
(c) Death or Disability of a Participant.
(i) In the event of a Participant's death, the
Participant's estate or beneficiaries shall have a
period specified in the Award Agreement within which
to receive or exercise any outstanding Award held by
the Participant under such terms, and to the extent,
as may be specified in the applicable Award
Agreement. Rights to any such outstanding Awards
shall pass by will or the laws of descent and
distribution in the following order: (a) to
beneficiaries so designated by the Participant; if
none, then (b) to a legal representative of the
Participant; if none, then (c) to the persons
entitled thereto as determined by a court of
competent jurisdiction. Subject to subparagraph (iii)
below, Awards so passing shall be exercised or paid
out at such times and in such manner as if the
Participant were living.
(ii) In the event a Participant is deemed by the
Company to be disabled within the meaning of Cumulus
Media Inc.'s group long-term disability plan, or if
Cumulus Media Inc. does not have such a plan, Section
22(e)(3) of the Code, the Award shall be exercisable
for the period, and to the extent, specified in the
Award Agreement. Awards and rights to any such Awards
may be paid to or exercised by the Participant, if
legally competent, or a legally designated guardian
or representative if the Participant is legally
incompetent by virtue of such disability.
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(iii) After the death or disability of a
Participant, the Committee may in its sole discretion
at any time (1) terminate restrictions in Award
Agreements and (2) accelerate any or all installments
and rights.
(iv) In the event of uncertainty as to
interpretation of or controversies concerning this
paragraph (c) of Section 12, the Committee's
determinations shall be binding and conclusive.
(d) No Service Rights. The Plan shall not confer upon any
Participant any right with respect to continuation of
employment by, or service with, the Company or service on the
Board, nor shall it interfere in any way with the right of the
Company to terminate any Participant's employment or service
with the Company or on the Board at any time.
13. NONASSIGNABILITY. Except as provided in subsection (c) of
Section 12 and this Section 13, no Award under the Plan shall be
assignable or transferable, or payable to or exercisable by anyone
other than the Participant to whom it was granted. Notwithstanding the
foregoing, the Committee (in the form of an Award Agreement or
otherwise) may permit Awards, other than ISO's within the meaning of
Section 422 of the Code, to be transferred to members of the
Participant's immediate family, to trusts for the benefit of the
Participant and/or such immediate family members, and to partnerships
or other entities in which the Participant and/or such immediate family
members own all the equity interests. For purposes of the preceding
sentence, "immediate family" shall mean a Participant's spouse, issue,
and spouses of his issue.
14. ADJUSTMENTS. In the event of any change in the outstanding
Class A Common Stock of the Company by reason of a stock split, stock
dividend, combination or reclassification of shares, recapitalization,
merger, or similar event, the Committee may adjust proportionally (a)
the number of shares of Class A Common Stock (i) reserved under the
Plan, (ii) for which Awards shall be granted to an individual
Participant, and (iii) covered by outstanding Awards denominated in
stock; (b) the stock prices related to outstanding Awards; and (c) the
appropriate Fair Market Value and other price determinations for such
Awards. In the event of any other change affecting the Class A Common
Stock or any distribution (other than normal cash dividends) to holders
of Class A Common Stock, such adjustments as may be deemed equitable by
the Committee, including adjustments to avoid fractional shares, shall
be made to give proper effect to such event. In the event of a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Committee shall be
authorized to issue or assume Stock Options by means of substitution of
new Stock Options for previously issued Stock Options or an assumption
of previously issued Stock Options.
15. NOTICE. Any notice to the Company required by any of the
provisions of the Plan shall be addressed to the director of finance of
the Company in writing, and shall become effective when it is received
by his office.
16. UNFUNDED PLAN. The Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants
who are entitled to cash, Class A Common
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Stock or rights thereto under the Plan, any such accounts shall be used
merely as a bookkeeping convenience. The Company shall not be required
to segregate any assets that may at any time be represented by cash,
Class A Common Stock or rights thereto, nor shall the Plan be construed
as providing for such segregation, nor shall the Company nor the Board
nor the Committee be deemed to be a trustee of any cash, Class A Common
Stock or rights thereto to be granted under the Plan. Any liability of
the Company to any Participant with respect to a grant of cash, Class A
Common Stock or rights thereto under the Plan shall be based solely
upon any contractual obligations that may be created by the Plan and
any Award Agreement; no such obligation of the Company shall be deemed
to be secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Board nor the Committee shall be
required to give any security or bond for the performance of any
obligation that may be created by the Plan.
17. GOVERNING LAW. The Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by
the laws of the United States, shall be governed by the laws of the
State of Wisconsin, without giving effect to principles of conflicts of
laws, and construed accordingly.
18. EFFECTIVE AND TERMINATION DATES. The effective date of the
Plan is May 3, 2002. The Plan shall terminate on May 3, 2012 subject to
earlier termination by the Board pursuant to Section 11, after which no
Awards may be made under the Plan, but any such termination shall not
affect Awards then outstanding or the authority of the Committee to
continue to administer the Plan.
19. OTHER BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by a Participant pursuant to an Award shall not be
deemed a part of such Participant's regular, recurring compensation for
purposes of the termination, indemnity or severance pay law of any
country and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan,
contract or similar arrangement, unless the Committee expressly
determines otherwise.
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