EXHIBIT 4.1
CUMULUS MEDIA INC.
2004 EQUITY INCENTIVE PLAN
1. PURPOSE. The purpose of the 2004 Equity Incentive Plan is to attract
and retain officers, key employees, non-employee directors and consultants
for Cumulus Media Inc., a Delaware corporation, and its Subsidiaries and
to provide to such persons incentives and rewards for superior
performance.
2. DEFINITIONS. As used in this Plan,
(a) "Board" means the Board of Directors of the Company and, to
the extent of any delegation by the Board to a committee (or
subcommittee thereof) pursuant to Section 13 of this Plan, such
committee (or subcommittee).
(b) "Business Combination" means a reorganization, merger or
consolidation or sale or other disposition of all or substantially
all of the assets of the Company.
(c) "Change in Control" will have the meaning provided in Section
9 of this Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Common Shares" means the shares of Class A common stock, par
value $.01 per share, of the Company or any security into which such
Common Shares may be changed by reason of any transaction or event
of the type referred to in Section 8 of this Plan.
(f) "Company" means Cumulus Media Inc., a Delaware corporation.
(g) "Date of Grant" means the date specified by the Board on which
a grant of Option Rights or a grant or sale of Restricted Shares or
Deferred Shares will become effective (which date will not be
earlier than the date on which the Board takes action with respect
thereto).
(h) "Deferral Period" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 6
of this Plan.
(i) "Deferred Shares" means an award made pursuant to Section 6 of
this Plan of the right to receive Common Shares at the end of a
specified Deferral Period.
(j) "Director" means a member of the Board of Directors of the
Company.
(k) "Evidence of Award" means an agreement, certificate,
resolution or other type or form of writing or other evidence
approved by the Board that sets forth the terms and conditions of
the awards granted. An Evidence of Award may be in an electronic
medium, may be limited to notation on the books and records of the
Company and, with the approval of the Board, need not be signed by a
representative of the Company or a Participant.
(l) "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.
(m) "Incentive Stock Options" means Option Rights that are
intended to qualify as "incentive stock options" under Section 422
of the Code or any successor provision.
(n) "Market Value per Share" means, as of any particular date, (i)
the closing sale price per Common Share as reported on the principal
exchange on which Common Shares are then trading or if there are no
sales on such day, on the next preceding trading day during which a
sale occurred, or (ii) if clause (i) does not apply, the fair market
value of the Common Shares as determined by the Board.
(o) "Optionee" means the optionee named in an Evidence of Award
evidencing an outstanding Option Right.
(p) "Option Price" means the purchase price payable on exercise of
an Option Right.
(q) "Option Right" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 4 of this Plan.
(r) "Participant" means a person who is selected by the Board to
receive benefits under this Plan and who is at the time an officer,
key employee, non-employee director or consultant of the Company or
any one or more of its Subsidiaries, or who has agreed to commence
serving in any of such capacities within 90 days of the Date of
Grant.
(s) "Person" means any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
(t) "Plan" means this Cumulus Media Inc. 2004 Equity Incentive
Plan.
(u) "Restricted Shares" means Common Shares granted or sold
pursuant to Section 5 of this Plan as to which neither the
substantial risk of forfeiture nor the prohibition on transfers
referred to in such Section 5 has expired.
(v) "Subsidiary" means a corporation, company or other entity (i)
more than 50 percent of whose outstanding shares or securities
(representing the right to vote for the election of directors or
other managing authority) are, or (ii) which does
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not have outstanding shares or securities (as may be the case in a
partnership, joint venture or unincorporated association), but more
than 50 percent of whose ownership interest representing the right
generally to make decisions for such other entity is, now or
hereafter, owned or controlled, directly or indirectly, by the
Company except that for purposes of determining whether any person
may be a Participant for purposes of any grant of Incentive Stock
Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50
percent of the total combined voting power represented by all
classes of stock issued by such corporation.
(w) "Voting Power" means at any time, the combined voting power of
the then-outstanding securities entitled to vote generally in the
election of Directors in the case of the Company, or members of the
board of directors or similar body in the case of another entity.
3. SHARES AVAILABLE UNDER THE PLAN.
(a) Subject to adjustment as provided in Section 3(b) and Section
8 of this Plan, the number of Common Shares that may be issued or
transferred (i) upon the exercise of Option Rights, (ii) as
Restricted Shares and released from substantial risks of forfeiture
thereof, (iii) as Deferred Shares or (iv) in payment of dividend
equivalents paid with respect to awards made under the Plan will not
exceed in the aggregate 2,795,000. Common Shares, plus any shares
described in Section 3(b). Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing.
(b) The number of shares available in Section 3(a) above will be
adjusted to account for shares relating to awards that expire or are
forfeited or that are transferred, surrendered or relinquished upon
the payment of any Option Price by the transfer to the Company of
Common Shares or upon satisfaction of any withholding amount. Upon
payment in cash of the benefit provided by any award granted under
this Plan, any shares that were covered by that award will again be
available for issue or transfer hereunder.
(c) Notwithstanding anything in this Section 3, or elsewhere in
this Plan, to the contrary and subject to adjustment as provided in
Section 8 of this Plan, (i) the aggregate number of Common Shares
actually issued or transferred by the Company upon the exercise of
Incentive Stock Options will not exceed 1,400,000 Common Shares;
(ii) no Participant will be granted Option Rights for more than
500,000 Common Shares during any calendar year; and (iii) the number
of shares issued as Restricted Shares and Deferred Shares will not
(after taking any forfeitures into account) in the aggregate exceed
925,000 Common Shares.
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4. OPTION RIGHTS. The Board may, from time to time and upon such terms
and conditions as it may determine, authorize the granting to Participants
of options to purchase Common Shares. Each such grant may utilize any or
all of the authorizations, and will be subject to all of the requirements
contained in the following provisions:
(a) Each grant will specify the number of Common Shares to which
it pertains subject to the limitations set forth in Section 3 of
this plan.
(b) Each grant will specify an Option Price per share, which may
not be less than the Market Value per Share on the day immediately
preceding the Date of Grant.
(c) Each grant will specify whether the Option Price will be
payable (i) in cash or by check acceptable to the Company, (ii) by
the actual or constructive transfer to the Company of Common Shares
owned by the Optionee for at least 6 months (or other consideration
authorized pursuant to Section 4(d)) having a value at the time of
exercise equal to the total Option Price, or (iii) by a combination
of such methods of payment.
(d) The Board may determine, at or after the Date of Grant, that
payment of the Option Price of any Option Right (other than an
Incentive Stock Option) may also be made in whole or in part in the
form of Restricted Shares or Deferred Shares. Unless otherwise
determined by the Board at or after the Date of Grant, whenever any
Option Price is paid in whole or in part by means of any of the
forms of consideration specified in this Section 4(d), the Common
Shares received upon the exercise of the Option Rights will be
subject to such risks of forfeiture or restrictions on transfer as
may correspond to any that apply to the consideration surrendered,
but only to the extent, determined with respect to the consideration
surrendered.
(e) To the extent permitted by law, any grant may provide for
deferred payment of the Option Price from the proceeds of sale
through a bank or broker on a date satisfactory to the Company of
some or all of the shares to which such exercise relates.
(f) Successive grants may be made to the same Participant whether
or not any Option Rights previously granted to such Participant
remain unexercised.
(g) Each grant will specify the period or periods of continuous
service by the Optionee with the Company or any Subsidiary that is
necessary before the Option Rights or installments thereof will
become exercisable and may provide for the earlier exercise of such
Option Rights in the event of a Change in Control.
(h) Any grant of Option Rights may specify management objectives
that must be achieved as a condition to the exercise of such rights.
(i) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are
intended to qualify under
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particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.
Incentive Stock Options may only be granted to Participants who meet
the definition of "employees" under Section 3401(c) of the Code.
(j) The Board may, at or after the Date of Grant of any Option
Rights (other than Incentive Stock Options), provide for the payment
of dividend equivalents to the Optionee on either a current or
deferred or contingent basis or may provide that such equivalents
will be credited against the Option Price.
(k) No Option Right will be exercisable more than 10 years from
the Date of Grant.
(l) The Board reserves the discretion after the Date of Grant to
provide for (i) the payment of a cash bonus at the time of exercise;
(ii) the availability of a loan at exercise; (iii) the right to
tender in satisfaction of the Option Price nonforfeitable,
unrestricted Common Shares, which are already owned by the Optionee
and have a value at the time of exercise that is equal to the Option
Price.
(m) Each grant of Option Rights will be evidenced by an Evidence
of Award. Each Evidence of Award shall be subject to the Plan and
shall contain such terms and provisions as the Board may approve.
5. RESTRICTED SHARES. The Board may also authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale may utilize any
or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer
of the ownership of Common Shares to the Participant in
consideration of the performance of services, entitling such
Participant to voting, dividend and other ownership rights, but
subject to the substantial risk of forfeiture and restrictions on
transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant
that is less than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale will provide that the Restricted
Shares covered by such grant or sale will be subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of
the Code for a period of not less than two years, to be determined
by the Board at the Date of Grant, and may provide for the earlier
lapse of such substantial risk of forfeiture in the event of a
Change in Control.
(d) Each such grant or sale will provide that during the period
for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares will be prohibited or
restricted in the manner and to the extent prescribed by the Board
at the Date of Grant (which restrictions may include, without
limitation, rights of repurchase or first refusal in the Company or
provisions
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subjecting the Restricted Shares to a continuing substantial risk of
forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify management
objectives that, if achieved, will result in termination or early
termination of the restrictions applicable to such shares.
(f) Any such grant or sale of Restricted Shares may require that
any or all dividends or other distributions paid thereon during the
period of such restrictions be automatically deferred and reinvested
in additional Restricted Shares, which may be subject to the same
restrictions as the underlying award.
(g) Each grant or sale of Restricted Shares will be evidenced by
an Evidence of Award and will contain such terms and provisions,
consistent with this Plan, as the Board may approve. Unless
otherwise directed by the Board, all certificates representing
Restricted Shares will be held in custody by the Company until all
restrictions thereon will have lapsed, together with a stock power
or powers executed by the Participant in whose name such
certificates are registered, endorsed in blank and covering such
Shares.
6. DEFERRED SHARES. The Board may also authorize the granting or sale
of Deferred Shares to Participants. Each such grant or sale may utilize
any or all of the authorizations, and will be subject to all of the
requirements contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the
Company to deliver Common Shares to the Participant in the future in
consideration of the performance of services, but subject to the
fulfillment of such conditions during the Deferral Period as the
Board may specify.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant
that is less than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale will be subject to a Deferral Period
of not less than 1 year, as determined by the Board at the Date of
Grant, and may provide for the earlier lapse or other modification
of such Deferral Period in the event of a Change in Control.
(d) During the Deferral Period, the Participant will have no right
to transfer any rights under his or her award and will have no
rights of ownership in the Deferred Shares and will have no right to
vote them, but the Board may, at or after the Date of Grant,
authorize the payment of dividend equivalents on such Shares on
either a current or deferred or contingent basis, either in cash or
in additional Common Shares.
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(e) Each grant or sale of Deferred Shares will be evidenced by an
Evidence of Award and will contain such terms and provisions,
consistent with this Plan, as the Board may approve.
7. TRANSFERABILITY.
(a) Except as otherwise determined by the Board, no Option Right
or other derivative security granted under the Plan will be
transferable by a Participant other than by will or the laws of
descent and distribution. Except as otherwise determined by the
Board, Option Rights will be exercisable during the Optionee's
lifetime only by him or her or by his or her guardian or legal
representative.
(b) The Board may specify at the Date of Grant that part or all of
the Common Shares that are (i) to be issued or transferred by the
Company upon the exercise of Option Rights or upon the termination
of the Deferral Period applicable to Deferred Shares or (ii) no
longer subject to the substantial risk of forfeiture and
restrictions on transfer referred to in Section 5 of this Plan, will
be subject to further restrictions on transfer.
8. ADJUSTMENTS. The Board may make or provide for such adjustments in
the numbers of Common Shares covered by outstanding Option Rights and
Deferred Shares granted hereunder, in the Option Price, and in the kind of
shares covered thereby, as the Board, in its sole discretion, exercised in
good faith, may determine is equitably required to prevent dilution or
enlargement of the rights of Participants that otherwise would result from
(a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company,
or (b) any merger, consolidation, spin-off, split- off, spin-out,
split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase
securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Board, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such
alternative consideration as it, in good faith, may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of all awards so replaced. The Board may also make or provide
for such adjustments in the numbers of shares specified in Section 3 of
this Plan as the Board in its sole discretion, exercised in good faith,
may determine is appropriate to reflect any transaction or event described
in this Section 8; provided, however, that any such adjustment to the
number specified in Section 3(c)(i) will be made only if and to the extent
that such adjustment would not cause any Option intended to qualify as an
Incentive Stock Option to fail so to qualify.
9. CHANGE IN CONTROL. For purposes of this Plan, except as may be
otherwise prescribed by the Board in an agreement evidencing a grant or
award made under the Plan, a "Change in Control" shall mean the occurrence
of any of the following events:
(a) 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 the Company; provided, however, that
for purposes of this
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Section 10(a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company, or (iv) any acquisition by any Person pursuant to a
transaction which complies with clauses (i) and (ii) of Section
9(c).
(b) A change in a majority of the members of the Board occurs: (i)
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 the Company, (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 the Company through the Board or a
committee of the Board).
(c) Consummation of a Business Combination unless, following such
Business Combination, (i) no Person (excluding any entity resulting
from such Business Combination or any employee benefit plan (or
related trust) sponsored or maintained by the Company 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
(ii) 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.
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(e) Such other event as the Board may determine by express
resolution to constitute a Change in Control for purposes of this
Plan.
10. FRACTIONAL SHARES. The Company will not be required to issue any
fractional Common Shares pursuant to this Plan. The Board may provide for
the elimination of fractions or for the settlement of fractions in cash.
11. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other person under
this Plan, and the amounts available to the Company for such withholding
are insufficient, it will be a condition to the receipt of such payment or
the realization of such benefit that the Participant or such other person
make arrangements satisfactory to the Company for payment of the balance
of such taxes required to be withheld, which arrangements (in the
discretion of the Board) may include relinquishment of a portion of such
benefit.
12. FOREIGN EMPLOYEES. In order to facilitate the making of any grant or
combination of grants under this Plan, the Board may provide for such
special terms for
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awards to Participants who are foreign nationals or who are employed by
the Company or any Subsidiary outside of the United States of America as
the Board may consider necessary or appropriate to accommodate differences
in local law, tax policy or custom. Moreover, the Board may approve such
supplements to or amendments, restatements or alternative versions of this
Plan as it may consider necessary or appropriate for such purposes,
without thereby affecting the terms of this Plan as in effect for any
other purpose, and the Secretary or other appropriate officer of the
Company may certify any such document as having been approved and adopted
in the same manner as this Plan. No such special terms, supplements,
amendments or restatements, however, will include any provisions that are
inconsistent with the terms of this Plan as then in effect unless this
Plan could have been amended to eliminate such inconsistency without
further approval by the shareholders of the Company.
13. ADMINISTRATION OF THE PLAN.
(a) This Plan will be administered by the Board, which may from
time to time delegate all or any part of its authority under this
Plan to the Compensation Committee of the Board (or a subcommittee
thereof), as constituted from time to time. A majority of the
committee (or subcommittee) will constitute a quorum, and the action
of the members of the committee (or subcommittee) present at any
meeting at which a quorum is present, or acts unanimously approved
in writing, will be the acts of the committee (or subcommittee). To
the extent of any such delegation, references in this Plan to the
Board will be deemed to be references to such committee or
subcommittee.
(b) The interpretation and construction by the Board of any
provision of this Plan or of any agreement, notification or document
evidencing the grant of Option Rights, Restricted Shares or Deferred
Shares and any determination by the Board pursuant to any provision
of this Plan or of any such agreement, notification or document will
be final and conclusive. No member of the Board will be liable for
any such action or determination made in good faith.
14. AMENDMENTS, ETC.
(a) The Board may at any time and from time to time amend the Plan
in whole or in part; provided, however, that any amendment which
must be approved by the shareholders of the Company in order to
comply with applicable law or the rules of the Nasdaq Stock Market
or, if the Common Shares are not traded on the Nasdaq Stock Market,
the principal national securities exchange upon which the Common
Shares are traded or quoted, will not be effective unless and until
such approval has been obtained.
(b) The Board also may permit Participants to elect to defer the
issuance of Common Shares or the settlement of awards in cash under
the Plan pursuant to such rules, procedures or programs as it may
establish for purposes of this Plan. The Board also may provide that
deferred issuances and settlements include the payment or crediting
of dividend equivalents or interest on the deferral amounts.
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(c) The Board may condition the grant of any award or combination
of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.
(d) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship
or other special circumstances, of a Participant who holds an Option
Right not immediately exercisable in full, or any Restricted Shares
as to which the substantial risk of forfeiture or the prohibition or
restriction on transfer has not lapsed, or any Deferred Shares as to
which the Deferral Period has not been completed, or who holds
Common Shares subject to any transfer restriction imposed pursuant
to Section 7(b) of this Plan, the Board may, in its sole discretion,
accelerate the time at which such Option Right may be exercised or
the time at which such substantial risk of forfeiture or prohibition
or restriction on transfer will lapse or the time when such Deferral
Period will end or the time when such transfer restriction will
terminate or may waive any other limitation or requirement under any
such award.
(e) This Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the
Company or any Subsidiary, nor will it interfere in any way with any
right the Company or any Subsidiary would otherwise have to
terminate such Participant's employment or other service at any
time.
(f) To the extent that any provision of this Plan would prevent
any Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision will be null and void
with respect to such Option Right. Such provision, however, will
remain in effect for other Option Rights and there will be no
further effect on any provision of this Plan.
15. GOVERNING LAW. The Plan and all grants and awards and actions taken
thereunder shall be governed by and construed in accordance with the
internal substantive laws of the State of Georgia.
16. TERMINATION. No grant will be made under this Plan more than 10
years after the date on which this Plan is first approved by the
shareholders of the Company, but all grants made on or prior to such date
will continue in effect thereafter subject to the terms thereof and of
this Plan.
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