CUMULUS MEDIA INC. (NASDAQ:CMLS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Amendment of Employment Agreements
Cumulus Media Inc. (the “Company,” “Cumulus,” “we,” “us” or “our”) amended existing “change of control” provisions in the employment agreements (the “Employment Agreements”) with (i) John Abbot, the Company’s Executive Vice President, Treasurer and Chief Financial Officer, on October 25, 2017, (ii) Richard Denning, the Company’s Senior Vice President, Secretary and General Counsel, on October 25, 2017, and (iii) Mary Berner, the Company’s President and Chief Executive Officer, on October 26, 2017. These amendments are intended to clarify language that was not consistent with the intent of the Employment Agreements when they were originally adopted.
As amended, the definition of “change of control” in the Employment Agreements means the date (i) any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock of the Company held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; provided, if any one person, or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a “change in control;” (ii) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition by such person or persons) ownership of the Company’s stock possessing thirty percent (30%) or more of the total voting power of the stock of the Company; (iii) a majority of members of the Company’s board of directors (the “Board”) is replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; (iv) the consummation of a merger or consolidation involving the Company or in which Company securities are issued other than a merger or consolidation that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (v) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.
In addition, as amended, Mr. Abbot’s Employment Agreement entitles him to (i) a pro rata annual bonus upon any termination other than for “cause” or due to his voluntary termination without “good reason” and (ii) base severance benefits equal to 1.5 times the sum of Mr. Abbot’s base salary and target bonus upon termination by the Company without “cause,” upon non-renewal by the Company or upon termination by Mr. Abbot with “good reason.” If such a termination occurred within twelve months after a “change in control” occurring before October 13, 2018, the applicable severance multiple would be 2.5 and would be 2.0 if such “change in control” occurred after October 13, 2018.
Except as described above, all other material terms of the Employment Agreements remain in full force and effect.
Supplemental Incentive Plan Extension
On October 26, 2017, upon the recommendation of the Compensation Committee of the Board, the Board approved the extension of the term of the Company’s 2017 supplemental incentive plan through December 31, 2018 (the “SIP”), effective upon the approval by the Board of the applicable SIP performance targets, subject to the Company’s authority to terminate the SIP as of the end of any calendar quarter during the term of the SIP, on substantially the same terms and conditions previously approved by the Board.
Except as described herein, the material terms of the SIP (including the quarterly target opportunity for each named executive officer), as previously described in the Company’s Current Report Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on August 13, 2017, remain in full force and effect.
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About CUMULUS MEDIA INC. (NASDAQ:CMLS)
Cumulus Media Inc. (Cumulus) is a radio broadcasting company. The Company is also a provider of country music and lifestyle content through its NASH brand, which serves through radio programming, NASH Country Weekly magazine and live events. Its product lines include broadcast advertising, digital advertising, political advertising and non-advertising based license fees. Its broadcast advertising includes the sale of commercial advertising time to local, national and network clients. Its digital advertising includes the sale of advertising and promotional opportunities across its Websites and mobile applications. Its across the nation platform generates content distributable through both broadcast and digital platforms. Its categories of advertisers consist of amusement and recreation; banking and mortgage; furniture and home furnishings; arts and entertainment; food and beverage services; healthcare services; automotive dealers; food and beverage stores, and telecommunications.
