<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CUMULUS MEDIA INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
CUMULUS LOGO
CUMULUS MEDIA INC.
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 2, 1999
------------------------
NOTICE AND PROXY STATEMENT
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Notice of Annual Meeting of Shareholders.................... 3
Proxy Statement............................................. 5
Proposals You May Vote On................................... 7
Security Ownership of Certain Beneficial Owners and
Management................................................ 14
Section 16(a) Beneficial Ownership Reporting Compliance..... 15
Non-Employee Director Compensation.......................... 16
Compensation Committee Interlocks and Insider
Participation............................................. 16
Certain Relationships and Related Transactions.............. 16
Nominees for Election to the Board of Directors............. 18
Information about the Board of Directors.................... 21
Compensation Committee Report on Executive Compensation..... 21
Executive Compensation...................................... 25
Performance Graph........................................... 30
Submission of Shareholder Proposals......................... 31
Pending Legal Proceedings................................... 31
Other Matters............................................... 31
</TABLE>
2
<PAGE> 4
CUMULUS MEDIA INC.
111 EAST KILBOURN AVENUE
MILWAUKEE, WISCONSIN 53202
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 2, 1999
To the Shareholders of Cumulus Media Inc.:
The 1999 Annual Meeting of Shareholders of Cumulus Media Inc. will be held
at the Hotel Metro at 411 E. Mason Street, Milwaukee, Wisconsin, 53202 on
Tuesday, November 2, 1999 at 1:30 p.m., local time, for the following purposes:
(1) To elect six directors;
(2) To ratify the Board's selection of PricewaterhouseCoopers LLP as
Cumulus' independent auditors for 1999;
(3) To approve the Cumulus Media Inc. 1998 Amended and Restated Employee
Stock Purchase Plan;
(4) To approve the Cumulus Media Inc. 1999 Stock Incentive Plan;
(5) To approve the Cumulus Media Inc. 1999 Executive Stock Incentive Plan;
(6) To amend Cumulus Media Inc.'s Amended and Restated Articles of
Incorporation to increase the authorized Class A Common Stock of the
Company from 50,000,000 shares to 100,000,000 shares;
(7) To amend Cumulus Media Inc.'s Amended and Restated Articles of
Incorporation to provide for staggered, three-year terms of directors;
and
(8) To transact such other business as may properly come before the Annual
Meeting, all in accordance with the accompanying Proxy Statement.
Only holders of record of Class A Common Stock or Class C Common Stock at
the close of business on September 20, 1999 are entitled to notice of and to
vote at the Annual Meeting.
YOUR BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS MADE IN THE
ENCLOSED PROXY STATEMENT.
At the meeting, members of Cumulus' senior management will report on
Cumulus' 1998 and year to date 1999 results. The Company's Annual Report for the
year ended December 31, 1998 is included with or has preceded the Proxy
Statement.
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF CLASS A COMMON STOCK AND
CLASS C COMMON STOCK MUST BE PRESENT IN PERSON OR BY PROXY IN ORDER FOR THE
MEETING TO BE HELD. THEREFORE, SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN
THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT THEY EXPECT TO
ATTEND THE ANNUAL MEETING IN PERSON. IF
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<PAGE> 5
YOU ATTEND THE MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO BY
REVOKING YOUR PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
TERRENCE J. LEAHY, Secretary
September 30, 1999
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<PAGE> 6
CUMULUS MEDIA INC.
111 EAST KILBOURN AVENUE
MILWAUKEE, WISCONSIN 53202
SEPTEMBER 30, 1999
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Cumulus Media
Inc. (the "Company") for use at the Annual Meeting of Shareholders to be held on
Tuesday, November 2, 1999 (the "Annual Meeting").
The expense of printing and mailing proxy materials, including expenses
involved in forwarding materials to beneficial owners of common stock held in
the name of another person, will be borne by the Company. The Company does not
expect to pay any fees for the solicitation of proxies but may pay brokers,
fiduciaries and other custodians their reasonable fees and expenses for sending
proxy materials to beneficial owners and obtaining their instructions. No
solicitation other than by mail is contemplated, except that officers or
employees of the Company or its subsidiaries may solicit the return of proxies
from certain shareholders in person or by telephone, facsimile transmission or
other means of electronic communication. The Proxy Statement and the
accompanying Proxy Card are being sent to the Company's shareholders commencing
on or about September 30, 1999.
Only holders of record of shares of Class A Common Stock, $.01 par value
(the "Class A Common Stock") or shares of Class C Common Stock, $.01 par value
(the "Class C Common Stock") at the close of business on September 20, 1999 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, the Company had outstanding 21,010,683 shares of Class A
Common Stock, 7,856,593 shares of Class B Common Stock, $.01 par value (the
"Class B Common Stock"), 2,151,277 shares of Class C Common Stock and 143,069
shares of Series Cumulative Redeemable Exchangeable Preferred Stock, $.01 par
value. The presence, in person or by proxy, of the holders of a majority of the
shares of Class A and Class C Common Stock outstanding on the Record Date is
required for a quorum with respect to the matters on which action is to be taken
at the Annual Meeting.
Any shareholder executing and delivering the enclosed proxy may revoke the
same at any time prior to the voting thereof by written notice of revocation
given to the Secretary of the Company.
The Company's Annual Report for the year ended December 31, 1998 is
included or has preceded this Proxy Statement.
Abstentions and broker non-votes (i.e., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owners or other persons entitled to vote shares as to a matter with respect to
which brokers or nominees do not have discretionary power to vote) will be
treated as present for purposes of determining the quorum. Each share of Class A
Common Stock entitles its holder to cast one vote on each matter to be voted
upon at the Annual Meeting. Subject to the following exception, each share of
Class C Common Stock entitles its holder to cast 10 votes on each matter to be
voted upon at the Annual Meeting. During the period of time commencing with the
date of conversion of any Class B Common Stock to Class C Common Stock by either
BA Capital Company, LP or State of Wisconsin Investment Board and ending with
the date on which BA Capital Company, LP or State of Wisconsin Investment Board
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<PAGE> 7
(together with their respective affiliates) each ceases to beneficially own at
least 5% of the aggregate shares of common stock held by such holders
immediately prior to the Company's initial public offering in July, 1998,
holders of Class C Common Stock are entitled to one vote per share.
UNLESS OTHERWISE DIRECTED, ALL PROXIES WILL BE VOTED FOR THE ELECTION OF
EACH OF THE INDIVIDUALS NOMINATED TO SERVE AS A DIRECTOR AND FOR EACH OF THE
OTHER PROPOSALS. DIRECTORS ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY
HOLDERS OF THE COMPANY'S CLASS A AND CLASS C COMMON STOCK ENTITLED TO VOTE AT A
MEETING AT WHICH A QUORUM IS PRESENT. IN OTHER WORDS, THE SIX DIRECTORS WHO
RECEIVE THE LARGEST NUMBER OF VOTES WILL BE ELECTED AS DIRECTORS. ANY SHARES NOT
VOTED, WHETHER BY WITHHELD AUTHORITY, BROKER NON-VOTE OR OTHERWISE, WILL HAVE NO
EFFECT IN THE ELECTION OF DIRECTORS EXCEPT TO THE EXTENT THAT THE FAILURE TO
VOTE FOR AN INDIVIDUAL RESULTS IN ANOTHER INDIVIDUAL RECEIVING A LARGER NUMBER
OF VOTES.
A MAJORITY OF THE VOTES ENTITLED TO BE CAST BY THE PRESENT OR REPRESENTED
SHARES ENTITLED TO VOTE IS REQUIRED TO RATIFY THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1999 AND TO
APPROVE THE COMPANY'S 1998 AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN,
THE COMPANY'S 1999 STOCK INCENTIVE PLAN AND THE COMPANY'S 1999 EXECUTIVE STOCK
INCENTIVE PLAN. BROKER NON-VOTES AND ABSTENTIONS WILL HAVE THE EFFECT OF A VOTE
AGAINST THESE PROPOSALS.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF CLASS A COMMON STOCK
OUTSTANDING AND ENTITLED TO VOTE, AS WELL AS A MAJORITY OF THE VOTES ENTITLED TO
BE CAST BY THE OUTSTANDING SHARES (CLASS A AND CLASS C COMMON STOCK) ENTITLED TO
VOTE, IS REQUIRED TO APPROVE THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION INCREASING THE AUTHORIZED SHARES OF CLASS A COMMON
STOCK. A MAJORITY OF THE VOTES ENTITLED TO BE CAST BY THE OUTSTANDING SHARES
ENTITLED TO VOTE IS REQUIRED TO APPROVE THE AMENDMENT TO THE COMPANY'S AMENDED
AND RESTATED ARTICLES OF INCORPORATION PROVIDING FOR STAGGERED TERMS FOR
DIRECTORS. BROKER NON-VOTES AND ABSTENTIONS WILL HAVE THE EFFECT OF A VOTE
AGAINST THE PROPOSALS TO AMEND THE COMPANY'S AMENDED AND RESTATED ARTICLES OF
INCORPORATION.
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<PAGE> 8
PROPOSALS YOU MAY VOTE ON
1. ELECTION OF DIRECTORS
The entire Board of Directors, consisting of six members, will be elected
at the Annual Meeting. Each director will serve until the next annual meeting of
the shareholders or until he is succeeded by another qualified director who has
been elected. If, however, the proposal to amend the Amended and Restated
Articles of Incorporation to provide for a staggered board is adopted, as
described below, the directors will be divided into three classes with staggered
terms expiring in 2000, 2001 and 2002. Detailed information about each nominee
is provided below.
The Board has no reason to believe that any nominee will be unable to serve
as a director. If for any reason a nominee becomes unable to serve, the persons
named in the proxy will vote for the election of such person or persons as the
Board may recommend.
YOUR BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
2. RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee and subject to ratification by
the Company's shareholders, the Board has appointed PricewaterhouseCoopers LLP
as the Company's independent auditors for the fiscal year ending December 31,
1999. PricewaterhouseCoopers LLP has served as the Company's independent
auditors since the incorporation of the Company on May 22, 1997. During 1998,
PricewaterhouseCoopers LLP also provided non-audit services to the Company.
Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting to make any statement they may desire and to respond to questions from
shareholders.
YOUR BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF PRICEWATERHOUSECOOPERS
LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
3. APPROVAL OF THE 1998 AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
The complete text of the 1998 Amended and Restated Employee Stock Purchase
Plan is set forth in Appendix A. The following summary of the material features
of the1998 Amended and Restated Employee Stock Purchase Plan is qualified in its
entirety by reference to Appendix A.
The Board of Directors approved the Company's Employee Stock Purchase Plan
on November 23, 1998 and amended it on August 30, 1999, subject to approval by
the Company's shareholders. The purpose of the Employee Stock Purchase Plan is
to provide employees of the Company and its subsidiaries with an incentive to
work for the continued success of the Company by granting such employees the
opportunity to purchase the Company's Class A Common Stock through one or more
offerings. The aggregate number of shares of Class A Common Stock subject to the
Employee Stock Purchase Plan is 1,000,000. No one person may purchase shares of
Class A Common Stock under the Amended and Restated Employee Stock Purchase Plan
or any other employee stock purchase plan of the Company or its subsidiaries
having a fair market value in excess of
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<PAGE> 9
$25,000 for each calendar year, and no employee may be granted an option if,
immediately after the grant, such employee would own 5% or more of the total
combined voting power or value of all classes of stock of the Company or its
subsidiaries as defined by statute.
The term of each offering under the Amended and Restated Employee Stock
Purchase Plan is 12 months, commencing on January 1, 1999. Eligible employees
who elect to participate in the Employee Stock Purchase Plan authorize periodic
payroll deductions from their compensation. A payroll deduction account is
maintained for each participating employee. At the end of an offering period,
the payroll deduction account is totaled and the employee is deemed to have
purchased whole shares of the Company's Class A Common Stock at the offering
price, which is 85% of the lesser of the fair market value of the Company's
Class A Common Stock on the first and last days of the 12-month offering period.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1998
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
4. APPROVAL OF THE 1999 STOCK INCENTIVE PLAN
The complete text of the 1999 Stock Incentive Plan is set forth in Appendix
B. The following summary of the material features of the 1999 Stock Incentive
Plan is qualified in its entirety by reference to Appendix B.
The Board of Directors approved the 1999 Stock Incentive Plan on August 30,
1999, subject to approval by the Company's shareholders. The purpose of the 1999
Stock Incentive Plan is to attract and retain certain selected officers, key
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. The aggregate number of shares of
Class A Common Stock subject to the 1999 Stock Incentive Plan is 900,000, all of
which may be granted as incentive stock options. In addition, no one person may
receive options over more than 300,000 shares of Class A Common Stock in any one
calendar year.
The 1999 Stock Incentive Plan permits the Company to grant nonqualified
stock options and incentive stock options ("ISOs"), as defined in Sections 422
of the Internal Revenue Code of 1986, as amended (the "Code"). No options may be
granted under the 1999 Stock Incentive Plan after August 30, 2009.
The Compensation Committee administers the 1999 Stock Incentive Plan. The
Compensation Committee has full and exclusive power to interpret the 1999 Stock
Incentive Plan and to adopt rules, regulations and guidelines for carrying out
the 1999 Stock Incentive Plan as it may deem necessary or proper.
Under the 1999 Stock Incentive Plan, current and prospective employees,
non-employee directors, consultants or other persons who provide services to the
Company are eligible to participate. As of August 30, 1999, approximately 100
individuals will participate in the 1999 Stock Incentive Plan. The following
table provides information on options that have been granted to the Named
Executive Officers as defined hereinafter, to all current executive officers as
a group, to all non-executive directors as a group and to all other employees as
of September 15, 1999.
8
<PAGE> 10
NEW PLAN BENEFITS TABLE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
NAME UNDERLYING OPTIONS GRANTED
---- --------------------------
<S> <C>
Richard W. Weening........................... 30,000
Lewis W. Dickey.............................. 30,000
William M. Bungeroth......................... 50,000
Richard J. Bonick, Jr........................ 10,000
John Dickey.................................. 16,354
All current executive officers as a group
(5)........................................ 136,354
All non-executive directors as a group (3)... 70,000
All other employees as a group (57).......... 444,300
</TABLE>
The 1999 Stock Incentive Plan may be amended by the approval of the Board
of Directors, but certain amendments adversely affecting the rights of a
participant under any existing option grant may not be made without obtaining
the participant's written consent, and amendments increasing the number of
shares of Class A Common Stock which may be granted under the 1999 Stock
Incentive Plan may not be made without obtaining shareholder approval.
The exercise price for options granted under the 1999 Stock Incentive Plan
may be no less than 100% of the fair market value of the Class A Common Stock on
the date of grant of the option (or 110% in the case of ISOs granted to
participants who are 10% shareholders of the Company). Options will be
exercisable during the period specified in each award agreement and will
generally be exercisable in installments pursuant to a vesting schedule to be
designated by the Compensation Committee. No option will remain exercisable
later than ten years after the date of grant (or five years from the date of
grant in the case of ISOs granted to 10% shareholders of the Company). The
closing sale price of the Class A Common Stock on the Nasdaq National Market on
September 16, 1999 was $29.50.
The federal income tax consequences of nonqualified stock options and ISOs
granted under the 1999 Stock Incentive Plan are generally as follows:
Nonqualified Stock Options. The grant of a nonqualified option will have no
federal income tax consequences to the Company or to a participant. A
participant will recognize taxable ordinary income at the time of exercise of
the option in an amount equal to the excess of the fair market value of the
shares acquired at the time of exercise over the option price, and the Company
will ordinarily be entitled to a deduction for such amount.
The holders of shares acquired upon exercise of a nonqualified option will,
upon a subsequent disposition of such shares, generally recognize a short-term
or long-term capital gain or loss, depending upon the holding period of the
shares, equal to the difference between the amount realized on the sale and the
basis in such shares (the sum of the option price and the amount taxed as
ordinary income at the time of exercise).
ISOs. Neither the grant nor exercise of an ISO will generally have any
federal income tax consequences for a participant. The amount by which the fair
market value of the shares acquired upon the exercise of any ISO exceeds the
option price at the date of exercise, however, is an item of "tax preference"
for purposes of computing the alternative minimum tax on individuals. If a
participant has held the shares acquired on the exercise
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<PAGE> 11
of an ISO for at least two years from the date of the grant of the option and at
least one year from the date of exercise, the participant will recognize taxable
long-term capital gain or loss upon a subsequent disposition of the shares. In
such circumstances, no deduction would be allowed to the Company for federal
income tax purposes in connection with the grant or exercise of the option or
the transfer of shares acquired upon such exercise.
If, however, the participant disposes of his or her shares within the
holding periods described above, (i) the participant will recognize ordinary
income in an amount equal to the difference between the fair market value of
such shares on the date of exercise and the option price, provided that, if the
amount realized from such sale of exchange is less than the fair market value on
the exercise date, then the ordinary income will be limited to the excess of the
amount realized upon the sale or exchange or shares over the option price; (ii)
the Company will be entitled to a deduction from such year in the amount of the
ordinary income so recognized; and (iii) the participant will recognize capital
gain or loss, as the case many be in an amount equal to the difference between
the amount realized upon such sale or exchange of shares and the sum of the
option price plus the amount of ordinary income, if any, recognized upon such
disposition.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1999 STOCK
INCENTIVE PLAN.
5. APPROVAL OF THE 1999 EXECUTIVE STOCK INCENTIVE PLAN
The completed text of the 1999 Executive Stock Incentive Plan is set forth
in Appendix C. The following summary of the material features of the 1999
Executive Stock Incentive Plan is qualified in its entirety by reference to
Appendix C.
The Board of Directors approved the 1999 Executive Stock Incentive Plan on
August 30, 1999, subject to approval by the Company's shareholders. The 1999
Executive Stock Incentive Plan governs the stock options to be granted to
Messrs. Weening and L. Dickey. The aggregate number of shares of Class C Common
Stock subject to the 1999 Executive Stock Incentive Plan is 1,000,000, 300,000
of which may be granted as ISOs. In addition, no one person may receive options
over more than 500,000 shares of Class C Common Stock in any one calendar year.
The 1999 Executive Stock Incentive Plan permits the Company to grant
nonqualified stock options and ISOs to Messrs. Weening and L. Dickey. No options
may be granted under the 1999 Executive Stock Incentive Plan after August 30,
2009.
The Compensation Committee administers the 1999 Executive Stock Incentive
Plan. The Compensation Committee has full and exclusive power to interpret the
1999 Executive Stock Incentive Plan and to adopt rules, regulations and
guidelines for carrying out the 1999 Executive Stock Incentive Plan as it may
deem necessary or proper.
As of August 30, 1999, Messrs. Weening and L. Dickey were each granted
options to purchase 500,000 shares of Class C Common Stock under the 1999
Executive Stock Incentive Plan.
The 1999 Executive Stock Incentive Plan may be amended by the approval of
the Board of Directors, but certain amendments adversely affecting the rights of
a participant under any existing option grant may not be made without obtaining
the participant's written consent, and amendments increasing the number of
shares of Class C Common
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<PAGE> 12
Stock which may be granted under the 1999 Executive Stock Incentive Plan may not
be made without obtaining shareholder approval.
The exercise price for nonqualified stock options granted under the 1999
Executive Stock Incentive Plan may be no less than 100% of the fair market value
of the Class A Common Stock on the date of grant of the option. The exercise
price for ISOs granted under the 1999 Executive Stock Incentive Plan may be no
less than 100% of the fair market value of the Class A Common on the date of
grant (or 110% in the case of ISOs granted to participants who are 10%
shareholders of the Company). The vesting schedule for options is 25% per year
with each option being fully exercisable four years from the date of the grant.
The closing sale price of the Class A Common Stock on the Nasdaq National Market
on September 16, 1999 was $29.50.
The federal income tax consequences of nonqualified stock options and ISOs
granted under the 1999 Executive Stock Incentive Plan are the same as for the
1999 Stock Incentive Plan as described above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1999 EXECUTIVE
STOCK INCENTIVE PLAN.
6. APPROVAL OF AN AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION INCREASING THE AUTHORIZED CLASS A COMMON STOCK
The proposed amendment to the Company's Amended and Restated Articles of
Incorporation increases the number of authorized shares of the Class A Common
Stock from 50,000,000 shares to 100,000,000 shares. As of the Record Date, of
the 50,000,000 shares of Class A Common Stock presently authorized, 21,010,683
shares were issued and outstanding and an aggregate of 3,188,834 shares were
reserved for issuance pursuant to the Company's 1998 Stock Incentive Plan, 1998
Employee Stock Purchase Plan and 1999 Stock Incentive Plan. In addition,
3,001,380 shares of Class C Common Stock, which are convertible into shares of
Class A Common Stock, were reserved for issuance pursuant to the 1998 Executive
Stock Incentive Plan and 1999 Executive Stock Incentive Plan.
The additional authorized shares of the Company's Class A Common Stock may
be used for any proper corporate purpose approved by the Board of Directors of
the Company. Their availability would enable the Company's Board of Directors to
act with flexibility when favorable opportunities arise to expand or strengthen
the Company's business through the issuance of Class A Common Stock. Among the
reasons for issuing additional shares would be to increase the Company's capital
through sale of the Company's Class A Common Stock, to engage in other types of
capital transactions, to undertake acquisitions and to satisfy contractual
commitments, including the Company's 1998 Stock Incentive Plan, 1998 Executive
Stock Incentive Plan, 1998 Amended and Restated Employee Stock Purchase Plan,
1999 Stock Incentive Plan and 1999 Executive Stock Incentive Plan and to pay
stock dividends or stock splits. The Board of Directors of the Company has not
proposed the increase in authorized capital stock with the intention of
discouraging tender offers or takeover attempts. However, the availability of
authorized shares for issuance could render more difficult or discourage a
merger, tender offer, proxy contest or other attempt to obtain control of the
Company.
The Company regularly reviews a range of financing transactions including
the issuance of the Company's Class A Common Stock. Except for shares reserved
for
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<PAGE> 13
issuance as described above, the Company has no present intention of issuing or
selling the newly authorized Class A Common stock for any purpose, but may do so
if market and other conditions indicate that such a course of action is
advisable.
If the amendment to the Company's Amended and Restated Articles of
Incorporation is approved, the Board of Directors of the Company generally may
issue the additional authorized shares of Class A Common Stock without further
shareholder approval. In some instances, shareholder approval for the issuance
of additional shares may be required by law or by the requirements of the Nasdaq
National Market, on which the Class A Common Stock is listed, or may otherwise
be necessary or desirable. Except in such cases, the Company does not anticipate
that further shareholder authorization will be solicited. Shareholders are not
entitled to preemptive rights to purchase any new issue of Class A Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO
THE COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION INCREASING THE
AUTHORIZED CLASS A COMMON STOCK.
7. APPROVAL OF AN AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION PROVIDING FOR STAGGERED TERMS OF DIRECTORS
Presently, all directors of the Company are elected annually. If approved,
the amendment provides for staggered terms of directors by dividing the Board of
Directors into three groups, designated as Class I, Class II and Class III.
Class I will initially consist of two directors, each to hold office until the
Annual Meeting of Shareholders in 2000; Class II will initially consist of two
directors, each to hold office until the annual Meeting of Shareholders in 2001;
Class III will initially consist of two directors, each to hold office until the
Annual Meeting of Shareholders in 2002. Starting with the 2000 Annual Meeting of
Shareholders, one class of directors would be elected for a three-year term at
each Annual Meeting, with the remaining directors continuing in office. The
directors of each class initially would be as follows:
<TABLE>
<CAPTION>
CLASS I CLASS II CLASS III
------- -------- ---------
<S> <C> <C>
William M. Bungeroth Robert H. Sheridan, III Richard W. Weening
Ralph B. Everett Eric P. Robison Lewis W. Dickey, Jr.
</TABLE>
A staggered Board of Directors, which prevents more than one-third of the
Board from being replaced at any one meeting, will help to assure the continuity
and stability of the Company's management and policies since a majority of the
directors will have prior experience as directors of the Company.
A classified Board of Directors should discourage certain types of activity
that involve an actual or threatened change in control of the Company by making
it more difficult and time consuming to change majority control of the Board.
Over the past several years, third parties have attempted to accumulate
substantial stock positions in public companies with a view toward using a
control block of stock to force a merger, consolidation, restructuring or to
force a corporation to repurchase a control block of stock at a premium. Such
actions are taken without advance notice to, or consultation with, the board or
directors or management of the corporation. In many cases, such third parties
seek representation on the corporation's board or directors in order to
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<PAGE> 14
increase the likelihood that their proposals will be implemented. If the
corporation resists their efforts to obtain representation on the corporation's
board, such parties may commence proxy contests to have themselves or their
nominees elected to the board of directors in place of certain directors or the
entire board. In some cases, the third party may not be interested in taking
over the corporation, but uses the threat of a proxy fight or takeover bid as
means of forcing the corporation to repurchase its holdings at a substantial
premium over market price.
The Board believes that the threat of removal of the Company's management
in such situations would curtail management's ability to negotiate effectively
with such purchasers. Management would be deprived of the time and information
necessary to evaluate the takeover proposal, to study alternative proposals and
to help ensure that the best price is obtained in any transaction involving the
Company that may be ultimately undertaken.
A classified Board of Directors would have the effect of making it more
difficult to change the composition of the Board. A staggered Board upon which
directors serve three-year terms requires at least two annual shareholder
meetings in order to effect a change in control of the Board.
By stabilizing the composition of the Board, a classified Board should
encourage any person who might seek to acquire control of the Company to consult
with the Company's Board and to negotiate the terms of any proposed business
combination or tender offer. The Board believes that any takeover attempt or
business combination in which the Company is involved should be thoroughly
studied by the Company's management and its Board to assure that all of the
Company's shareholders are treated fairly and that shareholder value is
maximized.
Takeover or changes in management of the Company that are proposed and
effected without prior consultation and negotiation with the Company's Board and
management may not necessarily be detrimental to the Company and its
shareholders. The adoption of this amendment could discourage or frustrate
future attempts to acquire control of the Company that are not approved by the
incumbent Board, but which a majority of shareholders may deem to be in their
best interests. One of the effects of a classified Board may be to discourage
prospective acquirers from making tender offers for, or open market purchases
of, shares of the Company's capital stock. Because tender offers are often made
at a premium above market price, and large purchases made in the open market
often result in temporary fluctuations in the market price of such shares,
shareholders may be denied the opportunity to sell their shares at prices in
excess of historic market prices if the proposed amendment discourages such
tender offers or open market purchases. A classified Board could also delay or
frustrate the assumption of control by a holder of a large block of the
Company's shares or the removal of incumbent directors, even if shareholders
considered such event to be beneficial. However, the Board feels that the
benefits to shareholders of seeking to protect its ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to take over or restructure
the Company outweigh the disadvantages to shareholders of discouraging such
proposals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO
THE AMENDED AND RESTATED ARTICLES OF INCORPORATION PROVIDING FOR STAGGERED TERMS
OF DIRECTORS.
13
<PAGE> 15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table lists information concerning the beneficial ownership
of the Common Stock of the Company on September 15, 1999 (unless otherwise
noted) by (i) each Director and Named Executive Officer of the Company and their
affiliates, (ii) all directors and executive officers as a group, and (iii) each
person known to the Company to own beneficially more than 5% of the Common Stock
of the Company.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK COMMON STOCK(1) COMMON STOCK(2)
---------------------- ---------------------- ----------------------
NUMBER NUMBER NUMBER
NAME OF STOCKHOLDER OF SHARES PERCENTAGE OF SHARES PERCENTAGE OF SHARES PERCENTAGE
------------------- --------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Weening(3)....... 181,000 * -- -- -- --
QUAESTUS Management
Corporation(4)............ 101,000 * -- -- 337,313 15.7%
CML Holdings, LLC(5)........ 201,100 * -- -- 1,522,422 70.8%
QUAESTUS Partner Fund....... 80,000 * -- -- -- --
Lewis W. Dickey, Jr.(3)..... 149,740 * -- -- -- --
DBBC of Georgia, LLC(6)..... -- -- -- -- 376,542 13.6%
William M. Bungeroth(7)..... 135,466 * -- -- -- --
Richard J. Bonick, Jr.(7)... 94,590 * -- -- -- --
John Dickey(7).............. 65,542 * -- -- -- --
BA Capital Company, LP...... -- -- 3,371,246 42.9% -- --
State of Wisconsin
Investment Board(8)....... -- -- 3,791,619 48.3% -- --
The Northwestern Mutual Life
Ins. Co.(9)............... -- -- 693,728 8.8% -- --
Putnam Investments,
Inc.(10).................. 1,123,900 5.3% -- -- -- --
Robert H. Sheridan,
III(11)................... 6,000 * -- -- -- --
Ralph B. Everett(11)........ 8,000 * -- -- -- --
Eric P. Robison............. -- -- -- -- -- --
All directors and executive
officers as a group (8
persons).................. 640,338 3.0% -- -- 2,151,277 100.00%
</TABLE>
- -------------------------
* Indicates less than one percent
(1) Except upon the occurrence of certain events, holders of Class B Common
Stock are not entitled to vote, whereas each share of Class A Common Stock
entitles its holders to one vote and subject to certain exceptions, each
share of Class C Common Stock entitles its holders to ten votes. Under
certain conditions and subject to prior governmental approval, shares of
Class B Common Stock are convertible into shares of Class A Common Stock
and/or Class C Common Stock.
(2) Subject to certain exceptions, each share of Class C Common Stock entitles
its holders to ten votes. Under certain conditions and subject to prior
governmental approval, shares of Class C Common Stock are convertible into
shares of Class A Common Stock.
(3) Represents beneficial ownership attributable to Mr. Weening as a result of
his controlling interests in QUAESTUS Management Corporation and QUAESTUS
Partner Fund and beneficial ownership attributable to Lewis W. Dickey, Jr.
as a
14
<PAGE> 16
result of his controlling interest in DBBC of Georgia, LLC. Includes
options to purchase 250,173 shares of Class C Common Stock exercisable
within 60 days granted to each of Messrs. Weening and Lewis W. Dickey, Jr.
under the 1998 Executive Stock Incentive Plan.
(4) The address of QUAESTUS Management Corporation is 111 East Kilbourn Avenue,
Suite 2700, Milwaukee, Wisconsin 53202. This information is based on a
Schedule 13G dated February 16, 1999.
(5) The address of CML Holdings, LLC is 111 East Kilbourn Avenue, Suite 2700,
Milwaukee, Wisconsin 53202.
(6) The address of DBBC of Georgia, LLC is 3060 Peachtree Road, N.W., Suite
730, Atlanta, Georgia 30305. This information is based on a Schedule 13G
dated February 16, 1999.
(7) Includes options to purchase 47,000, 6,124 and 30, 452 shares of Class A
Common Stock exercisable within 60 days granted to Messrs. Bungeroth,
Bonick, and John Dickey, respectively, under the 1998 Stock Incentive Plan.
(8) The address of the State of Wisconsin Investment Board is P.O. Box 7842,
Madison, Wisconsin 53707. This information is based on a Schedule 13G dated
February 4, 1999.
(9) The address of The Northwestern Mutual Life Insurance Company is 720 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202. This information is based on
a Schedule 13G dated February 10, 1999.
(10) The address of Putnam Investments, Inc. is One Post Office Square, Boston,
Massachusetts 02109. This information is based on a Schedule 13G dated May
5, 1999. Of these shares, Putnam Investments, Inc. has shared voting power
as to 592,000 shares and shared dispositive power as to all 1,123,900
shares of Common Stock.
(11) Include options to purchase 6,000 shares of Class A Common Stock
exercisable within 60 days granted to each of Messrs. Sheridan and Everett
upon their election to Board of Directors.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under U.S. securities laws, directors, certain executive officers and
persons holding more than 10% of the Company's common stock must report their
initial ownership of the Class A Common Stock and any changes in that ownership
to the Securities and Exchange Commission. The Commission has designated
specific due dates for these reports and the Company must identify in this proxy
statement those persons for whom these reports were not filed when due. The
Company believes, based upon a review of copies of such reports and written
materials, that no other reports were required, and that during 1998 all Section
16 filing requirements applicable to the Company's directors, executive officers
and greater than 10% beneficial owners were complied with, except for the
following: (i) the original Form 3 filed for Lewis W. Dickey, Jr. did not
include certain shares purchased for his personal account; (ii) the original
Form 3 reports for CML Holdings did not include one transaction and was not
filed on a timely basis; and (iii) the Form 4 report for one transaction of CML
Holdings for the month end September 30, 1998 was filed shortly after the due
date of October 10, 1998. Each of these matters was subsequently reported
correctly as required.
15
<PAGE> 17
NON-EMPLOYEE DIRECTOR COMPENSATION
Directors of the Company who are not employees receive a fee of $1,000 for
each Board meeting which they attend, plus out-of-pocket expenses incurred in
connection with attendance at each such meeting. In addition, in 1998, Messrs.
Sheridan and Everett each received options to purchase a total of 30,000 shares
of Class A Common Stock. Such options are exercisable at the fair market value
of the Class A Common Stock at the date of grant. These options will vest 20%
per year with each option being fully exercisable five years from the date of
grant. On August 30, 1999, Messrs. Sheridan and Everett each received additional
options to purchase a total of 10,000 shares of Class A Common Stock, and Mr.
Robison received options to purchase a total of 50,000 shares of Class A Common
Stock. Such options are exercisable at the fair market value of the Class A
Common Stock at the date of grant. These options will vest 20% over year with
each option being fully exercisable five years from the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Everett was a member of the Compensation Committee in 1998 but is no
longer a member of such committee. Mr. Everett is a partner with the Washington,
D.C. office of the law firm of Paul, Hastings, Janofsky & Walker LLP, where he
heads the firm's Federal Legislative Practice Group. The Company engages the law
firm of Paul, Hastings, Janofsky & Walker LLP in numerous matters dealing with
compliance with federal regulation and corporate finance activities. Total
expenses paid to Paul, Hastings, Janofsky & Walker LLP during fiscal 1998 and
1997 were approximately $1,190,000 and $0, respectively. Of these expenses paid
in 1998 and 1997, $1,131,000 and $0 were capitalized as acquisition or financing
costs. The remaining expenses have been included as part of the corporate
general and administrative expenses in the statement of operations. At December
31, 1998 and 1997, amounts payable to Paul, Hastings, Janofsky & Walker LLP were
approximately $642,000 and $22,000, respectively.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Lewis W. Dickey, Jr. and John Dickey each have a 25% ownership interest in
Stratford Research, Inc. ("Stratford"), an entity that provides programming
consulting and market research services to the Company. Under an agreement with
Stratford, Stratford receives $25,000 to evaluate programming at target radio
stations. Annual strategic studies cost the Company a minimum of $25,000
negotiable depending on competitive market conditions. Additionally, Stratford
provides program-consulting services for contractually specified amounts over
the three years of the agreement. Total fees paid to Stratford by the Company
during 1998 and 1997 were $2,735,000 and $184,000 respectively.
QUAESTUS Management Corporation ("QUAESTUS"), an investment firm
specializing in media and new media controlled by Richard W. Weening, performs
due diligence on the Company's proposed transactions as well as certain other
consulting services including internet strategy consulting, research support for
Department of Justice inquiries and analytic services in support of the Treasury
and corporate finance function. During 1998 and 1997, the Company paid QUAESTUS
$1,423,000 and $297,000 respectively, for services. Under an Agreement reviewed
and approved by the independent directors, for specified due diligence services
QUAESTUS receives a specified flat rate per transaction between $15,000 and
$60,000 depending on the amount of work involved as
16
<PAGE> 18
reflected in the number of FM stations proposed to be acquired in the
transaction. For other services QUAESTUS is paid an hourly rate per person-hour.
QUAESTUS is not paid based on the value of any transaction. The Company is
obligated to reimburse QUAESTUS for all of its out-of-pocket expenses incurred
in connection with the performance of services under such agreement.
The Company also paid to Cumulus Media, LLC fees in 1998 and 1997
consisting of (i) a non-recurring organizational fee of $300,000 in 1997 (with
QUAESTUS receiving $180,000 of such fee and DBBC of Georgia, LLC, receiving
$120,000 of such fee) and (ii) management fees of $150,000 and $206,000 (with
QUAESTUS receiving $90,000 and $123,000 respectively, of such fees from Cumulus
Media, LLC and DBBC of Georgia, LLC, receiving $60,000 and $834,000,
respectively, of such fees from Cumulus Media, LLC). The fees paid to Cumulus
Media, LLC have terminated. Lewis W. Dickey, Jr. and John Dickey have a 75% and
25% ownership interest in DBBC of Georgia LLC, respectively.
As noted above, one of the Company's directors is Mr. Ralph B. Everett. Mr.
Everett is a partner with the Washington, D.C. office of the law firm of Paul,
Hastings, Janofsky & Walker LLP, which the Company has engaged.
17
<PAGE> 19
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTORSHIPS
NAME --------------------------------------
<S> <C>
Richard W. Weening Mr. Weening, age 53, has served as Executive
Chairman, Treasurer and Director of the Company
since March 1998. Mr. Weening served as Chairman
of the Company from its inception on May 22, 1997
until March 1998. Mr. Weening was a founder and
an initial investor in Cumulus Media, LLC through
his ownership interest in CML Holdings LLC
("CML"), an investment fund managed by QUAESTUS,
a private equity investment and advisory firm
specializing in information services and media
and new media companies. QUAESTUS was also a
Managing Member of Cumulus Media, LLC. Mr.
Weening served as Chairman and Chief Executive
Officer of Cumulus Media, LLC from its inception
in April 1997 until its dissolution in June 1998.
Mr. Weening founded QUAESTUS in 1989 and served
as Chairman and Chief Executive Officer until
March 1998. Mr. Weening has over 20 years
experience as a chief executive officer and
investor in the information and media industry,
including text and reference book publishing,
business magazine publishing, radio broadcasting,
interactive information services and electronic
commerce software and services. In 1985, Mr.
Weening founded Caribbean Communications Company
Ltd., a radio broadcasting company acquired by
the Company in May 1997. He currently serves as a
director of QUAESTUS and ARI Network Services,
Inc. He holds a Bachelor of Arts degree from St.
John's University.
Lewis W. Dickey, Jr. Mr. Dickey, age 37, has served as Executive Vice
Chairman and Director of the Company since March
1998. Mr. Dickey was a founder and an initial
investor in Cumulus Media, LLC through his
interest in CML and owns 75% of the outstanding
capital stock of DBBC of Georgia, LLC, a Managing
Member of Cumulus Media, LLC. He served as
Executive Vice Chairman and a Director of Cumulus
Media, LLC from its inception in April 1997 until
its dissolution in June 1998. Mr. Dickey is the
founder and was President of Stratford from
September 1985 to March 1998 and owns 25% of the
outstanding capital stock of Stratford. Stratford
is a strategy consulting and market research firm
advising radio and television broadcasters as
well as other media related industries. From
January 1988 until March 1998, Mr. Dickey served
as President and Chief Operating Officer of
Midwestern Broadcasting, which operated two
stations in Toledo, Ohio that were acquired by
the Company in November 1997. He also
</TABLE>
18
<PAGE> 20
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTORSHIPS
NAME --------------------------------------
<S> <C>
has an ownership interest (along with members of
his family and Mr. Weening) in three stations in
Nashville, Tennessee: WQQK-FM, WNPL-FM and
WVOL-AM. Mr. Dickey is a nationally regarded
consultant on radio strategy and the author of
The Franchise -- Building Radio Brands, published
by the National Association of Broadcasters, one
of the industry's leading texts on competition
and strategy. He holds Bachelor of Arts and
Master of Arts degrees from Stanford University
and a Master of Business Administration degree
from Harvard University. Mr. Dickey is the
brother of John Dickey, the Company's Senior Vice
President of Programming.
William M. Bungeroth Mr. Bungeroth, age 52, has served as President
and Director of the Company and President and
Chief Executive Officer of Cumulus Broadcasting,
Inc. since the companies began operations in May
1997. Mr. Bungeroth joined the Company from WPNT
Radio in Chicago where he was Vice President and
General Manager of this flagship property of
Century Broadcasting Corporation. Prior to
joining Century Broadcasting Corporation in 1992,
he was President of Consulting Partners, which
specialized in improving the operations of radio
stations in smaller and mid-size markets. From
August 1989 to July 1990, Mr. Bungeroth was Vice
President of Major Market Affiliations at Unistar
Radio Networks. From August 1987 to August 1989,
he was President and Chief Operating Officer of
Sunbelt Communications. From 1982 to 1987, he was
Vice President of Sales and Operations at Century
Broadcasting. He holds a Bachelor of Arts degree
from Lafayette College
Robert H. Sheridan, III Mr. Sheridan, age 36, has served as a Director of
the Company since July 1998. Mr. Sheridan served
as a member of the Investment Committee of
Cumulus Media, LLC from April 1997 until its
dissolution in June 1998. Mr. Sheridan has served
as a Managing Director of Bank of America Capital
Investors or its predecessor, the principal
investment group within Bank of America
Corporation since January 1998, and is a Senior
Vice President of BA Capital Company, L.P.,
formerly known as NationsBanc Capital Corp. He
was a Director of a predecessor of Bank of
America Capital Investors from January 1996 to
January 1998. BA Capital Company, L.P. is a
stockholder of the Company. Prior to joining a
predecessor of Bank of America Capital Investors
in January 1994, Mr. Sheridan worked in the
corporate bank division of a predecessor from
June 1989 to January 1994.
</TABLE>
19
<PAGE> 21
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTORSHIPS
NAME --------------------------------------
<S> <C>
Mr. Sheridan serves as a director of several
privately held companies. Mr. Sheridan holds
a Bachelor of Arts degree from Vanderbilt
University and a Master of Business Administration
from Columbia University. See "Security Ownership
of Certain Beneficial Owners and Management."
Ralph B. Everett Mr. Everett, age 48, has served as a Director of
the Company since July 1998. Since 1989, Mr.
Everett has been a partner with the Washington,
D.C. office of the law firm of Paul, Hastings,
Janofsky & Walker LLP, where he heads the firm's
Federal Legislative Practice Group. Prior to
1989, he was Chief Counsel and Staff Director of
the United States Senate Committee on Commerce,
Science and Transportation. He is a Director and
a member of the Investment Committee of
Shenandoah Life Insurance Company. He is also a
member of the Board of Visitors of Duke
University Law School and the Norfolk Southern
Corporation Advisory Board. Mr. Everett holds a
Bachelor of Arts degree from Morehouse College
and a Juris Doctor degree from Duke University.
Eric P. Robison Mr. Robison, age 40, has served as a Director of
the Company since August 1999. Since January
1994, Mr. Robison has worked for Vulcan
Northwest, Inc., the holding company that manages
all personal and business interests for investor
Paul G. Allen. In this role Mr. Robison serves as
a Business Development Associate for Vulcan
Ventures, Inc., the venture fund division of
Vulcan and investigates and secures investment
opportunities. Mr. Robison also serves on the
board of directors of C/NET, Inc., ARI Network
Services, Inc., Egghead.com, Inc., Liquid Audio,
Inc. Prior to joining Vulcan, Mr. Robison was
co-founder and vice president of The Stanton
Robison Group, Inc., a business development,
marketing and advertising consulting firm. Mr.
Robison has served in key marketing management
positions with SGS, Inc., Ashton-Tate, Inc., and
Denny's Inc. He has also worked on the account
staff of some of the nation's most prestigious
advertising agencies including McCann Erickson,
Doyle Dane Bernbach and Foote Cone and Belding.
Robison holds a Bachelor of Arts degree in
communication studies from California State
University, Sacramento, and a Master of Business
Administration in general management from the
University of California, Davis.
</TABLE>
20
<PAGE> 22
INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors held three regularly scheduled and special meetings
during 1998. Each director attended at least 75% of his Board and committee
meetings.
It is primarily the Board's responsibility to oversee the management of the
Company's business. To assist in carrying out this responsibility, the Board has
established the standing committees listed below. The Company does not have a
standing nominating committee.
The Audit Committee (1) reviews management's recommendation for selection
of the Company's independent auditors, (2) examines accounting processes and
reporting systems, (3) assesses the adequacy of internal controls and risk
management, (4) reviews and approves the Company's financial disclosures and (5)
reviews other similar matters. The Audit Committee did not meet during 1998, but
did meet during the first quarter of 1999 to discuss the Company's fiscal year
1998 audit. The current members of the Audit Committee are Messrs. Sheridan
(Chairman) and Everett.
The Compensation Committee oversees the determination of all matters
relating to employee compensation and benefits and specifically reviews and
approves salaries, bonuses and stock-based compensation for the named executive
officers. The Compensation Committee met once in 1998, after the Company's
initial public offering. The current members of the Compensation Committee are
Messrs. Sheridan (Chairman) and Robison.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee was established after completion of the
Company's initial public offering in June 1998. In 1998, the Compensation
Committee consisted of Messrs. Sheridan and Everett, neither of whom is an
employee of the Company. The Compensation Committee is responsible for making
recommendations to the Board concerning the compensation levels of the executive
officers of the Company. The Compensation Committee also administers the
Company's 1999 Stock Incentive Plan, the 1999 Executive Stock Incentive Plan,
the 1998 Stock Incentive Plan and the 1998 Executive Stock Incentive Plan and
determines awards to be made under such plans to the Company's executive
officers and to other eligible individuals. The Compensation Committee reviews
compensation programs for executive officers annually.
With respect to 1998, virtually all of the compensation decisions for
executive officers were made by the Company's Board of Directors prior to the
completion of the initial public offering.
The Company's executive compensation program aims to:
- Link managers' goals with shareholders' interests.
- Support business plans and long-term Company goals.
- Tie executive compensation to Company performance.
- Attract and retain talented management.
21
<PAGE> 23
TYPES OF COMPENSATION
There are two main types of compensation:
(1) Annual compensation. This includes salary and bonus. The Company awards
bonuses only when profits and other performance criteria meet certain
levels.
(2) Equity Based Compensation. The Company adopted the 1999 Stock Incentive
Plan and the 1999 Executive Stock Incentive Plan in connection with the
Company's follow on equity offering in July 1999. The Company adopted
the 1998 Stock Incentive Plan and the 1998 Executive Stock Incentive
Plan in connection with the Company's initial public offering. The
Compensation Committee expects that stock option grants will be the
primary form of long-term incentive compensation for the Company's
executive officers. The Compensation Committee believes stock options
are an effective means of incenting senior management to increase the
long-term value of the Company's Common Stock.
In making compensation decisions, it is the Compensation Committee's
current intention to recommend plans and awards which will meet the
requirements for deductibility for tax purposes under Section 162(m) of
the Internal Revenue Code of 1986, as amended.
FACTORS CONSIDERED IN DETERMINING COMPENSATION
The Compensation Committee wants the compensation of the Company's
executives to be competitive in the broadcast industry and with other U.S.
media companies. The Committee conducts its own review of various parts of
the compensation program, and using its assessment of the skills,
experience, and achievements of individual executives, the Committee
decides the compensation of executives.
The Committee looks at the size and success of other companies and the
types of jobs covered by these companies in determining executive
compensation. One goal of the Company's compensation program is to
approximate the survey group's average compensation, adjusted for company
size and performance.
The Committee also considers the tax deductibility of compensation paid to
the executive officers.
ANNUAL COMPENSATION
GENERAL
Annual compensation for the Company's executives includes salary and bonus.
This is similar to the compensation programs of most leading companies.
The Committee aims to pay salaries at the average of the survey companies,
adjusted for company size and performance. The Committee also looks at the
specific job duties, the person's achievements and other criteria.
BONUSES
The Company provides cash awards to executives; market managers and other
key personnel based on the Company's achievement of the overall financial
performance
22
<PAGE> 24
plan and the achievement of executive-specific performance goals in the
applicable fiscal year. Bonus awards are limited to a percentage of base
salary ranging from 10% to 50% depending on the participant's level of
responsibility. Awards are made at the sole discretion of the Executive
Chairman and the Compensation Committee taking into account the above
mentioned factors and such other factors as the Compensation Committee may
deem relevant.
EQUITY BASED COMPENSATION
GENERAL
Today's business decisions affect the Company over a number of years. This
is why the long-term incentive awards are tied to the Company's performance
and the value of the Company's Common Stock over several years.
In general, the amount of the long-term incentive awards does not change as
much as the amount of the annual bonus awards.
STOCK OPTIONS
Stock options are an important part of the Company's long-term incentive
program. The managers who receive them gain only when the Common Stock
value goes up.
In 1998, the executives and other employees received ten-year options in
amounts commensurate with rank and responsibility. In deciding the size of
individual option grants for 1998, the Committee considered the
responsibilities and title, as well as the total number of options awarded
to all employees.
EXECUTIVE CHAIRMAN COMPENSATION
ANNUAL COMPENSATION
In determining Mr. Weening's salary, the Committee considered his job
duties, the pay practices of other companies and Mr. Weening's preference
for equity-based compensation.
Mr. Weening's bonus for 1998 was based on the terms of his employment
agreement and Company performance criteria set forth therein, which
provided for the full bonus of $150,000 if the Company exceeded revenue and
EBITDA thresholds. Such thresholds were exceeded in 1998. The Committee
also considered his job as head of a significant U.S. media company with a
wide area of control and broad duties. The Committee reviewed his 1998
accomplishments, and the Committee considered these combined views.
EQUITY BASED COMPENSATION
The value of the stock options and granted to Mr. Weening in 1998 also
depends on the Company's future success and whether that success is
reflected in the value of the Common Stock.
In deciding the number of stock options to grant Mr. Weening, the Committee
considered the value of his other long-term incentive compensation compared
with competitive long-term compensation values. The Committee also
considered the
23
<PAGE> 25
complexity and duties of his job. Finally, the Committee considered the
deductibility of Mr. Weening's compensation under the tax laws.
COMPENSATION COMMITTEE
Robert H. Sheridan III, Chairman
Ralph B. Everett
24
<PAGE> 26
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued for
services rendered to the Company in all capacities, for the past two years for
the Chief Executive Officer and each of the other executive officers of the
Company employed as of December 31, 1998 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION(3)
- --------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Richard W. Weening.......... 1998 $300,000 $150,000(1) 1,000,690 $ --
Executive Chairman & 1997(2) $ -- $ -- -- $ --
Treasurer
Lewis W. Dickey............. 1998 $300,000 $150,000(1) 1,000,690 $ --
Executive Vice Chairman 1997(2) $ -- $ -- -- $ --
William M. Bungeroth........ 1998 $275,000 $ -- 235,000 $ 2,160
President................. 1997 $170,000 $ 50,000 -- $205,000
Richard J. Bonick, Jr. ..... 1998 $250,000 $ -- 36,620 $ 2,145
Vice President & CFO 1997 $170,000 $ 25,000 -- $205,000
John Dickey................. 1998 $250,000 $ -- 152,708 $ --
Senior Vice President of 1997(2) $ -- $ -- -- $ --
Programming
</TABLE>
- -------------------------
(1) The Compensation Committee approached Messrs. Weening and L. Dickey about
substituting options for any cash bonus earned under their employment
agreements as a way of more closely tying their compensation to the future
growth in the Company. As a result, Messrs. Weening and L. Dickey were each
granted an option to purchase 30,000 shares of Class A Common Stock in
August 1999 under the 1999 Stock Incentive Plan.
(2) During 1997, Messrs. Weening, L. Dickey and J. Dickey dedicated
approximately 85%, 89% and 0% of their time, respectively, to matters
directly related to the Company and its business, since the Company's
inception. Messrs. Weening, L. Dickey and J. Dickey did not receive any
compensation directly from the Company. However, during 1997, the Company
paid $297,000 to QUAESTUS, an entity controlled by Mr. Weening, for
acquisitions and corporate finance services performed on behalf of the
Company. In addition, the Company paid $184,000 to Stratford Research, an
entity controlled by L. Dickey and J. Dickey, for programming research and
broadcast strategy consulting services. At December 31, 1997, the Company
owed an additional $240,000 to Stratford Research for services rendered.
During 1997, the Company also paid a nonrecurring organization fee of
$300,000 (with QUAESTUS receiving $180,000 of such fee and DBBC, an entity
controlled by L. Dickey, receiving $120,000 of such fee), and a management
fee of $206,000 (with QUAESTUS receiving $123,600 of such fee and DBBC
receiving $82,400 of such fee).
(3) During the fiscal year ending December 31, 1998, Messrs. Bungeroth and
Bonick received $2,160 and $2,145, respectively, in other compensation
representing the matching Company contribution under the Company's Defined
Contribution Plan (the "401(k) Plan"). No other executives were eligible to
participate in the 401(k) Plan in 1998.
25
<PAGE> 27
EMPLOYMENT AGREEMENTS
As discussed more particularly below, the Company has entered into
employment agreements with certain of the Named Executive Officers. If the Named
Executive Officer voluntarily terminates his employment with the Company for
other than "good reason" or is terminated following a "change in control" (both
as defined in the employment agreements) such employment agreements prohibit
each of the Named Executive Officers from competing with the Company for a
specified period after termination of employment (18 months for Messrs. Weening
and Dickey and 12 months for Messrs. Bungeroth and Bonick).
Mr. Weening serves as Executive Chairman and Treasurer of the Company under
an employment agreement with the Company. Under the terms of Mr. Weening's
employment agreement, he is entitled to receive an annual base salary of
$300,000. Such base salary will increase by a minimum of 5.0% during each year
and may increase further if the Compensation Committee deems appropriate. The
agreement provides that Mr. Weening may receive a bonus of up to 50% of his base
salary, with bonus targets to be based on budgeted broadcast cash flow as
determined by the Compensation Committee. Mr. Weening's employment agreement has
a three-year term, which automatically extends each year for one additional
year, subject to non-renewal. The terms of the agreement also provide that upon
the death or disability of Mr. Weening, the Company shall continue to pay Mr.
Weening's base salary for the twelve-month period immediately following such
event, all unvested time vested options will vest and the Company will continue
to provide certain welfare benefits to Mr. Weening and his dependents for twelve
months.
In addition, in the event (i) the death or disability occurs after the
mid-point of a particular vesting year and (ii) the fair market value of the
Class A Common Stock as of the date of such death or disability equals or
exceeds the exercise price per share of the performance options scheduled to
vest at the end of such vesting year, such performance options will vest. The
agreement also provides that in the event Mr. Weening is terminated by the
Company without cause or terminates his employment for good reason, the Company
will pay to Mr. Weening an amount equal to the greater of (i) the base salary
owed to Mr. Weening for the remainder of the term of the agreement and (ii) one
hundred percent of his annual base salary in effect as of the date of
termination plus the last bonus received by Mr. Weening, all unvested time
vested options will vest and the Company will continue to provide benefits to
Mr. Weening and his dependents for twelve months. In addition, if the fair
market value of the Class A Common Stock as of the date of such termination
equals or exceeds the exercise price per share of the unvested performance
options; such performance options will vest.
Further, if the cumulative total return of the Class A Common Stock from
July 1, 1998 to the date of termination exceeds the total return of the bottom
quartile of an index of eight publicly traded companies most comparable to the
Company, the performance options will vest. Such performance options that become
vested shall remain exercisable until 90 days following the date that such
performance options would otherwise have become vested and exercisable. If,
within the one-year period following a change of control, the Company terminates
Mr. Weening's employment for any reason other than death or disability or for
cause or Mr. Weening terminates his employment for "good reason" (as defined in
the employment agreement), Mr. Weening will be paid the same amount as if he
were terminated without cause if no change of control had occurred and all
unvested time vested options and performance options will vest.
26
<PAGE> 28
Mr. Dickey serves as Executive Vice Chairman of the Company under an
employment agreement with the Company. Under the terms of Mr. Dickey's
employment agreement he is entitled to receive an annual base salary of
$300,000. Such base salary will increase by a minimum of 5.0% during each year
and may increase further if the Compensation Committee deems it appropriate. The
agreement provides that Mr. Dickey may receive a bonus of up to 50% of his base
salary, with bonus targets to be based on budgeted Broadcast Cash Flow as
determined by the Compensation Committee. Mr. Dickey's employment agreement has
a three-year term, which automatically extends each year for one additional
year, subject to non-renewal.
The terms of the agreement also provide that upon the death or disability
of Mr. Dickey, the Company shall continue to pay Mr. Dickey's base salary for
the twelve-month period immediately following such event, all unvested time
vested options will vest and the Company will continue to provide certain
welfare benefits to Mr. Dickey and his dependents for twelve months. In
addition, if (i) the death or disability occurs after the mid-point of a
particular vesting year and (ii) the fair market value of the Class A Common
Stock as of the date of such death or disability equals or exceeds the exercise
price per share of the performance options scheduled to vest at the end of such
vesting year, such performance options will vest.
The agreement also provides that in the event Mr. Dickey is terminated by
the Company without cause or terminates his employment for good reason, the
Company will pay to Mr. Dickey an amount equal to the greater of (i) the base
salary owed to Mr. Dickey for the remainder of the term of the agreement and
(ii) one times annual base salary in effect as of the date of termination plus
the last bonus received by Mr. Dickey and all unvested time vested options will
vest. In addition, if the fair market value of the Class A Common Stock as of
the date of such termination equals or exceeds the exercise price per share of
the unvested performance options; such performance options will vest. Further,
if the cumulative total return of the Class A Common Stock from July 1, 1998 to
the date of termination exceeds the total return of the bottom quartile of an
index of eight publicly traded companies most comparable to the Company, the
performance options will vest. Such performance options that become vested shall
remain exercisable until 90 days following the date that such performance
options would otherwise have become vested and exercisable. If, within the
one-year period following a change of control, the Company terminates Mr.
Dickey's employment for any reason other than death or disability or for cause,
or Mr. Dickey terminates his employment for "good reason" (as defined in the
employment agreement), Mr. Dickey will be paid the same amount as if he were
terminated without cause if no change of control had occurred and all unvested
time vested options and performance options will vest.
Mr. Bungeroth serves as President and Chief Executive Officer of the
Company and President and Chief Executive Officer of Cumulus Broadcasting, Inc.
under an employment agreement with the Company. Under the terms of Mr.
Bungeroth's employment agreement, he is entitled to receive an annual base
salary of $300,000 and is eligible to receive a bonus of up to 50% of his annual
base salary based on goals agreed upon by Mr. Bungeroth and the Company's Board
of Directors. Mr. Bungeroth's employment agreement is terminable by either
party.
Mr. Bonick is a party to an employment agreement with the Company, pursuant
to which he serves as Vice President and Chief Financial Officer of the Company
and Cumulus Broadcasting, Inc. Under the terms of Mr. Bonick's employment
agreement, he is entitled to receive an annual base salary of $250,000 and is
eligible to receive a bonus of
27
<PAGE> 29
up to 50% of his annual base salary based on goals agreed upon by Mr. Bonick and
the Company's Board of Directors. Mr. Bonick's employment agreement is
terminable by either party.
OPTION GRANTS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
The following table sets forth information regarding options to purchase
Common Stock granted by the Company to the Named Executive Officers in the
Summary Compensation Table during the 1998 calendar year:
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR PER SHARE DATE VALUE(1)
---- ---------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Richard W. Weening(2)
Group #1................ 312,715 9.95% $14.00 June 22, 2008 $2,040,465
Group #2................ 312,715 9.95% (3) June 22, 2008 $1,823,128
Group #3................ 375,260 11.94% (3) June 22, 2008 $2,191,518
Lewis W. Dickey, Jr.(2)
Group #1................ 312,715 9.95% $14.00 June 22, 2008 $2,040,465
Group #2................ 312,715 9.95% (3) June 22, 2008 $1,823,128
Group #3................ 375,260 11.94% (3) June 22, 2008 $2,191,518
William M. Bungeroth(4)... 235,000 7.48% $14.00 June 22, 2008 $1,688,710
Richard J. Bonick,
Jr.(4).................. 36,620 1.17% $14.00 June 22, 2008 $ 263,151
John Dickey(4)............ 152,708 4.86% $14.00 June 22, 2008 $1,097,360
</TABLE>
- -------------------------
(1) The present value of each grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions: dividend yield of 0.00% for all years; expected volatility of
65.59%; risk-free interest rate of 4.73%; and expected life of four years
for the 1998 Executive Stock Incentive Plan and five years for the 1998
Stock Incentive Plan.
(2) All options relate to shares of Class C Common Stock.
(3) Stock options under the 1998 Executive Stock Incentive Plan were granted on
July 1, 1998 and are divided into three groups. Group 1 consists of time
vested options with an exercise price equal to $14.00 per share and vest
quarterly in equal installments over a four-year period (subject to
accelerated vesting in certain circumstances as described under
"-- Employment Agreements"). Group 2 and Group 3 also consist of time-vested
options which vest in four equal annual installments on July 1, 1999, July
1, 2000, July 1, 2001 and July 1, 2002 (subject to accelerated vesting in
certain circumstances as described below above "Employment Agreements"). The
first installment of both the Group 2 options and Group 3 options are
exercisable at a price of $14.00 per share on July 1, 1999 and subsequent
installments are exercisable at a price 15% (or 20% in the case of Group 3
options) greater than the prior year's exercise price for each of the next
three years. All options vest upon a change of control of the Company as
described below above "Employment Agreements".
(4) All options relate to shares of Class A Common Stock.
28
<PAGE> 30
AGGREGATED OPTION EXERCISES FOR THE TWELVE MONTHS ENDING DECEMBER 31, 1998 AND
YEAR-END VALUES
The following table sets forth information concerning option exercises for
the year ended December 31, 1998 by the Named Executive Officers in the Summary
Compensation Table, and the value of each such executive officer's unexercised
options at December 31, 1998. No options were exercised in 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT DECEMBER 31, 1998 MONEY OPTIONS AT
(#) DECEMBER 31, 1998 ($)(1)
------------------------------ ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Richard W. Weening (3)......... 0 1,000,690 0$ $1,272,363(2)
Lewis W. Dickey, Jr. (3)....... 0 1,000,690 0$ $1,272,363(2)
William M. Bungeroth (4)....... 0 235,000 0$ $ 616,875
Richard J. Bonick, Jr. (4)..... 0 36,620 0$ $ 96,128
John Dickey (4)................ 0 152,708 0$ $ 400,858
</TABLE>
- -------------------------
(1) Based upon a per share price for Common Stock of $16.625. This price
represents the closing price for the Common Stock on the NASDAQ National
Market System on December 31, 1998.
(2) Represents the value of 484,710 in-the-money options for each individual,
respectively, at December 31, 1998.
(3) Unexercised options related to shares of Class C Common Stock.
(4) Unexercised options related to shares of Class A Common Stock.
29
<PAGE> 31
PERFORMANCE GRAPH
The following graph compares the total stockholder return on the Company's
Common Stock since the Company's initial public offering on June 26, 1998 with
that of the (i) Standard & Poors 500 Stock Index; (ii) the NASDAQ Stock Market
Index and (iii) an index comprised of radio broadcast and media companies. See
note (a) below. The total return calculations set forth below assume $100
invested on June 26, 1998, with reinvestment of dividends into additional shares
of the same class of securities at the frequency with which dividends were paid
on such securities through December 31, 1998. Since the Company effected its
initial public offering in June 1998, the information in the graph is provided
in twenty-three or twenty-four day intervals from June 26, 1998 through December
31, 1998. The stock price performance shown in the graph below should not be
considered indicative of potential future stock price performance.
Performance Graph
(a) Index comprised of radio broadcast, outdoor and other media companies with
the following trading symbols: Chancellor Media Corporation (AMFM), Clear
Channel Communications Corporation (CCU), Citadel Broadcasting Company
(CITC), Capstar Broadcasting Partners, Inc. (CRB), Cox Radio Inc. (CXR),
Emmis Broadcasting Corporation (EMMS), Hefterl Broadcasting Corporation
(HBCCA), Jacor Communications Inc. (JCOR) and Saga Communications Inc.
(SGA).
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
6/26/98 7/19/98 8/12/98 9/04/98 9/28/98 10/21/98 11/14/98 12/07/98 12/31/98
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulus $100.00 $114.29 $121.43 $78.57 $65.18 $63.84 $65.18 $ 94.64 $118.75
- --------------------------------------------------------------------------------------------------------------------
S&P 500 100.00 104.72 95.68 85.94 92.54 94.41 99.34 104.81 108.47
- --------------------------------------------------------------------------------------------------------------------
NASDAQ 100.00 107.45 97.65 83.79 93.03 89.58 98.85 109.15 117.29
- --------------------------------------------------------------------------------------------------------------------
Radio Index(a) 100.00 112.35 99.92 83.79 88.76 79.83 83.89 92.61 95.31
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE> 32
SUBMISSION OF SHAREHOLDER PROPOSALS
In accordance with the Company's Amended and Restated By-Laws, nominations,
other than by or at the direction of the Board of Directors, of candidates for
election as directors at the 2000 Annual Meeting of Shareholders and any other
shareholder proposed business to be brought before the 2000 Annual Meeting of
Shareholders must be submitted to the Company not later than August 4, 2000.
Shareholder proposed nominations and other shareholder proposed business must be
made in accordance with the Company's Amended and Restated By-Laws which
provide, among other things, that shareholder proposed nominations must be
accompanied by certain information concerning the nominee and the shareholder
submitting the nomination, and that shareholder proposed business must be
accompanied by certain information concerning the proposal and the shareholder
submitting the proposal. To be considered for inclusion in the proxy statement
solicited by the Board of Directors, shareholder proposals for consideration at
the 2000 Annual Meeting of Shareholders of the Company must be received by the
Company at its principal executive offices, 111 East Kilbourn Avenue, Milwaukee,
Wisconsin 53202 on or before June 2, 2000. Proposals should be directed to Mr.
Terrence J. Leahy, Secretary. To avoid disputes as to the date of receipt, it is
suggested that any shareholder proposal be submitted by certified mail, return
receipt requested.
If the Company's annual meeting in 2000 is changed by more than 30 days
from the anniversary date of the 1999 Annual Meeting, the Company will notify
shareholders of such change and the new deadlines for submitting shareholder
proposals for consideration at the meeting and for inclusion in the Company's
proxy statement. Such notice will be included in the Company's Quarterly Report
on Form 10-Q under Item 5.
PENDING LEGAL PROCEEDINGS
No director or executive officer of the Company is an adverse party or has
an interest adverse to the Company or its subsidiaries in any material pending
legal proceeding.
OTHER MATTERS
Although management is not aware of any other matters that may come before
the Annual Meeting, if any such matters should be presented, the persons named
in the accompanying proxy intend to vote such proxy in accordance with their
best judgment.
The Company's financial statements, supplementary financial information,
management's discussion and analysis of financial condition and results of
operations, and quantitative and qualitative disclosures about market risk are
incorporated herein by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 and the Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999. Shareholders
may obtain a copy of the Company's Annual Report for the year ended December 31,
1998 as filed on Form 10-K at no cost by writing to Mr. Terrence J. Leahy,
Secretary, Cumulus Media, Inc., 111 East Kilbourn Avenue, Milwaukee, Wisconsin
53202.
By Order of the Board of
Directors,
Terrence J. Leahy, Secretary
31
<PAGE> 33
APPENDIX A
CUMULUS MEDIA INC.
AMENDED AND RESTATED
1998 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of this Plan is to provide eligible employees of
Cumulus Media Inc. (the "Company") and its Subsidiaries (as defined in Paragraph
12 hereof) (collectively, the "Employer"), with an opportunity to purchase $.01
par value Class A common stock of the Company (the "Class A Common Stock")
through annual offerings to be made commencing on the 1st day of January, 1999
(the "Effective Date of the Offering"), and thus develop a stronger incentive to
work for the continued success of the Employer. The aggregate number of shares
of Common Stock authorized to be sold pursuant to options granted under this
Plan is 1,000,000 shares, subject to adjustment as provided in Paragraph 17
hereof. In computing the number of shares available for grant, any shares
relating to options which are granted, but which subsequently lapse, are
canceled, or are otherwise not exercised by the final date for exercise, shall
be deemed available for future grants of options. The Plan is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended (the" Code") and, therefore, the provisions of
the Plan shall be construed so as to govern participation in a manner consistent
with the requirements of Section 423(b) of the Code.
2. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"). Any
expenses of the Committee shall be paid by the Company. The Committee may adopt
regulations not inconsistent with the provisions of this Plan for the
administration thereof, and its interpretation and construction of the Plan and
the regulations shall be final, conclusive and binding on all participants in
the Plan.
3. ELIGIBILITY.
(a) All employees of the Employer will be eligible to participate in
the Plan, provided they have a minimum period of continuous service with
the Employer of one (1) month as of the Effective Date of the Offering,
subject to the additional limitations imposed herein.
(b) Any provision of this Plan to the contrary notwithstanding, no
employee shall be granted an option:
(i) if, immediately after the grant, such employee would own,
and/or hold outstanding options to purchase stock possessing 5% or more
of the total combined voting power or value of all classes of stock of
the Company or of any parent or Subsidiary of the Company as provided in
Section 423(b)(3) of the Code; or
(ii) which permits the employee's rights to purchase stock under
all employee stock purchase plans, as defined in Section 423 of the
Code, of the Company and any parent or Subsidiaries to accrue at a rate
which exceeds $25,000 of Fair Market Value of the stock (determined at
the time such option is granted) for each calendar year in which such
stock option is outstanding at any time as provided in Section 423(b)(8)
of the Code.
A-1
<PAGE> 34
4. OFFERINGS. The Board of Directors of the Company may authorize the
Committee to make one or more annual offerings to employees (through the grant
of options) to purchase Common Stock under this Plan. The term of any offering
shall be for a period of twelve (12) months' duration.
5. PARTICIPATION. An employee eligible on the Effective Date of any
Offering (as defined in paragraph 1 hereof) may participate in such offering by
completing and forwarding a payroll deduction authorization form to his
appropriate payroll location before September 30th of the offering period. The
form will authorize a regular payroll deduction from the employee's pay.
6. DEDUCTIONS. The Employer will maintain payroll deduction accounts for
all participating employees. With respect to any offering made under this Plan,
an employee may authorize a payroll deduction in terms of whole number
percentages up to a maximum of 15% of the compensation an employee received
during the offering period (or during such portion thereof as an employee may
elect to participate).
7. DEDUCTION CHANGES. An employee may increase or decrease his payroll
deduction by filing a new payroll deduction authorization form before September
30th of the offering period. The change may not become effective sooner than the
next pay period after receipt of the form. A payroll deduction may be increased
only once and reduced only once during the term of any offering period.
8. WITHDRAWAL OF FUNDS. Upon written notice to the Committee, an employee
may at any time and for any reason permanently draw out the balance accumulated
in his account, and thereby withdraw from participation in an offering. The only
right of an employee withdrawing from an offering shall be to be paid the entire
amount credited to his account. He may thereafter begin participating again only
once, provided it is before September 30th, during the remainder of the offering
period. Partial withdrawals will not be permitted.
9. PURCHASE OF SHARES.
(a) Each employee participating in an offering under this Plan will be
granted an option, upon the Effective Date of the Offering, to purchase as
many whole shares of Common Stock of the Company as can be purchased with
the total payroll deductions credited to his account during the specified
offering period in the manner and on the terms herein provided.
(b) The purchase price for a share granted under any offering will be
the Offering Price of 85% of the lesser of the Fair Market Value (as
defined in Section 12 hereof) of a share of Class A Common Stock on the
Effective Date of the Offering and December 31 of the year which includes
the Effective Date of the Offering, provided, however, that the purchase
price shall not be less than par value.
(c) As of December 31st of each year, the account of each
participating employee shall be totaled and the Offering Price determined.
If a participating employee shall have sufficient funds in his account to
purchase one or more full shares at the Offering Price as of that date, the
employee shall be deemed to have exercised his option to purchase such
share or shares at such price, his account shall be charged for the amount
of the purchase and a stock certificate shall be issued to him as of such
day. The balance of any payroll deductions credited to his account during
the offering shall be returned to the participating employee.
A-2
<PAGE> 35
10. INTEREST. Interest will not accrue on any employee payroll deduction
accounts.
11. REGISTRATION OF CERTIFICATES. Certificates will be registered only in
the name of the employee. If an employee makes a written request to the
Committee, the Committee may cause the certificates to be issued in his name
jointly with a member of his family with right of survivorship.
12. DEFINITIONS
(a) "Fair Market Value" shall be the closing sale price of the Common
Stock of the Company on the Nasdaq National Market (the "Nasdaq") as
reported in the Midwest Edition of The Wall Street Journal on the date in
question, provided that, if no sales of Common Stock of the Company were
made on the Nasdaq on any such date, Fair Market Value shall mean the
closing sale price of the Common Stock of the Company as reported for the
most recent preceding day on which sales of Common Stock were made on the
Nasdaq, or, failing any such sales, such other price as the Committee may
determine in conformity with pertinent law and regulations of the Treasury
Department.
(b) "Subsidiary" means any corporation of which the Company or a
Subsidiary owns 50% or more of the combined voting power of all classes of
stock unless the Board determines that such corporation shall not be a
"Subsidiary" for purposes hereof. Only subsidiaries that satisfy the
requirements of Section 424(f) of the Code shall be entitled to participate
in the Plan.
13. RIGHTS AS A SHAREHOLDER. None of the rights or privileges of a
shareholder of the Company shall exist with respect to shares purchased under
this Plan unless and until such full shares shall have been duly issued.
14. RIGHTS ON RETIREMENT, DEATH, OR TERMINATION OF EMPLOYMENT. In the event
of a participating employee's retirement, death, or termination of employment,
no payroll deduction shall be taken from any pay due and owing to him at such
time and the balance in his account shall be paid to him or, in the event of his
death, to his estate. Transfer of a participating employee from the Company to a
parent or Subsidiary thereof or vice versa shall not constitute termination of
employment.
15. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable by
a participating employee, otherwise than by will or the laws of descent and
distribution, and are exercisable, during his lifetime, only by him. In
addition, rights under the Plan may not be subject to any attachment,
garnishment or encumbrance of any kind by creditors of the participating
employee.
16. APPLICATION OF FUNDS. All funds received or held by the Company under
this Plan may be used for any corporate purpose and need not be segregated.
17. ADJUSTMENT IN CASE OF CHANGES AFFECTING THE COMMON STOCK OF THE
COMPANY. In the event of any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, or the like, as a result of
which shares of any class shall be issued in respect of the outstanding Common
Stock, or the Common Stock shall be changed into the same or different number of
the same or another class of stock, or into securities of another person, cash
or other property (not including a regular cash dividend), the total number of
shares authorized to be offered in accordance with Paragraph 1, the number of
shares subject to each outstanding option, the option price applicable to each
such option, and/or the consideration to be received upon exercise of
A-3
<PAGE> 36
each such option shall be adjusted in a fair and reasonable manner by the
Committee. In addition, the Committee shall, in its sole discretion, have
authority to provide, in appropriate cases, for (i) acceleration of the exercise
date of outstanding options, or (ii) the conversion of outstanding options into
cash or other property to be received in certain of the transactions specified
in the preceding sentence upon effectiveness of such transactions.
18. AMENDMENT OF THE PLAN.
(a) The Board of Directors of the Company may at any time, or from
time to time, amend this Plan in any respect; provided, however, that no
amendment shall be made without the approval of the shareholders of the
Company to increase the aggregate number of shares which may be issued
under this Plan (other than as provided in Paragraph 17 hereof) or for
which shareholder approval is required under applicable tax, securities or
other laws.
(b) In the event that the Board of Directors determines that the
ongoing operation of the Plan may result in unfavorable financial
accounting consequences, the Board of Directors may, in its discretion and,
to the extent necessary or desirable, amend the Plan to reduce or eliminate
such accounting consequence including, but not limited to:
(i) altering the purchase price for any offering period including
an offering period underway at the time of the change in purchase price;
(ii) shortening any offering period such that the offering period
ends on a new exercise date, including an offering period underway at
the time of the action of the Board of Directors; and
(iii) allocating shares.
Such amendments shall be made without the approval of the shareholders of the
Company or the consent of any participating employees.
19. TERMINATION OF THE PLAN.
(a) This Plan and all rights of employees under any offering hereunder
shall terminate:
(i) on the day that participating employees become entitled to
purchase a number of shares equal to or greater than the number of
shares remaining available for purchase. If the number of shares so
purchasable is greater than the shares remaining available, the
available shares shall be allocated by the Committee among such
participating employees in such manner as it deems fair and consistent
with Section 423 of the Code; or
(ii) at any time, at the discretion of the Board of Directors of
the Company.
(b) Upon termination of this Plan, all amounts in the accounts of
participating employees shall be either (i) promptly refunded in total or
(ii) refunded to the extent not used to purchase shares of Class A Common
Stock, in the sole discretion of the Board of Directors of the Company.
A-4
<PAGE> 37
20. GOVERNMENTAL REGULATIONS. The obligation to sell and deliver shares of
the Class A Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance,
or sale of such stock.
A-5
<PAGE> 38
APPENDIX B
CUMULUS MEDIA INC.
1999 STOCK INCENTIVE PLAN
1. OBJECTIVES. The Cumulus Media Inc. 1999 Stock Incentive Plan is designed
to attract and retain certain selected officers, key 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 Plan
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) "Cause" shall mean termination of a Participant's employment 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 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
employee's position with the Company or substantially impairs the
Participant's ability to perform his duties with the Company.
(e) "Change in Control" shall mean any of the following events:
(i) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (a "Person"), after the date hereof, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 35% or more of either (a) the then outstanding
shares of common stock of Cumulus Media Inc. (the "Outstanding Company
Common Stock") or (b) the combined voting power of the then outstanding
voting securities of Cumulus Media Inc. entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change of Control: (a) any
acquisition directly from Cumulus Media Inc., (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
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acquisition by any corporation pursuant to a transaction which complies
with clauses (a), (b) and (c) of subsection (iii) of this Section 2(e);
or
(ii) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by Cumulus Media Inc.'s shareholders, was approved by a vote of
at least a majority of the directors then constituting the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board; or
(iii) consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the Company for which approval of the shareholders of Cumulus Media Inc.
is required (a "Business Combination"), in each case, unless,
immediately following such Business Combination, (a) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns Cumulus Media Inc. or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (b) no Person
(excluding any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 35% or more of, respectively,
the then outstanding common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (c) at
least a majority of the members of the Board of Directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of he initial agreement, or
of the action of the Board, providing for such Business Combination; or
(iv) approval by the shareholders of Cumulus Media Inc. of a
complete liquidation or dissolution of Cumulus Media Inc.
(f) "Class A Common Stock" shall mean the authorized and issued or
unissued $.01 par value Class A common stock of Cumulus Media Inc.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
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(h) "Committee" shall mean the Compensation Committee of the Board of
Directors of Cumulus Media Inc. which shall be comprised of at least two
non-employee directors.
(i) "Company" shall mean Cumulus Media Inc. and its subsidiaries
including subsidiaries of subsidiaries and partnerships and other business
ventures in which Cumulus Media Inc. has a significant equity interest, as
determined in the sole discretion of the Committee.
(j) "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 of the Treasury Department. Notwithstanding
the foregoing, in the case of Awards which are effective on the date the
Company sells shares of Class A Common Stock in an underwritten public
offering, Fair Market Value shall mean the price per share at which the
Class A Common Stock is initially sold to the public pursuant to the
offering.
(k) "Participant" shall mean a current or prospective employee,
non-employee director, consultant or other person who provides services to
the Company to whom an Award has been made under the Plan. Notwithstanding
the foregoing, if a director is serving on the Board to represent the
interests of a corporate shareholder of the Company, the option which
otherwise would be awarded to the director may be awarded to the director's
employer.
(l) "Plan" shall mean the Cumulus Media Inc. 1999 Stock Incentive
Plan.
(m) "Retirement" shall mean termination of employment with the Company
or service as a member of the Board on or after the attainment of age 65.
(n) "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 Fair Market Value on the date of
grant. A stock option may be in the form of a nonqualified stock option or
an incentive stock option ("ISO"). A nonqualified stock option is an option
that does not meet the criteria of an ISO. An ISO, in addition to being
subject to applicable terms, conditions and limitations established by the
Committee, complies with Section 422 of the Code which, among other
limitations, provides that the aggregate Fair Market Value (determined at
the time the option is granted) of Class A Common Stock for which ISOs are
exercisable for the first time by a Participant during any calendar year
shall not exceed $100,000; that ISOs shall be priced at not less than 100%
of the Fair Market Value on the date of the grant (110% in the case of a
Participant who is a 10% shareholder of the Company within the meaning of
Section 422 of the Code); and that ISOs shall be exercisable for a period
of not more than ten years (five years in the case of a Participant who is
a 10% shareholder of the Company).
3. ELIGIBILITY. Current and prospective employees, non-employee directors,
consultants or other 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
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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.
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 900,000 shares of Class A Common Stock,
all of which may be in the form of incentive stock options. 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 300,000
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, 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 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.
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9. STOCK OPTION EXERCISE. 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 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
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 obtained
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, 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 Section 14 hereof.
12. TERMINATION OF EMPLOYMENT. If the employment 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 terminate and all vested but unexercised, deferred or unpaid
Awards shall terminate 90 days after such termination of employment or 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.
Notwithstanding the foregoing, if a Participant's employment 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
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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.
(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 Employment Rights. The Plan shall not confer upon any
Participant any right with respect to continuation of employment by 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
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 incentive
stock options 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.
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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) available for ISOs, (iii) for
which Awards may be granted to an individual Participant, and (iv) 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,
whether or not in a transaction to which Section 424(a) of the Code applies, 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 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
August 30, 1999. The Plan shall terminate on August 30, 2009 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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APPENDIX C
CUMULUS MEDIA INC.
1999 EXECUTIVE STOCK INCENTIVE PLAN
1. OBJECTIVES. The Cumulus Media Inc. 1999 Executive Stock Incentive Plan
is designed to be a plan which governs the stock options to be granted to
Richard W. Weening ("Mr. Weening") and Lewis W. Dickey, Jr. ("Mr. Dickey").
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) "Cause" shall have the same meaning as in Section 6(c) of the
Employment Agreements.
(e) "Change of Control" shall have the same meaning as in Section 8 of
the Employment Agreements.
(f) "Class A Common Stock" shall mean the authorized and issued or
unissued $.01 par value Class A common stock of Cumulus Media Inc.
(g) "Class C Common Stock" shall mean the authorized and issued or
unissued $.01 par value Class C 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 of
Directors of Cumulus Media Inc. comprised of at least two non-employee
directors.
(j) "Company" shall mean Cumulus Media Inc. and its subsidiaries
including subsidiaries of subsidiaries and partnerships and other business
ventures in which Cumulus Media Inc. has a significant equity interest, as
determined in the sole discretion of the Committee.
(k) "Employment Agreements" shall mean the employment agreements
between the Company and Mr. Weening and Mr. Dickey, respectively, dated as of
July 1, 1998.
(l) "Fair Market Value", as regards the Class A Common Stock 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
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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 of the Treasury Department. Notwithstanding the foregoing,
in the case of Awards which are effective on the date the Company sells
shares of Class A Common Stock in an underwritten public offering, Fair
Market Value shall mean the price per share at which the Class A Common
Stock is initially sold to the public pursuant to the offering. "Fair
Market Value" as regards the Class C Common Stock from time to time, shall
mean the Fair Market Value of the Class A Common Stock at such same time
unless the Committee determines otherwise because of a determination that
the Fair Market Value of the Class A Common Stock is not indicative of the
Fair Market Value of the Class C Common Stock. In the event of such a
determination, the Committee shall determine the Fair Market Value of the
Class C Common Stock in conformity with pertinent law and regulations of
the Treasury Department.
(m) "Participant" shall mean Mr. Weening and/or Mr. Dickey.
(n) "Plan" shall mean the Cumulus Media Inc. 1999 Executive Stock
Incentive Plan.
(o) "Stock Option" shall mean a grant of a right to purchase a
specified number of shares of Class C Common Stock the purchase price of
which shall be not less than 100% of Fair Market Value on the date of
grant, as determined by the Committee. A stock option may be in the form of
a nonqualified stock option or an incentive stock option ("ISO"). A
nonqualified stock option is an option that does not meet the criteria of
an ISO. An ISO, in addition to being subject to applicable terms,
conditions and limitations established by the Committee, complies with
Section 422 of the Code which, among other limitations, provides that the
aggregate Fair Market Value (determined at the time the option is granted)
of Class C Common Stock for which ISOs are exercisable for the first time
by a Participant during any calendar year shall not exceed $100,000; that
ISOs shall be priced at not less than 100% of the Fair Market Value on the
date of the grant (110% in the case of a Participant who is a 10%
shareholder of the Company within the meaning of Section 422 of the Code);
and that ISOs shall be exercisable for a period of not more than ten years
(five years in the case of a Participant who is a 10% shareholder of the
Company).
3. ELIGIBILITY. Mr. Weening and Mr. Dickey are the only employees eligible
to participate in the Plan.
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 1,000,000 shares of Class C Common Stock,
provided that not more than 300,000 shares of Class C Common Stock may be
subject to incentive stock options. 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 C Common Stock reserved under the Plan in any one calendar year,
subject to adjustment as provided
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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 C 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
persons are Participants, 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 payments of some or all types 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 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. The price at which shares of Class C 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 or Class C 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 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
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 C Common Stock obtained
pursuant to an Award hereunder until arrangements satisfactory to it have been
made with respect to any such withholding obligation. If Class C 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.
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11. AMENDMENT OR TERMINATION OF THE PLAN. The Board may, at any time, but
only by unanimous consent or approval, 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 C Common Stock which
may be delivered pursuant to Awards hereunder, except for increases
resulting from Section 14 hereof.
12. TERMINATION OF EMPLOYMENT.
(a) Termination of Options. The impact of a Participant's termination
of employment on the vesting and exercisability of a Stock Option shall be
governed by the Award Agreement.
(b) 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 suffers a Disability as defined in
Section 6(e) of the Employment Agreements, 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.
(iii) In the event of uncertainty as to interpretation of or
controversies concerning this paragraph (b) of Section 12, the
Committee's determinations shall be binding and conclusive.
(c) No Employment Rights. The Plan shall not confer upon any
Participant any right with respect to continuation of employment by the
Company nor shall it interfere in any way with the right of the Company to
terminate any Participant's employment at any time.
13. NONASSIGNABILITY. Except as provided in Section 12(b) 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,
except that Awards, other than incentive stock options, within the meaning of
Section 422 of the Code, may be transferred
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<PAGE> 49
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 C
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
C Common Stock (i) reserved under the Plan, (ii) available for ISOs, (iii) for
which Awards may be granted to an individual Participant, and (iv) 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 C Common Stock or any distribution (other than normal cash dividends) to
holders of Class C 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,
whether or not in a transaction to which Section 424(a) of the Code applies, 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
Class C Common Stock 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 Class C Common Stock , 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 Class C Common
Stock granted under the Plan. Any liability of the Company to any Participant
with respect to a grant of Class C Common Stock under the Plan shall be based
solely upon any contractual obligations that may be created by the Plan and any
Award Agreement; and 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
August 30, 1999. The Plan shall terminate on August 30, 2009 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.
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<PAGE> 50
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 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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<PAGE> 51
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PROXY CARD
CUMULUS MEDIA INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Richard W. Weening and Lewis W. Dickey, Jr. and
each of them, as proxies, each with the power to appoint his substitute, and
authorizes each of them to represent and to vote, as designated below, all of
the shares of stock of Cumulus Media Inc. held of record by the undersigned on
September 20, 1999 at the 1999 Annual Meeting of Shareholders of Cumulus Media
Inc. to be held on November 2, 1999 or at any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTORS, "FOR" THE APPROVAL OF
THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS FOR 1999,
"FOR" THE APPROVAL OF THE 1998 AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE
PLAN, "FOR" THE APPROVAL OF THE 1999 STOCK INCENTIVE PLAN, "FOR" THE APPROVAL OF
THE 1999 EXECUTIVE STOCK INCENTIVE PLAN, "FOR" THE APPROVAL OF AN AMENDMENT TO
THE AMENDED AND RESTATED ARTICLES OF INCORPORATION INCREASING THE AUTHORIZED
CLASS A COMMON STOCK AND "FOR" THE APPROVAL OF AN AMENDMENT TO THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION PROVIDING FOR STAGGERED TERMS FOR DIRECTORS.
(Detach below and return using the envelope provided.)
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<PAGE> 52
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CUMULUS MEDIA INC. 1999 ANNUAL MEETING
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C> <C> <C>
1-Richard W. Weening |_| FOR all nominees |_| WITHHOLD AUTHORITY
2-Lewis W. Dickey, Jr. listed to the left to vote for all
3-William M. Bungeroth (except as specified nominees listed
4-Robert M. Sheridan, III below). to the left.
5-Ralph B. Everett
6-Eric P. Robison
(Instructions: To withhold authority to vote for any indicated nominee, [ ]
write the number(s) of the nominee(s) in the box provided to the right.) [ ]
</TABLE>
2. PROPOSAL TO APPROVE THE 1998 AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE
PLAN:
[ ] FOR approval of the 1998 Amended and Restated Employee Stock Purchase
Plan.
[ ] AGAINST approval of the 1998 Amended and Restated Employee Stock
Purchase Plan.
[ ] ABSTAIN from voting on the 1998 Amended and Restated Employee Stock
Purchase Plan.
3. PROPOSAL TO APPROVE THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT AUDITORS FOR 1999:
[ ] FOR approval of the ratification of PricewaterhouseCoopers LLP as
independent auditors for 1999.
[ ] AGAINST approval of the ratification of
PricewaterhouseCoopers LLP as independent auditors for 1999.
[ ] ABSTAIN from voting on the ratification of PricewaterhouseCoopers LLP
as independent auditors for 1999.
4. PROPOSAL TO APPROVE THE 1999 STOCK INCENTIVE PLAN:
[ ] FOR approval of the 1999 Stock Incentive Plan.
[ ] AGAINST approval of the 1999 Stock Incentive Plan.
[ ] ABSTAIN from voting on the 1999 Stock Incentive Plan.
5. PROPOSAL TO APPROVE THE 1999 EXECUTIVE STOCK INCENTIVE PLAN:
[ ] FOR approval of the 1999 Executive Stock Incentive Plan.
[ ] AGAINST approval of the 1999 Executive Stock Incentive Plan.
[ ] ABSTAIN from voting on the 1999 Executive Stock Incentive Plan.
6. PROPOSAL TO APPROVE AN AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION INCREASING THE AUTHORIZED CLASS A COMMON STOCK:
[ ] FOR approval of an amendment to the Amended and Restated Articles of
Incorporation increasing the authorized Class A Common Stock.
[ ] AGAINST approval of an amendment to the Amended and Restated Articles
of Incorporation increasing the authorized Class A Common Stock.
[ ] ABSTAIN from voting on the amendment to the Amended and Restated
Articles of Incorporation increasing the authorized Class A Common
Stock.
7. PROPOSAL TO APPROVE AN AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF
INCORPORATION PROVIDING FOR STAGGERED TERMS FOR DIRECTORS:
[ ] FOR approval of an amendment to the Amended and Restated Articles of
Incorporation providing for staggered terms for directors.
[ ] AGAINST approval of an amendment to the Amended and Restated Articles
of Incorporation providing for staggered terms for directors.
[ ] ABSTAIN from voting on the amendment to the Amended and Restated
Articles of Incorporation providing for staggered terms for directors.
8. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
No. of Shares
--------
Date:
--------------------------------------
Check appropriate box
Indicate changes below: --------------------------------------
(Signature of Shareholder)
Address Change? [ ] Name Change? [ ]
----------------------------------------------
(Signature of Shareholder - if held jointly)
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name
by President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
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