As filed with the Securities and Exchange Commission on October 22, 1999
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WESTWOOD ONE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-3980449
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9540 WASHINGTON BOULEVARD
CULVER CITY, CALIFORNIA 90232
(310) 840-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
WESTWOOD ONE, INC. 1999 STOCK INCENTIVE PLAN
(Full Title of Plan)
FARID SULEMAN
CHIEF FINANCIAL OFFICER
WESTWOOD ONE, INC.
9540 WASHINGTON BOULEVARD
CULVER CITY, CALIFORNIA 90232
(212) 314-9215
(Name and address, including zip code,
and telephone number, including area code, of agent for service)
Copy to:
HOWARD CHATZINOFF, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of Registration
to be Registered Registered Offering Price Aggregate Offering Fee
Per Share(1) Price(1)
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Common Stock, par value $.01 per share 4,000,000 shares (2) $38.84375 $155,375,000 $43,194.25
===================================================================================================================================
(1) Estimated pursuant to Rule 457(h) and Rule 457(c) under the Securities Act
of 1933, as amended, based upon the average of the high and low sales
prices of the Registrant's Common Stock on the New York Stock Exchange on
October 18, 1999.
(2) Represents the registration of shares of Common Stock issuable under the
Registrant's 1999 Stock Incentive Plan, as amended, pursuant to the
exercise of options that may be granted thereunder.
</TABLE>
================================================================================
815832 v.5
<PAGE>
EXPLANATORY NOTE
This Registration Statement is intended to register all shares to be
issued under the 1999 Stock Incentive Plan, as amended (the "Plan"), of Westwood
One, Inc., a Delaware corporation ("Westwood"). Pursuant to the Note to Part I
of Form S-8, the plan information specified by Part I of Form S-8 to be
contained in a Section 10(a) prospectus to be distributed to each optionee is
not being filed with the Securities and Exchange Commission (the "SEC"). Part II
contains information that is required in this Registration Statement pursuant to
Part II of Form S-8.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 and the statement of availability of information required by Item 2 of Form
S-8 and information relating to the Plan and other information required by Item
2 of Form S-8 have previously been, or will be, sent or given to Plan
participants as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act"). Such documents are not required to be and are
not filed with the SEC either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents and
the documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
3
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the SEC by Westwood pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this document:
o Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
o Quarterly Reports on Form 10-Q for the quarters ended June 30, 1999
and March 31, 1999;
o Form 8-K filed on June 4, 1999;
o Form 8-K filed on October 1, 1999; and
o The description of Westwood's common stock set forth in its
Registration Statement on Form S-3/A, filed by Westwood with the SEC
on May 6, 1996.
All documents subsequently filed by Westwood with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities covered by this Registration Statement have been sold or which
deregisters all of the securities then remaining unsold, will be deemed to be
incorporated by reference in this Registration Statement and to be a part of
this document from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference in this
document will be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained in this document
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this document modifies or supersedes such
statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated under the laws of the State of
Delaware. Section 145 of the General Corporation Law of the State of Delaware
("DGCL")
4
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provides that a Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of the
fact that such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his or her conduct was
illegal. A Delaware corporation may indemnify any person who was or is, or is
threatened to be made, a party to any threatened, pending or completed action or
suit by or in the right of the corporation by reason of the fact that such
person is or was a director, officer, employee or agent of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorney's fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit,
provided such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the corporation's best interests except that
no indemnification is permitted without judicial approval if such person is
adjudged to be liable to the corporation. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him or her against the expenses (including
attorneys' fees) which such officer or director has actually and reasonably
incurred.
Section 145 further provides that the indemnification provisions of
Section 145 shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office. The Registrant's Certificate of Incorporation contains a provision
eliminating the liability of a director to the Registrant and its stockholders
for monetary damages for breaches of fiduciary duty as a director. However,
neither the DGCL nor the Registrant's Certificate of Incorporation currently
allows such provision to limit the liability of a director for: (i) any breach
of the director's duty of loyalty to the Registrant or its stockholders; (ii)
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) payment of dividends, stock purchases or
redemptions that violate the DGCL; or (iv) any transaction from which the
director derived an improper personal benefit. Such limitation of liability also
does not affect the availability of equitable remedies such as injunctive relief
or rescission.
The Registrant's By-Laws provide that, to the fullest extent
permitted by the DGCL as it exists or may in the future be amended, the
Registrant will indemnify and hold harmless any officer or director who is or
was made a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether
5
<PAGE>
civil, criminal, administrative or investigative, by reason of the fact that
such person is or was a director or officer of the Registrant or a director or
officer of a predecessor corporation of the Registrant, and may indemnify any
employee or agent of the Registrant and any person serving at the request of the
Registrant as an officer, director, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise. The Registrant's By-Laws
also state that such indemnification is not exclusive of any other rights of the
indemnified party, including rights under any indemnification agreements,
insurance policy, vote of the directors or stockholders of the Registrant, or
otherwise.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him or her and incurred by him or her in
any such capacity, arising out of his or her status as such, whether or not the
corporation would otherwise have the power to indemnify him or her under Section
145.
The Registrant has entered into indemnification agreements with each
of Joel Hollander and Farid Suleman, each dated as of March 30, 1999. Each
indemnification agreement terminates upon the earlier of (i) the effectiveness
of the indemnified party's voluntary resignation as a director or an officer of
the Registrant, (ii) the effective date of the indemnified party's involuntary
removal from office or termination as an officer, (iii) if the indemnified party
is a director, the election and qualification of his duly nominated successor,
or (iv) the indemnified party's death. Pursuant to each indemnification
agreement, the Registrant will purchase and maintain in effect, subject to
certain limitations set forth therein, for the benefit of each indemnified
party, one or more insurance policies for its officers and directors providing
the broadest coverage generally available to directors and officers of publicly
held corporations in an amount of at least $10,000,000. Pursuant to each
indemnification agreement, the Registrant also will indemnify the indemnified
party to the fullest extent provided by Section 145 of the DGCL and Article V of
the Registrant's By-Laws, as well as for expenses in any proceeding involving
the Registrant (whether or not brought by or in the Registrant's right) subject
to certain conditions and limitations depending on the circumstances of the
proceeding and the conduct of such indemnified party. In addition, each
indemnified party is entitled to be advanced expenses in connection with any
such proceeding upon request by such indemnified party, subject to certain
conditions.
Pursuant to an employment agreement, dated as of April 29, 1998,
between the Registrant and Norman Pattiz, the Registrant will indemnify Mr.
Pattiz to the fullest extent provided by Section 145 of the DGCL and Article V
of the Registrant's By-Laws, as well as for expenses in any proceeding involving
the Registrant (whether or not brought by or in the Registrant's name) subject
to certain conditions and limitations depending on the circumstances of the
proceeding and the conduct of Mr. Pattiz. In addition, Mr. Pattiz is entitled to
be advanced expenses in connection with any such proceeding upon his request,
subject to certain conditions.
6
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibits
- --------
Number Description
- ------ -----------
4.1 The Registration Statement on Form S-3/A of Westwood, filed with the
SEC on May 6, 1996, is incorporated herein by reference.
4.2* The Westwood 1999 Stock Incentive Plan, as amended.
5.1* Opinion of Weil, Gotshal & Manges LLP, as to the legality of the
securities being registered.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1 to
this Registration Statement).
24.1* Powers of Attorney (included in the signature pages of this
Registration Statement).
- --------------------------------
* Filed herewith.
7
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; and
(2) that, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
8
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, as
amended, Westwood certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, as of October 22,
1999.
WESTWOOD ONE, INC.
By: /s/ Farid Suleman
-------------------------
Farid Suleman
Chief Financial Officer
9
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Farid Suleman, Joel Hollander and Gary
Yusko, and each of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement and any
related Rule 462(b) registration statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the SEC,
granting unto said attorney-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
as of the date set forth above on the signature page hereof.
SIGNATURE TITLE
--------- -----
/s/ Norman J. Pattiz Chairman of the Board and Director
- -------------------------------
Norman J. Pattiz
/s/ Joel Hollander President, Chief Executive Officer
- -------------------------------
Joel Hollander and Director
/s/ Farid Suleman Executive Vice President, Chief
- -------------------------------
Farid Suleman Financial Officer, Secretary and Director
/s/ Mel Karmazin Director
- -------------------------------
Mel Karmazin
/s/ David L. Dennis Director
- -------------------------------
David L. Dennis
/s/ Paul G. Krasnow Director
- -------------------------------
Paul G. Krasnow
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SIGNATURE TITLE
--------- -----
/s/ Joseph B. Smith Director
- -------------------------------
Joseph B. Smith
/s/ Gerald Greenberg Director
- -------------------------------
Gerald Greenberg
/s/ Steven A. Lerman Director
- -------------------------------
Steven A. Lerman
/s/ David I. Saperstein Director
- -------------------------------
David I. Saperstein
/s/ Dennis F. Holt Director
- -------------------------------
Dennis F. Holt
11
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Exhibits
- --------
Number Description
- ------ -----------
4.1 The Registration Statement on Form S-3/A of Westwood, filed with the
SEC on May 6, 1996, is incorporated herein by reference.
4.2* The Westwood 1999 Stock Incentive Plan, as amended.
5.1* Opinion of Weil, Gotshal & Manges LLP, as to the legality of the
securities being registered.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1 to
this Registration Statement).
24.1* Powers of Attorney (included in the signature pages of this
Registration Statement).
- --------------------------------
* Filed herewith.
12
EXHIBIT 4.2
COMPOSITE COPY*
WESTWOOD ONE, INC.
1999 STOCK INCENTIVE PLAN
Dated effective March 11, 1999
as amended on July 23, 1999 and September 22, 1999
- --------
*This composite copy of Westwood's 1999 Stock Incentive Plan (the "Plan")
combines the Plan, dated effective March 11, 1999, the amendment dated July 23,
1999 and the amendment dated September 22, 1999. Any text that has been added
to, or that has replaced text in, the Plan as a result of the September 22, 1999
amendment appears in italics and bold.
13
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<TABLE>
<CAPTION>
1999 STOCK INCENTIVE PLAN
INDEX
-----
SECTION
-------
<S> <C>
ARTICLE I General Purpose of Plan
Purpose.........................................................................1.1
Effective Date of Plan..........................................................1.2
ARTICLE II Definitions
Board...........................................................................2.1
Code............................................................................2.2
Committee.......................................................................2.3
Common Stock....................................................................2.4
Company.........................................................................2.5
Date of Grant...................................................................2.6
Director........................................................................2.7
Disability......................................................................2.8
Eligible Person.................................................................2.9
Exercise Price.................................................................2.10
Fair Market Value..............................................................2.11
Grantee........................................................................2.12
Incentive Period...............................................................2.13
Incentive Stock Option.........................................................2.14
Non-Employee Director..........................................................2.15
Non-Qualified Stock Option.....................................................2.16
Offeree........................................................................2.17
Optionee.......................................................................2.18
Parent.........................................................................2.19
Participant....................................................................2.20
Plan...........................................................................2.21
Plan Administrator.............................................................2.22
Performance Right..............................................................2.23
Purchase Right.................................................................2.24
Reload Stock Option............................................................2.25
Related Stock Option...........................................................2.26
Retirement.....................................................................2.27
Rights.........................................................................2.28
Special Terminating Event......................................................2.29
Stock Appreciation Right or SAR................................................2.30
Stock Option...................................................................2.31
Subsidiary.....................................................................2.32
Ten Percent Stockholder........................................................2.33
Window Period..................................................................2.34
Voluntary Termination..........................................................2.35
i
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1999 STOCK INCENTIVE PLAN
INDEX
-----
(continued)
SECTION
-------
ARTICLE III Administration
Plan Administrator..............................................................3.1
ARTICLE IV Stock Subject to Plan
Common Stock Subject to the Plan................................................4.1
Unexercised Rights..............................................................4.2
Limitation on Number of Shares Underlying Stock Options and SARs
Granted to Any One Participant.................... ............................4.3
ARTICLE V Eligibility
ARTICLE VI Stock Options
General.........................................................................6.1
Terms and Conditions of Stock Options...........................................6.2
Reload Stock Options............................................................6.3
ARTICLE VII Stock Appreciation Rights
General.........................................................................7.1
Stock Appreciation Rights Included in Stock Options.............................7.2
Stock Appreciation Rights Not Included in Stock Options.........................7.3
Termination and Exercise........................................................7.4
ARTICLE VIII Purchase Rights
General.........................................................................8.1
Terms and Conditions of Purchase Rights.........................................8.2
Termination of Employment.......................................................8.3
ARTICLE IX Performance Rights
Performance Rights..............................................................9.1
ARTICLE X Mandatory Grants to Outside Directors
Grants.........................................................................10.1
Initial Date of Grant..........................................................10.2
Amendment......................................................................10.3
ARTICLE XI Adjustments and Effect of Certain Transactions
Adjustments....................................................................11.1
Effect of Certain Transactions.................................................11.2
ARTICLE XII Amendment and Termination
General........................................................................12.1
ARTICLE XIII General Provisions
General Restrictions...........................................................13.1
Other Compensation Arrangements................................................13.2
Tax Withholding................................................................13.3
ii
<PAGE>
1999 STOCK INCENTIVE PLAN
INDEX
-----
(continued)
SECTION
-------
Loans..........................................................................13.4
Termination of Employment......................................................13.5
Special Terminating Events.....................................................13.6
Nontransferability of Rights...................................................13.7
Regulatory Matters.............................................................13.8
Six (6) Month Holding Period...................................................13.9
Delivery......................................................................13.10
Gender........................................................................13.11
Headings......................................................................13.12
Governing Law.................................................................13.13
Written Agreement.............................................................13.14
Rights as Stockholders........................................................13.15
Stockholder Approval..........................................................13.16
ARTICLE XIV Term of Plan
</TABLE>
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WESTWOOD ONE, INC.
1999 STOCK INCENTIVE PLAN
EFFECTIVE MARCH 11, 1999
ARTICLE I
GENERAL PURPOSE OF PLAN
Section 1.1 Purpose. The name of this plan is the Westwood One, Inc.
1999 Stock Incentive Plan (the "Plan"). The purpose of the Plan is to enable
Westwood One, Inc. (the "Company") as well as any Parent or any Subsidiary, to
obtain and retain the services of the employees, consultants, officers and
Directors who will contribute to the Company's long term success and to provide
incentives which are linked directly to increases in share value which will
inure to the benefit of all stockholders of the Company.
Section 1.2 Effective Date of Plan. The Plan was adopted by the Board
of Directors and became effective on March 11, 1999; provided that, within
twelve (12) months of that date, the Plan is approved by the affirmative votes
of the holders of at least a majority of the shares of voting stock of the
Company cast in person or by proxy at a duly held meeting of the stockholders of
the Company. (If the provisions of the corporate charter, by-laws or applicable
state law prescribes a greater degree of stockholder approval for this action,
the approval by the holders of that percentage will be obtained at a duly held
meeting of stockholders.)
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms will be defined as set
forth below:
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Committee" means a committee of at least two (2) Non-Employee
Directors appointed by the Board to administer the Plan.
2.4 "Common Stock" means the Company's Common Stock par value $0.01
per share, or in the event that the outstanding shares of Common Stock are later
changed into or exchanged for a different class of stock or securities of the
Company or another corporation, that other stock or security.
2.5 "Company" means Westwood One, Inc., a corporation organized under
the laws of the State of Delaware.
4
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2.6 "Date of Grant" means the date on which the Plan Administrator
adopts a resolution expressly granting a Right to a Participant.
2.7 "Director" means a member of the Board.
2.8 "Disability" means the inability of an individual to perform the
services normally rendered by such individual due to any physical or mental
impairment that can be expected either to persist for a continuous period for
twelve (12) months or more or to result in death, as determined by the Plan
Administrator on the basis of appropriate medical evidence; provided, however,
that with respect to an Incentive Stock Option the term "Disability" will have
the meaning set forth in Section 22(e)(3) of the Code.
2.9 "Eligible Person" means an employee or officer or any consultant
or Director of the Company, any Parent or any Subsidiary.
2.10 "Exercise Price" means the price at which shares may be
purchased.
2.11 "Fair Market Value" means the fair market value of the Common
Stock as determined by the Plan Administrator in its sole discretion; provided,
however, that: i) if the Common Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or other
comparable quotation system and has been designated as a National Market System
("NMS") security, Fair Market Value on any date will be the last sale price
reported for the Common Stock on such system on such date or on the last day
preceding such date on which a sale was reported; ii) if the Common Stock is
admitted to quotation on NASDAQ and has not been designated an NMS security,
Fair Market Value on any date will be the average of the highest bid and lowest
asked prices of the Common Stock on such system on such date; or iii) if the
Common Stock is admitted to trading on a national securities exchange, Fair
Market Value on any date will be the last sale price reported for the Common
Stock on such exchange on such date or on the last date preceding such date on
which a sale was reported.
2.12 "Grantee" means a Participant who is granted Performance Rights
or Stock Appreciation Rights pursuant to the Plan.
2.13 "Incentive Period" means the period determined by the Plan
Administrator for goals to be achieved and after which: i) payment may be made
pursuant to a Performance Right; or ii) all (or a portion) of the principal
amount of a promissory note made in connection with a Purchase Right may be
forgiven under Section 8.3.
2.14 "Incentive Stock Option" means a Stock Option intended to
qualify as an "incentive stock option" as that term is defined in Section 422 of
the Code.
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2.15 "Non-Employee Director" shall mean a person who is a
"Non-Employee Director" within the meaning of Rule 16b-3 of the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a person who is an "outside director" or any
successor definition adopted by the SEC and, to the extent and when required by
such regulations, within the meaning of Section 162(m) of the Code and the final
regulations of the U.S. Treasury Department promulgated thereunder.
2.16 "Non-Qualified Stock Option" means a Stock Option intended to
not qualify as an Incentive Stock Option.
2.17 "Offeree" means a Participant who is granted a Purchase Right
pursuant to the Plan.
2.18 "Optionee" means a Participant who is granted a Stock Option
pursuant to the Plan.
2.19 "Parent" means any present or future corporation which would be
a "parent corporation" as that term is defined in Section 424 of the Code.
2.20 "Participant" means any Eligible Person selected by the Plan
Administrator, pursuant to the Plan Administrator's authority in Article III, to
receive grants of Rights.
2.21 "Plan" means the Westwood One, Inc. 1999 Stock Incentive Plan.
2.22 "Plan Administrator" means either: i) the Board of Directors of
the Company, provided that each member of the Board consists of Non-Employee
Directors; or ii) a Committee consisting of at least two (2) Non-Employee
Directors, as set forth in Article III.
2.23 "Performance Right" means a right awarded pursuant to Article
IX, hereof.
2.24 "Purchase Right" means a right to purchase Common Stock pursuant
to Article VIII.
2.25 "Reload Stock Option" means a Stock Option granted pursuant to
Section 6.3.
2.26 "Related Stock Option" means a Stock Option related to a Stock
Appreciation Right, as set forth in Section 7.
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2.27 "Retirement" means the first day of the calendar month following
the individual's 65th birthday unless the normal retirement date is defined as a
different date in: i) a retirement plan for salaried employees which the Company
may hereafter put into effect; or ii) the individual's employment agreement.
2.28 "Rights" means Stock Options, Purchase Rights, Performance
Rights and Stock Appreciation Rights (SARs).
2.29 "Special Terminating Event" with respect to a Participant will
mean the death or disability of that Participant.
2.30 "Stock Appreciation Right" or "SAR" means a stock appreciation
right granted alone or in tandem with a Stock Option pursuant to Article VII.
2.31 "Stock Option" means any option to purchase shares of Common
Stock granted pursuant to Article VI or Article X.
2.32 "Subsidiary" means any present or future corporation which would
be a "subsidiary corporation" as that term is defined in Section 424 of the
Code.
2.33 "Ten Percent Stockholder" means an Eligible Person who, at the
time an Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or a Parent or Subsidiary.
2.34 "Window Period" means the period beginning on the third business
day following the date of release for publication of the quarterly and annual
summary statements of sales and earnings of the Company and ending on the
twelfth business day following such date.
2.35 "Voluntary Termination" means termination of service by an
employee on his or her own volition.
ARTICLE III
ADMINISTRATION
Section 3.1 Plan Administrator.
(a) The Plan will be administered by either: i) the Board, provided
that each member of the Board consists of Non-Employee Directors; ii) a
Committee consisting of at least two (2) Non-Employee Directors (the group that
administers the Plan is referred
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to as the "Plan Administrator"); or iii) otherwise in compliance with Rule 16b-3
of the Exchange Act.
(b) The Plan Administrator will have the power and authority to grant
Rights to Eligible Persons. Pursuant to the terms of the Plan the following
Rights may be granted: i) Stock Options (including Reload Stock Options); ii)
Stock Appreciation Rights; iii) Purchase Rights; iv) Performance Rights; or v)
any combination of the foregoing.
(c) All decisions made by the Plan Administrator pursuant to the
provisions of the Plan will be final and binding on the Company and the
Participants.
(d) The Board may, in its sole and absolute discretion, from time to
time delegate any or all of its duties and authority with respect to the Plan to
a Committee of not less than two (2) Non-Employee Directors to be appointed by
and to serve at the pleasure of the Board. Once appointed, the Committee will
continue to serve until otherwise directed by the Board.
(e) From time to time, the Board may increase or decrease (to not
less than two (2) members) the size of the Committee. In addition, the Board may
add additional members, remove members (with or without cause), appoint new
members in substitution and fill vacancies on the Committee, subject to the
requirement that all members of the Committee must be Non-Employee Directors.
Committee action will be taken pursuant to a vote of the majority of its
members, whether present or not, or by the written consent of the majority of
its members. However, if the Committee consists of two (2) members, the
Committee must act pursuant to the unanimous vote or consent of its members.
Minutes will be kept of all of its meetings and copies of the minutes will be
provided to the Board. Subject to the limitations prescribed by the Plan and the
Board, the Committee may establish and follow rules and regulations for the
conduct of its business.
ARTICLE IV
STOCK SUBJECT TO PLAN
Section 4.1 Common Stock Subject to the Plan. The total number of
shares of Common Stock reserved and available for issuance under the Plan is
4,000,000 shares, subject to adjustment as provided in Article XI. This number
includes the shares of Common Stock previously authorized under the Plan as
originally approved by the Board. The Company will at all times reserve and keep
available the number of shares of Common Stock sufficient to satisfy the
requirements of the Plan. The reserved shares may consist, in whole or in part,
of authorized but unissued shares or treasury shares. A maximum of 200,000 of
the shares of Common Stock may be allocated to Incentive Stock Options.
Section 4.2 Unexercised Rights. To the extent that any Rights expire
or are surrendered, canceled or otherwise terminated without being exercised,
the shares of
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Common Stock related to such Rights will again be available for issuance in
connection with future Rights under the Plan.
Section 4.3 Limitation on Number of Shares Underlying Stock Options
and SARs Granted to Any One Participant. To the extent required by applicable
regulations of the U.S. Treasury Department promulgated under Section 162(m) of
the Code, the maximum number of shares of Common Stock subject to Stock Options
and SARs that may be granted to any one Participant pursuant to this Plan is
400,000, inclusive of all Stock Options and SARs that have been canceled,
surrendered, or repriced.
ARTICLE V
ELIGIBILITY
Section 5.1 Officers, employees, consultants and Directors of the
Company who are responsible for or contribute to the management, growth or
profitability of the business of the Company, the Parent or any Subsidiary will
be eligible to be granted Rights, subject to limitations set forth in this Plan.
The Participants under the Plan will be selected from time to time by the Plan
Administrator, in its sole discretion, from among the Eligible Persons.
ARTICLE VI
STOCK OPTIONS
Section 6.1 General. Stock Options may be granted alone or in
addition to other Rights granted under the Plan. Any Stock Option granted under
the Plan will be in such form as the Plan Administrator may from time to time
approve. The terms and conditions of Stock Option grants need not be the same
with respect to each Optionee. Stock Options granted under the Plan may be
either Incentive Stock Options or Non-Qualified Options.
Section 6.2 Terms and Conditions of Stock Options. Each Stock Option
granted pursuant to the Plan will be evidenced by a written Stock Option
agreement between the Company and the Optionee. A Stock Option agreement will
contain such terms and conditions as the Plan Administrator in its sole
discretion approves, provided that the agreement complies with the Plan. Any
Stock Option agreement will be subject to the terms and conditions of the Plan,
including the following:
(a) Number of Shares. Each Stock Option agreement will state the
number of shares of Common Stock subject to the Stock Option. The number of such
shares are subject to the limitations of Section 4.3 hereof.
(b) Type of Option. Each Stock Option agreement will identify the
portion of the Stock Option which constitutes an Incentive Stock Option, if any.
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(c) Exercise Price. Each Stock Option agreement will state the price
at which the shares subject to the Stock Option may be purchased (the "Exercise
Price"). The Exercise Price will be not less than one hundred percent (100%) of
the Fair Market Value of the shares of Common Stock on the Date of Grant.
However, in the case of an Incentive Stock Option granted to a Participant who
is a Ten Percent Stockholder immediately before such grant the Exercise Price
will not be less than one hundred ten percent (110%) of such Fair Market Value.
(d) Value of Shares. To the extent that the aggregate Fair Market
Value of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Participant during any calendar year
exceeds One Hundred Thousand Dollars ($100,000) (or such other amount as may be
specified under 422(d)(1) of the Code), such Options will be treated as
Non-Qualified Stock Options.
(e) Medium and Time of Payment. At the time of exercise, the Exercise
Price will be paid in full, in cash or cash equivalent or, with the approval of
the Plan Administrator, in shares of Common Stock which have been held by the
Optionee for a period of at least six (6) calendar months preceding the date of
surrender and which have a Fair Market Value equal to the Exercise Price, or in
a combination of cash and such shares. At the discretion of the Plan
Administrator, payment may be made in whole or in part with monies borrowed from
the Company in accordance with Section 13.4.
(f) Term and Exercise of Stock Options. After completion of any
required period of employment or association specified in a particular Stock
Option agreement, Common Stock Options will be exercisable over the exercise
period specified in the related Stock Option agreement (including provisions
regarding exercise in installments). Each Common Stock Option will be
exercisable and will expire at such time as the Plan Administrator may
determine, but not later than ten (10) years from the Date of Grant of the Stock
Option. However, in the case of an Incentive Stock Option granted to a Ten
Percent Stockholder, the exercise period will be determined by the Plan
Administrator, but will not exceed five (5) years from the Date of Grant. In
addition, Stock Options will be subject to earlier termination as provided in
Sections 13.5 and 13.6. A Stock Option which is currently exercisable may be
exercised in full or in part, by giving written notice of the exercise to the
Company.
Section 6.3 Reload Stock Options.
(a) From time to time, the Plan Administrator may grant Reload Stock
Options to Participants. A Reload Stock Option may be an Incentive Stock Option
or Non-Qualified Stock Option depending on the type of Stock Option previously
granted to the participant and being adjusted by the Reload Stock Option. The
Optionee will have the right to retain the previously granted Stock Option or to
exchange it for the Reload Stock Option. The Optionee must make this election
within forty-five (45) days from the Date of Grant of the Reload Stock Option.
The Reload Stock Option will be for the same
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number of shares of Common Stock underlying the Stock Option surrendered for
exchange by the Participant.
(b) The Reload Stock Option will be subject to all terms and
conditions contained in the Plan and the Stock Option agreement relating to the
Stock Option exchanged for the Reload Stock Option, provided however, that: i)
the exercise price of the Reload Stock Option will be determined with regard to
the Fair Market Value of the Common Stock at the date of grant of the Reload
Stock Option; ii) the six (6) month holding period set forth in Section 13.9
will commence upon the Date of Grant of the Reload Stock Option; and iii) the
required period of employment prior to exercisability and the vesting schedule
imposed with respect to the exchanged Stock Option will both be measured from
the Date of the Grant of the Reload Stock Option. The Plan Administrator will
have the right to determine a new vesting schedule for the Reload Stock Option.
ARTICLE VII
STOCK APPRECIATION RIGHTS
Section 7.1 General.
(a) The Plan Administrator will have the right to grant a Stock
Appreciation Right or "SAR" alone or in addition to other Rights granted under
the Plan. Any Stock Appreciation Right granted under the Plan will be in such
form and will contain such terms and conditions which are consistent with the
Plan. The terms and conditions of the grant of Stock Appreciation Rights need
not be the same with respect to each Grantee.
(b) Each Stock Appreciation Right or SAR granted pursuant to the Plan
will be evidenced by a written SAR agreement between the Company and the
Grantee, which agreement will comply with and be subject to the following terms
and conditions of this Article VII. Each agreement will state the number of SARs
granted pursuant to the agreement. The number of shares to which the SARs relate
is subject to the limitations of Section 4.3 hereof.
Section 7.2 Stock Appreciation Rights Included in Stock Options.
(a) Stock Appreciation Rights may be included in any Stock Option,
thereby enabling the Grantee to exercise either the Stock Option or the SAR, or
any combination thereof, with respect to all or a portion of the shares of
Common Stock which the Stock Option and the SAR relate. If SARs are included in
Stock Options, upon the exercise of the SAR (or a portion of it), a Grantee will
surrender the Common Stock Option (or a portion of it) which is then exercisable
and receive in exchange an amount equal to the excess of the Fair Market Value
of the Common Stock covered by the Stock Option surrendered, or a portion of it,
determined on the date prior to surrender, over the aggregate Exercise Price of
the Stock Option surrendered or portion of it.
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(b) Stock Appreciation Rights included in Stock Options: i) will have
a term no later than the term of the underlying Stock Option; ii) may be for no
more than one hundred percent (100%) of the difference between the Fair Market
Value of a share of the Common Stock at the time the Stock Appreciation Right is
exercised and the Exercise Price of the underlying Stock Option; iii) are
transferable only when the underlying Stock Options are transferable, and under
the same conditions; and iv) may be exercised only when the underlying Stock
Option is eligible to be exercised.
Section 7.3 Stock Appreciation Rights Not Included in Stock Options.
(a) As previously set forth, Stock Appreciation Rights may be granted
alone. The grant to a Participant of a Stock Appreciation Right that is not
included in a Stock Option will entitle the Grantee to an amount equal to the
excess of the Fair Market Value of a share of Common Stock as of the date of
exercise of the Stock Appreciation Right over the Fair Market Value of a share
of Common Stock as of the Date of Grant of the Stock Appreciation Right.
(b) The Plan Administrator will determine the term of a Stock
Appreciation Right which is not included in a Stock Option. However, the term
may not exceed ten (10) years from the Date of Grant of the Stock Appreciation
Right. In its discretion, the Plan Administrator may provide that portions of
the SAR may become exercisable at intervals throughout the term.
Section 7.4 Termination and Exercise.
(a) Upon the exercise of a SAR included in a Stock Option, the Stock
Option related to such SAR ("Related Stock Option") will cease to be exercisable
to the extent of the shares of Common Stock with respect to which such SAR is
exercised. However, the Stock Option will be considered to have been exercised
to that extent for purposes of determining the number of shares available for
the grant of further Rights pursuant to the Plan. Upon the exercise or
termination of a Related Stock Option, the SAR granted in tandem with such
Related Stock Option will terminate to the extent of such exercise or
termination. Any grant of Stock Appreciation Rights will be subject to earlier
termination as provided in Sections 13.5 and 13.6 of this Plan. SARs which are
currently exercisable may be exercised in whole or in part, by giving written
notice of such exercise to the Company.
(b) Upon exercise of Stock Appreciation Rights, the Plan
Administrator may pay the Participant in shares of Common Stock valued at Fair
Market Value, in cash, or partly in cash and partly in shares of Common Stock,
as the Plan Administrator determines in the exercise of its sole discretion.
(c) Notwithstanding the provisions of this Section 7, no SAR may vest
in a period shorter than six (6) months following its Date of Grant.
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(d) Notwithstanding the provisions of this Section 7 or the related
SAR agreement to the contrary, any Grantee who at the date of the exercise of an
SAR (or any portion thereof) is an officer or Director of the Company within the
meaning of Section 16(b) of the Exchange Act (a "Section 16(b) Person"), may
only make an election to receive cash in complete or partial settlement of an
SAR and the related exercise of the SAR for cash during the period beginning on
the third business day following the date of release for publication of the
quarterly and annual summary statements of sales and earnings of the Company and
ending on the twelfth (12th) business day following such date (the "Window
Period"). The foregoing does not authorize the Participant to make an election
regarding the form of payment. Such election will be at the sole discretion of
the Plan Administrator, as set forth in Section 7.4(b) above.
ARTICLE VIII
PURCHASE RIGHTS
Section 8.1 General. Purchase Rights may be granted alone or in
addition to other Rights under the Plan. Purchase Rights will be exercisable for
a term determined by the Plan Administrator. However, the term may not exceed
ten (10) years from the Date of Grant. Each sale of Common Stock under this
Article VIII will be evidenced by a Stock Purchase agreement between the
Participant and the Company in the form from time to time adopted by the Plan
Administrator. The Stock Purchase agreement will contain such terms and
conditions which the Plan Administrator deems appropriate and which are
consistent with the Plan. The provisions of the various Common Stock Purchase
agreements entered into under the Plan need not be identical.
Section 8.2 Terms and Conditions of Purchase Rights. A Stock Purchase
agreement between the Company and the Participant will contain the following
terms and conditions:
(a) Number of Shares. Each Stock Purchase agreement will state the
number of shares of Common Stock which may be purchased pursuant to that
agreement.
(b) Purchase Price. Each Common Stock Purchase agreement will state
the price at which the Common Stock subject to such purchase agreement may be
purchased (the "Purchase Price"). However, the Purchase Price will not be less
than one hundred percent (100%) of the Fair Market Value of the Common Stock on
the Date of Grant.
(c) Medium and Time of Payment. The Purchase Price must be paid in
full, at the time of exercise, in cash or cash equivalent. With the approval of
the Plan Administrator, payment may be made with shares of Common Stock which
have been held by the Participant for a period of at least six (6) calendar
months preceding the date of surrender and which have a Fair Market Value equal
to the Purchase Price or in a combination of cash or cash equivalent and such
shares. At the discretion of the Plan Administrator, payment may be made in
whole or in part with monies borrowed from the Company in accordance with
Section 13.4 of the Plan.
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(d) Incentive Period. A Participant's liability on the principal and
interest under a promissory note issued pursuant to 8.2(c) above, may be
forgiven by the Company, in whole or in part, in accordance with a formula based
on achievement during the Incentive Period of performance goals. Performance
goals established for each Participant may vary. For example, the goals may
relate to cumulative earnings per share of Common Stock; weighted average return
on assets; return on invested capital; earnings before interest, taxes,
depreciation and amortization or such other objective and verifiable performance
goals as may be established by the Plan Administrator on the Date of the Grant.
The Incentive Period will be determined by the Plan Administrator, but will not
be less than two (2) fiscal years from the Date of Grant. Notwithstanding any
provision in this Article VIII to the contrary, the performance goals and the
Incentive Period will be determined by the Plan Administrator in compliance with
Section 162(m) of the Code and the final regulations promulgated by the U.S.
Treasury Department thereunder to the extent required thereby. The Stock
Purchase agreement may also contain restrictions on distribution as set forth in
Section 13.1 and will prohibit the sale or other disposition of Common Stock
received upon the exercise of any Purchase Right during the applicable Incentive
Period.
Section 8.3 Termination of Employment. If a Participant's employment
with the Company is terminated (except for a Special Terminating Event),
liability on a promissory note payable to the Company pursuant to Section 8.2(c)
will be automatically accelerated. In addition, in the event of a Voluntary
Termination which occurs during the Incentive Period, the Company will have the
option to repurchase the shares of Common Stock at the lower of either: i) the
cash price paid by Participant; or ii) the Fair Market Value of the Common Stock
at the time of such Voluntary Termination.
ARTICLE IX
PERFORMANCE RIGHTS
Section 9.1 Performance Rights.
(a) The Plan Administrator may award Performance Rights alone or in
addition to other Rights granted under the Plan. Each Performance Rights
agreement will specify a goal or goals for the performance of the Company or of
a particular business or management unit. Notwithstanding any provision in this
Article IX to the contrary, performance goals will be determined by the Plan
Administrator in compliance with Section 162(m) of the Code and the final
regulations promulgated by the U.S. Treasury Department thereunder, to the
extent required thereby. Such goal or goals may differ with respect to each
Grantee. The Incentive Period will be determined by the Plan Administrator, but
will be not less than two (2) fiscal years from the Date of Grant. However, no
more than one (1) Performance Right awarded to a Grantee may become payable in a
single fiscal year. No payment may be made with respect to any Performance Right
prior to the expiration of the applicable Incentive Period. The Plan
Administrator will have sole discretion to determine whether the payment to a
Grantee
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with respect to a Performance Right will be made in cash, in shares of Common
Stock, or by a combination of cash and shares of Common Stock. In the event that
no action is taken by the Plan Administrator to determine the method of payment,
the amount due will be paid in shares of Common Stock.
(b) Performance Rights issued at different times may contain
different types of performance goals. For example, the goals may relate to
cumulative earnings per share of Common Stock; weighted average return on
assets; return on invested capital; earnings before interest, taxes,
depreciation and amortization or such other objective and verifiable performance
goals as may be established by the Plan Administrator on the Date of Grant. A
Performance Right agreement will provide for the payment to the Grantee of a
specific, predetermined amount if a particular goal or goals are achieved or
based on the degree of improvement in the performance of the Company or the
applicable business or management unit. No payment will be made to a Grantee
unless the minimum level of performance specified in a Performance Right
agreement is achieved.
(c) The amount actually paid to any Grantee pursuant to any single
Performance Right, regardless of the terms of the Performance Right agreement,
may not exceed one hundred twenty-five percent (125%) of the Grantee's highest
annual base compensation for the final fiscal year in the Incentive Period.
(d) In the event that a payment is made to a Grantee pursuant to a
Performance Right (in whole or in part) in the form of shares, the shares of
Common Stock will be valued at their Fair Market Value on the last day of the
Incentive Period.
(e) Notwithstanding the provisions of this Section 9 or any
Performance Right agreement, any Grantee who is a Section 16(b) Person at the
date that payment is made with respect to a Performance Right deemed to be a
"derivative security related to an equity security" within the meaning of Rule
16b-3(e) of the Exchange Act, may only make an election to receive cash in
complete or partial payment of such Performance Right and the related exercise
of such Performance Right during the Window Period. The foregoing does not
authorize the Participant to make an election regarding the form of payment.
Such election will be at the sole discretion of the Plan Administrator as set
forth in Section 9.1(a) above.
ARTICLE X
MANDATORY GRANTS TO OUTSIDE DIRECTORS
Section 10.1 Grants. Notwithstanding any other provision of this
Plan, mandatory grants of Stock Options to Directors who are not also employees
or officers of the Company will be made in accordance with and be subject to the
following limitations of this Article X:
(i) Effective on the Initial Date of Grant (as defined in Section
10.2 hereof), and every year thereafter on the date of the Company's Annual
Meeting
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of Shareholders, the Board of Directors will grant to each Director of the
Company who is not also an employee or officer of the Company, a ten-year
Non-Qualified Stock Option under this Plan to purchase ten thousand
(10,000) shares of Common Stock.
(ii) All Stock Options granted to Directors under this Article X will
be exercisable at an Exercise Price equal to 100% of the Fair Market Value
of a share of Common Stock on the Date of Grant. For purposes of this
Article X, the Date of Grant of each such Stock Option will be the date
upon which such Stock Option is required to be granted pursuant to
Subsection 10.1(i) hereof.
(iii) All Stock Options granted to Directors under this Article X
will become exercisable at the rate of 20% per year on the anniversary of
the Date of Grant.
(iv) Unless otherwise provided in the Plan, all provisions regarding
the terms of Non-Qualified Stock Options will be applicable to the Stock
Options granted to Directors under this Article X. Specifically Section
13.7 (Nontransferability of Rights) and Section 13.9 (Six Month Holding
Period) are hereby incorporated by reference.
Section 10.2 Initial Date of Grant. For purposes of this Article X,
the Initial Date of Grant shall be determined as follows:
(i) With respect to Directors that were members of the Board on June
10, 1999, the Initial Date of Grant shall mean June 10, 1999.
(ii) With respect to Directors elected or appointed to the Board
after June 10, 1999, the Initial Date of Grant shall mean the date such
Director is elected or appointed to the Board.
Section 10.3 Amendment. Notwithstanding any other provision of this
Plan, the provisions regarding mandatory grants to Directors may not be amended
more than once every six (6) months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act, or the rules thereunder.
ARTICLE XI
ADJUSTMENTS AND EFFECT OF CERTAIN TRANSACTIONS
Section 11.1 Adjustments.
(a) The existence of outstanding Rights will not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds,
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debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights of the Common Stock, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
(b) The Company may effect a subdivision or consolidation of shares
or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of the Common Stock outstanding,
without receiving compensation for it in cash, services or property. In such
event, the following will apply: i) the number, class and per share price of
shares of Common Stock subject to outstanding Rights under this Plan will be
appropriately adjusted in a manner as to entitle a Participant to receive upon
exercise of a Right, for the same aggregate cash consideration, the same total
number and class or classes of shares the Participant would have received had
the Participant exercised his or her Right in full immediately prior to the
event requiring the adjustment; and ii) the number and class of shares then
reserved for issuance under the Plan will be adjusted by substituting for the
total number and class of shares of stock then reserved the number and class or
classes of shares of stock that would have been received by the owner of an
equal number of outstanding shares of Common Stock as the result of the event
requiring the adjustment.
Section 11.2 Effect of Certain Transactions.
(a) In the event that the Company merges or consolidates with another
corporation, whether or not the Company is a surviving corporation, or if the
Company is liquidated or sells or otherwise disposes of substantially all of its
assets while unexercised Rights remain outstanding under the Plan, the Plan
Administrator will have the right to make one or more of the following
adjustments: i) after the effective date of the merger, consolidation,
liquidation, sale or other disposition, as the case may be, each holder of an
outstanding Right may be entitled, upon exercise of a Right, to receive, in lieu
of shares of Common Stock, the number and class or classes of shares of stock or
other securities or property to which the holder would have been entitled if,
immediately prior to the merger, consolidation, liquidation, sale or other
disposition, the holder had been the holder of record of a number of shares of
Common Stock equal to the number of shares as to which the Right may be
exercised; ii) any limitations or vesting periods set out in or imposed pursuant
to this Plan may be waived or accelerated, so that all Rights will be
exercisable in full from and after a date specified by the Plan Administrator;
or iii) all outstanding Rights may be canceled by the Plan Administrator as of
the effective date of any merger, consolidation, liquidation, sale or other
disposition.
(b) Except as expressly provided in this Plan, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe for
shares, or upon conversion of shares or obligations of the Company convertible
into shares or other securities, will not affect the number or price of shares
of Common Stock then subject to outstanding Rights.
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ARTICLE XII
AMENDMENT AND TERMINATION
Section 12.1 General.
(a) The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation will be made: i) which would impair the
rights of the Participant under any Right previously granted without such
Participant's consent; or ii) without the approval of the stockholders of the
Company as set forth in Section 1.2 hereof, which would: (1) materially increase
the total number of shares of Common Stock reserved for the purposes of the
Plan, except as provided in Article X, (2) materially increase the benefits
accruing to Participants or Eligible Persons under the Plan; or (3) materially
modify the requirements for eligibility under the Plan. Notwithstanding the
foregoing, no amendment which would increase the number of shares of Common
Stock allocable to Incentive Stock Options may be made without the approval of
the stockholders of the Company.
(b) Subject to the terms and conditions of the Plan, the Plan
Administrator may amend the terms of any Rights theretofore granted,
prospectively or retroactively, provided that such amendment does not impair the
rights of any holder without his or her consent.
ARTICLE XIII
GENERAL PROVISIONS
Section 13.1 General Restrictions.
(a) The Plan Administrator may require each Participant purchasing
shares of Common Stock pursuant to the Plan to represent to, and agree with, the
Company in writing that such person is acquiring such shares without a view to
distribution thereof. The certificates for such shares may include any legend
which the Plan Administrator deems appropriate to reflect any restrictions on
transfer.
(b) All certificates for shares of Common Stock delivered under the
Plan will be subject to: i) such stop transfer orders and other restrictions as
the Plan Administrator may deem advisable under the rules; ii) regulations and
other requirements of the SEC, any stock exchange regulations upon which the
Common Stock is then listed; and iii) any applicable federal or state securities
laws. The Plan Administrator may place a legend on any such certificates to make
appropriate reference to such restrictions.
Section 13.2 Other Compensation Arrangements. Nothing contained in
this Plan will prevent the Board from adopting other or additional compensation
arrangements, subject to Stockholder approval, if such approval is required.
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Section 13.3 Tax Withholding.
(a) The Plan Administrator will require the Participant to pay any
sums required by federal, state, or local tax law with respect to the grant or
exercise of a Right hereunder. If the Participant is required to pay the sum to
the Company, payment in cash or by check of such sums must be delivered within
ten (10) days after the date of exercise.
(b) As an alternative to requiring payment as set forth in Paragraph
12.3(a) above, the Company or any Subsidiary will be entitled to deduct from the
salary or other compensation payable to a Participant such sums required by
federal, state and local tax law with respect to the grant or exercise of a
Right.
(c) The Company will have no obligation upon exercise of any Right,
until payment has been received by the Company for all sums due with respect to
such exercise, including taxes. Each Participant is responsible for seeking
independent counsel regarding the existence of the tax or the amount which the
Company is required to withhold.
Section 13.4 Loans.
(a) The Company may make loans to Grantees, as the Plan Administrator
in its discretion may determine in connection with the exercise of Stock Options
and Purchase Rights granted under the Plan. Such loans will: i) be evidenced by
promissory notes entered into by the holders in favor of the Company; ii) be
subject to the terms and conditions set forth in this Section 13.4 and such
other terms and conditions, consistent with the Plan, as the Plan Administrator
will determine; and iii) bear interest, if any, at such rate as the Plan
Administrator determines. In no event may the principal amount of any such loan
exceed the Exercise Price or the Purchase Price less the par value of the shares
of Common Stock covered by the Stock Option or Purchase Right, or portion
thereof, exercised by the Grantees.
(b) Subject to the terms and conditions of the Plan, the Plan
Administrator will determine: i) the term of the loan; ii) the schedule of
payments of principal and interest under the loan; iii) the extent to which the
loan is to be with recourse against the holder with respect to principal and
applicable interest; and iv) the conditions upon which the loan becomes payable
in the event of the holder's termination of employment. However, the term of the
loan, including extensions, will not exceed ten (10) years. Unless the Plan
Administrator determines otherwise, when a loan is made, shares of Common Stock
having a Fair Market Value equal or greater to the principal amount of the loan
will be pledged by the holder to the Company as security for payment of the
unpaid balance of the loan. Such pledge will be evidenced by a pledge agreement,
the terms of which will be determined by the Plan Administrator, in its
discretion. Each loan must comply with all applicable laws, regulations and
rules of the Board of Governors of the Federal Reserve System and any other
governmental agency having jurisdiction.
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Section 13.5 Termination of Employment. Except as provided in this
Section 13.5, no Right may be exercised unless the Rights holder is currently a
Director or Employee of the Company or any Parent or Subsidiary, or rendering
services as a consultant to the Company or any Parent or Subsidiary, and unless
he or she has remained continuously so employed since the Date of Grant. If the
employment or services of a Rights holder are terminated (other than by reason
of a Special Terminating Event), all Rights previously granted to the Rights
holder which are exercisable at the time of such termination may be exercised
for the period ending three (3) months after such termination, or such shorter
period as may be provided in the Rights agreement. However, no Right may be
exercised following the date of its expiration. Nothing in this Plan or in any
Rights agreement pursuant to the Plan will confer upon an employee any right to
continue in the employ of the Company or any Parent or Subsidiary.
Section 13.6 Special Terminating Events. If a Special Terminating
Event occurs, all Rights granted to such Rights holder which are exercisable at
the time that such event occurs may, unless earlier terminated in accordance
with their terms, be exercised by the Rights holder or by his or her estate or
by a person who acquired the right to exercise such Right by bequest or
inheritance or otherwise by reason of the death or Disability of the Rights
holder, at any time within one (1) year after the date of the Special
Terminating Event.
Section 13.7 Nontransferability of Rights. Rights granted under the
Plan will not be transferable by a Participant: i) except by will or by the laws
of descent and distribution; or ii) pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA, or rules thereunder. During
the lifetime of a Participant, a Right may be exercised only by the Rights
holder or by his or her guardian or legal representative.
Section 13.8 Regulatory Matters. Each Rights agreement will provide
that no shares will be purchased or sold thereunder, unless and until any then
applicable requirements of the state or federal laws and regulatory agencies
have been fully complied with to the satisfaction of the Company and its
counsel.
Section 13.9 Six (6) Month Holding Period. A Participant is
prohibited from selling or otherwise disposing of shares of Common Stock
received upon the exercise of any Stock Option, Stock Appreciation Right or
Purchase Right, or upon payment pursuant to a Performance Right, within six (6)
months from the date any such Right is granted.
Section 13.10 Delivery. Upon exercise of a Right granted under this
Plan, the Company will issue Common Stock or pay any amount due within a
reasonable period of time thereafter. Subject to any statutory obligations the
Company may otherwise have, for purposes of this Plan, sixty (60) days will be
considered a reasonable period of time.
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Section 13.11 Gender. When used in this Plan, words of one gender
will include the other. Words used in the singular or plural will include the
other.
Section 13.12 Headings. Headings of Articles and Sections are
included for convenience of reference only and do not constitute part of the
Plan and will not be used in construing the terms of the Plan.
Section 13.13 Governing Law. The provisions of this Plan will be
construed, administered, and governed under the laws of the State of California
and, to the extent applicable, the laws of the United States.
Section 13.14 Written Agreement. Each Stock Option, Stock
Appreciation Right, Purchase Right and Performance Right agreement will be
subject to the terms and conditions of this Plan. Each agreement must be signed
by the Participant and by either: i) a member of the Board (if the Board is then
serving as the Plan Administrator); or ii) a member of the Committee (if the
Committee is then serving as the Plan Administrator), on behalf of the Company.
In the alternative, each agreement may be signed by either: i) the Chief
Financial Officer; or ii) the Vice President of Finance; or iii) the Vice
President of Legal and Business Affairs on behalf of the Company, upon
authorization of Plan Administrator. Each agreement may contain other provisions
that the Plan Administrator deems advisable, as long as such provisions are
consistent with the terms and conditions of the Plan.
Section 13.15 Rights as Stockholders. No Participant will have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for this Plan or subject to any Right except as to such shares of
Common Stock, if any, as will have been previously sold, issued or transferred
to him or her.
Section 13.16 Stockholder Approval. No shares of Common Stock will be
issued pursuant to Rights granted hereunder without, among other things,
compliance with the provisions of Section 1.2 regarding stockholder approval of
the Plan.
ARTICLE XIV
TERM OF PLAN
Section 14.1 No Right will be granted pursuant to the Plan on or
after the earlier to occur of: i) March 11, 2009; or ii) the termination of the
Plan by the Board pursuant to Article XI, but Rights theretofore granted may
extend beyond that date.
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Exhibit 5.1
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[Weil, Gotshal & Manges LLP Letterhead]
October 22, 1999
Westwood One, Inc.
9540 Washington Boulevard
Culver City, California 90232
Ladies and Gentlemen:
We have acted as counsel to Westwood One, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing of
the Company's Registration Statement on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), relating to
the registration under the Securities Act of shares of common stock, par value
$.01 per share (the "Common Stock"), of the Company to be issued upon the
exercise of stock options granted under the Company's 1999 Stock Incentive Plan
(the "Plan"). Terms defined in the Registration Statement and not otherwise
defined herein are used herein with the meanings as so defined.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Registration Statement and such
corporate records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and
representatives of the Company, and have made such inquiries of such officers
and representatives, as we have deemed relevant and necessary as a basis for the
opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to this opinion that have not been independently established,
we have relied upon certificates or comparable documents of officers and
representatives of the Company.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that the shares of Common Stock to be issued by
the Company as contemplated by the Registration Statement have been duly
authorized and, when issued as contemplated by the Registration Statement and in
accordance with the terms of the Plan, against payment of the exercise price
therefor, will be validly issued, fully paid and nonassessable.
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The opinion expressed herein is limited to the corporate laws of the
State of Delaware, and we express no opinion as to the effect on the matters
covered by this letter of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
------------------------------
23
Exhibit 23.1
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 17, 1999 relating to the
financial statements and financial statement schedules, which appears in
Westwood One, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1998.
/s/ PricewaterhouseCoopers LLP
- -------------------------------
Century City, California
October 11, 1999
24
