(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2007 | ||
Or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
|
13-3827791 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Class A common stock, par value $0.0001 per share
|
The NASDAQ Global Market |
Large accelerated
filer
o
|
Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
1
Item 1. | Business |
2
| Hispanic Population Growth. The U.S. Hispanic population is the largest ethnic minority group and the fastest growing consumer market and demographic group of the U.S. population. Between 1990 and 2007, the Hispanic population growth surged by 100% compared to 13% for the non-Hispanic population and a 21% gain for the total population. The Hispanic population has grown 26.6% since 2000. By 2012, it is estimated that nearly one out of every six individuals living in the U.S. will be of Hispanic origin. | |
| Hispanic Buying Power. The U.S. Hispanic population accounted for an estimated buying power of $862 billion in 2007 and Hispanic buying power is growing at nearly twice the annual rate of non-Hispanic buying power. Hispanic buying power is expected to increase by 39.2% to $1.2 trillion by 2012, positioning the Hispanic demographic as an extremely attractive group for advertisers. | |
| Growth in Spanish Language Advertising Spending. In 2007, advertisers spent an estimated $3.8 billion on Spanish-language media advertising, compared to $3.3 billion in 2006, representing a 10.8% increase from the previous year. |
3
4
Our Markets | ||||||||||||||||||||||
2007 Estimated
|
2007 Total
|
|||||||||||||||||||||
2007 Estimated
|
% of Total
|
2007 Estimated
|
Estimated
|
|||||||||||||||||||
Hispanic
|
Hispanic
|
Hispanic
|
% of Total
|
Market Radio
|
Number of
|
|||||||||||||||||
Market
|
Population
|
Population in
|
U.S. Hispanic
|
Revenue
|
Stations
|
|||||||||||||||||
Rank(a)
|
Hispanic Market | (000)(a) | Market(a) | Population(a) | ($mm)(b) | We Operate | ||||||||||||||||
1
|
Los Angeles | 8,507 | 48 | % | 18 | % | $ | 1,060 | 2 | |||||||||||||
2
|
New York | 4,435 | 21 | % | 9 | % | 791 | 2 | ||||||||||||||
*
|
Puerto Rico | 3,912 | 99 | % | 9 | % | 119 | 11 | ||||||||||||||
3
|
Miami | 2,152 | 49 | % | 5 | % | 315 | 4 | ||||||||||||||
4
|
Chicago | 1,972 | 20 | % | 4 | % | 586 | 1 | ||||||||||||||
6
|
San Francisco | 1,712 | 24 | % | 4 | % | 420 | 1 | ||||||||||||||
Total for our markets | 22,690 | 35 | % | 48 | % | $ | 3,291 | 21 |
(a) | Sources: Synovate 2008 Diversity Markets Report; U.S. Census Bureau Population Estimates for Puerto Rico, July 2007. | |
(b) | Source: BIA Financial Network Inc.s Investing in Radio, 2007 Market Report. |
* | Puerto Rico is not ranked by the Synovate 2008 Diversity Markets Report . |
5
6
| Spanish Tropical. The Spanish Tropical format primarily consists of salsa, merengue, bachata and reggaeton music. Salsa is dance music combining Latin Caribbean rhythms with jazz originating from Puerto Rico, Cuba and the Dominican Republic, which is popular with the Hispanics whom we target in New York, Miami and Puerto Rico. Merengue music is up-tempo dance music originating in the Dominican Republic. Bachata is a softer tempo dance music also originating in the Dominican Republic. Reggaeton is a modern rhythmic dance genre that incorporates certain elements of hip-hop music. | |
| Regional Mexican. The Regional Mexican format consists of various types of music played in different regions of Mexico such as ranchera, nortena, banda and cumbia. Ranchera music, originating from Jalisco, Mexico, is a traditional folkloric sound commonly referred to as mariachi music. Mariachi music features acoustical instruments and is considered the music indigenous to Mexicans who live in country towns. Nortena means northern, and is representative of Northern Mexico. Featuring an accordion, nortena has a polka sound with a distinct Mexican flavor. Banda is a regional format from the state of Sinalóa, Mexico and is popular in California. Banda resembles up-tempo marching band music with synthesizers. | |
| Spanish Adult Contemporary. The Spanish Adult Contemporary format includes soft romantic ballads and Spanish pop music, international hits from Puerto Rico, Mexico, Latin America and Spain. | |
| Spanish Oldies. The Spanish Oldies format includes a variety of Latin and English classics mainly from the 1960s, 1970s and 1980s. | |
| Top 40. The Top 40 format consists of the most popular current chart hits. | |
| News Talk. Top local, national and world news along with local traffic and weather information. Moment by moment monitoring of breaking news as it happens along with compelling hard hitting topics that shape our world. | |
| Hurban. The Hispanic Urban (Hurban) format consists of reggaeton, which is dance music that originated in Panama and Puerto Rico more than a decade ago and has evolved into a mix of Spanish- and English-language dance hall, traditional reggae, Latin pop and Spanish hip-hop. |
7
Target Buying
|
||||||||
Demographic
|
||||||||
Market
|
FM Station | Format | Group by Age | |||||
Los Angeles
|
KLAX | Regional Mexican | 18-49 | |||||
KXOL | Hurban | 18-34 | ||||||
New York
|
WSKQ | Spanish Tropical | 18-49 | |||||
WPAT | Spanish Adult Contemporary | 25-54 | ||||||
Puerto Rico
|
WMEG | Top 40 | 18-34 | |||||
WEGM | Top 40 | 18-34 | ||||||
WRXD | News Talk | 25-54 | ||||||
WIOA | Spanish Adult Contemporary | 18-49 | ||||||
WIOB | Spanish Adult Contemporary | 18-49 | ||||||
WIOC | Spanish Adult Contemporary | 18-49 | ||||||
WZNT | Spanish Tropical | 18-49 | ||||||
WZMT | Spanish Tropical | 18-49 | ||||||
WZET | Spanish Tropical | 18-49 | ||||||
WODA | Hurban | 18-34 | ||||||
WNOD | Hurban | 18-34 | ||||||
Chicago
|
WLEY | Regional Mexican | 18-49 | |||||
Miami
|
WXDJ | Spanish Tropical | 18-49 | |||||
WCMQ | Spanish Oldies | 25-54 | ||||||
WRMA | Spanish Adult Contemporary | 18-49 | ||||||
WRZA | Regional Mexican | 18-49 | ||||||
San Francisco
|
KRZZ | Regional Mexican | 18-49 |
8
9
| management experience; | |
| talent and popularity of on-air personalities and television show hosts and actors; | |
| audience ratings and our broadcast stations rank in their markets; | |
| signal strength and frequency; and | |
| audience demographics, including the nature of the Spanish-language market targeted by a particular station. |
10
11
| assigns frequency bands for radio and television broadcasting; | |
| determines the particular frequencies, locations and operating power of radio and television broadcast stations; | |
| issues, renews, revokes and modifies radio and television broadcast station licenses; | |
| establishes technical requirements for certain transmitting equipment used by radio and television broadcast stations; | |
| adopts and implements regulations and policies that directly or indirectly affect the ownership, operation, program content and employment and business practices of radio and television broadcast stations; and | |
| has the power to impose penalties, including monetary forfeitures, for violations of its rules and the Communications Act. |
12
| changes to the license authorization and renewal process; | |
| proposals to impose spectrum use or other fees on FCC licensees; | |
| proposals to codify indecency regulations or increase sanctions for broadcasting indecent material; | |
| changes to the FCCs equal employment opportunity regulations and other matters relating to the involvement of minorities and women in the broadcasting industry; | |
| proposals to change rules relating to political broadcasting including proposals to grant free air time to candidates, and other changes regarding program content; | |
| proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages; | |
| proposals to increase and/or quantify locally oriented program content and diversity; | |
| proposals to change rules regarding studio location and operations; | |
| technical and frequency allocation matters; | |
| the implementation of digital audio broadcasting on a terrestrial basis; | |
| changes in broadcast, multiple ownership, foreign ownership, cross-ownership and ownership attribution policies; | |
| proposals to allow telephone companies to deliver audio and video programming to homes in their service areas; and | |
| proposals to alter provisions of the tax laws affecting broadcast operations and acquisitions. |
13
Broadcast
|
Date of
|
Date of License
|
Operation
|
FCC
|
||||||||||||||||||||||
Station
|
Market
|
Acquisition | Expiration | Frequency | Class | HAAT | Power | |||||||||||||||||||
(In meters) | (In kilowatts) | |||||||||||||||||||||||||
KLAX-FM
|
Los Angeles, CA | 02/24/88 | 12/01/13 | 97.9 MHz | B | 184 | 33.0 | |||||||||||||||||||
KXOL-FM
|
Los Angeles, CA | 10/30/03 | 12/01/13 | 96.3 MHz | B | 388 | 7.0 | |||||||||||||||||||
WSKQ-FM
|
New York, NY | 01/26/89 | 06/10/06 | (a) | 97.9 MHz | B | 415 | 6.0 | ||||||||||||||||||
WPAT-FM
|
New York, NY | 03/25/96 | 06/01/14 | 93.1 MHz | B | 433 | 5.4 | |||||||||||||||||||
WMEG-FM
|
Puerto Rico | 05/13/99 | 02/01/12 | 106.9 MHz | B | 594 | 25.0 | |||||||||||||||||||
WEGM-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 95.1 MHz | B | 600 | 25.0 | |||||||||||||||||||
WRXD-FM(b)
|
Puerto Rico | 12/01/98 | 02/01/12 | 96.5 MHz | B | 852 | 11.5 | |||||||||||||||||||
WZET-FM
|
Puerto Rico | 05/13/99 | 02/01/12 | 92.1 MHz | A | 337 | 3.0 | |||||||||||||||||||
WIOA-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 99.9 MHz | B | 560 | 31.0 | |||||||||||||||||||
WIOB-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 97.5 MHz | B | 302 | 50.0 | |||||||||||||||||||
WIOC-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 105.1 MHz | B | (61 | ) | 47.0 | ||||||||||||||||||
WZNT-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 93.7 MHz | B | 560 | 28.0 | |||||||||||||||||||
WZMT-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 93.3 MHz | B1 | (69 | ) | 14.5 | ||||||||||||||||||
WODA-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 94.7 MHz | B | 560 | 31.0 | |||||||||||||||||||
WNOD-FM
|
Puerto Rico | 01/14/00 | 02/01/12 | 94.l MHz | B | 597 | 25.0 | |||||||||||||||||||
WLEY-FM
|
Chicago, IL | 03/27/97 | 12/01/12 | 107.9 MHz | B | 232 | 21.0 | |||||||||||||||||||
WXDJ-FM
|
Miami, FL | 03/28/97 | 02/01/12 | 95.7 MHz | C2 | 167 | 40.0 | |||||||||||||||||||
WCMQ-FM
|
Miami, FL | 12/22/86 | 02/01/12 | 92.3 MHz | C2 | 188 | 31.0 | |||||||||||||||||||
WRMA-FM
|
Miami, FL | 03/28/97 | 02/01/12 | 106.7 MHz | CO | 300 | 100.0 | |||||||||||||||||||
WRAZ-FM(c)
|
Miami, FL | 01/01/08 | 02/01/12 | 106.3 MHz | C2 | 93 | 50.0 | |||||||||||||||||||
KRZZ-FM
|
San Francisco, CA | 12/23/04 | 12/01/13 | 93.3 MHz | B | 150 | 50.0 | |||||||||||||||||||
WSBS-TV
|
Key West, FL | 03/01/06 | 02/01/13 | CH. 22 | TV | 62 | 11.2 | |||||||||||||||||||
WSBS-DT
|
Miami, FL | 03/01/06 | 02/01/13 | CH. 3 | DTV | 54 | 1.0 | |||||||||||||||||||
WSBS-CA
|
Miami, FL | 03/01/06 | 02/01/13 | CH. 50 | CA | 236 | 150.0 |
(a) | Application for renewal of license is pending. In the great majority of cases, radio broadcast licenses are renewed by the FCC even when petitions to deny are filed against license renewal applications. The FCC license for WSKQ-FM expired on June 10, 2006. A petition to deny the application for renewal was filed by several parties who alleged, inter alia, that WSKQ-FM had broadcast some indecent material over the license term. An opposition pleading was submitted to the Commission categorically stating that the allegations made did not raise sufficient questions to warrant non-renewal of the license. The application remains pending and the station continues to operate under its expired license until the FCC takes action on the renewal. | |
(b) | Broadcast station WRXD-FM was formerly known as WCMA-FM. | |
(c) | Pursuant to a Local Marketing Agreement between South Broadcasting Company, Inc. and SBS, the station is programmed by us and, therefore, attributable to us pursuant to FCC Rules. |
| the station has served the public interest, convenience and necessity; | |
| there have been no serious violations by the licensee of the Communications Act or FCC rules and regulations; and | |
| there have been no other violations by the licensee of the Communications Act or FCC rules and regulations which, taken together, indicate a pattern of abuse. |
14
| the financial and legal qualifications of the prospective assignee or transferee, including compliance with FCC restrictions on non-U.S. citizens or entity ownership and control; | |
| compliance with FCC rules limiting the common ownership of attributable interests in broadcast and newspaper properties; | |
| the history of compliance with FCC operating rules; and | |
| the character qualifications of the transferee or assignee and the individuals or entities holding attributable interests in them. |
15
| broadcast stations above certain limits serving the same local market; and | |
| broadcast stations and a daily newspaper serving the same local market. |
| In a radio market with 45 or more full-power commercial and noncommercial radio stations, a party may own, operate or control up to eight commercial radio stations, not more than five of which are in the same service (AM or FM). | |
| In a radio market with between 30 and 44 (inclusive) full-power commercial and noncommercial radio stations, a party may own, operate or control up to seven commercial radio stations, not more than four of which are in the same service (AM or FM). |
16
| In a radio market with between 15 and 29 (inclusive) full-power commercial and noncommercial radio stations, a party may own, operate or control up to six commercial radio stations, not more than four of which are in the same service (AM or FM). | |
| In a radio market with 14 or fewer full-power commercial and noncommercial radio stations, a party may own, operate or control up to five commercial radio stations, not more than three of which are in the same service (AM or FM), except that a party may not own, operate, or control more than 50% of the radio stations in such market. |
| the television stations do not have overlapping broadcast signals; or | |
| there will remain after the transaction eight independently owned, full power noncommercial or commercial operating television stations in the market and one of the two commonly owned stations is not ranked in the top four based upon audience share. |
| in markets where 20 media voices will remain, a television station owner may own an additional five radio stations, or, if the owner only has one television station, an additional six radio stations; and | |
| in markets where ten media voices will remain, a television station owner may own an additional three radio stations. |
17
18
| require carriage of its signal by cable systems in the stations market, which is referred to as must carry rules; or | |
| negotiate the terms on which such broadcast station would permit transmission of its signal by the cable systems within its market which is referred to as retransmission consent. |
19
20
21
| a significant portion of our net cash flow from operations will be dedicated to servicing our debt obligations and will not be available for operations, future business opportunities or other purposes; | |
| our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes will be limited; | |
| our substantial debt could make us more vulnerable to downturns in our business or in the general economy and increases in interest rates, limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business and economic conditions; | |
| our substantial debt could place us at a disadvantage compared to our competitors who have less debt; and | |
| it may be more difficult for us to satisfy our obligations relating to our Series B preferred stock and our Exchange Notes, if issued (for example, we may not be able to pay cash dividends and interest, respectively, or repurchase our Series B preferred stock when, and if, we are required to do so). |
22
| incur additional debt, incur contingent obligations and issue additional preferred stock; | |
| redeem or repurchase securities ranking junior to our Series B preferred stock; | |
| create liens and encumbrances; | |
| pay dividends, distributions or make other specified restricted payments, and restrict the ability of certain of our subsidiaries to pay dividends or make other payments to us; |
23
| sell assets; | |
| make certain capital expenditures, investments and acquisitions; | |
| change or add lines of business; | |
| enter into certain transactions with affiliates; | |
| enter into sale and leaseback transactions; | |
| issue capital stock or other equity interests; | |
| sell capital stock of our subsidiaries; and | |
| merge or consolidate with any other person, company or other entity or sell, assign, transfer, lease, convey or otherwise dispose of all, or substantially all, of our assets. |
24
25
26
| the limits on our ability to acquire additional stations due to our substantial level of debt; | |
| the need to raise additional financing, which may be limited by the terms of our debt instruments and market conditions; | |
| the failure to increase our station operating income or yield other anticipated benefits for future acquired stations; | |
| the need for required regulatory approvals, including FCC and antitrust approvals; | |
| the challenges of managing any rapid growth; and | |
| the difficulties of programming newly acquired stations to attract listenership or viewership. |
27
| cable television operators offer a service commonly referred to as cable radio which provides cable television subscribers with several high-quality channels of music, news and other information; |
28
| the Internet offers new, diverse and evolving forms of video and audio program distribution; | |
| direct satellite broadcast television companies are supplying subscribers with several high quality music channels; | |
| the introduction of satellite digital audio radio technology has resulted in new satellite radio services with multi-channel programming and sound quality equivalent to that of compact discs; | |
| the introduction of in-band on-channel digital radio could provide multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; and | |
| the provision of video programming to cellular telephones, digital handheld devices and gaming consoles. |
29
30
| fluctuations in our financial results; | |
| general conditions or developments in the media broadcasting industry and other media, and the national economy; | |
| significant sales of our common stock into the marketplace; | |
| significant decreases in our stations audience ratings; | |
| inability to implement our acquisition and operating strategy; | |
| a shortfall in revenue, gross margin, earnings or other financial results from operations or changes in analysts expectations; and | |
| developments in our relationships with our customers and suppliers. |
31
32
| influence the election of our board of directors; | |
| influence our management and policies; and |
33
| influence the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets. |
Item 2. | Properties |
Aggregate Size of
|
||||||||||||
Property in
|
Lease
|
|||||||||||
Square Feet
|
Owned or
|
Expiration
|
||||||||||
Location
|
(approximate) | Leased | Date | |||||||||
New York, NY(2)
|
12,000 | Owned | N/A | |||||||||
Los Angeles, CA(3)
|
40,000 | Owned | N/A | |||||||||
Miami, FL(4)
|
70,000 | Owned | N/A | |||||||||
Miami, FL(5)
|
48,000 | Leased | 2015 | |||||||||
Guaynabo, PR
|
29,000 | Owned | N/A |
(1) | Excludes properties less than 12,000 square feet. | |
(2) | Facility used for the offices and studios for WSKQ-FM and WPAT-FM and certain internet and television operations. | |
(3) | Facility used for the offices and studios for KLAX-FM and KXOL-FM and certain internet and television operations. | |
(4) | Facility under construction/renovation to house the consolidated Miami radio and television broadcasting operations. This facility was leased from November 25, 2006 to January 4, 2007, when the facility was purchased. We expect this facility to be operational in the 3rd quarter of 2008. | |
(5) | Building includes corporate space, and sales space for Miami radio and MegaTV. |
34
Item 3. | Legal Proceedings |
35
36
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 4A. | Directors and Executive Officers of the Registrant |
Name
|
Age
|
Position
|
||||
Raúl Alarcón, Jr.
|
51 | Chairman of the Board of Directors, Chief Executive Officer and President | ||||
Pablo Raúl Alarcón, Sr.
|
82 | Chairman Emeritus and Director | ||||
Joseph A. García
|
62 | Chief Financial Officer, Executive Vice President and Secretary | ||||
Marko Radlovic
|
44 | Chief Operating Officer of Radio Segment and Executive Vice President | ||||
Cynthia Hudson
|
45 | Chief Creative Officer | ||||
Antonio S. Fernandez
|
68 | Director | ||||
Jose A. Villamil
|
61 | Director | ||||
Mitchell A. Yelen
|
60 | Director | ||||
Jason L. Shrinsky
|
70 | Director |
37
38
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
(a) | Market Information |
2007 | 2006 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First quarter
|
$ | 4.70 | 3.75 | 6.07 | 4.95 | |||||||||||
Second quarter
|
4.95 | 3.27 | 5.65 | 4.89 | ||||||||||||
Third quarter
|
4.60 | 2.48 | 5.24 | 3.94 | ||||||||||||
Fourth quarter
|
2.84 | 1.68 | 5.20 | 3.90 |
(b) | Record Holders |
(c) | Dividends |
39
(d) | Stock Performance Graph |
* | $100 INVESTED ON DECEMBER 31, 2002 IN STOCK OR INDEX, INCLUDING REINVESTMENT OF DIVIDENDS. |
Cumulative total return | 12/02 | 12/03 | 12/04 | 12/05 | 12/06 | 12/07 | ||||||||||||||||||||||||
Spanish Broadcasting System, Inc.
|
$ | 100.00 | 146.53 | 146.67 | 70.97 | 57.08 | 25.69 | |||||||||||||||||||||||
NASDAQ Composite
|
$ | 100.00 | 149.75 | 164.64 | 168.60 | 187.83 | 205.22 | |||||||||||||||||||||||
NASDAQ Telecommunications
|
$ | 100.00 | 188.21 | 199.04 | 192.18 | 244.38 | 253.12 | |||||||||||||||||||||||
(e) | Equity Compensation Plans |
40
Item 6.
Selected
Financial Data
(In thousands, except ratios, shares outstanding and per share
data)
2007
2006
2005
2004
2003
$
179,752
176,931
169,832
156,443
135,266
125,281
125,104
103,162
88,202
73,374
2,943
14,967
14,440
14,359
13,346
17,853
4,742
3,991
3,447
3,308
2,901
49
(50,795
)
645
(5,461
)
34,713
84,191
48,219
57,048
38,195
(19,057
)
(20,176
)
(35,619
)
(41,109
)
(36,622
)
(2,997
)
(32,597
)
1,986
(3
)
1,769
164
1,125
17,642
61,015
(18,228
)
16,103
2,698
16,661
11,145
17,034
16,495
11,280
981
49,870
(35,262
)
(392
)
(8,582
)
(8
)
28,410
(168
)
981
49,870
(35,270
)
28,018
(8,750
)
$
(9,668
)
(9,668
)
(9,449
)
(8,548
)
(1,366
)
(11,457
)
$
(8,687
)
40,202
(44,719
)
8,013
(10,116
)
$
(0.12
)
0.56
(0.62
)
(0.31
)
(0.16
)
(0.12
)
0.56
(0.62
)
0.13
(0.16
)
$
72,381
72,381
72,381
64,900
64,684
72,381
72,383
72,381
65,288
64,684
$
10,514
9,616
4,484
2,998
3,365
18,124
19,931
11,733
12,839
13,226
(10,499
)
36,598
48,798
75,458
(231,170
)
(13,318
)
(114,870
)
(67,407
)
(1,874
)
192,123
$
61,122
66,815
125,156
132,032
45,609
936,129
929,740
1,013,217
1,009,723
842,282
341,073
335,592
423,130
453,947
454,194
89,932
89,932
89,932
84,914
76,366
304,603
322,994
274,827
312,636
216,676
41
Table of Contents
(1)
Station operating expenses include
engineering, programming, selling and general and administrative
expenses, but exclude stock-based programming expenses, which
are listed separately. Refer to footnote No. 3 below for
further details.
(2)
We adopted
SFAS No. 123(R)
Share-Based
Payment
, using the modified prospective transition method
beginning January 1, 2006. Accordingly, we recorded
stock-based
compensation expense for awards granted prior to, but not yet
vested, as of January 1, 2006, as if the fair value method
required for pro forma disclosure under SFAS No. 123,
Accounting for Stock Based Compensation,
were in effect
for expense recognition purposes, adjusted for estimated
forfeitures.
The impact on our results of
operations of recording stock based compensation for the fiscal
years ended December 31, 2007 and 2006 was as follows (in
thousands):
2007
2006
$
897
1,037
736
942
$
1,633
1,979
(3)
We were required to issue warrants
to the International Church of the FourSquare Gospel (ICFG) from
the date that ICFG ceased to broadcast its programming over
KZAB-FM
and
KZBA-FM
until the closing of the acquisition of
KXOL-FM.
On
each of March 31, April 30, May 31, June 30,
July 31, August 31, and September 30, 2003, we
granted ICFG a warrant exercisable for 100,000 shares (an
aggregate of 700,000 shares) of our Class A common
stock at an exercise price of $6.14, $7.67, $7.55, $8.08, $8.17,
$7.74 and $8.49 per share, respectively. The warrant issued on
September 30, 2003 was the final warrant required under the
amended time brokerage agreement due to the closing of the
acquisition of
KXOL-FM.
We
assigned these warrants an aggregate fair market value of
approximately $2.9 million based on the Black-Scholes
option pricing model. The fair market value of each warrant was
recorded as a nonrecurring stock-based programming expense on
the respective date of grant. During fiscal year 2006, all of
the warrants issued expired, unexercised.
(4)
On January 31, 2006, we sold
the stations assets of
KZAB-FM
and
KZAB-FM
for
$120.0 million, which consisted of $63.9 million of
intangible assets, net and $1.2 million of property and
equipment. We recognized a gain of approximately
$50.8 million, net of disposal costs.
On November 30, 2004, we sold
the stations assets of
WDEK-FM,
WKIE-FM
and
WKIF-FM
for
$28.0 million, which consisted of $21.3 million of
intangible assets, net and $1.0 million of property and
equipment. We recognized a gain of approximately
$5.5 million, net of disposal costs.
(5)
Interest expense, net, includes
noncash interest, such as the accretion of principal, the
amortization of discounts on debt and the amortization of
deferred financing costs.
(6)
During the fiscal year ended
December 31, 2006, we repaid our $100.0 senior secured
credit facility due 2013 (Second Lien Credit Facility). We
recorded a loss on early extinguishment of debt of approximately
$3.0 million, which was related to the write-off of the
related unamortized deferred financing costs and prepayment
premium.
During the fiscal year ended
December 31, 2005, we repaid $481.2 million of the
outstanding indebtedness, redemption premiums and accrued
interest under a senior credit facility and the
9
5
/
8
% senior
subordinated notes due 2009. We recorded an extraordinary loss
of approximately $32.6 million, which was related to the
write-off of the related unamortized deferred financing costs
and call premiums.
(7)
Our income tax expense differs from
the statutory federal tax rate of 35% and related statutory
state tax rates, primarily as a result of the application of
SFAS No. 142,
Goodwill and Other Intangible
Assets
(SFAS No. 142). Under SFAS No. 142,
the reversal of our deferred tax liabilities related to our
intangible assets could no longer be assured over our net
operating loss carry forward period. Therefore, our effective
book tax rate is impacted by establishing a valuation allowance
on substantially all of our deferred tax assets.
(8)
On December 31, 2001, we
adopted the provisions of SFAS No. 144,
Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of
(SFAS No. 144). Under
SFAS No. 144, discontinued businesses or assets held
for sale are removed from the results of continuing operations.
We determined that the sales of
KPTI-FM
serving the San Francisco, California market,
KLEY-FM
and
KSAH-AM
serving the San Antonio, Texas market and
KTCY-FM
serving the Dallas, Texas market, each met the criteria in
accordance with SFAS No. 144. The results of
operations of these stations, including the gains on the sales
of these assets, were classified as discontinued operations in
the selected historical consolidated statements of operations.
On September 24, 2004, we sold
the stations assets of
KPTI-FM
for
$30.0 million, which consisted of $13.0 million of
intangible assets, net, and $0.3 million of property and
equipment. We recognized a gain of approximately
$16.8 million, net of closing costs and taxes on the sale.
On January 30, 2004, we sold
the stations assets of
KLEY-FM
and
KSAH-AM
for
$24.4 million, which consisted of $11.3 million of
intangible assets, net, and $0.6 million of property and
equipment. We recognized a gain of approximately
$11.6 million, net of closing costs and taxes on the sale.
42
Table of Contents
44
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
43
Table of Contents
Change
2007
2006
Change
Percentage
( In thousands)
$
169,573
172,081
(2,508
)
(1
)%
10,179
4,850
5,329
110
%
$
179,752
176,931
2,821
2
%
$
35,896
33,798
2,098
6
%
14,687
16,882
(2,195
)
(13
)%
$
50,583
50,680
(97
)
0
%
$
67,097
66,383
714
1
%
7,601
8,041
(440
)
(5
)%
$
74,698
74,424
274
0
%
14,967
14,440
527
4
%
$
2,897
2,637
260
10
%
608
355
253
71
%
1,237
999
238
24
%
$
4,742
3,991
751
19
%
$
49
(50,795
)
50,844
(100
)%
0
%
0
%
$
49
(50,795
)
50,844
(100
)%
$
63,634
120,058
(56,424
)
(47
)%
(12,717
)
(20,428
)
7,711
(38
)%
(16,204
)
(15,439
)
(765
)
5
%
$
34,713
84,191
(49,478
)
(59
)%
Table of Contents
Change
2007
2006
Change
Percentage
(In thousands)
$
179,752
176,931
2,821
2
%
50,583
50,680
(97
)
0
%
74,698
74,424
274
0
%
14,967
14,440
527
4
%
4,742
3,991
751
19
%
49
(50,795
)
50,844
(100
)%
34,713
84,191
(49,478
)
(59
)%
(19,057
)
(20,176
)
1,119
(6
)%
(2,997
)
2,997
(100
)%
1,986
(3
)
1,989
(66,300
)%
16,661
11,145
5,516
49
%
$
981
49,870
(48,889
)
(98
)%
45
Table of Contents
46
Table of Contents
Change
2006
2005
Change
Percentage
(In thousands)
$
172,081
169,832
2,249
1
%
4,850
4,850
100
%
$
176,931
169,832
7,099
4
%
$
33,798
32,098
1,700
5
%
16,882
1,949
14,933
766
%
$
50,680
34,047
16,633
49
%
$
66,383
67,875
(1,492
)
(2
)%
8,041
1,240
6,801
548
%
$
74,424
69,115
5,309
8
%
14,440
14,359
81
1
%
$
2,637
2,343
294
13
%
355
81
274
338
%
999
1,023
(24
)
(2
)%
$
3,991
3,447
544
16
%
$
(50,795
)
645
(51,440
)
(7,975
)%
0
%
0
%
$
(50,795
)
645
(51,440
)
(7,975
)%
$
120,058
66,871
53,187
80
%
(20,428
)
(3,270
)
(17,158
)
525
%
(15,439
)
(15,382
)
(57
)
0
%
$
84,191
48,219
35,972
75
%
47
Table of Contents
Change
2006
2005
Change
Percentage
( In thousands)
$
176,931
169,832
7,099
4
%
50,680
34,047
16,633
49
%
$
74,424
69,115
5,309
8
%
14,440
14,359
81
1
%
3,991
3,447
544
16
%
(50,795
)
645
(51,440
)
(7,975
)%
84,191
48,219
35,972
75
%
(20,176
)
(35,619
)
15,443
(43
)%
(2,997
)
(32,597
)
29,600
(91
)%
(3
)
1,769
(1,772
)
(100
)%
11,145
17,034
(5,889
)
(35
)%
(8
)
8
(100
)%
$
49,870
(35,270
)
85,140
(241
)%
$
762
762
100
%
275
275
100
%
942
942
100
%
$
1,979
1,979
100
%
48
Table of Contents
49
Table of Contents
the demand for advertising within the broadcasting industry and
economic conditions in general will not deteriorate in any
material respect;
we will continue to successfully implement our business
strategy; and
we will not incur any material unforeseen liabilities, including
environmental liabilities and legal judgments.
2007
2006
Change
(In thousands)
$
2,080
4,387
(2,307
)
5,287
3,983
1,304
3,147
1,246
1,901
$
10,514
9,616
898
$
18,124
19,931
(1,807
)
(10,499
)
36,598
(47,097
)
(13,318
)
(114,870
)
101,552
$
(5,693
)
(58,341
)
52,648
50
Table of Contents
2006
2005
Change
(In thousands)
$
4,387
2,562
1,825
3,983
1,326
2,657
1,246
596
650
$
9,616
4,484
5,132
$
19,931
11,733
8,198
36,598
48,798
(12,200
)
(114,870
)
(67,407
)
(47,463
)
$
(58,341
)
(6,876
)
(51,465
)
51
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52
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Total
2008
2009
2010
2011
2012
Thereafter
$
399,172
22,029
21,835
21,671
21,507
312,130
18,500
18,500
11,705
969
958
941
878
752
7,207
146,328
9,668
9,668
9,668
9,668
9,668
97,988
575,705
32,666
50,961
32,280
32,053
322,550
105,195
38,516
6,444
4,257
4,194
4,141
4,184
15,296
44,473
20,244
11,637
6,716
3,569
2,244
63
25,908
5,028
4,254
4,909
5,595
6,030
92
$
684,602
64,382
71,109
48,099
45,358
335,008
120,646
(a)
Our First Lien Credit Facility is a
variable-rate debt instrument, but we entered into an interest
rate swap to hedge (fix) our interest rate until June 2010. See
notes 2(v) and 7 to our consolidated financial statements
for additional information. For the purpose of calculating our
contractual obligations, we assumed an interest rate of
approximately 6.0% after the interest rate swap terminates.
(b)
In connection with the acquisition
of MegaTV, we entered into a thirty-four month,
non-interest-bearing secured promissory note in the principal
amount of $18.5 million, which is due on January 6,
2009.
(c)
Other long-term debt relates to a
capital lease and mortgage related to a building (see
note 9 to our consolidated financial statements).
(d)
Our Series B preferred stock
has no specified maturity. However, holders of the preferred
stock may exercise an option on October 15, 2013, to
require us to redeem all or a portion of their preferred stock.
The holders of shares of Series B preferred stock are
entitled to receive cumulative dividends at a rate of
10
3
/
4
%
per year of the $1,000 liquidation preference per share. All
dividends are cumulative from the date of issuance of the
Series B preferred stock and are payable quarterly in
arrears on October 15, January 15, April 15 and July
15 of each year. On or before October 15, 2008, we, at our
option, may pay dividends in cash or in additional fully paid
and nonassessable shares of Series B preferred stock
(including fractional shares or, at our option, cash in lieu of
fractional shares) having an aggregate liquidation preference
equal to the amount of such dividends. After October 15,
2008, dividends may be paid only in cash, which are included in
this contractual obligation table. Our ability to pay cash
dividends is subject to the terms of our First Lien Credit
Facility. For the purpose of calculating our contractual
obligations we assumed that the Series B preferred stock
will pay dividends in cash going forward as of December 31,
2007.
(e)
Included in our noncancelable
operating lease obligations are minimum lease payments for
office space and facilities and certain equipment.
53
Table of Contents
(f)
We are committed to employment and
service contracts for certain executives, on-air talent,
managers and others expiring through 2013.
(g)
Included are contracts for rating
services, programming contracts, software contracts and others.
54
Table of Contents
55
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56
Table of Contents
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
Item 8. | Financial Statements and Supplementary Data |
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
57
58
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits, Financial Statement Schedules |
1. | Financial Statements |
2. | Financial Statement Schedule |
59
Page | ||||
61 | ||||
63 | ||||
64 | ||||
65 | ||||
66 | ||||
67 | ||||
100 |
60
61
Table of Contents
99
102
103
104
105
106
107
110
111
112
113
114
115
62
Table of Contents
AND SUBSIDIARIES
63
Table of Contents
AND SUBSIDIARIES
2007
2006
2005
(In thousands, except share data)
$
179,752
176,931
169,832
50,583
50,680
34,047
74,698
74,424
69,115
14,967
14,440
14,359
4,742
3,991
3,447
144,990
143,535
120,968
49
(50,795
)
645
34,713
84,191
48,219
(22,170
)
(23,630
)
(38,235
)
3,113
3,454
2,616
(2,997
)
(32,597
)
1,986
(3
)
1,769
17,642
61,015
(18,228
)
16,661
11,145
17,034
981
49,870
(35,262
)
(8
)
981
49,870
(35,270
)
(9,668
)
(9,668
)
(9,449
)
$
(8,687
)
40,202
(44,719
)
$
(0.12
)
0.56
(0.62
)
$
(0.12
)
0.56
(0.62
)
72,381
72,381
72,381
72,381
72,383
72,381
64
Table of Contents
AND SUBSIDIARIES
Class C
Class A
Class B
Accumulated
Preferred Stock
Common Stock
Common Stock
Additional
Other
Total
Number of
Par
Number of
Par
Number of
Par
Paid-in
Comprehensive
Accumulated
Stockholders
Shares
Value
Shares
Value
Shares
Value
Capital
Income
Deficit
Equity
(In thousands, except share data)
380,000
$
4
40,197,805
$
4
24,583,500
$
2
$
520,447
$
$
(207,821
)
$
312,636
(29
)
(29
)
80,000
(80,000
)
(9,449
)
(9,449
)
(35,270
)
(35,270
)
6,939
6,939
(28,331
)
380,000
4
40,277,805
4
24,503,500
2
520,418
6,939
(252,540
)
274,827
5,170
5,170
380,000
4
40,277,805
4
24,503,500
2
520,418
6,939
(247,370
)
279,997
1,979
1,979
(9,668
)
(9,668
)
49,870
49,870
816
816
50,686
380,000
4
40,277,805
4
24,503,500
2
522,397
7,755
(207,168
)
322,994
500,000
(500,000
)
1,633
1,633
(9,668
)
(9,668
)
981
981
(11,337
)
(11,337
)
(10,356
)
380,000
$
4
40,777,805
$
4
24,003,500
$
2
$
524,030
$
(3,582
)
$
(215,855
)
$
304,603
65
Table of Contents
AND SUBSIDIARIES
2007
2006
2005
(In thousands)
$
981
49,870
(35,270
)
8
49
(50,795
)
2,997
32,597
1,633
1,979
173
4,742
3,991
3,447
(299
)
(248
)
595
1,478
1,443
1,048
717
1,111
1,185
1,749
1,303
1,009
16,466
10,663
17,108
(1,785
)
278
(575
)
241
244
(75
)
(75
)
(75
)
(33
)
(4,954
)
755
(2,877
)
(1,097
)
175
(1,144
)
(1,554
)
(3
)
574
(16
)
(2,693
)
(1,279
)
(183
)
(1,032
)
(4,002
)
116
188
18,124
19,931
12,794
(1,061
)
18,124
19,931
11,733
64,751
(502
)
55,000
(6,186
)
(8,581
)
(4,484
)
(4,328
)
(1,035
)
15
(18,537
)
(1,216
)
(10,499
)
36,598
48,798
(351,124
)
(123,750
)
325,000
(3,250
)
(3,250
)
(2,437
)
100,000
(101,000
)
(9,668
)
(9,668
)
(2,417
)
(400
)
(600
)
(3,622
)
(352
)
(9,057
)
(13,318
)
(114,870
)
(67,407
)
(5,693
)
(58,341
)
(6,876
)
66,815
125,156
132,032
$
61,122
66,815
125,156
$
20,063
22,222
40,412
15
1,189
$
(11,337
)
816
6,939
7,650
5,338
14,778
5,018
66
Table of Contents
AND SUBSIDIARIES
(1)
Organization
and Nature of Business
(2)
Summary
of Significant Accounting Policies and Related Matters
(a)
Basis
of Presentation
(b)
Revenue
Recognition
(c)
Valuation
of Accounts Receivable
(d)
Property
and Equipment
67
Table of Contents
AND SUBSIDIARIES
(e)
Impairment
or Disposal of Long-Lived Assets
(f)
Indefinite-Lived
Intangible Assets (FCC Licenses) and Goodwill
68
Table of Contents
AND SUBSIDIARIES
(g)
Other
Intangible Assets, Net
$
36
36
36
36
36
(h)
Deferred
Financing Costs
(i)
Barter
Transactions and Unearned Revenue
(j)
Cash
and Cash Equivalents
69
Table of Contents
AND SUBSIDIARIES
(k)
Income
Taxes
(l)
Advertising
Costs
(m)
Deferred
Commitment Fee
(n)
Use of
Estimates
(o)
Concentration
of Business and Credit Risks
70
Table of Contents
AND SUBSIDIARIES
(p)
Basic
and Diluted Net (Loss) Income Per Common Share
2007
2006
2005
$
981
49,870
(35,262
)
(9,668
)
(9,668
)
(9,449
)
(8,687
)
40,202
(44,711
)
(8
)
$
(8,687
)
40,202
(44,719
)
72,381
72,381
72,381
72,381
72,383
72,381
$
(0.12
)
0.56
(0.62
)
$
(0.12
)
0.56
(0.62
)
(q)
Fair
Value of Financial Instruments
71
Table of Contents
AND SUBSIDIARIES
December 31
2007
2006
Gross
Gross
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
$
89.9
89.9
89.9
99.8
(r)
Stock
Option Plans
(s)
Leasing
(Operating Leases)
72
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AND SUBSIDIARIES
(t)
Segment
Reporting
(u)
Other,
net
(v)
Derivative
Instrument
73
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AND SUBSIDIARIES
(w)
Comprehensive
Income (Loss)
(x)
Capitalized
Interest
2007
2006
2005
$
475
22,170
23,630
38,235
$
22,645
23,630
38,235
(y)
Reclassification
(3)
Station
Acquisitions
74
Table of Contents
AND SUBSIDIARIES
(4)
Dispositions
of Stations Not Classified as Discontinued Operations
75
Table of Contents
AND SUBSIDIARIES
(5)
Property
and Equipment, Net
Estimated
2007
2006
Useful Lives
$
7,466
2,437
29,454
20,422
20 years
4,847
4,773
7-15 years
13,590
12,180
10 years
4,467
3,611
3-10 years
6,571
6,235
7-10 years
6,708
4,392
5-13 years
6,374
4,930
5 years
2,450
2,793
5 years
81,927
61,773
(38,188
)
(33,751
)
$
43,739
28,022
76
Table of Contents
AND SUBSIDIARIES
(6)
Accounts
Payable and Accrued Expenses
2007
2006
$
2,125
2,207
8,431
8,035
1,230
1,353
107
130
1,315
1,137
1,744
1,549
4,688
4,211
$
19,640
18,622
(7)
Senior
Secured Credit Facilities
2007
2006
$
316,063
319,313
316,063
319,313
(3,250
)
(3,250
)
$
312,813
316,063
$
3,250
3,250
3,250
3,250
303,063
$
316,063
(a)
Senior
Secured Credit Facilities due 2012 and 2013
77
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AND SUBSIDIARIES
78
Table of Contents
AND SUBSIDIARIES
incur additional debt, incur contingent obligations and issue
additional preferred stock;
create liens;
pay dividends, distributions or make other specified restricted
payments, and restrict the ability of certain of our
subsidiaries to pay dividends or make other payments to us;
sell assets;
make certain capital expenditures, investments and acquisitions;
enter into certain transactions with affiliates;
enter into sale and leaseback transactions; and
merge or consolidate with any other person or sell, assign,
transfer, lease, convey or otherwise dispose of all or
substantially all of our assets.
(8)
Non-Interest
Bearing Promissory Note due 2009, Net
79
Table of Contents
AND SUBSIDIARIES
(9)
Other
Long-Term Debt
2007
2006
$
7,370
406
492
144
7,920
492
(430
)
(79
)
$
7,490
413
$
430
438
448
425
347
5,840
$
7,928
80
Table of Contents
AND SUBSIDIARIES
(10)
10
3
/
4
%
Series A and B Cumulative Exchangeable Redeemable Preferred
Stock
81
Table of Contents
AND SUBSIDIARIES
(11)
Stockholders
Equity
(a)
Series C
Convertible Preferred Stock
(b)
Class A
and B Common Stock
82
Table of Contents
AND SUBSIDIARIES
(c)
Warrants
(d)
Share-Based
Payment Plans
83
Table of Contents
AND SUBSIDIARIES
2007
2006
$
761
762
136
275
736
942
$
1,633
1,979
$
1,633
1,979
$
1,633
1,979
$
0.02
0.03
2007
2006
2005
7 years
7 years
5 years
None
None
None
4.25%
4.65%
4.25%
59%
65%
69%
84
Table of Contents
AND SUBSIDIARIES
Weighted
Weighted
Average
Average
Aggregate
Remaining
Exercise
Intrinsic
Contractual
Shares
Price
Value
Life (Years)
3,013
$
12.28
379
7.54
(453
)
13.14
2,939
11.54
100
4.79
(10
)
8.21
3,029
11.33
175
2.60
(141
)
10.55
3,063
$
10.86
$
5.1
2,675
$
11.25
$
4.8
Weighted
Weighted
Average
Weighted
Average
Remaining
Average
Vested
Unvested
Exercise
Contractual
Options
Exercise
Options
Options
Price
Life (Years)
Exercisable
Price
310
65
$
3.77
7.71
310
$
4.03
1,482
293
8.72
5.69
1,482
8.62
173
30
10.77
6.65
173
10.71
710
20.00
1.83
710
20.00
2,675
388
10.86
5.10
2,675
11.25
85
Table of Contents
AND SUBSIDIARIES
2005
$
(44,719
)
(2,940
)
$
(47,659
)
$
(0.62
)
(0.66
)
(12)
Commitments
(a)
Leases
86
Table of Contents
AND SUBSIDIARIES
2007
2006
$
1,230
1,230
178
1,408
1,230
(1,001
)
(897
)
$
407
333
Capital
Operating
Lease
Lease
$
200
6,444
209
4,257
209
4,194
169
4,141
62
4,184
15,296
849
$
38,516
(216
)
633
(83
)
$
550
87
Table of Contents
AND SUBSIDIARIES
$
562
578
578
407
341
1,451
$
3,917
(b)
Employment
and Service Agreements
$
20,244
11,637
6,716
3,569
2,244
63
$
44,473
(c)
401(k)
Profit-Sharing Plan
88
Table of Contents
AND SUBSIDIARIES
(d)
Other
Commitments
$
4,395
4,254
4,909
5,595
6,030
92
$
25,275
(13)
Income
Taxes
2007
2006
2005
$
16,661
11,145
17,034
$
16,661
11,145
17,034
2007
2006
2005
$
23,332
64,710
(15,694
)
(5,690
)
(3,695
)
(2,534
)
$
17,642
61,015
(18,228
)
89
Table of Contents
AND SUBSIDIARIES
2007
2006
2005
$
(10
)
195
30
307
(444
)
175
175
175
195
482
(74
)
14,160
8,988
13,343
2,306
1,675
3,765
16,466
10,663
17,108
16,661
11,145
17,034
$
16,661
11,145
17,034
2007
2006
$
56,479
50,939
13,389
10,335
2,056
2,263
230
164
1,186
1,186
1,470
2,678
2,533
77,488
67,420
(75,693
)
(62,247
)
1,795
5,173
350
99
171,334
154,868
259
703
3,186
171,943
158,856
$
170,148
153,683
90
Table of Contents
AND SUBSIDIARIES
2007
2006
2005
35.0
%
35.0
%
(35.0
)%
8.2
6.6
(1.6
)
(0.3
)
0.3
1.0
49.8
(28.5
)
115.3
2.9
0.9
1.6
(3.0
)
2.5
12.1
1.8
1.5
94.4
%
18.3
%
93.4
%
91
Table of Contents
AND SUBSIDIARIES
(14)
Contingencies
(a)
Environmental
Matters
92
Table of Contents
AND SUBSIDIARIES
(b)
FCC
Licenses Matters
(15)
Related-Party
Transactions
(16)
Litigation
(a)
Wolf,
et al., Litigation
93
Table of Contents
AND SUBSIDIARIES
94
Table of Contents
AND SUBSIDIARIES
(b)
Amigo
Broadcasting Litigation
95
Table of Contents
AND SUBSIDIARIES
(17)
New
Accounting Pronouncements
(18)
Quarterly
Results of Operations (Unaudited)
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
38,937
47,871
46,772
46,172
1,014
2,390
2,541
(4,964
)
(2,417
)
(2,417
)
(2,417
)
(2,417
)
$
(1,403
)
(27
)
124
(7,381
)
$
(0.02
)
(0.10
)
96
Table of Contents
AND SUBSIDIARIES
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
37,775
48,841
45,891
44,424
53,541
2,431
843
(6,945
)
(2,417
)
(2,417
)
(2,417
)
(2,417
)
$
51,124
14
(1,574
)
(9,362
)
$
0.71
(0.02
)
(0.13
)
97
Table of Contents
AND SUBSIDIARIES
(19)
Segment
Data
Fiscal Years Ended
2007
2006
2005
$
169,573
172,081
169,832
10,179
4,850
$
179,752
176,931
169,832
$
35,896
33,798
32,098
14,687
16,882
1,949
$
50,583
50,680
34,047
$
67,097
66,383
67,875
7,601
8,041
1,240
$
74,698
74,424
69,115
$
14,967
14,440
14,359
$
2,897
2,637
2,343
608
355
81
1,237
999
1,023
$
4,742
3,991
3,447
$
49
(50,795
)
645
$
49
(50,795
)
645
$
63,634
120,058
66,871
(12,717
)
(20,428
)
(3,270
)
(16,204
)
(15,439
)
(15,382
)
$
34,713
84,191
48,219
98
Table of Contents
AND SUBSIDIARIES
Fiscal Years Ended
2007
2006
2005
$
2,080
4,387
2,562
5,287
3,983
1,326
3,147
1,246
596
$
10,514
9,616
4,484
December 31
2007
2006
$
862,048
861,804
62,462
49,376
11,619
18,560
$
936,129
929,740
(20)
Subsequent
Events
Table of Contents
Years Ended December 31, 2007, 2006 and 2005
Balance
Charged
Charged to
Beginning
to Cost
Other
Balance at
of Year
and Expense
Accounts(1)(3)
Deductions(2)
End of Year
(In thousands, except share data)
$
4,383
1,478
2,238
3,623
62,247
8,790
4,656
75,693
3,832
1,443
892
4,383
82,071
(17,384
)
(2,440
)
62,247
3,440
1,046
654
3,832
69,282
21,017
(8,228
)
82,071
(1)
True-up
to
tax returns of deferred tax accounts.
(2)
Cash write-offs, net of recoveries.
(3)
Amounts charged to other comprehensive income related to
derivative instruments.
100
Table of Contents
Exhibit
3
.1
Third Amended and Restated Certificate of Incorporation of
Spanish Broadcasting System, Inc. (the Company), dated
September 29, 1999 (incorporated by reference to the
Companys 1999 Registration Statement on
Form S-1
(Commission File
No. 333-85499)
(the 1999 Registration Statement)) (Exhibit A to this
exhibit is incorporated by reference to the Companys
Current Report on
Form 8-K,
dated March 25, 1996 (the 1996 Current Report).
3
.2
Certificate of Amendment to the Third Amended and Restated
Certificate of Incorporation of the Company, dated
September 29, 1999 (incorporated by reference to
Exhibit 3.2 of the Companys 1999 Registration
Statement).
3
.3
Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.3 of the Companys 1999
Registration Statement).
3
.4
Certificate of Elimination of 14
1
/
4
% Senior
Exchangeable Preferred Stock, Series A of the Company,
dated October 28, 2003 (incorporated by reference to
Exhibit 3.3 of the Companys Quarterly Report on
Form 10-Q,
dated November 14, 2003 (the 11/14/03 Quarterly Report)).
4
.1
Article V of the Third Amended and Restated Certificate of
Incorporation of the Company, dated September 29, 1999
(incorporated by reference to Exhibit 3.1 of the
Companys 1999 Registration Statement).
4
.2
Certificate of Designations dated October 29, 2003 Setting
Forth the Voting Power, Preferences and Relative, Participating,
Optional and Other Special Rights and Qualifications,
Limitations and Restrictions of the 10
3
/
4
%
Series A Cumulative Exchangeable Redeemable Preferred Stock
of Spanish Broadcasting System, Inc. (incorporated by reference
to Exhibit 4.1 of the Companys 11/14/03 Quarterly
Report).
4
.3
Certificate of Designations dated October 29, 2003 Setting
Forth the Voting Power, Preferences and Relative, Participating,
Optional and Other Special Rights and Qualifications,
Limitations and Restrictions of the 10
3
/
4
%
Series B Cumulative Exchangeable Redeemable Preferred Stock
of Spanish Broadcasting System, Inc. (incorporated by reference
to Exhibit 4.2 of the Companys 11/14/03 Quarterly
Report).
4
.4
Indenture dated June 29, 1994 among the Company, IBJ
Schroder Bank & Trust Company, as Trustee, the
Guarantors named therein and the Purchasers named therein
(incorporated by reference to Exhibit 4.1 of the
Companys 1994 Registration Statement on
Form S-4
(the 1994 Registration Statement).
4
.5
First Supplemental Indenture dated as of March 25, 1996 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the
1996 Current Report).
4
.6
Second Supplemental Indenture dated as of March 1, 1997 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the
1996 Current Report).
4
.7
Supplemental Indenture dated as of October 21, 1999 to the
Indenture dated as of June 29, 1994 among the Company, the
Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the
Companys 1999 Registration Statement).
4
.8
Indenture with respect to
9
5
/
8
% Senior
Subordinated Notes due 2009 with The Bank of New York as
Trustee, dated November 2, 1999 (incorporated by reference
to the Current Report on
Form 8-K
dated November 2, 1999 (the 1999 Current Report)).
4
.9
Indenture with respect to
9
5
/
8
% Senior
Subordinated Notes due 2009 with the Bank of New York as
Trustee, dated June 8, 2001 (incorporated by reference to
the Companys Registration Statement on
Form S-3,
filed on June 25, 2001 (the 2001
Form S-3).
4
.10
Form of stock certificate for the Class A common stock of
the Company (incorporated by reference to the Companys
1999 Registration Statement).
101
Table of Contents
Exhibit
4
.11
Certificate of Elimination of 14
1
/
4
%
of Senior Exchangeable Preferred Stock, Series A of the
Company, dated October 28, 2003 (incorporated by reference
to Exhibit 3.3 of the Companys Quarterly Report on
Form 10-Q
filed November 14, 2003).
4
.12
Certificate of Designation Setting Forth the Voting Power,
Preferences and Relative, Participating, Optional and Other
Special Rights and Qualifications, Limitations and Restrictions
of the Series C Convertible Preferred Stock of the Company
(Certificate of Designation of Series C Preferred Stock)
(incorporated by reference to Exhibit 4.1 of the
Companys Current Report on Form 8).
4
.13
Certificate of Correction to Certificate of Designation of
Series C Preferred Stock of the Company dated
January 7, 2005 (incorporated by reference to
Exhibit 4.13 of the Companys Annual Report filed on
Form 10).
4
.14
Form of Notice of Redemption, dated June 10, 2005, with
respect to the redemption of the registrants
9
5
/
8
% Senior
Subordinated Notes due 2009 under the indenture dated as of
November 2, 1999 (incorporated by reference to
Exhibit 99.1 of the Companys Current Report on
Form 8-K
filed June 16, 2005).
4
.15
Form of Notice of Redemption, dated June 10, 2005, with
respect to the redemption of the registrants
9
5
/
8
% Senior
Subordinated Notes due 2009 under the indenture dated as of
June 8, 2001 (incorporated by reference to
Exhibit 99.2 of the Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.1
Warrant Agreement dated as of March 15, 1997 among the
Company and IBJ Schroder Bank & Trust Company, as
Warrant Agent (incorporated by reference to the 1996 Current
Report).
10
.2*
Common Stock Registration Rights and Stockholders Agreement
dated as of June 29, 1994 among the Company and certain
Management Stockholders named therein (incorporated by reference
to the 1994 Registration Statement).
10
.3*
Amended and Restated Employment Agreement dated as of
October 25, 1999, by and between the Company and Raúl
Alarcón, Jr. (incorporated by reference to the
Companys 1999 Registration Statement).
10
.4*
Employment Agreement dated as of October 25, 1999, by and
between the Company and Joseph A. García (incorporated by
reference to the Companys 1999 Registration Statement).
10
.5
Ground Lease dated December 18, 1995 between Louis Viola
Company and SBS-NJ (incorporated by reference to the 1996
Current Report).
10
.6
Ground Lease dated December 18, 1995 between Frank F. Viola
and Estate of Thomas C. Viola and SBS-NJ (incorporated by
reference to the 1996 Current Report).
10
.7
Lease and License Agreement dated February 1, 1991 between
Empire State Building Company, as landlord, and SBS-NY, as
tenant (incorporated by reference to Exhibit 10.15.1 of the
1994 Registration Statement).
10
.8
Modification of Lease and License dated June 30, 1992
between Empire State Building Company and SBS-NY related to
WSKQ-FM
(incorporated by reference to Exhibit 10.15.2 of the 1994
Registration Statement).
10
.9
Lease and License Modification and Extension Agreement dated as
of June 30, 1992 between Empire State Building Company, as
landlord, and SBS-NY as tenant (incorporated by reference to
Exhibit 10.15.3 of the 1994 Registration Statement).
10
.10
Lease Agreement dated June 1, 1992 among Raúl
Alarcón, Sr., Raúl Alarcón, Jr., and SBS-Fla
(incorporated by reference to Exhibit 10.30 of the 1994
Registration Statement).
10
.11
Agreement of Lease dated as of March 1, 1996
No. WT-174-A119
1067 between The Port Authority of New Jersey and SBS of Greater
New York, Inc. as assignee of Park Radio (incorporated by
reference to the 1996 Current Report).
10
.15*
Indemnification Agreement with Raúl Alarcón, Jr. dated
as of November 2, 1999 (incorporated by reference to the
1999 Current Report).
10
.16*
Indemnification Agreement with Jason L. Shrinsky dated as of
November 2, 1999 (incorporated by reference to the 1999
Current Report).
Table of Contents
Exhibit
10
.17*
Spanish Broadcasting System 1999 Stock Option Plan (incorporated
by reference to the Companys 1999 Registration Statement).
10
.18*
Spanish Broadcasting System 1999 Company Stock Option Plan for
Nonemployee Directors (incorporated by reference to the
Companys 1999 Registration Statement).
10
.19
Form of
Lock-Up
Letter Agreement (incorporated by reference in the
Companys 1999 Registration Statement).
10
.20*
Option Grant not under the Stock Option Plans with Arnold
Sheiffer, dated October 27, 1999 (incorporated by reference
to the 1999 Current Report).
10
.25
Lease Agreement by and between the Company and Irradio Holdings,
Ltd. made as of December 14, 2000 (incorporated by
reference to Exhibit 10.50 of the Companys 2000
Form 10-K).
10
.26
First Addendum to Lease between the Company and Irradio
Holdings, Ltd. as of December 14, 2000 (incorporated by
reference to Exhibit 10.51 of the Companys 2000
Form 10-K).
10
.27
Asset Purchase Agreement dated as of November 2, 2000 by
and between International Church of the FourSquare Gospel and
the Company (incorporated by reference to Exhibit 10.1 of
the Companys 2000
Form 10-K).
10
.28
Addendum to Asset Purchase Agreement, dated March 13, 2001,
by and between International Church of the FourSquare Gospel and
the Company (incorporated by reference to Exhibit 10.2 of
the Companys Quarterly Report on
Form 10-Q
filed on May 9, 2001 (5/9/01 Quarterly Report)).
10
.29
Time Brokerage Agreement, dated March 13, 2001, by and
between International Church of the FourSquare Gospel and the
Company (incorporated by reference to Exhibit 10.3 of the
Companys 5/9/01 Quarterly Report
10
.30
93.5 Time Brokerage Agreement, dated March 13, 2001, by and
between Spanish Broadcasting System Southwest, Inc. and
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.4 of the Companys 5/9/01
Quarterly Report).
10
.38
Amendment dated as of February 8, 2002 to Asset Purchase
Agreement dated as of November 2, 2000 by and between
International Church of the FourSquare Gospel and Spanish
Broadcasting System, Inc., as amended by an Addendum dated
March 13, 2001 (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Transition
Report on
Form 10-Q
filed February 13, 2002).
10
.39
Amendment No. 1 dated as of February 8, 2002 to Time
Brokerage Agreement dated as of March 13, 2001 by and
between International Church of the FourSquare Gospel, as
Licensee, and Spanish Broadcasting System, Inc., as Time Broker
(incorporated by reference to Exhibit 10.2 to the
Companys Quarterly Transition Report on
Form 10-Q
filed February 13, 2002).
10
.40
Amendment No. 1 dated as of February 8, 2002 to the
93.5 Time Brokerage Agreement dated as of March 13, 2001 by
and between Spanish Broadcasting System SouthWest, Inc., as
Licensee and International Church of the FourSquare Gospel, as
Time Broker (incorporated by reference to Exhibit 10.3 to
the Companys Quarterly Transition Report on
Form 10-Q
filed February 13, 2002).
10
.41
Warrant dated February 8, 2002 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.1 to the Companys Quarterly
Report on
Form 10-Q
filed May 2, 2002).
10
.42*
Stock Option Agreement dated as of January 16, 2002 between
the Company and Joseph A. García (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
filed May 2, 2002).
10
.45*
Companys 1999 Stock Option Plan as amended on May 6,
2002 (incorporated by reference to Exhibit 10.3 to the
Companys Quarterly Report on
Form 10-Q
filed August 14, 2002).
10
.46*
Companys 1999 Stock Option Plan for Non-Employee Directors
as amended on May 6, 2002 (incorporated by reference to
Exhibit 10.4 to the Companys Quarterly Report on
Form 10-Q
filed August 14, 2002).
Table of Contents
Exhibit
10
.47*
Stock Option Agreement dated as of October 29, 2002 between
the Company and Raúl Alarcón, Jr. (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on
Form 10-Q
filed November 13, 2002).
10
.51
Warrant dated March 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.4 of the Companys Quarterly
Report on
Form 10-Q,
dated May 15, 2003 (the 5/15/03 Quarterly Report)).
10
.52
Warrant dated April 30, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.5 of the Companys 5/15/03
Quarterly Report).
10
.53
Warrant dated May 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.1 of the Companys Quarterly
Report on
Form 10-Q,
dated August 13, 2003 (the 8/13/03 Quarterly Report)).
10
.54
Warrant dated June 30, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.2 of the Companys 8/13/03
Quarterly Report).
10
.55
Warrant dated July 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.3 of the Companys 8/13/03
Quarterly Report).
10
.56
Asset Purchase Agreement dated as of September 18, 2003
between Spanish Broadcasting System, Inc. and Border Media
Partners, LLC (incorporated by reference to Exhibit 10.1 of
the Companys Current Report on
Form 8-K,
dated September 25, 2003).
10
.58
Warrant dated August 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.1 of the Companys 11/14/03
Quarterly Report).
10
.59
Warrant dated September 30, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.2 of the Companys 11/14/03
Quarterly Report).
10
.64
Transmission Facilities Lease between the Company and
International Church of the FourSquare Gospel, dated
October 30, 2003 (incorporated by reference to
Exhibit 10.7 of the Companys 11/14/03 Quarterly
Report).
10
.65
Purchase Agreement dated October 30, 2003 between the
Company and Merrill Lynch, Pierce Fenner & Smith
Incorporated, Deutsche Bank Securities Inc. and Lehman Brothers
Inc. with respect to
10
3
/
4
%
Series A Cumulative Exchangeable Redeemable Preferred Stock
(incorporated by reference to Exhibit 10.8 of the
Companys 11/14/03 Quarterly Report).
10
.66*
Registration Rights Agreement dated October 30, 2003
between the Company and Merrill Lynch, Pierce Fenner &
Smith Incorporated, Deutsche Bank Securities Inc. and Lehman
Brothers Inc. with respect to
10
3
/
4
%
Series A Cumulative Exchangeable Redeemable Preferred Stock
(incorporated by reference to Exhibit 10.9 of the
Companys 11/14/03 Quarterly Report).
10
.69*
Amended and Restated Employment Agreement dated October 31,
2003 between the Company and Marko Radlovic (incorporated by
reference to Exhibit 10.81 of the Companys 2004
Form 10-K).
10
.70*
Nonqualified Stock Option Agreement dated October 27, 2003
between the Company and Raúl Alarcón, Jr.
(incorporated by reference to Exhibit 10.78 of the
Companys 2004
Form 10-K).
10
.71*
Nonqualified Stock Option Agreement dated December 10, 2003
between the Company and Marko Radlovic (incorporated by
reference to Exhibit 10.79 of the Companys 2004
Form 10-K).
10
.72*
Incentive Stock Option Agreement dated December 10, 2003
between the Company and Marko Radlovic (incorporated by
reference to Exhibit 10.80 of the Companys 2004
Form 10-K).
10
.73*
Non-Qualified Stock Option Agreement dated as of March 3,
2004 between the Company and Joseph A. García (incorporated
by reference to Exhibit 10.1 to the Companys
Quarterly Report on
Form 10-Q
filed May 10, 2004 (the 5/10/04 Quarterly Report)).
10
.74*
Incentive Stock Option Agreement dated as of March 3, 2004
between the Company and Joseph A. García
(incorporated by reference to Exhibit 10.2 to the
Companys 5/10/04 Quarterly Report).
Table of Contents
Exhibit
10
.77*
Stock Option Letter Agreement dated as of July 2, 2004
between the Company and Antonio S. Fernandez (incorporated by
reference to Exhibit 10.1 of the Companys Quarterly
Report on
Form 10-Q
filed August 9, 2004 (the 8/9/04 Quarterly Report)).
10
.78*
Stock Option Letter Agreement dated as of July 2, 2004
between the Company and Jose Antonio Villamil (incorporated by
reference to Exhibit 10.2 of the Companys 8/9/04
Quarterly Report).
10
.81
Merger Agreement dated as of October 5, 2004 among Infinity
Media Corporation, Infinity Broadcasting Corporation of
San Francisco, Spanish Broadcasting System, Inc. and SBS
Bay Area, LLC (incorporated by reference to Exhibit 10.1 of
the Companys Quarterly Report on
Form 8-K
filed on October 12, 2004).
10
.82*
Stockholder Agreement dated as of October 5, 2004 among
Spanish Broadcasting System, Inc., Infinity Media Corporation
and Raúl Alarcón, Jr. (incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on
Form 8-K
filed on October 12, 2004).
10
.83
Local Marketing Agreement dated as of October 5, 2004
between Infinity Broadcasting Corporation of San Francisco
and SBS Bay Area, LLC (incorporated by reference to
Exhibit 10.3 of the Companys Quarterly Report on
Form 8-K
filed on October 12, 2004).
10
.85
Warrant to Purchase Series C Preferred Stock of Spanish
Broadcasting System, Inc. dated December 23, 2004 by the
Company in favor of Infinity Media Corporation (incorporated by
reference to Exhibit 4.2 of the Companys Quarterly
Report on
Form 8-K
filed on December 27, 2004).
10
.86
Registration Rights Agreement dated as of December 23, 2004
between Spanish Broadcasting System, Inc. and Infinity Media
Corporation (incorporated by reference to Exhibit 4.3 of
the Companys Quarterly Report on
Form 8-K
filed on December 27, 2004).
10
.87*
Nonqualified Stock Option Agreement, dated as of March 15,
2005 between the Company and Jason Shrinsky (incorporated by
reference to Exhibit 10.1 of the Companys Quarterly
Report on
Form 10-K
filed May 10, 2005).
10
.89
First Lien Credit Agreement, dated as of June 10, 2005,
among Spanish Broadcasting System, Inc., Merrill Lynch, Pierce
Fenner & Smith, Incorporated, Wachovia Bank, National
Association, Lehman Commercial Paper Inc. and various lenders
(incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.90
Second Lien Term Loan Agreement, dated as of June 10, 2005,
among Spanish Broadcasting System, Inc., Merrill Lynch, Pierce
Fenner & Smith, Incorporated, Wachovia Bank, National
Association, Lehman Commercial Paper Inc. and various lenders
(incorporated by reference to Exhibit 10.2 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.91
First Lien Guarantee and Collateral Agreement, dated as of
June 10, 2005, among Spanish Broadcasting System, Inc.,
certain of its subsidiaries and Lehman Commercial Paper Inc.
(incorporated by reference to Exhibit 10.3 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.92
Second Lien Guarantee and Collateral Agreement, dated as of
June 10, 2005, among Spanish Broadcasting System, Inc.,
certain of its subsidiaries and Lehman Commercial Paper Inc.
(incorporated by reference to Exhibit 10.4 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.93
Intercreditor Agreement, dated as of June 10, 2005, among
Spanish Broadcasting System, Inc. and Lehman Commercial Paper
Inc. (incorporated by reference to Exhibit 10.5 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.94*
Nonqualified Stock Option Agreement, dated as of July 11,
2003 between the Company and Joseph A. García (incorporated
by reference to Exhibit 10.2 of the Companys
Quarterly Report on
Form 10-K
filed May 10, 2005).
10
.95
Asset Purchase Agreement, dated July 12, 2005 among the
Company, WDLP Broadcasting Company, LLC, WDLP Licensed
Subsidiary, LLC, Robin Broadcasting Company, LLC and Robin
Licensed Subsidiary, LLC (incorporated by reference to
Exhibit 10.1 of the Companys Quarterly Report on
Form 10-K
filed August 9, 2005).
Table of Contents
Exhibit
10
.96
Second Amendment to Lease, dated December 1, 2004 between
the Company and Irradio Holdings, Ltd. (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly
Report on
Form 10-K
filed August 9, 2005).
10
.97*
Amendment to Amended and Restated Employment Agreement, dated as
of July 21, 2005, by and between the Company and Marko
Radlovic (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed November 9,
2007.)
10
.99
Amendment to Asset Purchase Agreement, dated January 6,
2006, by and among Mega Media Holdings, Inc., WDLP Licensing,
Inc., and WDLP Broadcasting Company, LLC, WDLP Licensed
Subsidiary, LLC, Robin Broadcasting Company, LLC, and Robin
Licensed Subsidiary, LLC (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed January 12, 2006).
10
.100
Security Agreement, dated as of March 1, 2006, among Mega
Media Holdings, Inc., WDLP Licensing, Inc., WDLP Broadcasting
Company, LLC, WDLP Licensed Subsidiary, LLC, Robin Broadcasting
Company, LLC and Robin Licensed Subsidiary, LLC (incorporated by
reference to Exhibit 10.1 of the Companys Current
Report on
Form 8-K
filed March 6, 2006).
10
.101
Pledge Agreement, dated as of March 1, 2006, among Mega
Media Holdings, Inc., WDLP Broadcasting Company, LLC, WDLP
Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC and
Robin Licensed Subsidiary, LLC (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
filed March 6, 2006).
10
.102
Secured Promissory Note, dated March 1, 2006, made by
Spanish Broadcasting System, Inc., Mega Media Holdings, Inc. and
WDLP Licensing, Inc. in favor of WDLP Broadcasting Company, LLC
and Robin Broadcasting Company, LLC, in the principal amount of
$18,500,000 (incorporated by reference to Exhibit 10.3 of
the Companys Current Report on
Form 8-K
filed March 6, 2006).
10
.103*
Third Amendment to Lease, dated as of March 7, 2006,
between Irradio Holdings, Ltd. and the Company (incorporated by
reference to Exhibit 10.106 of the Companys Annual
Report on
Form 10-K
filed March 16, 2006).
10
.104*
Employment Agreement dated as of November 21, 2005,
effective January 3, 2006 between the Company and Cynthia
Hudson (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
filed on July 6, 2006).
10
.105*
Spanish Broadcasting System, Inc. 2006 Omnibus Equity
Compensation Plan (incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on
Form 10-Q
filed on August 8, 2006).
10
.106
Agreement for Purchase and Sale dated August 24, 2006, by
and between 7007 Palmetto Investments, LLC and the Company
(incorporated by reference to Exhibit 10.1 of the
Companys Current Report of
Form 8-K
filed on October 30, 2006 (the 10/30/06 Current Report)).
10
.107
Amendment to Purchase and Sale dated September 25, 2006, by
and between 7007 Palmetto Investments, LLC and the Company
(incorporated by reference to Exhibit 10.2 of the
Companys 10/30/06 Current Report).
10
.108
Second Amendment dated October 25, 2006, by and between
7007 Palmetto Investments, LLC and the Company (incorporated by
reference to Exhibit 10.3 of the Companys 10/30/06
Current Report).
10
.109
Assignment and Assumption Agreement dated October 25, 2006,
by and between the Company and SBS Miami Broadcast Center, Inc.
(SBS Miami Broadcast Center) (incorporated by reference to
Exhibit 10.4 of the Companys 10/30/06 Current Report).
10
.110
Lease dated October 25, 2006, by and between the 7007
Palmetto Investments, LLC and SBS Miami Broadcast Center
(incorporated by reference to Exhibit 10.5 of the
Companys 10/30/06 Current Report).
10
.111
Loan Agreement dated January 4, 2007, by and between
Wachovia Bank, National Association (Wachovia) and SBS Miami
Broadcast Center (incorporated by reference to Exhibit 10.1
of the Companys Current Report on
Form 8-K
filed on January 10, 2006 (the 1/10/06 Current Report)).
Table of Contents
Exhibit
10
.112
Promissory Note, dated January 4, 2007, by SBS Miami
Broadcast Center in favor of Wachovia (incorporated by reference
to Exhibit 10.2 of the Companys 1/10/06 Current
Report).
10
.113
Mortgage, Assignment of Rents and Security Agreement dated
January 4, 2007, by and between Wachovia and SBS Miami
Broadcast Center (incorporated by reference to Exhibit 10.3
of the Companys 1/10/06 Current Report).
10
.114
Unconditional Guaranty dated January 4, 2007, by Spanish
Broadcasting System, Inc. in favor of Wachovia (incorporated by
reference to Exhibit 10.4 of the Companys 1/10/06
Current Report).
10
.115
Termination of Lease dated January 4, 2007, by and between
the Seller and SBS Miami Broadcast Center (incorporated by
reference to Exhibit 10.5 of the Companys 1/10/06
Current Report).
10
.116*
Restricted Stock Grant, dated as of March 10, 2007 to
Raúl Alarcón, Jr.
10
.117*
Indemnification Agreement with Mitchell A. Yelen as of
October 1, 2007 (incorporated by reference to
Exhibit 10.1 of the Companys Quarterly Report on
Form 10-Q
filed November 11, 2007).
10
.118*
Stock Option Agreement dated as of October 1, 2007 between
the Company and Mitchell A. Yelen (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly
Report on
Form 10-Q
filed November 11, 2007).
10
.119*
Incentive Stock Option Agreement dated November 8, 2007
between the Company and Cynthia Hudson.
10
.120*
Amendment No. 2 to Amended and Restated Employment
Agreement dated as of November 7, 2007 by and between the
Company and Marko Radlovic (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed November 9, 2007).
10
.121
Consulting Agreement by and between Jason L. Shrinsky and
the Company dated January 31, 2008 and effective as of
January 1, 2008 (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed February 29, 2008).
10
.122
Local Marketing Agreement dated as of January 1, 2008, by
and between the Company and South Broadcasting System, Inc.
14
.1
Code of Business Conduct and Ethics (incorporated by reference
to Exhibit 14.1 of the Companys 2004
Form 10-K).
21
.1
List of Subsidiaries of the Company.
23
.1
Consent of KPMG LLP.
24
.1
Power of Attorney (included on the signature page of this Annual
Report on
Form 10-K).
31(i)
.1
Chief Executive Officers Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31(i)
.2
Chief Financial Officers Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32
.1
Chief Executive Officers Certification pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32
.2
Chief Financial Officers Certification pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
*
Indicates a management contract or compensatory plan or
arrangement, as required by Item 15(a)(3) of
Form 10-K.
Table of Contents
By:
Title:
Chairman of the Board of Directors,
Chairman of the board of directors, Chief Executive Officer and
President (principal executive officer)
Executive Vice President, Chief Financial Officer, and Secretary
(principal financial and accounting officer)
Director
Director
Director
Director
Director
108
Table of Contents
Exhibit
3
.1
Third Amended and Restated Certificate of Incorporation of
Spanish Broadcasting System, Inc. (the Company), dated
September 29, 1999 (incorporated by reference to the
Companys 1999 Registration Statement on
Form S-1
(Commission File
No. 333-85499)
(the 1999 Registration Statement)) (Exhibit A to this
exhibit is incorporated by reference to the Companys
Current Report on
Form 8-K,
dated March 25, 1996 (the 1996 Current Report).
3
.2
Certificate of Amendment to the Third Amended and Restated
Certificate of Incorporation of the Company, dated
September 29, 1999 (incorporated by reference to
Exhibit 3.2 of the Companys 1999 Registration
Statement).
3
.3
Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.3 of the Companys 1999
Registration Statement).
3
.4
Certificate of Elimination of
14
1
/
4
% Senior
Exchangeable Preferred Stock, Series A of the Company,
dated October 28, 2003 (incorporated by reference to
Exhibit 3.3 of the Companys Quarterly Report on
Form 10-Q,
dated November 14, 2003 (the 11/14/03 Quarterly Report)).
4
.1
Article V of the Third Amended and Restated Certificate of
Incorporation of the Company, dated September 29, 1999
(incorporated by reference to Exhibit 3.1 of the
Companys 1999 Registration Statement).
4
.2
Certificate of Designations dated October 29, 2003 Setting
Forth the Voting Power, Preferences and Relative, Participating,
Optional and Other Special Rights and Qualifications,
Limitations and Restrictions of the
10
3
/
4
%
Series A Cumulative Exchangeable Redeemable Preferred Stock
of Spanish Broadcasting System, Inc. (incorporated by reference
to Exhibit 4.1 of the Companys 11/14/03 Quarterly
Report).
4
.3
Certificate of Designations dated October 29, 2003 Setting
Forth the Voting Power, Preferences and Relative, Participating,
Optional and Other Special Rights and Qualifications,
Limitations and Restrictions of the
10
3
/
4
%
Series B Cumulative Exchangeable Redeemable Preferred Stock
of Spanish Broadcasting System, Inc. (incorporated by reference
to Exhibit 4.2 of the Companys 11/14/03 Quarterly
Report).
4
.4
Indenture dated June 29, 1994 among the Company, IBJ
Schroder Bank & Trust Company, as Trustee, the
Guarantors named therein and the Purchasers named therein
(incorporated by reference to Exhibit 4.1 of the
Companys 1994 Registration Statement on
Form S-4
(the 1994 Registration Statement).
4
.5
First Supplemental Indenture dated as of March 25, 1996 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the
1996 Current Report).
4
.6
Second Supplemental Indenture dated as of March 1, 1997 to
the Indenture dated as of June 29, 1994 among the Company,
the Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the
1996 Current Report).
4
.7
Supplemental Indenture dated as of October 21, 1999 to the
Indenture dated as of June 29, 1994 among the Company, the
Guarantors named therein and IBJ Schroder Bank &
Trust Company, as Trustee (incorporated by reference to the
Companys 1999 Registration Statement).
4
.8
Indenture with respect to
9
5
/
8
% Senior
Subordinated Notes due 2009 with The Bank of New York as
Trustee, dated November 2, 1999 (incorporated by reference
to the Current Report on
Form 8-K
dated November 2, 1999 (the 1999 Current Report)).
4
.9
Indenture with respect to
9
5
/
8
% Senior
Subordinated Notes due 2009 with the Bank of New York as
Trustee, dated June 8, 2001 (incorporated by reference to
the Companys Registration Statement on
Form S-3,
filed on June 25, 2001 (the 2001
Form S-3).
4
.10
Form of stock certificate for the Class A common stock of
the Company (incorporated by reference to the Companys
1999 Registration Statement).
4
.11
Certificate of Elimination of
14
1
/
4
%
of Senior Exchangeable Preferred Stock, Series A of the
Company, dated October 28, 2003 (incorporated by reference
to Exhibit 3.3 of the Companys Quarterly Report on
Form 10-Q
filed November 14, 2003).
109
Table of Contents
Exhibit
4
.12
Certificate of Designation Setting Forth the Voting Power,
Preferences and Relative, Participating, Optional and Other
Special Rights and Qualifications, Limitations and Restrictions
of the Series C Convertible Preferred Stock of the Company
(Certificate of Designation of Series C Preferred Stock)
(incorporated by reference to Exhibit 4.1 of the
Companys Current Report on Form 8.
4
.13
Certificate of Correction to Certificate of Designation of
Series C Preferred Stock of the Company dated
January 7, 2005 (incorporated by reference to
Exhibit 4.13 of the Companys Annual Report filed on
Form 10).
4
.14
Form of Notice of Redemption, dated June 10, 2005, with
respect to the redemption of the registrants
9
5
/
8
% Senior
Subordinated Notes due 2009 under the indenture dated as of
November 2, 1999 (incorporated by reference to
Exhibit 99.1 of the Companys Current Report on
Form 8-K
filed June 16, 2005).
4
.15
Form of Notice of Redemption, dated June 10, 2005, with
respect to the redemption of the registrants
9
5
/
8
% Senior
Subordinated Notes due 2009 under the indenture dated as of
June 8, 2001 (incorporated by reference to
Exhibit 99.2 of the Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.1
Warrant Agreement dated as of March 15, 1997 among the
Company and IBJ Schroder Bank & Trust Company, as
Warrant Agent (incorporated by reference to the 1996 Current
Report).
10
.2*
Common Stock Registration Rights and Stockholders Agreement
dated as of June 29, 1994 among the Company and certain
Management Stockholders named therein (incorporated by reference
to the 1994 Registration Statement).
10
.3*
Amended and Restated Employment Agreement dated as of
October 25, 1999, by and between the Company and Raúl
Alarcón, Jr. (incorporated by reference to the
Companys 1999 Registration Statement).
10
.4*
Employment Agreement dated as of October 25, 1999, by and
between the Company and Joseph A. García (incorporated by
reference to the Companys 1999 Registration Statement).
10
.5
Ground Lease dated December 18, 1995 between Louis Viola
Company and SBS-NJ (incorporated by reference to the 1996
Current Report).
10
.6
Ground Lease dated December 18, 1995 between Frank F. Viola
and Estate of Thomas C. Viola and SBS-NJ (incorporated by
reference to the 1996 Current Report).
10
.7
Lease and License Agreement dated February 1, 1991 between
Empire State Building Company, as landlord, and SBS-NY, as
tenant (incorporated by reference to Exhibit 10.15.1 of the
1994 Registration Statement).
10
.8
Modification of Lease and License dated June 30, 1992
between Empire State Building Company and SBS-NY related to
WSKQ-FM
(incorporated by reference to Exhibit 10.15.2 of the 1994
Registration Statement).
10
.9
Lease and License Modification and Extension Agreement dated as
of June 30, 1992 between Empire State Building Company, as
landlord, and SBS-NY as tenant (incorporated by reference to
Exhibit 10.15.3 of the 1994 Registration Statement).
10
.10
Lease Agreement dated June 1, 1992 among Raúl
Alarcón, Sr., Raúl Alarcón, Jr., and SBS-Fla
(incorporated by reference to Exhibit 10.30 of the 1994
Registration Statement).
10
.11
Agreement of Lease dated as of March 1, 1996
No. WT-174-A119
1067 between The Port Authority of New Jersey and SBS of Greater
New York, Inc. as assignee of Park Radio (incorporated by
reference to the 1996 Current Report).
10
.15*
Indemnification Agreement with Raúl Alarcón, Jr. dated
as of November 2, 1999 (incorporated by reference to the
1999 Current Report).
10
.16*
Indemnification Agreement with Jason L. Shrinsky dated as of
November 2, 1999 (incorporated by reference to the 1999
Current Report).
10
.17*
Spanish Broadcasting System 1999 Stock Option Plan (incorporated
by reference to the Companys 1999 Registration Statement).
10
.18*
Spanish Broadcasting System 1999 Company Stock Option Plan for
Nonemployee Directors (incorporated by reference to the
Companys 1999 Registration Statement).
Table of Contents
Exhibit
10
.19
Form of
Lock-Up
Letter Agreement (incorporated by reference in the
Companys 1999 Registration Statement).
10
.20*
Option Grant not under the Stock Option Plans with Arnold
Sheiffer, dated October 27, 1999 (incorporated by reference
to the 1999 Current Report).
10
.25
Lease Agreement by and between the Company and Irradio Holdings,
Ltd. made as of December 14, 2000 (incorporated by
reference to Exhibit 10.50 of the Companys 2000
Form 10-K).
10
.26
First Addendum to Lease between the Company and Irradio
Holdings, Ltd. as of December 14, 2000 (incorporated by
reference to Exhibit 10.51 of the Companys 2000
Form 10-K).
10
.27
Asset Purchase Agreement dated as of November 2, 2000 by
and between International Church of the FourSquare Gospel and
the Company (incorporated by reference to Exhibit 10.1 of
the Companys 2000
Form 10-K).
10
.28
Addendum to Asset Purchase Agreement, dated March 13, 2001,
by and between International Church of the FourSquare Gospel and
the Company (incorporated by reference to Exhibit 10.2 of
the Companys Quarterly Report on
Form 10-Q
filed on May 9, 2001 (5/9/01 Quarterly Report)).
10
.29
Time Brokerage Agreement, dated March 13, 2001, by and
between International Church of the FourSquare Gospel and the
Company (incorporated by reference to Exhibit 10.3 of the
Companys 5/9/01 Quarterly Report).
10
.30
93.5 Time Brokerage Agreement, dated March 13, 2001, by and
between Spanish Broadcasting System Southwest, Inc. and
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.4 of the Companys 5/9/01
Quarterly Report).
10
.36*
Stock Option Agreement dated as of January 15, 2001 between
the Company and Joseph A. García (incorporated by reference
to Exhibit 10.49 to the Companys Annual Report on
Form 10-K
filed December 31, 2001).
10
.38
Amendment dated as of February 8, 2002 to Asset Purchase
Agreement dated as of November 2, 2000 by and between
International Church of the FourSquare Gospel and Spanish
Broadcasting System, Inc., as amended by an Addendum dated
March 13, 2001 (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Transition
Report on
Form 10-Q
filed February 13, 2002).
10
.39
Amendment No. 1 dated as of February 8, 2002 to Time
Brokerage Agreement dated as of March 13, 2001 by and
between International Church of the FourSquare Gospel, as
Licensee, and Spanish Broadcasting System, Inc., as Time Broker
(incorporated by reference to Exhibit 10.2 to the
Companys Quarterly Transition Report on
Form 10-Q
filed February 13, 2002).
10
.40
Amendment No. 1 dated as of February 8, 2002 to the
93.5 Time Brokerage Agreement dated as of March 13, 2001 by
and between Spanish Broadcasting System SouthWest, Inc., as
Licensee and International Church of the FourSquare Gospel, as
Time Broker (incorporated by reference to Exhibit 10.3 to
the Companys Quarterly Transition Report on
Form 10-Q
filed February 13, 2002).
10
.41
Warrant dated February 8, 2002 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.1 to the Companys Quarterly
Report on
Form 10-Q
filed May 2, 2002).
10
.42*
Stock Option Agreement dated as of January 16, 2002 between
the Company and Joseph A. García (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on
Form 10-Q
filed May 2, 2002).
10
.45*
Companys 1999 Stock Option Plan as amended on May 6,
2002 (incorporated by reference to Exhibit 10.3 to the
Companys Quarterly Report on
Form 10-Q
filed August 14, 2002).
10
.46*
Companys 1999 Stock Option Plan for Non-Employee Directors
as amended on May 6, 2002 (incorporated by reference to
Exhibit 10.4 to the Companys Quarterly Report on
Form 10-Q
filed August 14, 2002).
Table of Contents
Exhibit
10
.47*
Stock Option Agreement dated as of October 29, 2002 between
the Company and Raúl Alarcón, Jr. (incorporated by
reference to Exhibit 10.2 to the Companys Quarterly
Report on
Form 10-Q
filed November 13, 2002).
10
.51
Warrant dated March 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.4 of the Companys Quarterly
Report on
Form 10-Q,
dated May 15, 2003 (the 5/15/03 Quarterly Report)).
10
.52
Warrant dated April 30, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.5 of the Companys 5/15/03
Quarterly Report).
10
.53
Warrant dated May 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.1 of the Companys Quarterly
Report on
Form 10-Q,
dated August 13, 2003 (the 8/13/03 Quarterly Report)).
10
.54
Warrant dated June 30, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.2 of the Companys 8/13/03
Quarterly Report).
10
.55
Warrant dated July 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.3 of the Companys 8/13/03
Quarterly Report).
10
.56
Asset Purchase Agreement dated as of September 18, 2003
between Spanish Broadcasting System, Inc. and Border Media
Partners, LLC (incorporated by reference to Exhibit 10.1 of
the Companys Current Report on
Form 8-K,
dated September 25, 2003).
10
.58
Warrant dated August 31, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.1 of the Companys 11/14/03
Quarterly Report).
10
.59
Warrant dated September 30, 2003 by the Company in favor of
International Church of the FourSquare Gospel (incorporated by
reference to Exhibit 10.2 of the Companys 11/14/03
Quarterly Report).
10
.64
Transmission Facilities Lease between the Company and
International Church of the FourSquare Gospel, dated
October 30, 2003 (incorporated by reference to
Exhibit 10.7 of the Companys 11/14/03 Quarterly
Report).
10
.65
Purchase Agreement dated October 30, 2003 between the
Company and Merrill Lynch, Pierce Fenner & Smith
Incorporated, Deutsche Bank Securities Inc. and Lehman Brothers
Inc. with respect to 10
3
/
4
%
Series A Cumulative Exchangeable Redeemable Preferred Stock
(incorporated by reference to Exhibit 10.8 of the
Companys 11/14/03 Quarterly Report).
10
.66*
Registration Rights Agreement dated October 30, 2003
between the Company and Merrill Lynch, Pierce
Fenner & Smith Incorporated, Deutsche Bank Securities
Inc. and Lehman Brothers Inc. with respect to 10
3
/
4
%
Series A Cumulative Exchangeable Redeemable Preferred Stock
(incorporated by reference to Exhibit 10.9 of the
Companys 11/14/03 Quarterly Report).
10
.69*
Amended and Restated Employment Agreement dated October 31,
2003 between the Company and Marko Radlovic (incorporated by
reference to Exhibit 10.81 of the Companys 2004
Form 10-K).
10
.70*
Nonqualified Stock Option Agreement dated October 27, 2003
between the Company and Raúl Alarcón, Jr.
(incorporated by reference to Exhibit 10.78 of the
Companys 2004
Form 10-K).
10
.71*
Nonqualified Stock Option Agreement dated December 10, 2003
between the Company and Marko Radlovic (incorporated by
reference to Exhibit 10.79 of the Companys 2004
Form 10-K).
10
.72*
Incentive Stock Option Agreement dated December 10, 2003
between the Company and Marko Radlovic (incorporated by
reference to Exhibit 10.80 of the Companys 2004
Form 10-K).
10
.73*
Non-Qualified Stock Option Agreement dated as of March 3,
2004 between the Company and Joseph A. García (incorporated
by reference to Exhibit 10.1 to the Companys
Quarterly Report on
Form 10-Q
filed May 10, 2004 (the 5/10/04 Quarterly Report)).
10
.74*
Incentive Stock Option Agreement dated as of March 3, 2004
between the Company and Joseph A. García (incorporated by
reference to Exhibit 10.2 to the Companys 5/10/04
Quarterly Report).
Table of Contents
Exhibit
10
.77*
Stock Option Letter Agreement dated as of July 2, 2004
between the Company and Antonio S. Fernandez
(incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on
Form 10-Q
filed August 9, 2004 (the 8/9/04 Quarterly Report)).
10
.78*
Stock Option Letter Agreement dated as of July 2, 2004
between the Company and Jose Antonio Villamil (incorporated by
reference to Exhibit 10.2 of the Companys 8/9/04
Quarterly Report).
10
.81
Merger Agreement dated as of October 5, 2004 among Infinity
Media Corporation, Infinity Broadcasting Corporation of
San Francisco, Spanish Broadcasting System, Inc. and SBS
Bay Area, LLC (incorporated by reference to Exhibit 10.1 of
the Companys Quarterly Report on
Form 8-K
filed on October 12, 2004).
10
.82*
Stockholder Agreement dated as of October 5, 2004 among
Spanish Broadcasting System, Inc., Infinity Media Corporation
and Raúl Alarcón, Jr. (incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on
Form 8-K
filed on October 12, 2004).
10
.83
Local Marketing Agreement dated as of October 5, 2004
between Infinity Broadcasting Corporation of San Francisco
and SBS Bay Area, LLC (incorporated by reference to
Exhibit 10.3 of the Companys Quarterly Report on
Form 8-K
filed on October 12, 2004).
10
.85
Warrant to Purchase Series C Preferred Stock of Spanish
Broadcasting System, Inc. dated December 23, 2004 by the
Company in favor of Infinity Media Corporation (incorporated by
reference to Exhibit 4.2 of the Companys Quarterly
Report on
Form 8-K
filed on December 27, 2004).
10
.86
Registration Rights Agreement dated as of December 23, 2004
between Spanish Broadcasting System, Inc. and Infinity Media
Corporation (incorporated by reference to Exhibit 4.3 of
the Companys Quarterly Report on
Form 8-K
filed on December 27, 2004).
10
.87*
Nonqualified Stock Option Agreement, dated as of March 15,
2005 between the Company and Jason Shrinsky (incorporated by
reference to Exhibit 10.1 of the Companys Quarterly
Report on
Form 10-K
filed May 10, 2005).
10
.89
First Lien Credit Agreement, dated as of June 10, 2005,
among Spanish Broadcasting System, Inc., Merrill Lynch, Pierce
Fenner & Smith, Incorporated, Wachovia Bank, National
Association, Lehman Commercial Paper Inc. and various lenders
(incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.90
Second Lien Term Loan Agreement, dated as of June 10, 2005,
among Spanish Broadcasting System, Inc., Merrill Lynch, Pierce
Fenner & Smith, Incorporated, Wachovia Bank, National
Association, Lehman Commercial Paper Inc. and various lenders
(incorporated by reference to Exhibit 10.2 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.91
First Lien Guarantee and Collateral Agreement, dated as of
June 10, 2005, among Spanish Broadcasting System, Inc.,
certain of its subsidiaries and Lehman Commercial Paper Inc.
(incorporated by reference to Exhibit 10.3 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.92
Second Lien Guarantee and Collateral Agreement, dated as of
June 10, 2005, among Spanish Broadcasting System, Inc.,
certain of its subsidiaries and Lehman Commercial Paper Inc.
(incorporated by reference to Exhibit 10.4 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.93
Intercreditor Agreement, dated as of June 10, 2005, among
Spanish Broadcasting System, Inc. and Lehman Commercial Paper
Inc. (incorporated by reference to Exhibit 10.5 of the
Companys Current Report on
Form 8-K
filed June 16, 2005).
10
.94*
Nonqualified Stock Option Agreement, dated as of July 11,
2003 between the Company and Joseph A. García (incorporated
by reference to Exhibit 10.2 of the Companys
Quarterly Report on
Form 10-K
filed May 10, 2005).
10
.95
Asset Purchase Agreement, dated July 12, 2005 among the
Company, WDLP Broadcasting Company, LLC, WDLP Licensed
Subsidiary, LLC, Robin Broadcasting Company, LLC and Robin
Licensed Subsidiary, LLC (incorporated by reference to
Exhibit 10.1 of the Companys Quarterly Report on
Form 10-K
filed August 9, 2005).
Table of Contents
Exhibit
10
.96
Second Amendment to Lease, dated December 1, 2004 between
the Company and Irradio Holdings, Ltd. (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly
Report on
Form 10-K
filed August 9, 2005).
10
.97*
Amendment to Amended and Restated Employment Agreement, dated as
of July 21, 2005, by and between the Company and Marko
Radlovic (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on Form 8-K filed November 9,
2007).
10
.99
Amendment to Asset Purchase Agreement, dated January 6,
2006, by and among Mega Media Holdings, Inc., WDLP Licensing,
Inc., and WDLP Broadcasting Company, LLC, WDLP Licensed
Subsidiary, LLC, Robin Broadcasting Company, LLC, and Robin
Licensed Subsidiary, LLC (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed January 12, 2006).
10
.100
Security Agreement, dated as of March 1, 2006, among Mega
Media Holdings, Inc., WDLP Licensing, Inc., WDLP Broadcasting
Company, LLC, WDLP Licensed Subsidiary, LLC, Robin Broadcasting
Company, LLC and Robin Licensed Subsidiary, LLC (incorporated by
reference to Exhibit 10.1 of the Companys Current
Report on
Form 8-K
filed March 6, 2006).
10
.101
Pledge Agreement, dated as of March 1, 2006, among Mega
Media Holdings, Inc., WDLP Broadcasting Company, LLC, WDLP
Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC and
Robin Licensed Subsidiary, LLC (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
filed March 6, 2006).
10
.102
Secured Promissory Note, dated March 1, 2006, made by
Spanish Broadcasting System, Inc., Mega Media Holdings, Inc. and
WDLP Licensing, Inc. in favor of WDLP Broadcasting Company, LLC
and Robin Broadcasting Company, LLC, in the principal amount of
$18,500,000 (incorporated by reference to Exhibit 10.3 of
the Companys Current Report on
Form 8-K
filed March 6, 2006).
10
.103*
Third Amendment to Lease, dated as of March 7, 2006,
between Irradio Holdings, Ltd. and the Company (incorporated by
reference to Exhibit 10.106 of the Companys Annual
Report on
Form 10-K
filed March 16, 2006).
10
.104*
Employment Agreement dated as of November 21, 2005,
effective January 3, 2006 between the Company and Cynthia
Hudson (incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
filed on July 6, 2006).
10
.105*
Spanish Broadcasting System, Inc. 2006 Omnibus Equity
Compensation Plan (incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on
Form 10-Q
filed on August 8, 2006).
10
.106
Agreement for Purchase and Sale dated August 24, 2006, by
and between 7007 Palmetto Investments, LLC and the Company
(incorporated by reference to Exhibit 10.1 of the
Companys Current Report of
Form 8-K
filed on October 30, 2006 (the 10/30/06 Current
Report)).
10
.107
Amendment to Purchase and Sale dated September 25, 2006, by
and between 7007 Palmetto Investments, LLC and the Company
(incorporated by reference to Exhibit 10.2 of the
Companys 10/30/06 Current Report).
10
.108
Second Amendment dated October 25, 2006, by and between
7007 Palmetto Investments, LLC and the Company (incorporated by
reference to Exhibit 10.3 of the Companys 10/30/06
Current Report).
10
.109
Assignment and Assumption Agreement dated October 25, 2006,
by and between the Company and SBS Miami Broadcast Center, Inc.
(SBS Miami Broadcast Center) (incorporated by reference to
Exhibit 10.4 of the Companys 10/30/06 Current Report).
10
.110
Lease dated October 25, 2006, by and between the 7007
Palmetto Investments, LLC and SBS Miami Broadcast Center
(incorporated by reference to Exhibit 10.5 of the
Companys 10/30/06 Current Report).
10
.111
Loan Agreement dated January 4, 2007, by and between
Wachovia Bank, National Association (Wachovia) and SBS Miami
Broadcast Center (incorporated by reference to Exhibit 10.1
of the Companys Current Report on
Form 8-K
filed on January 10, 2006 (the 1/10/06 Current Report)).
Table of Contents
Exhibit
10
.112
Promissory Note, dated January 4, 2007, by SBS Miami
Broadcast Center in favor of Wachovia (incorporated by reference
to Exhibit 10.2 of the Companys 1/10/06 Current
Report).
10
.113
Mortgage, Assignment of Rents and Security Agreement dated
January 4, 2007, by and between Wachovia and SBS Miami
Broadcast Center (incorporated by reference to Exhibit 10.3
of the Companys 1/10/06 Current Report).
10
.114
Unconditional Guaranty dated January 4, 2007, by Spanish
Broadcasting System, Inc. in favor of Wachovia (incorporated by
reference to Exhibit 10.4 of the Companys 1/10/06
Current Report).
10
.115
Termination of Lease dated January 4, 2007, by and between
the Seller and SBS Miami Broadcast Center (incorporated by
reference to Exhibit 10.5 of the Companys 1/10/06
Current Report).
10
.116*
Restricted Stock Grant, dated as of March 10, 2007 to
Raúl Alarcón, Jr.
10
.117*
Indemnification Agreement with Mitchell A. Yelen as of
October 1, 2007 (incorporated by reference to
Exhibit 10.1 of the Companys Quarterly Report on
Form 10-Q
filed November 11, 2007).
10
.118*
Stock Option Agreement dated as of October 1, 2007 between
the Company and Mitchell A. Yelen (incorporated by
reference to Exhibit 10.2 of the Companys Quarterly
Report on
Form 10-Q
filed November 11, 2007).
10
.119*
Incentive Stock Option Agreement dated November 8, 2007
between the Company and Cynthia Hudson.
10
.120*
Amendment No. 2 to Amended and Restated Employment
Agreement dated as of November 7, 2007 by and between the
Company and Marko Radlovic (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed November 9, 2007).
10
.121
Consulting Agreement by and between Jason L. Shrinsky and
the Company dated January 31, 2008 and effective as of
January 1, 2008 (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed February 29, 2008).
10
.122
Local Marketing Agreement dated as of January 1, 2008, by
and between the Company and South Broadcasting System, Inc.
14
.1
Code of Business Conduct and Ethics (incorporated by reference
to Exhibit 14.1 of the Companys 2004
Form 10-K).
21
.1
List of Subsidiaries of the Company.
23
.1
Consent of KPMG LLP.
24
.1
Power of Attorney (included on the signature page of this Annual
Report on
Form 10-K).
31(i)
.1
Chief Executive Officers Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31(i)
.2
Chief Financial Officers Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32
.1
Chief Executive Officers Certification pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32
.2
Chief Financial Officers Certification pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
*
Indicates a management contract or compensatory plan or
arrangement, as required by Item 15(a)(3) of
Form 10-K.
2
3
SPANISH BROADCASTING SYSTEM, INC.
|
||||
By: | /s/ Joseph A. García | |||
Name: | Joseph A. García | |||
Title: | EVP/CFO | |||
/s/ Raúl Alarcón, Jr. | ||||
Grantee | ||||
April 4, 2007 | ||||
Date | ||||
4
Granted To: | Cynthia Hudson | |
Grant Date: | November 5, 2007 | |
Options Granted: | 25,000 | |
Option Price per Share: | $2.55 Total Cost to Exercise: $63,750.00 | |
Expiration Date: | November 5, 2017 unless terminated earlier. | |
Vesting Schedule: | 33+% per year for 3 years | |
8,334 on 11/05/2008 | ||
8,333 on 11/05/2009 | ||
8,333 on 11/05/2010 | ||
Transferability: | Not transferable except in accordance with the Plan. |
Spanish Broadcasting System, Inc.
|
||||
By: | /s/ Raúl Alarcón, Jr. | |||
|
||||||
Signature:
|
/s/ Cynthia Hudson | Date: | November 8, 2007 | |||
|
||||||
|
Cynthia Hudson |
2
3
4
5
6
7
8
9
10
|
To Programmer: | Mr. Raul Alarcon, Jr. | ||
|
Spanish Broadcasting System, Inc. | |||
|
2601 South Bayshore Drive, PHII | |||
|
Coconut Grove, Florida 33133 | |||
|
Telephone: (305) 441-6901 | |||
|
||||
|
Copy to: | Melanie Montenegro, Esq. | ||
|
Spanish Broadcasting System, Inc. | |||
|
2601 South Bayshore Drive, PHII | |||
|
Coconut Grove, Florida 33133 | |||
|
Telephone: (305) 441-6901 |
11
|
||||
|
To Licensor: | Mr. Raul Alarcon, Sr. | ||
|
c/o South Broadcasting System, Inc. | |||
|
2601 South Bayshore Drive, PHII | |||
|
Coconut Grove, Florida 33133 | |||
|
Telephone: (305) 441-6901 | |||
|
||||
|
Copy to: | Barry A. Friedman, Esq. | ||
|
Thompson Hine, LLP | |||
|
1920 N Street, N.W. | |||
|
Suite 800 | |||
|
Washington, D.C. 20036 | |||
|
Telephone: (202) 331-8800 |
12
13
LICENSOR: |
SOUTH BROADCASTING SYSTEM, INC.
|
|||
By: |
/s/ Raúl Alarcón, Sr.
|
|||
Name: | Raul Alarcon, Sr. | |||
Title: | President | |||
PROGRAMMER: |
SPANISH BROADCASTING SYSTEM, INC.
|
|||
By: |
/s/ Joseph A. García
|
|||
Name: | Joseph A. Garcia | |||
Title: | Chief Financial Officer | |||
14
Subsidiary Name
State of Incorporation
New York
Puerto Rico
Delaware
Delaware
New York
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Puerto Rico
Delaware
Delaware
Delaware
New York
New York
Delaware
Puerto Rico
Puerto Rico
New Jersey
New York
California
Florida
Delaware
Delaware
Delaware
Puerto Rico
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Puerto Rico
Puerto Rico
Delaware
Delaware
Delaware
Delaware
Puerto Rico
Puerto Rico
Puerto Rico
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Puerto Rico