(Rule 14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE 14A
INFORMATION
Proxy Statement
Pursuant to Section 14(a) of the Securities
Exchange Act of
1934
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Filed by the Registrant ☑
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Filed by a Party other than the Registrant ☐
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Check the appropriate box:
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☐ Preliminary Proxy Statement
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☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☑ Definitive Proxy Statement
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☐ Definitive Additional Materials
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☐ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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URBAN ONE, INC.
(Name of Registrant as
Specified in Its Charter)
(Name of Person(s) Filing
Proxy Statement if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was
determined):
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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☐
Fee paid previously with preliminary materials.
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☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule and the date of its filing.
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Amount previously paid:
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Form, schedule or registration statement no.:
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Filing party:
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Date filed:
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1010 Wayne Avenue, 14th Floor
Silver Spring, Maryland 20910
301-429-3200
PLEASE NOTE THAT THE 2021 ANNUAL STOCKHOLDERS MEETING WILL
BE TELEPHONIC WITH NO PHYSICAL LOCATION.
THE 2021 ANNUAL MEETING CAN BE ACCESSED BY CALLING TOLL FREE 844-291-6362 AND
ENTERING THE ACCESS CODE 9323973 AT THE PROMPT.
April 30, 2021
Dear Fellow Stockholder:
You are cordially invited to attend the 2021 annual meeting of stockholders of Urban One, Inc. (“Urban One”), to be held on Wednesday, June 23, 2021 at 9:30
a.m. Eastern Time. There will not be a physical meeting location. The 2021 annual meeting can be accessed by calling toll free (844) 291-6362 and entering the access code 9323973 at the prompt. You will be able to listen to the meeting live and submit questions during the question and answer period. You will be voting online prior
to the meeting by following the instructions on your proxy card. We encourage you to allow ample time for dial-in prior to the call. Please note that you will not be able to attend the meeting in person.
A replay of the 2021 annual meeting will be available from 12:30 p.m. EDT June 23, 2021 until 12:00 a.m. EDT June 26, 2021. Callers may access the replay by calling (866) 207-1041; international callers may dial direct (402) 970-0847. The replay access code is 5896281.
Access to live audio and a replay of the conference call will also be available on Urban One’s corporate website at www.urban1.com. The replay will be made available on the website for seven days after the 2021 annual meeting.
Prior to the meeting, the Class A and Class B stockholders will be asked to vote on several
proposals, all of which are described in detail in the attached proxy statement. Also made available are Urban One’s Annual Report on Form 10-K for the year ended December 31, 2020 and, if you are a holder of Class A or Class B common stock, a
proxy card.
If you are a Class A or Class B stockholder, it is important that your shares be represented and voted at the meeting. Thus, we are offering you three voting methods apart from in person attendance: (i) by proxy;
(ii) by internet voting; and (iii) by phone voting.
If you choose to vote by proxy, after reading the attached proxy statement, please complete, sign, date and promptly return the proxy card
in the enclosed self-addressed envelope. No postage is required if it is mailed in the United States. In light of the unique circumstances of the global pandemic, your cooperation in promptly returning your completed proxy card is greatly
appreciated.
In addition to voting by proxy, you may use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 22, 2021. Online voting
is available at www.proxyvote.com. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
Similarly, you may vote by phone by dialing (800) 690-6903. Use any touch-tone telephone to transmit your voting instructions up
until 11:59 p.m. Eastern Time on June 22, 2021. Have your proxy card in hand when you call and then follow the instructions.
We look forward to your telephonic attendance at the annual meeting.
Sincerely,
Alfred C. Liggins, III
Chief Executive Officer
URBAN ONE, INC.
1010 Wayne Avenue, 14th Floor
Silver Spring, Maryland 20910
301-429-3200
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2021
9:30 a.m.
The Annual Meeting will be held virtually.
There will not be a physical location for the annual meeting.
The 2021 annual meeting can be accessed by calling toll free 844-291-6362 and
entering the access code 9323973 at the prompt.
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NOTICE IS HEREBY GIVEN that the 2021 annual meeting
of stockholders of Urban One, Inc., a Delaware corporation (“Urban One”), will be held on Wednesday, June 23, 2021 at 9:30 a.m. Eastern Time. Due to the ongoing public health impact of the coronavirus (COVID-19) pandemic and to support the
health and well-being of our stockholders, Board of Directors and other stakeholders, this year’s Annual Meeting will be a completely virtual meeting. There will not be a physical location for the Annual Meeting. The 2021 annual meeting can be
accessed by calling toll free (844) 291-6362 and entering the access code 9323973 at the prompt. You will be able to listen to the meeting live and submit questions during the question and answer period. You will be voting online prior to the meeting by following the instructions on your proxy
card. We encourage you to allow ample time for dial-in prior to the call. Please note that you will not be able to attend the meeting in person.
A replay of the 2021 annual meeting will be available from 12:30 p.m. EDT June 23, 2021 until 12:00 a.m. EDT June 26, 2021. Callers may access the replay by calling (866) 207-1041; international callers may dial direct (402) 970-0847. The replay access code is 5896281. Access to live audio and a replay of the conference call will also be available on Urban One’s corporate website at www.urban1.com. The replay will be made available on the website for seven days after the 2021
annual meeting.
The 2021 annual meeting of the stockholders is being held to consider and act upon the following matters:
(1) The election of Terry L. Jones and Brian W. McNeill as Class A directors to serve until the 2022 annual meeting of stockholders or until their successors are duly elected and qualified.
(2) The election of Catherine L. Hughes, Alfred C. Liggins, III, and Doyle Mitchell as directors to serve until the 2022 annual meeting of stockholders or until their successors are duly elected and qualified.
(3) An advisory vote on executive compensation for named executive officers.
(4) An advisory vote on the frequency of votes on executive compensation.
(5) To approve an amendment of the Urban One 2019 Equity and Performance Incentive Plan to increase the number shares available for grant and to
provide for the grant of Class A as well as Class D shares.
(6) The ratification of the appointment of BDO USA, LLP as the independent registered public accounting firm for Urban One for the year ending December 31, 2021.
(7) The transaction of such other business as may properly come before the 2021 annual meeting or any adjournment thereof.
At this time, the Board of Directors is not aware of any other business that will be presented for consideration at the 2021 annual meeting.
The Board of Directors Unanimously recommends that the Stockholders Vote “For” each of Proposals 1, 2, 3, 5 and 6 to be presented at the Annual Meeting.
Only Class A and Class B stockholders of record at the close of business on April 26, 2021 will be entitled to vote at the 2021 annual meeting or any adjournment thereof. A list of stockholders entitled to vote at
the 2021 annual meeting will be available for inspection by any stockholder, for any reason germane to the meeting, during ordinary business hours during the ten days prior to the meeting at Urban One’s offices at 1010 Wayne Avenue, Silver Spring,
Maryland 20910. If you wish to view the list of stockholders, please contact Karen Wishart, Urban One’s Assistant Secretary, at (301) 429-3200.
We hope that you will be able to attend the 2021 annual meeting telephonically. However, whether or not you plan to attend,
if you are a holder of Class A or Class B common stock, please vote by completing, dating, signing, and returning the enclosed proxy card promptly to ensure that your shares are represented at the meeting. As noted above, you may also vote by
internet or by phone by following the instructions on your proxy card.
By Order of the Board of Directors,
Karen Wishart
Assistant Secretary
Dated: April 30, 2021
URBAN ONE, INC.
1010 Wayne Avenue, 14th Floor
Silver Spring, Maryland 20910
301-429-3200
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PROXY STATEMENT FOR 2021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2021
9:30 a.m.
The Annual Meeting will be held virtually.
There will not be a physical location for the annual meeting.
The 2021 annual meeting can be accessed by calling toll free 844-291-6362 and
entering the access code 9323973 at the prompt.
PROXY STATEMENT
The Board of Directors of Urban One, Inc., a Delaware corporation (“Urban One”)
is soliciting your proxy with this proxy statement. Your proxy will be voted at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Wednesday, June 23, 2021 at 9:00 a.m. Eastern Time. Due to the ongoing public health
impact of the coronavirus (COVID-19) pandemic and to support the health and well-being of our stockholders, Board of Directors and other stakeholders, this year’s Annual Meeting will be a completely virtual meeting. There will not be a physical
location for the Annual Meeting.
The 2021 annual meeting can be accessed by calling toll free (844)
291-6362 and entering the access code 9323973 at the prompt. You will be able to listen to the meeting live
and submit questions during the question and answer period. You will be voting online prior to the meeting by following the instructions on your proxy card. We encourage you to allow ample time for dial-in prior to the call. Please note that you will
not be able to attend the meeting in person.
This Proxy Statement and Urban One’s Annual Report to Stockholders are first being made available to stockholders on or
about April 30, 2021.
QUESTIONS AND ANSWERS ABOUT THIS ANNUAL MEETING
Q: Why did I receive this proxy statement?
You received this proxy statement because our Board of Directors is soliciting
your proxy to vote at our annual meeting of stockholders (including any adjournment or postponement of the annual meeting). The annual meeting will be held on Wednesday, June 23, 2021 at 9:30 a.m. Eastern Time. Due to the ongoing public health impact of the coronavirus (COVID-19) pandemic and to support the health and well-being of our stockholders, Board of Directors and other stakeholders, the 2021 annual meeting of
stockholders will be held exclusively via live teleconference on June 23, 2021, at 9:30 A.M., Eastern Time. There will not be a physical meeting location. The 2021 annual meeting can be accessed by calling toll free 844-291-6362 and entering the access code 9323973 at the prompt. The meeting can also be accessed by calling 234-720-6995 and entering the access code 9323973 at the prompt. A
replay of the 2021 annual meeting will be available from 12:30 p.m. EDT June 23, 2021 until 12:00 a.m. EDT June 26, 2021. Callers may access the replay by calling (866) 207-1041; international callers may dial direct (402) 970-0847. The
replay access code is 5896281. This proxy statement
and a copy of our Annual Report on Form 10-K for the year ended December 31, 2020 are first being mailed or otherwise made available on or about April 30, 2021 to stockholders of record at the close of business on April 26, 2021.
Q: What am I voting on?
You are being asked to consider and vote on the following:
(1) The election of Terry L. Jones and Brian W. McNeill as Class A directors to serve until the 2022 annual meeting of stockholders or until their successors are duly elected and qualified (Proposal 1);
(2) The election of Catherine L. Hughes, Alfred C. Liggins, III and Doyle Mitchell as directors to serve until the 2022 annual meeting of stockholders or until their successors are duly elected
and qualified (Proposal 2);
(3) An advisory votes on executive compensation for named executive officers (Proposal 3);
(4) An advisory vote on the frequency of votes on executive compensation (Proposal 4); and
(5) To approve an amendment of the Urban One 2019 Equity and Performance Incentive Plan to increase the
number shares available for grant and to provide for the grant of Class A as well as Class D shares (Proposal 5);
(6) The ratification of the appointment of BDO USA, LLP as the independent registered public accounting firm for Urban
One for the year ending December 31, 2021 (Proposal 6); and
(7) The transaction of such other business as may
properly come before the 2021 annual meeting or any adjournment thereof.
No matters other than those referred to above are presently scheduled to be considered at the meeting.
Q: Who is entitled to vote?
Shareholders of record of Class A and Class B common stock at the close of business on April 26, 2021, the record date, will be entitled to vote at the meeting. As of April 26, 2021, there were
6,327,900 shares of Class A common stock and 2,861,843 shares of Class B common stock issued, outstanding and eligible to vote. Each share of Class A
common stock is entitled to one non-cumulative vote and each share of Class B common stock is entitled to ten non-cumulative votes.
Q: What is a stockholder of record and what is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Shareholder of Record. If your shares are registered directly in your name with the Company’s transfer agent,
American Stock Transfer, you are considered the stockholder of record with respect to those shares, and the notice was sent directly to you by the Company. If you request printed copies of the proxy materials by mail, you will receive a proxy card.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank,
broker-dealer, or other similar organization, then you are the “beneficial owner” of shares held in “street name,” and a notice was forwarded to you by that organization. The organization holding your account is considered the stockholder of record
for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. Those instructions are contained in a “vote instruction form.” If you request
printed copies of the proxy materials by mail, you will receive a vote instruction form.
Q: How do I vote?
You may attend the meeting telephonically and you can vote by proxy, internet or phone. To vote by proxy, sign and date each proxy card you receive and return it to us by mail in the postage-paid
envelope provided. The instructions for voting are contained on the enclosed proxy card. The individuals named on the card are your proxies. They will vote your shares as you indicate. If you sign your proxy card and return it without marking any
voting instructions, your shares will be voted as follows:
• Proxies received from the holders of Class A common stock will be voted FOR:
All of the nominees for Class A director (for which holders of Class B common stock are not eligible to vote).
• Proxies received from holders of Class A common stock and Class B common stock will be voted FOR:
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(i)
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All of the other nominees for director;
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(ii)
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An advisory vote on executive compensation for named executive officers;
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(iii)
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An advisory vote on executive compensation to be held every three years;
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(iv)
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Approval of an amendment of the Urban One 2019 Equity and Performance Incentive Plan to increase the number shares available for grant and to
provide for the grant of Class A as well as Class D shares;
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(v)
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Ratification of the appointment of BDO USA, LLP as the independent registered public accounting firm for Urban One for the year ending December 31, 2021; and
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(vi)
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At the discretion of the proxies, on any other matter that may be properly brought before the meeting.
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In addition to voting by proxy, you may use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 22,
2021. Online voting is available at www.proxyvote.com. Please have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Similarly, you may vote by phone by dialing 1-800-690-6903. You may use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 22, 2021. Please have
your proxy card in hand when you call and then follow the instructions.
Votes may be cast in favor of or in opposition to each proposal or, in the case of the election of directors, votes may be cast in favor of the election of each nominee or withheld. Other than in
the election of directors, abstentions may be specified on each proposal. Abstentions, instructions to withhold voting authority and broker non-votes are not deemed to be votes cast and, accordingly, will have no effect on the outcome of the voting.
Q: How do I change my proxy?
You may change or revoke your proxy at any time before the meeting by either notifying our Assistant Secretary or returning a later-dated proxy. The address of our Assistant Secretary is 1010 Wayne
Avenue, 14th Floor, Silver Spring, Maryland 20910, Attention: Karen Wishart. If your shares are held in the name of a broker, bank or other record holder (i.e.,
in “ street name”), you must either direct the record holder of your shares how to vote your shares or obtain a proxy from the record holder to vote at the meeting.
Q: What does it mean if I obtain more than one proxy card?
If you receive more than one proxy card it means you hold shares registered in more than one account. Sign and return all proxy cards to ensure that all of your shares are voted.
Q: What are the voting rights of the Class A common stock and the Class B common stock?
On each matter submitted to a vote of our stockholders, each share of Class A common stock is entitled to one vote and each share of Class B common stock is entitled to ten votes. Members of our
Board of Directors are elected by a plurality of votes cast. This means that the nominees that receive the most votes cast will be elected to the board, even if they do not receive a majority of votes cast. At the close of business on April 26, 2021,
there were 6,327,900 outstanding shares of our Class A common stock and 2,861,843 outstanding shares of our Class B common stock. Accordingly, a
total of 34,946,330 votes may be cast at the meeting. Class C and Class D common stock are not entitled to vote on any proposal presented at the
meeting.
Q: What constitutes a quorum?
A quorum exists when the holders of a majority of the outstanding shares of Urban One voting common stock have been voted prior to the meeting or are present at the meeting by proxy. A quorum is
necessary to take action at the meeting. Abstentions, instructions to withhold voting authority and broker non-votes are counted as present for purposes of determining whether there is a quorum. A broker non-vote occurs when a nominee, who holds
shares for a beneficial owner, does not vote on a proposal because the nominee does not have discretionary voting power and has not received voting instructions from the beneficial owner. In the event that a quorum is not obtained at the meeting, we
expect that the meeting will be adjourned or postponed to solicit additional proxies.
If a quorum is not present, the stockholders present by proxy may adjourn the meeting to another time or place. Unless the adjournment is for more than 30 days or a new record date is set for the
adjourned meeting, no further notice of the adjourned meeting need be given. At the adjourned meeting, we may transact any business which might have been transacted at the original meeting.
Q: How many votes are needed for approval of each proposal?
If a quorum is present at the meeting:
• the affirmative vote of a plurality of the votes cast by all eligible holders of Class A common stock will be necessary for the election of Terry L. Jones and Brian W. McNeill as Class A
directors;
• the affirmative vote of a plurality of the votes cast by all eligible holders of Class A common stock and Class B common stock will be necessary for the election of the remaining director
nominees;
• the affirmative vote of a majority of the votes cast by all eligible holders of Class A common stock and Class B common stock will be necessary for approval of amendment of the Urban One 2019
Equity and Performance Incentive Plan to increase the number shares available for grant and to provide for the grant of Class A as well as Class D shares; and
• the affirmative vote of a majority of the votes cast by all eligible holders of Class A common stock and Class B common stock will be necessary for the ratification of the appointment of the
independent registered public accounting firm;
Q: How do our officers and directors intend to vote?
We have been advised by various members of management and the Board of Directors who, in the aggregate, hold or otherwise have voting power with respect to 10,000 shares of Class A common stock and
2,861,843 shares of Class B common stock (together representing approximately 82% of the votes possible) that they intend to vote such shares in favor of each of the proposals to be presented for consideration and approval at the meeting. Further,
we are a “controlled company” under rules governing the listing of our securities on the NASDAQ Stock Market because more than 50% of our voting power is held by Catherine L. Hughes, our Chairperson of the board and Secretary, and Alfred C.
Liggins, III, our CEO and President. Ms. Hughes and Mr. Liggins together hold shares of stock representing approximately 82% of the votes possible.
Q: What happens if I do not give specific voting instructions?
Shareholders of Record. If you are a stockholder of record and you:
• Indicate when voting on the internet or by telephone that you wish to vote as recommended by the Board of Directors; or
• Sign and return a proxy card without giving specific voting instructions,
then the persons named as proxy holders will vote your shares in the manner recommended by the Board of Directors on all matters presented in this proxy statement and as the proxy holders may determine in their
discretion with respect to any other matters properly presented for a vote at the annual meeting.
Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in “street name”
and do not provide the organization that holds your shares with specific voting instructions then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If
the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with
respect to your shares. This is generally referred to as a “broker non-vote.”
Q: Which ballot
measures are considered “routine” or “non-routine”?
The ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for 2021 (Proposal No. 6) is a matter considered routine under applicable rules. A
broker or other nominee may generally vote on routine matters, and, therefore, no broker non-votes are expected to exist in connection with Proposal No. 6.
Q: Who can attend the Annual Meeting?
All stockholders as of April 26, 2021 can attend telephonically.
Q: Who will pay the cost of this proxy solicitation?
We will pay all expenses incurred in connection with this proxy solicitation. We will solicit proxies by mail, and the directors, officers and employees of Urban One may also solicit proxies by
telephone, facsimile or telegram. Those persons will receive no additional compensation for these services, but will be reimbursed for reasonable out-of-pocket expenses.
Q: Who will count the votes?
Votes cast by proxy or prior to the meeting will be tabulated by the inspector of election appointed for the meeting.
Q: Where can I find the voting results of the Annual Meeting?
The preliminary voting results will be announced at the Annual Meeting. The final voting results will be tallied by the inspector of election and published in the Company’s Current Report on Form
8-K, which the Company is required to file with the SEC within four business days following the Annual Meeting.
Q: Will all subsequent annual meetings be held telephonically, virtually or otherwise without a physical meeting?
PROPOSAL 1 — ELECTION OF CLASS A DIRECTORS
(CLASS A COMMON STOCK ONLY)
Two Class A directors will be elected at the 2021 annual meeting to serve until the 2021 annual meeting. The two nominees for Class A directors are Terry L. Jones and Brian W. McNeill. Each of them
is an incumbent director. Each of Mr. Jones and Mr. McNeill qualifies as an independent director as that term is defined in Rule 5605(a)(2) of the NASDAQ Listing Rules. These nominees have consented to serve if elected, but should any nominee be
unavailable to serve, your proxy will vote for the substitute nominee recommended by the Board of Directors. To be elected, each nominee must receive the affirmative vote of a plurality of the votes cast by the holders of the Class A common stock.
There is no cumulative voting for the Board of Directors. Following is certain biographical information about the nominees for Class A director.
The Board Unanimously Recommends that You Vote “For” each of the Persons
Nominated for Class A Director in Proposal 1.
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Terry L. Jones
Director since 1995
Age: 74
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Mr. Jones is the Managing Member of the General Partner of Syndicated Communications Venture Partners V, L.P. and the Managing Member of Syncom Venture Management Co., LLC (“Syncom”). Prior to joining Syncom in
1978, he was co-founding stockholder and Vice President of Kiambere Savings and Loan in Nairobi, and a Lecturer at the University of Nairobi. He also worked as a Senior Electrical Engineer for Westinghouse Aerospace and Litton Industries. He
is a member of the Board of Directors for several Syncom portfolio companies, including Urban One, Inc. He formerly served on the board of the Southern African Enterprise Development Fund, a presidential appointment, and is on the Board of
Trustees of Spelman College. Mr. Jones received a B.S. degree in Electrical Engineering from Trinity College, an M.S. degree in Electrical Engineering from George Washington University and a Masters of Business Administration from Harvard
University. During the last ten years, Mr. Jones has sat on the boards of directors of TV One, LLC, Iridium Communications, Inc., a publicly held company (“Iridium”), PKS Communications, Inc., a publicly held company, Weather Decisions
Technology, Inc., V-me, Inc., Syncom and Verified Identity Pass, Inc. He currently serves on the Board of Directors of Iridium (2001 to present), Syncom and Cyber Digital, Inc., a publicly held company. Mr. Jones’ qualifications to serve as a
director include his knowledge of Urban One, his many years of senior management experience at various public and private media enterprises, and his ability to provide insight into a number of areas including governance, executive
compensation and corporate finance.
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Brian W. McNeill
Director since 1995
Age: 65
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Mr. McNeill is a founder and Managing General Partner of Alta Communications. He specializes in identifying and managing investments in the traditional sectors of the media industry, including radio and
television broadcasting, outdoor advertising and other advertising-based or cash flow-based businesses. Over the last five years, Mr. McNeill has served on the Board of Directors of some of the most significant companies in the radio and
television industries including Una Vez Mas, Millennium Radio Group, LLC and NextMedia Investors LLC. He joined Burr, Egan, Deleage & Co. as a general partner in 1986, where he focused on the media and communications industries.
Previously, Mr. McNeill formed and managed the Broadcasting Lending Division at the Bank of Boston. He received an MBA from the Amos Tuck School of Business Administration at Dartmouth College and graduated magna cum laude with a degree in
economics from the College of the Holy Cross. Mr. McNeill’s qualifications to serve as a director include his knowledge of Urban One, the media industry and the financial markets, and his ability to provide input into a number of areas
including governance, executive compensation and corporate finance. His service on the boards of directors of various other media companies also is beneficial to Urban One.
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The Board Unanimously Recommends that You Vote “For” each of the Persons
Nominated for Class A Director in Proposal 1.
PROPOSAL 2 — ELECTION OF OTHER DIRECTORS
Three other directors will be elected by the holders of Class A common stock and Class B common stock voting together at the meeting, to serve until the 2022 annual meeting. The three nominees for
Class B directors are Catherine L. Hughes, Alfred C. Liggins, III, and Doyle Mitchell. Each of the nominees is an incumbent director. Mr. Mitchell also qualifies as an independent director as that term is defined in Rule 5605(a)(2) of the NASDAQ
Listing Rules. These nominees have consented to serve if elected, but should any nominee be unavailable to serve, your proxy will vote for the substitute nominee recommended by the Board of Directors. To be elected, the four persons nominated for
director must receive the affirmative vote of a plurality of the votes cast by all stockholders entitled to vote. There is no cumulative voting for the Board of Directors. The table below contains certain biographical information about the nominees.
The Board Unanimously Recommends that You Vote “For” each of the Persons Nominated in Proposal 2.
The Board Unanimously Recommends that You Vote “For” each of the Persons
Nominated for Other Director in Proposal 2.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors is currently comprised of five members, three of whom are neither officers, nor employees of Urban One. During the year ended December 31, 2020, the Board of Directors was
comprised of five members, three of whom were neither officers, nor employees of Urban One. The Board held one meeting during the calendar year ended December 31, 2020, and acted seven times by unanimous written consent. All five members of the Board
of Directors, including each of the current five directors who are currently standing for election, attended more than 75% of the aggregate number of meetings of the board and committees thereof on which he or she served. It is the policy of the
Company that all members of the Board of Directors attend annual meetings of the stockholders. All of the directors attended the 2020 annual meeting of the stockholders of the Company except Mr. Mitchell who was not a member of the Board of Directors
at the time of the 2020 annual meeting.
Controlled Company Exemption
We are a “controlled company” within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules, because more than 50% of our voting power is held by Catherine L. Hughes, our Chairperson of the
Board and Secretary, and Alfred C. Liggins, III, our CEO and President. See “Security Ownership of Beneficial Owners and Management” below. Therefore, we are not subject to NASDAQ Stock Market listing rules
that would otherwise require us to have: (i) a majority of independent directors on the board; (ii) a compensation committee composed solely of independent directors; (iii) a nominating committee composed solely of independent directors;
(iv) compensation of our executive officers determined by a majority of the independent directors or a compensation committee composed solely of independent directors; and (v) director nominees selected, or recommended for the board’s selection,
either by a majority of the independent directors or a nominating committee composed solely of independent directors.
Board Leadership Structure
Ms. Hughes has been Chairperson of the Board of Directors since 1980. Since the appointment of Mr. Liggins as CEO in 1997, the roles of Chairperson of the Board and CEO have been separate. We
believe it is the CEO’s responsibility to run the Company and the Chairperson’s responsibility to run the Board of Directors. By having Ms. Hughes serve as Chairperson of the Board, Mr. Liggins is better able to focus on running the day to day
operations of the Company. Bifurcating the roles enables non-management Directors to raise issues and concerns for Board consideration without immediately involving the CEO. The Chairperson or lead Director also serves as a liaison between the Board
and senior management and also provides further vision as to the strategic direction of the Company. Finally, the Board has a third leadership position in the Chairmen of our Audit Committee. As discussed below, our Audit Committee is comprised of
three independent directors. The Audit Committee is responsible for oversight of the quality and integrity of the accounting, auditing and reporting practices of Urban One and for the Company’s risk management. The Chair of the Audit Committee
effectively serves as a “check” on both the Chairperson and the CEO by representing a strong outside presence with significant financial and business experience.
The Board of Directors believes that the appropriate leadership structure should be based on the needs and circumstances of the Board, the Company and its stockholders at a
given point in time, and that the Board should remain adaptable to shaping the leadership structure as those needs change in the future.
Communication with the Board
Our stockholders may communicate directly with the Board of Directors. All communications should be in written form and directed to Urban One’s Assistant Secretary at the following address:
Assistant Secretary
Urban One, Inc.
1010 Wayne Avenue, 14th Floor
Silver Spring, Maryland 20910
Communications should be enclosed in a sealed envelope that prominently indicates that it is intended for Urban One’s Board of Directors. Each communication intended for Urban One’s Board of
Directors and received by the Assistant Secretary that is related to the operation of Urban One and is relevant to the director’s service on the board shall be forwarded to the specified party following its clearance through normal review and
appropriate security procedures.
Committees of the Board of Directors
The board has a standing audit committee, compensation committee and nominating committee.
Audit Committee
The audit committee consists of Brian W. McNeill, Terry L. Jones and Doyle Mitchell, each of whom satisfies the requirements for audit committee membership under the listing standards of the NASDAQ
Stock Market. Each of the audit committee members is an “independent director”, as that term is defined in Rule 5605(a)(2) of the NASDAQ Listing Rules. The Board of Directors has determined that each of Mr. McNeill, Mr. Jones and Mr. Mitchell
qualify as “audit committee financial experts,” as defined by Item 401(h) of Regulation S-K of the Securities Act of 1933. The board has adopted a written audit committee charter, which is available on our website at
https://urban1.com/urban-one-investor-relations/. The audit committee met six times during the calendar year ended December 31, 2020.
The audit committee is responsible for oversight of the quality and integrity of the accounting, auditing and reporting practices of Urban One, and as part of this responsibility the audit
committee:
• selects our independent registered public accounting firm;
• reviews the services performed by our independent registered public accounting firm, including non-audit services, if any;
• reviews the scope and results of the annual audit;
• reviews the adequacy of the system of internal accounting controls and internal control over financial reporting;
• reviews and discusses the financial statements and accounting policies with management and our independent registered public accounting firm;
• reviews the performance and fees of our independent registered public accounting firm;
• reviews the independence of our independent registered public accounting firm;
• reviews the audit committee charter; and
• reviews related party transactions, if any.
The audit committee also oversees Urban One’s risk policies and processes relating to the financial statements and financial reporting processes, as well as key credit liquidity risks, market risks
and compliance, and the guidelines, policies and processes for monitoring and mitigating those risks.
Compensation Committee
Our compensation committee consists of Terry L. Jones, Brian W. McNeill and Doyle Mitchell. The compensation committee did not meet during the calendar year ended December 31, 2020. The board has
adopted a revised written compensation committee charter. The functions of the compensation committee include:
• reviewing and approving the salaries, bonuses and other compensation of our executive officers, including stock options or restricted stock grants;
• establishing and reviewing policies regarding executive officer compensation and perquisites; and
• performing such other duties as shall from time to time be delegated by the board.
Nominating Committee
Our nominating committee consists of Alfred C. Liggins, III, Catherine L. Hughes, Terry L. Jones and Brian W. McNeill. The nominating committee is responsible for recommending the criteria for
selection of board members and assisting the board in identifying candidates. The nominating committee acted once by written consent during the calendar year ended December 31, 2020. The nominating committee does not have a charter.
The nominating committee reviews the qualifications of all persons recommended by stockholders as nominees to the Board of Directors to determine whether the recommended nominees will make good
candidates for consideration for membership on the board. The nominating committee has not established specific minimum qualifications for recommended nominees. However, as a matter of practice, the nominating committee evaluates recommended nominees
for directors based on their integrity, judgment, independence, financial and business acumen, relevant experience, and their ability to act on behalf of all stockholders, as well as meet the needs of the Board of Directors, including the need to
have a diversity of perspective. In the consideration of diversity of perspective, the nominating committee is most concerned with finding nominees that counter any perceived weaknesses in board composition. Such weaknesses may include weaknesses in
perspective based upon race, sex, gender identification, skill sets and industry insight particularly as the Company diversifies its business. Following such evaluation, the nominating committee will make recommendations for director membership and
review the recommendations with the Board of Directors, which will decide whether to invite the candidate to be a nominee for election to the board. Nominees are not discriminated against on the basis of race, religion, national origin, sex, sexual
orientation, disability or any other basis proscribed by law. The nominating committee recommended to the board that the incumbent directors, excluding D. Geoffrey Armstrong who resigned as of November 30, 2020, be nominated for re-election to the
board at the 2021 annual meeting. In Mr. Armstrong’s place, the nominating committee recommended to the board that B. Doyle Mitchell, Jr. be nominated to the board.
Code of Ethics
Environmental, Social and Governance Matters
We recognize the
importance of environmental, social and governance (“ESG”) matters in governance and in creating and sustaining long-term stockholder value. Given our long-lasting commitment to our stockholders and the communities we serve, we have invested
heavily in our operations to ensure that operations are conducted in a socially responsible manner. To provide accountability and transparency for our stakeholders, we will provide annual updates to our ESG disclosures.
Environmental
Within our operations, we
strive toward our commitment to sustainability through building efficiency measures, use of environmentally friendly supplies, office recycling programs, and sustainable business practices at our consumer facing events. In addition, the Company
actively strives to reduce energy consumption and waste.
Diversity and Inclusion
As a business founded by
an African-American woman, diversity and inclusion is engrained in our corporate history. Our Board of Directors is diverse; Catherine L. Hughes, our Founder and Chairperson, is an African-American woman, and 4 of our 5 directors are minorities.
Our President and Chief Executive Officer, Alfred C. Liggins, III is an African-American male, as is our Senior Vice President and General Counsel, Kristopher Simpson. Further, Karen Wishart, our Executive Vice President and Chief Administrative
Officer, is an African-American woman, as is Michelle Rice, President of TV ONE. Additionally, as of December 31, 2020, 80% of our employees were racially diverse, and 45% of our employees were women. We are proud that our organization is governed
and propelled by such a diverse group of individuals, which we believe contributes to our Company’s success now, and in the long-term.
Our senior leadership team
has introduced various initiatives to ensure that our Company remains inclusive and supportive for all, including:
|
•
|
Conducting regular workplace training, which includes focuses on unconscious bias, discrimination and harassment; and
|
|
•
|
Leveraging a diverse slate of candidates for all job vacancies, including senior leadership.
|
Corporate Citizenship
While the Company’s
national presence through our on-air radio, television and digital talent is undeniable, our focus on corporate citizenship and local community impact is one of our most notable accomplishments. Following the model established by Cathy Hughes, the
Company maintains a philanthropic footprint for each community served within our various markets. We maintain a strong focus on the local communities that we serve. Our on-air talent and staff are vested in providing information resources and
solutions to the community. From employment assistance and financial literacy to educational services and voter registration, they seek to make a difference each and every day, hosting ongoing events throughout the year. Myriad community partners
help to provide career fairs, food drives, back to school programs, voter registration drives, health fairs, and other worthwhile initiatives as part of the Company’s community service repertoire.
Other examples include:
|
•
|
Radio One Raleigh’s Women’s Empowerment and Networking Expo - created to educate and inspire African American women - it has grown into the
largest Women’s Expo on the east coast, with attendance topping 20,000 people annually.
|
|
•
|
Radio One DC’s annual walk – Making Strides Against Breast Cancer – garners over 10,000
participants each year and raises money for cancer research.
|
|
•
|
Radio One Houston’s Harvey Didn’t Win Home Giveaway – hundreds of local families entered the
contest by submitting their story to win a new three-bedroom/two-bathroom home after losing everything during Hurricane Harvey.
|
|
•
|
Radio One Cleveland’s Empower One virtual homeownership forum – presented to educate listeners about the proper steps for homeownership –
over 6,000 attendees participated.
|
|
•
|
The Biden-Harris campaign partnered with the Company’s divisions to host the Black Ballot initiative during the 2020 presidential campaign to
secure the Black vote. The initiative sought to educate voters about the key issues that affect the African American community and counteract voter suppression.
|
|
•
|
The Company’s annual Urban One Honors Awards, which honor achievements in innovative programming, business, advanced technology,
entertainment, social activism, education and community service. The 2021 theme is “Women Leading the Change.”
|
These programs indicate
the level of support Urban One stations provide to local communities and demonstrate the level of support they reciprocated by their loyal listeners and content consumers. Regardless of a natural disaster or shutdowns due to the COVID-19 pandemic,
Urban One remains a vital voice and resource to the community – in person or virtually.
Urban One took another
step to formalize its legacy of community service and philanthropic mission during the celebration of its 40th anniversary in October 2020. To commemorate this milestone anniversary, the Company announced the launch of Urban One Community Works,
Inc., (UOCW) a non-profit organization designed to provide support to organizations and programs that work to strengthen and improve African Americans’ quality of life in the communities in which it operates. UOCW allows Urban One to assist
non-profit organizations with their critical missions to address the disparities and inequities in the African American community. Through various partnerships, UOCW strives to support multiple campaigns and initiatives, including voter
registration drives, voter education, anti-voter intimidation efforts, financial literacy, and educational programs, for disenfranchised individuals and families.
Our Programming During 2020
We are dedicated providing to trustworthy and value
information and perspective for all audiences. News and information broadcast by the Company follows the basic tenets of good broadcast journalism, fair and accurate reporting. This was of particular importance throughout 2020 as our country
navigated both the COVID-19 pandemic and the demands for social and racial justice in the aftermath of the tragic deaths of George Floyd and Breonna Taylor. We responded to the COVID-19 pandemic in a variety of ways to address the needs and
concerns of our listeners by providing timely and accurate information about the pandemic through public service announcements and meaningful interviews with those on the front lines. We leveraged our radio stations and digital assets to foster
discussion and healing during an intense period of social unrest by keeping listeners up to date and informed about protests and marches happening locally and across the country, partnering with leading civil rights organizations and offering
opportunities for the public to take action. During the many marches and protests nationwide against racism and injustice that followed in cities and communities across America, our stations and personalities made it a priority to ensure that our
listeners felt heard, understood and supported.
Stockholder Submissions
For a stockholder to submit a candidate for the board to be considered by the nominating committee, a stockholder must notify Urban One’s Assistant Secretary. To make a recommendation for director
nomination in advance of the 2022 annual meeting of Urban One, a stockholder must notify Urban One’s Assistant Secretary in writing no later than January 1, 2022, the date that is expected to be approximately 120 days prior to the mailing of the
proxy statement for the 2022 annual meeting of stockholders. Notices should be sent to:
Assistant Secretary
Urban One, Inc.
1010 Wayne Avenue, 14th Floor
Silver Spring, Maryland 20910
All notices must include all information relating to the stockholder and the proposed nominee that would be required to be disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for elections of directors under the proxy rules of the United States Securities Exchange Commission.
EXECUTIVE OFFICERS
In the table below we set forth certain information on those persons currently serving as our executive officers. Biographical information on Catherine L. Hughes, Chairperson of the Board and
Secretary, and Alfred C. Liggins, III, Chief Executive Officer and President, is included above in ”Proposal 2 — Election of Other Directors .”
|
Peter D. Thompson
Executive Vice President and Chief Financial Officer
Age: 56
|
Mr. Thompson has been Chief Financial Officer (“CFO”) of Urban One since February 2008. Mr. Thompson joined the Company in October 2007 as the Company’s Executive Vice President of Business Development. Prior
to working with the Company, Mr. Thompson spent 13 years at Universal Music in the United Kingdom, including five years serving as CFO. Prior to that he spent four years working in public accounting at KPMG in London, where he qualified as a
Chartered Accountant.
|
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The Company has four classes of common stock, Class A, Class B, Class C and Class D. Generally, except as summarized below, the shares of each class are identical in all respects and entitle the
holders thereof to the same rights and privileges. However, with respect to voting rights, each share of Class A common stock entitles its holder to one vote and each share of Class B common stock entitles its holder to ten votes. The holders of
Class C and Class D common stock are not entitled to vote on any matters. The holders of Class A common stock can convert such shares into shares of Class C or Class D common stock. Subject to certain limitations, the holders of Class B common stock
can convert such shares into shares of Class A common stock. The holders of Class C common stock can convert such shares into shares of Class A common stock. The holders of Class D common stock have no such conversion rights.
The following table sets forth certain information regarding the beneficial ownership of our common stock as of April 26, 2021 by:
| • |
each person (or group of affiliated persons) known by us to be the beneficial owner of more than five percent of any class of common stock;
|
|
| • |
each of the current executive officers named in the Summary Compensation Table;
|
|
| • |
each of our directors and nominees for director; and
|
|
| • |
all of our directors and executive officers as a group.
|
In the case of persons other than our executive officers, directors and nominees, such information is based solely upon a review of the latest schedules 13D or 13G, as amended. Each individual stockholder
possesses sole voting and investment power with respect to the shares listed, unless otherwise noted. Information with respect to the beneficial ownership of the shares has been provided by the stockholders. The number of shares of stock includes all
shares that may be acquired within 60 days of April 26, 2021.
|
Common Stock
|
||||||||||||||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Class C
|
Class D
|
|||||||||||||||||||||||||||||||||||||
|
|
Number of Shares
|
Percent of
Class
|
Number of Shares
|
Percent of
Class
|
Number of Shares
|
Percent of
Class
|
Number of Shares
|
Percent of
Class
|
Economic Interest
|
Voting
Interest
|
||||||||||||||||||||||||||||||
|
Catherine L. Hughes (1)(2)(3)(4)(6)
|
|
|
|
851,536
|
29.75
|
%
|
1,387,531
|
47.37
|
%
|
5,464,802
|
14.75
|
%
|
15.67
|
%
|
24.37
|
%
|
||||||||||||||||||||||||
|
Alfred C. Liggins, III (1)(3)(4)(5)(6)
|
|
|
|
2,010,307
|
70.25
|
%
|
1,541,375
|
52.63
|
%
|
13,996,289
|
37.79
|
%
|
35.70
|
%
|
57.53
|
%
|
||||||||||||||||||||||||
|
Terry L. Jones (7)
|
|
|
|
434,536
|
1.17
|
%
|
1.00
|
%
|
0.00
|
%
|
||||||||||||||||||||||||||||||
|
Brian W. McNeill (8)
|
|
|
|
379,899
|
1.03
|
%
|
*
|
|
0.00
|
%
|
||||||||||||||||||||||||||||||
|
D. Geoffrey Armstrong (9)
|
10,000
|
*
|
|
256,774
|
*
|
|
*
|
|
*
|
|
||||||||||||||||||||||||||||||
|
Peter D. Thompson (10)
|
|
|
587,463
|
1.59
|
%
|
1.35
|
%
|
0.00
|
%
|
|||||||||||||||||||||||||||||||
|
David M. Kantor
|
|
|
250,420
|
*
|
|
*
|
|
0.00
|
%
|
|||||||||||||||||||||||||||||||
|
Karen Wishart
|
|
|
|
37,349
|
*
|
|
*
|
|
0.00
|
%
|
||||||||||||||||||||||||||||||
|
Eric Semler
|
200,000
|
3.16
|
%
|
|
|
|
*
|
|
*
|
|
||||||||||||||||||||||||||||||
|
TCS
|
675,480
|
10.67
|
%
|
2,221,197
|
6.00
|
%
|
6.68
|
%
|
1.93
|
%
|
||||||||||||||||||||||||||||||
|
All Directors and Named Executives as a group (8 persons)
|
10,000
|
0.16
|
%
|
2,861,843
|
100.0
|
%
|
2,928,906
|
100.0
|
%
|
21,407,532
|
57.79
|
%
|
||||||||||||||||||||||||||||
|
* Less Than 1%
|
|
|
|
(1)
|
Includes 31,210 shares of Class C common stock and 62,998 shares of Class D common stock held by Hughes-Liggins & Company, L.L.C., the members of which are the Catherine L. Hughes Revocable Trust, dated
March 2, 1999, of which Ms. Hughes is the trustee and sole beneficiary (the "Hughes Revocable Trust"), and the Alfred C. Liggins, III Revocable Trust, dated March 2, 1999, of which Mr. Liggins is the trustee and sole beneficiary (the
"Liggins Revocable Trust"). The address of Ms. Hughes and Mr. Liggins is 1010 Wayne Avenue, Silver Spring, Maryland 20910.
|
|
(2)
|
The shares of Class B common stock, 247,366 shares of Class C common stock and 3,260,133 shares of Class D common stock are held by the Hughes Revocable Trust; 1,124,560 shares of Class C common stock and
520,404 shares of Class D common stock are held by the Catherine L. Hughes Dynastic Trust, dated March 2, 1999, of which Ms. Hughes is the trustee and sole beneficiary.
|
|
(3)
|
The shares of Class B common stock are subject to a voting agreement between Ms. Hughes and Mr. Liggins with respect to the election of Urban One’s directors.
|
|
(4)
|
As of April 26, 2021, the combined economic and voting interests of Ms. Hughes and Mr. Liggins were 51.37% and 81.89%, respectively.
|
|
(5)
|
The shares of Class B common stock, 605,314 shares of Class C common stock, and 8,428,099 shares of Class D common stock are held by the Liggins Revocable Trust. In addition, and 920,456 shares of Class C
common stock are held by the Alfred C. Liggins, III Dynastic Trust dated March 2, 1999, of which Mr. Liggins is the trustee and sole beneficiary.
|
|
(6)
|
Ms. Hughes’ total includes 1,068,587 shares of Class D common stock obtainable upon the exercise of stock options. Mr. Liggins’ total includes 1,879,646 shares of Class D common stock obtainable upon the exercise of stock options.
|
|
(7)
|
Includes 43,489 shares of Class D common stock obtainable upon the exercise of stock options and 600 shares of Class D common stock held by Mr. Jones as custodian for his daughter.
|
|
(8)
|
Includes 0 shares of Class D common stock obtainable upon the exercise of stock options.
|
|
(9)
|
Includes 43,489 shares of Class D common stock obtainable upon the exercise of stock options.
|
|
(10)
|
Includes 392,860 shares of Class D common stock obtainable upon the exercise of stock options.
|
|
|
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Urban One’s directors and executive officers and persons who beneficially own more than ten percent of our common stock to file with the Securities and
Exchange Commission (“SEC”) reports showing ownership and changes in ownership of our common stock and other equity securities. Solely on the basis of reports and representations submitted by Urban One’s directors, executive officers, and greater
than ten percent owners, we believe that information contained in all required Section 16(a) filings for the fiscal year ended December 31, 2020, was timely made available except for a Form4/5 filing related to a small gift made by Mr. Liggins that
was identified as we reconciled ownership for this proxy. A Form 4 for this gift is being filed at or about the time of the filing of this proxy. We note that while some required Section 16(a) filings for the fiscal year ended December 31, 2020 were
filed late due to administrative delays related to the pandemic, the information required to be contained in those filings was timely made available in the form of a Current Report on Form 8-K.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation for each of our named executive officers, for the years ended December 31, 2020 and 2019:
|
Name and Principal Position
|
Year
|
Salary (1) $
|
Bonus (2) $
|
Stock
Awards (3) $
|
Option
Awards (3) $
|
Non-Equity
Incentive Plan Compensation $
|
Non-qualified Deferred Compensation Earnings $
|
All Other Compensation $
|
Total $
|
|||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Catherine L. Hughes – Chairperson
|
2020
|
857,500
|
375,000
|
441,219
|
83,839
|
0
|
0
|
45,677
|
(4
|
)
|
1,803,235
|
|||||||||||||||||
|
|
2019
|
1,000,000
|
0
|
878,027
|
0
|
0
|
0
|
33,936
|
(4
|
)
|
1,911,963
|
|||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Alfred C. Liggins, III – CEO
|
2020
|
1,071,875
|
937,500
|
754,074
|
139,731
|
0
|
0
|
3,778,982 |
(5
|
)
|
6,682,162
|
|||||||||||||||||
|
|
2019 |
1,250,000
|
0
|
1,463,378
|
0
|
0
|
0
|
3,698,525
|
(5
|
)
|
6,411,903
|
|||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Peter D. Thompson - CFO
|
2020
|
588,250
|
262,500
|
277,810
|
47,842
|
0
|
0
|
0
|
1,176,402
|
|||||||||||||||||||
|
|
2019
|
650,000
|
0
|
501,041
|
0
|
0
|
0
|
0
|
1,151,041
|
|||||||||||||||||||
|
(1)
|
The 2020 salary amounts reflect a temporary reduction due to the economic impact of the COVID-19 pandemic and cost reduction efforts taken by the Company to navigate the economic downturn.
|
|
(2)
|
Reflects discretionary bonuses. These amounts were paid in the year susequent to being awarded.
|
|
(3)
|
The dollar amount recognized for financial statement purposes in accordance with Accounting Standards Codification ("ASC") 718, "Compensation – Stock Compensation," for the fair value of options and
restricted stock granted. These values are based on assumptions described in Note 11 to the Company's audited consolidated financial statements included elsewhere in Form 10-K.
|
|
(4)
|
For 2020 and 2019, for company automobile provided to Ms. Hughes and financial services and administrative support in the amounts of $10,337 and $9,633 and $35,340 and $24,303, respectively.
|
|
(5)
|
Mr. Liggins employment terms provide, among other things, that in recognition of Mr. Liggins' contributions in founding TV One on our behalf, he is eligible to receive an award amount equal to approximately
4% of any proceeds from distributions or other liquidity events in excess of the return of the Company's aggregate investment in TV One. The Company's obligation to pay the award to Mr. Liggins was triggered during 2016 after its recovery
of the aggregate amount of our pre-Comcast Buyout capital contribution in TV One, and only upon actual receipt of distributions of cash or marketable securities. An award in the amount of $3,685,625 and $3,590,907 was paid in 2020 and 2019,
respectively. In addition, for 2020 and 2019, the Company provided financial services and administrative support to Mr. Liggins in the amounts of $93,357 and $107,618, respectively.
|
Employment Agreements
Employment Agreement of the CFO
Chief Financial Officer. Peter
D. Thompson serves as an Executive Vice President and Chief Financial Officer. Pursuant to an amendment to his employment agreement effective April 21, 2016, Mr. Thompson was employed as Executive Vice
President and Chief Financial Officer of the Company and Vice President of its wholly-owned subsidiaries commencing as of January 1, 2014 until December 31, 2018. Effective October 1, 2014, Mr. Thompson became entitled to a base salary payable
at the annualized rate of $650,000 per year and eligible for a bonus of up to $350,000, which is paid on a discretionary basis. Mr. Thompson is also entitled to receive a pro-rata portion of his bonus upon termination due to death or
disability. Mr. Thompson also receives standard retirement, welfare and fringe benefits, as well as a vehicle allowance. Mr. Thompson is currently not employed under an agreement, however, we continue to employ Mr. Thompson under the terms of
his 2014 employment agreement, as amended April 21, 2016.
Principal terms of prior employment agreement or arrangement under which the Company and the named executive officers are operating as modified by the 2014 Terms of Employment
On September 30, 2014, the compensation committee approved the principle terms of employment under which the Founder and the CEO are operating (the “2014 Terms of
Employment”). The Founder and the CEO thus operate under prior employment agreements as modified by 2014 Terms of Employment. The terms of employment of each of the Founder and the CEO are described below.
Chairperson. Catherine L. Hughes, our founder, serves as our Chairperson of the Board of Directors and Secretary. Ms. Hughes is entitled to a base salary payable at the
annualized rate of $1,000,000 per year and eligible for a bonus of up to $500,000 which is paid on a discretionary basis. Ms. Hughes will have periodic personal use of a private aircraft up to a maximum of 25 hours per year, such usage subject to
the Company’s financial position as determined by the CEO in his sole discretion.
Under her prior employment agreement under which the Company and Ms. Hughes currently operate, Ms. Hughes is also entitled to receive a pro-rata portion of her bonus upon
termination due to death or disability. Ms. Hughes also receives standard retirement, welfare and fringe benefits, as well as vehicle and wireless communication allowances and financial manager services.
President and Chief Executive Officer. Alfred C. Liggins, III is employed as our President and CEO and is a member of the Board of Directors. Pursuant to the terms approved
by the compensation committee, Mr. Liggins is employed as the President and Executive Officer of the Company and its wholly-owned subsidiaries and as the Chief Executive Officer of TV One, LLC. Mr. Liggins is entitled to a base salary payable at
the annualized rate of $1,250,000 per year and eligible for a bonus of up to $1,250,000, which is paid on a discretionary basis. Mr. Liggins also has periodic personal use of a private aircraft up to a maximum of 25 hours per year, subject to
the Company’s financial position.
Under his prior employment agreement under which the Company and Mr. Liggins currently operate, Mr. Liggins is entitled to receive a pro-rata portion of his bonus upon
termination due to death or disability. In recognition of his contributions in founding TV One on behalf of the Company, Mr. Liggins is also eligible to receive an award amount equal to approximately 4% of any proceeds from distributions or other
liquidity events in excess of the return of our aggregate investment in TV One (the “Employment Agreement Award"). Our obligation to pay the award was triggered only after our recovery of the aggregate amount of our capital contributions in TV
One, and continues to be triggered only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to such invested amount. Mr. Liggins’ rights to the Employment Agreement Award (i) cease
if he is terminated for cause or he resigns without good reason and (ii) expire at the termination of his employment (but similar rights could be included in the terms of a new employment agreement). Mr. Liggins also receives standard retirement,
welfare and fringe benefits, as well as vehicle and wireless communication allowances, a personal assistant and financial manager services.
Post-Termination and Change in Control Benefits
Under the terms of her employment agreement, upon termination without cause or for good reason within two years following a change of control, Ms. Hughes will receive an amount equal to
three times the sum of (i) her annual base salary and (ii) the average of her last three annual incentive bonus payments, in a cash lump sum within five days of such termination, a pro-rated annual bonus for the year of termination, and continued
welfare benefits for three years, subject to all applicable federal, state and local deductions. Similarly, under the terms of his employment agreement, upon termination without cause or for good reason within two years following a change of
control, Mr. Liggins will receive an amount equal to three times the sum of (i) his annual base salary and (ii) the average of his last three annual incentive bonus payments, in a cash lump sum within five days of such termination, a pro-rated
annual bonus for the year of termination, and continued welfare benefits for three years, subject to all applicable federal, state and local deductions.
Under Ms. Hughes’ and Mr. Liggins’ employment agreements the terms “cause” and “good reason” are defined generally as follows:
”Cause” means (i) the commission by the executive of a felony, fraud, embezzlement or an act of serious, criminal moral turpitude which, in case of
any of the foregoing, in the good faith judgment of the board, is likely to cause material harm to the business of the Company and the Company affiliates, taken as a whole, provided, that in the absence of
a conviction or plea of nolo contendere, the Company will have the burden of proving the commission of such act by clear and convincing evidence; (ii) the commission of an act by the executive constituting
material financial dishonesty against the Company or any Company affiliate, provided, that in the absence of a conviction or plea of nolo contendere, the Company
will have the burden of proving the commission of such act by a preponderance of the evidence; (iii) the repeated refusal by the executive to use his reasonable and diligent efforts to follow the lawful and reasonable directives of the board; or
(iv) the executive’s willful gross neglect in carrying out his material duties and responsibilities under the agreement, provided, that unless the board reasonably determines that a breach described in
clause (iii) or (iv) is not curable, the executive will be given written notice of such breach and will be given an opportunity to cure such breach to the reasonable satisfaction of the board within thirty (30) days of receipt of such written
notice.
”Good Reason” shall be deemed to exist if, without the express written consent of the executive, (i) the executive’s rate of annual base salary is
reduced, (ii) the executive suffers a substantial reduction in his title, duties or responsibilities, (iii) the Company fails to pay the executive’s annual base salary when due or to pay any other material amount due to the executive hereunder
within five (5) days of written notice from the executive, (iv) the Company materially breaches the agreement and fails to correct such breach within thirty (30) days after receiving the executive’s demand that it remedy the breach, or (v) the
Company fails to obtain a satisfactory written agreement from any successor to assume and agree to perform the agreement, which successor the executive reasonably concludes is capable of performing the Company’s financial obligations under this
Agreement.
The foregoing summaries of the definitions of “cause” and “good reason” are qualified in their entirety by reference to the actual terms of the employment agreements filed with that certain
Form 8-K filed April 18, 2008.
Under the terms of his employment agreement, in the event that Mr. Thompson is terminated other than for cause, provided Mr. Thompson executes a general liability release, the Company will
pay Mr. Thompson severance in an amount equal to six month’s base compensation, subject to all applicable federal, state and local deductions.
Other Benefits and Perquisites
As part of our competitive compensation package to attract and retain talented employees, we offer retirement, health and other benefits to our employees. Our named executive officers
participate in the same benefit plans as our other salaried employees. The only benefit programs offered to our named executive officers either exclusively or with terms different from those offered to other eligible employees are the following:
Deferred Compensation. We had a deferred compensation plan that allowed Catherine L. Hughes, our Chairperson, to
defer compensation on a voluntary, non-tax qualified basis. The plan was terminated in 2017, and as such Ms. Hughes did not defer any of her compensation during the year ended December 31, 2020. The amount owed to her as deferred compensation
for prior years is an unfunded and unsecured general obligation of our Company. Deferred amounts accrue interest based upon the return earned on an investment account with a designated brokerage firm established by Urban One. All deferred
amounts are payable in a lump sum 30 days after the date of the event causing the distribution to be paid. No named executive officer earns above-market or preferential earnings on nonqualified deferred compensation.
Other Perquisites. We provide few perquisites to our named executive officers. Currently, we provide or
reimburse executives for a company automobile, driver and various administrative services including a financial manager and a personal assistant.
We have set forth the incremental cost of providing these benefits and perquisites to our named executives in the 2020 Summary Compensation Table in the “All Other Compensation” column.
401(k) Plan
The Company has a defined contribution 401(k) savings and retirement plan. In each of 2020 and 2019, participants could contribute up to $19,500 and 19,000, respectively, of their gross
compensation, subject to certain limitations. Employees age 50 or older could make an additional catch-up contribution of in each of, 2020 and 2019 up to $6,000 and $6,000, respectively, of their gross compensation. The Company currently does not
offer any matching component with respect to its 401(k) savings and retirement plan.
Tax Deductibility of Executive Compensation
Section 162(m) of the Code limits the deductibility of compensation paid to certain “covered employees” in excess of $1 million per year. Prior to the enactment of the Tax Cuts and Jobs
Act passed by Congress in December 2017, there was an exception to this deduction limitation for compensation that qualified as “performance-based compensation.” The Tax Cuts and Jobs Act significantly changed Section 162(m) by, among other
things, repealing the performance-based compensation exemption, and reducing the federal corporate income tax rate. As a result, compensation paid to certain current and former executive officers in excess of $1 million a year generally would
not be deductible unless such compensation qualifies for certain transition relief. The Compensation Committee takes into consideration the potential deductibility of the compensation as one of the factors to be considered when establishing
our executive compensation program. However, the Compensation Committee believes that its primary responsibility is to provide a compensation program that attracts, retains, and rewards our executive officers that are critical to our success.
Following the Tax Cuts and Jobs Act, the Compensation Committee may continue to consider tax deductibility as a factor in determining executive compensation but may not structure its compensation arrangements around tax deductibility. The
Committee will continue to monitor the effect of tax reform on our executive compensation program.
The following table sets forth the number of shares of common stock subject to exercisable and unexercisable stock options held as of December 31, 2020.
| Outstanding Equity Awards at 2020 Fiscal Year-End | ||||||||||||||||||||||||
|
OPTION AWARDS
|
STOCK AWARDS
|
|||||||||||||||||||||||
|
Name
|
Number of Securities Underlying Unexercised Options (#) exercisable
|
Number of Securities Underlying Unexercised Options (#) unexercisable
|
Number of Shares of Stock That Have Not Vested (#)
|
Market Value of Shares of Stock That Have Not
Vested ($)
|
||||||||||||||||||||
|
Option Exercise
|
Option
|
|
|
|
||||||||||||||||||||
|
Class A
|
Class D
|
Class D
|
Price ($)
|
Expiration Date
|
Class D
|
Class D
|
||||||||||||||||||
|
Catherine L. Hughes
|
0
|
293,000
|
2.75
|
10/6/2024
|
0
|
$ |
0
|
|||||||||||||||||
|
0
|
199,836
|
1.90
|
8/7/2027
|
0
|
$
|
0
|
||||||||||||||||||
|
0
|
210,937
|
1.80
|
1/5/2028
|
0
|
$
|
0
|
||||||||||||||||||
|
0
|
174,971
|
2.17
|
7/5/2029
|
0
|
$
|
0
|
||||||||||||||||||
|
189,843
|
2.00
|
6/5/2030
|
427,148
|
$
|
499,763
|
|||||||||||||||||||
|
Alfred C. Liggins, III
|
0
|
587,000
|
2.75
|
10/6/2024
|
0
|
$
|
0
|
|||||||||||||||||
|
0
|
333,059
|
1.90
|
8/7/2027
|
0
|
$
|
0
|
||||||||||||||||||
|
0
|
351,562
|
1.80
|
1/5/2028
|
0
|
$
|
0
|
||||||||||||||||||
|
0
|
291,619
|
2.17
|
7/5/2029
|
0
|
$
|
0
|
||||||||||||||||||
|
316,406
|
2.00
|
6/5/2030
|
711,914
|
$
|
1,352,637
|
|||||||||||||||||||
|
Peter D. Thompson
|
0
|
225,000
|
2.75
|
10/6/2024
|
0
|
$
|
0
|
|||||||||||||||||
|
0
|
59,527
|
2.17
|
7/5/2029
|
0
|
$
|
0
|
||||||||||||||||||
|
108,333
|
2.00
|
6/5/2030
|
243,750
|
$
|
463,125
|
|||||||||||||||||||
Directors’ Fees
Pursuant to our director compensation policy, our
non-employee directors each receive an annual retainer of $50,000 which is paid in equal installments on a quarterly basis and $50,000 of restricted stock units which vest over a two year period. In addition, they receive $10,000 annually for
being a member of a committee (the chairman of each committee receives an additional $5,000 per annum) and are reimbursed for all out-of-pocket expenses related to meetings attended. Under our policies, the grant date for the Non-Employee
Director Annual Award is the fifth day of the month following the date of the annual stockholder meeting.
|
2020 Director Compensation
|
||||||||||||
|
Name
|
Fees Earned or Paid in Cash $ (1)
|
Stock Awards $ (1) (2)
|
Total $
|
|||||||||
|
Terry L. Jones (3)
|
85,000
|
50,071
|
135,071
|
|||||||||
|
Brian W. McNeill (3)
|
80,000
|
50,071
|
130,071
|
|||||||||
|
B. Doyle Mitchell (4)
|
0
|
0
|
0
|
|||||||||
|
D. Geoffrey Armstrong (3)
|
75,000
|
50,071
|
125,071
|
|||||||||
|
(1)
|
The dollar amount recognized for financial accounting statement reporting purposes in 2020 in accordance with ASC 718.
|
|||||||||||||
|
(2)
|
On June 16, 2020 each non-employee director was awarded 18,248 restricted shares of Class D common stock.
|
|||||||||||||
|
The number of shares was determined by dividing $2.00, the closing price of our Class D common stock on June 16, 2020 into $50,000.
|
||||||||||||||
|
On June 17, 2019 each non-employee director was awarded 25,000 restricted shares of Class D common stock.
|
||||||||||||||
|
The number of shares was determined by dividing $2.00, the closing price of our Class D common stock on June 17, 2019 into $50,000.
|
||||||||||||||
|
(3)
|
86,978 exercisable options outstanding in the aggregate as of December 31, 2020.
|
|||||||||||||
|
(4)
|
Mr. Mitchell was elected to the Board in January 2021 and therefore did not receive compensation for services in 2020.
|
|||||||||||||
Equity Compensation Plan Information
The following table sets forth, as of December 31, 2020, the number of shares of Class A and Class D common stock that are issuable upon the exercise of stock options
outstanding under our Urban One 2019 Equity and Performance Incentive Plan.
AUDIT COMMITTEE REPORT
This report is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any of Urban One’s
filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date of this proxy statement and irrespective of any general incorporation language in any such filing.
The audit committee’s responsibilities are described in its written charter adopted by the board. The audit committee charter is posted on Urban One’s website located at
https://urban1.com/urban-one-investor-relations/. The audit committee fulfills its responsibilities through periodic meetings with our independent registered public accounting firm and management. The audit committee reviews the financial
information that will be provided to stockholders and others, the systems of internal controls that management and the board have established, and the audit process. In fulfilling these responsibilities, the committee, among other things,
oversees the independent registered public accounting firm and confirms their independence, reviews the adequacy of the system of internal accounting controls and internal control over financial reporting, reviews financial statements, earnings
releases and accounting matters, and reviews related party transactions. Management is responsible for the financial statements and the reporting process, including the system of internal controls. The independent registered public accounting
firm is responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States.
The committee meetings regularly included separate sessions with the independent registered public accounting firm, in each case without the presence of Urban One’s
management. As part of its oversight of Urban One’s financial statements, the committee reviewed and discussed with both management and the independent registered public accounting firm the audited financial statements included in the Annual
Report on Form 10-K for the year ended December 31, 2020, and quarterly operating results prior to their issuance.
During 2020, management advised the committee that each set of financial statements reviewed had been prepared in
accordance with generally accepted accounting principles and reviewed significant accounting and disclosure issues with the committee. The committee also typically holds discussions with management and the independent registered public
accounting firm regarding the effectiveness of Urban One's internal control over financial reporting in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Even though not required due to the Company’s status as
an non-accelerated filer for the year ended December 31, 2020, such discussion was held in connection with the filing of the Form 10-K for 2020. The committee also discussed with the independent registered public accounting firm the matters
required to be discussed by Public Company Accounting Oversight Board ("PCAOB") Auditing Standard AS 1301, "Communications with Audit Committees," as amended, which includes, among other items, matters related to the conduct of the annual
audit of Urban One’s financial statements. In addition, the committee discussed with the independent registered public accounting firm the auditor’s independence from Urban One and its management, including the matters in the written
disclosures required by AS 1005, "Independence," and the committee satisfied itself as to the independent registered public accounting firm’s independence.
In reliance on the reviews and discussions referred to above, the committee recommended to the board, and the
board approved, the inclusion of the audited financial statements in Urban One's Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC.
Respectfully submitted,
Audit Committee:
Brian W. McNeill, Chairman
Terry L. Jones
B. Doyle Mitchell
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We review all transactions and relationships in which Urban One and our directors and executive officers or their immediate family members are participants to determine
whether such persons have a direct or indirect material interest. In addition, our code of ethics requires our directors, executive officers and principal financial officers to report to the board or the audit committee any situation that could
be perceived as a conflict of interest. Once a related person transaction has been identified, the Board of Directors may appoint a special committee of the Board of Directors to review and, if appropriate, approve such transaction. The special
committee will consider the material facts, such as the nature of the related person’s interest in the transaction, the terms of the transaction, the importance of the transaction to the related person and to us, whether the transaction is on
terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, and other matters it deems appropriate. As required under the SEC rules, we disclose in the proxy statement related
party transactions that are directly or indirectly material to us or a related person.
Reach Media operates the Tom Joyner Foundation’s Fantastic Voyage® (the “Fantastic Voyage®”), a fund-raising event, on behalf of the Tom Joyner
Foundation, Inc. (the “Foundation”), a 501(c)(3) entity. The agreement under which the Fantastic Voyage® operates provides that Reach Media provide all necessary operations of the cruise and that Reach Media will be reimbursed its
expenditures and receive a fee plus a performance bonus. Distributions from operating revenues are in the following order until the funds are depleted: up to $250,000 to the Foundation, reimbursement of Reach’s expenditures, up to a $1.0
million fee to Reach, a performance bonus of up to 50% of remaining operating revenues to Reach Media, with the balance remaining to the Foundation. For 2021 and 2022, $250,000 to the Foundation is guaranteed. Reach Media’s earnings for the
Fantastic Voyage® in any given year may not exceed $1.75 million. The Foundation’s remittances to Reach Media under the agreements are limited to its Fantastic Voyage® related cash collections. Reach Media bears the risk
should the Fantastic Voyage® sustain a loss and bears all credit risk associated with the related passenger cruise package sales. The agreement between Reach and the Foundation automatically renews annually unless termination is
mutually agreed or unless a party’s financial requirements are not met, in which case the party not in breach of their obligations has the right, but not the obligation, to terminate unilaterally. Due to the pandemic, the 2020 cruise has been
rescheduled to November 2021 and passengers have been given the option to have the majority of their payments refunded. As of December 31, 2020, Reach Media owed the Foundation $244,000 due to passengers’ refunds pending and as of December 31,
2019, the Foundation owed Reach Media $24,000.
Reach Media provides office facilities (including office space, telecommunications facilities, and office equipment) to the Foundation. Such services are provided to the
Foundation on a pass-through basis at cost. Additionally, from time to time, the Foundation reimburses Reach Media for expenditures paid on its behalf at Reach Media-related events. Under these arrangements, as of December 31, 2020 and 2019,
the Foundation owed $6,000 and $32,000, respectively, to Reach Media.
For the year ended December 31, 2019, Reach Media’s revenues, expenses, and operating income for the Fantastic Voyage were approximately $10.2 million, $8.5 million, and
$1.7 million, respectively. The Fantastic Voyage took place during the second quarter of 2019. Due to the aforementioned rescheduling of the Fantastic Voyage resulting from impacts of the COVID pandemic, no cruise was operated in 2020.
PROPOSAL 3: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICERS COMPENSATION
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, as amended, we provide
our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the overall compensation of our named executive officers as disclosed in this Proxy Statement. This advisory vote is commonly referred to as “say-on-pay.”
On June 5, 2012, the Company conducted its first “say-on-pay” advisory voting with respect to its fiscal year 2011 executive compensation, including potential bonus
compensation although none was paid to the named executive officers for the fiscal year ended December 31, 2011. The 2011 compensation was approved and, further, it was determined by the stockholder vote that advisory votes on executive
compensation would be held every three years. Thus, as a part of the compensation review process, the Company conducts an advisory vote with respect to executive compensation every three years and the compensation committee will consider the
results of such voting as it reviews and sets executive compensation. On June 19, 2018, the Company conducted its third and most recent “say-on-pay” advisory voting with respect to its fiscal year 2017 executive compensation. The results of the
voting were votes 28,653,554 for, 110,744 votes against, 533 abstentions, and 1,254,053 non-votes. Thus, the 2017 compensation awarded to Urban One’s named executive officers, including (i) potential bonus compensation, although none was paid to
the named executive officers for the fiscal year ended December 31, 2017 and (ii) the compensation to the named executive officers under their new terms of employment, was approved.
Our executive compensation programs are designed to convey a recognition of services performed by the recipients and motivate and retain the recipients over the long term.
The purpose of the executive compensation is to provide competitive compensation in order to attract, motivate, and retain talented and experienced executives, who are instrumental to our success, and to reward the executive officers for the
achievement of short-term and long-term strategic and operational goals and the creation of enhanced value for our stockholders. We seek to closely align the interests of our named executive officers with the interests of our stockholders, and
our Compensation Committee regularly reviews named executive officer compensation against peer companies, the general market trend and other industry data to ensure that such compensation is consistent with our compensation philosophy.
Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s stockholders approve the compensation paid to the Company’s named executive officers, as disclosed in the Company’s Proxy
Statement for the 2021 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Summary Compensation Table, the other related compensation tables and narrative discussion.”
This advisory resolution is non-binding on the Board. Although non-binding, the Board and the Compensation Committee will carefully review and consider
the voting results when evaluating our executive compensation program.
The Board of Directors unanimously recommends a vote “FOR” proposal number 3.
PROPOSAL 4: FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, as amended, we
are asking stockholders to vote on whether future advisory votes on the compensation of our named executive officers should occur every year, every two years or every three years.
We recommend that this advisory vote be held once every three years, but
stockholders are not voting to approve or disapprove of that recommendation. We believe that a triennial voting frequency will provide our stockholders with sufficient time to evaluate the effectiveness of our overall compensation philosophy,
policies, and practices in the context of our long-term business results for the corresponding period, while avoiding over-emphasis on short-term variations in compensation and business results. We also believe that a three-year timeframe
provides a better opportunity to observe and evaluate the impact of any changes to our executive compensation policies and practices that have occurred since the last advisory vote.
Required Vote and Recommendation
The frequency that receives the highest number of votes cast will be deemed to be the frequency selected by the stockholders. Because this vote is advisory, it will not be binding upon
our Board of Directors. However, the compensation committee will consider the outcome of the stockholder vote, along with other relevant factors, in recommending a voting frequency to our Board of Directors.
The Board Unanimously Recommends that You Vote for a Frequency of Once Every “3 YEARS” for Future Non-Binding Stockholder Advisory Votes on Compensation Awarded to our Named Executive Officers.
PROPOSAL 5 — APPROVAL OF AMENDMENT OF 2019 EQUITY AND PERFORMANCE INCENTIVE PLAN
On April 10, 2019, the Board of Directors adopted, subject to stockholder approval, a new equity and incentive plan called the Urban One 2019 Equity and Performance
Incentive Plan (the “2019 Incentive Plan”). The stockholders approved the 2019 Incentive Plan on May 21, 2019. On April 30, 2021, the members of our Board of Directors constituting our compensation committee and all of our independent Board
members adopted, subject to stockholder approval, certain amendments to the 2019 Incentive Plan (the “2019 Incentive Plan Amendments”). In this proposal, the Company is asking our stockholders to approve the 2019 Incentive Plan Amendments to (i)
permit issuance of 2,000,000 shares of our Class A common stock and (ii) provide for issuance of an additional 5,519,575 shares of our Class D common stock. Upon passage of the 2019 Incentive Plan Amendments there will be a total of 2,000,000
Class A shares and 6,000,000 Class D shares available for issuance under the 2019 Incentive Plan.
Our board believes that the 2019 Incentive Plan is a vital component of our employee compensation programs, since it allows us the ability to compensate our employees,
consultants and non-employee directors whose contributions are important to our success, by offering them the opportunity to participate in our future performance, while at the same time providing an incentive to build long-term stockholder
value. We operate in a competitive market and grants are essential in helping us attract talented individuals. Likewise, annual grants are essential in helping us retain and motivate our most valuable employees. Both new hire grants and annual
grants help keep employees’ interests aligned with the interests of our stockholders. On April 30, 2021, the board approved (i) the issuance of Class A shares under the 2019 Incentive Plan (in addition to Class D shares) and (ii) the increase to
the available share reserve, subject to approval by our stockholders. Our board and management, therefore, recommend that stockholders approve the 2019 Incentive Plan Amendments. If our stockholders do not approve the 2019 Incentive Plan
Amendments, the 2019 Incentive Plan will remain in effect with its current terms and conditions and the number of shares reserved for issuance will not increase.
2019 Incentive Plan Share Reserve
As of April 30, 2021, an aggregate of 480,425 shares of Class D common stock remained available for future grants under our 2019 Incentive Plan. The compensation
committee believes that this share reserve amount is insufficient to meet future long term incentive needs of the Company. Accordingly, the compensation committee believes that the request for an additional 5,519,575 shares of our Class D common
stock is reasonable and necessary to allow us to replenish our share usage from previous years, to continue granting practices in the future and to respond to competition for future employees. In addition, the compensation committee believes
that adding 2,000,000 shares of our Class A common stock to the 2019 Incentive Plan will add further flexibility in designing competitive compensation packages. Upon passage of the 2019 Incentive Plan Amendments there will be a total of
2,000,000 Class A shares and 6,000,000 Class D shares available for issuance under the 2019 Incentive Plan.
Description of the 2019 Incentive Plan
The following description of the 2019 Incentive Plan is only a summary of certain provisions of the plan and is qualified in its entirety by reference to the full
text of the 2019 Incentive Plan, a copy of which is included as Appendix A to our proxy statement filed April 11, 2019.
Purpose and Summary of Terms of the 2019 Incentive Plan
The purpose of the 2019 Incentive Plan is to promote the long-term financial success of the Company by providing a means to attract, retain and reward individuals who can
and do contribute to such success and to further align their interests with those of the Company’s stockholders.
Administration of the 2019 Incentive Plan
The 2019 Incentive Plan is administered by the Compensation Committee consisting of two or more directors who are “non-employee directors.” In the event that for any
reason the Compensation Committee is unable to act or if the Compensation Committee at the time of any grant, award or other acquisition under the 2019 Incentive Plan does not consist of two or more “non-employee directors,” or if there is no
such committee, then the 2019 Incentive Plan will be administered by the Board, except to the extent such Board action would have adverse consequences under Section 16(b) of the Securities Exchange Act.
Subject to the other provisions of the 2019 Incentive Plan, the Compensation Committee has authority, in its sole and absolute discretion: (i) to grant cash-based
awards, non-qualified stock options, incentive stock options, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards, all of which are referred to collectively as “Awards”; (ii) to determine
the terms and conditions of each Award granted (which need not be identical); (iii) to interpret the 2019 Incentive Plan and all Awards granted thereunder; and (iv) to make all other determinations necessary or advisable for the administration
of the 2019 Incentive Plan.
Eligibility. The persons eligible for participation in the 2019 Incentive Plan as recipients
of Awards include employees, consultants and non-employee directors to the Company or any subsidiary or affiliate of the Company.
Shares Subject to the 2019 Incentive Plan. As originally approved, the total number and class
of shares which could be issued pursuant to Awards granted under the 2019 Incentive Plan could not exceed 5,500,000 shares of Class D Common Stock plus any shares subject to outstanding awards under any prior plan as of the Effective Date
that, on or after the Effective Date, cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and nonforfeitable shares of Class
D Common Stock). The 2019 Incentive Plan Amendments would provide for (i) the issuance of 2,000,000 Class A shares under the 2019 Incentive Plan (in addition to Class D shares) and (ii) the increase to the available Class D share reserve to
6,000,000 shares, subject to approval by our stockholders.
Eligible Participants in the Plan
Participants in the 2019 Incentive Plan may include any director, executive or other key employee of the Company, or any other individual who performs substantial work for or
provides services to the Company, who is granted an award in accordance with the terms of the 2019 Incentive Plan by the Compensation Committee.
Types of Equity Awards the Company May Issue Under the Plan
Stock Options. A stock option is the
right to purchase shares of common stock at a future date at a specified price per share called the exercise price. An option may be either an ISO or a nonqualified stock option. ISOs and nonqualified stock options are taxed differently, as
described under Federal Income Tax Consequences of Awards. Except in the case of options granted pursuant to an assumption or substitution for another option, the exercise price of a stock option may not be less than the fair market value (or
in the case of an ISO granted to a ten percent stockholder, 110% of the fair market value) of a share of common stock on the grant date. As of the record date, the closing price of our Class A common stock was $5.24 and the closing price of our
Class D common stock was $2.15. Full payment of the exercise price must be made at the time of such exercise either in cash or bank check or in another manner approved by the Committee.
Restricted Stock Grants. A restricted stock award is an award of actual shares of common stock which are subject to
certain restrictions for a period of time determined by the Compensation Committee. Restricted stock may be held by the Company in escrow or delivered to the participant pending the release of the restrictions. Participants who receive restricted
stock awards generally have the rights and privileges of stockholders regarding the shares of restricted stock during the restricted period, including the right to vote and the right to receive dividends.
Impact of a Change in Control
The Compensation Committee may provide for the acceleration of the vesting and exercisability of outstanding options, vesting of restricted stock, restricted stock units,
performance shares, performance units, cash-based awards, other stock awards, in the event of a change in control of the Company.
Federal Income Tax Consequences of Awards
The following is a summary of U.S. federal income tax consequences of awards granted under the Plan, based on current U.S. federal income tax laws. This
summary does not constitute legal or tax advice and does not address municipal, state or foreign income tax consequences.
Nonqualified Stock Options
The grant of a nonqualified stock option will not result in taxable income to the participant. The participant will recognize ordinary income at the time of
exercise equal to the excess of the fair market value of the shares on the date of exercise over the exercise price and the Company will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon
the sale of the shares acquired on exercise will be treated as capital gains or losses.
Incentive Stock Options
The grant of an ISO will not result in taxable income to the participant. The exercise of an ISO will not result in taxable income to the participant if at
the time of exercise the participant has been employed by the Company or its subsidiaries at all times beginning on the date the ISO was granted and ending not more than 90 days before the date of exercise. However, the excess of the fair market
value of the shares on the date of exercise over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum tax liability for the year the shares are sold.
If the participant does not sell the shares acquired on exercise within two years from the date of grant and one year from the date of exercise then on the
sale of the shares any amount realized in excess of the exercise price will be taxed as capital gain. If the amount realized in the sale is less than the exercise price, then the participant will recognize a capital loss.
If these holding requirements are not met, then the participant will generally recognize ordinary income at the time the shares are sold in an amount equal
to the lesser of (a) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (b) the excess, if any, of the amount realized on the sale of the shares over the exercise price, and the Company will be
entitled to a corresponding deduction.
Restricted Stock
Unless a participant makes an election to accelerate the recognition of income to the grant date, the grant of restricted stock or performance shares awards
will not result in taxable income to the participant. When the restrictions lapse, the participant will recognize ordinary income on the excess of the fair market value of the shares on the vesting date over the amount paid for the shares, if
any, and the Company will be entitled to a corresponding deduction.
If the participant makes an election under Section 83(b) of the Internal Revenue Code within thirty days after the grant date, the participant will recognize
ordinary income as of the grant date equal to the fair market value of the shares on the grant date over the amount paid, if any, and the Company will be entitled to a corresponding deduction. Any future appreciation will be taxed at capital
gains rates. However, if the shares are later forfeited, the participant will not be able to recover any taxes paid.
Section 409A
Section 409A of the Code imposes complex rules on nonqualified deferred compensation arrangements, including requirements with respect to elections to defer
compensation and the timing of payment of deferred amounts. Depending on how they are structured, certain equity-based awards may be subject to Section 409A of the Code, while others are exempt. If an award is subject to Section 409A of the Code
and a violation occurs, the compensation is includible in income when no longer subject to a substantial risk of forfeiture and the participant may be subject to a 20% penalty tax and, in some cases, interest penalties. The 2019 Incentive Plan
and awards granted under the 2019 Incentive Plan are intended to be exempt from or conform to the requirements of Section 409A of the Code.
Section 162(m) and Limits on the Company’s Deductions
Section 162(m) of the Code denies deductions to publicly held corporations for compensation paid to certain senior executives that exceeds $1,000,000.
New Plan Benefits
Awards under the Plan will be granted in amounts and to
individuals as determined by the Compensation Committee in its sole discretion. Therefore, the benefits or amounts that will be received by employees, officers, directors and consultants under the plan are not determinable at this time.
The Board Unanimously Recommends that You Vote “For” the Approval of the 2019 Incentive Plan Amendments
to increase the number and types of shares reserved for issuance by 2,000,000 shares of our Class A common stock and 5,519,575 shares of our Class D common stock such that upon passage of the 2019 Incentive Plan
Amendments there will be a total of 2,000,000 Class A shares and 6,000,000 Class D shares available for issuance under the 2019 Incentive Plan.
PROPOSAL 6 —RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our financial statements for the year ended December 31, 2020, have been audited by BDO USA, LLP, our independent registered public accounting firm. The Board of Directors has
appointed BDO USA, LLP as independent registered public accounting firm to audit our financial statements for the year ending December 31, 2021. Although not required by the bylaws or other applicable laws, the Board of Directors, in accordance
with accepted corporate practice, is asking stockholders to ratify the action of the Board of Directors in appointing the firm of BDO USA, LLP to be the independent registered public accounting firm of Urban One for the year ending December 31,
2021, and to perform such other services as may be requested.
Whether the selection of BDO USA, LLP is ratified or not by our stockholders at the annual meeting, the Board of Directors in its discretion may select and appoint a different independent
registered public accounting firm at any time. In all cases, the Board of Directors will make any determination as to the selection of Urban One’s independent registered public accounting firm in light of the best interests of Urban One and its
stockholders.
Representatives of BDO USA, LLP will be present at the meeting, and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees
The following table shows the fees paid by us for audit and other services provided by BDO USA, LLP during 2020 and 2019.
|
Year Ended December 31,
|
||||||||
|
|
2020
|
2019
|
||||||
|
Audit fees (1)
|
$ | 1,723,518 |
$
|
1,429,400
|
||||
|
Audit-related fees (2)
|
-
|
19,385
|
||||||
__________
|
(1)
|
Consists of professional services rendered in connection with the audit of our financial statements for the most recent fiscal year, reviews of the financial statements included in our quarterly reports
on Form 10-Q during the fiscal years ended December 31, 2020 and 2019, respectively, and the issuance of consents for filings with the SEC.
|
|
|
|
|
(2)
|
Consists of professional services rendered in connection with corporate income tax compliance.
|
Pre-Approval Policies and Procedures
The audit committee has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed for Urban One by BDO USA, LLP. This policy
provides for pre-approval by the audit committee of specifically defined audit and non-audit services. The audit committee has delegated to the chairman of the audit committee authority to approve permitted services up to a certain amount
provided that the chairman reports any decisions to the audit committee at its next scheduled meeting.
The Board Unanimously Recommends that You Vote “For”
the Ratification of BDO USA, LLP as the Independent Registered Public Accounting Firm
for the Year Ending December 31, 2021.
STOCKHOLDER PROPOSALS FOR THE 2022 ANNUAL MEETING
In order for a stockholder proposal intended to be presented pursuant to Rule 14a-8 under the Exchange Act to be included in the proxy statement for the 2022 annual
meeting, we must receive it no later than January 1, 2022, the date that is expected to be approximately 120 days prior to the mailing of the proxy statement for the 2022 annual meeting of stockholders. To be considered for inclusion in our proxy
statement for that meeting, the stockholder proposal must be in compliance with Rule 14a-8 under the Exchange Act. In order for a stockholder proposal outside of Rule 14a-8 to be considered timely within the meaning of Rule 14a-4(c) of the
Exchange Act, the stockholder proposal must be received by Urban One no later than March 10, 2022. Stockholder proposals must be submitted by written notice delivered to the Assistant Secretary, Urban One, Inc., 14th Floor, 1010 Wayne Avenue,
Silver Spring, Maryland 20910.
OTHER BUSINESS
At this time, the Board of Directors does not know of any business to be brought before the meeting other than the matters described in the notice of annual meeting.
However, if a stockholder properly brings any other matters for action, each person named in the accompanying proxy intends to vote the proxy in accordance with his or her judgment on such matters.
By Order of the Board of Directors,
Karen Wishart
Assistant Secretary
Exhibit A
AMNEDED AND RESTATED
URBAN ONE, INC. 2019
EQUITY AND PERFORMANCE INCENTIVE PLAN
ARTICLE 1.
ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment. Urban One, Inc., a Delaware
corporation (hereinafter referred to as the “Company”), establishes an incentive compensation plan to be known as the 2019 Equity and Performance Incentive Plan (hereinafter referred to as the “Plan”), as set forth in this document. The Plan
permits the grant of Cash-Based Awards, Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units and Other Stock-Based Awards. The Plan shall become effective upon
stockholder approval (the “Effective Date”) and shall remain in effect as provided in Section 1.3 hereof. Upon stockholder approval of this Plan, the Plan will supersede the Urban One, Inc. Amended and Restated 2009 Stock Option and
Restricted Stock Plan (the “Prior Plan”) with respect to future awards and no further awards will be granted under the Prior Plan.
1.2 Purpose of the Plan. The purpose of the Plan
is to promote the interests of the Company and its stockholders by strengthening the Company's ability to attract, motivate, and retain employees and directors upon whose judgment, initiative, and efforts the financial success and growth of
the business of the Company largely depend, and to provide an additional incentive for such individuals through stock ownership and other rights that promote and recognize the financial success and growth of the Company and create value for
stockholders.
1.3 Duration of the Plan. Unless sooner
terminated as provided herein, the Plan shall terminate ten years from the Effective Date; provided, however, that Incentive Stock Options may not be granted under the Plan after the tenth (10th) anniversary of the date of the Board's
approval of the Plan. After the Plan is terminated, no Awards may be granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan's terms and conditions.
ARTICLE 2.
DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the
initial letter of the word shall be capitalized.
2.1 “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the General Rules and Regulations
of the Exchange Act.
2.2 “Award” means, individually or collectively, a grant under this Plan of Cash-Based Awards, Nonqualified Stock Options,
Incentive Stock Options, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or Other Stock-Based Awards, in each case subject to the terms of this Plan. In the event of any inconsistency between the Plan and any
Award, the terms of the Plan shall govern. In the event of any inconsistency between an employment agreement and an Award the terms of the employment agreement shall govern.
2.3 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to
such term in Rule 13d-3 promulgated under the General Rules and Regulations under the Exchange Act.
2.4 “Board” or “Board of directors” means the Board of directors of the Company
2.5 “Cash-Based Award” means an Award granted to a Participant as described in Article 10.
2.6 “Change in Control” means a Change in Control as defined in Article 15.
2.7 “Code” means the Internal Revenue Code of 1986, as amended from time to time.
2.8 “Committee” means the Compensation Committee of the Board, or any other committee designated by the Board to administer
this Plan. The members of the Committee shall be appointed from time to time by and shall serve at the discretion of the Board. The Committee shall consist of two or more directors who are Nonemployee directors and “Outside directors” (as such
term is defined in Section 162(m) of the Code).
2.9 “Company” means Urban One, Inc., a Delaware corporation, and any successor thereto as provided in Article 18 herein.
2.10 “Director” means a member of the Board of directors of the Company and/or any of its Affiliates and/or Subsidiaries.
2.11 “Effective Date” has the meaning set forth in Section 1.1.
2.12 “Employee” means any employee of the Company, its Affiliates and/or Subsidiaries. For purposes of Incentive Stock Options,
the individual must be an employee under Code Section 3401 and the Regulations thereunder.
2.13 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
2.14 “Evidence of Award” means an agreement, certificate, resolution or other type or form of writing or other evidence approved
by the Committee which sets forth the terms and conditions of an Award. An Evidence of Award may be in any electronic medium, may be limited to a notation on the books and records of the Company and need not be signed by a representative of the
Company or a Participant.
2.15 “Fair Market Value” or “FMV” means the last sales price reported for the Shares on the applicable date as reported on the
principal national securities exchange in the United States on which it is then traded or The NASDAQ Stock Market (if the Shares are so listed), or, if such date is not a trading day, the last prior day on which the Shares were so traded; or if
not so listed, the mean between the closing bid and asked prices of publicly traded Shares in the over-the-counter market, or, if such bid and asked prices shall not be available, as reported by any nationally recognized quotation service
selected by the Company, or as determined by the Committee in a manner consistent with the provisions of the Code. If, however, the required accounting standards used to account for equity Awards granted to Participants are substantially
modified subsequent to the Effective Date of the Plan such that fair value accounting for such Awards becomes required, the Committee shall have the ability to determine an Award's FMV based on the relevant facts and circumstances, but in a
manner consistent with the Section 409A Rules.
2.16 “Full Value Award” means an Award other than in the form of an Option, and which is settled by the issuance of Shares.
2.17 “Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” under Section 422 of the
Code or any successor provision.
2.18 “Insider” shall mean an individual who is, on the relevant date, an officer, Director, or more than ten percent (10%)
Beneficial Owner of any class of the Company's equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange Act.
2.19 “Nonemployee Director” has the same meaning set forth in Rule 16b-3 promulgated under the Exchange Act, or any successor
definition adopted by the United States Securities and Exchange Commission.
2.20 “Nonqualified Stock Option” means an Option that is not intended to meet the requirements of Section 422 of the Code, or
that otherwise does not meet such requirements.
2.21 “Option” means the right to purchase Shares granted to a Participant in accordance with Article 6. Options granted under
this Plan may be Nonqualified Stock Options, Incentive Stock Option or a combination thereof.
2.22 “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.
2.23 “Other Stock-Based Award” means an equity-based or equity-related Award not otherwise described by the terms of this Plan,
granted pursuant to Article 10.
2.24 “Participant” means any eligible person as set forth in Article 5 to whom an Award is granted.
2.25 “Performance Measures” means measures as described in Article 11 on which the performance goals are based and which are
approved by the Company's stockholders pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.
2.26 “Performance Period” means the period of time during which the performance goals must be met in order to determine the
degree of payout and/or vesting with respect to an Award.
2.27 “Performance Share” means an Award granted to a Participant, as described in Article 9.
2.28 “Performance Unit” means an Award granted to a Participant, as described in Article 9.
2.29 “Period of Restriction” means the period when Restricted Stock or Restricted Stock Units are subject to a “substantial risk
of forfeiture” within the meaning of Section 83 of the Code (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Committee, in its discretion), as provided in Article
8.
2.30 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a “group” as defined in Section 13(d) thereof.
2.31 “Plan” means the Urban One, Inc. 2019 Equity and Performance Incentive Plan.
2.32 “Plan Year” means the Company's fiscal year.
2.33 “Restricted Stock” means Shares granted or sold to a Participant pursuant to Article 8 as to which the Period of Restriction
has not lapsed.
2.34 “Restricted Stock Unit” means a unit granted or sold to a Participant pursuant to Article 8 as to which the Period of
Restriction has not lapsed.
2.35 “Section 409A Rules” means the provisions of Section 409A of the Code and Treasury Regulations and other Internal Revenue
Service guidance promulgated thereunder.
2.36 “Share” means, at the sole discretion of the Committee with respect to any grant, either a share of (i) Class A common stock
of the Company, $.01 par value per share or (ii) Class D common stock of the Company, $.01 par value per share.
2.37 “Subsidiary” means a corporation, company or other entity (i) more than 50 percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated
association), but more than 50 percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company, except that for
purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which at the time the Company owns or controls, directly or indirectly, more than 50
percent (50%) of the total combined voting power represented by all classes of stock issued by such corporation.
2.38 “Substitute Awards” means Awards granted or Shares issued by the Company in assumption
of, or in substitution or exchange for, Awards previously granted, or the right or obligation to make future Awards, by an entity acquired by the Company or with which the Company or any Subsidiary or Affiliate thereof combine.
2.39 “Termination of Employment” or a similar reference means the event where the Employee is
no longer an Employee of the Company or of any Subsidiary, including but not limited to where the employing Corporation ceases to be a Subsidiary. With respect to any Participant who is not an Employee, “Termination of Employment” shall mean
cessation of the performance of services. With respect to any Award that provides “non-qualified deferred compensation” within the meaning of the Section 409A Rules, “Termination of Employment” shall mean a “separation from service” as
defined under the Section 409A Rules.
ARTICLE 3.
ADMINISTRATION
3.1 General. The Committee shall be responsible for administering the Plan, subject to this
Article 3 and the other provisions of the Plan. The act or determination of a majority of the Committee shall be the act or determination of the Committee and any decision reduced to writing and signed by all of the members of the Committee
shall be fully effective as if it had been made by a majority at a meeting duly held. The Committee may employ attorneys, consultants, accountants, agents, and other persons, any of whom may be an Employee, and the Committee, the Company, and
its officers and directors shall be entitled to rely upon the advice, opinions, or valuations of any such persons. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested persons, and shall be given the maximum deference permissible by law. The Committee may act without a meeting if all members consent thereto in writing or by electronic transmission, and
the writings or electronic transmissions are filed with the minutes of proceedings of the Committee.
3.2 Authority of the Committee. The Committee shall have full and exclusive discretionary
power to interpret the terms and the intent of the Plan and any Evidence of Award or other agreement or document ancillary to or in connection with the Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms,
instruments, and guidelines for administering the Plan as the Committee may deem necessary or proper. Such authority shall include, but not be limited to, selecting Award recipients, establishing all Award terms and conditions, including the
terms and conditions set forth in an Evidence of Award, correcting any defects, supplying any omissions or reconciling any inconsistencies in the Plan or any Award, in the manner and to the extent it shall deem feasible to carry out the
purposes of the Plan and, subject to Article 16, adopting modifications and amendments to the Plan or any Evidence of Award, including without limitation, any that are necessary to comply with the laws of the countries and other jurisdictions
in which the Company, its Affiliates, and/or its Subsidiaries operate. In the event that for any reason the Committee is unable to act or if the Committee at the time of any grant, Award or other acquisition under the Plan does not consist of
two or more Nonemployee Directors, or if there shall be no such Committee, then the Plan shall be administered by the Board, and references herein to the Committee except to the extent that the grant or exercise of such authority would cause
any Award or transaction to become subject to (or lose an exemption under) the short swing profit recovery rules of Section 16 of the Exchange Act, shall be deemed to be references to the Board.
3.3 Delegation of Authority. To the extent not prohibited by law, the Committee may delegate
its authority hereunder to one or more of its members or other persons, except that no such delegation shall be permitted with respect to Awards to Participants who are subject to Section 16 of the Act. Any person to whom the Committee
delegates its authority pursuant to this Section 3(d) may receive Awards only if such Awards are granted directly by the Administrator without delegation. The Committee may act through subcommittees, including for purposes of perfecting
exemptions under Rule 16b-3, in which case the subcommittee shall be subject to and have the authority under the charter applicable to the Committee and the acts of the subcommittee shall be deemed to be the acts of the Committee hereunder.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 Number of Shares Available for Awards. Subject to adjustment as provided in Section 4.3
herein, the maximum number of Shares available for issuance to Participants under the Plan (the “Share Authorization”) shall be 2,000,000 shares of Class A common stock of the Company, $.01 par value per share and 6,000,000 shares of Class D
common stock of the Company, $.01 par value per share. Shares plus any Shares subject to outstanding awards under the Prior Plan as of the Effective Date that, on or after the Effective Date, cease for any reason to be subject to such awards
(other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and nonforfeitable Shares). All of the Shares available for issuance under this Plan may be Incentive Stock Options.
4.2 Share Usage. Shares covered by an Award shall only be counted as used to the extent they
are actually issued. Any Shares related to Awards which terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee's
permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under the Plan. Moreover, if the Option Price of any Option granted under the Plan or the tax withholding requirements with
respect to any Award granted under the Plan are satisfied by tendering Shares to the Company (by either actual delivery or by attestation) only the number of Shares issued, net of the Shares tendered, if any, will be deemed delivered for
purposes of determining the maximum number of Shares available for delivery under the Plan and any Shares so tendered shall again be available for issuance under the Plan. The Shares available for issuance under the Plan may be authorized and
unissued Shares, treasury Shares or a combination thereof. Substitute Awards shall not alter the Shares available for issuance under the Plan.
4.3 Adjustments in Authorized Shares. In the event of any corporate event or transaction
(including, but not limited to, a change in the Shares of the Company or the capitalization of the Company) such as a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split
up, spin-off, or other distribution of stock or property of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like change in capital structure or distribution (other than normal cash dividends) to stockholders
of the Company, or any similar corporate event or transaction, the Committee, in its sole discretion, in order to prevent dilution or enlargement of Participants' rights under the Plan, shall substitute or adjust, as applicable, the number
and kind of Shares that may be issued under the Plan or under particular forms of Awards, the number and kind of Shares subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards, and other value
determinations applicable to outstanding Awards.
The Committee, in its sole discretion, may also make appropriate adjustments in the terms of any Awards under the Plan to reflect or related to such changes or
distributions and to modify any other terms of outstanding Awards, including modifications of performance goals and changes in the length of Performance Periods. The determination of the Committee as to the foregoing adjustments, if any, shall
be conclusive and binding on Participants under the Plan.
Subject to the provisions of Article 16, without affecting the number of Shares reserved or available hereunder, the Committee may authorize the issuance or assumption of
benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with the rules under Section 422 of the
Code and the Section 409A Rules, where applicable.
ARTICLE 5
ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Individuals eligible to participate in this Plan include all Employees and
Nonemployee Directors.
5.2 Actual Participation. Subject to the provisions of the Plan, the Committee may, from time
to time, select from all eligible individuals, those to whom Awards shall be granted and shall determine, in its sole discretion, the nature of, any and all terms permissible by law, and the amount of each Award. In making this determination,
the Committee may consider any factors it deems relevant, including without limitation, the office or position held by a Participant or the Participant's relationship to the Company, the Participant's degree of responsibility for and
contribution to the growth and success of the Company or any Subsidiary or Affiliate, the Participant's length of service, promotions and potential.
ARTICLE 6.
OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be
granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee, in its sole discretion.
6.2 Evidence of Award. Each Option grant shall be evidenced by an Evidence of Award that
shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which an Option shall become vested and exercisable, and such other provisions as the Committee shall
determine which are not inconsistent with the terms of the Plan.
6.3 Option Price. The Option Price for each grant of an Option under this Plan shall be as
determined by the Committee and shall be specified in the Evidence of Award. The Option Price may not be less than 100% of the Fair Market Value of the Shares on the date of grant; provided, however, that an Option granted outside the United
States to a person who is a non-U.S. taxpayer may be granted with an Option Price less than the Fair Market Value of the underlying Shares on the date of grant if necessary to utilize a locally available tax advantage.
6.4 Duration of Options. Except as otherwise provided in Section 422 of the Code, each
Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant and specify in the Evidence of Award; provided, however, that no Option shall be exercisable later than the seventh (7th)
anniversary date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall in each instance approve and specify in the Evidence of Award, which terms and restrictions need not be the same for each grant or for each Participant. The
Committee may provide in the Evidence of Award for the acceleration of the vesting and exercisability of outstanding Options, in whole or in part, as determined by the Committee in its sole discretion, in the event of a Change in Control. If
the exercise period for an Option, other than its original terms, would expire when the Participant's exercise would violate federal, state, local or foreign law, the Committee shall extend the exercise period until 30 days after the first
date the exercise would no longer violate applicable law.
6.6 Payment. Options granted under this Article 6 shall be exercised by the delivery of a
notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Committee, or by complying with any alternative procedures which may be authorized by the Committee, setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares.
A condition of the issuance of the Shares as to which an Option shall be exercised shall be the payment of the Option Price. The Option Price of any Option shall be
payable to the Company in full either: (a) in cash (including check, bank draft or money order); (b) by delivery of outstanding shares of Common Stock, of the same class for which the Option is to be exercised, with a Fair Market Value on the
date of exercise equal to the aggregate exercise price payable with respect to the Options' exercise; (c) by simultaneous sale through a broker reasonably acceptable to the Committee of Shares acquired on exercise, as permitted under Regulation
T of the Federal Reserve Board or other method of legally permissible cashless exercise; (d) by authorizing the Company to withhold from issuance a number of Shares issuable upon exercise of the Option which, when multiplied by the Fair Market
Value of a share of the relevant class of Shares on the date of exercise is equal to the aggregate exercise price payable with respect to the Option so exercised; (e) by any combination of the foregoing; or (f) in any additional manner the
Committee approves.
Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any
applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares, or upon the Participant's request, Share certificates in an appropriate amount based upon the number of Shares purchased under the
Option(s).
Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars.
6.7 Restrictions on Share Transferability. The Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem advisable and specify in the Evidence of Award, including, without limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, or under any blue sky or state securities laws applicable to such Shares.
6.8 Termination of Employment. Each Participant's Evidence of Award shall set forth the extent
to which the Participant shall have the right to exercise the Option following Termination of the Participant's Employment with the Company, its Affiliates and Subsidiaries, as the case may be. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Evidence of Award entered into with each Participant, need not be uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on the reasons for
termination.
6.9 Transferability of Options. Except as otherwise provided in a Participant's Evidence of
Award or otherwise at any time by the Committee, no Option granted under this Article 6 may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or by
designation of beneficiary or as otherwise required by law including qualified domestic relations order; provided that the Board or Committee may permit further transferability, on a general or a specific basis, and may impose conditions and
limitations on any permitted transferability. Further, except as otherwise provided in a Participant's Evidence of Award or otherwise at any time by the Committee, or unless the Board or Committee decides to permit further transferability,
all Options granted to a Participant under this Article 6 shall be exercisable during his or her lifetime only by such Participant or his or her authorized representative. With respect to those Options, if any, that are permitted to be
transferred to another person, references in the Plan to exercise or payment of the Option Price by the Participant shall be deemed to include, as determined by the Committee, the Participant's permitted transferee.
6.10 Incentive Stock Option Limits. Incentive Stock Options may be granted only to
Participants who are employees of the Company, or of any subsidiary corporation (within the meaning of Section 424 of the Code) of the Company, on the grant date. Any person who is not an Employee of an Incentive Stock Option qualifying
corporation on the grant date of an Option to such person shall receive a Nonqualified Stock Option. The aggregate Fair Market Value (determined as of the grant date of the Incentive Stock Option) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company (or of any parent or subsidiary corporation (within the meaning of Section 424 of the Code) of the Company)) shall
not exceed $100,000 or such other amount as may subsequently be specified by the Code and/or applicable regulations; provided that if such limitation is exceeded, any Options or Shares in excess of such limitation shall be deemed to be
Nonqualified Stock Options. If an Option is treated as an Incentive Stock Option in part and a Nonqualified Stock Option in part by reason of the limitation set forth in this subsection, the Participant may designate which portion of such
Option the Participant is exercising. In the absence of any such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Upon exercise, Shares issued pursuant to such Option shall
be separately identified. Incentive Stock Options shall contain such other provisions as the Committee shall deem advisable but shall in all events be consistent with and contain or be deemed to contain all provisions required in order to
qualify as incentive stock options under Section 422 of the Code. To the extent that Incentive Stock Options are not exercised within the time required under the Code after the Participant's termination of employment with the Company and its
Affiliates, the Incentive Stock Options will automatically convert to Nonqualified Stock Options. The Participant may thereafter exercise the Nonqualified Stock Options for the period provided in the Award or the Plan.
6.11 Dividends. In no event will dividends or dividend equivalents be paid currently with
respect to Options.
ARTICLE 7.
RESERVED
ARTICLE 8.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine. Restricted Stock Units shall represent the
right of a Participant to receive payment upon the lapse of the Period of Restriction.
8.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock and/or
Restricted Stock Unit grant shall be evidenced by an Evidence of Award that shall specify the Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the
Committee shall determine.
8.3 Transferability. Except as provided in this Plan or an Evidence of Award, the Shares of
Restricted Stock and/or Restricted Stock Units granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction established by the Committee and
specified in the Evidence of Award (and in the case of Restricted Stock Units until the date of delivery or other payment), or upon earlier satisfaction of any other conditions, as specified by the Committee, in its sole discretion, and set
forth in the Evidence of Award or otherwise at any time by the Committee. All rights with respect to the Restricted Stock and/or Restricted Stock Units granted to a Participant under the Plan shall be available during his or her lifetime only
to such Participant, except as otherwise provided in an Evidence of Award or at any time by the Committee.
8.4 Other Restrictions. The Committee shall impose such other conditions and/or restrictions
on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted
Stock or each Restricted Stock Unit, restrictions based upon the achievement of specific performance goals, time-based restrictions on vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions
under applicable laws or under the requirements of any stock exchange or market upon which such Shares are listed or traded, or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted
Stock or Restricted Stock Units.
The Committee may provide in the Evidence of Award (or immediately prior to a Change in Control) for immediate vesting of Restricted Stock or Restricted Stock Units, in
whole or in part, in the event of a Change in Control.
In the event that the vesting date occurs on a date which is not a trading day on the principal securities exchange on which the Shares are then traded, the Fair Market
Value on the last prior trading date will be utilized for cost basis.
To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of Restricted Stock in the Company's possession until such
time as all conditions and/or restrictions applicable to such Shares have been satisfied or lapse.
Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each Restricted Stock Award shall become freely transferable by the Participant after
all conditions and restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares, or a combination of cash
and Shares as the Committee, in its sole discretion shall determine.
8.5 Certificate Legend. In addition to any legends placed on certificates pursuant to Section
8.4, each certificate representing Shares of Restricted Stock granted pursuant to the Plan may bear a legend as determined by the Committee in its sole discretion.
8.6 Voting and Dividend Rights. Unless otherwise determined by the Committee and set forth in
a Participant's Evidence of Award, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock granted hereunder may be granted the right to exercise full voting rights with
respect to those Shares during the Period of Restriction. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. In no event will dividends or dividend equivalents be paid currently with
respect to unvested Awards of Restricted Stock or Restricted Stock Units.
8.7 Termination of Employment. To the extent consistent with the Section 409A Rules, each
Evidence of Award shall set forth the extent to which the Participant shall have the right to retain Restricted Stock and/or Restricted Stock Units following the Participant's Termination of Employment with the Company, its Affiliates, and/or
its Subsidiaries, as the case may be. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Evidence of Award entered into with each Participant, need not be uniform among all Shares of
Restricted Stock or Restricted Stock Units issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination.
ARTICLE 9.
PERFORMANCE UNITS/PERFORMANCE SHARES
9.1 Grant of Performance Units/Performance Shares. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance Shares to Participants in such amounts and upon such terms as the Committee shall determine.
9.2 Value of Performance Units/Performance Shares. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine the value and/or number of Performance Units/Performance Shares that will be paid out to the Participant.
The Committee may provide in the Evidence of Award (or immediately prior to a Change in Control) for the immediate vesting of Performance Shares or Performance Units, in
whole or in part, in the event of a Change in Control.
9.3 Earning of Performance Units/Performance Shares. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of Performance Units/Performance Shares shall be entitled to receive payout on the value and number of Performance Units/Performance Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding performance goals have been achieved.
9.4 Form and Timing of Payment of Performance Units/Performance Shares. Payment of earned
Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in the Evidence of Award. Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Units/Performance
Shares in the form of cash or in Shares (or in a combination thereof) equal to the value of the earned Performance Units/Performance Shares at the close of the applicable Performance Period, or as soon as practicable after the end of the
Performance Period. Any Shares may be granted subject to any restrictions deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Evidence of Award
pertaining to the grant of the Award.
9.5 Dividends. In no event will dividends or dividend equivalents be paid currently with
respect to unvested Performance Units or Performance Shares.
9.6 Termination of Employment. To the extent consistent with the Section 409A Rules, each
Evidence of Award shall set forth the extent to which the Participant shall have the right to retain Performance Units and/ or Performance Shares following the Participant's Termination of Employment with the Company, its Affiliates, and/or
its Subsidiaries, as the case may be. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the Evidence of Award entered into with each Participant, need not be uniform among all Awards of
Performance Units or Performance Shares issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination.
9.7 Nontransferability. Except as otherwise provided in a Participant's Evidence of Award or
otherwise at any time by the Committee, Performance Units/Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or designation
of beneficiary or as otherwise required by law. Further, except as otherwise provided in a Participant's Evidence of Award or otherwise at any time by the Committee, a Participant's rights under the Plan shall be exercisable during his or her
lifetime only by such Participant or his or her authorized representative.
ARTICLE 10.
CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS
10.1 Grant of Cash-Based Awards. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such amounts and upon such terms as the Committee may determine.
10.2 Other Stock-Based Awards. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Awards may
involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws
of jurisdictions other than the United States.
The Committee may provide in the Evidence of Award (or immediately prior to a Change in Control) for the immediate vesting of Cash-Based Awards or Other Stock-Based Awards,
in whole or in part.
10.3 Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based Award shall specify a
payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee.
10.4 Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if any, with respect
to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash, Shares or a combination thereof, as the Committee determines.
10.5 Termination of Employment. The Committee shall determine the extent to which the
Participant shall have the right to receive Cash-Based Awards following the Participant's Termination of Employment with the Company, its Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall be determined in the sole
discretion of the Committee, such provisions may be included in an agreement entered into with each Participant, but need not be uniform among all Awards of Cash-Based Awards issued pursuant to the Plan, and may reflect distinctions based on
the reasons for termination.
10.6 Nontransferability. Except as otherwise determined by the Committee, neither Cash-Based
Awards nor Other Stock-Based Awards may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or designation of beneficiary. Further, except as otherwise
provided by the Committee, a Participant's rights under the Plan, if exercisable, shall be exercisable during his or her lifetime only by such Participant or his or her authorized representative. With respect to those Cash-Based Awards or
Other Stock-Based Awards, if any, that are permitted to be transferred to another person, references in the Plan to exercise or payment of such Awards by or to the Participant shall be deemed to include, as determined by the Committee, the
Participant's permitted transferee.
10.7 Dividends. In no event will dividends or dividend equivalents be paid currently with
respect to Other Stock-Based Awards.
ARTICLE 11.
PERFORMANCE MEASURES
The
Committee may from time to time establish and specify performance goals, if any, applicable to any Award. “Performance Measures” may include any of the following business criteria with respect to the Company, any subsidiary or any division or
operating unit: (a) net income; (b) pre-tax income; (c) operating income; (d) cash flow; (e) earnings per share; (f) return on equity; (g) return on invested capital or assets; (h) cost reductions or savings; (i) funds from operations;
(j) appreciation in the fair market value of Company Stock; (k) total shareholder returns; (l) earnings before any one or more of the following items: interest, taxes, depreciation or amortization; (m) market share or ratings gains; and (n)
bank covenant compliance (each as determined in accordance with generally accepted accounting principles or subject to such adjustments as may be specified by the Committee). Performance Measures may be established in terms of objectives that
are related to the individual Participant or that are Company-wide or related to a subsidiary, division, department, region, function or business unit and may be measured on an absolute or cumulative basis or on the basis of percentage of
improvement over time, and may be measured in terms of Company performance (or performance of the applicable Subsidiary, division, department, region, function or business unit) or measured relative to selected reference companies or a market
index.
ARTICLE 12.
BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the
Plan is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Participant in writing with the Company during the Participant's lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.
ARTICLE 13.
DEFERRALS
To the extent permitted by the Section 409A Rules, the Committee may permit or require a Participant to defer such Participant's receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option, the lapse or waiver of restrictions with respect to Restricted Stock or Restricted Stock Units, or the satisfaction of any requirements
or performance goals with respect to Performance Shares, Performance Units, Cash-Based Awards or Other Stock-Based Awards. If any such deferral election is required or permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals, consistent with the Section 409A Rules.
ARTICLE 14.
RIGHTS OF PARTICIPANTS
14.1 Employment. Nothing in the Plan or an Evidence of Award shall interfere with or limit in
any way the right of the Company, its Affiliates, and/or its Subsidiaries, to terminate any Participant's employment or service on the Board at any time or for any reason not prohibited by law, nor confer upon any Participant any right to
continue his or her employment or service for any specified period of time.
Neither an Award nor any benefits arising under this Plan shall constitute an employment contract of any kind with the Company, its Affiliates, and/or its Subsidiaries and,
accordingly, subject to Articles 3 and 16, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates,
and/or its Subsidiaries.
14.2 Participation. No individual shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive a future Award.
14.3 Rights as a Stockholder. Except as otherwise provided herein, a Participant shall have
none of the rights of a stockholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.
ARTICLE 15.
CHANGE IN CONTROL
For purposes of this Plan, a “Change in Control” shall be deemed to have occurred in the event of a transaction or series of related transactions pursuant
to which any Person or group (as such term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of Persons, other than Catherine L. Hughes and/or Alfred C. Liggins, III, (a) acquire, whether by merger,
consolidation or transfer or issuance of capital stock, capital stock of the Company (or any surviving or resulting company) possessing the voting power to elect a majority of the Board of the Company (or such surviving or resulting company)
or (b) acquire all or substantially all of the Company's assets determined on a consolidated basis.
ARTICLE 16.
AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION
16.1 Amendment, Modification, Suspension, and Termination. Subject to Section 16.3 and 16.4,
the Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminate the Plan and any Evidence of Award in whole or in part; provided, however, that (a) without the prior approval of the Company's stockholders,
Options issued under the Plan will not be repriced, replaced, or regranted through cancellation; and (b) no amendment of the Plan shall be made without stockholder approval if stockholder approval is required by law, regulation, or stock
exchange rule.
16.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The
Committee may make adjustments, consistent with Section 162(m) of the Code and the Section 409A Rules, in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4.3 hereof) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. The determination of the Committee as to the foregoing adjustments, if any,
shall be conclusive and binding on Participants under the Plan.
16.3 Awards Previously Granted. Notwithstanding any other provision of the Plan to the
contrary, no termination, amendment, suspension, or modification of the Plan or an Evidence of Award shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant
holding such Award except as required under Section 16.4 or otherwise under the tax laws.
16.4 Compliance with the Section 409A Rules. It is the intention of the Board that the Plan
comply strictly with the Section 409A Rules and the Committee shall exercise its discretion in granting Awards hereunder (and the terms of such grants), accordingly. The Plan and any grant of an Award hereunder may be amended from time to
time as may be necessary or appropriate to comply with the Section 409A Rules.
ARTICLE 17.
WITHHOLDING
17.1 Tax Withholding. The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company, the minimum statutory amount (or, if and when the Company adopts any applicable accounting standard allowing for greater Share withholding, up to such withholding rate that will not cause an
adverse accounting consequence or cost) to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.
17.2 Share Withholding. With respect to withholding required upon the exercise of Options or
any other taxable event arising as a result of an Award granted hereunder, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares
having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction (or, if and when the Company adopts any applicable accounting standard allowing for greater
Share withholding, up to such withholding rate that will not cause an adverse accounting consequence or cost). All such elections shall be irrevocable, made in writing, and signed by the Participant, and shall be subject to any restrictions
or limitations that the Committee, in its sole discretion, deems appropriate. With respect to withholding required upon the lapse of restrictions on Restricted Stock or upon the achievement of performance goals related to Performance Shares,
Participants shall be required to satisfy the withholding requirement by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on
the transaction (or, if and when the Company adopts any applicable accounting standard allowing for greater Share withholding, up to such withholding rate that will not cause an adverse accounting consequence or cost).
17.3 Section 83(b) Election. In any case which a Participant makes an election under Section
83(b) of the Code to include in gross income in the year of the transfer the amount specified in Section 83(b) of the Code, the Participant shall notify the Company of such election within ten (10) days of filing notice of the election with
the Internal Revenue Service, in addition to any filing or notification requirements pursuant to regulations under Section 83(b) of the Code.
17.4 Disqualifying Disposition. If the Option granted to a Participant hereunder is an
Incentive Stock Option, and if the Participant sells or otherwise disposes of any of the Shares acquired pursuant to the Incentive Stock Option on or before the later of (i) the date two years after the grant date, or (ii) the date one year
after the date of exercise, the Participant shall immediately notify the Company of such disposition.
ARTICLE 18.
SUCCESSORS
All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
ARTICLE 19.
GENERAL PROVISIONS
19.1 Forfeiture Events. The Committee may specify in an Evidence of Award that the
Participant's rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award. Such events may include, but shall not be limited to, termination of employment for cause, termination of the Participant's provision of services to the Company, Affiliate, and/ or Subsidiary, violation of
material Company, Affiliate, and/or Subsidiary policies, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or
reputation of the Company, its Affiliates, and/or its Subsidiaries.
19.2 Prohibition Against Option Repricing. Except for reductions of the exercise price
approved by the Company's stockholders, neither the Committee nor the Board shall have the right or authority to make any adjustment or amendment that reduces or would have the effect of reducing the exercise price of a stock option
previously granted under the Plan.
19.3 Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.
19.4 Legend. The certificates for Shares may include any legend, which the Committee deems
appropriate in its sole discretion to reflect any restrictions on transfer of such Shares.
19.5 Severability. In the event any provision of the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. To the extent that any provision of this
Plan would prevent any Option that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision shall be null and void with respect to such Option. Such provision, however, shall remain in effect for other
Options and there shall be no further effect on any provision of this Plan.
19.6 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan
shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
19.7 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of
title for Shares issued under the Plan prior to:
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(a)
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Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
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(b)
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Completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be
necessary or advisable.
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19.8 Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been obtained.
19.9 Uncertificated Shares. To the extent that the Plan provides for issuance of certificates
to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.
19.10 Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to
any investments that the Company, and/or its Subsidiaries, and/or Affiliates may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other person. To the extent that any person acquires a right to receive payments from the
Company, and/or its Subsidiaries, and/or Affiliates under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company, a Subsidiary, or an Affiliate, as the case may be. All payments to be made
hereunder shall be paid from the general funds of the Company, a Subsidiary, or an Affiliate, as the case may be and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts
except as expressly set forth in the Plan. For the avoidance of doubt, this Section is not intended to preclude the establishment by the Company of a grantor trust under Code Section 671. The Plan is not subject to ERISA.
19.11 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.
19.12 Retirement and Welfare Plans. Neither Awards made under the Plan nor Shares or cash paid
pursuant to such Awards will be included as “compensation” for purposes of computing the benefits payable to any Participant under the Company's or any Subsidiary's or Affiliate's retirement plans (both qualified and non-qualified) or welfare
benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a participant's benefit.
19.13 Nonexclusivity of the Plan. The adoption of this Plan shall not be construed as creating
any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.
19.14 No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (i) limit,
impair, or otherwise affect the Company's or a Subsidiary's or an Affiliate's right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve,
liquidate, sell, or transfer all or any part of its business or assets; or, (ii) limit the right or power of the Company or a Subsidiary or an Affiliate to take any action which such entity deems to be necessary or appropriate.
19.15 Governing Law. The Plan and each Evidence of Award shall be governed by the laws of the
State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Evidence of
Award, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware, to resolve any and all issues that may arise out of or relate to the Plan or any related
Evidence of Award.
19.16 No Liability of the Company. The Company and any Subsidiary or Affiliate which is in
existence or hereafter comes into existence shall not be liable to a Participant or any other person as to: (i) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction
or authority deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder; and (ii) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or
settlement of any Award granted hereunder.
19.17 No Representations on Covenants with Respect to Tax Qualification. Although the Company
may endeavor to qualify an Award for favorable tax treatment under the laws of the United States or jurisdictions outside of the United States or to avoid adverse tax treatment, the Company makes no representation to the effect and expressly
disavows any covenant to maintain favorable or avoid unfavorable tax treatment, notwithstanding anything to the contrary in the Plan and the Company will have no liability to a Participant or to any other party if a payment under an Award
that is intended to benefit from favorable tax treatment or avoid adverse tax treatment fails to realize such intention or for any action taken by the Committee with respect to such Award. The Company shall be unconstrained in its corporate
activities and may engage in such activities without regard to the potential negative impact on holders of Awards under the Plan.
19.18 No Obligation to Notify. Neither the Company nor the Committee shall have any duty or
obligation to any holder of any Award to advise such holder as to the time or manner of exercising such Award. Furthermore, neither the Company nor the Committee shall have any duty or obligation to warn or otherwise advise such holder of a
pending termination or expiration of an Award or a possible period in which the Award may not be exercised. Neither the Company nor the Committee has any duty or obligation to minimize the tax consequences of an Award to the Option holder.
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