UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 28, 2015 (April 27, 2015)
CUMULUS MEDIA INC.
(Exact name of registrant as specified in its charter)
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Delaware
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000-24525
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36-4159663
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS employer
Identification No.)
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3280 Peachtree Road, N.W., Suite 2300, Atlanta GA
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30305
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code (404) 949-0700
n/a
(Former name or
former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreement.
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On April 27, 2015, Cumulus Media Inc.
(“Cumulus” or the “Company”) entered into a First Amendment to the Stockholders’ Agreement (the “Amendment”) originally entered into on September 16, 2011 (the “Stockholders’ Agreement”).
Currently, BA Capital Company, L.P. and Banc of America Capital Investors SBIC, L.P. (together, the “BofA Stockholders”), Lewis W. Dickey, Jr., John W. Dickey and certain members of their family, and Crestview Radio Investors, LLC
(“Crestview”) are the stockholders of the Company with remaining rights or obligations under the Stockholders’ Agreement.
Pursuant to the Amendment, Crestview’s right to have one of its designees to the Board of Directors of the Company (the
“Board”) appointed as the lead director of the Board has been converted into a right to have one such designee appointed as Chairman of the Board. In connection therewith, Jeffrey A. Marcus, the Board’s current lead director, has been
appointed non-executive Chairman of the Board.
The Amendment also provides that each stockholder party thereto that maintains a right to
designate one or more nominees for election to the Board may transfer such rights to an affiliate of such stockholder or to another transferee of such stockholder’s shares of common stock of the Company (the “Common Stock”), provided
that such transferee will only retain such right for as long as it holds at least the minimum number of shares of Common Stock that the transferring stockholder would be required to hold in order to retain such right, and only for so long as the
transferring stockholder would retain such right, under the Stockholders’ Agreement.
The Amendment also extends the standstill
period by one year, to September 16, 2019, pursuant to which any stockholder party thereto which, together with its controlled affiliates, beneficially owns 15% or more of the Common Stock (a “Significant Stockholder”), may not,
directly or indirectly, acquire, agree to acquire or make a proposal to acquire beneficial ownership of any equity securities of the Company not owned by them on September 16, 2011, subject to certain exceptions. Further, the Amendment provides
that, subject to certain exceptions, no Significant Stockholder will transfer its Common Stock or warrants to acquire such stock to a person or group that is, to the Significant Stockholder’s knowledge, a specified competitor of the Company or
that, following such transfer, would beneficently own greater than 25% of the Common Stock, an increase from 10% prior to the Amendment;
provided, however
, that any such transferee that would own greater than 10% of the Common Stock must
agree to be bound by the terms and conditions of the Stockholders’ Agreement, as so amended. In addition, pursuant to the Amendment and during the term of the Stockholders’ Agreement, Crestview is restricted from acquiring, other than
pursuant to the exercise of certain warrants currently held by it, shares of Common Stock if the acquisition thereof would cause Crestview to beneficially own more than 75.0 million shares of Common Stock.
The foregoing description of the Amendment is qualified in its entirety by reference to the full text thereof, which is attached hereto as
Exhibit 10.1
and is incorporated herein by reference.
Item 5.02 — Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Also on April 28, 2015, the Company and Lewis W.
Dickey, Jr., the Company’s President and Chief Executive Officer, entered into an amendment to his employment agreement, originally dated November 29, 2011 (the “Employment Agreement Amendment”). Pursuant to the Employment
Agreement Amendment, Mr. Dickey has agreed to extend the term of his original employment agreement until December 31, 2018. Consistent with the terms and provisions of the Amendment, the Employment Agreement Amendment provides that
Mr. Dickey will retain the titles of President and Chief Executive Officer of the Company.
The Employment Agreement Amendment also
provides that, in the event Mr. Dickey is terminated without Cause or resigns for Good Reason (each as defined in his Employment Agreement), he will be entitled to receive a payment equal to three times his then-current salary and target bonus
award, and 100% of his unvested equity awards as of the date of termination will vest. In addition, in the event Mr. Dickey’s employment is terminated for Cause, 100% of his stock options will cease to vest and be exercisable upon the date
of his termination. In the event he resigns Without Good Reason (as defined in the Amendment), 100% of his options will continue to vest and be exercisable for 90 days following such resignation and, upon a separation of service from the Company
other than for Cause or a Resignation Without Good Reason, 100% of Mr. Dickey’s stock options will continue to vest and be exercisable for the full term of such options.
The foregoing description of the Employment Agreement Amendment is qualified in its entirety by
reference to the full text thereof, which is attached hereto as
Exhibit 10.2
and incorporated herein by reference.
Item 8.01 — Other
Events.
On April 28, 2015, the Company issued a press release announcing, among other things: (i) the entry into the Amendment;
(ii) the appointment of Jeffrey A. Marcus as non-executive Chairman of the Board; (iii) the entry into the Employment Agreement Amendment; and (iv) the nomination of Mary G. Berner as a director.
A copy of the press release is attached hereto as
Exhibit 99.1
and is incorporated herein by reference.
Item 9.01 — Financial Statements and Exhibits.
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Number
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Exhibit
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10.1
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First Amendment to Stockholders’ Agreement, dated April 27, 2015
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10.2
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First Amendment to Employment Agreement, dated April 28, 2015, between Lewis W. Dickey, Jr. and Cumulus Media Inc.
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99.1
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Press release
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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CUMULUS MEDIA INC.
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By:
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/s/ J.P. Hannan
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Name:
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J.P. Hannan
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Title:
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Senior Vice President, Treasurer and Chief Financial Officer
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Date: April 28, 2015
Exhibit Index
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Number
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Exhibit
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10.1
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First Amendment to Stockholders’ Agreement, dated April 27, 2015
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10.2
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First Amendment to Employment Agreement, dated April 28, 2015, between Lewis W. Dickey, Jr. and Cumulus Media Inc.
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99.1
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Press release
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Exhibit 10.1
FIRST AMENDMENT TO STOCKHOLDERS’ AGREEMENT
This First Amendment to Stockholders’ Agreement (this “
First Amendment
”) is entered as of April 27, 2015, among
CUMULUS MEDIA INC., a Delaware corporation (the “
Company
”); and CRESTVIEW RADIO INVESTORS, LLC (“
Crestview Stockholder
”).
RECITALS
WHEREAS, the
parties hereto, along with certain other stockholders of the Company, are parties to that certain Stockholders’ Agreement dated as of September 16, 2011 (the “
Stockholders’ Agreement
”);
WHEREAS, the Company has confirmed that Crestview Stockholder holds the number of shares of Common Stock of the Company necessary to approve
and effect, together with the approval of the Company, the amendments provided for herein to the Stockholders’ Agreement, and Crestview Stockholder and the Company desire to modify certain terms of the Stockholders’ Agreement in accordance
with the terms hereof;
WHEREAS, this First Amendment, once executed by the Company and Crestview Stockholder shall be incorporated into
the Stockholders’ Agreement and shall have the same force and effect as if it were part of the original Stockholders’ Agreement; and
WHEREAS, capitalized terms used but not defined in this First Amendment have the respective meanings set forth in the Stockholders’
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth
herein, the parties agree upon the amendments to the Stockholders’ Agreement set for below:
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1.
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The final paragraph of Section 2.1(b) is deleted and replaced in its entirety with:
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“The rights of the Stockholders to designate nominees for election to the Board set forth in this Section 2.1(b) are
personal to each Stockholder and may not be exercised by any Transferee, except such rights may be exercised by the applicable Transferee (if and to the extent assigned to such Transferee by the transferring Stockholder) in the event (x) a
Stockholder no longer holds any Common Stock but its Affiliates continue to hold Common Stock transferred by such Stockholder to such Affiliates (whether directly or by Transfers through other Affiliates of such Stockholder), and such rights have
not been terminated pursuant to Section 2.1(e), or (y) a Transferee and its Affiliates acquires by Transfer from a Stockholder (whether directly or by Transfers through other Affiliates of such Stockholder) in a Transfer not prohibited
under Section 3.5 a number of shares of Common Stock in excess of those specifically indicated in Section 2.1(e) in respect of the transferring Stockholder necessary for such Stockholder to maintain such right. The provisions of
Section 2.1(e) will continue to apply to any Transferee described in this Section 2.1(b).”
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2.
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Section 2.1(c) is deleted and replaced in its entirety with:
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“(c)
Chairman
. Jeffrey Marcus has been appointed by the Directors of the Company to serve as the Chairman of the Board (who shall not be an officer of the Company), effective as of the date of the First Amendment to this Agreement. For so long as
Crestview Stockholder is the largest stockholder of the Company, Crestview Stockholder will have the right to have one of its designees who is nominated and elected to the Board appointed by the Directors to serve as the Chairman of the Board. In
the event that a vacancy is created at any time by the death, disability, resignation or removal of the Person serving as Chairman of the Board, the Stockholders shall use their reasonable best efforts to cause the Directors to approve any such
other designee of Crestview Stockholder who is nominated and elected to the Board to serve as the Chairman of the Board. Any such designee must qualify as an Independent Director. This right of Crestview Stockholder to have one of its designees who
is nominated and elected to the Board appointed by the Directors to serve as Chairman of the Board is personal to Crestview Stockholder and may not be exercised by any Transferee, except in the event Crestview Stockholder no longer holds any Common
Stock but its Affiliates continue to hold Common Stock transferred by Crestview Stockholder to such Affiliates (whether directly or by Transfers through other Affiliates of such Stockholder), and such right of Crestview Stockholder to designate at
least one nominee for election to the Board has not been terminated pursuant to Section 2.1(e), then this right of Crestview Stockholder may be exercised by such Affiliates of Crestview Stockholder to which such Common Stock was transferred.
Further, this right of Crestview Stockholder to have one of its designees who is nominated and elected to the Board appointed by the Directors to serve as Chairman of the Board shall terminate when the rights of Crestview Stockholder to designate
any nominee for election to the Board have been terminated pursuant to Section 2.1(e).”
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3.
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In Section 2.2, “lead director” is deleted and replaced with “Chairman”.
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4.
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In Section 3.2(a), “Prior to the seven (7) year anniversary of the Closing” is deleted and replaced with “Prior to the eight (8) year anniversary of the Closing,”.
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5.
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Section 3.2(b) is deleted and replaced in its entirety with:
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“(b)
Notwithstanding anything in
Section 3.2(a)
to the contrary, Crestview Stockholder will be permitted to (i) exercise the Crestview Class A Warrants and (ii) directly or indirectly, acquire, agree to acquire or make a
proposal to acquire (or publicly announce or otherwise disclose an intention to propose to acquire) beneficial ownership of a number of shares that would not cause Crestview Stockholder to beneficially own more than 75,000,000 shares of Common Stock
(in addition to the shares underlying the Crestview Class A Warrants), as such number may be proportionately adjusted for stock splits, reverse stock splits and the like after the date of this Agreement.”
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6.
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In Section 3.5, the phrase “ten percent (10%)” is deleted and replaced with “twenty-five percent (25%)”, and there is added to the end of such Section the following:
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“Prior to the consummation of a Transfer by a Stockholder that is not an Excluded Transfer, as a condition thereto, the
applicable Transferee shall agree in writing to be bound by the terms of this Agreement (if not already bound hereby) to the same extent as the Transferring Stockholder is bound hereunder, and the applicable Transferee shall be entitled to the
benefits of the terms of this Agreement to the same extent as the Transferring Stockholder is entitled hereunder (including, as applicable, any rights assigned by the Transferring Stockholder to the applicable Transferee in accordance with
Section 2.1(b)), and shall become a Stockholder (and, if applicable, Significant Stockholder) hereunder, prior to giving effect to such Transfer, if and only if, immediately following the consummation of such Transfer to such proposed
Transferee, such Person would have (together with its Affiliates and all members of any Group that includes such Person) beneficial ownership of ten percent (10%) or more of the outstanding shares of Common Stock.”
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7.
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In Section 4.5, “lead director” is deleted, and replaced with “Chairman of the Board”.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed effective
as of the date set forth in the first paragraph hereof.
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CUMULUS MEDIA INC.
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By:
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/s/ Richard S. Denning
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Name:
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Richard S. Denning
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Title:
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Senior Vice President
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CRESTVIEW RADIO INVESTORS, LLC
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By:
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/s/ Jeffrey A. Marcus
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Name:
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Jeffrey A. Marcus
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Title:
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Managing Director
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Exhibit 10.2
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement (“First Amendment”), is made by and between Lewis W. Dickey, Jr. (“Employee”)
and Cumulus Media Inc. (“Company”) on the 28th day of April, 2015 (the “Amendment Effective Date”).
WHEREAS
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Employee and Company are parties to that certain Employment Agreement dated November 29, 2011 (“Agreement”);
WHEREAS
, the Parties wish to extend and modify the terms of the Agreement in accordance with the terms hereof; and
WHEREAS,
this First Amendment, once executed by the Parties, shall be incorporated into the Agreement and shall have the same force and
effect as if it were part of the original Agreement between the Parties.
NOW THEREFORE,
the Parties in consideration of the mutual
promises set forth herein, hereby agree as follows:
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1.
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The first sentence of Section 2 of the Agreement is deleted in its entirety and the following is inserted in lieu thereof:
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“The Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date and shall
continue until December 31, 2018 (the “Initial Term”).”
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2.
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Section 3(a) of the Agreement is deleted in its entirety and the following is inserted in lieu thereof:
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“During the Term, the Executive shall, pursuant to the terms of this Agreement, serve as the Chief Executive Officer and President of
the Company, and shall report directly to the Board of Directors of the Company (the “Board”).”
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3.
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The reference to Chairman in Section 3(b) of the Agreement is hereby deleted.
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4.
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Section 6(c)(i), clause (A) of the Agreement is deleted in its entirety and replaced with the following:
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“(A) three (3) (the “
Severance Multiple
”) and”.
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5.
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Section 6(c)(iii) of the Agreement is deleted in its entirety and replaced with the following:
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“100% of any unvested Equity Awards shall become immediately and fully vested.”
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6.
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In connection with and conditional upon the effectiveness of this First Amendment, the provisions of Section 8 of each Nonqualified Stock Option Agreement under which Employee holds options exercisable for shares
of Class A Common Stock of the Company pursuant to the Company’s 2011 Equity Incentive Plan shall be amended to delete clauses (a) - (e) in their entirety and replace with the following:
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“(a)
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the date of Optionee’s Termination for Cause;
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(b)
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ninety (90) calendar days following Optionee’s Resignation Without Good Reason; or
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(c)
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ten (10) years from the Date of Grant.”
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Further, in connection with and
conditional upon effectiveness of this First Amendment, such Section 8 of each such Nonqualified Stock Option Agreement is amended to add thereto :
“For purposes of this Agreement, “Resignation Without Good Reason” shall mean the termination of the Optionee’s employment
with the Company or any Subsidiary by resignation by the Optionee without “Good Reason”, as that term is defined in that certain Employment Agreement by and between the Company and the Optionee, dated as of November 29, 2011, as
amended.”
All capitalized terms used herein, unless given specific definitions in this First Amendment shall have the definition
ascribed to such terms in the Agreement.
Except as expressly amended hereby, the Agreement shall remain in full force and effect in
accordance with its terms.
This First Amendment may be executed in any number of counterparts, each of which when taken together shall
constitute one and the same original instrument.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed
this First Amendment the day and year indicated herein.
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COMPANY
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EMPLOYEE
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Cumulus Media Inc.
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Lewis W. Dickey, Jr.
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By:
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/s/ Richard S. Denning
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/s/ Lewis W. Dickey, Jr.
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Name:
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Richard S. Denning
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Title:
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Senior Vice President
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Exhibit 99.1
Cumulus Announces Multi-Year Contract Extension for CEO & President Lew Dickey
Robert H. Sheridan III to Retire from Cumulus Board in May
Media Industry Veteran, Mary G. Berner, Nominated to the Board
Lead Director Jeff Marcus Named Non-Executive Chairman
ATLANTA, April 28, 2015
— Cumulus Media Inc. (NASDAQ: CMLS) today announced that the Company has entered into a multi-year extension of
co-founder Lew Dickey’s Employment Agreement, Under the terms of the extension, Mr. Dickey will continue to serve as President and Chief Executive Officer, and a member of the Board of Directors, through 2018. He will continue in his role
directing the Company’s strategic development, and will be responsible for day-to-day operational oversight of Cumulus’ broadcasting stations, networks and strategic investments. “Our Board is grateful that Lew Dickey, who has built
Cumulus into a leading national media business, has renewed his commitment to lead the company into the future. I look forward to continuing to collaborate with Lew to build value for our shareholders”, said Board member Jeff Marcus.
Cumulus also announced that long-time director Robert H. (“Trey”) Sheridan, III, of Ridgemont Equity Partners, will retire when his term ends at the
2015 annual meeting of stockholders, and that the Board has nominated Mary G. Berner to stand for election to fill the vacancy created on the Board by Mr. Sheridan’s retirement. Ms. Berner is the current President and Chief Executive
Officer of MPA – The Association of Magazine Media (“MPA”), the industry association for multi-platform magazine media companies. Prior to running MPA, Ms. Berner led some of the most storied media brands, including Glamour, TV
Guide, W, Women’s Wear Daily, Details, Brides, The Family Handyman and Every Day with Rachael Ray. She brings to the Board deep media experience, operational expertise and cross-platform perspectives. “We are fortunate to be adding
Mary Berner to our Board, where her insights and experience will be valuable as we continue to position the company for long-term success in the changing media landscape,” Dickey said.
In light of the additional operational responsibilities assumed by Lew Dickey in November, 2014, the Company announced that veteran media executive Jeffrey
Marcus, currently the Company’s Lead Director, has been appointed as non-executive Chairman of the Board of Directors. Mr. Marcus is a partner with Crestview Partners, the largest stockholder of Cumulus, where he leads Crestview’s
media investment strategy. He has been a member of the Board of Directors of Cumulus, and its Lead Director, since Crestview’s investment in Cumulus in September 2011.
ABOUT CUMULUS MEDIA
Cumulus Media Inc. (CMLS) combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands in order to deliver
premium choices for listeners, provide substantial reach for advertisers and create opportunities for shareholders. As the largest pure-play radio broadcaster in the United States, Cumulus provides exclusive content that is fully distributed through
approximately 460 owned-and-operated stations in 90 U.S. media markets (including eight of the top 10), approximately 8,500 broadcast radio affiliates and numerous digital channels. Cumulus is well-positioned in the widening digital audio space
through a significant stake in the Rdio digital music service, featuring over 30 million songs on-demand in addition to custom playlists and exclusive curated channels. Cumulus is also the leading provider of country music and lifestyle content
through its NASH brand, which serves country fans through radio programming, NASH Country Weekly magazine, concerts, licensed products and television/video. For more information, visit www.cumulus.com.
CONTACT
Davidson Goldin
david@goldin.com
212 319 3451 x640