Emmis Communications will convert all outstanding shares of preferred stock into Class A common stock.
That’s because NASDAQ notified the company in August it no longer complies with the requirement to maintain a minimum market value of publicly held shares. The company had until Feb. 17 to come into compliance; that didn’t happen, so now NASDAQ has told Emmis the “EMMSP” stock will be delisted and Emmis won’t appeal. Trading of EMMSP will be suspended Feb. 29 and NASDAQ will file a form with the SEC to delist the stock.
The ratio will be 2.80 shares of Class A common stock for each share of preferred stock as of the fifth business day after any delisting. The conversion ratio stems from an initial conversion price of $17.857 per share of preferred stock and is subject to adjustment, says Emmis in a filing with the Securities and Exchange Commission. Once the mandatory conversion is completed, the preferred stock will cease to be outstanding.
Trading of Emmis common stock, “EMMS,” is not affected by the conversion.
Separately, Emmis tells the SEC the company has signed a new three-year employment contract to retain Gregory Loewen as president of the Publishing Division, president/CEO Digonex Technologies and Chief Strategy Officer, effective March 1. Loewen’s previously-agreed to annual base salary is $435,000 for the first year and is subject to a 5% reduction. He receives annual increases in subsequent years equal to the average percentage merit increase of our other Emmis corporate employees. Loewen’s annual incentive compensation target for each year is 60% of his base compensation, with the actual amount awarded, if any, to be determined by the Compensation Committee. Emmis has the right to pay any annual incentive compensation in cash or shares of its Class A common stock.
On or about March 1, Loewen will receive an option to acquire 150,000 shares of Class A common stock, and will subsequently also receive an award of 100,000 restricted shares of Class A common stock. The option and restricted stock are scheduled to vest upon when the contract is complete. Loewen receives a $1,000 per month car allowance.