RBR-TVBR First
With the company’s emergence from Chapter 11 reorganization, the top managers of Citadel Broadcasting have signed new contracts with the company. CEO Farid Suleman has a five-year deal and other top execs have three-year contracts – all with automatic one-year extensions if neither they nor the company give notice that their employment is ending.
Here, from an SEC filing by the company, are summaries of the contract terms for Suleman, Randy Taylor, Jacquelyn Orr, Judith Ellis and Patricia Stratford:
“Farid Suleman
Mr. Suleman, the Company’s Chief Executive Officer, is a party to an employment agreement (the “Suleman Employment Agreement”) with the Company that has a five year term and is subject to automatic one year extensions unless either party provides prior written notice of his or its intention not to extend the term of employment under the agreement. Under this agreement, Mr. Suleman is entitled to receive an annual base salary equal to that in effect on June 3, 2010 (i.e., $1,250,000), and an annual performance-based bonus. His target bonus for 2010 is $2,000,000. Mr. Suleman is also entitled to participate in the Company’s health and welfare benefit plans, including a non-qualified retirement benefit plan (to be established). Within 30 days following the Effective Date, Mr. Suleman is also entitled to a grant of stock appreciation rights which generally vest in three ratable annual installments commencing on the first anniversary of the grant date.
In the event Mr. Suleman’s employment is terminated without “Cause” or for “Good Reason” (each as defined in the Suleman Employment Agreement), he is entitled to (i) all accrued but unpaid amounts due and owing to him (the “Accrued Benefits”), (ii) a lump sum payment of a pro rata portion of the annual bonus that he would have received for the year of his termination of employment (based on the number of days he was employed during the calendar year in which such termination of employment occurs) (a “Pro Rata Annual Bonus”), (iii) a lump sum payment of three times (x) his annual base salary and (y) target bonus for the year in which such termination of employment occurs, (iv) continued participation in the Company’s health and welfare benefits for himself and his covered dependents for 24 months and (v) accelerated vesting of all outstanding equity awards (which shall remain outstanding and exercisable for the shorter of two years following the date of termination and the expiration of the original term of the award(s)). All such payments, other than the Accrued Benefits, are subject to Mr. Suleman’s execution of a general release of claims in favor of the Company.
Mr. Suleman is also entitled to a gross-up for any additional taxes imposed by reason of Section 4999 of the Code, on any “parachute payments” received by Mr. Suleman (as defined by Code Section 280G).
Mr. Suleman is subject to customary restrictive covenants, including non-disclosure of confidential information, non-solicitation of employees, and noncompetition. Generally, Mr. Suleman is bound by these covenants only during the term of his employment (non-disclosure of confidential information continues in perpetuity); provided, however, the Company may, at its option, elect to pay Mr. Suleman continued base salary for an additional 12 months following his termination by the Company for Cause or by Mr. Suleman without Good Reason, in which case these covenants will continue to apply during such 12-month period.
Others
Each of Mr. Taylor (the Company’s Chief Financial Officer), Ms. Orr (the Company’s General Counsel), Ms. Ellis (the Company’s Chief Operating Officer) and Ms. Stratford (the Company’s Senior Vice President Finance and Administration) is also party to an employment agreement with the Company (the “Other Employment Agreements”), each of which is substantially similar to each other.
The Other Employment Agreements each have a three year term, subject to automatic one-year extensions unless either party provides prior written notice of his, her, or its intention not to extend the term of employment under the agreement. Under the Other Employment Agreements, these executives are entitled to receive an annual base salary equal to that in effect on June 3, 2010 ( i.e., Mr. Taylor – $400,000; Ms. Orr – $350,000; Ms. Ellis – $500,000; Ms. Stratford – $200,000), and an annual performance-based bonus. The target bonuses for 2010 are as follows – Mr. Taylor – $200,000; Ms. Orr – $200,000; Ms. Ellis – $200,000; Ms. Stratford – $125,000). Each of these executives is also entitled to participate in the Company’s health and welfare benefit plans (excluding the non-qualified retirement benefit plan mentioned above, which is solely for Mr. Suleman’s benefit). Within 30 days following the Effective Date, each of these executives is also entitled to a grant of stock appreciation rights which generally vest in three ratable annual installments commencing on the first anniversary of the grant date.
In the event of a termination of employment without “Cause” or for “Good Reason” (each as defined in the Other Employment Agreements), the applicable executive is entitled to (i) the Accrued Benefits, (ii) a Pro Rata Annual Bonus, (iii) a lump sum payment of two times (x) his/her annual base salary and (y) target bonus for the year in which such termination of employment occurs, (iv) continued participation in the Company’s health and welfare benefits for himself/herself and his/her covered dependents for 24 months and (v) accelerated vesting of all outstanding equity awards (which shall remain outstanding and exercisable for the shorter of two years following the date of termination and the expiration of the original term of the award(s)). In addition, each of these executives may terminate his/her employment (i) within 90 days following Mr. Suleman’s ceasing to serve as the Company’s Chief Executive Officer by reason of his termination by the Company for Cause or his resignation with Good Reason, and upon such termination would be entitled to a lump sum payment equal to one times his/her annual base salary and a pro rata target bonus (based on the number of days he/she was employed during the calendar year in which such termination of employment occurs) (“Pro Rata Target Bonus”) and (ii) within 90 days following Mr. Suleman’s ceasing to serve as the Company’s chief executive officer by reason of his voluntary resignation from the Company without Good Reason, and upon such termination would be entitled to a lump sum payment equal to 1/2 times his/her annual base salary and a lump sum payment equal to the Pro Rata Target Bonus. All such payments, other than the Accrued Benefits, are subject to the applicable executive’s execution of a general release of claims in favor of the Company.
Each of Mr. Taylor and Ms. Orr is also entitled to a gross-up for any additional taxes imposed by reason of Section 4999 of the Code, on any “parachute payments” received by him or her (as defined by Code Section 280G).
Each of these executives is also subject to customary restrictive covenants, including non-disclosure of confidential information, non-solicitation of employees, and noncompetition. Generally, these executives are bound by these covenants only during the term of his/her employment (non-disclosure of confidential information continues in perpetuity), though the Company may, at its option, elect to pay the applicable executive continued base salary for an additional 12 months following his/her termination by the Company for Cause or by the applicable executive without Good Reason, in which case these covenants will continue to apply during such 12-month period.”
Citadel also has a new board of directors. In addition to Suleman, the board consists of William M. Campbell, III; Greg Mrva; Paul N. Saleh; Jonathan Mandel; John L. Sander; and Doreen Wright.
RBR-TVBR observation: Still no word on where and when the company’s newly minted shares of stock will trade. Stay tuned.
