Document:

EX-10.2

Exhibit 10.2

 

 

CUMULUS MEDIA INC.

 

WARRANT AGREEMENT

 

Dated
As Of June 29, 2009

Warrants To Purchase 1,250,000

Shares Of Class A Common Stock

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	1.	 	ISSUANCE OF WARRANTS.	 	2
	2.	 	FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.	 	2
	 	 	2.1	 	Form of Warrant Certificates.
	 	2
	 	 	2.2	 	Execution of Warrant Certificates; Registration Books
	 	2
	 	 	2.3	 	Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Lost or Stolen Warrant Certificates
	 	3
	3.	 	EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE	 	4
	 	 	3.1	 	Exercise of Warrants
	 	4
	 	 	3.2	 	Issuance of Common Stock
	 	5
	 	 	3.3	 	Unexercised Warrants
	 	5
	 	 	3.4	 	Cancellation and Destruction of Warrant Certificates
	 	6
	 	 	3.5	 	Expiration
	 	6
	 	 	3.6	 	Fractional Shares
	 	6
	4.	 	AGREEMENTS OF THE COMPANY	 	6
	 	 	4.1	 	Reservation of Common Stock
	 	6
	 	 	4.2	 	Common Stock To Be Duly Authorized and Issued, Fully Paid
and Nonassessable etc.
	 	6
	 	 	4.3	 	Transfer Taxes
	 	7
	 	 	4.4	 	Common Stock Record Date
	 	7
	 	 	4.5	 	Rights in Respect of Common Stock
	 	7
	 	 	4.6	 	Right of Action
	 	8
	 	 	4.7	 	Form D
	 	8
	5.	 	ANTI-DILUTION ADJUSTMENTS	 	8
	 	 	5.1	 	Mechanical Adjustments
	 	8
	 	 	5.2	 	Stock Dividends, Subdivisions and Combinations
	 	8
	 	 	5.3	 	Dividends and Distributions
	 	9
	 	 	5.4	 	Consolidation; Merger; Sale; Reclassification
	 	9
	 	 	5.5	 	Miscellaneous
	 	9
	 	 	5.6	 	Other Securities
	 	10
	 	 	5.7	 	Additional Agreement of the Company
	 	10
	 	 	5.8	 	Information Concerning Anti-Dilution Adjustments
	 	10

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	 	 	 	 	 	 	Page
	6.	 	REPRESENTATIONS AND WARRANTIES	 	11
	 	 	6.1	 	Company Representations and Warranties
	 	11
	 	 	6.2	 	Representations and Warranties of the Dickey Family
	 	12
	 	 	6.3	 	Representations and Warranties of the Purchasers
	 	12
	7.	 	TAG-ALONG RIGHTS	 	13
	8.	 	REGISTRATION RIGHTS	 	15
	 	 	8.1	 	Shelf Registration
	 	15
	 	 	8.2	 	Registration Procedures
	 	15
	 	 	8.3	 	Indemnity and Contribution
	 	17
	 	 	8.4	 	Rule 144 Reporting
	 	19
	9.	 	INTERPRETATION OF THIS AGREEMENT.	 	19
	 	 	9.1	 	Certain Defined Terms
	 	19
	 	 	9.2	 	Section Heading and Table of Contents and Construction
	 	23
	 	 	9.3	 	Directly or Indirectly
	 	24
	 	 	9.4	 	Governing Law
	 	24
	10.	 	MISCELLANEOUS	 	24
	 	 	10.1	 	Amendment and Waiver
	 	25
	 	 	10.2	 	Entire Agreement
	 	25
	 	 	10.3	 	Successors and Assigns
	 	25
	 	 	10.4	 	Notices
	 	25
	 	 	10.5	 	Severability
	 	26
	 	 	10.6	 	Execution in Counterpart
	 	26
	 	 	10.7	 	Waiver of Jury Trial; Consent to Jurisdiction, Etc.
	 	26

	 	 	 	 	 
	Exhibit A

	 	—
	 	Form of Joinder Agreement
	 
	 	 	 	 
	Exhibit B

	 	—
	 	Warrant Allocation
	 
	 	 	 	 
	Attachment A

	 	—
	 	Form of Warrant Certificate
	 
	 	 	 	 
	Schedule 6.2(a)

	 	—
	 	Dickey Family Shares

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CUMULUS MEDIA INC.

Warrant Agreement

 

Warrants for Class A Common Stock

     This
WARRANT AGREEMENT, dated as of June 29, 2009, is made among CUMULUS MEDIA INC., a
corporation incorporated under the laws of the State of Delaware (together with its successors and
assigns, the “Company"), each of the Consenting Lenders (as defined below) that have signed a
joinder agreement in the form attached hereto as Exhibit A agreeing to be a party to this Agreement
(and together with each of their successors and assigns, individually a “Purchaser” and together
the “Purchasers") and certain of the shareholders of the Company listed on the signature page
hereto (the “Dickey Family"). Capitalized terms shall have the meaning specified in Section 9.1
hereof.

RECITALS

     WHEREAS, simultaneously with the execution and delivery of this Agreement, the Company has
entered into Amendment No. 3 (the “Third Amendment"), to the Credit Agreement, dated as of June 7,
2006 (as amended, supplemented or otherwise modified prior to the date hereof, the “Credit
Agreement"), among the Company, the several banks and other financial institutions parties thereto
(the “Lenders"), and Bank of America, N.A., a national banking organization organized and existing
under the laws of the United States as administrative agent for the Lenders thereunder;

     WHEREAS, certain of the Lenders under the Credit Agreement have consented to the Third
Amendment (such consenting lenders, the “Consenting Lenders");

     WHEREAS, it is a condition precedent to entering into, or otherwise consenting to, the Third
Amendment by the Consenting Lenders that the Company issue to the Consenting Lenders warrants
exercisable into an aggregate of One Million Two Hundred Fifty Thousand (1,250,000) shares of Class
A Common Stock, which warrants will be allocated ratably to the Consenting Lenders based on
Revolving Commitments (as defined in the Credit Agreement, and after giving effect to the Third
Amendment) and Term Loans (as defined in the Credit Agreement, and after giving effect to the Third
Amendment) of the Consenting Lenders, as such allocation is more specifically set forth on
Exhibit B of this Agreement; and

     WHEREAS, the parties desire to set forth in this Agreement the terms and provisions of the
Warrants and the conditions to the issuance and sale of the Warrants to the Purchasers;

AGREEMENTS

     NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein,
the parties to this Agreement hereby agree as follows:

 

 

1. ISSUANCE OF WARRANTS.

     At the Closing and in connection with the execution of the Third Amendment, the Company hereby
agrees to issue and sell to each Purchaser, and each Purchaser agrees to purchase from the Company,
for a purchase price of $1.00 and other good and valuable consideration, all of which is deemed to
have been received by the Company upon execution and delivery of the Third Amendment, warrants to
purchase that number of shares of Class A Common Stock set forth next to such Purchaser’s name on
Exhibit B hereto for an initial exercise price equal to the Initial Exercise Price per
share (together with any warrants issued in substitution or replacement therefor, the “Warrants").
The closing of the transactions contemplated hereby (the “Closing”) shall take place simultaneously
with the execution of the Amendment at such place as the parties may agree. At the Closing, the
Company will deliver to each Purchaser Warrant Certificates evidencing the Warrants purchased by
such Purchaser.

2. FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.

2.1 Form of Warrant Certificates.

     The Warrant Certificates shall be in the forms set forth in Attachment A. The Warrant
Certificates may have such letters, numbers or other marks of identification or designation as may
be required to comply with any law or with any rule or regulation of any governmental authority,
stock exchange or self-regulatory organization made pursuant thereto. Each Warrant Certificate
shall be dated the date of issuance thereof by the Company, either upon initial issuance or upon
transfer or exchange. Each Warrant Certificate shall represent the right to purchase the number of
shares of Class A Common Stock set forth in such Warrant Certificate at a price per share of Class
A Common Stock equal to the Exercise Price; provided, that the number of shares of Class A Common
Stock issuable upon exercise of the Warrants and the Exercise Price thereof shall be subject to
adjustment as provided herein.

2.2 Execution of Warrant Certificates; Registration Books.

     (a) Execution of Warrant Certificates. The Warrant Certificates shall be executed on
behalf of the Company by an officer of the Company authorized by the Board of Directors.
In case the officer of the Company who shall have signed any Warrant Certificate shall
cease to be such an officer of the Company before issuance and delivery by the Company of
such Warrant Certificate, such Warrant Certificate nevertheless may be issued and delivered
with the same force and effect as though the individual who signed such Warrant Certificate
had not ceased to be such an officer of the Company, and any Warrant Certificate may be
signed on behalf of the Company by any individual who, at the actual date of the execution
of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Agreement any such individual
was not such an officer.

     (b) Registration Books. The Company will keep or cause to be kept at its office,
maintained at the address of the Company referred to in Section 10.5 hereof or at
such other office of the Company in the United States of America of which the Company shall
have given notice to each holder of Warrant Certificates, books for

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registration and transfer of the Warrant Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Warrant Certificates,
the registration number and date of each of the Warrant Certificates and the Denomination
thereof.

2.3 Transfer, Split Up, Combination and Exchange of Warrant Certificates; Lost or Stolen
Warrant Certificates.

     (a) Transfer, Split Up, etc.

     (i) Transfer. Subject to compliance with the Securities Act and any
applicable state securities laws, any Warrant Certificate, with or without other
Warrant Certificates, may be transferred to any Person for a Warrant Certificate or
Warrant Certificates in an aggregate like Denomination as the Warrant Certificate or
Warrant Certificates surrendered then entitled such registered holder to purchase.
Any registered holder desiring to transfer any Warrant Certificate shall make such
request in writing delivered to the Company, which request shall include the
identity of the transferee and the aggregate number of Warrants to be transferred,
and shall surrender the Warrant Certificate or Warrant Certificates to be
transferred at the office of the Company referred to in Section 2.2 hereof,
whereupon the Company shall deliver promptly to such transferee a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested, which
Warrant Certificate or Warrant Certificates shall evidence, collectively, the same
aggregate number of Warrants as the Warrant Certificate or Warrant Certificates so
surrendered for transfer.

     (ii) Split Up, Combination, Exchange, etc. Any Warrant Certificate,
with or without other Warrant Certificates, may be split up, combined or exchanged
for another Warrant Certificate or Warrant Certificates, in an aggregate like
Denomination as the Warrant Certificate or Warrant Certificates surrendered then
entitle such registered holder to purchase. Any registered holder desiring to split
up, combine or exchange any Warrant Certificate shall make such request in writing
delivered to the Company, and shall surrender the Warrant Certificate or Warrant
Certificates to be split up, combined or exchanged at the office of the Company
referred to in Section 2.2 hereof, whereupon the Company shall deliver
promptly to such registered holder a Warrant Certificate or Warrant Certificates, as
the case may be, as so requested, which Warrant Certificate or Warrant Certificates
shall evidence, collectively, the same aggregate Denomination as the Warrant
Certificate or Warrant Certificates so surrendered for split-up, combination or
exchange.

     (b) Loss, Theft, etc. Upon receipt by the Company of evidence reasonably satisfactory
to it of the ownership of, and the loss, theft, destruction or mutilation of, any Warrant
Certificate (which evidence shall be, in the case of a Purchaser, notice from such
Purchaser of such ownership (or of ownership by such Purchaser’s nominee) and such loss,
theft, destruction or mutilation), and:

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     (i) in the case of loss, theft or destruction, an affidavit of loss, together
with indemnity reasonably satisfactory to the Company; provided, however, that if
the holder of such Warrant Certificate is a Purchaser, or a nominee of such
Purchaser, such Purchaser’s own unsecured agreement of indemnity together with its
affidavit of loss, shall be deemed to be satisfactory; or

     (ii) in the case of mutilation, upon surrender and cancellation thereof;

the Company at its own expense will execute and deliver, in lieu thereof, a new Warrant
Certificate, dated the date of such lost, stolen, destroyed or mutilated Warrant Certificate
and of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate
and evidencing the same Denomination as the Warrant Certificate so lost, stolen, destroyed
or mutilated.

3. EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.

3.1 Exercise of Warrants.

     (a) Manner of Exercise. At any time and from time to time prior to the Expiration
Date, the holder of any Warrant Certificate may exercise the Warrant evidenced thereby, in
whole or in any part, by surrender of such Warrant Certificate, with an election to
purchase (a form of which is attached to each Warrant Certificate) attached thereto duly
executed, to the Company at its office referred to in Section 2.2 hereof, together
with payment of the Exercise Price for each share of Common Stock with respect to which the
Warrants are then being exercised. Such Exercise Price shall be payable either:

     (i) in cash pursuant to Section 3.1(b) hereof;

     (ii) by cashless exercise by delivery of Warrant Certificates pursuant to
Section 3.1(c) hereof; or

     (iii) or any combination of the above.

     (b) Payment in Cash. Upon exercise of any Warrants, the holder of a Warrant
Certificate may pay the Exercise Price in cash or by certified or official bank check
payable to the order of the Company or by wire transfer of immediately available funds to
the account of the Company.

     (c) Cashless Exercise. In the event that any holder of Warrant Certificates delivers
such Warrant Certificates to the Company and notifies the Company in writing that such
holder intends to exercise all, or any portion of, the Warrants represented by such Warrant
Certificates to satisfy its obligation to pay the Exercise Price in respect thereof by
virtue of the provisions of this Section 3.1(c), such holder shall become entitled
to receive, instead of the number of shares of Class A Common Stock such holder would have
received had the Exercise Price been paid pursuant to Section 3.1(b), a number of
shares of Class A Common Stock in respect of the exercise of such Warrants equal to the
product of:

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     (i) the number of shares of Class A Common Stock issuable upon such exercise of
such Warrant Certificate (or, if only a portion of such Warrant Certificate is being
exercised, issuable upon the exercise of such portion); multiplied by

     (ii) the quotient of:

     (A) the difference of:

     (I) the Market Price per share of Common Stock at the
time of such exercise; minus

     (II) the Exercise Price per share of Class A Common
Stock at the time of such exercise;

     divided by

     (B) the Market Price per share of Common Stock at the time of such
exercise.

     (d) Fractional Shares. The Company may, in accordance with Section 3.6, pay
the exercising holder cash in lieu of issuing a fractional share in connection with an
exercise of Warrants; provided that if it does not issue a fractional share in such
circumstances, it will make such cash payment.

3.2 Issuance of Common Stock.

     Upon timely receipt of a Warrant Certificate, with the form of election to purchase duly
executed, accompanied by payment of the Exercise Price for each of the shares of the Common Stock
to be purchased in the manner provided in Section 3.1(a) hereof and an amount equal to any
applicable transfer tax (if not payable by the Company as provided in Section 4.3 hereof),
the Company shall thereupon promptly cause certificates representing the number of whole shares of
Class A Common Stock then being purchased to be delivered to or upon the order of the registered
holder of such Warrant Certificate, registered in such name or names as may be designated by such
holder, and, promptly after such receipt deliver the cash, if any, to be paid in lieu of fractional
shares pursuant to Section 3.6 hereof to or upon the order of the registered holder of such
Warrant Certificate.

3.3 Unexercised Warrants.

     In case the registered holder of any Warrant Certificate shall exercise less than all the
Warrants evidenced thereby, a new Warrant Certificate evidencing Warrants equal in number to the
number of Warrants remaining unexercised shall be issued by the Company to the registered holder of
such Warrant Certificate or to its duly authorized assigns.

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     3.4 Cancellation and Destruction of Warrant Certificates.

     All Warrant Certificates surrendered to the Company for the purpose of exercise, exchange,
substitution or transfer shall be cancelled by it, and no Warrant Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company
shall cancel and retire any other Warrant Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof.

     3.5 Expiration.

     All Warrants that have not been exercised or purchased in accordance with the provisions of
this Agreement shall expire and all rights of holders of such Warrants shall terminate and cease on
the Expiration Date.

     3.6 Fractional Shares.

     The Company shall not be required to issue fractional shares of Class A Common Stock upon the
exercise of any Warrant. If fractional shares are not issued upon the exercise of any Warrant,
there shall be paid to the holder thereof, in lieu of any fractional share of Class A Common Stock
resulting therefrom, an amount of cash equal to the product of:

     (a) the fractional amount of such share of Class A Common Stock; times

     (b) the Market Price, as determined on the trading day immediately prior to the date
of exercise of such Warrant.

4. AGREEMENTS OF THE COMPANY.

     4.1 Reservation of Common Stock.

     The Company covenants and agrees that it will at all times cause to be reserved and kept
available out of its authorized and unissued shares of Class A Common Stock such number of shares
of Class A Common Stock as will be sufficient to permit the exercise in full of all Warrants issued
hereunder into Class A Common Stock and the exercise of all other Rights exercisable or convertible
into Class A Common Stock.

     4.2 Common Stock To Be Duly Authorized and Issued, Fully Paid and Nonassessable etc.

     The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all shares of Class A Common Stock delivered upon the exercise of any Warrant and the
payment of the Exercise Price pursuant to Section 3.1 hereof (in each case, at the time of
delivery of the certificates representing such shares of Class A Common Stock), shall be duly and
validly authorized and issued and fully paid and nonassessable, free of any preemptive rights in
favor of any Person in respect of such issuance and free of any Lien created by, or arising out of
actions of, the Company, any Subsidiary or any Affiliate of the Company (other than such rights and
Liens, if any, arising out of the provisions of this Agreement).

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     4.3 Transfer Taxes.

     The Company covenants and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the initial issuance or delivery
of:

     (a) each Warrant Certificate;

     (b) each Warrant Certificate issued in exchange for any other Warrant Certificate
pursuant to the terms of this Agreement; and

     (c) each share of Class A Common Stock issued upon the exercise of any Warrant.

     The Company shall not, however, be required to:

     (i) pay any transfer tax that may be payable in respect of the transfer or
delivery of Warrant Certificates in a name other than that of the registered holder
of the Warrant Certificate surrendered for exercise, conversion, transfer or
exchange (any such tax being payable by the holder of such certificate at the time
of surrender); or

     (ii) issue or deliver any such certificates referred to in the foregoing clause
(i) until any such tax referred to in the foregoing clause (i) shall have been paid.

     4.4 Common Stock Record Date.

     Each Person in whose name any certificate for shares of Class A Common Stock is issued upon
the exercise of Warrants shall for all purposes be deemed to have become the holder of record of
the Class A Common Stock represented thereby on, and such certificates (if any) shall be dated, the
date upon which the Warrant Certificate evidencing such Warrants was duly surrendered with an
election to purchase attached thereto duly executed and payment of the aggregate Exercise Price
(and any applicable transfer taxes, if payable by such Person) was made.

     4.5 Rights in Respect of Common Stock.

     Except as otherwise set forth herein, prior to the exercise of the Warrants evidenced thereby,
the holder of a Warrant Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to the Class A Common Stock into which the Warrants shall be exercisable,
including, without limitation, the right to vote in respect of any matter upon which the holders of
Common Stock may vote, the right to receive any distributions of cash or property (except as
provided in Section 5) and, except as expressly set forth herein, the right to receive any
notice of any proceedings of the Company. Prior to the exercise of the Warrants evidenced thereby,
the holders of the Warrant Certificates shall not have as such any obligation in respect of any
assessment or any other obligation or liability as a stockholder of the Company, whether such
obligations or liabilities are asserted by the Company or by creditors of the Company.

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     4.6 Right of Action.

     All rights of action in respect of the Warrants are vested in the respective registered
holders of the Warrant Certificates, and any registered holder of any Warrant Certificate, without
the consent of the holder of any other Warrant Certificate, may, on its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, its right to exercise the Warrants evidenced by such
Warrant Certificate in the manner provided in such Warrant Certificate and in this Agreement.

     4.7 Form D.

     The Company covenants and agrees to file with the Securities and Exchange Commission (the
“Commission”) a complete Form D in respect of the grant of the Warrants, to the extent each
Purchaser furnishes the Company with all information requested by the Company necessary for such
purpose.

5. ANTI-DILUTION ADJUSTMENTS.

     5.1 Mechanical Adjustments.

     The number of shares of Class A Common Stock purchasable upon the exercise of each Warrant,
and the Exercise Price, shall be subject to adjustment as set forth in this Section 5.

     5.2 Stock Dividends, Subdivisions and Combinations.

     In the event that the Company shall, on or after the date hereof:

     (a) pay a dividend in shares of Additional Common Stock or make a distribution in shares of Additional Common Stock;

     (b) reclassify by subdivision of its outstanding shares of Common Stock into a greater
number of shares; or

     (c) reclassify by combination of its outstanding shares of Common Stock into a smaller
number of shares;

then, and in each such case, the number of shares of Class A Common Stock for which a Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted to equal the
number of shares of Class A Common Stock for which such Warrant is exercisable immediately before
the occurrence of any such event multiplied by a fraction (x) the numerator of which is the total
number of outstanding shares of Common Stock immediately after the occurrence of such event and (y)
the denominator of which is the total number of outstanding shares of Common Stock immediately
before the occurrence of such event.

Any adjustment made pursuant to this Section 5.2 shall become effective on the effective
date of such event.

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     5.3 Dividends and Distributions.

     In the event that the Company shall make any dividend or distribution of any kind in respect
of its Common Stock (other than as described in Section 5.2), no adjustment to the Exercise
Price or the number of shares issuable upon exercise of a Warrant shall be made.

     5.4 Consolidation; Merger; Sale; Reclassification.

     In the event that there shall be:

     (a) any consolidation of the Company with, or merger of the Company with or into,
another Person (other than a merger in which the Company is the surviving corporation and
that does not result in any reclassification or change of shares of Common Stock
outstanding immediately prior to such merger);

     (b) any sale or conveyance to another Person of the property, business or assets of
the Company substantially as an entirety; or

     (c) any reclassification of the Common Stock of the Company that results in the
issuance of other Securities of the Company;

then, in each such case, lawful provision shall be made as a part of the terms of such transaction
so that the holders of Warrants shall thereafter have the right to purchase the number and kind of
shares of stock, other Securities, cash, property and Rights receivable upon such consolidation,
merger, sale, conveyance or reclassification by a holder of such number of shares of Class A Common
Stock as the holder of a Warrant would have had the right to acquire upon the exercise of such
Warrant immediately prior to such consolidation, merger, sale, conveyance or reclassification, at
the Exercise Price then in effect, and, without further action on the part of any Person, each
Warrant will thereafter represent the right to receive, upon payment of the Exercise Price, such
shares of stock, other Securities, cash, property and Rights as are so receivable. The Company
agrees that, as a condition of proceeding with such consolidation, merger or sale, it shall cause
the Person surviving such merger or consolidation, the Person or Persons holding the shares of the
Class A Common Stock immediately after such transaction or the Person to whom such sale or
conveyance is made, as the case may be, at the time of such consolidation, merger or sale, to
expressly assume the due and punctual observance and performance of each and every provision of
this Agreement and all obligations and liabilities of the Company hereunder (subject to the
foregoing sentence), in each case, pursuant to such agreements and instruments as are reasonably
acceptable to the Required Warrantholders.

     5.5 Miscellaneous.

     (a) Adjustments shall be made pursuant to this Section 5 successively whenever
any of the events referred to in Section 5.2 or Section 5.4 shall occur.

     (b) If any Warrant shall be exercised subsequent to the record date for any of the
events referred to in Section 5.2 or in Section 5.4 but prior to the
effective date thereof, appropriate adjustments shall be made immediately after such
effective date so that the holder of such Warrant on such record date shall have received,
in the

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aggregate, the kind and number of shares of Common Stock or other Securities or
property that it would have owned or been entitled to receive on such effective date had
such Warrant been exercised prior to such record date.

     (c) Shares of Common Stock owned by or held for the account of the Company or any
Subsidiary shall not, for purposes of the adjustments set forth in this Section 5,
be deemed outstanding.

     5.6 Other Securities.

     In the event that at any time, as a result of an adjustment made pursuant to this Section
5, each holder of Warrants shall become entitled to purchase any Securities of the Company
other than shares of Common Stock, the number or amount of such other Securities so purchasable and
the Exercise Price of such Securities shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions contained in Section 5.2
and in Section 5.4 hereof, and all other relevant provisions of this Section 5 that
are applicable to shares of Common Stock shall be applicable to such other Securities.

     5.7 Additional Agreement of the Company.

     The Company covenants and agrees that it shall not, by amendment to its charter documents as
in effect on the date hereof, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, liquidation, issuance or sale of Securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, or which would have the effect of circumventing or avoiding the
provisions of this Section 5, but shall at all times in good faith assist in the carrying
out of all the provisions of this Section 5 and in the taking of all such actions as may be
necessary or appropriate in order to protect the rights of the holders of the Warrant Certificates
against dilution or other impairment.

     5.8 Information Concerning Anti-Dilution Adjustments.

     (a) Notice of Adjustment. Whenever the number of shares of Class A Common Stock
issuable upon the exercise of Warrants is adjusted or the Exercise Price in respect thereof
is adjusted, as provided in this Agreement, the Company shall promptly give to each holder
of Warrants notice of such adjustment or adjustments and shall promptly deliver to each
holder of Warrants a certificate of the Chief Financial Officer of the Company setting
forth:

     (i) the number of shares of Class A Common Stock issuable upon the exercise of
each Warrant and the Exercise Price of such shares after such adjustment;

     (ii) a brief statement of the facts requiring such adjustment; and

     (iii) the computation by which such adjustment was made.

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     (b) Confirmation by Accountants. At the request of any holder of Warrants, a
certificate of the Chief Financial Officer of the Company pursuant to Section 5.8(a)
shall be confirmed by a certificate from the independent certified public accountants
of the Company.

6. REPRESENTATIONS AND WARRANTIES

     6.1 Company Representations and Warranties.

     The Company represents and warrants to each Purchaser as follows:

     (a) Capitalization and Ownership of the Company. The authorized capital stock of the
Company consists of (i) 20,262,000 shares of Preferred Stock, par value $0.01 per share, 0
shares of which are issued and outstanding as of the date hereof, (ii) 200,000,000 shares
of Class A common stock, par value $0.01 per share (“Class A Common Stock”), 35,260,532
shares of which are issued and outstanding as of the date hereof, (iii) 20,000,000 shares
of Class B common stock, par value $0.01 per share (“Class B Common Stock”), 5,809,191
shares of which are issued and outstanding as of the date hereof and (iv) 30,000,000 shares
of Class C common stock, par value $0.01 per share (“Class C Common Stock), 644,871 shares
of which are issued and outstanding as of the date hereof. Each share of Class C Common
Stock is convertible into exactly one share of Class A Common Stock. As of the date
hereof, prior to the grant of the Warrants, 43,701,180 shares of Common Stock are
outstanding on a Fully Diluted Basis.

     (b) Authorization and Issuance of Warrants. The issuance of the Warrants has been
duly authorized and, upon delivery to each Purchaser of the Warrant Certificates therefor
in accordance with the terms hereof, the Warrants will have been validly issued and fully
paid and nonassessable, free and clear of all Liens and the issuance thereof will not give
rise to any preemptive rights.

     (c) Securities Laws. The offer, issuance, sale and delivery of the Warrants, as
provided in this Agreement, are and will be exempt from the registration requirements of
the Securities Act and all applicable state securities laws.

     (d) Authority. The Company has the right, power, authority and capacity to execute
and deliver this Agreement and the Warrants and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by the Company and constitutes the valid and
binding agreement of the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors’ rights generally and except that the availability
of the remedy of specific performance or other equitable relief is subject to the
discretion of the court before which any proceeding therefor may be brought.

     (e) Absence of Restrictions and Conflicts. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated

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hereby do not or will not (as the case may be), with the passing of time or the giving
of notice or both, violate or conflict with, constitute a breach of or default under,
result in the loss of any benefit under, permit the acceleration of any obligation under or
create in any party the right to terminate, modify or cancel, (a) any term or provision of
the charter documents of the Company or any of its Subsidiaries, (b) any contract,
agreement, permit, franchise, license or other instrument applicable to the Company or any
of its Subsidiaries, (c) any judgment, decree or order of any court or Governmental Entity
or agency to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any of their respective properties are bound or (d)
any Law or arbitration award applicable to the Company or any of its Subsidiaries.

     6.2 Representations and Warranties of the Dickey Family.

     Each Person included in the Dickey Family, severally, represents and warrants to each
Purchaser as follows:

     (a) Ownership. Schedule 6.2(a) of this Agreement sets forth a true and
accurate description of the number of shares of Class A Common Stock, Class B Common Stock,
Class C Common Stock and any other share of capital stock of the Company or Right directly
or indirectly Beneficially Owned by such Person, any Affiliate of such Person, any family
member in the household of such Person or any trust of which such Person is a beneficiary
or trustee, together with the name of the record holder of such Security. The aggregate
number of shares of Common Stock on a Fully Diluted Basis represented on Schedule
6.2(a) is 14,947,948 (the “Base Dickey Share Amount”).

     (b) Authority. Such Person has the right, power, authority and capacity to execute
and deliver this Agreement and to perform his/her obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly executed and delivered
by such Person and constitutes the valid and binding agreement of such Person enforceable
against such Person in accordance with its respective terms.

     (c) Absence of Restrictions and Conflicts. The execution, delivery and performance of
this Agreement, the consummation of the transactions contemplated hereby and the
fulfillment of and compliance with the terms and conditions hereof do not or shall not, as
the case may be, with the passing of time or the giving of notice or both, violate or
conflict with (a) any contract, agreement, permit, franchise, license or other instrument
applicable to such Person, (b) any judgment, decree or order of any Governmental Entity to
which such Person is a party or by which such Person or any of his/her respective
properties are bound or (c) any Law or arbitration award applicable to such Person.

     6.3 Representations and Warranties of the Purchasers.

     Each Purchaser severally and not jointly represents and warrants to the Company as follows:

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     (a) Purchase Entirely for Own Account. The Warrant will be acquired for investment
for such Purchaser’s own account, not as nominee or agent, and not with a view to the
resale, distribution or offering of any part thereof, and such Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing the same;
provided, however, that the foregoing representation will not be construed
as imposing any limitation on such Purchaser’s right to transfer any of the Warrants or the
Warrant Shares that is not otherwise set forth in this Agreement or required under
applicable law.

     (b) Accredited Investor; Investment Experience. Such Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits
and risks of the prospective investment in the securities, it has obtained sufficient
information from the Company as such Purchaser deems appropriate to evaluate an investment
in the Warrants, it is able to bear the economic consequences thereof, and it qualifies as
an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated
under the Securities Act. Such Purchaser is experienced in evaluating and investing in
securities of publicly traded companies and acknowledges that it can bear the economic risk
of its investment.

     (c) Reliance by Company. Each Purchaser understands that the Company will be relying
on the representations made in this Section 6.3. Each Purchaser further acknowledges and
agrees that the Company has made no representations or warranties other than as
specifically set forth in this Agreement. Each Purchaser understands that the Warrants are
being offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and such Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of such
Purchaser set forth herein in order to determine the availability of such exemptions and
the eligibility of such Purchaser to acquire the Warrants.

7. TAG-ALONG RIGHTS.

     (a) Right. If at any time any Person included in the Dickey Family (the “Selling
Person”) shall determine to enter into a transaction or a series of transactions with any
third party or the Company (any such third party or the Company, as the case may be, a
“Prospective Purchaser”) involving the sale, transfer or other disposition by such Person
or Persons of an aggregate number of shares of Class A Common Stock of the Company on a
Fully Diluted Basis (including the number of such shares as have been so transferred by the
Dickey Family prior to the date of such transaction, but after the Closing) that is greater
than fifty percent (50%) of the Base Dickey Share Amount, such Person or Persons shall
first give written notice (the “Offer Notice”) to all of the holders of Warrant Securities,
specifying the name and address of the Prospective Purchaser and the number of shares, if
any, of Class A Common Stock of the Company proposed to be sold, transferred or otherwise
disposed of (the “Subject Shares”) and setting forth in reasonable detail the price,
structure and other terms and conditions of the proposed transaction. The Offer Notice
shall represent the offer (the “Offer”) from the Selling Person to each holder of Warrant
Securities to include in the proposed

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transfer described in the Offer Notice, in substitution for an equal number of Subject
Shares, a number of Warrant Shares equal to a pro rata portion of Warrant
Shares then owned by such holder and on the same terms and conditions (including price and
form of consideration) as are being offered by the Selling Person in the proposed
transaction. The holder’s pro rata portion shall be determined by
multiplying the number of Warrant Shares actually owned by such holder or represented by a
Warrant owned by such holder by a fraction, the numerator of which is the lesser of (a) the
Base Dickey Share Amount and (b) the number of shares of Common Stock proposed to be sold
by the members of the Dickey Family (including such shares as have been so transferred by
the Dickey Family prior to the date of such transaction, but after the Closing and
including for this purpose any shares of Common Stock issuable upon exercise of any options
or conversion of any preferred stock, or any other Right), and the denominator of which
shall be the Base Dickey Share Amount. Each holder shall have thirty (30) days from the
date of receipt of the Offer Notice to give written notice of its intention to accept or
reject the Offer. Failure to respond within such thirty-day period shall be deemed notice
of rejection. In the event that any holder(s) of the Warrant Securities gives written
notice to the Selling Person of its or their intention to accept such Offer, then such
written notice, taken in conjunction with the Offer Notice, shall constitute a valid and
legally binding agreement, and each of the holders so giving such written notice shall be
entitled to sell to the Prospective Purchaser, contemporaneously with the consummation of
the proposed transaction, on the same terms and conditions as are being offered by the
Prospective Purchaser to the Selling Person. In the event the proposed sale, transfer or
other disposition is not consummated within ninety (90) days after receipt by the holders
of an Offer Notice, such transaction or transactions shall again be subject to the
provisions of this Section 7(a). In the event that in connection with any Offer
Notice the Prospective Purchaser is unwilling to include in the entire number of shares of
Class A Common Stock it is willing to purchase the entire number of Warrant Shares of Class
A Common Stock that the holders have elected to include in such transaction pursuant to
this Section 7(a), then the Selling Person shall simultaneously purchase from the
Warrant Securities holders that have elected to sell in such transaction pursuant to this
Section 7(a) the number of offered Warrant Shares that such Warrant Securities
holders have elected to include in such transaction on the same terms and conditions as set
forth in the Offer Notice. The Company shall cooperate in any reasonable way necessary to
enable such holders electing such option to exercise their Warrants for the described
number of shares of Class A Common Stock so as to participate in the proposed transfer on
the basis specified in the Offer Notice.

     (b) Permitted Transferees. The rights described in Section 7(a) shall not
apply to (i) any transfer of capital stock of the Company by a Peron included in the Dickey
Family to another Person included in the Dickey Family; (ii) any pledge of shares of
capital stock of the Company made pursuant to a bona fide loan transaction
that creates a mere security interest; (iii) any transfer of shares of Class A Common Stock
by gift or bequest or through inheritance to, or for the benefit of, any ancestor,
descendent or the spouse of a Person included in the Dickey Family; (iv) any transfer of shares of Class A Common Stock by a Person included in the Dickey Family to a trust for the
benefit of any person described in clause (iii) (persons to whom or which the transfers
described in this paragraph are made being referred to herein as “Permitted

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Transferees”); provided, however, that each Permitted Transferee shall be required as
a condition of such transfer to agree in writing that he, she, or it will receive and hold
the shares of capital stock or interest therein subject to the provisions of this
Section 7.

8. REGISTRATION RIGHTS

     8.1 Shelf Registration.

     (a) If at any time after six months following the date of this Agreement, (i) the
holders of Warrant Securities do not have available to them the full benefits of Rule 144
under the Securities Act (or its successor rule) or any other rule or regulation of the
Commission that may at any time permit such holder to sell Warrant Shares to the public
without registration and (ii) the Company receives a request from the Required
Warrantholders that the Company file a registration statement on Form S-3 with respect to
the Warrant Shares, then the Company shall use its best efforts to file a registration
statement on a Form S-3 or other available form with the Commission, within twenty (20)
days after the date such request is given, to effect a registration covering all Warrant
Shares subject to this Agreement (the “Registrable Securities”) and any related
qualification or compliance under applicable state securities or Blue Sky laws with respect
to the Registrable Securities, which shall be a resale “shelf” offering pursuant to Section
415 under the Securities Act, and to cause such registration statement to be declared
effective by the Commission as promptly as practicable, but in no event later than sixty
(60) days of the date such request is given by the Required Warrantholders. The Company
shall notify each Purchaser by facsimile or e-mail as promptly as practicable, and in any
event, within twenty-four (24) hours, after the registration statement is declared
effective and shall simultaneously provide such Purchaser with copies of any related
prospectus to be used in connection with the sale or other disposition of the securities
covered thereby.

     (b) The Company shall bear all expenses in connection with the procedures of this
Section 8 and the registration of the resale of the Warrant Shares pursuant to such
registration statement.

     (c) The Company shall provide to each Purchaser and its representatives, if requested,
the opportunity to conduct a reasonable inquiry of the Company’s financial and other
records during normal business hours and make available its officers, directors and
employees for questions regarding information which such Purchaser may reasonably request
in order to fulfill any due diligence obligation on its part.

     8.2 Registration Procedures.

     In connection with registration of Company securities under this Section 8, the
Company shall use its reasonable best efforts to effect the registration and the sale of such
securities in accordance with the intended method of disposition thereof as quickly as practicable,
and, in connection with any such request:

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     (a) The Company shall as expeditiously as possible prepare and file with the
Commission a shelf registration statement on Form S-3, and use its best efforts to cause
such filed registration statement to become and remain effective until the disposition of
the Registrable Securities by the holders thereof.

     (b) Prior to filing a registration statement or prospectus or any amendment or
supplement thereto, the Company shall, if requested, furnish to each Purchaser copies of
such registration statement as proposed to be filed, and thereafter the Company shall
furnish to each Purchaser such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act and such
other documents as such Purchaser may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Purchaser. Each Purchaser shall
have the right to request that the Company modify any information contained in such
registration statement, amendment and supplement thereto pertaining to such Purchaser, and
the Company shall use its reasonable best efforts to comply with such request, provided,
however, that the Company shall not have any obligation to so modify any information if the
Company reasonably expects that so doing would cause the prospectus to contain an untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.

     (c) After the filing of the registration statement, the Company shall (i) cause the
related prospectus to be supplemented by any required prospectus supplement, and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with
the provisions of the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during the applicable period in
accordance with the intended methods of disposition by each Purchaser set forth in such
registration statement or supplement to such prospectus and (iii) promptly notify each
Purchaser of any stop order issued or threatened by the Commission or any state securities
commission and take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered.

     (d) The Company shall use its best efforts (i) to register or qualify the securities
covered by such registration statement under such other securities or “blue sky” laws of
such jurisdictions in the United States as each Purchaser reasonably (in light of the
Purchaser’s intended plan of distribution) requests and (ii) cause such securities to be
registered with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable each Purchaser to
consummate the disposition of its securities, provided that the Company shall not be
required to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 8.02(d), (B) subject itself
to taxation in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.

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     (e) The Company shall immediately notify each Purchaser, at any time when a prospectus
relating to such registration statement is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of such securities,
such prospectus will not contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein
not misleading and promptly prepare and make available to each Purchaser and file with the
Commission any such supplement or amendment. The Company shall use its reasonable best
efforts to cause such supplement or amendment to be declared effective and such
registration statement and the related prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter.

     (f) The Company shall furnish to each Purchaser, on the date such Warrant Shares are
delivered to the underwriters for sale pursuant to such registration or, if such Warrant
Shares are not being sold through underwriters, on the date that the applicable
registration statement becomes effective, (i) an opinion or opinions of counsel to the
Company and (ii) a comfort letter or comfort letters from the Company’s independent public
accountants, each in customary form and covering such matters of the kind customarily
covered by opinions or comfort letters, as the case may be, as such Purchaser or the
managing underwriter therefor reasonably requests.

     (g) The Company shall otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission.

     (h) The Company may require each Purchaser to promptly furnish in writing to the
Company such information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as may be
legally required in connection with such registration.

     (i) The Company shall use its best efforts to list all Registrable Securities covered
by such registration statement on any securities exchange or quotation system on which the
Common Stock is then listed or traded.

     8.3 Indemnity and Contribution.

     (a) Indemnification by the Company. The Company agrees to indemnify and hold harmless
each Purchaser to the extent beneficially owning any Registrable Securities covered by a
registration statement, its officers, directors, employees, partners, Affiliates and
agents, and each Person, if any, who controls such Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by or
relating to any untrue statement or alleged untrue statement of a material fact contained
in any registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by or relating to any omission or alleged
omission to state therein a material

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fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such Damages are caused by or related to any such untrue
statement or omission or alleged untrue statement or omission so made based upon
information furnished in writing to the Company by such Purchaser or on such Purchaser’s
behalf expressly for use therein.

     (b) Indemnification by Buyer. Each Purchaser, to the extent holding Registrable
Securities included in any registration statement, agrees, severally and not jointly, to
indemnify and hold harmless the Company, its officers, directors and agents and each
Person, if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Purchaser, but only with respect to information
furnished in writing by such Purchaser or on such Purchaser’s behalf expressly for use in
any registration statement or prospectus relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary prospectus. For purposes of
clarification, a Purchaser shall not be liable for any indemnification under this
Section 8.3(b) for any information provided by another Purchaser. Notwithstanding
the foregoing, each Purchaser’s liability under this Section 8.3(b) shall be
limited to the net proceeds realized by such Purchaser in the sale of Registrable
Securities of the Purchaser to which such Damages relate.

     (c) Contribution. If the indemnification provided for in this Section 8.3 is
unavailable to the indemnified parties in respect of any Damages, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Damages in such
proportion as is appropriate to reflect the relative fault of the indemnifying party and
the indemnified parties in connection with the actions which resulted in such Damages, as
well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by
indemnifying party or indemnified parties, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.

     The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 8.3(c) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of
the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8.3(c), no Purchaser shall be required to
contribute any amount in excess of the net proceeds realized by such Purchaser in the sale of
Registrable Securities of the Purchaser to which such Damages relate. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

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     8.4 Rule 144 Reporting

     With a view to making available to each Purchaser the benefits of Rule 144 under the
Securities Act (or its successor rule) and any other rule or regulation of the Commission that may
at any time permit such Purchaser to sell Warrant Shares to the public without registration, the
Company covenants and agrees to: (i) use its commercially reasonable efforts to make and keep
public information available, as those terms are understood and defined in Rule 144, until the
earlier of (A) the one year anniversary of the Closing or (B) such date as all of the Purchasers’
Warrant Shares shall have been resold; and (ii) file with the Commission in a timely manner all
reports and other documents required of the Company under the Exchange Act; and (iii) furnish to
each Purchaser upon request, as long as such Purchaser owns any Warrant Shares, (A) a written
statement by the Company that it has complied with the reporting requirements of the Exchange Act,
(B) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q
and (C) such other information as may be reasonably requested in order to avail such Purchaser of
any rule or regulation of the Commission that permits the selling of any such Warrant Shares
without registration.

9. INTERPRETATION OF THIS AGREEMENT.

     9.1 Certain Defined Terms.

     For the purpose of this Agreement, the following terms shall have the meanings set forth below
or set forth in the Section hereof following such term:

     Additional Common Stock — means Common Stock, including treasury shares, issued after the
date hereof, except Class A Common Stock issued upon the exercise of any one or more Warrants.

     Affiliate — means, with respect to any Person, (a) a director, officer or stockholder of such
Person, (b) a spouse, parent, sibling or descendant of such Person (or spouse, parent, sibling or
descendant of any director or executive officer of such Person) and (c) any other Person that,
directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is
under common Control with, such Person, at such time; provided, however, that neither the Purchaser
nor any Purchaser Affiliate shall be deemed to be an “Affiliate” of the Company and no Person
holding any one or more of the Warrants shall be deemed to be an “Affiliate” of the Company solely
by virtue of the ownership of such Securities.

     Agreement, this — and references thereto means this Warrant Agreement as it may from time to
time be amended, restated, supplemented or modified.

     Base Dickey Share Amount — as defined in Section 6.2(a).

     Beneficially Owned — has the meaning ascribed to in Rule 13d-3 promulgated under the Exchange
Act (or any successor rule).

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     Board of Directors — means, at any time, the board of directors of the Company or any
committee thereof which, in the instance, shall have the lawful power to exercise the power and
authority of such board of directors.

     Class A Common Stock — as defined in Section 6.1(a).

     Class B Common Stock — as defined in Section 6.1(a).

     Class C Common Stock — as defined in Section 6.1(a).

     Closing — as defined in Section 1.

     Commission — as defined in Section 4.7.

     Common Stock — means shares now or hereafter authorized of any class of common stock of the
Company and any other capital stock of the Company however designated that has the right (subject
to any prior rights of any class or series of preferred stock) to participate in any distribution
of the assets upon voluntary or involuntary liquidation, dissolution or winding up of the Company
or in the earnings of the Company without limit as to per share amount, and includes without
limitation, the presently authorized 200,000,000 shares of Class A Common Stock, 20,000,000 shares
of Class B Common Stock and 30,000,000 shares of Class C Common Stock.

     Company — as defined in the introductory paragraph hereof.

     Consenting Lenders — as defined in the recitals to this Agreement.

     Control — means, with respect to any Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting Securities, by contract or otherwise.

     Credit Agreement — as defined in the recitals to this Agreement.

     Damages — as defined in Section 8.3(a).

     Denomination — means, in the case of any Warrant Certificate, the number of shares of Class A
Common Stock issuable upon exercise of such Warrant Certificate represented thereby.

     Dickey Family — as defined in the introductory paragraph hereof.

     Exchange Act — means the Securities Exchange Act of 1934, as amended.

     Exercise Price — means, prior to any adjustment pursuant to Section 5, the Initial
Exercise Price per share of Class A Common Stock; and thereafter such Initial Exercise Price as
successively adjusted and readjusted from time to time in accordance with the provisions of
Section 5.

     Expiration
Date — means June 29, 2019.

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     Fair Market Value — with respect to the Company, with respect to shares of Common Stock or
with respect to any other property shall be determined by the Board of Directors in good faith,
provided, that such determination is approved by the Required Warrantholders. The Fair Market
Value of the shares of Common Stock shall not include a discount for a minority ownership interest.
If the Board of Directors and the Required Warrantholders are unable to agree on the Fair Market
Value within ten (10) days, then the Board of Directors shall select and approve an appraiser
experienced in the business of evaluating or appraising the market value of securities (which
appraiser shall be subject to approval by the Required Warrantholders, which approval shall not be
unreasonably withheld). The Fair Market Value established by such appraiser shall be conclusive
and binding on the parties and the fees and expenses for such appraiser shall be paid for by the
Company.

     Fully Diluted Basis — means, with respect to any calculation of the number of shares of
Common Stock at any time, the sum of:

     (a) the number of shares of Common Stock outstanding at such time (other than shares
held by the Company so long as such shares remain treasury shares); plus

     (b) the aggregate number of shares of Common Stock issuable upon the exercise,
conversion or exchange, as the case may be, of all Rights outstanding at such time,
regardless of whether such Rights are then exercisable, convertible or exchangeable and
regardless of whether the consideration given up by the holder of any such Right in
connection with the exercise, conversion or exchange thereof would exceed the value of the
Common Stock received upon such exercise, conversion or exchange.

For the sake of clarity, if any series of Common Stock, now or hereafter authorized, is convertible
into more than one share of Class A Common Stock then each share of such series of Common Stock
shall be treated as the number of shares of Class A Common Stock into which such share is
convertible for all purposes in this Agreement.

     Governmental Entity — means any federal, state, local or foreign government, any political
subdivision thereof, or any court, administrative or regulatory agency, department,
instrumentality, body or commission or other governmental authority or agency, domestic or foreign.

     Initial Exercise Price — means $1.17.

     Law — means all statutes, rules, codes, regulations, restrictions, ordinances, orders,
decrees, approvals, directives, judgments, injunctions, writs, awards and decrees of, or issued by,
any Governmental Entity.

     Lenders — as defined in the recitals to this Agreement.

     Lien — means any mortgage, pledge, hypothecation, assignment, charge, deposit arrangement,
encumbrance, lien (statutory or other), adverse claim or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever, including any conditional
sale or other title retention agreement, any financing lease involving

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substantially the same economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any jurisdiction.

     Market Price — means, per share of Class A Common Stock, as of any date of determination, the
arithmetic mean of the daily closing prices for the fifteen (15) consecutive trading days before
such date of determination; provided that if the Class A Common Stock is then neither listed nor
admitted to trading on any national securities exchange, then “Market Price” means the Fair Market
Value of such share.

     Offer — as defined in Section 7.

     Offer Notice — as defined in Section 7.

     Person — means any natural person, corporation, partnership, limited liability company, firm,
association, government, governmental agency or any other entity, whether acting in an individual,
fiduciary or other capacity.

     Prospective Purchaser — as defined in Section 7.

     Purchaser — as defined in the introductory paragraph hereof.

     Purchaser Affiliate —  means (a) a partner of a Purchaser, (b) any Person that, directly or
indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common
Control with, a Purchaser and (c) any managed account or investment fund which is managed by a
Purchaser or another Purchaser Affiliate described in clause (b) of this definition.

     Registrable Securities — as defined in Section 8.1.

     Required Warrantholders — means, at any time, the holders of Warrants representing at least a
majority of the Class A Common Stock issuable upon exercise of the Warrants then outstanding
(exclusive of any Warrants directly or indirectly held by the Company, any Subsidiary or any
Affiliate of the Company).

     Right — means and includes:

     (a) any warrant (including, without limitation, any Warrant) or any option (including,
without limitation, employee stock options) to acquire any Common Stock;

     (b) any right issued to holders of the Common Stock, or any class thereof, permitting
the holders thereof to subscribe for Additional Common Stock (pursuant to a rights offering
or otherwise);

     (c) any right to acquire Common Stock pursuant to the provisions of any Security
convertible or exchangeable into Common Stock (including, without limitation, an option or
any convertible preferred stock); and

     (d) any similar right permitting the holder thereof to subscribe for or purchase Common
Stock.

-22-

 

     Securities Act — means the Securities Act of 1933, as amended.

     Security — as defined in Section 2(1) of the Securities Act.

     Subsidiary — of any corporation means any other corporation, partnership or limited liability
company of which greater than 50% of the outstanding shares of capital stock or other ownership
interests having ordinary voting power for the election of directors (or others serving equivalent
functions) is owned directly or indirectly by such corporation. Except as otherwise indicated
herein, references to Subsidiaries shall refer to Subsidiaries of the Company.

     Third Amendment — as defined in the recitals to this Agreement.

     Transferee — means any registered transferee of all or any part of any one or more Warrant
Certificates initially acquired by the Purchaser under this Agreement; provided, that such
transfer is in accordance with this Agreement.

     Warrant — as defined in Section 1.

     Warrant Certificate — means a certificate evidencing the Warrants in the forms set forth in
Attachment A.

     Warrant Securities — means, collectively, the Warrants and the Warrant Shares.

     Warrant Shares — means the securities that a holder of a Warrant Certificate may acquire upon
exercise or conversion of a Warrant, together with any other securities that such holder may
acquire on account of any such Warrant Shares whether upon the making or paying of any dividend or
other distribution on Common Stock, upon any split-up of such Common Stock, upon a
recapitalization, merger, consolidation, share exchange, reorganization or other transaction or
series of related transactions in which shares of Common Stock are changed into or exchanged for
securities of another corporation, upon exercise of any preemptive right (or the exercise or
conversion of any security which such holder may acquire in connection with the exercise of any
preemptive right) with respect to any such Common Stock or otherwise.

     9.2 Section Heading and Table of Contents and Construction.

     (a) Section Headings and Table of Contents, etc. The titles of the Sections of this
Agreement and the Table of Contents of this Agreement appear as a matter of convenience
only, do not constitute a part hereof and shall not affect the construction hereof. The
words “herein,” “hereof,” “hereunder” and “hereto” refer to this Agreement as a whole and
not to any particular Section or other subdivision. References to Sections are, unless
otherwise specified, references to Sections of this Agreement. References to Annexes and
Attachments are, unless otherwise specified, references to Annexes and Attachments attached
to this Agreement.

     (b) Independent Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each other covenant
contained herein, and compliance with any one covenant shall not

-23-

 

(absent such an express contrary provision) be deemed to excuse compliance with one or
more other covenants.

     9.3 Directly or Indirectly.

     Where any provision herein refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action is taken directly or
indirectly by such Person, including actions taken by or on behalf of any partnership in which such
Person is a general partner.

     9.4 Governing Law.

     THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
DELAWARE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO THE EXTENT THAT ANY SUCH
RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

10. MISCELLANEOUS.

     10.1 Expenses.

          Except as expressly provided in this Agreement to the contrary, the Company agrees to pay, and
save each Purchaser and any Transferees harmless against liability for the payment of, all
reasonable out-of-pocket expenses (including, without limitation, the reasonable fees and
disbursements of special counsel for the Purchasers and any Transferee) arising in connection with
the transactions herein contemplated (other than the transfer taxes not payable by the Company
pursuant to Section 4.3), including, without limitation:

               (a) compliance with Section 4.7 hereof;

               (b) the reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees;
provided, however, that the Company shall not be required to pay the fees of more than one counsel
for all holders of Warrants) incurred by the holders of Warrants in connection with the
consideration, negotiation, preparation or execution of any amendments, waivers, consents,
standstill agreements and other similar agreements with respect to this Agreement, the Warrant
Certificates or the Warrants (whether or not any such amendments, waivers, consents, standstill
agreements or other similar agreements are executed); and

               (c) any enforcement of (or determination of whether or how to enforce) any rights under this
Agreement, the Warrant Certificates or the Warrants or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this Agreement or the
transactions contemplated hereby or by reason of any Purchaser or any Transferee having acquired
any Warrant Certificate, including, without limitation, the reasonable fees and expenses of counsel
engaged by the holders of the Warrants (provided, however, that the Company shall not be required
to pay the fees of more than one counsel for all holders of

-24-

 

Warrants) and the costs and expenses incurred in any bankruptcy case involving the Company or
any Subsidiary.

     10.2 Amendment and Waiver.

     This Agreement may be amended, and the observance of any term of this Agreement may be waived,
with and only with the written consent of the Company and the Required Warrantholders; provided,
however, that no amendment or waiver of the provisions of this Section 10.2, Section
5.4 or of any term defined in Section 9.1 to the extent used herein or therein, may be
made without the prior written consent of all holders of Warrants then outstanding (excluding any
Warrants directly or indirectly held by the Company, any Subsidiary or any Affiliate of the
Company); and, provided, further, that

     (a) no such amendment or waiver of any of the provisions of this Agreement pertaining
to the Exercise Price or the number of shares or kind of Common Stock that may be purchased
upon exercise of each Warrant; and

     (b) no change accelerating the occurrence of the Expiration Date

shall be effective as to the holder of any Warrants unless consented to in writing by such holder.

     10.3 Entire Agreement.

     This Agreement embodies the entire agreement and understanding between the Purchasers and the
Company and supersedes all prior agreements and understandings relating to the subject matter
hereof.

     10.4 Successors and Assigns.

     All covenants and other agreements in this Agreement contained by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respective successors and assigns of the
parties hereto to the extent they become holders of Warrants (including, without limitation, any
Transferee) whether so expressed or not. Notwithstanding the foregoing sentence, except as
provided in Section 5.4, the Company may not assign any of its rights, duties or
obligations hereunder or under the Warrant Certificates without the prior written consent of all
holders of Warrants then outstanding.

     10.5 Notices.

     All communications hereunder or under the Warrants shall be in writing and shall be delivered
either by national overnight courier or by facsimile transmission (confirmed by delivery by
national overnight courier sent on the day of the sending of such facsimile transmission), and
shall be addressed to the following addresses:

     (a) if to a Purchaser, at its address set forth on such Purchaser’s respective joinder
to this Agreement or at such other address as such Purchaser shall have specified to the
Company in writing; and

-25-

 

     (b) if to the Company, at the address set forth below, or at such other address as the
Company shall have specified to each holder of Warrants in writing.

To:

Cumulus Media, Inc.

3280 Peachtree Road, N.W., Suite 2300

Atlanta, GA 30305

Any communication addressed and delivered as herein provided shall be deemed to be received when
actually delivered to the address of the addressee (whether or not delivery is accepted) or
received by the telecopy machine of the recipient. Any communication not so addressed and
delivered shall be ineffective unless actually received by the intended addressee. Notwithstanding
the foregoing provisions of this Section, service of process in any suit, action or proceeding
arising out of or relating to this Agreement or any document, agreement or transaction contemplated
hereby shall be delivered in the manner provided in Section 10.8(c).

     10.6 Severability.

     Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

     10.7 Execution in Counterpart.

     This Agreement may be executed in one or more counterparts and shall be effective when at
least one counterpart shall have been executed by each party hereto, and each set of counterparts
that, collectively, show execution by each party hereto shall constitute one duplicate original.

     10.8 Waiver of Jury Trial; Consent to Jurisdiction, Etc.

     (a) Waiver of Jury Trial. THE PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE WARRANTS OR ANY OF THE DOCUMENTS,
AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY.

     (b) Consent to Jurisdiction. ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE WARRANTS, OR ANY OF THE DOCUMENTS, AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE
ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER THIS AGREEMENT, THE WARRANTS OR ANY
DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT BY SUCH

-26-

 

PARTY TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW IN ANY FEDERAL DISTRICT COURT
LOCATED IN THE DISTRICT OF DELAWARE (OR, IF SUCH FEDERAL DISTRICT COURTS ARE UNAVAILABLE,
IN ANY STATE COURT LOCATED IN WILMINGTON, DELAWARE) AS SUCH PARTY MAY IN ITS SOLE
DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE IN PERSONAM JURISDICTION OF
EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT
IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY
CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN
ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     (c) Other Forums. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF
ANY PURCHASER OR ANY OTHER HOLDER OF A WARRANT TO SERVE ANY WRITS, PROCESSES OR SUMMONSES
IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER THE COMPANY IN
SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.

[Remainder of page intentionally left blank; next page is signature page]

-27-

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed
and delivered on its behalf by one of its duly authorized officers or representatives.

	 	 	 	 	 
	 	COMPANY:

CUMULUS MEDIA INC.

 	 
	 	By:  	/s/ Martin R. Gausvik
 	 
	 	 	Name:  	Martin R. Gausvik 	 
	 	 	Title:  	Executive Vice President
Treasurer & Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	DICKEY FAMILY:

 	 
	 	/s/ Lewis W. Dickey, Sr.
 	 
	 	Lewis W. Dickey, Sr. 	 
	 	 	 
	 	                                                     /s/ Lewis W. Dickey, Jr.
 	 
	 	Lewis W. Dickey, Jr. 	 
	 	 	 
	 	                                                     /s/ John W. Dickey
 	 
	 	John W. Dickey 	 
	 	 	 
	 	                                                     /s/ Michael W. Dickey
 	 
	 	Michael W. Dickey 	 
	 	 	 
	 	/s/ David W. Dickey
 	 
	 	David W. Dickey 	 
	 	 	 
	 
	 	Lewis W. Dickey, Sr. Revocable Trust

 	 
	 	 	 
	 	By:  	/s/ Lewis W. Dickey, Jr.
 	 
	 	 	Name:  	Lewis W. Dickey, Jr. 	 
	 	 	Title:  	 	 
	 
	 	DBBC, LLC

 	 
	 	By:  	/s/ John W. Dickey
 	 
	 	 	Name:  	John W. Dickey 	 
	 	 	Title:  	Vice President 	 
	 

[SIGNATURE PAGE TO WARRANT AGREEMENT]exv10w18

Exhibit 10.18

2009 SUCCESS SHARING PROGRAM FOR EMPLOYEES

OF PENN MILLERS

The Success Sharing Program is an incentive program that is designed to (a) motivate and reward
strong financial and operational performance at organizational and individual performance
levels, (b) reinforce the importance of teamwork and cooperation, (c) link rewards to the
Company’s business plans, strategic initiatives and vision statement, (d) provide a
competitive, cost effective total cash compensation opportunity, (e) communicate expectations
to employees, and (f) facilitate executive retention.

DEFINITIONS

“Base Earnings” means, (a) with respect to employees classified as “exempt” under the Fair
Labor Standards Act (FLSA) the basic rate of compensation payable for a one year period, and
(b) with respect to employees classified as “non-exempt” under the FLSA, a participant’s base
salary plus overtime. Base earnings shall not include bonuses, fringe benefits, annual stipend,
employer contributions to retirement plans or similar compensation.

“Bonus Award” means the actual bonus payable to a participant in the plan.

“Bonus Award Opportunity” means the percentage of base earnings a plan participant is eligible
to receive.

“Company” means Penn Millers Holding Corporation, Penn Millers Mutual Holding Company, and the
subsidiaries thereof.

“Maximum Performance” means the attainment of the level of performance at which the maximum
Bonus Award payment is earned.

“Performance Period” means a calendar year.

“Target Performance” means the attainment of the level of performance at which 100% of the
target award payment is earned.

“Threshold Performance” means the attainment of the level of performance at which the minimum
bonus award payment is earned.

ELIGIBILITY

All regular full time and regular part time employees who have completed at least four months
of service prior to the end of the Performance Period and during the performance period
satisfactorily perform their duties, tasks and assignments.

 

 

An employee will not be eligible to earn a Bonus Award under the plan if such employee is
required to participate in a performance improvement plan or is on disciplinary probation. An
employee may be reinstated after achievement of satisfactory performance or removal from
disciplinary probation.

Plan Category Classification- Each plan participant is assigned a plan category. A
non-executive employee’s participation status and plan category must be approved by the
President & Chief Executive Officer and an executive’s participation status and plan category
must be recommended by the President & Chief Executive Officer and approved by the Board of
Directors.

BONUS AWARD OPPORTUNITIES

The annual Bonus Award Opportunities, expressed as a percentage of base earnings shall be
established for each Performance Period by the Compensation Committee of the Board of Directors
at a Threshold, Target and Maximum Performance level for each applicable performance goal and
each applicable employee category listed below.

Chief Executive Officer

Executive Vice President & Senior Vice President

Vice President

Assistant Vice President

Manager, Assistant Manager

& Supervisor

Staff Employees

PERFORMANCE GOALS

For each Performance Period the Compensation Committee of the Board of Directors shall
establish specific performance goals for the Company as the basis for Bonus Award
Opportunities under the plan. In establishing the criteria for these goals, the
 Compensation Committee shall establish Target, Threshold and Maximum Performance levels for
each goal, where appropriate.

In establishing performance goals and the criteria thereof, the Compensation Committee may
consider any number of business factors, including, but not limited to, economic or industry
conditions or forecasts. In addition, the Compensation Committee may consider corporate
objectives, including, but not limited to, improving profitability, growing its market share,
the proper deployment of capital and expense control.

Where appropriate, the Compensation Committee shall establish and provide definitions and
formulas for establishing goals so it may be determined how the Bonus Award

 

 

should be calculated. When the criteria for each goal is selected, the Compensation
Committee shall also establish a specific weight to be given to that goal in determining the
employees’ Bonus Award. In determining such weight to be given, the
 Compensation Committee shall consider the weight which is appropriate given current economic
and industry conditions and forecasts and the importance of each of the Company’s current
corporate objectives and their relationship to the criteria for the goal identified.

BONUS AWARD COMPONENTS

The Bonus Award for employees at, or above, the Assistant Vice Principal (AVP) level and the
majority of employees identified as “Staff Employees” will be based solely on Company
performance as outlined in the Plan.

Interpolation within each performance goal between Threshold, Target and Maximum
Performance goals will be used to determine the actual percentage payable for that category and
the weighted results of all components will be summed to determine total Bonus Award payout.
The Compensation Committee, in its discretion, may make the receipt of a Bonus Award payout
contingent on the Threshold Performance criteria for one or more performance goals being met,
even if performance for other performance goals would otherwise generate a Bonus Award payout
in the absence of such a restriction.

Employees below the level of AVP holding a supervisory position or other key position having
responsibility for operational and strategic objectives will have 50% of their Bonus Award
based upon Company performance as outlined in this program and 50% on the achievement of their
individual performance objectives. These individuals will be specifically identified at the
beginning of the Performance Period.

With respect to the portion of a participant’s Bonus Award that relates to individual
performance (if any), such portion shall be determined based upon the rating of performance in
the achievement of individual objectives.

Bonus Awards shall be pro-rated based upon the number of full months during the Performance
Period that an individual was a participant in the plan.

PAYMENT OF BONUS AMOUNTS

The Compensation Committee of the Board of Directors may determine, in its discretion, to grant
no Bonus Awards if it believes none are warranted. Conversely, even if the goals under the
Success Sharing Plan are not achieved and no Bonus Awards are earned under the program, the
Compensation Committee could award bonuses if, in the exercise of its business judgment, the
Compensation Committee determines that they are warranted under the circumstances and in the
best interest of the Company.

 

 

The payment of Bonus Awards shall be paid on or before March 15 of the calendar year following
the Performance Period.

AMENDMENT AND TERMINATION

While it is the intention of the Company to continue the Plan, the Board of Directors reserves
the right to change or discontinue the Plan at any time.

CLAW BACK PROVISION

If the Board of Directors learns of any misconduct by an officer who contributed to the Company
restating all or a portion of its financial statements, it will do what is required to correct
the misconduct and prevent it from occurring again and, if appropriate, take necessary remedial
action. To determine the corrective action, the Board of Directors will review the situation to
identify whether the restatement was the result of negligence, gross negligence or intentional
misconduct. The Board of Directors will require reimbursement of any success sharing incentive
compensation awarded to an officer if all of the following apply:

	 	§	 	The amount of the success sharing award was calculated based on the achievement
of certain financial results that were subsequently the subject of a restatement.
	 
	 	§	 	The executive engaged in intentional misconduct that caused or partially caused
the need for the restatement.
	 
	 	§	 	The amount of the success sharing Bonus Award that would have been awarded to the
executive had the financial results been properly reported would have been lower than
the amount actually awarded.

Additionally, at the Board of Directors’ discretion, it may dismiss the officer, authorize
legal action for breach of fiduciary duty or take other action to enforce the executive’s
obligations to the Company.

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