Clear Channel Reveals The Numbers Behind Yesterday's Pittman And Hogan Moves
January 14, 2014 at 4:00 AM (PT)
YESTERDAY (NET NEWS 1/13), ALL ACCESS reported CLEAR CHANNEL MEDIA + ENTERTAINMENT Chairman/CEO JOHN HOGAN would retire and CC MEDIA HOLDINGS, INC. Chairman/CEO BOB PITTMAN had signed a five-year extension of his contract.
The company also filed a form 8-K with THE SECURITY AND EXCHANGE COMMISSION, which provided details of those moves.
CLEAR CHANNEL wrote, "Mr. PITTMAN will receive a base salary at a rate no less than $1,200,000 per year, which shall be increased at the discretion of the CCMH Board or its Compensation Committee. Mr. PITTMAN will also have the opportunity to earn an annual performance bonus for the achievement of reasonable performance goals established annually by the CCMH Board or its Compensation Committee after consultation with Mr. PITTMAN. The aggregate target performance bonus is 150% of Mr. PITTMAN’s annual base salary.
"The PITTMAN Employment Agreement also entitles Mr. PITTMAN to participate in all pension, profit sharing, and other retirement plans, all incentive compensation plans, and all group health, hospitalization and disability or other insurance plans, paid vacation, sick leave and other employee welfare benefit plans in which other similarly situated employees of CCMH may participate.
"During the term of his employment, CCMH will make an aircraft (which, to the extent available, will be a DASSAULT-BREGUET MYSTERE FALCON 900) available to Mr. PITTMAN for his business and personal use and will pay all costs associated with the provision of the aircraft. If a company aircraft is not available due to service or maintenance issues, CCMH will charter a comparable aircraft for Mr. PITTMAN's business and personal use. CCMH will make a car and driver available for Mr. PITTMAN's business and personal use in and around the NEW YORK area as well as anywhere else on company business. CCMH will reimburse Mr. PITTMAN for reasonable legal fees incurred by Mr. PITTMAN in connection with the negotiation of the PITTMAN Employment Agreement. The PITTMAN Employment Agreement also contains customary confidentiality, non-competition and non-solicitation provisions."
As far as JOHN HOGAN's deal, CLEAR CHANNEL reports, "CLEAR CHANNEL BROADCASTING, INC., a subsidiary of CCMH and CCU (“CCB”), and Mr. HOGAN entered into a Severance Agreement and General Release (the “Separation Agreement”) pursuant to which CCB agreed to pay Mr. HOGAN: (1) $900,000, representing the amount previously earned by Mr. HOGAN pursuant to a supplemental incentive plan with respect to 2012 performance; (2) an annual bonus of $77,250 for performance during 2013; and (3) a prorated annual bonus with respect to the days he was employed during 2014, calculated as provided in the Employment Agreement dated NOVEMBER 15th, 2010, as amended (the “Hogan Employment Agreement”).
"Pursuant to the Separation Agreement and in consideration of the extension by Mr. HOGAN of certain restrictive covenants applicable to him, the vesting of 93,076 restricted shares of Class A Common Stock of CCMH granted to Mr. HOGAN on OCTOBER 22nd, 2012 will be accelerated and CCMH will repurchase 83,938 of such shares (the aggregate repurchase amount of such repurchased shares, the “Repurchase Amount”), provided Mr. HOGAN does not revoke the Separation Agreement.
"Additionally, in exchange for the Separation Agreement, Mr. HOGAN’s release of claims and the extension of certain restrictive covenants applicable to him, and provided that Mr. HOGAN does not revoke the Separation Agreement, CCB agreed to pay Mr. HOGAN: (a) $333,000, representing the remaining amount earned by Mr. HOGAN pursuant to a supplemental incentive plan with respect to 2011 performance; (b) an 'equity value preservation payment' equal to $1,027,355, paid in a lump sum payment; (c) a lump sum severance payment equal to (x) $1,538,000 minus (y) the Repurchase Amount; (d) a severance payment equal to $3,297,000, paid over 36 months; and (e) a payment of $1,000,000, paid over 12 months, beginning on the first anniversary of the date of separation.
"However, if Mr. HOGAN violates the restrictive covenants contained in Sections 4, 5 or 6 of the HOGAN Employment Agreement, the severance payments referred to in (d) and/or (e) above shall cease and Mr. HOGAN will be required to promptly repay amounts already received. Mr. HOGAN is also entitled to received continued healthcare coverage for 36 months, continued secretarial services for six months, $20,000 in outplacement services, and a housing allowance of $25,000 per month for up to nine months, which amount is grossed up for certain applicable taxes; provided, that the housing allowance payments will stop if Mr. HOGAN ceases to have obligations under the terms of his current lease agreement. CCB also will pay up to $25,000 for Mr. HOGAN’s reasonable legal fees incurred in connection with the negotiation of the Separation Agreement."