Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Based upon succession planning discussions by the Board of Directors (the “Board”) of Salem Media Group, Inc. (the “Company”), and in conjunction with the Board’s continued focus on succession planning strategy to provide leadership continuity as the Company continues to execute its strategic initiatives, the following changes were approved on December 20, 2021. A copy of the press release announcing these changes is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Effective January 2, 2022, Edward G. Atsinger III, the Company’s current Chief Executive Officer, will transition to the newly created role of Executive Chairman of the Board of Directors. Additionally, the Company announced the appointment of David Santrella as Chief Executive Officer and David Evans as Chief Operating Officer, also effective January 2, 2022. Currently, Mr. Santrella serves as the Company’s President of Broadcast Media and Mr. Evans serves as the Company’s President of Digital Media and Publishing. Further, Stuart W. Epperson, Sr., the Company’s current Chairman of the Board, will resign from the Board and transition to the position of Chairman Emeritus. As Chairman Emeritus, Mr. Epperson, Sr. will not have a Board seat or an executive officer position, but will be entitled to be an observer at Board meetings. There were no circumstances representing disagreement with the Company that caused Mr. Epperson’s resignation from the Board. Stuart W. Epperson, Jr. will join the Board, filling the vacancy created by Mr. Epperson, Sr.’s resignation.
Edward G. Atsinger III
In connection with Mr. Atsinger’s appointment to Executive Chairman, he entered into a new employment agreement with Salem Communications Holding Corporation (“HoldCo”), a wholly-owned subsidiary of the Company, to be effective as of January 2, 2022. The Compensation Committee of the Board (the “Committee”) also approved the terms of Mr. Atsinger’s new employment agreement and, in its capacity as the administering body of the Company’s 1999 Stock Incentive Plan, the stock option grant described therein.
Mr. Atsinger’s new employment agreement supersedes and replaces the employment agreement entered into by HoldCo and Mr. Atsinger as of July 1, 2019, as amended on May 11, 2020.
The employment agreement provides that, for as long as he remains employed by HoldCo, Mr. Atsinger will receive an annual base salary of $1,000,000.
In addition to his base salary, Mr. Atsinger will be eligible for an annual merit bonus in an amount to be determined at the discretion of the Company’s Board.
Additional benefits under Mr. Atsinger’s employment agreement include: (a) reimbursement for 100% of the costs of all medical expenses for Mr. Atsinger, including all vision, health and dental expenses incurred by Mr. Atsinger that are not otherwise covered by the Company’s medical benefits program, full reimbursement for all medical-related travel costs and full reimbursement for any applicable income or employment taxes associated therewith, (b) an automobile allowance, and (c) payment by the Company for all regulatory filing fees associated with any stock or stock-based (including stock options) compensation received by Mr. Atsinger or as a result of Mr. Atsinger’s beneficial ownership of Company stock (including full reimbursement for any income or employment taxes applicable to the payment of such fees).
Mr. Atsinger’s employment agreement generally provides that if Mr. Atsinger’s employment is terminated as a result of a “disability” (as defined in the employment agreement), HoldCo will: (a) pay Mr. Atsinger the accrued portion of his salary and bonus through the termination date of the employment agreement, (b) pay a severance equal to 100% of Mr. Atsinger’s then-current base salary for a period of fifteen (15) months without offset of any disability payments Mr. Atsinger may receive, and (c) as of the termination date, accelerate 100% of the vesting of any then unvested or time-vested stock options previously granted to Mr. Atsinger by the Company.
If Mr. Atsinger’s employment is terminated by HoldCo without “Cause” or by Mr. Atsinger for “good reason” (as defined in the employment agreement), HoldCo will pay Mr. Atsinger as severance an amount equal to his then base salary for six (6) months or the remainder of the term of the employment agreement, whichever period is longer, with acceleration of 100% of the vesting of any then unvested or time-vested stock options previously granted to Mr. Atsinger by the Company.
