Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 1, 2022, pursuant to authorization from the Compensation Committee,
Nexstar Media Group, Inc. (the "Company") entered into an Amendment to Amended
Executive Employment Agreement with Perry A. Sook, the Company's Chairman and
Chief Executive Officer (the "Employment Agreement"). The Employment Agreement
extends the term of Mr. Sook's employment with the Company from March 1, 2023
until March 31, 2026 (the "Term"), with automatic renewal provided for
successive one-year periods, subject to earlier termination under specified
circumstances.
Pursuant to the Employment Agreement, during the Term and any subsequent renewal
term, Mr. Sook shall be entitled to receive the following base salary:
Period Base Salary
March 1, 2023 and thereafter $ 3,000,000
In addition, during the Term and any subsequent renewal term, Mr. Sook will be
eligible to receive an annual short-term incentive bonus ("Bonus") in the
amount, if any, based on a target of 200% of Mr. Sook's base salary, subject to
(i) increase or decrease based on the criteria set forth in the table below and
(ii) approval of the Compensation Committee. The Compensation Committee may
alter the criteria set forth in the table below as circumstances warrant and in
consultation with Mr. Sook.
Component Weight No Payout Threshold Target Maximum
Adjusted EBITDA 35% <85% of 85% of Target Budgeted 105% of Target
(a) Target Target (a)
Net Revenues (a) 35% <85% of 85% of Target Budgeted 105% of Target
Target Target (a)
Individual 30% Discretionary
Performance (b)
Payout Opportunity 100% 0% (no Bonus 50% of Target 100% of Target 200% of Target
payout) (e.g., 100% (e.g. 200% of (e.g., 400% of
of Base Base Salary) Base Salary)
Salary)
a)
As defined in the Employment Agreement.
b)
Individual performance will be earned at the Compensation Committee's discretion
based on Mr. Sook's achievement of the objectives established by Compensation
Committee and/or Board at the beginning of the applicable fiscal year.
On August 1, 2022, the Company awarded Mr. Sook target number of performance
based restricted stock units ("PSU") of 62,500 PSUs.
Subject to performance, 50% of the target number of PSUs will vest on August 1,
2023 and the remaining 50% of the target number of PSUs will vest on August 1,
2024. PSUs will vest based on the following vesting grid measured by one-year
total shareholder return performance, or "TSR" (calculation defined in the
Employment Agreement), against the TSR Peer Group (defined in the Employment
Agreement) as calculated on the first vesting date. No calculation is required
on the second vesting date, such shares vest automatically if the shares vested
on the first vesting date.
Level Relative TSR vs Peer Group Percentage of PSUs to Vest
Below Threshold <35th Percentile
No vesting
Threshold 35th to 50th Percentiles 80% of Target
Target 51st to 65th Percentiles 100% of Target
Stretch 66th to 80th Percentiles 150% of Target
Maximum 81st and > Percentiles 200% of Target
Within five days of March 1, 2023, the Company will award Mr. Sook
non-performance based restricted stock units ("RSUs") in the amount of
$10,000,000 to vest as follows: 50% of the RSUs will vest on March 1, 2024 and
the remaining 50% will vest on March 1, 2025.
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Within five days of March 1, 2023, the Company will also award PSUs with a
target amount of $10,000,000. Subject to performance, 50% of the target amount
of PSUs will vest on March 1, 2024 and the remaining 50% of the target amount of
PSUs will vest on March 31, 2025. PSUs will vest based on the following vesting
grid measured by one-year TSR performance against the TSR Peer Group as
calculated on the first vesting date. No calculation is required on the second
vesting date, such shares vest automatically if the shares vested on the first
vesting date.
Level Relative TSR vs Peer Group Percentage of PSUs to Vest
Below Threshold <35th Percentile No vesting
Threshold 35th to 50th Percentiles 80% of Target
Target 51st to 65th Percentiles 100% of Target
Stretch 66th to 80th Percentiles 150% of Target
Maximum 81st and > Percentiles 200% of Target
Beginning on March 1, 2024, and annually thereafter during the Term and any
renewal term, Mr. Sook may also participate in additional long-term incentive
compensation awards at the discretion of the Compensation Committee.
In the event of specific instances of termination (including for merger, a
reason by the Company other than for cause or for good reason), Mr. Sook is
eligible to receive his base salary in effect of such termination date, (i) all
accrued and unpaid base salary as of the date of termination, (ii) all accrued
but unused vacation, (iii) the unpaid Bonus for years preceding the year of
termination, and (iv) the sum of 200% of Mr. Sook's base salary in effect on the
date of termination, plus target bonus equal to 200% of Mr. Sook's base salary
in effect on the date of termination, plus an additional $29,000. In addition,
all equity (including, but not limited to, any RSUs and PSUs, stock options
and/or stock appreciation rights) previously granted or awarded to him by the
Company prior to his termination shall become immediately and fully vested
without further action by either Mr. Sook or the Company. For clarity, all PSUs
will accelerate at the greater of actual or target.
The Company shall also reimburse Mr. Sook in the amount up to $500,000 for his
use of an aircraft for personal matters during the Term.
The foregoing description of the Employment Agreement is qualified in its
entirety by reference to the complete copy of that agreement that is filed as
Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference
herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Amended Executive Employment Agreement, dated as of August
1, 2022 between Perry A. Sook and Nexstar Media Group, Inc.
99.1 Press Release of Nexstar Media Group, Inc. dated August 1,
2022.
104 Cover Page Interactive Data File (embedded within the Inline
XBRL document).
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