meg20160606_def14a.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

 

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Definitive Proxy Statement

   

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Media General, Inc.

(Name of Registrant as Specified In Its Charter)

 

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Notice of 2016

Annual Meeting

and

Proxy Statement

 

 

 

 

 

July 21, 2016

11:00 a.m.

350 Fifth Avenue

Empire State Building, 62nd Floor

New York, New York

10118

 

 

 

 

 
 

 

 

Media General, Inc.   333 East Franklin Street   Richmond, Virginia 23219   (804) 887-5000   www.mediageneral.com

 

 

 

 

Vincent L. Sadusky

President and Chief Executive Officer

 

 

June 9, 2016

Dear Stockholder:

 

I am pleased to forward our 2016 Proxy Statement as I cordially invite you to attend Media General’s 2016 Annual Meeting on Thursday, July 21, 2016.

 

Our Annual Meeting will be held at our offices located at the Empire State Building at 350 Fifth Avenue, 62nd Floor, New York, NY 10118.

 

We are pleased once again to be taking advantage of the Securities and Exchange Commission rule allowing Stockholders to receive proxy materials over the Internet. This environmentally responsible e-proxy process expedites receipt of our proxy materials and lowers costs for the Company.

 

Whether or not you plan to be present at the Annual Meeting, we value your vote. Most Stockholders have a choice of voting over the Internet, by telephone, or by using a traditional proxy card. Please refer to your proxy card or the information forwarded by your bank, broker or other holder of record to see which options are available to you. However you choose to vote, please do so at your earliest convenience.

 

Thank you for being a Media General Stockholder. I look forward to seeing you at the Annual Meeting.

 

 

Yours sincerely,

Vincent L. Sadusky

  

 
 

 

 

 

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS

 

To the Holders of Voting Common Stock

    of Media General, Inc.:

 

The 2016 Annual Meeting of Stockholders of Media General, Inc. will be held at our offices located at the Empire State Building, 62nd Floor, 350 Fifth Avenue, New York, New York 10118 on Thursday, July 21, 2016, at 11:00 am E.T. for the following purposes:

 

 

1.

To elect a Board of Directors;

  

 

2.

To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2016;

     

 

3.

To hold an advisory vote on executive compensation; and

 

 

4.

To act upon such other matters as properly may come before the meeting.

 

Holders of the Company’s Voting Common Stock of record at the close of business on May 31, 2016, are entitled to notice of and to vote at the meeting.

 

Stockholders are requested to vote by the Internet, by telephone or, for those who have received paper copies of the proxy card, by completing and returning the accompanying proxy card in the envelope provided, whether or not they expect to attend the meeting in person. Internet and telephone voting facilities will close at 11:59 p.m. E.T. on July 20, 2016 (July 18, 2016 for participants in the Employees’ MG Advantage 401(k) Plan and/or the Media General, Inc. Supplemental 401(k) Plan). A proxy may be revoked at any time before it is voted.

 

 

By Order of the Board of Directors,

 

ANDREW C. CARINGTON,

Secretary  

 

Richmond, Virginia 

June 9, 2016

 

 
 

 

 

PROXY STATEMENT

 

2016 Annual Meeting of Stockholders

SOLICITATION OF PROXIES

 

This statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Media General, Inc., to be used at the 2016 Annual Meeting of Stockholders to be held at our offices located at the Empire State Building, 62nd Floor, 350 Fifth Avenue, New York, New York 10118, on Thursday, July 21, 2016, at 11:00 a.m. E.T. All shares entitled to vote and represented by properly completed proxies received prior to the meeting and not revoked will be voted in accordance with their instructions. Internet and telephone voting facilities will close at 11:59 p.m. E.T. on July 20, 2016 (July 18, 2016 for participants in the Employees’ MG Advantage 401(k) Plan and/or the Media General, Inc. Supplemental 401(k) Plan). A proxy may be revoked by a Stockholder at any time before it is voted.

 

A notice containing instructions on how to access this Proxy Statement and our Annual Report online was mailed to some of the Company’s Stockholders on June 9, 2016. On that date, we also began mailing a full set of proxy materials to other Stockholders and to those Stockholders who had requested paper copies of our proxy materials.

 

Only holders of record of Voting Common Stock at the close of business on May 31, 2016 will be entitled to vote, and each share of Voting Common Stock will be entitled to one vote on each matter being voted upon. As of the close of business on May 31, 2016, the record date of this Proxy Statement, there were 129,320,219 shares of Voting Common Stock outstanding.

 

In the event that the strategic transaction with Nexstar Broadcasting Group, Inc. (Nexstar) closes prior to the 2016 Annual Meeting, the 2016 Annual Meeting will not be held.

 

 

 

DIRECTOR INDEPENDENCE

 

All non-management members of the Company’s Board of Directors are independent, in accordance with the rules of the New York Stock Exchange (the NYSE) and the Company’s more stringent Director Independence Standards. The Board affirmatively has determined that the Company’s non-management Directors and Director nominees, Diana F. Cantor, Royal W. Carson, III, H.C. Charles Diao, Dennis J. FitzSimons, Soohyung Kim, Douglas W. McCormick, John R. Muse, Wyndham Robertson, and Thomas J. Sullivan are independent and have no relationship with the Company that would interfere with their exercise of independent judgment in carrying out the responsibilities of a Director. In making this determination with respect to Soohyung Kim, the Board considered that Mr. Kim is the Chief Executive Officer and the Chief Investment Officer of Standard General, L.P. (Standard General), which exercises voting and investment control over approximately 5.9% of the outstanding shares of the Voting Common Stock of the Company that are held by investment funds for which Standard General serves as investment manager. In making this determination with respect to Thomas J. Sullivan, the Board considered that Mr. Sullivan was the Executive Chairman of Young until it merged with the Company in November 2013, was Young's Chief Financial Officer in 2012 and continued to receive severance payments until November 2014 (not conditioned on his continued service as a Director of the Company) in respect of his prior service as Young's Executive Chairman. In making this determination with respect to John R. Muse, the Board considered that Mr. Muse, a former director of LIN Media who joined the Board in December 2014 in connection with the Company’s merger with LIN Media, is the Chairman of Kainos Capital, LLC, successor to Hicks, Muse & Co., and has shared voting and dispositive power with respect to approximately 9.0% of the outstanding shares of the Voting Common Stock of the Company that are held by investment funds for which Kainos Capital serves as investment manager. In making this determination with respect to Douglas W. McCormick, the Board considered that Mr. McCormick is on the Board of Directors of Everyday Health Media, LLC, which entered into a 30 day cross-promotional agreement with a subsidiary of Media General, a transaction that qualified as a related party transaction in December of 2015. The Audit Committee reviewed and approved the transaction beforehand pursuant to the applicable Policy and Procedures with Respect to Related Person Transactions. The Company’s Director Independence Standards are available at the Company website, www.mediageneral.com.

 

 
 

 

 

THE BOARD AND ITS COMMITTEES

 

The Chairman of the Board of Directors historically presided over the meetings of the Board and, as described in the Company’s Principles of Corporate Governance, established the agenda for each meeting. Senior management, led by the Chief Executive Officer, is responsible for conducting the day-to-day operations of the Company and keeping the Board informed of the status of the Company’s operations. In adopting this leadership structure, the Board additionally has determined that the Board and the Company are best managed by separating the roles of the Chairman and the Chief Executive Officer. On January 23, 2016, J. Stewart Bryan III, the Chairman of Media General, passed away following many years of dedicated service to the Company, and the Board has determined not to elect a new Chairman at this time. Instead, Dennis J. FitzSimons has been selected to preside over meetings of the Board.

 

The Board of Directors held sixteen (16) meetings during 2015. The Company’s non-management Directors meet regularly in executive session. The presiding position at these executive sessions is rotated among the chairs of the Audit, Compensation, Nominating & Governance and Finance Committees, a practice the Board believes is more advantageous than having a single “presiding director.” All Directors attended, during the period in which they were members of the Board during 2015, 75% or more of the meetings of the Board and the Board committees on which they served.

 

The standing committees of the Board of Directors are the Audit Committee, the Compensation Committee, the Finance Committee and the Nominating & Governance Committee. Each of these Committees, with the exception of the Finance Committee, has a written charter, which is available at the Company’s website, www.mediageneral.com.

 

The Audit Committee consists of Mrs. Cantor, as Chairman of the Committee, and Messrs. Diao and FitzSimons, each of whom is independent under the rules of the NYSE and the Securities and Exchange Commission. As discussed more fully below, each member of the Committee also is an “audit committee financial expert.” This Committee has been established in accordance with the rules of the NYSE and the Securities Exchange Act of 1934 (Exchange Act) and oversees the audit function of the Company with regard to its internal auditors and its independent registered public accounting firm. The Committee meets with these internal and independent auditors, has sole authority to retain and terminate the Company’s independent auditors and reviews all quarterly and annual SEC filings made by the Company. The Audit Committee met eight (8) times during 2015.

 

The Compensation Committee consists of Miss Robertson and Messrs. Carson, FitzSimons, and Kim. Mr. FitzSimons is Chairman of the Committee. All of the members of the Committee are independent under the rules of the NYSE, taking into account the additional factors required to be considered under the NYSE rules with respect to such members. The Committee has general responsibility for employee compensation and makes recommendations to the Board with respect to the compensation of all Directors, officers and other key executives, including incentive compensation plans and equity-based plans. The Committee receives recommendations from the Chief Executive Officer, and it receives reports and recommendations from the compensation consultants it has retained directly on both short-term and long-term executive and director compensation matters. The Committee has the sole authority to retain, terminate and fix the compensation of any advisor it deems appropriate to assist it in the fulfillment of its responsibilities. In 2015, the Committee selected and directly retained the services of Pearl Meyer & Partners, LLC (Pearl Meyer), an independent executive compensation consulting firm. Pearl Meyer does not provide any other services to the Company and works with the Company’s management only on matters at the direction and under the supervision of the Compensation Committee. The Committee has assessed the independence of Pearl Meyer pursuant to SEC rules and concluded that no conflict of interest exists that would prevent Pearl Meyer from serving as an independent consultant to the Compensation Committee. The Compensation Committee periodically seeks input from Pearl Meyer on a range of external market factors, including evolving compensation trends, appropriate peer companies and market survey data. Pearl Meyer also provides general observations on the Company’s compensation programs, but it does not determine or recommend the amount or form of compensation for the named executive officers. The Compensation Committee met nine (9) times during 2015.

 

The Finance Committee consists of Messrs. Diao, Kim, Muse and Sullivan. Mr. Kim is the Chairman of the Committee. The Committee has general responsibility and oversight of certain financial affairs and policies of the Company, including such matters as the capital structure of the Company, dividends, external financing, investment and debt policies and complex financial transactions, including potential mergers, acquisitions or divestitures of the Company and its subsidiaries and their assets. The Finance Committee met thirteen (13) times during 2015.

 

 
2

 

 

The Nominating & Governance Committee consists of Mrs. Cantor, Miss Robertson and Messrs. Diao, Kim and McCormick. Mr. Diao is Chairman of the Committee. All of the members of the Committee are independent under the rules of the NYSE. The Committee assists the Board with the identification and consideration of, and recommends to the Board, candidates qualified to become nominees for election as Directors of the Company. The Committee additionally is responsible for developing policies and practices relating to corporate governance, including the Company’s Principles of Corporate Governance and its Code of Business Conduct and Ethics. The Nominating & Governance Committee met three (3) times during 2015.

 

Compensation Risk

 

The primary components of compensation of the Company’s employees are base salary, sales commissions, annual incentives and long-term incentives. The Company believes that none of these compensation components encourages excessive risk-taking. Accordingly, the Company does not believe that its compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company.

 

The Board’s Role in Risk Oversight

 

The Board of Directors receives regular reports from the Chief Executive Officer and members of senior management on operational, financial, legal and regulatory issues and risks. The Audit Committee of the Board additionally is charged under its Charter with oversight of financial risk, including the Company’s internal controls, and it receives regular reports from management, the Company’s internal auditors and the Company’s independent auditors. In addition, the Audit Committee receives each year from management a comprehensive risk assessment covering both financial and operational risk. Whenever a Committee of the Board receives a report involving risk identification, risk management or risk mitigation, the Chairman of the Committee reports on that discussion, as appropriate, to the full Board during the next Board meeting.

 

 
3

 

 

PRINCIPAL HOLDERS OF THE COMPANY’S VOTING COMMON STOCK

 

The following table shows the stock ownership as of the most recent practicable date of all persons known by the Company to have been the beneficial owners of more than 5% of the Company’s Voting Common Stock and the stock ownership of the Directors and officers of the Company. All such information is based on information furnished by or on behalf of the persons listed, who have sole voting power and sole dispositive power as to all shares listed, unless noted to the contrary.

 

Name and Address

of Beneficial Owner

 

Amount

and Nature

of Beneficial

Ownership

 

 

Percent of

Ownership

 

 

 

 

 

 

 

 

 

 

John R. Muse, Hicks Muse Fund III, Incorporated and affiliates(1)

 

 

11,631,627

 

 

 

9.0

%

2100 McKinney Avenue, Suite 1600

 

 

 

 

 

 

 

 

Dallas, TX 75201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mario Gabelli, GAMCO Investors, Inc. and affiliates(2)

 

 

10,284,921

 

 

 

7.9

%

One Corporate Center

 

 

 

 

 

 

 

 

Rye, NY 10590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oppenheimer Funds, Inc. and affiliate(3)

 

 

9,716,568

 

 

 

7.5

%

Two World Financial Center

 

 

 

 

 

 

 

 

225 Liberty Street

 

 

 

 

 

 

 

 

New York, NY 10281

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Soohyung Kim, Standard General L.P. and affiliates(4)

 

 

7,581,149

 

 

 

5.9

%

767 Fifth Avenue, 12th Floor

 

 

 

 

 

 

 

 

New York, NY 10153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Officers: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vincent L. Sadusky, President and Chief Executive Officer(6)

 

 

1,306,401

 

 

 

1.0

%

James F. Woodward, Senior Vice President, Chief Financial Officer(7)

 

 

76,414

 

 

 

*

 

Deborah A. McDermott, Senior Vice President and Chief Operating Officer(8)

 

 

9,471

 

 

 

*

 

Andrew C. Carington, Vice President, General Counsel and Secretary(9)

 

 

39,478

 

 

 

*

 

Timothy J. Mulvaney, Controller and Chief Accounting Officer(10)

 

 

41,973

 

 

 

*

 

 

 

 

 

 

 

 

 

 

Outside Directors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diana F. Cantor(11)

 

 

98,537

 

 

 

*

 

Royal W. Carson, III(12)

 

 

120,278

 

 

 

*

 

H.C. Charles Diao

 

 

110,919

 

 

 

*

 

Dennis J. FitzSimons

 

 

74,791

 

 

 

*

 

Soohyung Kim(13)

 

 

7,581,149

 

 

 

5.9

%

Douglas W. McCormick(14)

 

 

255,272

 

 

 

*

 

John R. Muse(1)

 

 

11,631,627

 

 

 

9.0

%

Wyndham Robertson

 

 

40,910

 

 

 

*

 

Thomas J. Sullivan

 

 

20,741

 

 

 

*

 

 

 

 

 

 

 

 

 

 

Directors and Officers as a group

 

 

21,407,961

 

 

 

16.5

%


*     Less than 1%

 

 
4

 

  

  

(1)

The share information is as of May 11, 2016, and is principally derived from a Schedule 13D filed by Hicks, Muse Fund III, Incorporated and affiliates, as amended on May 11, 2016. According to the Schedule 13D as amended, of the 11,631,627 shares listed: (1) Hicks, Muse, Tate & Furst Equity Fund III, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 8,855,759 shares; (2) HM3/GP Partners, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 8,855,759 shares; (3) Hicks Muse GP Partners III, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 8,971,563 shares; (4) Hicks Muse Fund III Incorporated may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 8,971,563 shares; (5) HM3 Coinvestors, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 115,804 shares; (6) Hicks, Muse & Co. Partners, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 123,198 shares; (7) HM Partners, Inc. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 123,198 shares; (8) Hicks, Muse, Tate & Furst Equity Fund IV, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 2,293,007 shares; (9) Hicks, Muse, Tate & Furst Private Equity Fund IV, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 15,423 shares; (10) HM4 Partners, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to 2,308,430 shares; (11) Hicks, Muse GP Partners L.A., L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 2,308,430 shares; (12) Hicks, Muse Latin America Fund I Incorporated may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 2,308,430 shares; (13) HM4-EQ Coinvestors, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 35,584 shares; (14) Hicks, Muse GP Partners IV, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 35,584 shares; (15) Hicks, Muse Fund IV, LLC may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 35,584 shares; (16) HM Capital Partners I LP, may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 4,829 shares; (17) HMCP GP LLC may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 4,829 shares; (18) Muse Family Enterprises, Ltd. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 685 shares; (19) JRM Interim Investors, L.P. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 4,927 shares; (20) JRM Management Company, LLC may be deemed to beneficially own, and has shared voting and dispositive power with respect to 5,612 shares; (21) John R. Muse, a director of the Company, may be deemed to beneficially own 11,631,627 shares, has sole voting and dispositive power with respect to 182,411 shares (which include 73,570 shares subject to currently exercisable options; 9,404 deferred stock units; and 3,972 restricted shares granted prior to the LIN Media merger under the LIN Media LLC Stock Plan, which shares remain subject to forfeiture until vested), and has shared voting and dispositive power with respect to 11,449,216 shares; and (22) Andrew S. Rosen may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 11,443,604 shares. Each of these entities and Messrs. Muse and Rosen disclaim beneficial ownership of the shares reported except to the extent of its or his pecuniary interest in such shares.

 

 

 

  

(2)

The share information is as of December 30, 2014, and is derived from a Schedule 13D filed by GAMCO Investors, Inc. (“GBL”) and affiliates, as amended on December 30, 2014. According to the Schedule 13D as amended, of the 10,284,921 shares listed, Gabelli Funds, LLC (“Gabelli Funds”) beneficially owns 3,060,381 shares, has sole voting power with respect to 13,000 shares, and has sole dispositive power with respect to 3,060,381 shares; GAMCO Asset Management Inc. (“GAMCO”) beneficially owns, has sole dispositive power with respect to, 5,985,888 shares, and has sole voting power with respect to 5,608,686 shares; MJG Associates, Inc. (“MJG Associates”) beneficially owns, and has sole voting and dispositive power with respect to, 3,007 shares; and Teton Advisors, Inc. (“Teton Advisors”) beneficially owns, and has sole voting and dispositive power with respect to, 1,188,889 shares; Gabelli Securities, Inc. (“GSI”) beneficially owns, and has sole voting and dispositive power with respect to, 44,513 shares; and GBL beneficially owns, and has sole voting and dispositive power with respect to, 2,243 shares. Each of GBL, GGCP, Inc. and Mario J. Gabelli is deemed to beneficially own, and has indirect sole voting and dispositive power with respect to the shares beneficially owned by Gabelli Funds, GAMCO, MJG Associates, Teton Advisors and GBL.

     

 

(3)

The share information is as of December 31, 2015, and derived from a Schedule 13G filed by OppenheimerFunds, Inc. and Oppenheimer Senior Floating Rate Fund as amended on February 4, 2016. According to the Schedule 13G as amended, of the 9,716,568 shares listed, OppenheimerFunds, Inc. may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 9,716,568 shares; and Oppenheimer Senior Floating Rate Fund may be deemed to beneficially own, and has shared voting and dispositive power with respect to, 6,793,744 shares.

 

 
5

 

 

  

(4)

The share information is as of March 4, 2016, and is derived from a Schedule 13D filed by Standard General L.P. (“Standard General”) and affiliates as amended on March 7, 2016. According to the Schedule 13D as amended, of the 7,581,149 shares listed, Standard General Communications LLC (“SG Communications”) beneficially owns 6,982,055 shares, and Standard General Fund L.P. (the “SG Fund”) beneficially owns 7,581,149 shares (including the 6,982,055 shares beneficially owned by SG Communications, its wholly owned subsidiary). Standard General serves as investment manager to each of the SG Fund and SG Communications and, in that capacity, exercises voting and investment control over the shares held by the SG Fund and SG Communications, and Soohyung Kim, a director of the Company, is a director of the general partner of Standard General. By virtue of the foregoing, Standard General and Mr. Kim may be deemed to beneficially own, and have share voting and dispositive power over, all of the 7,581,149 shares listed. Each of Mr. Kim, Standard General, the SG Fund and SG Communications disclaims beneficial ownership of the shares reported except to the extent of its or his pecuniary interest in such shares.

     

  

(5)

Includes shares held in the 401(k) Plan as of May 31, 2016.

 

 

 

  

(6)

The share information is as of May 31, 2016. Shares listed for Mr. Sadusky include 271,215 shares subject to currently exercisable options.

 

 

 

  

(7)

The share information is as of May 31, 2016. Shares listed for Mr. Woodward include 44,400 shares subject to currently exercisable options.

     

  

(8)

The share information is as of May 31, 2016. Shares listed for Mrs. McDermott include no shares subject to currently exercisable options.

 

 

 

  

(9)

The share information is as of May 31, 2016. Shares listed for Mr. Carington include 28,500 shares subject to currently exercisable options.

 

 

 

  

(10)

The share information is as of May 31, 2016. Shares listed for Mr. Mulvaney include 22,900 shares subject to currently exercisable options.

 

 

 

  

(11)

Includes deferred stock units earned, as of December 31, 2015, pursuant to the Media General, Inc., Directors’ Deferred Compensation Plan as indicated in “Director Compensation.”

 

 

 

  

(12)

The share information is as of May 31, 2016. Shares listed for Mr. Carson include 18,465 shares subject to currently exercisable options.

 

 

 

  

(13)

See (4) above.

 

 

 

  

(14)

The share information is as of May 31, 2016. Shares listed for Mr. McCormick include 24,682 shares subject to currently exercisable options.

 

 
6

 

 

EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion & Analysis

 

Introduction

 

This Compensation Discussion & Analysis (CD&A) provides an overview of our executive compensation program and fiscal 2015 pay determination for our named executive officers (NEOs), who are listed below:

 

Name

Title

Vincent L. Sadusky

President and Chief Executive Officer

James F. Woodward 

Senior Vice President and Chief Financial Officer

Deborah A. McDermott

Senior Vice President and Chief Operating Officer

Andrew C. Carington 

Vice President, General Counsel and Secretary

Robert S. Richter

Former Senior Vice President and Chief Digital Officer

 

Mr. Richter’s employment with the Company terminated effective as of February 1, 2016. Mr. Richter received severance payouts based on his employment agreement and related separation agreement as further described in “Former Named Executive Officer” on page 19 below. 

 

As part of our ongoing effort to enhance shareholder communications, our CD&A consists of the following three sections: 

 

Section I:

Executive Summary: 2015 in Review

Section II:

Overview of the Executive Compensation Program

Section III:

Details and Analysis of the 2015 Executive Compensation Program

 

Section I: Executive Summary: 2015 in Review

 

In this Executive Summary, we discuss a number of significant changes in 2015, including the following subjects:

 

 

Another Year of Transition – Following the December 19, 2014 merger with LIN Media, which created one of the nation’s largest local media companies, 2015 included significant transition as the Company integrated the operations of the two businesses. The Company also negotiated a strategic transaction with Nexstar Broadcasting Group, Inc. (Nexstar) culminating in a merger agreement signed on January 27, 2016.

 

 

Pay Outcomes – Pay outcomes for our NEOs for 2015 were less discretionary and more directly tied to the performance of the Company than in 2014. In addition, we made equity grants which were tied to both financial performance metrics and continued service.

 

Our Board of Directors strongly believes in improving both financial results and shareholder returns. As such, the Board is supporting management’s ongoing business strategies for realizing such objectives. During 2015, the Compensation Committee developed and implemented an executive compensation philosophy and related programs designed to support and drive the business strategies in a manner beneficial to all stockholders.

 

Another Year of Transition

 

The significant transformation of Media General continued in 2015 and included the following major milestones for the Company:

 

 

successful integration with LIN Media, with the combined company owning, operating or providing services to 71 television stations in 48 markets reaching 23% of U.S. TV households;

  

 

maintenance of a strong balance sheet, significant cash flow and ownership of top-ranked stations in attractive markets along with industry-leading news and digital operations;

  

 

realization of significant immediate synergies with more than $70 million in expected annual run-rate synergies by the end of 2018; and

  

 

improved position to further participate in the consolidation of the television broadcasting industry.

 

 
7

 

 

In addition to the milestones above, 2015 was an important year of transition for our executive pay programs, including the integration of executive pay programs from Young, LIN Media and Media General. The Committee reevaluated its compensation philosophy and incentive programs during 2015 in light of the new opportunities presented by the continuing transformation of Media General, all in an effort to sharpen its focus on shareholder return.

 

Pay Outcomes

 

With respect to fiscal 2015, our Committee made the following pay decisions with respect to NEOs, which generally reflect the Committee’s focus on pay for performance:

 

 

Salaries for most NEOs remained the same in 2015 as in 2014. The Committee reviewed the CEO’s base salary and determined an adjustment would be appropriate due to his performance, especially in light of his leadership during a period of significant transition. In February, 2015, the Committee recommended and the Board approved an increase in Mr. Sadusky’s annual salary to $900,000. In addition, the Board approved an increase to Mr. Sadusky’s 2015 annual target bonus to $1,125,000. Target bonuses for other NEOs were maintained at the same levels as in 2014.

 

 

Annual incentive payouts for 2015 were based upon both performance metrics and discretionary components and were made at levels that reflected the Company’s financial performance and other criteria in 2015 as follows: 

 

 

For Mr. Carington and Mrs. McDermott, annual incentive payouts were above target based on incentive plan guidelines and discretionary adjustments approved by the Committee and the Board of Directors. Achievement of budgeted financial objectives against the below performance scale accounted for 60% of their bonus targets, and Mr. Carington and Mrs. McDermott achieved 34.5% and 121%, respectively, of the portion of their bonus tied to budgeted financial objectives.

 

 Financial Target

 Bonus

 90.

0%

  0.

0%

 92.

0%

 15.

0%

 94.

0%

 30.

0%

 96.

0%

 45.

0%

 98.

0%

 60.

0%

100.

0%

100.

0%

102.

0%

110.

0%

104.

0%

120.

0%

106.

0%

130.

0%

108.

0%

140.

0%

110.

0%

150.

0%

112.

0%

160.

0%

114.

0%

170.

0%

116.

0%

180.

0%

118.

0%

190.

0%

120.

0%

200.

0%

 

 
8

 

 

 

Messrs. Sadusky, Woodward and Richter’s annual incentive payouts were below target, based largely on the failure to meet budgeted financial objectives due to the underperformance of our digital operations. Achievement of these budgeted financial objectives against the above performance scale accounted for 60% of their bonus targets, and Messrs. Sadusky, Woodward and Richter achieved 34.5%, 34.5% and 0%, respectively, of the portion of their bonus tied to budgeted financial objectives.

    

 

Equity incentives were granted by the Committee to key executives in 2015. These awards were comprised of two components: performance-based restricted stock units (P-RSUs) tied to financial targets representing 75% of the total award value, and time-based restricted stock units (T-RSUs) representing the remaining 25% of the total award value.

 

Looking Forward

 

Our Committee examined all of the executive pay programs from each legacy company during 2015 and strongly focused on ensuring the compensation program has a robust pay-for-performance orientation. The Committee used the following pay philosophies as the basis for its decisions:

 

 

Salary increases were considered in the context of the achievement of budgeted financial objectives and/or an increase in overall responsibilities.

  

 

Annual incentives for the NEOs were tied to the achievement of financial and individual objectives.

  

 

Long-term incentives are mostly performance-based.

  

 

Retention objectives are met primarily through individual components of the compensation programs.

  

 

Most executive perquisites have been or will be eliminated over time.

 

Section II: Overview of the Executive Compensation Program

 

Compensation Philosophy and Objectives

 

Historically, our compensation philosophy was designed to support and reinforce the achievement of key operating and strategic goals. The philosophy was applied consistently to the NEOs identified in the Summary Compensation Table.

 

Media General’s executive compensation programs were designed to:

 

 

align the interests of the individual with those of shareholders; and

  

 

link individual performance with compensation opportunities.

 

These elements were intended to motivate the executives, and the Committee believes a tightly administered compensation system that rewards appropriate performance is a constructive way to grow shareholder value and attract and retain talented personnel.

 

As noted above, in 2015, our Committee continued a pay philosophy that is more directly based on pay-for-performance, which manifests itself in both the design of the programs and the method by which they are administered on a year-by-year basis. For 2015, our Committee focused on providing annual incentives that, in its judgment, were directionally correct for the performance achieved in the context of a fiscal year during which Media General and LIN Media were integrated.

 

 
9

 

 

Primary Components of the Executive Compensation Program

 

For 2015, our executive compensation program included the following major components designed to achieve the purposes and objectives indicated:

 

Component

 

Purpose/Objective

 

Performance Linkage

 

Form of Payout

Salaries

 

Provide a fixed, competitive level of pay based on responsibility, qualifications, experience and performance.

 

Moderate; merit increases are based on a combination of Company performance, experience, market pay levels and internal pay equity.

 

Cash.

Annual Incentives

 

Align annual incentives with annual performance based on attainment of budgeted financial objectives (60%) and attainment of individual performance goals (40%).

 

Strong; no awards are paid for performance below a defined threshold.

 

Cash.

Long-Term Incentives

 

Align long-term incentives with longer-term financial performance and shareholder value creation, enhance executive retention and provide an equity interest to further align executive and shareholder interests.

 

Strong; outstanding prior awards continued to provide financial performance linkage.

 

Cash or equity-based instruments; most of the 2015 awards (75%) are earned for financial performance, and only 25% of the awards are earned for continued service.

Retirement and Other Benefits

 

Provide for competitive health, welfare and retirement needs to further enhance executive retention. Our NEOs are also eligible for certain perquisites to enhance retention.

 

Limited.

 

Retirement benefits are paid in cash following a qualifying separation from service.

 

The Committee and its Role in Determining Executive Pay

 

Our Committee is responsible for the design and oversight of our executive compensation programs covering the NEOs. Each of the Committee members is independent, as defined by the rules of the New York Stock Exchange. The Committee makes policy and strategic recommendations to the Board and has authority delegated from the Board to:

 

 

make recommendations to the Board with respect to executive pay decisions;

  

 

design and recommend to the Board the salary, incentive pay and benefit programs for the NEOs; and

  

 

oversee the Company’s equity incentive plans.

 

The Committee met nine (9) times in 2015, and in three (3) of those meetings, the Committee met in executive session during which management was not present. Most compensation decisions are finalized in the first and fourth quarter of each fiscal year. The Committee Charter, which sets forth the Committee's responsibilities on a more comprehensive basis, is available under the “Corporate Governance” tab at www.mediageneral.com and is reviewed on an annual basis to ensure it continues to satisfy changing corporate governance requirements and expectations.

 

 
10

 

 

To ensure it is making fully informed compensation determinations, the Committee reviews, considers and relies on various sources of information and materials. Without limitation, the Committee generally (i) considers market information and advice provided by its independent compensation consultant and other advisors; (ii) reviews financial and company performance materials such as budgets, financial statements, management reports of our business activities and individual performance assessments; (iii) considers factors such as the experience, skill sets and contributions of each NEO to our overall success; (iv) receives input from the CEO with respect to salaries, incentives and total pay for the NEOs other than the CEO; and (v) reviews an analysis of the overall compensation element values and totals, primarily to identify any competitive issues, gain an understanding of the relative dollar values of each compensation element and to understand the magnitude of total compensation; and thereafter makes its recommendations to the Board. Parameters of the overall levels of compensation are determined by the Board after consideration of the Committee’s recommendations, and the compensation for the NEOs is set within such parameters in the discretion of the Committee.

 

The Role of Pearl Meyer as Independent Advisors to the Committee

 

Periodically, the Company reviews its compensation programs with outside consultants who are engaged by and report directly to the Committee.

 

In mid-2013, the Committee retained Pearl Meyer as its independent consultant to provide assistance specifically with the implementation of the employment agreements for each of the NEOs in the context of the Young merger. In September 2013, the Committee retained Pearl Meyer as its ongoing independent consultant. Pearl Meyer consulted on a variety of executive pay issues, including pay philosophy, salary management, incentive plan design and general assistance to the Committee in its intensive reexamination of executive pay during the remainder of 2013 following the Young merger and early in 2014. During 2015, Pearl Meyer assisted the Committee by reviewing the Company’s executive compensation and non-employee Director compensation programs. The Committee assessed the independence of Pearl Meyer pursuant to the applicable SEC rules. The Committee concluded following the assessment that no conflict of interest exists that would prevent Pearl Meyer from serving as its independent consultant in 2015.

 

How Pay is Set: Initial Benchmarking

 

Peer Group Companies

 

Our Committee examines competitive peer group and survey information, compiled by the Company’s Human Resources Department and Pearl Meyer, as one factor to assist in determining base salary, annual incentive compensation and, if appropriate, stock-based long-term equity awards. The peer group companies provide relevant comparisons based on their similarity to us in size and business operations. Due to numerous acquisitions in the broadcast industry, only six television broadcasting companies were available to be included in the Company’s peer group in 2015, so management, the Committee and Pearl Meyer jointly developed a new peer group which included a broader group of media companies, given the low number of “pure play” television broadcasting companies following recent industry consolidation. The key factors considered in choosing the new peer group were:

 

 

industry (media companies which have a television segment or business);

 

 

revenues (within about 40% - 250% of Media General’s projected $1.3 billion of revenues in 2015); and

 

 

market cap (within 20% - 500% of Media General’s market cap).

 

The 2015 peer group included:

 

Clear Channel Outdoor Holdings, Inc.

New York Times Company

Dex Media, Inc.

Nexstar Broadcasting Group, Inc.

Tegna, Inc.

Scholastic Corporation

Gray Television, Inc.

Sinclair Broadcast Group, Inc.

Meredith Corporation

Tribune Media Company

 

The 2015 peer group included companies from the advertising and broadcasting industries. We note Media General is at about the 18th percentile versus the peer group in terms of revenue comparisons (based on Media General’s 2015 revenues), but at about the 60th percentile and 56th percentile respectively, in terms of market cap and estimated EBITDA. We also note that Tegna was spun out of Gannett in 2015. Gannett was a much larger company than Media General in terms of revenue, when it split into broadcasting and publishing companies. We subsequently elected to include Tegna’s broadcasting business but exclude separate from other business entities within Tegna. The Committee used the 2015 peer group to evaluate CEO pay during 2015.

 

 
11

 

 

In addition to market data, the Committee considered factors such as individual performance, internal pay equity among executives, promotion potential and retention risk in determining total compensation for our NEOs.

 

Section III: Details and Analysis of the 2015 Executive Compensation Program

 

Salary

 

The Company believes individual performance has a significant impact on overall Company results. Therefore, the Company considers individual performance, along with the factors below, when determining salaries for its NEOs:

 

 

company performance;

 

 

management level and experience;

 

 

market salary data; and

 

 

internal pay equity.

 

The Committee approved the following salary increases in 2015:

 

 

 

2014

 

 

2015

 

 

%

 

Executive

 

Salary

 

 

Salary

 

 

Change

 

Vincent L. Sadusky

 

$

711,000

 

 

$

900,000

 

 

 

27%

 

James F. Woodward

 

$

500,000

 

 

$

500,000

 

 

 

0%

 

Deborah A. McDermott

 

$

575,000

 

 

$

575,000

 

 

 

0%

 

Andrew C. Carington

 

$

400,000

 

 

$

400,000

 

 

 

0%

 

Robert S. Richter*

 

$

394,000

 

 

$

500,000

 

 

 

27%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Mr. Robert S. Richter became an NEO in 2015.

 

 

 

 

 

 

 

 

 

 

Annual Incentives

 

The Committee established 2015 individual incentive award targets at the beginning of the year. Award targets for each of the NEOs were based on a percentage of the individual’s salary at the rate in effect at the beginning of 2015 and contained two components, the first of which (weighted at 60%) was determined quantitatively based solely on achievement of financial goals for the business. The second component (weighted at 40%) was determined qualitatively based on the assessment of other performance criteria on a case-by-case basis. Depending upon performance, an NEO could receive in excess of 100% of the financial or qualitative component, as set forth in the Grants of Plan-Based Awards in 2015 Table.

 

The target incentives along with the discretionary payments for 2015 are shown below:

 

 

 

 

 

 

 

 

Annual

 

 

Annual

 

Actual

 

 

2015

 

 

Incentive

 

 

Incentive

 

Incentive

Executive

 

Salary

 

 

Target %

 

 

Target $

 

Paid

Vincent L. Sadusky

 

$

900,000

 

X

 

 

125.0

%

=

 

$

1,125,000

 

 

$

570,375

 

James F. Woodward

 

$

500,000

 

X

 

 

45.0

%

=

 

$

225,000

 

 

$

181,575

 

Deborah A. McDermott

 

$

575,000

 

X

 

 

45.0

%

=

 

$

258,750

 

 

$

301,994

 

Robert S. Richter

 

$

500,000

 

X

 

 

45.0

%

=

 

$

225,000

 

 

$

18,000

 

Andrew C. Carington

 

$

400,000

 

X

 

 

36.0

%

=

 

$

144,000

 

 

$

215,246

 

 

 
12

 

 

Long-Term Incentive Equity-Based Awards

 

The Committee and the Board of Directors approved grants of P-RSUs and T-RSUs in 2015. The 2015 grants were subject to shareholder approval of the Media General Amended and Restated Long-Term Incentive Plan (the “Long-Term Incentive Plan”), which was approved at the Company’s 2015 Annual Meeting. The P-RSUs are eligible to vest over a three-year performance period based on the achievement of financial performance objectives and continued employment through the applicable vesting date. The T-RSUs will vest subject to continued employment over a three-year service period. Both P-RSUs and T-RSUs are designed to align NEO interest with that of shareholders and promote retention.

 

 

 

P-RSUs

 

 

T-RSUs

 

 

Total

Grant

 

Executive

 

# Granted

 

 

Grant Date

Fair Values

 

 

# Granted

 

 

Grant Date

Fair Values

 

 

Date Fair

Values

 

Vincent L. Sadusky

 

 

201,733

 

 

$

3,405,253

 

 

 

67,244

 

 

$

1,135,079

 

 

$

4,540,332

 

James F. Woodward

 

 

22,415

 

 

 

378,365

 

 

 

7,472

 

 

 

126,127

 

 

 

504,492

 

Deborah A. McDermott

 

 

53,796

 

 

 

908,076

 

 

 

17,932

 

 

 

302,692

 

 

 

1,210,768

 

Andrew C. Carington

 

 

20,173

 

 

 

340,520

 

 

 

6,724

 

 

 

113,501

 

 

 

454,021

 

Robert S. Richter

 

 

134,489

 

 

 

2,270,174

 

 

 

44,830

 

 

 

756,730

 

 

 

3,026,904

 

 

Perquisites and Other Personal Benefits

 

The Company provides its NEOs with a limited number of perquisites and other personal benefits as described below:

 

 

The Company offers tax preparation and financial planning services to some of its NEOs to reduce the amount of time and attention the officer must devote to such activities and to ensure the officer’s tax returns comply with IRS regulations. The services are taxable to the NEO, and the NEO pays the associated income taxes.

  

 

Consistent with their prior entitlements under the LIN Media’s automobile policy, Mr. Sadusky and Mr. Richter, until his separation, continue to use a company-owned vehicle and are responsible for paying income taxes associated with their personal use of such vehicles. In addition, Mrs. McDermott and certain other executives are eligible to receive a Company automobile allowance.

  

 

The Company provides life insurance coverage to Mr. Woodward beyond that offered to other Company employees. The Company pays the annual premium and related tax gross-ups.

 

Pension and Other Retirement Benefits

 

Certain NEOs, including our CEO, participate in various qualified and non-qualified retirement plans. At one time, these plans were generally available to a broad range of employees, including NEOs. However, Media General has frozen its retirement programs and the Deferred Compensation Plan. In addition, Media General assumed the obligations of LIN’s frozen retirement plan and its deferred compensation plan upon consummation of the merger. Each of the qualified and non-qualified plans are described more fully in the narrative discussion following the Pension and Non-qualified Deferred Compensation tables. The Company continues to sponsor a 401(k) Plan and a supplemental 401(k) Plan.

 

Employment Arrangements, Severance and Change-in-Control Benefits

 

In 2015, the Company entered into an amended and restated employment agreement with Mr. Woodward. The terms of this agreement and the agreements with Mr. Sadusky and the other named executive officers are summarized below following the Summary Compensation Table and in the Section titled “Potential Payments Upon Termination or Change in Control.” Certain agreements were further amended in early 2016 as described below.

 

Section 162(m) of the Internal Revenue Code (Code) limits the Company’s deduction for compensation paid to the NEOs (with the exception of the CFO) named in the Summary Compensation Table to $1 million during the tax year, subject to certain permitted exceptions. The Company’s Long-Term Incentive Plan has been structured so that awards of stock options, stock appreciation rights and certain performance awards may be granted in a manner that satisfies the exception under Section 162(m) of the Code for “qualified performance-based compensation.” However, although the Committee will consider the impact of Section 162(m) in making its compensation decisions, it believes the tax deduction is only one of several relevant considerations in setting compensation. Accordingly, if it is deemed appropriate to provide compensation that does not constitute qualified performance-based compensation, the Committee may do so and, in such event, certain portions of compensation paid to the NEOs may not be deductible for federal income tax purposes by reason of Section 162(m) of the Code.

 

 
13

 

 

Compensation Committee Report

 

The Committee has reviewed the section of this Proxy Statement titled “Compensation Discussion and Analysis” with the management of the Company, and the Committee has recommended that the CD&A be included in this Proxy Statement and filed with the Securities and Exchange Commission.

 

 

The Compensation Committee

 

Dennis J. FitzSimons, Chairman

Royal W. Carson, III

Soohyung Kim

Wyndham Robertson

 

 
14

 

 

Summary Compensation Table

 

The following table sets forth total compensation for 2015, 2014, and 2013 for the Company’s President and Chief Executive Officer, its Senior Vice President and Chief Financial Officer, the three other most highly compensated executive officers as of December 31, 2015 from the time they became NEOs. Please note, as described in the footnotes below, that total compensation includes equity-based compensation (i.e., stock awards and option awards) and certain compensation paid in-kind (e.g., certain perquisites). Therefore, total compensation reflected below includes both cash and non-cash compensation attributable to each NEO during the applicable year.

 

 Name and

 Principal Position

Year

 

Salary

 

 

Bonus

 

 

Stock

Awards

(2)

 

 

Option

Awards

 

 

Non-Equity

Incentive Plan

Compensation

(3)

 

 

Change in Pension Value

and Non-

qualified

Deferred

Compensation

Earnings

(4)

 

 

All Other

Compensation

(5)

 

 

Total

 

 Vincent L. Sadusky (1)

2015

 

$

900,000

 

 

 

-

 

 

$

4,540,332

 

 

 

-

 

 

$

        400,000  

 

 

 

-

 

 

$

127,446

 

 

$

5,967,778

 

President and

2014

 

 

24,605

 

 

$

400,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

424,605

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 James F. Woodward

2015

 

 

500,000

 

 

 

-

 

 

 

504,493

 

 

 

-

 

 

 

        200,000  

 

 

 

-

 

 

 

95,380

 

 

 

1,299,873

 

Senior Vice President

2014

 

 

500,000

 

 

 

200,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$

          148,806

 

 

 

61,952

 

 

 

910,758

 

and Chief Financial

2013

 

 

414,039

 

 

 

-

 

 

 

768,962

 

 

$

43,520

 

 

 

        153,456  

 

 

 

-

 

 

 

58,762

 

 

 

1,438,739

 

Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Robert S. Richter (6)

2015

 

 

500,000

 

 

 

125,000

 

 

 

3,026,905

 

 

 

-

 

 

 

        125,000  

 

 

 

-

 

 

 

71,017

 

 

 

3,847,922

 

Former Senior Vice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President and Chief Digital Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Deborah A. McDermott (1)

2015

 

 

575,000

 

 

 

-

 

 

 

1,210,769

 

 

 

-

 

 

 

        200,000  

 

 

 

-

 

 

 

45,300

 

 

 

2,031,069

 

Senior Vice President

2014

 

 

575,000

 

 

 

200,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

21,200

 

 

 

796,200

 

and Chief Operating

2013

 

 

78,767

 

 

 

-

 

 

 

884,299

 

 

 

-

 

 

 

        700,000  

 

 

 

-

 

 

 

1,397

 

 

 

1,664,463

 

Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Andrew C. Carington

2015

 

 

400,000

 

 

 

-

 

 

 

454,021

 

 

 

-

 

 

 

        144,000  

 

 

 

-

 

 

 

22,185

 

 

 

1,020,206

 

Vice President and

2014

 

 

400,000

 

 

 

144,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

           23,727

 

 

 

10,400

 

 

 

578,127

 

General Counsel &

2013

 

 

326,933

 

 

 

-

 

 

 

617,013

 

 

 

23,120

 

 

 

           94,631  

 

 

 

-

 

 

 

25,064

 

 

 

1,086,761

 

Secretary

                                                                 

 

 

(1)

Compensation for Mr. Sadusky in 2014 is limited to amounts earned or awarded on or after the closing of the merger with LIN Media on December 19, 2014. Compensation for Mrs. McDermott for 2013 is limited to amounts earned or awarded on or after the closing of the merger with Young on November 12, 2013.

 

  

  

 

(2)

The amounts in this column represent the grant date fair value of the equity awards calculated in accordance with FASB ASC Topic 718. Details and assumptions used in calculating the grant date fair value of the awards may be found in Note 6, “Stock-based Compensation,” to the Company’s audited consolidated financial statements for the year ended December 31, 2015, included in our annual report on Form 10-K filed with the SEC on February 29, 2016.

 

 

 

 

(3)

Reflects annual incentive awards paid in 2015 for the 2014 fiscal year. The annual incentive awards for 2015 were paid in 2016 and are reflected on page 12 in under the heading “Annual Incentives.” 

 

 
15 

 

 

 

(4)

Due to a higher discount rate, the present value for all Plans decreased in value during the year ended December 31, 2015 as shown below:

 

Name

 

Change in Present

Value of

Accumulated

Benefits under

Retirement Plan

   

Change in Present

Value of

Accumulated

Benefits under

Supplemental

Retirement Plan

   

Change in Present

Value of

Accumulated

Benefits under

ERISA Excess Plan

   

Total 

 Vincent L. Sadusky

 

$

(18,406)

 

 

$

(44,744)

 

 

 

-

 

 

$

(63,150

)

 James F. Woodward

 

 

(29,536)

 

 

 

-

 

 

 

(534)

 

 

 

(30,070

)

 Robert S. Richter

 

 

(1,827)

 

 

 

(488)

 

 

 

-

 

 

 

(2,315

)

 Andrew C. Carington

 

 

(6,089)

 

 

 

-

 

 

 

-

 

 

 

(6,089

)

 

In 2015 Mr. Sadusky and Mr. Richter participated in the former LIN Media plans. Mrs. McDermott does not participate in a pension plan.

 

  

(5)

The amounts disclosed under this column for the most recent fiscal year (2015) consist of the following:

 

 Name

 

Annual

Company

Contributions

to Vested

and Unvested

Defined

Contribution

Plans

 

 

Annual

Company

Contributions

to

Supplemental

401(k) Plan

and

Supplemental

Income

Deferral

Plan

 

 

Dollar Value of

Insurance Premiums

Paid by the Company

With Respect to

Variable Universal

Life Insurance for

the Benefit of the

Named Executive

Officer

 

 

Tax Gross

Up

Associated

with

Variable

Universal Life

Insurance

for the

Benefit of

the

Named

Executive

Officer

 

 

Perquisites

 

 

Total

 

 Vincent L. Sadusky

 

$

24,000

 

 

$

85,769

 

 

 

-

 

 

 

-

 

 

$

17,677

 

 

$

127,446

 

 James F. Woodward

 

 

18,000

 

 

 

13,050

 

 

$

24,456

 

 

$

39,874

 

 

 

-

 

 

 

95,380

 

 Robert S. Richter

 

 

18,000

 

 

 

41,635

 

 

 

-

 

 

 

-

 

 

 

11,383

 

 

 

71,017

 

 Deborah A. McDermott

 

 

18,000

 

 

 

15,300

 

 

 

-

 

 

 

-

 

 

 

12,000

 

 

 

45,300

 

 Andrew C. Carington

 

 

18,000

 

 

 

4,185

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

22,185

 

 

Perquisites for Messrs. Sadusky, Richter and Mrs. McDermott were for car allowances. Perquisites for Messrs. Woodward and Carington were less than $10,000 in aggregate and thus are excluded from total compensation.

 

 

(6)

Robert S. Richter, the Company’s Senior Vice President and Chief Digital Officer, separated from the Company effective as of February 1, 2016.

  

 
16

 

 

GRANTS OF PLAN-BASED AWARDS IN 2015

 

 

 

 

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards

 

 

Estimated Future Payouts Under
Equity Incentive Plan Awards

 

 

All Other Stock Awards:

 

 

 

 

 Name

Grant Date

 

Threshold

($)

 

 

Target
($)

 

 

Maximum

($)

 

 

Threshold

(#)

 

 

Target
(#)

 

 

Maximum

(#)

 

 

Number

of

Shares

of

Stock or

Units
(#)

 

 

Grant

Date

Fair Value

of Equity

Awards
($)

 

 Vincent L. Sadusky

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity Incentive Plan

 

 

$

225,000

 

 

$

1,125,000

 

 

$

2,250,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,347

 

 

 

201,733

 

 

 

201,733

 

 

 

 

 

 

$

3,405,253

 

T-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,244

 

 

 

1,135,079

 

 James F. Woodward

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity Incentive Plan

 

 

 

45,000

 

 

 

225,000

 

 

 

450,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,483

 

 

 

22,415

 

 

 

22,415

 

 

 

 

 

 

$

378,365

 

T-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,472

 

 

 

126,127

 

 Robert S. Richter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity Incentive Plan

 

 

 

45,000

 

 

 

225,000

 

 

 

450,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,898

 

 

 

134,489

 

 

 

134,489

 

 

 

 

 

 

$

2,270,174

 

T-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,830

 

 

 

756,730

 

 Deborah A. McDermott

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity Incentive Plan

 

 

 

51,750

 

 

 

258,750

 

 

 

517,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,759

 

 

 

53,796

 

 

 

53,796

 

 

 

 

 

 

$

908,076

 

T-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,932

 

 

 

302,692

 

 Andrew C. Carington

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity Incentive Plan

 

 

 

28,800

 

 

 

144,000

 

 

 

288,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,035

 

 

 

20,173

 

 

 

20,173

 

 

 

 

 

 

$

340,520

 

T-RSUs

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,724

 

 

 

113,501

 

 

Employment Agreements

 

The following are descriptions of employment agreements for the named executive officers.

 

Chief Executive Officer. On March 21, 2014, the Company entered into an employment agreement (Employment Agreement) with Mr. Sadusky, which commenced on December 19, 2014 (Effective Date) and continues for a term ending on the fifth anniversary of the Effective Date (subject to earlier termination as provided therein). Pursuant to the Employment Agreement, Mr. Sadusky was paid an annual base salary in the amount of $711,000 and, beginning with each fiscal year commencing as of January 1, 2015, was eligible to receive an annual incentive payment of up to $757,000. In February 2015, the Board approved a new base salary of $900,000 and target annual incentive payment of $1,125,000.

 

Mr. Sadusky is subject to covenants prohibiting competition with the Company and solicitation of the employees, consultants, customers and suppliers of the Company, in each case during the term of his employment and for the one-year period following the termination of his employment for any reason. Mr. Sadusky is also subject to a perpetual covenant not to disclose the confidential information or trade secrets of the Company. Under the Employment Agreement, during its term, the Company is required to use its best efforts to have Mr. Sadusky nominated as a member of the Board.  

 

 
17

 

 

Other Named Executive Officers. Media General is party to an employment agreement with each of its named executive officers. During 2013, Media General entered into an employment agreement with each of Mr. Carington, Mrs. McDermott and Mr. Woodward, which became effective on November 12, 2013. During the year ended December 31, 2015, Media General entered into an amended and restated employment agreement with Mr. Woodward, which became effective on August 6, 2015. Pursuant to their employment agreements, in the event a named executive officer is terminated during the employment term by Media General other than for cause or disability, or by the officer for good reason, referred to as a “qualifying termination,” the officer will be entitled to severance and benefits consisting of:

 

  

1.5 times (one time for Mr. Sadusky, two times for Mr. Woodward) the sum of his base salary at the rate in effect immediately prior to termination plus the amount of the target annual incentive for the year of such termination (and in Mr. Sadusky’s case, the annual incentive amount for the prior fiscal year), referred to as the “severance payment;”

 

  

for all named executive officers, an amount equal to the target annual incentive opportunity for the year of such termination, pro-rated through the date of termination;

 

  

continuation of medical, dental, disability, and life insurance benefits for 12 months (24 months for Mr. Woodward) following the termination date;

 

  

accelerated vesting of any equity or stock-based compensation held by Messrs. Carington, and Woodward and Mrs. McDermott as of the termination date; and

 

  

for Mr. Woodward, outplacement services.

 

In addition, Mr. Woodward’s agreement provides that Media General may, upon delivery of notice of termination for any reason other than for cause, elect to extend Mr. Woodward’s employment for a period of six months in a non-officer position, during which period, (x) the terms of Mr. Woodward’s employment agreement shall continue to apply (other than the provision specifying his officer title) and (y) either Media General or Mr. Woodward may terminate Mr. Woodward’s employment prior to the end of the six-month extension period with 30 days’ notice. If Media General does not elect to extend Mr. Woodward’s employment in accordance with the foregoing, or Mr. Woodward elects to terminate his employment prior to the end of the six-month extension period, he shall be entitled to a lump sum payment equal to the base salary that would have been paid had he remained employed through the end of the extension period.

 

The agreements for Messrs. Sadusky, Carington, and Mrs. McDermott provide for increased severance payments and benefits in the event that a qualifying termination occurs in connection with a “change in control” (as such term is defined in the agreements) of Media General. The closing of transaction contemplated by the merger agreement signed in early 2016 with Nexstar would constitute a change in control under the agreements. The severance payments and benefits for Messrs. Sadusky and Carington and Mrs. McDermott in the event that a qualifying termination occurs in connection with a “change in control” include:

 

  

2 times the severance payment (as described above);

 

  

an amount equal to the target annual incentive opportunity for the year of such termination, pro-rated through the date of termination;

 

  

continuation of medical, dental, disability, and life insurance benefits for 24 months following the termination date for Mr. Sadusky (12 months following the termination date for Mr. Carington and Mrs. McDermott); and

 

  

accelerated vesting of any equity or stock-based compensation held by Messrs. Carington and Mrs. McDermott as of the termination date.

 

On January 5, 2016, Media General entered into an amendment with Messrs. Woodward and Carington, which would become effective upon the closing of the Nexstar transaction, which amended their employment agreements to provide the executive would be entitled to an excise tax gross-up in the event that, as a result of the payments that would be made as a result of or in connection with a change of control, the executive would be subject to an excise tax under Section 4999 of the Code. With the exception of Mr. Woodward’s agreement which was amended to remove his non-compete covenant, employment agreements also provide that following the termination of the named executive officer’s employment for any reason during the employment term, he or she will be bound by non-compete and non-solicitation covenants for a period of 12 months following such termination. In addition, on or about January 27, 2016, Media General entered into an amendment with Mrs. McDermott and Messrs. Carington and Woodward to extend the term of their respective employment agreements for a period of one year.

 

 
18

 

 

Former Named Executive Officer.

 

On September 27, 2013, the Company entered into an employment agreement with Mr. Richter, which commenced as of such date and continued for an indefinite term (subject to termination as provided therein). Pursuant to the employment agreement, Mr. Richter served in the role of Senior Vice President Digital, was paid an annual base salary of $383,000 and was eligible to receive an annual bonus payment equal to $255,000. In 2015, the Board approved a new base salary of $500,000. Mr. Richter’s employment agreement contained covenants prohibiting competition with the Company and solicitation of the employees, consultants, customers and suppliers of the Company, in each case during the term of his employment and for the one-year period following the termination of his employment for any reason. Mr. Richter is also subject to a perpetual covenant not to disclose the confidential information or trade secrets of the Company. Mr. Richter separated from the Company effective as of February 1, 2016, pursuant to the terms of a separation agreement which is described later in this report under the section entitled “Potential Payments Upon Termination or Change-in-Control.”

 

Outstanding Equity Awards Table

 

The following table provides a detail of outstanding stock options, restricted stock awards (RSA), performance-based stock units (P-RSU), time-based stock units (T-RSU) and PARS for each named executive officer as of December 31, 2015.

 

 

 

 

 

Option Awards

 

Stock Awards

 

Name

Grant Date

 

Number of

Securities

Underlying

Unexercised

Options

Exercisable (#)

 

 

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

(#) (1)

 

 

Option

Exercise

Price ($)

 

Option

Expiration

Date

 

Number of

Shares or

Units of

Stock that

Have Not

Vested (#)

(2)

(3) (4)

 

 

Market

Value of

Shares or

Units of

Stock that

Have Not

Vested as

of 12/31/15

($)

 

 Vincent L. Sadusky

 

12/8/2011

 

 

104,248

 

 

 

-

 

 

$

2.46

 

12/08/2021

 

 

 

 

 

 

 

 

 

 

12/6/2012

 

 

166,967

 

 

 

-

 

 

 

4.49

 

12/06/2022

 

 

 

 

 

 

 

 

 

(RSA)

9/10/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

135,074

 

 

$

2,181,445

 

 

(P-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,347

 

 

 

651,604

 

 

(T-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,244

 

 

 

1,085,991

 

 James F. Woodward

 

1/26/2006

 

 

5,100

 

 

 

-

 

 

$

49.66

 

1/26/2016

 

 

 

 

 

 

 

 

 

 

1/29/2008

 

 

2,400

 

 

 

-

 

 

 

20.30

 

1/29/2018

 

 

 

 

 

 

 

 

 

 

1/29/2009

 

 

5,000

 

 

 

-

 

 

 

2.16

 

1/29/2019

 

 

 

 

 

 

 

 

 

 

1/28/2010

 

 

5,000

 

 

 

-

 

 

 

8.90

 

1/28/2020

 

 

 

 

 

 

 

 

 

 

1/27/2011

 

 

4,900

 

 

 

-

 

 

 

5.20

 

1/27/2021

 

 

 

 

 

 

 

 

 

 

1/26/2012

 

 

11,100

 

 

 

-

 

 

 

4.98

 

1/26/2022

 

 

 

 

 

 

 

 

 

 

1/31/2013

 

 

10,667

 

 

 

5,333

 

 

 

4.26

 

1/31/2023

 

 

 

 

 

 

 

 

 

(PARS)

1/29/2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,800

 

 

$

77,520

 

 

(PARS)

1/28/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,600

 

 

 

122,740

 

 

(PARS)

1/26/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,600

 

 

 

268,090

 

 

(P-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,483

 

 

 

72,400

 

 

(T-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,472

 

 

 

120,673

 

 Robert S. Richter

 

12/8/2011

 

 

33,474

 

 

 

-

 

 

$

2.46

 

12/08/2021

 

 

 

 

 

 

 

 

 

 

12/6/2012

 

 

42,707

 

 

 

-

 

 

 

4.49

 

12/06/2022

 

 

 

 

 

 

 

 

 

(RSA)

9/10/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,722

 

 

$

480,010

 

 

(P-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,898

 

 

 

434,403

 

 

(T-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,830

 

 

 

724,005

 

 Deborah A. McDermott

(P-RSU)

4/23/2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,759

 

 

$

173,758

 

 

(T-RSU)

4/23/2015