Business Context and Reporting Period
This Form 8-K Current Report was filed by Entravision Communications Corporation on June 2, 2011, covering events occurring on May 26, 2011, and June 1, 2011. The filing details the entry into new material employment agreements with top executives and reports the results of the Company's annual meeting of stockholders held on May 26, 2011.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on corporate governance and executive compensation agreements.
Material Changes and Agreements
Executive Employment Agreements
On June 1, 2011, the Company entered into new employment agreements with Chairman and CEO Walter F. Ulloa and President and COO Philip C. Wilkinson. These agreements are effective as of January 1, 2011, and replace prior agreements from 2005. Key terms include:
- Term: Agreements end on December 31, 2013.
- Base Salary: $767,000 per year for each executive, subject to annual review.
- Bonus: Eligible for an annual bonus of up to 100% of base salary.
- Equity: Eligible for stock options and restricted stock under the 2004 Equity Incentive Plan.
- Severance (Termination without Cause): Two times the sum of current base salary plus average annual bonus (3-year average), plus two years of benefits and immediate vesting of time-based equity.
- Severance (Change of Control/Good Reason): Three times the sum of current base salary plus average annual bonus (3-year average).
Annual Meeting Results
At the Annual Meeting on May 26, 2011, stockholders voted on several matters. A quorum was established with 47,736,143 Class A shares and 22,188,161 Class B shares present.
- Election of Directors: All six nominees (Walter F. Ulloa, Philip C. Wilkinson, Paul A. Zevnik, Darryl B. Thompson, Esteban E. Torres, and Gilbert R. Vasquez) were elected.
- Auditor Ratification: McGladrey & Pullen, LLP was ratified as the independent auditor for the fiscal year ending December 31, 2011.
- Executive Compensation: Stockholders approved the advisory non-binding resolution on executive compensation.
- Compensation Vote Frequency: Stockholders voted to hold an advisory vote on executive compensation every three years (232,774,723 votes for 3 years vs. 17,324,067 for 1 year).
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or management commentary regarding future business performance. The primary risk disclosed relates to the significant financial obligations associated with the new executive employment agreements, specifically the severance packages triggered by termination without cause or change of control.
Investor Verification Checklist
- Verify the total potential severance liability for Messrs. Ulloa and Wilkinson under the new agreements, particularly in a change of control scenario.
- Confirm the Board's implementation of the three-year frequency for executive compensation advisory votes as recommended by stockholders.
- Review the Company's 2004 Equity Incentive Plan to understand the specific terms of equity grants available to the executives under the new agreements.
- Check subsequent filings for the actual equity grants made to the executives under the new terms.