Item 5. Other Information
ITEM 5. OTHER INFORMATION
During the three months ended June 30, 2024, none of Sinclair's or SBG's directors, managers, or officers, as applicable, adopted or terminated any contract, instruction, or written plan for the purchase or sale of Sinclair's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."
On August 8, 2024, Sinclair and SBG entered into a Second Amended and Restated Employment Agreement with Christopher S. Ripley, our President and Chief Executive Officer (the “New Ripley Agreement”). The New Ripley Agreement supersedes the Amended and Restated Employment Agreement entered into by Mr. Ripley and Old Sinclair on August 23, 2017.
Under the terms of the New Ripley Agreement, Mr. Ripley is entitled to an annual base salary of $1,000,000 from the date of the New Ripley Agreement through December 31, 2025. Mr. Ripley is also entitled to receive (i) an annual discretionary cash bonus of up to $1,500,000 and $1,000,000 for calendar years 2024 and 2025, respectively, (ii) quarterly performance bonuses of up to $250,000 per quarter for calendar years 2024 and 2025, subject to achievement of Adjusted EBITDA targets determined by Sinclair’s Board of Directors and an annual performance bonus of up to $500,000 for calendar years 2024 and 2025, subject to achievement of exceeds Adjusted EBITDA targets determined by Sinclair’s Board of Directors (collectively, the “EBITDA Performance Bonuses”) and (iii) an annual group performance bonus of up to $1,600,000 for calendar year 2025 (the “Group Performance Bonus”), subject to achievement of criteria determined by the Compensation Committee of Sinclair’s Board of Directors (the “Compensation Committee”). Mr. Ripley is also eligible to receive certain long-term performance bonuses of $5,000,000 if the average of the closing sales prices of shares of Sinclair’s Class A common stock over a twenty-two (22) trading day period exceeds (i) $33 per share, (ii) $40 per share, and (iii) every $5 per share interval thereafter, in each case adjusted for certain events as described in the New Ripley Agreement, with the value of the adjustment reasonably determined by the Compensation Committee. Mr. Ripley also has the opportunity to participate in certain Sinclair investments. Any changes to Mr. Ripley’s base salary, cash bonus, or equity incentive opportunities for future calendar years shall be determined by the Compensation Committee.
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Mr. Ripley is entitled to the following severance benefits, in addition to any earned but unpaid compensation and benefits as of the termination date: (i) in the case of his death or termination due to disability, prorated bonus amounts and a payout of unused vacation; and (ii) in the case of his termination without Cause or his resignation for Good Reason (each as defined in the New Ripley Agreement), or a termination for any reason (other than for Cause) either within twelve (12) months prior to or twelve (12) months following a Change in Control (as defined in the New Ripley Agreement), (x) a lump-sum cash payment in an amount equal to $3,500,000, (y) any Group Performance Bonus and EBITDA Performance Bonuses (prorated for the year of termination) for which the criteria is met in the same year as the termination date and (z) a payout of unused vacation. In addition, the vesting of Mr. Ripley’s equity awards will accelerate on certain termination events to the extent set forth in the award agreements governing his equity awards. As a condition to receipt of these benefits, on a termination of Mr. Ripley’s employment without Cause or for Good Reason or a termination of employment for any reason (other than for Cause) in connection with a Change in Control, Mr. Ripley is required to comply with his restrictive covenants described below and execute and not revoke a release of claims in our favor. The New Ripley Agreement also contains non-competition, non-solicitation, and confidentiality restrictions on Mr. Ripley.
The foregoing description of the New Ripley Agreement is not intended to be complete and is qualified in its entirety by reference to the New Ripley Agreement, a copy of which shall be filed as an exhibit with our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
ITEM 6. EXHIBITS
Exhibit
Number Description
31.1 Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.2 Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.3 Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, LLC, pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.4 Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, LLC, pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
32.1** Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.2** Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.3** Certification by Christopher S. Ripley, as Chief Executive Officer of Sinclair Broadcast Group, LLC, pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.4** Certification by Lucy Rutishauser, as Chief Financial Officer of Sinclair Broadcast Group, LLC, pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
101† The Company's Consolidated Financial Statements and related Notes for the quarter ended June 30, 2024 from this Quarterly Report on Form 10-Q, formatted in iXBRL (Inline eXtensible Business Reporting Language).
104 Cover Page Interactive Data File (included in Exhibit 101).
† Filed herewith.
** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on the 9th day of August 2024.
SINCLAIR, INC.
SINCLAIR BROADCAST GROUP, LLC
By: /s/ David R. Bochenek
David R. Bochenek
Senior Vice President/Chief Accounting Officer
(Authorized Officer and Chief Accounting Officer)
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.