METRO NETWORKS INC, DEF 14A, 1998-04-27

METRO NETWORKS INC
DEF 14A, 1998-04-27
COMMUNICATIONS SERVICES, NEC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

METRO NETWORKS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:

<PAGE>

METRO NETWORKS, INC.

----------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 28, 1998

----------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of METRO
NETWORKS, INC., a Delaware corporation (the "Company"), will be held at
Transco Tower, 2nd Floor Auditorium, 2800 Post Oak Boulevard, Houston, Texas
77056, on Thursday, May 28, 1998, at 10:00 a.m., Central Time, for the
following purposes:

1. To elect two Class 2 Directors;

2. To ratify and approve the 1997 Stock Option Plan;

3. To ratify and approve the issuance of certain stock options to the non-
employee Directors of the Company;

4. To ratify and approve the Company's independent public accountants for
fiscal 1998; and

5. To consider and act upon any other matters which may properly come
before the Annual Meeting and any adjournment thereof.

The Board of Directors has fixed the close of business on Tuesday, April 14,
1998 as the record date for the determination of the holders of capital stock
entitled to notice of and to vote at the Annual Meeting.

A list of stockholders entitled to vote at the Annual Meeting will be open
for examination by any stockholder for any purpose relevant to the meeting
during ordinary business hours for a period of ten days prior to the Annual
Meeting at the offices of the Company, 2800 Post Oak Boulevard, Suite 4000,
Houston, Texas, 77056, and will also be available for examination at the
Annual Meeting until its adjournment.

Attendance at the Annual Meeting will be limited to holders of record of the
Company's capital stock or their proxies, beneficial owners having evidence of
ownership, and guests of the Company. If you hold stock through a bank or
broker, a copy of an account statement from your bank or broker as of the
record date will suffice as evidence of ownership.

YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT. WE INVITE
ALL STOCKHOLDERS TO ATTEND THE ANNUAL MEETING. TO ENSURE THAT YOUR SHARES WILL
BE VOTED AT THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE YOUR SHARES IN PERSON, EVEN IF YOU HAVE
PREVIOUSLY SUBMITTED A PROXY.

By Order of the Board of Directors

[SIGNATURE APPEARS HERE]
David I. Saperstein
Chairman of the Board and Chief
Executive Officer

Houston, Texas
April 27, 1998

IMPORTANT

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN
THE ENVELOPE PROVIDED TO THE COMPANY'S TRANSFER AGENT AT AMERICAN STOCK
TRANSFER & TRUST COMPANY, ATTENTION: PROXY TABULATION DEPARTMENT, TO BE
RECEIVED NO LATER THAN MAY 27, 1998. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING IN YOUR PROXY PROMPTLY.

<PAGE>

PROXY STATEMENT

METRO NETWORKS, INC.
2800 POST OAK BOULEVARD
SUITE 4000
HOUSTON, TEXAS 77056

----------------

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 28, 1998

----------------

SOLICITATION AND REVOCATION OF PROXIES

The enclosed proxy is solicited by and on behalf of the Board of Directors
of METRO NETWORKS, INC., a Delaware corporation (the "Company"), for use at
the Company's 1998 Annual Meeting of Stockholders (the "Annual Meeting") to be
held on Thursday, May 28, 1998 at 10:00 a.m., Central Time, at Transco Tower,
2nd Floor Auditorium, 2800 Post Oak Boulevard, Houston, Texas 77056, and at
any and all adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders.

Any stockholder has the power to revoke his or her proxy at any time before
it is voted. A proxy may be revoked by delivering written notice of revocation
to the Company at its office at 681 Fifth Avenue, 10th Floor, New York, New
York, 10022, Attention: Gary L. Worobow, Corporate Secretary, by a subsequent
proxy executed by the person executing the prior proxy and presented at the
Annual Meeting, or by attendance at the Annual Meeting and voting in person by
the person executing the proxy. If not revoked, the proxy will be voted at the
Annual Meeting in accordance with the instructions indicated on the proxy card
by the stockholder or, if no instructions are indicated, will be voted FOR the
slate of Directors nominated herein, FOR the ratification and approval of the
1997 Stock Option Plan, FOR the ratification and approval of the issuance of
certain stock options to the non-employee Directors, FOR the ratification and
approval of KPMG Peat Marwick LLP as the Company's independent public
accountants and as to any other matter that may be properly brought before the
Annual Meeting, in accordance with the judgment of the proxy holder.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for the purpose of determining whether a
quorum is present, and each is tabulated separately. In determining whether a
proposal has been approved, abstentions are counted as votes against a
proposal and broker non-votes are not counted as votes for or against a
proposal or as votes present and voting on a proposal.

In addition to solicitation by mail, officers, Directors and regular
employees of the Company, who will receive no additional compensation for
their services, may solicit proxies by mail, telegraph or personal calls. All
costs of solicitation will be borne by the Company. The Company has requested
brokers and nominees who hold stock in their name to furnish this proxy
material to their customers and the Company will reimburse such brokers and
nominees for their related out-of-pocket expenses. This Proxy Statement of the
Company is being mailed on or about April 27, 1998 to each stockholder of
record as of the close of business on April 14, 1998.

VOTING AT THE ANNUAL MEETING

As of April 14, 1998, the Company had outstanding 16,588,024 shares of
Common Stock, par value $.001 per share (the "Common Stock"), and 2,549,750
shares of Series A Preferred Stock, par value $.001 per share (the "Preferred
Stock"). Holders of record of shares of Common Stock and Preferred Stock at
the close of business on April 14, 1998 will be entitled to notice of and to
vote at the Annual Meeting and will be entitled to one vote for each such
share so held of record.
<PAGE>

NOMINATION AND ELECTION OF CLASS 2 DIRECTORS
(PROPOSAL 1)

The persons named in the enclosed proxy will vote to elect the two nominees
named below under "Nominees for Class 2 Director" unless instructed otherwise
in the proxy. The persons receiving the greatest number of votes, up to the
number of Directors to be elected, shall be the persons elected as the Class 2
Directors. Shares represented by proxies which are marked "withhold authority"
will have the same effect as a vote against the nominees. The Class 2
Directors are to hold office until the 2001 Annual Meeting of Stockholders and
until their respective successors are duly qualified and elected.

The names and certain information concerning the persons nominated to be
elected as Class 2 Directors by the Board of Directors at the Annual Meeting
are set forth below. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE ELECTION OF THE NOMINEES NAMED BELOW UNDER "NOMINEES FOR CLASS 2
DIRECTOR". It is intended that shares represented by the proxies will be voted
FOR the election to the Board of Directors of the persons named below unless
authority to vote for the nominees has been withheld in the proxy. Although
the persons nominated have consented to serve as Directors if elected, and the
Board of Directors has no reason to believe that the nominees will be unable
to serve as Directors, if any nominee withdraws or otherwise becomes
unavailable to serve, the persons named as proxies will vote for any
substitute nominee designated by the Board of Directors. The following
information regarding the Company's Directors and executive officers,
including nominees, is relevant to your consideration of the slate proposed by
your Board of Directors:

DIRECTORS AND EXECUTIVE OFFICERS

The current Directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
David I. Saperstein(1).... 57 Chairman of the Board of Directors and Chief
Executive Officer
Charles I. Bortnick(1).... 44 President and Director
Shane E. Coppola(1)....... 32 Executive Vice President and Director
Timothy D. McMillin....... 55 Senior Vice President, Chief Financial Officer
Gary L. Worobow........... 33 Senior Vice President, General Counsel, Secretary
and Director
Ivan N. Shulman........... 35 Senior Vice President, Marketing
D. Patrick LaPlatney...... 38 Senior Vice President, Television
John R. Tomlinson......... 48 Senior Vice President, News
James A. Arcara(2)(3)..... 63 Director
Dennis F. Holt(3)......... 61 Director
Robert M. Miggins(2)(3)... 70 Director
Kenin M. Spivak........... 40 Director
</TABLE>
- --------
(1) Member of Executive Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee

The Board of Directors is divided into three classes, with each class
holding office for staggered three-year terms. The terms of Class 1 Directors
David I. Saperstein, Kenin M. Spivak and Gary L. Worobow expire in 2000, the
terms of Class 2 Directors Charles I. Bortnick and Robert M. Miggins expire in
1998 and the terms of Class 3 Directors Shane E. Coppola, James A. Arcara and
Dennis F. Holt expire in 1999. All executive officers of the Company are
chosen by the Board of Directors and serve at the Board's discretion.

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<PAGE>

ATTENDANCE AT MEETINGS AND BOARD COMMITTEES

During the fiscal year ended December 31, 1997, the Board of Directors held
two meetings.

The standing committees of the Board of Directors are the Executive
Committee, the Compensation Committee and the Audit Committee. The Board of
Directors has no nominating committee or committee performing a similar
function.

The Executive Committee, which held one meeting in fiscal 1997, has
authority to act for the Board on most matters during intervals between Board
meetings.

The Compensation Committee, which held one meeting in fiscal 1997, is
responsible for determining the compensation of executive officers and the
Company's non-executive officer employee compensation structure. The
Compensation Committee currently consists of James A. Arcara and Robert M.
Miggins.

The Audit Committee, which did not meet in 1997 but met in February 1998 to
review matters relating to the 1997 audit, is responsible for (i) reviewing
the Company's financial results and the scope and results of audits; (ii)
evaluating the Company's system of internal controls and meeting with
independent auditors and appropriate Company financial personnel concerning
the Company's system of internal controls; (iii) recommending to the Board of
Directors the appointment of the independent auditors; and (iv) evaluating the
Company's financial reporting activities and the accounting standards and
principles followed. The Audit Committee currently consists of James A.
Arcara, Dennis F. Holt and Robert M. Miggins.

NOMINEES FOR CLASS 2 DIRECTOR

The following persons' names will be placed in nomination for election to
the Board of Directors. The shares represented by the proxy cards returned
will be voted FOR the election of these nominees unless you specify otherwise.

CHARLES I. BORTNICK has been President and a Director of the Company since
June 1996. From April 1994 to May 1996, Mr. Bortnick served as Executive Vice
President/General Manager of the Company. Mr. Bortnick joined the Company in
March 1993 as Vice President/General Manager--Midwest Region based in Chicago.
Prior to joining the Company, Mr. Bortnick had 17 years of experience in the
radio broadcasting industry. From November 1987 through March 1993, Mr.
Bortnick served as Vice President/General Manager for Malrite Communications
at its WMMS-FM/WHK-AM radio station in Cleveland, Ohio and its KKHT-FM radio
station in Houston, Texas. From September 1984 to October 1987, Mr. Bortnick
served as Vice President/General Manager with TK Communications at its WSHE-
FM/WSRF-AM radio stations in Miami/Ft. Lauderdale. Mr. Bortnick is a board
member of the Radio Advertising Bureau and the March of Dimes AIR Awards.

ROBERT M. MIGGINS became a Director of the Company in October 1996. Mr.
Miggins served as Vice President/Western Region Manager for TeleRep, Inc. a
leading national television station representation company, from 1988 until
his retirement in December 1995. TeleRep is the National Sales division of Cox
Broadcasting Co. Prior to 1988, Mr. Miggins served as a principal and Vice
President and Regional Area Manager for Petry Television. Mr. Miggins also
served as Vice President of TeleRep from its formation in 1969 to 1980. Mr.
Miggins formed the Los Angeles Television Representative Association and was
President of the Association for nearly 5 years.

OTHER DIRECTORS AND EXECUTIVE OFFICERS

DAVID I. SAPERSTEIN founded Metro Networks, Inc. in 1978. Since 1978, Mr.
Saperstein has been the Chief Executive Officer and a Director of the Company.
Mr. Saperstein served as President of the Company from 1978 through June 1996.
Mr. Saperstein serves on the Boards of Directors for the Business Arts Fund
and the Toxoplasmosis Research Institute of the Michael Reese Hospital in
Chicago; the Board of Trustees for the Houston chapter of the United Way; the
Board of Governors for the Music Center of Los Angeles County and

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the Cedars-Sinai Medical Center in Los Angeles and is a member of the Dean's
Advisory Council for Touro College of Law in New York.

SHANE E. COPPOLA has served as Executive Vice President and a Director of
the Company since June 1996. From April 1992 through May 1996, Mr. Coppola was
Vice President--Corporate Development of the Company. From August 1989 through
March 1992, Mr. Coppola was a member of the Communications Finance Group at
The Toronto-Dominion Bank. Mr. Coppola earned a Masters of Business
Administration from the University of Rochester's William E. Simon School of
Business Administration in 1989 and a Bachelor of Arts from the University of
Rochester in 1988. Mr. Coppola is the son-in-law of Mr. Saperstein.

TIMOTHY D. MCMILLIN has served as Senior Vice President/Chief Financial
Officer since August 1997. Prior to joining the Company, from September 1995
through July 1997, he was Senior Vice President/Chief Financial Officer of
Four M Corporation. From September 1990 to August 1995, Mr. McMillin was an
independent strategic and financial consultant, serving as Chairman of
Executive Advisors, Inc. from November 1994 to September 1995. Prior to
joining the Company, Mr. McMillin had over 25 years experience in the
financial services industry serving in a variety of capacities including
Executive Vice President of a major regional bank.

GARY L. WOROBOW has served as General Counsel and Secretary of the Company
since May 1995, and as a Senior Vice President and a Director of the Company
since June 1996. From August 1991 until joining the Company, Mr. Worobow was
an attorney with the New York law firm of Stursberg & Veith. Mr. Worobow
earned a Juris Doctorate from Fordham Law School in 1991, a Masters of
Business Administration from the William E. Simon School of Business
Administration in 1989 and a Bachelor of Arts from the University of Rochester
in 1987.

IVAN N. SHULMAN has served as Senior Vice President of Marketing of the
Company since January 1997. From July 1995 through December 1996, Mr. Shulman
was Vice President of Marketing of the Company. From July 1994 through June
1995, he was Vice President, Merchandising of the Company; and from January
1991 through June 1994, Mr. Shulman was National Merchandising Manager of the
Company. Mr. Shulman joined the Company in October 1987. Prior to joining the
Company, Mr. Shulman worked in the consumer products industry with Carnation
Company.

D. PATRICK LAPLATNEY has been Senior Vice President of Television since
March 1997. Mr. LaPlatney previously served as Senior Vice President,
Programming and Distribution, Vice President of Affiliate Relations and
Manager, Southeast Region Advertising Sales for RAYCOM, Inc., from January
1989 through February 1997. Prior to working for RAYCOM, Inc., Mr. LaPlatney
had seven years of experience in television sales management with Blair
Television.

JOHN R. TOMLINSON has served as Senior Vice President of News since August
1997. From April 1996 through July 1997, Mr. Tomlinson served as Vice
President/General Manager of News. From April 1994 to May 1996, he was Vice
President/General Manager, Midwest Region. Mr. Tomlinson joined the Company in
February 1992 as Regional Director of Operations, Midwest Region and Great
Lakes Region. Prior to joining the Company, from January 1990 to February
1992, Mr. Tomlinson was Chief Operating Officer of Wisconsin and Illinois
Radio Networks. Prior to his service with Wisconsin and Illinois Radio
Networks, Mr. Tomlinson had 14 years of experience in the network radio news
industry.

JAMES A. ARCARA became a Director of the Company in October 1996. Mr. Arcara
is Chairman of Radio Enterprises Incorporated, a company that he founded in
1996 to acquire and operate radio stations. Mr. Arcara served as President of
Capital Cities/ABC Radio, a division of Capital Cities/ABC, Inc., from 1986
until April 1996. From 1980 until 1986, prior to the merger of Capital Cities
Communications, Inc. with ABC, Inc., Mr. Arcara served as Executive Vice
President for Capital Cities Radio. Mr. Arcara is a past President of the
Radio Advertising Bureau and a past Director of the National Association of
Broadcasters. From 1970 until 1980, Mr. Arcara served as Vice
President/General Manager for WPAT-AM/FM radio in Clifton, New Jersey. From
1967

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until 1970, Mr. Arcara served as Vice President/General Manager for WPRO-AM
radio in Providence, Rhode Island. From 1961 until 1967, Mr. Arcara served as
General Sales Manager for WKBW-AM radio in Buffalo, New York.

DENNIS F. HOLT became a Director of the Company in October 1996. Mr. Holt
has been the President and Chief Executive Officer of Western International
Media Corporation since founding the company in 1969. Western International
Media is the largest media-buying organization in the United States. Mr. Holt
serves as a member of Skull and Dagger, Blue Key, the Silver Shield
Foundation, the Board of Counselors for the University of Southern California
School of Public Administration, the Board of Directors of Aames Home Loan,
St. John's Hospital, the SKIRBALL Cultural Center and the United States
Information Agency. Mr. Holt has received the Los Angeles AD Club's Silver
Medal, and the Hollywood Radio and Television Society's Advertising Executive
of the Year Award. Mr. Holt was named Man of the Year in Advertising in 1993
and was awarded the Advertising Industry Emergency Fund's Golden Life Savers
Award in 1994.

KENIN M. SPIVAK became a Director of the Company in March 1997. Mr. Spivak
has served as Vice Chairman of John Paul Mitchell Systems, a leading hair care
products company, since August 1996 and Director since November 1993. He has
been Chairman of Aquarius Enterprises Inc., a supermarket advertising company,
since July 1997. In January 1995 Mr. Spivak co-founded Archon Communications
Inc. and served as the company's President and Co-Chief Executive Officer
until its sale in June 1997, as well as Chairman of Knowledge Exchange LLC,
and a Director and Co-Chairman of the executive committee of the Board of its
affiliate, Premiere Radio Network Inc., from August 1995 until June 1997. From
1991 until 1994, Mr. Spivak was President of the Island World Group and from
1988 to 1990, he served as Executive Vice President of MGM/UA Communications
Co. From 1985 through 1988 Mr. Spivak was an investment banker with Merrill
Lynch & Co. and from 1984 to 1985 he was Vice President of LCA/Highgate
Pictures, Inc. From 1980 until 1984 Mr. Spivak was an entertainment attorney
in New York and Los Angeles.

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<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 14, 1998, by all persons
known by the Company to own beneficially more than five percent (5%) of the
Company's Common Stock, each Director, the Chief Executive Officer of the
Company and the four most highly compensated executive officers of the Company
whose total salary and bonus exceeded $100,000 at December 31, 1997, and all
Directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED
--------------------
NUMBER(1) PERCENT
--------- -------
<S> <C> <C>
David I. Saperstein.................................... 7,939,602(2) 47.8%
Metro Networks, Inc.
2800 Post Oak Boulevard
Suite 4000
Houston, Texas 77056
Baron Capital Group, Inc./BAMCO, Inc./Baron Capital
Management,
Inc./Baron Asset Fund/Ronald Baron.................... 1,887,500(3) 11.4%(3)
767 Fifth Avenue
24th Floor
New York, New York 10153
Charles I. Bortnick.................................... 26,000 *
Shane E. Coppola....................................... 236,050(4) 1.4%
Gary L. Worobow........................................ 500(5) *
Ivan N. Shulman........................................ 12,067 *
John R. Tomlinson...................................... 1,634 *
James A. Arcara........................................ 8,334 *
Dennis F. Holt......................................... 53,334 *
Robert M. Miggins...................................... 3,834 *
Kenin M. Spivak........................................ 3,334 *
All executive officers and Directors as a group (12
persons).............................................. 8,294,689 49.7%
</TABLE>
- --------
* Less than 1%.
(1) Includes presently exercisable stock options and stock options which will
become exercisable within 60 days of the date of this table. The following
Directors and Officers hold the number of such options set forth opposite
their respective names: David I. Saperstein--33,334; Charles I. Bortnick--
25,000; Shane E. Coppola--25,000; Ivan N. Shulman--11,667; John R.
Tomlinson--1,334; James A. Arcara--3,334; Dennis F. Holt--3,334; Robert M.
Miggins--3,334; and Kenin M. Spivak--3,334.
(2) Does not include shares held by certain trusts created for the benefit of
Mr. Saperstein's children, beneficial ownership of which Mr. Saperstein
disclaims. In addition, the number of shares beneficially owned does not
include 2,549,750 shares of Series A Convertible Preferred Stock owned by
Mr. Saperstein and pledged to the Company in connection with the stock
loan under the Stock Loan and Pledge Agreement. See "Certain Relationships
and Related Transactions." Such shares have not been included because they
can only be converted into Common Stock upon repayment of such stock loan;
repayment may be achieved either through the acquisition of shares of
Common Stock in the open market and delivery of such shares to the Company
or the delivery of shares of Series A Convertible Preferred Stock. Mr.
Saperstein retains the voting rights to all pledged shares of Series A
Convertible Preferred Stock.
(3) Baron Capital Group, Inc. ("BCG"), BAMCO, Inc. ("BAMCO"), Baron Capital
Management, Inc. ("BCM"), Baron Asset Fund ("BAF"), and Ronald Baron
("Baron") have filed with the Securities and Exchange Commission Amendment
No. 1 to Schedule 13G (the "Schedule 13G"), dated February 13, 1998,
reporting that BCG, BAMCO, BCM, BAF and Baron may be deemed to
beneficially own 1,887,500, 1,590,000, 297,500, 1,230,000 and 1,887,500
shares, respectively, of the Common Stock. BCG, BAMCO, BAF and Baron have
filed the Schedule 13G as a group, pursuant to Rule 13d-1(b)(1)(ii) (F) of
the Securities Exchange Act of 1934, as amended. The number and percent of
shares beneficially owned set forth above are taken from the Schedule 13G
and are as of the date thereof.
(4) Includes 210,050 shares beneficially owned through the Michelle Joy
Coppola Trust. Mrs. Coppola, the beneficiary of the trust, is Mr.
Coppola's wife. These shares have been loaned to Mr. Saperstein in
connection with the Company's initial public offering.
(5) Includes 200 shares owned by Mr. Worobow's minor child for which Mr.
Worobow is custodian.

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<PAGE>

EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation. The following table provides
certain summary information concerning compensation paid or accrued by the
Company to or on behalf of the Company's Chief Executive Officer and the four
executive officers of the Company who received an annual salary and bonus in
excess of $100,000 (the "Named Executive Officers") for the year ended
December 31, 1997:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
NUMBER OF
ANNUAL COMPENSATION SECURITIES
---------------------------- UNDERLYING
OTHER ANNUAL STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS
--------------------------- ---- ------- ------- ------------ ----------
<S> <C> <C> <C> <C> <C>
David I. Saperstein............ 1997 349,683 37,500 29,505(1) 100,000
Chairman of the Board of 1996 833,437 -- 117,285(2) 100,000
Directors 1995 957,576 -- 65,092(3) --
and Chief Executive Officer
Charles I. Bortnick............ 1997 273,837 211,633 4,059(4) 75,000
President 1996 264,274 153,192 8,516(5) 75,000
1995 252,878 58,303 17,069(6) --
Shane E. Coppola............... 1997 199,181 25,000 10,490(7) 75,000
Executive Vice President 1996 382,159 -- 20,388(8) 75,000
1995 245,493 -- 8,142(9) --
Ivan N. Shulman................ 1997 199,243 20,000 3,769(10) 35,000
Senior Vice President, 1996 196,344 140,499 7,194(11) 35,000
Marketing 1995 333,591 -- 16,565(12) --

John R. Tomlinson.............. 1997 179,219 20,000 14,513(13) 30,000
Senior Vice President, News 1996 172,668 -- 10,737(14) 4,000
1995 152,481 -- 9,462(15) --
</TABLE>
- --------
(1) Includes expenses related to automobiles of $25,330, group term life
insurance premiums of $1,800 and the Company's contributions on behalf of
the named individual under the 401(k) Plan of $2,375.
(2) Includes cost of group term life insurance premiums of $1,800, the
Company's contributions on behalf of the named individual under the
401(k) Plan of $2,375 and expenses related to automobile use of $90,879
and certain medical benefits in the amount of $22,231.
(3) Includes expenses related to automobiles of $58,982, the Company's
contributions on behalf of the named individual under the 401(k) Plan of
$2,310 and group term life insurance premiums of $1,800.
(4) Includes cost of group term life insurance premiums of $408, fringe
benefits in the amount of $1,276 and the Company's contributions on
behalf of the named individual under the 401(k) Plan of $2,375.
(5) Includes expenses related to automobiles of $3,452, the Company's
contributions on behalf of the named individual under the 401(k) Plan of
$2,375, cost of group term life insurance premiums of $408 and fringe
benefits in the amount of $2,281.
(6) Includes cost of group term life insurance premiums of $408, the
Company's contributions on behalf of the named individual under the
401(k) Plan of $2,310, expenses related to automobile use of $5,209 and
fringe benefits in the amount of $9,142.
(7) Includes expenses related to automobiles of $7,750, group term life
insurance premiums of $216 and fringe benefits in the amount of $2,524.
(8) Includes expenses related to automobiles of $3,690, fringe benefits of
$16,482, and group term life insurance premiums of $216.
(9) Includes cost of group term life insurance premiums of $184, fringe
benefits in the amount of $6,439 and expenses related to automobiles of
$1,519.

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<PAGE>

(10) Includes cost of group term life insurance premiums of $264, the
Company's contributions on behalf of the named individual under the
401(k) Plan of $2,229 and fringe benefits in the amount of $1,276.
(11) Includes cost of group term life insurance premiums of $189, the
Company's contributions on behalf of the named individual under the
401(k) Plan of $2,302, expenses related to automobiles of $277 and fringe
benefits in the amount of $4,426.
(12) Includes cost of group term life insurance premiums of $113 the Company's
contributions on behalf of the named individual under the 401(k) Plan of
$1,397, fringe benefits in the amount of $14,201 and expenses related to
automobiles of $854.
(13) Includes cost of group term life insurance premiums of $696, the
Company's contributions on behalf of the named individual under the
401(k) Plan of $2,117 and fringe benefits in the amount of $11,700.
(14) Includes cost of group term life insurance premiums of $696 and the
Company's contributions on behalf of the named individual under the
401(k) Plan of $1,813, fringe benefits in the amount of $7,800 and
expenses related to automobiles of $428.
(15) Includes cost of group term life insurance premiums of $696, the
Company's contributions on behalf of the named individual under the
401(k) Plan of $1,155, fringe benefits in the amount of $6,510 and
expenses related to automobiles of $1,101.

Stock Options. The following table contains information concerning the stock
options granted during 1997 to the Named Executive Officers. All grants were
made under either the 1996 Incentive Stock Option Plan ("the 1996 Plan") or
the Company's 1997 Stock Option Plan (the "1997 Plan").

OPTIONS GRANTED IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
--------------------------------------------- -------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
GRANTED (#) FISCAL YEAR ($/SH)(1) DATE 5%($) 10%($)
----------- ------------ --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
David I. Saperstein..... 100,000 17.3% 33.34 10-30-02 812,650 1,860,500
Charles I. Bortnick..... 75,000 13.0% 30.25 09-05-07 1,668,750 3,909,075
Shane E. Coppola........ 75,000 13.0% 30.25 09-05-07 1,668,750 3,909,075
Ivan N. Shulman......... 35,000 6.1% 30.25 09-05-07 778,750 1,824,235
John R. Tomlinson....... 30,000 5.2% 30.25 09-02-07 667,500 1,563,630
</TABLE>
- --------
(1) All options other than those granted to a participant who owns more than
10% of the combined voting power of all classes of outstanding stock of
the Company (a "Ten Percent Stockholder") were granted at fair market
value at the date of grant for a term of ten years. Options granted to Ten
Percent Stockholders were granted at 110% of the fair market value at the
date of grant for a term of five years. All options granted under the 1996
and 1997 Plans are subject to vesting and to earlier termination in
certain instances relating to termination of employment.
(2) Calculation of potential realizable value is based on the closing price of
the Common Stock at December 31, 1997 ($32.75) minus the exercise price
per share, times the number of options held by the named executive
officer, increased at the indicated rate and compounded annually through
the stated expiration date.

8
<PAGE>

Options Exercised and Holdings. The following table sets forth information
concerning the exercise of options during the last fiscal year and unexercised
options held as of December 31, 1997 by the Named Executive Officers.

AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($)(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David I. Saperstein..... 0 0 33,333 166,667 504,995 1,010,005
Charles I. Bortnick..... 0 0 25,000 125,000 418,750 1,025,000
Shane E. Coppola........ 0 0 25,000 125,000 418,750 1,025,000
Ivan N. Shulman......... 0 0 11,667 58,333 195,422 478,328
John R. Tomlinson....... 0 0 1,333 32,667 22,328 119,672
</TABLE>
- --------
(1) Calculation of value realized is based on the closing price of the Common
Stock at December 31, 1997 ($32.75) minus the exercise price per share
times the number of shares acquired upon the exercise of stock options by
the Named Executive Officer.
(2) Calculation of the value of unexercised in-the-money options at December
31, 1997 is based on the closing price of the Common Stock at December 31,
1997 ($32.75) minus the exercise price per share of the options granted,
times the number of options held by the Named Executive Officer.

STOCK OPTION PLANS

The Company's Board of Directors adopted the 1996 Incentive Stock Option
Plan (the "1996 Plan") for the Company's officers and employees. The total
number of shares reserved for issuance under the 1996 Plan is 1,000,000, of
which approximately 994,500 were issued as of March 20, 1998. In October 1997,
the Company's Board of Directors adopted the 1997 Stock Option Plan (the "1997
Plan") for the Company's officers, employees and non-employee Directors. The
total number of shares reserved for issuance under the 1997 Plan is 1,500,000
of which approximately 208,500 were issued as of March 20, 1998. The 1997 Plan
is subject to stockholder approval at the 1998 Annual Meeting. The Board of
Directors has discretionary authority, subject to certain restrictions, to
administer both plans, including but not limited to determining the
individuals to whom, the times at which, and the exercise price for which
options will be granted. The exercise price of incentive options granted under
the 1996 Plan or 1997 Plan may not be less than 100% of the fair market value
(or not less than 110% of the fair market value as to any individual who, at
the time the option is granted, owned more than 10% of the total combined
voting power of all classes of stock of the Company) of the Common Stock on
the date such option was granted. Options granted under either plan are not
transferable by the optionholders except by will or by the laws of descent and
distribution. Options granted under the 1996 Plan and 1997 Plan typically
become vested and exercisable for up to 33 1/3% of the total optioned shares
upon the first anniversary of the grant of the option and for an additional
33 1/3% of the total optioned shares upon each succeeding anniversary until the
option is fully exercisable at the end of the third year. Generally, the
unexercised portion of any option automatically terminates upon the earlier of
(i) termination of the optionee's employment with the Company, (ii) the
expiration of 90 days from the date his employment with the Company terminates
for any reason other than cause, death, or disability (iii) the expiration of
one year after the optionee's death or (iv) the expiration of the option. Upon
the sale, merger or liquidation of the Company, outstanding options may be
exercised immediately prior to the consummation of such a transaction, whether
or not vested as of such date of consummation.

In addition, options to purchase an aggregate of 50,000 shares were issued
to non-employee members of the Board of Directors during 1997. The issuance of
40,000 of these options to non-employee Directors is subject to stockholder
approval at the 1998 Annual Meeting.

9
<PAGE>

EMPLOYEE STOCK PURCHASE PLAN

A total of 1,500,000 shares of the Company's Common Stock have been reserved
for issuance under the Company's 1996 Employee Stock Purchase Plan (the
"Purchase Plan"), of which 10,604 shares have been issued. The Purchase Plan
permits an eligible employee of the Company to purchase common stock at a
discount through payroll deductions not to exceed 10% of the compensation
received by such employee during such pay period ("Employee Purchases"). An
employee's right to purchase shares under the Purchase Plan will be granted at
the beginning of each six month period based on payroll deductions made in the
prior six month period. All purchases will be made automatically at the end of
each six month period. Employee Purchases cannot exceed $25,000 in any plan
year. The price at which the Common Stock is purchased under the Purchase Plan
as set by the Board of Directors is the lesser of 95% of the fair market value
of the Common Stock at the time an employee's right to purchase the stock is
granted, or the fair market value of the Common Stock on the date of purchase.

DEFINED CONTRIBUTION PLAN

Effective in April 1995, the Company established a profit sharing plan under
Section 401(k) of the Internal Revenue Code (the "401(k) Plan") for all
eligible employees. Under the 401(k) Plan, all eligible employees are
permitted to defer compensation up to a maximum of 10% of their income. The
401(k) Plan provides for a matching contribution by the Company equal to 25%
of the amount contributed by the employee, up to 6% of the employee's total
compensation. These contributions amounted to $314,000 in 1997. The employee's
contribution is immediately vested and 20% of the Company's matching
contribution vests every year after the second year of the employee's
participation in the plan. Accordingly, the matching contribution is fully
vested six years after such contribution.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with each of the Named
Executive Officers. Such employment agreements prohibit each of the Named
Executive Officers from competing with the Company for a period of one year
after termination of employment.

Mr. Saperstein is a party to an employment agreement with the Company
pursuant to which he serves as Chief Executive Officer of the Company. Under
the terms of Mr. Saperstein's employment agreement, he is entitled to receive
an annual base salary of $350,000. Such base salary will increase by 5% during
each year of the term of the employment agreement. The employment agreement
provides that Mr. Saperstein may receive a bonus of up to $150,000 per annum
at the discretion of the Board of Directors or the Compensation Committee. The
bonus potential will increase by 5% during each year of the term of the
employment agreement. Pursuant to the employment agreement, Mr. Saperstein was
granted stock options under the 1996 Plan to purchase up to 100,000 shares of
the Company's Common Stock at an exercise price equal to 110% of the initial
public offering price. Subsequent grants of options to Mr. Saperstein during
the term of the employment agreement are at the discretion of the Board of
Directors or the Compensation Committee. Mr. Saperstein's employment agreement
became effective as of October 16, 1996, and has a two year term subject to
automatic renewal at the end of the second year for an additional period of
one year, unless the Company gives written notice at least 90 days prior to
the end of such second year of its election to terminate such employment
agreement at the end of such second year (hereinafter, a "Non-Renewal").

Mr. Bortnick is a party to an employment agreement with the Company pursuant
to which he serves as President of the Company. Under the terms of Mr.
Bortnick's employment agreement he is entitled to receive an annual base
salary of $275,000. Such base salary will increase by 5% upon each anniversary
of the closing of the Company's initial public offering during the term of the
employment agreement. The agreement provides that Mr. Bortnick may receive a
bonus of up to $100,000 per annum at the discretion of the Board of Directors
or the Compensation Committee. The bonus potential increases by 5% during each
year of the term of the employment agreement. Pursuant to the employment
agreement, Mr. Bortnick was granted stock options under

10
<PAGE>

the 1996 Plan to purchase up to 75,000 shares of the Company's Common Stock at
an exercise price equal to the initial public offering price. Subsequent
grants during the term of the employment agreement are at the discretion of
the Board of Directors or the Compensation Committee. Mr. Bortnick's
employment agreement has a two year term from October 16, 1996 with an
automatic renewal provision of one year, subject to Non-Renewal. Mr. Bortnick
currently receives a base salary of $275,000. Mr. Bortnick's agreement also
provides that upon the termination of such agreement by the Company or Mr.
Bortnick under certain circumstances, Mr. Bortnick will continue to receive
the salary provided for under his employment agreement for three months
following termination of employment. Additionally, upon a change of control
(as defined in the employment agreement) of the Company, if Mr. Bortnick's
employment does not continue for a minimum of one year, he would be entitled
to receive two (2) times his then current base salary.

Mr. Coppola is a party to an employment agreement with the Company pursuant
to which he serves as Executive Vice President of the Company. Under the terms
of Mr. Coppola's employment agreement he is entitled to receive an annual base
salary of $200,000. Such base salary will be increased by 5% during each year
of the term of the employment agreement. The employment agreement provides
that Mr. Coppola may receive a bonus of up to $100,000 per annum at the
discretion of the Board of Directors or the Compensation Committee. The bonus
potential will increase by 5% during each year of the term of the employment
agreement. Pursuant to the employment agreement, Mr. Coppola was granted stock
options under the 1996 Plan to purchase up to 75,000 shares of the Company's
Common Stock at an exercise price equal to the initial public offering price.
Subsequent grants during the term of the employment agreement are at the
discretion of the Board of Directors or the Compensation Committee. Mr.
Coppola's employment agreement became effective as of October 16, 1996, and
has a two year term with an automatic renewal provision of one year, subject
to Non-Renewal.

Mr. Shulman is a party to an employment agreement with the Company pursuant
to which he serves as Senior Vice-President--Marketing of the Company. Under
the terms of Mr. Shulman's employment agreement he is entitled to receive an
annual base salary of $200,000. Such base salary will increase by 5% during
each year of the term of the employment agreement. The employment agreement
provides that Mr. Shulman may receive a bonus of up to $75,000 per annum at
the discretion of the Board of Directors or the Compensation Committee. The
bonus potential will increase by 5% during each year of the employment
agreement. Pursuant to the employment agreement, Mr. Shulman was granted stock
options under the 1996 Plan to purchase up to 35,000 shares of the Company's
Common Stock at an exercise price equal to the initial public offering price.
Subsequent grants during the term of the employment agreement are at the
discretion of the Board of Directors or the Compensation Committee. Mr.
Shulman's employment agreement became effective as of October 16, 1996 and has
a two-year term with an automatic renewal provision of one year, subject to
Non-Renewal.

Mr. Tomlinson is a party to an employment agreement with the Company
pursuant to which he serves as Senior Vice President--News of the Company.
Under the terms of Mr. Tomlinson's employment agreement he is entitled to
receive an annual base salary of $200,000. Such base salary will increase by
5% during each year of the term of the employment agreement. The agreement
provides that Mr. Tomlinson may receive a bonus of up to 25% of his base
salary per annum at the discretion of the Board of Directors or the
Compensation Committee. Mr. Tomlinson's employment agreement became effective
as of January 1, 1998 and has a two-year term, subject to the Company's right
to terminate at the end of the first year.

INDEMNIFICATION MATTERS

The Company's Amended and Restated Certificate of Incorporation and Bylaws
require the Company to indemnify each officer, Director or employee in respect
of claims made by reason of his or her status with the Company, including
stockholder derivative suits, provided he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interest of the Company and, with respect to any criminal act or proceeding,
had no reasonable cause to believe his or her conduct was unlawful. Expenses
incurred in the defense of any such action may be paid by the Company in
advance of final disposition upon receipt of an undertaking from the officer,
Director or employee to repay the advances if there is an ultimate
determination that he or she is not entitled to be indemnified.

11
<PAGE>

NON-EMPLOYEE DIRECTOR COMPENSATION

Each member of the Board of Directors who is not an officer or an owner, or
the representative of an owner, of more than 5% of the outstanding Common
Stock of the Company receives compensation of $1,000 per meeting for serving
on the Board of Directors. The Company also reimburses Directors for any
expenses incurred in attending meetings of the Board of Directors and the
committees thereof. Upon their election to the Board of Directors, each non-
employee Board member was granted options to purchase 10,000 shares of the
Company's Common Stock. In September 1997, each non-employee Board member was
granted additional options to purchase 10,000 shares of the Company's Common
Stock. Such options will be exercisable at the fair market value of the common
stock at the date of grant. These options will become vested and exercisable
for up to 33 1/3% of the total optioned shares upon the first anniversary of
the grant of the options and for an additional 33 1/3% of the total optioned
shares upon each succeeding anniversary until the option is fully exercisable
at the end of the third year.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (the "Committee")
consists of James A. Arcara and Robert M. Miggins. The Committee is charged
with reviewing and approving compensation of the Company's executives. The
Company's executive compensation program consists of three main components:
base salary, potential for an annual bonus based on performance, and the
opportunity to receive stock options exercisable for the purchase of Common
Stock of the Company. The Committee is charged with the responsibility of
granting stock options to employees.

The Company's compensation programs have been aligned with the Committee's
beliefs that:

1. base salaries should be at or below median practices for similar jobs in
the Company's industry;

2. annual incentive opportunities should represent a significant portion of
total cash compensation for executives, and provide meaningful downside
risk and upside opportunity for variations in performance; and

3. stock incentives should include ownership of stock options in order to
link executives' rewards directly with stockholders' risks and
opportunities.

It is the Committee's further belief that managing a compensation program
around these principles will place executives' and stockholders' interests
together and enhance the financial returns to the Company's stockholders.
During 1997, the Committee reviewed the total compensation provided to
executives and confirmed that it is consistent with the Company's performance-
based principles.

The Company has previously entered into employment agreements with each of
the Named Executive Officers covered in the Summary Compensation Table above.
See "Executive Compensation--Employment Agreements." Each of such persons
receives a base salary and is eligible to receive a bonus in accordance with
such contracts at the discretion of the Committee. In general, bonuses are
calculated using as criteria the Company's performance and the performance of
the executive during the relevant year.

The Company's executives are eligible to receive stock options in accordance
with the Company's stock option plans. The objectives of such participation
are to align the long-term interests of executives and stockholders by
encouraging executives to develop and maintain a significant, long-term stock
ownership position in the Company. The Committee has the responsibility of
granting stock options to executives and other employees. In granting stock
options, the Committee takes into account Company performance and individual
performance. Company performance is measured by increases in earnings and, to
a lesser extent, increases in revenues, and individual performance is measured
by the individuals' contributions to such enhanced performance.

The Company's Chairman of the Board and Chief Executive Officer, David I.
Saperstein, received compensation in 1997 determined in accordance with the
provisions of his employment agreement with the Company. See "Executive
Compensation--Employment Agreements."

James A. Arcara
Robert M. Miggins

12
<PAGE>

PERFORMANCE GRAPH

The following graph compares the Company's cumulative total return to
stockholders since the Company's initial public offering on October 17, 1996,
with that of the Standard & Poor's 500 Stock Index (the "S&P 500 Index") and a
peer group index (the "Peer Group Index") consisting of those public companies
traded on an exchange and listed under the same standard industry
classification code as the Company (SIC No. 4899--Communications Services, Not
Elsewhere Classified). The total return calculations set forth below assume
$100 invested on October 17, 1996, in each of the Company, the S&P 500 Index
and the Peer Group Index, with reinvestment of dividends into additional
shares of the same class of securities at the frequency with which dividends
were paid on such securities through December 31, 1997. Historical results are
not necessarily indicative of future performance.

COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE S&P 500 INDEX
AND THE PEER GROUP INDEX

[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
PEER S&P
Period METRO GROUP 500
(Fiscal Year Covered) NETWORKS INDEX INDEX
- --------------------- --------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-10/17/1996 $100.00 $100.00 $100.00
12/31/1996 $123.17 $102.87 $105.43
03/31/1997 $112.20 $100.25 $108.25
06/30/1997 $118.29 $106.98 $127.15
09/30/1997 $146.95 $141.52 $136.68
12/31/1997 $159.76 $136.38 $140.60
</TABLE>

13
<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers, Directors and 10%
stockholders to file reports regarding initial ownership and changes in
ownership with the Securities and Exchange Commission and the Nasdaq Stock
Market. Executive officers, Directors and 10% stockholders are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file. The Company's information
regarding compliance with Section 16(a) is based solely on a review of the
copies of such reports furnished to the Company by the Company's executive
officers, Directors and 10% stockholders. The Company is not aware of any
noncompliance with the requirements of Section 16(a) to file reports during
1997 other than the late filing by Mr. Arcara of a Form 4 to report the open
market purchase of 3,000 shares of Common Stock.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Prior to October 1996, the Company entered into certain reciprocal
arrangements with unrelated third parties as a result of which the Company
received or will receive goods and services for the benefit of Mr. Saperstein.
The reciprocal arrangements obligate the Company to provide commercial
airtime, provide other goods and services, and make cash disbursements to such
third parties in exchange for the goods and services received by the Company.
The dollar values of such arrangements have typically been calculated based
upon the Company's estimate of the fair market value of the commercial airtime
inventory involved and the Company believes that its estimates have been made
on a basis similar to the basis on which estimates are made by others in the
broadcast industry. As of December 31, 1997, the Company was obligated to
provide approximately $800,000 of commercial airtime, goods and services and
cash under these reciprocal arrangements.

In October 1996, the Company and Mr. Saperstein entered into an agreement
pursuant to which Mr. Saperstein may seek reimbursement from the Company for
any income tax obligation attributable to any period prior to the Company's
initial public offering. Alternatively, in the event that the status of any of
Metro Video News, Inc., Metro Reciprocal, Inc., or Metro Traffic Control, Inc.
as a subchapter S corporation is not respected, the Company may seek
reimbursement from Mr. Saperstein, but only to the extent that Mr. Saperstein
receives a tax refund attributable to amounts he previously included in income
in his capacity as a stockholder of such corporations. The Company does not
anticipate that the subchapter S status of Metro Video News, Inc., Metro
Reciprocal, Inc., or Metro Traffic Control, Inc., will be successfully
challenged. In October 1996, the Company distributed to Mr. Saperstein a non-
interest bearing promissory note in the amount of $3.1 million representing
the estimated tax obligation attributable to the period prior to the Company's
initial public offering. Such note was repaid in 1997.

In October 1996, the Company entered into a Stock Loan and Pledge Agreement
with Mr. Saperstein pursuant to which the Company loaned Mr. Saperstein
2,549,750 shares of Common Stock. The loan is for a term of ten years,
although the Company has the right to require the return of the loaned Common
Stock (the "Loaned Stock") from Mr. Saperstein prior to that time upon three
days notice. As security for the loan, Mr. Saperstein pledged a number of
shares of Series A Convertible Preferred Stock of the Company which when
converted into common stock will be equal to the number of shares of Loaned
Stock. Mr. Saperstein is obligated to pay to the Company an annual fee over
the term of the loan of 0.1% of the average fair market value of the Loaned
Stock during the five day period immediately following the date of the Stock
Loan and Pledge Agreement. One-half of this fee is payable annually, and the
remaining one-half of this fee is payable upon the termination of the loan if
such termination occurs pursuant to an Event of Default (as defined in the
Stock Loan and Pledge Agreement) or at the end of the ten year term of the
Stock Loan and Pledge Agreement. The Company will forfeit this portion of the
fee if it calls the loan prior to the end of the ten year term. In addition,
Mr. Saperstein paid an upfront transaction fee of $2,550 to the Company and is
obligated to repay to the Company any dividends that are paid by the Company
on the Loaned Stock. The Series A Convertible Preferred Stock does not pay any
dividends.

14
<PAGE>

RATIFICATION AND APPROVAL OF
THE 1997 STOCK OPTION PLAN
(PROPOSAL 2)

INTRODUCTION

Subject to approval by the Company's stockholders, the Board of Directors
adopted the 1997 Stock Option Plan in October 1997. Ratification and approval
of the 1997 Plan will require the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock present or represented at
the Annual Meeting and entitled to vote thereat.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY AND APPROVE THE ADOPTION OF THE 1997 PLAN.

The essential features of the 1997 Plan are summarized below. The summary
does not purport to be a complete description of the 1997 Plan. Any
stockholder of the Company may obtain a copy of the 1997 Plan upon written
request to the Secretary of the Company.

GENERAL PURPOSE

In order to advance the interests of the Company and its stockholders by
attracting, motivating and retaining highly competent officers, employees and
non-employee Directors, the Board of Directors adopted the 1997 Plan to
provide such individuals with an opportunity to acquire or increase their
proprietary interest in the Company by granting them stock options.

The 1997 Plan provides for the grant by the Company of incentive stock
options to purchase up to an aggregate of 1,500,000 shares of Common Stock of
the Company to officers and employees of the Company. Options granted under
the 1997 Plan may be either "incentive stock options" as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") or
"nonqualified stock options" (i.e., options that do not qualify for incentive
stock option treatment under Section 422 of the Code). All employee
participants in the 1997 Plan are eligible to receive incentive stock options
or nonqualified stock options. Non-employee Directors are eligible to receive
nonqualified stock options. As of April 14, 1998, eight executive officers,
four non-employee Directors and approximately 50 employees of the Company were
eligible to participate in the 1997 Plan.

Shares issuable under the 1997 Plan are issued by the Company and are not
purchased in the open market by the Company. In connection with such
issuances, no fees, commissions or other charges are paid. As of April 14,
1998, the closing price per share of the Company's Common Stock on the Nasdaq
National Market was $38.875.

The 1997 Plan is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974, as amended, and is not a qualified
deferred compensation plan under Section 401(a) of the Code.

ADMINISTRATION

The 1997 Plan may be administered by the Board of Directors or by a
committee of at least two Directors appointed by the Board in a manner
consistent with the Bylaws of the Company (the Board or such committee
administering the 1997 Plan referred to herein as the "Administrator").

Subject to the limitations on eligibility discussed below and the specific
provisions of the 1997 Plan, the Administrator has discretion to determine the
officers and employees to be granted options, the number of options to be
granted to such persons and all other terms and conditions of each option and,
generally, to interpret and construe the provisions of the 1997 Plan and all
options granted thereunder. Determinations by the Administrator are final and
binding upon all participants in the 1997 Plan.

15
<PAGE>

ELIGIBILITY

Officers and employees of the Company, as may be determined by the
Administrator and who qualify for incentive stock options under the applicable
provisions of the Code, will be eligible for selection to receive incentive
options under the 1997 Plan. To the extent options received by officers and
employees of the Company do not qualify as incentive stock options under the
Code, such options will be deemed nonqualified stock options. In addition,
non-employee Directors of the Company will receive nonqualified stock options
as determined by the Administrator. A holder of more than ten percent of the
total combined voting power of all classes of outstanding stock of the Company
(a "10% Stockholder") will not be eligible to receive an incentive stock
option under the 1997 Plan unless the exercise price per share of the Common
Stock granted pursuant to such option is at least 110% of the fair market
value of such Common Stock on the date of grant and such option by its terms
is not exercisable after the expiration of five years from the date of grant.

The maximum number of options which any participant may receive under the
1997 Plan during any calendar year is 100,000, and, subject to adjustment as
described below, the maximum number of shares issuable under the 1997 Plan
upon the exercise of options thereunder is 1,500,000. If the outstanding
shares of Common Stock of the Company are subdivided, consolidated, increased,
decreased, changed into or exchanged for a different number or kind of shares
or securities through reorganization, merger, recapitalization,
reclassification, capital adjustment or otherwise, or if the Company issues
shares of Common Stock as a dividend or upon a stock split, the number and
kind of shares available for purposes of the 1997 Plan and all shares subject
to the unexercised portion of any options previously granted, and the exercise
price of such options, will be appropriately adjusted to prevent dilution or
enlargement of rights; provided, however, that any such adjustment in
outstanding options will be made without changing the total exercise price
applicable to the unexercised portion of any outstanding options.

TERMS AND CONDITIONS OF OPTIONS

Option Agreement; Conditions. Each option granted under the 1997 Plan must
be evidenced by a written agreement dated as of the date of grant and executed
by the Company and the optionee, setting forth the number of options granted,
the exercise price and such other terms and conditions consistent with the
1997 Plan as the Administrator may determine.

To the extent that the aggregate fair market value of shares of Common Stock
(determined as of the time an option is granted) with respect to which
incentive stock options are exercisable for the first time by an optionee
during any calendar year under the 1997 Plan and all similar plans maintained
by the Company (including the 1996 Plan) exceeds $100,000, options for such
shares will be treated as nonqualified stock options. Options granted to an
optionee may be exercised in any order, so that an optionee may exercise an
option if another option granted to him at an earlier time remains
outstanding. No option may be assigned or transferred by an optionee other
than by will or by the laws of descent and distribution. During the lifetime
of an optionee, any option granted to him may be exercised only by such
optionee.

An optionee or transferee of an option has no rights as a stockholder with
respect to any shares of Common Stock subject to the option prior to the
purchase of the shares by exercise of the Option.

Option Price. The exercise price per share of Common Stock granted pursuant
to an option is determined by the Administrator, but in no event may the
exercise price be less than the fair market value of the Common Stock on the
date of grant of the option; provided, however, that in the case of an option
granted to a 10% Stockholder, the exercise price per share may not be less
than 110% of the fair market value of the Common Stock on the date of grant.
"Fair market value" means (i) if the Common Stock is not publicly traded on
the date of grant of the option, the fair market value on the date of grant as
determined and set forth in writing by the Administrator (which, in making
such determination, will make a good faith effort to establish the true fair
market value as of such date using such methods as it deems appropriate,
including independent appraisals, and taking into consideration any
requirements set forth in the Code or the regulations thereunder), or (ii) if
the

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Common Stock is publicly traded on the date of grant of the option, the
closing price per share of the Common Stock on the date of grant. The closing
price shall be the average of the highest and lowest quoted selling prices on
the New York Stock Exchange or, if the Shares are not listed or admitted to
trading on such Exchange, on the principal national securities exchange on
which the Shares are listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, as reported by the
Nasdaq Stock Market's National Market. The exercise price is subject to the
anti-dilution provisions described above.

Option Term. The period of time during which an option may be exercised will
be determined in each case by the Administrator, but in any event may not be
more than ten years from the date of grant of such option; except in the case
of incentive stock options issued to 10% stockholders, which options will have
a term of five years.

Method of Exercise; Payment; Withholding Tax. Options granted under the 1997
Plan are exercisable by delivering written notice of exercise to the Company
and tendering payment in full for the shares to be purchased. Payment may be
tendered in cash, by certified, bank cashier's or teller's check, by delivery
of shares of Common Stock of the Company valued at fair market value as of the
date of tender, or any combination of the foregoing.

In the event that the Company determines that it is required to withhold
state or federal income tax as a result of the exercise of an option, the
optionee may be required as a condition to exercise to make arrangements
satisfactory to the Company to enable it to satisfy such withholding
requirements. Payment of such withholding requirements may be made, in the
discretion of the Administrator, (i) in cash, (ii) by delivery of shares of
Common Stock registered in the name of the optionee, or by the Company not
issuing such number of shares subject to the option, having a fair market
value at the time of exercise equal to the amount to be withheld, or (iii) any
combination of (i) and (ii) above; provided, however, that certain
restrictions on payment of withholding requirements may apply in the event
that the optionee is an officer of the Company subject to Section 16(b) of the
Exchange Act.

Rights in the Event of Sale, Merger or Other Reorganization. The grant of an
option pursuant to the 1997 Plan will not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or
assets. In any such event (other than a merger in which the Company is the
surviving corporation and under the terms of which the shares of Common Stock
outstanding immediately prior to the merger remain outstanding and unchanged),
all rights of an optionee with respect to the unexercised portion of any
option will terminate and all options will be cancelled, except to the extent
that any agreement or undertaking of any party to any such merger,
consolidation, or sale or transfer of assets, or any plan pursuant to which
such liquidation or dissolution is effected, makes specific provision with
respect to the 1997 Plan and the rights of optionees with respect to options
granted thereunder. Notwithstanding the foregoing, the holder of any such
outstanding and unexercised option will have the right immediately prior to
the effective date of such merger, consolidation, sale or transfer of assets,
liquidation or dissolution to exercise such option in whole or in part without
regard to any installment provision that may have been made part of the terms
and conditions of such option or right, provided that any conditions precedent
to such exercise set forth in the written option agreement executed by the
optionee and the Company, other than the passage of time, have occurred. In no
event, however, may any option which becomes exercisable in this manner in
connection with a merger, consolidation, sale or transfer of assets,
liquidation or dissolution be exercised, in whole or in part, later than the
date preceding the tenth anniversary of the date of grant.

Rights in the Event of Termination of Employment or Service. In the event of
the termination of employment of an optionee by reason of total and permanent
disability or death, any options exercisable on the date of disability or
death will be exercisable by the optionee, or in the case of death, by the
person or persons acquiring the right, by will or by the laws of descent and
distribution, to exercise the optionee's options, for a period not to exceed
the lesser of the remaining option term or one year after the date of such
disability or death. At the end of such period, any options of such optionee
remaining unexercised will expire. "Total and permanent disability" means the
inability of an employee to engage in any substantial gainful activity by
reason of any

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<PAGE>

medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve months.

In the event of the termination of an optionee's employment or a non-
employee Director's service, other than by reason of total and permanent
disability or death or termination for cause, any options exercisable on the
date of such termination will be exercisable by the optionee for a period not
to exceed the lesser of the remaining option term or three months after the
date of such termination. At the end of such period, any options of such
optionee remaining unexercised will expire.

If an optionee's employment or service is terminated for "cause", the
Company may notify the optionee that any options not exercised prior to the
termination are cancelled. A termination of employment for cause includes, but
is not limited to, dismissal as a result of the conviction of the optionee of
any crime or offense involving money or other property of the Company or its
subsidiaries or which constitutes a felony in the jurisdiction involved, gross
negligence, gross incompetence or willful misconduct of the optionee in the
performance of his or her duties or willful failure or refusal of the optionee
to perform his or her duties.

No Right of Continued Employment. Neither the 1997 Plan nor any option
granted thereunder confers upon any person the right to continued employment
by the Company.

TERMINATION, AMENDMENT AND MODIFICATION OF THE 1997 PLAN

The Board may amend or modify the 1997 Plan at any time. However, the
stockholders of the Company must approve certain amendments to the 1997 Plan,
including any amendment which would increase the benefits accruing to
participants under the 1997 Plan or the number of shares issuable thereunder,
modify the eligibility requirements of the 1997 Plan or change the exercise
price with respect to any outstanding option (other than to conform with any
applicable provisions of the Code) or amend the foregoing provisions to defeat
their purpose. No termination, amendment or modification of the 1997 Plan may
affect any option previously granted thereunder without the consent of the
optionee or his heirs, executors or administrators.

Unless earlier terminated by the Board in accordance with the foregoing
provisions, the 1997 Plan will terminate in October, 2002.

SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES

The following discussion is intended only as a brief and general description
of the federal income tax consequences of participation in the 1997 Plan and
does not describe all of the tax consequences that may be relevant to an
optionee in light of such optionee's particular tax circumstances. The
discussion is based on the provisions of the Code, and regulations,
administrative rulings and judicial decisions now in effect (or, in the case
of certain Treasury regulations, proposed), all of which are subject to change
at any time (possibly with retroactive effect) or different interpretations.
The discussion does not address tax consequences under the laws of any state
or local jurisdiction and the tax treatment of each optionee will depend in
part upon such optionee's particular tax situation. Accordingly, all optionees
are urged to consult their own tax advisors as to the specific tax
consequences to them of participating in the 1997 Plan under federal, state,
local and other applicable laws.

An optionee will not recognize any income upon the grant, and in general the
exercise, of an incentive stock option. However, the difference between the
option price and the fair market value of the shares acquired at the time of
exercise of an incentive stock option will be an item of tax adjustment to an
optionee for purposes of computing the federal alternative minimum tax.

In general, any gain or loss recognized by an optionee upon the sale or
other disposition of the shares acquired upon the exercise of an incentive
stock option will be treated as capital gain or loss, and will be treated as
long-term gain or loss if the shares have been held for more than one year
subject to a maximum rate of 28%. Shares held for more than 18 months will be
subject to tax at a maximum rate of 20%. However, if an optionee

18
<PAGE>

sells or otherwise disposes of the shares acquired upon the exercise of an
incentive stock option within one year after the option was exercised or
within two years after the date of grant of the option (each, a "disqualifying
disposition"), any gain recognized will be taxed as ordinary income to the
extent the fair market value of the shares at the time of exercise or the sale
price, whichever is less, exceeds the option price. Any remaining gain will be
treated as capital gain. Any loss recognized upon a disqualifying disposition
will be treated as a capital loss. In addition, special rules may apply in
specific circumstances, such as the use of already-owned stock to exercise an
incentive stock option.

The Company will be entitled to a deduction for federal income tax purposes
only to the extent that an optionee recognizes ordinary income upon a
disqualifying disposition of shares.

Under the 1997 Plan, the Company has the power to withhold, or require a
participant to remit to the Company, an amount sufficient to satisfy federal
and state withholding tax requirements with respect to any options exercised
under the 1997 Plan.

RATIFICATION AND APPROVAL OF THE ISSUANCE OF CERTAIN STOCK OPTIONS
TO THE NON-EMPLOYEE DIRECTORS OF THE COMPANY
(PROPOSAL 3)

GENERAL

Subject to approval by the Company's stockholders, the Board granted options
to purchase 10,000 shares of Common Stock to each of the non-employee
Directors of the Company (the "Non-Employee Director Grant") in September
1997. Ratification and approval of the Non-Employee Director Grant will
require the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present or represented at the Annual Meeting and
entitled to vote thereat.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY AND APPROVE THE ADOPTION OF THE NON-EMPLOYEE DIRECTOR
GRANT.

The essential features of the Non-Employee Director Grant as described in
the related stock option agreements are summarized below. The summary does not
purport to be a complete description of the Non-Employee Director Grant. Any
stockholder of the Company may obtain a copy of the form of stock option
agreement which sets forth the terms of the Non-Employee Director Grant upon
written request to the Secretary of the Company.

General. In order to advance the interests of the Company and its
stockholders by enhancing the ability of the Company to attract and retain
well-qualified persons to serve as Directors of the Company, the Board adopted
the Non-Employee Director Grant to provide such individuals with an incentive
to acquire or increase their proprietary interest in the Company by issuing
them options to purchase Common Stock.

The Company has entered into stock option agreements with each of Messrs.
Arcara, Holt, Miggins and Spivak. Each such agreement provides for the
issuance by the Company of options to purchase up to an aggregate of 10,000
shares of Common Stock of the Company at a purchase price of $30.25 per share.
Such options become exercisable in equal one-third installments on each of the
first, second and third anniversaries of the date of grant.

The Non-Employee Director Grant may be administered by the Board of
Directors or by a committee of at least two Directors appointed by the Board
in a manner consistent with the Bylaws of the Company (the Board or such
committee administering the Non-Employee Director Grant referred to herein as
the "Administrator").

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Options granted to an optionee may be exercised in any order, so that an
optionee may exercise an option if another option granted to him at an earlier
time remains outstanding. No option may be assigned or transferred by an
optionee other than by will or by the laws of descent and distribution. During
the lifetime of an optionee, any option granted to him may be exercised only
by such optionee. An optionee or transferee of an option has no rights as a
stockholder with respect to any shares of Common Stock subject to the option
prior to the purchase of the shares by exercise of the Option.

Method of Exercise; Payment; Withholding Tax. Options are exercisable by
delivering written notice of exercise to the Company and tendering payment in
full for the shares to be purchased. Payment may be tendered in cash, by
certified, bank cashier's or teller's check, by delivery of shares of Common
Stock of the Company valued at fair market value as of the date of tender, or
any combination of the foregoing.

Rights in the Event of Sale, Merger or Other Reorganization. The grant of an
option pursuant to the Non-Employee Director Grant will not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets. In any such event (other than a merger in which the
Company is the surviving corporation and under the terms of which the shares
of Common Stock outstanding immediately prior to the merger remain outstanding
and unchanged), all rights of an optionee with respect to the unexercised
portion of any option will terminate and all options will be cancelled, except
to the extent that any agreement or undertaking of any party to any such
merger, consolidation, or sale or transfer of assets, or any plan pursuant to
which such liquidation or dissolution is effected, makes specific provision
with respect to the Non-Employee Director Grant and the rights of optionees
with respect to options granted thereunder. Notwithstanding the foregoing, the
holder of any such outstanding and unexercised option will have the right
immediately prior to the effective date of such merger, consolidation, sale or
transfer of assets, liquidation or dissolution to exercise such option in
whole or in part without regard to any installment provision that may have
been made part of the terms and conditions of such option or right, provided
that any conditions precedent to such exercise set forth in the written option
agreement executed by the optionee and the Company, other than the passage of
time, have occurred. In no event, however, may any option which becomes
exercisable in this manner in connection with a merger, consolidation, sale or
transfer of assets, liquidation or dissolution be exercised, in whole or in
part, later than the date preceding the tenth anniversary of the date of
grant.

Rights in the Event of Termination of Service. In the event of the
termination of service of an optionee by reason of total and permanent
disability or death, any options exercisable on the date of disability or
death will be exercisable by the optionee, or in the case of death, by the
person or persons acquiring the right, by will or by the laws of descent and
distribution, to exercise the optionee's options, for a period not to exceed
the lesser of the remaining option term or one year after the date of such
disability or death. At the end of such period, any options of such optionee
remaining unexercised will expire. "Total and permanent disability" means the
inability of an optionee to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than twelve months.

20
<PAGE>

In the event of the termination of an optionee's service, other than by
reason of total and permanent disability or death or termination for cause,
any options exercisable on the date of such termination will be exercisable by
the optionee for a period not to exceed the lesser of the remaining option
term or three months after the date of such termination. At the end of such
period, any options of such optionee remaining unexercised will expire.

If an optionee's service is terminated for "cause", the Company may notify
the optionee that any options not exercised prior to the termination are
cancelled. A termination of service for cause includes, but is not limited to,
dismissal as a result of the conviction of the optionee of any crime or
offense involving money or other property of the Company or its subsidiaries
or which constitutes a felony in the jurisdiction involved, gross negligence,
gross incompetence or willful misconduct of the optionee in the performance of
his or her duties or willful failure or refusal of the optionee to perform his
or her duties.

SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES

The following discussion is intended only as a brief and general description
of the federal income tax consequences of participation in the Non-Employee
Director Grant and does not describe all of the tax consequences that may be
relevant to an optionee in light of his particular tax circumstances. The
discussion is based on the provisions of the Code, and regulations,
administrative rulings and judicial decisions now in effect (or, in the case
of certain Treasury regulations, proposed), all of which are subject to change
at any time (possibly with retroactive effect) or different interpretations.
The discussion does not address tax consequences under the laws of any state
or local jurisdiction and the tax treatment of each optionee will depend in
part upon such optionee's particular tax situation. Accordingly, all optionees
are urged to consult their own tax advisors as to the specific tax
consequences to them of participation in the Non-Employee Director Grant under
federal, state, local and other applicable laws.

An optionee will not recognize any income upon the grant of an option under
the Non-Employee Director Grant. The optionee will recognize ordinary income
in the amount of the fair market value of the shares of Common Stock
underlying the options on the date the options are exercised. The Company is
entitled to a tax deduction for federal income tax purposes at the time, and
in the amount, of the ordinary income recognized by the optionee. Under the
Non-Employee Director Grant, the Company has the power to withhold, or require
an optionee to remit to the Company, any amount sufficient to satisfy federal
and state withholding tax requirements with respect to any options that vest
under the Non-Employee Director Grant.

RATIFICATION AND APPROVAL OF
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 4)

The Board of Directors has selected KPMG Peat Marwick LLP to audit the
financial statements of the Company for the year ended December 31, 1998. KPMG
Peat Marwick LLP has audited the financial statements of the Company and its
predecessors, since 1995.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY AND APPROVE THE SELECTION OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 1998.

It is expected that a representative of KPMG Peat Marwick LLP will be
present at the Annual Meeting to respond to any questions and to make a
statement on behalf of his or her firm, if such representative so desires.

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<PAGE>

TRANSACTION OF OTHER BUSINESS

As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters other than those set forth herein and in the Notice of Annual
Meeting of Stockholders that will come before the meeting. Should any other
matters arise requiring the vote of stockholders, it is intended that proxies
will be voted in respect thereto in accordance with the best judgment of the
person or persons voting the proxies.

FUTURE STOCKHOLDER PROPOSALS

The Company must receive at its principal office before December 26, 1998,
any proposal which a stockholder wishes to submit to the 1999 Annual Meeting
of Stockholders, if the proposal is to be considered by the Board of Directors
for inclusion in the proxy materials for that annual meeting.

----------------

Please return your proxy as soon as possible. Unless a quorum consisting of
a majority of the outstanding shares entitled to vote is represented at the
meeting, no business can be transacted. Therefore, please be sure to date and
sign your proxy exactly as your name appears on your stock certificate and
return it in the enclosed prepaid return envelope. Please act promptly to
ensure that you will be represented at this important meeting.

THE COMPANY WILL PROVIDE WITHOUT CHARGE, ON THE WRITTEN REQUEST OF ANY
BENEFICIAL OWNER OF SHARES ENTITLED TO VOTE AT THE ANNUAL MEETING OF
STOCKHOLDERS, A COPY WITHOUT EXHIBITS OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1997. REQUESTS SHOULD BE MAILED TO THE VICE
PRESIDENT OF CORPORATE COMMUNICATIONS, METRO NETWORKS, INC., 2800 POST OAK
BOULEVARD, SUITE 4000, HOUSTON, TEXAS 77056. THE ANNUAL REPORT ON FORM 10-K
IS NOT SOLICITING MATERIAL AND IS NOT INCORPORATED IN THIS DOCUMENT BY
REFERENCE.

By Order of the Board of Directors

[SIGNATURE APPEARS HERE]
David I. Saperstein
Chairman of the Board and Chief
Executive Officer

April 27, 1998

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<PAGE>

METRO NETWORKS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
MAY 28, 1998

David I. Saperstein, Shane E. Coppola and Gary L. Worobow and each of them,
with full power of substitution, are hereby authorized to represent and to vote
as directed on this proxy the shares of Common Stock and Preferred Stock of
Metro Networks, Inc. held of record by the undersigned on April 14, 1998 at the
Annual Meeting of Stockholders to be held on May 28, 1998, and at any
adjournments thereof, as if the undersigned were present and voting at the
meeting.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. WHERE NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED FOR EACH OF THE PROPOSALS SET FORTH ON THIS
PROXY.

Whether or not you expect to attend the meeting, you are urged to execute
and return this proxy, which may be revoked at any time prior to its use.

(CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE)

- --------------------------------------------------------------------------------

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK.

1. ELECTION OF NOMINEES AS CLASS 2 DIRECTORY OF THE COMPANY

FOR all nominees [_] WITHHOLD authority to vote for all nominees [_]

To withhold authority for either nominee,
write his name in the space provided

__________________________________________

2. RATIFICATION AND APPROVAL OF 1997 STOCK OPTION PLAN

FOR [_] AGAINST [_] ABSTAIN [_]

3. RATIFICATION AND APPROVAL OF THE ISSUANCE OF CERTAIN STOCK OPTIONS TO THE
NON-EMPLOYEE DIRECTORS OF THE COMPANY

FOR [_] AGAINST [_] ABSTAIN [_]

4. RATIFICATION AND APPROVAL OF KPMG PEAT MARWICK LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS

FOR [_] AGAINST [_] ABSTAIN [_]

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING

NOTE: Signatures should agree with the names stencilled
hereon. When signing as executor, administrator, trustee,
guardian or attorney, please give the title as such. For
joint accounts or co-fiduciaries, all joint owners or
co-managers should sign.

Dated: _______________________________________, 1998

__________________________________________
__________________________________________