<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
UNIVISION COMMUNICATIONS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pur-
suant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
[LOGO]
UNIVISION COMMUNICATIONS INC.
1999 AVENUE OF THE STARS, SUITE 3050
LOS ANGELES, CALIFORNIA 90067
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Univision Communications Inc. which will be held at the Hotel Bel-Air, Garden
Room, 701 Stone Canyon Road, Los Angeles, California on Wednesday, May 13, 1998,
at 10:00 A.M. (local time).
At the Annual Meeting, holders of Class A Common Stock, Class P Common Stock
and Series A Cumulative Convertible Preferred Stock will elect six Class A/P
Directors, holders of the Class T Common Stock will elect one Class T Director
and one Alternate Class T Director, and holders of the Class V Common Stock will
elect one Class V Director and one Class V Alternate Director. The holders of
Class A Common Stock will also be asked to approve an amendment to the Restated
Certificate of Incorporation to increase the authorized shares of Class A Common
Stock from 150,000,000 to 300,000,000. In addition, all stockholders will be
asked to ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the 1998 fiscal year. The attached Proxy
Statement contains information about these matters.
The Company's management would like you to attend. HOWEVER, WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED. Accordingly, please sign, date and return the enclosed proxy card
which will indicate your vote upon the matters to be considered. If you do
attend the meeting and desire to vote in person, you may do so by withdrawing
your proxy at that time.
We hope you will be able to attend the Annual Meeting and look forward to
seeing you on May 13, 1998.
Sincerely,
A. Jerrold Perenchio
CHAIRMAN OF THE BOARD
March 25, 1998
<PAGE>
UNIVISION COMMUNICATIONS INC.
1999 AVENUE OF THE STARS, SUITE 3050
LOS ANGELES, CALIFORNIA
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
---------------------
The Annual Meeting of Stockholders of Univision Communications Inc. (the
"Company") will be held on Wednesday, May 13, 1998, at 10:00 A.M. (local time)
at the Hotel Bel-Air, Garden Room, 701 Stone Canyon Road, Los Angeles,
California for the following purposes:
(1) To elect six Class A/P Directors who will be elected by the holders of
the Class A Common Stock, Class P Common Stock and Series A Cumulative
Convertible Preferred Stock, voting together as a separate class;
(2) To amend the Restated Certificate of Incorporation to increase the
number of authorized shares of Class A Common Stock from 150,000,000 to
300,000,000;
(3) To ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the 1998 fiscal year; and
(4) To transact other business that may properly come before the Annual
Meeting.
In addition, the holders of the Class T Common Stock, voting as a separate
class, will elect one Class T Director and one Class T Alternate Director and
the holders of the Class V Common Stock, voting as a separate class, will elect
one Class V Director and one Class V Alternate Director.
Only stockholders of record at the close of business on March 20, 1998 will
be entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment thereof. Each stockholder, even though he or she may presently
intend to attend the Annual Meeting, is requested to sign and date the enclosed
proxy card and return it without delay in the enclosed postage-paid envelope.
Any stockholder present at the Annual Meeting may withdraw his or her proxy card
and vote in person on each matter properly brought before the Annual Meeting.
Please sign, date and mail the proxy card promptly in the enclosed envelope
so that your shares of stock may be represented and voted at the meeting.
By Order of the Board of Directors,
Robert V. Cahill
SECRETARY
March 25, 1998
<PAGE>
UNIVISION COMMUNICATIONS INC.
1999 AVENUE OF THE STARS, SUITE 3050
LOS ANGELES, CALIFORNIA
------------------------
PROXY STATEMENT
------------------
GENERAL
The Company is furnishing this Proxy Statement to the holders (together, the
"Class A/P Stockholders") of Class A Common Stock, Class P Common Stock and
Series A Cumulative Convertible Preferred Stock (together, the "Class A/P
Stock") of Univision Communications Inc. (the "Company") in connection with the
solicitation of proxies for use at the Company's Annual Meeting of Stockholders
to be held on Wednesday, May 13, 1998, at 10:00 A.M. (local time) and at any
adjournment thereof. The Annual Meeting will be held at the Hotel Bel-Air,
Garden Room, 701 Stone Canyon Road, Los Angeles, California.
The Board of Directors of the Company is making this solicitation. The
Company's principal executive offices are located at 1999 Avenue of the Stars,
Suite 3050, Los Angeles, California 90067, telephone (310) 556-7676. This Proxy
Statement, proxy card and Notice of Annual Meeting of Stockholders are being
mailed to stockholders on or about March 30, 1998.
The shares represented by a properly signed proxy and received by the
Company prior to or at the Annual Meeting will be voted in accordance with the
specifications made thereon. Proxies received by the Company on which no
specification has been made by the stockholder will be voted in favor of the
nominees to the Board of Directors listed in this Proxy Statement, for the
amendment to the Restated Certificate of Incorporation and for the ratification
of the appointment of Arthur Andersen LLP as the Company's independent public
accountants for the 1998 fiscal year.
Any stockholder may revoke his or her proxy at any time before it is voted
at the Annual Meeting by giving written notice of such revocation to the
Secretary of the Company at the address of the Company indicated above. A
stockholder may also give notice by filing a properly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
Stockholders of record at the close of business on March 20, 1998 are
entitled to notice of and to vote at the Annual Meeting. On March 1, 1998 the
outstanding voting securities of the Company consisted of 46,095,726 shares of
Class A Common Stock, 22,097,898 shares of Class P Common Stock, 8,918,582
shares of Class T Common Stock, 8,918,582 shares of Class V Common Stock and
12,000 shares of Series A Cumulative Convertible Preferred Stock ("Series A
Preferred") (convertible at the option of the holder into 734,225 shares of
Class A Common Stock).
The Company will pay the cost of this proxy solicitation. Brokers and
nominees should forward soliciting materials to the beneficial owners of the
Class A Common Stock held of record by such brokers and nominees. The Company
will reimburse such persons for their reasonable forwarding expenses. In
addition to the use of the mails, directors, officers and regular employees of
the Company, who will not receive additional compensation therefor, may solicit
proxies by personal contact or by telephone or other means of communication.
<PAGE>
VOTING SECURITIES
The holders of the Class A Common Stock, Class T Common Stock, Class V
Common Stock and Series A Preferred have one vote per share on all matters on
which they are entitled to vote. The holders of the Class P Common Stock have 10
votes per share on all matters on which they are entitled to vote(1). Thus, the
holders of Class P Common Stock will have sufficient votes to control each
matter they vote on at the meeting. For information regarding certain beneficial
owners, see "Security Ownership of Certain Beneficial Owners and Management."
VOTES REQUIRED FOR BOARD ELECTION
The Class A/P Stockholders, voting together as a separate class, will elect
six directors (the "Class A/P Directors"); the holders of the Class T Common
Stock will elect one director and one alternate director (the "Class T Director"
and "Class T Alternate Director"); and the holders of the Class V Common Stock
will elect one director and one alternate director (the "Class V Director" and
"Class V Alternate Director").
The presence at the Annual Meeting, in person or by proxy, of the holders of
a majority of the voting interest of the Company's Class A/P Stock (voting
together as a separate class) will constitute a quorum for the holding of a
meeting of the Class A/P Stockholders for the purpose of electing the six Class
A/P Directors. The nominees for Class A/P Directors receiving the most votes
cast by the Class A/P Stockholders will be elected as Class A/P Directors.
The presence at the Annual Meeting, in person or by proxy, of the holders of
a majority of the voting interest of each of the Class T Common Stock and Class
V Common Stock, as the case may be, will constitute a quorum for the holding of
a meeting of stockholders of such classes for the purpose of electing the
director and alternate director that each such class has the right to elect. The
Class T Director, Class T Alternate Director, Class V Director and Class V
Alternate Director will be elected by (i) the votes cast by holders of the class
of Common Stock that has the right to elect such director or alternate director
present in person or by proxy at the Annual Meeting or (ii) the written consent
of the holders of a majority of the voting interest of the class entitled to
elect such director or alternate director.
VOTE REQUIRED FOR AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The presence at the Annual Meeting, in person or by proxy, of the holders of
a majority of the voting interest of the Company's Class A Common Stock will
constitute a quorum for the holding of a meeting of such class to amend the
Restated Certificate of Incorporation. The affirmative vote of a majority of the
voting interest of the Class A Common Stock will be sufficient to amend the
Restated Certificate of Incorporation.
VOTE REQUIRED FOR RATIFICATION OF ACCOUNTANTS
The affirmative vote of a majority of the voting interest of all shares of
capital stock, voting as a single class, present in person or by proxy at the
Annual Meeting,
- ------------------------------
(1) If A. Jerrold Perenchio is incapacitated (defined as Mr. Perenchio being
subject to a conservatorship of the estate under applicable state law) at
the time of the Annual Meeting or if Mr. Perenchio and any of his permitted
transferees own less than 13,243,042 shares of Class P Common Stock, the
holders of the Class P Common Stock will have one vote per share.
2
<PAGE>
is required to ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the 1998 fiscal year.
Proxies in the enclosed form will be voted, unless authority is withheld,
for the election of the six nominees for Class A/P Director named below, for the
approval of the amendment to the Restated Certificate of Incorporation and for
the ratification of the appointment of Arthur Andersen LLP.
The inspector of elections appointed by the Company will count all votes
cast in person, by proxy or by written consent at the Annual Meeting.
Abstentions will be treated as shares that are present and entitled to vote for
purposes of determining the presence of a quorum, but will not be treated as
votes cast for purposes of determining the approval of any matter submitted for
a vote of the stockholders. If a broker or nominee indicates on its proxy that
it does not have discretionary authority to vote on a particular matter as to
certain shares, those shares will be counted for general quorum purposes but
will not be counted in determining the number of shares necessary for approval.
BOARD OF DIRECTORS
ELECTION OF DIRECTORS
The six nominees proposed for election as Class A/P Directors by the Class
A/P Stockholders at the Annual Meeting are A. Jerrold Perenchio, Henry Cisneros,
Harold Gaba, Alan F. Horn, John G. Perenchio and Ray Rodriguez. The nominees
proposed for election as a Class T Director and Class T Alternate Director by
the holders of Class T Common Stock are Lawrence W. Dam and Emilio Romano,
respectively. The nominees proposed for election as a Class V Director and Class
V Alternate Director by the holders of Class V Common Stock are Gustavo Cisneros
and Alejandro Rivera, respectively. All of the nominees for director are
currently serving as directors and both of the nominees for alternate director
are serving as alternate directors. Each director and alternate director will
serve until the next annual meeting of stockholders and until his successor is
qualified and elected or until the earlier of a director's death, resignation or
removal.
An alternate director may act in the place of the director for whom he is an
alternate if such director is absent from a Board meeting. While so acting, the
alternate director has all of the rights, duties, privileges and powers of the
director for whom he is acting as an alternate (including the right to vote at
such meeting) and is counted in determining whether a quorum is present. Except
when acting as an alternate, no alternate director is entitled to vote at a
meeting of the Board of Directors and is not counted as a member of the Board in
determining a quorum. At present, the Class A/P Directors do not intend to
nominate any alternate Class A/P Director nominees for election by the Class A/P
Stockholders.
Each nominee is willing to serve if elected, but if any nominee becomes
unable to serve, the proxies solicited hereby will be voted for the election of
such other person or persons as the Class A/P Directors select. The information
below concerning each nominee has been furnished to the Company by such nominee.
3
<PAGE>
NOMINEES FOR ELECTION AS CLASS A/P DIRECTORS
The nominees for election to the Board of Directors to represent the Class
A/P Stockholders are:
<TABLE>
<CAPTION>
FIRST
YEAR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION CLASS ELECTED
- --------------------------- --- -------------------------------------- ----- -----------
<S> <C> <C> <C> <C>
A. Jerrold Perenchio....... 67 Chairman of the Board and Chief A/P 1992
Executive Officer of Univision
Communications Inc.
Henry Cisneros............. 50 President and Chief Operating Officer A/P 1997
of Univision Communications Inc.
Harold Gaba................ 52 President and Chief Executive Officer A/P 1996
of ACT III Communications Inc.
Alan F. Horn............... 55 Chairman and Chief Executive Officer A/P 1992
of Castle Rock Entertainment
John G. Perenchio.......... 42 President of Ultimatum Music, LLC, A/P 1992
Vice President of Malibu Bay Company
and Executive of Chartwell Partners,
LLC
Ray Rodriguez.............. 47 President and Chief Operating Officer A/P 1996
of the Univision Network
</TABLE>
Mr. A. Jerrold Perenchio has been the Chairman of the Board and Chief
Executive Officer of the Company since December 1992. From December 1992 through
January 1997 he was also the Company's President. Mr. Perenchio has owned and
been active in Chartwell Partners LLC since it was formed in 1983. Chartwell
Partners LLC is an investment firm that is active in the media and
communications industry. Mr. Perenchio has over 25 years of experience in the
U.S. media and communications industry. During his career, Mr. Perenchio has
been the chief executive officer of a number of successful entities involved in
the production and syndication of television programming, and from 1975 to 1986
owned and operated Spanish-language television stations in Los Angeles and New
York. A. Jerrold Perenchio is John G. Perenchio's father.
Mr. Henry Cisneros joined the Company in January 1997 as its President and
Chief Operating Officer. From January 1993 through January 1997, Mr. Cisneros
was the Secretary of the U.S. Department of Housing and Urban Development. As a
member of the President's Cabinet, Secretary Cisneros was assigned America's
housing and community development portfolio. Prior to joining the cabinet, he
was Chairman of Cisneros Asset Management Company, a fixed income money
management firm operating nationally. In 1981, Mr. Cisneros became the first
Hispanic mayor of a major U.S. city when he was elected Mayor of San Antonio,
the nation's 10th largest city, where he served four terms until 1989. Mr.
Cisneros has served as President of the National League of Cities, Chairman of
the National Civic League, Deputy Chair of the Federal Reserve Bank of Dallas,
and as a board member of the Rockefeller Foundation. Mr. Cisneros was accused in
a federal indictment in December 1997 of violating certain federal statutes. Mr.
Cisneros is accused of
4
<PAGE>
making false statements, obstructing justice, and conspiring to mislead in
connection with his appointment as Secretary of the U.S. Department of Housing
and Urban Development. Mr. Cisneros was arraigned on January 8, 1998, and pled
not guilty. Mr. Cisneros has informed the Company that he will defend himself
vigorously. Henry Cisneros is not related to Gustavo Cisneros.
Mr. Gaba has been President and CEO of ACT III Communications Inc., a
multi-media communications company with interests in theatrical exhibition,
television and motion picture production, and broadcasting since August 1990.
Since November 1992, he has also served as CEO and a director of ACT III
Theatres, ACT III Broadcasting, and of certain other affiliates of ACT III
Communications. From 1988 to 1995, Mr. Gaba was a partner of Hark Television
Corporation, a broadcast management company.
Mr. Horn has been Chairman and Chief Executive Officer of Castle Rock
Entertainment since January 1994. Mr. Horn has also been a member of the
Executive Committee and the Planning Committee of Turner Broadcasting Systems,
Inc. since January 1994. From 1987 until January 1994, Mr. Horn was the Chairman
of the Management Committee of Castle Rock Entertainment. From 1985 to 1987, Mr.
Horn was the President and Chief Operating Officer of Twentieth Century Fox Film
Corporation. Prior to such time, he was an executive of Embassy Communications
and its predecessor, TAT Communications Company, and Tandem Productions. From
1982 to 1985 he served as Chief Executive Officer and Chairman of the Board of
Directors of Embassy.
Mr. John G. Perenchio has been an executive at Chartwell Partners LLC and
Vice President of Malibu Bay Company (a real estate development and management
company) since 1990. In August 1997, Mr. Perenchio also became President of
Ultimatum Music, LLC (a record and music publishing company). From 1985 to 1990
he was a Business Affairs executive and subsequently a Director of Contemporary
Music at Triad Artists, Inc. John G. Perenchio is the son of A. Jerrold
Perenchio.
Mr. Rodriguez has been President and Chief Operating Officer of the Network
since December 1992. In August 1990 Mr. Rodriguez joined the Network's
predecessor as Vice President and Director of Talent Relations. In September
1991, he became Senior Vice President and Operating Manager of the Network. In
May 1992, Mr. Rodriguez became President and Chief Executive Officer of
Univision Holdings, Inc., the Company's predecessor ("UHI"). Prior to joining
UHI, he owned and operated a management consulting and production company that
produced Spanish-language television programs. From 1983 to 1989, he was Julio
Iglesias' manager and Chief Executive Officer of that performer's organization.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS CLASS A/P
DIRECTORS OF THE NOMINEES LISTED ABOVE.
NOMINEES FOR ELECTION AS CLASS T AND CLASS V DIRECTORS AND ALTERNATE DIRECTORS
The holders of Class T Common Stock are entitled to elect one Class T
Director and one Class T Alternate Director at the Annual Meeting. The holders
of Class V Common Stock are entitled to elect one Class V Director and one Class
V Alternate Director at the Annual Meeting.
5
<PAGE>
The following individuals have been nominated for election to the Board of
Directors or as alternate directors to represent the holders of Class T Common
Stock and the holders of the Class V Common Stock. This information is being
provided to Class A/P Stockholders for informational purposes only, as they are
not entitled to vote for the Class T Director, Class V Director or their
alternates.
<TABLE>
<CAPTION>
FIRST
YEAR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION CLASS ELECTED
- ------------------------ --- ----------------------------------- ----------- -----------
<S> <C> <C> <C> <C>
Lawrence W. Dam......... 51 President and Chief Operating T 1993
Officer of Televisa International,
L.L.C.
Gustavo Cisneros........ 52 Chairman of Member Companies of the V 1994
Cisneros Group of Companies
Emilio Romano........... 32 Vice President of International Alternate 1996
Affiliates of Grupo Televisa S.A. T
Alejandro Rivera........ 54 Managing Director and Vice Alternate 1996
President of Venevision V
International
</TABLE>
Mr. Dam has been President and Chief Operating Officer of Televisa
International, L.L.C. and its predecessor, Univisa, Inc., both wholly-owned
subsidiaries of Televisa, since 1993. From 1987 to 1993 he was Vice President
and General Counsel of Univisa, Inc. From 1963 to 1988, Univisa, Inc. and its
predecessors owned and operated the Univision Network.
For more than five years, Mr. Gustavo Cisneros has been a direct or indirect
beneficial owner of interests in and a director of certain companies that own or
are engaged in a number of diverse commercial enterprises, principally in
Venezuela, the United States, Brazil, Chile and Mexico (the "Cisneros Group"),
including Venevision. Mr. Cisneros is Chairman of the Board of Directors of
Pueblo Xtra International, Inc., a member of the Board of Directors of Evenflo &
Spalding Holdings Corporation and a member of the Board of Directors of RSL
Communications, Inc. Gustavo Cisneros is not related to Henry Cisneros.
Mr. Romano joined Televisa in June 1995. Until April 1997 he was responsible
for mergers and acquisitions and new project development. In April 1997, Mr.
Romano was appointed Vice President of International Affiliates for Televisa.
From January 1993 until March 1995, Mr. Romano served as General Director of
Revenue Policy and International Fiscal Affairs, and then as Federal Fiscal
Attorney, in the Mexican Ministry of Finance. Mr. Romano headed the
representative office of the Mexican Ministry of Finance in Washington, D.C.
from May 1991 until December 1992.
Mr. Rivera has served in executive positions with companies in the Cisneros
Group since 1976, including Venevision. Mr. Rivera is a member of the Board of
Directors of Pueblo Xtra International, Inc.
6
<PAGE>
DIRECTORS' COMPENSATION
Each non-employee director who owns less than 5% of the Company's capital
stock and who is not affiliated with A. Jerrold Perenchio, Grupo Televisa S.A.
or Corporacion Venezolana de Television, C.A. (Venevision) is paid $50,000 for
each year of service.
BOARD OF DIRECTORS MEETINGS
The Board of Directors held four meetings during 1997. Each director other
than Gustavo Cisneros attended more than 75% of the aggregate number of Board of
Directors meetings and Committee meetings on which he served in 1997. As
permitted by the Company's Restated Certificate of Incorporation and bylaws,
Alejandro Rivera, the Class V Alternate Director, attended the Board meetings in
Mr. Gustavo Cisneros' place.
BOARD COMMITTEES
AUDIT COMMITTEE
The Company's Audit Committee, comprised of Messrs. Gaba, Horn and Gustavo
Cisneros, makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans and
results of such audit engagement, approves professional services provided by the
independent public accountants, reviews independence of the independent public
accountants, considers the range of audit and non-audit fees and reviews the
adequacy of the Company's internal accounting controls. The Audit Committee met
one time in 1997.
COMPENSATION COMMITTEE
The Company's Compensation Committee, comprised of Messrs. Gaba, Horn, and
Dam, makes recommendations to the Board concerning compensation of the Company's
executive officers and administers the 1996 Performance Award Plan. See
"Compensation Committee Report." The Compensation Committee met six times in
1997.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's voting securities as of March 1, 1998 by (i) each
person who is known by the Company to own beneficially 5% or more of the
outstanding shares of any class of the Company's voting securities, (ii) each of
the Company's directors and the Named Executive Officers (as defined in the
"Executive Compensation" section below), and (iii) all directors and executive
officers as a group. In February 1998, Mr. A. Jerrold Perenchio, together with
his wife and two other selling stockholders, sold 22,000,000 shares of Class A
Common Stock in a public offering. As a consequence, Mr. Perenchio and his
affiliates have 83.6% of the aggregate voting power of the Class A/P Stock
outstanding and 78.5% of the aggregate voting power of all of the Company's
voting securities outstanding. Except as indicated in the footnotes to the
table, the persons named in the table have sole voting and investment power with
respect to all shares of the Company's voting securities shown as beneficially
owned by them, subject to community property laws where applicable.
Please see the footnotes below for the disclosure required by the Securities
Exchange Act of 1934 for each of the parties listed below. Because the Class P,
Class T and Class V Common Stock and the Series A Preferred can be converted to
Class A Common Stock at any time, the Company is presenting the information
below based on such conversions. All share numbers presented below reflect the
two-for-one stock split effected on January 12, 1998 (the "Stock Split"). The
Company obtained the information presented below for stockholders other than
officers and directors from Schedule 13Gs and amendments thereto, which reflect
beneficial ownership as of December 31, 1997.
<TABLE>
<CAPTION>
PERCENT OF
CLASS A
COMMON STOCK
BENEFICIALLY
PERCENT OF OWNED
NUMBER OF SHARES OF CLASS A COMMON ASSUMING
CLASS A COMMON STOCK WARRANTS
STOCK BENEFICIALLY BENEFICIALLY ARE
OWNED OWNED EXERCISED
NAME AND ADDRESS (A) TITLE OF CLASS (B)(C) (C) (J)
- ----------------------------- -------------- ------------------- -------------- ------------
<S> <C> <C> <C> <C>
A. Jerrold Perenchio(a) Class A and 22,098,098(d)(e) 26.5% 20.0%
Class P
Common Stock
Grupo Televisa, S.A. Class T 8,918,582(e)(f) 10.3 19.7
Avenida Chapultepec, Common Stock
No. 28 06724 Mexico, D.F.
Mexico
Venevision Class V 8,918,582(e)(f)(i) 10.3 19.7
c/o Finser Corporation Common Stock
550 Biltmore Way,
Suite 900
Coral Gables,
Florida 33134
Putnam Investments, Inc. Class A 4,399,896(g) 5.1 3.8
One Post Office Square, Common Stock
Boston, Massachusetts 02109
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
CLASS A
COMMON STOCK
BENEFICIALLY
PERCENT OF OWNED
NUMBER OF SHARES OF CLASS A COMMON ASSUMING
CLASS A COMMON STOCK WARRANTS
STOCK BENEFICIALLY BENEFICIALLY ARE
OWNED OWNED EXERCISED
NAME AND ADDRESS (A) TITLE OF CLASS (B)(C) (C) (J)
- ----------------------------- -------------- ------------------- -------------- ------------
<S> <C> <C> <C> <C>
Janus Capital Corporation Class A 3,271,650(h) 3.8 2.9
100 Fillmore Street, Common Stock
Denver, Colorado 80206-4973
The Davila Family, LLC Class A, P, T 2,842,526(e)(f) 3.5 2.6
c/o Suite 2500 and V
One New York Plaza Common Stock
New York, New York 10004
Stephen P. Rader Class A Common 2,241,526(k) 2.6 2.0
and Anne W. Rader Stock
c/o Coldstream Capital, LLC
865 South Figueroa St.,
Suite 700,
Los Angeles, California
90017
Morgan Stanley, Dean Witter, Class A 1,279,700(l) 1.5 1.1
Discover & Co. Common Stock
1585 Broadway
38th Floor
New York, New York 10036
George W. Blank (a) Class A 183,000(n) * *
Common Stock
Robert V. Cahill (a) Class A 100,000(n) * *
Common Stock
Henry Cisneros (a) Class A 66,666(n) * *
Common Stock
Harold Gaba (a) Class A 21,000 * *
Common Stock
Alan F. Horn (a) Class A 50,000 * *
Common Stock
John G. Perenchio (a) Class A 6,600 * *
Common Stock
Ray Rodriguez (a) Class A 169,800(n) * *
Common Stock
Gustavo Cisneros N/A 0(i) 0 0
c/o Finser Corporation
550 Biltmore Way
Suite 900
Coral Gables, Florida 33134
Lawrence Dam Class A 106,600(n) * *
c/o Televisa International, Common Stock
LLC
7710 Haskell Avenue
Van Nuys, California 91406
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
CLASS A
COMMON STOCK
BENEFICIALLY
PERCENT OF OWNED
NUMBER OF SHARES OF CLASS A COMMON ASSUMING
CLASS A COMMON STOCK WARRANTS
STOCK BENEFICIALLY BENEFICIALLY ARE
OWNED OWNED EXERCISED
NAME AND ADDRESS (A) TITLE OF CLASS (B)(C) (C) (J)
- ----------------------------- -------------- ------------------- -------------- ------------
<S> <C> <C> <C> <C>
Alejandro Rivera Class A 100,000(n) 0 0
c/o Finser Corporation Common Stock
550 Biltmore Way
Suite 900
Coral Gables, Florida 33134
Emilio Romano N/A 0 0 0
Avenida Chapultapec
No. 28
06724 Mexico, D.F.
Mexico
Chester and Naomi Smith Series A 734,225(m) * *
c/o J. Wilmer Jensen, Esq. Preferred
1514 H. Street
Modesto, California 95354
All directors and Class A, Class 22,901,764(e)(f)(i) 26.4 19.9
executive officers as a P, Class T and
group (10 persons) Class V Common
Stock
</TABLE>
- ------------------------------
(a) Unless otherwise indicated, the address of each executive officer and
director is 1999 Avenue of the Stars, Suite 3050, Los Angeles, California
90067.
(b) Each of A. Jerrold Perenchio and his affiliates ("Perenchio"), Grupo
Televisa, S.A. de C.V. and its affiliates ("Televisa"), Corporacion
Venezolana de Television, C.A. (Venevision) and its affiliates
("Venevision"), and Chester and Naomi Smith benefically own 100% of their
respective classes.
(c) Assumes that the Class P, Class T and Class V Common Stock outstanding is
converted into Class A Common Stock on a share for share basis and assumes
that the 12,000 shares of Series A Preferred have been converted into
734,225 shares of Class A Common Stock since this may be done at any time in
accordance with their respective terms . Does not include the shares
issuable upon exercise of the 28,152,212 warrants that are outstanding (see
footnotes e and f below).
(d) Includes 442,870 shares of Class P Common Stock beneficially owned by
Margaret Perenchio, A. Jerrold Perenchio's wife. Mr. Perenchio has the sole
power to vote such shares pursuant to a proxy, but Mrs. Perenchio has sole
power to dispose of or direct the disposition of such shares. Also includes
200 shares of Class A Common Stock owned by Mr. Perenchio.
(e) Perenchio, Televisa and Venevision have each formed a partnership in which
they are the general partner and The Davila Family, LLC is the managing
general and limited partner. The partnership with Perenchio owns 1,191,318
shares of Class A Common Stock and 12,034 shares of Class P Common Stock.
The partnerships with Televisa and Venevision each own 469,348 shares of
Class A Common Stock and 4,742 shares of Class T and Class V Common Stock,
respectively. The partnerships with Televisa and Venevision also each own
Warrants to purchase 270,542 shares of Class A Common Stock and 7,292 shares
of Class T and Class V Common Stock, respectively. The Davila Family, LLC
has full dispositive and voting power over the shares of Class A Common
Stock owned by the partnerships, and Perenchio, Televisa and Venevision each
has full dispositive and voting power over the shares of Class P Common
Stock, Class T Common Stock and Class V Common Stock owned by the
partnership in which it is a partner. Based on information provided to the
Company by The Davila Family, LLC in connection with the closing of the sale
of warrants to purchase 731,428 shares of common stock on February 13, 1998,
The Davila Family, LLC owned
10
<PAGE>
6.1% of the Class A Common Stock outstanding as of such date. According to a
Schedule 13G, The Davila Family, LLC disclaims beneficial ownership of the
shares of the Company owned by any other person pursuant to Rule 13(d)(4) of
the Securities Exchange Act of 1934, as amended.
(f) Excludes 13,718,850 shares of Class T Common Stock and 13,718,850 shares of
Class V Common Stock issuable upon exercise of warrants held by Televisa and
Venevision, respectively. Such warrants may be exercised by the holder, so
long as the aggregate shares owned by Televisa, Venevision and all non-U.S.
aliens do not represent more than 25% of the outstanding stock.
(g) Based on a report on Schedule 13G/A dated January 28, 1998, Putnam
Investments, Inc. and/or its affiliates had shared voting and shared
dispositive power over all such shares. Based on such Schedule 13G/A, Putnam
Investments, Inc. owned 18.3% of the Class A Common Stock outstanding as of
December 31, 1997.
(h) Based on a report on Schedule 13G/A dated February 13, 1998, Janus Capital
Corporation and/or its affiliates had shared voting and shared dispositive
power over all such shares. Based on such Schedule 13G/A, Janus Capital
Corporation owned 13.6% of the Class A Common Stock outstanding as of
December 31, 1997.
(i) A trust for the benefit of the family of Gustavo Cisneros and a trust for
the benefit of the family of Ricardo Cisneros each owns a 50% indirect
beneficial ownership interest in the equity of the Venevision affiliates
that own these shares. These affiliates have shared voting and dispositive
powers. Messrs. Gustavo and Ricardo Cisneros disclaim beneficial ownership
of such shares.
(j) The Warrants to purchase Class T and Class V Common Stock are subject to
certain exercise restrictions. See "Certain Transactions--Warrants."
(k) Based on a Schedule 13G/A dated February 11, 1998 filed by Stephen and Anne
Rader, the Raders own 9.3% of the Class A Common Stock outstanding as of
December 31, 1997. They share voting and dispositive powers.
(l) Based on a report on Schedule 13G dated February 12, 1998, Morgan Stanley,
Dean Witter, Discover & Co. and/or its affiliates had shared voting and
shared dispositive power over all such shares. Based on such Schedule 13G,
Morgan Stanley, Dean Witter, Discover & Co. owned 5.3% of the Class A Common
Stock outstanding as of December 31, 1997.
(m) The Series A Preferred Stock is voting stock (one vote per share) and is
convertible into 734,225 shares of Class A Common Stock at the option of the
holders until March 20, 2001. The Series A Preferred is redeemable at the
option of the holders at any time, and by the Company after March 20, 2001.
(n) The following persons hold stock options that are vested or will vest and
become exercisable on or before May 1, 1998: Mr. Cahill--100,000; Mr.
Blank--150,000; Mr. Henry Cisneros--66,666; Mr. Rodriguez--150,000; Mr.
Dam--100,000; and Mr. Rivera--100,000.
* Represents less than one percent.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION*
In September 1996, the Company effected its initial public offering (the
"Initial Offering"), and concurrently the Board of Directors established the
Compensation Committee. The Compensation Committee currently consists of Messrs.
Dam, Gaba and Horn, none of whom is an employee of the Company. The Compensation
Committee is responsible for making recommendations to the Board concerning the
- ------------------------
* This section of the Proxy Statement shall not be deemed to be incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filings of the Company pursuant to the Securities Act of 1933
or the Securities Exchange Act of 1934, as amended, except to the extent the
Company specifically incorporates this section by reference therein, and shall
not be deemed soliciting material or otherwise deemed filed under either such
Acts.
11
<PAGE>
compensation levels of the senior officers of the Company. The Compensation
Committee also administers the Company's 1996 Performance Award Plan (the "1996
Plan") and determines awards to be made under such plan to the Company's
officers and to other eligible individuals.
The Compensation Committee may consider other forms of compensation, both
short and long-term, in addition to those described below, designed to link
compensation with achieving financial targets.
BASE SALARY. Basic compensation paid to the Company's executives during
1997 was established by Mr. Perenchio, the Chairman of the Company. The basic
compensation of the executive officers other than Messrs. Perenchio and Cahill
is set forth in employment agreements whose terms extend beyond 1998. Mr.
Cisneros' employment agreement was approved by the entire Board in 1997.
Employment agreements with other executive officers were entered into prior to
the establishment of the Compensation Committee.
Prior to the Initial Offering, Mr. Perenchio served without remuneration.
His wholly-owned company, however, received certain management fees from
Univision's Network until the Initial Offering was completed. At the time of the
Initial Offering, the Board of Directors agreed to pay Mr. Perenchio a salary of
$100,000 per month for the following six months; subsequent to March 31, 1997,
Mr. Perenchio resumed serving without remuneration. See also "Certain
Relationships and Related Transactions" for a description of reimbursements by
Univision of salaries and services provided by another Company wholly-owned by
Mr. Perenchio.
BONUS COMPENSATION. Bonuses for 1997 were approved by the Compensation
Committee, based upon the recommendation of Mr. Perenchio. All such bonuses were
based on subjective criteria. In 1997 the Compensation Committee explored the
possibility of implementing a bonus plan based on objective criteria. After
several meetings, the Compensation Committee decided to leave the current
subjective bonus program in place, in part because the Committee felt that the
flexibility afforded by the current program would continue to provide incentives
more closely aligned with actual individual achievement. Although the criteria
for the cash bonuses is subjective, the Committee takes into consideration such
factors as profitability in a particular fiscal year, Company stock performance,
outstanding achievements, and improvement in market share and industry position.
EQUITY BASED COMPENSATION. The Compensation Committee will provide long-
term incentives linked to an increase in stock value by awarding stock options
at the fair market value on the date of grant that vest over time to encourage
employees to continue to use their best professional skills and to remain
employed with the Company. Outstanding stock options granted in connection with
the Initial Offering are exercisable in two equal increments on the first and
second anniversaries of the date of grant. Mr. Henry Cisneros' stock options
vest in three equal annual installments. All other options granted since the
Initial Offering are, and future options are expected to be, exercisable in
annual 25% increments over a four-year period.
THE DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the Internal
Revenue Code limits the deductibility by the Company of cash compensation in
excess of $1 million paid to the chief executive officer and the four highest
compensated executive officers during any taxable year, unless such compensation
12
<PAGE>
meets certain requirements. The Company believes the 1996 Plan complies with the
rules under Section 162(m) for treatment as performance-based compensation,
allowing the Company to fully deduct compensation paid to executives under the
plan.
THE COMPENSATION COMMITTEE
Lawrence W. Dam
Harold Gaba
Alan F. Horn
13
<PAGE>
SUMMARY TABLE OF EXECUTIVE COMPENSATION
The following table shows the compensation paid or accrued by the Company
and its subsidiaries during the fiscal years ended December 31, 1997, 1996 and
1995 to each of the Company's executive officers (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION -------------------------------
----------------------------------------------- SECURITIES
NAME AND CASH OTHER ANNUAL DEFERRED UNDERLYING ALL OTHER
PRINCIPAL SALARY BONUSES COMPENSATION COMPENSATION OPTIONS/SARS COMPENSATION
POSITION YEAR ($) ($) ($)(A) AWARDS($) (#) ($)
- ------------------------ --------- --------- --------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
A. Jerrold 1997 300,000 None None None None None
Perenchio(b) 1996 300,000 None None None None None
Chairman of the Board 1995 None None None None None None
and Chief Executive
Officer
Henry Cisneros(c) 1997 374,359 400,000 None None 300,000 1,000,000(d)
President and 1996 None None None None None None
Chief Operating 1995 None None None None None None
Officer
George W. Blank 1997 500,000 500,000 None None 100,000 4,800(e)
Executive Vice 1996 499,992 500,000 None None 300,000 4,500(e)
President and Chief 1995 499,992 500,000 None None None 4,500(e)
Financial Officer
Robert V. Cahill(f) 1997 500,000 500,000 None None 100,000 None
Vice President and 1996 500,000 500,000 None None 200,000 None
Secretary 1995 500,000 500,000 None None None None
Ray Rodriguez 1997 600,000 600,000 None None 100,000 4,800(e)
President of the 1996 600,000 600,000 None None 300,000 4,500(e)
Network 1995 574,992 600,000 None None None 4,500(e)
</TABLE>
- ------------------------------
(a) Other annual compensation did not exceed the lesser of $50,000 or 10% of the
total salary and bonuses of any Named Executive Officer.
(b) The services of Mr. Perenchio were provided by Perenchio pursuant to the
informal arrangement described in "--Employment Agreements and
Arrangements." Mr. Perenchio was not compensated for his services in any
employment capacity by the Company or any of its subsidiaries during the
past three years except from October 1996 through March 1997. However, one
of his affiliates, that was a partner of the Network, received $2,595,000
and $3,174,000 in 1996 and 1995, respectively, as a management fee from the
Network.
(c) Mr. Cisneros was hired by the Company on January 27, 1997.
(d) Sign-on bonus paid February 1, 1997.
(e) Matching contribution pursuant to 401(k) Plan. See "--401(k) Savings and
Thrift Plan."
(f) The services of Mr. Cahill in 1997, 1996 and 1995 were provided by Perenchio
pursuant to the informal arrangement among Perenchio, Televisa and
Venevision described in "--Employment Agreements and Arrangements." Mr.
Cahill was paid a salary by Perenchio of $500,000 in 1997, 1996 and 1995,
respectively, for all of the services he performed for UTG and the Network.
UTG was charged for one-half of Mr. Cahill's salary in 1997, 1996 and 1995.
A bonus of $500,000 earned in each of 1997, 1996 and 1995 was paid by UTG to
Mr. Cahill. See "--Employment Agreements and Arrangements."
14
<PAGE>
EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
Effective as of January 27, 1997 the Company entered into a three-year
employment agreement with Henry Cisneros. Effective as of February 12, 1997 Mr.
Cisneros was elected President and Chief Operating Officer of the Company in
accordance with the terms of his employment agreement. Mr. Cisneros' base
compensation is $400,000 in 1997, $500,000 in 1998 and $600,000 in 1999. He also
received a signing bonus of $1 million in 1997. On December 22, 1997, Mr.
Cisneros and the Company amended his agreement to extend the term through
December 31, 2000. Mr. Cisneros' base compensation will be $600,000 in 2000.
On December 22, 1997 Messrs. Blank and Rodriguez entered into amended
employment agreements with the Company, each of which expires on December 31,
2000. Mr. Blank's and Mr. Rodriguez's base salary under their respective amended
employment agreements is $500,000 and $600,000 for 1997 and $550,000 and
$650,000 for 1998, 1999 and 2000, respectively. In addition, based upon an
annual review of each individual's performance and the results of operations and
prospects of the Company, the Company may in its sole discretion grant Mr.
Cisneros, Mr. Blank and Mr. Rodriguez bonuses.
The employment agreements for Messrs. Cisneros, Blank and Rodriguez may be
terminated for cause, upon death or disability or without cause. In the case of
a termination without cause, the employee shall, subject to certain conditions
regarding confidentiality, trade secrets and competitive activities, be entitled
to receive his base salary for the remainder of his employment agreement.
Pursuant to an informal arrangement among Perenchio, Televisa and
Venevision, the services of Messrs. Cahill and A. Jerrold Perenchio were
provided by Perenchio in 1997, 1996 and 1995. In each of 1997, 1996 and 1995,
Mr. Cahill was paid $500,000 by Perenchio for services as an executive officer
of Univision Television Group, Inc., a wholly-owned subsidiary of the Company
("UTG"), and the Network and one-half was charged to UTG. In addition, UTG paid
a bonus for 1997, 1996 and 1995 of $500,000 each year to Mr. Cahill. The Company
paid Mr. Perenchio $100,000 per month from October 2, 1996 through March 31,
1997 for his services as Chief Executive Officer, and since then, he has served
as Chairman of the Board and Chief Executive Officer without compensation.
401(K) SAVINGS AND THRIFT PLAN
The Company presently has a retirement savings plan (the "401(k) Plan")
covering all eligible employees who have completed one year of service. The
401(k) Plan allows all employees to defer up to 15% of the total eligible
compensation that would otherwise be paid to the employee, which deferral in
1997 could not exceed $9,500. Employee contributions are invested in selected
mutual funds and a unitized fund of the Company's Class A Common Stock according
to the direction of the employee. Effective January 1998, the 401(k) Plan
permits the Company each year to match up to the first 6% of such employee's
eligible compensation contributed to the plan, subject to certain limitations
imposed by the Internal Revenue Service. During 1995, 1996 and 1997, the Company
at its discretion offered matching contributions to each eligible employee of
75% of the first 4% of an employee's contribution.
15
<PAGE>
1996 PERFORMANCE AWARD PLAN
The 1996 Plan was established in connection with the Initial Offering to
attract, reward and retain talented and experienced officers, other key
employees and certain other eligible persons ("Eligible Persons") who may be
granted awards from time to time by the Compensation Committee ("Committee").
Awards under the Plan may be in the form of nonqualified stock options,
incentive stock options, stock appreciation rights (SARs), restricted stock,
performance shares, stock bonuses and cash bonuses. Awards may be granted singly
or in combination with other awards, consistent with the terms of the 1996 Plan.
Awards under the 1996 Plan generally are nontransferable by a holder (other than
by will or the laws of descent and distribution) and rights thereunder generally
will be exercisable, during the holder's lifetime, only by the holder, subject
to such exceptions as (consistent with applicable legal considerations) may be
authorized from time to time by the Committee.
Unless prior to a Change in Control Event the Committee determines that
benefits under awards made under the Plan will not accelerate or the Committee
provides otherwise in an award agreement, then upon a Change in Control Event
each option and SAR will become immediately exercisable, restricted stock will
immediately vest free of restrictions and the number of shares, cash or other
property covered by each award will be issued to the grantee of such award. A
Change in Control Event under the 1996 Plan is defined generally to include the
acquisition of 50% or more of the outstanding voting securities of the Company
by any person other than a person who is the beneficial owner of more than 20%
of the Class A Common Stock at the time the 1996 Plan was adopted, a transfer of
substantially all of the Company's assets, the dissolution or liquidation of the
Company, or a merger, consolidation or reorganization whereby stockholders
immediately prior to such event own less than 50% of the outstanding voting
securities of the surviving entity after such event.
The maximum term of options, SARs and other rights granted to acquire Class
A Common Stock under the Plan is 10 years after the initial date of award. No
award under the 1996 Plan can be made after September 20, 2006.
No more than 11,000,000 shares of Class A Common Stock may be issued in
respect of awards under the 1996 Plan (subject to certain anti-dilution
adjustments). The number of shares of Class A Common Stock subject to options
and SARs granted to any individual in any calendar year is limited to 1,000,000
and the number of shares of Class A Common Stock that may be subject to awards
granted in any calendar year may not exceed 2,750,000 (excluding any Eligible
Person hired in that year as the chief executive officer of the Company).
Unless approved by the Board of Directors, no award may vest more quickly
than 25% per year other than in the case of options issued in connection with
the Initial Offering or awards granted in lieu of cash bonuses, which may vest
at the rate of 50% per year.
16
<PAGE>
OPTIONS GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 1997
------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE
OPTIONS TO EMPLOYEES IN PRICE PER EXPIRATION GRANT DATE PRESENT
NAME GRANTED (#) LAST FISCAL YEAR SHARE ($) DATE VALUE ($)(A)
- ------------------------------ -------------- ---------------- ----------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
A. Jerrold Perenchio.......... N/A N/A N/A N/A N/A
January
Henry Cisneros (b)............ 200,000 7.9% 18.500 2007 2,448,000
December
Henry Cisneros (c)............ 100,000 4.0% 34.125 2007 1,224,000
December
George W. Blank (c)........... 100,000 4.0% 34.125 2007 1,224,000
December
Robert V. Cahill (c).......... 100,000 4.0% 34.125 2007 1,224,000
December
Ray Rodriguez (c)............. 100,000 4.0% 34.125 2007 1,224,000
</TABLE>
- ------------------------------
(a) The estimated value was developed solely for the purposes of comparative
disclosure in accordance with the rules and regulations of the Securities
and Exchange Commission and is not intended to predict future prices of the
Company's Class A Common Stock. The estimate was developed using the
Black-Scholes option pricing model incorporating the following
weighted-average assumptions: dividend yield of 0%; expected volatility of
29.736%; risk-free interest rate of 5.86%; and expected life of five years.
The weighted-average fair value of options granted during the year is
$12.24.
(b) The options vest in three equal annual installments commencing on January
27, 1998.
(c) The options vest in four equal annual installments commencing on December
12, 1998.
17
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND
FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
OPTIONS AT FY- IN-THE-MONEY OPTIONS
END # AT FY-END ($)(A)
---------------- --------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------ --------------- --------------- ---------------- --------------------
<S> <C> <C> <C> <C>
A. Jerrold Perenchio.......... N/A N/A N/A N/A
Henry Cisneros................ -- -- --/300,000 --/3,368,750
George W. Blank............... 0 0 150,000/250,000 3,515,625/3,596,875
Robert V. Cahill.............. 0 0 100,000/200,000 2,343,750/2,425,000
Ray Rodriguez................. 0 0 150,000/250,000 3,515,625/3,596,875
</TABLE>
- ------------------------
(a) This amount represents solely the difference in the market price ($34.9375)
on the last trading day of the year, December 31, 1997, of those unexercised
options which had an exercise price below such market price (i.e.,
"in-the-money options") and the respective exercise prices of the options.
The exercise price of outstanding options ranges from $11.50 to $34.125. No
assumptions or representations regarding the value of such options are made
or intended.
18
<PAGE>
UNIVISION STOCK PRICE PERFORMANCE GRAPH*
The following graph compares the Company's cumulative total stockholder
return with those of the S&P Broadcasting Index (TV, Radio & Cable) and the S&P
500 Index. The graph assumes that $100 was invested on September 27, 1996 (the
date of the Initial Offering) in (i) the Company's Class A Common Stock and (ii)
the S&P Broadcasting Index and (iii) the S&P 500 Index, including in each case,
if applicable, reinvestment of dividends. Since the Company effected the Initial
Offering in September 1996, the information in the graph is provided at month
end intervals. Note: The Company's management cautions that the stock price
performance shown in the graph below should not be considered indicative of
potential future stock price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C>
UNIVISION COMMUNICATIONS INC. S & P 500 S & P BROADCASTING (TV, RADIO & CABLE)
9/27/96 100 100 100
9/96 146 108 97
12/96 161 114 100
3/97 142 118 97
6/97 170 138 114
9/97 236 148 135
12/97 304 153 165
</TABLE>
$100 INVESTED ON 9/27/96 IN STOCK OR ON
8/31/96 IN INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS, FISCAL YEAR ENDING DECEMBER 31.
* This section of the Proxy Statement shall not be deemed to be incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filings of the Company pursuant to the Securities Act of 1933
or the Securities Exchange Act of 1934, as amended, except to the extent the
Company specifically incorporates this section by reference therein, and shall
not be deemed soliciting material or otherwise deemed filed under either such
Acts.
19
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC and the New York Stock Exchange. These persons are
required by regulation of the SEC to furnish the Company copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no forms were
required for those persons, the Company believes that during the fiscal year
ended December 31, 1997, all of the Company's officers, directors and greater
than 10% beneficial owners complied with all applicable Section 16(a) filing
requirements other than Mr. Horn who inadvertantly filed a late Form 4 for a
December 1997 transaction.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following is a brief presentation of the material terms of certain
agreements between the Company and one or more of Perenchio, Televisa and
Venevision filed as exhibits to the Company's Registration Statement (File No.
333-44213) and the Company's Annual Report on Form 10-K for the year ended
December 31, 1997. The information set forth below does not purport to be and is
not a complete summary of all such agreements. See "Security Ownership of
Certain Beneficial Owners and Management."
PROGRAM LICENSE AGREEMENTS
A subsidiary of the Company has entered into Program License Agreements with
affiliates of both Televisa and Venevision which expire in December 2017 and
which are guaranteed by the Company. Under these agreements, the Company has the
exclusive right to air in the United States, all Spanish-language programming
produced by or for Televisa and Venevision (with certain exceptions). In return
for these programs, the Company's subsidiary paid to the Televisa and Venevision
affiliates an aggregate net royalty of approximately $59.6 million or 13.5% of
its Combined Net Time Sales (time sales less advertising commissions, certain
special event revenues, music license fees, outside affiliate compensation and
certain taxes) in 1997 and will pay 15% of such sales in 1998 and each
subsequent year. The obligations of their respective affiliates have been
guaranteed by Televisa and Venevision.
Additionally, pursuant to the Program License Agreements, Televisa and
Venevision have the right to use, without charge, advertising time that is not
sold to advertisers or used by the Company or its subsidiaries. There are
limitations on the ability of Televisa and Venevision to use such time for
telemarketing products and such time may be preempted to the extent sold to a
paying advertiser. Televisa and Venevision may each also purchase for its own
use non-preemptable time at the lowest spot rate for the applicable time period.
INTERNATIONAL PROGRAM RIGHTS AGREEMENT
The Company has also granted Televisa and Venevision certain rights to
exploit various programming produced by the Company or its subsidiaries on a
royalty-free basis. These rights cover all countries outside of the U.S. for
programs produced prior to the Initial Offering or that replace such programs
("Grandfathered Programs") and cover Mexico and Venezuela for all other
programs. For
20
<PAGE>
Grandfathered Programs, the rights described above will revert back to the
Company from Televisa or Venevision when the applicable Program License
Agreement terminates. For other programs, Televisa's or Venevision's rights
revert back to the Company when that entity owns less than 30% of the securities
that it owned on the date of the Initial Offering.
PARTICIPATION AGREEMENT
Pursuant to a Participation Agreement (the "Participation Agreement"),
Perenchio, Televisa and Venevision have also agreed that none of them will enter
into certain transactions involving Spanish-language television broadcasting or
a Spanish-language television network in the U.S. without first offering the
Company the opportunity to acquire a 50% economic interest. The Participation
Agreement provides that if the Company elects to participate in any of these
transactions, the offeror party will have substantial control over management of
such transaction.
WARRANTS
In connection with Perenchio, Televisia and Venevision's December 1992
acquisition of the Company's predecessors, Televisa and Venevision were issued
warrants to purchase Common Stock. The Warrants are not exercisable unless it is
lawful for the holder to own the number of shares issuable as a result of such
exercise and such exercise would not violate the Communications Act of 1934, as
amended. Subject to applicable securities laws, the Warrants are freely
transferable. The Warrants are exercisable for Class T and Class V Common Stock.
However, at the option of Televisa or Venevision, as the case may be, or if the
Warrants are not held by Televisa or Venevision or their respective permitted
transferees, the Warrants are exercisable for Class A Common Stock. The Warrants
are exercisable for Common Stock at an exercise price of $0.06439 per share. If
all Warrants issued by the Company were fully exercised and all voting
securities were converted to Class A Common Stock, each of Televisa and
Venevision, respectively, would own 19.7% of the Common Stock of the Company.
REGISTRATION RIGHTS AGREEMENTS
The Company has entered into a Registration Rights Agreement with Perenchio,
Televisa and Venevision, pursuant to which it has agreed to file registration
statements covering the Company's securities owned by them. Perenchio has the
right to demand four registration statements, and Televisa and Venevision each
have the right to demand two. In addition, the Company gave these stockholders
various piggyback registration rights. In general, the Company will pay all
fees, costs and expenses of any such registration statements. Pursuant to this
agreement, the Company paid expenses of approximately $600,000 associated with a
public offering of 22,000,000 shares of Class A Common Stock in February 1998 by
Perenchio, his wife and two other selling stockholders.
Under a registration rights agreement entered into in connection with the
acquisition of the Sacramento station, the current holders of the Series A
Preferred are entitled to certain rights with respect to registration of their
shares under the Securities Act. The terms of such registration rights agreement
are similar to those of the registration rights agreement described above except
that the current holders of the Series A Preferred only have the right to make
one demand (excluding demands that the Company file a registration statement
containing only the information required by Form S-3.)
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NEW PROGRAMMING
The Company and Televisa agreed in principle to co-produce a maximum of 800
hours of non-NOVELA programming, Spanish-language programming. Under current
discussions, the Company and Televisa will each commit approximately $10 million
over a one year period, and each will independently produce 400 hours of the new
programming. The Company expects to air some of this new programming beginning
in May 1998. There can be no assurance that a definitive agreement will be
entered into or, if entered into, that the programs will be successful.
WORLD CUP BROADCAST RIGHTS AGREEMENT
The Company has acquired the Spanish-language broadcast rights in the U.S.
to all 64 of the 1998 World Cup Soccer Championship Games from a Televisa
subsidiary. The terms call for a fixed payment of $25,000,000 in four equal
installments during May, June, August and September 1998. In addition to these
payments and consistent with past coverage of the World Cup Games, the Company
will be responsible for all costs associated with advertising, promotion, and
broadcast of the World Cup Games, as well as the production of certain
television programming related to the games.
REIMBURSEMENT ARRANGEMENTS
Univision reimbursed Chartwell Partners LLC ("Chartwell"), an affiliate of
A. Jerrold Perenchio, for compensation of certain Chartwell employees who devote
substantially all of their time to Univision activities. In 1997, Univision
reimbursed Chartwell approximately $850,000 for one-half of the salary, benefits
and payroll taxes and all of the bonus and payroll taxes on such bonus relating
to Univision's Vice President and Secretary, Robert Cahill and the salary bonus
and payroll taxes of support staff. In 1998 Univision reimbursed Chartwell
approximately $160,000 for salaries, benefits, and office, transportation and
other administrative costs incurred in 1997.
Chartwell Services, Inc., another company wholly-owned by Mr. Perenchio,
entered into an agreement as of January 1998 with Univision to continue
providing such services through December 2000, subject to automatic one-year
extensions.
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
On December 3, 1997, the Board of Directors approved the Stock Split that
became effective January 12, 1998. The Stock Split increased the number of
Company shares outstanding and lowered the price, which the Company believes
makes the stock more accessible to a broader base of investors.
As of December 4, 1997, the holders of a majority of the voting interest of
the Company's capital stock had approved the Stock Split and the related
amendment to the Restated Certificate of Incorporation. The holders of each of
the Class P, Class T and Class V Common Stock approved the amendment to the
Restated Certificate of Incorporation increasing the number of shares of their
respective classes of common stock to enable the Company to issue sufficient
shares to effect the Stock Split and to provide flexibility for the future. The
number of shares of Class P Common Stock increased from 23,830,000 to
96,000,000; the number of shares of each of the Class T and Class V Common Stock
increased from 11,915,000 to 48,000,000.
22
<PAGE>
At the December 3, 1997 Board meeting, the Board also approved an increase
in the number of authorized shares of Class A Common Stock from 150,000,000 to
300,000,000, subject to approval by the holders of the Class A Common Stock.
Although the Stock Split did not require an increase in the authorized number of
shares of Class A Common Stock, the weighted average shares of Class A Common
Stock outstanding on a fully diluted, post-split basis as of December 31, 1997
was 116,345,337, only 33,654,663 less than the 150,000,000 authorized shares of
Class A Common Stock. As a consequence, the Board believes that it is in the
Company's best interest to have more shares available for future events such as
acquisitions, warrant and stock option exercises, the conversion of securities
convertible into Class A Common Stock and any other future stock splits and
stock dividends. The Company does not presently intend to issue the additional
authorized shares of Class A Common Stock.
The additional 150,000,000 authorized shares of Class A Common Stock will
have the same rights and privileges as the shares of Class A Common Stock
presently issued and outstanding. No holder of any class or series of Company
capital stock is entitled to preemptive rights.
If the amendment is approved, the Restated Certificate of Incorporation will
be amended by deleting the portion of Article Fourth that reads,
"The Corporation shall have the authority to issue 342,000,000 shares of
Common Stock, par value $.01 per share, divided into the following
classes:
(i) 150,000,000 shares of Class A Common Stock (the "Class A Common
Stock");"
and substituting the following:
"The Corporation shall have the authority to issue 492,000,000 shares of
Common Stock, par value $.01 per share, divided into the following
classes:
(i) 300,000,000 shares of Class A Common Stock (the "Class A Common
Stock");"
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE
RESTATED CERTIFICATE OF INCORPORATION.
FINANCIAL AND OTHER INFORMATION
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1997, including financial statements, is enclosed with this Proxy
Statement. The Company will furnish, without charge, a copy of its Annual Report
on Form 10-K for the fiscal year ended December 31, 1997 (including any
financial statements and schedules, and a list describing any exhibits not
contained therein) to any stockholder who submits a written request to the
Secretary, at the Company's offices, 1999 Avenue of the Stars, Suite 3050, Los
Angeles, California 90067. The exhibits to the 10-K are available upon payment
of charges which approximate the Company's cost of reproduction.
23
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed Arthur Andersen LLP as the Company's independent
public accountants and auditors for the 1998 fiscal year. Arthur Andersen LLP
has served as the Company's independent public accountants since 1992.
The Company expects representatives of Arthur Andersen LLP to be present at
the Annual Meeting and to be available to respond to appropriate questions from
stockholders. The Arthur Andersen LLP representatives will be given an
opportunity to make a statement if they desire.
Ratification of the appointment of Arthur Andersen LLP as the Company's
independent public accountants for fiscal 1998 will require the affirmative vote
of a majority in voting interest of the Class A Common Stock, the Class P Common
Stock, the Class T Common Stock, the Class V Common Stock and the Series A
Preferred represented in person or by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR
FISCAL 1998.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1999 annual
meeting of stockholders must be received by the Company at its principal
executive offices not later than November 25, 1998 for inclusion in the
Company's proxy statement and form of proxy relating to the meeting.
OTHER MATTERS
The Board of Directors knows of no matters to be presented for action by the
stockholders at the Annual Meeting other than those described in this Proxy
Statement. Unless otherwise indicated, if any other matter is properly brought
before the meeting and may be properly acted upon, the persons named in the
accompanying form of proxy will be authorized by such proxy to vote the proxies
thereon in accordance with their best judgment.
For the Board of Directors
March 25, 1997
Robert V. Cahill
SECRETARY
24
<PAGE>
UNIVISION COMMUNICATIONS INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
May 13, 1998
I/We hereby appoint Robert V. Cahill and George W. Blank, or either of
them, as Proxies, with full power of substitution, to represent me (us) and
to vote all of my (our) shares of Class A Common Stock and/or Series A
Preferred Stock and/or Class P Common Stock, as the case may be, of Univision
Communications Inc. (the "Company"), on all matters which may come before the
1998 Annual Meeting of Stockholders of the Company and any adjournments
thereof. Said Proxies are directed to vote as hereafter indicated.
Proxies will vote in accordance with their judgement in connection with
the transactions of such other business as may properly come before the
meeting or any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed
hereon. If no direction is made, it will be voted "FOR" the election of Class
A/P Directors all of the individuals identified in the accompanying Proxy
Statement as the Class A/P Board nominees, "FOR" the approval of the
amendment to the Restated Certificate of Incorporation and "FOR" the
ratification of the appointment of Arthur Andersen LLP as the Company's
independent public accountants.
UNIVISION COMMUNICATIONS INC.
P.O. BOX 11405
NEW YORK, N.Y. 10203-0405
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE.)
<PAGE>
/ /
1. ELECTION OF CLASS A/P DIRECTORS
FOR all nominees listed below /X/
WITHHOLD AUTHORITY to vote for all nominees listed below /X/
EXCEPTIONS /X/
Nominees: A. Jerold Perenchio, Henry Cisneros, Harold Gaba, Alan F. Horn,
John G. Perenchio, Ray Rodriguez
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.)
"Exceptions
-------------------------------------------------------------------
2. "PROPOSAL, to approve of the amendment to the Restated Certificate of
Incorporation to increase the authorized Shares of Class A Common Stock from
150,000,000 to 300,000,000.
FOR /X/ AGAINST /X/ ABSTAIN /X/
3. PROPOSAL to ratify the appointment of Arthur Andersen LLP as independent
public accountants for fiscal 1998.
FOR /X/ AGAINST /X/ ABSTAIN /X/
CHANGE OF ADDRESS AND
OR COMMENTS MARK HERE /X/
Please sign exactly as your name
appears hereon. When signing in a
representative capacity, please
give full title.
Dated: , 1998
----------------------
----------------------------------
Signature
----------------------------------
Signature
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
