FISHER COMPANIES INC
10-12G, 1997-04-25
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<PAGE>
 
As Filed With the Securities and Exchange Commission on April 25, 1997
                                                                Registration No.
================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  __________

                                    FORM 10

                               GENERAL FORM FOR
                          REGISTRATION OF SECURITIES


                     Pursuant to Section 12(b) or 12(g) of
                      the Securities Exchange Act of 1934

                                  __________


                             FISHER COMPANIES INC.
            (Exact name of registrant as specified in its charter)


         Washington                                     91-0222175
  (State or other jurisdiction           (I.R.S. employer identification number)
of incorporation or organization)

   1525 One Union Square                                98101-3185
   600 University Street                                (Zip code)
    Seattle, Washington
   (Address of principal
     executive offices)

                                (206) 624-2752
             (Registrant's telephone number, including area code)

                          Securities to be registered
                     pursuant to Section 12(b) of the Act:

                                     None

                          Securities to be registered
                     pursuant to Section 12(g) of the Act:

                         Common Stock, $2.50 par value

================================================================================
<PAGE>
 
                             FISHER COMPANIES INC.

                        FORM 10 REGISTRATION STATEMENT


ITEM 1.    BUSINESS.

     Through its operating subsidiaries, Fisher Companies Inc. (the "Company")
is actively engaged in television and radio broadcasting, the operation of
satellite teleports and the exploitation of other emerging technologies; flour
milling and bakery products distribution; and real estate investment and
proprietary property management.  The Company provides direction and guidance to
its operating subsidiaries.

     The Company was founded in 1910 as Fisher Flouring Mills Company ("FFMCO"),
and was reorganized into its current structure in 1971, by means of mergers with
two milling-related entities that had common ownership with FFMCO and an entity
with real estate investments that had similar ownership with FFMCO and the
establishment of two additional operating subsidiaries, Fisher Mills Inc.
("FMI") and Fisher Properties Inc. ("FPI").  At the same time, FFMCO became a
holding company and was renamed Fisher Companies Inc.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS (1):

<TABLE>
<CAPTION>
 
                                                                                                         
                                                                            CORPORATE,                   
                                                                           ELIMINATIONS                  
                        BROADCASTING      MILLING        REAL ESTATE          & OTHER         CONSOLIDATED              
                        ------------      --------       -----------       ------------       ------------              
<S>                     <C>                <C>             <C>              <C>                 <C>                     
SALES AND OTHER                                                                                                         
REVENUE                                                                                                                 
       1996                $111,967       $135,697           $13,556         $  4,000             $265,220              
       1995                 101,192        112,360            10,941            4,087              228,580              
       1994                  87,112         93,277             8,659            3,460              192,508              
                                                                                                                        
INCOME FROM OPERATIONS                                                                                                  
       1996                  34,025          3,410             5,749            1,948               45,132              
       1995                  31,518          2,907             3,267            2,152               39,844              
       1994                  26,066          1,078             2,199            2,236               31,579              
                                                                                                                        
IDENTIFIABLE ASSETS                                                                                                     
       1996                 120,911         57,638            86,600          129,000              394,149              
       1995                  97,532         54,565            90,212          110,726              353,035              
       1994                  84,760         47,899            90,887           84,526              308,072              
 
(1)  In thousands of dollars.
</TABLE>

                            BROADCASTING OPERATIONS
                            -----------------------

                                 INTRODUCTION

     The Company's broadcasting operations are conducted through Fisher
Broadcasting Inc. ("Fisher Broadcasting"), a Washington corporation.  Fisher
Broadcasting was incorporated by 

                                       1
<PAGE>
 
FFMCO in 1926 as Fisher's Blend Stations Inc. to operate radio broadcasting
properties, and was renamed Fisher Broadcasting Inc. in 1978. The Company owns
all of the outstanding capital stock of Fisher Broadcasting, except that 3% of
the outstanding shares of a class of nonvoting participating preferred stock is
owned by third parties. Fisher Broadcasting owns and operates, directly or
through subsidiaries in Washington, Oregon and Montana, two network-affiliated
television stations, 23 radio stations, two broadcast satellite teleports, and
provides emerging media development service. Fisher Broadcasting's television
stations reach approximately 2,500,000 households, or 2.5% of all U.S.
television households; its radio stations collectively represent the 37th
largest radio group in the U.S. by audience, reaching approximately 1,300,000
persons in total cume (the estimated number of persons who listen to a station
for a minimum of five minutes within a given time period); and its satellite
teleports serve many of the Northwest's businesses and news organizations.
Fisher Broadcasting believes that the foundation of its success in the broadcast
and news media businesses is its commitment to creating value in today's
broadcasting environment and in tomorrow's emerging communications marketplace.
Throughout its 70 year history, Fisher Broadcasting has been committed to
maximizing shareholder value by looking for ways to leverage its core
competencies in a manner that serves Fisher Broadcasting's viewers, listeners,
vendors and clients.

     Both of Fisher Broadcasting's television stations are located in the top 25
television markets:  KOMO TV 4 (ABC) Seattle-Tacoma, Washington, market rank 12;
and KATU Television 2 (ABC), Portland, Oregon, market rank 24. See Broadcasting
Operations - "Television - KOMO TV" and "- Television - KATU Television."
Fisher Broadcasting's stations are rated either number one or two in overall
sign-on/sign-off audience delivery in their respective markets.  Fisher
Broadcasting's radio operations are concentrated in large, medium and small
markets located in Washington, Oregon and Montana.  In Seattle, KOMO News 1000,
`Hot Talk' KVI 570, and STAR 101.5 (KPLZ) are uniquely positioned radio stations
that serve a broad base of listeners with news, information and entertainment.
See "Broadcasting Operations - Radio - Seattle Radio Market."  In Portland,
Oregon, the KWJJ AM/FM stations deliver country music to the total metropolitan
population of approximately 1,900,000.  See "Broadcasting Operations - Radio -
Portland Radio Market."  Sunbrook Communications, Inc. ("Sunbrook"), a wholly-
owned subsidiary of Fisher Broadcasting, owns and operates 18 radio stations in
Washington and Montana.  See "Broadcasting Operations - Radio - Medium - and
Small - Market Radio Operations."

     Fisher Communications Inc. ("FishComm"), a wholly owned subsidiary of
Fisher Broadcasting, owns and operates Fisher Broadcasting's satellite teleport
services, Internet services, and emerging media development operations.
FishComm is committed to the full use of existing Fisher Broadcasting facilities
and services and to leading the way into the future of emerging new media and
emerging technologies. By generating new revenue from  existing facilities, such
as satellite communications receive and transmit facilities, FishComm is
positioned to leverage Fisher Broadcasting's core competencies.  See
"Broadcasting Operations - Satellite, Internet, and Emerging Media Operations."

     As of December 31, 1996, Fisher Broadcasting employed 780 full- and part-
time employees, 136 of whom are covered by five collective bargaining agreements
with three labor unions.  KOMO TV's IBEW (International Brotherhood of
Electrical Workers) and AFTRA (American Federation of Television and Radio
Artists) Staff Artists contracts expire on May 31 

                                       2
<PAGE>
 
and December 1, 1997, respectively. The station's IATSE (International Alliance
of Theatrical Stage Employees) contracts for photographers and for film and tape
editors expire on May 1 and June 1, 1998, respectively. KATU's IATSE contract
for photographers expires September 1, 1997. KWJJ AM/FM's IBEW contract for its
on-air staff expires on December 4, 1997. Negotiations for the three-year
contracts usually begin approximately one month prior to the end of the
contract. Fisher Broadcasting believes its relations with employees to be good.


                        TELEVISION AND RADIO OPERATIONS

     Fisher Broadcasting focuses on increasing shareholder value and
profitability by serving the needs and wants of the diverse communities in which
it operates.  Management believes that increased audience share and revenue
growth each flow from a commitment to serve the various audiences in the
community.  Fisher Broadcasting strives to develop and maintain the highest
ranked stations in each of its markets, while maintaining careful control of
programming and other operating costs.

POSITIONING AND BRANDING STATIONS

     In each of its markets, Fisher Broadcasting positions its stations in a
manner that creates and reinforces a local "brand" with which the viewer,
listener or advertiser can identify.  In developing and implementing this
positioning, each broadcasting operation utilizes a market-specific planning
process designed to integrate news and entertainment programming with customized
promotional and sales strategies.  Fisher Broadcasting's positioning varies by
market, taking into account service to the community, demographics, competition,
and other market dynamics and opportunities.  See "Broadcasting Operations -
Television - General Overview" and "- Radio - General Overview."

BUILDING ON LOCAL NEWS INFORMATION AND ENTERTAINMENT PROGRAMMING FRANCHISES

     Each Fisher Broadcasting station strives to build audience loyalty by
focusing on local news and entertainment programming.  Fisher Broadcasting
believes a strong, well-defined local news product builds viewer loyalty.  In
addition, each station also produces information, entertainment, public affairs
and children's programs that enhance Fisher Broadcasting's ties to the local
communities served by such station.  Dedication to public service and community
affairs also serves to strengthen Fisher Broadcasting's bond with the viewers,
listeners and advertisers in such communities.  See "Broadcasting Operations -
Television - Competition" and "- Radio - Competition."

INVESTING IN EMPLOYEES

     Fisher Broadcasting believes that its employees are its most important and
valuable resource. Each employee has the opportunity to participate in training
to assist him or her in the continual process of generating a new future, both
for the employee and for Fisher Broadcasting.  Through Fisher University, a
program for employees of the Company and all of its subsidiaries, employees
receive training that emphasizes the importance of Fisher Broadcasting's
historical strengths, while addressing current and future challenges.

                                       3
<PAGE>
 
INVESTING IN TECHNOLOGY AND OTHER CAPITAL IMPROVEMENTS

     Fisher Broadcasting regularly invests in capital equipment that will either
increase worker productivity, reduce station operating costs, or improve signal
quality and strength.  Capital expenditures for Fisher Broadcasting's television
and radio operations over the past five years were approximately $18.5 million.
Fisher Broadcasting believes that its capital investment program enables it to
enhance the quality of its programming production and gain competitive
advantages in the local markets served by its stations.

     On January 20, 1997, under an experimental license granted by the Federal
Communications Commission ("FCC"), KOMO TV became the first commercial broadcast
station on the West Coast to transmit digital high definition television. As
discussed in "Broadcasting Operations - Licensing and Regulations Application to
Television and Radio Broadcasting - Proposed Legislation and Regulations", the
FCC has just announced its licensing plan for digital television.  Advancements
in digital technology are expected to replace today's current analog standard,
making it the first fundamental change in television in over 50 years, and
Fisher Broadcasting is prepared to make the necessary investment in order to
fully exploit this technology.

ACQUISITIONS

     In early 1994, Fisher Broadcasting owned and operated two television
stations (KOMO TV, Seattle and KATU Television, Portland) and one radio station
(KOMO AM, Seattle).  Since that time, Fisher Broadcasting has acquired two
additional radio stations in Seattle, two radio stations in Portland, and
eighteen radio stations in Washington and Montana.  See "Broadcasting Operations
- - Radio."

     Fisher Broadcasting plans to continue to evaluate and, if appropriate,
pursue acquisition opportunities in television, radio, and emerging media
markets.  Any acquisition would target broadcast and emerging media properties
that could be acquired on favorable terms and offer attractive opportunities for
the successful application of Fisher Broadcasting's operating strategies or
would be complementary to its current operations and core competencies.  In
assessing acquisition opportunities, Fisher Broadcasting will consider various
factors, including (1) price, (2) available resources for acquisition, (3)
government regulation of station ownership, (4) whether the size, location,
network affiliation, and other characteristics of any acquisition candidate
would complement Fisher Broadcasting's current broadcast operating commitments,
(5) whether the projected population growth, audience demographics, and business
development opportunities in the acquisition candidate's markets would
facilitate increased advertising revenues, and (6) whether any acquisition
candidate would provide station- and market-specific opportunities to increase
revenues and leverage Fisher Broadcasting's core competencies and existing
technology commitments.  Fisher Broadcasting does not presently have any
agreements or understandings to acquire or sell broadcast or emerging media
properties.  Fisher Broadcasting is not committed to any timetable for
acquisitions nor to any number or level of acquisitions.  There can be no
guarantee that Fisher Broadcasting will make future acquisitions and, if there
are such acquisitions, no guarantee as to the number of stations or the size of
the markets any such stations might serve.

                                       4
<PAGE>
 
EXPANDING PROGRAMMING PRODUCTION

     Fisher Broadcasting seeks to address and satisfy the news, information,
entertainment and public outreach needs of the local communities served by each
station.  Fisher Broadcasting believes that consistent focus on such needs is
one of the principal reasons why various Fisher Broadcasting programs have
received significant local and national attention.  This attention has, in turn,
led to the syndication of some of Fisher Broadcasting's programming efforts.
Fisher Broadcasting believes that syndication is an area of emerging growth,
creating new revenue opportunities without commensurate increases in expenses.

                                   TELEVISION

GENERAL OVERVIEW

     Commercial television broadcasting began in the United States on a regular
basis in the 1940s.  There are a limited number of channels available for
broadcasting in any one geographic area, and the license to operate a television
station is granted by the FCC.  Television stations that broadcast over the very
high frequency ("VHF") band (channels 2-13) of the spectrum generally have some
competitive advantage over television stations that broadcast over the ultra-
high frequency ("UHF") band (channels above 13) of the spectrum because VHF
channels usually have better signal coverage and operate at a lower transmission
cost.  However, the improvement of UHF transmitters and receivers, the complete
elimination from the marketplace of VHF-only television receivers and the
expansion of cable television systems have reduced the competitive advantage of
stations broadcasting over the VHF band.

     Television station revenues are primarily derived from the sale of local,
regional and national advertising and, to a much lesser extent, from network
compensation and studio rental and commercial production activities.  Broadcast
television stations' heavy reliance on advertising revenues renders the stations
vulnerable to cyclical changes in the economy.  The size of advertisers'
budgets, which are affected by broad economic trends, affect the broadcast
industry in general and, specifically, the revenues of individual broadcast
television stations.

     Television stations in the country are grouped by A.C. Nielsen & Co.
("Nielsen"), a company that provides audience measuring services, into
approximately 210 generally recognized television markets that are ranked in
size according to various formulae based upon an actual or potential audience.
Each market is designated as an exclusive geographic area consisting of all
counties in which the home-market commercial stations receive the greatest
percentage of total viewing hours.

     Nielsen periodically publishes data on estimated audiences for television
stations in the various markets throughout the country.  These estimates are
expressed in terms of the percentage of the total potential audience viewing a
station in the market (the station's "rating") and of the percentage of the
audience actually watching television (the station's "share").  Nielsen provides
such data on the basis of total television households and selected demographic
groupings in the market.  The specific geographic markets are called Designated
Market Areas, or "DMAs."

                                       5
<PAGE>
 
     Nielsen uses two methods of determining a station's rating and share.  In
larger geographic markets, ratings are determined by a combination of meters
connected directly to selected television sets and weekly viewer-completed
diaries.  In smaller markets, ratings are determined by weekly diaries only.
Both markets in which Fisher Broadcasting has television stations are metered.

     Historically, three major broadcast networks, ABC, CBS, and NBC, dominated
broadcast television.  In recent years, The Fox Network ("Fox") has effectively
evolved into the fourth major network, although the hours of network programming
produced by Fox for its affiliated stations are fewer than those produced by the
other three major networks.  In addition, the United-Paramount Network ("UPN")
and the Warner Brothers Network ("WB") have launched new television networks
with a limited amount of weekly programming.  See "Broadcasting Operations -
Television - Network Affiliations."

     The affiliation by a television station with one of the four major networks
has a significant impact on the composition of the station's programming,
revenues, expenses and operations.  A typical affiliated station receives
approximately 9 to 10 hours of each day's programming from the network.  This
programming, along with cash payments ("network compensation"), is provided to
the affiliate by the network in exchange for a substantial majority of the
advertising time sold during the airing of network programs.  The network then
sells this advertising time for its own account.   The affiliate retains the
revenues from time sold during designated breaks for local sale in and between
network programs, and during programs produced by the affiliate or purchased
from non-network sources.  In acquiring programming to supplement network
programming, network affiliates compete primarily with other affiliates and
independent stations in their markets.  Cable systems generally do not compete
with local stations for programming, although various national cable networks
from time to time have acquired programs that would otherwise have been offered
to local stations.  In addition, a television station may acquire programming
through bartering arrangements.  Under such arrangements, which are becoming
increasingly popular with both network affiliates and independents, a national
program distributor may receive advertising time in exchange for the programming
it supplies, with the station paying no cash or a reduced fee for such
programming.

     An affiliate of UPN or WB receives a smaller portion of its programming
from the network compared to an affiliate of NBC, ABC, CBS or Fox.  Currently,
UPN and WB provide twelve hours and seventeen hours, respectively, of
programming per day to their affiliates.  As a result of the smaller amount of
programming provided by their networks, affiliates of UPN or WB must purchase or
produce a greater amount of their programming, resulting in generally higher
programming costs.  These stations, however, retain a larger portion of the
inventory of advertising time and the revenues obtained from the sale of such
time than stations affiliated with the major networks.

     In contrast to a network-affiliated station, an independent station
purchases or produces all of the programming that it broadcasts, generally
resulting in higher programming costs, although the independent station is, in
theory, able to retain its entire inventory of advertising time and all of the
revenue obtained from the sale of such time.  Barter and cash-plus-barter
arrangements, however, also have become increasingly popular among independent
stations.

                                       6
<PAGE>
 
     Broadcast television stations compete for advertising revenues primarily
with other broadcast television stations and, to a lesser extent, with radio
stations, cable system operators and programmers and newspapers serving the same
market.  Traditional network programming, and recently Fox programming,
generally achieves higher audience levels than syndicated programs aired by
independent stations.  However, as greater amounts of advertising time are
available for sale by independent stations and Fox affiliates in syndicated
programs, those stations typically achieve a share of the television market
advertising revenues that is greater than their share of the market's audience.

     Through the 1970s, network television broadcasting enjoyed virtual
dominance in viewership and television advertising revenues because network-
affiliated stations only competed with each other in local markets.  Beginning
in the 1980s, this level of dominance began to change as the FCC authorized more
local stations, and marketplace choices expanded with the growth of independent
stations and cable television services.

     Cable television systems were first installed in significant numbers in the
1970s and were initially used to retransmit broadcast television programming to
paying subscribers in areas with poor broadcast signal reception.  In the
aggregate, cable-originated programming has emerged as a significant competitor
for viewers of broadcast television programming, although no single cable
programming network regularly attains audience levels amounting to more than a
small fraction of any of the major broadcast networks.  The advertising share of
cable networks increased during the 1970s and 1980s as a result of the growth in
cable penetration (the percentage of television households that are connected to
a cable system).  Notwithstanding such increases in cable viewership and
advertising, over-the-air broadcasting remains the dominant distribution system
for mass market television advertising.

     Fisher Broadcasting believes that the market shares of television stations
affiliated with NBC, ABC and CBS declined during the 1980's primarily because of
the emergence of Fox and certain strong independent stations and, secondarily,
because of increased cable penetration.  Independent stations have emerged as
viable competitors for television viewership share, particularly as a result of
the availability of first-run, network-quality programming.  In addition, there
has been substantial growth in the number of home satellite dish receivers and
video cassette recorders, which have further expanded the number of programming
alternatives available to household audiences.

     Further advances in technology may increase competition for household
audiences and advertisers.  Video compression techniques, now in use with direct
broadcast satellites and in development for cable and wireless cable, are
expected to permit greater numbers of channels to be carried with existing
bandwidth.  These compression techniques, as well as other technological
developments, are applicable to all digital delivery systems, including over-
the-air broadcasting, and have the potential to provide vastly expanded
programming to highly targeted audiences.  Reduction in the cost of creating
additional channel capacity could lower entry barriers for new channels and
encourage the development of increasingly specialized niche programming.  This
ability to reach very narrowly defined audiences is expected to alter the
competitive dynamics for advertising expenditures. Fisher Broadcasting is unable
to predict the effect that technological changes will have on the broadcast
television industry or the future results of Fisher Broadcasting's operations.

                                       7
<PAGE>
 
COMPETITION

     Competition in the television industry, including the markets in which
Fisher Broadcasting's stations compete, takes place on several levels:
competition for audience, competition for programming (including news) and
competition for advertisers.  Additional factors material to a television
station's competitive position include signal coverage and assigned frequency.
The television broadcasting industry is continually faced with technological
change and innovation, the possible rise in popularity of competing
entertainment and communications media, and governmental restrictions or actions
of federal regulatory bodies, including the FCC and the Federal Trade
Commission, any of which could have a material effect on the broadcasting
business in general and Fisher Broadcasting's business in particular.

     Audience.  Stations compete for audiences on the basis of program
     --------
popularity, which has a direct effect on advertising rates.  A majority of the
daily programming on network-affiliated stations is supplied by the network with
which such stations are affiliated.  During periods of network programming, the
stations are totally dependent upon the performance of the network programs in
attracting viewers.  The competition between the networks is intense and the
success of any network's programming can vary significantly over time.  Each
station competes in non-network time periods on the basis of the performance of
its programming during such time periods, using a combination of self-produced
news, public affairs and other entertainment programming that each station
believes will attract viewers.  The competition between stations in non-network
time periods is intense and here, too, success can vary over time.

     Fisher Broadcasting's stations compete for television viewership share
against local network-affiliated and independent stations, as well as against
cable and alternate methods of television transmission.  These other
transmission methods can increase competition for a station by bringing into its
market distant broadcasting signals not otherwise available to the station's
audience, and also by serving as a distribution system for non-broadcast
programming originated on the cable system.  Historically, cable operators have
not sought to compete with broadcast stations for a share of the local news
audience.  To the extent cable operators elect to do so in the future, the
increased competition for local news audiences could have an adverse effect on
Fisher Broadcasting's advertising revenues.

     Other sources of competition for Fisher Broadcasting's television stations
include home entertainment systems (including video cassette recorder and
playback systems, videodisks and television game devices), multipoint
distribution systems, multichannel-multipoint distribution systems, wireless
cable and satellite master antenna television systems.  Fisher Broadcasting's
stations also face competition from high-powered, direct broadcast satellite
services, such as DIRECT-TV, which transmit programming directly to homes
equipped with special receiving antennas or to cable television systems for
transmission to their subscribers.  Fisher Broadcasting competes with these
sources of competition both on the basis of service and product performance
(quality of reception and number of channels that may be offered) and price (the
relative cost to utilize these systems compared to television viewing).

     Programming.  Competition for non-network programming involves negotiating
     -----------
with national program distributors, or syndicators, which sell first-run and
rerun packages of programming.  Fisher Broadcasting's stations compete against
in-market broadcast stations for exclusive access to off-network reruns (such as
"Home Improvement") and first-run product 

                                       8
<PAGE>
 
(such as "The Oprah Winfrey Show"). Cable systems generally do not compete with
local stations for programming, although various national cable networks from
time to time have acquired programs that would have otherwise been offered to
local television stations.

     Advertising.  Advertising rates are based upon the size of the market in
     -----------
which a station operates, a program's popularity among the viewers an advertiser
wishes to attract in that market, the number of advertisers competing for the
available time, the demographic make-up of the market served by the station, the
availability of alternative advertising media in the market area, the presence
of aggressive and knowledgeable sales forces, and the development of projects,
features and programs that tie advertiser messages to programming.  Advertising
rates are also determined by a station's overall ability to attract viewers in
its market, as well as the station's ability to attract viewers among particular
demographic groups that an advertiser may be targeting.  Fisher Broadcasting's
stations compete for advertising revenues with other television stations in
their respective markets, as well as with other advertising media, such as
newspapers, radio, magazines, outdoor advertising, transit advertising, yellow
page directories, direct mail and local cable systems.  The amount of paid
political advertising fluctuates significantly and follows no predictable
pattern.  Competition for advertising dollars in the television broadcasting
industry occurs primarily within individual markets on the basis of the above
factors as well as on the basis of advertising rates charged by competitors.
Generally, a television broadcasting station in one market area does not compete
with stations in other market areas.  Fisher Broadcasting's television stations
are located in highly competitive markets.

NETWORK AFFILIATIONS

     Fisher Broadcasting's television stations are both affiliated with the ABC
Television Network.  The stations' affiliation agreements with ABC provide each
station with the right to broadcast all programs transmitted by the network.  In
return, the network has the right to sell most of the advertising time during
such broadcasts.  Each station receives a specified amount of network
compensation for broadcasting network programs.  To the extent a station's
preemption of network programming exceeds a designated amount, such compensation
may be reduced.  The payments are also subject to decreases by the network
during the term of the affiliation agreement under other circumstances, with
provisions for advanced notice.  Fisher Broadcasting's ABC affiliation
agreements for KOMO TV and KATU expire in 2004.  Although Fisher Broadcasting
expects to continue to be able to renew its affiliation agreements with ABC, no
assurance can be given that such renewals will be obtained.  The non-renewal or
termination of one or both of those agreements could have a material adverse
effect on Fisher Broadcasting's results of operations.

KOMO TV, SEATTLE, WASHINGTON

     Market Overview.  KOMO TV, an ABC affiliate, operates in the Seattle-Tacoma
     ---------------
market, the 12th largest DMA in the nation, with approximately 1.5 million
television households and a population of approximately 3.9 million.  In 1996,
approximately 72% of the population in the DMA subscribed to cable.  According
to recent U.S. Census Bureau reports, the market's metropolitan audience had an
average household income of approximately $50,300, as compared to the national
average of approximately $46,800.  Major industries in the market include
aerospace, biotechnology, forestry, software, telecommunications,
transportation, retail and international trade.  Major employers include The
Boeing Company, Microsoft Corporation, 

                                       9
<PAGE>
 
Nordstrom, Inc. and Alaska Airlines, Inc. In 1996, television advertising
revenue for the Seattle-Tacoma DMA was $276 million, as reported by Miller,
Kaplan, Arase & Co., an accounting firm that provides the television industry
with revenue figures.

     Station Performance.  KOMO TV had an average audience share of 18%, sign on
     -------------------
to sign off from 1992-1996.  Fisher Broadcasting believes that KOMO TV has
established a strong local presence in the Seattle-Tacoma market through the
station's community involvement, local news operation and local non-news
programming.

     KOMO TV has made a major commitment to enhancing the health and welfare of
the Northwest's young people and their families with its "For Kids' Sake"
campaign.  KOMO TV fulfills this commitment with a significant schedule of
programming, projects, and community outreach activities and events.  Since the
campaign's inception in 1987, KOMO TV has been recognized for its leadership in
the area of children and families by the White House, the National Association
of Broadcasting, the National Association of Television Arts and Sciences, and
the National Association of Television Programmers and Executives.  Now in its
11th year, KOMO TV's "For Kids Sake" campaign has helped raise over $24 million
for Children's Hospital and Medical Center in Seattle, Washington; collected
over 2.8 million pounds of food to help feed hungry families in Western
Washington; produced award-winning prime time specials on issues of concern to
Northwest families; and encouraged thousands of young people to "Read as much as
you watch TV."

     KOMO TV broadcasts 25 hours per week of scheduled local news programs.
KOMO News 4 has been recognized for excellence by the National Association of
Broadcasters, the Radio and Television News Directors' Association, and the
National Association of Television Arts and Sciences.

     KOMO TV was notified in April 1997 that it had received a George Foster
Peabody Award for "Excellence in Local TV Programming."  There were 31
recipients of this international award which recognizes broadcasting and cable
excellence, with KOMO TV being one of the four commercial television stations in
the country to be honored.  KOMO TV received the Peabody Award for its News 4
specials "War on Children" and "Earth Agenda."

     KOMO TV also has a long-standing history of local non-news programming.
"Northwest Afternoon" is a live Monday through Friday talk program designed to
meet the information and entertainment needs of the female audience.  "Town
Meeting," which airs on Sundays at 6:00 p.m., is a weekly public affairs program
that provides a forum for viewers to share and discuss important issues in their
lives.  KOMO TV also airs a number of syndicated programs, including "Live with
Regis and Kathie Lee," "Wheel of Fortune," "Jeopardy," and, beginning in the
fall of 1997, "The Rosie O'Donnell Show."

     KOMO TV broadcasts from its studios in Seattle.  Currently, Fisher
Broadcasting is contemplating a new broadcast center with digital equipment that
would greatly expedite the transition from analog to digital high definition
television broadcasting.  Planning of the contemplated facility is in the
initial stage only, and no decision has been made to proceed.  If subsequent
planning and actual construction is approved and proceeds according to Fisher

                                       10
<PAGE>
 
Broadcasting's preliminary objectives, it is anticipated that KOMO TV's move
into such new facility would be completed by January 1, 2000.

<TABLE>
<CAPTION>
 
KOMO TV MARKET/STATION DATA
                                             1992        1993        1994        1995        1996
                                           ---------   ---------   ---------   ---------   ---------
<S>                                        <C>         <C>         <C>         <C>         <C>
Market revenue (in thousands)...........   $211,472    $218,347    $254,376    $258,660    $275,594
Market revenue growth over prior
  period................................        8.9%        3.3%       16.5%        1.7%        6.5%
Market rank (DMA).......................         13          13          12          12          12
Television homes (in thousands).........      1,390       1,428       1,429       1,464       1,492
Total commercial competitors in market..          8           8           8           8           8
Station rank in market, sign on to sign
 off....................................          1           1           2           2           2
Station audience share, sign on to sign
 off....................................         19%         19%         18%         17%         15%
Station rank in market 4:00 p.m. to
 8:00 p.m...............................          2           2           1           1           2
Station audience share 4:00 p.m. to
8:00 p.m................................         20%         22%         23%         21%         19%
</TABLE>
- ---------------------
Source:  Miller, Kaplan, Arase & Co.; The A.C. Nielsen Co.

KATU TELEVISION, PORTLAND, OREGON

     Market Overview.  Portland, Oregon ranks as the 24th largest DMA in the
     ---------------
nation, with a population of approximately 2.5 million and approximately 952,700
television households. Approximately 63% of Portland's population subscribed to
cable in 1996.  In 1996, the average household income in the Portland DMA was
approximately $44,500.  Portland maintains a balanced economy with services,
wholesale/retail and manufacturing representing approximately 26%, 25% and 16%
of total employment, respectively.  Major employers include high-technology
companies such as Intel Corporation, Hewlett-Packard Company and Tektronix,
Inc., as well as Nike, Inc., Kaiser Permanente, the United States Government and
the State of Oregon.

     Station Performance.  KATU, an ABC affiliate, had an average audience share
     -------------------
of 20% during the past five years, sign-on to sign-off.  KATU currently
broadcasts 26 hours per week of scheduled local news programs.  The station has
won numerous local and regional awards for excellence, including the 1995
Associated Press award for Best Newscast in Oregon.  In addition, KATU has a
strong commitment to public affairs and local interest programming.  "AM
Northwest" is a daily, hour-long topical interest program directed at women
viewers.  "Town Hall" is a weekly public affairs discussion program that airs
Sunday evenings at 6:00 p.m.  The station's syndicated programming includes
"Wheel of Fortune," "Jeopardy" and "The Rosie O'Donnell Show."

     KATU also devotes a large amount of air time and resources to community
service projects.  When massive flooding afflicted Oregon and Southwest
Washington in February 1996, the station organized a relief effort that raised
nearly one million dollars for flood victims.  Each 

                                       11
<PAGE>
 
year the station broadcasts the Children's Miracle Network Telethon benefiting
Portland's Doernbecher Children's Hospital. Since 1994, the station has
supported an annual campaign that has raised nearly $2 million to help local
schools. The station also supports numerous community service events and
projects throughout the year with public service announcements and programming
support.

     KATU has developed a local on-line computer service, offering viewers news,
weather and programming information via the station's own electronic bulletin
board.  The station is in the process of expanding that service via the
Internet, and intends to involve its TV advertisers in the service as a way to
generate incremental income for the station and provide added value to its
clients.

     KATU operates from studios in the city of Portland.  The station
continuously invests in new technology to improve the quality of its programs
and reduce operating costs.

<TABLE>
<CAPTION>
KATU MARKET/STATION DATA
                                             1992        1993        1994        1995        1996
                                           ---------   ---------   ---------   ---------   ---------
<S>                                        <C>         <C>         <C>         <C>         <C>
Market revenue (in thousands)...........   $118,600    $118,900    $138,700    $145,200    $161,050
Market revenue growth over prior
 period.................................        7.7%        0.2%       16.7%        4.7%       11.0%
Market rank (DMA).......................         27          27          27          24          24
Television homes (in thousands).........        846         868         890         920         953
Total commercial competitors in market.           6           6           7           8           8
Station rank in market, sign on to
 sign off...............................          1           1           1           1           1
Station audience share, sign on to
 sign off...............................         20%         22%         21%         19%         17%
Station rank in market 4:00 p.m. to
 8:00 p.m...............................          1           1           1           1           1
Station audience share 4:00 p.m. to
8:00 p.m................................         23%         27%         25%         23%         22%
</TABLE>
- ---------------------
Source:  Laura M. Lekas, C.P.A.; The A.C. Nielsen Co.

                                     RADIO

GENERAL OVERVIEW

     Commercial radio broadcasting began in the United States in the early
1920s.  There are a limited number of frequencies available for broadcasting in
any one geographic area.  The license to operate a radio station is granted by
the FCC.  There are two commercial broadcast bands, each of which employ
different methods of delivering the radio signal to radio receivers.  The AM
band (amplitude modulation) consists of frequencies from 550 KHz to 1700 KHz.
The FM (frequency modulation) band consists of frequencies from 88.1 MHz to
107.9 MHz.

     Radio listeners have gradually shifted over the years from AM to FM
stations.  Stations on the FM band are generally considered to have a
competitive advantage over stations that broadcast on the AM band.  FM reception
is generally clearer than AM and provides greater tonal range and higher
fidelity.  Music formats that appeal to the younger demographics desired 

                                       12
<PAGE>
 
by the majority of advertisers are found almost exclusively on the FM band
because of the disparity in the quality of reception. A radio station on the FM
band, therefore, has an abundance of choices in format while AM stations tend to
be limited to either spoken word formats or musical formats that appeal to
adults 55 years of age and older. Nationally, the FM listener share is now in
excess of 75%, despite the fact that the number of AM and FM commercial stations
in the United States is approximately equal.

     Radio station revenues are derived almost exclusively from local, regional
and national advertising.  At present, approximately 80% of the average
station's revenues are derived from local and regional advertisers, and 20% or
less is from national advertisers located outside of the radio station's market.
Radio stations generally employ a local sales force to call on local and
regional advertisers and contract with a national firm to represent business
from outside the market and/or region.  Both sales forces are generally
compensated by way of a commission on advertising time sold.  Because radio
stations rely on advertising revenues, they are sensitive to cyclical changes in
the economy.  The growth in radio revenues, though, has been relatively stable
over the past two decades.  With the exception of 1991, when total radio
advertising revenue fell by 3.1% from the preceding year, radio advertising
revenues over the past 15 years have grown faster than inflation and the Gross
National Product.  In 1995, the Radio Advertising Bureau estimated that the
industry garnered in excess of $11 billion in total advertising revenues.

     Radio is generally viewed as a highly targetable medium for advertisers.
Radio stations are generally classified by their format, such as country,
alternative rock, news/talk, adult contemporary or oldies.  A station's format
and style of presentation enable it to target certain demographics and
psychographics.  By capturing a specific audience share of a market's radio
listeners, a station is able to market its broadcasting time to advertisers
seeking to reach a specific audience. For example, grocery and department stores
find that the majority of purchases are made by women between 25 and 49 years of
age.  In a market of Seattle's size, as many as six radio stations may target
women aged 25-49, developing music and on-air presentations to serve the needs
of such women.

     Most of a radio station's programming is produced locally, although
syndicated programs such as Rush Limbaugh and Dr. Joy Brown, as well as weekly
countdown shows, contribute to many stations daily and weekly programming line-
ups.  These syndicated programs are obtained with either cash payments, barter
agreements for air time on the station, or a combination of both.  However, the
emphasis on local programming provides radio stations with maximum flexibility
in programming, retention of nearly its entire commercial inventory and the
revenue from sale of that time.

     Advertisers and stations utilize data published by audience measuring
services to estimate how many people within particular geographical markets and
demographics listen to specific stations.  Arbitron is the largest audience
measuring service.  Arbitron measures audience on either a quarterly, semi-
annual, or annual basis, depending on market size.  Both Seattle and Portland
are quarterly measurement markets.  Arbitron's audience estimates are based on
geographically and demographically representative samples of radio listeners who
agree to record their radio listening for one week in diaries provided by
Arbitron.  The quarterly sample sizes vary by market size, but generally
represent 0.1625% of a market's total population.  Arbitron estimates a radio
station's cumulative (cume) audience, and time spent listening (the amount of
time each listener spent with that radio station).  Arbitron then estimates by
hour (i.e., 

                                       13
<PAGE>
 
7:00 a.m. to 8:00 a.m.) and daypart (i.e., 6:00 a.m. to 10:00 a.m., or morning
drive) how many listeners are tuned to each radio station in a given 15-minute
span of time, or average quarter-hour persons (AQH Persons). The estimated
number is then compared to the total population in a given demographic and
expressed as a rating (AQH Rating), or compared to the total number of people in
the demographic who were listening to a radio in the given daypart and expressed
as a share (AQH Share).

     Through the early 1970s, a handful of AM radio stations in each market
dominated the listening shares.  The rise of FM listening, brought about by an
industry standard for FM stereo broadcast, essentially doubled the number of
viable competitors in each market.  In the early and mid-1980s, the FCC awarded
additional FM signals to many communities and allowed radio stations from
communities on the fringe of many major metropolitan areas ("metro") to redirect
their signal patterns to cover the entire metro.  In the early 1990s, the FCC
expanded the AM band to 1700 KHz.  The result of this increase in the number of
viable competitors has been a significant decline in the listening shares
reasonably available to the average radio station.  By the late 1980s, the Radio
Advertising Bureau estimated that one-third of all licensees were losing money.
This, in part, led the FCC to relax its ownership regulations on radio stations
and led to the creation of duopolies (ownership of more than one AM or FM
station in a given market).  The Telecommunications Act of 1996 further eased
radio station ownership regulations governing multiple ownership.  See
"Broadcasting Operations - Licensing and Regulation Applicable to Television"
and "- Radio Broadcasting - Multiple Ownership Rules and Cross-Ownership
Restrictions."  The common ownership of multiple stations in a single market
allows for more aggressive marketing and can drive up the cost per rating point
in such market.

     Further advances in technology may increase competition for radio listening
shares. New media technologies, such as the delivery of audio programming by
satellite, digital audio broadcasting ("DAB") and cable television systems, are
either in use currently or in development.  Historically, the radio broadcasting
industry has grown despite the introduction of new technologies for the delivery
of entertainment and information, such as broadcast television, cable
television, audio tapes and compact discs.  A growing population and greater
availability of radios, particularly car and portable radios, have contributed
to this growth.  There can be no assurance, however, that the development or
introduction in the future of any new media technology will not have a material
adverse effect on the radio broadcasting industry.  The FCC has authorized the
use of DAB to deliver audio programming by satellite, and is considering whether
to authorize terrestrial DAB.  DAB will provide a medium for the delivery by
satellite or terrestrial means of multiple new, high quality audio programming
formats to local and national audiences.  Terrestrial DAB may be used in the
future by radio broadcast stations either on existing or alternate broadcasting
frequencies, or on new frequency bands.

COMPETITION

     Competition in the radio industry, including each of the markets in which
Fisher Broadcasting's radio stations compete, takes place primarily on two
levels: competition for audience and competition for advertisers.  Additional
significant factors affecting a radio station's competitive position include
assigned frequency and signal strength.  The radio broadcasting industry is
continually faced with technological change and innovation, the possible rise in
popularity of competing entertainment and communications media, as well as
governmental restrictions or actions of federal regulatory bodies, including the
FCC and the 

                                       14
<PAGE>
 
Federal Trade Commission, any of which could have a material adverse effect on
the broadcasting business.

     Audience.  Fisher Broadcasting's radio stations compete for audience on the
     --------
basis of programming popularity, which has a direct effect on advertising rates.
As a program or station grows in ratings (percentage of total population
reached), the station is capable of charging a higher cost-per-point to
advertising agencies, in particular, and direct advertisers, in general.
Formats, stations and music are highly researched through large-scale perceptual
studies, auditorium-style music tests and weekly call-outs.  All are designed to
evaluate the distinctions and unique tastes of formats and listeners.  In the
early days of radio, and until the early to mid-1970s, many stations programmed
a variety of elements to attract larger shares of audience.  In today's
competitive market, new formats and audience niches have created very targeted
advertising vehicles and programming that is highly focused and tightly
regulated to appeal to a narrow segment of the population.  Formats in one
market targeting similar audiences with slight variances in demographic or
psychographic appeal may be Classic Rock, Alternative Rock, Adult Album
Alternative, and/or Album-Oriented-Rock.  Tactical and strategic plans are
utilized to attract larger shares of audience through marketing campaigns and
promotions.  Marketing campaigns through television, transit, outdoor,
telemarketing or direct mail are designed to improve a station's cume audience
(total number of people listening) while promotional tactics such as cash
giveaways, trips and prizes are utilized by stations to extend the TSL (time-
spent-listening), which works in correlation to cume as a means of establishing
a station's share of audience.

     Advertising.  Advertising rates are based upon the size of the market in
     -----------
which a radio station operates, the total number of listeners the station
attracts in a particular demographic group that an advertiser may be targeting,
the number of advertisers competing for the available time, the demographic
make-up of the market served by the station, the availability of alternative
advertising media in the market area, the presence of aggressive and
knowledgeable sales forces and the development of projects, features and
programs that tie advertisers' messages to programming.  The amount of paid
political advertising on radio fluctuates significantly and follows no
particular pattern.  Fisher Broadcasting's radio stations compete for revenue
primarily with other radio stations and, to a lesser degree, with other
advertising mediums such as television, cable, newspaper, yellow pages
directories, direct mail, and outdoor and transit advertising.  Competition for
advertising dollars in the radio broadcasting industry occurs primarily within
the individual markets on the basis of the above factors, as well as on the
basis of advertising rates charged by competitors.  Generally, a radio station
in one market area does not compete with stations in other market areas.

SEATTLE RADIO MARKET

     Introduction.  Seattle, Washington ranks as the 13th largest radio
     ------------
metropolitan area in the nation, with a Persons aged 12+ population of
approximately 2,745,000 and a total population of approximately 3,260,000.  The
Seattle-Tacoma radio metropolitan area ("metro") is comprised of King,
Snohomish, Pierce, Kitsap, Thurston and Island counties.  Using PRIZM (a market
segmentation analysis developed by Claritas, Inc., and provided to The Arbitron
Company), Seattle's largest population concentration is Affluentials (upwardly
mobile young singles and couples; white-collar suburban families) at
approximately 20% of the population, compared to an approximately 9.5% national
average.  Median household income for the metro is approximately 

                                       15
<PAGE>
 
$50,100 and total retail expenditures per household are approximately $24,500.
Major industries in the market include aerospace, biotechnology, forestry,
software, telecommunications, transportation, retail and international trade.
Major employers include the Boeing Company, Microsoft Corporation, Nordstrom
Inc. and Alaska Airlines Inc. Seattle is tied with Chicago as the most
competitive News/Talk radio market in the nation, with a format reach of 21.5%
compared to a national average of 12.5%, and a West-Regional average of 15.1%.
Radio advertising revenue for the Seattle-Tacoma market was approximately $135
million in 1996, as compiled by Miller, Kaplan, Arase & Co., an accounting firm
that provides the radio industry with revenue figures. The Seattle radio market
has 18 FM and 29 AM stations licensed to the metro.

     Figures set forth in the preceding discussion of the Seattle radio market
vary from those set forth in the discussion of the Seattle television market
(see "Broadcasting Operations - KOMO TV - Market Overview"), as different size
and measurement criteria are applied by the relevant rating organizations in the
two separate markets.

<TABLE>
<CAPTION>
                                                                       MARKET DATA
SEATTLE-TACOMA, WASHINGTON                    1992          1993          1994          1995          1996
                                           -----------   -----------   -----------   -----------   -----------
<S>                                        <C>           <C>           <C>           <C>           <C>
Market Revenue (in thousands)              $   94,100    $  102,700    $  114,400    $  127,175    $  134,844
Market Revenue Growth over prior period           3.5%          9.1%         11.4%         11.2%          6.0%
Market Rank (Arbitron Metro)                       13            13            13            13            13
Persons 12+ Population                      2,342,500     2,365,100     2,696,500     2,696,500     2,698,900
Total commercial competitors in market             47            47            47            47            47
</TABLE>
- ---------------------
Source:  Miller, Kaplan, Arase & Co.; The Arbitron Company.

     Fisher Broadcasting has owned and operated KOMO-AM since December 31, 1926
when the station signed on the air.  When changes to FCC regulations allowed
multiple station ownership in one market, Fisher Broadcasting pioneered new
ground.  Fisher Radio Seattle was formed on May 5, 1994 when Fisher Broadcasting
purchased the assets of KVI-AM and KPLZ-FM.  Since then, all three station
staffs and many of the stations' operating functions have been consolidated into
a $1.3 million facility in downtown Seattle.  Fisher Broadcasting believes that
the synergies achieved through collaborative efforts benefit all three of its
Seattle radio stations.  As a result, station personnel work side-by-side to
maximize available resources and talent at a considerable cost savings.  In
addition, fiber optic links between the radio and television facilities allow
resources to be shared with KOMO TV.  A more detailed description of Fisher
Broadcasting's Seattle radio stations is set forth below.

     KOMO-AM [1000 KHz / 50 kw (day/night), Affiliate:  ABC Information
     -------
Network].  KOMO-AM, known as "KOMO News 1000," is one of the United States'
heritage 50,000 watt radio stations.  The station was ranked 12th in the market
in 1996 (average) with a 3.7% share of listening among Persons 12+, Monday-
Sunday, 6:00 a.m. to 12 midnight.  The station's primary target audience is
Adults 35-54.  KOMO News 1000 programs a combination of news and talk, featuring
a variety of information services such as hourly news, weather, traffic, sports
and talk programs concerning local and national news issues.  With a staff of
eight news journalists, KOMO has one of the largest radio news staffs in the
Northwest.  While the station has always enjoyed a strong reputation for
information services, the News/Talk format is an evolution from the long-time
full-service format and is a relatively new development for KOMO-AM.  As home of
University of Washington Husky Sports, the station builds on the large
University alumni base 

                                       16
<PAGE>
 
in the Northwest and works together with the University on many promotional and
community events throughout the year. In addition to news, talk and sports
programming, the station participates in numerous community service sponsorships
with local organizations, such as Food Lifeline, Children's Hospital, and the
Fred Hutchinson Cancer Research Center, to serve the needs and interests of the
community.

     Fisher Broadcasting believes the investments made in talent and marketing
strategies will support growth in the station's new format.

<TABLE>
<CAPTION>
KOMO-AM STATION DATA
                                                         1992       1993       1994       1995       1996   
                                                       --------   --------   --------   --------   -------- 
<S>                                                    <C>        <C>        <C>        <C>        <C>      
Station rank in market Mon-Sun, 6 a.m. to 12-                                                                      
mid, AQH Share                                               4          6         10         15         12  
                                                                                                            
Station audience AQH share in market Mon-Sun,                                                               
6 a.m. to 12-mid                                           5.2%       4.7%       4.1%       3.3%       3.7% 
                                                                                                            
Station rank in market for cumulative weekly                                                                
audience Mon-Sun, 6 a.m. to 12-mid                           3          5          7          7          7  
                                                                                                            
Station cumulative audience in market Mon-Sun,                                                              
6 a.m. to 12-mid                                       378,400    378,800    331,000    317,100    337,100   
</TABLE>
- -----------------------------
Source:  The Arbitron Company

     KVI-AM [570 KHz / 5 kw (day/night), Affiliate:  ABC Entertainment Network].
     ------
KVI-AM is known as "Hot Talk 570-KVI."  KVI was the leading talk radio station
in Seattle, tied for fourth  among all stations in the market with a 5.2% share
of listening among Persons 12+, Monday-Sunday, 6:00 a.m. to 12 midnight
(Arbitron-Summer 1996), and eighth among its target audience of Adults 25-54.
KVI's programming mission is to enlighten, educate and inform through listener
issue-oriented, entertaining talk radio.  The station is a mixture of local
programming featuring strong local hosts, including the nationally recognized
Michael Medved, and national programming such as Rush Limbaugh and Mike Reagan.
KVI's commitment to numerous community service projects is exemplified by its
efforts on behalf of the Make-A-Wish Foundation.  Each year, the station
sponsors a Make-A-Wish Foundation Radiothon to raise money for children with
life-threatening diseases.  Last year, KVI and its listeners raised over
$160,000 and 800,000 frequent flier miles in just six hours to support the
children of the Make-A-Wish Foundation.  Other community oriented projects have
ranged from grass-roots support of replacing a vandalized statue in West Seattle
to supporting a local retail store victimized by crime.  While KVI and KOMO are
complimentary formats, they maintain unique identities and format niches in the
market.

<TABLE>
<CAPTION>
KVI-AM STATION DATA
                                                         1992       1993       1994       1995       1996   
                                                       --------   --------   --------   --------   -------- 
<S>                                                    <C>        <C>        <C>        <C>        <C>      
Station rank in market                                                                                      
Mon-Sun, 6 a.m. to 12-mid, AQH Share                        18          5          3          3          5  

Station audience AQH share in market                                                                        
Mon-Sun, 6 a.m. to 12-mid                                  2.0%       4.6%       5.9%       5.4%       5.2% 

Station rank in market for cumulative weekly                                                                
audience Mon-Sun, 6 a.m. to 12-mid                          16         12         12         11         12  
                                                                                                            
Station cumulative audience in market                                                                       
Mon-Sun, 6 a.m. to 12-mid                              136,200    247,100    261,100    264,000    246,100   
</TABLE>
- -----------------------------
Source:  The Arbitron Company

                                       17
<PAGE>
 
     KPLZ-FM [101.5 MHZ / 100 kw, Affiliation:  Independent].  KPLZ-FM is known
     ------- 
as "Star 101.5," playing a mix of 80s and 90s music.  In January 1994, the
station's format shifted to Adult Top 40 or Hot Adult Contemporary.  The station
was ranked 9th in the market with a 4.0% share of listening among Persons 12+,
Monday-Sunday, 6:00 a.m. to 12 midnight (Arbitron-Average 1996).

     The station is involved in numerous promotional and community events every
year.  KPLZ-FM sponsors events such as the Northwest Women's Show, the Teacher
of the Week recognition contest, the Baby Star Team, and the Back To School
Fashion Show and Concert.  In addition, the station hosts the annual Starlight
Foundation Auction and Golf Tournament, the Sharing Sleigh and the Terry Fox
Run.  The station features a weekly community service program called the Pulse
of Puget Sound.

<TABLE>
<CAPTION>
KPLZ-FM STATION DATA
                                             1992       1993       1994       1995       1996
                                           --------   --------   --------   --------   --------
<S>                                        <C>        <C>        <C>        <C>        <C>
Station rank in market
Mon-Sun, 6 a.m. to 12-mid, AQH Share             5         12         11         13          9

Station audience AQH share in market
Mon-Sun, 6 a.m. to 12-mid                      4.9%       3.2%       4.0%       3.7%       4.0%

Station rank in market for cumulative weekly
audience Mon-Sun, 6 a.m. to 12-mid               3          6          6          6          4
                                  
Station cumulative audience in market
Mon-Sun, 6 a.m. to 12-mid                  389,800    322,100    345,300    332,900    359,300
</TABLE>
- -----------------------------
Source:  The Arbitron Company


PORTLAND RADIO MARKET

     Introduction.  Portland, Oregon ranks as the 24th largest radio metro in
     ------------
the nation, with a Persons 12+ population of approximately 1,600,000 and a total
population of approximately 1,900,000.  The radio metro is comprised of
Multnomah, Washington, Clackamas, Marion and Yamhill counties in Oregon and
Clark County in the State of Washington.  Median household income for the metro
was approximately $46,200, and total retail expenditures per household were
approximately $25,150.  The Portland metro maintains a balanced economy with
services, wholesale/retail and manufacturing representing approximately 26%, 25%
and 16% of total employment, respectively.  Major employers include such
companies as Intel Corporation, Hewlett Packard Company, Nike, Inc. and
Tektronix, Inc., as well as Kaiser Permanente, the United States Government and
the State of Oregon.  The FCC has licensed 14 FM and 13 AM stations in the
Portland radio metro.

     Figures set forth in the preceding discussion of the Portland radio market
may vary from those set forth in the discussion of the Portland television
market (see "Broadcasting Operations -- KATU Television-Market Overview") as
different size and measurement criteria are applied by the relevant rating
organizations to the two separate markets.

     KWJJ AM [1080 KHz / 50 kw (day), 10 kw (night), Affiliation:  Independent]
     -------
and KWJJ FM [99.9 MHz / 52 kw, Affiliation:  Independent].  KWJJ-FM was the
second-ranked radio station in the Portland market, with a 7.2% share of
listening Persons 12+, Monday-Sunday, 6:00 a.m. to 12:00 midnight, as of the
Summer 1996 Arbitron survey.  KWJJ-AM was the 17th ranked 

                                       18
<PAGE>
 
radio station in the market, with a 1.7% share of listening Persons 12+, Monday-
Sunday, 6:00 a.m. to 12:00 midnight, as of the Summer 1996 Arbitron survey. Both
radio stations program a mix of country music, with KWJJ-FM playing contemporary
country hits and KWJJ-AM playing classic country favorites. Advertising time on
the two stations is sold to advertisers as a combination (i.e., for one price,
advertisers receive commercials on both radio stations). Among radio formats,
country music has garnered an average 14% of the market's radio listening shares
over the past decade, ranking it consistently #1 or #2 among format preferences
in the market. KWJJ-AM has a 50,000 watt signal.

     KWJJ AM/FM participates in numerous community service sponsorships with
local organizations, such as Doernbecher Children's Hospital, Western Youth
Development, Salmon Aid and the Oregon City Chamber of Commerce.  The stations
also produce and broadcast a weekly half-hour public service show called Metro
Magazine.

     Since purchasing the Portland radio stations in June 1996, Fisher
Broadcasting has made a substantial investment to upgrade the stations'
facilities and equipment.  In April 1997, the stations moved into new broadcast
facilities in downtown Portland.  An investment of approximately $1.9 million is
being made in the new facility, which will equip both radio stations with fully
digital production and broadcast equipment, communication links between KATU
Television and both radio stations, and computer equipment needed for traffic
news, accounting and sales.  Fisher Broadcasting expects that the new facility
will improve operating efficiencies and reduce operating costs.

<TABLE>
<CAPTION>
KWJJ MARKET/STATION DATA (1)
                                              1992          1993          1994          1995          1996
                                           -----------   -----------   -----------   -----------   -----------
<S>                                        <C>           <C>           <C>           <C>           <C>
Market Revenue (in thousands)              $   52,081    $   57,858    $   66,056    $   73,194    $   86,159

Market Revenue Growth over prior period           9.7%         11.1%         14.2%         10.8%         17.7%

Market Rank (Arbitron Metro)                       25            25            26            24            24

Persons 12+ Population                      1,432,900     1,473,700     1,511,600     1,563,300     1,598,800

Total commercial competitors in market             25            25            26            27            27

Station rank in market,
Mon-Sun, 6 a.m. to 12-mid, AQH Share                7             7             1             1             2

Station audience AQH share in market
Mon-Sun, 6 a.m. to 12-mid                         6.2%          6.3%          8.1%          8.7%          8.1%

Station rank in market for cumulative weekly
audience, Mon-Sun, 6 a.m. to 12-mid                 7             6             2             1             2

Station cumulative audience in market,
Mon-Sun, 6 a.m. to 12-mid                     204,000       242,000       286,200       294,000       308,500
</TABLE>
- -------------------------
Source:  Miller, Kaplan, Arase & Co.; The Arbitron Company


MEDIUM- AND SMALL-MARKET RADIO OPERATIONS

     Introduction.  The local radio station plays a significant role in smaller
     ------------
communities in America.  In communities that do not have their own TV station,
the primary source of up-to-date news is the radio.  In all small markets,
radio choices are limited.  Radio stations have benefited in this environment,
where the local schools, civic clubs, churches, and government depend upon their
local radio stations as the primary source for local news, weather information,

                                       19
<PAGE>
 
and other matters of local interest such as the school lunch menu and the high
school's football game.

     Small-market radio has also benefited from an advertising sales environment
in which most sales occur through direct contact with local retailers rather
than through national advertising agencies.  Typically, a national advertiser
utilizes a long-term strategy to deliver a set number of ratings points at the
lowest possible cost-per-point.  Thus, the revenue is often outside of the
broadcaster's control.  In contrast, small-market radio can more easily control
its destiny as a result of its direct ties to local advertisers who are
generally small, independent merchants.

     Recent changes in the multiple ownership limitations under federal law have
resulted in increased competition among acquisition-minded broadcast companies
for major-market radio stations.  Consequently, significant consolidation has
occurred, reducing the acquisition opportunities that are available in the major
markets and leading, in turn, to increased interest in small and medium markets.

     Small markets are increasingly inhabited by larger group broadcasters.
Fisher Broadcasting believes that Sunbrook is well-positioned to compete in this
environment, having succeeded over the past decade in its strategy to reach the
largest number of listeners in selected markets.  Sunbrook is committed to
increasing listenership through research, marketing, and community service.
Fisher Broadcasting believes that this commitment will continue to build long-
term value as the Sunbrook-operated stations capitalize on their audience
leadership to generate increased revenue, and on their experience in strict cost
controls to maximize operating income.

     Through Sunbrook, Fisher Broadcasting operates radio stations in five small
and medium markets in the northwestern United States.  Sunbrook is the leading
radio broadcaster in Montana, with 14 radio stations in the four largest cities
in the state.  Additionally, Sunbrook owns four radio stations and has a joint
sales agreement with a fifth station in Wenatchee, a market of approximately
55,000 people in the center of Washington State.

     Sunbrook has sought to acquire under-performing stations in small and
medium markets at cash-flow multiples that are considerably lower than in larger
markets.  The relaxation of federal multiple ownership rules has led Sunbrook to
expand its holdings within its existing markets.  The resulting synergy allows
Sunbrook to better serve its communities while enjoying certain economies of
scale.

The following table sets forth general information for each of Sunbrook's 
stations and the markets they serve.

                                       20
<PAGE>
 
<TABLE> 
<CAPTION> 
                                                     
                                               # OF                  RATINGS(1)           MARKET REVENUE   
                                               COMMERCIAL      ---------------------   ---------------------
                         DIAL                  RADIO STATIONS    RANK IN     STATION    STATION   $ (IN               
MARKET         STATION   POSITION    POWER     IN THE MARKET     MARKET      SHARE      SHARE     THOUSANDS)      FORMAT       
- -------------------------------------------------------------------------------------------------------------------------------
<S>            <C>       <C>        <C>         <C>             <C>          <C>         <C>       <C>          <C> 
Billings, MT                                                                                       $5,300
               KRKX      93.3 FM      100 Kw       12              3           11.9%        12%                 Adult Contemp  
               KYYA      94.1 FM      100 Kw                       4           10.6%        14%                 Classic Rock   
               KBLG(2)    910 AM        1 Kw                       8            5.0%         4%                 News/Talk      
Missoula, MT                                                                                       $4,500                      
               KZOQ      100.1 FM      14 Kw        8              1           24.5%        21%                 Classic Rock   
               KGGL      93.3 FM       43 Kw                       2           19.5%        19%                 Country        
               KYLT      1340 AM        1 Kw                       7            3.1%         6%                 Oldies         
               KGRZ      1450 AM        1 Kw                       8            1.8%         2%                 Sports/Talk    
Great Falls, MT                                                                                    $3,000                      
               KAAK      98.9 FM      100 Kw        8              2           15.9%        23%                 Adult Contemp  
               KQDI      106.1 FM     100 Kw                       3           12.0%        20%                 Classic Rock   
               KXGF      1400 AM        1 Kw                       5            8.3%         3%                 Pop Standards  
               KMSL      1450 AM        1 Kw                       8            1.9%         3%                 News/Talk      
Butte, MT                                                                                          $1,500                      
               KAAR      92.5 FM      4.5 Kw        5              1           40.9%        27%                 Country        
               KMBR      95.5 FM       50 Kw                       2           15.9%        23%                 Classic Rock   
               KXTL      1370 AM        5 Kw                       5            6.8%         7%                 Oldies/Talk    
Wenatchee, WA                                                                                      $3,100                      
               KYSN      97.7 FM        3 Kw        9              1           22.2%        22%                 Country        
               KWWW(3)   96.7 FM       .5 Kw                       2           14.6%        16%                 Adult Contemp  
               KZPH(4)  106.7 FM        3 Kw                       5            8.6%         8%                 Classic Rock   
               KXAA(5)   99.5 FM        5 Kw                       6            7.9%        14%                 Oldies         
               KWWX      1340 AM        1 Kw                       9            (6)          5%                 Spanish         
</TABLE>
- ------------------
(1) Ratings information in the above chart refers to average-quarter-hour share
    of listenership among total persons, Adults 12+, Monday through Sunday, 6
    a.m. to midnight, and is subject to the qualifications listed in each
    report. Sources:

   Billings, Montana:     Arbitron Ratings, Fall, 1996 Billings Market Report
   Missoula, Montana:     Willhight Research, Spring, 1996, Missoula Market 
                          Report
   Great Falls, Montana:  Arbitron Ratings, Spring, 1996 Great Falls Market
                          Report
   Butte, Montana:        Arbitron Ratings, 1996 County Coverage Study, 
                          Silver-Bow County
   Wenatchee, Washington: Willhight Research, Winter, 1996 Wenatchee Market
                          Report.
(2) KBLG's power is 1,000 watts days, 63 watts nights.
(3) KWWW is licensed to the city of Quincy, Washington.
(4) Sunbrook sells advertising on KZPH under a joint sales agreement.  KZPH is
    licensed to the city of Cashmere, Washington.
(5) KXAA is licensed to the city of Rock Island, Washington.
(6) Listenership below minimum reporting standards.

     The following discussion briefly describes the radio stations owned and
operated by Sunbrook, and such stations' respective markets.

     Montana.  Sunbrook is Montana's largest radio broadcaster, with stations in
     -------
the state's four largest markets.  Available rating information (derived from
the sources listed in footnote (1) to the preceding table) indicates that nearly
250,000 Montanans listen to a Sunbrook radio station each week, representing
nearly one out of every three people in the state.  A brief discussion of each
Montana market and Sunbrook's stations follows.

     Billings, Montana.  Billings is Montana's largest market (population
approximately 125,000) and a regional trade center.  Billings is a livestock
center for a four-state region and is also home to two petroleum refineries and
two local colleges.  The Billings market is served by twelve commercial radio
stations, three local television stations, and one local newspaper.

     Recent combined historical audience performance of Sunbrook's three 
Billings stations is set forth below.

                                       21
<PAGE>
 
<TABLE> 
<CAPTION> 
                                        1992        1993          1994         1995         1996
                                        ----        ----          ----         ----         ----                                    
<S>                                    <C>         <C>           <C>          <C>          <C> 
Combined Audience Share                20.0%       29.7%         34.0%        28.8%        26.4%                                    

Group Ownership Audience Rank             2           2             2            2            2               
</TABLE>
- -------------------------
Source:  The Arbitron Company
(Average-quarter-hour share of total audience Persons 12+, Monday through
Sunday, 6 a.m. to midnight).

     Missoula, Montana.  Missoula is Montana's second largest market.  Its
current population is approximately 86,000.  The wood and paper products
industry provides the largest employment base, followed by the U.S. Forest
Service, which has regional headquarters and a fire-fighting school in Missoula.
the city is home to the University of Montana, which is also one of the city's
largest employers and provides a strong influence on the community's lifestyle.
Missoula is served by eight commercial radio stations, three local television
stations, and a daily newspaper.

     Recent combined historical audience performance of Sunbrook's four 
Missoula stations is set forth below.
<TABLE> 
<CAPTION> 
                                       1992        1993       1994        1995        1996                                    
                                       ----        ----       ----        ----        ----
<S>                                    <C>         <C>        <C>         <C>         <C> 
Combined Audience Share                47.4%       37.5%      39.8%       42.0%       48.9%                                         

Group Ownership Audience Rank(1)           1           1          1           1           1                 
</TABLE>
- ----------------------
(1) The data above reflect the position of the four combined stations which
Sunbrook now owns. Sunbrook did not own or operate all four of these stations
during all five of these years.
(Audience information from Willhight Research, Missoula Spring reports from each
year noted, 1993 through 1996.  Average-quarter-hour share of total audience
Persons 12+, Monday through Sunday, 6 a.m. to midnight. 1992 information from
American Radio Research, Spring Missoula report, Brand Loyal Listeners, total
audience Persons 12+).

     Great Falls, Montana.  Great Falls is Montana's third largest market, with
a population of approximately 84,000.  Agriculture and the Malmstrom Air Force
Base are major forces in the Great Falls economy.  Great Falls is served by
eight commercial radio stations, three television stations, and one daily
newspaper.

     Recent combined historical audience performance of Sunbrook's four Great
Falls stations is set forth below.

<TABLE> 
<CAPTION> 
                                        1992         1993         1994        1995        1996                                
                                        ----         ----         ----        ----        ----
<S>                                    <C>          <C>          <C>         <C>         <C> 
Combined Audience Share                41.1%        34.4%        34.6%       44.2%       38.1%                                
Group Ownership Audience Rank(1)           1            1            1           1          2                 
</TABLE>
- ---------------------
(1) The data above reflect the position of the four combined stations which
Sunbrook now owns. Sunbrook did not own or operate all four of these stations
during all five of these years.
(Audience information from Arbitron ratings, Great Falls Spring reports for each
year noted.  Average-quarter-hour share of total audience Persons 12+, Monday
through Sunday, 6 a.m. to midnight).

     Butte, Montana.  Butte is Montana's fourth largest city, with a population
of approximately 35,000.  While the city has, historically, been a mining town,
mining interests today only employ approximately 400 people.  The largest
employer in Butte is the state's primary electric utility, Montana Power
Company, which has its corporate headquarters in the 

                                       22
<PAGE>
 
city and employs nearly 1,000 people. Butte is served by three television
stations, five commercial radio stations, and one newspaper.

     Recent combined historical audience performance of Sunbrook's three Butte
stations is set forth below.
<TABLE> 
<CAPTION> 
                                       1992        1993       1994       1995       1996                                            

                                       ----        ----       ----       ----       ----
<S>                                    <C>         <C>        <C>        <C>        <C> 
Combined Audience Share                33.0%       60.8%      55.6%      63.6%      63.6%                                           

Group Ownership Audience Rank             2           1          1          1          1                   
</TABLE>
- ------------------------
Source:  Arbitron County Coverage Report, Silver Bow County,  for 1994, 1995 &
1996.  Willhight Research, Butte Report, Spring, 1993.  Average quarter-hour
share of total audience Persons 12+, Monday through Sunday, 6 a.m. to midnight.
American Radio Research, Butte Report, Spring, 1992, Brand-loyal listeners,
total audience Persons 12+.

     Washington.  In addition to being the largest radio group in Montana,
     ----------
Sunbrook also is the market leader in Wenatchee, Washington, a market of
approximately 55,000 people that is located in the center of Washington.  While
agriculture dominates the local economy, an aluminum manufacturing facility also
provides significant employment.  The Wenatchee market is served by nine
commercial radio stations and one local newspaper.  There are no local
television stations in Wenatchee.

     Recent combined historical audience performance of Sunbrook's four
Wenatchee area stations and the station with which it has a joint sales
agreement is set forth below.

<TABLE>
<CAPTION>
                                       1992        1993       1994       1995       1996  
                                       -----       -----      -----      -----      -----
<S>                                    <C>         <C>        <C>        <C>        <C>  
Combined Audience Share                49.2%       58.0%      65.2%      57.5%      53.3%
Group Ownership Audience Rank(1)          1           1          1          1          1  
</TABLE>
- ----------------------
(1) The data above reflect the position of the four combined stations which
Sunbrook now owns and the station with which it has a joint sales agreement.
Sunbrook did not own or operate all four of the stations that it now owns during
all five of these years.
Source:  Willhight Research, Wenatchee Report, Winter, 1994, 1995 and 1996,
Average quarter-hour share of total audience Persons 12+, Monday through Sunday,
6 a.m. to midnight.  American Radio Research, Wenatchee  Report, Spring, 1992
and 1993, Brand-loyal listeners, total audience Persons 12+.

                      LICENSING AND REGULATION APPLICABLE
                     TO TELEVISION AND RADIO BROADCASTING

     The following is a brief discussion of certain provisions of the
Communications Act of 1934, as amended (the "Communications Act"), most recently
amended by the Telecommunications Act of 1996 (the "Telecommunications Act"),
and of FCC regulations and policies that affect the television and radio
broadcasting business conducted by Fisher Broadcasting.  Reference should be
made to the Communications Act, FCC rules and the public notices and rulings of
the FCC, on which this discussion is based, for further information concerning
the nature and extent of FCC regulation of television broadcasting stations.

LICENSE RENEWAL, ASSIGNMENTS AND TRANSFERS

     Broadcasting licenses for both radio and television stations are currently
granted for a maximum of eight years and are subject to renewal upon application
to the FCC.  The FCC prohibits the assignment of a license or the transfer of
control of a television or radio 

                                       23
<PAGE>
 
broadcasting license without prior FCC approval. In determining whether to grant
or renew a broadcasting license, the FCC considers a number of factors
pertaining to the applicant, including compliance with limitations on alien
ownership, common ownership of broadcasting, cable and newspaper properties, and
compliance with character and technical standards. The Telecommunications Act,
which has been enacted, but not yet fully implemented by the FCC, eliminates the
comparative renewal process and simplifies license renewal. During certain
limited periods when a renewal application is pending, petitions to deny a
license renewal may be filed by interested parties, including members of the
public. Such petitions may raise various issues before the FCC. The FCC is
required to hold evidentiary, trial-type hearings on renewal applications if a
petition to deny renewal raises a "substantial and material question of fact" as
to whether the grant of the renewal application would be inconsistent with the
public interest, convenience and necessity. The FCC is required to renew a
broadcast license if: the FCC finds that the station has complied with FCC
regulations regarding equal employment opportunity; that the station has served
the public interest, convenience and necessity; there have been no serious
violations by the licensee of either the Communications Act or the FCC's rules;
and there have been no other violations by the licensee which taken together
would constitute a pattern of abuse. Additionally, in the case of renewal of
television licenses, the FCC considers the station's compliance with FCC
programming and commercialization rules relating to programming for children. If
the incumbent licensee fails to meet the renewal standard, and if it does not
show other mitigating factors warranting a lesser sanction, the FCC then has the
authority to deny the renewal application and permit the submission of competing
applications for that frequency.

     Failure to observe FCC rules and policies, including, but not limited to,
those discussed herein, can result in the imposition of various sanctions,
including monetary forfeitures, the grant of short-term (i.e., less than the
full eight years) license renewals or, for particularly egregious violations,
the denial of a license renewal application or revocation of a license.

     While the vast majority of such licenses are renewed by the FCC, there can
be no assurance that Fisher Broadcasting's licenses will be renewed at their
expiration dates, or, if renewed, that the renewal terms will be for eight
years.  Both of Fisher Broadcasting's television stations are presently
operating under regular five-year licenses, granted prior to recent FCC action
which extended license terms to eight years, that expire on January 31, 1999.
Fisher Broadcasting's and Sunbrook's radio stations in Washington and Oregon
currently operate under seven-year licenses, also granted prior to recent FCC
action extending the term of radio licenses to eight years, that expire on
January 31, 1998.  The license terms for all of Sunbrook's Montana radio
stations expire on April 1, 1997.  Sunbrook has filed applications for renewal
of these stations' licenses.  Upon renewal, such licenses would extend until
April 1, 2005.  The non-renewal or revocation of one or more of Fisher
Broadcasting's FCC licenses could have a material adverse effect on Fisher
Broadcasting's television or radio broadcasting operations.

MULTIPLE OWNERSHIP RULES AND CROSS OWNERSHIP RESTRICTIONS

     The FCC generally applies its ownership limits to "attributable" interests
held by an individual, corporation, partnership or other association.  In the
case of corporations holding broadcast licenses, the interests of officers,
directors and those who, directly or indirectly, have the right to vote 5% or
more of the corporation's stock (or 10% or more of such stock in the case of
insurance companies, mutual funds, bank trust departments and certain other
passive investors that are holding stock for investment purposes only) are
generally deemed to be attributable, as 

                                       24
<PAGE>
 
are interests held by officers and directors of a corporate parent of a
broadcast licensee. Pursuant to the Telecommunications Act, the FCC has
eliminated the restrictions on the number of television stations in which a
person or entity may have an attributable interest, but instead establishes a
national television reach limit of 35%. The Telecommunications Act requires the
FCC to conduct a rulemaking proceeding to determine whether the local "duopoly"
television ownership rules should be retained, modified or eliminated. The
present "duopoly" rules prohibit attributable interests in two or more
television stations with overlapping service areas. The FCC initiated the
rulemaking proceeding required by the Telecommunications Act in November 1996.
Initial comments to the FCC's proposals were received by the FCC on February 7,
1997. While the FCC has proposed to allow ownership of television stations where
the stations do not have substantial signal overlap and are in separate
Designated Market Areas, the majority of comments in the proceeding urged the
FCC to adopt a looser standard, thereby allowing more duopolies.

     The statutory prohibition against television station/cable system cross-
ownership is repealed in the Telecommunications Act, but the FCC's parallel
cross-ownership rule remains in place.  The FCC intends to conduct a proceeding
on repeal of this cross-ownership restriction.  The television station/daily
newspaper cross-ownership prohibition in the FCC rule was not repealed by the
Telecommunications Act.  The FCC, however, intends to conduct a rule-making
proceeding on whether to repeal such restriction.  The Telecommunications Act
requires the FCC to review its ownership rules biennially as part of its
regulatory reform obligations.

     The FCC imposes less severe restraints on the control or ownership of AM
and FM radio stations that serve the same area than are imposed with regard to
television stations.  In a number of situations, a single party may control or
own an AM and/or an FM "duopoly" - two AM and/or two FM stations - in the same
market area.  FCC rules also preclude the grant of applications for station
acquisitions that would result in the creation of new radio-television
combinations in the same market under common ownership, or the sale of such a
combination to a single party, subject to the availability of a waiver.  Under
FCC policy, waiver applications that involve radio-television station
combinations in the top 50 TV markets where there would be at least 30
separately owned, operated and controlled broadcast licensees after the proposed
combination will generally be favorably received.  At present, the FCC imposes
no limits on the number of radio stations that may be directly or indirectly
owned nationally by a single entity.  National ownership of television stations
by one entity, direct or indirect, is limited to a 35% national share, computed
by dividing the aggregate number of households in each market in which the
licensee owns a station by the total number of households nationally.  In the
case of UHF television stations, the number of households in such markets is
halved for purposes of the foregoing formula.

     If an attributable stockholder of the Company has or acquires an
attributable interest in other television or radio stations, or in daily
newspapers, depending on the size and location of such stations and/or
newspapers, or if a proposed acquisition by the Company or Fisher Broadcasting
would cause a violation of the FCC's multiple ownership rules or cross-ownership
restrictions, Fisher Broadcasting may be unable to obtain from the FCC one or
more authorizations needed to conduct its business and may be unable to obtain
FCC consents for certain future acquisitions.

                                       25
<PAGE>
 
     Fisher Broadcasting is unable to predict the ultimate outcome of possible
changes to these FCC rules and the impact such changes may have on its
broadcasting operations.

ALIEN OWNERSHIP

     Under the Communications Act, broadcast licenses may not be granted to or
held by any corporation having more than one-fifth of its capital stock owned of
record or voted by non-U.S. citizens (including a non-U.S. corporation), foreign
governments or their representatives (collectively, "Aliens").  The
Communications Act also prohibits a corporation, without an FCC public interest
finding, from holding a broadcast license if that corporation is controlled,
directly or indirectly, by another corporation, more than one-fourth of the
capital stock of which is owned of record or voted by Aliens.  The FCC has
issued interpretations of existing law under which these restrictions in
modified form apply to other forms of business organizations, including general
and limited partnerships.  As a result of these provisions, and without an FCC
public interest finding, the Company, which serves as a holding company for its
television station licensee subsidiaries, cannot have more than 25% of its
capital stock owned of record or voted by Aliens or their representatives.

PROGRAMMING AND OPERATION

     The Communications Act requires broadcasters to serve the "public
interest."  Since the late 1970s, the FCC gradually relaxed or eliminated many
of the more formalized procedures it had developed to promote the broadcast of
certain types of programming responsive to the needs of a station's community of
license.  Broadcast station licensees continue, however, to be required to
present programming that is responsive to community problems, needs and
interests and to maintain certain records demonstrating such responsiveness.
Complaints from viewers concerning a station's programming may be considered by
the FCC when it evaluates license renewal applications, although such complaints
may be filed, and generally may be considered by the FCC, at any time.  Stations
must also follow various FCC rules that regulate, among other things, children's
television programming, political advertising, sponsorship identifications,
contest and lottery advertising, obscene and indecent broadcasts, and technical
operations, including limits on radio frequency radiation.  In addition,
broadcast licensees must develop and implement affirmative action programs
designed to promote equal employment opportunities, and must submit reports to
the FCC with respect to these matters on an annual basis and in connection with
a license renewal application.

SYNDICATED EXCLUSIVITY/TERRITORIAL EXCLUSIVITY

     Effective January 1, 1990, the FCC reimposed syndicated exclusivity rules
and expanded the existing network non-duplication rules.  The syndicated
exclusivity rules allow local broadcast stations to require that cable
television operators black out certain syndicated, non-network programming
carried on "distant signals" (i.e., signals of broadcast stations, including so-
called superstations, that serve areas substantially removed from the local
community).  Under certain circumstances, the network non-duplication rule
allows local broadcast network affiliates to demand that cable television
operators black out duplicative network broadcast programming carried on more
distant signals.

                                       26
<PAGE>
 
RESTRICTIONS ON BROADCAST ADVERTISING

     The advertising of cigarettes on broadcast stations has been banned for
many years.  The broadcast advertising of smokeless tobacco products has more
recently been banned by Congress.  Certain Congressional committees have
examined legislative proposals to eliminate or severely restrict the advertising
of alcohol, including beer and wine.  Fisher Broadcasting cannot predict whether
any or all of such proposals will be enacted into law and, if so, what the final
form of such law might be.  The elimination of all beer and wine advertising
would have an adverse effect on Fisher Broadcasting's stations revenues and
operating income, as well as the revenues and operating incomes of other
stations that carry beer and wine advertising.

     Additionally, the FCC has promulgated a number of regulations prohibiting,
with certain exceptions, advertising relating to lotteries and casinos.  The FCC
has also placed limits upon the amount of commercialization during, and adjacent
to, television programming intended for an audience of children ages 12 and
under.

OTHER PROGRAMMING RESTRICTIONS

     The Telecommunications Act requires that any newly manufactured television
set with a picture screen of 13 inches or greater be equipped with a feature
designed to enable viewers to block all programs with a certain violence rating
(the "v-chip").  The FCC, after consulting with the TV manufacturing industry,
will specify the effective date of this requirement, which may not be less than
two years after enactment of the law.  The FCC is directed to oversee the
adoption of standards for this blocking technology.  The television industry has
adopted, effective January 1, 1997, a voluntarily rating scheme regarding
violence and sexual content contained in television programs.  The FCC has
indicated that it will accept public comments on the industry rating scheme, and
will subsequently make a decision as to whether such scheme meets the standards
of the Telecommunications Act.  Fisher Broadcasting cannot predict whether the
v-chip and a ratings system will have any significant effect on the operations
of its business.

     The FCC has adopted regulations, which will take effect September 1, 1997,
effectively requiring television stations to broadcast a minimum of three hours
per week of programming designed to meet specifically identifiable educational
and informational needs, and interests, of children.  Present FCC regulations
require that each television station licensee appoint a liaison responsible for
children's' programming.  Information regarding children's programming and
commercialization during such programming is required to be filed quarterly with
the FCC and made available to the public.  Fisher Broadcasting does not believe
that the FCC children's programming regulations described above have, or will
have, an adverse effect on the operation of its business.

CABLE "MUST-CARRY" OR "RETRANSMISSION CONSENT" RIGHTS

     The 1992 Cable Act requires television broadcasters to make an election to
exercise either "must-carry" or "retransmission consent" rights in connection
with the carriage of television stations by cable television systems in the
station's local market.  If a broadcaster chooses to exercise its must-carry
rights, it may demand carriage on a specified channel on cable systems within
its market, which, in certain circumstances, may be denied.  Must-carry rights
are not absolute, and their exercise is dependent on variables such as the
number of activated channels 

                                       27
<PAGE>
 
on and the location and size of the cable system and the amount of duplicative
programming on a broadcast station. If a broadcaster chooses to exercise its
retransmission consent rights, it may prohibit cable systems from carrying its
signal, or permit carriage under a negotiated compensation arrangement. Fisher
Broadcasting has executed retransmission consent agreements with all of the
cable systems operating within the DMAs of its two television stations.

     On March 31, 1997, the United States Supreme Court upheld the
constitutionality of the must-carry provisions of the 1992 Cable Act.  The Court
held that the must-carry provisions were "content neutral" and thus not subject
to strict scrutiny, and that Congress' stated interests in preserving the
benefits of free, over-the-air local broadcast television, promoting the
widespread dissemination of information from a multiplicity of sources and (in
the view of a four justice plurality) promoting fair competition in the market
for television programming qualified as important governmental interests.  The
Court concluded that Congress had established an extensive evidentiary record
justifying the predictive judgment that the must-carry provisions served
important governmental interests, and that Congress' judgment deserved great
deference from the Court.

PROPOSED LEGISLATION AND REGULATIONS

     On April 3, 1997, the FCC adopted new regulations regarding the
implementation of advanced television in the United States.  These new
regulations govern a new form of digital telecasting ("DTV") based on technical
standards adopted by the FCC in December 1996.  They permit, but do not require,
broadcasters to provide a high definition television ("HDTV") signal.

     While the formal regulations have not yet been released, the FCC has
announced a number of key aspects of its implementation program.

     Each existing station will be given a second channel in the range of
channels 2 through 51 on which to initiate DTV broadcasts.  The FCC will specify
the channel and the maximum power that may be radiated by each station.  DTV
stations will be limited to 1 million watts Effective Radiated Power, and no
station will be assigned less than 50 thousand watts Effective Radiated Power.
The FCC has announced its intention to release a list of channel and power
allotments in the immediate future, but it is not known at this time which
channels and power levels will be allocated to Fisher Broadcasting's Seattle and
Portland television stations or their competitors.  The FCC has stated that the
new channels will be paired with existing analog channels, and broadcasters will
not be permitted to sell their DTV channels, while retaining their analog
channels, and vice versa.

     Affiliates of the ABC, CBS, Fox and NBC television networks in the top 10
television markets will be given until May 1, 1999, to construct and commence
operation of DTV facilities on their newly allocated DTV channels.  Affiliates
of those networks in markets 11 through 30 will be given until November 1, 1999
to do the same.  All other commercial television stations will be given five
years to place a DTV signal on the air, and all non-commercial stations will
have six years to begin operation of a DTV signal.  As ABC affiliates operating
in markets 12 and 24, Fisher Broadcasting's Seattle and Portland television
stations will be required to commence DTV broadcasts by November 1, 1999.
Stations will have one-half of the specified construction periods in which to
apply to the FCC for a construction permit authorizing 

                                       28
<PAGE>
 
construction of the new DTV facilities. The FCC has indicated its intention to
act expeditiously on such applications. While the FCC has announced its
intention to grant extensions of the construction deadlines in appropriate
cases, the impact of failing to meet these applications and construction
deadlines cannot be predicted at this time.

     Once a Fisher Broadcasting station begins operation of its new DTV
facilities it will be required to deliver, at a minimum, a free programming
service with picture resolution at least as good as that of the current analog
service provided by the station, and will have to be aired during the same time
periods as the current service.  It may prove possible to provide more than one
of such "analog equivalent" signals over a single DTV channel, or to mix an
"analog equivalent" signal with other forms of digital material.  The FCC will
not require a broadcaster to transmit a higher quality, HDTV signal over a DTV
channel; the choice as to whether to transmit an HDTV signal or one or more
"analog equivalent" channels will be left up to the station licensee.  ABC has
announced that it intends to supply its affiliates with an HDTV feed of network
programming, and it is not believed possible, under the present state of the
art, to transmit additional program information over the DTV signal while it is
transmitting in the HDTV mode.  It cannot be predicted whether competitors of
Fisher Broadcasting's television stations will operate in the HDTV or "analog
equivalent" mode or to the economic impact of such choices on the stations'
operations.

     Stations operating in the DTV mode will be subject to existing public
service requirements.  The FCC has announced that it will consider imposing
additional public service requirements, such as free advertising time for
federal political candidates, and increased news, public affairs, and children's
programming requirements, in the future.  It cannot be predicted whether such
changes will be adopted, or any impact they might have on station operations.

     By 2002, DTV stations will have to devote at least one-half of their
broadcast time to duplication of the programming on their paired analog
stations.  In 2003, this simulcasting requirement will increase to 75%, and to
100% in 2004 and 2005.

     The FCC has indicated that the transition from analog to digital service
will end in 2006, at which time one of the two channels being used by
broadcasters will have to be relinquished to the government, and DTV
transmissions will be "repacked" into channels 2-46 or channels 7-51.  It is
unknown whether licensees will be permitted to retain their former analog
channels if they operate using DTV technology, and relinquish their new digital
channels, or whether they will be required to utilize the newly allotted
channels, and return their former analog channels.

     Implementation of DTV is expected to generally improve the technical
quality of television signals received by viewers.  Under certain circumstances,
however, conversion to DTV may reduce a station's geographic coverage area or
result in some increased interference.  Also, the FCC's allocations could reduce
the competitive advantage presently enjoyed by Fisher Broadcasting's Seattle and
Portland television stations, which operate on low VHF channels serving broad
areas.  Implementation of DTV will impose substantial additional costs on
television stations because of the need to replace equipment and because some
stations will operate at higher utility costs.  Fisher Broadcasting estimates
that the adoption of DTV would require average capital expenditures of
approximately $8-10 million per station to provide facilities and equipment
necessary to produce the broadcast DTV programming.  The 

                                       29
<PAGE>
 
introduction of this new technology will require that customers purchase new
receivers (television sets) for DTV signals or, if available by that time,
adapters for their existing receivers.

     When the Telecommunications Act was passed, certain leaders in Congress
asked the FCC to postpone issuing DTV licenses pending consideration of possible
future legislation that might require broadcasters to bid at auctions for DTV
channels or which might require that the current conventional channels be
returned to the government on an expedited schedule.  In the course of the
debate on the federal budget, some leaders in Congress have proposed various
plans that might require the auctioning of the spectrum which broadcasters will
need in order to provide DTV.  Various plans for raising revenue also include
provisions to require the auctioning of radio frequencies in bands which
encompass those currently licensed for use by broadcasters, including those
channels used for "auxiliary" purposes, such as remote pickups in electronic
news gathering and studio-to-transmitter links.  Hearings on spectrum auctions
and usage were recently held by Congress.  While the FCC has authorized DTV in
the United States, Fisher Broadcasting cannot predict whether Congress will
attempt to modify the FCC's actions, or the effect DTV authorizations might have
on Fisher Broadcasting's television broadcasting business.  Fisher Broadcasting
cannot predict whether legislation requiring auctions for DTV spectrum will be
enacted or the effect of such legislation.

     Other matters that could affect Fisher Broadcasting's stations include
technological innovations affecting the mass communications industry such as
technical allocation matters, including assignment by the FCC of channels for
additional broadcast stations, low-power television stations and wireless cable
systems and their relationship to and competition with full-power television
broadcasting service.

     Congress and the FCC also have under consideration, or may in the future
consider and adopt, new laws, regulations and policies regarding a wide variety
of matters that could, directly or indirectly, affect the operation, ownership
and profitability of Fisher Broadcasting's broadcasting business, resulting in
the loss of audience share and advertising revenues of the stations, and
affecting Fisher Broadcasting's ability to acquire additional, or retain
ownership of existing, broadcast stations, or finance such acquisitions.  Such
matters include, for example, (i) changes to the license renewal process; (ii)
imposition of spectrum use or other governmentally imposed fees upon a licensee;
(iii) proposals to expand the FCC's equal employment opportunity rules and other
matters relating to minority and female involvement in broadcasting; (iv)
proposals to increase the benchmarks or thresholds for attributing ownership
interest in broadcast media; (v) proposals to change rules or policies relating
to political broadcasting; (vi) technical and frequency allocation matters,
including those relative to the implementation of DTV; (vii) proposals to
restrict or prohibit the advertising of beer, wine and other alcoholic beverages
on broadcast stations; (viii) changes in the FCC's cross-interest, multiple
ownership, alien ownership and cross-ownership policies; (ix) changes to
broadcast technical requirements; and (x) proposals to limit the tax
deductibility of advertising expenses by advertisers.  Fisher Broadcasting
cannot predict what other matters might be considered in the future, nor can it
judge in advance what impact, if any, the implementation of any of these
proposals or changes might have on its television broadcasting business.

     The foregoing does not purport to be a complete discussion of all of the
provisions of the Communications Act, the Telecommunications Act, or other
Congressional acts or related FCC regulations and policies.  Reference is made
to the Communications Act, the 

                                       30
<PAGE>
 
Telecommunications Act, other Congressional acts, such regulations, and the
public notices promulgated by the FCC, on which the foregoing discussion is
based, for further information. There are additional FCC regulations and
policies, and regulations and policies of other federal agencies, that govern
political broadcasts, public affairs programming, equal employment opportunities
and other areas affecting Fisher Broadcasting's broadcasting business and
operations.

               SATELLITE, INTERNET, AND EMERGING MEDIA OPERATIONS

INTRODUCTION

     FishComm is a regional satellite teleport operator, Internet service
provider, and emerging media development company. FishComm was created to expand
on Fisher Broadcasting's capacity to develop revenue from existing resources,
such as satellite communication receive and transmit facilities, and to
investigate the potential for revenue streams from new technologies, such as the
Internet.  Since its inception, FishComm has operated satellite communication
teleports in Portland and Seattle, primarily supplying news and sporting event
video originating from these two markets for distant multi- and single-market
consumption.  The Portland teleport consists of two C-band transmit and receive
satellite dishes while the Seattle teleport consists of four such dishes.  The
teleports are connected to each other by microwave.  KU-band satellite
transmissions are handled by a mobile truck.  The list of FishComm's current
clients include ABC, NBC, AT&T, CNN, ESPN, Fox, the National Basketball
Association and Microsoft Corporation for occasional use video purposes, and
Primetime 24 and Canadian Communications Corporation for continuous use
purposes.  FishComm also operates a fiber optic terminal, with connectivity to
the VYVX fiber optic national network, for the point-to-point transmission of
audio and video signals.  Fisher Broadcasting believes that the combination of
fiber optic and satellite communication capabilities provides FishComm with a
competitive advantage in the efficient transmission of point-to-point and point-
to-multi-point video and audio from the Pacific Northwest.

     FishComm also has developed a presence on the Internet World Wide Web for
the Company and its subsidiaries, providing e-mail and Internet connectivity as
well as home page design, execution and implementation.  FishComm Internet
servers provide the bandwidth for possible intercompany intranet applications,
with excess bandwidth available for sale to host potential outside users.
Current revenues attributable to FishComm's operations are not material to the
Company's results of operations.  As the Internet grows, potential applications
also are expected to grow.

COMPANY PERFORMANCE, COMPETITION AND COMMITMENTS

     From its inception, FishComm has focused on profitably marketing the excess
capacity of Fisher Broadcasting's existing resources.  The capacity of Fisher
Broadcasting's existing satellite transmission equipment, for instance, has been
increased from 1% use for revenue generation to 14% use in just two years.   KU-
band satellite transmissions are often handled by production companies that
utilize mobile trucks for one-time-only events.  FishComm will compete for this
business through the use of its mobile truck.  FishComm's Internet program is
currently in the development stage.

                                       31
<PAGE>
 
                FLOUR MILLING AND FOOD DISTRIBUTION OPERATIONS
                ----------------------------------------------

                                 INTRODUCTION

     FMI, a wholly owned subsidiary of the Company, is a manufacturer of wheat
flour and a distributor of bakery products.  Wheat flour is produced at FMI's
milling sites in Seattle, Washington; Portland, Oregon and Modesto, California.
A mill in Blackfoot, Idaho, which is owned and operated jointly by FMI and
another party (see "Flour Milling and Food Distribution Operations -
Marketing"), commenced operations in April 1997.  FMI was incorporated in
Washington State in 1971, although it has conducted flour milling operations
since 1910, initially as FFMCO.

     FMI produces approximately two million pounds of flour daily.  Fluctuations
in wheat prices can result in fluctuations in FMI's revenues and profits.  FMI
seeks to hedge flour sales through the purchase of wheat futures or cash wheat.
FMI does not speculate in the wheat market.  Wheat is purchased from grain
merchandisers in Washington, Idaho, Montana and California, and is delivered
directly to the mills by rail or truck.  FMI expects that the Blackfoot mill
will add an additional 200,000 pounds of daily capacity.  During 1996, FMI
operated its mills on more than 320 days.

     Bakery products purchased from other food manufacturers are warehoused and
distributed, along with FMI-manufactured flour, from FMI's three warehouses in
Seattle, Washington; Portland, Oregon and Rancho Cucamonga, California.  FMI's
distribution division markets its products primarily in the retail bakery and
food manufacturing industries.  FMI makes deliveries using company owned and
leased vehicles with primarily company drivers.

     Per capita flour consumption in the U.S. has risen steadily over the past
twenty-five years, from 111 pounds to 148 pounds in 1996.  Production of wheat
flour by U.S. mills in 1996 reached a new all-time record of 396,176,000 one-
hundred pound units ("cwts"), up 1.9% from 388,689,000 cwts in 1995, according
to the Bureau of Census.  Acceptance by the American public of the new food
pyramid and nutritional labeling have been instrumental in promoting
carbohydrate-based food.  Due to changes in the American diet, and increased
emphasis on the importance of grain-based products, there has been a significant
growth of specialty bread shops in general, and in particular, a sharp increase
in the number of bagel producers.  Other specialty items such as tortillas,
muffins and pretzels also contribute to the increased consumption of flour based
foods.

     Construction of conventional milling capacity has been limited in the last
five years primarily to mills capable of producing durum flour.  Construction
costs are typically expressed in the cost of producing one cwt of flour on a
daily basis.  Costs for land, buildings, wheat cleaning equipment and milling
equipment are currently between $2,000 and $3,000 per cwt of rated daily
capacity.

     The combination of relatively limited new construction and increased demand
due to population increase and per capita flour consumption has equalized supply
and demand.  U.S. flour mills are currently operating at approximately 91% of
rated capacity based upon a six day, 24 hour per day work week.  Although the
current market environment is expected to create 

                                       32
<PAGE>
 
opportunity for improved profit margins, the considerable expense and time
required to bring new milling capacity on line serves as a barrier to entry into
the market.

     As of January 1, 1997, FMI had 191 full-time employees, 101 of whom are
covered by collective bargaining agreements with three labor unions.  On July 1,
1996, FMI negotiated five-year collective bargaining agreements with the
International Longshoremen and Warehouseman's Union and with the AFL-CIO
covering the Seattle plant.  Two separate contracts with the International
Brotherhood of Teamsters expire March 31, 1998 and December 31, 1999.  FMI
considers its relations with its employees to be good.

                               BUSINESS PRODUCTS

     FMI's mills produce wheat flour for sale to a wide variety of end-users.
FMI primarily serves specialty niche markets with bag product for smaller
manufacturers, institutional markets such as restaurants and hotels, retail and
in-store bakeries.  Bulk flour shipped in rail cars and tanker trucks is
delivered to large wholesale bakeries and mix manufacturers.

     FMI produces approximately 40 grades of flour, ranging from high-gluten
spring wheat flour to low-protein cake and cookie flour.  FMI believes that it
differentiates itself from competitors by producing high quality specialty
flours for specific applications.  FMI also produces millfeed for sale to the
animal feed industry.  Millfeed is incorporated into feed rations for dairy
cattle and other livestock.

     FMI's food distribution division purchases and markets approximately 2,000
bakery related items, including grain commodities (such as corn, oats, rye and
barley products), mixes, sugars and shortenings, paper goods, and other items.
Where appropriate, FMI takes advantage of bulk buying discounts and exclusive
supplier agreements to purchase bakery products at favorable market prices.  FMI
intends to evaluate and, as appropriate, engage in new mill construction and
acquisition of food distribution operations.  The building and associated
support structure at FMI's new Blackfoot, Idaho mill (see "Flour Milling and
Food Distribution Operations - Marketing" below) has been designed to double the
company's current compact milling capacity.  The food distribution division
continues to evaluate expansion opportunities through acquisitions in its
current marketing area.

                                  COMPETITION

     The U.S. milling industry is currently composed of 197 flour mills, down
from 252 in 1981, with a median mill size of approximately 7,500 cwts per day
capacity.  During the same period, the number of milling companies has decreased
from 166 to 91.  The largest five manufacturers account for approximately 74% of
total U.S. production.  FMI, at 21,000 cwts of daily capacity, ranks 13th in the
U.S.

                                   MARKETING

     FMI's milling division markets its products principally in the states of
Washington, Oregon and California.  The majority of FMI's flour sales are made
under contractual agreements with large wholesale bakeries, mix manufacturers,
blending facilities, food service distributors, 

                                       33
<PAGE>
 
and finished food manufacturers. No flour customer accounts for more than
fifteen percent of FMI's total revenues.

     FMI's food distribution division, including its wholly-owned subsidiary,
Sam Wylde Flour Co., Inc.,  markets its products primarily within a 100-mile
radius of FMI's warehouses.  FMI's customer base consists primarily of retail
and wholesale bakeries, in-store bakeries, retail and wholesale donut shops,
retail and wholesale bagel shops and small food manufacturers.

     FMI's milling division strives to differentiate itself from its competition
with a strong service and technical department, an emphasis on branded products,
new product development, and growth through the development of compact milling
units.  FMI targets its marketing in food groups that are in emerging or growth
product life cycles.  These food groups are characterized by growth rates higher
than average, fragmented market share and a need for technological assistance in
product formulation.  FMI evaluates market conditions related to each of its
products and will exit certain product categories where market consolidation,
over capacity and lack of growth lead to lower flour margins.

     FMI's milling division also utilizes its technical service department as a
value-added sales tool.  The technical service department is accountable for
developing and training salespersons in the company's network of food service
distributors.  The service department also provides on-site product trouble-
shooting and formulation assistance to small retail bakers and restaurants.

     FMI markets its flour through the use of branded products such as
Mondako(R) and Power(R) and product category branded ingredients under the name
Sol Brillante(R). This marketing strategy builds brand identity and
differentiates a group of products from other products in the market. Trademarks
are also registered in selected international markets in which FMI is engaged in
business.

     In 1991, FMI became the first milling company in the country to install a
new milling concept called a KSU shortflow.  The "shortflow" or "compact"
process reduces the amount of building and equipment required to mill flour.
The electronically controlled modular units can be installed at approximately 60
percent of the cost of a conventional mill and in one-third of the construction
time.  While compact units do not replace the need for conventional milling
capacity, they do provide flexible milling capacity for niche milling segments.
Since 1991, FMI has installed three additional compact units and is the world
leader in compact flour production.  FMI's recently completed flour mill in
Blackfoot, Idaho adds a KSU 2000 milling unit to FMI's capacity.  This unit is
owned and operated jointly with Koch Agriculture Company of Wichita, Kansas
("Koch").  FMI and Koch are each 50% interest owners in the limited liability
company which owns and operates the Blackfoot mill (the "Koch Fisher Mills
L.L.C.").  FMI and Koch have announced their plans to expand the Blackfoot
compact mill, and to construct a conventional flour mill at the Blackfoot site.
These projects will be constructed, owned and operated by the Koch Fisher Mills
L.L.C.  FMI anticipates its investment in these projects will not exceed $10
million.  FMI's investment will be funded through existing lines of credit and
is expected to be repaid from cash flow from the projects.  In addition to the
direct investment by FMI, the Company may guarantee FMI's proportionate share
(50%) of up to $10 million of industrial revenue bonds which will provide a
portion of the projects' funding.

                                       34
<PAGE>
 
                     RISKS ASSOCIATED WITH FOOD PRODUCTION

       The food manufacturing and distribution industry is subject to varying
degrees of risk.  Food production is a heavily regulated industry, and federal
laws or regulations promulgated by the Food and Drug Administration, or agencies
having jurisdiction at the state level, could adversely effect FMI's revenues
and results of operations.  Certain risks are associated with the production and
sale of food products.  Food producers can be liable for damages if contaminated
food causes injury to consumers.  Although flour is not a highly perishable
product, FMI is subject to some risk as a result of its need for timely and
efficient transportation of its flour.  Costs associated with compliance with
environmental laws can adversely affect profitability.  In addition, the amount
of wheat available for milling, and consequently the price of wheat, is affected
by weather and growing conditions.


                               REVENUES BY CLASS

       FMI's revenue by product class is summarized as follows:
<TABLE>
<CAPTION>
 
                                  1994       1995       1996
                                        (In thousands)
<S>                              <C>       <C>        <C>
FLOUR                            $50,122   $ 61,535   $ 75,319
MILLFEED                           7,595      7,828     11,428
FOOD DISTRIBUTION AND OTHER       35,560     42,997     48,950
                                 -------   --------   --------
                                 $93,277   $112,360   $135,697
 
</TABLE>
                            REAL ESTATE OPERATIONS
                            ----------------------

                                 INTRODUCTION

     FPI, a wholly owned subsidiary of the Company, is a proprietary real estate
company engaged in the acquisition, development, ownership and management of a
diversified portfolio of real estate properties, principally located in the
Seattle, Washington metropolitan area.  The real estate development and
acquisition activities currently conducted by FPI were initiated prior to 1971,
at which time various real estate interests were consolidated into FPI, in the
Fisher Companies Inc. reorganization.  (See "Real Estate Operations -
Business").  FPI had 31 employees as of January 1, 1997.

     As of December 31, 1996, FPI's portfolio of real estate assets included 24
commercial and industrial buildings containing over 1.1 million square feet of
leaseable space with approximately 160 tenants, a 201 slip marina, and more than
320 acres of unimproved residential land held for development.  FPI's most
recent development is the 185,000 square foot West Lake Union Center located
adjacent to Lake Union, in Seattle, Washington.  The ten-story office building
was completed in 1994 and achieved 99% occupancy in 1996.  FPI's real estate
assets also include interests in two partnerships.  The largest such partnership
is Fisher Business Center, a 195,000 square foot, two-building, office complex
located in Lynnwood, Washington.  FPI owns 95% of the Fisher Business Center;
the remaining 5% interest is owned by Mr. William W. 

                                       35
<PAGE>
 
Krippaehne, President of the Company. (See "Item 7 - Certain Relationships and
Related Transactions").

     FPI estimates that the total fair market value of FPI's real estate
holdings was approximately $120 million as of December 31, 1996, including FPI's
partnership interests and excluding any related liabilities and potential
liquidation costs.  Although the foregoing fair market value estimate is based
on information and assumptions considered to be adequate and reasonable by FPI,
such estimate requires significant subjective judgments to be made by FPI.  Such
estimate is not based on technical appraisals and will change from time to time,
and could change materially, as economic and market factors change, and as
management evaluates those and other factors.

     FPI's owned real estate is managed, leased, and operated by FPI.  More than
half of FPI's employees are engaged in activities related to service of FPI's
existing buildings and their tenants.  FPI does not manage properties for third-
party owners, nor does it anticipate doing so in the future.

                                   BUSINESS

     FPI focuses on reducing debt, enhancing the revenue stream of FPI's
existing properties, and acquiring or developing selected strategic properties.
The cash flow from real estate operations is used entirely to pay real estate
debt, maintain properties and otherwise finance real estate operations.  As
stated in Note 10 to the Consolidated Financial Statements included in this Form
10, the income from operations reported for the real estate segment excludes
interest expense.  When interest expense is taken into account, real estate
operations have historically had negative income or nominal profit, including
negative income in 1994 and 1995.  FPI also would have incurred a loss in 1996,
except for gain from the sale of real property.  The majority of FPI's existing
operating properties were developed by FPI.  FPI anticipates that most future
acquisition and development activities will be located near existing facilities
to promote business efficiencies.  FPI believes that, by developing, owning, and
managing a diverse portfolio of properties in a relatively small geographic
area, it can better control the overall character of FPI's developments.

                    DEVELOPMENT AND ACQUISITION ACTIVITIES

     FPI plans to increase its ownership of industrial and office properties in
the Seattle area.  FPI intends to be significantly involved in planning and
development of contemplated new studio space and corporate offices for Fisher
Broadcasting and others on a block of land owned partially by Fisher
Broadcasting and partially by FPI at Fourth Avenue and Denny Street in Seattle,
if current preliminary plans result in a decision to proceed with the project
(see "Broadcasting Operations - KOMO TV").

     From time to time, FPI may consider selling a property when it reaches a
certain maturity, no longer fits FPI's investment goals, or is under threat of
condemnation.  FPI has no current plans to sell any of its properties.

                                       36
<PAGE>
 
                             OPERATING PROPERTIES

     FPI's portfolio of operating properties are classified into three business
categories: (i) marina properties; (ii) office; and (iii) warehouse and
industrial.  Note 4 to the Consolidated Financial Statements sets forth the
minimum future rentals from leases in effect as of December 31, 1996 with
respect to FPI's properties.  The following table includes FPI's significant
properties:

<TABLE>
<CAPTION>
                                                                                                                                 
                                                                                                                                  
                                  OWNERSHIP          FPI'S         YEAR        LAND AREA           RENTABLE              % LEASED 
      NAME AND LOCATION            INTEREST        INTEREST      DEVELOPED       (ACRES)             SPACE)              12/31/96 
      -----------------            --------        --------      ---------       -------             ------              --------
<S>                               <C>               <C>            <C>           <C>                <C>                  <C> 
MARINA
Marina Mart Moorings             Fee & Leased        100%          1939          5.01 Fee &         201 Slips                 98%
Seattle, WA                                                         to           2.78 Leased                                     
                                                                   1987                                                          
OFFICE                                                                                                                           
West Lake Union Center                Fee            100%          1994             1.24            185,000 SF                99%
Seattle, WA                                                                                          487 car                     
                                                                                                      garage                     
I-90 Building                         Fee            100%        Renovated           .34            28,265 SF                 93%
Seattle, WA                                                        1990                           22 car garage                  

Fisher Business Center                Fee             95%          1986             9.75            195,000 SF                86%
Lynnwood, WA                                                                                       Parking for                   
                                                                                                     733 cars                    
Marina Mart                           Fee            100%        Renovated            *             18,950 SF                100%
Seattle, WA                                                        1993                                                          

Latitude 47 Restaurant                Fee            100%        Renovated            *             15,470 SF                100%
Seattle, WA                                                        1987                                                          

1530 Building                         Fee            100%        Renovated            *             10,160 SF                 97%
Seattle, WA                                                        1985                                                          
                                                                                                                                 
INDUSTRIAL                                                                                                                       
Fisher Industrial Park                Fee            100%        1982 and          22.08            398,600 SF               100%
Kent, WA                                                           1992                                                          

Fisher Commerce Center                Fee            100%           NA             10.21            171,400 SF                96%
Seattle, WA                                                                                                                      

Fisher Industrial Center              Fee            100%      Redeveloped          3.3             80,475 SF                 96%
Seattle, WA                                                        1980                                                          

Pacific North Equipment Co.           Fee            100%           NA              5.5             38,000 SF                100%
Kent, WA
</TABLE>
- ------------------
*  Undivided land portion of Marina.

     In addition to the above listed properties, FPI owns a 2.6 acre parking lot
that serves Fisher Mills Inc. in Seattle, a one acre parking lot that serves
Fisher Broadcasting in Seattle, 320 acres of unimproved residential property in
Marysville, Washington, held for future development, and a small residential
property in Seattle.  FPI does not currently intend to acquire other parking or
residential properties.

                                       37
<PAGE>
 
     West Lake Union Center, Fisher Business Center, Fisher Industrial Center,
Fisher Industrial Park, and Fisher Commerce Center are encumbered by liens
securing non-recourse, long-term debt financing that was obtained by FPI in
connection with the development or refinancing of such properties.  Each of
these properties produces cash flow that exceeds debt service, and in no case
does such debt exceed 75% of the estimated value of the financed property.
Total FPI debt is approximately 50% of the estimated value of the total owned
real estate.  It is FPI's objective to reduce this ratio over time with excess
cash flow not needed for capital investments.  FPI believes that it currently
has sufficient credit and cash flow to meet its investment objectives.

                       RISKS ASSOCIATED WITH REAL ESTATE

     The development, ownership and operation of real property is subject to
varying degrees of risk.  FPI's revenue, operating income and the value of its
properties may be adversely affected by the general economic climate, the local
economic climate and local real estate conditions, including the perceptions of
prospective tenants of attractiveness of the properties and the availability of
space in other competing properties; FPI's ability to provide adequate
management, maintenance and insurance; the inability to collect rent due to
bankruptcy or insolvency of tenants or otherwise; and increased operating costs.
One of FPI's properties is leased to, and occupied by, a single tenant, and
several properties are leased to, and occupied by, single tenants which occupy
substantial portions of such properties.  Real estate income and values may also
be adversely affected by such factors as applicable laws and regulations,
including tax and environmental laws, interest rate levels and the availability
of financing.

     FPI carries comprehensive liability, fire, extended coverage and rent loss
insurance with respect to its properties, with policy specifications and insured
limits customary for similar properties.  There are, however, certain types of
losses that may be either uninsurable or not economically insurable.  If an
uninsured loss occurs with respect to a property, FPI could lose both its
invested capital in and anticipated profits from such property.

                        INVESTMENT IN SAFECO CORPORATION

     A substantial portion of the Company's assets is represented by an
investment in 3,002,376 shares of the common stock of SAFECO Corporation, an
insurance and financial services corporation ("SAFECO").  The Company has been a
stockholder of SAFECO since 1923.  The market value of the Company's investment
in SAFECO common stock as of December 31, 1996, 1995, and 1994, was
approximately $118,406,000, $103,582,000, and $78,062,000, respectively,
representing 30%, 29.3%, and 25.3%, respectively, of the Company's total assets
as of such dates.  Dividends paid with respect to the Company's SAFECO common
stock constituted 11.4%, 12.1%, and 15.0% of the Company's net income for the
years 1996, 1995, and 1994, respectively.  As of April 15, 1997, the market
value of the SAFECO common stock beneficially owned by the Company was
$116,342,000.  A significant decline in the market price of SAFECO common stock
or a significant reduction in the amount of SAFECO's periodic dividends could
have a material adverse effect on the financial condition or results of
operation of the Company.  The Company has no present intention of disposing of
its SAFECO common stock or its other marketable securities, although such
securities are classified as investments available for sale under applicable
accounting standards (see "Notes to Consolidated Financial Statements; Note 1:
Operations and Accounting Policies: Marketable Securities").  Mr. William

                                       38
<PAGE>
 
W. Krippaehne, Jr., President, CEO, and a Director of the Company, is a Director
of SAFECO. SAFECO's common stock is registered under the Securities Exchange Act
of 1934, as amended, and further information concerning SAFECO may be obtained
from reports and other information filed by SAFECO with the Securities and
Exchange Commission (the "Commission"). SAFECO common stock trades on The NASDAQ
Stock Market under the symbol "SAFC".

                                       39
<PAGE>
 
ITEM 2 -  FINANCIAL INFORMATION.

SELECTED FINANCIAL DATA

     The following financial data of the Company are derived from the Company's
historical audited financial statements and related footnotes.  The information
set forth below should be read in conjunction with  "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and related footnotes contained elsewhere in this Registration
Statement.

<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
                                                            YEAR ENDED DECEMBER 31,
                                               1992        1993       1994       1995       1996
                                             ---------   --------   --------   --------   ---------
                                                (All amounts in thousands except per share data)
<S>                                          <C>         <C>        <C>        <C>        <C>
Sales and other revenue
  Broadcasting                                $ 70,763   $ 73,291   $ 87,112   $101,192   $111,967
  Milling                                       88,696     94,490     93,277    112,360    135,697
  Real estate                                    5,944      6,462      8,659     10,941     13,556
  Corporate and other, primarily                
    dividends and interest income (1)            2,843      3,232      3,460      4,087      4,000                        
                                              --------   --------   --------   --------   --------
                                              $168,246   $177,475   $192,508   $228,580   $265,220
                                              ========   ========   ========   ========   ========
 
Operating income
  Broadcasting                                $ 12,905   $ 15,947   $ 26,066   $ 31,518   $ 34,025
  Milling                                          577        737      1,078      2,907      3,410
  Real estate                                    1,388      1,476      2,199      3,267      5,749
  Corporate and other                              958      1,852      2,236      2,152      1,948
                                              --------   --------   --------   --------   --------
 
                                              $ 15,828   $ 20,012   $ 31,579   $ 39,844   $ 45,132
                                              ========   ========   ========   ========   ========
 
    Income before effect of a change
      in accounting method                    $  9,621   $ 12,343   $ 18,152   $ 22,683   $ 26,086
 
    Cumulative effect of a change in
      method of accounting for
      postretirement benefits (2)                                     (1,305)
                                              --------   --------   --------   --------   --------        
                                          
    Net income                                $  9,621   $ 12,343   $ 16,847   $ 22,683   $ 26,086
                                              ========   ========   ========   ========   ========
 
    Per common share data (3)
 
       Income before effect of a
         change in accounting method          $   2.26   $   2.89   $   4.26   $   5.32   $   6.12
 
       Cumulative effect of a change in
         method of accounting for
         postretirement benefits (2)                                   (0.31)
                                              --------   --------   --------   --------   --------
 
       Net income                             $   2.26   $   2.89   $   3.95   $   5.32   $   6.12
                                              ========   ========   ========   ========   ========
 
       Cash dividends declared (4)            $   1.26   $   1.26   $   1.34   $   1.52   $   3.68
                                              ========   ========   ========   ========   ========
</TABLE>

                                       40
<PAGE>
 
<TABLE>
<CAPTION>
 
                                                  DECEMBER 31,
                                1992       1993       1994       1995       1996
                              --------   --------   --------   --------   --------
<S>                           <C>        <C>        <C>        <C>        <C>
Working capital               $ 44,787   $ 48,989   $ 47,227   $ 49,744   $ 42,421
Total assets (5)               179,851    211,000    308,072    353,035    394,149
Total debt                      46,714     67,563     75,859     71,869     74,971
Stockholders' equity (5)       101,071    107,996    170,751    203,681    232,129
</TABLE>

(1)  Included in this amount are dividends received from the Company's
     investment in SAFECO Corporation common stock amounting to $2,342 in 1992,
     $2,582 in 1993, $2,822 in 1994, $3,062 in 1995 and $3,333 in 1996.

(2)  In 1994, the Company adopted the Financial Accounting Standards Board's
     Statement of Financial Accounting Standards No. 106, "Employers' Accounting
     for Postretirement Benefits Other Than Pensions" (FAS 106), which requires
     that the cost of health care and life insurance benefits provided to
     certain retired employees be accrued during the years that employees render
     service.  Health care and life insurance benefits are provided to all non-
     broadcasting employees.  The Company elected to immediately recognize the
     accumulated benefit obligation, measured as of December 31, 1993.
     Accordingly, the $2,012 cumulative effect of this change in accounting
     method on years prior to 1994 ($1,305 after income tax effects) is deducted
     from the results of operations for 1994.

(3)  1994 and prior per-share amounts have been restated for a four-for-one
     stock split that was effective May 15, 1995.

(4)  1992 through 1995 amounts were declared and paid.  1996 includes $1.96 per
     share declared for payment in 1997.

(5)  In the first quarter of 1994, the Company adopted the Financial Accounting
     Standards Board's Statement of Financial Accounting Standards No. 115
     "Accounting for Certain Investments in Debt and Equity Securities" (FAS
     115), which requires investments in equity securities,  be designated as
     either trading or available-for-sale.  While the Company has no present
     intention to dispose of its investments in marketable securities, it has
     classified its investments as available-for-sale and, beginning in 1994,
     those investments are reported at fair market value.  Accordingly, total
     assets include unrealized gain on marketable securities as follows:
     December 31, 1994 - $79,531; December 31, 1995 - $105,401; December 31,
     1996 - $120,468.  Stockholders' equity includes unrealized gain on
     marketable securities, net of deferred income tax, as follows:  December
     31, 1994 - $51,695; December 31, 1995 - $68,510; December 31, 1996 -
     $78,304.

                                       41
<PAGE>
 
                     MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL POSITION AND RESULTS OF OPERATIONS


CONSOLIDATED RESULTS OF OPERATIONS

Year ended December 31, 1996 compared to year ended December 31, 1995
- ---------------------------------------------------------------------

          Sales and other revenue in 1996 increased by $36,640,000 or 16.0% to
$265,220,000 from $228,580,000 in 1995.  Broadcasting, milling, and real estate
operations had increases in sales and other revenue of 10.6%, 20.8%, and 23.9%,
respectively.

          Cost of products and services sold in 1996 increased by $25,138,000 or
17.4% to $170,016,000 from $144,878,000 in 1995.  The increase resulted
primarily from increased costs to acquire and produce broadcasting programming
and from historically high wheat prices.  As a percentage of sales and other
revenue, cost of products and services sold was 64.1% and 63.4% in 1996 and
1995, respectively.  The increase in the cost of products and services sold as a
percentage of sales and other revenue was due to lower margins at recently
acquired radio stations which operate in smaller markets and have a lower return
than larger market radio stations.

          Selling expenses in 1996 increased by $3,071,000 or 22.1% to
$16,941,000 from $13,870,000 in 1995.  The increase is the result of increased
sales by broadcasting and milling operations and additional selling expenses
incurred at recently acquired radio stations.  As a percentage of sales and
other revenue, selling expenses were 6.4% and 6.1% in 1996 and 1995,
respectively.

          General and administrative expenses in 1996 increased by $3,143,000 or
10.5% to $33,131,000 from $29,988,000 in 1995.  The increase relates primarily
to general and administrative expenses at recently acquired radio stations and
the Rancho Cucamonga food distribution center which operated for the entire year
compared to seven months in 1995.  As a percentage of sales and other revenue,
general and administrative expenses were 12.5% and 13.1% in 1996 and 1995,
respectively.

          Interest expense increased in 1996 by $391,000 or 7.4% to $5,671,000
from $5,280,000 in 1995.  The increase in interest expense is due to higher
average long-term debt balances outstanding during 1996 compared to 1995.
Additionally, the average interest rate during 1996 and 1995 was 7.7% and 7.1%,
respectively, which further impacted the effect of the increase in average long-
term debt outstanding on interest expense.

          Provision for federal and state income taxes in 1996 increased by
$1,494,000 or 12.6% to $13,375,000 from $11,881,000 in 1995.  For 1996 and 1995,
the Company's effective tax rate was 33.9% and 34.4%, respectively.  The
decrease in the effective tax rate in 1996 was due to increased dividend income
for which a dividends received deduction is available.

                                       42
<PAGE>
 
Year ended December 31, 1995 compared to year ended December 31, 1994
- ---------------------------------------------------------------------

          Sales and other revenue in 1995 increased by $36,072,000 or 18.7% to
$228,580,000 from $192,508,000 in 1994.  Broadcasting, milling, and real estate
operations had increases in sales and other revenue of 16.2%, 20.5%, and 26.4%,
respectively.

          Cost of products and services sold in 1995 increased by $20,395,000 or
16.4% to $144,878,000 from $124,483,000 in 1994.  The increase is primarily
related to growth at recently acquired radio stations and food distribution
operations, increased costs to acquire and produce broadcasting programming, and
historically high wheat prices.  As a percentage of sales and other revenue,
costs of products and services sold was 63.4% and 64.7% in 1995 and 1994,
respectively.  The decrease in costs of products and services sold as a
percentage of net revenue is due, in part, to increased margins at KVI-AM and
KPLZ-FM, which had improved ratings in 1995.  These stations were included in
broadcasting operations for the entire year of 1995 compared to only seven
months in 1994.

          Selling expenses in 1995 increased by $2,854,000 or 25.9% to
$13,870,000 from $11,016,000 in 1994.  The increase in selling expenses is due
principally to the growth at acquired and existing radio stations and at the
Rancho Cucamonga food distribution center.  As a percentage of sales and other
revenue, selling expenses were 6.1% and 5.7% in 1995 and 1994, respectively.

          General and administrative expenses in 1995 increased by $4,558,000 or
17.9% to $29,988,000 from $25,430,000 in 1994.  The increase is primarily due to
general and administrative expenses at recently acquired and existing radio
stations and at the Rancho Cucamonga food distribution center.  As a percentage
of sales and other revenue, general and administrative expenses were 13.1% and
13.2% in 1995 and 1994, respectively.

          Interest expense increased in 1995 by $1,275,000 or 31.8% to
$5,280,000 from $4,005,000 in 1994.  The increase in interest expense is due to
the Company incurring higher average interest rates.  The average interest rate
on the Company's long-term debt during 1995 and 1994 was 7.1% and 5.6%,
respectively.

          Provision for federal and state income taxes in 1995 increased by
$2,459,000 or 26.1% to $11,881,000 from $9,422,000 in 1995.  For 1995 and 1994,
the Company's effective tax rate was 34.4% and 34.2%, respectively.

Year ended December 31, 1994 compared to year ended December 31, 1993
- ---------------------------------------------------------------------

          Sales and other revenue in 1994 increased by $15,033,000 or 8.5% to
$192,508,000 from $177,475,000 in 1993.  Sales and other revenue increased at
broadcasting and real estate operations by 17.9% and 33.8%, respectively, while
milling operations had a decrease in sales and other revenue of 1.4%.

          Cost of products and services sold in 1994 decreased by $3,346,000 or
2.6% to $124,483,000 from $127,829,000 in 1993.  The decrease is primarily
related to lower milling revenue and expiration and renegotiation of certain
television and radio broadcasting rights 

                                       43
<PAGE>
 
contracts. As a percentage of sales and other net revenue, cost of products and
services sold was 64.7% and 72.0% in 1994 and 1993, respectively. The decrease
in costs of products and services sold as a percentage of net revenue is
primarily due to lower costs at the broadcasting operations and improvements in
the gross margin percentage at the milling operations.

          Selling expenses in 1994 increased by $1,762,000 or 19.0% to
$11,016,000 from $9,254,000 in 1993.  The increase in selling expenses is due to
acquisition of KVI-AM and KPLZ-FM in May 1994 and additional selling expenses at
existing broadcasting operations, a function of increasing revenue.  As a
percentage of sales and other revenue, selling expenses were 5.7% and 5.2% in
1994 and 1993, respectively.

          General and administrative expenses in 1994 increased by $3,736,000 or
17.2% to $25,430,000 from $21,694,000 in 1993.  The increase is largely
attributed to general and administrative expenses at KVI-AM and KPLZ-FM which
were acquired in May 1994, a non-recurring charge of $1,200,000 for
restructuring broadcasting operations, and adoption of Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions" (FAS 106) which requires that the cost of health care and
life insurance benefits provided to certain retired employees be accrued during
the years that employees render service.  As a percentage of sales and other
revenue, general and administrative expenses were 13.2% and 12.2% in 1994 and
1993, respectively.  The increase in general and administrative expenses as a
percentage of sales and other revenue was due to the non-recurring restructuring
charge and the adoption of FAS 106.

          Interest expense increased in 1994 by $2,166,000 or 117.8% to
$4,005,000 from $1,839,000 in 1993. The increase in interest expense is due to
increased long-term debt balances resulting from debt financing of the West Lake
Union Center project which opened in March 1994 and higher average interest
rates. The average interest rate on the Company's long-term debt during 1994 and
1993 was 5.6% and 3.2%, respectively.

          Provision for federal and state income taxes in 1994 increased by
$3,592,000 or 61.6% to $9,422,000 from $5,830,000 in 1993.  For 1994 and 1993,
the Company's effective tax rate was 34.2% and 32.1%, respectively.  The lower
effective tax rate in 1993 was primarily due to a rehabilitation tax credit
received related to restoration activities by real estate operations at the
Marina Mart Building.

BROADCASTING OPERATIONS

Year ended December 31, 1996 compared to year ended December 31, 1995
- ---------------------------------------------------------------------

          Broadcasting revenue in 1996 increased by $10,775,000 or 10.6% to
$111,967,000 from $101,192,000 in 1995.  The increase in broadcasting revenue
is, in part, due to the revenue earned at KWJJ-AM/FM and four radio stations in
eastern Washington and Montana which were acquired during 1996.  These stations
contributed net revenue of approximately $4,600,000 in 1996.  Additionally,
revenue at the two television stations increased by $3,968,000 primarily due to
growth in local advertising sales and to additional political and advocacy
advertising during the 1996 campaign year.  The remaining increase in revenue is
attributed to the full year of operations in 1996 of the twelve radio stations
acquired in March 1995.

                                       44
<PAGE>
 
          Operating income in 1996 increased by $2,507,000 or 8.0% to
$34,025,000 from $31,518,000 in 1995.  As a percentage of broadcasting revenue,
operating income was 30.4% and 31.1% in 1996 and 1995, respectively.
Broadcasting operating expenses outpaced the growth in broadcasting revenue
primarily due to the operation of recently acquired radio stations in eastern
Washington and Montana.  These stations have a lower return on revenue than
stations in larger markets because advertising time is sold for lower rates
while operating expenses are somewhat comparable to radio stations in larger
markets.

Year ended December 31, 1995 compared to year ended December 31, 1994
- ---------------------------------------------------------------------

          Broadcasting revenue in 1995 increased by $14,080,000 or 16.2% to
$101,192,000 from $87,112,000 in 1994.  The increase in broadcasting revenue is,
in part, due to a full year of operations of KVI-AM and KPLZ-FM in 1995,
compared to seven months of operations in 1994, as well as improved audience
ratings for those stations during 1995.  Revenue from KVI-AM and KPLZ-FM in 1995
increased $5,206,000 over 1994.  Revenue from the twelve radio stations acquired
in March 1995 totaled $4,960,000.  Additionally, television revenue grew 3.9%.
This increase was due in part to an increase in the stations' share of national
advertising revenue at a time when the local advertising markets experienced
little growth.

          Operating income in 1995 increased by $5,452,000 or 20.9% to
$31,518,000 from $26,066,000 in 1994.  As a percentage of broadcasting revenue,
operating income was 31.1% and 29.9% in 1995 and 1994, respectively.  The
increase in operating income exceeded the growth in broadcasting revenue due to
the ability of broadcasting operations to leverage its selling, general and
administrative expenses for its Seattle radio stations (KOMO-AM, KVI-AM and
KPLZ-FM) and improved ratings performance of KVI-AM and KPLZ-FM.

Year ended December 31, 1994 compared to year ended December 31, 1993
- ---------------------------------------------------------------------

          Broadcasting revenue in 1994 increased by $13,821,000 or 18.9% to
$87,112,000 from $73,291,000 in 1993.  The increase in broadcasting revenue is,
in part, due to revenue earned by radio stations KVI-AM and KPLZ-FM which were
acquired in May 1994.  These stations contributed $6,400,000 to broadcasting
revenue in 1994.  Revenue from television operations increased $8,596,000 as a
result of increased demand for advertising spots which increased advertising
rates.  The increases in revenue were partially offset by a decline in KOMO-AM
radio revenue attributed to lower ratings.

          Operating income in 1994 increased by $10,119,000 or 63.5% to
$26,066,000 from $15,947,000 in 1993.  As a percentage of broadcasting revenue,
operating income was 30.0% and 21.6% in 1994 and 1993, respectively.  The
increase in operating income resulted from the expiration of certain television
broadcasting contracts and renegotiation of the contract for rights to broadcast
University of Washington Husky sports on KOMO-AM which resulted in lower
operating expenses.  Additionally, an improved local economy caused greater
demand for advertising time which increased broadcasting revenue without
significant sales and administrative expenditures.

                                       45
<PAGE>
 
MILLING OPERATIONS

Year ended December 31, 1996 compared to year ended December 31, 1995
- ---------------------------------------------------------------------

          Revenue from the milling subsidiary in 1996 increased by $23,337,000
or 20.8% to $135,697,000 from $112,360,000 in 1995.  The increase in revenue is
primarily due to increased sales prices for flour which resulted from
historically high wheat prices and from increased sales volume in both the
milling and food distribution divisions.  Flour sales volume increased 6.2% in
1996.  Revenue from the food distribution division increased $7,908,000 due
largely to a full year of operations of the Rancho Cucamonga food distribution
operation in 1996 compared to seven months activity in 1995.

          Operating income in 1996 increased by $503,000 or 17.3% to $3,410,000
from $2,907,000 in 1995.  As a percentage of milling revenue, operating income
was 2.5% and 2.6% in 1996 and 1995, respectively.  The consistency of operating
income as a percentage of milling revenue was due to similar gross margin
percentage in 1996 and 1995 and the milling operations ability to leverage its
operating expenses during a period of increased sales volumes.

Year ended December 31, 1995 compared to year ended December 31, 1994
- ---------------------------------------------------------------------

          Revenue from the milling subsidiary in 1995 increased by $19,083,000,
or 20.5% to $112,360,000 from $93,277,000 in 1994.  The increase in milling
revenue was primarily due to increased sales prices for flour which were driven
by higher wheat prices and increased sales volume at both the milling and food
distribution divisions.  Flour sales volume increased 7.9% in 1995.  Revenue
from the food distribution division increased $6,824,000 primarily as a result
additional sales at the Rancho Cucamonga food distribution operation which was
acquired in June of 1995.

          Operating income in 1995 increased by $1,829,000 or 169.7% to
$2,907,000 from $1,078,000 in 1994.  As a percentage of milling revenue,
operating income was 2.6% and 1.2% in 1995 and 1994, respectively.  The increase
in operating income and operating income as a percentage of milling revenue was
due to improved gross margin percentage particularly in the food  distribution
division.  Gross margin for the food distribution division increased to 14.3% in
1995 from 12.4% in 1994, as a result of emphasis to increase sales to higher
margin bakery customers.

Year ended December 31, 1994 compared to year ended December 31, 1993
- ---------------------------------------------------------------------

          Revenue from the milling subsidiary in 1994 decreased $1,213,000 or
1.3% to $93,277,000 from $94,490,000 in 1993.  The decrease in milling revenue
resulted from a decrease in sales volume of 3.4% as the milling division
discontinued sales to certain low-margin bulk flour accounts.  The decrease in
sales volume was partially offset by higher flour prices.

          Operating income in 1994 increased by $341,000 or 46.3% to $1,078,000
from $737,000 in 1993.  As a percentage of milling revenue, operating income was
1.2% and 0.8% in 1994 and 1993, respectively.  The increase in operating income
and operating income as a percentage of 

                                       46
<PAGE>
 
milling revenue was the result of an improvement in gross margin percentage of
2.8% to 11.8% in 1994 compared to 9.0% in 1993.

REAL ESTATE OPERATIONS

Year ended December 31, 1996 compared to year ended December 31, 1995
- ---------------------------------------------------------------------

          Real estate revenue in 1996 increased by $2,615,000 or 23.9% to
$13,556,000 from $10,941,000 in 1995.  The increase in real estate revenue is
primarily due to a gain of $2,300,000 on the sale of property which was sold
under the threat of condemnation.  Real estate revenue also increased due to
higher average occupancy levels which were 95.3% and 93.7% in 1996 and 1995,
respectively.

          Operating income in 1996 increased by $2,482,000 or 76.0% to
$5,749,000 from $3,267,000 in 1995.  As a percentage of real estate revenue,
operating income was 42.4% and 29.9% in 1996 and 1995, respectively.  The
increase in operating income is primarily due to a gain of $2,300,000 on the
sale of property.

Year ended December 31, 1995 compared to year ended December 31, 1994
- ---------------------------------------------------------------------

          Real estate revenue in 1995 increased by $2,282,000 or 26.4% to
$10,941,000 from $8,659,000 in 1994.  The increase in real estate revenue is
primarily due to higher occupancy rates and to rental income from the West Lake
Union Center project which was in operation for the entire year compared to ten
months of 1994.  Average occupancy levels in 1995 and 1994 were 93.7% and 86.9%,
respectively.

          Operating income in 1995 increased by $1,068,000 or 48.6% to
$3,267,000 from $2,199,000 in 1994.  As a percentage of revenue, operating
income was 29.9% and 25.4% in 1995 and 1994, respectively.  The increase in
operating income is primarily due to higher occupancy rates which increased
revenue but did not require significant additional operating expenses.

Year ended December 31, 1994 compared to year ended December 31, 1993
- ---------------------------------------------------------------------

          Real estate revenue in 1994 increased by $2,197,000 or 34.0% to
$8,659,000 from $6,462,000 in 1993.  The increase in real estate revenue was, in
part, due to rental income from the West Lake Union Center project which opened
in March 1994 and was 77% occupied by year end.  Additionally, real estate
revenue increased as average occupancy levels increased to 86.9% in 1994
compared to 85.6% in 1993.

          Operating income in 1994 increased by $723,000 or 49.0% to $2,199,000
from $1,476,000 in 1993.  As a percentage of real estate revenue, operating
income was 25.4% and 22.8% in 1994 and 1993, respectively.  The increase in
operating income is due to higher occupancy rates which increased revenue but
did not require significant additional operating expenses.

                                       47
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

          As of December 31, 1996, the Company had working capital of
$42,421,000 and cash and short-term cash investments totaling $5,116,000.  The
Company intends to finance working capital, debt service, capital expenditures,
and dividend requirements primarily through operating activities.  However, the
Company will consider using available lines-of-credit to fund acquisition
activities and significant real estate project development activities.

          Net cash provided by operating activities was $32,511,000 for the year
ended December 31, 1996.  Net cash provided by operating activities consists of
the Company's net income, increased by non-cash expenses such as depreciation
and amortization, and adjusted by changes in components of working capital.  Net
cash used in investing activities was $42,554,000 for the year ended December
31, 1996.  The principle use of cash in investing activities was $36,684,000 for
acquisition of the assets of KWJJ-AM/FM and four radio stations in eastern
Washington and Montana, and $8,730,000 to purchase property, plant and equipment
used in operations.  Net cash used by financing activities was $4,330,000 for
the year ended December 31, 1996.  Cash for financing activities was provided by
borrowing under a mortgage loan agreement in the amount of $27,000,000 and
$17,000,000 under a line of credit.  Proceeds from the mortgage loan were used
to repay construction period financing for the West Lake Union Center project.
Proceeds from the line of credit were used as partial payment to acquire the
assets of KWJJ-AM/FM.  In addition, during 1996 the Company repaid $5,000,000 on
the line of credit and retired other debt amounting to $4,200,000. Cash paid for
dividends to stockholders totaled $7,432,000 or $1.72 per common share.

ITEM 3 -  DESCRIPTION OF PROPERTIES.

     Fisher Broadcasting's television stations operate from offices and studios
owned by Fisher Broadcasting and located in Seattle, Washington and Portland,
Oregon.  Television transmitting facilities and towers are also owned by Fisher
Broadcasting.  Radio studios are generally located in leased space.  Radio
transmitting facilities and towers are owned by Fisher Broadcasting, except
KWJJ-FM and the stations operated by Sunbrook, where such facilities are
situated on leased land.

     The Seattle flour mill and food distribution facility operate from FMI-
owned facilities in Seattle, Washington.  The compact flour mill and food
distribution facilities located in Portland, Oregon, are owned by FMI.  In
California, FMI's food distribution activities and compact flour mill operate
from leased facilities in Rancho Cucamonga and Modesto, respectively.

     Property operated by the Company's real estate subsidiary, FPI, is
described under "Real Estate Operations - Operating Properties."  Real estate
projects that are subject to non-recourse mortgage loans are West Lake Union
Center, Fisher Business Center, Fisher Industrial Center, Fisher Industrial
Park, and Fisher Commerce Center.

     The Company believes that the properties owned or leased by its operating
subsidiaries are generally in good condition and well maintained, and are
adequate for present operations.

                                       48
<PAGE>
 
ITEM 4 -  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Principal Stockholders.  The following table sets forth information as of
April 15, 1997, with respect to the shares of the common stock, $2.50 par value
of the Company ("Company Common Stock") beneficially owned by (i) each person
known by the Company to own beneficially more than 5% of Company Common Stock,
(ii) each director of the Company, (iii) the five most highly compensated
executive officers of the Company (including certain executive officers of
subsidiaries of the Company - see "Executive Compensation"), and (iv) all
directors and executive officers of the Company as a group.  The number of
shares beneficially owned by each stockholder, director or executive officer is
determined according to rules of the Commission, and the information is not
necessarily indicative of beneficial ownership for any other purpose.  Under
such rules, beneficial ownership includes any shares as to which the individual
or entity has sole or shared voting power or investment power.  As a
consequence, several persons may be deemed to be the "beneficial owners" of the
same shares.  Except as noted below, each holder has sole voting and investment
power with respect to shares of Company Common Stock listed as owned by such
person or entity.  When a person is a "co-trustee" or one of a number of
directors of a corporation that owns shares of the Company's Common Stock, he or
she has shared voting and investment power.

<TABLE>
<CAPTION>
                                        NUMBER OF           PERCENTAGE OF        
          NAME AND ADDRESS              SHARES OF            OUTSTANDING         
        OF BENEFICIAL OWNER            COMMON STOCK          COMMON STOCK        
        -------------------            ------------          ------------           
<S>                                    <C>            <C>
BANK OF AMERICA NT & SA/(1)/........     779,502                18.3%           
P.O. Box 34260                                                                  
Seattle, WA 98124-1260                                                          
                                                                                
TRUSTEES OF THE D. R. FISHER                                                    
  TRUST UW OF D. R.                                                             
  FISHER/(2)/.......................     238,504                 5.6%           
P.O. Box 98549                                                                  
Des Moines, WA  98198                                                           
                                                                                
O. D. FISHER                                                                    
  INVESTMENT CO./(3)/...............     232,816                 5.5%           
1525 One Union Square                                                           
Seattle, WA 98101                                                               
                                                                                
LULA FISHER WARREN                                                              
  TRUST/(4)/........................     240,184                 5.6%           
The Bank of California
P.O. Box 3123
Seattle, WA 98114
</TABLE> 

                                       49
<PAGE>
 
<TABLE> 
<CAPTION> 
                                        NUMBER OF          PERCENTAGE OF       
         NAME OF DIRECTOR/              SHARES OF           OUTSTANDING        
         EXECUTIVE OFFICER             COMMON STOCK         COMMON STOCK       
         -----------------             ------------         ------------       
<S>                                    <C>                  <C> 
Robin E. Campbell/(5)/..............      460,780              10.8%
James W. Cannon.....................            0                 *
Phelps K. Fisher/(6)/...............      134,471               3.2%
William O. Fisher/(7)/..............      240,704               5.6%
Carol H. Fratt/(8)/.................          300                 *
Donald G. Graham, Jr./(9)/..........      484,144              11.3%
Donald G. Graham, III/(10)/.........      240,016               5.6%
William W. Krippaehne, Jr./(11)/....        2,938                 *
John D. Mangels.....................          400                 *
Jean F. McTavish/(12)/..............       35,400                 *
Jacklyn F. Meurk/(13)/..............       45,516               1.1%
W. W. Warren/(14)/..................      412,576               9.7%
W. W. Warren, Jr./(15)/.............          465                 *
George D. Fisher/(16)/..............      357,368               8.4%
Patrick M. Scott/(17)/..............        4,305                 *
Terry L. Barrans/(18)/..............          815                 *
Mark A. Weed/(19)/..................        1,000                 *
David D. Hillard/(20)/..............          205                 *
Directors and Executive Officers                   
as a Group (18 Persons)/(21)(22)/...    1,717,267              40.2%
</TABLE>
- ------------------
*  Represents holdings of less than 1%.

(1)  Bank of America National Trust and Savings Association, as a fiduciary,
     possesses sole voting power as to 510,678 shares of Company Common Stock,
     sole investment power as to 665,674 shares of Company Common Stock, and
     shared investment power as to 35,280 shares of Company Common Stock under a
     number of wills, trusts and agency arrangements.

(2)  Three trustees of the D.R. Fisher Trust share voting and investment power
     as to the 238,504 shares held by such trust.  The shares held by the D.R.
     Fisher Trust are also reported as beneficially owned by two of such
     trustees, Messrs. William O. Fisher and George D. Fisher.

(3)  Mr. Donald G. Graham, Jr., President, director and a 14.40% shareholder of
     the O.D. Fisher Investment Company ("ODFICO"), has sole voting power with
     respect to the shares of Company Common Stock owned by ODFICO.  Ms. Robin
     Campbell is Chairman of the Board of Directors of ODFICO, and a 4.96%
     shareholder thereof; Mr. Donald G. Graham, III is Vice President, a
     director, and a 3.86% shareholder of ODFICO.  The 232,816 shares owned by
     ODFICO are also reported as beneficially owned by Ms. Campbell and Messrs.
     Donald G. Graham, Jr. and Donald G. Graham, III.

(4)  The 240,184 shares held by the Lula Fisher Warren Trust are also reported
     in this table as beneficially owned by Mr. W. W. Warren, who shares voting
     and investment power as one of several trustees of such trust.

(5)  Ms. Campbell owns 114,144 shares.  In addition, she shares voting power, as
     co-trustee, as to 7,040 shares held by Trust A Under the Will of Peggy
     Locke Newman and 106,780 shares held by Trust B Under the Will of Peggy
     Locke Newman.  Additionally, Ms. Campbell shares investment power as to the
     232,816 shares held by the O.D. Fisher Investment Company (see footnote
     (3)).

(6)  Mr. Phelps K. Fisher owns 41,517 shares.  In addition, he has sole voting
     power and shared investment power as to 67,436 shares owned by K.R. Fisher
     Investment Company, and has sole voting power, pursuant to a power of
     attorney, as to 7,036 shares and 7,096 shares, respectively, owned by two
     of his adult sons.  Mr. Fisher's wife owns 11,386 shares.

                                       50
<PAGE>
 
(7)  Mr. William O. Fisher owns 2,200 shares.  In addition, he shares voting and
     investment power as one of three trustees of the D.R. Fisher Trust, as to
     the 238,504 shares held by such trust.

(8)  Mrs. Fratt owns 100 shares, and her husband owns 200 shares.

(9)  Mr. Donald G. Graham, Jr. owns 36,960 shares.  In addition, he has sole
     voting  power  and shared investment power as to the 232,816 shares owned
     by the O.D. Fisher Investment Company. Additionally, Mr. Graham has voting
     power as to a total of 214,368 shares held by (i) two trusts under the will
     of Nellie Hughes Fisher, and (ii) two trusts under the will of O.D. Fisher.

(10) Mr. Donald G. Graham, III, owns 7,200 shares.  In addition, he shares
     investment power as to 232,816 shares owned by the O.D. Fisher Investment
     Company (see footnote (3)).

(11) Mr. Krippaehne holds 228 shares in an Individual Retirement Account and
     owns 1,390 shares jointly with his wife.  Includes 1,320 shares subject to
     purchase within sixty days upon the exercise of stock options.

(12) Ms. McTavish owns 120 shares.  In addition, she shares voting power, as
     one of three trustees, as to 35,280 shares held by a trust under the will
     of Vivien S. Fisher.  Ms. McTavish is also one of two income beneficiaries
     under such trust.

(13) Ms. Meurk owns 900 shares jointly with her husband. She also has sole
     voting power, as trustee under the will of Ethyln Gaige Fisher, as to 9,284
     shares held by that trust. She is also a general partner in the Meurk
     Family Limited Partnership, which owns 5,720 shares, and shares voting and
     investment power with respect to such shares. Ms. Meurk also shares voting
     and investment power, as a trustee of the Revocable Living Trust of Elaine
     Fisher Gourlie, as to the 29,612 shares held by that trust.

(14) Mr. W. W. Warren owns 12,420 shares.  In addition, he shares voting and
     investment power, as one of several Trustees, as to 240,184 shares owned by
     the Lula Fisher Warren Trust; Mr. Warren is an income beneficiary of such
     trust.  Mr. Warren also has sole voting power and shares investment power
     with respect to 159,972 shares owned by Warren Investment Company, of which
     he is President and a Director.

(15) Mr. W. W. Warren, Jr. owns 465 shares jointly with his wife.

(16) Mr. George D. Fisher owns 2,400 shares.  In addition, he shares voting and
     investment power as one of three trustees of the D.R. Fisher Trust, as to
     the 238,504 shares held by such trust.  Mr. Fisher is also President and a
     director of the D.R. Fisher Company, which owns 116,464 shares, and has
     sole voting power and shares investment power with respect to such shares.

(17) Mr. Scott owns 700 shares and owns 2,465 shares jointly with his wife.
     Includes 1,140 shares subject to purchase within sixty days upon the
     exercise of stock options.

(18) Mr. Barrans owns 180 shares and owns 445 shares jointly with his wife.
     Includes 190 shares subject to purchase within sixty days upon exercise of
     stock options.

(19) Mr. Weed's beneficial ownership includes 260 shares subject to purchase
     within sixty days upon the exercise of stock options.

(20) Mr. Hillard owns 205 shares jointly with his wife.

(21) Includes 2,910 shares subject to purchase within sixty days by all
     Directors and Executive Officers as a Group.

(22) The total number of shares and percentage of outstanding Company Common
     Stock for the Group eliminates the duplication of any shares deemed to be
     beneficially owned by more than one member of the Group.

ITEM 5   -  DIRECTORS AND EXECUTIVE OFFICERS.

     The following information is provided with respect to the directors and
executive officers of the Company.

                                       51
<PAGE>
 
                                  MANAGEMENT
                                  ----------

EXECUTIVE OFFICERS AND DIRECTORS:
<TABLE>
<CAPTION>
NAME                                                      POSITION WITH COMPANY
- ----                                                      ---------------------
<S>                                                       <C>
William W. Krippaehne, Jr./(1)/.......................    President, Chief Executive Officer,
                                                          and Director
David D. Hillard......................................    Senior Vice President, Chief Financial Officer,
                                                          and Secretary
Glen P. Christofferson................................    Vice President and Controller
Robin E. Campbell.....................................    Director
James W. Cannon /(2)/.................................    Director
George D. Fisher......................................    Director
Phelps K. Fisher /(4)/................................    Director
William O. Fisher.....................................    Director
Carol H. Fratt........................................    Director
Donald G. Graham, Jr. /(1)(2)(3)(4)/..................    Director
Donald G. Graham, III.................................    Director
John D. Mangels /(2)(3)/..............................    Director
Jean F. McTavish /(1)(3)(4)/..........................    Director
Jacklyn F. Meurk /(1)(3)(4)/..........................    Director
W. W. Warren /(1)(2)(4)/..............................    Director
W. W. Warren, Jr. /(3)/...............................    Director
</TABLE>
- -----------------------
(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
(4) Member of the Nominating Committee

     The Company has three classes of Directors: Class 1, Class 2 and Class 3,
the terms of office of which will expire, respectively, at the annual meetings
of stockholders in 2000, 1998, and 1999.  The term of the current Class 1
Directors, Robin E. Campbell, James W. Cannon, George D. Fisher, Phelps K.
Fisher, and William O. Fisher, will expire at the 2000 Annual Meeting of the
Company's stockholders.  The term of the current Class 2 Directors, Carol H.
Fratt, Donald G. Graham, Jr., Donald G. Graham, III, W. W. Krippaehne, Jr., and
John D. Mangels, will expire at the 1998 Annual Meeting of the Company's
stockholders.  The term of the current Class 3 Directors, Jean F. McTavish,
Jacklyn F. Meurk, W. W. Warren, and W. W. Warren, Jr., will expire at the 1999
Annual Meeting of the Company's stockholders.  Successors to any Directors whose
terms are expiring are elected to three year terms and hold office until their
successors are elected and qualified.  Executive officers of the Company are
elected by the Board of Directors annually, for one-year terms, at each annual
meeting of the Board of Directors of the Company.

     William W. Krippaehne, Jr., 46, is President and Chief Executive Officer of
the Company, and a Director of the Company.  He has served as President since
April 1991, and as 

                                       52
<PAGE>
 
Chief Executive Officer since June 1993, and as a Director since March 1982. Mr.
Krippaehne also serves as a Director of Fisher Broadcasting, FPI, FMI, and
SAFECO Corporation.

     David D. Hillard, 54, was elected Senior Vice President of the Company in
April 1996, and has served as Chief Financial Officer and Secretary since
December 1992. Prior to that, Mr. Hillard served as Assistant Treasurer of the
Company, from May 1979.

     Glen P. Christofferson, 37, has been Vice President and Controller of the
Company since April 1996. From December 1992 until April 1996, he served as
Controller of the Company. Prior to such time, Mr. Christofferson was the Vice
President-Finance of the Seattle Supersonics basketball organization.

     Robin E. Campbell, 51, has owned and operated a jewelry design and
appraisal business since 1986. Ms. Campbell has served as a Director of the
Company since April 1996.

     James W. Cannon, 69, is the retired Executive Vice President of SAFECO
Corporation and retired President of SAFECO's Property and Casualty Insurance
Companies. Mr. Cannon retired from such positions on December 31, 1992. SAFECO
is engaged in insurance and financial services activities. Mr. Cannon has served
as a Director of the Company since April 1993.

     George D. Fisher, 48, is Vice President and Secretary of Hunting, Fisher &
Co. P.S., C.P.A.s, positions he has held since 1976.  Mr. Fisher has served as a
Director of the Company since December 4, 1996, when he was elected by the Board
of Directors to fill the vacancy created by the death of Mr. G. O. Fisher. Mr.
Fisher is the brother of Mr. William O. Fisher.

     Phelps K. Fisher, 62, is the Executive Vice President - Marketing of Fisher
Broadcasting, a position he has held since May 1993. Prior to such time, Mr.
Fisher served as Vice President and Director of Marketing of Fisher
Broadcasting. Mr. Fisher has served as a Director of the Company since March
1979. Mr. Fisher also serves as a Director of Fisher Broadcasting, FPI and FMI.

     William O. Fisher, 46, is a partner in the law firm of Pillsbury, Madison &
Sutro LLP, a position he has held since 1987.  Mr. Fisher has served as a
Director of the Company since April 1993.  Mr. Fisher is the brother of Mr.
George D. Fisher.

     Carol H. Fratt, 52, is a landscape designer.  Since 1989, she has owned and
operated a landscape design business.  Ms. Fratt has served as a Director of the
Company since April 1993. Ms. Fratt is the niece of Ms. Jean McTavish.

     Donald G. Graham, Jr., 73, has served as Chairman of the Board of Directors
of the Company since June 1993.  Mr. Graham was President and Chief Executive
Officer of the Company from January 1974 to April 1991, and served as Chairman
and Chief Executive Officer of the Company from April 1991 to May 1993.  Mr.
Graham has been a Director of the Company since May 1972.  Mr. Graham also
serves as a Director of Fisher Broadcasting, FPI and FMI.  Mr. Graham is the
father of Donald G. Graham, III.

                                       53
<PAGE>
 
     Donald G. Graham, III, 42, is, and has been since 1983, a commercial
photographer. Mr. Graham has served as a Director of the Company since April
1993. Mr. Graham is the son of Donald Graham, Jr.

     John D. Mangels, 71, is the retired Chairman and Chief Executive Officer of
Security Pacific Bancorporation Northwest and Security Pacific Bank Washington.
Mr. Mangels has served as a Director of the Company since December 1990.

     Jean F. McTavish, 74, is a homemaker and is involved in a number of
community and charitable activities. Ms. McTavish has served as a Director of
the Company since November 1979. Ms. McTavish is also a member of the Boards of
Directors of Fisher Broadcasting and FPI. Ms. McTavish is the first cousin of
Mr. W. W. Warren. Ms. McTavish is the aunt of Ms. Carol H. Fratt.

     Jacklyn F. Meurk, 74, manages property, assets and investments for family
trusts, partnerships and other interests. She is a member of the Boards of
Directors of the Virginia Mason Medical Center and the Virginia Mason Health
System. Ms. Meurk has served as a Director of the Company since January 1973.
Ms. Meurk also serves as a Director of FPI.

     W. W. Warren, 85, is the retired Chairman and Chief Executive Officer of
Fisher Broadcasting. Mr. Warren has served as a Director of the Company since
March 1979. Mr. Warren also serves as a Director of Fisher Broadcasting. Mr.
Warren is the first cousin of Ms. Jean McTavish and the father of Mr. W. W.
Warren, Jr.

     W. W. Warren, Jr., 58, is a Professor of Physics and the Director of the 
W. M. Keck Nuclear Magnetic Resonance Laboratory at Oregon State University,
positions he has held since 1991. Mr. Warren has served as a Director of the
Company since March 1992. Mr. Warren is the son of Mr. W. W. Warren.

COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY

     The standing committees of the Board of Directors of the Company are the
Executive Committee, the Audit Committee, the Compensation Committee, and the
Nominating Committee.  The Company also has a Stock Purchase Committee, although
such committee does not currently meet regularly.  The Executive Committee has
authority to exercise all of the authority of the Board of Directors.
Additionally, the Executive Committee has the power and duty to vote the stock
of all subsidiaries of the Company and to make all decisions and determinations
with respect to such subsidiaries.  The Audit Committee reviews the Company's
audit plan, the scope of activities of the Company's independent auditors, the
results of the audit after completion, and the fees for related services
performed during the year.  The Audit Committee also recommends to the Board of
Directors the firm to be appointed as independent auditors.  At times, the Audit
Committee meets with representatives of the Company's independent auditors
without any officers or employees of the Company present.  The Compensation
Committee reviews and approves, in advance, the Company's retirement and benefit
plans, determines the compensation of officers of the Company, and authorizes
and approves bonus and incentive programs for executive personnel.  The
Compensation Committee also reviews and recommends changes in compensation for
members of the Board of Directors, and administers the Fisher Companies
Incentive Plan of 1995.  The Nominating Committee 

                                       54
<PAGE>
 
considers and recommends to the Board of Directors nominees for possible
election to the Board of Directors and considers other matters pertaining to the
size and composition of the Board of Directors and its Committees.

DIRECTORS' COMPENSATION

     The Board of Directors of the Company is comprised of fourteen Directors,
two of whom are salaried employees of the Company or one of its subsidiaries.
The members of the Company's Board of Directors who are not officers of the
Company, or its subsidiaries, receive an annual retainer of $12,000. The
Chairman of the Board of Directors receives a total annual retainer of $55,000.
In addition, every Director receives a fee of  $1,000 for each Board of
Directors or Committee meeting attended.  The Company also pays the Chairmen of
the Audit Committee and the Compensation Committee an annual retainer of $3,000.
Directors are reimbursed for travel expenses incurred, and receive a per diem
payment of $200, in connection with travel to and from Board of Directors or
Committee meetings.

ITEM 6 -  EXECUTIVE COMPENSATION

     The following information is provided regarding the compensation paid by
the Company or its subsidiaries, as the case may be, to the Chief Executive
Officer of the Company and the most highly compensated executive officers of the
Company or its subsidiaries, as the case may be, in fiscal year 1996.  In
accordance with applicable regulations promulgated by the Commission,
information regarding Messrs. Scott, Weed and Barrans, who are the CEOs of
Fisher Broadcasting, FPI and FMI, respectively, is included because such persons
perform policy making functions for the Company.

<TABLE>
<CAPTION>
                                                                         SUMMARY COMPENSATION TABLE
                                                                                                      LONG-TERM
                                                ANNUAL COMPENSATION                                 COMPENSATION
                                       --------------------------------------   ---------------------------------------------
                                                                                  RESTRICTED       SECURITIES 
                                                               OTHER ANNUAL         STOCK          UNDERLYING          ALL OTHER   
                                YEAR    SALARY     BONUS     COMPENSATION(1)       AWARDS(2)       OPTIONS (3)     COMPENSATION(4) 
                                ----   --------   --------   ---------------       ---------       -----------    ----------------
<S>                             <C>    <C>        <C>        <C>                   <C>             <C>            <C>
WILLIAM W. KRIPPAEHNE, JR.      1996   $410,000   $220,000          $2,000            $115,475        6,600            $4,500
  President and CEO                                                                                                    
PATRICK M. SCOTT                1996    385,000    165,000           1,709              98,713        5,700             4,500
  President and CEO,                                                                                                   
  Fisher Broadcasting Inc.                                                                                             
MARK A. WEED                    1996    193,500     65,000             387              22,350        1,300             4,500
  President and CEO,                                                                                                   
  Fisher Properties Inc.                                                                                               
TERRY L. BARRANS                1996    172,500     60,000             290              16,763          950             4,500
  President and CEO,                                                                                                   
  Fisher Mills Inc.                                                                                                    
DAVID D. HILLARD                1996    147,917     35,000             355              20,488            0             4,500
  Senior Vice President,
  Chief Financial Officer
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  This column reflects dividends paid on stock rights awarded under the
     Fisher Companies Incentive Plan of 1995.  See footnote (2) below.
(2)  This column shows the market value of restricted stock awards made pursuant
     to the Fisher Companies  Incentive Plan of 1995.  The restricted stock
     awards vest (i.e., stock is issuable or an equivalent cash payment is
     payable) in an amount equal to 20% of the total restricted stock award, on
     each of  five annual target dates designated in the written agreement
     granting such awards, conditioned on the continued employment of the
     awardee 

                                       55
<PAGE>
 
     through such target dates.  Each of the restricted stock awards
     reflected in this column was made on February 28, 1996, and provides for
     vesting dates commencing March 15, 1997 (and continuing on March 15 of each
     of the following four years). The total number of shares awarded to the
     named executives, subject to the vesting schedule described above, is: Mr.
     Krippaehne, 1,550; Mr. Scott, 1,325; Mr. Weed, 300; Mr. Barrans, 225; and
     Mr. Hillard, 275.  The Fisher Companies Incentive Plan of 1995 provides for
     the annual payment of additional compensation to persons holding restricted
     stock rights, whether or not vested, in an amount equal to any dividend
     that would have been payable to the holder of such rights if the holder had
     owned the stock subject to such rights.  The value of the restricted stock
     awards, on a per-share basis, as of April 14, 1997, was $116.00, based upon
     the average of the bid and ask price of Company Common Stock on such date.
(3)  This column reflects the number of shares of Company Common Stock issuable
     upon exercise of stock options granted.
(4)  This column reflects Company contributions to the Fisher Broadcasting
     401(k) Retirement Plan and the Fisher 401(k) Retirement Plan.

     The following table sets forth stock options granted during 1996 to the
executive officers named in the "Summary Compensation Table" above, pursuant to
the Fisher Companies Incentive Plan of 1995. All such stock options were granted
on February 28, 1996.

<TABLE>
<CAPTION>
                                 OPTION/SAR GRANTS IN FISCAL YEAR 1996                                       POTENTIAL REALIZABLE
                                                                                                            VALUE AT ASSUMED ANNUAL
                                                                                                             RATES OF STOCK PRICE
                                                                                                               APPRECIATION FOR
                                           INDIVIDUAL GRANTS                                                    OPTION TERM/(3)/
- -----------------------------------------------------------------------------------------------------------------------------------
                                                         Percent of
                                     Number of          Total Options
                                    Securities            Granted to                        
                                Underlying Options     Employees in         Exercise Price    Expiration
          Name                      Granted(1)           Fiscal Year          ($/Sh) (2)         Date            5%           10%
          ----                      ----------           -----------        --------------    -----------     --------      --------
<S>                             <C>                   <C>                   <C>               <C>          <C>           <C> 
William W. Krippaehne, Jr.            6,600                 31%                 $74.50         2/28/2006      $121.36       $193.25
Patrick M. Scott                      5,700                 27%                 $74.50         2/28/2006      $121.36       $193.25
Mark A. Weed                          1,300                  6%                 $74.50         2/28/2006      $121.36       $193.25
Terry L. Barrans                        950                  5%                 $74.50         2/28/2006      $121.36       $193.25
</TABLE>
(1)  The options are non-qualified stock options and become exercisable in five
equal annual installments beginning March 15, 1997.

(2)  The per-share option exercise price represents the fair market value of the
Company's Common Stock at the date of grant, based on the average of the
bid and ask price of such stock on such date.

(3)  The dollar amounts under these columns result from calculations at the 5%
and 10% assumed appreciation rate established by the Commission and,
therefore, are not intended to forecast possible future appreciation, if
any, of the Company's Common Stock price.

     Mr. Patrick M. Scott, one of the named executive officers, is covered by
the Fisher Broadcasting Inc. Retirement Plan (the "Fisher Broadcasting Pension
Plan"), which is a funded, qualified, non-contributory, defined benefit plan
that covers employees of Fisher Broadcasting.  The Fisher Broadcasting Pension
Plan provides benefits based on the participant's highest 3-year annual average
salary and the participant's length of service.  The amounts payable under the
Fisher Broadcasting Pension Plan are in addition to any Social Security benefit
to be received by a participant.  The Fisher Broadcasting Pension Plan benefit
vests 20% after 3 years of service with Fisher Broadcasting, and an additional
20% for each year of service thereafter until 7 years 

                                       56
<PAGE>
 
of service, when the benefits are 100% vested. As of December 31, 1996, Mr.
Scott had 28 years of credited service under the terms of the Fisher
Broadcasting Pension Plan.

     All named executive officers except Mr. Scott are covered by the Retirement
Plan for Certain Employees of Fisher Mills Inc. (the "Retirement Plan").  The
Retirement Plan is a funded, qualified, non-contributory defined benefit plan
that covers all employees of the Company, FPI, and FMI.  The Retirement Plan
provides benefits based on a participant's length of service.  The amounts
payable under the Retirement Plan are in addition to any Social Security benefit
to be received by a participant.  The Retirement Plan benefit vests 100% upon
completion of five years of service with the Company, FPI, or FMI, as the case
may be.  As of December 31, 1996, the following named executive officers have
the following years of credited service under the terms of the Retirement Plan:
Mr. Krippaehne, 15 years; Mr. Weed, 9 years; Mr. Barrans, 20 years: and Mr.
Hillard, 18 years.

     The Company and its subsidiaries have supplemental retirement plans
("SRPs") for certain executive and management personnel of the Company, Fisher
Broadcasting, FPI and FMI.  The SRPs are non-funded, non-qualified, non-
contributory defined benefit plans.  The SRPs do not require funding, but
generally the companies have acquired annuity contracts and life insurance on
the lives of the individual participants to assist in payment of retirement
benefits.  The companies are the owners and beneficiaries of such policies.  The
SRPs require continued employment through the date of expected retirement.  The
SRPs provide that the SRP benefits, together with all other pension and
retirement benefits provided by the employing entity, including an amount equal
to one-half of the participant's Social Security benefits, will represent a
specified percentage (between 50% and 70%) of the participant's average annual
compensation.  "Average annual compensation" for purposes of the SRPs is
determined by averaging the participant's base salary over a period of the three
consecutive years that will provide the highest average.  The SRPs provide for
payment of accrued benefits in the event of involuntary termination prior to age
65, and for death or disability benefits in the event of death or permanent
disability prior to age 65.  Each of Messrs. Krippaehne, Scott, Weed, Barrans
and Hillard is a participant in an SRP.

     Fisher Broadcasting has established a 401(k) Retirement Plan (the "Fisher
Broadcasting 401(k) Plan") to provide a savings incentive for employees.  The
Fisher Broadcasting 401(k) Plan involves a contribution by Fisher Broadcasting,
matching participant contributions on a dollar-for-dollar basis up to a maximum
of 3% of participant compensation.  Fisher Broadcasting contributions to the
Fisher Broadcasting Inc. 401(k) Plan  vest at the rate of 20% per year of
service, commencing with the third year of completed service.  Employees who
have completed at least one year of service with Fisher Broadcasting, including
Mr. Patrick M. Scott, are eligible to participate in the Fisher Broadcasting
401(k) Plan.

     A plan entitled Fisher 401(k) Retirement Plan (the "Fisher 401(k) Plan")
has been established for employees of the Company, FMI, and FPI.  The Fisher
401(k) Plan has the same levels of  employer contributions, vesting schedule,
and standards of eligibility as the Fisher Broadcasting 401(k) Plan described
above.  Messrs. Krippaehne, Weed, Barrans, and Hillard are eligible to
participate in the Fisher 401(k) Plan.

                                       57
<PAGE>
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During 1996, the following persons served as members of the Company's
Compensation Committee of the Board of  Directors: James W. Cannon, Donald G.
Graham, Jr., John D. Mangels, and W. W. Warren.  Mr. Graham was formerly
President and Chief Executive Officer of the Company, having served in such
capacity from 1974 to 1991, and served as Chairman and Chief Executive Officer
of the Company from 1991 to 1993.  Prior to retirement, Mr. Warren was the Chief
Executive Officer of Fisher Broadcasting.  Mr. Graham serves as the executor of
two estates, and as trustee of two trusts, which have made loans to the Company,
and as attorney-in-fact for his mother, who has made a loan to the Company.  See
"Certain Relationships and Related Transactions" below.

ITEM 7 -  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Certain directors and shareholders of the Company (together with employees
and others), and/or entities in which such persons have ownership interests,
have made working capital loans to the Company.  Such persons and/or entities
hold promissory notes ("Notes") from the Company reflecting such loans.  At
December 31, 1996, the total amount of Notes payable was approximately $8.1
million.  The Notes are payable either on demand, or in 90-days, and bear
interest at rates equivalent to rates available to the Company for short-term
cash equivalents.  Of the approximately $8.1 million in principal amount of
Notes outstanding at December 31, 1996, approximately $5.2 million consisted of
demand notes, accruing interest at a rate equal to the 90-day certificate of
deposit ("CD") rate for CDs of $100,000 or more as announced from time to time
by Seafirst Bank, less 0.25%.  Approximately $2.9 million of the Notes
outstanding as of December 31, 1996, were Notes having a 90-day maturity, and
providing for interest at a rate equal to the 90-day CD rate for CDs of $100,000
or more as announced from time to time by Seafirst Bank, plus 0.35%.  The
Company currently anticipates that it will continue to borrow funds under these
loan arrangements in the future, at approximately historical levels, although
the exact amount of such Notes outstanding at any particular time is expected to
fluctuate significantly from time to time and, consequently, cannot be
predicted.

     In 1984, FPI and Mr. William W. Krippaehne, Jr., entered into a joint
venture to construct and operate for lease two office buildings in Lynnwood,
Washington.  At that time, Mr. Krippaehne was President of FPI; he is now
President and Chief Executive Officer of the Company.  FPI contributed land at
its fair market value for a 95% interest in the joint venture, and Mr.
Krippaehne contributed cash for a 5% interest.  The joint venture agreement
provides that profits and losses, additional cash contributions, if any, and
distributions shall be allocated in proportion to the original contributions.
The joint venture owns the Fisher Business Center in Lynnwood, Washington.  (See
"Real Estate Operations - Operating Properties".)

ITEM 8 -  LEGAL PROCEEDINGS

     The Company and its subsidiaries are parties to various claims, legal
actions and complaints in the ordinary course of their businesses.  In the
Company's opinion, all such matters are adequately covered by insurance, are
without merit or are of such kind, or involve such amounts, that unfavorable
disposition would not have a material adverse effect on the consolidated
financial position or results of operations of the Company.

                                       58
<PAGE>
 
ITEM 9 -  MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY AND
          RELATED STOCKHOLDER MATTERS

     Bid and ask prices for the Company's Common Stock are quoted in the Pink
Sheets and on the OTC Bulletin Board.  As of April 11, 1997, there were five
Pink Sheet Market Makers and eight Bulletin Board Market Makers.  The range of
high and low bid prices for the Company's Common Stock for each quarter during
the two most recent fiscal years is as follows:

<TABLE>
<CAPTION>
             QUARTERLY COMMON STOCK PRICE RANGES (1)
             ---------------------------------------
                    1996                 1995
             -------------------   -----------------
QUARTER        HIGH       LOW       HIGH       LOW
- ----------   --------   --------   -------   -------
<S>          <C>        <C>        <C>       <C>
1ST           $ 80.00     $73.50    $69.00    $56.75
2ND             86.00      80.00     73.25     70.00
3RD            100.00      85.25     75.50     72.25
4TH            100.00      97.00     75.00     74.00
</TABLE>
- -----------
(1) This table reflects the range of high and low bid prices for the Company's
Common Stock during the indicated periods, as published in the NQB Non-NASDAQ
Price Report by the National Quotation Bureau. Prices for 1995 have been
adjusted to reflect a four-for-one stock split that was effective May 15, 1995.
The quotations merely reflect the prices at which transactions were proposed,
and do not necessarily represent actual transactions. Prices do not include
retail markup, markdown or commissions.

     The approximate number of record holders of the Company's Common stock as
of April 15, 1997 was 512.

     The Company paid cash dividends on its Common Stock of  $1.52 and $1.72 per
share, respectively, for the fiscal years 1995 and 1996.  In addition, the
Company declared, on December 4, 1996, a dividend of $1.96 per share for 1997,
which will be payable at a rate of $0.49 per quarter to shareholders of record
on such quarterly payment dates during 1997.  Annual cash dividends have been
paid on the Company's Common Stock every year since the Company's reorganization
in 1971.  The Company currently expects that comparable cash dividends will
continue to be paid in the future.

ITEM 10 - RECENT SALES OF REGISTRANT'S SECURITIES TO BE REGISTERED

     In 1997 (March 15 through April 15), the Company sold 390 shares of Company
Common Stock to certain officers and employees of the Company, Fisher
Broadcasting, FMI and FPI, upon the exercise of non-qualified stock options
previously granted to such persons under the Fisher Companies Incentive Plan of
1995.  The aggregate price for the Company Common Stock sold to such persons was
$29,055.  No underwriting discounts or commissions were paid in connection with
such sale.  The issuance and sale of Company Common Stock pursuant to the Fisher
Companies Incentive Plan of 1995 is exempt from registration under the
Securities Act of 1933, as amended, pursuant to Section 4(2) of such Act, as a
sale of securities not involving a public offering.  The Company intends to
register Company Common Stock issued pursuant to the Fisher Companies Incentive
Plan of 1995, on a Form S-8 registration statement under the 

                                       59
<PAGE>
 
Securities Act of 1933, to be effective immediately following the effective date
of this Registration Statement.

ITEM 11  -  DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED

DESCRIPTION OF CAPITAL STOCK

     The Company is currently authorized to issue 12,000,000 shares of Company
Common Stock, $2.50 par value per share.  The following description of the
Company Common Stock and certain provisions of the Company's Amended and
Restated Articles of Incorporation (the "Articles") and Bylaws is a summary,
does not purport to be complete, and is subject to the detailed provisions of,
and is qualified in its entirety by reference to, the Articles and Bylaws,
copies of which  have been filed as exhibits to this Registration Statement.

VOTING

     The holders of Company Common Stock are entitled to one vote per share held
of record on all matters submitted to a vote of the stockholders, except in the
case of election of directors.  The Bylaws provide for cumulative voting for
director elections, giving each stockholder the right to vote the number of
shares owned by such shareholder times the number of persons being elected as
directors and for whose election such shareholder has a right to vote, or to
cumulate such votes by giving one candidate as many votes as the number of
directors being elected multiplied by the number of shares owned, or by
distributing such votes on the same principle among any number of candidates.
The Bylaws provide that a majority of shares entitled to vote constitutes a
quorum, and that the affirmative vote of the majority of the shares represented
at a meeting at which a quorum is present constitutes the act of the
stockholders, unless the vote of a greater number is required by law or by the
Articles.  The Articles contain no provisions requiring a greater number of
votes than provided in the Bylaws.

DIVIDENDS AND OTHER DISTRIBUTIONS (INCLUDING DISTRIBUTIONS UPON LIQUIDATION)

     All shares of Common Stock are equal in respect of dividends and other
distributions in cash, stock or property, including distributions upon
liquidation of the Company.

TRANSFERABILITY OF SHARES

     The shares of Common Stock are freely transferable, subject to certain
restrictions on resale imposed on (i) affiliates of the Company, and (ii)
persons having received shares of Company Common Stock pursuant to the Incentive
Plan of 1995.

WASHINGTON LAW REGARDING CERTAIN BUSINESS TRANSACTIONS

     Certain provisions of the Revised Code of Washington ("RCW"), summarized
below, may be considered to have an anti-takeover effect and may delay, deter,
or prevent a tender offer, proxy contest or other takeover attempt that a
stockholder might consider to be in such stockholder's best interest, including
such an attempt as might result in payment of a premium over the market price
for shares held by stockholders.

                                       60
<PAGE>
 
     As a Washington corporation, the Company is subject to the provisions of
the RCW, including Section 23B.19.  In general,  Section 23B.19 prohibits a
Washington corporation from engaging in a "significant business transaction" for
a period of five years after the acquisition of ten percent or more of the
corporation's outstanding stock by a third party (an "acquiring person"), unless
the significant business transaction or the acquisition of the threshold number
of shares by the acquiring person is approved, prior to the acquisition of the
shares, by a majority of the directors of the corporation.  "Significant
business transactions" are defined to include, among other things, (i) merger of
the target corporation or any subsidiary thereof with the acquiring person or
any affiliate; (ii) sale, lease, mortgage, or other disposition or encumbrance,
to or with the acquiring person or affiliate, of five percent or more of the
target corporation's assets; (iii) termination of five percent or more of the
employees of the target corporation or its subsidiaries employed in Washington;
(iv) issuance, transfer or redemption by the target corporation or any
subsidiary, of shares, or of options, warrants, or rights to acquire shares of
the target corporation or any subsidiary, to or beneficially owned by an
acquiring person, unless on the same terms as are offered to all other target
corporation shareholders; and (v) the liquidation or dissolution of the target
corporation proposed by, or pursuant to an agreement or understanding with, an
acquiring person or affiliate.

SPECIAL MEETINGS OF SHAREHOLDERS

     The Bylaws provide that special meetings of shareholders may be called by
the Chairman of the Board of Directors, the President or by the Secretary at the
request of any three or more directors.

CLASSIFIED BOARD OF DIRECTORS

     The Articles and the Bylaws provide for the division of the Board of
Directors into three classes nearly equal in size as possible with staggered
three-year terms (except for the current terms of current Class 2 and Class 3
directors, which are 2 years and 3 years, respectively).  At each annual meeting
of the shareholders, successors to the directors whose terms expire at that
annual meeting are elected for a three-year term, with each director to hold
office until a successor has been duly elected and qualified.  As a result,
approximately one-third of the Board of Directors will be elected each year.
See "Management--Executive Officers and Directors."

ITEM 12  -  INDEMNIFICATION OF DIRECTORS AND OFFICERS

DIRECTOR LIABILITY AND INDEMNIFICATION

     The Articles and the Bylaws, taken together, provide that the Company shall
indemnify any person who was or is involved in any manner or was or is
threatened to be made so involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that such person is or was a director or
director-officer of the Company or any of its subsidiaries, against all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such proceeding.  The
Company may not, however, provide such indemnification on account of (a) acts or
omissions finally adjudged to be intentional misconduct or knowing violation of
law; (b) conduct finally adjudged to be in violation of RCW Section 23B.08.310;
or (c) any transaction with respect to which it was finally adjudged that such
person personally 

                                       61
<PAGE>
 
received a benefit in money, property, or services to which such person was not
entitled (the foregoing instances being defined in the Company's Bylaws as
"egregious conduct"). The Articles provide that no director of the Company will
be liable to the Company or to its shareholders, or to any subsidiary or its
shareholders, for monetary damages for conduct as a director or director-officer
except in instances involving egregious conduct. The rights to indemnification
provided by the Articles and Bylaws include the right to receive payment of any
expenses incurred by the person being indemnified in connection with a
proceeding in advance of the final disposition of the proceeding consistent with
applicable law. Such rights are not exclusive of any other rights to which any
person seeking indemnification may otherwise be entitled. The Articles and
Bylaws also specify or incorporate by reference certain procedures, presumptions
and remedies that apply with respect to the right to indemnification and the
advancement of expenses.

                                       62
<PAGE>
 
                       REPORT OF INDEPENDENT ACCOUNTANTS


To the Stockholders and
Board of Directors of Fisher Companies Inc.



     In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Fisher
Companies Inc. and its subsidiaries at December 31, 1996 and 1995, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.  These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits.  We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for the opinion expressed above.



Price Waterhouse LLP
Seattle, Washington
February 21, 1997

                                       63
<PAGE>
 
ITEM 13  -  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                     FISHER COMPANIES INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
 
YEAR ENDED DECEMBER 31                                               1994        1995       1996
- --------------------------------------------------------------------------------------------------
<S>                                                                <C>         <C>        <C>
(In thousands except per share amounts)
 
Sales and other revenue:
 Broadcasting                                                      $ 87,112    $101,192   $111,967
 Milling                                                             93,277     112,360    135,697
 Real estate                                                          8,659      10,941     13,556
 Corporate and other, primarily dividends and interest income         3,460       4,087      4,000
- --------------------------------------------------------------------------------------------------
                                                                    192,508     228,580    265,220
- --------------------------------------------------------------------------------------------------
Costs and expenses:
 Cost of products and services sold                                 124,483     144,878    170,016
 Selling expenses                                                    11,016      13,870     16,941
 General, administrative and other expenses                          25,430      29,988     33,131
- --------------------------------------------------------------------------------------------------
                                                                    160,929     188,736    220,088
- --------------------------------------------------------------------------------------------------
Income from operations                                               31,579      39,844     45,132
 
Interest expense                                                      4,005       5,280      5,671
- --------------------------------------------------------------------------------------------------
Income before provision for income taxes and effect of
 change in accounting method                                         27,574      34,564     39,461
Provision for federal and state income taxes                          9,422      11,881     13,375
- --------------------------------------------------------------------------------------------------
Income before effect of change in accounting method                  18,152      22,683     26,086
Cumulative effect of change in method of accounting for
 postretirement benefits, net of tax                                 (1,305)
- --------------------------------------------------------------------------------------------------
Net income                                                         $ 16,847    $ 22,683   $ 26,086
- --------------------------------------------------------------------------------------------------
Income per common share:
 Income before effect of change in accounting method               $   4.26       $5.32      $6.12
 Cumulative effect of change in method of accounting for
  postretirement benefits, net of tax                                  (.31)
- --------------------------------------------------------------------------------------------------
Net income                                                         $   3.95       $5.32      $6.12
- --------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>

                                       64
<PAGE>
 
                     FISHER COMPANIES INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                           Unrealized
                                                                                            Gain on
                                                                 Common     Capital in     Marketable   Retained      Total
                                                                  Stock    excess of par   Securities   Earnings     Equity
- ----------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                                              <C>       <C>             <C>          <C>         <C>
Balance, December 31, 1993                                       $10,663         $    48                $ 97,285    $107,996
Change in method
 of accounting,
 January 1, 1994                                                                              $54,948                 54,948
Net income                                                                                                16,847      16,847
Dividends paid                                                                                            (5,787)     (5,787)
Net decrease                                                                                   (3,253)                (3,253)
- ----------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1994                                        10,663              48       51,695    108,345     170,751
Net income                                                                                                22,683      22,683
Dividends paid                                                                                            (6,568)     (6,568)
Net increase                                                                                   16,815                 16,815
- ----------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1995                                        10,663              48       68,510    124,460     203,681
Net income                                                                                                26,086      26,086
Dividends paid                                                                                            (7,432)     (7,432)
Net increase                                                                                    9,794                  9,794
- ----------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1996                                       $10,663         $    48      $78,304   $143,114    $232,129
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE> 

See accompanying notes to consolidated financial statements

                                       65
<PAGE>
 
                    FISHER COMPANIES INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION> 

                                                                                                              YEAR ENDED DECEMBER 31
                                                                                                              1995             1996
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
 <S>                                                                                                          <C>              <C>
(In thousands except share amounts)
Current Assets:
   Cash and short-term cash investments                                                                         $ 19,489   $  5,116
   Receivables                                                                                                    41,675     44,759
   Inventories                                                                                                    11,793     13,199
   Prepaid expenses                                                                                                6,384      7,859
   Television and radio broadcast rights                                                                           5,606      5,383
- ------------------------------------------------------------------------------------------------------------------------------------
     Total current assets                                                                                         84,947     76,316
- ------------------------------------------------------------------------------------------------------------------------------------
Marketable Securities, at market value                                                                           106,447    121,545
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets:
   Cash value of life insurance and retirement deposits                                                            8,881      9,362
   Television and radio broadcast rights                                                                           1,010        317
   Intangible assets, net of amortization                                                                         14,641     47,982
   Other                                                                                                           3,075      4,033
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  27,607     61,694
- ------------------------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment, net                                                                               134,034    134,594
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                $353,035   $394,149
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Notes payable                                                                                                $ 13,759   $  9,258
   Trade accounts payable                                                                                          6,782      8,674
   Accrued payroll and related benefits                                                                            4,058      4,536
   Television and radio broadcast rights payable                                                                   5,056      5,036
   Income taxes payable                                                                                            2,054      1,147
   Other current liabilities                                                                                       3,494      5,244
- ----------------------------------------------------------------------------------------------------------------------------------- 
        Total current liabilities                                                                                 35,203     33,895
- ------------------------------------------------------------------------------------------------------------------------------------
Long-term Debt, net of current maturities                                                                         58,110     65,713
- ------------------------------------------------------------------------------------------------------------------------------------
Other Liabilities:
   Accrued retirement benefits                                                                                    11,496     11,924
   Deferred income taxes                                                                                          42,705     49,483
   Television and radio broadcast rights payable, long-term portion                                                  860        296
   Deposits and retainage payable                                                                                    947        676
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  56,008     62,379
- ------------------------------------------------------------------------------------------------------------------------------------
Minority Interests                                                                                                    33         33
- ------------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Notes 11 and 12)
- ------------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
   Common stock, shares authorized 12,000,000, $2.50 par value;
       issued 4,265,172                                                                                           10,663     10,663
   Capital in excess of par                                                                                           48         48
   Unrealized gain on marketable securities, net of deferred
      income taxes of $36,891 in 1995 and $42,164 in 1996                                                         68,510     78,304
   Retained earnings                                                                                             124,460    143,114
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 203,681    232,129
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                $353,035   $394,149
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements

                                                 66
<PAGE>
 
                    FISHER COMPANIES INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31
                                                                       1994            1995           1996
- -------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>            <C>
(In thousands)

Cash flows from operating activities:
 Net income                                                           $ 16,847       $ 22,683       $ 26,086
 Adjustments to reconcile net income to working capital
   provided by operating activities:
     Depreciation and amortization                                       8,387          9,747         10,753
     (Decrease) increase in noncurrent deferred income taxes                (8)           910          1,505
     Gain on sale of real estate                                                                      (2,300)
     Cumulative effect of change in method of accounting for
       postretirement benefits, before tax                               2,012
- ------------------------------------------------------------------------------------------------------------
       Working capital provided by operating activities                 27,238         33,340         36,044
 Change in operating assets and liabilities:
   Receivables                                                          (4,820)        (5,869)        (3,084)
   Inventories                                                             792         (2,518)        (1,406)
   Prepaid expenses                                                       (986)           (82)        (1,475)
   Cash value of life insurance and retirement deposits                   (363)          (335)          (481)
   Income taxes payable                                                    843            711           (907)
   Trade accounts payable, accrued payroll and related
     benefits and other current liabilities                             (3,467)         4,175          4,120
   Other assets                                                            360           (564)          (958)
   Accrued retirement benefits                                             240            128            428
   Deposits and retainage payable                                         (567)           (77)          (271)
 Amortization of television and radio broadcast rights                   7,993          8,119          8,575
 Payments for television and radio broadcast rights                     (7,802)        (8,067)        (8,243)
 Other, net                                                                 94            270            169
- ------------------------------------------------------------------------------------------------------------
       Net cash provided by operating activities                        19,555         29,231         32,511
- ------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
 Proceeds from sale of real estate                                                                     2,860
 Purchase assets of radio stations                                     (11,282)        (6,740)       (36,684)
 Purchase of property, plant and equipment                             (16,640)       (10,784)        (8,730)
- -------------------------------------------------------------------------------------------------------------
       Net cash used in investing activities                           (27,922)       (17,524)       (42,554)
- -------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
 Net borrowings under notes payable                                      3,518          1,662         (4,698)
 Borrowings under borrowing agreements and mortgage loans                9,431                        44,000
 Payments on borrowing agreements and mortgage loans                    (4,653)        (5,652)       (36,200)
 Cash dividends paid                                                    (5,787)        (6,568)        (7,432)
- -------------------------------------------------------------------------------------------------------------
       Net cash provided by (used in) financing activities               2,509        (10,558)        (4,330)
- -------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and short-term cash investments         (5,858)         1,149        (14,373)
Cash and short-term cash investments, beginning of year                 24,198         18,340         19,489
- -------------------------------------------------------------------------------------------------------------
Cash and short-term cash investments, end of year                     $ 18,340       $ 19,489       $  5,116
- -------------------------------------------------------------------------------------------------------------
</TABLE>

       Supplemental cash flow information is included in Notes 5 and 8.
          See accompanying notes to consolidated financial statements

                                       67
<PAGE>
 
                    FISHER COMPANIES INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1

OPERATIONS AND ACCOUNTING POLICIES

     The principal operations of Fisher Companies Inc. and subsidiaries are
television and radio broadcasting, flour milling and distribution of bakery
supplies, and proprietary real estate development and management. The Companies
conduct business primarily in Washington, Oregon, California and Montana. A
summary of significant accounting policies is as follows:

     Principles of consolidation.  The consolidated financial statements include
     ---------------------------
the accounts of Fisher Companies Inc., its majority-owned subsidiaries and a
joint venture in which the Company's real estate subsidiary is the majority
partner (see Note 4). All material intercompany balances and transactions have
been eliminated.

     Estimates.  The preparation of financial statements in conformity with
     ---------
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

     Short-term cash investments.  Short-term cash investments comprise discount
     ---------------------------
notes issued by federal agencies and repurchase agreements collateralized by
U.S. Government securities held by major banks. The recorded amount represents
market value because of the short maturity of the investments. For purposes of
the statement of cash flows, the Company considers short-term cash investments
which have original maturities of 90 days or less to be cash equivalents.

     Inventories.  Inventories of grain and the grain component of finished
     -----------
products are valued at December 31 market prices and adjusted for unrealized
gains and losses on open purchase and sales contracts to approximate cost. Grain
futures and option contracts are entered into by the milling subsidiary to
protect the Company from risks related to commitments to buy grain and sell
flour. Gains and losses arising from grain hedging activity are a component of
the cost of the related inventory. The market value of hedges is based on spot
prices obtained from brokers. All other inventories and inventory components are
valued at the lower of average cost or market.

     Revenue recognition.  Television and radio revenue is recognized when the
     -------------------
advertisement is broadcast. Sales of flour and food products are recognized when
the product is shipped. Rentals from real estate leases are recognized over the
term of the lease.

     Television and radio broadcast rights.  Costs of television and radio
     -------------------------------------
broadcast rights are charged to operations using accelerated or straight-line
methods of amortization selected to match expense with anticipated revenue over
the contract life. Asset costs and liabilities for television and radio
broadcast rights are recorded without discount for any noninterest-bearing
liabilities. Those costs attributable to programs scheduled for broadcast after
one year have been classified as noncurrent assets in the accompanying financial
statements.

                                       68
<PAGE>
 
     Marketable securities.  Marketable securities consist of equity securities
     ---------------------
(primarily SAFECO Corporation) traded on a national securities exchange or
reported on the NASDAQ securities market. Market value is based on closing per
share sale prices. While the Company has no intention to dispose of its
investments in marketable securities, it has classified its investments as
available-for-sale and those investments are reported at fair market value.
Unrealized gains and losses are a separate component of stockholders' equity.

     Intangible assets.  Intangible assets represent the excess of purchase
     -----------------
price of certain broadcast properties over the fair value of tangible net assets
acquired (goodwill) and are amortized based on the straight-line method over the
estimated useful life of 40 years. Accumulated amortization at December 31, 1995
and 1996 is $358,000 and $1,169,000, respectively. The Company periodically
reviews its intangible assets to determine whether impairment has occurred. The
Company assesses the recoverability of intangible assets by reviewing the
performance of the underlying operations, in particular the operating cash flows
(earnings before income taxes, depreciation and amortization) of the operation.
No losses from impairment of value have been recorded in the financial
statements.

     Property, plant and equipment.  Replacements and improvements are
     -----------------------------
capitalized while maintenance and repairs are charged as expense when incurred.

     Real estate taxes, interest expense and certain other costs related to real
estate projects constructed for lease to third parties are capitalized as a cost
of such projects until the project, including major tenant improvements, is
substantially completed. A project is generally considered to be substantially
completed when a predetermined occupancy level has been reached or the project
has been available for occupancy for a period of one year. Costs, including
depreciation, applicable to a project are charged to expense based on the ratio
of occupied space to total rentable space until the project is substantially
completed, after which costs are expensed as incurred.

     For financial reporting purposes, depreciation of plant and equipment is
determined primarily by the straight-line method over the estimated useful lives
of the assets as follows:

              Buildings and improvements        30 - 55 years

              Machinery and equipment            3 - 20 years

              Land improvements                 10 - 55 years

     Income taxes.  Deferred income taxes are provided for all significant
     ------------
temporary differences in reporting for financial reporting purposes versus
income tax reporting purposes.

     Advertising.  The Company expenses advertising costs at the time the
     -----------
advertising first takes place. Net advertising expense was $1,148,000,
$1,892,000 and $2,507,000 in 1994, 1995 and 1996, respectively.

     Earnings per share.  Income per common share has been calculated on the
     ------------------
basis of the weighted average number of shares outstanding during the year.

                                       69
<PAGE>
 
     Fair Value of Financial Instruments.  The carrying amount of cash and
     -----------------------------------
short-term cash investments, receivables, inventories, marketable securities,
trade accounts payable and broadcast rights payable approximate fair value.

     The fair value of notes payable and long-term debt approximates the
recorded amount based on borrowing rates currently available to the Company.

     Reclassifications.  Certain 1994 and 1995 balances have been reclassified
     -----------------
to conform to the 1996 presentation.

NOTE 2

RECEIVABLES

Receivables are summarized as follows (in thousands):

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
December 31                                                  1995      1996
- ----------------------------------------------------------------------------
<S>                                                        <C>       <C>
Trade accounts                                             $42,614   $45,704
Other                                                          668       473
- ----------------------------------------------------------------------------
                                                            43,282    46,177
Less - Allowance for
doubtful accounts                                            1,607     1,418
- ----------------------------------------------------------------------------
                                                           $41,675   $44,759
- ----------------------------------------------------------------------------
</TABLE> 

NOTE 3

INVENTORIES

Inventories are summarized as follows (in thousands):
<TABLE> 
<CAPTION> 
- ----------------------------------------------------------------------------
December 31                                                  1995      1996
- ----------------------------------------------------------------------------
<S>                                                         <C>      <C> 
Finished products                                          $ 4,296   $ 4,758
Raw materials                                                7,296     8,255
Spare parts and supplies                                       201       186
- ----------------------------------------------------------------------------
                                                           $11,793   $13,199
- ----------------------------------------------------------------------------
</TABLE>

                                       70
<PAGE>
 
NOTE 4

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are summarized as follows (in thousands):

<TABLE>
<CAPTION>
- -------------------------------------------------------
December 31                           1995       1996
- -------------------------------------------------------
<S>                                 <C>        <C>
Buildings and improvements          $118,386   $120,128
Machinery and equipment               82,397     84,033
Land and improvements                 15,935     16,622
- -------------------------------------------------------
                                     216,718    220,783
Less  Accumulated depreciation        85,838     91,487
- -------------------------------------------------------
                                     130,880    129,296
Construction in progress               3,154      5,298
- -------------------------------------------------------
                                    $134,034   $134,594
- -------------------------------------------------------
</TABLE>

     The Company's real estate subsidiary and the president of the Company are
partners in a joint venture established in 1984 to construct and operate for
lease to third parties two office buildings in Lynnwood, Washington. The
subsidiary contributed land at its fair value for a 95% interest in the venture.
The minority partner contributed cash for a 5% interest. The joint venture
agreement provides that profits and losses, additional cash contributions, if
any, and distributions be allocated in proportion to the original contributions.

     The Company's real estate subsidiary receives rental income principally
from the lease of warehouse, office and retail space, boat moorages and
unimproved properties under gross and net leases which expire at various dates
through 2005. These leases are accounted for as operating leases. The subsidiary
generally limits lease terms to periods not in excess of five years. Minimum
future rentals from leases which were in effect at December 31, 1996 are (in
thousands):

<TABLE>
<CAPTION>
Year                                  Rentals
- ----                                  -------
<S>                                   <C>   
1997                                   $9,133
1998                                    7,620
1999                                    6,148
2000                                    4,313
2001                                    2,714
Thereafter                              4,761
- ---------------------------------------------
                                      $34,689
- ---------------------------------------------
</TABLE>

     Property held by the real estate subsidiary includes property leased to
third parties and to other subsidiaries of the Company and property held for
future development. The investment in property held for lease to third parties
included in property, plant and equipment at December 31, 1996 includes
buildings, equipment and improvements of $95,912,000, land and improvements of
$11,962,000 and accumulated depreciation of $25,740,000.

                                       71
<PAGE>
 
     Interest capitalized relating to construction of property, plant and
equipment amounted to approximately $758,000 and $97,000 in 1994 and 1995,
respectively.  No interest was capitalized in 1996.

NOTE 5

NOTES PAYABLE AND LONG-TERM DEBT

     Notes payable.  The Company maintains bank lines of credit which totaled
     -------------
$25,000,000 at December 31, 1996. The lines are unsecured and bear interest at
rates no higher than the prime rate.  No borrowings were outstanding under the
lines at December 31, 1996.

     The notes payable to directors, stockholders and others comprise notes
payable on demand and in 90 days. Such notes bear interest at rates equivalent
to those available to the Company for short-term cash investments. Interest on
such notes amounted to $238,000, $401,000 and $430,000 in 1994, 1995 and 1996,
respectively.

     Notes payable are summarized as follows (in thousands):

<TABLE>
<CAPTION>
- ---------------------------------------------
December 31                   1995      1996
- ---------------------------------------------
<S>                          <C>       <C>
Banks                        $ 6,255
Directors, stockholders
 and others                    6,584   $8,141
Current maturities of
 long-term debt                  920    1,117
- ---------------------------------------------
                             $13,759   $9,258
- ---------------------------------------------
</TABLE> 

Long-term debt.
- --------------

     Line of credit.  The Company maintains an unsecured reducing revolving line
     --------------
of credit with a bank in the amount of $45,000,000, for the purpose of funding
potential acquisitions of broadcast properties. The amount available under the
line is reduced by $5,000,000 in September 1998 and 1999, and by $10,000,000 in
September 2000 and 2001. The line matures in September 2002. Borrowings under
the line bear interest at a variable rate not to exceed the bank's prime lending
rate. $12,000,000 was outstanding under the line at December 31, 1996.

     Mortgage loans.  The real estate subsidiary maintains the following
     --------------
mortgage loans:

     Principal amount of $4,411,000 secured by an industrial park with a book
value of $6,213,000 at December 31, 1996. The nonrecourse loan requires monthly
payments including interest of $29,836. The loan matures in May 2006 and bears
interest at 6.88%. The interest rate is subject to adjustment in May 2001 to the
then prevailing market rate for loans of a similar type and maturity; the real
estate subsidiary may prepay all or part of the loan on that date.

     Principal amount of $12,784,000 secured by two industrial parks with a
combined book value of $13,320,000 at December 31, 1996 and principal amount of
$11,111,000 secured by the Lynnwood project owned by the real estate joint
venture with a book value of $17,123,000 at 

                                       72
<PAGE>
 
December 31, 1996. The loans mature in 2008, bear interest at 7.75% and require
monthly payments of $101,025 and $87,807, respectively, including interest.
These mortgage loans are nonrecourse; however, the real estate subsidiary has
guaranteed 20% of the combined outstanding principal balance until certain loan
to value ratios are reached. The interest rates are subject to adjustment in
December 1998 and 2003 to the then prevailing rate for loans of a similar type
and maturity; all or a portion of the outstanding principal balance may be
prepaid on those dates. The agreements provide that the real estate subsidiary
maintain a stipulated minimum net worth and hold marketable securities with a
market value equal to 75% of the outstanding principal balance of the loans.

     Principal amount of $26,511,000 secured by an office building and parking
structure with a book value of $34,782,000 at December 31, 1996. The nonrecourse
loan matures in February 2006, bears interest at 7.72% and requires monthly
payments of principal and interest amounting to $221,157.

     Long-term debt is summarized as follows (in thousands):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
December 31                                              1995           1996
- ----------------------------------------------------------------------------
<S>                                                   <C>            <C>
Notes payable under
bank lines of credit                                  $30,268        $12,000
Mortgage loans payable                                 28,747         54,817
Other                                                      15             13
- ----------------------------------------------------------------------------
                                                       59,030         66,830
Less - Current maturities                                 920          1,117
- ----------------------------------------------------------------------------
                                                      $58,110        $65,713
- ----------------------------------------------------------------------------
</TABLE> 

Future maturities of notes payable and long-term debt are as follows (in 
thousands):

<TABLE> 
<CAPTION> 
- -----------------------------------------------------------------------------
                        Directors,     Bank            Mortgage
                        Stockholders   Line            Loans
                        and Others     of Credit       and Other       Total
- ----------------------------------------------------------------------------
<S>                      <C>         <C>              <C>            <C>
1997                     $8,141                       $ 1,117        $ 9,258
1998                                                    1,206          1,206
1999                                                    1,301          1,301
2000                                                    1,405          1,405
2001                                                    1,517          1,517
Thereafter                           $12,000           48,284        $60,284
- ----------------------------------------------------------------------------
                         $8,141      $12,000           $54,830       $74,971
- ----------------------------------------------------------------------------
</TABLE>

     Cash paid for interest (net of amounts capitalized) during 1994, 1995 and
1996 was $3,950,000, $5,071,000 and $6,184,000, respectively.

                                       73
<PAGE>
 
NOTE 6

TELEVISION AND RADIO BROADCAST RIGHTS

     At December 31, 1996, the long-term portion of television and radio
broadcast rights payable is primarily due in 1997.

     Television and radio broadcast rights acquired under contractual
arrangements were $9,187,000 and $7,658,000 in 1995 and 1996, respectively.

     At December 31, 1996, the broadcasting subsidiary had executed license
agreements amounting to $29,056,000 for future rights to television and radio
programs. As these programs will not be available for broadcast until after
December 31, 1996, they have been excluded from the financial statements.

NOTE 7

STOCKHOLDERS' EQUITY

     The Board of Directors authorized a four-for-one stock split which was
effective May 15, 1995. Accordingly, 1994 per share amounts and number of shares
have been restated.

     During 1995 the stockholders approved the Fisher Companies Incentive Plan
of 1995 (the Plan) which provides that up to 280,000 shares of the Company's
common stock may be issued or sold to eligible key management employees pursuant
to options and rights through 2002.

STOCK OPTIONS
- -------------

     The Plan provides that eligible key management employees may be granted
options to purchase the Company's common stock at the fair market value on the
date the options are granted. The options generally vest over five years and
generally expire ten years from the date of grant. Options to purchase 21,000
shares were granted in 1996 at an exercise price of $74.50 per share. These
options remained outstanding and unvested at December 31, 1996.

RESTRICTED STOCK RIGHTS
- -----------------------

     The Plan also provides that eligible key management employees may be
granted restricted stock rights which entitle such employees to receive a stated
number of shares of the Company's common stock. The rights generally vest over
five years and expire upon termination of employment. Restricted stock rights
issued in 1996 entitled employees to receive a total of 9,700 common shares.
Compensation expense of $145,000 related to the rights was recorded during the
year ended December 31, 1996.

     The Company accounts for common stock options and restricted common stock
rights issued pursuant to the Plan in accordance with Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25). In
1995 the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (FAS123)
which requires companies which elect to adopt its provisions to utilize a fair
value approach for stock compensation. The Company has elected to 

                                       74
<PAGE>
 
apply the provisions of APB 25 in its financial statements. If the provisions of
FAS 123 were applied to the Company's stock options and restricted stock rights,
the impact on net income and net income per share would not have been material.

     Cash dividends are as follows (in thousands except per share amounts):

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Year Ended December 31                                 1994      1995      1996
- --------------------------------------------------------------------------------
<S>                                                  <C>       <C>       <C> 
Fisher Companies Inc. common stock,
$1.34, $1.52 and $1.72 per share, respectively       $5,715    $6,482    $7,337
Subsidiary's preferred stock held by
minority interest                                        72        86        95
- --------------------------------------------------------------------------------
                                                     $5,787    $6,568    $7,432
- --------------------------------------------------------------------------------
</TABLE> 

NOTE 8

INCOME TAXES

Income taxes have been provided as follows (in thousands):
<TABLE> 
<CAPTION> 
- --------------------------------------------------------------------------------
Year Ended December 31                                 1994      1995      1996
- --------------------------------------------------------------------------------
<S>                                                  <C>       <C>       <C> 
Payable currently                                    $8,390    $11,509   $11,630
Current and noncurrent
 deferred income taxes                                1,032        372     1,745
- --------------------------------------------------------------------------------
                                                     $9,422    $11,881   $13,375
- --------------------------------------------------------------------------------
</TABLE>

Reconciliation of income taxes computed at federal statutory rates to the
reported provisions for income taxes is as follows (in thousands):

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Year Ended December 31                                 1994      1995      1996
- --------------------------------------------------------------------------------
<S>                                                  <C>       <C>       <C>
Normal provision computed
at 35% of pretax income before change in             
accounting method                                    $9,653    $12,098   $13,811
Dividends received credit                              (713)      (776)    (844)
Rehabilitation investment tax credit                     (6)
State taxes, net of federal tax benefit                 336        426       309
Other                                                   152        133        99
- --------------------------------------------------------------------------------
                                                     $9,422    $11,881   $13,375
- --------------------------------------------------------------------------------
</TABLE>

                                       75
<PAGE>
 
Deferred tax assets (liabilities) are summarized as follows (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
December 31                                     1995           1996
- ---------------------------------------------------------------------
<S>                                         <C>            <C>
Current:
 Accrued employee benefits                   $   (759)      $   (923) 
 Allowance for doubtful accounts                  554            495  
 Accrued property tax                            (176)          (227)  
 Other                                            180            194  
- ---------------------------------------------------------------------
                                             $   (201)      $   (461)
- ---------------------------------------------------------------------
Noncurrent                                                            
 Unrealized gain on marketable securities    $(36,891)      $(42,164)  
 Property, plant and equipment                 (9,021)       (10,432)  
 Accrued employee benefits                      3,207          3,113   
- ---------------------------------------------------------------------
                                             $(42,705)      $(49,483)
- ---------------------------------------------------------------------
</TABLE>

     The current deferred tax liability is reflected in other current
liabilities.

     Cash paid for income taxes during 1994, 1995 and 1996 was $7,855,000,
$9,938,000 and $12,636,000, respectively.

NOTE 9

RETIREMENT BENEFITS


     The Company and its subsidiaries have qualified defined benefit pension
plans covering substantially all of their employees not covered by union plans.
Benefits are based on years of service and, in one of the pension plans, on the
employees' compensation at retirement. The Companies accrue annually the normal
costs of their pension plans plus the amortization of prior service costs over
periods ranging to 15 years. Such costs are funded in accordance with provisions
of the Internal Revenue Code.

     The funded status of the Companies' pension plans is as follows (in
thousands):
<TABLE>
<CAPTION>
- -----------------------------------------------------------
December 31                           1995           1996
- -----------------------------------------------------------
<S>                               <C>            <C> 
Plan assets at fair value-
Insurance contracts and
 marketable securities             $ 23,782       $ 26,745
Actuarial present values
of benefit obligations
 Vested benefits                    (18,945)       (20,620)
 Nonvested benefits                  (1,352)        (1,501)
- -----------------------------------------------------------
Accumulated benefit
obligation  the actuarial
present value of pension
benefits earned to date
based on current
compensation levels                 (20,297)       (22,121)
Excess of plan assets
over accumulated
benefit obligation                 $  3,485       $  4,624
- -----------------------------------------------------------
</TABLE>  

                                       76
<PAGE>
 
The composition of the prepaid pension cost is as follows (in thousands):
<TABLE> 
<CAPTION> 
- -----------------------------------------------------------
December 31                           1995           1996
- -----------------------------------------------------------
<S>                               <C>            <C> 
Plan assets at fair value          $ 23,782       $ 26,745
Projected benefit obligation
- -the actuarial present
value of pension benefits
earned to date reflecting
assumed increases to
compensation levels                 (23,885)       (25,668)
Items not yet recognized in
earnings to be amortized
over the average
remaining service period
of plan participants:
  Prior service costs resulting
   from plan amendments               1,142            693
  Net asset at adoption
   of FAS 87                           (191)          (124)
  Net loss from past
   experience different
   from assumed                       1,437          1,108
- -----------------------------------------------------------
Prepaid pension cost
included in the
consolidated balance sheet         $  2,285       $  2,754
- -----------------------------------------------------------
</TABLE>

     The discount rate used in determining the actuarial present value of the
projected benefit obligation at December 31, 1995 and 1996 was 7.5%; the rate of
increase in future compensation was 4.5%. The expected long-term rate of return
on assets ranged from 8.5% to 9.25% in both years.

     The Company and its subsidiaries have a noncontributory supplemental
retirement program for key management. The program provides for vesting of
benefits under certain circumstances. Funding is not required, but generally the
Companies have acquired annuity contracts and life insurance on the lives of the
individual participants to assist in payment of retirement benefits. The
Companies are the owners and beneficiaries of such policies; accordingly, the
cash value of the policies as well as the accrued liability are reported in the
financial statements. The program requires continued employment through the date
of expected retirement and the cost of the program is accrued over the
participants' remaining years of service.

     The Companies have two defined contribution retirement plans which are
qualified under Section 401(k) of the Internal Revenue Code. All U.S. employees
who are age 21 or older and have completed one year of service are eligible to
participate. The Companies match employee contributions up to a maximum of 3% of
gross pay.

                                       77
<PAGE>
 
Amounts charged to expense for the respective plans are as follows (in
thousands):

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Y e a r  E n d e d  D e c e m b e r  31      1994       1995     1996
- ------------------------------------------------------------------------
<S>                                          <C>        <C>      <C>   
Qualified defined benefit
pension plans:                                                         
 Benefits earned                                                       
  during the year                            $ 1,182    $1,058   $1,182
 Interest cost on projected                                            
  benefit obligation                           1,715     1,655    1,739
Net amortization and                                                   
 deferral of items not                                                 
 recognized in earnings                       (2,389)    3,010      484
- ------------------------------------------------------------------------
                                                 508     5,723    3,405
Less: Actual return                                                    
 on plan assets                               (1,063)    4,300    2,072
- ------------------------------------------------------------------------
Net pension cost, qualified                                            
 defined benefit plans                         1,571     1,423    1,333
Qualified defined contribution                                         
 retirement plans                                690       855      940
Supplemental retirement                                                
 program                                         506       614      609
Contributions to union                                                 
 pension plans                                    92       110      120
- ------------------------------------------------------------------------
                                             $ 2,859    $3,002   $3,002 
- ------------------------------------------------------------------------
</TABLE>

     In 1994 the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" (FAS 106), which requires that the
cost of health care and life insurance benefits provided to certain retired
employees be accrued during the years that employees render service. Health care
and life insurance benefits are provided to all retired non-broadcasting
employees. The Company elected to immediately recognize the accumulated benefit
obligation, measured as of January 1, 1994. Accordingly, the $2,012,000
cumulative effect of this change in accounting method on years prior to 1994
($1,305,000 after income tax effects) is deducted from the results of operations
for 1994. Cash flow is not affected.

     The Company's net periodic postretirement cost was $197,000, $153,000 and
$112,000 in 1994, 1995 and 1996, respectively.  The accrued postretirement
benefit cost at December 31, 1995 and 1996 was $2,158,000 and $1,905,000,
respectively.

     The discount rate used in determining the actuarial present value of the
accumulated postretirement benefit obligation at December 31, 1995 and 1996 was
7.5%. A one percent increase in the health care cost trend rate would not have
had a significant affect on plan costs or the accumulated benefit obligation in
1995 and 1996.  Beginning in 1996 plan costs are generally based on a defined
maximum employer contribution which is not directly subject to health care cost
trend rates.

                                       78
<PAGE>
 
NOTE 10

SEGMENT INFORMATION

     The operations of the Company are organized into three principal business
segments, broadcasting, milling and real estate. Operating results and other
financial data for each segment are as follows (in thousands):

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
                                                              Corporate,
                                                             Eliminations
                                   Broadcasting   Milling    Real Estate    & Other    Consolidated
- ---------------------------------------------------------------------------------------------------
<S>                                <C>            <C>        <C>            <C>        <C>
Sales and other revenue
     1994                              $ 87,112   $ 93,277      $ 8,659     $  3,460     $192,508   
     1995                               101,192    112,360       10,941        4,087      228,580   
     1996                               111,967    135,697       13,556        4,000      265,220   
Income from operations                                                                              
     1994                              $ 26,066   $  1,078      $ 2,199     $  2,236     $ 31,579   
     1995                                31,518      2,907        3,267        2,152       39,844   
     1996                                34,025      3,410        5,749        1,948       45,132   
Identifiable assets                                                                                 
     1994                              $ 84,760   $ 47,899      $90,887     $ 84,526     $308,072   
     1995                                97,532     54,565       90,212      110,726      353,035   
     1996                               120,911     57,638       86,600      129,000      394,149   
Capital expenditures                                                                                
     1994                              $  4,053   $  1,055      $11,479     $     53     $ 16,640   
     1995                                 4,934      2,495        3,319           36       10,784   
     1996                                 5,092      2,207        1,365           66        8,730   
Depreciation and amortization                                                                       
     1994                              $  3,100   $  1,794      $ 3,462     $     31     $  8,387   
     1995                                 3,587      1,915        4,211           34        9,747   
     1996                                 4,391      2,009        4,314           39       10,753 
</TABLE>

     Intersegment sales are not significant. Income from operations by business
segment is total sales and other revenue less operating expenses. In computing
income from operations by business segment, interest income and dividends from
marketable securities have not been added, and interest expense, income taxes
and unusual items have not been deducted. Identifiable assets by business
segment are those assets used in the operations of each segment. Corporate
assets are principally long-term equity investments. Capital expenditures are
reported exclusive of acquisitions.

     No geographic areas outside the United States were material relative to
consolidated sales and other revenue, income from operations or identifiable
assets. Export sales by the milling subsidiary were $2,100,000 in 1994,
$2,300,000 in 1995 and $2,600,000 in 1996.

                                       79
<PAGE>
 
NOTE 11

ACQUISITIONS

     On June 20, 1996, assignment of Federal Communication Commission (FCC)
licenses for radio broadcasting stations KWJJ-AM/FM in Portland, Oregon was
completed, and the broadcasting subsidiary acquired the assets, including real
estate, of those stations for $35.2 million. Additionally, during May and June
1996, upon assignment of FCC licenses, the broadcasting subsidiary acquired the
assets of four radio broadcasting stations in Eastern Washington and Montana for
$1.5 million.

     On March 1, 1995, assignment of FCC licenses and acquisition of the assets
of ten radio broadcasting stations in Montana and two in Eastern Washington by
the broadcasting subsidiary was completed. The acquisition cost was $6.7
million.

     On May 5, 1994, assignment of FCC licenses and acquisition of the assets of
KPLZ-FM and KVI-AM in Seattle, Washington was completed. The acquisition cost
was $11.3 million.

     The above transactions are accounted for under the purchase method.
Accordingly, the Company has recorded identifiable assets and liabilities of the
acquired stations at their fair market value. The excess of the purchase price
over the fair market value of the assets acquired has been allocated to
goodwill. The results of operations of the acquired radio stations are included
in the financial statements from the date of acquisition. Unaudited pro forma
results as if the acquired stations had been included in the financial results
since January 1, 1994 are as follows (in thousands except per share amounts):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
Year ended December 31             1994       1995       1996
- ---------------------------------------------------------------
(All amounts are unaudited)
<S>                              <C>        <C>        <C>
Sales and other revenue          $204,466   $234,461   $267,782

Net income                       $ 16,875   $ 22,351   $ 25,950

Income per share                 $   3.96   $   5.24   $   6.08
</TABLE>

     The pro forma results are not necessarily indicative of what actually would
have occurred if the acquisition had been in effect for the entire periods
presented. In addition, they are not intended to be a projection of future
results and do not reflect any synergies that might be achieved from combined
operations.

     In July 1996 the milling subsidiary entered into an agreement to become a
50% member of a Limited Liability Company formed to construct and operate a
compact or short flow flour mill in Idaho. The agreement provides for each 50%
member to share equally in initial capital contributions, profits and losses,
additional capital contributions, if any, and distributions. Construction of the
flour mill is in progress, with completion expected in April 1997. Original
capital commitments by each member amount to $1.6 million.

                                       80
<PAGE>
 
NOTE 12

SUBSEQUENT EVENTS

     The broadcasting subsidiary has entered into agreements to purchase the
assets (including assignment of FCC licenses and real estate) of an AM and an FM
radio broadcasting station in Missoula, Montana. Assignment of FCC licenses
occurred on January 15, 1997 and the acquisition was completed on that date at a
cost of $3.9 million.

     In January 1997 the real estate subsidiary entered into an agreement in
principle to acquire 5.5 acres of improved real estate located adjacent to an
existing industrial park at a cost of $2.8 million. The transaction is expected
to be completed in the first quarter of 1997.

ITEM 14  -  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

            Not Applicable.

ITEM 15  -  FINANCIAL STATEMENTS AND EXHIBITS INDEX

            (a)(1) Report of  Independent Accountants.

               (2) Consolidated Statement of Income for the years ended December
                   31, 1996, December 31, 1995 and December 31, 1994.

               (3) Consolidated Statements of Stockholders' Equity.

               (4) Consolidated Balance Sheets at December 31, 1996 and December
                   31, 1995.

               (5) Consolidated Statements of Cash Flows for the years ended
                   December 31, 1996, December 31, 1995 and December 31, 1994.

               (6) Notes to Consolidated Financial Statements.

            (b)    Exhibits: See "Exhibit Index."

                                       81
<PAGE>
 
                                  SIGNATURES
                                  ----------

     Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                            FISHER COMPANIES INC.
                                            ---------------------
                                                (Registrant)


Date: April 24, 1997              By:  /s/ William W. Krippaehne, Jr.
                                       ------------------------------
                                       William W. Krippaehne, Jr.
                                       President and Chief Executive Officer

                                       82
<PAGE>
 
                                 EXHIBIT INDEX
                                 -------------

<TABLE>
<CAPTION>

Exhibit No.         Description
- -----------         -----------                     
<C>           <S>
   3.1        Articles of Incorporation.

   3.2        Bylaws.

   4.1        Form of Stock Certificate.

  10.1        Primary Television Affiliation Agreement 
              between FBI and American Broadcasting 
              Companies, Inc., dated April 17, 1995, 
              regarding KOMO TV.

  10.2        Primary Television Affiliation Agreement 
              between FBI and American Broadcasting 
              Companies, Inc., dated April 17, 1995, 
              regarding KATU TV.

  10.3        Fisher Companies Inc. Incentive Plan of 1995.

  10.4        Fisher Companies Inc. Supplemental Pension 
              Plan, dated February 29, 1996.

  10.5        Fisher Broadcasting Inc. Supplemental Pension 
              Plan, dated March 7, 1996.

  10.6        Fisher Mills Inc. Supplemental Pension Plan, 
              dated March 1, 1996.

  10.7        Fisher Properties Inc. Supplemental Pension 
              Plan, dated March 1, 1996.

  22          Subsidiaries of the Registrant.

  27          Financial Data Schedule.
</TABLE> 
 

                                       83

<PAGE>
 
                                                                     Exhibit 3.1

                             AMENDED AND RESTATED

                           ARTICLES OF INCORPORATION

                                      OF

                             FISHER COMPANIES INC.


                                   ARTICLE I
                                   ---------

                                     Name
                                     ----

The name of the corporation is FISHER COMPANIES INC.

                                  ARTICLE II
                                  ----------

                                Capitalization
                                --------------

The number of shares of stock which the corporation is authorized to issue is
12,000,000, all of which are one class of a par value of $2.50 each, and all of
which are common stock.

                                  ARTICLE III
                                  -----------

                              Stockholder Rights
                              ------------------

The stockholders of the corporation do not have preemptive rights to acquire
proportional amounts of the corporation's unissued shares upon the decision of
the Board of Directors to issue them.

                                  ARTICLE IV
                                  ----------

                              Board of Directors
                              ------------------

Section 1.  The Board of Directors shall consist of not fewer than 9 nor more
- ---------
than 19 individuals.  The exact number shall be fixed by the Bylaws and may be
changed from time to time by amending such Bylaws as provided in the Bylaws.

Section 2.  The Board of Directors shall be divided into three classes: Class 1,
- ---------
Class 2 and Class 3.  Each such Class shall consist, as nearly as possible, of
one-third of the total number of directors constituting the entire Board of
Directors.  In no event shall a Class be comprised of fewer than 3 directors.
Each director shall serve for a term ending on the date of the third annual
meeting of stockholders following the annual meeting at which such director was
elected; provided, however, that each initial director in Class 1 shall hold
office until the annual meeting of stockholders in 1997; each initial director
in Class 2 shall hold office until the annual meeting of stockholders in 

                                       1
<PAGE>
 
1998; and each initial director in Class 3 shall hold office until the annual
meeting of stockholders in 1999.

Section 3.  In the event of an increase or decrease in the authorized number of
- ---------
directors, (a) each director then serving as such shall nevertheless continue as
a director of the Class in which he or she is a member until the expiration of
his or her current term, or his or her earlier resignation, removal from office
or death, and (b) the newly created or eliminated directorships resulting from
such increase or decrease shall be apportioned by the Board of Directors among
the three Classes of directors so as to maintain such Classes as nearly equal as
possible.

                                   ARTICLE V
                                   ---------

                 Director Standard of Care and Indemnification
                 ---------------------------------------------

Section 1.  The personal liability of an existing or former director or officer-
- ---------
director to the corporation or its stockholders, or to a subsidiary corporation
or its stockholders, for monetary damages for conduct as a director or officer-
director is hereby eliminated, provided that such liability shall not be
eliminated for acts or omissions that involve intentional misconduct or a
knowing violation of law, for conduct violating RCW (S) 23B.08.310, or for any
transaction from which the existing or former director or officer-director will
personally receive a benefit in money, property, or services to which such
person is not legally entitled.

Section 2.  The corporation shall indemnify an existing or former director or
- ---------
officer-director made a party to a proceeding by reason of the fact that such
person is or was a director or officer-director and obligate itself to advance
or reimburse expenses incurred in any such proceeding, all without regard to the
limitations in RCW (S)(S) 23B.08.510 through 23B.08.550 and in RCW (S)
23B.08.560(2), provided that no such indemnity, advance or reimbursement shall
be provided from or on account of (a) acts or omissions finally adjudged to be
intentional misconduct or a knowing violation of law, (b) conduct finally
adjudged to be in violation of RCW (S) 23B.08.310, or (c) any transaction with
respect to which it was finally adjudged that such person personally received a
benefit in money, property, or services to which such person was not entitled.

Section 3.  The Board of Directors, by resolution adopted at any regular or
- ---------
special meeting, shall make provisions in the corporation's Bylaws for the
matters set forth in this Article V.


                                     /s/ William W. Krippaehne, Jr. 
                                     ------------------------------ 
                                     William W. Krippaehne, Jr.     
                                     President and CEO               

                                       2

<PAGE>
 
                                                                     EXHIBIT 3.2


                                    BYLAWS

                                      OF

                             FISHER COMPANIES INC.

                 (Incorporated Under the Laws of the State of
                                  Washington)

                           As amended April 22, 1997
                           -------------------------

                                       1
<PAGE>
 
                                  ARTICLE  I
                                  ----------

                               REGISTERED OFFICE
                               -----------------

     The location and post office address of the registered office of the
corporation shall be 1525 One Union Square, Seattle, Washington 98101.


                                  ARTICLE  II
                                  -----------

                            STOCKHOLDERS' MEETINGS
                            ----------------------

     1.  Annual Meeting.  The annual meeting of the stockholders of the
         --------------
corporation for the election of Directors to succeed those whose terms expire
and for the transaction of such other business as may properly come before the
meeting shall be held each year at the principal place of business of the
corporation (unless a different place within or without the State of Washington
is specified in the notice of the meeting), on a day in the last two weeks of
April to be set by the Directors, at 10:00 o'clock in the forenoon unless
otherwise stated in the notice of meeting. In the event of failure to hold an
election of Directors at the annual meeting of the stockholders or in the event
the annual meeting of the stockholders shall be omitted by oversight or
otherwise, a meeting of the stockholders may be held at a later date for the
election of Directors and for the transaction of such other business as may
properly come before the meeting. Any election held or other business transacted
at any such later meeting shall be as valid as if done or transacted at the
annual meeting of the stockholders. Any such later meeting shall be called in
the same manner as a special meeting of the stockholders and notice of the time,
place and purpose thereof shall be given in the same manner as notice of a
special meeting of the stockholders.

     2.  Special Meetings. Special meetings of the stockholders for any purpose
         ----------------
or purposes may be called at any time by the Board of Directors to be held at
such time and place as the Board may prescribe. At any time, upon the request of
the Chairman of the Board, the President, or of any three (3) Directors, or of
any stockholder or stockholders holding in the aggregate at least twenty percent
(20%) of the voting power of all stockholders, it shall be the duty of the
Secretary to call a special meeting of the stockholders to be held at such place
and at such time as the Secretary may fix, not less than ten (10) nor more than
sixty (60) days after the receipt of said request, and if the Secretary shall
neglect or refuse to issue such call, the Directors or stockholders making the
request may do so.

                                       2
<PAGE>
 
     3.  Notices of Meetings. Written notice stating the place, day and hour of
         -------------------
the meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten (10) nor more than
sixty (60) days before the date of the meeting, unless a purpose of the meeting
is to act on an amendment to the Articles of Incorporation, a plan of merger or
share exchange, a proposed sale of all or substantially all of the assets of the
corporation, or the dissolution of the corporation, in which case notice will be
delivered not less than twenty (20) nor more than sixty (60) days before the
date of the meeting. Notice of any shareholders' meeting will be delivered
either personally or by mail, by or at the direction of the Chairman of the
Board, the President, the Secretary, or the person or persons calling the
meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the stockholder at his address as it appears in the
stockholder address records of the corporation, with postage thereon prepaid.

     4.  Waiver of Notice.  Notice of any stockholders' meeting may be waived in
         ----------------
writing by any stockholder at any time, either before or after any such meeting,
and shall be deemed waived by the presence of such stockholder at the meeting
unless such stockholder (a) shall have made his written objection to the
transaction of business at such meeting for the reason that it is not lawfully
called or convened, and (b) shall, at or prior to the commencement of such
meeting, deliver such written objection to the chairman of the meeting or other
officer of the corporation present at such meeting.

     5.  Adjourned Meetings.  An adjournment or adjournments of any
         ------------------
stockholders' meeting may be taken until such time and place as those present
may determine without new notice being given, whether by reason of the failure
of a quorum to attend or otherwise; but any meeting at which Directors are to be
elected shall be adjourned only from day to day until such Directors are
elected. If a new record date for the adjourned meeting is or must be fixed,
however, notice of the adjourned meeting must be given to persons who are
stockholders as of the new record date.

     6.  Quorum of Stockholders.  A majority of the shares entitled to vote,
         ----------------------
represented in person or by proxy, shall constitute a quorum at a meeting of
stockholders.  If a quorum is present, the affirmative vote of a majority of the
shares represented at the meeting and entitled to vote on the subject matter
under consideration shall be the act of the stockholders, unless the vote of a
greater number is required by law or by the Articles of Incorporation.

     7.  Voting of Shares.  Each outstanding share shall be entitled to one vote
         ----------------
on each matter submitted, except in the case of election of Directors as
provided in this section. All voting at stockholders' meetings shall be by voice
vote, unless any qualified voter shall demand a vote by ballot. A stockholder
may vote either in person or by proxy executed in writing by the stockholder or
his duly authorized attorney-in-fact. No proxy shall be valid after eleven (11)
months from the date of its execution, unless otherwise provided in such proxy.
At each election for Directors, every stockholder entitled to vote at such
election shall have the right to vote in person or by proxy the number of shares
owned by him for as many persons as there are Directors to be elected and for
whose election he has a right to vote, or to cumulate his votes by giving one
candidate as many votes as the number of such Directors multiplied by the number
of his shares shall equal, or by distributing such votes on the same principle
among any number of such candidates.

                                       3
<PAGE>
 
                                 ARTICLE  III
                                 ------------

                              BOARD OF DIRECTORS
                              ------------------

     1.  Number and Qualifications.  The business and affairs of the corporation
         -------------------------
shall be managed by a board of fourteen (14) Directors who need not be
stockholders of the corporation nor residents of the State of Washington.

     2.  Election - Term of Office.  The Board of Directors shall be divided
         -------------------------
into three classes: Class 1, Class 2, and Class 3. Each such Class shall
consist, as nearly as possible, of one-third of the total number of directors
constituting the entire Board of Directors. In no event shall a Class be
comprised of fewer than 3 directors. Each director shall serve for a term ending
on the date of the third annual meeting of shareholders following the annual
meeting at which such director was elected; provided, however, that each initial
                                            --------  -------
director in Class 1 shall hold office until the annual meeting of shareholders
in 1997; each initial director in Class 2 shall hold office until the annual
meeting of shareholders in 1998; and each initial director in Class 3 shall hold
office until the annual meeting of shareholders in 1999; and in each case until
their successors are duly elected and have qualified or until their earlier
resignation, removal from office or death. In the event of an increase or
decrease in the authorized number of directors, (a) each director then serving
as such shall nevertheless continue as a director of the Class in which he or
she is a member until the expiration of his or her current term, or his or her
earlier resignation, removal from office or death, and (b) the newly created or
eliminated directorships resulting from such increase or decrease shall be
apportioned by the Board of Directors among the three Classes of Directors so as
to maintain such classes as nearly equal as possible.

     3.  Vacancies.  Except as otherwise provided by law, vacancies in the Board
         ---------
of Directors, whether caused by resignation, death or otherwise, may be filled
by a majority of the remaining Directors attending any regular meeting of the
Board of Directors, or any special meeting if the notice of such special meeting
indicates that filling such vacancy is a purpose of the meeting. A Director thus
elected to fill in a vacancy shall hold office during the unexpired term of his
predecessor and until his successor is elected and qualified.

     4.  Annual Meeting.  The first meeting of each newly elected Board of
         --------------
Directors shall be known as the annual meeting thereof and shall be held
immediately after and at the same place as the annual stockholders' meeting or
any later stockholders' meeting at which a Board of Directors is elected.

     5.  Chairman of the Board.  At its annual meeting, the Board of Directors
         ---------------------  
shall elect a Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the stockholders, the Directors, and the Executive Committee,
and shall perform such other duties as may from time to time be assigned by the
Board or the Executive Committee.

                                       4
<PAGE>
 
     6.  Regular Meetings.  Regular Meetings of the Board of Directors shall be
         ----------------
held on such dates and at such times and places as the Board of Directors by
resolution may decide.

     7.  Special Meetings.  Special meetings of the Board of Directors may be
         ----------------
held at any time or at any place whenever called by the Chairman of the Board,
the President or by the Secretary at the request of any three (3) or more
Directors.

     8.  Place of Meetings.  Any meeting of the Board of Directors may be held
         -----------------
within or without the State of Washington.

     9.  Notice of Meetings.  Notice of the annual meeting of the Board of
         ------------------
Directors shall not be required. Notice of the time and place of all other
meetings of the Board of Directors shall be given by the Chairman of the Board,
the President, the Secretary or any person or persons calling the meeting by
mail, radio, telegram or personal communication over the telephone or otherwise,
at least three (3) days prior to the day upon which the meeting is to be held;
provided, that no notice need be given if the time and place thereof shall have
been fixed by resolution of the Board of Directors and a copy of such resolution
has been mailed to every Director at least three (3) days before the first of
any meeting or meetings held in pursuance thereof.

     10.  Waiver of Notice.  Notice of any meeting of the Board of Directors
          ----------------
need not be given to any Director if such notice is waived in a writing signed
by the Director, whether before or after such meeting is held, and delivered to
the corporation for inclusion in the minutes or filing with the corporate
records. Notice of any meeting shall be deemed waived by the presence of a
Director at the meeting unless such Director (a) at the beginning of the meeting
or promptly upon the Director's arrival, shall have made his written objection
to the holding of the meeting or the transaction of business at the meeting, and
(b) does not thereafter vote for or assent to action taken at the meeting. Any
meeting of the Board shall be a legal meeting without any notice thereof having
been given if all of the Directors are either present, other than for the sole
purpose just described, or waive notice thereof.

     11.  Directors' Fees.  Each Director shall receive a fee, as set by the
          ---------------
Board of Directors from time to time, for services rendered at each regular or
special meeting of the Board of Directors or meeting of a committee thereof and,
in addition, shall be reimbursed for expenses of travel and lodging reasonably
incurred in attending any such meeting. In addition to the foregoing, each
outside Director shall receive an annual retainer fee as set by the Directors.
An outside Director is a Director who is not a salaried officer or employee of
this corporation or any of its subsidiaries. Nothing in this section shall be
construed to preclude a Director from serving the corporation in any other
capacity and receiving compensation therefor. If there are simultaneous Board
Meetings of Fisher companies, and a Director of Fisher Companies Inc. is a
Director of one or more of the other companies involved, he will receive only
one fee for the meeting, namely his fee as Director of Fisher Companies Inc.

     12.  Quorum of Directors.  A majority of the number of Directors fixed by
          -------------------
these Bylaws shall constitute a quorum for the transaction of business, but a
less number may adjourn any meeting from time to time and the same may be held
without further notice. When a quorum is 

                                       5
<PAGE>
 
present at any meeting, a majority vote of the members in attendance shall
decide any question brought before such meeting, except that no sale or exchange
of unissued stock shall be made without the affirmative vote of three-fourths
(3/4) of the entire Board of Directors declaring that the sale or exchange of
such stock is necessary for a specific business purpose of the corporation other
than the acquisition of additional capital funds in cash. The act of a majority
of the Directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.


                                  ARTICLE  IV
                                  -----------

                                  COMMITTEES
                                  ----------


     1.  Designation of Committees.  The Board of Directors of this corporation
         -------------------------
may, by resolution adopted at any regular or special meeting of such Board,
designate from among its members one or more committees each of which shall have
two or more members and, to the extent provided in this Article IV or in such
resolution, shall have and may exercise all of the authority of the Board of
Directors, but no such committee shall have the authority of the Board of
Directors in reference to: amending the Articles of Incorporation or the Bylaws
of the corporation, adopting a plan of merger or consolidation, recommending to
the shareholders, the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the corporation other than in the
usual and regular course of its business, or recommending to the shareholders a
voluntary dissolution of the corporation or a revocation thereof. The
designation of any such committee by the Board of Directors and the delegation
thereto of authority shall not operate to relieve the Board of Directors, or any
of its members, of any responsibility imposed by law.

     2.  Executive Committee.
         -------------------

         (a) Membership.  The Executive Committee shall be comprised of the
             ----------
Chairman of the Board, the President and three (3) other Directors elected by
the Board of the Directors. Members of the Executive Committee shall be elected
by the Board of Directors at each annual meeting, to hold office until their
successors are elected and qualified. The Chairman of the Board shall be
chairman of the Committee unless the Board designates some other member of the
Committee as its chairman. Each member of the Committee shall continue as a
member of the Committee at the pleasure of the Board.

         (b) Vacancies.  Vacancies on the Committee arising from any cause may
             ---------
be filled by the Board of Directors at any regular or special meeting.

         (c) Powers and Duties.  The Executive Committee shall have and may
             -----------------
exercise all of the authority of the Board of Directors. The Executive Committee
shall specifically have the power and duty to vote the stock of fully and
partially owned subsidiary companies, which power and duty of the Executive
Committee shall include authority to make all determinations and decisions with
respect thereto. All actions of the Executive Committee shall be recorded in
minutes of its meetings and shall be reported to the Board of Directors at its
meeting next succeeding any 

                                       6
<PAGE>
 
such action and shall be subject to revision or alteration by the Board, except
that existing rights of third parties shall not be affected thereby.

     (d)  Rules of Procedure.  The Executive Committee shall fix its own rules
          ------------------
of procedure and shall meet where and as provided by such rules. Special
meetings of the Committee may be called at any time by the President, the
chairman of the Committee if not the President, or any two (2) members. At all
meetings of the Committee, the presence of at least three (3) members shall be
necessary to constitute a quorum. The affirmative vote of a majority of the
members present shall be necessary and sufficient for the adoption of any
resolutions.

     3. Compensation Committee.
        ----------------------

        (a) Membership.  The Compensation Committee shall consist of not less
            ----------
than four (4) Directors of the corporation elected by the Board of Directors,
none of whom shall be an employee of the corporation or of any of its
subsidiaries. Each member of the Committee shall continue as a member of the
Committee at the pleasure of the Board.

        (b) Vacancies.  Vacancies on the Committee arising from any cause may be
            ---------
filled by the Board of Directors at any regular or special meeting.

        (c) Powers and Duties.  The Compensation Committee shall:
            -----------------

            (1)  Review and establish the salary of officers and selected other
                 key management employees of the corporation, as well as review
                 and consider for approval, prior to their effective date, the
                 salaries of key management employees of subsidiaries set by the
                 subsidiaries' Compensation Committees, where a salary exceeds
                 an amount set from time to time by the Committee.

            (2)  Review and establish all cash bonuses under and pursuant to the
                 Fisher Companies Management Incentive Plan, as well as review
                 and consider for approval, prior to their effective date,
                 bonuses established under and pursuant to Management Incentive
                 Plans of subsidiaries.

            (3)  Review and recommend changes in compensation for members of
                 the corporation's Board of Directors and its Chairman;

            (4)  Administer the Fisher Companies Incentive Plan of 1995 and
                 review and establish all stock options and stock rights to be
                 granted to officers and selected other key management employees
                 of the corporation and its subsidiaries;

            (5)  Authorize the enrollment of selected management employees of
                 the corporation as new participants in the Supplemental
                 Pension Plan.

                                       7
<PAGE>
 
            (6)  Recommend to the Board any additional compensation or employee
                 benefit programs of a substantial nature and changes to
                 existing programs of the corporation or its subsidiaries;

            (7)  Record all actions of the Committee in minutes of its
                 meetings; and

            (8)  Report to the Board compensation actions of the Committee
                 prior to their effective date.

        (d) Rules of Procedure. The Compensation Committee shall fix its own
rules of procedure and shall meet where and as provided by such rules. Special
meetings of the Committee may be called at any time by the chairman of the
Committee or any two (2) members. At all meetings of the Committee, the presence
of at least three (3) members shall be necessary to constitute a quorum. The
affirmative vote of a majority of the members present shall be necessary and
sufficient for the adoption of any resolution.


     4.  Audit Committee.
         ---------------

         (a) Membership.  The Audit Committee shall consist of not less than
             ----------
five (5) Directors of the corporation elected by the Board of the Directors,
none of whom shall be an employee of the corporation or of any of its
subsidiaries. Each member of the Committee shall continue as a member of the
Committee at the pleasure of the Board.

         (b) Vacancies.  Vacancies on the Committee arising from any cause may
             ---------
be filled by the Board of Directors at any regular or special meeting.

         (c) Powers and Duties.  The Audit Committee shall:
             -----------------

             (1)  Recommend the independent public accountants for selection as
                  auditors by the Board;

             (2)  Review the scope and, upon completion, the results of the
                  audit with the corporation's independent public accountants;

             (3)  Review management letters received from the independent
                  public accountants in connection with audits;

             (4)  Review the corporation's internal accounting controls;

             (5)  Review compliance with the Financial Accounting Charter;

             (6)  Review with management any accounting changes affecting the
                  corporation or its subsidiaries;

                                       8
<PAGE>
 
             (7)  Meet in alternative and separate executive sessions with the
                  independent public accountants and management;

             (8)  Review the scope of and fees for consulting services provided
                  by the independent public accountants;

             (9)  Review any interested party conflict-of-interest situation
                  brought to its attention;

             (10) Record all actions of the Committee in minutes of its
                  meetings; and

             (11) Report the Committee's actions and recommendations to the
                  Board.

         (d) Rules of Procedure.  The Audit Committee shall fix its own rules of
             ------------------
procedure and shall meet where and as provided by such rules. Special meetings
of the Committee may be called at any time by the chairman of the Committee or
any two (2) members. At all meetings of the Committee, the presence of at least
three (3) members shall be necessary to constitute a quorum. The affirmative
vote of a majority of the members present shall be necessary and sufficient for
the adoption of any resolution.

     5. Stock Purchase Committee.
        ------------------------

        (a) Membership.  The Stock Purchase Committee shall consist of not less
            ----------
than four (4) Directors of the corporation elected by the Board of the
Directors, none of whom shall be an employee of the corporation or of any of its
subsidiaries. Each member of the Committee shall continue as a member of the
Committee at the pleasure of the Board.

        (b) Vacancies.  Vacancies on the Committee arising from any cause may be
            ---------
filled by the Board of Directors at any regular or special meeting.

        (c) Powers and Duties.  The Stock Purchase Committee shall:
            -----------------

            (1) Exercise the powers and perform the duties prescribed for it by
                the Board of Directors in order to carry out a stock purchase
                policy, at such time as such a policy is adopted by the Board of
                Directors, subject to revision or alteration by the Board;

            (2) Record all actions of the Committee in minutes of its meetings;
                and

            (3) Report the actions and recommendations of the Committee to the
                Board.

        (d) Rules of Procedure.  The Stock Purchase Committee shall fix its own
            ------------------
rules of procedure and shall meet where and as provided by such rules. Special
meetings of the 

                                       9
<PAGE>
 
Committee may be called at any time by the chairman of the Committee or any two
(2) members. At all meetings of the Committee, the presence of at least three
(3) members shall be necessary to constitute a quorum. The affirmative vote of a
majority of the members present shall be necessary and sufficient for the
adoption of any resolution.

     6. Nominating Committee.
        ---------------------

        (a)  Membership. The Nominating Committee shall consist of not less than
             ---------- 
five (5) Directors of the corporation elected by the Board of Directors, none of
whom shall be an employee of the corporation or of any of its subsidiaries. Each
member of the Committee shall continue as a member of the Committee at the
pleasure of the Board.

        (b) Vacancies.  Vacancies on the Committee arising from any cause may be
            ---------
filled by the Board of Directors at any regular or special meeting.

        (c) Powers and Duties.  The Nominating Committee shall:
            -----------------

            (1)  Review qualifications of candidates for Board membership from
                 whatever source received;

            (2)  Recommend to the Board the slate of Director candidates to be
                 proposed for election by stockholders at the annual meeting;

            (3)  Recommend to the Board candidates to fill Director vacancies
                 which occur between annual meetings of stockholders;

            (4)  Recommend to the Board criteria regarding personal
                 qualifications for nomination as Director, including
                 experience, skills, affiliations and characteristics;

            (5)  Recommend to the Board criteria regarding the composition of
                 the Board, including total size and number of employee-
                 Directors;

            (6)  Recommend to the Board criteria relating to tenure as a
                 Director, including retirement age and continuation of a
                 Director in an honorary or similar capacity;

            (7)  Record all actions of the Committee and minutes of its meeting;
                 and

            (8)  Report to the Board all actions and recommendations of the
                 Committee.

        (d) Rules of Procedure.  The Nominating Committee shall fix its own
            ------------------
rules of procedure and shall meet where and as provided by such rules. Special
meetings of the Committee may be called at any time by the chairman of the
Committee or any two (2) members. At all 

                                       10
<PAGE>
 
meetings of the Committee, the presence of at least three (3) members shall be
necessary to constitute a quorum. The affirmative vote of a majority of the
members present shall be necessary and sufficient for the adoption of any
resolution.

                                  ARTICLE  V
                                  ----------

                                   OFFICERS
                                   --------

     1. Officers Enumerated - Election.  The officers of the corporation shall
        ------------------------------
be a President, one or more Vice Presidents, a Secretary and a Treasurer, and
such assistants to such officers as the Board of Directors may determine, all of
whom shall be elected by the Board of Directors at the annual meeting thereof to
hold office for the term of one year and until their successors are elected and
qualified.

     2. Qualification.  None of the officers of the corporation except the
        -------------
President need be a Director.  Excluding the President, any two of the other
corporate offices may be combined in one person.

     3. President.  The President shall be the chief executive officer of the
        ---------
corporation and, subject to the Board of Directors and the Executive Committee,
shall supervise and control the business and affairs of the corporation.  In the
absence of the Chairman of the Board, the President shall preside at meetings of
the stockholders, the Directors and the Executive Committee.

     4. Vice Presidents.  Each Vice President shall perform such duties as the
        ---------------
Board of Directors, the Executive Committee, or the President may from time to
time designate or assign.  In the absence or disability of the President, one of
the Vice Presidents, in the order determined by the order of their election,
shall act as President, but a Vice President who is not a Director cannot
succeed to or fill the office of President.

                (a) One such Vice President shall be designated Chief Financial 
Officer and be accountable for the corporation's overall financial plans and 
policies, consistent with the corporation's Financial Accounting Charter, and
the conduct of the corporation's relationships with banks and lending
institutions, and the financial community. The chief financial officer shall
also have charge and custody of and be responsible for all funds and securities
of the corporation. He shall deposit all such funds in the name of the
corporation in such depositories or invest them in such manner as may be
designated or approved by the Board of Directors, and shall authorize
disbursement of the funds of the corporation in payment of just demands against
the corporation.

     5. Secretary. The Secretary shall issue notices of meetings of stockholders
        ---------
and Directors and shall make and keep minutes of meetings of stockholders and
Directors. The Secretary shall keep and, when proper, affix the seal of the
corporation. The Secretary shall keep the stock book of the corporation, a
record of certificates representing shares of stock issued by the corporation,
and a record of transfers of such certificates. The Secretary shall exercise the
usual authority pertaining to the office of Secretary, and he shall perform such
other duties as the Board of Directors, the Executive Committee or the President
may from time to time designate.

                                       11
<PAGE>
 
     6. Vacancy.  Vacancies in any office arising from any cause may be filled
        ------- 
by the Board of Directors at any regular or special meeting.

     7. Other Officers and Agents.  The Board of Directors may appoint such
        ------------------------- 
other officers and agents as it shall deem necessary or expedient. Such other
officers shall hold their offices for terms as provided in Section 1 of this
Article V and such other agents shall hold their offices for such period as
shall be determined from time to time by the Board of Directors. Such other
officers and agents shall exercise such authority and perform such duties as the
Board of Directors, Executive Committee or President may prescribe, which
authority and duties may include, in the case of the other officers, one or more
of the duties of the named officers of the corporation.

     8. Removal of Officers.  Any officer or agent may be removed by the Board
        -------------------
of Directors whenever in its judgment the best interest of the corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.

     9. Salaries.  Salaries of all officers and agents of the corporation
        --------
appointed by the Board of Directors shall be fixed by the Board of Directors.

                                 ARTICLE  VI
                                 -----------

                                     STOCK
                                     -----

     1. Certificate of Stock.  Certificates of stock shall be issued in
        --------------------
numerical order and each stockholder shall be entitled to a certificate signed
by the President or Vice President and the Secretary or an Assistant Secretary
and sealed with the corporate seal. Every certificate of stock shall state (1)
the name of the corporation and that it is incorporated under the laws of the
State of Washington, (2) the name of the registered holder of the shares
represented thereby, and (3) the number and class of shares the certificate
represents.

     2. Transfers.  Shares of stock may be transferred by delivery of the
        ---------
certificates therefor accompanied either by an assignment in writing on the back
of the certificate or by a separate written assignment and power of attorney to
transfer the same, which in either event is signed by the record holder of the
certificate.  No transfer shall be valid, except as between the parties thereto,
until such transfer shall have been made upon the books of the corporation.
Except as otherwise specifically provided in these Bylaws, no shares of stock
shall be transferred on the books of the corporation until the outstanding
certificate or certificates therefor have been surrendered to the corporation.

     3. Stockholders of Record.  The corporation shall be entitled to treat the
        ----------------------
holder of record on the books of the corporation of any share or shares of stock
as the holder in fact thereof 

                                       12
<PAGE>
 
for all purposes, including the payment of dividends on such stock and the right
to vote on such stock.

     4. Loss or Destruction of Certificates.  In case of loss or destruction of
        -----------------------------------
any certificate of stock, another may be issued in its place upon proof of such
loss or destruction and upon the giving of a satisfactory bond of indemnity to
the corporation. A new certificate may be issued without requiring any bond
when, in the judgment of the Board of Directors, it is proper to do so.

     5. Closing of Transfer Books.  The Board of Directors may close the books
        -------------------------
of the corporation against transfers of stock of the corporation for such period
as the Directors may from time to time determine, in anticipation of
stockholders' meetings, the payment of any dividend or distribution, or any
change, conversion or exchange of shares of the corporation.

     6. Regulations.  The Board of Directors shall have the power and authority
        -----------   
to make all such rules and regulations as it may deem expedient concerning the
issue, transfer, conversion and registration of certificates for shares of the
stock of the corporation not inconsistent with these Bylaws, the Articles of
Incorporation, or the laws of the State of Washington.

                                 ARTICLE  VII
                                 ------------

                               BOOKS AND RECORDS
                               -----------------

     1. Records of Corporate Meetings and Share Register.  The corporation shall
        ------------------------------------------------
keep either at its principal place of business or at its registered office (a)
complete records of all of the proceedings of the Board of Directors and
stockholders, and (b) a share register giving the names of the stockholders in
alphabetical order and showing their respective addresses, the number of shares
held by each and the dates upon which they acquired the same.

     2. Copies of Resolutions.  Any person dealing with the corporation may rely
        ---------------------
upon a copy of any of the records of the proceedings, resolutions or votes of
the Board of Directors or stockholders when certified by the President, a Vice
President, the Secretary or an Assistant-Secretary.


                                  ARTICLE  VIII
                                  -------------

                                  CORPORATE SEAL
                                  --------------

     The corporate seal of the corporation shall consist of a flat-faced
circular die producing in raised form, words, letters and figures, the design of
which shall conform to the impression which appears upon this page opposite to
this Bylaw.

                                       13
<PAGE>
 
                                  ARTICLE  IX
                                  -----------

                                INDEMNIFICATION
                                ---------------

     1. Definitions.  As used in this Article IX and, if applicable, Article V
        -----------
of the corporation's Articles of Incorporation:

     (a)  The term "egregious conduct" by a person shall mean acts or omissions
that involve intentional misconduct or a knowing violation of law, conduct
violating Section 23B.08.310, as amended, of the Revised Code of Washington, or
participation in any transaction from which the person personally received a
benefit in money, property, or services to which the person is not legally
entitled.

     (b)  The term "finally adjudged" shall mean stated in a final judgment
based on clear and convincing evidence by a court having jurisdiction, from
which there is no further right to appeal.

     (c)  The term "director" shall mean any person who is a director of the
corporation or a subsidiary corporation and any person who, while a director of
the corporation or a subsidiary corporation, is serving at the request of the
corporation as a director, officer, manager, partner, trustee, employee, or
agent of another foreign or domestic corporation, limited liability company,
partnership, joint venture, trust, or other enterprise, or is a fiduciary or
party in interest in relation to any employee benefit plan maintained by the
corporation or any subsidiary corporation; and "conduct as a director" shall
include conduct while such a person is or was acting in any of such capacities.

     (d) The term "officer-director" shall mean any person who is simultaneously
both an officer and director of the corporation, or an officer and director of a
subsidiary corporation, and any person who, while simultaneously both an officer
and director of the corporation, or a subsidiary corporation, is serving at the
request of the corporation as a director, officer, manager, partner, trustee,
employee, or agent of another foreign or domestic corporation, limited liability
company, partnership, joint venture, trust, or other enterprise, or is a
fiduciary or party in interest in relation to any employee benefit plan
maintained by the corporation or any subsidiary corporation; and "conduct as an
officer-director" shall include conduct while such a person is or was acting as
an officer of the corporation or a subsidiary corporation or in any of such
capacities.

     (e) The term "subsidiary corporation" shall mean any corporation or limited
liability company at least 51 percent of the voting interests of which is held
beneficially by the corporation.

     (f) No person shall be deemed to be serving at the request of the
corporation unless the Board of Directors has expressly stated so in a duly
adopted resolution.

     2. Indemnification - Generally.  The corporation shall indemnify any person
        ---------------------------
who is, or is threatened to be made, a party to any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and whether formal or
informal, and whether by or in the right of the corporation or its stockholders
or by any other party, by reason of the fact that the person is or 

                                       14
<PAGE>
 
was a director or officer-director against judgments, penalties or penalty
taxes, fines, settlements (even if paid or payable to the corporation or its
stockholders or to a subsidiary corporation) and reasonable expenses, including
attorneys' fees, actually incurred in connection with such action, suit or
proceeding unless the liability and expenses were on account of conduct finally
adjudged to be egregious conduct. The reasonable expenses, including attorneys'
fees, of such person incurred in connection with such action, suit or proceeding
shall be paid or reimbursed by the corporation, upon request of such person, in
advance of the final disposition of such action, suit or proceeding upon receipt
by the corporation of a written, unsecured promise by the person to repay such
amount if it shall be finally adjudged that the person is not eligible for
indemnification. All expenses incurred by such person in connection with such
action, suit or proceeding shall be considered reasonable.

     3.  No Determination.  Except as stated in Section 4 of this Article IX, no
         ----------------
action by the board of directors, the stockholders, independent counsel, or any
other person or persons shall be necessary or appropriate to the determination
of the corporation's indemnification obligation in any specific case, to the
determination of the reasonableness of any expenses incurred by a person
entitled to indemnification under this Article IX or Article V of the
corporation's Articles of Incorporation, nor to the authorization of
indemnification in any specific case.

     4. Limitation on Expenses.  Notwithstanding Section 3 of this Article IX,
        ----------------------
the corporation shall not be obligated to indemnify any person for any expenses,
including attorneys' fees, incurred to assert any claim against the corporation
or a subsidiary corporation (except a claim based on Section 6 of this Article
IX) or against any person related to or associated with the corporation or a
subsidiary corporation.

     5. Submission of Claim; Presumption.  If a claim under this Article IX or
        --------------------------------   
Article V of the corporation's Articles of Incorporation is not paid in full by
the corporation within 60 days after a written claim has been received by the
corporation, except in the case of a claim for expenses incurred in defending an
action, suit or proceeding in advance of its final disposition, in which case
the applicable period shall be 20 days, the claimant may at any time thereafter
bring suit against the corporation to recover the unpaid amount of the claim
and, to the extent successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. The claimant
shall be presumed to be entitled to indemnification under Article V of the
corporation's Articles of Incorporation and this Article IX upon submission of a
written claim (and, in an action brought to enforce a claim for expenses
incurred in defending any action, suit or proceeding in advance of its final
disposition, where the required undertaking has been tendered to the
corporation), and thereafter the corporation shall have the burden of proving
that the claimant is not so entitled. The claimant is entitled to
indemnification even if the corporation (including its Board of Directors,
independent legal counsel or its stockholders) failed to determine prior to the
commencement of such action that indemnification or reimbursement or advancement
of expenses to the claimant is proper in the circumstances or even if the
corporation (including its Board of Directors, independent legal counsel or its
stockholders) actually determined that the claimant is not entitled to
indemnification or to the reimbursement or advancement of expenses.

                                       15
<PAGE>
 
     6. Enforcement Expenses.  The corporation shall indemnify any person
        --------------------
granted indemnification rights under this Article IX or Article V of the
corporation's Articles of Incorporation against any reasonable expenses incurred
by the person to enforce such rights.

     7. Set-Off.  Any person granted indemnification rights under this Article
        -------
IX or Article V of the corporation's Articles of Incorporation may directly
assert such rights in set-off of any claim raised against the person by or in
the right of the corporation and shall be entitled to have the same tribunal
that adjudicates the corporation's claim adjudicate the person's entitlement to
indemnification by the corporation.

     8. Rights Not Exclusive.  The right to indemnification and the payment of
        --------------------
expenses incurred in defending an action, suit or proceeding in advance of its
final disposition conferred by this Article IX and Article V of the
corporation's Articles of Incorporation shall not be exclusive of any other
right that any person may have or hereafter acquire under any statute, provision
of the Articles of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.

     9. Officers, Employees and Agents.  As provided by the Washington Business
        ------------------------------
Corporation Act, as amended from time to time, the corporation may by action of
its Board of Directors provide indemnification and pay expenses in advance of
the final disposition of an action, suit or proceeding to officers, employees
and agents of the corporation or a subsidiary corporation with the same scope
and effect as the provisions of this Article IX and Article V of the
corporation's Articles of Incorporation with respect to the indemnification and
advancement of expenses of directors and officer-directors.

     10. Cessation of Service.  The indemnification rights provided in this
         --------------------
Article IX and Article V of the corporation's Articles of Incorporation shall
continue as to a person who has ceased to be a director or officer-director and
shall inure to the benefit of the heirs, executors, and administrators of such
person.

     11. Interpretation. The provisions of this Article IX shall be construed to
         --------------
be adopted in furtherance of, and not in limitation of, Article V of the
corporation's Articles of Incorporation.

     12. Amendment and Repeal.  Notwithstanding anything in these Bylaws to the
         --------------------
contrary, this Article IX may only be amended by the stockholders in accordance
with the statutory requirements that would be applicable to such stockholder
action if this Article IX were part of the corporation's Articles of
Incorporation. No amendment or repeal of this Article IX or Article V of the
corporation's Articles of Incorporation shall adversely affect any right or
protection of a director or officer-director or person formerly serving in any
of such capacities existing at the time of such amendment or repeal with respect
to acts or omissions occurring prior to such amendment or repeal.

     13. Severability.  Each of the substantive provisions of this Article IX
         ------------ 
and Article V of the corporation's Articles of Incorporation is separate and
independent of the others, so that if any provision of this Article IX or
Article V of the corporation's Articles of Incorporation shall be held

                                       16
<PAGE>
 
to be invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of any other
provisions.

                                  ARTICLE  X
                                  ----------

                              AMENDMENT OF BYLAWS
                              -------------------

     1. By the Stockholders.  These Bylaws may be amended, altered or repealed
        -------------------
at any regular or special meeting of the stockholders if notice of the proposed
alteration or amendment is contained in the notice of the meeting.

     2. By the Board of Directors.  These Bylaws may be amended, altered or
repealed, so long as consistent with the Articles of Incorporation, by the
affirmative vote of a majority of the Board of Directors at any regular or
special meeting of the Board if notice of the proposed alteration or amendment
is contained or transmitted in the notice of the meeting.  Any action of the
Board of Directors with respect to the amendment, alteration or repeal of these
Bylaws is hereby made expressly subject to change or repeal by the stockholders.

                                       17

<PAGE>
 
                                                                     EXHIBIT 4.1
                          [LOGO OF FISHER COMPANIES]

                             FISHER COMPANIES INC.
NUMBER                                                                  SHARES

            Incorporated Under the Laws of the State of Washington
                                                              CUSIP  337756 20 9
                                             SEE REVERSE FOR CERTAIN DEFINITIONS
- --------------------------------------------------------------------------------
This Certifies that


is the registered owner of      ***SPECIMEN***


- --------------------------------------------------------------------------------
fully paid and nonassessable shares of the Common Stock of

                             FISHER COMPANIES INC.

a corporation, transferable only on the books of the corporation by the holder 
hereof in person or by duly authorized attorney upon the surrender of this 
certificate properly endorsed.  This certificate and the shares represented 
hereby are issued and shall be held subject to all of the provisions of the 
Articles of Incorporation of the Corporation as now or hereafter amended, to all
of which the holder hereof by acceptance hereof assents.

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by 
its officers.

                       [Fisher Companies Corporate SEAL]

Dated:
                  Secretary                         President

                                       1

<PAGE>
 
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:




TEN COM- as tenants in common              UGMA-________Custodian____________
                                                 (Cust)            (Minor)



TEN ENT- as tenants by the entireties      under Uniform Gifts to Minors Act


JT TEN-  as joint tenants with right     
         of survivorship and not as                _________________
         tenants in common                              (State)

    Additional abbreviations may also be used though not in the above list

   For value received,________________hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE

_______________________________________

_______________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
__________________________________________________________________   Shares
represented by the within Certificate, and do hereby irrevocably constitute and 
appoint
__________________________________________________________________Attorney

to transfer the said stock on the books of the within-named Corporation with 
full power of substitution in the premises.

Dated,_______________________


                ________________________________________________________________
                NOTICE: The signature to this Assignment must correspond with
                the Name as Written Upon the Face of the Certificate in Every
                Particular, Without Alteration or Enlargement or Any Change
                Whatever

                                       2

<PAGE>
 
                                                                    EXHIBIT 10.1

                                                                  April 17, 1995


                    PRIMARY TELEVISION AFFILIATION AGREEMENT
                    ----------------------------------------


Fisher Broadcasting Inc.


TELEVISION STATION: KOMO - Seattle, Washington


Gentlemen:

The following shall constitute the agreement between American Broadcasting
Companies, Inc. ("ABC" or "we") and Fisher Broadcasting Inc. ("you"), in order
that your station may continue to serve the public interest, convenience and
necessity.  We and you hereby mutually agree upon the following plan of network
cooperation which shall replace, effective September 1, 1994, the affiliation
agreement between you and us dated May 31, 1989, as amended:

I.  NETWORK AFFILIATION AND PROGRAM SERVICE
    ---------------------------------------

     A.  PRIMARY AFFILIATION.  You agree to serve as our primary affiliate to
         -------------------
broadcast Network Television Programs, in the community to which your station is
licensed by the Federal Communications Commission, subject to the conditions and
limitations set forth herein. As used in this Agreement, Network Television
Programs means television programs which are part of the network schedule for
the then current September to September television season, broadcast on a
national television basis and in the time period established for such broadcast
by ABC. (Network Television Programs will also be referred to herein as "network
programs," "television programs," "programs" or "programming" or in the singular
of such terms.)

     B. FIRST CALL RIGHTS. To enable you to serve as our primary affiliate, we
        -----------------
agree to offer you first call on the right to broadcast Network Television
Programs, in the time period established by ABC for their broadcast, in the
community to which your station is licensed by the Federal Communications
Commission ("First Call Rights"), for reception by the general public in places
to which no admission is charged. Notwithstanding the foregoing, ABC shall have
the right to authorize any television broadcasting station, regardless of the
community to which it is licensed by the FCC, to broadcast any network
presentation of a subject we deem to be of immediate national significance
including, but not limited to, a Presidential address.

        1. You agree that, within 15 days of the date of our offer of a First
Call Right to a regularly scheduled network program, you will advise us of your
acceptance (if requested to do so by the terms of our offer) or rejection. With
respect to any network program not regularly scheduled, you will advise us of
your acceptance or rejection of our offer of a First Call night within 72 hours
(exclusive of Saturdays, Sundays and holidays) after such offer has been
received at your station. However, if the first broadcast referred to in our
offer is scheduled to

                                       1
<PAGE>
 
occur within less than 15 days after the date of our offer with respect to
regularly scheduled network programs or less than 72 hours after our offer has
been received at your station with respect to network programs not regularly
scheduled, you shall notify us of your acceptance or rejection of such offer as
promptly as possible, but in no event after the first broadcast time specified
in such offer. Acceptance by you of our offer of a First Call Right shall
constitute your agreement to broadcast subject network program in accordance
with the terms of this Agreement and of our offer to you. As an ABC primary
affiliate, you are obligated to accept the substantial majority of the ABC
network programs offered to you, provided, that the obligation does not apply to
network programming offered to you above the level of such programming offered
to ABC affiliates generally on the effective date of this Agreement. Your
failure to do so shall constitute a material breach of this Agreement entitling
ABC, in addition to all other remedies, to terminate this Agreement on fourteen
(14) days written notice to you.

          2. You will be offered "First Call Rights" with respect to:

          a. Network Sponsored Programs. "Network sponsored programs", as used
             --------------------------
          in this Agreement, shall mean those Network Television Programs which
          contain one or more commercial announcements paid for by or on behalf
          of one or more ABC Network advertisers. 


          You agree to broadcast network sponsored programs in their entirety,
          including but not limited to the network commercial announcements
          ordered for your station, network identifications, program promotional
          material or credit announcements contained in such programs which you
          accept, without interruption or deletion or addition of any kind.
          Notwithstanding the foregoing, you may substitute other ABC Network
          promotional announcements in lieu of program promotional material
          which is inaccurate as it pertains to your station. It is also
          understood that no commercial announcement, promotional announcement
          or public service announcement will be broadcast by you during any
          interval within a network program designated by ABC as being for the
          sole purpose of making a station identification announcement.

          b. Network Sustaining, Cooperative and Spot Carrier Programs.
             ---------------------------------------------------------

               i)  We will from time to time offer you live or recorded Network
               Television Programs identified as sustaining programs,
               cooperative programs or spot carrier programs.  Except as set
               forth below in subparagraphs (ii) and (iii), you agree to
               broadcast such programs which you accept in their entirety
               without interruption or deletion or addition of any kind.

               ii)  The network sustaining programs which we may offer to you
               may not, without our prior written consent, be sold by your
               station for commercial sponsorship or interrupted for commercial
               announcements or used for any purpose other than sustaining
               broadcasting.

               iii)  You may carry the cooperative or spot carrier programs on
               the same basis as regular sustaining programs or you may offer
               them for

                                       2
<PAGE>
 
               commercial sponsorship on terms and conditions specified by
               us at the time such programs are offered to you.

     C. PROGRAM DELIVERY. By means satisfactory to us, we will arrange, at our
        ----------------
own expense, for programs to be delivered to your station.

II.  TERM
     ----

    This agreement shall become effective at 3:00 AM, NYT, on the lst day of
September, 1994, and shall continue until 3:00 AM, NYT, on the 1st day of
September, 2004.


III.  NETWORK STATION COMPENSATION
      ----------------------------

      Your compensation will be determined by the formula set forth in Schedule
A attached hereto and made a part hereof.

     A. Your network station rate, the table of daypart percentages and the
network weekly deduction set forth in Schedule A (respectively, the "Original
Network Station Rate," the "Original Percentages" and the "Original Network
Deduction") shall be used to calculate your compensation provided that the
following conditions are satisfied:

          1.  Your station will maintain the same level of clearances of ABC
network programs as it did in the 1993-1994 television season (i.e., the last
two quarters of 1993 and the first two quarters of 1994).

          2.  Your station's preemption levels for network prime-time and sports
programming will not exceed one hundred (100) half hours for each year (measured
from September 1 to August 31 of the following year) during the term of this
Agreement.

          3.  Nightline will be regularly scheduled to clear on a "live" basis.

     B. 1. If you fail to satisfy any of the conditions set forth in paragraph A
of this Section, and we give you written notice of such failure, you shall have
ninety (90) days from receipt of such notice to return to complying fully with
such conditions. If at the end of such ninety (90) day period, you fail to
return to complying fully with such conditions, in addition to the remedy set
out in paragraph C of this Section, we will have the right then and periodically
thereafter to reevaluate and change (a) your station's network station rate, (b)
the percentages set forth in the Table in Schedule A, or (c) your station's
network weekly deduction, by notice to you in writing to such effect. If the
effect of such changes, alone or in combination with any other previous such
changes, would be to decrease your annual network compensation under Schedule A,
using the Original Network Station Rate, the Original Percentages and the
Original Network Deduction, by more than 25%, you may, if you so elect,
terminate this Agreement by giving us prior written notification within forty-
five (45) days after the date of our notice to you, provided 

                                       3
<PAGE>
 
that such termination will not be effective less than one hundred twenty (120)
days after your notice is received by us.

     If after your compensation has been reduced in accordance with paragraph
B(1) of this Section, you thereafter return to complying fully with all of the
conditions set forth in paragraph A of this Section, your compensation will
(subject to the rights reserved to us under paragraphs B(1) and C of this
Section) be calculated by using the Original Network Station Rate, the Original
Percentages and the Original Network Deduction.

     C. Your Original Network Station Rate will be increased if the aggregate
annual compensation paid by us to all ABC primary affiliates (not including
payments by us under any bonus compensation programs in force during the term of
this Agreement) (the "Aggregate Affiliate Compensation"), calculated annually
for the period January 1 through December 31 beginning for the year ending
December 31, 1996, exceeds by more than fifteen percent (15%) the Aggregate
Affiliate Compensation paid during the year ending December 31, 1995 (the "1995
Compensation"). In that event, your Original Network Station Rate will be
increased, effective January 1 of the same year, by the percent difference
between the 1995 Compensation and the most recently calculated Aggregate
Affiliate Compensation minus fifteen percent (15%) (and minus any previous
increase made to your Original Network Station Rate under this subparagraph).

     D. If you fail at any time to satisfy any of the conditions set forth in
paragraph A of this Section, and we give you written notice of such failure, you
shall have ninety (90) days from receipt of such notice to return to complying
fully with such conditions. If by the end of such ninety (90) day period, you
fail to return to complying fully with such conditions, we shall have the right,
in our sole discretion, in addition to the remedy set forth in paragraph B of
this Section, to terminate this Agreement upon no less than two hundred seventy
(270) days written notice to you.

IV.  NETWORK NON-DUPLICATION PROTECTION
     ----------------------------------

     You shall be entitled to network non-duplication protection provided as and
to the extent set forth in Rider One to this Agreement, which is attached hereto
and made a part hereof.

V.  CUT-IN ANNOUNCEMENTS AND LOCAL TAG SERVICES
    -------------------------------------------

     A. CUT-IN ANNOUNCEMENTS. "Cut-In Announcements", as used herein, shall mean
        --------------------
the substitution of a special commercial in place of a regularly scheduled
network commercial.

        1. Upon at least twenty-four (24) hours' notice, you shall, at our
request, furnish such personnel and equipment as may be necessary to (a)
broadcast cut-in announcements from your station alone, or (b) originate from
your station cut-in announcements to one or more other stations, without regard
to whether or not your station is requested to broadcast said cut -in
announcement(s) . Notwithstanding anything contained in this Agreement, you may
refuse to broadcast any such cut-in announcement in the community to which your
station is licensed by the FCC if, in your opinion, it is not in the public
interest, convenience or necessity, but you shall

                                       4
<PAGE>
 
nevertheless furnish such personnel and equipment as may be necessary to
originate such cut-in announcements from your station to one or more other
stations.

        2. Cut-in announcements shall be broadcast only when authorized by us
and then only in accordance with the instructions furnished to you. You will be
supplied, as promptly as possible, with the material and instructions for these
announcements.

        3. We may cancel any order for cut-in announcements without liability on
our part, provided we do so upon not less than twenty-four (24) hours' notice to
you, failing which, we will pay you the compensation you would have received if
the announcements had continued as scheduled for twenty-four (24) hours
following receipt by you of such notice of cancellation.

        4. For each program during which such cut-in announcements are included,
we shall pay you in accordance with the applicable table set forth in Schedule B
hereto and hereby made a part hereof.

     B. LOCAL TAG SERVICES.  "Local Tag Announcements", as used herein, 
        ------------------
shall mean a visual commercial announcement, made by you on behalf of a local
dealer of a network advertiser, not exceeding ten seconds of a one-minute
network commercial announcement or five seconds of a thirty-second network
commercial announcement projected by means of a slide and not utilizing more
than two (2) slides.

        1. Upon at least twenty-four (24) hours, notice, you shall, at our
request, furnish such personnel and equipment as may be necessary to broadcast
"local tag announcements".

        2. Local tag announcements shall be broadcast in accordance with our
instructions. The network advertiser shall supply to you or purchase from you,
as promptly as possible, the slide(s) for each local tag announcement. Local tag
announcements shall not be accompanied by oral announcements unless the network
advertiser shall make direct requests of you therefor and shall have assumed
sole responsibility for payment of such oral announcements.

        3. We may cancel any order for local tag announcements without liability
on our part provided we do so upon not less than twenty-four (24) hours, notice
to you, failing which we will pay you the compensation you would have received
if the local tag announcements had continued as scheduled for twenty-four (24)
hours following receipt by you of such notice of cancellation.

        4. For each local tag announcement which you broadcast, we shall
compensate you in accordance with the applicable table set forth in Schedule B
hereto and hereby made a part hereof.

                                       5
<PAGE>
 
VI.  GENERAL
     -------

     A. We may at any time, upon notice to you, substitute for any scheduled
network program another network program, except that if such other network
program in our judgment involves a special event of public interest or
importance, no such notice is required. No compensation will be paid to you for
the scheduled program or for the substitute program unless such substitute
program is a network sponsored program in which event you shall be compensated
in accordance with the terms or formula, whichever is applicable, set forth in
Schedule A hereof.

     B. Nothing contained in this Agreement shall be construed to prevent or
hinder us, at any time upon notice to you as soon as practicable, from canceling
one or more network programs, whether sponsored or sustaining, in which event
you shall receive no compensation for any such canceled network sponsored
program(s).

     C. With respect to network programs offered or already accepted pursuant to
this Agreement, nothing herein contained shall be construed to prevent or hinder
you from exercising your rights under Federal Communications Commission rules
to:

      1)  reject or refuse network programs which you reasonably believe to be
      unsatisfactory, unsuitable or contrary to the public interest; or

      2)  substitute a program, which in your good faith opinion, is of greater
      local or national importance, including, but not limited to, coverage of
      news events and local public affairs programming.

We shall not compensate you for any such program you have refused or rejected or
for which you have substituted a program which is of greater local or national
importance.  With respect to programs already accepted hereunder, you shall give
us prompt notice of any such refusal, rejection or substitution no later than
fourteen (14) days prior to the air date of such programming, except where the
nature of the substitute program makes such notice impracticable (e.g., coverage
of breaking news or other unscheduled events), in which case you agree to give
us as much advance notice as possible under the circumstances.  Such notice
shall include a statement of the reason(s) you believe that a rejected or
refused network program is unsatisfactory, unsuitable or contrary to the public
interest, and/or that a substituted program is of greater local or national
importance.

     In addition to all other remedies, we shall have the right, upon thirty
(30) days' notice, to terminate your "First Call Rights" on a series of Network
programs already accepted hereunder and withdraw all future episodes of that
series if one or more individual program episode(s) of such series is preempted
by you for any reason other than those set forth in (a) and (b) above.

    We shall also have the right, upon thirty (30) days' notice, to terminate
your "First Call Rights" concerning a series of Network programs already
accepted hereunder and to withdraw all future episodes of that series if three
or more individual program episodes of such series are pre-empted by you in any
thirteen-week period, whether or not such pre-emptions are for the reasons 

                                       6
<PAGE>
 
set forth in (a) and (b) above. Such thirteen-week periods shall be measured
consecutively from the first broadcast date of the program series in question.

    We reserve the right not to offer you the "First Call Rights" for the next
broadcast season on any series of Network program as to which we have terminated
your "First Call Rights" and withdrawn future episodes of that series pursuant
to this Paragraph and which has been placed by ABC on another station serving
your market.

     D. You will submit to us in writing, upon forms provided by us for that
purpose, such reports covering network programs broadcast by your station as ABC
may request from time to time. To verify your carriage of network commercial
announcements, identifications and program promotional material, we may require
delivery by you, within five (5) days of our request, of copies of your official
station logs, air checks or broadcast tapes.

     E. Neither you nor we shall incur any liability hereunder because of our
failure to deliver, or your failure to broadcast, any or all network programs
due to:

          (1)  failure of facilities

          (2)  labor disputes, or

          (3)  causes beyond the control of the party so failing to deliver or
               broadcast.

     F. You agree to notify us of any application made to the Federal
Communications Commission to modify your station's transmitter location, power,
frequency or hours of operation within ten (10) days of the filing of such
application. In the event that the transmitter location, power, frequency or
hours of operation of your station are changed permanently at any time so that
your station is of less value to us as a network outlet than it is as of the
effective date of this agreement, including but not limited to, as a result of
additional overlap of your station's broadcast signal with that of another ABC
affiliate, we will have the right to terminate this Agreement upon thirty (30)
days, advance written notice.

     G. Unless we exercise our right of termination set forth in this paragraph,
this Agreement shall be binding on any assignee or transferee of your station's
license. You agree not to assign or to transfer any of the rights or privileges
granted to you under this Agreement without our prior consent in writing, which
consent shall not be unreasonably withheld. You also agree that if any
application is made to the Federal Communications Commission pertaining to an
assignment or a transfer of control of your license, or any interest therein,
you shall notify us in writing immediately of the filing of such application.
Except as to assignments or transfers of control comprehended by Section
73.3540(f) of the Rules and Regulations of the Federal Communications
Commission, we shall have the unilateral right to terminate this Agreement
effective as of the effective date of any assignment or transfer of control
(voluntary or involuntary) of your license or any interest therein, provided ABC
shall have given you notice in writing of such termination within thirty (30)
days after we have been advised that such application for assignment or transfer
has been filed with the Federal Communications Commission. If you fail to notify
us of the assignment or transfer of control of your station's license, we shall
have the unilateral right, as a non-exclusive remedy, to terminate this

                                       7
<PAGE>
 
Agreement within thirty (30) days of receiving notice of said assignment or
transfer or control. We shall not seek to renegotiate this Agreement or to
impose upon the proposed assignee or transferee any obligations or standards of
performance not provided in this Agreement as a condition to ABC's consent to
the assignment or transfer of the rights and privileges granted to you under
this Agreement.

     If ABC elects not to accept the proposed assignee or transferee, then ABC
shall give you notice of termination as set forth above and such termination
shall be effective upon the effective date of the assignment or transfer of
control of your station's license to such assignee or transferee.  If ABC elects
to accept the proposed assignee or transferee, you agree that you shall not
consummate any assignment or transfer of control of your station's license until
you have procured and delivered to us, in form satisfactory to us, the
acknowledgment of the proposed assignee or transferee that, upon consummation of
the assignment or transfer of control of your station's license, the assignee or
transferee will assume and perform this Agreement in its entirety without
limitation of any kind.  You agree that in view of the uniqueness of the plan of
network cooperation set forth in this Agreement and the fact that money damages
would be inadequate to compensate ABC for the breach of your obligations
hereunder, in addition to all other remedies, ABC shall be entitled to obtain
equitable relief to enforce the obligations set forth in this paragraph.

     H. Your rights under this Agreement are limited to the First Call Rights to
Network Television Programs pursuant to the terms herein. You agree not to
authorize, cause, permit or enable the use of any program which we supply to you
herein for any purpose other than broadcasting by your station pursuant to the
terms herein, in the community to which your station is licensed by the Federal
Communications Commission, for reception by the general public in places to
which no admission is charged. You agree when you are authorized to tape a
program for subsequent broadcast that the recording will be broadcast not more
than once in its entirety and will be erased within six (6) hours of use. All
rights not specifically granted to you by this Agreement shall be retained by
ABC.

     I. Except with our prior written consent and except upon such terms and
conditions as we may impose, you agree not to authorize, cause, permit or enable
anything to be done whereby a recording on film, tape or otherwise is made or a
recording is broadcast, of a program which has been, or is being, broadcast on
our network, or a rebroadcast is made of the broadcast transmission of your
station during any hours when your station is broadcasting a program provided by
ABC.

     J. With respect to any and all promotional material issued by you or under
your direction or control, you agree to abide by any and all restrictions of
which we advise you pertaining to the promotion of a network program(s)
scheduled to be broadcast by you in your community, including, but without
limitation, on-the- air promotion, billboards, and newspaper or other printed
advertisements, announcements or promotions.

     K. You agree to maintain for your television station such licenses,
including performing rights licenses as now are or hereafter may be in general
use by television broadcasting stations and necessary for you to broadcast the
television programs which we furnish to you hereunder. we will clear all music
in the repertory of ASCAP and of BMI used in 

                                       8
<PAGE>
 
our network programs, thereby licensing the broadcasting of such music in such
programs over your station. You will be responsible for all music license
requirements for any commercial or other material inserted by you within or
adjacent to our network programs in accordance with this agreement.

     L. The furnishing of film or tape recorded programs hereunder is contingent
upon our ability to make arrangements satisfactory to us for the film or tape
recordings necessary to deliver the programs to you. Such film or tape recorded
programs shall be used only for a single television broadcast over your station.
Positive prints of film or tape recorded programs are to be shipped by us,
shipping charges prepaid, and you agree to return to us or to forward to such
television station as we designate, shipping charges prepaid, each print or copy
of said film or tape recording received by you hereunder, together with the
original reels and containers furnished therewith. You will return or forward
all prints in the same condition as received by you, ordinary wear and tear
excepted, immediately after a single TV broadcast over your station. In the
event you damage a print of any film or tape recorded program which is delivered
to you, or fail to return or forward the original reels and containers furnished
therewith, as aforesaid, you agree to pay the cost of replacing the complete
print, original reels and/or containers as and when billed by us.

     M. No inducements, representations or warranties except as specifically set
forth herein have been made by any of the parties to this Agreement. This
Agreement constitutes the entire contract between the parties hereto and no
provision thereof shall be changed or modified, nor shall this Agreement be
discharged in whole or in part, except by an agreement in writing, signed by the
party against whom the change, modification or discharge is claimed or sought to
be enforced; nor shall any waiver of any of the conditions or provisions of this
Agreement be effective and binding unless such waiver shall be in writing and
signed by the party against whom the waiver is asserted, and no waiver of any
provision of this Agreement shall be deemed to be a waiver of any preceding or
succeeding breach of the same or of any other provision.

     N. All notices, demands, requests or other communications which may be or
are required to be given or made by ABC or you pursuant to this Agreement
(except for our program offers and your notices of acceptance or rejection, if
required, of such offers and any other program information or program
administration communications) shall be delivered (postage or fee prepaid) by
first-class mail, express mail, express delivery service or by facsimile
transmission addressed as follows:

          (a)  If to you:

               Mr. Patrick Scott
               President and Chief Executive Officer
               Fisher Broadcasting Inc.
               100 Fourth Avenue
               Seattle, WA 98109-4997
               Phone: 206-443-4000 / Fax: 206-443-8272

               with copies (which shall not constitute notice) to:

                                       9
<PAGE>
 
          Fisher Companies Inc.
          Attn.: William W. Krippaehne, Jr.
          President and Chief Executive Officer
          1525 One Union Square
          Seattle, WA 98101
          Phone: 206-682-7733 / Fax: 206-682-3211

          Clifford M. Harrington, Esq.
          Fisher Wayland Cooper Leader & Zaragoza
          2001 Pennsylvania Avenue, N.W., Suite 400
          Washington, DC 20006-1851
          Phone: 202-659-3494 / Fax: 202-296-6518

     (b)  If to ABC:

          Ms. Maureen Lesourd
          Senior Vice President
          Affiliate Relations
          ABC Television Network
          77 West 66 Street, 2nd Floor
          New York, NY 10023-6298
          Phone: 212-456-6493 / Fax: 212-456-7450

          with a copy (which shall not constitute notice) to:

          Roger Goodspeed, Esq.
          Capital Cities/ABC, Inc.
          Law & Regulation Department
          77 West 66 Street, 16th Floor
          New York, NY 10023-6298
          Phone: 212-456-7593 / Fax: 212-456-6202

 or to such other person, address or facsimile number as you or ABC may
 designate by written notice.

     O. This Agreement and all questions relating to its validity,
interpretation, performance, and enforcement (including, without limitation,
provisions concerning limitations of action) , shall be governed by and
construed in accordance with the laws of the State of New York, notwithstanding
conflict-of-laws doctrines of any state or other jurisdictions to the contrary.

     P. Upon termination of this Agreement, the consent theretofore granted to
broadcast our network programs or use ABC logos or trademarks shall be deemed
immediately withdrawn and you shall have no further rights of any nature
whatsoever in such programs, logos or trademarks.

                                       10
<PAGE>
 
     Q. We mutually acknowledge that, in view of the uniqueness of the plan of
network cooperation set forth in this Agreement, in the event that the
obligations of either party under this Agreement are not performed in accordance
with its terms, the other party would not have an adequate remedy at law and
therefore agree that any aggrieved party shall be entitled to specific
performance of the terms hereof in addition to any other remedy to which it may
be entitled at law or in equity.

     R. You agree to indemnify and hold ABC and its parent corporation,
subsidiaries and their respective officers, directors, agents and employees,
successors and assigns harmless from and against any and all claims made against
us and all damages, liabilities, costs and expenses incurred as a result of such
claims, including reasonable attorney's fees, arising out of the broadcast by
ABC of any material supplied by you to ABC in accordance with this Agreement,
and we agree to indemnify and hold you and your parent corporation, subsidiaries
and their respective officers, directors, agents and employees, successors and
assigns harmless from and against any and all claims made against you and all
damages, liabilities, costs and expenses incurred as a result of such claims,
including reasonable attorney's fees, arising out of the broadcast by you of any
material provided by ABC to you in accordance with this Agreement. It is
understood that the foregoing indemnities shall apply only with respect to
materials that are broadcast without change from the form and content in which
such materials were originally provided and in strict conformance to any
instructions or limitations given by the party providing the material. The
parties also agree to indemnify and hold harmless the other, as well as their
parent companies, subsidiaries, officers, directors, agents and employees,
successors and assigns, from and against any and all claims, or portion thereof,
made and all damages, liabilities, costs and expenses incurred including
reasonable attorneys fees, arising exclusively out of or solely as a result of
any material editing, lead- ins, or other contextual changes made to such
material without the consent of the originating party. Each party will notify
the other promptly of any litigation or claim to which such indemnity applies
and will cooperate fully in the defense at the other party's request. The
provisions of this paragraph shall survive the expiration or sooner termination
of this Agreement.

     S. Nothing in this Agreement shall create any partnership, association,
joint venture, fiduciary or agency relationship between ABC and you.

If, after examination, you find that the arrangement herein proposed is
satisfactory to you, please indicate your acceptance on the copy of this letter
enclosed for that purpose and return that copy to us.

                              Very sincerely yours,

                              AMERICAN BROADCASTING COMPANIES, INC.



                              By:  /s/ Maureen Lesourd
                                 ---------------------

                                       11
<PAGE>
 
Accepted this 21st day of
April, 1995

Licensee:  Fisher Broadcasting Inc.

By: /s/ Patrick M. Scott
   ---------------------
Name: Patrick M. Scott
      ------------------      
Title: Fisher Broadcasting Inc., President & CEO
       -----------------------------------------

                                       12
<PAGE>
 
                                   RIDER ONE
                                   ---------


     You shall be entitled to network non-duplication protection, as defined by
Rule 76.92 of the Federal Communications Commission Rules, as follows:

     a.  The geographic zone of network non-duplication protection shall be the
     Area of Dominant Influence ("ADI") (as defined by Arbitron) in which your
     station is located, or any lesser zone pursuant to any geographic
     restrictions contained in the Federal Communications Commission rules and
     regulations, now or as subsequently modified.

     b.  Network non-duplication protection shall extend to all ABC television
     network programs that you broadcast in accordance with this Agreement.
     Protection shall not extend to individually preempted programs of an
     otherwise cleared series.

     c.  Network non-duplication protection shall begin 48 hours prior to the
     live time period designated by us for broadcast of that network program by
     your station, and shall end at 12:00 Midnight on the seventh day following
     that designated time period.


You are under no obligation to exercise in whole or in part the network non-
duplication rights granted under this Agreement.

                                       13
<PAGE>
 
                                   SCHEDULE A
                                   ----------
STATION COMPENSATION
- --------------------

(a)  We will pay you within a reasonable period of time after the close of each
     four or five week accounting period, as the case may be, for broadcasting
     each network sponsored program or portion thereof hereunder, except those
     specified in paragraph (b) hereof, which is broadcast over your station
     during the live time period* therefor, the amount resulting from
     multiplying the following:

           (i)      Your network station rate of $3,571.00 or such other rate
                    applicable pursuant to the terms of Section III of the
                    Agreement; by

           (ii)     the percentage set forth in the table below opposite such
                    applicable time period or such other percentage applicable
                    pursuant to the terms of Section III of the Agreement; by

           (iii)    the fraction of an hour substantially occupied by such
                    program or portion thereof; by

           (iv)     the fraction of the aggregate length of all commercial
                    availabilities** during such program or portion thereof
                    occupied by network commercial announcements***


          *     Live time period, as used herein, means the time period or
                periods as specified by us in our initial offer of a network
                program for the broadcast of such program over your station.

          **    Commercial availability, as used herein, means a period of time
                made available by us during a network sponsored program for one
                or more network commercial announcements or local cooperative
                commercial announcements.

          ***   Network commercial announcement, as used herein, means a
                commercial announcement broadcast over your station during a
                commercial availability and paid for by or on behalf of one or
                more of our network advertisers, not including, however,
                announcements consisting of billboards, credits, public service
                announcements, promotional announcements, and announcements
                required by law.

For each network sponsored program or portion thereof, except those specified in
paragraph (b) hereof, which is broadcast by your station with our consent during
a time period other than the live time period therefor, we will pay you as if
your station had broadcast such program or portion thereof during such live time
period, except that:

                                       14
<PAGE>
 
           (i) if the percentage set forth above opposite the time period during
               which your station broadcast such program or portion thereof is
               less than that set forth opposite such live time period, then we
               will pay you on the basis of the time period during which your
               station broadcast such program or portion thereof.

(b) Payment For Other Programs
    --------------------------

We will establish such compensation arrangements as we and you shall agree upon
prior to the expiration of the applicable periods of time for program
acceptance, as set forth in Paragraph I(B) of this affiliation agreement, for
all network sponsored programs broadcast by your station consisting of:

          (i)   Sports programs;

          (ii)  special events programs (including, but not limited to, special
                news programs, awards programs, entertainment specials and
                miniseries);

          (iii) programs for which we specified a live time period, which time
                period straddles any of the time period categories in the table
                in paragraph (a) above; and

          (iv)  any other programs which we may designate from time to time.

 (c)  Deductions
      ----------

          (i)   From the amounts we are to pay you for station compensation
                hereunder, we shall throughout the term of this affiliation
                agreement deduct during each accounting period a sum equal to
                168% of your station's network rate, or such other percentage
                applicable pursuant to the terms of Section III of the 
                Agreement, for each week of said period.

          (ii)  We will deduct a sum equal to the total of whatever fees, if 
                any, may have mutually been agreed upon by you and us with 
                respect to local cooperative commercial announcements broadcast 
                during the applicable accounting period for which your station 
                is being compensated.

                                       15
<PAGE>
 
                                     TABLE
                                     -----
                                    PACIFIC

<TABLE>
<CAPTION>
                             MONDAY through FRIDAY
                             ---------------------
                       <S>          <C>  <C>          <C>   
 
                       Sign-on      to   10:00 a.m.   - 7%
                       10:00 a.m    to   12:00 N      - 16.30%
                       12:00 N      to   3:00 p.m.    - 6%
                       3:00 p.m     to   8:00 p.m.    - 10%
                       8:00 p.m     to   11:00 p.m.   - 30%
                       11:00 p.m    to   Sign-off     - 15%
</TABLE>

<TABLE>
<CAPTION>
               Saturday                             Sunday
               --------                             ------
<S>             <C>                <C>             <C>           <C>
Sign-on    to   9:00 AM   -  5%    Sign-on    to   9:00 a.m.     -  5%
9:00 AM    to   2:00 PM   -  8%    9:00 AM    to   2:00 PM       -  6%
2:00 PM    to   6:00 PM   - 15%    2:00 PM    to   5:00 PM       - 15%
6:00 PM    to   8:00 PM   - 10%    5:00 PM    to   7:00 PM       - 10%
8:00 PM    to   11:00 PM  - 30%    7:00 PM    to   11:00 PM      - 30%
11:00 PM   to   Sign-off  - 15%    11:00 PM   to   Sign-off      - 15%
</TABLE>

 All times in this paragraph are expressed in terms of your station's then
 current local time.

                                       16
<PAGE>
 
                                   SCHEDULE B
                                   ----------

             COMPENSATION FOR CUT-IN AND LOCAL TAG ANNOUNCEMENT(S)
             -----------------------------------------------------

A.   CUT-IN ANNOUNCEMENTS
     --------------------

     I.   With respect to programs broadcast by you during the time period(s)
          -------------------------------------------------------------------
          specified by us in our initial offer for such programs.
          -------------------------------------------------------

     For each local cut-in announcement you broadcast within a program, which
     program is broadcast during the time period(s) specified by us in our
     initial offer for such program, we will pay you the amount resulting from
     multiplying your network station rate (set forth in Section II of the
     agreement) by the percentage for cut-in announcements) set forth in the
     applicable Table in Section C below opposite such applicable time period.

     II.  With respect to programs broadcast by you with our consent during time
          ----------------------------------------------------------------------
          period(s) other than that specified by us in our initial offer of such
          ----------------------------------------------------------------------
          programs.
          ---------

     For each local cut-in announcement you broadcast within a program, which
     program is broadcast by you with our consent during a time period other
     than that specified by us in our initial offer of such program, we will pay
     you an amount as set forth in Section A.I. above, except that:

                (i) if the percentage set forth in the applicable Table in
                Section C below for cut-in announcement(s) opposite the time
                period during which your station actually broadcast the program
                in which you broadcast or originated such cut-in announcement(s)
                is less than that set forth opposite the applicable time period
                specified in our initial offer of such program, then we will pay
                you for each cut-in announcement(s) on the basis of the time
                period during which your station actually broadcast such
                program.

III.  With respect to programs broadcast by you in a time period which
      ----------------------------------------------------------------
      straddles any of the time period categories set forth in the applicable
      -----------------------------------------------------------------------
      Table in Section C below.
      ------------------------

      In the event that we offer you a program for broadcast in a time period
      which straddles any of the time period categories set forth in the
      applicable Table in Section C below, and you broadcast such program within
      which you also broadcast or originate one or more cut-in announcements),
      we will pay you such amounts as we and you shall have agreed upon prior to
      your broadcast or origination of such cut-in announcement(s).

LOCAL TAG ANNOUNCEMENTS
- -----------------------

I.   With respect to programs broadcast by you during the time period(s)
     -------------------------------------------------------------------
     specified by us in our initial offer for such programs.
     ------------------------------------------------------

                                       17
<PAGE>
 
     For each local tag announcement you broadcast within a program, which
     program is broadcast during the time period(s) specified by us in our
     initial offer for such program, we will pay you the amount resulting from
     multiplying your network station rate (set forth in Section II of the
     agreement) by the percentage for each local tag announcement set forth in
     the applicable Table in Section C below opposite such applicable time
     period.

II.  With respect to programs broadcast by you with our consent during -time
     -----------------------------------------------------------------------
     period(s) other than that specified by us in our initial offer of such
     ----------------------------------------------------------------------
     programs.
     --------

     For each local tag announcement you broadcast within a program, which
     program is broadcast by you with our consent during a time period other
     than that specified by us in our initial offer of such program, we will pay
     you an amount as set forth in Section B.I. above, except that:

          (i) if the percentage set forth in the applicable Table in Section C
          below for each local tag announcement opposite the time period during
          which your station actually broadcast the program in which you
          broadcast such local tag announcement is less than that set forth
          opposite the applicable time period specified in our initial offer of
          such program, then we will pay you for each local tag announcement on
          the basis of the time period during which your station actually
          broadcast such program.

III. With respect to programs broadcast by you in a time period-which straddles
     --------------------------------------------------------------------------
     any of the time period categories set forth in the applicable Table in
     ----------------------------------------------------------------------
     Section C below.
     ---------------

     In the event that we offer you a program for broadcast in a time period
     which straddles any of the time period categories set forth in the
     applicable Table in Section C below, and you broadcast such program within
     which you also broadcast one or more local tag announcement (s), we will
     pay you such amounts as we and you shall have agreed upon prior to your
     broadcast of such local tag announcement(s).

                                       18
<PAGE>
 
C.  COMPENSATION TABLE FOR CUT-IN OR LOCAL TAG ANNOUNCEMENTS
    --------------------------------------------------------

                             Cut-In Announcements
                             --------------------

Monday through Sunday   6:00 p.m. to 11:00 p.m. - 18.75%
                        All other times         -  7.50%


                            Local Tag Announcements
                            -----------------------

Monday through Sunday   6:00 p.m. to 11:00 p.m. -  9.38%
                        All other times         -  3.75%


All times in this paragraph are expressed in terms of your station's then-
current local time.

                                       19

<PAGE>
 
                                                                    EXHIBIT 10.2


                                                                  April 17, 1995


                    PRIMARY TELEVISION AFFILIATION AGREEMENT
                    ----------------------------------------


Fisher Broadcasting Inc.


TELEVISION STATION: KATU - Portland, Oregon


Gentlemen:

The following shall constitute the agreement between American Broadcasting
Companies, Inc. ("ABC" or "we") and Fisher Broadcasting Inc. ("you"), in order
that your station may continue to serve the public interest, convenience and
necessity.  We and you hereby mutually agree upon the following plan of network
cooperation which shall replace, effective September 1, 1994, the affiliation
agreement between you and us dated May 31, 1989, as amended:

I.  NETWORK AFFILIATION AND PROGRAM SERVICE
    ---------------------------------------

      A.  PRIMARY AFFILIATION.  You agree to serve as our primary affiliate to
          -------------------
broadcast Network Television Programs, in the community to which your station is
licensed by the Federal Communications Commission, subject to the conditions and
limitations set forth herein.  As used in this Agreement, Network Television
Programs means television programs which are part of the network schedule for
the then current September to September television season, broadcast on a
national television basis and in the time period established for such broadcast
by ABC. (Network Television Programs will also be referred to herein as "network
programs," "television programs," "programs" or "programming" or in the singular
of such terms.)

      B.  FIRST CALL RIGHTS.  To enable you to serve as our primary affiliate,
          -----------------
we agree to offer you first call on the right to broadcast Network Television
Programs, in the time period established by ABC for their broadcast, in the
community to which your station is licensed by the Federal Communications
Commission ("First Call Rights"), for reception by the general public in places
to which no admission is charged. Notwithstanding the foregoing, ABC shall have
the right to authorize any television broadcasting station, regardless of the
community to which it is licensed by the FCC, to broadcast any network
presentation of a subject we deem to be of immediate national significance
including, but not limited to, a Presidential address.

 
          1.  You agree that, within 15 days of the date of our offer of a First
Call Right to a regularly scheduled network program, you will advise us of your
acceptance (if requested to do so by the terms of our offer) or rejection. With
respect to any network program not regularly scheduled, you will advise us of
your acceptance or rejection of our offer of a First Call night within 72 hours
(exclusive of Saturdays, Sundays and holidays) after such offer has been
received at your station. However, if the first broadcast referred to in our
offer is scheduled to

                                       1
<PAGE>
 
occur within less than 15 days after the date of our offer with respect to
regularly scheduled network programs or less than 72 hours after our offer has
been received at your station with respect to network programs not regularly
scheduled, you shall notify us of your acceptance or rejection of such offer as
promptly as possible, but in no event after the first broadcast time specified
in such offer. Acceptance by you of our offer of a First Call Right shall
constitute your agreement to broadcast subject network program in accordance
with the terms of this Agreement and of our offer to you. As an ABC primary
affiliate, you are obligated to accept the substantial majority of the ABC
network programs offered to you, provided, that the obligation does not apply to
network programming offered to you above the level of such programming offered
to ABC affiliates generally on the effective date of this Agreement. Your
failure to do so shall constitute a material breach of this Agreement entitling
ABC, in addition to all other remedies, to terminate this Agreement on fourteen
(14) days written notice to you.

     2.  You will be offered "First Call Rights" with respect to:

     a.  Network Sponsored Programs.  "Network sponsored programs", as used in
         --------------------------
     this Agreement, shall mean those Network Television Programs which contain
     one or more commercial announcements paid for by or on behalf of one or
     more ABC Network advertisers.

     You agree to broadcast network sponsored programs in their entirety,
     including but not limited to the network commercial announcements ordered
     for your station, network identifications, program promotional material or
     credit announcements contained in such programs which you accept, without
     interruption or deletion or addition of any kind. Notwithstanding the
     foregoing, you may substitute other ABC Network promotional announcements
     in lieu of program promotional material which is inaccurate as it pertains
     to your station. It is also understood that no commercial announcement,
     promotional announcement or public service announcement will be broadcast
     by you during any interval within a network program designated by ABC as
     being for the sole purpose of making a station identification announcement.

     b.  Network Sustaining, Cooperative and Spot Carrier Programs.
         ----------------------------------------------------------

         i)  We will from time to time offer you live or recorded Network
         Television Programs identified as sustaining programs, cooperative
         programs or spot carrier programs. Except as set forth below in
         subparagraphs (ii) and (iii), you agree to broadcast such programs
         which you accept in their entirety without interruption or deletion or
         addition of any kind.

         ii) The network sustaining programs which we may offer to you may not,
         without our prior written consent, be sold by your station for
         commercial sponsorship or interrupted for commercial announcements or
         used for any purpose other than sustaining broadcasting.

         iii) You may carry the cooperative or spot carrier programs on the same
         basis as regular sustaining programs or you may offer them for
         

                                       2
<PAGE>
 
         commercial sponsorship on terms and conditions specified by us at the
         time such programs are offered to you.

     C.  PROGRAM DELIVERY.  By means satisfactory to us, we will arrange, at our
         ----------------
  own expense, for programs to be delivered to your station.

II.  TERM
     ----
    This agreement shall become effective at 3:00 AM, NYT, on the lst day of
September, 1994, and shall continue until 3:00 AM, NYT, on the 1st day of
September, 2004.


III.  NETWORK STATION COMPENSATION
      ----------------------------
      Your compensation will be determined by the formula set forth in Schedule
A attached hereto and made a part hereof.

      A.  Your network station rate, the table of daypart percentages and the
network weekly deduction set forth in Schedule A (respectively, the "Original
Network Station Rate," the "Original Percentages" and the "Original Network
Deduction") shall be used to calculate your compensation provided that the
following conditions are satisfied:

          1.  Your station will maintain the same level of clearances of ABC
network programs as it did in the 1993-1994 television season (i.e., the last
two quarters of 1993 and the first two quarters of 1994).

          2.  Your station's preemption levels for network prime-time and sports
programming will not exceed one hundred (100) half hours for each year (measured
from September 1 to August 31 of the following year) during the term of this
Agreement.

          3.  Nightline will be regularly scheduled to clear on a "live" basis.

     B.   1. If you fail to satisfy any of the conditions set forth in paragraph
A of this Section, and we give you written notice of such failure, you shall
have ninety (90) days from receipt of such notice to return to complying fully
with such conditions. If at the end of such ninety (90) day period, you fail to
return to complying fully with such conditions, in addition to the remedy set
out in paragraph C of this Section, we will have the right then and periodically
thereafter to reevaluate and change (a) your station's network station rate, (b)
the percentages set forth in the Table in Schedule A, or (c) your station's
network weekly deduction, by notice to you in writing to such effect. If the
effect of such changes, alone or in combination with any other previous such
changes, would be to decrease your annual network compensation under Schedule A,
using the Original Network Station Rate, the Original Percentages and the
Original Network Deduction, by more than 25%, you may, if you so elect,
terminate this Agreement by giving us prior written notification within forty-
five (45) days after the date of our notice to you, provided

                                       3
<PAGE>
 
that such termination will not be effective less than one hundred twenty (120)
days after your notice is received by us.

         If after your compensation has been reduced in accordance with
paragraph B(1) of this Section, you thereafter return to complying fully with
all of the conditions set forth in paragraph A of this Section, your
compensation will (subject to the rights reserved to us under paragraphs B(1)
and C of this Section) be calculated by using the Original Network Station Rate,
the Original Percentages and the Original Network Deduction.

     C.  Your Original Network Station Rate will be increased if the aggregate
annual compensation paid by us to all ABC primary affiliates (not including
payments by us under any bonus compensation programs in force during the term of
this Agreement) (the "Aggregate Affiliate Compensation"), calculated annually
for the period January 1 through December 31 beginning for the year ending
December 31, 1996, exceeds by more than fifteen percent (15%) the Aggregate
Affiliate Compensation paid during the year ending December 31, 1995 (the "1995
Compensation"). In that event, your Original Network Station Rate will be
increased, effective January 1 of the same year, by the percent difference
between the 1995 Compensation and the most recently calculated Aggregate
Affiliate Compensation minus fifteen percent (15%) (and minus any previous
increase made to your Original Network Station Rate under this subparagraph).

     D.  If you fail at any time to satisfy any of the conditions set forth in
paragraph A of this Section, and we give you written notice of such failure, you
shall have ninety (90) days from receipt of such notice to return to complying
fully with such conditions.  If by the end of such ninety (90) day period, you
fail to return to complying fully with such conditions, we shall have the right,
in our sole discretion, in addition to the remedy set forth in paragraph B of
this Section, to terminate this Agreement upon no less than two hundred seventy
(270) days written notice to you.

IV.  NETWORK NON-DUPLICATION PROTECTION
     ----------------------------------
     You shall be entitled to network non-duplication protection provided as and
to the extent set forth in Rider One to this Agreement, which is attached hereto
and made a part hereof.

V.  CUT-IN ANNOUNCEMENTS AND LOCAL TAG SERVICES
    -------------------------------------------
    A.  CUT-IN ANNOUNCEMENTS.  "Cut-In Announcements", as used herein, shall
        --------------------
mean the substitution of a special commercial in place of a regularly
scheduled network commercial.


            1.  Upon at least twenty-four (24) hours' notice, you shall, at our
request, furnish such personnel and equipment as may be necessary to (a)
broadcast cut-in announcements from your station alone, or (b) originate from
your station cut-in announcements to one or more other stations, without regard
to whether or not your station is requested to broadcast said cut-in
announcement(s) . Notwithstanding anything contained in this Agreement, you may
refuse to broadcast any such cut-in announcement in the community to which your
station is licensed by the FCC if, in your opinion, it is not in the public
interest, convenience or necessity, but you shall

                                       4
<PAGE>
 
nevertheless furnish such personnel and equipment as may be necessary to
originate such cut-in announcements from your station to one or more other
stations.

             2.  Cut-in announcements shall be broadcast only when authorized by
us and then only in accordance with the instructions furnished to you. You will
be supplied, as promptly as possible, with the material and instructions for
these announcements.

             3.  We may cancel any order for cut-in announcements without
liability on our part, provided we do so upon not less than twenty-four (24)
hours' notice to you, failing which, we will pay you the compensation you would
have received if the announcements had continued as scheduled for twenty-four
(24) hours following receipt by you of such notice of cancellation.

             4.  For each program during which such cut-in announcements are
included, we shall pay you in accordance with the applicable table set forth in
Schedule B hereto and hereby made a part hereof.

     B.  LOCAL TAG SERVICES.  "Local Tag Announcements", as used herein, shall
         ------------------
mean a visual commercial announcement, made by you on behalf of a local dealer
of a network advertiser, not exceeding ten seconds of a one-minute network
commercial announcement or five seconds of a thirty-second network commercial
announcement projected by means of a slide and not utilizing more than two (2)
slides.

             1.  Upon at least twenty-four (24) hours, notice, you shall, at our
request, furnish such personnel and equipment as may be necessary to broadcast
"local tag announcements".

             2.  Local tag announcements shall be broadcast in accordance with
our instructions. The network advertiser shall supply to you or purchase from
you, as promptly as possible, the slide(s) for each local tag announcement.
Local tag announcements shall not be accompanied by oral announcements unless
the network advertiser shall make direct requests of you therefor and shall have
assumed sole responsibility for payment of such oral announcements.

             3.  We may cancel any order for local tag announcements without
liability on our part provided we do so upon not less than twenty-four (24)
hours, notice to you, failing which we will pay you the compensation you would
have received if the local tag announcements had continued as scheduled for
twenty-four (24) hours following receipt by you of such notice of cancellation.

             4.  For each local tag announcement which you broadcast, we shall
compensate you in accordance with the applicable table set forth in Schedule B
hereto and hereby made a part hereof.

                                       5
<PAGE>
 
VI.  GENERAL
     -------

     A.  We may at any time, upon notice to you, substitute for any scheduled
network program another network program, except that if such other network
program in our judgment involves a special event of public interest or
importance, no such notice is required. No compensation will be paid to you for
the scheduled program or for the substitute program unless such substitute
program is a network sponsored program in which event you shall be compensated
in accordance with the terms or formula, whichever is applicable, set forth in
Schedule A hereof.

     B.  Nothing contained in this Agreement shall be construed to prevent or
hinder us, at any time upon notice to you as soon as practicable, from canceling
one or more network programs, whether sponsored or sustaining, in which event
you shall receive no compensation for any such canceled network sponsored
program(s).

     C.  With respect to network programs offered or already accepted pursuant
to this Agreement, nothing herein contained shall be construed to prevent or
hinder you from exercising your rights under Federal Communications Commission
rules to:

      1)  reject or refuse network programs which you reasonably believe to be
      unsatisfactory, unsuitable or contrary to the public interest; or

      2)  substitute a program, which in your good faith opinion, is of greater
      local or national importance, including, but not limited to, coverage of
      news events and local public affairs programming.

We shall not compensate you for any such program you have refused or rejected or
for which you have substituted a program which is of greater local or national
importance.  With respect to programs already accepted hereunder, you shall give
us prompt notice of any such refusal, rejection or substitution no later than
fourteen (14) days prior to the air date of such programming, except where the
nature of the substitute program makes such notice impracticable (e.g., coverage
of breaking news or other unscheduled events), in which case you agree to give
us as much advance notice as possible under the circumstances.  Such notice
shall include a statement of the reason(s) you believe that a rejected or
refused network program is unsatisfactory, unsuitable or contrary to the public
interest, and/or that a substituted program is of greater local or national
importance.

     In addition to all other remedies, we shall have the right, upon thirty
(30) days' notice, to terminate your "First Call Rights" on a series of Network
programs already accepted hereunder and withdraw all future episodes of that
series if one or more individual program episode(s) of such series is preempted
by you for any reason other than those set forth in (a) and (b) above.

    We shall also have the right, upon thirty (30) days' notice, to terminate
your "First Call Rights" concerning a series of Network programs already
accepted hereunder and to withdraw all future episodes of that series if three
or more individual program episodes of such series are pre-empted by you in any
thirteen-week period, whether or not such pre-emptions are for the reasons

                                       6
<PAGE>
 
set forth in (a) and (b) above. Such thirteen-week periods shall be measured
consecutively from the first broadcast date of the program series in question.

    We reserve the right not to offer you the "First Call Rights" for the next
broadcast season on any series of Network program as to which we have terminated
your "First Call Rights" and withdrawn future episodes of that series pursuant
to this Paragraph and which has been placed by ABC on another station serving
your market.

        D.  You will submit to us in writing, upon forms provided by us for
that purpose, such reports covering network programs broadcast by your station
as ABC may request from time to time. To verify your carriage of network
commercial announcements, identifications and program promotional material, we
may require delivery by you, within five (5) days of our request, of copies of
your official station logs, air checks or broadcast tapes.

        E.  Neither you nor we shall incur any liability hereunder because of
our failure to deliver, or your failure to broadcast, any or all network
programs due to:

              (1)  failure of facilities

              (2)  labor disputes, or

              (3)  causes beyond the control of the party so failing to deliver
                   or broadcast.

         F.   You agree to notify us of any application made to the Federal
Communications Commission to modify your station's transmitter location, power,
frequency or hours of operation within ten (10) days of the filing of such
application.  In the event that the transmitter location, power, frequency or
hours of operation of your station are changed permanently at any time so that
your station is of less value to us as a network outlet than it is as of the
effective date of this agreement, including but not limited to, as a result of
additional overlap of your station's broadcast signal with that of another ABC
affiliate, we will have the right to terminate this Agreement upon thirty (30)
days, advance written notice.

          G.   Unless we exercise our right of termination set forth in this
paragraph, this Agreement shall be binding on any assignee or transferee of your
station's license. You agree not to assign or to transfer any of the rights or
privileges granted to you under this Agreement without our prior consent in
writing, which consent shall not be unreasonably withheld. You also agree that
if any application is made to the Federal Communications Commission pertaining
to an assignment or a transfer of control of your license, or any interest
therein, you shall notify us in writing immediately of the filing of such
application. Except as to assignments or transfers of control comprehended by
Section 73.3540(f) of the Rules and Regulations of the Federal Communications
Commission, we shall have the unilateral right to terminate this Agreement
effective as of the effective date of any assignment or transfer of control
(voluntary or involuntary) of your license or any interest therein, provided ABC
shall have given you notice in writing of such termination within thirty (30)
days after we have been advised that such application for assignment or transfer
has been filed with the Federal Communications Commission. If you fail to notify
us of the assignment or transfer of control of your station's license, we shall
have the unilateral right, as a non-exclusive remedy, to terminate this 

                                       7
<PAGE>
 
Agreement within thirty (30) days of receiving notice of said assignment or
transfer or control. We shall not seek to renegotiate this Agreement or to
impose upon the proposed assignee or transferee any obligations or standards of
performance not provided in this Agreement as a condition to ABC's consent to
the assignment or transfer of the rights and privileges granted to you under
this Agreement.

         If ABC elects not to accept the proposed assignee or transferee, then
ABC shall give you notice of termination as set forth above and such termination
shall be effective upon the effective date of the assignment or transfer of
control of your station's license to such assignee or transferee. If ABC elects
to accept the proposed assignee or transferee, you agree that you shall not
consummate any assignment or transfer of control of your station's license until
you have procured and delivered to us, in form satisfactory to us, the
acknowledgment of the proposed assignee or transferee that, upon consummation of
the assignment or transfer of control of your station's license, the assignee or
transferee will assume and perform this Agreement in its entirety without
limitation of any kind. You agree that in view of the uniqueness of the plan of
network cooperation set forth in this Agreement and the fact that money damages
would be inadequate to compensate ABC for the breach of your obligations
hereunder, in addition to all other remedies, ABC shall be entitled to obtain
equitable relief to enforce the obligations set forth in this paragraph.

    H.  Your rights under this Agreement are limited to the First Call Rights to
Network Television Programs pursuant to the terms herein.  You agree not to
authorize, cause, permit or enable the use of any program which we supply to you
herein for any purpose other than broadcasting by your station pursuant to the
terms herein, in the community to which your station is licensed by the Federal
Communications Commission, for reception by the general public in places to
which no admission is charged.  You agree when you are authorized to tape a
program for subsequent broadcast that the recording will be broadcast not more
than once in its entirety and will be erased within six (6) hours of use.  All
rights not specifically granted to you by this Agreement shall be retained by
ABC.

    I.  Except with our prior written consent and except upon such terms and
conditions as we may impose, you agree not to authorize, cause, permit or enable
anything to be done whereby a recording on film, tape or otherwise is made or a
recording is broadcast, of a program which has been, or is being, broadcast on
our network, or a rebroadcast is made of the broadcast transmission of your
station during any hours when your station is broadcasting a program provided by
ABC.

    J.  With respect to any and all promotional material issued by you or under
your direction or control, you agree to abide by any and all restrictions of
which we advise you pertaining to the promotion of a network program(s)
scheduled to be broadcast by you in your community, including, but without
limitation, on-the-air promotion, billboards, and newspaper or other printed
advertisements, announcements or promotions.

    K.  You agree to maintain for your television station such licenses,
including performing rights licenses as now are or hereafter may be in general
use by television broadcasting stations and necessary for you to broadcast the
television programs which we furnish to you hereunder. we will clear all music
in the repertory of ASCAP and of BMI used in 

                                       8
<PAGE>
 
our network programs, thereby licensing the broadcasting of such music in such
programs over your station. You will be responsible for all music license
requirements for any commercial or other material inserted by you within or
adjacent to our network programs in accordance with this agreement.

    L.  The furnishing of film or tape recorded programs hereunder is contingent
upon our ability to make arrangements satisfactory to us for the film or tape
recordings necessary to deliver the programs to you. Such film or tape recorded
programs shall be used only for a single television broadcast over your station.
Positive prints of film or tape recorded programs are to be shipped by us,
shipping charges prepaid, and you agree to return to us or to forward to such
television station as we designate, shipping charges prepaid, each print or copy
of said film or tape recording received by you hereunder, together with the
original reels and containers furnished therewith. You will return or forward
all prints in the same condition as received by you, ordinary wear and tear
excepted, immediately after a single TV broadcast over your station. In the
event you damage a print of any film or tape recorded program which is delivered
to you, or fail to return or forward the original reels and containers furnished
therewith, as aforesaid, you agree to pay the cost of replacing the complete
print, original reels and/or containers as and when billed by us.

    M.  No inducements, representations or warranties except as specifically set
forth herein have been made by any of the parties to this Agreement.  This
Agreement constitutes the entire contract between the parties hereto and no
provision thereof shall be changed or modified, nor shall this Agreement be
discharged in whole or in part, except by an agreement in writing, signed by the
party against whom the change, modification or discharge is claimed or sought to
be enforced; nor shall any waiver of any of the conditions or provisions of this
Agreement be effective and binding unless such waiver shall be in writing and
signed by the party against whom the waiver is asserted, and no waiver of any
provision of this Agreement shall be deemed to be a waiver of any preceding or
succeeding breach of the same or of any other provision.

    N.  All notices, demands, requests or other communications which may be or
are required to be given or made by ABC or you pursuant to this Agreement
(except for our program offers and your notices of acceptance or rejection, if
required, of such offers and any other program information or program
administration communications) shall be delivered (postage or fee prepaid) by
first-class mail, express mail, express delivery service or by facsimile
transmission addressed as follows:

     (a)  If to you:

          Mr. Patrick Scott
          President and Chief Executive Officer
          Fisher Broadcasting Inc.
          100 Fourth Avenue
          Seattle, WA 98109-4997
          Phone: 206-443-4000 / Fax: 206-443-8272
          with copies (which shall not constitute notice) to:

                                       9
<PAGE>
 
          Fisher Companies Inc.
          Attn.: William W. Krippaehne, Jr.
          President and Chief Executive Officer
          1525 One Union Square
          Seattle, WA 98101
          Phone:  206-682-7733 / Fax: 206-682-3211

          Clifford M. Harrington, Esq.
          Fisher Wayland Cooper Leader & Zaragoza
          2001 Pennsylvania Avenue, N.W., Suite 400
          Washington, DC 20006-1851
          Phone:  202-659-3494 / Fax: 202-296-6518

     (b)  If to ABC:

          Ms. Maureen Lesourd 
          Senior Vice President 
          Affiliate Relations 
          ABC Television Network 
          77 West 66 Street, 2nd Floor 
          New York, NY 10023-6298 
          Phone: 212-456-6493 / Fax: 212-456-7450
          
          with a copy (which shall not constitute notice) to:

          Roger Goodspeed, Esq.
          Capital Cities/ABC, Inc.
          Law & Regulation Department
          77 West 66 Street, 16th Floor
          New York, NY 10023-6298
          Phone: 212-456-7593 / Fax: 212-456-6202

 or to such other person, address or facsimile number as you or ABC may
 designate by written notice.

    O.  This Agreement and all questions relating to its validity,
interpretation, performance, and enforcement (including, without limitation,
provisions concerning limitations of action), shall be governed by and
construed in accordance with the laws of the State of New York, notwithstanding
conflict-of-laws doctrines of any state or other jurisdictions to the contrary.

    P.  Upon termination of this Agreement, the consent theretofore granted to
broadcast our network programs or use ABC logos or trademarks shall be deemed
immediately withdrawn and you shall have no further rights of any nature
whatsoever in such programs, logos or trademarks.

                                       10
<PAGE>
 
    Q.  We mutually acknowledge that, in view of the uniqueness of the plan of
network cooperation set forth in this Agreement, in the event that the
obligations of either party under this Agreement are not performed in accordance
with its terms, the other party would not have an adequate remedy at law and
therefore agree that any aggrieved party shall be entitled to specific
performance of the terms hereof in addition to any other remedy to which it may
be entitled at law or in equity.

    R.  You agree to indemnify and hold ABC and its parent corporation,
subsidiaries and their respective officers, directors, agents and employees,
successors and assigns harmless from and against any and all claims made against
us and all damages, liabilities, costs and expenses incurred as a result of such
claims, including reasonable attorney's fees, arising out of the broadcast by
ABC of any material supplied by you to ABC in accordance with this Agreement,
and we agree to indemnify and hold you and your parent corporation, subsidiaries
and their respective officers, directors, agents and employees, successors and
assigns harmless from and against any and all claims made against you and all
damages, liabilities, costs and expenses incurred as a result of such claims,
including reasonable attorney's fees, arising out of the broadcast by you of any
material provided by ABC to you in accordance with this Agreement. It is
understood that the foregoing indemnities shall apply only with respect to
materials that are broadcast without change from the form and content in which
such materials were originally provided and in strict conformance to any
instructions or limitations given by the party providing the material. The
parties also agree to indemnify and hold harmless the other, as well as their
parent companies, subsidiaries, officers, directors, agents and employees,
successors and assigns, from and against any and all claims, or portion thereof,
made and all damages, liabilities, costs and expenses incurred including
reasonable attorneys fees, arising exclusively out of or solely as a result of
any material editing, lead-ins, or other contextual changes made to such
material without the consent of the originating party. Each party will notify
the other promptly of any litigation or claim to which such indemnity applies
and will cooperate fully in the defense at the other party's request. The
provisions of this paragraph shall survive the expiration or sooner termination
of this Agreement.

    S.  Nothing in this Agreement shall create any partnership, association,
joint venture, fiduciary or agency relationship between ABC and you.

If, after examination, you find that the arrangement herein proposed is
satisfactory to you, please indicate your acceptance on the copy of this letter
enclosed for that purpose and return that copy to us.

 Very sincerely yours,

 AMERICAN BROADCASTING COMPANIES, INC.



 By:  /s/ Maureen Lesourd
    ---------------------

                                       11
<PAGE>
 
Accepted this 21st day of
April, 1995

Licensee:  Fisher Broadcasting Inc.

By: /s/ Patrick M. Scott
   ---------------------

Name: Patrick M. Scott
      ----------------        

Title: Fisher Broadcasting Inc., President & CEO
       -----------------------------------------

                                       12
<PAGE>
 
                             RIDER ONE
                             ---------


     You shall be entitled to network non-duplication protection, as defined by
Rule 76.92 of the Federal Communications Commission Rules, as follows:

     a.  The geographic zone of network non-duplication protection shall be the
     Area of Dominant Influence ("ADI") (as defined by Arbitron) in which your
     station is located, or any lesser zone pursuant to any geographic
     restrictions contained in the Federal Communications Commission rules and
     regulations, now or as subsequently modified.

     b.  Network non-duplication protection shall extend to all ABC television
     network programs that you broadcast in accordance with this Agreement.
     Protection shall not extend to individually preempted programs of an
     otherwise cleared series.

     c.  Network non-duplication protection shall begin 48 hours prior to the
     live time period designated by us for broadcast of that network program by
     your station, and shall end at 12:00 Midnight on the seventh day following
     that designated time period.


You are under no obligation to exercise in whole or in part the network non-
duplication rights granted under this Agreement.

                                       13
<PAGE>
 
                                   SCHEDULE A
                                   ----------
STATION COMPENSATION
- --------------------

(a)  We will pay you within a reasonable period of time after the close of each
     four or five week accounting period, as the case may be, for broadcasting
     each network sponsored program or portion thereof hereunder, except those
     specified in paragraph (b) hereof, which is broadcast over your station
     during the live time period* therefor, the amount resulting from
     multiplying the following:

           (i)      Your network station rate of $2,491.00 or such other rate
                    applicable pursuant to the terms of Section III of the
                    Agreement; by

           (ii)     the percentage set forth in the table below opposite such
                    applicable time period or such other percentage applicable
                    pursuant to the terms of Section III of the Agreement; by

           (iii)    the fraction of an hour substantially occupied by such
                    program or portion thereof; by

           (iv)     the fraction of the aggregate length of all commercial
                    availabilities** during such program or portion thereof
                    occupied by network commercial announcements***


          *     Live time period, as used herein, means the time period or
                periods as specified by us in our initial offer of a network
                program for the broadcast of such program over your station.

          **    Commercial availability, as used herein, means a period of time
                made available by us during a network sponsored program for one
                or more network commercial announcements or local cooperative
                commercial announcements.

          ***   Network commercial announcement, as used herein, means a
                commercial announcement broadcast over your station during a
                commercial availability and paid for by or on behalf of one or
                more of our network advertisers, not including, however,
                announcements consisting of billboards, credits, public service
                announcements, promotional announcements, and announcements
                required by law.

For each network sponsored program or portion thereof, except those specified in
paragraph (b) hereof, which is broadcast by your station with our consent during
a time period other than the live time period therefor, we will pay you as if
your station had broadcast such program or portion thereof during such live time
period, except that:

                                       14
<PAGE>
 
           (i) if the percentage set forth above opposite the time period during
               which your station broadcast such program or portion thereof is
               less than that set forth opposite such live time period, then we
               will pay you on the basis of the time period during which your
               station broadcast such program or portion thereof.

(b) Payment For Other Programs
    --------------------------

We will establish such compensation arrangements as we and you shall agree upon
prior to the expiration of the applicable periods of time for program
acceptance, as set forth in Paragraph I(B) of this affiliation agreement, for
all network sponsored programs broadcast by your station consisting of:

           (i)  Sports programs;

          (ii)  special events programs (including, but not limited to, special
                news programs, awards programs, entertainment specials and
                miniseries);

         (iii)  programs for which we specified a live time period, which time
                period straddles any of the time period categories in the table
                in paragraph (a) above; and

          (iv)  any other programs which we may designate from time to time.

 (c)  Deductions
      ----------

           (i)  From the amounts we are to pay you for station compensation
                hereunder, we shall throughout the term of this affiliation
                agreement deduct during each accounting period a sum equal to
                168% of your station's network rate, or such other percentage
                applicable pursuant to the terms of Section III of the
                Agreement, for each week of said period.

          (ii)  We will deduct a sum equal to the total of whatever fees, if
                any, may have mutually been agreed upon by you and us with
                respect to local cooperative commercial announcements broadcast
                during the applicable accounting period for which your station
                is being compensated.

                                       15
<PAGE>
 
                                     TABLE
                                     -----
                                    PACIFIC
<TABLE>
<CAPTION>
                             MONDAY through FRIDAY
                             ---------------------
               <S>                 <C>   <C>               <C>
             Sign-on               to    10:00 a.m.           - 7%
             10:00 a.m.            to      12:00 N        - 16.30%
             12:00 N               to     3:00 p.m.           - 6%
             3:00 p.m.             to     8:00 p.m.          - 10%
             8:00 p.m.             to    11:00 p.m.          - 30%
             11:00 p.m.            to     Sign-off           - 15%

</TABLE> 
 
<TABLE> 
<CAPTION> 

<S>           <C>  <C>            <C>      <C>        <C>  <C>              <C> 
Saturday                                                Sunday
- --------                                               --------
Sign-on       to   9:00 AM        - 5%     Sign-on    to   9:00 a.m.        - 5%
9:00 AM       to   2:00 PM        - 8%     9:00 AM    to   2:00 PM          - 6%
2:00 PM       to   6:00 PM        - 15%    2:00 PM    to   5:00 PM          - 15%
6:00 PM       to   8:00 PM        - 10%    5:00 PM    to   7:00 PM          - 10%
8:00 PM       to   11:00 PM       - 30%    7:00 PM    to   11:00 PM         - 30%
11:00 PM      to   Sign-off       - 15%    11:00 PM   to   Sign-off         - 15%
 
</TABLE>
 All times in this paragraph are expressed in terms of your station's then
 current local time.

                                       16
<PAGE>
 
                                   SCHEDULE B
                                   ----------

      COMPENSATION FOR CUT-IN AND LOCAL TAG ANNOUNCEMENT(S)
      -----------------------------------------------------

A.   CUT-IN ANNOUNCEMENTS
     --------------------

     I.   With respect to programs broadcast by you during the time period(s)
          -------------------------------------------------------------------
          specified by us in our initial offer for such programs.
          -------------------------------------------------------

     For each local cut-in announcement you broadcast within a program, which
     program is broadcast during the time period(s) specified by us in our
     initial offer for such program, we will pay you the amount resulting from
     multiplying your network station rate (set forth in Section II of the
     agreement) by the percentage for cut-in announcements) set forth in the
     applicable Table in Section C below opposite such applicable time period.

     II.  With respect to programs broadcast by you with our consent during time
          ----------------------------------------------------------------------
          period(s) other than that specified by us in our initial offer of such
          ----------------------------------------------------------------------
          programs.
          ---------

     For each local cut-in announcement you broadcast within a program, which
     program is broadcast by you with our consent during a time period other
     than that specified by us in our initial offer of such program, we will pay
     you an amount as set forth in Section A.I. above, except that:

                (i) if the percentage set forth in the applicable Table in
                Section C below for cut-in announcement(s) opposite the time
                period during which your station actually broadcast the program
                in which you broadcast or originated such cut-in announcement(s)
                is less than that set forth opposite the applicable time period
                specified in our initial offer of such program, then we will pay
                you for each cut-in announcement(s) on the basis of the time
                period during which your station actually broadcast such
                program.

III.  With respect to programs broadcast by you in a time period which
      ----------------------------------------------------------------
      straddles any of the time period categories set forth in the applicable
      -----------------------------------------------------------------------
      Table in Section C below.
      -------------------------

      In the event that we offer you a program for broadcast in a time period
      which straddles any of the time period categories set forth in the
      applicable Table in Section C below, and you broadcast such program within
      which you also broadcast or originate one or more cut-in announcements),
      we will pay you such amounts as we and you shall have agreed upon prior to
      your broadcast or origination of such cut-in announcement(s).

LOCAL TAG ANNOUNCEMENTS
- -----------------------

I.   With respect to programs broadcast by you during the time period(s)
     -------------------------------------------------------------------
     specified by us in our initial offer for such programs.
     -------------------------------------------------------

                                       17
<PAGE>
 
     For each local tag announcement you broadcast within a program, which
     program is broadcast during the time period(s) specified by us in our
     initial offer for such program, we will pay you the amount resulting from
     multiplying your network station rate (set forth in Section II of the
     agreement) by the percentage for each local tag announcement set forth in
     the applicable Table in Section C below opposite such applicable time
     period.

II.  With respect to programs broadcast by you with our consent during -time
     -----------------------------------------------------------------------
     period(s) other than that specified by us in our initial offer of such
     ----------------------------------------------------------------------
     programs.
     ---------

     For each local tag announcement you broadcast within a program, which
     program is broadcast by you with our consent during a time period other
     than that specified by us in our initial offer of such program, we will pay
     you an amount as set forth in Section B.I. above, except that:

          (i) if the percentage set forth in the applicable Table in Section C
          below for each local tag announcement opposite the time period during
          which your station actually broadcast the program in which you
          broadcast such local tag announcement is less than that set forth
          opposite the applicable time period specified in our initial offer of
          such program, then we will pay you for each local tag announcement on
          the basis of the time period during which your station actually
          broadcast such program.

III.  With respect to programs broadcast by you in a time period-which straddles
      --------------------------------------------------------------------------
     any of the time period categories set forth in the applicable Table in
     ----------------------------------------------------------------------
     Section C below.
     ----------------

     In the event that we offer you a program for broadcast in a time period
     which straddles any of the time period categories set forth in the
     applicable Table in Section C below, and you broadcast such program within
     which you also broadcast one or more local tag announcement (s) , we will
     pay you such amounts as we and you shall have agreed upon prior to your
     broadcast of such local tag announcement(s).

                                       18
<PAGE>
 
C.  COMPENSATION TABLE FOR CUT-IN OR LOCAL TAG ANNOUNCEMENTS
    --------------------------------------------------------
                              Cut-In Announcements
                              --------------------

Monday through Sunday  6:00 p.m. to 11:00 p.m.  - 18.75%
                       All other times          -  7.50%


                            Local Tag Announcements
                            -----------------------

Monday through Sunday  6:00 p.m. to 11:00 p.m.  - 9.38%
                       All other times          - 3.75%


All times in this paragraph are expressed in terms of your station's then-
current local time.

                                       19

<PAGE>
 
                                                                    EXHIBIT 10.3


                    FISHER COMPANIES INCENTIVE PLAN OF 1995

1.         PURPOSE

  The purpose of the Plan is to provide selected eligible key employees of
  Fisher Companies Inc. ("Company") or any present or future subsidiary of the
  Company with an inducement to remain in the employ of the Company and to
  participate in the ownership of the Company, and with added incentives to
  advance the interests of the Company and increase the value of the Company's
  common stock.

2.   DEFINITIONS
 
     1)   "Committee" shall mean the committee described in Section 3 hereof and
        selected by the Company's Board of Directors to administer the Plan.
 
     b.   "Nonemployee Director" has the meaning set forth in Rule 16b-3 under
        the Securities Exchange Act of 1934, as amended.
 
     c.   "Options" means any incentive stock option or non-statutory stock
        option granted hereunder.
  
     d.   "Rights" means any restricted stock right or performance stock right
        granted hereunder.
 
     e.   "Subsidiary" as used in the Plan shall mean any corporation in an
        unbroken chain of corporations beginning with the Company if each of the
        corporations other than the last corporation in the broken chain, owns
        stock possessing 50% or more of the total combined voting power of all
        classes of stock in one of the other corporations in such chain.
 
3.   ADMINISTRATION
 
     1)   The Plan shall be administered by a Committee appointed by the Board
        of Directors and to consist of not less than three members of the Board
        of Directors, all of whom shall be Nonemployee Directors.
 
     2)   Subject to the terms of the Plan, the Committee shall have full and
        final authority to determine the persons who are to be granted Options
        and Rights under the Plan and the number of shares subject to each
        Option and Right, the option price, the form, terms and conditions,
        including but not limited to any target stock prices or any performance
        goals of the Options, whether the Options granted shall be incentive
        stock options or non-statutory stock options, or both, the time or times
        when each Option becomes exercisable, the duration of the exercise
        period and the terms and conditions of all Rights granted hereunder, and
        to make such other determinations as may be appropriate or necessary for
        the administration of the Plan.
 

                                       1
<PAGE>
 
     3)   The Committee shall select one of its members as the Chairman, and
        shall hold its meetings at such times and places as it shall deem
        advisable. At least one-half of its members shall constitute a quorum
        for the conduct of business, and any decision or determination approved
        by a majority of members present at any meeting in which a quorum exists
        shall be deemed to have been made by the Committee. In addition, any
        decision or determination reduced to writing and signed by all of the
        members shall be deemed to have been made by the Committee. The
        Committee may appoint a Secretary, shall keep minutes of its meetings,
        and may make such rules and regulations for the conduct of its business
        and for the carrying out of the Plan as it shall deem appropriate.
 
    (d)   The interpretation and construction by the Committee of any provisions
        of the Plan and of the Options and Rights granted thereunder shall be
        final and conclusive on all persons having any interest thereunder.

4.   SHARES SUBJECT TO PLAN

  Subject to the provisions of Section 18 (relating to adjustment due to changes
  in capital structure), the number of shares of stock which may be issued and
  sold pursuant to Options and Rights granted under the Plan shall not exceed
  Seventy Thousand (70,000) shares of the Company's common stock (Two Hundred
  Eighty Thousand (280,000) shares in the event of a four-for-one stock split
  that will be effective May 15,1995, subject to stockholder approval of an
  increase in the number of authorized shares.) If any Options or Rights granted
  under the Plan shall terminate or expire without having been exercised in
  full, the stock not purchased or acquired under such Options or Rights shall
  be available again for the purposes of the Plan.

5.   ELIGIBILITY
 
     a.   Options and Rights may be granted only to salaried key management
        employees of the Company or a Subsidiary (including officers and
        directors who are also salaried employees) who, in the judgment of the
        Committee, will perform services of special importance in the
        management, operation and development of the business of the Company or
        the businesses of one or more of its Subsidiaries, provided:
 
        (i)  The Option or Right grant date for an employee shall not occur
             during or after the calendar year in which the employee reaches the
             age of 65, and
     
        (ii) An Option or Right shall not be granted to an employee who,
             immediately after the Option or Right is granted, owns stock
             possessing more than five percent (5%) of the total combined voting
             power or value of all classes of stock of the Company or a
             Subsidiary.

    (b) For purposes of determining the stock owned at a given time by an
        individual under Section 5(a)(ii) hereof, the following rules shall
        apply:
  
        (i) Stock which the individual may purchase or acquire under outstanding
            Options or Rights shall be treated as stock owned by such
            individual;
     

                                       2
<PAGE>
 
        (ii) Stock owned directly or indirectly by or for the individual's
             brothers, sisters, spouse, ancestors and lineal descendants shall
             be considered as owned by such individual;
       
        (iii)Stock owned directly or indirectly by or for a corporation,
             partnership, estate or trust, shall be considered as owned
             proportionately by or for its shareholders, partners or
             beneficiaries.
 
 6.  PRICE AND TERM OF OPTION
 
     1)   The exercise price under each Option will be determined by the
        Committee but shall not be less than 100% of the fair market value of
        the shares of stock covered by the Option at the time of the grant of
        the Option, as determined by the Committee.
 
     b.   The term of each Option shall be as determined by the Committee, but
        not in excess of ten (10) years from the date it is granted. An Option
        granted for an initial term of less than ten (10) years may be extended
        by amendment for a period of up to ten (10) years from the date of the
        initial grant, provided that no such amendment of an incentive stock
        Option shall be made without the prior consent of the optionee.
 
7.   LIMITATIONS ON EXERCISE OF OPTION RIGHTS
 
     a.   Except as provided in Section 13 hereof, the optionee must remain in
        the continuous employ of the Company and/or its Subsidiaries for at
        least one year from the date the Option is granted before any part
        thereof or right thereunder may be exercised. Absence on leave or on
        account of illness or disability under rules established by the
        Committee shall not, however, be deemed an interruption of employment
        for purposes of the Plan. Thereafter, the Option may be exercisable in
        whole or in installments in accordance with its terms, as determined by
        the Committee.
 
     b.   The minimum number of shares with respect to which option rights may
        be exercised in part at any time shall be determined by the Committee at
        the time the Option is granted.
 
     c.   With respect to incentive stock Options granted to an employee under
        the Plan, the aggregate fair market value (determined at the time the
        Options are granted) of the stock with respect to which incentive stock
        Options are exercisable for the first time by such employee during any
        calendar year (including all such plans of the Company and its
        Subsidiaries) shall not exceed $100,000.
 
8.   METHOD OF EXERCISE OF OPTION

     Each exercise of an Option granted hereunder, whether in whole or in part,
     shall be by written notice to the Chief Executive Officer of the Company
     designating the number of shares as to which the Option is exercised, and,
     where stock is to be purchased pursuant to such exercise,

                                       3
<PAGE>
 
     shall be accompanied by payment in full for the number of shares so
     designated. Stock to be purchased under the Plan may be paid for in cash,
     in shares of the Company's common stock at their fair market value on the
     date of exercise, or partly in cash and partly in such shares. Fractional
     shares may not be purchased under an Option, and fractional shares may not
     be delivered to the Company for payment of the option price. No shares
     shall be issued until full payment thereof has been made. Each optionee who
     has exercised an Option shall, upon notification of the amount due and
     prior to or concurrently with delivery of the certificates representing the
     shares, pay to the Company amounts necessary to satisfy applicable federal,
     state and local withholding tax requirements.

9.   FORM OF OPTION AGREEMENT

     Each Option agreement shall contain the essential terms of the Option and
     such other provisions as the Committee shall from time to time determine,
     but such Option agreements need not be identical. If the Option is an
     incentive stock option, the instrument evidencing such Option shall contain
     such terms and provisions relating to exercise and otherwise as may be
     necessary to render it an incentive stock option under the applicable
     provisions of the Internal Revenue Code of 1986, as amended (presently
     Section 422 thereof), and the Regulations thereunder, or corresponding
     provisions of subsequent laws and regulations.

10.  FINANCING OF OPTIONS

     The Company and its Subsidiaries may not extend credit, arrange credit,
     guarantee obligations, or otherwise aid employees in  financing  their
     purchases of stock pursuant to Options granted under this Plan.

11.  RESTRICTED STOCK RIGHTS
 
     a. The Committee may grant any eligible employee restricted stock rights
        which entitle such employee to receive a stated number of shares of the
        Company's stock if the employee for a stated number of years remains
        continuously employed by the Company or a Subsidiary or, following the
        employee's normal retirement, serves on the Board of Directors of the
        Company or in another capacity approved by the Committee (the
        "Restricted Period"). At the time the restricted stock right is issued,
        the Committee shall designate the length of the Restricted Period and
        the service that will qualify under the Restricted Period; provided,
        however, in no event may the Restricted Period extend beyond the fifth
        anniversary date of the employee's termination of employment. The
        Committee shall also have full and final authority to select the
        employees who receive restricted stock rights, to specify the number of
        shares of stock subject to each such right, and to establish the other
        terms, conditions and definitions that govern such rights.
 
     b.   The Company shall pay to each holder of an unexpired restricted stock
        right during the Restricted Period, as additional compensation, an
        amount of cash equal to the dividends that would have been payable to
        the holder of such right during the Restricted Period if the

                                       4
<PAGE>
 
        holder had owned the stock subject to the right. Such amount shall be
        paid as near in time as reasonably practical to the applicable dividend
        payment dates.
 
     c.   At the expiration of each Restricted Period, the Company shall issue
        to the holder of the restricted stock right the shares of stock relating
        to such Restricted Period or at the request of the holder make a payment
        of an amount equal to the fair market value of such shares (or any
        portion thereof), provided all conditions have been met.
 
     d.   Upon grant of a restricted stock right, the Company shall deliver to
        the recipient a document which sets forth and describes in detail the
        terms and conditions of the right.
 
12.  PERFORMANCE STOCK RIGHTS
 
     1)   The Committee may grant to an eligible employee performance stock
        rights which entitle such employee to receive a stated number of shares
        of the Company's common stock if the employee attains certain specified
        performance goals within a stated performance period. The Committee
        shall have full and final authority to select the employees who receive
        performance stock rights, to specify the number of shares of stock
        subject to each such right, to establish the performance requirements,
        to establish the performance period and to establish the terms,
        conditions and definitions that govern such rights.
 
     2)   Unlike restricted stock rights, the Company shall not pay to each
        holder of an unexpired performance stock right during the performance
        period an amount of cash equal to the dividends that would have been
        payable to the holder during the performance period if the holder had
        owned the stock subject to the right.
 
     3)   At such time that the performance requirements of a performance stock
        right are satisfied, the Company shall issue to the holder of the
        performance stock right the shares of stock subject to the right. If the
        performance requirements are not met by the expiration of the
        performance period, the performance stock right shall expire and the
        holder thereof shall have no further rights thereunder.
 
     4)   Upon granting a performance stock right, the Company shall issue to
        the recipient a document which sets forth and describes in detail the
        terms and conditions of the right.
 
 13. TERMINATION OF EMPLOYMENT
 
     (a)  In the event the employment of an optionee by the Company or a
          Subsidiary shall terminate for any reason other than the optionee's
          normal retirement, the optionee having become age 65, physical
          disability as hereinafter provided or death, the Option may be
          exercised by the optionee at any time prior to the expiration date of
          the Option or the expiration of three months after the date of such
          termination of employment, whichever is the shorter period, but only
          if and to the extent the optionee was entitled to exercise the Option
          at the date of such termination.

                                       5
<PAGE>
 
     (b)  If an optionee retires under the normal retirement policies of the
          Company or a Subsidiary having become age 65, the Option may be
          exercised by the optionee at any time prior to the expiration date of
          the Option but in any event no later than the fifth anniversary date
          of the optionee's termination of employment.
 
     (c)  If an optionee dies while in the employ of the Company or a
          Subsidiary, or dies following termination of employment but during the
          period that the Option could have been exercised by the optionee, the
          optionee's Option rights may be exercised at any time by the person or
          persons to whom such rights under the Option shall pass by will or by
          the laws of descent and distribution, and, with respect to such
          decedents, such Options may be exercised without regard to the
          limitation provided in Section 7(a) (relating to one year of
          employment) or installment limitations, if any, that would otherwise
          apply. But with respect to a decedent whose employment was terminated
          for any reason other than normal retirement, death or disability
          within the meaning of Section 22(e)(3) of the Internal Revenue Code of
          1986, as amended, such Option rights may be exercised only to the
          extent exercisable on the date of termination of employment.

     (d)  In the event of the termination of the optionee's employment because
          of the disability within the meaning of Section 22(e)(3) of the
          Internal Revenue Code of 1986, as amended, the Option may be exercised
          by the optionee at any time prior to the expiration date of the Option
          or the expiration of one year after the date of such termination,
          whichever is the shorter period, but only if and to the extent the
          optionee was entitled to exercise the Option at the date of such
          termination.
 
     (e)  In the event a holder of restricted stock rights issued under the
          provisions of Section 11 hereof fails to satisfy the employment or
          service requirements for the issuance of stock under such rights for
          any reason other than death or disability as herein defined, such
          holder shall lose all rights to receive stock under the provisions of
          the restricted stock rights. In the event a holder of a restricted
          stock right is unable to satisfy the requirements of a restricted
          stock right because of death or disability within the meaning of
          Section 22(e)(3) of the Internal Revenue Code of 1986, as amended,
          then, with respect to each group of restricted stock rights granted at
          a given time, the holder or the personal representative of the
          holder's estate, as the case may be, either shall be issued a number
          of shares of the Company's common stock which, when added to all
          shares theretofore issued to such holder as a result of restricted
          stock rights issued at such given time, produces a sum (i) which bears
          the same ratio to the total number of all shares covered by restricted
          stock rights granted at such time, as (ii) the period that elapsed
          from the grant of the restricted stock rights to the time the holder
          ceased to satisfy the employment or service requirements for the
          issuance of stock under such rights bears to the longest Restricted
          Period contained in such restricted stock rights or in lieu thereof at
          the request of such holder or personal representative an amount equal
          to the fair market value of such shares.
 
      f)  In the event the employment of an employee who holds a performance
          stock right granted under the provisions of Section 12 hereof
          terminates for any reason prior to the expiration of the performance
          period specified in the performance stock right, then, except to the
          extent

                                       6
<PAGE>
 
          the Committee may decide otherwise in select situations, such employee
          shall lose all rights to thereafter receive any stock under such
          performance stock right.
 
     (g)  To the extent that the Option of any deceased optionee or of any
          optionee whose employment is terminated shall not have been exercised
          within the time periods provided above, all further rights to purchase
          shares pursuant to such Option or to exercise stock appreciation
          rights shall cease and terminate at the expiration of such period.
 
     (h)  If a corporation ceases to be a Subsidiary of the Company, employees
          of such corporation shall be deemed to have terminated their
          employment with the Company or a Subsidiary of the Company for
          purposes of this Plan.
 
14.  OPTIONS AND RIGHTS NOT TRANSFERABLE

     Any Option or Right granted hereunder shall not be transferable except by
     will or by the laws of descent and distribution of the state or country of
     the employee's domicile at the date of death, and, during the lifetime of
     the person to whom the Option or Right is granted, only the optionee or the
     guardian of the optionee may exercise it.

15.  RIGHTS AS STOCKHOLDER

     Neither a person to whom an Option or Right is granted, nor such person's
     legal representative, heir, legatee or distributee, shall be deemed to be
     the holder of, or to have any rights of a holder with respect to, any
     shares subject to such Option or Right, until after the stock is issued.

16.  AMENDMENTS TO THE PLAN

     The Company's Board of Directors may from time to time make such amendments
     to the Plan as it may deem proper and in the best interests of the Company
     or a Subsidiary, provided that -

     (a)  No amendment shall be made which (i) would impair, without the consent
          of the applicable employee, any Option or Right theretofore granted
          under the Plan or deprive any employee of any shares of stock of the
          Company which he may have acquired through or as a result of the Plan,
          or (ii) would withdraw the administration of the Plan from a Committee
          of Directors of the Company meeting the qualifications set forth in
          Section 3(a) hereof.
 
     (b)  Any such amendment which would --
  
          (i)  Materially increase the benefits accruing to participants under
               the Plan,
     
          (ii) Increase the number of securities which may be issued under the
               Plan, or
     
          (iii)Materially modify the requirements as to eligibility for
               participation in the Plan

                                       7
<PAGE>
 
     shall be submitted to the shareholders of the Company for their approval at
     the next annual or special meeting after adoption by the Board of
     Directors, and if such shareholder approval is not obtained, the amendment,
     together with any actions taken under the Plan on the necessary authority
     of such amendment, shall be null and void.

17.  TERMINATION OF THE PLAN

     Options and Rights may be granted under the Plan at any time prior to the
     seventh (7th) anniversary date of the effective date of the Plan, on which
     anniversary date the Plan will expire except as to those Options and Rights
     then outstanding thereunder, which Options and Rights shall remain in
     effect until they have been exercised or have expired in accordance with
     their terms. The Plan may be abandoned or terminated at any time by the
     Company's Board of Directors, except with respect to Options and Rights
     then outstanding under the Plan.

18.  CHANGES IN CAPITAL STRUCTURE
 
     a.   Except as provided in subparagraph (b), in the event that the
        outstanding shares of Common Stock of the Company are hereafter
        increased or decreased or changed into or exchanged for a different
        number or kind of shares or other securities of the Company or of
        another corporation, by reason of any reorganization, merger,
        consolidation, recapitalization, reclassification, stock split-up,
        combination of shares, dividend payable in shares, rights offering,
        change in the corporate structure of the Company, or otherwise
        appropriate adjustment shall be made in the number and kind of shares
        for which Options and Rights may be granted under the Plan. In addition,
        an appropriate adjustment shall be made in the number and kind of shares
        as to which outstanding Options and Rights, or portions thereof then
        unexercised, shall be exercisable, to the end that the proportionate
        interest of the existing holder of an Option or Right shall be
        maintained as before the occurrence of such event. Such adjustment in
        outstanding Options and Rights shall be made without change in the total
        price applicable to the unexercised portion of the Option and Right and
        with a corresponding adjustment in the exercise price per share. Any
        such adjustment made by the Board of Directors shall be conclusive.
 
     b.   In the event of dissolution or liquidation of the Company or a
        reorganization, merger or consolidation with one or more corporations,
        in lieu of providing for Options and Rights as provided for above in
        this Section 18, the Board of Directors of the Company may, in its sole
        discretion, provide a 30-day period immediately prior to such event
        during which optionees shall have the right to exercise Options in whole
        or in part without any limitations on exercisability.
 
19.  APPROVALS

     The obligation of the Company under this Plan shall be subject to the
     approval of such state or federal authorities or agencies, if any, as may
     have jurisdiction in the matter. Shares shall not be issued with respect to
     an Option or Right unless the exercise and the issuance and delivery of the
     shares shall comply with all relevant provisions of law, including, without
     limitation, any

                                       8
<PAGE>
 
     applicable state securities laws, the Securities Act of 1933, as amended,
     the Securities Exchange Act of 1934, as amended, the Internal Revenue Code
     of 1986, as amended, the respective rules and regulations promulgated
     thereunder, and the requirements of any stock exchange upon which the
     shares may then be listed, and shall be further subject to the approval of
     counsel for the Company with respect to such compliance. Inability of the
     Company to obtain from any regulatory body having jurisdiction authority
     deemed by the Company's counsel to be necessary to the lawful issuance and
     sale of any shares hereunder shall relieve the Company of any liability for
     the nonissuance or sale of such shares. The Board may require any action or
     agreement by an employee holding an Option or Right as may from time to
     time be necessary to comply with the federal and state securities laws. The
     Company shall not be obliged to register Options or Rights, or stock
     granted or purchased under the Plan.

20.  EMPLOYMENT RIGHTS

     Nothing in this Plan or any Option or Right granted pursuant thereto shall
     confer upon any employee any right to be continued in the employment of the
     Company or any Subsidiary of the Company, or to interfere in any way with
     the right of the Company, in its sole discretion, to terminate such
     employee's employment at any time.

21.  EFFECTIVE DATE OF THE PLAN

     The effective date of this Plan is April 27, 1995.

                                       9

<PAGE>
 
                                                                    EXHIBIT 10.4

                           SUPPLEMENTAL PENSION PLAN

     THIS Plan is established, and is to be effective as of the 29th day of
February, 1996, by FISHER COMPANIES INC., a Washington corporation (the
"Company"), for the benefit of a select group of management employees (the
"Participants"). 

A.   The Participants in this Plan shall be as determined from
time to time by the Board of Directors of the Company. 

B.   The ability and experience of the Participants are of such value to the
Company that the Company wishes to more adequately compensate the Participants
for their past and future services by providing special retirement and
survivorship income benefits to them.

C.   The funds accumulated in Company-sponsored qualified retirement plans may
be inadequate in amount to provide the Participants with a retirement benefit
commensurate with the anticipated value of their past and future services to the
Company.

D.   This Plan is intended to supersede any and all Supplementary Pension
Agreements and all amendments thereto previously entered into between the
Company and the Participants who were employed by the Company as of the
effective date hereof.

     NOW, THEREFORE, the Company hereby agrees as follows:


1.   Retirement Benefits.

     (a)  Entitlement/Payment. If a Participant is in the employ of the Company
when the Participant attains sixty-five (65) years of age, then the Company
shall thereafter pay to the Participant monthly retirement income as determined
pursuant to paragraph (b) immediately below, commencing with a payment on the
first day of the month coincident with or next following the Participant's
attainment of sixty-five (65) years of age (hereinafter referred to as the
"Retirement Date") and continuing with a like payment on the first day of each
month thereafter throughout the Participant's lifetime. if, while receiving said
monthly retirement income, the Participant dies prior to the expiration of a
period of one hundred twenty (120) months from and after his Retirement Date,
then the Company shall thereafter pay said amount to the beneficiary designated
in paragraph 6 below, continuing until the expiration of said one hundred twenty
(120) month period; provided, however, that if (i) the primary beneficiary
designated in paragraph 6 below is the Participant's surviving spouse; (ii) the
Participant was married to said spouse on the Participant's Retirement Date, and
(iii) said spouse is living at the end of the aforesaid one hundred twenty (120)
month period, said payments shall thereafter continue until the death of said
surviving spouse.

                                       1
<PAGE>
 
     (b)  Amount. A participant's monthly retirement income under this
paragraph (b) shall be equal to seventy percent (70%) of the participant's
average compensation less the following amounts:

     i)  One-half of the Participant's monthly Primary Social Security amount
     determined as if the Participant commenced receiving Social Security
     benefits as of the Participant's Retirement Date;

     ii)  The monthly amount payable to the Participant as the normal form of
     benefit pursuant to any qualified pension plan maintained by the Company.
     Such amount shall be determined as of the Participant's Retirement Date, as
     if the Participant remained in the employ of the Company until that date.
     the amount of the reduction under this subparagraph (b)(ii) shall not
     include any benefit attributable to Participant contributions and earnings
     thereon; and

     iii)  The monthly amount payable to the Participant in the form of a single
     life annuity pursuant to any qualified profit sharing (including 401(k))
     plan maintained by the Company. Such amount shall be determined as of the
     Participant's Retirement Date, as if the participant remained in the employ
     of the Company until that date. Further, the monthly amount payable as a
     single life annuity shall be determined by converting the Participant's
     account balance to a single life annuity as of the Participant's Retirement
     Date using the interest rate and mortality assumptions set forth in
     paragraph 7(e) hereof. The amount of the reduction under this subparagraph
     (b)(iii) shall not consider any portion of the Participant's account
     balance attributable to Participant contributions and earnings thereon. In
     determining the amount of the reduction attributable to employer
     contributions and earnings thereon, the following assumptions shall be
     used:

          a)  Employer contributions shall equal actual employer contributions;

          b)  Historical earnings shall equal actual earnings on employer
          contributions; and

          c)  Hypothetical future earnings shall be projected at the average of
          the dividend (interest) rates of the Plan's money market option
          determined as of December 31 of each of the prior three (3) years.

     (c)  Average Compensation. A Participant's Average Compensation shall be
the average of the Participant's Plan Compensation for the Averaging Period in
the Participant's Compensation History which results in the highest Average
Compensation, divided by 12. A Participant's Compensation History is the
Participant's entire period of employment with the Employer. The Averaging
Period is 3 consecutive Compensation periods (or the entire period of
employment, if shorter). A Compensation Period is the 12-month period ending on
the last day of the Plan Year. A Participant's Compensation History does not
include the 12-month Compensation period in which the Participant terminates
employment. Average Compensation shall not include

                                       2
<PAGE>
 
long-term and short-term incentive compensation, bonuses, commissions and
taxable and non-taxable fringe benefits.

     i)  Total Compensation.  All wages for federal income tax withholding
     purposes, as defined under Code (S)3401(a) (for purposes of income tax
     withholding at the source), disregarding any rules limiting the
     remuneration included as wages based on the nature or location of the
     employment or the services performed. Total Compensation also includes all
     other payments to an employee in the course of the Employer's trade or
     business, for which the Employer must furnish the Employee a written
     statement under Code (S)(S)6041, 6051 and 6052. As long as the instructions
     to the "wages, tips, other compensation" box of Form W-2 (or a
     corresponding box on a later released Form W-2), are consistent with the
     instructions for the 1991 Form W-2 (Box 10), the Employer may treat the
     amount reported in the "wages, tips, other compensation" as satisfying this
     definition. Total Compensation does not include elective contributions.

     ii)  Plan Compensation. Plan Compensation means Total Compensation
     described in subparagraph (c)(i)), but excluding reimbursements or other
     expense allowances, fringe benefits (cash and noncash), moving expenses,
     bonuses, long-term and short-term incentive compensation, deferred
     compensation and welfare benefits, and including elective contributions.
     Plan Compensation applies to determine a Participant's benefit formula and
     Accrued Benefit under Article V.

     iii)  Elective Contributions. Elective contributions are amounts excludable
     from the Employee's gross income under Code (S)(S)125 or 402(e)(3), and
     contributed by the Employer, at the Employee's election, to a Code
     (S)401(k) arrangement or cafeteria plan.

     iv)  Plan Year. Plan year means the fiscal year of the Plan, a twelve (12)
     consecutive month period ending every june 30.

A Participant's Plan Compensation for each of the three Plan Years ending prior
to July 1, 1996, shall be equal to the Participant's Plan Compensation for the
Plan Year ended June 30, 1996.

     (d)  Late Retirement. In the event that Participant continues in the employ
of the Company beyond the Participant's Retirement Date such continued
employment shall not be taken into account under this Plan inasmuch as the
Participant's monthly retirement income commences as of his Retirement Date.


2.   Termination Benefit.

      If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, such Participant's accrued benefit
shall be determined as follows:

                                       3
<PAGE>
 
<TABLE>
<S>                                 <C>                        <C>
Total actual years of service
with the Company after first
becoming a Participant in
the Plan and prior to
attaining age sixty-five
(65) Total possible years
of service with the Company         Projected Monthly
after first becoming a              Retirement Benefit        Participant's
Participant in the Plan and         as contemplated by        Accrued Benefit
prior to attaining age          x   Paragraph 1 of        =   (payable monthly
sixty-five (65)                     this Plan                 commencing at age
                                                              sixty-five (65) 
</TABLE>

     For purposes of determining a Participant's accrued benefit, the term
"years of service" shall include all calendar years in which the Participant
completes at least 1,000 hours of service and the term "hours of service" shall
have the same meaning as it does under the qualified pension plan of the
Company. Furthermore, "total possible years of service with the Company after
first becoming a Participant in the Plan and prior to attaining age sixty-five
(65)" shall be determined by computing the maximum number of years of service
that the Participant could possibly complete with the Company between the date
the Participant first becomes a Participant in the Plan and the date on which
the Participant attains age sixty-five (65). The Participant's accrued benefit
under this paragraph 2 shall never exceed the Participant's retirement benefit
as contemplated by paragraph 1 of this Plan.

     If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, the Participant's accrued benefit shall
normally be paid in the form of a monthly annuity commencing at age sixty-five
(65), but may, in the sole discretion of the Company, be paid to the Participant
as a reduced annuity commencing prior to age sixty-five (65) or as a lump sum.
Any annuity shall be payable under the same terms and conditions as contemplated
by paragraph 1 of this Plan; provided, however, that payments shall only
continue until the death of the Participant's surviving spouse if:  (i) the
beneficiary designated in paragraph 6 below is the Participant's surviving
spouse and (ii) the Participant was married to said spouse on the Participant's
termination date.  Any present value calculations required in connection with
the payment of a lump sum shall be made using the 1983 Group Annuity Mortality
Table (GAM 83) adjusted as provided in Rev. Rul. 95-6, 1995-4 I.R.B. 22, and the
annual rate of interest on 30-year Treasury securities, as prescribed by the
Secretary, for the month of May preceding the Plan Year in which the
distribution occurs, or 6% interest per annum, whichever is greater.

                                       4
<PAGE>
 
     If the Participant dies prior to receiving the entirety of the benefits
contemplated by this paragraph 2, such benefits shall thereafter be paid to the
beneficiary designated in paragraph 6 below.

3.  Death Benefit.

     (a) If a Participant dies prior to his Retirement Date while in the employ
of the Company, then the Company shall thereafter pay to the beneficiary
designated in paragraph 6 below a monthly death benefit amount as determined
pursuant to paragraph (b) below commencing with a payment on the first day of
the month next following the Participant's death and continuing with a like
payment on the first day of each month thereafter for a total of one hundred
twenty (120) months; provided, however, that if the primary beneficiary
designated in paragraph 6 below is the Participant's surviving spouse, and said
spouse is living at the end of the aforesaid one hundred twenty (120) month
period, said payments shall continue until the death of said surviving spouse.

     (b) A Participant's monthly death benefit amount under this paragraph (b)
shall be equal to the greater of:

     (i) The Participant's Accrued Benefit under paragraph 2 of this Plan
     determined as if the Participant's employment had been involuntarily
     terminated on the day preceding the Participant's death, or

     (ii) Thirty-five percent (35%) of the Participant's Average Compensation
     less the following amounts:

          a) One-Half of the Participant's monthly Primary Social Security
          amount determined as if the Participant commenced receiving Social
          Security benefits as of the Participant's Retirement Date annuitized
          over the payment period set forth in paragraph 3(a);

          b) The greater of the present value of the monthly amount payable to
          the Participant as the normal form of benefit pursuant to any
          qualified pension plan maintained by the Company or the present value
          of the death benefit under any such plan, annuitized over the payment
          period set forth in paragraph 3(a). Such amount shall be determined as
          of the Participant's date of death. The amount of the reduction under
          this subparagraph (b)(ii)b) shall not include any benefit attributable
          to Participant contributions and earnings thereon;

          c) The Participant's account balance in any qualified profit sharing
          (including 401(k)) plan maintained by the Company annuitized over the
          payment period set forth in paragraph 3(a). Such amount shall be
          determined as of the Participant's date of death. The amount of the
          reduction under this subparagraph (b)(iii)c) shall not consider any
          portion of the Participant's account balance attributable to
          Participant contributions and earnings thereon; and

                                       5
<PAGE>
 
          d) The proceeds from any life insurance policy on the life of the
          Participant under any Company sponsored Group Life Insurance Plan,
          annuitized over the payment period set forth in paragraph 3(a).

4.   Disability Benefit.

     (a) If the Participant becomes totally and permanently disabled prior to
his retirement date and while in the employ of the Company and such disability
continues for a period of six (6) months, then the Company shall thereafter pay
the Participant a monthly disability payment in the amount as determined
pursuant to paragraph (b) below commencing with a payment on the first day of
the month next following the expiration of the six- (6-) month period
(hereinafter referred to as the "Disability Date") and continuing with a like
payment on the first day of each month thereafter until the Participant attains
sixty-five (65) years of age or ceases to be disabled, whichever occurs first.
If the Participant continues to be disabled until he is sixty-five (65) years of
age, then the monthly payments to the Participant thereafter shall be equal to
the monthly amount of retirement income specified in paragraph 1, and shall be
paid pursuant to the terms and conditions of paragraph 1. If, while receiving
disability payments under this paragraph the Participant dies prior to attaining
the age of sixty-five (65) years, such disability payments shall cease, and the
Company shall thereafter pay to the beneficiary designated in paragraph 6 the
amount of the death benefit specified in paragraph 3, in the manner and for the
period of time provided in said paragraph.

     (b) A Participant's monthly disability benefit amount under this paragraph
(b) shall be equal to sixty percent (60%) of the Participant's Average
Compensation less the following amounts:

     (i) The monthly amount payable to the Participant pursuant to the Company
     sponsored Group Long-Term disability Plan determined prior to any reduction
     for the Participant's monthly disability Social Security amount, if any;
     and

     (ii) One-half of the Participant's monthly disability Social Security
     amount, determined as of the Participant's Disability Date.



5.  Voluntary Termination.

     If a the Participant voluntarily terminates employment with the Company
prior to attaining age sixty-five (65) for any reason other than total and
permanent disability, the Participant shall be entitled to no benefit under this
Plan.

6.  Beneficiary.

                                       6
<PAGE>
 
     For purposes of paragraphs 1, 2, 3, and 4, the Participant's beneficiary
shall be as follows:

     (a) The spouse of the Participant shall be the primary beneficiary.

     (b) If said spouse fails to survive the Participant, then any remaining
payments under this Plan shall be made in accordance with the Participant's
beneficiary designation form then on file with the Company, or if none to the
Participant's estate.

     (c) If said spouse survives the Participant and thereafter dies before
receiving all payments hereunder, such remaining payments shall be made to such
persons in such amounts as said spouse designates in a validly executed
beneficiary designation form on file with the Company. If said spouse fails to
exercise this power of appointment, such remaining payments shall be made to
such persons in such amounts as provided in paragraph 6(b) immediately above.

7.   Conditions and Other Provisions.

     (a) The benefits under paragraphs 1, 2, 3, and 4 are conditioned upon the
Participant having been continuously in the employ of the Company from the date
of becoming a Participant in this Plan until the happening of the event that
would qualify the Participant (or his beneficiary) for such benefits; provided,
however, that the employment of the Participant shall not be deemed to have
ceased because of or during (i) any period of involuntary military service of
the Participant or (ii) a leave of absence granted the Participant by the
Company which does not exceed a period of one (1) year.

     (b) Upon the death of the Participant, if monthly benefits become payable
to a beneficiary by virtue of the provisions of paragraphs 1, 2, 3, or 4, the
Company may then, or at any time thereafter, at its sole option and discretion
and without the consent of any beneficiary, elect to pay the current
beneficiary, in one lump sum, the present value of the monthly payments
remaining unpaid at the time of such election. Any present value calculations
required in connection with the payment of such a lump sum shall be made using
the 1983 Group Annuity Mortality Table (GAM 83) adjusted as provided in REV.
RUL. 95-6, 1995-4 I.R.B. 22, and the annual rate of interest on 30-year Treasury
securities, as prescribed by the Secretary, for the month of May preceding the
plan year in which the distribution occurs, or 6% interest per annum, whichever
is greater.

     (c) Except as specifically provided herein, benefits under this Plan shall
not be payable to the Participant or any beneficiary under more than one of the
first four paragraphs of this Plan.

     (d) For the purpose of determining any and all benefits payable under this
Plan, it shall be assumed that the Participant's spouse is no more than fifteen
(15) years younger than the Participant. In the event that a Participant's
spouse is more than fifteen years younger than the Participant, the monthly
amount payable to the spouse hereunder shall be a reduced amount, actuarially
determined. Such reduced amount shall be calculated by first determining the
present

                                       7
<PAGE>
 
value of the benefits payable to the surviving spouse over his or her
life expectancy as if he or she were exactly fifteen (15) years younger than the
Participant, and then determining the monthly benefit that could be paid over
the surviving spouse's actual life expectancy, using the present value amount so
determined.

     (e) Except as otherwise specifically provided herein, for purposes of
determining present values and/or alternative forms of benefits hereunder, the
1983 Group Annuity Mortality Table (GAM 83) adjusted as provided in REV. RUL. 
95-6, 1995-4 I.R.B. 22, and 6% interest per annum shall be used.

8.   Termination of Participation/Benefits.

     Participation in this Plan may be terminated by the Company, and all
accrued benefits hereunder may at any time be forfeited, either before or after
benefits become payable hereunder, notwithstanding any provision in this Plan to
the contrary, if the Board of Directors of the Company, acting in its sole and
absolute discretion, shall find that at any time before or after the
Participant's termination, retirement or disability and before the Participant's
death:

     (a) The Participant induces or attempts to induce a client or customer of
the Company to curtail or cancel any business dealing with the Company,

     (b) The Participant induces or attempts to induce any other employee of the
Company to terminate employment with the Company,

     (c) The Participant fails to cooperate in the procurement or maintenance of
any policies of insurance as contemplated by paragraph 9 below, or

     (d) The Participant commits a violation of the Statement on Ethics of
Fisher Companies Inc., and such violation results in the termination of the
Participant's employment with the Company.

9.  Insurance.

     (a) It is further a condition of participation in this Plan that, if the
Company at its sole option shall at any time wish to own, sponsor and/or
maintain any policy of life or disability insurance on the Participant the
proceeds of which are payable to either the Participant or the Company:

     (i) The Participant shall fully cooperate with the Company in its
     application for such insurance, including, without limiting the generality
     of the foregoing, submitting to physical examinations and answering
     truthfully and completely, without mental reservation or concealment, any
     questions or requests for information in connection therewith; and

                                       8
<PAGE>
 
     (ii) The Participant shall not, by act or omission, give cause for any
insurance company to restrict or cancel any policy of insurance on the
Participant owned by the Company or give cause for such insurance company's
refusal to pay the full proceeds to the Company, including refusal to pay the
full proceeds because of the suicide of the Participant.

     (b) an individual shall not become a participant in this plan unless and
until:

     (i) The Company has procured a policy of life insurance and a policy of
disability insurance on that individual adequate in amount to fund the life and
disability benefits contemplated by this Plan assuming no further increases in
the individual's Average Compensation;

     (ii) The Company has specifically waived such requirement in writing; or

     (iii) The Company has, by separate agreement entered into between the
Company and the individual, limited the benefits payable to that individual
under this Plan. it is contemplated that such an agreement may be entered into
if an individual is uninsurable, uninsurable against certain risks or
uninsurable at standard rates. Any such agreement shall be deemed to be part of
this Plan with respect to the Participant to whom it applies.

     (c) All determinations made by the insurance company with regard to the
question of death, disability, waiver of premium and/or pre-existing conditions
shall be accepted as conclusive by the Company, the Participant and any
beneficiary.

10.  ERISA.

     Participation in this Plan may be terminated by the Company if the
Department of Labor issues regulations under ERISA which indicate that the
Participant is no longer eligible for continued participation in the Plan. This
determination shall be made by the Board of Directors of the Company acting in
its sole and absolute discretion. In the event of a termination of this
Agreement pursuant to this paragraph 10, the Participant shall be entitled to
receive a termination benefit pursuant to the terms and conditions of paragraph
2.

11.  No Current Benefit.

     The benefits to be paid pursuant to the terms of this Plan are granted by
the Company as additional benefits to the Participants and are not part of any
salary reduction plan or an arrangement deferring a bonus or a salary increase.
The Participants have no option to receive any current payment or bonus in lieu
of these additional benefits.

12.  No Trust Agreement.

     (a) Nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship

                                       9
<PAGE>
 
between the Company, or any employee or agent thereof, and the Participants or
any other person.

     (b) The rights of the Participants or beneficiaries under this Plan are
purely contractual and shall not be funded or secured in any way. Payments to
the Participants or their beneficiaries hereunder shall be made only from the
general assets of the Company, and no person, other than the company, shall
have, by virtue of this Plan, any interest in such assets. such assets are
available to satisfy the claims of the Company's general creditors and, to the
extent any person acquires a right to receive payments from the Company under
the terms of this Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company.

     (c) The Company, at its discretion, may acquire an annuity or insurance
policy insuring the life of the Participants from which it can satisfy its
obligation to make benefit payments pursuant to this Plan. However, it is
expressly understood that such contract (or contracts), if acquired, does not
create any account or fund separate from the ordinary assets of the Company, and
neither the Participants nor their beneficiaries may look to any such contract
as the fund from which benefits under this plan are to be paid. Any such
contract so acquired for the convenience of the Company shall be the sole and
exclusive property of the Company, with the Company named as applicant, owner,
and beneficiary of any life insurance contract payments; provided, further, that
any such contract shall not be held in trust or collateral security for the
benefit of the Participants or beneficiaries, nor is any representation made
herein that such contract, if acquired, will be used to provide benefits under
this plan. Neither the Participants nor their beneficiaries shall have any
beneficial ownership interest in, or preferred or other claim against, the life
insurance contract, if acquired by the Company.

13.  No Assignment.

     No right of a Participant or any other person to the payment of deferred
compensation or other benefits under this Plan shall be assigned, transferred,
pledged, hypothecated, or encumbered. No right of a Participant under this Plan
shall be subject to garnishment, attachment, or other legal process, whether by
the Participant or any beneficiary named herein, any heir or creditor of the
Participant, or any other person. Any attempted assignment of any right
hereunder by a Participant or a beneficiary shall, at the Company's option,
cause all rights of the Participant hereunder to terminate.

14.  Incapacity of Beneficiary.

     If the Company shall determine that a Participant is unable to care for his
or her affairs because of illness, accident, or other incapacity, any payment
due may be paid to the Participant's spouse or to any other person considered by
the Company to have incurred expense for the Participant or to be otherwise
responsible for the Participant or his or her affairs, in such manner and
proportions as the Company may determine (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee, or other legal
representative). Any such payment 

                                       10
<PAGE>
 
made in good faith by the Company shall be a complete discharge of the
liabilities of the Company under this Plan.

15.  Company's Powers and Liabilities.

     The Company shall have the full power and authority to interpret, construe,
and administer this Plan, and the Company's interpretation and construction
hereof and action hereunder shall be binding and conclusive on all persons for
all purposes. Neither the Company, its officers, directors, employees, or agents
shall be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless attributable to his
own willful misconduct or lack of good faith. Any notice, consent, or demand
required or permitted to be given under the terms of this Plan shall be in
writing and shall be signed by the party giving or making the same. The date of
such notice, consent, or demand shall be the date of receipt by the addressee.

16.  Binding Effect.

     This Plan shall be binding upon and inure to the benefit of the Company,
its successors and assigns, and the Participant, his heirs, executors,
administrators and legal representatives.

17.  Continued Employment.

     Nothing contained herein shall be construed as conferring upon a
Participant the right to continue in the employ of the Company as an executive
or in any other capacity. The Participant or the Company may terminate the
Participant's employment at will, with or without cause. Upon termination of the
Participant's employment with the Company, all rights of the Participant
hereunder shall terminate, except as otherwise provided herein.

18.  Governing Law.

     This Plan shall be construed and governed in accordance with the laws of
the State of Washington.

19.  Qualified Plan.

     Any deferred compensation payable under this Plan shall not be deemed
salary or other compensation to the Participants for purposes of computing
benefits to which they may be entitled under any pension plan or other
arrangement of the Company for the benefit of its employees.

20.  Amendment; Entire Agreement.

     No modification of this Plan shall be effective unless communicated in
writing to the Participant. With respect to the subject matter hereof, this Plan
constitutes the entire agreement and understanding of the Company and the
Participant and shall supersede any prior agreement

                                       11
<PAGE>
 
or understanding including any and all Supplemental Pension Plan Agreements and
amendments thereto previously entered into between the Company and the
Participant. Further, the Company may, from time to time, furnish the
Participant with information containing estimates of the projected benefits
available under this Plan. This information will be provided simply as a tool to
assist the Participant in planning for his or her retirement, and not as a
definitive statement of the benefits that will be available to the Participant
upon retirement or in the event of death or disability. This is because the
estimates of projected benefits are affected by a number of variables that are
constantly changing which include, but are not limited to salary levels,
interest rates, qualified plan benefits, group life and disability benefits and
Social Security benefits. In certain circumstances the benefits payable to a
Participant under this Plan may be adjusted based upon that Participant's
individual circumstances. Adjustments resulting in a reduction of benefits will
generally be prospective in application, whereas adjustments resulting in an
increase in benefits may be retroactive.

21.  Severability.

     If any provision of this Plan is rendered invalid or unenforceable, the
remaining provisions of this Plan shall continue to be fully effective.

22.  Participation in Other Participant Benefit Plans.

     Nothing herein shall, in any manner, modify, impair, or affect the existing
or future rights or interests of the Participants (i) to receive any employee
benefits to which he would otherwise be entitled; or (ii) as participants in the
present or any future incentive or bonus plan, stock option plan, pension plan,
or profit sharing plan of the Company, applicable generally to salaried
employees. The rights and interests of the Participants to any employee benefits
or as a participant or beneficiary in or under any or all such plans shall
continue in full force and effect unimpaired, and this Plan shall not act to
deny the Participant the right at any time hereafter to become a participant or
beneficiary under or pursuant to any and all such plans.

23.  Legal and Tax Consequences to Participants.

     The Company does not represent or guarantee that any particular income or
other tax consequences will occur under the Plan. The Participant acknowledges
that he has been advised to consult with professional tax and other advisors
regarding all benefits, burdens, risks, and consequences arising in connection
with this Plan.

24.  FICA/Medicare/Federal Income Tax Withholding.

     Any benefits payable to a Participant and/or a beneficiary hereunder shall
be subject to FICA, Medicare, and Federal and State Income Tax withholding to
the extent required by law.

     IN WITNESS WHEREOF, the undersigned has executed this Plan as of the date
first above written.

                                       12
<PAGE>
 
                             FISHER COMPANIES INC.
 
 
                             By: /s/ William W. Krippaehne, Jr.
                                 ------------------------------
                                 William W. Krippaehne, Jr.
                                 Its President & CEO

                                       13

<PAGE>
 
                                                                    EXHIBIT 10.5



                           SUPPLEMENTAL PENSION PLAN


     THIS Plan is established, and is to be effective as of the 7th day of
March, 1996, by FISHER BROADCASTING INC., a Washington corporation (the
"Company"), for the benefit of a select group of management employees (the
"Participants").

A.  The Participants in this Plan shall be as determined from time to time by
the Board of Directors of the Company.

B.  The ability and experience of the Participants are of such value to the
Company that the company wishes to more adequately compensate the Participants
for their past and future services by providing special retirement and
survivorship income benefits to them.

C.  The funds accumulated in Company-sponsored qualified retirement plans may be
inadequate in amount to provide the Participants with a retirement benefit
commensurate with the anticipated value of their past and future services to the
Company.

D.  This plan is intended to supersede any and all Supplementary Pension
Agreements and all amendments thereto previously entered into between the
Company and the Participants who were employed by the Company as of the
effective date hereof.

     NOW, THEREFORE, the Company hereby agrees as follows:


1.  Retirement Benefits.

     (a) Entitlement/Payment. If a Participant is in the employ of the Company
when the Participant attains sixty-five (65) years of age, then the Company
shall thereafter pay to the Participant monthly retirement income as determined
pursuant to paragraph (b) immediately below, commencing with a payment on the
first day of the month coincident with or next following the Participant's
attainment of sixty-five (65) years of age (hereinafter referred to as the
"Retirement Date") and continuing with a like payment on the first day of each
month thereafter throughout the Participant's lifetime. If, while receiving said
monthly retirement income, the Participant dies prior to the expiration of a
period of one hundred twenty (120) months from and after his Retirement Date,
then the Company shall thereafter pay said amount to the beneficiary designated
in paragraph 6 below, continuing until the expiration of said one hundred twenty
(120) month period; provided, however, that if (i) the primary beneficiary
designated in paragraph 6 below is the Participant's surviving spouse; (ii) the
Participant was married to said spouse on the Participant's Retirement Date, and
(iii) said spouse is living at the end of the aforesaid one hundred twenty (120)
month period, said payments shall thereafter continue until the death of said
surviving spouse.

                                       1
<PAGE>
 
     (b) Amount.  A Participant's monthly retirement income under this paragraph
(b) shall be equal to seventy percent (70%) of the Participant's average
compensation less the following amounts:

     i)  One-half of the Participant's monthly Primary Social Security amount
     determined as if the Participant commenced receiving Social Security
     benefits as of the Participant's Retirement Date;

     ii)  The monthly amount payable to the Participant as the normal form of
     benefit pursuant to any qualified pension plan maintained by the Company.
     such amount shall be determined as of the Participant's Retirement Date, as
     if the Participant remained in the employ of the Company until that date.
     The amount of the reduction under this subparagraph (b)(ii) shall not
     include any benefit attributable to Participant contributions and earnings
     thereon; and

     iii)  The monthly amount payable to the Participant in the form of a single
     life annuity pursuant to any qualified profit sharing (including 401(k))
     plan maintained by the company.  Such amount shall be determined as of the
     Participant's Retirement Date, as if the Participant remained in the employ
     of the Company until that date.  Further, the monthly amount payable as a
     single life annuity shall be determined by converting the Participant's
     account balance to a single life annuity as of the Participant's Retirement
     Date using the interest rate and mortality assumptions set forth in
     paragraph 7(e) hereof.  The amount of the reduction under this subparagraph
     (b)(iii) shall not consider any portion of the Participant's account
     balance attributable to Participant contributions and earnings thereon.  In
     determining the amount of the reduction attributable to Employer
     contributions and earnings thereon, the following assumptions shall be
     used:

          a)  Employer contributions shall equal actual Employer contributions;

          b)  Historical earnings shall equal actual earnings on Employer
          contributions; and

          c)  Hypothetical future earnings shall be projected at the average of
          the dividend (interest) rates of the Plan's money market option
          determined as of December 31 of each of the prior three (3) years.

     (c) Average Compensation.  A Participant's Average Compensation shall be
the average of the Participant's Plan Compensation for the Averaging Period in
the Participant's Compensation History which results in the highest Average
Compensation, divided by 12. A Participant's Compensation History is the
Participant's entire period of employment with the Employer. The Averaging
Period is 3 consecutive Compensation periods (or the entire period of
employment, if shorter). A Compensation period is the 12-month period ending on
the last day of the Plan Year. A Participant's Compensation History does not
include the 12-month Compensation period in which the Participant terminates
employment. Average Compensation shall not include

                                       2
<PAGE>
 
long-term and short-term incentive compensation, bonuses, commissions and
taxable and non-taxable fringe benefits.

     i)  Total Compensation. All wages for federal income tax withholding
     purposes, as defined under Code (S)3401(a) (for purposes of income tax
     withholding at the source), disregarding any rules limiting the
     remuneration included as wages based on the nature or location of the
     employment or the services performed. Total Compensation also includes all
     other payments to an Employee in the course of the Employer's trade or
     business, for which the Employer must furnish the Employee a written
     statement under Code (S)(S)6041, 6051 and 6052. As long as the instructions
     to the "wages, tips, other compensation" box of Form W-2 (or a
     corresponding box on a later released Form W-2), are consistent with the
     instructions for the 1991 Form W-2 (Box 10), the Employer may treat the
     amount reported in the "wages, tips, other compensation" as satisfying this
     definition. Total Compensation does not include elective contributions.

     ii)  Plan Compensation. Plan Compensation means Total Compensation
     described in subparagraph (c)(i)), but excluding reimbursements or other
     expense allowances, fringe benefits (cash and noncash), moving expenses,
     bonuses, long-term and short-term incentive compensation, deferred
     compensation and welfare benefits, and including elective contributions.
     Plan Compensation applies to determine a Participant's benefit formula and
     Accrued Benefit under Article V.

     iii)  Elective Contributions. Elective contributions are amounts excludable
     from the Employee's gross income under Code (S)(S)125 or 402(e)(3), and
     contributed by the Employer, at the Employee's election, to a Code
     (S)401(k) arrangement or cafeteria plan.

     iv)  Plan Year. Plan year means the fiscal year of the Plan, a twelve (12)
     consecutive month period ending every June 30.

A Participant's Plan Compensation for each of the three Plan Years ending prior
to July 1, 1996, shall be equal to the Participant's Plan Compensation for the
Plan Year ended June 30, 1996.

     (d)  Late Retirement. In the event that Participant continues in the employ
     of the company beyond the Participant's Retirement Date such continued
     employment shall not be taken into account under this Plan inasmuch as the
     Participant's monthly retirement income commences as of his Retirement
     Date.


2.  Termination Benefit.

    If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, such Participant's accrued benefit
shall be determined as follows:

                                       3
<PAGE>
 
<TABLE>

<S>                                  <C>                       <C> 
Total actual years of service
with the Company after first
becoming a Participant in
the Plan and prior to
attaining age sixty-five
(65) Total possible years
of service with the Company          Projected Monthly
after first becoming a               Retirement Benefit        Participant's
Participant in the Plan and          as contemplated by        Accrued Benefit
prior to attaining age           x   Paragraph 1 of       =    (payable monthly
sixty-five (65)                      this Plan                 commencing at age
                                                               sixty-five (65)
 
</TABLE>



     For purposes of determining a Participant's accrued benefit, the term
"years of service" shall include all calendar years in which the Participant
completes at least 1,000 hours of service and the term "hours of service" shall
have the same meaning as it does under the qualified pension plan of the
Company. Furthermore, "total possible years of service with the Company after
first becoming a Participant in the Plan and prior to attaining age sixty-five
(65)" shall be determined by computing the maximum number of years of service
that the Participant could possibly complete with the Company between the date
the Participant first becomes a Participant in the Plan and the date on which
the Participant attains age sixty-five (65). The Participant's accrued benefit
under this paragraph 2 shall never exceed the Participant's retirement benefit
as contemplated by paragraph 1 of this Plan.

     If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, the Participant's accrued benefit shall
normally be paid in the form of a monthly annuity commencing at age sixty-five
(65), but may, in the sole discretion of the Company, be paid to the Participant
as a reduced annuity commencing prior to age sixty-five (65) or as a lump sum.
Any annuity shall be payable under the same terms and conditions as contemplated
by paragraph 1 of this Plan; provided, however, that payments shall only
continue until the death of the Participant's surviving spouse if: (i) the
beneficiary designated in paragraph 6 below is the Participant's surviving
spouse and (ii) the Participant was married to said spouse on the Participant's
termination date. Any present value calculations required in connection with the
payment of a lump sum shall be made using the 1983 Group Annuity Mortality Table
(GAM 83) adjusted as provided in Rev. Rul. 95-6, 1995-4 I.R.B. 22, and the
annual rate of interest on 30-year Treasury securities, as prescribed by the
Secretary, for the month of May preceding the Plan Year in which the
distribution occurs, or 6% interest per annum, whichever is greater.

                                       4
<PAGE>
 
     If the Participant dies prior to receiving the entirety of the benefits
contemplated by this paragraph 2, such benefits shall thereafter be paid to the
beneficiary designated in paragraph 6 below.

3.   Death Benefit.

     (a)  If a Participant dies prior to his Retirement Date while in the employ
of the Company, then the Company shall thereafter pay to the beneficiary
designated in paragraph 6 below a monthly death benefit amount as determined
pursuant to paragraph (b) below commencing with a payment on the first day of
the month next following the Participant's death and continuing with a like
payment on the first day of each month thereafter for a total of one hundred
twenty (120) months; provided, however, that if the primary beneficiary
designated in paragraph 6 below is the Participant's surviving spouse, and said
spouse is living at the end of the aforesaid one hundred twenty (120) month
period, said payments shall continue until the death of said surviving spouse.

     (b)  A Participant's monthly death benefit amount under this paragraph (b)
shall be equal to the greater of:

     (i) The Participant's Accrued Benefit under paragraph 2 of this Plan
     determined as if the Participant's employment had been involuntarily
     terminated on the day preceding the Participant's death, or

     (ii) Thirty-five percent (35%) of the Participant's Average Compensation
     less the following amounts:

          a)  One-half of the Participant's monthly Primary Social Security
          amount determined as if the Participant commenced receiving Social
          Security Benefits as of the Participant's Retirement Date annuitized
          over the payment period set forth in paragraph 3(a);

          b)  The greater of the present value of the monthly amount payable to
          the Participant as the normal form of benefit pursuant to any
          qualified pension plan maintained by the Company or the present value
          of the death benefit under any such plan, annuitized over the payment
          period set forth in paragraph 3(a).  Such amount shall be determined
          as of the Participant's date of death.  The amount of the reduction
          under this subparagraph (b)(ii)b) shall not include any benefit
          attributable to Participant contributions and earnings thereon;

          c)  The Participant's account balance in any qualified profit sharing
          (including 401(k)) plan maintained by the Company annuitized over the
          payment period set forth in paragraph 3(a).  Such amount shall be
          determined as of the participant's date of death.  The amount of the
          reduction under this subparagraph (b)(iii)c) shall not consider any
          portion of the Participant's account balance attributable to
          participant contributions and earnings thereon; and

                                       5
<PAGE>
 
          d)  The proceeds from any life insurance policy on the life of the
          Participant under any Company sponsored Group Life Insurance Plan,
          annuitized over the payment period set forth in paragraph 3(a).



4.  Disability Benefit.

     (a) If the Participant becomes totally and permanently disabled prior to
his retirement date and while in the employ of the Company and such disability
continues for a period of six (6) months, then the Company shall thereafter pay
the Participant a monthly disability payment in the amount as determined
pursuant to paragraph (b) below commencing with a payment on the first day of
the month next following the expiration of the six- (6-) month period
(hereinafter referred to as the "Disability Date") and continuing with a like
payment on the first day of each month thereafter until the Participant attains
sixty-five (65) years of age or ceases to be disabled, whichever occurs first.
If the Participant continues to be disabled until he is sixty-five (65) years of
age, then the monthly payments to the Participant thereafter shall be equal to
the monthly amount of retirement income specified in paragraph 1, and shall be
paid pursuant to the terms and conditions of paragraph 1. If, while receiving
disability payments under this paragraph the Participant dies prior to attaining
the age of sixty-five (65) years, such disability payments shall cease, and the
Company shall thereafter pay to the beneficiary designated in paragraph 6 the
amount of the death benefit specified in paragraph 3, in the manner and for the
period of time provided in said paragraph.

     (b) A Participant's monthly disability benefit amount under this paragraph
(b) shall be equal to sixty percent (60%) of the Participant's Average
Compensation less the following amounts:

     (i) The monthly amount payable to the Participant pursuant to the Company
     sponsored Group Long-term Disability Plan determined prior to any reduction
     for the Participant's monthly disability Social Security amount, if any;
     and

     (ii) One-half of the Participant's monthly disability Social Security
     amount, determined as of the Participant's Disability Date.



5.  Voluntary Termination.

    If a the Participant voluntarily terminates employment with the Company
prior to attaining age sixty-five (65) for any reason other than total and
permanent disability, the Participant shall be entitled to no benefit under this
Plan.

                                       6
<PAGE>
 
6.  Beneficiary.

    For purposes of paragraphs 1, 2, 3, and 4, the Participant's beneficiary
shall be as follows:

    (a) The spouse of the Participant shall be the primary beneficiary.

    (b) If said spouse fails to survive the Participant, then any remaining
payments under this Plan shall be made in accordance with the Participant's
beneficiary designation form then on file with the Company, or if none to the
Participant's estate.

    (c) If said spouse survives the Participant and thereafter dies before
receiving all payments hereunder, such remaining payments shall be made to such
persons in such amounts as said spouse designates in a validly executed
beneficiary designation form on file with the Company. If said spouse fails to
exercise this power of appointment, such remaining payments shall be made to
such persons in such amounts as provided in paragraph 6(b) immediately above.


7.  Conditions and Other Provisions.

    (a) The benefits under paragraphs 1, 2, 3, and 4 are conditioned upon the
Participant having been continuously in the employ of the Company from the date
of becoming a Participant in this plan until the happening of the event that
would qualify the Participant (or his beneficiary) for such benefits; provided,
however, that the employment of the Participant shall not be deemed to have
ceased because of or during (i) any period of involuntary military service of
the Participant or (ii) a leave of absence granted the Participant by the
Company which does not exceed a period of one (1) year.

    (b) Upon the death of the Participant, if monthly benefits become payable to
a beneficiary by virtue of the provisions of paragraphs 1, 2, 3, or 4, the
Company may then, or at any time thereafter, at its sole option and discretion
and without the consent of any beneficiary, elect to pay the current
beneficiary, in one lump sum, the present value of the monthly payments
remaining unpaid at the time of such election. Any present value calculations
required in connection with the payment of such a lump sum shall be made using
the 1983 Group Annuity Mortality Table (GAM 83) adjusted as provided in Rev.
Rul. 95-6, 1995-4 I.R.B. 22, and the annual rate of interest on 30-year Treasury
securities, as prescribed by the Secretary, for the month of May preceding the
Plan Year in which the distribution occurs, or 6% interest per annum, whichever
is greater.

    (c) Except as specifically provided herein, benefits under this Plan shall
not be payable to the Participant or any beneficiary under more than one of the
first four paragraphs of this Plan.

    (d) For the purpose of determining any and all benefits payable under this
plan, it shall be assumed that the participant's spouse is no more than fifteen
(15) years younger than the participant. in the event that a participant's
spouse is more than fifteen years younger than the participant, the monthly
amount payable to the spouse hereunder shall be a reduced amount,

                                       7
<PAGE>
 
actuarially determined. Such reduced amount shall be calculated by first
determining the present value of the benefits payable to the surviving spouse
over his or her life expectancy as if he or she were exactly fifteen (15) years
younger than the Participant, and then determining the monthly benefit that
could be paid over the surviving spouse's actual life expectancy, using the
present value amount so determined.

    (e) Except as otherwise specifically provided herein, for purposes of
determining present values and/or alternative forms of benefits hereunder, the
1983 Group Annuity Mortality Table (GAM 83) adjusted as provided in Rev. Rul. 
95-6, 1995-4 I.R.B. 22, and 6% interest per annum shall be used.

8.  Termination of Participation/Benefits.

    Participation in this Plan may be terminated by the Company, and all accrued
benefits hereunder may at any time be forfeited, either before or after benefits
become payable hereunder, notwithstanding any provision in this Plan to the
contrary, if the Board of Directors of the Company, acting in its sole and
absolute discretion, shall find that at any time before or after the
Participant's termination, retirement or disability and before the Participant's
death:


    (a) The participant induces or attempts to induce a client or customer of
the Company to curtail or cancel any business dealing with the Company,

    (b) The Participant induces or attempts to induce any other employee of the
Company to terminate employment with the Company,

    (c) The Participant fails to cooperate in the procurement or maintenance of
any policies of insurance as contemplated by paragraph 9 below, or

    (d) The Participant commits a violation of the Statement on Ethics of Fisher
Companies Inc., and such violation results in the termination of the
Participant's employment with the Company.


9.  Insurance.

    (a) It is further a condition of participation in this Plan that, if the
Company at its sole option shall at any time wish to own, sponsor and/or
maintain any policy of life or disability insurance on the Participant the
proceeds of which are payable to either the Participant or the Company:

    (i) The Participant shall fully cooperate with the Company in its
    application for such insurance, including, without limiting the generality
    of the foregoing, submitting to physical examinations and answering
    truthfully and completely, without mental reservation or concealment, any
    questions or requests for information in connection therewith; and

                                       8
<PAGE>
 
    (ii) The Participant shall not, by act or omission, give cause for any
    insurance company to restrict or cancel any policy of insurance on the
    Participant owned by the Company or give cause for such insurance company's
    refusal to pay the full proceeds to the Company, including refusal to pay
    the full proceeds because of the suicide of the Participant.

    (b) An individual shall not become a participant in this plan unless and
until:

    (i) the Company has procured a policy of life insurance and a policy of
    disability insurance on that individual adequate in amount to fund the life
    and disability benefits contemplated by this Plan assuming no further
    increases in the individual's Average Compensation;

    (ii) the Company has specifically waived such requirement in writing; or

    (iii) the Company has, by separate agreement entered into between the
    Company and the individual, limited the benefits payable to that individual
    under this Plan. it is contemplated that such an agreement may be entered
    into if an individual is uninsurable, uninsurable against certain risks or
    uninsurable at standard rates. Any such agreement shall be deemed to be part
    of this Plan with respect to the Participant to whom it applies.

    (c) All determinations made by the insurance company with regard to the
question of death, disability, waiver of premium and/or pre-existing conditions
shall be accepted as conclusive by the Company, the Participant and any
beneficiary.

10.  ERISA.

     Participation in this Plan may be terminated by the Company if the
Department of Labor issues regulations under ERISA which indicate that the
Participant is no longer eligible for continued participation in the Plan. This
determination shall be made by the Board of Directors of the Company acting in
its sole and absolute discretion. In the event of a termination of this
Agreement pursuant to this paragraph 10, the Participant shall be entitled to
receive a termination benefit pursuant to the terms and conditions of paragraph
2.

11.  No Current Benefit. 

     The benefits to be paid pursuant to the terms of this Plan are granted by
the Company as additional benefits to the Participants and are not part of any
salary reduction plan or an arrangement deferring a bonus or a salary increase.
The Participants have no option to receive any current payment or bonus in lieu
of these additional benefits.

12.  No Trust Agreement.

     (a) Nothing contained in this Plan and no action taken pursuant to the
provisions of this Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship

                                       9
<PAGE>
 
between the Company, or any employee or agent thereof, and the Participants or
any other person.

     (b) The rights of the Participants or beneficiaries under this Plan are
purely contractual and shall not be funded or secured in any way. Payments to
the Participants or their beneficiaries hereunder shall be made only from the
general assets of the Company, and no person, other than the Company, shall
have, by virtue of this Plan, any interest in such assets. Such assets are
available to satisfy the claims of the Company's general creditors and, to the
extent any person acquires a right to receive payments from the Company under
the terms of this Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company.

     (c) The Company, at its discretion, may acquire an annuity or insurance
policy insuring the life of the Participants from which it can satisfy its
obligation to make benefit payments pursuant to this Plan. However, it is
expressly understood that such contract (or contracts), if acquired, does not
create any account or fund separate from the ordinary assets of the Company, and
neither the Participants nor their beneficiaries may look to any such contract
as the fund from which benefits under this Plan are to be paid. Any such
contract so acquired for the convenience of the Company shall be the sole and
exclusive property of the Company, with the Company named as applicant, owner,
and beneficiary of any life insurance contract payments; provided, further, that
any such contract shall not be held in trust or collateral security for the
benefit of the Participants or beneficiaries, nor is any representation made
herein that such contract, if acquired, will be used to provide benefits under
this Plan. Neither the Participants nor their beneficiaries shall have any
beneficial ownership interest in, or preferred or other claim against, the life
insurance contract, if acquired by the Company.

13.  No Assignment.

     No right of a Participant or any other person to the payment of deferred
compensation or other benefits under this Plan shall be assigned, transferred,
pledged, hypothecated, or encumbered. No right of a Participant under this Plan
shall be subject to garnishment, attachment, or other legal process, whether by
the Participant or any beneficiary named herein, any heir or creditor of the
Participant, or any other person. Any attempted assignment of any right
hereunder by a Participant or a beneficiary shall, at the Company's option,
cause all rights of the Participant hereunder to terminate.

14.  Incapacity of Beneficiary.

     If the Company shall determine that a Participant is unable to care for his
or her affairs because of illness, accident, or other incapacity, any payment
due may be paid to the Participant's spouse or to any other person considered by
the Company to have incurred expense for the Participant or to be otherwise
responsible for the Participant or his or her affairs, in such manner and
proportions as the Company may determine (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee, or other legal
representative). Any such payment

                                       10
<PAGE>
 
made in good faith by the Company shall be a complete discharge of the
liabilities of the Company under this Plan.

15.  Company's Powers and Liabilities.

     The Company shall have the full power and authority to interpret, construe,
and administer this Plan, and the Company's interpretation and construction
hereof and action hereunder shall be binding and conclusive on all persons for
all purposes. Neither the Company, its officers, directors, employees, or agents
shall be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless attributable to his
own willful misconduct or lack of good faith. Any notice, consent, or demand
required or permitted to be given under the terms of this Plan shall be in
writing and shall be signed by the party giving or making the same. The date of
such notice, consent, or demand shall be the date of receipt by the addressee.

16.  Binding Effect.

     This Plan shall be binding upon and inure to the benefit of the Company,
its successors and assigns, and the Participant, his heirs, executors,
administrators and legal representatives.

17.  Continued Employment.

     Nothing contained herein shall be construed as conferring upon a
Participant the right to continue in the employ of the Company as an executive
or in any other capacity. The Participant or the Company may terminate the
Participant's employment at will, with or without cause. Upon termination of the
Participant's employment with the Company, all rights of the Participant
hereunder shall terminate, except as otherwise provided herein.

18.  Governing Law.

     This Plan shall be construed and governed in accordance with the laws of
the State of Washington.

19.  Qualified Plan.

     Any deferred compensation payable under this Plan shall not be deemed
salary or other compensation to the Participants for purposes of computing
benefits to which they may be entitled under any pension plan or other
arrangement of the Company for the benefit of its employees.

20.  AMENDMENT; ENTIRE AGREEMENT.

     No modification of this Plan shall be effective unless communicated in
writing to the Participant. With respect to the subject matter hereof, this Plan
constitutes the entire agreement and understanding of the Company and the
Participant and shall supersede any prior agreement

                                       11
<PAGE>
 
or understanding including any and all Supplemental Pension Plan Agreements and
amendments thereto previously entered into between the Company and the
Participant. Further, the Company may, from time to time, furnish the
Participant with information containing estimates of the projected benefits
available under this Plan. This information will be provided simply as a tool to
assist the Participant in planning for his or her retirement, and not as a
definitive statement of the benefits that will be available to the Participant
upon retirement or in the event of death or disability. This is because the
estimates of projected benefits are affected by a number of variables that are
constantly changing which include, but are not limited to salary levels,
interest rates, qualified plan benefits, group life and disability benefits and
Social Security benefits. In certain circumstances the benefits payable to a
Participant under this Plan may be adjusted based upon that Participant's
individual circumstances. Adjustments resulting in a reduction of benefits will
generally be prospective in application, whereas adjustments resulting in an
increase in benefits may be retroactive.

21.  Severability.

     If any provision of this Plan is rendered invalid or unenforceable, the
remaining provisions of this Plan shall continue to be fully effective.

22.  Participation in Other Participant Benefit Plans.

     Nothing herein shall, in any manner, modify, impair, or affect the existing
or future rights or interests of the Participants (i) to receive any employee
benefits to which he would otherwise be entitled; or (ii) as participants in the
present or any future incentive or bonus plan, stock option plan, pension plan,
or profit sharing plan of the Company, applicable generally to salaried
employees. The rights and interests of the Participants to any employee benefits
or as a participant or beneficiary in or under any or all such plans shall
continue in full force and effect unimpaired, and this Plan shall not act to
deny the Participant the right at any time hereafter to become a participant or
beneficiary under or pursuant to any and all such plans.

23.  Legal and Tax Consequences to Participants.

     The Company does not represent or guarantee that any particular income or
other tax consequences will occur under the Plan. The Participant acknowledges
that he has been advised to consult with professional tax and other advisors
regarding all benefits, burdens, risks, and consequences arising in connection
with this Plan.

24.  FICA/Medicare/Federal Income Tax Withholding.

     Any benefits payable to a Participant and/or a beneficiary hereunder shall
be subject to FICA, Medicare, and Federal and State Income Tax withholding to
the extent required by law.

                                       12
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned has executed this Plan as of the date
first above written.


                                   FISHER BROADCASTING INC.
 
   
                                   By:/s/ Patrick M. Scott
                                      --------------------
                                      Patrick M. Scott
                                      Its President & CEO

                                       13

<PAGE>
 
                                                                    EXHIBIT 10.6

                           SUPPLEMENTAL PENSION PLAN


     THIS Plan is established, and is to be effective as of the 1st day of
March, 1996, by FISHER MILLS INC., a Washington corporation (the "Company"), for
the benefit of a select group of management employees (the "Participants").

A.  The Participants in this Plan shall be as determined from time to time by
the Board of Directors of the Company.

B.  The ability and experience of the Participants are of such value to the
Company that the Company wishes to more adequately compensate the Participants
for their past and future services by providing special retirement and
survivorship income benefits to them.

C.  The funds accumulated in Company-sponsored qualified retirement plans may be
inadequate in amount to provide the Participants with a retirement benefit
commensurate with the anticipated value of their past and future services to the
Company.

D.  This Plan is intended to supersede any and all Supplementary Pension
Agreements and all amendments thereto previously entered into between the
Company and the Participants who were employed by the Company as of the
effective date hereof.

     NOW, THEREFORE, the Company hereby agrees as follows:


1.  RETIREMENT BENEFITS.

     (a) ENTITLEMENT/PAYMENT.  If a Participant is in the employ of the Company
when the Participant attains sixty-five (65) years of age, then the Company
shall thereafter pay to the Participant monthly retirement income as determined
pursuant to paragraph (b) immediately below, commencing with a payment on the
first day of the month coincident with or next following the Participant's
attainment of sixty-five (65) years of age (hereinafter referred to as the
"Retirement Date") and continuing with a like payment on the first day of each
month thereafter throughout the Participant's lifetime.  If, while receiving
said monthly retirement income, the Participant dies prior to the expiration of
a period of one hundred twenty (120) months from and after his Retirement Date,
then the Company shall thereafter pay said amount to the beneficiary designated
in paragraph 6 below, continuing until the expiration of said one hundred twenty
(120) month period; provided, however, that if (i) the primary beneficiary
designated in paragraph 6 below is the Participant's surviving spouse; (ii) the
Participant was married to said spouse on the Participant's Retirement Date, and
(iii) said spouse is living at the end of the aforesaid one hundred twenty (120)
month period, said payments shall thereafter continue until the death of said
surviving spouse.

                                       1
<PAGE>
 
     (b) AMOUNT.  A Participant's monthly retirement income under this paragraph
(b) shall be equal to fifty percent (50%) of the Participant's Average
Compensation less the following amounts:

     i)  One-half of the Participant's monthly Primary Social Security amount
     determined as if the Participant commenced receiving Social Security
     Benefits as of the Participant's Retirement Date;

     ii)  The monthly amount payable to the Participant as the normal form of
     benefit pursuant to any qualified pension plan maintained by the Company.
     Such amount shall be determined as of the Participant's Retirement Date, as
     if the Participant remained in the employ of the Company until that date.
     The amount of the reduction under this subparagraph (b)(ii) shall not
     include any benefit attributable to Participant contributions and earnings
     thereon; and

     iii)  The monthly amount payable to the Participant in the form of a single
     life annuity pursuant to any qualified profit sharing (including 401(k))
     plan maintained by the Company.  Such amount shall be determined as of the
     Participant's Retirement Date, as if the Participant remained in the employ
     of the Company until that date.  Further, the monthly amount payable as a
     single life annuity shall be determined by converting the Participant's
     account balance to a single life annuity as of the Participant's Retirement
     Date using the interest rate and mortality assumptions set forth in
     paragraph 7(e) hereof.  The amount of the reduction under this subparagraph
     (b)(iii) shall not consider any portion of the Participant's account
     balance attributable to Participant contributions and earnings thereon.  In
     determining the amount of the reduction attributable to Employer
     contributions and earnings thereon, the following assumptions shall be
     used:

          a)  Employer contributions shall equal actual Employer contributions;

          b)  Historical earnings shall equal actual earnings on Employer
          contributions; and

          c)  Hypothetical future earnings shall be projected at the average of
          the dividend (interest) rates of the Plan's money market option
          determined as of December 31 of each of the prior three (3) years.

     (c) AVERAGE COMPENSATION.  A Participant's Average Compensation shall be
the average of the Participant's Plan Compensation for the Averaging Period in
the Participant's Compensation History which results in the highest Average
Compensation, divided by 12. A Participant's Compensation History is the
Participant's entire period of employment with the Employer. The Averaging
Period is 3 consecutive Compensation periods (or the entire period of
employment, if shorter). A Compensation period is the 12-month period ending on
the last day of the Plan Year. A Participant's Compensation History does not
include the 12-month Compensation period in which the Participant terminates
employment.  Average Compensation shall not include 

                                       2
<PAGE>
 
long-term and short-term incentive compensation, bonuses, commissions and
taxable and non-taxable fringe benefits.

     i)   TOTAL COMPENSATION. All wages for federal income tax withholding
     purposes, as defined under Code (S)3401(a) (for purposes of income tax
     withholding at the source), disregarding any rules limiting the
     remuneration included as wages based on the nature or location of the
     employment or the services performed. Total Compensation also includes all
     other payments to an Employee in the course of the Employer's trade or
     business, for which the Employer must furnish the Employee a written
     statement under Code (S)(S)6041, 6051 and 6052. As long as the instructions
     to the "wages, tips, other compensation" box of Form W-2 (or a
     corresponding box on a later released Form W-2), are consistent with the
     instructions for the 1991 Form W-2 (Box 10), the Employer may treat the
     amount reported in the "wages, tips, other compensation" as satisfying this
     definition. Total Compensation does not include elective contributions.

     ii)  PLAN COMPENSATION. Plan Compensation means Total Compensation
     described in subparagraph (c)(i)), but excluding reimbursements or other
     expense allowances, fringe benefits (cash and noncash), moving expenses,
     bonuses, long-term and short-term incentive compensation, deferred
     compensation and welfare benefits, and including elective contributions.
     Plan Compensation applies to determine a Participant's benefit formula and
     Accrued Benefit under Article V.

     iii) ELECTIVE CONTRIBUTIONS. Elective contributions are amounts excludable
     from the Employee's gross income under Code (S)(S)125 or 402(e)(3), and
     contributed by the Employer, at the Employee's election, to a Code
     (S)401(k) arrangement or cafeteria plan.

     iv)  PLAN YEAR. Plan year means the fiscal year of the Plan, a twelve (12)
     consecutive month period ending every June 30.

A Participant's Plan Compensation for each of the three Plan Years ending prior
to July 1, 1996, shall be equal to the Participant's Plan Compensation for the
Plan Year ended June 30, 1996.

     (d)  LATE RETIREMENT. In the event that Participant continues in the employ
of the company beyond the Participant's Retirement Date such continued
employment shall not be taken into account under this plan inasmuch as the
Participant's monthly retirement income commences as of his Retirement Date.


2.  TERMINATION BENEFIT.

    If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, such Participant's accrued benefit
shall be determined as follows:

                                       3

<PAGE>
 
Total actual years of service
with the Company after first
becoming a Participant in           Projected Monthly         Participant's   
the Plan and prior to               Retirement Benefit        Accrued Benefit   
attaining age sixty-five            as contemplated by        (payable monthly 
              ---------- 
(65) Total possible years           Paragraph 1 of            commencing at age 
- ----
of service with the Company    x    this Plan            =    sixty-five (65)) 
after first becoming a                                        
Participant in the Plan and        
prior to attaining age            
sixty-five (65)                    
                                   
 
     For purposes of determining a Participant's accrued benefit, the term
"years of service" shall include all calendar years in which the Participant
completes at least 1,000 hours of service and the term "hours of service" shall
have the same meaning as it does under the qualified pension plan of the
Company. Furthermore, "total possible years of service with the Company after
first becoming a Participant in the Plan and prior to attaining age sixty-five
(65)" shall be determined by computing the maximum number of years of service
that the Participant could possibly complete with the Company between the date
the Participant first becomes a Participant in the Plan and the date on which
the Participant attains age sixty-five (65). The Participant's accrued benefit
under this paragraph 2 shall never exceed the Participant's retirement benefit
as contemplated by paragraph 1 of this Plan.

     If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, the Participant's accrued benefit shall
normally be paid in the form of a monthly annuity commencing at age sixty-five
(65), but may, in the sole discretion of the Company, be paid to the Participant
as a reduced annuity commencing prior to age sixty-five (65) or as a lump sum.
Any annuity shall be payable under the same terms and conditions as contemplated
by paragraph 1 of this Plan; provided, however, that payments shall only
continue until the death of the Participant's surviving spouse if: (i) the
beneficiary designated in paragraph 6 below is the Participant's surviving
spouse and (ii) the Participant was married to said spouse on the Participant's
termination date. Any present value calculations required in connection with the
payment of a lump sum shall be made using the 1983 Group Annuity Mortality Table
(GAM 83) adjusted as provided in Rev. Rul. 95-6, 1995-4 I.R.B. 22, and the
annual rate of interest on 30-year Treasury securities, as prescribed by the
Secretary, for the month of May preceding the Plan Year in which the
distribution occurs, or 6% interest per annum, whichever is greater.

                                       4
<PAGE>
 
     If the Participant dies prior to receiving the entirety of the benefits
contemplated by this paragraph 2, such benefits shall thereafter be paid to the
beneficiary designated in paragraph 6 below.

3.  DEATH BENEFIT.

    (a)  If a Participant dies prior to his Retirement Date while in the employ
of the Company, then the Company shall thereafter pay to the beneficiary
designated in paragraph 6 below a monthly death benefit amount as determined
pursuant to paragraph (b) below commencing with a payment on the first day of
the month next following the Participant's death and continuing with a like
payment on the first day of each month thereafter for a total of one hundred
twenty (120) months; provided, however, that if the primary beneficiary
designated in paragraph 6 below is the Participant's surviving spouse, and said
spouse is living at the end of the aforesaid one hundred twenty (120) month
period, said payments shall continue until the death of said surviving spouse.

    (b)  A Participant's monthly death benefit amount under this paragraph (b)
shall be equal to the greater of:

     (i) The Participant's Accrued Benefit under paragraph 2 of this Plan
     determined as if the Participant's employment had been involuntarily
     terminated on the day preceding the Participant's death, or

     (ii) Thirty-five percent (35%) of the Participant's Average Compensation
     less the following amounts:

          a)  One-half of the Participant's monthly Primary Social Security
          amount determined as if the Participant commenced receiving Social
          Security Benefits as of the Participant's Retirement Date annuitized
          over the payment period set forth in paragraph 3(a);

          b)  The greater of the present value of the monthly amount payable to
          the Participant as the normal form of benefit pursuant to any
          qualified pension plan maintained by the Company or the present value
          of the death benefit under any such plan, annuitized over the payment
          period set forth in paragraph 3(a).  Such amount shall be determined
          as of the Participant's date of death.  The amount of the reduction
          under this subparagraph (b)(ii)b) shall not include any benefit
          attributable to Participant contributions and earnings thereon;

          c)  The Participant's account balance in any qualified profit sharing
          (including 401(k)) plan maintained by the Company annuitized over the
          payment period set forth in paragraph 3(a).  Such amount shall be
          determined as of the Participant's date of death.  The amount of the
          reduction under this subparagraph (b)(iii)c) shall not consider any
          portion of the Participant's account balance attributable to
          Participant contributions and earnings thereon; and

                                       5
<PAGE>
 
          d)  The proceeds from any life insurance policy on the life of the
          Participant under any Company sponsored Group Life Insurance Plan,
          annuitized over the payment period set forth in paragraph 3(a).



4.  DISABILITY BENEFIT.

     (a) If the Participant becomes totally and permanently disabled prior to
his retirement date and while in the employ of the Company and such disability
continues for a period of six (6) months, then the Company shall thereafter pay
the Participant a monthly disability payment in the amount as determined
pursuant to paragraph (b) below commencing with a payment on the first day of
the month next following the expiration of the six- (6-) month period
(hereinafter referred to as the "Disability Date") and continuing with a like
payment on the first day of each month thereafter until the Participant attains
sixty-five (65) years of age or ceases to be disabled, whichever occurs first.
If the Participant continues to be disabled until he is sixty-five (65) years of
age, then the monthly payments to the Participant thereafter shall be equal to
the monthly amount of retirement income specified in paragraph 1, and shall be
paid pursuant to the terms and conditions of paragraph 1. If, while receiving
disability payments under this paragraph the Participant dies prior to attaining
the age of sixty-five (65) years, such disability payments shall cease, and the
Company shall thereafter pay to the beneficiary designated in paragraph 6 the
amount of the death benefit specified in paragraph 3, in the manner and for the
period of time provided in said paragraph.

     (b) A Participant's monthly disability benefit amount under this paragraph
(b) shall be equal to sixty percent (60%) of the Participant's Average
Compensation less the following amounts:

     (i) The monthly amount payable to the Participant pursuant to the Company
     sponsored Group Long-Term Disability Plan determined prior to any reduction
     for the Participant's monthly disability Social Security amount, if any;
     and

     (ii) One-half of the Participant's monthly disability Social Security
     amount, determined as of the Participant's Disability Date.


5.  VOLUNTARY TERMINATION.

     If a the Participant voluntarily terminates employment with the Company
prior to attaining age sixty-five (65) for any reason other than total and
permanent disability, the Participant shall be entitled to no benefit under this
Plan.

                                       6
<PAGE>
 
6.  BENEFICIARY.

     For purposes of paragraphs 1, 2, 3, and 4, the Participant's beneficiary
shall be as follows:

     (a)  The spouse of the Participant shall be the primary beneficiary.

     (b) If said spouse fails to survive the Participant, then any remaining
payments under this Plan shall be made in accordance with the Participant's
beneficiary designation form then on file with the Company, or if none to the
Participant's estate.

     (c) If said spouse survives the Participant and thereafter dies before
receiving all payments hereunder, such remaining payments shall be made to such
persons in such amounts as said spouse designates in a validly executed
beneficiary designation form on file with the Company. If said spouse fails to
exercise this power of appointment, such remaining payments shall be made to
such persons in such amounts as provided in paragraph 6(b) immediately above.

7.   CONDITIONS AND OTHER PROVISIONS.

     (a) The benefits under paragraphs 1, 2, 3, and 4 are conditioned upon the
Participant having been continuously in the employ of the Company from the date
of becoming a Participant in this Plan until the happening of the event that
would qualify the Participant (or his beneficiary) for such benefits; provided,
however, that the employment of the Participant shall not be deemed to have
ceased because of or during (i) any period of involuntary military service of
the participant or (ii) a leave of absence granted the Participant by the
Company which does not exceed a period of one (1) year.

     (b) Upon the death of the Participant, if monthly benefits become payable
to a beneficiary by virtue of the provisions of paragraphs 1, 2, 3, or 4, the
Company may then, or at any time thereafter, at its sole option and discretion
and without the consent of any beneficiary, elect to pay the current
beneficiary, in one lump sum, the present value of the monthly payments
remaining unpaid at the time of such election. Any present value calculations
required in connection with the payment of such a lump sum shall be made using
the 1983 Group Annuity Mortality Table (GAM 83) adjusted as provided in Rev.
Rul. 95-6, 1995-4 I.R.B. 22, and the annual rate of interest on 30-year Treasury
securities, as prescribed by the Secretary, for the month of May preceding the
Plan Year in which the distribution occurs, or 6% interest per annum, whichever
is greater.

     (c) Except as specifically provided herein, benefits under this Plan shall
not be payable to the Participant or any beneficiary under more than one of the
first four paragraphs of this Plan.

     (d) For the purpose of determining any and all benefits payable under this
Plan, it shall be assumed that the Participant's spouse is no more than fifteen
(15) years younger than the Participant. In the event that a Participant's
spouse is more than fifteen years younger than the Participant, the monthly
amount payable to the spouse hereunder shall be a reduced amount,

                                       7
<PAGE>
 
actuarially determined. Such reduced amount shall be calculated by first
determining the present value of the benefits payable to the surviving spouse
over his or her life expectancy as if he or she were exactly fifteen (15) years
younger than the Participant, and then determining the monthly benefit that
could be paid over the surviving spouse's actual life expectancy, using the
present value amount so determined.

    (e) Except as otherwise specifically provided herein, for purposes of
determining present values and/or alternative forms of benefits hereunder, the
1983 Group Annuity Mortality Table (GAM 83) adjusted as provided in Rev. Rul.
95-6, 1995-4 I.R.B. 22, and 6% interest per annum shall be used.

8.  TERMINATION OF PARTICIPATION/BENEFITS.

    Participation in this Plan may be terminated by the Company, and all accrued
benefits hereunder may at any time be forfeited, either before or after benefits
become payable hereunder, notwithstanding any provision in this Plan to the
contrary, if the Board of Directors of the Company, acting in its sole and
absolute discretion, shall find that at any time before or after the
Participant's termination, retirement or disability and before the Participant's
death:

    (a) The Participant induces or attempts to induce a client or customer of
the Company to curtail or cancel any business dealing with the Company,

    (b) The Participant induces or attempts to induce any other employee of the
Company to terminate employment with the Company,

    (c) The Participant fails to cooperate in the procurement or maintenance of
any policies of insurance as contemplated by paragraph 9 below, or

    (d) The Participant commits a violation of the Statement on Ethics of Fisher
Companies Inc., and such violation results in the termination of the
Participant's employment with the Company.

9.  INSURANCE.

    (a) It is further a condition of participation in this Plan that, if the
Company at its sole option shall at any time wish to own, sponsor and/or
maintain any policy of life or disability insurance on the Participant the
proceeds of which are payable to either the Participant or the Company:

    (i) the Participant shall fully cooperate with the Company in its
application for such insurance, including, without limiting the generality of
the foregoing, submitting to physical examinations and answering truthfully and
completely, without mental reservation or concealment, any questions or requests
for information in connection therewith; and

                                       8
<PAGE>
 
     (ii) The Participant shall not, by act or omission, give cause for any
     insurance company to restrict or cancel any policy of insurance on the
     Participant owned by the Company or give cause for such insurance company's
     refusal to pay the full proceeds to the Company, including refusal to pay
     the full proceeds because of the suicide of the Participant.

     (b) An individual shall not become a Participant in this Plan unless and
     until:

     (i) the Company has procured a policy of life insurance and a policy of
     disability insurance on that individual adequate in amount to fund the life
     and disability benefits contemplated by this Plan assuming no further
     increases in the individual's Average Compensation;

     (ii) the Company has specifically waived such requirement in writing; or

     (iii)  the Company has, by separate agreement entered into between the
     Company and the individual, limited the benefits payable to that individual
     under this Plan. It is contemplated that such an agreement may be entered
     into if an individual is uninsurable, uninsurable against certain risks or
     uninsurable at standard rates.  Any such agreement shall be deemed to be
     part of this Plan with respect to the Participant to whom it applies.

     (c)  All determinations made by the insurance company with regard to the
question of death, disability, waiver of premium and/or pre-existing
conditions shall be accepted as conclusive by the Company, the Participant
and any beneficiary.

10.  ERISA.

     Participation in this Plan may be terminated by the Company if the
Department of Labor issues regulations under ERISA which indicate that the
Participant is no longer eligible for continued participation in the Plan. This
determination shall be made by the Board of Directors of the Company acting in
its sole and absolute discretion. In the event of a termination of this
Agreement pursuant to this paragraph 10, the Participant shall be entitled to
receive a termination benefit pursuant to the terms and conditions of paragraph
2.

11.  NO CURRENT BENEFIT.

     The benefits to be paid pursuant to the terms of this Plan are granted by
the Company as additional benefits to the Participants and are not part of any
salary reduction plan or an arrangement deferring a bonus or a salary increase.
The Participants have no option to receive any current payment or bonus in lieu
of these additional benefits.

12.  NO TRUST AGREEMENT.

     (a)  Nothing contained in this Plan and no action taken pursuant to the
     provisions of this Plan shall create or be construed to create a trust of
     any kind, or a fiduciary relationship 

                                       9
<PAGE>
 
between the Company, or any employee or agent thereof, and the Participants or
any other person.

     (b) The rights of the Participants or beneficiaries under this Plan are
purely contractual and shall not be funded or secured in any way. Payments to
the Participants or their beneficiaries hereunder shall be made only from the
general assets of the Company, and no person, other than the Company, shall
have, by virtue of this Plan, any interest in such assets. Such assets are
available to satisfy the claims of the Company's general creditors and, to the
extent any person acquires a right to receive payments from the Company under
the terms of this Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company.

     (c) The Company, at its discretion, may acquire an annuity or insurance
policy insuring the life of the Participants from which it can satisfy its
obligation to make benefit payments pursuant to this Plan. However, it is
expressly understood that such contract (or contracts), if acquired, does not
create any account or fund separate from the ordinary assets of the Company, and
neither the Participants nor their beneficiaries may look to any such contract
as the fund from which benefits under this Plan are to be paid. Any such
contract so acquired for the convenience of the Company shall be the sole and
exclusive property of the Company, with the Company named as applicant, owner,
and beneficiary of any life insurance contract payments; provided, further, that
any such contract shall not be held in trust or collateral security for the
benefit of the Participants or beneficiaries, nor is any representation made
herein that such contract, if acquired, will be used to provide benefits under
this Plan. Neither the Participants nor their beneficiaries shall have any
beneficial ownership interest in, or preferred or other claim against, the life
insurance contract, if acquired by the Company.

13.  NO ASSIGNMENT.

     No right of a Participant or any other person to the payment of deferred
compensation or other benefits under this Plan shall be assigned, transferred,
pledged, hypothecated, or encumbered. No right of a Participant under this Plan
shall be subject to garnishment, attachment, or other legal process, whether by
the Participant or any beneficiary named herein, any heir or creditor of the
Participant, or any other person. Any attempted assignment of any right
hereunder by a Participant or a beneficiary shall, at the Company's option,
cause all rights of the Participant hereunder to terminate.

14.  INCAPACITY OF BENEFICIARY.

     If the Company shall determine that a Participant is unable to care for his
or her affairs because of illness, accident, or other incapacity, any payment
due may be paid to the Participant's spouse or to any other person considered by
the Company to have incurred expense for the Participant or to be otherwise
responsible for the Participant or his or her affairs, in such manner and
proportions as the Company may determine (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee, or other legal
representative). Any such payment

                                       10
<PAGE>
 
made in good faith by the Company shall be a complete discharge of the
liabilities of the Company under this Plan.

15.  COMPANY'S POWERS AND LIABILITIES.

     The Company shall have the full power and authority to interpret, construe,
and administer this Plan, and the Company's interpretation and construction
hereof and action hereunder shall be binding and conclusive on all persons for
all purposes. Neither the Company, its officers, directors, employees, or agents
shall be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless attributable to his
own willful misconduct or lack of good faith. Any notice, consent, or demand
required or permitted to be given under the terms of this Plan shall be in
writing and shall be signed by the party giving or making the same. The date of
such notice, consent, or demand shall be the date of receipt by the addressee.

16.  BINDING EFFECT.

     This Plan shall be binding upon and inure to the benefit of the Company,
its successors and assigns, and the Participant, his heirs, executors,
administrators and legal representatives.

17.  CONTINUED EMPLOYMENT.

     Nothing contained herein shall be construed as conferring upon a
Participant the right to continue in the employ of the Company as an executive
or in any other capacity. The Participant or the Company may terminate the
Participant's employment at will, with or without cause. Upon termination of the
Participant's employment with the Company, all rights of the Participant
hereunder shall terminate, except as otherwise provided herein.

18.  GOVERNING LAW.

     This Plan shall be construed and governed in accordance with the laws of
the State of Washington.

19.  QUALIFIED PLAN.

     Any deferred compensation payable under this Plan shall not be deemed
salary or other compensation to the Participants for purposes of computing
benefits to which they may be entitled under any pension plan or other
arrangement of the Company for the benefit of its employees.

20.  AMENDMENT; ENTIRE AGREEMENT.

     No modification of this Plan shall be effective unless communicated in
writing to the Participant. With respect to the subject matter hereof, this Plan
constitutes the entire agreement and understanding of the Company and the
Participant and shall supersede any prior agreement 

                                       11
<PAGE>
 
or understanding including any and all Supplemental Pension Plan Agreements and
amendments thereto previously entered into between the Company and the
Participant. Further, the Company may, from time to time, furnish the
Participant with information containing estimates of the projected benefits
available under this Plan. This information will be provided simply as a tool to
assist the Participant in planning for his or her retirement, and not as a
definitive statement of the benefits that will be available to the Participant
upon retirement or in the event of death or disability. This is because the
estimates of projected benefits are affected by a number of variables that are
constantly changing which include, but are not limited to salary levels,
interest rates, qualified plan benefits, group life and disability benefits and
Social Security benefits. In certain circumstances the benefits payable to a
Participant under this Plan may be adjusted based upon that Participant's
individual circumstances. Adjustments resulting in a reduction of benefits will
generally be prospective in application, whereas adjustments resulting in an
increase in benefits may be retroactive.

21.  SEVERABILITY.

     If any provision of this Plan is rendered invalid or unenforceable, the
remaining provisions of this Plan shall continue to be fully effective.

22.  PARTICIPATION IN OTHER PARTICIPANT BENEFIT PLANS.

     Nothing herein shall, in any manner, modify, impair, or affect the existing
or future rights or interests of the Participants (i) to receive any employee
benefits to which he would otherwise be entitled; or (ii) as participants in the
present or any future incentive or bonus plan, stock option plan, pension plan,
or profit sharing plan of the Company, applicable generally to salaried
employees. The rights and interests of the Participants to any employee benefits
or as a participant or beneficiary in or under any or all such plans shall
continue in full force and effect unimpaired, and this Plan shall not act to
deny the Participant the right at any time hereafter to become a participant or
beneficiary under or pursuant to any and all such plans.

23.  LEGAL AND TAX CONSEQUENCES TO PARTICIPANTS.

     The Company does not represent or guarantee that any particular income or
other tax consequences will occur under the Plan. The Participant acknowledges
that he has been advised to consult with professional tax and other advisors
regarding all benefits, burdens, risks, and consequences arising in connection
with this Plan.

24.  FICA/MEDICARE/FEDERAL INCOME TAX WITHHOLDING.

     Any benefits payable to a Participant and/or a beneficiary hereunder shall
be subject to FICA, Medicare, and Federal and State Income Tax withholding to
the extent required by law.

                                       12
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned has executed this Plan as of the date
first above written.


                                       FISHER MILLS INC.
 
 
                                       By: /s/ Terry L. Barrans
                                          ---------------------
                                       Terry L. Barrans
                                       Its President & CEO

                                       13

<PAGE>
 
                                                                    EXHIBIT 10.7

                           SUPPLEMENTAL PENSION PLAN



     THIS Plan is established, and is to be effective as of the 1st day of
March, 1996, by FISHER PROPERTIES INC., a Washington corporation (the
"Company"), for the benefit of a select group of management employees (the
"Participants").

A.   The Participants in this Plan shall be as determined from time to time by
the Board of Directors of the Company.

B.   The ability and experience of the Participants are of such value to the
Company that the Company wishes to more adequately compensate the Participants
for their past and future services by providing special retirement and
survivorship income benefits to them.

C.   The funds accumulated in Company-sponsored qualified retirement plans may
be inadequate in amount to provide the Participants with a retirement benefit
commensurate with the anticipated value of their past and future services to the
Company.

D.   This Plan is intended to supersede any and all Supplementary Pension
Agreements and all amendments thereto previously entered into between the
company and the participants who were employed by the Company as of the
effective date hereof.

     NOW, THEREFORE, the Company hereby agrees as follows:


1.   Retirement Benefits.

     (a) Entitlement/Payment.  If a Participant is in the employ of the Company
when the Participant attains sixty-five (65) years of age, then the Company
shall thereafter pay to the Participant monthly retirement income as determined
pursuant to paragraph (b) immediately below, commencing with a payment on the
first day of the month coincident with or next following the Participant's
attainment of sixty-five (65) years of age (hereinafter referred to as the
"Retirement Date") and continuing with a like payment on the first day of each
month thereafter throughout the Participant's lifetime.  If, while receiving
said monthly retirement income, the Participant dies prior to the expiration of
a period of one hundred twenty (120) months from and after his Retirement Date,
then the Company shall thereafter pay said amount to the beneficiary designated
in paragraph 6 below, continuing until the expiration of said one hundred twenty
(120) month period; provided, however, that if (i) the primary beneficiary
designated in paragraph 6 below is the participant's surviving spouse; (ii) the
participant was married to said spouse on the Participant's Retirement Date, and
(iii) said spouse is living at the end of the aforesaid one hundred twenty (120)
month period, said payments shall thereafter continue until the death of said
surviving spouse.

                                       1
<PAGE>
 
     (b)   Amount. A Participant's monthly retirement income under this
paragraph (b) shall be equal to sixty percent (60%) of the Participant's Average
Compensation less the following amounts:

     i)    One-half of the Participant's monthly Primary Social Security amount
     determined as if the Participant commenced receiving Social Security
     Benefits as of the Participant's Retirement Date;

     ii)   The monthly amount payable to the Participant as the normal form of
     benefit pursuant to any qualified pension plan maintained by the Company.
     Such amount shall be determined as of the Participant's Retirement Date, as
     if the Participant remained in the employ of the Company until that date.
     the amount of the reduction under this subparagraph (b)(ii) shall not
     include any benefit attributable to Participant contributions and earnings
     thereon; and

     iii)  The monthly amount payable to the Participant in the form of a single
     life annuity pursuant to any qualified profit sharing (including 401(k))
     plan maintained by the Company. Such amount shall be determined as of the
     Participant's Retirement Date, as if the Participant remained in the employ
     of the Company until that date. Further, the monthly amount payable as a
     single life annuity shall be determined by converting the Participant's
     account balance to a single life annuity as of the Participant's Retirement
     Date using the interest rate and mortality assumptions set forth in
     paragraph 7(e) hereof. The amount of the reduction under this subparagraph
     (b)(iii) shall not consider any portion of the Participant's account
     balance attributable to Participant contributions and earnings thereon. In
     determining the amount of the reduction attributable to Employer
     contributions and earnings thereon, the following assumptions shall be
     used:

           a)  Employer contributions shall equal actual Employer contributions;

           b)  Historical earnings shall equal actual earnings on Employer
           contributions; and

           c)  Hypothetical future earnings shall be projected at the average of
           the dividend (interest) rates of the Plan's money market option
           determined as of December 31 of each of the prior three (3) years.

     (c)   Average compensation.  A Participant's Average Compensation shall be
the average of the Participant's Plan Compensation for the Averaging Period in
the Participant's Compensation History which results in the highest Average
Compensation, divided by 12. A Participant's Compensation History is the
Participant's entire period of Employment with the Employer. The Averaging
Period is 3 consecutive Compensation periods (or the entire period of
employment, if shorter). A Compensation period is the 12-month period ending on
the last day of the Plan Year. A Participant's Compensation History does not
include the 12-month Compensation period in which the Participant terminates
employment.  Average Compensation shall not include

                                       2
<PAGE>
 
long-term and short-term incentive compensation, bonuses, commissions and
taxable and non-taxable fringe benefits.

     i)    Total Compensation. All wages for federal income tax withholding
     purposes, as defined under Code (s)3401(a) (for purposes of income tax
     withholding at the source), disregarding any rules limiting the
     remuneration included as wages based on the nature or location of the
     employment or the services performed. Total Compensation also includes all
     other payments to an Employee in the course of the Employer's trade or
     business, for which the Employer must furnish the Employee a written
     statement under Code (s)(s)6041, 6051 and 6052. As long as the instructions
     to the "wages, tips, other compensation" box of form W-2 (or a
     corresponding box on a later released Form W-2), are consistent with the
     instructions for the 1991 form W-2 (Box 10), the Employer may treat the
     amount reported in the "wages, tips, other compensation" as satisfying this
     definition. Total Compensation does not include elective contributions.
   
     ii)  Plan Compensation. Plan Compensation means Total Compensation
     described in subparagraph (c)(i)), but excluding reimbursements or other
     expense allowances, fringe benefits (cash and noncash), moving expenses,
     bonuses, long-term and short-term incentive compensation, deferred
     compensation and welfare benefits, and including elective contributions.
     Plan Compensation applies to determine a Participant's benefit formula and
     Accrued Benefit under Article V.

     iii) Elective Contributions. Elective contributions are amounts excludable
     from the Employee's gross income under Code (S)(S)125 or 402(e)(3), and
     contributed by the Employer, at the Employee's election, to a code
     (S)401(k) arrangement or cafeteria plan.

     iv)  Plan Year. Plan year means the fiscal year of the Plan, a twelve (12)
     consecutive month period ending every June 30.

A Participant's Plan Compensation for each of the three Plan Years ending prior
to July 1, 1996, shall be equal to the Participant's Plan Compensation for the
Plan Year ended June 30, 1996.

     (d)  Late Retirement. In the event that Participant continues in the employ
of the company beyond the Participant's Retirement Date such continued
employment shall not be taken into account under this Plan inasmuch as the
Participant's monthly retirement income commences as of his Retirement Date.


2.  TERMINATION BENEFIT.

     If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, such Participant's accrued benefit
shall be determined as follows:

                                       3
<PAGE>
 
<TABLE>
<S>                                <C>                       <C>
Total actual years of service
with the Company after first
becoming a Participant in
the Plan and prior to
attaining age sixty-five
(65) Total possible years
of service with the Company        Projected Monthly
after first becoming a             Retirement Benefit        Participant's
Participant in the Plan and        as contemplated by        Accrued Benefit
prior to attaining age         x   Paragraph 1 of            (payable monthly
sixty-five (65)                    this Plan                 commencing at age
                                                             sixty-five (65)
</TABLE>

     For purposes of determining a Participant's accrued benefit, the term
"years of service" shall include all calendar years in which the Participant
completes at least 1,000 hours of service and the term "hours of service" shall
have the same meaning as it does under the qualified pension plan of the
Company. Furthermore, "total possible years of service with the Company after
first becoming a Participant in the Plan and prior to attaining age sixty-five
(65)" shall be determined by computing the maximum number of years of service
that the Participant could possibly complete with the Company between the date
the Participant first becomes a Participant in the Plan and the date on which
the Participant attains age sixty-five (65). The Participant's accrued benefit
under this paragraph 2 shall never exceed the Participant's retirement benefit
as contemplated by paragraph 1 of this Plan.

     If a Participant's employment with the Company is terminated, other than
voluntarily, prior to attaining age sixty-five (65), for any reason other than
death or total and permanent disability, the Participant's accrued benefit shall
normally be paid in the form of a monthly annuity commencing at age sixty-five
(65), but may, in the sole discretion of the Company, be paid to the Participant
as a reduced annuity commencing prior to age sixty-five (65) or as a lump sum.
Any annuity shall be payable under the same terms and conditions as contemplated
by paragraph 1 of this Plan; provided, however, that payments shall only
continue until the death of the Participant's surviving spouse if: (i) the
beneficiary designated in paragraph 6 below is the Participant's surviving
spouse and (ii) the Participant was married to said spouse on the Participant's
termination date. Any present value calculations required in connection with the
payment of a lump sum shall be made using the 1983 Group Annuity Mortality Table
(GAM 83) adjusted as provided in Rev. Rul. 95-6, 1995-4 I.R.B. 22, and the
annual rate of interest on 30-year Treasury securities, as prescribed by the
Secretary, for the month of May preceding the Plan Year in which the
distribution occurs, or 6% interest per annum, whichever is greater.

                                       4
<PAGE>
 
     If the Participant dies prior to receiving the entirety of the benefits
contemplated by this paragraph 2, such benefits shall thereafter be paid to the
beneficiary designated in paragraph 6 below.

3.   Death Benefit.

     (a) If a Participant dies prior to his Retirement Date while in the employ
     of the Company, then the Company shall thereafter pay to the beneficiary
     designated in paragraph 6 below a monthly death benefit amount as
     determined pursuant to paragraph (b) below commencing with a payment on the
     first day of the month next following the Participant's death and
     continuing with a like payment on the first day of each month thereafter
     for a total of one hundred twenty (120) months; provided, however, that if
     the primary beneficiary designated in paragraph 6 below is the
     Participant's surviving spouse, and said spouse is living at the end of the
     aforesaid one hundred twenty (120) month period, said payments shall
     continue until the death of said surviving spouse.

     (b) A Participant's monthly death benefit amount under this paragraph (b)
     shall be equal to the greater of :

     (i) The participant's Accrued Benefit under paragraph 2 of this Plan
     determined as if the Participant's employment had been involuntarily
     terminated on the day preceding the Participant's death, or

     (ii) Thirty-five percent (35%) of the Participant's Average Compensation
     less the following amounts:

          a) One-half of the Participant's monthly Primary Social Security
          amount determined as if the Participant commenced receiving Social
          Security Benefits as of the Participant's Retirement Date annuitized
          over the payment period set forth in paragraph 3(a);

          b) The greater of the present value of the monthly amount payable to
          the Participant as the normal form of benefit pursuant to any
          qualified pension plan maintained by the Company or the present value
          of the death benefit under any such plan, annuitized over the payment
          period set forth in paragraph 3(a). Such amount shall be determined
          as of the Participant's date of death. The amount of the reduction
          under this subparagraph (b)(ii)b) shall not include any benefit
          attributable to Participant contributions and earnings thereon;

          c) The participant's account balance in any qualified profit sharing
          (including 401(k)) plan maintained by the Company annuitized over the
          payment period set forth in paragraph 3(a). Such amount shall be
          determined as of the Participant's date of death.  The amount of the
          reduction under this subparagraph (b)(iii)c) shall not consider any
          portion of the Participant's account balance attributable to
          participant contributions and earnings thereon; and

                                       5
<PAGE>
 
          d) the proceeds from any life insurance policy on the life of the
          participant under any company sponsored group life insurance plan,
          annuitized over the payment period set forth in paragraph 3(a).

4.   Disability Benefit.

     (a) If the participant becomes totally and permanently disabled prior to
     his retirement date and while in the employ of the Company and such
     disability continues for a period of six (6) months, then the Company shall
     thereafter pay the Participant a monthly disability payment in the amount
     as determined pursuant to paragraph (b) below commencing with a payment on
     the first day of the month next following the expiration of the six- (6-)
     month period (hereinafter referred to as the "Disability Date") and
     continuing with a like payment on the first day of each month thereafter
     until the Participant attains sixty-five (65) years of age or ceases to be
     disabled, whichever occurs first. If the Participant continues to be
     disabled until he is sixty-five (65) years of age, then the monthly
     payments to the Participant thereafter shall be equal to the monthly amount
     of retirement income specified in paragraph 1, and shall be paid pursuant
     to the terms and conditions of paragraph 1. If, while receiving disability
     payments under this paragraph the participant dies prior to attaining the
     age of sixty-five (65) years, such disability payments shall cease, and the
     Company shall thereafter pay to the beneficiary designated in paragraph 6
     the amount of the death benefit specified in paragraph 3, in the manner and
     for the period of time provided in said paragraph.

     (b) a participant's monthly disability benefit amount under this paragraph
(b) shall be equal to sixty percent (60%) of the participant's average
compensation less the following amounts :

     (i) The monthly amount payable to the Participant pursuant to the Company
     sponsored Group Long-Term Disability Plan determined prior to any reduction
     for the Participant's monthly disability Social Security amount, if any;
     and

     (ii) One-half of the Participant's monthly disability Social Security
     amount, determined as of the Participant's Disability Date.

5.  Voluntary Termination.

     If a the Participant voluntarily terminates employment with the Company
prior to attaining age sixty-five (65) for any reason other than total and
permanent disability, the Participant shall be entitled to no benefit under this
Plan.

                                       6
<PAGE>
 
6.   Beneficiary.

     For purposes of paragraphs 1, 2, 3, and 4, the Participant's beneficiary
shall be as  follows:

     (a) the spouse of the Participant shall be the primary beneficiary.

     (b) If said spouse fails to survive the Participant, then any remaining
payments under this plan shall be made in accordance with the Participant's
beneficiary designation form then on file with the Company, or if none to
the Participant's estate.

     (c) If said spouse survives the Participant and thereafter dies before
receiving all payments hereunder, such remaining payments shall be made to such
persons in such amounts as said spouse designates in a validly executed
beneficiary designation form on file with the Company. If said spouse fails to
exercise this power of appointment, such remaining payments shall be made to
such persons in such amounts as provided in paragraph 6(b) immediately above.

7.   Conditions and Other Provisions.

     (a) The benefits under paragraphs 1, 2, 3, and 4 are conditioned upon the
     Participant having been continuously in the employ of the Company from the
     date of becoming a Participant in this Plan until the happening of the
     event that would qualify the Participant (or his beneficiary) for such
     benefits; provided, however, that the employment of the Participant shall
     not be deemed to have ceased because of or during (i) any period of
     involuntary military service of the Participant or (ii) a leave of absence
     granted the Participant by the Company which does not exceed a period of
     one (1) year.

     (b) Upon the death of the Participant, if monthly benefits become payable
     to a beneficiary by virtue of the provisions of paragraphs 1, 2, 3, or 4,
     the Company may then, or at any time thereafter, at its sole option and
     discretion and without the consent of any beneficiary, elect to pay the
     current beneficiary, in one lump sum, the present value of the monthly
     payments remaining unpaid at the time of such election. Any present value
     calculations required in connection with the payment of such a lump sum
     shall be made using the 1983 Group Annuity Mortality Table (GAM 83)
     adjusted as provided in Rev. Rul. 95-6, 1995-4 I.R.B. 22, and the annual
     rate of interest on 30-year Treasury securities, as prescribed by the
     Secretary, for the month of May preceding the Plan Year in which the
     distribution occurs, or 6% interest per annum, whichever is greater.

     (c) Except as specifically provided herein, benefits under this Plan shall
     not be payable to the Participant or any beneficiary under more than one of
     the first four paragraphs of this Plan.

     (d) For the purpose of determining any and all benefits payable under this
     Plan, it shall be assumed that the Participant's spouse is no more than
     fifteen (15) years younger than the Participant. In the event that a
     Participant's spouse is more than fifteen years younger than the
     Participant, the monthly amount payable to the spouse hereunder shall be a
     reduced amount,

                                       7
<PAGE>
 
actuarially determined. such reduced amount shall be calculated by first
determining the present value of the benefits payable to the surviving spouse
over his or her life expectancy as if he or she were exactly fifteen (15) years
younger than the Participant, and then determining the monthly benefit that
could be paid over the surviving spouse's actual life expectancy, using the
present value amount so determined.

     (e) except as otherwise specifically provided herein, for purposes of
determining present values and/or alternative forms of benefits hereunder,
the 1983 Group Annuity Mortality table (GAM 83) adjusted as provided in
Rev. Rul. 95-6, 1995-4 I.R.B. 22, and 6% interest per annum shall be used.

8.   Termination of Participation/Benefits.

     Participation in this Plan may be terminated by the Company, and all
accrued benefits hereunder may at any time be forfeited, either before or after
benefits become payable hereunder, notwithstanding any provision in this Plan to
the contrary, if the Board of Directors of the Company, acting in its sole and
absolute discretion, shall find that at any time before or after the
Participant's termination, retirement or disability and before the Participant's
death :

     (a) The Participant induces or attempts to induce a client or customer of
the Company to curtail or cancel any business dealing with the Company,

     (b) The Participant induces or attempts to induce any other employee of the
Company to terminate employment with the Company,

     (c) The Participant fails to cooperate in the procurement or maintenance of
any policies of insurance as contemplated by paragraph 9 below, or

     (d) The Participant commits a violation of the statement on Ethics of
Fisher Companies Inc., and such violation results in the termination of the
Participant's employment with the Company.

9.   Insurance.

     (a) It is further a condition of participation in this Plan that, if the
Company at its sole option shall at any time wish to own, sponsor and/or
maintain any policy of life or disability insurance on the Participant the
proceeds of which are payable to either the Participant or the Company:

     (i) The Participant shall fully cooperate with the Company in its
     application for such insurance, including, without limiting the generality
     of the foregoing, submitting to physical examinations and answering
     truthfully and completely, without mental reservation or concealment, any
     questions or requests for information in connection therewith; and

                                       8
<PAGE>
 
     (ii) The Participant shall not, by act or omission, give cause for any
     insurance company to restrict or cancel any policy of insurance on the
     Participant owned by the Company or give cause for such insurance company's
     refusal to pay the full proceeds to the Company, including refusal to pay
     the full proceeds because of the suicide of the Participant.

     (b) An individual shall not become a Participant in this Plan unless and
     until:

     (i) the Company has procured a policy of life insurance and a policy of
     disability insurance on that individual adequate in amount to fund the life
     and disability benefits contemplated by this Plan assuming no further
     increases in the individual's Average Compensation;

     (ii) the Company has specifically waived such requirement in writing; or

     (iii) the company has, by separate agreement entered into between the
     Company and the individual, limited the benefits payable to that individual
     under this Plan. It is contemplated that such an agreement may be entered
     into if an individual is uninsurable, uninsurable against certain risks or
     uninsurable at standard rates. Any such agreement shall be deemed to be
     part of this Plan with respect to the Participant to whom it applies.

     (c) All determinations made by the insurance company with regard to the
 question of death, disability, waiver of premium and/or pre-existing
 conditions shall be accepted as conclusive by the Company, the Participant
 and any beneficiary.

10.  ERISA.

     Participation in this Plan may be terminated by the Company if the
Department of Labor issues regulations under ERISA which indicate that the
Participant is no longer eligible for continued participation in the Plan. This
determination shall be made by the Board of Directors of the Company acting in
its sole and absolute discretion. In the event of a termination of this
Agreement pursuant to this paragraph 10, the Participant shall be entitled to
receive a termination benefit pursuant to the terms and conditions of paragraph
2.

11.  No Current Benefit.

     The benefits to be paid pursuant to the terms of this Plan are granted by
the Company as additional benefits to the Participants and are not part of any
salary reduction plan or an arrangement deferring a bonus or a salary increase.
The Participants have no option to receive any current payment or bonus in lieu
of these additional benefits.

12.  No Trust Agreement.

     (a) Nothing contained in this Plan and no action taken pursuant to the
     provisions of this Plan shall create or be construed to create a trust of
     any kind, or a fiduciary relationship

                                       9
<PAGE>
 
between the company, or any employee or agent thereof, and the participants or
any other person.

     (b) The rights of the Participants or beneficiaries under this Plan are
     purely contractual and shall not be funded or secured in any way. Payments
     to the Participants or their beneficiaries hereunder shall be made only
     from the general assets of the Company, and no person, other than the
     Company, shall have, by virtue of this Plan, any interest in such assets.
     Such assets are available to satisfy the claims of the Company's general
     creditors and, to the extent any person acquires a right to receive
     payments from the Company under the terms of this Plan, such right shall be
     no greater than the right of any unsecured general creditor of the Company.

     (c) The Company, at its discretion, may acquire an annuity or insurance
     policy insuring the life of the Participants from which it can satisfy its
     obligation to make benefit payments pursuant to this Plan. However, it is
     expressly understood that such contract (or contracts), if acquired, does
     not create any account or fund separate from the ordinary assets of the
     Company, and neither the Participants nor their beneficiaries may look to
     any such contract as the fund from which benefits under this Plan are to be
     paid. Any such contract so acquired for the convenience of the Company
     shall be the sole and exclusive property of the Company, with the Company
     named as applicant, owner, and beneficiary of any life insurance contract
     payments; provided, further, that any such contract shall not be held in
     trust or collateral security for the benefit of the Participants or
     beneficiaries, nor is any representation made herein that such contract, if
     acquired, will be used to provide benefits under this Plan. Neither the
     Participants nor their beneficiaries shall have any beneficial ownership
     interest in, or preferred or other claim against, the life insurance
     contract, if acquired by the Company.

13.  No Assignment.

     No right of a Participant or any other person to the payment of deferred
compensation or other benefits under this Plan shall be assigned, transferred,
pledged, hypothecated, or encumbered.  No right of a Participant under this Plan
shall be subject to garnishment, attachment, or other legal process, whether by
the Participant or any beneficiary named herein, any heir or creditor of the
Participant, or any other person.  Any attempted assignment of any right
hereunder by a Participant or a beneficiary shall, at the Company's option,
cause all rights of the Participant hereunder to terminate.

14.  Incapacity of Beneficiary.

     If the Company shall determine that a Participant is unable to care for his
or her affairs because of illness, accident, or other incapacity, any payment
due may be paid to the Participant's spouse or to any other person considered by
the Company to have incurred expense for the Participant or to be otherwise
responsible for the Participant or his or her affairs, in such manner and
proportions as the Company may determine (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee, or other legal
representative). Any such payment

                                       10
<PAGE>
 
made in good faith by the Company shall be a complete discharge of the
liabilities of the Company under this Plan.

15.  Company's Powers and Liabilities.

     The Company shall have the full power and authority to interpret, construe,
and administer this Plan, and the Company's interpretation and construction
hereof and action hereunder shall be binding and conclusive on all persons for
all purposes. Neither the Company, its officers, directors, employees, or agents
shall be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless attributable to his
own willful misconduct or lack of good faith. Any notice, consent, or demand
required or permitted to be given under the terms of this Plan shall be in
writing and shall be signed by the party giving or making the same. The date of
such notice, consent, or demand shall be the date of receipt by the addressee.

16.  Binding Effect.

     This Plan shall be binding upon and inure to the benefit of the Company,
its successors and assigns, and the Participant, his heirs, executors,
administrators and legal representatives.

17.  Continued Employment.

     Nothing contained herein shall be construed as conferring upon a
Participant the right to continue in the employ of the Company as an executive
or in any other capacity. The Participant or the Company may terminate the
Participant's employment at will, with or without cause. Upon termination of the
Participant's employment with the Company, all rights of the Participant
hereunder shall terminate, except as otherwise provided herein.

18.  Governing Law.

     This Plan shall be construed and governed in accordance with the laws of
the State of Washington.

19.  Qualified Plan.

     Any deferred compensation payable under this Plan shall not be deemed
salary or other compensation to the Participants for purposes of computing
benefits to which they may be entitled under any pension plan or other
arrangement of the Company for the benefit of its employees.

20.  Amendment; Entire Agreement.

     No modification of this Plan shall be effective unless communicated in
writing to the Participant.  With respect to the subject matter hereof, this
Plan constitutes the entire agreement and understanding of the Company and
the Participant and shall supersede any prior agreement

                                       11
<PAGE>
 
or understanding including any and all Supplemental Pension Plan Agreements and
amendments thereto previously entered into between the Company and the
Participant. Further, the Company may, from time to time, furnish the
Participant with information containing estimates of the projected benefits
available under this Plan. This information will be provided simply as a tool to
assist the Participant in planning for his or her retirement, and not as a
definitive statement of the benefits that will be available to the Participant
upon retirement or in the event of death or disability. This is because the
estimates of projected benefits are affected by a number of variables that are
constantly changing which include, but are not limited to salary levels,
interest rates, qualified plan benefits, group life and disability benefits and
Social Security benefits. In certain circumstances the benefits payable to a
Participant under this Plan may be adjusted based upon that Participant's
individual circumstances. Adjustments resulting in a reduction of benefits will
generally be prospective in application, whereas adjustments resulting in an
increase in benefits may be retroactive.

21.  Severability.

     If any provision of this Plan is rendered invalid or unenforceable, the
remaining provisions of this Plan shall continue to be fully effective.

22.  Participation in other participant Benefit Plans.

     Nothing herein shall, in any manner, modify, impair, or affect the existing
or future rights or interests of the Participants (i) to receive any employee
benefits to which he would otherwise be entitled; or (ii) as participants in the
present or any future incentive or bonus plan, stock option plan, pension plan,
or profit sharing plan of the Company, applicable generally to salaried
employees. The rights and interests of the Participants to any employee benefits
or as a participant or beneficiary in or under any or all such plans shall
continue in full force and effect unimpaired, and this Plan shall not act to
deny the Participant the right at any time hereafter to become a participant or
beneficiary under or pursuant to any and all such plans.

23.  Legal and Tax Consequences to Participants.

     The Company does not represent or guarantee that any particular income or
other tax consequences will occur under the Plan. The Participant acknowledges
that he has been advised to consult with professional tax and other advisors
regarding all benefits, burdens, risks, and consequences arising in connection
with this Plan.

24.  FICA/Medicare/Federal Income Tax Withholding.

     Any benefits payable to a Participant and/or a beneficiary hereunder shall
be subject to FICA, Medicare, and Federal and State Income Tax withholding to
the extent required by law.

                                       12
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned has executed this Plan as of the date
first above written.


                                       FISHER PROPERTIES INC.
 
 
                                       BY:/s/ Mark A. Weed
                                       -------------------
                                       Mark A. Weed
                                       Its President & CEO

                                       13

<PAGE>
 
                                                                  Exhibit No. 22
 
                             FISHER COMPANIES INC.
                                  SUBSIDIARIES

<TABLE> 
<CAPTION> 

Subsidiary                                             State of Incorporation
- ----------                                             ----------------------
<S>                                                   <C> 
Fisher Broadcasting Inc.                               Washington

Fisher Mills Inc.                                      Washington

Fisher Properties Inc.                                 Washington

Technovators Inc.                                      Washington

Fisher Communications Inc. (1)                         Washington

Sunbrook Communications, Inc. (1)                      Washington

Sam Wylde Flour Co., Inc. (2)                          Washington

Valley Milling Co. (2)                                 Washington

Fisher Baking Supply Limited (2)                       Canada

Trotwood Inc. (3)                                      Washington
</TABLE> 

_____________________________

(1) Wholly owned by Fisher Broadcasting Inc.
(2) Wholly owned by Fisher Mills Inc.
(3) Wholly owned by Fisher Properties Inc.

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 5
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               DEC-31-1996
<CASH>                                           5,116
<SECURITIES>                                   121,545
<RECEIVABLES>                                   44,759
<ALLOWANCES>                                     1,418
<INVENTORY>                                     13,199
<CURRENT-ASSETS>                                76,316
<PP&E>                                         134,594
<DEPRECIATION>                                  91,487
<TOTAL-ASSETS>                                 394,149
<CURRENT-LIABILITIES>                           33,895
<BONDS>                                         65,713
                                0
                                          0
<COMMON>                                        10,663
<OTHER-SE>                                     221,466
<TOTAL-LIABILITY-AND-EQUITY>                   394,149
<SALES>                                        261,220
<TOTAL-REVENUES>                               265,220
<CGS>                                          170,016
<TOTAL-COSTS>                                  170,016
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                 1,522
<INTEREST-EXPENSE>                               5,671
<INCOME-PRETAX>                                 39,461
<INCOME-TAX>                                    13,375
<INCOME-CONTINUING>                             26,086
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    26,086
<EPS-PRIMARY>                                     6.12
<EPS-DILUTED>                                        0
        

</TABLE>


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