<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BIG CITY RADIO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is off set as provided by Exchange Act
Rule 0-a)(2) and identify the filing for which the off setting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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<PAGE>
BIG CITY RADIO, INC.
11 SKYLINE DRIVE
HAWTHORNE, NEW YORK 10532
[LOGO]
April 14, 1999
Dear Stockholder:
On behalf of the Board of Directors, I wish to extend to you a cordial
invitation to attend the Annual Meeting of Stockholders of Big City Radio, Inc.,
which will be held on the Concourse Level at 1285 Avenue of the Americas, New
York, New York 10019 at 3:00 p.m., Eastern Daylight time, on Thursday, May 20,
1999. I look forward to greeting as many stockholders as possible at the Annual
Meeting.
At the Annual Meeting, holders of Class A Common Stock of Big City Radio
will be asked to vote on proposals to elect two Class A Directors for a one year
term ending in the year 2000 and all stockholders will be asked to vote on
proposals to adopt the Big City Radio, Inc. 1999 Incentive Stock Plan and to
ratify the selection of KPMG LLP as Big City Radio's independent accountants for
the year ending December 31, 1999 and to vote on any other matters that may
properly come before the Annual Meeting.
It is important that your shares be represented at the Annual Meeting,
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy promptly. If you later decide to attend the Annual
Meeting, you may revoke your proxy and vote in person.
Thank you.
Sincerely,
/s/ Stuart Subotnick
Stuart Subotnick
CHAIRMAN OF THE BOARD OF DIRECTORS
<PAGE>
BIG CITY RADIO, INC.
------------------------
11 SKYLINE DRIVE
HAWTHORNE, NEW YORK 10532
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1999
------------------------
TO THE STOCKHOLDERS OF
BIG CITY RADIO, INC.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (the "Annual
Meeting") of Big City Radio, Inc., a Delaware corporation ("Big City Radio"),
will be held on Thursday, May 20, 1999, at 3:00 p.m., Eastern Daylight time, on
the Concourse Level, 1285 Avenue of the Americas, New York, New York 10019.
At the Annual Meeting, holders of Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), will be asked to consider and vote as a
separate class upon the election of two members to Big City Radio's Board of
Directors to serve a one-year term as Class A Directors (Proposal 1).
At the Annual Meeting, holders of Class A Common Stock together with holders
of Class B Common Stock, par value $.01 per share, will be asked to consider and
vote as a single class upon the adoption of the Big City Radio, Inc. 1999
Incentive Stock Plan (Proposal 2) and the ratification of the selection of KPMG
LLP as Big City Radio's independent accountants for the year ending December 31,
1999 (Proposal 3) and to vote upon the transaction of such other business as may
properly come before the Annual Meeting or any adjournment thereof. The Board of
Directors is not aware of any other business that will be presented for
consideration at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" PROPOSALS 1, 2 AND 3 AT THE ANNUAL MEETING.
Only stockholders of record at the close of business on March 26, 1999 (the
"Record Date"), will be entitled to notice of and to vote at the Annual Meeting
or any adjournments thereof. The Annual Meeting may be adjourned from time to
time without notice other than by announcement at the Annual Meeting. A list of
stockholders entitled to vote at the Annual Meeting will be available for
inspection by any stockholder, for any reason germane to the Annual Meeting,
during ordinary business hours during the ten days prior to the Annual Meeting
at the law offices of Paul, Weiss, Rifkind, Wharton and Garrison, LLP, 1285
Avenue of the Americas, New York, New York 10019.
We hope that you will be able to attend the Annual Meeting in person.
However, whether or not you plan to attend the meeting in person, please
complete, sign, date and mail the enclosed proxy in the return envelope to
assure your shares are represented and voted at the Annual Meeting. If you do
attend the Annual Meeting, you may revoke your proxy if you wish and vote in
person. Thank you for your cooperation and continued support.
By Order of the Board of Directors,
/s/ Arnold L. Wadler
Arnold L. Wadler
Secretary
Hawthorne, New York
April 14, 1999
<PAGE>
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU HOLD IN ORDER THAT A QUORUM MAY BE
ASSURED, WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING IN PERSON.
PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING
RETURN ENVELOPE (TO WHICH NO POSTAGE NEED BE AFFIXED BY THE SENDER IF MAILED
WITHIN THE UNITED STATES). IF YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOUR
SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE
SIGNED AND RETURNED TO ASSURE THAT ALL OF YOUR SHARES WILL BE VOTED. THE PROXY
SHOULD BE SIGNED BY ALL REGISTERED HOLDERS EXACTLY AS THE STOCK IS REGISTERED.
<PAGE>
BIG CITY RADIO, INC.
------------------------
11 SKYLINE DRIVE
HAWTHORNE, NEW YORK 10532
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1999
------------------------
This Proxy Statement, the accompanying Notice of Annual Meeting and proxy
card are being furnished to the holders of shares of Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), and to the holders of shares
of Class B Common Stock, par value $.01 per share (the "Class B Common Stock"
and, together with the Class A Common Stock, the "Common Stock"), of Big City
Radio, Inc., a Delaware corporation ("Big City Radio" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of Big
City Radio for use at the Annual Meeting of the Stockholders of Big City Radio
to be held at 3:00 p.m., Eastern Daylight Time, on Thursday, May 20, 1999 on the
Concourse Level, 1285 Avenue of the Americas, New York, New York 10019 (the
"Annual Meeting"), and any adjournments of the Annual Meeting. This Proxy
Statement and the accompanying Notice of Annual Meeting and proxy card, along
with the Company's Annual Report to Stockholders for the year ended December 31,
1998 are being mailed to the stockholders of the Company on or about April 19,
1999.
INFORMATION REGARDING THE ANNUAL MEETING
PROPOSALS. At the Annual Meeting, holders of the Class A Common Stock of
Big City Radio will be asked to consider and vote as a separate class upon the
election of two members to Big City Radio's Board of Directors to serve a
one-year term as Class A Directors (Proposal 1), and holders of the Class A
Common Stock together with holders of the Class B Common Stock will be asked to
consider and vote as a single class upon the adoption of the Big City Radio,
Inc. 1999 Incentive Stock Plan (Proposal 2) and the ratification of the
selection of KPMG LLP as Big City Radio's independent accountants for the year
ending December 31, 1999 (Proposal 3), and to vote upon such other matters as
may properly come before the Annual Meeting.
The Board of Directors of Big City Radio knows of no business that will be
presented for consideration at the Annual Meeting other than the matters
described in this Proxy Statement.
RECORD DATE; QUORUM. Only holders of record of Common Stock as of the close
of business on March 26, 1999 (the "Record Date") will be entitled to notice of
and to vote at the Annual Meeting (such holders are referred to herein as the
"Stockholders"). As of the Record Date, there were 5,818,817 shares of Class A
Common Stock outstanding and entitled to vote at the Annual Meeting, held by
approximately 38 stockholders of record, which number includes nominees for an
undeterminable number of beneficial owners, with each share entitled to one vote
and 8,250,458 shares of Class B Common Stock outstanding and entitled to vote at
the Annual Meeting, held by three stockholders of record, with each share
entitled to ten votes on each matter voted upon. The presence of one-third of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting,
present in person or represented by proxy, is necessary to constitute a quorum
at the Annual Meeting. Broker non-votes, shares of Common Stock represented by
proxies marked "ABSTAIN" for any proposal presented at the Annual Meeting and
shares of Common Stock held by persons in attendance at the Annual Meeting who
abstain from voting on any such proposal will be counted for purposes of
determining the presence of a quorum.
VOTE REQUIRED. The affirmative vote of the holders of a plurality of shares
of Class A Common Stock voting as a separate class present in person or
represented by proxy and entitled to vote at the Annual Meeting will be required
to elect each of the Class A Directors to Big City Radio's Board of Directors.
The affirmative vote of the holders of a majority of shares of Common Stock
voting as a single class present in
<PAGE>
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to approve and adopt each of the matters identified in this Proxy
Statement as being presented to holders of shares of Common Stock at the Annual
Meeting (other than Proposal 1), each of which will be voted upon separately at
the Annual Meeting. In voting on each matter, holders of Class A Common Stock
are entitled to one vote per share and holders of Class B Common Stock are
entitled to ten votes per share.
Stockholders who hold their shares through an intermediary must provide
instructions on voting as requested by their banks or brokers. Votes cast by
proxy or in person at the Annual Meeting will be tabulated by one or more
inspectors of election appointed by the Board of Directors. These inspectors of
election will also determine whether a quorum is present for the transaction of
business.
Shares of Common Stock represented by proxies marked "ABSTAIN" for any
proposal presented at the Annual Meeting and shares of Common Stock held by
persons in attendance at the Annual Meeting who abstain from voting on any such
proposal will not be voted for or against such proposal. Broker non-votes will
not be voted for or against a proposal. Because of the vote required to approve
the proposals presented at the Annual Meeting, abstentions and broker non-votes
will have the effect of a vote against such proposals (except with respect to
Proposal 1). Because only a plurality is required for the election of directors,
abstentions and broker non-votes will have no effect on the election of
directors.
PROXIES. All properly executed proxy cards delivered pursuant to this
solicitation and not revoked will be voted at the Annual Meeting in accordance
with the directions given. In voting by proxy with regard to the election of
directors, the Stockholders entitled to vote upon such election may vote in
favor of all nominees, withhold their votes as to all nominees or withhold their
votes as to specific nominees. With regard to other proposals, the Stockholders
may vote in favor of each proposal or against each proposal, or in favor of some
proposals and against others, or may abstain from voting on any or all
proposals. Stockholders should specify their respective choices on the
accompanying proxy card. If no specific instructions are given with regard to
the matters to be voted upon, the shares of Common Stock represented by a signed
proxy card will be voted "FOR" Proposals 1, 2 and 3 listed on the proxy card. If
any other matters properly come before the Annual Meeting, the persons named as
proxies will vote upon such matters according to their judgment.
All proxies delivered pursuant to this solicitation are revocable at any
time prior to the Annual Meeting at the option of the Stockholders executing
them by giving written notice of revocation to the Secretary of Big City Radio,
by delivering a duly executed proxy card bearing a later date or by attending
and voting in person at the Annual Meeting. Attendance at the Annual Meeting
will not in itself constitute revocation of a proxy. All written notices of
revocation and other communications with respect to revocations of proxies
should be addressed to: Big City Radio, Inc., c/o Metromedia Company, One
Meadowlands Plaza, East Rutherford, NJ 07073-2137, Attention: Arnold L. Wadler,
Secretary.
Proxies will initially be solicited by Big City Radio by mail, but
directors, officers and selected employees may solicit proxies from Stockholders
personally or by telephone, facsimile or other forms of communication. Such
directors, officers and employees will not receive any additional compensation
for such solicitation. Big City Radio will also request brokerage houses,
nominees, fiduciaries and other custodians to forward soliciting materials to
beneficial owners, and Big City Radio will reimburse such persons for their
reasonable expenses incurred in doing so. All expenses incurred in connection
with the solicitation of proxies will be borne by Big City Radio.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of the Record Date, certain information
regarding the beneficial ownership (as such term is defined in Rule 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of each
class of Common Stock by (i) each person (including any "group" as that term is
used in Section 13(d)(3) of the Exchange Act) known to own beneficially more
than 5% of the outstanding shares of each class of Common Stock, (ii) each
director and director nominee of Big City Radio, (iii) each executive officer
named in the Summary Compensation Table under "Executive Compensation" and (iv)
all directors and executive officers of Big City Radio as a group. In accordance
with the rules promulgated by the Commission, such ownership includes shares
currently owned as well as shares which the named person has the right to
acquire beneficial ownership of within 60 days, including, but not limited to,
shares which the named person has the right to acquire through the exercise of
any option, warrant or right, or through the conversion of a security.
Accordingly, more than one person may be deemed to be a beneficial owner of the
same securities. Except as otherwise indicated, each stockholder listed below
has sole voting and investment power with respect to shares beneficially owned
by such person.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE OF
COMMON STOCK OUTSTANDING
BENEFICIALLY CLASS OF COMMON
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNED(1) STOCK
- --------------------------- ----------------------------------------------- -------------------- ----------------
<S> <C> <C> <C>
Class B Common Stock Stuart Subotnick, Anita Subotnick.............. 8,250,458(2) 100.0%
Class A Common Stock Michael Kakoyiannis (3)........................ 1,220,817 20.9%
Gilder Gagnon Howe & Co.
LLC(4)......................................... 1,312,275 22.5%
Capital Guardian Trust Company (5)............. 371,500 6.4%
T. Rowe Price Associates, Inc. (6)............. 495,000 8.5%
Georgica Advisors LLC (7)...................... 495,000 8.5%
Michael H. Boyer............................... 2,500(8) *
Silvia Kessel.................................. 18,140(9) *
Arnold L. Wadler............................... 17,000(9) *
Leonard White.................................. 2,500(8) *
Steven G. Blatter.............................. 35,450(10) *
Bryan Subotnick................................ 42,000(11) *
Alan D. Kirschner.............................. 42,128(11) *
Paul R. Thomson................................ 47,000(11) *
All Directors and Executive Officers
as a Group (11 persons)........................ 9,514,110(12) 66.8%
</TABLE>
- ------------------------
* Holdings do not exceed one percent of the total outstanding shares of any
class of Common Stock.
(1) Unless otherwise indicated by footnote, the named individuals have sole
voting and investment power with respect to the shares of Common Stock
beneficially owned.
(2) Includes 1,000,000 shares of Class B Common Stock owned by Subotnick
Partners, L.P. of which Anita Subotnick is general partner and Stuart
Subotnick is a limited partner. The shares of Class B Common Stock are
convertible into shares of Class A Common Stock at the rate of one share of
Class A Common Stock for each share of Class B Common Stock and the holders
of shares of Class B Common Stock are entitled to 10 votes per share and to
vote as a separate class to elect 75% of the members of the Company's Board
of Directors. Mr. and Mrs. Subotnick have shared voting and investment
power with respect to their shares. Mr and Mrs. Subotnick's address is c/o
Kluge & Company, 215 East 67th Street, New York, New York 10021.
(3) Mr. Kakoyiannis' address is c/o Big City Radio, Inc., 11 Skyline Drive,
Hawthorne, NY 10532.
3
<PAGE>
(4) Pursuant to a report on Schedule 13G filed with the Securities and Exchange
Commission on February 16, 1999, Gilder Gagnon Howe & Co. LLC ("Gilder"), a
broker/dealer under Section 15 of the Securities Exchange Act of 1934, is
the beneficial owner of 1,312,275 shares of Class A Common Stock of which
1,287,475 are customer accounts over which members and/or employees of
theirs have discretionary authority to dispose of or direct the disposition
of the shares, 18,850 shares are held in accounts owned by the members of
Gilder and their families and 5,950 shares are held in the account of the
profit-sharing plan of Gilder.
(5) Pursuant to a report on Schedule 13G filed with the Securities Exchange
Commission on February 8, 1999, Capital Guardian Trust Company, a bank as
defined in Section 3(a)6 of the Securities Act of 1933 is the beneficial
owner of 371,500 shares of Class A Common Stock as a result of its serving
as the investment manager of various institutional accounts. Capital
Guardian Trust Company is a wholly-owned subsidiary of The Capital Group
Companies, Inc., the parent holding company of a group of investment
management companies that hold investment power and, in some cases, voting
power over the securities reported. The Capital Group Companies, Inc. does
not have investment power or voting power over any of the securities
reported herein; however, The Capital Group Companies, Inc. may be deemed
to "beneficially own" such securities by virtue of Rule 13d-3 under the
Exchange Act. The business address of The Capital Group Companies, Inc. and
Capital Guardian Trust Company is 333 South Hope Street Los Angeles
California 90071.
(6) Pursuant to a report on Schedule 13G filed with the Securities and Exchange
Commission on February 12, 1999, these shares are owned by various
individuals and institutional investors including T. Rowe Price Small-Cap
Value Fund, Inc. (which owns 450,000 shares representing 7.7% of the shares
outstanding), which T. Rowe Price Associates, Inc. ("Price Associates")
serves as investment adviser with power to direct investments and/or sole
power to vote the shares. For purposes of the Securities Exchange Act of
1934, Price Associates is deemed to be a beneficial owner of such
securities, however, Price Associates expressly disclaims that it is the
beneficial owner of such securities. The business address of T. Rowe Price
Associates is 100 East Pratt Street, Baltimore, Maryland 21202.
(7) Pursuant to a report on Schedule 13G filed with the Securities and Exchange
Commission on October 21, 1998, Georgica Advisors LLC is the beneficial
owner of 495,000 shares of the Class A Common Stock as a result of its
acting as manager of investment accounts for several individual investors.
(8) Includes 2,500 shares issuable upon exercise of options that are currently
exercisable or exercisable within 60 days of the date of this Proxy
Statement.
(9) Includes 11,000 shares issuable upon exercise of options that are currently
exercisable.
(10) Includes 35,000 shares issuable upon exercise of options that are currently
exerciable.
(11) Includes 40,750 shares issuable upon exercise of options that are currently
exercisable and, subject to approval of Proposal No. 2--Adoption of the Big
City Radio, Inc. 1999 Stock Incentive Plan, 1,125 shares issuabable upon
exercise of options that will be immediately exercisable upon adoption of
the Big City Radio, Inc. 1999 Incentive stock plan.
(12) Includes 188,000 shares issuable upon exercise of options that are
currently exercisable and 8,250,458 shares of Class B Common Stock.
The foregoing information is based on a review, as of the Record Date, by
Big City Radio of statements filed with the Commission under Sections 13(d) and
13(g) of the Exchange Act. To the best knowledge of Big City Radio, except as
set forth above, no other person owns beneficially more than 5% of the
outstanding Common Stock.
4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE OFFICERS OF BIG CITY RADIO
The following table sets forth certain information regarding the executive
officers of the Company as of the date of this report.
<TABLE>
<CAPTION>
NAME AGE OFFICE OR POSITION HELD
- --------------------------------------- ----------- ---------------------------------------------------------------
<S> <C> <C>
Michael Kakoyiannis.................... 56 Chief Executive Officer and President
Alan D. Kirschner...................... 47 Vice President--Engineering
Bryan Subotnick........................ 35 Executive Vice President--Corporate Development
Paul R. Thomson........................ 42 Vice President, Chief Financial Officer and Treasurer
Silvia Kessel.......................... 48 Executive Vice President
Arnold L. Wadler....................... 55 Executive Vice President, General Counsel, Secretary and
Director
</TABLE>
Set forth below is the background of each of the Company's executive
officers other than those who are also directors (for the backgrounds of each of
the Company's directors, including biographical information, see "PROPOSAL NO.
1--ELECTION OF DIRECTORS" below).
ALAN D. KIRSCHNER has been a Vice President of the Company since September
1997 and a Director of Engineering since July 1995. Mr. Kirschner has been
serving as radio technical consultant for AM and FM radio stations since 1972.
Mr. Kirschner served as Chief Engineer responsible for technical operations of
radio station WYNY owned by Broadcasting Partners, Inc. and Evergreen Media, in
New York from 1993 to 1995 and a Director of Engineering for Westwood One
Stations Group in New York from 1988 to 1993.
BRYAN SUBOTNICK has served as Executive Vice President--Corporate
Development of the Company since September 1997. Mr. Subotnick served as Vice
President of the Company from January 1997, and Director of Operations from May
1995 to December 1996. Prior to joining the Company, Mr. Subotnick was Vice
President and General Counsel of Papamarkou & Company, an international finance
and investment company, in 1995, and as a General Partner in the law firm of
Shanker & Subotnick, which specialized in entertainment law, from 1992 to 1994,
Mr. Subotnick is the son of Stuart Subotnick, the Chairman of the Board of
Directors of the Company, and of Anita Subotnick, a director of the Company.
PAUL R. THOMSON has served as Vice President of the Company since September
1997 and as Chief Financial Officer of the Company since January 1996. Prior to
joining the Company, Mr. Thomson served as Corporate Controller of Herbalife
International, Inc. from 1993 to 1996, as Chief Financial Officer of Barnard
Salick Companies from 1992 to 1993 and as Controller--Radio Stations Group of
Westwood One, Inc. from 1989 to 1992. Prior to 1992, Mr. Thomson worked with
Price Waterhouse LLP for 12 years in London, Caracas and Los Angeles. He is a
certified public accountant and a member of the Institute of Chartered
Accountants in England and Wales.
DIRECTORS OF BIG CITY RADIO
The Amended and Restated Certificate of Incorporation of Big City Radio (the
"Certificate of Incorporation") provides that the Board of Directors shall
initially consist of eight members: six Directors to be elected by the holders
of Class B Common Stock (the "Class B Directors") and two Directors to be
elected by the holders of Class A Common Stock (the "Class A Directors"). The
Board of Directors currently consists of five Class B Directors and two Class A
Directors. The Class B Directors are Mr. Stuart Subotnick, Mrs. Anita Subotnick,
Mr. Michael Kakoyiannis, Ms. Silvia Kessel and Mr. Arnold L. Wadler. The Class A
Directors are Mr. Leonard L. White and Mr. Michael H. Boyer. Holders of the
Class B Common Stock remain entitled to elect one additional Class B Director.
5
<PAGE>
Directors of each class will hold office until their successors are elected
and qualified or until their earlier death, resignation or removal. The Amended
and Restated Bylaws of the Company (the "Bylaws") provide that the Class A
Directors will be elected by a plurality of the votes cast at a meeting of
stockholders (or stockholders acting by written consent) by the holders of Class
A Common Stock entitled to vote at the election, voting as a separate class, and
that Class B Directors will be elected by a plurality of the votes cast at a
meeting of stockholders (or stockholders acting by written consent) by the
holders of Class B Common Stock entitled to vote at the election, voting as a
separate class.
The Class A Directors and Class B Directors are nominated for election by a
Class A Nominating Committee and a Class B Nominating Committee, respectively.
For more information regarding the Class A Nominating Committee and the Class B
Nominating Committee and their respective members, see "Meetings of Certain
Committees of the Board" below. In addition, nominations for election of Class A
Directors only to the Board of Directors of Big City Radio may be made at an
annual or special meeting of stockholders called by the Board of Directors for
the purpose of electing Directors, by any holder of the Class A Common Stock
entitled to vote for the election of directors at such meeting. Such nominations
shall be made pursuant to timely notice in writing to the Secretary of Big City
Radio. To be timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of Big City Radio not less than 60
days nor more than 90 days prior to the scheduled date of the meeting,
regardless of any postponement, deferral or adjournment of that meeting to a
later date; PROVIDED, HOWEVER, that if less than 70 days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so delivered or received not later than
the close of business on the 10th day following the earlier of (i) the day on
which such notice of the date of the meeting was mailed or (ii) the day on which
such public disclosure was made. A stockholder's notice to the Secretary of Big
City Radio shall set forth (i) as to each person whom the stockholder proposes
to nominate for election or reelection as a director (a) the name, age, business
address and residence address of such person, (b) the principal occupation or
employment of such person, (c) the class and number of shares of stock of Big
City Radio which are beneficially owned by such person on the date of such
stockholder's notice and (d) any other information relating to such person that
is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required in each case pursuant to Regulation 14A
under the Exchange Act (including, without limitation, such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director, if elected); (ii) as to the stockholder giving the notice (a) the name
and address, as they appear on Big City Radio's books, of such stockholder and
any other stockholders known by such stockholder to be supporting such
nominee(s), (b) the class and number of shares of stock of Big City Radio which
are beneficially owned by such stockholder on the date of such stockholder's
notice and by any other stockholders known by such stockholder to be supporting
such nominee(s) on the date of such stockholder's notice, (c) a representation
that the stockholder is a holder of record of stock of Big City Radio entitled
to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; and (iii) a
description of all arrangements or understandings between the stockholder and
each nominee and other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
stockholder. Any such nominations should be submitted in writing to Big City
Radio, Inc., c/o Metromedia Company, One Meadowlands Plaza, East Rutherford, New
Jersey 07073-2137, Attention: Secretary.
Directors may be removed, with or without cause, only by the holders of the
class or classes of Common Stock or series of preferred stock, if any, that, as
of the date such removal is effected, would be entitled to elect such Directors
at the next annual meeting of stockholders. Newly created directorships
resulting from an increase in the number of Directors and vacancies occurring on
the Board of Directors for any reason, including the removal of Directors
without cause, may be filled only by (i) the affirmative vote of a majority of
the remaining Directors elected by holders of each class or classes of Common
Stock or series of preferred stock, if any, that (x) elected such Directors and
(y) as of the date such vacancy is filled, would be entitled to elect such
Directors at the next annual meeting of stockholders or (ii) if there
6
<PAGE>
are no such remaining Directors, then by a plurality of the votes cast by the
holders of the class or classes of Common Stock or series of preferred stock, if
any, that, as of the date such vacancy is filled, would be entitled to elect
such Directors at the next annual meeting of stockholders, voting as a separate
class at a meeting, special or otherwise, of the holders of Common Stock of such
class or classes or series of preferred stock, if any.
For more information regarding each of Big City Radio's directors, including
biographical information, see "PROPOSAL 1--ELECTION OF DIRECTORS."
MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
The Board of Directors held four regular meetings during 1998. In addition,
the Board of Directors took action by unanimous written consent three times in
1998. All directors attended at least 75% of the aggregate total number of
meetings of the Board of Directors and all committees of the Board of Directors
on which they serve.
The Board of Directors has delegated certain functions to the following
standing committees:
THE EXECUTIVE COMMITTEE. The Executive Committee was created on December
24, 1997 and is authorized to exercise, to the extent permitted by law, all of
the powers of the Board of Directors in the management and affairs of the
Company including, without limitation, the power and authority to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger in connection with the merger of Big City Radio and any of
its subsidiaries. The Executive Committee took action by unanimous written
consent two times in 1998. The members of the Executive Committee are Mr. Stuart
Subotnick and Ms. Silvia Kessel.
THE AUDIT COMMITTEE. The Audit Committee was created on March 25, 1998 and
is responsible for (a) making recommendations concerning the engagement of
independent public accountants, (b) approving the professional services provided
by Big City Radio's independent auditors, (c) reviewing, in consultation with
Big City Radio's independent auditors, the plans and results of the audit
engagement, (d) reviewing the independence of Big City Radio's independent
auditors, (e) considering the range of audit and non-audit fees and (f)
reviewing the adequacy of Big City Radio's internal accounting controls. The
Audit Committee held four meetings in 1998. The members of the Audit Committee
are Mr. Michael H. Boyer, Mr. Leonard White and Ms. Silvia Kessel.
THE COMPENSATION COMMITTEE. The Compensation Committee was created on March
25, 1998 and its function is to review, approve, recommend and report to the
Board of Directors on matters specifically relating to the compensation of Big
City Radio's executive officers and other key executives and to administer Big
City Radio's stock option plans. The Compensation Committee held one meeting in
1998. In addition, the Compensation Committee took action by unanimous written
consent four times in 1998. The members of the Compensation Committee are Mr.
Michael H. Boyer and Mr. Leonard White.
THE NOMINATING COMMITTEES. The Class A Nominating Committee and the Class B
Nominating Committee (together, the "Nominating Committees") were created on
December 24, 1997 and (i) establish criteria and procedures for the election of
the Class A Directors and the Class B Directors, respectively, (ii) review
management's evaluation of any officers proposed for nomination as Class A
Director or Class B Director, as applicable, (iii) review the qualifications of
and, when necessary and appropriate, interview candidates who may be proposed
for nomination as Class A Director or Class B Director, as applicable, (iv)
recommend to the entire Board of Directors a slate of Class A Directors or Class
B Directors, as applicable, to be elected for the following year and (v) perform
such other duties in connection with the selection, election or termination of
the Directors as the Board of Directors may request.
7
<PAGE>
The Nominating Committees did not hold any formal meetings in 1998. The
current member of the Class A Nominating Committee is Mr. Leonard White and the
current members of the Class B Nominating Committee are Mr. Stuart Subotnick and
Mrs. Anita Subotnick.
COMPENSATION OF DIRECTORS
Directors who are officers, employees or affiliates of the Company receive
no compensation for their services as directors. Accordingly, Messrs. Subotnick,
Kakoyiannis and Wadler and Ms. Kessel and Mrs. Subotnick do not receive
compensation for their services as directors. Each director of the Company who
is not also an officer, employee or affiliate of the Company (an "outside
director") is entitled to receive annual directors' fees of $20,000, an
additional $1,200 for each Board of Directors meeting attended ($500 if attended
by conference telephone call) and $500 for each committee meeting attended.
Outside directors are eligible to participate in the Big City Radio 1997
Incentive Stock Plan (the "1997 Incentive Stock Plan") and the Big City Radio
1998 Incentive Stock Plan (the "1998 Incentive Stock Plan" together with the
1997 Incentive Stock Plan, the "Incentive Stock Plans") pursuant to which
options to purchase 2,500 shares of Class A Common Stock will be granted to each
outside director immediately upon such director's initial election and
qualification for the Board of Directors. Options to purchase 2,500 shares of
Class A Common Stock will be granted annually on the day of each annual
stockholders' meeting. Each outside director is eligible to receive options to
purchase a maximum of 25,000 shares of Class A Common Stock pursuant to the
Incentive Stock Plans. Each option will have an exercise price equal to the fair
market value of a share of Class A Common Stock on the date of grant. All such
options granted to outside directors will be immediately exercisable.
On July 6, 1998, the Board of Directors granted to each of Ms. Silvia Kessel
and Mr. Arnold L. Wadler options under the 1997 Incentive Stock Plan to purchase
up to 5,000 shares of Class A Common Stock at an aggregate price of $7.8125 per
share and on January 16, 1998 granted to Mr. Michael H. Boyer options under the
1997 Incentive Stock Plan to purchase up to 2,500 shares of Class A Common
Stock, at an exercise price of $7.125 per share.
8
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information on
compensation awarded to, earned by or paid to the Company's Chief Executive
Officer and the other most highly compensated executive officers whose
individual compensation exceeded $100,000 during the years ended December 31,
1998, 1997 and 1996 for services rendered in all capacities to Big City Radio
and its subsidiaries. The persons listed in the table below are referred to as
the "Named Executive Officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
------------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
--------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARD(S)($) STOCK OPTIONS COMPENS.($)
- ------------------------------------ --------- ---------- --------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael Kakoyiannis................. 1998 $ 300,000 $ 50,000 $ 796,918(1) --
(President and Chief 1997 300,000 75,000 -- --
Executive Officer) 1996 230,000 -- -- --
Paul R. Thomson..................... 1998 187,500 25,000 -- 10,000(2)
(Vice President and Chief 1997 175,000 30,000 -- 75,000(3)
Financial Officer) 1996 165,000 25,000 -- --
Steven G. Blatter(4)................ 1998 132,000 7,500 -- --
(Vice President--Programming) 1997 165,000 27,500 -- 35,000(5)
1996 150,000 25,000 -- --
Bryan Subotnick..................... 1998 125,000 10,000 -- 10,000(2) (6)
(Executive Vice President-- 1997 100,000 -- -- 75,000(3)
Corporate Development) 1996 (6) (6) -- (6)
Alan D. Kirschner................... 1998 110,000 15,000 -- 10,000(2) (6)
(Vice President--Engineering) 1997 94,000 5,000 -- 75,000(3)
1996 (6) (6) -- (6)
</TABLE>
- ------------------------
(1) Pursuant to his employment agreement, Mr. Kakoyiannis is entitled to receive
93,755 shares of Class A Common Stock for every 20% increase in the average
closing price of the Class A Common Stock following the Company's initial
public offering (up to a maximum of 281,265 shares). On August 3, 1998,
93,755 shares were issued to Mr. Kakoyiannis under his employment agreement.
The closing price of the Class A Common Stock on August 3, 1998 as reported
by the American Stock Exchange was $8.50 per share. No shares were issued to
Mr. Kakoyiannis under his employment agreement in 1997.
(2) Options to purchase 10,000 shares of Class A Common Stock granted on July 6,
1998 at an exercise price of $7.8125 per share, 2,000 of which are presently
exercisable and the remainder of which become exercisable in four annual
installments on each anniversary of the grant date.
(3) Includes options to purchase 25,000 shares of Class A Common Stock at an
exercise price of $6.00 per share, exercisable immediately and options to
purchase 50,000 shares of Class A Common Stock at an exercise price of $7.00
per share, 10,000 shares of which are presently exercisable and the
remainder of which will become exercisable in four annual installments one
each anniversary of the grant date.
(4) Steven G. Blatter served as Vice President--Programming from January 1, 1996
through September 25, 1998, and during such period the Company provided
perquisites and other personal benefits to Mr. Blatter. The value of the
perquisites and benefits provided Mr. Blatter during 1996, 1997 and 1998
9
<PAGE>
did not exceed the lesser of $50,000 or 10% of such officer's salary plus
annual bonus. The amounts shown for 1998 reflect less than a full year of
compensation for Mr. Blatter.
(5) Includes options to purchase 25,000 shares of Class A Common Stock at an
exercise price of $6.00 per share exercisable immediately and 10,000 shares
of Class A Common Stock at an exercise price of $7.00 per share exercisable
immediately.
(6) Compensation information is omitted because aggregate compensation during
fiscal year 1996 was less than $100,000.
During 1998, Mr. Wadler and Ms. Kessel, each of whom serves as an executive
officer of the Company, were employed and paid by Metromedia Company
("Metromedia"). No other amounts were paid by Big City Radio to such named
executive officers or to Metromedia for services during 1998.
10
<PAGE>
OPTION/SAR GRANTS
DURING THE YEAR ENDED DECEMBER 31, 1998
The following table sets forth individual grants of stock options by Big
City Radio pursuant to the Company's Incentive Stock Plans to the Named
Executive Officers during the fiscal year ended December 31, 1998. The Incentive
Stock Plans do not provide for stock appreciation rights and Big City Radio did
not grant any stock appreciation rights during the fiscal year ended December
31, 1998. All options listed below were granted pursuant to the 1997 Incentive
Stock Plan.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL OPTIONS
UNDERLYING GRANTED TO EMPLOYEES IN EXERCISE EXPIRATION GRANT-DATE
NAME OPTIONS GRANTED (#) FISCAL YEAR PRICE($/SH) DATE VALUE(1)
- ------------------------------ ------------------- ----------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Michael Kakoyiannis........... -- -- -- -- --
Paul R. Thomson............... 10,000 2.53% 7.8125 7/06/08 51,980
Steven G. Blatter............. -- -- -- 7/06/08 51,980
Bryan Subotnick............... 10,000 2.53% 7.8125 7/06/08 51,980
Alan D. Kirschner............. 10,000 2.53% 7.8125 7/06/08 51,980
</TABLE>
- ------------------------
(1) The modified Black-Scholes method of option valuation has been used to
determine grant date present value. The assumptions used in the
Black-Scholes option valuation calculation are (i) estimated future annual
stock price volatility of 50%; (ii) a United States risk free rate of return
of 5.57%; (iii) a future dividend yield of 0%; and (iv) an expected life of
ten years.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table sets forth the exercise of stock options during the year
ended December 31, 1997, by each of the Named Executive Officers and the
year-end value of unexercised options.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE FISCAL YEAR-END(#) FISCAL YEAR-END($)
ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
--------------- ----------- ----------------------- --------------------------
<S> <C> <C> <C> <C>
Michael Kakoyiannis........... -- -- -- -- / --
Paul R. Thomson............... -- -- 37,000/48,000 -- / --
Steven G. Blatter............. -- -- 35,000/10,000 -- / --
Bryan Subotnick............... -- -- 37,000/48,000 -- / --
Alan D. Kirschner............. -- -- 37,000/48,000 -- / --
</TABLE>
- ------------------------
(1) Calculated based on a closing price for the Class A Common Stock of $4.063
as reported by the American Stock Exchange on December 31, 1998.
11
<PAGE>
EMPLOYMENT AGREEMENTS OF NAMED EXECUTIVE OFFICERS
The Company has entered into employment agreements with the following named
executive officers: Messrs. Michael Kakoyiannis, Alan D. Kirschner, Bryan
Subotnick and Paul R. Thomson.
EMPLOYMENT AGREEMENT WITH MICHAEL KAKOYIANNIS
The Company and Mr. Kakoyiannis are parties to an employment agreement that
provides that he will be employed as the Company's President and Chief Executive
Officer through December 31, 2000 and that Mr. Kakoyiannis will receive a base
salary of $360,000 a year. In addition to his base salary, Mr. Kakoyiannis is
also entitled to an annual bonus as determined by the Compensation Committee if
certain performance targets have been met. Mr. Kakoyiannis is entitled to
participate in all benefits generally made available to senior executives of the
Company. The Company has caused a term life insurance to be issued to Mr.
Kakoyiannis for $2.0 million. Under his employment agreement, Mr. Kakoyiannis is
entitled to receive 93,755 shares of Class A Common Stock for every 20% increase
in the average closing price of the Class A Common Stock following the Initial
Public Offering (up to a maximum of 281,265 shares) provided that such price
remains in effect for six consecutive months. If Mr. Kakoyiannis earns these
grants of shares of Class A Common Stock, the Company will record future
non-cash, compensation expense equal to the fair value of such stock on the date
of grant. If the fair value were based on exact 20% increments over the Initial
Public Offering price of $7.00 per share, future compensation expense would be
approximately $2.9 million. If the Company terminates Mr. Kakoyiannis'
employment without cause, it will be obligated to pay him severance payments in
an amount equal to eighteen times his base monthly salary. In addition, Mr.
Kakoyiannis' employment-related benefits will continue for eighteen months after
his termination of employment. If Mr. Kakoyiannis' employment is terminated for
cause or disability, the Company will not be obligated to make any severance
payments or continue any benefits. Mr. Kakoyiannis will be entitled to terminate
his employment and to receive severance payments upon the occurrence of a
"change of control" of the Company (as defined in Mr. Kakoyiannis' employment
agreement). Following the termination of his employment with the Company for any
reason, Mr. Kakoyiannis will not, during eighteen months thereafter, own,
acquire or obtain any license for an AM or FM radio station or render any
services or advice to, or be engaged in any AM or FM radio station within 75
miles of the transmitter of any radio station owned or operated by the Company.
EMPLOYMENT AGREEMENT WITH PAUL R. THOMSON
The Company and Mr. Thomson are parties to an employment agreement that
provides for Mr. Thomson's employment as Vice President and Chief Financial
Officer through December 31, 2000. Mr. Thomson's employment agreement provides
for an annual base salary of $210,000 for 1999 and $225,000 for 2000. Mr.
Thomson is entitled to participate in all benefits generally made available to
senior executives of the Company and to receive annual bonus compensation as
determined by the Compensation Committee if certain performance targets have
been met. Such bonus compensation will not exceed $40,000 for 1999 and $50,000
for 2000. If the Company terminates Mr. Thomson's employment without cause or
upon the occurrence of a "change of control" (as defined in Mr. Thomson's
employment agreement), the Company will be obligated to make severance payments
in an amount equal to twelve (12) months of Mr. Thomson's monthly base salary at
the time of termination. Following the termination of his employment with the
Company for any reason, Mr. Thomson shall not serve in any accounting or
financial capacity for, or otherwise be involved in the accounting and financial
functions of any radio station with a rock-based format within 50 miles of the
transmitter of any of the Company's radio stations for a period of six months
following the termination of Mr. Thomson's employment agreement.
12
<PAGE>
EMPLOYMENT AGREEMENT WITH ALAN D. KIRSCHNER
The Company and Mr. Kirschner are parties to an employment agreement that
provides for Mr. Kirshner's employment as Vice President-Engineering through
December 31, 2000. Mr. Kirschner's employment agreement provides for an annual
base salary of $137,500 for 1999 and $151,250 for 2000. Mr. Kirschner is
entitled to participate in all benefits generally made available to senior
executives of the Company and to receive annual bonus compensation as determined
by the Compensation Committee if certain performance targets have been met. Such
bonus compensation shall not exceed $15,000 for 1999 and $20,000 for 2000. If
Mr. Kirschner's employment agreement is terminated without cause or upon Mr.
Kirschner's disability, the Company will be obligated to make severance payments
in an amount equal to six times Mr. Kirschner's base monthly salary. If Mr.
Kirschner's employment agreement is terminated upon a "change of control" (as
defined in Mr. Kirschner's employment agreement), the Company shall pay Mr.
Kirschner twelve times his monthly salary. Following the termination of his
employment with the Company for any reason, Mr. Kirschner shall not serve in any
engineering or technical capacity for, or otherwise be involved in the
engineering and technical functions of any radio station within 50 miles of the
transmitter of any of the Company's radio stations for 30 days following the
termination of Mr. Kirschner's employment agreement.
EMPLOYMENT AGREEMENT WITH BRYAN SUBOTNICK
The Company and Mr. Subotnick are parties to an employment agreement that
provides for Mr. Subotnick's employment as Executive Vice President-Corporate
Development through December 31, 2000. Mr. Subotnick's employment agreement
provides for an annual base salary of $150,000.
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 29, 1996, the Company was merged with Q Broadcasting, Inc., a
Delaware corporation, owned by Mr. and Mrs. Subotnick, with the Company as the
surviving corporation. As a result of the merger, Mr. and Mrs. Subotnick each
received 216 shares of then existing common stock, par value $.01 per share, of
the Company (the "Old Common Stock").
On May 30, 1996, the Company entered into an Amended and Restated Credit
Agreement (the "Credit Facility") with The Chase Manhattan Bank ("Chase")
pursuant to which Chase agreed to make revolving credit loans to the Company
from time to time until December 24, 2002 or earlier, as provided under the
Credit Facility. The payment and performance by the Company under the Credit
Facility was guaranteed by Stuart Subotnick under a Guarantee Agreement, dated
as of May 30, 1996. Simultaneously with the consummation of the Initial Public
Offering of the Company and the application or the use of proceeds therefrom,
Mr. Subotnick's guarantee was reduced from a guarantee of the entire Credit
Facility to a guarantee of $6.0 million. On March 17, 1998, in connection with
the consummation of the offering of its 11 1/4% Senior Discount Notes due 2005
(the "Notes") and the application of the proceeds therefrom, the Company entered
into a Second Amended and Restated Credit Agreement (the "Revolving Facility")
with Chase and repaid its indebtedness under the Credit Facility and Mr.
Subotnick's guarantee of the Credit Facility was terminated. Mr. Subotnick does
not guarantee all or any portion of the Revolving Facility.
In addition, pursuant to a Pledge Agreement, dated as of May 30, 1996 (the
"Pledge Agreement"), Mr. and Mrs. Subotnick (the "Principal Stockholders") each
granted Chase a first priority security interest in their shares of Old Common
Stock and Mr. Kakoyiannis granted Chase a second priority security interest in
his shares of Old Common Stock. In connection with the consummation of the
Company's Initial Public Offering, the Pledge Agreement terminated.
On October 31, 1997, Mr. Subotnick gave a support letter to the Company
guaranteeing his financial support through the earlier of a successful minimum
initial public offering of $36.0 million of equity securities to the public or
October 1, 1998. In connection with the consummation of the offering of the
Notes by the Company, this support letter was terminated.
The Principal Stockholders have made various loans to the Company in order
to finance the Company's radio station acquisitions and working capital
requirements. The loans from the Principal Stockholders bore interest at
variable rates not exceeding 8%, payable monthly, and aggregated approximately
$8.7 million of principal amount on May 30, 1996. In May 1996, in connection
with the merger of Q Broadcasting, Inc. with and into the Company, the Principal
Stockholders contributed $5.1 million principal amount of stockholders' loans to
Q Broadcasting, Inc. to the capital of Q Broadcasting, Inc. The Principal
Stockholders' outstanding loans to Q Broadcasting, Inc. and to the Company of
$11.7 million of aggregate principal amount were subordinated to the Credit
Facility by a subordinated promissory note dated May 24, 1996. Immediately prior
to the consummation of the Initial Public Offering on December 18, 1997, the
Principal Stockholders contributed $13.3 million representing the entire amount
of their outstanding stockholders' loans to the capital of the Company. In
addition, in connection with the consummation of the Initial Public Offering,
the Principal Stockholders exchanged all of their shares of Class A Common Stock
for shares of Class B Common Stock, effectively giving them control of the
Company.
As of July 1, 1997, Mr. and Mrs. Subotnick transferred an aggregate of 68
shares of Old Common Stock to Mr. Kakoyiannis as an employment incentive.
Mr. Subotnick and Mr. Kakoyiannis entered into a Loan Agreement, dated as of
August 4, 1995, as amended, pursuant to which Mr. Subotnick made a loan to Mr.
Kakoyiannis as evidenced by a promissory note, dated August 4, 1995, in the
original principal amount of $500,000. This loan is secured by a first priority
security interest in favor of Mr. Subotnick in Mr. Kakoyiannis' shares of Class
A Common Stock.
14
<PAGE>
The Company receives certain legal, accounting, tax and other services from
Metromedia for which it pays to Metromedia an annual fee not to exceed initially
up to $200,000, increasing up to $500,000. Mr. Subotnick is a general partner of
Metromedia. The Company did not pay Metromedia a management fee during 1998.
INDEMNIFICATION AGREEMENTS
The Company has not entered into any indemnification agreements.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires Big City Radio's directors and
executive officers, and persons who beneficially own more than 10% of the
outstanding Common Stock, to file with the Commission and the American Stock
Exchange ("AMEX") initial reports of ownership and reports of changes in
ownership of the Class A Common Stock. Such officers, directors and greater than
10% stockholders are required by the regulations of the Commission to furnish
Big City Radio with copies of all reports that they file under Section 16(a). To
Big City Radio's knowledge, based solely on a review of the copies of such
reports furnished to Big City Radio and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to Big
City Radio's officers, directors and greater than 10% beneficial owners were
complied with by such persons during the fiscal year ended December 31, 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. Michael H. Boyer
and Mr. Leonard White. Mr. White is also a director of Metromedia International
Group, Inc. ("MMG") and of Metromedia Fiber Network, Inc. ("MFN"), two public
companies controlled by Metromedia.
COMPENSATION COMMITTEE REPORT ON COMPENSATION
The Compensation Committee of the Board of Directors is comprised entirely
of independent directors and is responsible for developing and making
recommendations to the Board of Directors with respect to Big City Radio's
executive compensation policies.
The following report of the Compensation Committee discusses Big City
Radio's executive compensation policies and the basis of the compensation paid
to Big City Radio's executive officers in 1998:
In general, the Compensation Committee seeks to link the
compensation paid to each executive officer to the performance of
such executive officer. Within these parameters, the executive
compensation program attempts to provide an overall level of
executive compensation that is competitive with companies of
comparable size and with similar market and operating
characteristics.
There are three elements in the Company's executive total
compensation program, all determined by individual and corporate
performance as specified in the various employment agreements:
Base salary
Annual incentive
Long-term incentive
15
<PAGE>
BASE SALARY
Amounts earned during 1998 by Big City Radio's executive
officers are shown in the Summary Compensation Table. The base
compensation of such executive officers is set by the terms of the
employment agreement entered into with such executive officer
except Mr. Subotnick's compensation which was established by the
Company and approved by the Compensation Committee. Base Salaries
were established by the Company and approved by the Compensation
Committee for each of the executive employment agreements.
ANNUAL INCENTIVES
Executive officers of Big City Radio were awarded cash bonuses
in 1998 based on 1997 performance against targets established by
the Company. Individual awards were determined based on provisions
of the various employment agreements. Each executive officer is
entitled to an annual incentive bonus as determined by the
Compensation Committee.
LONG-TERM INCENTIVES
Long-term incentive awards are intended to align a significant
portion of the executive compensation program with shareholder
interests. Executives of the Company are eligible to participate
in the 1997 and 1998 Incentive Stock Plans. During 1998, the
Company granted and the Compensation Committee approved stock
options to purchase 10,000 shares of the Company's Class A Common
Stock to each of Mr. Thomson, Mr. Subotnick and Mr. Kirschner at
an exercise price of $7.8125 per share which was the fair market
of the Class A Common Stock on the grant date, July 6, 1998.
1997 AND 1998 INCENTIVE STOCK PLANS
The Company has adopted the 1997 Incentive Stock Plan and 1998
Incentive Stock Plan (collectively, the "Incentive Stock Plans")
pursuant to which key employees, officers and directors (including
independent directors and members of the Compensation Committee)
of the Company and its subsidiaries who have substantial
responsibility in the direction of the Company and its
subsidiaries, and others whom the Compensation Committee
determines provide substantial and important services to the
Company may be granted (i) incentive stock options ("ISOs") and/or
(ii) non-qualified stock options ("NQSOs" and together with ISOs,
"Stock Options" and "Awards"). The aggregate number of shares of
the Class A Common Stock that may be the subject of Awards under
Incentive Stock Plans is 1,000,000 (700,000 under the 1997
Incentive Stock Plan and 300,000 under the 1998 Incentive Stock
Plan) and the maximum number of shares of Class A Common Stock
available with respect to Awards granted to any one grantee is
200,000 shares (100,000 per plan).
The exercise price of all ISOs granted under the Incentive
Stock Plans is not less than the fair market value of the Class A
Common Stock on the date of grant (or 110% of such fair market
value with respect to ISOs granted to persons who own stock
possessing more than 10% of the voting rights of Big City Radio's
capital stock) and the exercise price of all NQSOs is determined
by the Compensation Committee. Stock Options vest and become
exercisable over a period of years and have a term not to exceed
ten years, as determined by the Compensation Committee.
If a grantee's employment with the Company or a subsidiary is
terminated because of the grantee's death, or the grantee's
retirement on or after attaining age sixty-five or
16
<PAGE>
such age specified in accordance with an employment agreement, if
any, with the grantor prior to the date when the Stock Option is
by its terms exercisable, the Stock Option shall be immediately
exercisable (and the restrictions thereof, if any, shall lapse) as
of the date of the termination of the grantee's employment,
subject to the other terms of the Incentive Stock Plans. Upon a
"change in control" of the Company (as defined in the 1997 and
1998 Incentive Stock Plans) and at the sole discretion of the
Board of Directors, each holder of a Stock Option shall have the
right to exercise the Stock Option in full without regard to any
waiting period, installment period or other limitation or
restriction thereon. Upon a grantee's termination of employment
from the Company or a subsidiary on account of disability, the
grantee or the legal representative of the grantee, shall have the
right for a period of one year following the date of such
termination to exercise an Award to the extent such award is
exercisable and to the extent such Award has not yet expired. In
the event the grantee's employment with the Company or a
subsidiary is terminated for any reason other than disability,
death or retirement on or after attaining age sixty-five, the
grantee may exercise an Award to the extent then vested within
three months after his or her termination of employment.
CHIEF EXECUTIVE OFFICER COMPENSATION.
Amounts earned during 1998 by Big City Radio's Chief Executive
Officer are shown in the Summary Compensation Table. The base
compensation of such Chief Executive Officer is set by the terms
of the employment agreement entered into with such Chief Executive
Officer. The Chief Executive Officer is also entitled to an annual
incentive bonus as determined by the Compensation Committee.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m).
One of the factors the Compensation Committee considers in
connection with compensation matters is the anticipated tax
treatment to the Company and to the executives of the compensation
arrangements. The deductibility of certain types of compensation
depends upon the timing of an executive's vesting in, or exercise
of, previously granted rights. Moreover, interpretation of, and
changes in, the tax laws and other factors beyond the Compensation
Committee's control also affect the deductibility of compensation.
Accordingly, the Compensation Committee will not necessarily limit
executive compensation to that deductible under Section 162(m) of
the Code. The Compensation Committee will consider various
alternatives to preserving the deductibility of compensation
payments and benefits to the extent consistent with its other
compensation objectives.
The foregoing report of the Compensation Committee shall not be deemed to be
incorporated by reference into any filing of Big City Radio under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates such information
by reference, and shall not otherwise be deemed filed under such Acts.
Submitted by the Compensation
Committee
of Big City Radio's Board of Directors
as of March 11, 1999
Michael H. Boyer
Leonard White
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PERFORMANCE GRAPH
The following graph sets forth Big City Radio's total stockholder return as
compared to the Bloomberg R&R Index, an equity index designed to track
performance in the radio industry, and the AMEX Composite Index, a
capitalization-weighted index representing the aggregate value of the common
shares or ADRs of all AMEX listed companies, REITS, master limited partnerships,
and closed-end investment vehicles.
COMPARISON OF CUMULATIVE TOTAL RETURN SINCE DECEMBER 1998 AMONG
BIG CITY RADIO, INC. & SELECT INDICES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS
<S> <C> <C> <C>
Big City Radio
Inc. Bloomberg R&R Index AMEX Composite Index
12-Dec-97 100 100 100
31-Dec-97 116 105 104
31-Dec-98 58 131 106
</TABLE>
Assumes $100 investment on December 19, 1997, the date of the initial public
offering, in Big City Radio, Inc. & select indices.
* Total Return Assumes Reinvestment of Dividends.
<TABLE>
<CAPTION>
12/12/97 12/31/97 12/31/98
----------- ----------- -----------
<S> <C> <C> <C>
Big City Radio, Inc................................................................. $ 100 $ 116 $ 58
Bloomberg R & R Index............................................................... $ 100 $ 105 $ 131
AMEX Composite Index................................................................ $ 100 $ 104 $ 106
</TABLE>
18
<PAGE>
PROPOSAL 1--ELECTION OF DIRECTORS
The following table sets forth certain information with respect to the
current members of Big City Radio's Board of Directors, including Mr. Michael H.
Boyer and Mr. Leonard White, who have been nominated for re-election as Class A
Directors at the Annual Meeting.
The Board of Directors knows of no reason why any of its nominees will be
unable to or will refuse to accept election. If any nominee becomes unable to or
refuses to accept election, the Board of Directors will either reduce the number
of directors to be elected or select a substitute nominee. If a substitute
nominee is selected, proxies will be voted in favor of such nominee.
The affirmative vote of the holders of a plurality of shares of Class A
Common Stock present in person or represented by proxy at the Annual Meeting and
voting as a single class will be required to elect each of Messrs. Boyer and
White as Class A Directors to Big City Radio's Board of Directors.
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION FOR PAST CLASS OF DIRECTOR
FIVE YEARS AND CERTAIN DIRECTORSHIPS AGE DIRECTORS SINCE
- --------------------------------------------------------------------------------------- --- --------- -----------
<S> <C> <C> <C>
Stuart Subotnick....................................................................... 57 Class B 1994
Mr. Subotnick founded the Company in 1994 and has served as Chairman of the Board of
Directors since the Company's inception. Mr. Subotnick has spent approximately 30 years
at Metromedia (and its predecessor) and together with long-time partner John W. Kluge,
has overseen Metromedia's investments in numerous media, entertainment and
communications businesses. Mr. Subotnick has served since 1996 as Vice Chairman,
President and Chief Executive Officer of Metromedia International Group, Inc. ("MMG"),
an international telecommunications and media company that invests in
telecommunications and media joint ventures in Eastern Europe, Russia, the republics of
the former Soviet Union, the People's Republic of China and other selected emerging
markets. Mr. Subotnick has also served as Executive Vice President of Metromedia and
its predecessor for over five years. Metromedia and its predecessor owned and operated
radio stations, television stations, an outdoor advertising business, and cellular
telephone and paging operations throughout the United States. Mr. Subotnick is also a
director of Carnival Cruise Lines, Inc., a cruise line company, and Metromedia Fiber
Network, Inc. ("MFN"), a provider of high bandwidth, fiber optic transmission capacity.
Mr. Subotnick is married to Anita Subotnick. Stuart and Anita Subotnick are the parents
of Bryan Subotnick.
Michael Kakoyiannis.................................................................... 56 Class B 1994
Mr. Kakoyiannis founded the Company in 1994 and has served as Chief Executive Officer,
President and a Director of the Company since its inception. Mr. Kakoyiannis has over
25 years of experience in the radio broadcasting business in major metropolitan
markets. Prior to joining the Company, Mr. Kakoyiannis was Executive Vice President of
the Westwood One Stations Group ("Westwood One"), which operated three stations in Los
Angeles and New York: WNEW-AM and WYNY-FM in New York and KQLZ-FM, known as "Pirate
Radio," in Los Angeles. Additionally, Mr. Kakoyiannis was Vice President and General
Manager of all three stations. Prior to his tenure at Westwood One, Mr. Kakoyiannis was
an Executive Vice President from 1986 to 1989 at Metropolitan Broadcasting, a company
that was owned by Metromedia and its predecessor, and controlled nine stations that
were generally located in major metropolitan markets.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
NAME, PRINCIPAL OCCUPATION FOR PAST CLASS OF DIRECTOR
FIVE YEARS AND CERTAIN DIRECTORSHIPS AGE DIRECTORS SINCE
- --------------------------------------------------------------------------------------- --- --------- -----------
<S> <C> <C> <C>
Anita Subotnick........................................................................ 55 Class B 1994
Ms. Subotnick founded the Company in 1994 and has been serving as a Director since the
Company's inception. Ms. Subotnick has been a private investor for over five years. Ms.
Subotnick is married to Stuart Subotnick. Anita Subotnick and Stuart Subotnick are the
parents of Bryan Subotnick.
Silvia Kessel.......................................................................... 48 Class B 1997
Ms. Kessel has served as a Director of the Company since December 1997 and has served
as Executive Vice President of the Company since September 1997. Ms. Kessel has served
as Executive Vice President of MFN since October 1997, Chief Financial Officer and
Treasurer of MMG since 1995 and Executive Vice President of MMG since 1996. In
addition, Ms. Kessel served as Executive Vice President of Orion Pictures Corporation
("Orion"), a motion picture production and distribution company, from January 1993
through July 1997, Senior Vice President of Metromedia since 1994 and President of
Kluge & Company since January 1994. Prior to that time, Ms. Kessel served as Senior
Vice President and a Director of Orion from June 1991 to November 1992 and Managing
Director of Kluge & Company from April 1990 to January 1994. Ms. Kessel is a member of
the Board of Directors of MMG and MFN.
Arnold L. Wadler....................................................................... 55 Class B 1997
Mr. Wadler has served as a Director and General Counsel of the Company since December
1997 and has served as Executive Vice President and Secretary of the Company since
September 1997. Mr. Wadler has served as Director of MFN since July 1997, General
Counsel of MFN since August 1997, Executive Vice President and Secretary of MFN since
October 1997, Executive Vice President, General Counsel and Secretary of MMG since
August 29, 1996 and, from November 1, 1995 until that date, as Senior Vice President,
General Counsel and Secretary of MMG. In addition, Mr. Wadler serves as a director of
MMG and has served as a Director of Orion from 1991 until July 1997 and has served as
Senior Vice President, Secretary and General Counsel of Metromedia for over five years.
Michael H. Boyer....................................................................... 49 Class A 1998
Mr. Boyer was elected as a Director of the Company as of January 1998. Mr. Boyer is
currently Senior Vice President and Chief Financial Officer of Stanadyne Automotive
Corp., a manufacturer of diesel fuel injection equipment and hydraulic valve lifters,
where he has been employed since July 1978. Mr. Boyer is a member of the Audit and
Compensation Committees.
Leonard White.......................................................................... 59 Class A 1997
Mr. White has served as a Director of the Company since December 1997. Mr. White is
President and Chief Executive Officer of Rigel Enterprises, a management and private
investment firm, since July 1997. Mr. White served as President and Chief Executive
Officer of Orion from 1992 until 1997 and as President and Chief Executive Officer of
Orion Home Entertainment Corporation from 1987 to 1992. Mr. White is also a Director of
MMG, American Film Technologies, Inc. and MFN. Mr. White is a member of the Audit and
Compensation Committees.
</TABLE>
20
<PAGE>
PROPOSAL 2--ADOPTION OF THE BIG CITY RADIO, INC.
1999 INCENTIVE STOCK PLAN
The Board of Directors has approved the Big City Radio, Inc. 1999 Incentive
Stock Plan (the "1999 Stock Option Plan"), subject to its adoption by the
Stockholders holding Class A Common Stock and Class B Common Stock, voting as a
single class. As Mr. Stuart Subotnick and Mrs. Anita Subotnick, the holders of
all outstanding shares of Class B Common Stock, have indicated that they intend
to vote in favor of the adoption of the 1999 Stock Option Plan, such adoption is
therefore assured. Once adopted at the Annual Meeting, the 1999 Stock Option
Plan will be effective as of the date of Board approval.
The following is a summary of the material features contained in the 1999
Stock Option Plan. A complete copy of the 1999 Stock Option Plan is attached as
Appendix A to this Proxy Statement.
The purpose of the 1999 Stock Option Plan is to give the Company a
significant advantage in retaining key employees, officers and directors, and to
provide an incentive to selected key employees, officers and directors of the
Company and its subsidiaries who have substantial responsibility in the
direction of the Company and its subsidiaries, and others whom the Compensation
Committee determines provide substantial and important services to the Company,
to acquire a proprietary interest in the Company, to continue as employees,
officers and directors or in their other capacities, and to increase their
efforts on behalf of the Company.
TYPES OF AWARDS
The types of awards that may be granted pursuant to the 1999 Stock Option
Plan include (i) incentive stock options ("ISOs") and (ii) non-qualified stock
options ("NQSOs" and together with ISOs, "Stock Options" and "Awards"). ISOs are
intended to be treated as incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). NQSOs are, in
general, options which do not have the special income tax advantages associated
with ISOs.
Stock Option grants consist of the maximum number of ISOs that may be
granted to a particular grantee under applicable law with the balance, if any,
of the Stock Options being NQSOs.
ADMINISTRATION OF THE PLAN
The 1999 Stock Option Plan will be administered by the Compensation
Committee. Members of the Compensation Committee will be eligible to receive
certain Awards (other than ISOs) under the 1999 Stock Option Plan.
Subject to the terms and conditions of the 1999 Stock Option Plan and the
formula awards for Independent Directors (as defined herein), the Compensation
Committee is authorized to grant Awards, to determine which employees, officers,
directors or other individuals may be granted Awards, to determine the type and
number of Awards to be granted, to determine the term of such Awards, to
determine the exercise price of any Award, to determine the terms of any
agreement pursuant to which Awards are granted, to interpret and construe the
1999 Stock Option Plan, and to determine any other matters delegated to it under
the 1999 Stock Option Plan or necessary for the proper administration of the
1999 Stock Option Plan.
SHARES OF CLASS A COMMON STOCK SUBJECT TO THE 1999 STOCK OPTION PLAN
Subject to certain adjustments set forth in the 1999 Stock Option Plan, the
aggregate number of shares of the Class A Common Stock that may be the subject
of Awards under the 1999 Stock Option Plan is 400,000. The maximum number of
shares of Class A Common Stock available with respect to Awards granted to any
one grantee shall not exceed, in the aggregate, 100,000 shares. Shares of Class
A Common Stock subject to Awards granted under the 1999 Stock Option Plan may
either be authorized but unissued
21
<PAGE>
shares of Class A Common Stock not reserved for any other purpose or shares of
Class A Common Stock held in or acquired for the treasury of the Company.
Shares of Class A Common Stock subject to an Award which terminates
unexercised may again be subject to an Award under the 1999 Stock Option Plan.
In addition, shares of Class A Common Stock surrendered to the Company in
payment of the exercise price or applicable taxes upon exercise of an Award may
also be used thereafter for additional Awards.
ELIGIBILITY
Any key employee, officer and director, including a director who is not an
employee and a director who serves on the Compensation Committee, of the Company
and its subsidiaries who has substantial responsibility in the direction of the
Company and its subsidiaries and anyone else whom the Compensation Committee
determines provides substantial and important services to the Company is
eligible to receive Awards.
Independent Directors who first serve on the Board of Directors, subsequent
to the date the 1999 Stock Option Plan is adopted, shall be entitled to receive
Awards under the 1999 Stock Option Plan with respect to 2,500 shares of Common
Stock, each having an exercise price equal to the fair market value of a share
of Class A Common Stock on the date of grant. Independent Directors shall be
entitled to receive, annually on the date of each annual stockholders' meeting,
Awards with respect to 2,500 shares of Common Stock (subject to an aggregate
maximum of 25,000 shares of Common Stock), each having an exercise price equal
to the fair market value of a share on the date of grant. Awards to Independent
Directors under the 1997 Incentive Stock Plan, the 1998 Incentive Stock Plan and
the 1999 Stock Option Plan will, however, be aggregated. Accordingly,
Independent Directors shall not be entitled to receive annual and aggregate
Awards under the 1997 Incentive Stock Plan, the 1998 Incentive Stock Plan and/or
the 1999 Stock Option Plan with respect to more than 2,500 and 25,000 shares of
Common Stock, respectively. For purposes hereof, "Independent Directors" shall
mean any member of the Board of Directors who during his entire term as a
director was not employed by the Company and its subsidiaries, within the
meaning of Section 424(f) of the Code, and who also satisfies the criteria for
"outside director" under Section 162(m) of the Code. These Stock Options will be
immediately exercisable on the date of grant.
TERMS AND CONDITIONS OF STOCK OPTIONS
The exercise price of all ISOs granted under the 1999 Stock Option Plan must
be at least the fair market value of the Class A Common Stock on the date of
grant. The exercise price of all NQSOs granted under the 1999 Stock Option Plan
is determined by the Compensation Committee. The term of each Stock Option
granted under the 1999 Stock Option Plan is determined by the Compensation
Committee but will in no event be greater than ten years from the date of grant.
With respect to ISOs granted to a grantee who owns stock possessing more
than 10% of the voting rights of the Company's outstanding capital stock on the
date of grant, the exercise price of the ISO must be equal to 110% of the fair
market value of the Class A Common Stock subject to the ISO on the date of grant
and the ISO may not be exercisable more than five years after the date of grant.
Stock Options vest and become exercisable over a period of years as
determined by the Compensation Committee.
Upon the exercise of a Stock Option, the grantee must pay the exercise price
in cash. Notwithstanding the foregoing, at the discretion of the Compensation
Committee, the exercise price may be paid with shares of Class A Common Stock
already owned by, and in possession of, the grantee or with a combination of
cash or shares of Class A Common Stock.
22
<PAGE>
The aggregate fair market value of the Class A Common Stock (determined on
the date of grant) for which ISOs granted under the 1999 Stock Option Plan and
any other plan of the Company or a subsidiary may be exercisable for the first
time by any grantee during any calendar year cannot exceed $100,000 or such
other amount as may be prescribed under the Code or applicable regulations and
rulings from time to time. To the extent that the aggregate fair market value
exceeds $100,000, such Stock Options will be treated as NQSOs.
ACCELERATION OF VESTING AND EXERCISABILITY
If a grantee's employment with the Company is terminated because of the
grantee's death, or the grantee's retirement on or after attaining age
sixty-five or the age specified in any employment agreement with the grantee
prior to the date the Stock Option is by its terms exercisable, the Stock Option
shall be immediately exercisable (and the restrictions thereof, if any, shall
lapse) as of the date of the termination of the grantee's employment, subject to
the other terms of the 1999 Stock Option Plan.
The Board of Directors shall have discretion to determine, at the time of
grant, whether, in the event of a Change in Control, a grantee with an
outstanding Stock Option will have the right at any time thereafter to exercise
the Stock Option in full notwithstanding any waiting period, installment period,
or other limitation or restriction in any agreement or in the 1999 Stock Option
Plan. In the event that the Board of Directors in its discretion, elects not to
provide in the grant to a Grantee for accelerated vesting in the event of a
Change of Control, the Board of Directors may nevertheless, in its sole
discretion, determine that upon a Change in Control each grantee with an
outstanding Stock Option shall have the right at any time thereafter to exercise
the Stock Option in full notwithstanding any waiting period, installment period
or other limitation, or restriction in any agreement or in the 1999 Stock Option
Plan. In general, under the 1999 Stock Option Plan, a "Change in Control" of the
Company shall be deemed to have occurred as of the first day any one or more of
the following four conditions have been satisfied: (i) any event whereby a
Person (as defined below) (other than (a) the Company or an affiliate, as
defined in the Securities Exchange Act of 1934 (the "Exchange Act") of the
Company, or (b) any employee benefit plan or trust sponsored or maintained by
the Company or an affiliate, as defined in the Exchange Act) (x) acquires 50% or
more of the Company's outstanding voting securities or (y) acquires (in one
transaction or in a series of related transactions) a subsidiary, business unit,
segment or division of the Company as defined by the Compensation Committee
(provided, however, that in such event a Change in Control shall be deemed to
occur only with respect to employees of such subsidiary, business unit, segment
or division and who cease to be employees of the Company or any "affiliate" of
the Company); (ii) a change in the composition of the Board of Directors such
that at any time a majority of the Board of Directors shall not have been
members of the Board of Directors for twenty-four months; provided, however,
that directors who were appointed or nominated for election by at least
two-thirds of the directors who were directors at the beginning of such
twenty-four month period (or deemed to be such directors under this clause (ii))
shall be deemed to be directors at the beginning of such twenty-four month
period for the purposes of this clause (ii); (iii) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company; or (iv) any consolidation or merger of the Company, other than a merger
or consolidation of the Company in which the voting securities of the Company
outstanding immediately prior thereto continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation. "Person" shall have the same meaning as ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Section 13(d) thereof.
ADJUSTMENT PROVISIONS
The total number and character of shares of Class A Common Stock subject to
Awards and the number and character of shares of Class A Common Stock subject to
outstanding Awards and/or the
23
<PAGE>
exercise price of such shares will be appropriately adjusted by the Compensation
Committee if the shares of Class A Common Stock are changed into or exchanged
for a different number or kind of shares of stock or other securities of the
Company or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split, reverse split, combination of shares,
or otherwise). The Compensation Committee may also make appropriate adjustments
in the event of a merger, consolidation or other transaction or event having a
similar effect.
FEDERAL INCOME TAX CONSEQUENCES
INCENTIVE STOCK OPTIONS
Under the Code and Treasury regulations and administrative pronouncements
thereunder, a grantee will not realize taxable income by reason of either the
grant or the exercise of an ISO, and the Company will not receive an income tax
deduction at either such time. However, any appreciation in share value
following the date of grant will be taken into consideration at the time of
exercise in determining liability for the alternative minimum tax. If a grantee
exercises an ISO and delivers shares of Class A Common Stock as payment for part
or all of the exercise price of the Class A Common Stock received upon exercise
of the ISO ("Payment Stock"), no gain or loss will be recognized with respect to
the Payment Stock delivered and no tax will be payable with respect to the
Payment Stock or the Class A Common Stock received upon exercise of the ISO. The
holding period of such Class A Common Stock received will include the holding
period of the Payment Stock. To the extent the number of shares received exceeds
the number of shares tendered, the grantee's basis in the additional shares of
Class A Common Stock received upon exercise of the ISO is zero and these shares
have a holding period that commences on the date of exercise of the ISO.
However, if the Payment Stock was acquired pursuant to the exercise of an ISO
and the required holding period in order to obtain favorable tax treatment with
respect to such Class A Common Stock is not met as of the date such Class A
Common Stock is delivered, the grantee will be treated as having sold the
Payment Stock in a disqualifying disposition and will be subject to the rules
described below for disqualifying dispositions. The grantee's basis in the Class
A Common Stock that he or she receives upon exercise of the ISO in exchange for
the Payment Stock is the same as his or her basis in the Payment Stock increased
by any amount included in gross income as ordinary income due to any
disqualifying disposition and any cash paid on the exercise. The holding period
of such Class A Common Stock commences on the date of exercise of the ISO.
If a grantee exercises an ISO and does not dispose of the shares of Class A
Common Stock within two years from the date of grant and one year from the date
of exercise, the entire gain, if any, realized upon disposition will be taxable
to the grantee as long term capital gain, and the Company will not be entitled
to any deduction. If, however, a grantee disposes of shares of Class A Common
Stock prior to the expiration of the holding periods described in the previous
sentence (a so-called "disqualifying disposition"), the grantee will generally
realize ordinary income in, and tax withholding may be required upon, an amount
equal to the difference between the exercise price and the fair market value of
such shares of Class A Common Stock on the date of exercise. The Company will be
entitled to a deduction equal to the amount recognized as ordinary income by the
grantee. Any additional appreciation will be treated as a capital gain (long
term or short term depending on how long the grantee held the shares of Class A
Common Stock prior to disposition) and the Company will not be entitled to any
further deductions for federal income tax purposes. If the amount realized by
the grantee is less than the fair market value of the shares of Class A Common
Stock upon exercise, then the amount of ordinary income and the corresponding
Company deduction is equal to the excess of the amount realized over the
exercise price.
NON-QUALIFIED STOCK OPTIONS
As to the NQSOs, there will be no federal income tax consequences to either
the grantee or the Company on the grant of the option because the NQSO does not
have a "readily ascertainable fair market value" as required by Section 83 of
the Code. Additionally, if a grantee exercises a NQSO and delivers
24
<PAGE>
shares of Class A Common Stock as payment for part or all of the exercise price
of the Class A Common Stock purchased, no gain or loss will be recognized with
respect to the Class A Common Stock delivered. To the extent a grantee receives
more shares of Class A Common Stock pursuant to the exercise of the option than
shares of Class A Common Stock delivered, the fair market value of this excess,
less any cash paid by the grantee, will be taxed as ordinary income and will be
subject to applicable tax withholding.
On the exercise of an NQSO, the grantee (except as described below)
recognizes taxable ordinary income equal to the difference between the exercise
price of the NQSO and the fair market value of such shares of Class A Common
Stock on the date of exercise. The Company will be entitled to a tax deduction
in an amount equal to the grantee's taxable ordinary income if it provides the
grantee with a timely Form W-2 or Form 1099, as appropriate.
Upon disposition of the Common Stock by the grantee, he or she will
recognize long term or short term capital gain or loss, as the case may be,
equal to the difference between the amount realized on such disposition and his
or her basis for the Class A Common Stock, which will include the amount
previously recognized by him or her as ordinary income. The holding period for
capital gains purposes will commence on the day the optionee acquires the shares
of Class A Common Stock pursuant to the NQSO. None of the appreciation on NQSO
is subject to the alternative minimum tax.
SECTION 280G
Under Section 280G of the Code, amounts payable to officers and highly
compensated individuals that are contingent upon a change in the ownership or
effective control of a corporation or of a substantial portion of its assets may
be subject to a 20% excise tax and may not be deductible by the corporate payor
if they exceed a "basic amount" allocated to such payment (so-called "excess
parachute payments"). The acceleration of the right to exercise otherwise
non-vested NQSOs, when considered in connection with other payments to officers
and highly compensated individuals of the Company, may give rise to excess
parachute payments. In that event, the affected grantee will be subject to a 20%
excise tax, and the Company will lose its deduction.
SECTION 162(M)
Under Section 162(m) of the Code, the income tax deduction of
publicly-traded companies may be limited to the extent total compensation
(including base salary, annual bonus, stock option exercises and non-qualified
benefits paid in 1994 and thereafter) for certain executive officers exceeds
$1,000,000 (less the amount of any "excess parachute payments" as defined in
Section 280G of the Code) in any one year. However, under Section 162(m) of the
Code, the deduction limit does not apply to certain "performance-based"
compensation established by an independent compensation committee which is
adequately disclosed to, and approved by, stockholders. In particular, Awards
will satisfy the performance-based exception if the Awards are made by a
qualifying compensation committee, the specified period and the compensation is
based solely on an increase in the stock price after the date of grant (i.e.,
the option exercise price is equal to or greater than the fair market value of
the stock subject to the Award on the grant date). The Company intends to
consider fully the implications of Section 162(m) of the Code on the
deductibility of compensation in making awards under the 1999 Stock Option Plan.
The foregoing federal income tax information is a summary only and does not
purport to be a complete statement of the relevant provisions of the Code.
AMENDMENT AND TERMINATION OF THE 1999 STOCK OPTION PLAN
Unless terminated earlier by action of the Board of Directors, the 1999
Stock Option Plan will terminate on the tenth anniversary of its adoption and no
additional grants under the 1999 Stock Option Plan will be made after that date.
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Except as provided below, the Board of Directors may amend or terminate the
1999 Stock Option Plan at any time. The 1999 Stock Option Plan may not however
be amended without the approval of the holders of a majority of the outstanding
voting stock of the Company (i) to decrease the minimum exercise price for ISOs;
(ii) to extend the term of the 1999 Stock Option Plan beyond ten years, (iii) to
extend the maximum terms of the Awards granted beyond ten years, (iv) to
withdraw the administration of the 1999 Stock Option Plan from the Compensation
Committee, (v) to change the class of eligible employees, officers, directors
and other grantees, (vi) to increase the aggregate number of shares of Class A
Common Stock which may be issued under the 1999 Stock Option Plan, and (vii) to
otherwise require stockholder approval to comply with Rule 16b-3 under the
Exchange Act or any other applicable law, regulation, or listing requirement or
to qualify for an exemption or characterization that is deemed desirable by the
Board of Directors. Furthermore, no amendment or termination of the 1999 Stock
Option Plan shall, without the written consent of the grantee, alter the terms
of Awards already granted and such Stock Options shall remain in full force and
effect as if the 1999 Stock Option Plan had not been terminated.
MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
The Compensation Committee may, within the limitations of the 1999 Stock
Option Plan, modify, extend or renew outstanding Awards granted under the 1999
Stock Option Plan, or accept the surrender of outstanding Awards and authorize
the granting of new Awards in substitution therefor. No modification may,
without the consent of the grantee, alter or impair any rights or obligations
under any Award theretofore granted to the grantee nor shall any modification
adversely affect the status of an ISO under Section 422 of the Code.
TRANSFERABILITY OF AWARDS AND OTHER PROVISIONS
The rights of a grantee with respect to the Awards granted pursuant to the
1999 Stock Option Plan are not transferable other than by will or the laws of
descent and distribution and are exercisable, during the lifetime of the
grantee, only by the grantee or by the guardian or legal representative of the
grantee acting in a fiduciary capacity on behalf of the grantee under state law
or court supervision. An Award is not subject, in whole or in part, to
attachment, execution or levy of any kind.
RIGHTS UPON TERMINATION OF EMPLOYMENT
If the grantee dies while an employee or when no longer an employee but
while he or she still has the right to exercise an Award, the grantee's estate
shall have the right for a period of one year following the date of death to
exercise the Award to the extent such Award is exercisable and to the extent
such Award has not yet expired.
Upon a grantee's retirement from the Company or a subsidiary on or after
attaining age sixty-five or the age specified in an employment agreement the
grantee shall have the right for a period of three months following the date of
retirement to exercise an Award to the extent such Award is exercisable and to
the extent such Award has not yet expired.
Upon a grantee's termination of employment from the Company or a subsidiary
on account of disability, the grantee or the legal representative of the
grantee, shall have the right for a period of one year following the date of
such termination to exercise an Award to the extent such award is exercisable
and to the extent such Award has not yet expired.
In the event the grantee's employment with the Company or a subsidiary is
terminated for any reason other than disability, death or retirement, the
grantee may exercise an Award within three months after his or her termination
of employment.
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RIGHTS AS STOCKHOLDER
No grantee of any Stock Option has any rights as a stockholder with respect
to any shares of Class A Common Stock subject to his or her Stock Option prior
to the date on which he or she is recorded as the holder of such shares of Class
A Common Stock on the records of the Company.
NO RIGHT TO CONTINUED EMPLOYMENT
The 1999 Stock Option Plan is not a contract of employment, and the terms of
employment of any grantee shall not be affected in any way by the 1999 Stock
Option Plan or related instruments except as specifically provided therein. The
establishment of the 1999 Stock Option Plan shall not be construed as conferring
any legal rights upon any grantee for a continuation of employment, nor shall it
interfere with the right of the Company or any subsidiary to discharge any
grantee and to treat him or her without regard to the effect which such
treatment might have upon him or her as a grantee.
The 400,000 shares of Class A Common Stock which would be available under
the 1999 Stock Option Plan represent approximately 6.87% of the shares of Class
A Common Stock outstanding on the Record Date.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ADOPTION
OF THE 1999 STOCK OPTION PLAN.
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PROPOSAL 3--RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of Big City Radio has appointed the firm of KPMG LLP,
independent auditors, to audit the financial statements of Big City Radio and
its subsidiaries for the year ending December 31, 1999, subject to ratification
by the Stockholders holding Class A Common Stock and Class B Common Stock,
voting as a single class. As Mr. Stuart Subotnick and Mrs. Anita Subotnick, the
holders of all outstanding shares of Class B Common Stock, have indicated that
they intend to vote in favor of the retention of KPMG LLP at the Annual Meeting,
such ratification is therefore assured.
A partner of KPMG LLP is expected to be present at the Annual Meeting and to
be provided with an opportunity to make a statement if such partner desires to
do so and to be available to respond to appropriate questions from stockholders.
If the Stockholders do not ratify the appointment KPMG LLP as Big City
Radio's independent auditors for the forthcoming fiscal year, such appointment
will be reconsidered by the Audit Committee and the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF BIG CITY RADIO'S
FINANCIAL STATEMENTS FOR THE YEAR ENDING DECEMBER 31, 1999.
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ANNUAL REPORT; INCORPORATION BY REFERENCE
The Company's Annual Report for the fiscal year ended December 31, 1998
(which contains the Company's audited financial statements) is being mailed to
stockholders together with this Proxy Statement. To the extent this Proxy
Statement has been or will be specifically incorporated by reference into any
filing by the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, the sections of the Proxy Statement
entitled "Compensation Committee Report on Compensation" and "Performance Graph"
shall not be deemed to be so incorporated unless specifically otherwise provided
in any such filing.
Upon the oral or written request of any stockholder of record on the Record
Date, a copy of the Company's annual report on Form 10-K for the fiscal year
ended December 31, 1998 (excluding exhibits), as filed with the Commission, will
be supplied without charge. Requests should be directed to Big City Radio, Inc.,
c/o Metromedia Company, One Meadowlands Plaza, East Rutherford, New Jersey
07073-2137, Attention: Arnold L. Wadler, Secretary, telephone number: (201)
531-8000.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any stockholder of Big City Radio who wishes to present a proposal at the
2000 Annual Meeting of Stockholders of Big City Radio, and who wishes to have
such proposal included in Big City Radio's proxy statement for that meeting,
must deliver a copy of such proposal to Big City Radio, Inc., c/o Metromedia
Company at One Meadowlands Plaza, East Rutherford, New Jersey 07073, Attention:
Corporate Secretary, no later than December 10, 1999; provided, however, that if
the 2000 Annual Meeting of Stockholders is held on a date more than 30 days
before or after the corresponding date of the 1999 Annual Meeting of
Stockholders, any stockholder who wishes to have a proposal included in Big City
Radio's proxy statement for that meeting must deliver a copy of the proposal to
Big City Radio a reasonable time before the proxy solicitation is made. Big City
Radio reserves the right to decline to include in Big City Radio's proxy
statement any stockholder's proposal which does not comply with the rules of the
Commission for inclusion therein.
OTHER BUSINESS
The Board of Directors does not intend to bring any other business before
the meeting and it is not aware that anyone else intends to do so. If any other
business comes before the meeting, it is the intention of the persons named in
the form of proxy, attached as an appendix, to vote as proxies in accordance
with their best judgment.
PLEASE EXERCISE YOUR RIGHT TO VOTE BY PROMPTLY COMPLETING, SIGNING AND
RETURNING THE ENCLOSED PROXY FORM. You may later revoke the proxy and, if you
are able to attend the meeting, you may vote your shares in person.
By Order of the Board of Directors,
Arnold L. Wadler
Executive Vice President,
General Counsel and Secretary
April 14, 1999
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APPENDIX--A
BIG CITY RADIO, INC.
1999 INCENTIVE STOCK PLAN
BIG CITY RADIO, INC.
1999 INCENTIVE STOCK PLAN
1. PURPOSE. The purposes of the Big City Radio, Inc. Incentive Stock Plan
are, in general, to give the Company a significant advantage in retaining key
employees, officers and directors, and to provide an incentive to selected key
employees, officers and directors of the Company and its subsidiaries, within
the meaning of Code Section 424(f), who have substantial responsibility in the
direction of the Company and its subsidiaries, and others whom the Committee
determines provide substantial and important services to the Company, to acquire
a proprietary interest in the Company, to continue as employees, officers and
directors or in their other capacities, and to increase their efforts on behalf
of the Company.
2. DEFINITIONS. Unless the context clearly indicates to the contrary, the
following terms, when used in the Plan, shall have the meanings set forth in
this Section 2.
"Act" shall mean the Securities Act of 1933, as amended from time to time.
"Award" means any Option.
"Board" means the Board of Directors of the Company.
"Change in Control" means an event that shall be deemed to have occurred as
of the first day any one or more of the following have been satisfied:
(a) any event whereby a Person (other than (i) the Company or an
affiliate, as defined in the Exchange Act, or (ii) any employee benefit plan
or trust sponsored or maintained by the Company or an affiliate, as defined
in the Exchange Act) (x) acquires 50% or more of the Company's outstanding
voting securities, or (y) acquires (in one transaction or in a series of
related transactions) a subsidiary, business unit, segment or division of
the Company as defined by the Committee (provided, however, that in such
event a Change in Control shall be deemed to occur only with respect to
employees of such subsidiary, business unit, segment or division and who
cease to be employees of the Company or of any "affiliate" of the Company).
For purposes of this subsection an "affiliate" shall mean any member of the
same controlled group (as defined in Code Sections 414(b)-(o) inclusive)
with the Company. "Person" shall have the same meaning as ascribed to such
term in Section 3(a)(9) of the Exchange Act and used in Section 13(d)
thereof;
(b) a change in the composition of the Board such that at any time a
majority of the Board shall not have been members of the Board for
twenty-four (24) months; provided, however, that directors who were
appointed or nominated for election by at least two-thirds of the directors
who were directors at the beginning of such twenty-four (24) month period
(or deemed to be such directors under this subparagraph) shall be deemed to
be directors at the beginning of such twenty-four (24) month period for the
purposes of this subparagraph;
(c) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or
(d) any consolidation or merger of the Company, other than a merger or
consolidation of the Company in which the voting securities of the Company
outstanding immediately prior thereto continue to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting power of the voting
securities of the Company, or such surviving entity, outstanding immediately
after such merger or consolidation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
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"Committee" shall mean the Committee described in Section 11 of the Plan.
"Common Stock" shall mean $.01 par value Class A common stock of the
Company.
"Company" shall mean Big City Radio, Inc. or any successor company thereto.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" shall mean the closing price of publicly traded Common
Stock on the national securities exchange on which the Common Stock is listed
(if the Common Stock is so listed) or on the NASDAQ National Market System (if
the Common Stock is regularly quoted on the NASDAQ National Market System), or,
if not so listed or regularly quoted, the mean between the closing bid and asked
prices of publicly traded Common Stock in the over-the-counter market, or, if
such bid and asked prices shall not be available, as reported by any nationally
recognized quotation service selected by the Company, or as determined by the
Committee in a manner consistent with the provisions of the Code.
"Grantee" shall mean any key employee, officer or director of the Company or
a subsidiary of the Company, within the meaning of Code Section 424(f), as
determined by the Committee who has substantial responsibility in the direction
of the Company and its subsidiaries, and anyone else whom the Committee
determines provides substantial and important services to the Company who is
granted an Award under the Plan.
"Incentive Stock Option" or "ISO" shall mean any stock option as defined in
Code Section 422.
"Independent Director" shall mean any member of the Board who during his
entire term as a director was not employed by the Company and its subsidiaries
within the meaning of Code Section 424(f), and who also satisfies the criteria
for "outside director" under Code Section 162(m).
"Non-Qualified Stock Option" or "NQSO" shall mean an option other than an
Incentive Stock Option.
"Option" shall mean ISOs and NQSOs, collectively.
"Plan" shall mean the Big City Radio, Inc. 1999 Incentive Stock Plan.
"Reporting Person" shall mean any person subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to equity
securities of the Company.
"Rule 16b-3" means Rule 16b-3 of the Exchange Act, or any successor thereto,
that excepts transactions under employee benefit plans, as in effect from time
to time.
3. TYPES OF AWARDS. The Plan provides for Incentive Stock Options and
Non-Qualified Stock Options. Except as provided herein, a particular form of
Award may be granted either alone or in addition to other grants hereunder. The
provisions of the particular forms of grants need not be the same with respect
to each recipient.
ISOs may be awarded to employees of the Company and its subsidiaries, within
the meaning of Code Section 424(f), including employees who are officers and
directors, but shall not be issued to directors or others who are not employees.
NQSOs may be awarded to employees and directors, including directors who are
not employees of the Company and its subsidiaries, within the meaning of Code
Section 424(f), and including members of the Committee and anyone whom the
Committee administering the Plan pursuant to Section 11 determines provides
substantial and important services to the Company. Options will consist of the
maximum number of ISOs that may be issued to a Grantee under applicable law,
with the balance (if any) of the Options being NQSO's.
4. TERM OF PLAN.
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(a) Effective Date. This Plan shall become effective as of the date of
adoption thereof by the Board; provided, however, that the Plan shall be
submitted for approval by the stockholders of the Company no earlier than twelve
(12) months prior to, and no later than twelve (12) months after, the date of
adoption of the Plan by the Board.
(b) Termination Date. This Plan shall terminate on the earliest of:
(i) the tenth anniversary of the effective date as determined under this
Section 4;
(ii) the date when all shares of the Common Stock reserved for issuance
under the Plan, shall have been acquired through exercise of any Awards
granted under the Plan; or
(iii) such earlier date as the Board may determine.
Any Award outstanding under the Plan at the time of its termination shall
remain in effect in accordance with its terms and conditions and those of the
Plan.
5. THE STOCK. Subject to adjustment as provided in Section 9, the aggregate
number of shares of Common Stock which may be issued under the Plan shall be
400,000 shares; provided, however, that the maximum number of shares of Common
Stock available with respect to the Awards granted by the Committee to any one
Grantee under the Plan, in the aggregate, shall not exceed 100,000. Such number
of shares of Common Stock may be set aside out of the authorized but unissued
shares of Common Stock not reserved for any other purpose or out of shares of
Common Stock held in or acquired for the treasury of the Company. The Company,
during the term of the Plan, will at all times reserve and keep available such
number of shares of Common Stock as shall be sufficient to satisfy the
requirements of the Plan. All or any shares of Common Stock subjected under this
Plan to an Award which, for any reason, terminates unexercised as to such
shares, may again be subjected to an Award under the Plan. In addition to the
foregoing, shares surrendered to the Company by, or on behalf of, a Grantee in
payment of the exercise price or applicable taxes upon exercise may also be used
thereafter for additional Awards.
6. STOCK OPTIONS.
(a) Grants. Options may be granted by the Committee at any time and from
time to time prior to the termination of the Plan. Each Option granted under the
Plan shall be evidenced by an agreement in a form approved by the Committee. The
terms and conditions of such Option agreement need not be identical with respect
to each Grantee, but each Option agreement will evidence on its face whether it
is an ISO, a NQSO, or both. For purposes of this Section, an Option shall be
deemed granted on the date the Committee selects an individual to be a Grantee,
determines the number of shares to be issued pursuant to such Option and
specifies the terms and conditions of the Option. Except as hereinafter
provided, Options granted pursuant to the Plan shall be subject to the following
terms and conditions set forth in this Section 6.
Independent Directors who serve on the Board on the date this Plan is
adopted shall be entitled to receive Awards under the Plan with respect to
shares of Common Stock, each having an exercise price equal to the Fair Market
Value of a share on the date of grant. Any other Independent Director who first
serves on the Board subsequent to the date the Plan was adopted shall be
entitled to receive Awards under the Plan, upon his initial election to the
Board, with respect to 2,500 shares of Common Stock, each having an exercise
price equal to the Fair Market Value of a share on the date of grant.
Independent Directors shall be entitled to receive annually on the date of each
annual stockholder's meeting, Awards with respect to 2,500 shares of Common
Stock (subject to an overall 25,000 shares of Common Stock limit), each having
an exercise price equal to the Fair Market Value of a share on the date of
grant. All Options awarded to Independent Directors shall be immediately
exercisable. Notwithstanding the above, if any of the Independent Directors are
eligible to receive Awards under the Big City Radio, Inc. 1997 Incentive Stock
Plan or the Big City Radio, Inc. 1998 Incentive Stock Plans (the "Prior Plans")
or any subsequent or future incentive stock plan maintained by the Company
(collectively, the "Prior and Future Plans"), then such
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Independent Directors shall be eligible to receive Awards under this Plan only
to the extent that: (i) the aggregate number of shares of Common Stock which can
be issued under the Prior Plans has been attained; and (ii) the Awards under
this Plan would not in the aggregate with Awards under the Prior and Future
Plans, either at the time of the Award or at any time thereafter, exceed 2,500
shares of Common Stock per annum or an overall total of 25,000 shares of Common
Stock.
(b) Price and Exercise. The purchase price of the shares of Common Stock
upon exercise of an ISO shall be no less than the Fair Market Value of the
shares of Common Stock at the time of grant of an ISO; provided, however, if an
ISO is granted to a person owning either directly (or through application of the
attribution rules under Code Section 318) shares of Common Stock of the Company
possessing more than 10% of the total combined voting power of all classes of
shares of Common Stock of the Company as defined in Code Section 422 ("10%
Stockholder"), the purchase price shall be equal to 110% of the Fair Market
Value of the shares of Common Stock. The purchase price of the shares of Common
Stock upon exercise of a NQSO may be any price set by the Committee.
The purchase price shall be paid in United States dollars in cash or by
certified or cashier's check payable to the order of the Company at the time of
purchase. At the discretion of the Committee the purchase price may be paid
with: (i) shares of Common Stock already owned by, and in the possession of, the
Grantee; or (ii) any combination of United States dollars or shares of Common
Stock of the Company. Any required withholding tax shall be paid by the Grantee
in full, in accordance with the provisions of Section 12. Shares of Common Stock
of the Company used to satisfy the purchase price of an Option shall be valued
at their Fair Market Value. The purchase price shall be subject to adjustment,
but only as provided in Section 9 hereof.
Any vested Option may be exercised in full at one time by giving written
notice to the Company, which notice shall be signed and dated by the Grantee and
shall state the number of shares of Common Stock with respect to which the
Option is being exercised. The notice of the exercise of any Option shall be
accompanied by payment in full of the purchase price. If required by the
Company, such notice of exercise of an Option shall be accompanied by the
Grantee's written representation in accordance with Section 21. Upon such
demand, delivery of such representation prior to the delivery of any Common
Stock issued upon exercise of an Option shall be a condition precedent to the
right of the Grantee or such other person to purchase any shares of Common
Stock.
(c) Vesting. Options shall vest in accordance with the schedule established
for each Grantee; provided, however, that all Options awarded to a Grantee shall
vest immediately upon said Grantee's death or retirement as defined herein. The
Committee may accelerate the vesting schedule of any Award other than in the
event of a Change in Control.
(d) Additional Restrictions on Exercise of an ISO. The aggregate Fair Market
Value of Common Stock (determined at the time an ISO is granted) for which an
ISO is exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company and its subsidiaries or parent) shall not exceed
$100,000 or such other amount as may be prescribed under the Code or applicable
regulations and rulings from time to time. To the extent that the aggregate Fair
Market Value of Common Stock (determined at the time an ISO is granted) with
respect to Options designated as ISOs exercisable for the first time by a
Grantee during any calendar year (under all plans of the Company and its
subsidiaries or parent) exceeds $100,000, such Options shall be treated as
NQSOs. The foregoing shall be applied by taking Options into account in the
order in which they were granted.
(e) Duration of Options. Options may be granted for terms of up to but not
exceeding ten (10) years from the effective date the particular Option is
granted; provided, however, that an ISO granted to a 10% Stockholder may be
granted for a term not exceeding five (5) years from the effective date the
particular ISO is granted.
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If the stockholders of the Company have not approved the adoption of the
Plan prior to the end of one (1) year from the date the Plan is approved by the
Board, any Option granted under the Plan prior to such date shall be null and
void and the Company shall rescind the issuance of any shares of Common Stock
issued upon the exercise of such Options by a Grantee prior to such date. In the
event of such rescission, the Company shall refund the price paid per share of
Common Stock by the Grantee upon exercise of the Options upon receipt of the
certificate representing such shares.
(f) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms and
conditions and within the limitations of the Plan, the Committee may modify,
extend or renew outstanding Options granted under the Plan, or accept the
surrender of outstanding Options (up to the extent not theretofore exercised)
and authorize the granting of new Options in substitution therefor (up to the
extent not theretofore exercised). In addition to the limitations set forth in
Section 15, the Committee shall not, however, with respect to ISOs, modify any
outstanding Award so as to specify a lower Award price or accept the surrender
of outstanding Awards and authorize the granting of new Awards in substitution
therefor specifying a lower price. Notwithstanding the foregoing or anything
herein, no modification of an Award shall, without the consent of the Grantee,
alter or impair any rights or obligations under any Award theretofore granted
under the Plan nor shall any modification be made which shall adversely affect
the status of an ISO under Code Section 422; provided, however, that any such
provision shall remain in effect with respect to other Awards, and there shall
be no further effect on the Plan.
(g) OTHER TERMS AND CONDITIONS. Awards may contain such other provisions,
which shall not be inconsistent with any of the foregoing terms, as the
Committee shall deem appropriate.
7. TERMINATION OF EMPLOYMENT. Upon the termination of a Grantee's employment
with the Company, any Award then held by such Grantee or Grantee's estate may
only be exercised as follows:
(a) RETIREMENT. If the Grantee's employment is terminated because he or she
has attained age 65, or in accordance with the age specified in an employment
agreement with a Grantee, he or she may within three (3) months following such
termination, exercise the Award to the extent such Award is otherwise
exercisable. However, in the event of his or her death prior to the end of the
three (3) month period after the aforesaid termination of his or her employment,
his or her estate shall have the right to exercise the Award within one (1) year
(but in no event after the scheduled expiration of the term of the Award)
following the date of his or her death with respect to all or any part of the
stock subject thereto, to the extent such Award is exercisable.
(b) DEATH. If the Grantee's employment with the Company is terminated by
death, his or her estate shall have the right to exercise the Award within one
(1) year (but in no event after the scheduled expiration of the term of the
Award) following such termination with respect to all or any part of the stock
subject thereto, to the extent such Award is exercisable.
(c) DISABILITY. If the Grantee's employment with the Company is terminated
by disability, as defined in Code Section 22(e)(3), he or she or his or her
legal representative shall have the right for a period of one (1) year (but in
no event after the scheduled expiration of the term of the Award) following the
date of such termination of employment to exercise any Award with respect to all
or any part of the stock subject thereto, to the extent such Award is
exercisable.
(d) OTHER REASONS. If the Grantee's employment with the Company is
terminated for any reason other than those provided above under "Retirement",
"Death" or "Disability", the Grantee shall have the right for a period of three
(3) months (but in no event after the scheduled expiration of the term of the
Award) following the date of such termination of employment to exercise any
Award, with respect to all or any part of the stock subject thereto, to the
extent such Award is exercisable. However, in the event of his or her death
prior to the end of the three (3) month period after the aforesaid termination
of his or her employment, his or her estate shall have the right to exercise the
Award within one (1) year (but in no event after the scheduled expiration of the
term of the Award) following the date of his or her death with
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respect to all or any part of the stock subject thereto, to the extent such
Award is exercisable. All other Awards may be exercised within such other period
of time as determined by the Committee in its sole discretion.
For purposes of this Section 7, "termination of employment" shall mean the
termination of a Grantee's employment with the Company or a subsidiary or a
parent within the meaning of Code Section 424. A Grantee employed by a
subsidiary shall also be deemed to have a termination of employment if the
subsidiary ceases to be a subsidiary of the Company, and the Grantee does not
immediately thereafter become an employee of the Company or of a subsidiary or
of a parent. A Grantee who is a member of the Board but who is not also an
employee of the Company shall be considered to have terminated his or her
employment at such time as he or she is no longer a member of the Board. Any
other Grantee who is not otherwise an employee of the Company shall be
considered to have terminated employment when substantial services, as
determined by the Committee, are no longer provided to the Company by the
Grantee.
Also for purposes of this Section 7, a Grantee's "estate" shall mean his or
her legal representatives upon his or her death or any person who acquires the
right to exercise an Award by reason of the Grantee's death. The Committee may
in its discretion require the transferee of a Grantee to supply it with written
notice of the Grantee's death or disability and to supply it with a copy of the
will (in the case of the Grantee's death) or such other evidence as the Board
(or, following its appointment, the Committee) deems necessary to establish the
validity of the transfer of an Option.
If a Grantee's employment with the Company is terminated after a Change in
Control, the provisions of Section 8 shall supersede the provisions of this
Section 7.
8. CHANGE IN CONTROL. The Board shall have discretion to determine, at the
time of grant, whether, in the event of a Change in Control, a Grantee with an
outstanding Option shall have the right at any time thereafter to exercise the
Option in full nonwithstanding any waiting period, installment period, or other
limitation or restriction in any agreement or in the Plan. In the event that the
Board in its discretion, elects not to provide in the grant to a Grantee for
accelerated vesting in the event of a Change in Control, the Board may
nevertheless, in its sole discretion, determine that upon a Change in Control
each Grantee with an outstanding Option shall have the right at any time
thereafter to exercise the Option in full notwithstanding any waiting period,
installment period or other limitation or restriction in any agreement or in the
Plan.
9. ADJUSTMENT OR CHANGES IN THE STOCK.
(a) The total number and character of shares of Common Stock subject to
Awards, the number and character of shares of Common Stock subject to
outstanding Awards and/or the exercise price of such shares will be
appropriately adjusted by the Committee if the shares of Common Stock are
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise. The Committee may also make appropriate
adjustments in the event of a merger, consolidation, or other transaction or
event having a similar effect.
(b) The Company shall not be required to issue any fractional shares of
Common Stock pursuant to the Plan. Fractional shares resulting from any
adjustment in Awards pursuant to this Section 9 may be settled in cash or
otherwise as the Board shall determine.
(c) Notice of any adjustment shall be given by the Company to each holder of
an Award which shall have been so adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes of the
Plan.
(d) If another corporation is merged into the Company or the Company
otherwise acquires another corporation, the Board may elect to assume under the
Plan any or all outstanding stock options or other
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awards granted by such corporation under any stock option or other plan adopted
by it prior to such acquisition. Such assumptions shall be on such terms and
conditions as the Committee may determine; provided, however, that the awards as
so assumed do not contain any terms, conditions or rights that are inconsistent
with the terms of this Plan. Unless otherwise determined by the Board, such
awards shall not be taken into account for purposes of the limitations contained
in Section 5 of the Plan.
10. TRANSFERABILITY OF AWARDS. An Award shall be transferable only by will
or the laws of descent and distribution and shall be exercisable during the
Grantee's lifetime only by the Grantee or by the guardian or legal
representative of the Grantee acting in a fiduciary capacity on behalf of the
Grantee under state law and court supervision. An Award is not subject, in whole
or in part, to attachment, execution or levy of any kind.
11. ADMINISTRATION.
(a) The Plan shall be administered by the Committee appointed by the Board
which shall be composed of not less than two (2) members of the Board, each of
whom shall be a "Non-Employee Director" within the meaning of Rule 16b-3 and an
"outside director" within the meaning of Proposed Treasury Regulation Section
1.162-27(e)(3) or such other regulations as may be issued in proposed, temporary
or final form under Code Section 162(m).
(b) The Committee shall act by a majority of its members at the time in
office and eligible to vote on any particular matter, and such action may be
taken either by a vote at a meeting or in writing without a meeting.
(c) Subject to the provisions of the Plan, the Committee shall from time to
time and at its discretion take the following actions:
(i) grant Awards;
(ii) determine which employees, officers, directors and other
individuals performing substantial and important services may be granted
Awards under the Plan;
(iii) determine the type of awards to be granted;
(iv) determine the number of shares subject to each Award;
(v) determine the term of each Award granted under the Plan;
(vi) determine the date or dates on which the Award granted shall be
exercisable;
(vii) determine the exercise price of any Award granted;
(viii) determine the Fair Market Value of the Common Stock subject to
the Awards granted;
(ix) determine the terms of any agreement pursuant to which Awards are
granted;
(x) amend any such agreement with the consent of the Grantee;
(xi) extend the exercise period of any Award;
(xii) accelerate the vesting period of any Award except in the event of
a Change in Control;
(xiii) establish performance-based goals within the meaning of Code
Section 162(m);
(xiv) establish such procedures as it deems appropriate for a recipient
of an Award hereunder to designate a beneficiary to whom any benefits
payable in the event of his or her death are to be made; and
(xv) determine any other matters specifically delegated to it under the
Plan or necessary for the proper administration of the Plan.
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The Committee shall also have the final authority and discretion to
interpret and construe the terms of the Plan and of any Award granted and such
interpretation and construction by the Committee shall be final, binding and
conclusive upon all persons including, without limitation, the Company,
stockholders of the Company or any subsidiary, the Plan, and all persons
claiming an interest in the Plan. Notwithstanding anything contained in this
Section 11 to the contrary, no term of the Plan relating to ISOs shall be
interpreted, nor shall any discretion or authority of the Committee be
exercised, so as to disqualify the Plan under Code Section 422 or, without the
consent of the Grantee, to disqualify any ISO under Code Section 422 or in a
manner inconsistent with Rule 16b-3.
(d) No member of the Committee or director of the Board shall be liable for
any action, interpretation or construction made in good faith with respect to
the Plan or any Award granted hereunder.
12. TAX WITHHOLDING. It shall be a condition to the obligation of the
Company to deliver shares or securities of the Company upon exercise of an
Award, that the Grantee of such Award pay to the Company such amount as may be
requested by the Company for the purpose of satisfying any liability for such
withholding taxes. The Committee may, in its sole discretion, permit the Grantee
of an Award, in accordance with any applicable regulations of the authority
issuing such regulations, to pay a portion or all of the amount of such minimum
required or additional permitted withholding taxes in shares provided, however,
that notwithstanding the foregoing, no shares can be withheld in excess of the
minimum number of shares to satisfy the Grantee's tax liability. At the
Committee's sole discretion, the Grantee shall be permitted to authorize the
Company to withhold, or shall agree to surrender back to the Company, on or
about the date such withholding tax liability is determinable, shares previously
owned by such Grantee or a portion of the shares that were or otherwise would be
distributed to such Grantee pursuant to such Award having a Fair Market Value
equal to the amount of such required or permitted withholding taxes to be paid
in shares.
13. SECURITIES LAW REQUIREMENTS.
(a) No Award granted pursuant to this Plan shall be exercisable in whole or
in part, nor shall the Company be obligated to acquire or sell any shares of
Common Stock subject to any such Option, if such exercise, acquisition and sale
would, in the opinion of counsel for the Company, violate the Act (or other
federal or state statutes having similar requirements), as it may be in effect
at that time. In this regard, the Committee may demand the representations
described in Sections 6(b) and 21.
(b) Each Award shall be subject to the further requirement that, if at any
time the Committee shall determine in its discretion that the listing or
qualification of the shares of Common Stock subject to such Award under any
securities exchange requirements or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary as a condition of, or
in connection with, the granting of such Award or the issue of shares
thereunder, such Award may not be exercised in whole or in part, unless such
listing, qualification, consent or approval shall have been affected or obtained
free of any conditions not acceptable to the Board.
(c) No person who acquires shares of Common Stock under the Plan may, during
any period of time that such person is an affiliate of the Company within the
meaning of the rules and regulations of the Securities and Exchange Commission
under the Act, sell such shares of Common Stock, unless such offer and sale is
made (i) pursuant to an effective registration statement under the Act, which is
current and includes the shares to be sold, or (ii) pursuant to an appropriate
exemption from the registration requirement of the Act, such as that set forth
in Rule 144 promulgated under the Act.
(d) With respect to any Reporting Person, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3. To the extent
any provision of the Plan or any action by an authority under the Plan fails to
so comply, such provision or action shall, without further action by any person,
be deemed to be automatically amended to the extent necessary to effect
compliance with Rule 16b-3, provided that if such provision or action cannot be
amended to effect such compliance, such provision or
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action shall be deemed null and void, to the extent permitted by law and deemed
advisable by the appropriate authority. Each Award to a Reporting Person under
the Plan shall be deemed issued subject to the foregoing qualification.
14. FOREIGN PARTICIPANTS. In order to facilitate the making of an Award and
to foster and promote achievement of the purposes of the Plan, the Committee may
provide for such special terms for Awards to Grantees who are foreign nationals,
or who are employed by the Company outside of the United States of America, as
the Committee may consider necessary or appropriate to accommodate differences
in local law, tax policy or custom. Moreover, the Committee may approve such
supplements to, or amendments, restatements or alternative versions of this Plan
as in effect for any other purpose, and the Secretary or other appropriate
officer of the Company may certify any such document as having been approved and
adopted in the same manner as the Plan; provided, however, that no such
supplements, amendments, restatements or alternative versions shall include any
provisions that are inconsistent with the terms of the Plan, as then in effect,
unless the Plan could have been amended to eliminate the inconsistency without
further approval by the stockholders of the Company.
15. AMENDMENT OR TERMINATION OF THE PLAN. The Board may amend or terminate
the Plan at any time, except that approval of the holders of a majority of the
outstanding voting stock of the Company is required for amendments which:
(i) decrease the minimum exercise price for ISOs;
(ii) extend the term of the Plan beyond ten (10) years;
(iii) extend the maximum terms of the Awards granted hereunder beyond
ten (10) years;
(iv) withdraw the administration of the Plan from the Committee
appointed pursuant to Section 11;
(v) change the class of eligible employees, officers, directors and
other Grantees;
(vi) increase the aggregate number of shares of Common Stock which may
be issued pursuant to the provisions of the Plan;
(vii) otherwise require stockholder approval to comply with Rule 16b-3
or any other applicable law, regulation, or listing requirement or to
qualify for an exemption or characterization that is deemed desirable by the
Board.
Notwithstanding the foregoing, the Board may, without the need for
stockholders' approval, amend the Plan in any respect to qualify ISOs as
incentive stock options under Code Section 422.
No amendment or termination of the Plan shall, without the written consent
of the Grantee, alter the terms of Options already granted and such options
shall remain in full force and effect as if the Plan had not been terminated.
Any Award that may be made pursuant to an amendment to the Plan that shall
have been adopted without the approval of the stockholders of the Company shall
be null and void as to persons subject to Section 16(a) of the Act if it is
subsequently determined that such approval was required in order for the Plan to
continue to satisfy the applicable conditions of Rule 16b-3.
Furthermore, technical or clarifying amendments shall be made by the
Committee and not by the Board.
16. NO OBLIGATION TO EXERCISE OPTION. The granting of an Award shall impose
no obligation upon the Grantee (or upon a transferee of a Grantee) to exercise
such Award.
17. NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of any Award shall not
in any way affect the right or power of the Company to make adjustments,
reclassification, or changes in its capital or business
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structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
18. PLAN NOT A CONTRACT OF EMPLOYMENT. The Plan is not a contract of
employment, and the terms of employment of any recipient of any Award hereunder
shall not be affected in any way by the Plan or related instruments except as
specifically provided therein. The establishment of the Plan shall not be
construed as conferring any legal rights upon any recipient of any Award
hereunder for a continuation of employment, nor shall it interfere with the
right of the Company or any subsidiary to discharge any recipient of any Award
hereunder and to treat him or her without regard to the effect which such
treatment might have upon him or her as the recipient of any Award hereunder.
19. EXPENSES OF THE PLAN. All of the expenses of the Plan shall be paid by
the Company.
20. FUNDING. The Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund or funds. The Plan shall not
establish any fiduciary relationship between the Company and any Grantee or
other person. To the extent any person holds any rights by virtue of an Award
granted under the Plan, such rights shall be no greater than the rights of an
unsecured general creditor of the Company.
21. COMPLIANCE WITH APPLICABLE LAW. Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or delivered
any certificates for shares of Common Stock pursuant to the exercise of an
Option, unless and until the Company is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of any exchange upon
which shares of Common Stock are traded including, without limitation, any
legends that are required on such stock certificates. The Company shall in no
event be obligated to register any securities pursuant to the Act (as now in
effect or as hereafter amended) or to take any other action in order to cause
the issuance and delivery of such certificates to comply with any such law,
regulation or requirement.
The Committee may require, as a condition of the issuance and delivery of
such certificates and in order to ensure compliance with such laws, regulations
and requirements, that the recipient of any Award hereunder make such covenants,
agreements and representations as the Committee, in its sole discretion, deems
necessary or desirable, including, without limitation, a written representation
from a stockholder that the stock is being purchased for investment and not for
distribution, acknowledging that such shares have not been registered under the
Act, as amended, and agreeing that such shares may not be sold or transferred
unless there is an effective registration statement for them under the Act, or,
in the opinion of counsel to the Company, that such sale or transfer is not in
violation of the Act.
22. EFFECT UPON OTHER COMPENSATION. Nothing contained herein shall prevent
the Company or any subsidiary from adopting other or additional compensation
arrangements for its employees or directors. The effect under any other benefit
plan of the Company of an inclusion in income by virtue of an Award hereunder
shall be determined under such other plan.
23. GRANTEE TO HAVE NO RIGHTS AS A STOCKHOLDER. No Grantee of any Option
shall have any rights as a stockholder with respect to any shares subject to his
or her Option prior to the date on which he or she is recorded as the holder of
such shares on the records of the Company. No Grantee of any Option shall have
the rights of a stockholder until he or she has paid in full the Option price.
24. NOTICE. Notice to the Company shall be deemed given if in writing and
mailed to Arnold Wadler, Esq., Metromedia Company, One Meadowlands Plaza, East
Rutherford, New Jersey 07073, by first class, certified mail. Notice to the
Grantee or the Grantee's estate, if applicable, shall be given by registered
mail to such person's last known address.
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25. GOVERNING LAW. Except to the extent preempted by federal law, this Plan
and all Option agreements entered into pursuant thereto shall be construed and
enforced in accordance with, and governed by, the laws of the State of New York
determined without regard to its conflict of law rules.
26. SUCCESSORS AND ASSIGNS. The Plan shall be binding on and inure to the
benefit of the Company and the employees to whom an Award is granted hereunder,
and such employees' heirs, executors, administrators, legatees, trustees,
personal representatives, assignees and transferees (where permitted).
27. DELIVERY OF THE PLAN. A copy of this Plan shall be delivered to the
Secretary of the Company and shall be shown by him to each eligible person
making reasonable inquiry concerning it. A copy of this Plan shall also be
delivered to each Grantee at the time his or her Award is granted.
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PROXY PROXY
BIG CITY RADIO, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD ON MAY 20, 1999, 3:00 P.M.
The undersigned hereby appoints Michael Kakoyiannis and Arnold L.
Wadler, and each of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote at the annual
meeting of stockholders of Big City Radio, Inc., to be held on May 20, 1999,
at 3:00 p.m. local time, on the Concourse Level, 1285 Avenue of the Americas,
New York, New York 10022, and any and all adjournments thereof, as designated
below, all of the shares of common stock, par value $.01 per share, of Big
City Radio, Inc. according to the number of votes which the undersigned would
possess if personally present, for the purposes of considering and taking
action upon the proposals set forth on the reverse side, as more fully set
forth in the Proxy Statement dated April 9, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
(CONTINUED ON REVERSE SIDE)
FOLD AND DETACH HERE
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<TABLE>
<S> <C> <C>
1. Election of Director-Nominees, 2. Proposal to approve the Big City 3. The ratification of the appointment of
Leonard White, Michael H. Boyer Radio, Inc. 1999 Incentive Stock KPMG LLP as independent auditors for
Plan. the year ending December 31, 1999.
FOR WITHHOLD
all nominees AUTHORITY FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
(except as to vote for
noted below) all nominees
- ------------------------------------ IMPORTANT: PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS CARD. EACH
NOMINEE EXCEPTION JOINT OWNER SHOULD SIGN. EXECUTORS, ADMINISTRATOR TRUSTEES, ETC.
SHOULD GIVE FULL TITLE.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE Date: _____________________________________________________, 1999
ABOVE LIST.)
_________________________________________________________________
Signature
_________________________________________________________________
Please Print Name Here
_________________________________________________________________
Signature
_________________________________________________________________
Please Print Name Here
THIS PROXY WHEN PROPERLY EXECUTED WILL VOTE IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSALS 1, 2, AND 3. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR, FOR PROPOSAL 2 AND FOR PROPOSAL 3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF.
</TABLE>
FOLD AND DETACH HERE
