THE WASHINGTON POST COMPANY
1150 15TH STREET, N.W., WASHINGTON, D. C. 20071
March 28, 1997
TO OUR STOCKHOLDERS:
You are cordially invited to the Company's 1997 Annual Meeting of
Stockholders, which will be held in the Ninth Floor Meeting Room, The Washington
Post Building, 1150 15th Street, N.W., Washington, D.C., on Thursday, May 8,
1997, at 8:00 o'clock in the morning.
At the meeting there will be a report on the Company's activities, and
Directors will be elected for the ensuing year.
It is important that your shares be represented at the meeting. Please sign
the accompanying Proxy and return it promptly in the envelope provided. If you
plan to attend, kindly so indicate in the space provided on the Proxy.
Sincerely yours,
ALAN G. SPOON DONALD E. GRAHAM
President Chairman
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THE WASHINGTON POST COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS/MAY 8, 1997
The Annual Meeting of Stockholders of The Washington Post Company will be
held in the Ninth Floor Meeting Room, The Washington Post Building, 1150 15th
Street, N.W., Washington, D.C., 20071 on Thursday, May 8, 1997, at 8:00 a.m.,
Eastern Daylight Saving Time, for the following purposes:
1. To elect Directors for the ensuing year, as more fully described in
the accompanying Proxy Statement.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 10, 1997, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting.
It is important that your shares be represented and voted at the meeting, and
you should therefore sign and return your Proxy at your earliest convenience.
By Order of the Board of Directors,
DIANA M. DANIELS, Secretary
Washington, D. C., March 28, 1997
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THE WASHINGTON POST COMPANY
1150 15th Street, N.W., Washington, D.C. 20071
PROXY STATEMENT
March 28, 1997
The accompanying Proxy is solicited by the Board of Directors of The
Washington Post Company (hereinafter called the "Company") for use at the Annual
Meeting of Stockholders to be held on Thursday, May 8, 1997, and at any
adjournment or adjournments thereof. A Proxy may be revoked at any time before
it is voted at the meeting. Solicitation of proxies will be made by the
Company's management through the mail, in person or by telegraph or telephone,
without additional compensation being paid to such members of the Company's
management, and the cost of such solicitation will be borne by the Company. In
addition, the Company will request brokers and other custodians, nominees and
fiduciaries to forward proxy cards and proxy soliciting material to the
beneficial owners of shares held of record by such persons, and the Company will
reimburse them for their expenses in so doing.
This Proxy Statement and the accompanying Proxy, together with a copy of the
Annual Report of the Company for the fiscal year ended December 29, 1996, are
being mailed to the stockholders on March 28, 1997. THE COMPANY HAS ALSO FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION A REPORT ON FORM 10-K FOR SUCH
FISCAL YEAR, A COPY OF WHICH WILL BE FURNISHED WITHOUT CHARGE (EXCEPT FOR
EXHIBITS) TO ANY STOCKHOLDER UPON HIS OR HER WRITTEN REQUEST ADDRESSED TO THE
TREASURER OF THE COMPANY AT THE ADDRESS SHOWN ABOVE. No material contained in
either of such reports is to be considered a part of the proxy soliciting
material.
As of the close of business on March 10, 1997, the record date for the Annual
Meeting, the Company had outstanding and entitled to vote 1,779,250 shares of
Class A Common Stock (hereinafter called "Class A Stock") and 9,042,997 shares
of Class B Common Stock (hereinafter called "Class B Stock"), each of which is
entitled to one vote upon all matters on which such class of stock is entitled
to vote. Only stockholders of record at the close of business on March 10, 1997,
are entitled to vote at the Annual Meeting or at any adjournment thereof.
As of the date of this Proxy Statement the only matter that the Board of
Directors expects to present to the Annual Meeting is the election of Directors
for the ensuing year. Information with respect to the principal holders of the
Class A Stock and the Class B Stock is given below.
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ELECTION OF DIRECTORS
A Board of fourteen Directors is to be elected, nine by the holders of Class
A Stock voting separately as a class and five by the holders of Class B Stock
voting separately as a class. All Directors will hold office until the next
Annual Meeting of Stockholders and until their respective successors shall have
been elected and shall have qualified or as otherwise provided in the By-laws of
the Company.
Each Class A Stock Proxy and each Class B Stock Proxy executed and returned
by a stockholder will be voted for the election of the respective Directors
hereinafter shown as nominees for each respective class of stock, unless
otherwise indicated on such Proxy. In the event that any nominee withdraws or
for any reason is not able to serve as a Director, the persons named in the
accompanying Proxy will either vote for such other person as the Board of
Directors may nominate or will not vote for anyone to replace such nominee. The
Board of Directors knows of no reason which would cause any nominee to be unable
to act or to refuse to accept nomination or election. Directors will be elected
by a plurality of the votes cast. Any shares not voted (whether by abstention,
broker non-vote or otherwise) have no impact on the vote.
NOMINEES FOR ELECTION BY CLASS A STOCKHOLDERS
WARREN E. BUFFETT
Mr. Buffett, age 66, has for more than eleven years been Chairman of the
Board and Chief Executive Officer of Berkshire Hathaway Inc. (insurance
underwriting, newspaper publishing and various manufacturing and marketing
activities). He was elected a Director of the Company in May 1996 and
serves as Chairman of the Finance Committee of the Board. Mr. Buffett also
served as a Director of the Company between 1974 and 1986. He is a director
of Berkshire Hathaway Inc., The Coca-Cola Company, The Gillette Company,
and Salomon Inc. Mr. Buffett is also a trustee of Grinnell College, The
Business Enterprise Trust and The Urban Institute.
MARTIN COHEN
Mr. Cohen, age 65, is a Vice President of the Company, having served as
Vice President--Finance and Treasurer from 1975 until July 1987, when he
was elected to the Board of Directors. He is a member of the Finance
Committee of the Board. He is also a director and President of Homer News,
Inc., which publishes a weekly newspaper in Homer, Alaska. Mr. Cohen also
serves as a trustee of the Philip L. Graham Fund.
GEORGE J. GILLESPIE, III
Mr. Gillespie, age 66, has since 1963 been a partner in Cravath, Swaine &
Moore, which is one of several law firms retained by the Company in 1995
and 1996 and which it proposes to retain in 1997. He has been a Director of
the Company since 1974 and is a member of
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the Finance Committee of the Board. Mr. Gillespie is also a director of The
Fund American Enterprises Holdings, Inc., and the National Multiple
Sclerosis Society, a director and Chairman of the Madison Square Boys &
Girls Club, a director and Secretary-Treasurer of the John M. Olin
Foundation, Inc., and a director and President of the Pinkerton Foundation.
Mr. Gillespie also serves on the boards of a number of other foundations,
educational institutions, and charitable organizations.
DONALD E. GRAHAM
Mr. Graham, age 51, has been Chairman of the Board of the Company since
September 1993 and Chief Executive Officer of the Company since May 9,
1991. Mr. Graham served as President of the Company between May 1991 and
September 1993. He is also Publisher of The Washington Post, a position he
has held since January 1979. Mr. Graham has been a Director of the Company
since 1974 and is a member of the Finance and Executive Committees of the
Board. He is the son of Katharine Graham, who is a Director and Chairman of
the Executive Committee of the Company. By virtue of his ownership of 14.7%
of the outstanding Class A Stock of the Company, his right to control the
vote, as a trustee of a certain family trust, of an additional 13.9% of
such stock, together with the ownership right of his mother, Katharine
Graham, of an additional 30.1% of such stock, Donald and Katharine Graham
effectively vote a total of 58.7% of the Class A shares. Mr. Graham is a
trustee of the Federal City Council and the Philip L. Graham Fund.
KATHARINE GRAHAM
Mrs. Graham, age 79, has been Chairman of the Executive Committee since
September 1993. On September 9, 1993, Mrs. Graham stepped down as Chairman
of the Board, a position she had held since 1973. Mrs. Graham and her son,
Donald Graham, effectively vote a total of 58.7% of the Class A shares (see
above). Mrs. Graham has been a Director of the Company since 1957 and is a
member of the Finance Committee and Chairman of the Executive Committee of
the Board. Mrs. Graham is also a director of the Council for Aid to
Education, a trustee of the Philip L. Graham Fund and The Urban Institute,
and a Life Trustee of the University of Chicago.
WILLIAM J. RUANE
Mr. Ruane, age 71, has for more than nine years been Chairman of the Board
of Ruane, Cunniff & Co., Inc., an investment management firm, and Sequoia
Fund, Inc., a mutual fund. He was elected a Director of the Company in
September 1985 and is a member of the Audit and Finance Committees of the
Board of Directors. He is also a director of the New York Theatre Workshop
and is a trustee of the Y.W.C.A. of New York and The Carmel Hill Fund.
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RICHARD D. SIMMONS
Mr. Simmons, age 62, has been retired since June 30, 1991; prior to his
retirement he had been President and Chief Operating Officer of the Company
for nearly ten years. Since September 1981, he has been a Director of the
Company and is a member of the Finance Committee and until May 1996 was a
member of the Compensation Committee of the Board of Directors. Through
March 1996, Mr. Simmons served as President of International Herald
Tribune, S.A., a French publishing company owned jointly by the Company and
The New York Times Company, a position he had held since 1989. Mr. Simmons
is a director of Morgan Guaranty Trust Company of New York, J.P. Morgan &
Co. Inc., Yankee Publishing, Inc., and Union Pacific Corporation, and a
member of the Council of the White Burkett Miller Center of Public Affairs
at the University of Virginia.
ALAN G. SPOON
Mr. Spoon, age 45, has been President since September 9, 1993, and Chief
Operating Officer of the Company and a Director of the Company since May 9,
1991. He is a member of the Executive and Finance Committees of the Board.
Mr. Spoon has served in various capacities with the Company since joining
in 1982 as Vice President for business development and planning. He is a
trustee of the National Museum of Natural History and a director of
American Management Systems, Inc.
GEORGE W. WILSON
Mr. Wilson, age 59, has for more than sixteen years been President and
Chief Executive Officer of Newspapers of New England, Inc., Newspapers of
New Hampshire, Inc., Newspapers of Massachusetts, Inc. and President of the
Concord Monitor, which is published in Concord, N.H. He was elected a
Director of the Company in September 1985 and serves as Chairman of the
Compensation Committee of the Board of Directors. Mr. Wilson is also a
director of The Bakersfield (California) Californian and The Associated
Press.
NOMINEES FOR ELECTION BY CLASS B STOCKHOLDERS
DANIEL B. BURKE
Mr. Burke, age 68, has been retired since February 1994; prior to his
retirement he had been President and Chief Executive Officer of Capital
Cities/ABC, Inc., a leading media company. He has been a member of the
Board of Directors of the Company since May 1996 and is a member of the
Compensation and Audit Committees of the Board. Mr. Burke is a director of
C.F. Hathaway & Co., Consolidated Rail Corporation, Darden Restaurants,
Morgan Stanley & Co., Inc. and Rohm & Haas Company. Mr.
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Burke is also a director of International Executive Service Corp., and
Co-Chairman of the Board of Presbyterian Hospital in the City of New York.
Mr. Burke is the brother of James E. Burke, a Director of the Company.
JAMES E. BURKE
Mr. Burke, age 72, is Chairman of the Partnership for a Drug-Free America.
Prior to his retirement in April 1989 he had been Chairman of the Board and
Chief Executive Officer of Johnson & Johnson, a leading manufacturer of
health care and other products. He joined the Board of Directors of the
Company in November 1989 and is a member of the Finance and Compensation
Committees of the Board. Mr. Burke is a trustee of the Robert Wood Johnson
Foundation, a director of the Center on Addiction and Substance Abuse, and
Chairman of the Business Enterprise Trust. He also serves on the boards of
a number of other foundations, councils and charitable organizations. Mr.
Burke is the brother of Daniel B. Burke, a Director of the Company.
RALPH E. GOMORY
Mr. Gomory, age 67, has since 1989 been President of the Alfred P. Sloan
Foundation, a charitable foundation. Before assuming his present position
he had served for thirty years with IBM Corporation, where he was Senior
Vice President for Science and Technology from 1986 to 1989 after having
been Senior Vice President and Director of Research since 1970. He became a
Director of the Company in July 1989 and is a member of the Audit Committee
of the Board. In addition he is a director of Ashland Oil, Inc., Lexmark
International, Inc., Polaroid Corporation and The Bank of New York. Mr.
Gomory is also a member of the National Academy of Sciences and the
National Academy of Engineering.
DONALD R. KEOUGH
Mr. Keough, age 70, has been Chairman of Allen & Company Incorporated since
April 1993 following his retirement as President, Chief Operating Officer
and a director of The Coca-Cola Company, a major international beverage
company. He has been a Director of the Company since 1989 and is a member
of the Compensation Committee and was until May 1996 a member of the Audit
Committee of the Board. He is also Chairman of Excaliber Technologies, and
a director of The Home Depot, Inc., McDonald's Corporation and H.J. Heinz
Company. Mr. Keough is also a trustee of the University of Notre Dame,
Morehouse School of Medicine and St. Joseph's Hospital Foundation, and
serves on the boards of a number of other educational institutions and
charitable organizations.
BARBARA SCOTT PREISKEL
Mrs. Preiskel, age 72, has been an attorney in private practice since March
1983, when she retired as Senior Vice President and General Counsel of the
Motion Picture Association of America, Inc., a position she had held since
December 1977. She was elected a Director of
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the Company in September 1985 and is Chairman of the Audit Committee of the
Board of Directors. Mrs. Preiskel is also a director of American Stores
Company, General Electric Company, Massachusetts Mutual Life Insurance Co.
and Textron Inc., and serves as a trustee of Tougaloo College and Wellesley
College.
The standing committees of the Board include an Audit Committee, a
Compensation Committee, an Executive Committee and a Finance Committee. The
Board does not have a nominating committee.
The Audit Committee recommends the independent accountants appointed by the
Board to audit the consolidated financial statements of the Company, which
includes an inspection of the books and accounts of the Company, and reviews
with such accountants the scope of their audit and their report thereon,
including any questions and recommendations that may arise relating to such
audit and report or the Company's internal accounting and auditing procedures.
The Audit Committee met twice in 1996.
The Compensation Committee considers and approves the Company's incentive
compensation and bonus programs, and specifically approves all salaries of
$150,000 or more per year, all incentive compensation awards and all other
bonuses (other than sales bonuses) of $5,000 or more, and also awards stock
options. During 1996 the Committee held two meetings.
The Executive Committee has and may exercise all of the powers of the Board
delegable by law in the management of the business and affairs of the Company.
During 1996 the Executive Committee met five times.
The Finance Committee considers and makes recommendations to the Board
relating to dividend policy, major acquisitions and dispositions of businesses,
incurrence of indebtedness, selection of managers of defined benefit plan
assets, stock repurchase programs and certain other financial matters. The
Finance Committee met once in 1996.
During 1996 the Board held six regular bi-monthly meetings. Except for Mr.
Warren Buffett and Mr. Daniel Burke, each of the persons nominated by the Board
for election as a Director and who served as a Director in 1996 attended at
least 75% of the aggregate of the total number of meetings held during 1996 of
the Board and of the committees on which he or she served.
COMPENSATION OF DIRECTORS
The only Directors of the Company who are compensated for serving in that
capacity are those who are not employees of the Company or its subsidiaries.
Each such person receives an annual fee of $35,000 for service as a Director and
an additional $5,000 for service as chairman of a committee of the Board. The
Company reimburses all such Directors for their expenses incurred in attending
Board and committee meetings.
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In July 1994, the Company extended its agreement with Mr. Richard D. Simmons,
a Director of the Company through March 31, 1996, under which Mr. Simmons
provided consulting and other services to the Company (see page 23).
STOCKHOLDER PROPOSALS
The Securities and Exchange Commission requires the Company to submit to a
vote at its annual meetings, and to include in its proxy materials for such
meetings, stockholder proposals meeting the requirements of the Commission's
proxy rules if such proposals are submitted in a timely fashion by stockholders
entitled to vote thereon. Eligible proposals intended to be submitted to the
Company's annual meeting to be held in 1998 must be received by the Secretary of
the Company at its offices in Washington, D.C., no later than November 29, 1997.
Holders of Class B Stock are entitled to vote only for the election of 30% of
the members of the Board of Directors (and, if required by the rules of the New
York Stock Exchange, on management proposals to reserve shares for stock options
or to acquire the stock or assets of other companies under certain
circumstances). In accordance with the rules of the Securities and Exchange
Commission, proposals submitted on other matters by holders of Class B Stock
have not been and will not be included in the Company's proxy materials for
annual meetings.
STOCK HOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information in the following two tables relates to each person who on
February 1, 1997, was a "beneficial owner" (as defined under the proxy rules of
the Securities and Exchange Commission) of more than 5% of the Company's Class A
or Class B Stock. Under the proxy rules a person is deemed to be the "beneficial
owner" of stock if such person has (or shares) either investment power or voting
power over such stock, or has (or shares) the right to acquire such stock within
60 days by any of a number of means, including the conversion of another
security which is convertible into such stock. A substantial number of shares of
the Company's Class A and Class B Stock is held in trusts or subject to other
agreements which provide for the sharing of investment power, voting power or
both among several persons, each of whom is deemed by the Securities and
Exchange Commission to be a "beneficial owner" of the shares so held.
Furthermore, in many cases such persons do not include the beneficiary of the
trust who, although not deemed to be a "beneficial owner" in the absence of
voting or investment power over the shares, is nevertheless shown below as a
beneficial owner because of the beneficiary's economic interest in the shares.
In addition, since all the shares of Class A Stock are convertible at the option
of the holder into Class B Stock on a share-for-share basis, each "beneficial
owner" of shares of Class A Stock is deemed by the Securities and Exchange
Commission to be a "beneficial owner" of the same number of shares of Class B
Stock; in indicating below a person's "beneficial ownership" of shares of Class
B Stock it has been assumed that such person has converted into Class B Stock
all shares of Class A Stock of which such person is a "beneficial owner". For
these reasons there is very substantial duplication in the numbers of shares and
percentages shown in the following table.
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PRINCIPAL HOLDERS OF STOCK
SHARES(%)
NAME AND ADDRESS OF -----------------------------------
BENEFICIAL OWNER CLASS A STOCK CLASS B STOCK*
-------------------- --------------- -------------------
Katharine Graham(a)(i) .................... 536,257(30.1%) 872,261(8.1%)
1150 15th Street, N.W.
Washington, D.C. 20071
Donald E. Graham(b)(i) .................... 941,469(52.9%) 3,481,022(32.2%)
1150 15th Street, N.W.
Washington, D.C. 20071
William W. Graham(c)(i) ................... 292,627(15.0%) **
Suite 401
11661 San Vincente Blvd.
Los Angeles, California 90049
Stephen M. Graham(d)(i).................... 309,889(17.4%) **
18 E. 78th Street
New York, N.Y. 10021
Elizabeth G. Weymouth(e)(i) ................ 404,874(22.8%) 580,834(5.4%)
790 Madison Ave, Suite 401
New York, N.Y. 10021
George J. Gillespie, III(f)(i) ............ 455,523(25.6%) 1,311,090(12.1%)
Worldwide Plaza
825 Eighth Avenue
New York, N.Y. 10019
Berkshire Hathaway Inc.(g)................. -- 1,727,765(16.0%)
1440 Kiewit Plaza
Omaha, Nebraska 68131
Morgan Guaranty Trust Company of New
York(h).................................... -- 528,961(4.9%)
9 West 57th Street
New York, N.Y. 10019
Southeastern Asset Management, Inc. (j).... -- 591,051(5.5%)
6075 Poplar Avenue, Suite 900
Memphis, Tennessee 38119
- ----------
* The calculations set forth in this table relating to percentage ownership
of Class B Stock include 1,779,250 shares of Class B Stock issuable upon
conversion of shares of Class A Stock beneficially owned.
** Less than five percent.
(Footnotes continued on following page)
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(Footnotes continued from preceding page)
(a) According to information as of February 1, 1997, and available to the
Company, Mrs. Graham has voting and investment power with respect to shares
of Class A Stock as follows: sole voting power, 536,257 (30.1%) shares, and
sole investment power, 536,257 (30.1%) shares. Mrs. Graham also has voting
and investment power with respect to shares of Class B Stock as follows:
shared voting power, 199,370 (1.9%) shares, and shared investment power,
199,370 (1.9%) shares. In addition Mrs. Graham, as the beneficiary of a
revocable trust, is deemed the beneficial owner of 136,634 (1.3%) shares of
Class B Stock. Mrs. Graham is also deemed the beneficial owner of 536,257
(5.0%) shares of Class B Stock issuable upon conversion of shares of Class
A Stock beneficially owned by her.
(b) According to information as of February 1, 1997, and available to the
Company, Mr. Donald Graham has voting and investment power with respect to
shares of Class A Stock as follows: sole voting power, 262,314 (14.7%)
shares, sole investment power, 262,314 (14.7%) shares, shared voting power,
679,155 (38.2%) shares, and shared investment power, 679,155 (38.2%)
shares. Mr. Graham also has voting and investment power with respect to
shares of Class B Stock as follows: sole voting power, 1,957,892 (18.1%)
shares, sole investment power 230,127 (2.1%) shares, shared voting power
546,661 (5.1%) shares, and shared investment power, 546,661 (5.1%) shares.
The holdings of Class B Stock recorded for Mr. Graham includes 35,000
shares held by Mr. Graham's wife, in which he disclaims beneficial
ownership, and 941,469 (8.7%) shares of Class B Stock issuable upon
conversion of shares of Class A Stock beneficially owned by Mr. Graham. The
holdings of Class B Stock recorded for Mr. Graham also include shares of
Class B Stock owned by subsidiaries of Berkshire Hathaway, Inc., which have
the sole investment power of the shares; sole voting power is held by Mr.
Donald Graham under an agreement dated as of February 25, 1977, and amended
and extended on September 13, 1985, and on May 15, 1996, which has a
termination date (which may be extended) of February 24, 2007.
(c) According to information as of February 1, 1997, and available to the
Company, Mr. William Graham has voting and investment power with respect to
shares of Class A Stock as follows: sole voting power, 57,514 (3.2%)
shares, sole investment power, 57,514 (3.2%), shared voting power, 85,697
(4.8%) shares, and shared investment power, 85,697 (4.8%) shares. In
addition, Mr. William Graham, as the beneficiary of trusts even though he
has no voting or investment power with respect thereto, is deemed to be the
beneficial owner of 124,416 (7.0%) shares of Class A Stock. The holdings of
Class B Stock recorded for Mr. Graham, including shares issuable upon
conversion of shares of Class A Stock beneficially owned by Mr. Graham, are
less than five percent.
(d) According to information as of February 1, 1997, and available to the
Company, Mr. Stephen Graham has voting and investment power with respect to
shares of Class A Stock as follows: sole voting power, 124,976 (7.0%)
shares, sole investment power, 124,976 (7.0%) shares, shared voting power,
60,497 (3.4%) shares and shared investment power, 60,497 (3.4%) shares. In
addition, Mr. Stephen Graham, as the beneficiary of trusts even though he
has no voting or investment power with respect thereto, is deemed to be the
beneficial owner of 124,416 (7.0%) shares of Class A Stock. The holdings of
Class B Stock recorded for Mr. Graham, including shares issuable upon
conversion of shares of Class A Stock beneficially owned by Mr. Graham, are
less than five percent.
(e) According to information as of February 1, 1997, and available to the
Company, Mrs. Weymouth has voting and investment power with respect to
shares of Class A Stock as follows: sole voting power, 93,834 (5.3%)
shares, sole investment power, 93,834 (5.3%) shares, shared voting power,
248,832 (14.0%) shares, and shared investment power, 248,832 (14.0%)
shares. In addition Mrs. Weymouth, as the beneficiary of a trust even
though she has no voting or investment power with respect thereto, is
deemed the beneficial owner of 62,208 (3.5%) shares of Class A Stock. Mrs.
Weymouth also has voting and investment power with respect to shares of
Class B Stock as follows: sole voting power, 20,000 (shared investment
power, 135,168 (1.2%) shares. In addition, Mrs. Weymouth, as the
beneficiary of a trust even though she has no voting or investment power
with respect thereto, is deemed the beneficial owner of 20,792 (B Stock.
Mrs. Weymouth is also deemed the beneficial owner of 404,874 (3.7%) of
Class B Stock issuable upon conversion of shares of Class A Stock
beneficially owned by her.
(Footnotes continued on following page)
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(Footnotes continued from preceding page)
(f) According to information as of February 1, 1997, and available to the
Company, Mr. Gillespie, as trustee of various trusts, has voting and
investment power with respect to shares of Class A Stock as follows: shared
voting power, 455,523 (25.6%) shares, and shared investment power, 455,523
(25.6%) shares. In addition, Mr. Gillespie has voting and investment power
with respect to shares of Class B Stock as follows: sole voting power,
620,744 (5.7%) shares, sole investment power, 146,634 (1.4%) shares, shared
voting power, 234,823 (2.2%) shares, and shared investment power, 708,924
(6.6%) shares. The holdings of Class B Stock recorded for Mr. Gillespie
include 4,000 shares held in trust for the benefit of Mr. Gillespie's wife,
in which shares he disclaims any beneficial interest, and 455,523 (4.2%)
shares of Class B Stock issuable upon conversion of shares of Class A Stock
deemed to be beneficially owned by Mr. Gillespie, as trustee of various
trusts.
(g) According to information as of February 1, 1997, and available to the
Company, Berkshire Hathaway, Inc. ("Berkshire") was the beneficial owner of
1,727,765 (16.0%) shares of Class B Stock. The ownership of these shares is
through several subsidiaries of Berkshire. Mr. Warren E. Buffett is
Chairman of the Board of Berkshire. Mr. Buffett, his wife and three trusts
of which Mr. Buffett is a trustee, but in which he has no economic
interest, own approximately 41.8% of the outstanding shares of Berkshire
and Mr. Buffett may be deemed to be in control of Berkshire under Federal
securities laws. With respect to shares of Class B Stock owned by
subsidiaries of Berkshire, Mr. Buffett, Berkshire and such subsidiaries may
be considered to share investment power. Pursuant to an agreement dated as
of February 25, 1977 and amended and extended on September 13, 1985, and on
May 15, 1996 (which has a termination date (which may be extended) of
February 24, 2007), Mr. Buffett, Berkshire and such subsidiaries have
granted Mr. Donald Graham a proxy to vote such shares in his discretion.
(h) According to information as of February 1, 1997, and available to the
Company, Morgan Guaranty Trust Company of New York ("Morgan"), was the
beneficial owner of 528,961 (4.9%) shares of Class B Stock. This number
includes shares of Class B Stock as to which Morgan has or shares voting
and investment power as follows: sole voting power, 25,670 (less than 1%),
sole investment power, 25,670 (less than 1%) shares, shared voting and
investment power, 503,291 (4.7%) shares.
(i) According to information as of February 1, 1997, and available to the
Company, Mr. Donald Graham, Mrs. Weymouth, and Mr. Gillespie share voting
and investment power over 248,832 (14.0%) shares of Class A Stock; Mr.
Gillespie and Mr. William Graham share voting and investment power over
25,200 (1.4%) shares of Class A Stock; Mr. Gillespie, Mr. William Graham
and Mr. Donald Graham share voting and investment power over 60,497 (3.4%)
shares of Class A Stock; Mr. Gillespie, Mr. Stephen Graham and Mr. Donald
Graham share voting and investment power over 60,497 (3.4%) shares of Class
A Stock; Mr. Donald Graham and Mr. Gillespie share voting and investment
power over 60,497 (3.4%)shares of Class A Stock; Mr. Donald Graham, Mrs.
Weymouth and Mr. Gillespie share voting and investment power over 135,168
(1.2%) shares of Class B Stock; Mr. Donald Graham and Mr. Gillespie share
voting and investment power over 66,333 (less than 1%) shares of Class B
Stock; Mr. Donald Graham, Mr. Gillespie and Mr. William Graham share voting
and investment power over 23,622 (less than 1%) shares of Class B Stock;
Mr. Donald Graham, Mrs. Graham and Mr. Gillespie share voting and
investment power of 2,600 (less than 1%) shares of Class B Stock; Mr.
Donald Graham and Mrs. Graham share voting and investment power over
196,770 (1.8%) shares of Class B Stock held by the Philip L. Graham Trust;
and Mr. Gillespie and Morgan Guaranty Trust share investment powers over
477,101 (4.4%) shares of Class B Stock.
(j) According to information as of February 1, 1997, and available to the
Company, Southeast Asset Management, Inc. ("Southeast"), was the beneficial
owner of 591,051 (5.5%) shares of Class B Stock. This number includes
shares of Class B Stock to which Southeast has or shares voting and
investment power as follows: sole voting power, 353,701 (3.3%) shares, sole
investment power, 425,501 (3.9%) shares, and shared voting and investment
power, 158,300 (1.5%) shares.
10
<PAGE>
The table below, which is based upon information furnished to the Company by
its Directors and officers, shows as of February 1, 1997, for each person
nominated for election as a Director, and for all Directors and executive
officers of the Company as a group, the number of shares of each class of Common
Stock "beneficially owned" (as defined in the Securities and Exchange
Commission's proxy rules) and, in the case of each nominee for election as a
Director, the nature of such "beneficial ownership". For the reasons set forth
in the first paragraph of this section of the Proxy Statement, there is very
substantial duplication in the numbers of shares and percentages shown in the
following table.
HOLDINGS OF DIRECTORS AND OFFICERS***
<TABLE>
<CAPTION>
SHARES(%)
-------------------------------------------
CLASS A CLASS B(g)
---------------- -------------------
<S> <C> <C>
Warren E. Buffett****............................ -- 1,727,765(16.0%)
Daniel B. Burke.................................. -- 500*
James E. Burke .................................. -- 1,000*
Martin Cohen(a)(f) .............................. -- 217,996(2.0%)
George J. Gillespie, III** ...................... 455,523(25.6%) 1,311,081(12.1%)
Ralph E. Gomory ................................. -- 1,000*
Donald E. Graham**(f) ........................... 941,469(52.9%) 3,481,022(32.2%)
Katharine Graham**(f)............................ 536,257(30.1%) 872,270(8.1%)
Donald R. Keough ................................ -- 500*
Barbara Scott Preiskel .......................... -- 350*
William J. Ruane(b).............................. -- 30,372*
Richard D. Simmons(c)............................ -- 12,913*
Alan G. Spoon(d)................................. -- 22,991*
George W. Wilson................................. -- 200*
All Directors and executive officers as a group,
eliminating duplications......................... 1,502,926(84.5%) 4,775,205(44.1%)(e)
</TABLE>
- ----------
* Less than one percent.
** See Table of "Principal Holders of Stock" on page 8.
*** Unless otherwise indicated, the Directors and officers listed below have
sole voting and investment power with respect to such securities.
**** With respect to voting securities which may be beneficially owned by Mr.
Buffett, see footnote (g) on page 10.
(Footnotes continued on following page)
11
<PAGE>
(Footnotes continued from preceding page)
(a) According to information as of February 1, 1997, and available to the
Company, this number includes shares of Class B Stock as to which Mr. Cohen
has voting and investment powers as follows: sole voting power, 21,226
(less than 1%) shares, sole investment power, 21,226 (less than 1%) shares,
shared voting and investment power, 196,770 (1.8%) shares.
(b) According to information as of February 1, 1997, and available to the
Company, this number includes shares of Class B Stock as to which Mr. Ruane
has voting and investment power as follows: sole voting power, 29,472 (less
than 1%) shares and sole investment power, 30,372 (less than 1%) shares.
(c) This number includes 10,000 shares of Class B Stock as to which Mr. Simmons
has a right to acquire on or before April 1, 1997, by exercise of stock
options.
(d) This number includes 18,000 shares of Class B Stock as to which Mr. Spoon
has a right to acquire on or before April 1, 1997, by exercise of stock
option.
(e) This number includes 1,502,926 shares of Class B Stock issuable upon
conversion of shares of Class A Stock "beneficially owned" by Directors and
officers and 36,000 shares of Class B Stock which Directors and executive
officers have the right to purchase on or before April 1, 1997 pursuant to
stock options; it does not include 195,434 shares of Class B Stock held as
of February 1, 1997 by the trustee of various savings plans maintained by
the Company and its business units over which the trustee has voting and
investment powers.
(f) In addition to the information set forth in footnote (i) in the Table of
"Principal Holders of Stock", Mr. Cohen also shares with Mr. Donald Graham
and Mrs. Graham voting and investment power over 196,770 (1.8%) shares of
Class B Stock in connection with the Philip L. Graham Fund.
(g) Includes 1,779,250 shares of Class B Stock issuable upon conversion of
shares of Class A Stock beneficially owned.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of Class B Common Stock.
To the Company's knowledge, based solely on a review of such reports and on
information furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 29, 1996, all
applicable Section 16(a) filing requirements were complied with.
12
<PAGE>
EXECUTIVE COMPENSATION
The following table shows the compensation paid by the Company during 1996,
1995 and 1994 to each of the chief executive officer and the four most highly
compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
---------------------------------- ---------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------- ---------------------------------------
AWARDS PAYOUTS
---------------------------- --------
OTHER SECURITIES ALL OTHER
ANNUAL RESTRICTED UNDERLYING LTIP COMPENSA-
NAME AND BONUS COMPENSA- STOCK OPTIONS PAYOUTS TION
PRINCIPAL POSITION YEAR SALARY ($) ($)(1) TION ($) AWARD(S)($)(2) (#) ($) ($)(3)
------------------ ---- ---------- -------- ---------- ---------------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald E. Graham...... 1996 $399,996 -- -- -- -- -- $ 7,800
Chief Executive 1995 399,996 -- -- $133,170 -- $450,726 7,800
Officer 1994 399,996 -- -- -- -- -- 7,800
Alan G. Spoon......... 1996 499,998 $346,500 -- -- -- -- 26,000
President and Chief 1995 467,499 362,780 -- 112,143 -- 525,240 24,310
Operating Officer 1994 429,996 323,145 -- -- -- -- 22,360
John B. Morse, Jr. .. 1996 280,004 174,636 -- -- 1,000 -- 14,560
Vice President and 1995 263,335 183,912 -- 67,673 -- 220,800 13,693
Chief Financial
Officer 1994 243,333 164,579 -- -- -- -- 7,864
Beverly R. Keil....... 1996 240,000 133,056 -- -- 1,000 -- 12,480
Vice President 1995 232,500 144,336 -- 51,479 -- 126,000 12,090
1994 207,500 124,749 -- -- -- -- 7,818
Diana M. Daniels...... 1996 221,670 122,892 -- -- 1,000 -- 11,572
Vice President 1995 210,000 130,368 -- 51,479 -- 126,000 10,920
1994 191,663 115,231 -- -- -- -- 9,966
</TABLE>
- ----------
(1) Bonus awards may be in the form of cash or deferred cash.
(2) The numbers in this column represent the dollar value of the restricted
stock awarded to the named executive in the relevant fiscal year. As of the
end of fiscal 1996, the Chief Executive Officer and the other named
executives had the following aggregate restricted stock holdings: Mr.
Graham--1,102 shares, $365,864; Mr. Spoon--918 shares, $304,776; Mr.
Morse--559 shares, $185,588; Mrs. Keil--425 shares, $141,100; and Ms.
Daniels--425 shares, $141,100. On December 11, 1996, the Compensation
Committee of the Board of Directors approved restricted stock grants
effective January 3, 1997, for the 1997-2000 Award Cycle to a number of
employees, including the five individuals whose compensation is shown
above: Mr. Graham--450 shares, $149,962; Mr. Spoon--400 shares, $133,300;
Mr. Morse--200 shares, $66,650; Mrs. Keil--150 shares,$49,988; and Ms.
Daniels--150 shares, $49,988; thus, these grants are not included in the
aggregate restricted stock holding at the end of fiscal 1996, as listed in
the preceding sentence. Dividends are paid on restricted stock and are the
same as dividends on non-restricted stock.
(3) Contributions to 401(k) savings plans and the Supplemental Executive
Retirement Plan ("SERP") constitute "all other compensation" for 1996 as
follows: Mr. Graham--$7,800 in Company contributions to 401(k) plan; Mr.
Spoon--$7,800 in Company contributions to 401(k) plan and $18,200 in
Company credits to SERP account; Mr. Morse--$7,800 in Company contributions
to 401(k) plan and $6,760 in Company credits to SERP account; Mrs.
Keil--$7,800 in Company contributions to 401(k) plan and $4,680 in Company
credits to SERP account; and Ms. Daniels--$7,800 in Company contributions
to 401(k) and $3,727 in Company credits to SERP account.
13
<PAGE>
<TABLE>
<CAPTION>
OPTIONS GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE AT
SECURITIES TOTAL OPTIONS ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE OF PRICE APPRECIATION FOR OPTION TERM
OPTION EMPLOYEES BASE PRICE EXPIRATION -----------------------------------
NAME GRANTED (#) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ----------------- ------------ -------------- ----------- ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Graham.. -- -- -- -- -- --
Alan G. Spoon .... -- -- -- -- -- --
John B. Morse, Jr. 1,000 5% $343.938 12/11/06 $216,300 $548,149
Beverly R. Keil .. 1,000 5% 343.938 12/11/06 216,300 548,149
Diana M. Daniels.. 1,000 5% 343.938 12/11/06 216,300 548,149
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT FISCAL
FISCAL YEAR-END YEAR-END
(#) ($)
SHARES -----------------------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------- ------------------- --------------
<S> <C> <C> <C> <C>
Donald E. Graham . -- -- -- --
Alan G. Spoon ..... -- -- 18,000/50,000(1) $1,953,625/$0
John B. Morse, Jr. -- -- 3,000/ 1,000 $350,688 /$0
Beverly R. Keil .. 1,000 $116,375 2,000/ 1,000 $169,250 /$0
Diana M. Daniels . -- -- 3,000/ 1,000 $341,125 /$0
</TABLE>
- ----------
(1) Mr. Spoon's one unexercised option is for 50,000 shares of Class B Stock at
a price of $318.50 (compared to a mean market price of $178.1875 on
December 19, 1991, the date on which the option was granted); it does not
become exercisable until June 30, 1999.
14
<PAGE>
RETIREMENT PLANS
Basic Plan. Most employees of the Company, including the individuals
identified in the table on page 13, are eligible to participate (subject to
minimum service requirements) in the Company's defined benefit retirement plan.
(Prior to 1996, the Company and its newspaper, magazine and broadcast divisions
maintained separate defined benefit plans. These plans have been merged into the
Company plan.) Benefits under this basic plan are determined on the basis of
base salary only, exclusive of all bonuses, deferred compensation and other
forms of remuneration. The Company and each of its business units also maintain
401(k) savings plans in which most employees are eligible to participate
(subject to minimum service requirements).
Supplemental Executive Retirement Plan. All amounts over $125,000 that would
otherwise be payable under a basic defined benefit retirement plan are currently
subject to reduction because of the annual pension limitation imposed by the Tax
Equity and Fiscal Responsibility Act of 1982, although the extent of such
reductions may vary in individual cases depending on circumstances existing at
the time retirement payments commence. In addition, defined benefit pension
benefits and defined contribution plan benefits payable by tax-qualified plans
may not be based on annual compensation exceeding maximum amounts imposed by the
Omnibus Budget Reconciliation Act of 1993 (currently $160,000 per year).
To offset these limitations on retirement benefits, the Company adopted
effective January 1, 1989, an unfunded Supplemental Executive Retirement Plan
(the "SERP") which is patterned after similar plans adopted by many other
companies. Under the Company's SERP there will be calculated for certain
participating executives (including the executive officers included in the table
on page 13) a "supplemented normal retirement benefit", which will be determined
under the rules of the qualified defined benefit retirement plan, but without
reference to either of the above-mentioned limitations and will also include in
earnings not only base salary (as in the past) but also bonuses under the Annual
Incentive Compensation Plan. The SERP also provides a supplemental defined
contribution plan benefit, which is equal to the applicable company matching
contribution percentage times the participating executive's base salary that is
in excess of the annual covered compensation limit with respect to qualified
plan benefits. The executive is required to make contributions to the SERP in
order to receive the applicable matching company credit each year. Starting in
1994, a number of other management employees (not including the executive
officers included in the table on page 13) became participants under the
Company's SERP with respect to the supplemental normal retirement benefit only.
For these participants, the supplemented normal retirement benefits will be
determined without reference to either of the above-mentioned limitations, but
will include in earnings only base salary and not bonuses. In each case in which
a retiring executive's supplemented normal retirement benefit exceeds the
benefit payable by the retirement plan or plans in which the executive has
participated, the Company will pay such excess amount to him or her as a
supplemental retirement benefit. Participation in the SERP is determined by the
Compensation Committee of the Board of Directors, which has designated as
participants a num-
15
<PAGE>
ber of senior executives including all those named in the table on page 13
(except that Mr. Graham, who has elected not to participate in savings plan
features of the SERP, will be covered only by the retirement plan features of
the SERP described above).
As of December 31, 1996, Mr. Graham had 23 years of service under the Company
plan, Mr. Spoon had 15 years of service under the Company plan, Mr. Morse had 8
years of service under the Company plan, Ms. Keil had 18 years of service under
the Company plan, and Ms. Daniels had 19 years of service under the Company
plan.
The following table shows the estimated maximum annual benefits payable upon
retirement at age 65 to persons in specified remuneration and years-of-service
classifications who participate in both the basic retirement plans and the SERP
(which includes all the individuals identified in the table on page 13):
PENSION PLAN TABLES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
ESTIMATED MAXIMUM ANNUAL PENSION (COMPUTED AS
COVERED STRAIGHT LIFE ANNUITY) FOR
COMPENSATION REPRESENTATIVE YEARS OF CREDITED SERVICE
- -------------- ---------------------------------------------------------------------
COMPANY
PLAN(A)(B) 10 15 20 25 30 35
- -------------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$300,000 $ 54,000 $ 81,000 $108,000 $135,000 $162,000 $162,000
400,000 71,500 107,250 143,000 178,750 214,500 214,500
450,000 80,250 120,375 160,500 200,625 240,750 240,750
500,000 89,000 133,500 178,000 222,500 267,000 267,000
550,000 97,750 146,625 195,500 244,375 293,250 293,250
600,000 106,500 159,750 213,000 266,250 319,500 319,500
650,000 115,250 172,875 230,500 288,125 345,750 345,750
700,000 124,000 186,000 248,000 310,000 372,000 372,000
750,000 132,750 198,875 265,000 331,625 398,250 398,250
800,000 141,500 212,250 283,000 353,750 424,500 424,500
850,000 150,250 225,375 300,500 375,625 450,750 450,750
</TABLE>
- ----------
(a) Before deducting the effect on benefits of an offset applicable to certain
benefits paid under the Company Plan and based on average social security
covered compensation over the employee's career. For an individual retiring
at age 65 during 1997 the deduction would be as follows for the indicated
number of years of credited service: 10 years, $2,198; 15 years, $3,297; 20
years, $4,396; 25 years, $5,495; 30 and 35 years, $6,593.
(b) Plan provides increased benefits for years of service after 1991. The
benefits shown in the table are those provided for service after that year.
16
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERALL POLICY
The Company's executive compensation program is based on the premise that
compensation should be competitive and linked to corporate performance. To that
end, the Company has developed an overall compensation strategy and compensation
plans that tie a significant portion of executive compensation to the Company's
success in meeting specified short-term and long-term performance goals and to
long-term appreciation in the Company's stock price. The strategy also supports
an environment that rewards Company and business unit achievement as compared to
that of industry performance levels over a number of years, where such
comparisons are appropriate. The overall objectives of this strategy are to
attract and retain key executive talent critical to the long-term success of the
Company, to motivate these executives to achieve goals inherent in the Company's
business strategy, to link executive and shareholder interests through
equity-based plans and finally to provide a compensation package that recognizes
individual contributions as well as overall business results.
Each year the Compensation Committee conducts a full review of the Company's
executive compensation program. This review includes a comprehensive report from
the Company's Vice President of Human Resources assessing the effectiveness of
the Company's compensation program and comparing the Company's executive
compensation, corporate performance and total return to shareholders to a group
of corporations that represent companies with business portfolios similar to
that of the Company. The Compensation Committee reviews the selection of peer
companies used for compensation purposes. Certain information about compensation
levels in other media companies included in this report is collected by
independent consultants. The Compensation Committee uses the median executive
compensation range of such peer companies as a guideline in setting the
compensation of the Company's executives. The peer companies used for
compensation purposes are constructed on a division by division basis. The
annual compensation reviews permit an ongoing evaluation of the link between the
Company's and its business units' performance and its executive compensation in
the context of the compensation programs of other companies and of the Company's
total return to shareholders.
The Compensation Committee determines the compensation of approximately the
80 most highly compensated corporate and divisional executives, including the
chief executive officer and the other individuals whose compensation is detailed
in this proxy statement (the "named executives"). In reviewing the individual
performance of the named executives, the Compensation Committee takes into
account the views of Mr. Graham and Mr. Spoon.
The key elements of the Company's executive compensation consist of base
salary, annual bonus, performance units, restricted stock and stock options. The
Compensation Committee's policies with respect to each of these elements,
including the bases for the compensation awarded to Mr. Graham, the Company's
chief executive officer, are discussed below. In addition, while the
17
<PAGE>
elements of compensation described below are considered separately, the
Compensation Committee takes into account the full compensation package afforded
by the Company to an individual, including special incentive compensation plans,
pension and savings plan benefits, supplemental retirement benefits and other
benefits as well.
BASE SALARIES
Base salaries for executive officers are initially determined by evaluating
the responsibilities of the position held and the experience of the individual,
and by reference to the competitive marketplace for executive talent, including
a comparison to base salaries for comparable positions at other media companies.
Salary adjustments are generally implemented on a twelve-month or longer
cycle and upon promotion. Such adjustments are determined by evaluating the
performance of the Company and the individual executive officer, and may also
take into account new responsibilities. In the case of executive officers with
responsibility for a particular business unit, such unit's financial results are
also considered, including, depending on the business unit, revenue, operating
income and cash flow. The Compensation Committee, where appropriate, also
considers other measures. These may include, among other factors, increases in
market share, reduction or cost containment in operating expenses, journalistic
achievements, improvements in product quality and improvements in relations with
customers, suppliers and employees, and comparisons to base salaries for
comparable positions at other media companies. In order to preserve flexibility
in setting compensation, the Compensation Committee has not established specific
elements of Company or business unit performance which must be evaluated or
assigned relative weights to such elements. Different factors are considered in
evaluating each executive officer's base salary depending on such officer's
position and business unit.
With respect to the base salary paid to Mr. Graham in 1996, the Compensation
Committee took into account a comparison of base salaries of chief executive
officers of peer companies, the Company's results in 1995 and the performance of
the Company. The Compensation Committee also took into account Mr. Graham's
service to the Company and his performance since 1979 as publisher of The
Washington Post. The Compensation Committee noted that Mr. Graham's base salary
is significantly below the median of base salaries paid to chief executive
officers of peer companies; and furthermore that the performance of the Company
in 1996 exceeded budgeted financial goals. However, due to Mr. Graham's request,
for personal reasons, to forego a base salary increase, Mr. Graham's base salary
in 1996 remained at $400,000, the level established in 1991 upon his promotion
to President and chief executive officer.
INCENTIVE COMPENSATION PLANS
The Company has two incentive compensation plans--the Annual Incentive
Compensation Plan and the Long-Term Incentive Compensation Plan--under which
awards are made primarily
18
<PAGE>
to key management and professional employees, including the Company's executive
officers, who have made or are in a position to make significant contributions
to the profitability of the Company and enhance shareholder value. Each plan is
administered by the Compensation Committee.
ANNUAL BONUS PLAN
The Company's Annual Incentive Compensation Plan provides for annual
incentive compensation awards based on the Company's and its business units'
short-term, i.e., annual, financial performance. At the end of 1995, the
Compensation Committee approved a range of incentive payouts for 1996 keyed to
performance against specified goals related to budgeted operating income, cash
flow or earnings per share, which vary by business unit. In 1996 the Company
exceeded its budgeted earnings per share goal. Mr. Graham waived participation
in the Annual Incentive Compensation Plan with respect to 1996. Awards to the
other executives whose compensation is detailed in this proxy statement are
shown in the column headed "Bonus" in the Summary Compensation Table shown on
page 13.
LONG-TERM PLAN
To balance the Annual Incentive Compensation Plan, which is intended to
reward short-term financial performance, the Company's Long-Term Incentive
Compensation Plan (the "Long-Term Plan") provides incentives for improved
financial performance over periods of Award Cycles (which beginning in 1983 have
consisted, and are expected to continue to consist, of four-year periods
starting at two-year intervals).
Performance Units.
In December 1996, executive officers, including the Chief Executive Officer
and the four most highly compensated executive officers of the Company, were
granted Performance Units, effective January 3, 1997, for the 1997-2007 Award
Cycle. Pursuant to these grants, the chief executive officer and the named
executives received the following: Donald E. Graham, 7,000 Performance Units;
Alan G. Spoon, 6,000 Performance Units; John B. Morse, Jr., 2,200 Performance
Units; Beverly R. Keil, 1,600 Performance Units; and Diana M. Daniels, 1,400
Performance Units. As in the past, each Performance Unit has a nominal value of
$100. The number of Units awarded in determined with reference to an
individual's relative level of Plan participation. The payout opportunities for
the 1997-2007 Award Cycle for Performance Units granted to these individuals
will be based on the simple average of the earned payouts for the major
operating divisions of the Company (66.6% weighting) and the Company's total
shareholder return during the Award Cycle compared to total shareholder returns
of peer companies (33.3% weighting). (Inasmuch as the Performance Unit awards
did not become effective until January 3, 1997, they relate to 1997 compensation
awards and will be treated as such in the Proxy Statement for the 1998 Annual
Meeting of Shareholders.)
19
<PAGE>
Payout values of Units awarded to Mr. Graham and Mr. Spoon and the other
Company executive officers named in the Summary Compensation Table shown on page
13 under the 1995-1998 Award Cycle will be determined by the original payout
formula which was adopted at the time the Units were awarded and which is based
on the weighted average of the payout values earned by each of the Company's
four major operating divisions and subject to the attainment of a minimum
required return on equity. The weighted average will be based on operating
income contribution of each division. In December 1994, the Compensation
Committee of the Board of Directors approved grants of Performance Units
effective January 2, 1995, under the Company's Long-Term Plan for the 1995-1998
Award Cycle to various key employees of the Company, including the chief
executive officer and the executive officers named in the table on page 13.
Pursuant to these grants, the chief executive officer and the named executives
received the following: Donald E. Graham, 6,402 Performance Units; Alan G.
Spoon, 5,394 Performance Units; John B. Morse, Jr., 2,168 Performance Units;
Beverly R. Keil, 1,236 Performance Units; and Diana M. Daniels, 1,236
Performance Units. Each Performance Unit has a nominal value of $100. The number
of Units awarded was determined with reference to an individual's Plan grade.
The payout opportunities for Messrs. Graham and Spoon and the other executive
officers named in the table shown on page 13 are based on the simple average of
the earned payouts for the major operating divisions of the Company (66.6%
weighting), and the Company's total shareholder return during the Award Cycle
compared to total shareholder returns of peer companies (33.3% weighting).
In December 1992, executive officers, including the chief executive officer
and the executive officers named in the table on page 13, were granted
Performance Units, effective January 4, 1993 for the 1993-1996 Award Cycle. The
payout opportunities of Messrs. Graham and Spoon, and the other executive
officers is based on the weighted average of the payout values earned by each of
the Company's four major operating divisions and subject to the attainment of a
minimum required return on equity. The weighted average will be based on
operating income contribution of each division. The final Unit valuation for the
1993-1996 Award Cycle will be determined by the Compensation Committee in the
first half of 1997.
Restricted Stock.
In December 1996, executive officers and other key employees were granted new
Restricted Stock for the 1997-2000 Award Cycle, effective January 3, 1997, based
on a formula similar to that used for determining the number of shares of
Restricted Stock in prior years, including 450 shares of Restricted Stock
awarded to Mr. Graham. The number of shares of Restricted Stock awarded is
determined by an individual's relative level of Plan participation and by the
actual market value of the Company's Class B Stock on the trading day
immediately preceding the date on which such awards are approved. Awards to the
named executives are referenced in the footnote to the column headed "Restricted
Stock Awards" in the Summary Compensation Table shown on page 13.
20
<PAGE>
On January 2, 1997, the restrictions terminated on shares of Restricted Stock
awarded to Mr. Graham and the other named executives for the 1993-96 Award
Cycle. On that date, Mr. Graham received unrestricted title to 551 shares having
a fair market value of $183,725 on January 3, 1997.
Special Incentives.
From time to time the Compensation Committee adopts special targeted
incentive plans for key executives. These plans provide a one-time special
incentive opportunity based on the achievement of special quantifiable operating
objectives. In 1996 the Committee adopted a special incentive program for Mr.
Spoon. A special incentive may be earned at the end of 1997, based on the
attainment of financial goals specified in this plan relating to average annual
operating income and cumulative cash flow targets for three of the Company's
major business units. No incentives will be paid if the financial goals are not
met.
STOCK OPTION PLAN
Under the Company's Stock Option Plan, which was approved by shareholders,
shares of Class B Stock are issuable upon the exercise of stock options that
have been or may be granted to key employees of the Company and its
subsidiaries, including the executives whose compensation is detailed in this
proxy statement.
The Compensation Committee believes that significant equity interests in the
Company held by key employees responsible for the Company's future growth and
continued success align the interests of shareholders and management, since the
full benefit of the compensation package cannot be realized unless stock
appreciation occurs over a number of years. In the opinion of management, which
is concurred in by the Compensation Committee, there are at present
approximately 30 key employees who fall within that category. Although there is
no target stock ownership level for key employees, in determining the number of
shares to be granted under options, the Compensation Committee takes into
account the amount and value of options currently held, as well as makes a
judgment about the level of contribution already made by and the potential of
such key employees to continue to make contributions to the Company. The
Compensation Committee does not assign relative weights to such factors.
Given Mr. Graham's significant ownership in the Company (see description of
holdings under "Stock Holdings of Certain Beneficial Owners and Management"),
the Compensation Committee has not granted any stock options to Mr. Graham.
In 1996, a non-qualified stock option was granted to each of Mr. Morse, Ms.
Keil and Ms. Daniels with respect to 1,000 shares, each at fair market value
price on the date of the grant. No other stock option awards were granted to the
executives whose compensation is detailed in this proxy statement during 1996.
21
<PAGE>
OTHER COMPENSATION PLANS
At various times in the past the Company has adopted certain broad-based
employee benefit plans in which the chief executive officer and the other
individuals whose compensation is detailed in this proxy statement are eligible
to participate on the same terms as non-executive employees who meet applicable
eligibility criteria, subject to applicable legal limitations on the amount of
benefits that may be payable pursuant to those plans. Benefits under the savings
and retirement plans are not tied to Company performance.
For the chief executive officer and certain other senior executives and
managerial employees including the named executives, the Company's Supplemental
Executive Retirement Plan ("SERP") provides tax-deferred accruals of amounts
proportionate to the benefits available to non-highly compensated participants
in the Company's savings and retirement plans, but which exceed benefits
permitted under the Company's plans due to tax law limitations. In 1996 no
amount was accrued for the benefit of Mr. Graham with respect to an employer
credit under the Company's SERP inasmuch as Mr. Graham waived his right for 1996
to maintain a separate unfunded saving plan account under the SERP. The amount
accrued to the named executives are shown in the footnote to the column headed
"All other compensation" in the Summary Compensation Table shown on page 13. The
estimated annual pension amounts set forth in the table on page 16 show the
maximum benefits payable to Mr. Graham and the named executives to the extent
they participate in the basic retirement plan and the supplemental executive
retirement plan. The benefits payable to Mr. Graham and the named executives
under the SERP are determined with reference to compensation including bonuses
under the Annual Incentive Compensation Plan.
In September 1996, the Compensation Committee recommended to the Board of
Directors of the Company the adoption of a voluntary deferred compensation plan
for certain executives, including the executives named in the table on page 13.
The plan which was adopted provides an opportunity for participants to elect to
defer the receipt of all or a portion of cash awards under the annual and/or
long-term incentive plans. Elections to defer must be filed in advance of
earning such awards. Deferred amounts will earn investment credits in accordance
with participant elections from a choice of investment indexes. Deferred amounts
will be payable at retirement or such other future date as specified by the
participant at the time of election.
CONCLUSION
Through the programs described above, a significant portion of the Company's
executive compensation is linked directly to business unit and corporate
performance and stock price appreciation. The Compensation Committee intends to
continue the policy of linking executive compensation to corporate performance
and returns to shareholders and deems it desirable that compensation paid under
the Annual Incentive Compensation Plan, the Long-Term Incentive Compensation
Plan and the Stock Option Plan meet the performance-based compensation
requirements of Section 162(m) of the Internal Revenue Code concerning
deductibility of executive compensation.
22
<PAGE>
However, the Committee reserves the right to put in place compensation programs
that do not meet the requirements of Section 162(m) so as to result in
compensation payments that are not deductible by the Company, if such programs
are otherwise in the best interests of the Company.
George W. Wilson, Chairman
Daniel B. Burke
James E. Burke
Donald R. Keough
COMPENSATION COMMITTEE INTERLOCKS AND INSIDERS PARTICIPATION
Daniel B. Burke, James E. Burke, Donald R. Keough, Richard D. Simmons and
George W. Wilson served as members of the Compensation Committee in 1996, with
Mr. Keough going on the Committee and Mr. Simmons going off the Committee in May
1996. Mr. Richard D. Simmons, a member of the Compensation Committee of the
Board of Directors since May 14, 1992 through May 7, 1996, was the Company's
President and Chief Operating Officer from September 1981 to May 9, 1991. During
the past fiscal year, Mr. Simmons received $25,000 pursuant to a three-year
agreement with the Company entered into following termination of his employment
on June 30, 1991, which was extended in July 1994 through March 31, 1996. Under
this agreement, Mr. Simmons consulted and advised on business matters affecting
the Company and oversaw the Company's interest in the International Herald
Tribune, S.A., including having served as its President and directeur de la
publication.
PERFORMANCE GRAPH
The following graph is a comparison of the yearly percentage change in the
Company's cumulative total shareholder return with the cumulative total return
of the Standard & Poor's 500 Stock Index and the Standard & Poor's
Publishing/Newspapers Index. The Standard & Poor's 500 Stock Index is comprised
of 500 U.S. companies in the industrial, transportation, utilities and financial
industries, weighted by market capitalization. The Standard & Poor's
Publishing/Newspapers Index is comprised of Dow Jones & Company, Inc., Gannett
Co., Inc., Knight-Ridder, Inc., The New York Times Company, The Times Mirror
Company and Tribune Company, weighted by market capitalization.
The graph reflects the investment of $100 on December 31, 1991 in the
Company's Class B Common Stock, the Standard & Poor's 500 Stock Index and the
Standard & Poor's Publishing/Newspapers Index. For purposes of this graph, it
has been assumed that dividends were reinvested on the date paid in the case of
the Company and the group of peer issuers and on quarterly basis in the case of
the Standard & Poor's 500 Index and the Standard & Poor's Publishing/Newspaper
Index.
23
<PAGE>
THE WASHINGTON POST COMPANY
CUMULATIVE TOTAL SHAREHOLDER RETURN FOR
FIVE YEAR PERIOD ENDING DECEMBER 31, 1996
IMAGE OMITTED
<TABLE>
<CAPTION>
December 31, 1991 1992 1993 1994 1995 1996
------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Washington Post 100.00 120.41 135.89 131.60 155.61 187.73
S&P 500 100.00 107.62 118.46 120.03 165.13 203.05
S&P Publishing (Newspapers) 100.00 111.83 129.52 119.65 150.74 191.65
</TABLE>
24
<PAGE>
CERTAIN TRANSACTIONS
The firm of Ruane, Cunniff & Co., Inc., of which Mr. William J. Ruane, a
Director of the Company, is Chairman of the Board and a principal owner, is one
of two firms that managed the investment of the Company's retirement funds in
1996, for which services it received $1,747,319.
Effective March 1, 1996, the Company renewed a contract with Mrs. Elizabeth
Weymouth, the daughter of Mrs. Katharine Graham and the sister of Mr. Donald
Graham, under which she contributes articles to The Washington Post newspaper.
Mrs. Weymouth is receiving compensation of $80,000 on an annualized basis and
reimbursement of certain expenses associated with providing those articles.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
As of the date of this Proxy Statement the only matters that the Board of
Directors expects to present to the meeting are those discussed herein. If any
other matter or matters are properly brought before the meeting or any
adjournment thereof, it is the intention of the persons named in the
accompanying form of Proxy to vote on those matters in accordance with their
best judgment.
Upon the recommendation of the Audit Committee, the Board of Directors has
selected Price Waterhouse LLP as the Company's independent accountants to audit
and report on its financial statements for the fiscal year 1997. The same firm
has acted as the Company's independent accountants continuously since the
Company was organized in 1946. As in previous years, a representative of Price
Waterhouse LLP will be present at the Annual Meeting, will have the opportunity
to make any statement he may desire with respect to the Company's financial
statements for 1996 and his firm's relationship with the Company, and will be
available to respond to appropriate questions from stockholders.
25
<PAGE>
<TABLE>
<CAPTION>
[X] Please mark your 0577
votes as in this
example
This proxy will be voted as specified. If no direction is given, this proxy
will be voted "FOR" Proposals 1 and 2.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1.Election of [ ] [ ] Nominees: Warren E. Buffett, 2. To transact such other business [ ] [ ] [ ]
Directors Martin Cohen, George J. as may properly come before said
(Check only Gillespie, III, Donald E. meeting or any adjournment
one box) Graham, Katharine Graham, thereof.
William J. Ruane, Richard D.
For all nominees(except as Simmons, Alan G. Spoon, George
stockholders may indicate W. Wilson
below)
- ----------------- I will attend the meeting. [ ]
- ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If the
signor is a corporation, please sign
full corporate name by duly authorized
officer.
----------------------------------------
----------------------------------------
SIGNATURE(S) DATE
</TABLE>
THE WASHINGTON POST COMPANY
CLASS A COMMON STOCK
PROXY-Annual Meeting of Stockholders-May 8, 1997
Solicited on behalf of the Board of Directors
The undersigned hereby appoints Katharine Graham, Donald E. Graham, Alan G.
Spoon, John B. Morse, Jr. and Diana M. Daniels, and each of them, his true and
lawful agents and proxies, with full power of substitution in each, to represent
the undersigned, and to vote as indicated on the reverse of this Proxy all
shares of Class A Common Stock which the undersigned is entitled to vote, at the
Annual Meeting of Stockholders of THE WASHINGTON POST COMPANY to be held on May
8, 1997, and at any adjournments thereof, on all matters coming before said
meeting
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE (Continued,and to be
signed on reverse side)
<PAGE>
<TABLE>
<CAPTION>
[X] Please mark your 0583
votes as in this
example
This proxy will be voted as specified. If no direction is given, this proxy
will be voted "FOR" Proposals 1 and 2.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1.Election of [ ] [ ] Nominees: Daniel B. Burke, James 2. To transact such other business [ ] [ ] [ ]
Directors E. Burke, Ralph E. Gomory, Donald as may properly come before said
(Check only R. Keough and Barbara Scott Preiskel meeting or any adjournment
one box) thereof.
For all nominees(except as
stockholders may indicate below)
- ----------------- I will attend the meeting. [ ]
- ------------------------------------------------------------------------------------------------------------------------------------
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If the
signor is a corporation, please sign
full corporate name by duly authorized
officer.
----------------------------------------
----------------------------------------
SIGNATURE(S) DATE
</TABLE>
<PAGE>
THE WASHINGTON POST COMPANY
CLASS B COMMON STOCK
PROXY -- Annual Meeting of Stockholders -- May 8, 1997
Solicited on behalf of the Board of Directors
The undersigned hereby appoints Katharine Graham, Donald E. Graham, Alan G.
Spoon, John B. Morse, Jr. and Diana M. Daniels, and each of them, his true and
lawful agents and proxies, with full power of substitution in each, to represent
the undersigned, and to vote as indicated on the reverse of this Proxy all
shares of Class B Common Stock which the undersigned is entitled to vote, at the
Annual Meeting of Stockholders of THE WASHINGTON POST COMPANY to be held on May
8, 1997, and at any adjournments thereof, on all matters coming before said
meeting
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE (Continued, and to be
signed on reverse side)
<PAGE>
THE WASHINGTON POST COMPANY
1150 Fifteenth Street, N.W., Washington, D.C. 20071
March 28, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Proxy Statement
---------------
Ladies and Gentleman:
The Proxy and Proxy Statement for use at the 1997 Annual Meeting of
Shareholders of The Washington Post Company are being electronically transmitted
to the Securities and Exchange Commission's EDGAR system simultaneously herewith
for filing under the relevant provisions of the Securities Exchange Act of 1934
and Regulation S-T.
If you have any questions concerning this filing, please call the
undersigned at (202) 334-6694.
Very truly yours,
/s/ Diana M. Daniels
---------------------
Diana M. Daniels
Vice President, General Counsel
and Secretary
DMD:cmc
