<PAGE>
March 25, 1996
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders of
Ackerley Communications, Inc. (the "Company"), which will be held at 9:00 a.m.,
Pacific Daylight Savings Time on Wednesday, May 1, 1996, at The Rainier Club,
820 4th Avenue, Seattle, Washington. In that connection, please find enclosed a
Notice of Annual Meeting, a Proxy Statement, a form of Proxy and a copy of the
Company's Annual Report on Form 10-K.
At the Annual Meeting, you will be asked to elect directors of the Company.
If you do not plan to attend this meeting, we request that you return the
enclosed proxy promptly in the return envelope provided for your convenience, so
that as many shares as possible will be represented at the meeting. If you
attend the meeting, you may vote in person.
Sincerely yours,
DENIS M. CURLEY
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER,
TREASURER AND SECRETARY
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Ackerley Communications, Inc. will be
held at The Rainier Club, 820 4th Avenue, Seattle, Washington, on Wednesday, May
1, 1996 at 9:00 a.m., Pacific Daylight Savings Time, for the purpose of
considering and voting upon the following matters:
1. ELECTION OF DIRECTORS. Electing a Board of Directors to hold office
until the next Annual Meeting of Shareholders and until their successors
have been elected and qualified.
2. APPROVAL OF NONEMPLOYEE-DIRECTORS' EQUITY COMPENSATION PLAN. Approving
the adoption by the Board of Directors of a Nonemployee-Directors' Equity
Compensation Plan providing for the optional payment to nonemployee
directors of directors' fees in Common Stock.
3. WHATEVER OTHER BUSINESS properly may be brought before the meeting or
any adjournment thereof.
Shareholders of record of Common Stock and Class B Common Stock at the close
of business on March 22, 1996 are entitled to notice of and to vote at the
Annual Meeting. A complete list of shareholders entitled to vote will be
available for examination at the Annual Meeting and at the Company's
headquarters, Suite 3770, Seafirst Fifth Avenue Plaza, 800 Fifth Avenue,
Seattle, Washington, for ten days before the meeting.
By Order of the Board of Directors
--------------------------------------
DENIS M. CURLEY
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, TREASURER AND
SECRETARY
Seattle, Washington
March 25, 1996
PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR
NOT YOU INTEND TO ATTEND THE MEETING IN PERSON. THE PROXY MAY BE REVOKED BY
DELIVERING WRITTEN NOTICE TO THE ASSISTANT SECRETARY OF THE COMPANY AT ANY TIME
PRIOR TO ITS EXERCISE.
<PAGE>
[ACKERLEY LETTERHEAD]
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying Proxy are being first sent or
given to shareholders on or about March 25, 1996, for use in connection with the
Annual Meeting of Shareholders of Ackerley Communications, Inc. (the "Company")
to be held on Wednesday, May 1, 1996 at 9:00 a.m., Pacific Daylight Savings
Time.
VOTING SHARES
Only those shareholders of record of the Company's voting common stock, par
value $.01, including Common Stock and Class B Common Stock, at the close of
business on March 22, 1996, shall be entitled to notice of the meeting and to
vote. The number of shares of voting common stock of the Company outstanding and
entitled to vote at the Annual Shareholders' Meeting is 9,849,669 shares of
Common Stock and 5,727,125 shares of Class B Common Stock. On each matter before
the meeting, including the election of directors, holders of Common Stock have
one vote for each share of Common Stock held and holders of Class B Common Stock
have ten (10) votes for each share of Class B Common Stock held. Shareholders
are not entitled to cumulate their votes in the election of directors.
SOLICITATION OF PROXIES
The enclosed Proxy is solicited by and on behalf of the Board of Directors
of the Company, and the costs of solicitation will be borne by the Company. In
addition to the use of the mails, solicitation may be made, without additional
compensation, by directors and officers and regular employees of the Company, by
telephone, telegraph and personal interview. The Company will reimburse brokers,
nominees and similar record holders for reasonable expenses in mailing proxy
material to beneficial owners.
APPOINTMENT AND REVOCATION OF PROXIES
If the enclosed Proxy is duly executed and received in time for the meeting,
it is the intention of the persons named therein to vote the shares represented
by the Proxy "FOR" the matter in question, unless otherwise indicated. Any proxy
given by a shareholder may be revoked before its exercise by notice to the
Secretary of the Company in writing at any time prior to its use. The shares
represented by properly executed proxies will be voted in accordance with the
specifications therein, or, if no preference is specified, in accordance with
the recommendation of management as specified above.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31, 1995
accompanies this Proxy Statement.
ITEM 1 -- ELECTION OF DIRECTORS
The Company's Bylaws provide that the number of directors to be elected at
the shareholders' meeting shall be not less than one (1) nor more than eight
(8), as determined by the Board of Directors. The Company's Third Restated
Certificate of Incorporation, as amended, provides that the Company's Board may
change the number of directors from time to time, and the Company's Bylaws
provide that the Company's Board may fill any vacancies created. The Board of
Directors has fixed the number of directors to be elected at this Annual Meeting
at five (5).
If any nominee should refuse or be unable to serve, the Proxy will be voted
for such person as shall be designated by the Board of Directors to replace any
such nominee. The Board of Directors presently has no knowledge that any of the
nominees will refuse or be unable to serve. The term of office for all the above
nominees will be for one year and until their successors are elected and have
qualified. The nominees for election as directors are the current members of the
Board of Directors: Barry A. Ackerley, Gail A. Ackerely, Richard P. Cooley, M.
Ian Gilchrist and Michel C. Thielen.
Each position on the Board of Directors is filled by the nominee receiving a
plurality of the votes cast with respect to such position. Abstentions from
voting will have the practical effect of voting
<PAGE>
against the nominee because it is one less vote for approval. "Broker non-votes"
will have no effect because they are not considered "shares present" for voting
purposes. Proxies cannot be voted for more than five persons.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES TO BE
ELECTED AS DIRECTORS.
SHARE OWNERSHIP BY DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, including the beneficial
ownership of shares of Common Stock and Class B Common Stock as of March 15,
1996, with respect to the nominees for director, current directors, the
executive officers named in the table appearing under "Executive Compensation"
below, persons known to the Company to beneficially own more than five (5)
percent of the outstanding Common Stock on March 15, 1996, and by the directors
and executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF THE COMPANY'S COMMON STOCK AND
CLASS B COMMON STOCK AND PERCENT OF CLASS BENEFICIALLY
OWNED (1)
--------------------------------------------------------
CLASS B
NAME, AGE AND PRINCIPAL OCCUPATION DURING PAST FIVE YEARS COMMON STOCK PERCENT COMMON STOCK PERCENT
- -------------------------------------------------------------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Barry A. Ackerley, 61 ........................................ 5,431,438(2) 55.1% 5,691,217(2) 99.4%
Chairman and Chief Executive Officer of the Company; Company
Director since 1975
Gail A. Ackerley, 58 ......................................... 5,431,438(3) 55.1% 5,691,217(3) 99.4%
Chairman of Ackerley Corporate Giving (Company's charitable
activities); Company Director since 1995
Richard P. Cooley, 72 ........................................ 1,570 * 0 *
Retired, Chairman (1988-April 1994) and Chief Executive
Officer (1988-1991), Seattle-First National Bank; director,
PACCAR, Inc.; director, Egghead Software Inc.; Director since
1995
M. Ian G. Gilchrist, 46 ...................................... 0 * 0 *
Managing Director (May 1995-present), Salomon Brothers Inc.
Managing Director (February 1991-May 1995), CS First Boston
Corporation (investment banking -- media/
telecommunications); Company Director since 1995
Michel C. Thielen, 61 ........................................ 0 * 0 *
President, MCT Thielen and Associates (advertising agency);
Vice President, Executive Wings, Inc. (airport operations
company); Company Director since 1979
William N. Ackerley, 35 ...................................... 11,715 * 10,074(4) *
President and Chief Operating Officer of the Company
Denis M. Curley, 48 .......................................... 1 * 0 *
Executive Vice President and Chief Financial Officer,
Treasurer and Secretary of the Company
Keith W. Ritzmann, 43 ........................................ 401 * 100 *
Vice President and Controller of the Company
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF THE COMPANY'S COMMON STOCK AND
CLASS B COMMON STOCK AND PERCENT OF CLASS BENEFICIALLY
OWNED (1)
--------------------------------------------------------
CLASS B
NAME, AGE AND PRINCIPAL OCCUPATION DURING PAST FIVE YEARS COMMON STOCK PERCENT COMMON STOCK PERCENT
- -------------------------------------------------------------- -------------- ----------- -------------- -----------
Gabelli Funds, Inc. (5% shareholder) ......................... 935,900 9.5% 0 *
One Corporate Center
Rye, NY 10580
<S> <C> <C> <C> <C>
All Directors and Executive Officers as a group
(8 persons).................................................. 5,445,125 55.3% 5,701,391 99.6%
</TABLE>
- ------------------------
(1) Unless otherwise indicated, represents shares over which each nominee
exercises sole voting or investment power.
(2) Barry Ackerley and Gail Ackerley are husband and wife. Includes 3,632 shares
of Common Stock and 132 shares of Class B Common Stock held by Gail A.
Ackerley, of which Mr. Ackerley disclaims beneficial ownership.
(3) Barry Ackerley and Gail Ackerley are husband and wife. The amount shown
includes 5,427,806 shares of Common Stock and 5,691,085 shares of Class B
Common Stock held by Barry A. Ackerley, of which Mrs. Ackerley disclaims
beneficial ownership.
(4) Includes 5,620 shares of Class B Common Stock held by his minor children,
for which William Ackerley exercises sole voting and investment power as
custodian under the Washington Uniform Transfer to Minor Act.
* Indicates amounts equal to less than 1% of the outstanding shares.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Since the election of directors at the last annual shareholders meeting in
May 1995, the Board of Directors met once. All directors attended that meeting
of the Board. Prior to that time, all business of the Board of Directors of the
Company during fiscal 1995 was conducted by unanimous written consent in lieu of
any meeting.
The Board of Directors of the Company established an Audit Committee in
September 13, 1995, comprised of Messrs. Cooley, Gilchrist and Thielen. The
Audit Committee review with the auditors the scope of the audit and the
financial statements. The Committee also is responsible for recommending to the
Board a firm of independent auditors to act as the Company's independent
auditor. The Audit Committee met for the first time on March 4, 1996.
Under the federal securities laws, the Company's directors and executive
officers, and any persons holding more than 10% of the Company's Common Stock
are required to report their initial ownership of the Common Stock and any
subsequent changes in that ownership to the Securities and Exchange Commission
(the "Commission") and the American Stock Exchange. Specific due dates for these
reports have been established and the Company is required to disclose in this
Proxy Statement any failure to file by these dates. In 1995, Mr. Richard Cooley
failed to timely file a Form 3 within ten days following his election as a
director of the Company. In making these disclosures, the Company has relied
solely on written representations of its directors and executive officers and
copies of the reports that they have filed with Commission.
DIRECTORS' FEES
As of May 1995, each director who is not an employee of the Company receives
a quarterly fee of $5,000. In addition, each director is reimbursed up to $1,500
per quarter for out-of-pocket expenses in connection with attendance at meetings
of the Board of Directors. Shareholders are being asked to approve a Directors'
Equity Compensation Plan that will allow nonemployee directors to elect to
receive directors fees in shares of Common Stock rather than cash. See Item 2 --
Approval of Nonemployee-Directors' Compensation Plan, below.
3
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
paid or accrued by the Company during the fiscal years ended December 31, 1995,
1994 and 1993, to or on behalf of the Company's Chief Executive Officer and to
or on behalf of each executive officer whose aggregate cash compensation
exceeded $100,000 for the prior fiscal year (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
ALL OTHER
AWARDS COMPENSATION
ANNUAL COMPENSATION ----------- -------------
------------------------------------------- SECURITIES PAYOUTS SAVINGS AND
OTHER ANNUAL UNDERLYING ------------- RETIREMENT
NAME AND PRINCIPAL COMPENSATION OPTIONS LTIP PAYOUTS PLAN ($)
POSITION YEAR SALARY ($) BONUS ($) ($)(1) (#) ($)(2) (3)
- ------------------------- --------- ----------- ----------- ----------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Barry A. Ackerley, 1995 $ 500,016 $ 200,000 N/A 0 $ 0 $ 6,000
Chairman of the Board 1994 $ 500,016 $ 200,000 N/A 0 $ 0 $ 6,000
and Chief Executive 1993 $ 500,016 $ 200,000 N/A 0 $ 0 $ 8,994
Officer
William N. Ackerley, 1995 $ 208,200 $ 30,731 N/A 10,000 $ 0 $ 6,000
President and Chief 1994 $ 187,500 $ 62,500 N/A 0 $ 0 $ 6,000
Operating Officer 1993 $ 150,000 $ 0 N/A 0 $ 0 $ 5,600
Denis M. Curley, 1995 $ 192,500 $ 28,248 N/A 15,000 $ 0 $ 6,000
Executive Vice President 1994 $ 182,500 $ 61,500 N/A 0 $ 0 $ 6,000
and Chief Financial 1993 $ 175,000 $ 0 N/A 0 $ 0 $ 8,000
Officer, Treasurer and
Secretary
Keith W. Ritzmann 1995 $ 106,800 $ 10,168 N/A 2,500 $ 0 $ 4,272
Vice President and 1994 $ 100,700 $ 12,139 N/A 0 $ 0 $ 3,743
Controller 1993 $ 95,000 $ 0 N/A 0 $ 0 $ 3,911
<CAPTION>
NAME AND PRINCIPAL OTHER ($)
POSITION (4)
- ------------------------- -----------
<S> <C>
Barry A. Ackerley, $ 18,706
Chairman of the Board $ 32,373
and Chief Executive $ 26,152
Officer
William N. Ackerley, $ 594
President and Chief $ 486
Operating Officer $ 432
Denis M. Curley, $ 1,566
Executive Vice President $ 1,566
and Chief Financial $ 1,044
Officer, Treasurer and
Secretary
Keith W. Ritzmann $ 552
Vice President and $ 526
Controller $ 286
</TABLE>
- ------------------------------
(1) None of the Named Executives received perquisites or other personal
benefits, in any of the years shown, in an aggregate amount equal to or
exceeding the lesser of (i) $50,000 or (ii) 10% of the executive's total
annual salary and bonus for each year.
(2) The amounts appearing in this column are the value as of December 31, 1995,
1994 and 1993, respectively, of the shares earned under the Company's
Employees Stock Option Plan.
(3) The amounts appearing in this column are Company contributions and credits
on behalf of each named executive under the Company's Savings and Retirement
Plan.
(4) Includes value of life insurance in excess of $50,000 for each of the Named
Executives and imputed interest on indebtedness to the Company in the amount
of $12,388 incurred by Barry Ackerley.
OPTION GRANTS IN LAST FISCAL YEAR
During 1995, options for shares of Common Stock were granted under the
Employees Stock Option Plan to the following Named Executives: William N.
Ackerley, President and Chief Operating Officer -- 10,000 shares; Dennis M.
Curley, Executive Vice President -- 15,000 shares; Keith Ritzmann, Vice
President and Controller -- 2,500 shares.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
This table includes the number of shares covered by both exercisable and
non-exercisable stock options held by each of the Named Executives as of
December 31, 1995. Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any such existing
stock options and the year-end price of the Common Stock. No options were
exercised by named executive officers during 1995.
4
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NO. OF SHARES VALUE OF
UNDERLYING UNEXERCISED IN-
UNEXERCISED THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED ($) UNEXERCISABLE (#) UNEXERCISABLE ($)
- ------------------------------------------------ --------------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C>
Barry A. Ackerley............................... N/A N/A N/A N/A
William N. Ackerley............................. N/A N/A 0/25,000 0/$ 208,125
Denis M. Curley................................. N/A N/A 0/35,000 0/$ 361,250
Keith W. Ritzmann............................... N/A N/A 0/7,500 0/$ 69,375
</TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The Company did not grant any long-term incentive compensation to any of the
Named Executives during 1995.
BOARD REPORT ON EXECUTIVE COMPENSATION
The Company has no separate Compensation Committee. Consequently, all
compensation matters respecting the Company's executive officers is determined
by the Board of Directors acting as a whole.
In determining the compensation to be paid to the Company's executive
officers in 1995, the Board employed compensation policies designed to align the
compensation with the Company's overall business strategy, values and management
initiatives. These policies are intended to reward executives for enhancing the
long-term value of the Company's assets, to support a performance-oriented
environment that rewards achievement of internal goals and recognizes Company
performance compared to performance levels of companies in its industries, and
to attract and retain executives whose abilities are critical to the long-term
success and competitiveness of the Company. The Board believes that by striving
to best obtain these goals the executive officers should enhance shareholder
value for the long-term.
The key components of executive officer compensation are (i) salary, which
is based on factors such as the individual officer's level of responsibility and
comparisons to similar positions in the Company's subsidiaries and comparable
media and advertising companies; (ii) cash bonus awards, which are based on
individual performance and the performance of the Company, measured primarily in
terms of increases in the Company's Operating Cash Flow and accomplishment of
the Company's strategic goals; and (iii) stock option awards which are intended
to increase the motivation for an interest in the Company's long-term success as
measured by the Company's share price.
The Board based the 1995 compensation of the executive officers on the
policies described above. The executives' salaries in 1995 were based on a
variety of factors including the salaries of the executive officers of
comparable media advertising companies. Cash bonuses were paid to executive
officers at year-end, primarily in recognition of the progress made by the
Company during the year in improving its Operating Cash Flow, achieving a record
level of sales and net income and pursuing the Company's overall strategic
goals. Individual performance was also taken into account.
The Board based the 1995 compensation of the Chief Executive Officer on the
policies described above. The Chief Executive Officer's salary in 1995 remained
at the same level as last year's and is believed to be in the lower range of
salaries of the chief executive officers of comparable media advertising
companies. The cash bonus which was paid to the Chief Executive Officer for 1995
was primarily in recognition of the record-level sales and net income as well as
the substantial progress, as
5
<PAGE>
determined by the Board of Directors, made by the Company during the year toward
(i) pursuing the Company's overall strategic goals, which include the
development of a new arena in Seattle and (ii) attaining the Company's long-term
goal of increasing the Company's earnings per share.
<TABLE>
<S> <C>
Barry A. Ackerley, M. Ian G. Gilchrist,
Director Director
Gail A. Ackerley, Director Michel C. Thielen, Director
Richard P. Cooley,
Director
</TABLE>
REPRICING, REPLACEMENT OR CANCELLATION AND REGRANT OF OPTIONS
No adjustments or amendments to the exercise price of stock options
previously awarded to any of the Named Executives were made at any time during
1995.
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors as a whole determines the compensation to be paid the
Company's executive officers as well as the options to be granted any executive
officer at any time. Mr. Barry A. Ackerley, the Company's Chief Executive
Officer, and his wife, Gail A. Ackerley, have served on the Board of Directors
during the past fiscal year.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The SEC requires that the Company include in this Proxy Statement a
line-graph presentation comparing cumulative, five-year shareholder returns on
an indexed basis with the S&P 500 Stock Index or other broad market index
performance and either a nationally recognized industry standard or an index of
peer companies selected by the Company. The Company has selected the S&P 500
Stock Index and the mutual fund, Fidelity Select Multimedia Portfolio, as an
index of peer companies.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ACKERLEY COMMUNICATIONS, INC., S&P 500 INDEX AND FIDELITY
SELECT MULTIMEDIA PORTFOLIO
[CHART]
SAVINGS AND RETIREMENT PLAN
In 1978, the Company adopted its Savings and Retirement Plan (the "Savings
Plan"). The Savings Plan was amended, effective January 1, 1985, to convert it
to one qualified under Section 401(k) of the Internal Revenue Code, as amended.
6
<PAGE>
All employees who have served at least three months with the Company as of
the beginning of a calendar quarter, including employees of subsidiaries of the
Company who are not covered by a collective bargaining agreement, may
participate in the Savings Plan. The Company may waive the exclusion of
employees subject to collective bargaining agreements in individual cases. As of
December 31, 1995, all subsidiaries of the Company were participating in the
Savings Plan.
An eligible employee may elect to have his or her base salary reduced from
2% to 15%, up to the statutory limitation. This amount, plus an equal amount
provided by the Company up to a maximum of 4% of the participant's pre-reduction
monthly salary, is then contributed by the Company to an independently managed
trust established pursuant to the Savings Plan. The Company also may make an
additional voluntary contribution, which is allocated pro rata among all
participating employees based on the amount of their contributions for that same
Savings Plan year.
The Company's contributions vest partially when a participant has completed
three years of service, with the vested portion of the Company's contributions
increasing to 100% upon the employee having completed five years of service. An
employee also becomes fully vested when he or she reaches age 65, becomes
totally disabled or dies. All amounts contributed by an employee, and those
portions of the amounts contributed by the Company that have vested, are payable
in a single lump sum or a qualified joint and survivor annuity upon retirement,
total disability, death or termination of employment with the Company. The
amounts contributed to the Savings Plan by the Company on behalf of the named
executive officers during 1995 is disclosed in the Summary Compensation Table
under the column entitled "All Other Compensation."
STOCK PURCHASE AGREEMENTS
In 1989, the Company entered into amendments to certain Stock Purchase
Agreements dated 1981 with certain of its key employees to sell shares of its
Common Stock at a price per share equal to the fair market value of such stock
at the time the agreements were executed. At any time ten years from the date of
the amended Stock Purchase Agreements, holders may purchase shares, in whole or
in part, by funds which have been credited to escrow accounts by such holders
subject to certain earlier termination provisions. Under certain circumstances,
the Company may have a right of first refusal on the sale of any shares of
Common Stock and Class B Common Stock acquired pursuant to the Stock Purchase
Agreements. In connection with the Class B Common Stock dividend in June 1987,
the Company amended the Stock Purchase Agreements to provide for the
distribution of one share of Class B Common Stock at no extra cost to the holder
for each share of Common Stock subject to the Stock Purchase Agreement at the
time such Common Stock is purchased.
As of December 31, 1995, there was an aggregate of 26,250 shares of Common
Stock and an equal number of shares of Class B Common Stock subject to Stock
Purchase Agreements at a weighted average purchase price per share of $4.00 per
share of Common Stock. During 1995, Stock Purchase Agreements for 41,250 shares
of Common Stock and 41,250 shares of Class B Common Stock were exercised. No
executive officers hold outstanding Stock Purchase Agreements.
STOCK OPTION PLAN
The Company's Employees Stock Option Plan (the "Plan") was approved by the
Board of Directors and the stockholders of the Company in 1983. In 1994, the
Plan was amended, with the approval of the shareholders, to, among other things,
extend the term of the Plan and to increase the number of shares available for
stock option grants. A total of 500,000 shares of Common Stock have been
authorized and reserved for issuance under the Plan.
The Plan provides for the granting to employees, including officers, of
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, and for the granting of nonstatutory stock
options to employees, including officers and directors. The Plan is currently
administered by the Board of Directors, which determines the recipients of
option grants and the terms of such options, including the term of the option,
exercise price, number of shares
7
<PAGE>
subject to the option and the exercisability thereof. No option granted under
the Plan is transferable by the holder other than by will or the laws of descent
and distribution, and each option is exercisable during the lifetime of the
holder only by such holder.
The exercise price of all incentive stock options granted under the Plan
must be at least equal to the fair market value of the Common Stock on the date
of grant. The exercise price of all nonstatutory stock options granted under the
Plan is determined by the Board at its sole discretion. With respect to any
participant who owns stock possessing more than 10% of the voting rights of the
Company's outstanding capital stock ("10% shareholder"), the exercise price of
any incentive stock option granted must equal at least 110% of the fair market
value on the grant date and the maximum term of the option must not exceed five
years. The terms of all options granted under the Plan, other than options
granted to a 10% shareholder, may not exceed ten years.
The Plan grants the Board of Directors the discretion to determine when
options granted thereunder shall become exercisable and when such options will
expire (up to ten years from grant). Generally, such options vest and become
exercisable five years from the date of grant and terminate ten years from the
date of grant, subject to earlier termination due to termination of employment
with the Company. In the event of a merger of the Company with or into another
corporation or a sale of substantially all of the Company's assets, each option
shall be assumed or an equivalent option substituted by the successor
corporation, or the Board of Directors may take such other action as it may
decide, including the acceleration of the exercisability of all outstanding
options.
As of December 31, 1995, the Company had granted options to purchase an
aggregate of 345,000 shares of Common Stock and all of which remain outstanding
at a weighted average exercise price of $5.95 per share, leaving 89,250 shares
of Common Stock available for future grants under the Plan. During 1995, stock
options for 10,000 shares of Common Stock and 10,000 shares of Class B Common
Stock were exercised, stock options for 41,000 shares of Common Stock were
cancelled and new stock options for 150,000 shares of Common Stock were issued.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1990, a corporation owned by the Company's Chairman and Chief
Executive Officer, Barry A. Ackerley, entered into an agreement with a
subsidiary of the Company to provide air transportation services for the Seattle
SuperSonics and other Company purposes. The agreement calls for monthly fees of
approximately $63,000 for such services and may be terminated on December 31,
1998 at the option of either party.
Kimberly Cleworth, who is Barry and Gail Ackerley's daughter, began serving
as the Company's Vice President of Marketing on January 1, 1994 and was paid a
total of $106,000 for the year as compensation for such services.
From time to time the Company advances funds to Mr. Barry Ackerley for his
personal use. Since January 1, 1993, the highest aggregate amount of such loans
was $350,000. For the years ended December 31, 1995, 1994 and 1993, the
aggregate outstanding principal amounts of such loans were $-0-, $150,000 and
$350,000, respectively. Interest on this indebtedness accrues and is imputed at
the same rate as that charged to the Company on its senior bank debt.
ITEM 2 -- APPROVAL OF NONEMPLOYEE-DIRECTORS'
EQUITY COMPENSATION PLAN
On November 14, 1995 the Board of Directors adopted a Nonemployee-Directors'
Equity Compensation Plan ("Directors' Plan") to allow directors who are not
employees of the Company ("Nonemployee Directors") to elect to receive
directors' fees in the form of shares of Common Stock instead of in cash. For
this purpose the Board authorized and reserved for issuance under the Directors'
Plan 100,000 shares of Common Stock.
8
<PAGE>
Under the terms of the Directors' Plan, a Nonemployee Director may elect to
have all or any part of his or her directors' fees, which is payable at the end
of a three-month period ("Quarter"), applied toward the purchase of shares of
Common Stock. To exercise this option, a Nonemployee Director must submit an
irrevocable, written election to the Company six months in advance of the
payment date for directors fees accrued during a Quarter (the "Payment Date").
The purchase price for shares of Common Stock issued pursuant such election is
based on the per share closing price for the Common Stock as reported on the
American Stock Exchange on the last trading day before the Payment Date.
The Board of Directors believes it is in the best interests of the Company
and its shareholders to adopt the Directors' Plan in order to promote the
further alignment of the interests of nonemployee directors with the interests
of the Company shareholders. Such alignment of interests should contribute to
the future success of the Company.
Pursuant to the terms of the Directors' Plan, the Directors' Plan must be
approved by a majority of the shares present or represented and entitled to vote
at the Annual Meeting.
A full copy of the proposed Directors' Plan is attached as Exhibit A to this
Proxy Statement.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
ITEM 3 -- OTHER MATTERS
The Board of Directors knows of no other matters to be brought before this
Annual Meeting. However, if other matters should properly come before the
meeting, it is the intention of the persons named in the Proxy to vote the Proxy
in accordance with the recommendations of management on such matters.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Ernst & Young LLP performed the audit of the consolidated
financial statements for the Company and its subsidiaries for the year ended
December 31, 1995. The Board of Directors has appointed Ernst & Young LLP as
independent auditors of the Company and its subsidiaries for the current year.
Shareholders are not required to take action on this selection. Representatives
of Ernst & Young LLP will be present at the Annual Meeting. They will be given
the opportunity to present a statement if they so desire and will be available
to respond to appropriate questions.
9
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INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual Meeting of
Shareholders of the Company scheduled to be held May 1, 1997 must be received
for inclusion in the Proxy Statement and form of Proxy relating to that meeting
by November 30, 1996.
By Order of the Board of Directors,
--------------------------------------
DENIS M. CURLEY
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, TREASURER AND
SECRETARY
Seattle, Washington
March 25, 1996
THE COMPANY URGES YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO
ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR PROXY. ANY PERSON GIVING A PROXY
MAY REVOKE IT PRIOR TO ITS EXERCISE.
10
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EXHIBIT A
ACKERLEY COMMUNICATIONS, INC.
NONEMPLOYEE-DIRECTORS' EQUITY COMPENSATION PLAN
1. PURPOSE OF THE PLAN
The purpose of this Nonemployee-Directors' Equity Compensation Plan (the
"Plan") is to provide for the optional payment to the nonemployee-directors
of Ackerley Communications, Inc. (the "Company") of directors' fees in
capital stock of the Company in order to encourage stock ownership by such
directors. The objective is to promote the further alignment of the interests
of such directors with the stockholders of the Company and, through such
alignment, promote the long-term profits and growth of the Company.
2. DEFINITIONS
(a) "Share Price" means the closing price per share for Common Stock
reported on the American Stock Exchange on the last trading day before the
Quarter Date.
(b) "Common Stock" means the Company's voting Common Stock, par value $.01
per share.
(c) "Director" means an individual duly elected or chosen as a director of
the Company who is not also an employee of the Company or any of its
subsidiaries.
(d) "Directors' Fees" means the fees earned by the Directors for services
rendered as directors of the Company as such amounts are established by
resolution of the Company Board of Directors from time to time.
(e) "Extraordinary Event" has the meaning set forth in Section 4.
(f) "Quarter" means any of the following consecutive three-month periods:
May through July, August through October, November through January, February
through April.
(g) "Quarter Date" means the date on which Directors' Fees for such Quarter
are payable, which date is the last day of each Quarter with the following
exception: for the Quarter ended April 30, 1996 the Directors' fees are
payable May 15, 1996.
(h) "Rule 16b-3" means the new rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Securities Exchange Act of 1934
on May 1, 1991 (or any successor rule to the same effect), as in effect from
time to time.
(i) "Shares" means shares of Common Stock that are purchased voluntarily in
accordance with Section 3.1.
(j) "Voluntary Amount" has the meaning set forth in Section 3.1(a).
3. PURCHASE OF SHARES
3.1 VOLUNTARY AMOUNT
(a) DIRECTORS' ELECTION. For any Quarter, a Director may elect to have up
to 100% of his or her Directors' Fee payable for such Quarter (a "Voluntary
Amount"), applied to the purchase of Shares pursuant to this Plan. This
election is subject to the following conditions: (i) the Director must
notify the Company in writing of such election not less than six months prior
to the
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end of the Quarter (or such later date as may be permitted under Rule 16b-3)
and (ii) any such election will be irrevocable after the notification
deadline. The Company may use any such Voluntary Amount to purchase shares
of Common Stock to fulfill its obligation to issue Shares to a Director
pursuant to Section 3.1(c).
(c) SHARE ISSUANCE. Promptly following each Quarter Date, the Company will
issue to each Director a number of whole Shares equal to such Director's
Voluntary Amount for such Quarter divided by the Share Price. To the extent
that the application of the foregoing formulas would result in fractional
Shares, no fractional shares of Common Stock will be issued by the Company
pursuant to this Plan. Instead, the Company will pay each Director in cash
any portion of the Voluntary Amount not convertible into whole Shares.
Shares will be fully paid, nonassessable shares of Common Stock. Shares may
be shares of original issuance or treasury shares or a combination of the
foregoing. Shares may also be shares purchased in the public market by the
Company in compliance with applicable federal and state laws. The Company
will pay any fees and commissions incurred in connection with the issuance or
purchase by the Company of shares of Common Stock that are to be Shares and
the transfer of such Shares to Directors.
(d) WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state or local taxes in connection with any cash component
of a Directors' Fee payable to a Director, and the amounts available to the
Company for such withholding are insufficient, it is a condition to the
receipt of any Shares that the Director make arrangements satisfactory to the
Company for the payment of the balance of such taxes required to be withheld,
which arrangements may include relinquishment of Shares. The Company and
Director also may make similar arrangements with respect to the payment of
any other taxes derived from or related to the payment of Shares with respect
to which withholding is not required.
3.2 RESTRICTIONS ON SHARES
(a) DIVIDENDS, VOTING RIGHTS, EXCHANGES, ETC. Except for any restrictions
required by law, a Director on issuance of Shares to him or her has all
rights of a stockholder with respect to such Shares.
(b) RESTRICTIONS ON TRANSFER OF RIGHTS TO SHARES. No rights to Shares may
be assigned, pledged, hypothecated or otherwise transferred by a Director or
any other person, voluntarily, or involuntarily, other than (i) by will or by
the laws of descent and distribution or (ii) pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as amended.
4. AMENDMENT AND TERMINATION
The Board of Directors of the Company may alter or amend this Plan from time
to time or may terminate it in its entirety subject to the exceptions
specified below.
(a) CONSENT OF DIRECTOR. No such action will, without the consent of a
Director, affect the rights in any Shares issued or to be issued to such
Director.
(b) STOCKHOLDER APPROVAL. Without further approval by the stockholders of
the Company no such action will (i) increase the total number of shares of
Common Stock to be issued under this Plan as specified in Section 5 (except
that adjustments and additions expressly authorized by this Section 4 will
not be limited by this Section 4(b)); (ii) change the provisions of Section
3.1(c) that specify the timing of the issuance or the calculation of the
number of Shares to be issued to a Director; or (iii) cause Rule 16b-3 to
become inapplicable to this Plan.
(c) ADJUSTMENTS FOR EXTRAORDINARY EVENTS. The Board of Directors may make or
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<PAGE>
provide for such adjustments in the number and kind of shares of Common Stock
specified in Section 5 as the Company Board of Directors, in its sole
discretion, exercised in good faith, may determine is equitably required to
reflect (i) any stock dividend, stock split, combination of shares,
recapitalization or any other change in the capital structure of the Company;
(ii) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of
assets, issuance of rights or warrants to purchase securities; or (iii) any
other corporate transaction or event having an effect similar to any of the
foregoing (the matters described in clauses (i), (ii) and (iii) (collectively
referred to as an "Extraordinary Event").
5. SHARES SUBJECT TO PLAN
Subject to adjustment as provided in Section 1(d) of this Plan, the total
number of shares of Common Stock which may be issued under this Plan shall be
100,000.
6. PLAN APPROVAL BY STOCKHOLDERS
The Plan must be submitted for approval by the stockholders of the Company.
If such approval has not been obtained by October 31, 1996, this Plan will be
nullified. In such case, all issuances of Shares and deliveries of
certificates therefor will be rescinded and Directors will receive in cash
all Voluntary Amounts previously paid under the Plan without interest.
7. GENERAL PROVISIONS
(a) NO CONTINUING RIGHT AS DIRECTOR. Neither the adoption or operation of
this Plan, nor any document describing or referring to this Plan, or any part
thereof, confers upon any Director any right to continue as director of the
Company or any subsidiary of the Company.
(b) GOVERNING LAW. The provisions of this Plan shall be governed by and
construed in accordance with the laws of the State of Washington.
(c) CASH IF SHARES NOT ISSUED. Pending issuance of the Shares, all
Voluntary Amounts are the property of the Directors and will be paid to them
in cash in the event that the Shares are not issued.
(d) MISCELLANEOUS. Headings are given to the sections of this Plan solely
as a convenience to facilitate reference. Such headings, numbering and
paragraphing are to be deemed material or relevant to the construction of
this Plan or any its provisions. The use of the masculine gender also
includes within its meaning the feminine. The use of the singular also
includes within its meaning the plural, and vice versa.
8. EFFECTIVE DATE
The effective date of this Plan is as of October 31, 1995.
Adopted by the Board of Directors of Ackerley Communication, Inc. on November
14, 1995.
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PROXY
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ACKERLEY COMMUNICATIONS, INC.
PLEASE SIGN AND RETURN IMMEDIATELY
KNOW ALL MEN BY THESE PRESENT, that I, the undersigned Shareholder of
Ackerley Communications, Inc., Seattle, Washington, (the "Company"), do hereby
nominate, constitute and appoint Keith W. Ritzmann and Carmen L. Smith, and each
of them (with full power to act alone), my true and lawful attorney with full
power of substitution, for me and in my name, place and stead to vote all the
Common Stock, including Class B Common Stock, of the Company standing in my name
and on its books on March 22, 1996, at the Annual Meeting of Shareholders to be
held at The Rainier Club, 820 4th Avenue, Seattle, Washington, on Wednesday, May
1, 1996, at 9:00 a.m. Pacific Daylight Savings Time, or at any adjournments
thereof, with all the powers the undersigned would possess if personally
present, as follows:
1. ELECTION OF DIRECTORS. / / FOR all nominees / / WITHHOLD AUTHORITY
The election of the listed below to vote for all
persons listed below to (Except as marked to nominees listed
serve as Directors for the the contrary below): below:
ensuing year.
Barry A. Ackerley Gail A. Ackerley Richard P. Cooley M. Ian G.
Gilchrist Michel C. Thielen
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.
________________________________________
2. APPROVAL OF NONEMPLOYEE-DIRECTORS' EQUITY COMPENSATION PLAN. Approving
the adoption by the Board of Directors of a Nonemployee-Directors' Equity
Compensation Plan providing for the optional payment to nonemployee
directors of directors' fees in Common Stock.
/ / FOR / / AGAINST / / WITHHOLD AUTHORITY
<PAGE>
3. WHATEVER OTHER BUSINESS may properly
be brought before the meeting or any
adjournment thereof.
THIS PROXY CONFERS AUTHORITY TO VOTE
"FOR" AND WILL BE VOTED "FOR" THE
PROPOSITIONS LISTED UNLESS AUTHORITY IS
WITHHELD, IN WHICH CASE THIS PROXY WILL
BE VOTED IN ACCORDANCE WITH THE
SPECIFICATION SO MADE.
Management knows of no other matters
that may properly be, or which are likely
to be brought before the meeting.
However, if any other matters are
properly presented at said meeting, this
proxy shall be voted in accordance with
the recommendations of the management.
The Board of Directors recommends a
vote "FOR" the listed propositions.
DATED , 1996
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE. IF MORE THAN
ONE TRUSTEE, ALL SHOULD SIGN. ALL
JOINT OWNERS MUST SIGN.
