<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant / X /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a.11(c) or Section 240.14a-12
THE ACKERLEY GROUP, INC.
(Name of Registrant as Specified in Charter)
N/A
(Name of Persons Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ X / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
/ / Fee paid previously with preliminary materials
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
(2) Form, Schedule or Registration Statement No.:
N/A
(3) Filing Party:
N/A
(4) Date Filed:
N/A
<PAGE>
March 28, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders of
The Ackerley Group, Inc. (formerly Ackerley Communications, Inc.) (the
"Company"), which will be held at 9:00 a.m., Pacific Daylight Savings Time on
Monday, May 5, 1997, at the 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,
Denis M. Curley
Executive Vice President
Chief Financial Officer,
Treasurer and Secretary
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of The Ackerley Group, Inc. (formerly
Ackerley Communications, Inc.) will be held at The Rainier Club, 820 4th Avenue,
Seattle, Washington, on Monday, May 5, 1997 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. 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 25, 1997 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 4000, 1301 Fifth Avenue, Seattle, Washington, for ten days
before the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
__________________________________
Seattle, Washington Denis M. Curley
March 28, 1997 Executive Vice President and Chief
Financial Officer, Treasurer and Secretary
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>
PROXY STATEMENT
GENERAL
This Proxy Statement and the accompanying Proxy are being first sent or
given to shareholders on or about March 28, 1997, for use in connection with the
Annual Meeting of Shareholders of The Ackerley Group, Inc. (the "Company") to be
held on Monday, May 5, 1997 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 25, 1997, 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 19,813,002 shares of
Common Stock and 11,353,810 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.
1
<PAGE>
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31, 1996
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. Ackerley, 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 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 14,
1997, 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 14, 1997, and by the directors
and executive officers of the Company as a group. All share amounts reflect a
two-for-one stock split that was effective on October 15, 1996.
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF THE COMPANY'S COMMON STOCK
AND CLASS B COMMON STOCK AND PERCENT
OF CLASS BENEFICIALLY OWNED (1)
NAME, AGE AND ---------------------------------------------------------
PRINCIPAL OCCUPATION CLASS B
DURING PAST FIVE YEARS COMMON STOCK PERCENT COMMON STOCK PERCENT
- -------------------------------------------------------------- --------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Barry A. Ackerley, 62 10,779,476(2) 54.4% 11,217,619(2) 99.3%
Chairman and Chief Executive Officer of
the Company; Company Director since 1975
Gail A. Ackerley, 59 10,779,476(2) 54.4% 11,217,619(2) 99.3%
Co-Chairman of the Company
Chairman of Ackerley Corporate Giving
(Company's charitable activities);
Company Director since 1995
Richard P. Cooley, 73 4,631 * -0- *
Retired, Chairman (1988-April 1994) and
Chief Executive Officer (1988-1991),
Seattle-First National Bank;
director, Egghead Software Inc.;
Director since 1995
M. Ian G. Gilchrist, 47 1,491 * -0- *
Managing Director (May 1995-present),
Salomon Brothers Inc.; Managing Director (February 1992-May
1995), CS First Boston Corporation (investment
banking--media/ telecommunications); Company Director since 1995
Michel C. Thielen, 62 1,491 * -0- *
Chairman of the Board and President,
Thielen & Associates (advertising agency); Vice President,
Executive Wings, Inc. (airport operations company); Company
Director since 1979
William N. Ackerley, 36 23,430 * 24,783(4) *
President and Chief Operating Officer
of the Company
Denis M. Curley, 49 2 * -0- *
Executive Vice President and Chief
Financial Officer, Treasurer and Secretary of the Company
Keith W. Ritzmann, 44 802 * 200 *
Vice President and Controller
of the Company
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OF THE COMPANY'S COMMON STOCK
AND CLASS B COMMON STOCK AND PERCENT
OF CLASS BENEFICIALLY OWNED (1)
NAME, AGE AND ---------------------------------------------------------
PRINCIPAL OCCUPATION CLASS B
DURING PAST FIVE YEARS COMMON STOCK PERCENT COMMON STOCK PERCENT
- -------------------------------------------------------------- --------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Gabelli Funds, Inc. (5% shareholder) 2,323,400 11.7% -0- *
One Corporate Center
Rye, NY 10580
All Directors and Executive 10,811,323 54.6% 11,296,602 99.5%
Officers as a group (8 persons)
</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 7,264 shares
of Common Stock and 264 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 10,772,212 shares of Common Stock and 11,271,355 shares of Class B
Common Stock held by Barry A. Ackerley, of which Mrs. Ackerley disclaims
beneficial ownership.
(4) Includes 14,330 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.
Section 16(a) Beneficial Ownership Compliance
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.
On March 8, 1996 and March 11, 1996, Barry A. Ackerley sold an aggregate of
50,000 shares of Common Stock and coverted 50,000 shares of Class B Common Stock
into an equivalent number of shares of Common Stock, pursuant to shareholder
rights granted in the Company's Certificate of Incorporation, on March 12, 1996.
These transactions were reported late on Form 4, filed with the Commission on
October 17, 1996. In addition, Gail A. Ackerley, who is deemed to possess an
indirect ownership interest in Mr. Ackerley's Common Stock and Class B Common
Stock holdings, reported her indirect interest in these transactions late on
Form 4, filed with with the Commission on February 11, 1997.
4
<PAGE>
In September 1996, Richard P. Cooley, M. Ian G. Gilchrist, and Michel C.
Thielen each filed a late report of their purchases of 200 shares of Common
Stock on May 15, 1996 under the Nonemployee Directors' Equity Compensation Plan.
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.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Since the election of directors at the last annual shareholders meeting in
May 1996, the Board of Directors met two times. All directors attended those
meetings of the Board.
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 one time during 1996.
DIRECTORS' FEES
As of May 1996, 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.
NONEMPLOYEE DIRECTORS' EQUITY COMPENSATION PLAN
The Company's Nonemployee-Directors' Equity Compensation Plan (the
"Directors' Plan") was approved by the Board of Directors in 1995 and by the
shareholders in 1996. The purpose of the Directors' Plan is 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. There is a total of 100,000 shares of Common Stock authorized and reserved
for issuance under the Directors' Plan.
Under the terms of the Directors' Plan, a Nonemployee Director may elect to
have all or any part of his or her directors' fees that are payable at the end
of a three-month period ("Quarter") applied toward the purchase of shares of
Common Stock. To exercise this option, Nonemployee Director must submit an
irrevocable written election to the Company six months in advance of the payment
date for directors' fees accrued during the Quarter ("Payment Date"). The
purchase price for shares of Common Stock 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.
5
<PAGE>
As of December 31, 1996, Richard P. Cooley, M. Ian G. Gilchrist, and Michel
C. Thielen have each received 350 shares of Common Stock pursuant to their
respective elections under the Directors' Plan.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
paid or accrued by the Company during the fiscal years ended December 31, 1996,
1995 and 1994, 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 $100,000 for the prior fiscal year (the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
<CAPTION>
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------------- ------------ -------
OTHER SECURITIES
NAME AND ANNUAL UNDERLYING LTIP
PRINCIPAL SALARY BONUS COMPENSATION OPTIONS PAYOUTS
POSITION YEAR ($) ($) ($)(1) (#)(2) ($) (3)
- --------------------------------- --------- ---------- ---------- --------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Barry A. Ackerley, Chairman of 1996 $500,016 $200,000 N/A -0- $-0-
the Board and Chief Executive 1995 $500,016 $200,000 N/A -0- $-0-
Officer 1994 $500,016 $200,000 N/A -0- $-0-
William N. Ackerley, President 1996 $216,010 $25,489 N/A -0- $-0-
and Chief Operating Officer 1995 $208,200 $30,731 N/A 20,000 $-0-
1994 $187,500 $62,500 N/A -0- $-0-
Denis M. Curley, Executive Vice
President and Chief Financial 1996 $200,000 $23,600 N/A -0- $-0-
Officer, Treasurer and 1995 $192,500 $28,248 N/A 30,000 $-0-
Secretary 1994 $182,500 $61,500 N/A -0- $-0-
Keith W. Ritzmann Vice President 1996 $111,000 $10,268 N/A -0- $-0-
and Controller 1995 $106,800 $10,168 N/A 5,000 $-0-
1994 $100,700 $12,139 N/A -0- $-0-
<CAPTION>
ALL OTHER
COMPENSATION
-------------------------
SAVINGS
AND
NAME AND RETIREMENT
PRINCIPAL PLAN ($) OTHER($)
POSITION (4) (5)
- --------------------------------- ----------- -----------
<S> <C> <C>
Barry A. Ackerley, Chairman of $6,000 $ 6,318
the Board and Chief Executive $6,000 $ 18,706
Officer $6,000 $ 32,373
William N. Ackerley, President $6,000 $ 594
and Chief Operating Officer $6,000 $ 486
$6,000
Denis M. Curley, Executive Vice
President and Chief Financial $4,863 $ 1,566
Officer, Treasurer and $6,000 $ 1,566
Secretary $6,000 $ 1,566
Keith W. Ritzmann Vice President $4,440 $ 577
and Controller $4,272 $ 552
$3,743 $ 526
</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) Share amounts reflect an adjustment for the October 15, 1996 2-for-1 stock
split.
(3) The amounts appearing in this column are the value as of December 31, 1996,
1995 and 1994, respectively, of the shares earned under the Company's
Employees Stock Option Plan.
(4) 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.
(5) Includes value of life insurance in excess of $50,000 for each of the Named
Executives and imputed interest on indebtedness to the Company incurred by
Barry Ackerley for the years 1995 and 1994.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
No options for shares of Common Stock were granted to any of the Named
Executives.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
This table includes the number of shares covered by both exercisable and
non-exercisable stock options held by each of the Named Executives as of
December 31, 1996. Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any such existing
stock options and the year-end price of the Common Stock. No options were
exercised by named executive officers during 1996.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
VALUE OF
UNEXERCISED
NO. OF SHARES IN-THE-MONEY
UNDERLYING OPTIONS AT
UNEXERCISED OPTIONS FISCAL
AT FISCAL YEAR-END
YEAR-END EXERCISABLE/
SHARES ACQUIRED VALUE EXERCISABLE/ UNEXERCISABLE
NAME ON EXERCISE REALIZED ($) 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-/50,000 -0-/414,375
Denis M. Curley............................. N/A N/A -0-/70,000 -0-/650,000
Keith W. Ritzmann........................... N/A N/A -0-/15,000 -0-/131,250
</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 1996.
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 1996, 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-
7
<PAGE>
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 1996 compensation of the executive officers on the
policies described above. The executives' salaries in 1996 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 1996 compensation of the Chief Executive Officer on
the policies described above. The Chief Executive Officer's salary in 1996
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 1996 was primarily in recognition of another year of record-level
sales and net income as well as the substantial progress, as determined by
the Board of Directors, made by the Company during the year toward pursuing
the Company's overall strategic goals and attaining the Company's long-term
goal of increasing the Company's earnings per share.
Barry A. Ackerley, Director M. Ian G. Gilchrist, Director
Gail A. Ackerley, Director Michel C. Thielen, Director
Richard P. Cooley, Director
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
1996.
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
8
<PAGE>
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.
The following chart compares total cumulative shareholder return for $100
invested in the Common Stock of the Company on December 31, 1991 with the
cumulative total return of the S&P 500 Stock Index and Fidelity Select
Multimedia Portfolio for the five most recently completed fiscal years.
[GRAPHIC]
9
<PAGE>
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.
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, 1996, 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 1996 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
10
<PAGE>
share of Common Stock subject to the Stock Purchase Agreement at the time
such Common Stock is purchased.
As of December 31, 1996, there was an aggregate of 52,500 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 $2.00 per
share of Common Stock. During 1996, no rights to purchase Common Stock or Class
B Common Stock under any Stock Purchase Agreement 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 1,000,000 shares of Common Stock (as adjusted to
reflect the October 15, 1996 stock split) 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 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
11
<PAGE>
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, 1996, the Company had granted options to purchase an
aggregate of 658,000 shares of Common Stock and all of which remain outstanding
at a weighted average exercise price of $2.96 per share, leaving 260,250 shares
of Common Stock available for future grants under the Plan. During 1996, stock
options for 32,000 shares of Common Stock (as adjusted for the October 1996
stock split) were exercised.
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 $108,575 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, 1994, the highest aggregate amount of such loans
was $350,000. For the years ended December 31, 1996, 1995 and 1994, the
aggregate outstanding principal amounts of such loans were $-0-, $-0- and
$150,000, 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--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, 1996. 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.
12
<PAGE>
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 4, 1998 must be
received for inclusion in the Proxy Statement and form of Proxy relating to
that meeting by November 30, 1997.
By Order of the Board of Directors,
/s/ Denis M. Curley
------------------------------------------
DENIS M. CURLEY
Seattle, Washington Executive Vice President and Chief
March 28, 1997 Financial Officer, Treasurer and Secretary
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.
13
<PAGE>
PROXY
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE ACKERLEY GROUP, INC.
PLEASE SIGN AND RETURN IMMEDIATELY
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned Shareholder of The
Ackerley Group, Inc., Seattle, Washington ("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 25, 1997, at the Annual Meeting of Shareholders to be held at
The Rainier Club, 820 Fourth Avenue, Seattle, Washington, on Monday, May 5,
1997, at 9:00 a.m. Pacific Daylight Time, or at any adjournments thereof, with
all the powers the undersigned would possess if personally present, as follows:
1. ELECTION OF DIRECTORS. The election of the persons listed below to serve
as Directors for the ensuing year.
FOR all nominees listed below (Except as WITHHOLD AUTHORITY
marked to the contrary below): to vote for all nominees
listed below:
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. 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 the meeting, this proxy shall be voted in accordance with
the recommendations of the management.
The Board of Directors recommends that you "FOR" the listed propositions.
DATED_________________________, 1997
____________________________________
____________________________________
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.
