<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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
------------------------
METROMEDIA INTERNATIONAL GROUP, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is 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:
2) Form, Schedule or Registration No.:
3) Filing Party:
4) Date Filed:
<PAGE>
<TABLE>
<S> <C>
[LOGO] ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073-2137
</TABLE>
April 9, 1998
Dear Stockholder:
On behalf of the Board of Directors, I wish to extend to you a cordial
invitation to attend the Annual Meeting of Stockholders of Metromedia
International Group, Inc. ("MMG"), which will be held on the Concourse Level at
1285 Avenue of the Americas, New York, New York 10019 at 9:00 a.m., Eastern
Standard time, on May 13, 1998. I look forward to greeting as many stockholders
as possible at the Annual Meeting.
At the Annual Meeting, you will be asked to vote on proposals: (i) to elect
four Class III Directors for a three year term ending in the year 2001; (ii) to
ratify the selection of KPMG Peat Marwick LLP as MMG's independent accountants
for the year ending December 31, 1998; and (iii) to consider and vote upon a
proposal submitted by a Stockholder of MMG to amend the Company's Certificate of
Incorporation to allow stockholders of MMG to take action by written consent,
and to call special meetings and to vote on any other matters that may properly
come before the Annual Meeting.
It is important that your shares be represented at the Annual Meeting,
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy promptly. If you later decide to attend the Annual
Meeting, you may revoke your proxy and vote in person.
Thank you for your time and consideration.
Sincerely,
Stuart Subotnick
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
------------------------
ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NEW JERSEY 07073-2137
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1998
------------------------
TO THE STOCKHOLDERS OF
METROMEDIA INTERNATIONAL GROUP, INC.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (the "Annual
Meeting") of Metromedia International Group, Inc., a Delaware corporation
("MMG"), will be held on May 13, 1998, at 9:00 a.m., Eastern Standard time, on
the Concourse Level, 1285 Avenue of the Americas, New York, New York 10019 for
the purpose of considering and acting upon the following:
1. The election of four (4) members to MMG's Board of Directors to serve a
three-year term as Class III Directors.
2. The ratification of the selection of KPMG Peat Marwick LLP as MMG's
independent accountants for the year ending December 31, 1998.
3. The proposal submitted by a stockholder of the Company to amend the
Company's Certificate of Incorporation to allow stockholders of MMG to
take action by written consent and to call special meetings; and
4. The transaction of such other business as may properly come before the
Annual Meeting or any adjournment thereof. The Board of Directors is not
aware of any other business that will be presented for consideration at
the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" EACH OF PROPOSALS NO. 1 AND NO. 2 AND "AGAINST" PROPOSAL NO. 3 TO BE
PRESENTED TO MMG STOCKHOLDERS AT THE MMG ANNUAL MEETING.
Only stockholders of record at the close of business on March 27, 1998, will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. The Annual Meeting may be adjourned from time to time without notice
other than by announcement at the Annual Meeting. A list of stockholders
entitled to vote at the Annual Meeting will be available for inspection by any
stockholder, for any reason germane to the Annual Meeting, during ordinary
business hours during the ten days prior to the Annual Meeting at One
Meadowlands Plaza, East Rutherford, New Jersey 07073-2137.
By Order of the Board of Directors.
Arnold L. Wadler
Secretary
East Rutherford, New Jersey
April 9, 1998
<PAGE>
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS OF
THE NUMBER OF SHARES YOU HOLD IN ORDER THAT A QUORUM MAY BE ASSURED, WHETHER OR
NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON. PLEASE COMPLETE, SIGN, DATE
AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN ENVELOPE (TO WHICH NO
POSTAGE NEED BE AFFIXED BY THE SENDER IF MAILED WITHIN THE UNITED STATES). IF
YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT
NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE SIGNED AND RETURNED TO ASSURE THAT
ALL OF YOUR SHARES WILL BE VOTED. THE PROXY SHOULD BE SIGNED BY ALL REGISTERED
HOLDERS EXACTLY AS THE STOCK IS REGISTERED.
<PAGE>
METROMEDIA INTERNATIONAL GROUP, INC.
------------------------
ONE MEADOWLANDS PLAZA
EAST RUTHERFORD, NJ 07073-2137
------------------------
PROXY STATEMENT
FOR AN ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1998
------------------------
This Proxy Statement is being furnished to the holders of shares of common
stock, par value $1.00 per share (the "Common Stock"), of Metromedia
International Group, Inc., a Delaware corporation ("MMG" or the "Company") in
connection with the solicitation of proxies by the Board of Directors of MMG for
use at the Annual Meeting of the Stockholders of MMG to be held at 9:00 a.m.
Eastern Standard time, on Wednesday, May 13, 1998 on the Concourse Level, 1285
Avenue of the Americas, New York, New York 10019 (the "Annual Meeting"), and any
adjournments of the Annual Meeting. This Proxy Statement and the accompanying
proxy card, Notice of Annual Meeting of Stockholders and the Exhibits, if any,
are first being mailed to the stockholders of the Company on or about April 9,
1998.
INFORMATION REGARDING THE ANNUAL MEETING
PROPOSALS. At the Annual Meeting, MMG Stockholders will be asked (i) to
vote upon the election of four (4) members to MMG's Board of Directors to serve
a three-year term as Class III Directors (Proposal 1), (ii) to vote upon the
ratification of the selection of KPMG Peat Marwick LLP as MMG's independent
accountants for the year ending December 31, 1998 (Proposal 2), (iii) to
consider and vote upon a proposal submitted by a stockholder of the Company, to
amend the Company's Certificate of Incorporation (the "Charter Amendment") to
allow stockholders of MMG to take action by written consent and to call special
meetings (Proposal 3), and (iv) to vote upon the transaction of such other
matters as may properly come before the Annual Meeting.
The Board of Directors of MMG knows of no business that will be presented
for consideration at the Annual Meeting other than the matters described in this
Proxy Statement.
RECORD DATE; QUORUM. Only holders of record of Common Stock as of the close
of business on March 27, 1998 (the "Record Date") will be entitled to notice of
and to vote at the Annual Meeting. As of the Record Date, there were 68,978,294
shares of Common Stock outstanding and entitled to vote at the Annual Meeting,
held by approximately 7,394 stockholders of record, with each share entitled to
one vote. The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum at the Annual
Meeting. Except with respect to broker non-votes, the consequences of which are
described below, shares of Common Stock represented by proxies marked "ABSTAIN"
for any proposal presented at the Annual Meeting and shares of Common Stock held
by persons in attendance at the Annual Meeting who abstain from voting on any
such proposal will be counted for purposes of determining the presence of a
quorum but shall not be voted for or against such proposal. Because of the vote
required (see below) to approve the proposals presented at the Annual Meeting,
abstentions will have the effect of a vote against such proposal (other than the
election of directors). Shares as to which a broker indicates it has no
discretion to vote and which are not voted will be considered not present at
such meeting for purposes of proposals presented at the Annual Meeting. Because
of the vote required to approve the Charter Amendment, broker non-votes with
respect to such proposals will have the effect of a vote against the Charter
Amendment and because of the vote required to approve the other proposals at the
Annual Meeting, broker non-votes will have no effect on the outcome and the vote
on any of such other proposals. With respect to the election of directors,
abstentions and broker non-votes will be disregarded and will have no effect on
the vote.
VOTE REQUIRED. The affirmative vote of the holders of a majority of shares
of Common Stock present in person or represented by proxy at the Annual Meeting
will be required to approve and adopt each of the matters identified in this
Proxy Statement as being presented to holders of shares of Common Stock at the
Annual Meeting (other than the Charter Amendment and the election of directors),
each of which will be
<PAGE>
voted upon separately at the Annual Meeting. The affirmative vote of the holders
of a majority of all of the issued and outstanding shares of Common Stock
(whether or not represented in person or by proxy at the Annual Meeting) is
required to approve the Charter Amendment. The affirmative vote of the holders
of a plurality of shares of Common Stock present in person or represented by
proxy at the Annual Meeting will be required to elect each of the Class III
Directors to MMG's Board of Directors.
Stockholders who hold their shares through an intermediary must provide
instructions on voting as requested by their banks or brokers. Votes cast by
proxy or in person at the Annual Meeting will be tabulated by one or more
inspectors of election appointed by the Board of Directors. These inspectors of
election will also determine whether a quorum is present for the transaction of
business.
PROXIES. All properly executed proxy cards delivered pursuant to this
solicitation and not revoked will be voted at the Annual Meeting in accordance
with the directions given. In voting by proxy with regard to the election of
directors, MMG Stockholders may vote in favor of all nominees, withhold their
votes as to all nominees or withhold their votes as to specific nominees. With
regard to other proposals, MMG Stockholders may vote in favor of each proposal
or against each proposal, or in favor of some proposals and against others, or
may abstain from voting on any or all proposals. Stockholders should specify
their respective choices on the accompanying proxy card. If no specific
instructions are given with regard to the matters to be voted upon, the shares
of Common Stock represented by a signed proxy card will be voted "FOR" each of
Proposals 1 and 2 and "AGAINST" Proposal 3 listed on the proxy card. If any
other matters properly come before the Annual Meeting, the persons named as
proxies will vote upon such matters according to their judgment.
The presence, in person or by proxy, of a majority of the outstanding shares
of Common Stock is necessary to constitute a quorum at the Annual Meeting. Each
of the proposals set forth in this Proxy Statement will be voted upon separately
at the Annual Meeting. The affirmative vote of the holders of a majority of all
of the issued and outstanding shares of Common Stock (whether or not represented
in person or by proxy at the Annual Meeting) is also required to approve
Proposal No. 3. The affirmative vote of the holders of a plurality of shares of
Common Stock present in person or represented by proxy at the Annual Meeting
will be required to elect each of the Class III Directors to MMG's Board of
Directors pursuant to Proposal No. 1. The affirmative vote of the holders of a
majority of shares of Common Stock present in person or represented by proxy at
the Annual Meeting will be required to approve and adopt Proposal No. 2. For
these reasons, it is important that all shares are represented at the Annual
Meeting, either in person or by proxy.
All proxy cards delivered pursuant to this solicitation are revocable at any
time prior to the Annual Meeting at the option of the persons executing them by
giving written notice to the Secretary of MMG, by delivering a later dated proxy
card or by voting in person at the Annual Meeting. All written notices of
revocation and other communications with respect to revocations of proxies
should be addressed to: Metromedia International Group, Inc., One Meadowlands
Plaza, East Rutherford, NJ 07073-2137, Attention: Arnold L. Wadler, Secretary.
Proxies will initially be solicited by MMG by mail, but directors, officers
and selected employees may solicit proxies from Stockholders personally or by
telephone, facsimile or other forms of communication. Such directors, officers
and employees will not receive any additional compensation for such
solicitation. MMG will also request brokerage houses, nominees, fiduciaries and
other custodians to forward soliciting materials to beneficial owners, and MMG
will reimburse such persons for their reasonable expenses incurred in doing so.
All expenses incurred in connection with the solicitation of proxies will be
borne by MMG.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" PROPOSALS NO. 1 AND NO. 2 AND "AGAINST" PROPOSAL NO. 3 TO BE PRESENTED TO
MMG STOCKHOLDERS AT THE MMG ANNUAL MEETING.
2
<PAGE>
The Common Stock is listed on the American Stock Exchange ("AMEX") under the
symbol "MMG." On March 27, 1998, the closing sale price for the Common Stock as
reported by the AMEX was $14 7/8 per share.
This Proxy Statement and the accompanying proxy card are being mailed to the
stockholders of the Company on or about April 8, 1998.
The date of this Proxy Statement is April 8, 1998.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected without charge at, and copies
thereof may be obtained at prescribed rates from, the public reference
facilities of the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices, at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center,
Suite 1300, New York, New York 10048. The Commission maintains a Web site that
contains reports, proxy and information statements, and other information
regarding registrants (such as the Company) that file electronically with the
Commission. The address of such site is: http://www.sec.gov. In addition, the
Common Stock is traded on the AMEX, and copies of reports, proxy statements and
other information can be inspected at the offices of the AMEX, 86 Trinity Place,
New York, New York 10006.
SPECIAL NOTE REGARDING FORWARD--LOOKING STATEMENTS
Certain statements in this Proxy Statement constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Reform Act") certain, but not necessarily all of such forward-looking
statements can be identified by the use of forward-looking terminology, such as
"believes," "inspects," "may," "will," "should" or "anticipates" or the negative
thereof or other variations thereon or comparable terminology. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions, which will, among other things, impact
demand for the Company's products and services; industry capacity, which tends
to increase during strong years of the business cycle; changes in public taste,
industry trends and demographic changes; competition from other communications
companies, which may affect the Company's ability to generate revenues;
political, social and economic conditions and laws, rules and regulations,
particularly in Eastern Europe, the republics of the former Soviet Union, the
People's Republic of China ("China") and other selected markets, which may
affect the Company's results of operations; timely completion of construction
projects for new systems for the joint ventures in which the Company has
invested; developing legal structures in Eastern Europe, the republics of the
former Soviet Union, China and other selected emerging markets, which may affect
the Company's results of operations; cooperation of local partners for the
Company's communications investments in Eastern Europe, the republics of the
former Soviet Union, China and other selected emerging markets; which may affect
the Company's results of operations; cooperation of local partners for the
Company's communications investments in Eastern Europe, the republics of the
former Soviet Union, China and other selected emerging markets; exchange rate
fluctuations; license renewals for the Company's communications investments in
Eastern Europe, the republics of the former Soviet Union, China and other
selected emerging markets; the loss of any significant customers; changes in
business strategy or development plans quality of management; availability of
qualified personnel; changes in, or the failure to comply with, government
regulations; and other factors referenced in this Proxy Statement. The Company
does not undertake, and specifically declines, any obligation to release
publicly the results of any revisions which
3
<PAGE>
may be made to any forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of the Record Date, certain information
regarding each person (including any "group" as that term is used in Section
13(d)(3) of the Exchange Act) known (based solely upon filings with the
Commission prior to the date hereof pursuant to Sections 13(d) or 13(g) of the
Exchange Act) to own beneficially (as such term is defined in Rule 13d-3 under
the Exchange Act) more than 5% of the outstanding Common Stock. In accordance
with the rules promulgated by the Commission, such ownership includes shares
currently owned as well as shares which the named person has the right to
acquire beneficial ownership of within 60 days, including, but not limited to,
shares which the named person has the right to acquire through the exercise of
any option, warrant or right, or through the conversion of a security.
Accordingly, more than one person may be deemed to be a beneficial owner of the
same securities.
<TABLE>
<CAPTION>
NUMBER OF SHARE OF
COMMON STOCK PERCENTAGE OF
BENEFICIALLY OWNED OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER (1) COMMON STOCK
- ---------------------------------------------- -------------------- -------------
<S> <C> <C>
John W. Kluge, Stuart Subotnick and Metromedia 18,331,228(2) 26.6%
Company.....................................
One Meadowlands Plaza
East Rutherford, NJ 07073
Snyder Capital Management, L.P................ 5,242,300(3) 7.6%
350 California Street, Suite 1460
San Francisco, California 94104-1436
Dietche & Field Advisors, Inc................. 3,398,000(4) 5.39%
437 Madison Avenue, 28th Floor
New York, New York 10022
</TABLE>
- ------------------------
(1) Unless otherwise indicated by footnote, the named persons have sole voting
and investment power with respect to the shares of Common Stock beneficially
owned.
(2) Metromedia Company is a Delaware general partnership owned and controlled by
John W. Kluge and Stuart Subotnick, each of whom is a director of MMG. The
amount set forth in the table above includes 12,415,455 shares beneficially
owned by Mr. Kluge and Mr. Subotnick beneficially through Metromedia Company
(7,989,206) and Met Telcell, Inc. ("Met Telcell") (4,426,249), a corporation
owned and controlled by Messrs. Kluge and Subotnick, and 4,604,548 and
451,225 shares of Common Stock owned directly by a trust affiliated with Mr.
Kluge and by Mr. Subotnick, respectively. The amount also includes options
to acquire 860,000 shares exercisable within 60 days of the date hereof.
(3) Pursuant to a report on Schedule 13G filed with the Commission on February
19, 1998 by Snyder Capital Management, L.P.
(4) Pursuant to a report on Schedule 13G filed with the Commission on August 5,
1997 by Dietche & Field Advisers, Inc.
The foregoing information is based on a review, as of the Record Date, by
MMG of statements filed with the Commission under Sections 13(d) and 13(g) of
the Exchange Act. To the best knowledge of MMG, except as set forth above, no
person owns beneficially more than 5% of the outstanding Common Stock.
4
<PAGE>
SECURITIES BENEFICIALLY OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of Common Stock as
of the Record Date with respect to (i) each director and director nominee of
MMG, (ii) each executive officer named in the Summary Compensation Table under
"Executive Compensation" and (iii) all directors and executive officers of MMG
as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE OF
COMMON STOCK OUTSTANDING
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) COMMON STOCK
- ------------------------- ------------------------ --------------------
<S> <C> <C>
John P. Imlay, Jr........ 40,000(2)(8) *
Clark A. Johnson......... 85,500(3)(8) *
John W. Kluge............ 17,450,003(2)(4)(5) 25.3%
Silvia Kessel............ 153,085(6) *
Robert A. Maresca........ 45,000(7) *
Carl E. Sanders.......... 71,497(2)(8)(9) *
Vincent D. Sasso, Jr..... 30,000(2) *
Richard J. Sherwin....... 912,605(10) 1.3%
Stuart Subotnick......... 13,076,680(2)(5)(11) 18.9%
Arnold L. Wadler......... 165,415(6) *
Leonard White............ 10,000(8) *
All Directors and
Officers as a group (10
persons)............... 19,554,330 28.3%
</TABLE>
- ------------------------
* Holdings do not exceed one percent of the total outstanding shares of Common
Stock.
(1) Unless otherwise indicated by footnote, the named individuals have sole
voting and investment power with respect to the shares of Common Stock
beneficially owned.
(2) Includes options to acquire 30,000 shares of Common Stock issued under the
Metromedia International Group, Inc. 1996 Incentive Stock Plan (the "1996
Stock Plan") excercisable within 60 days from the date hereof. The 1996
Stock Plan was approved by the Company's stockholders at the 1996 Annual
Meeting of Stockholders of the Company.
(3) Includes 10,000 shares subject to purchase within 60 days of the date hereof
under the Company's 1991 Non-Employee Director Stock Option Plan (the "1991
Stock Plan") and 5,000 shares subject to purchase within 60 days of the date
hereof under the Company's 1996 Stock Plan.
(4) Represents 12,415,455 shares beneficially owned through Metromedia Company
(7,989,206) and Met Telcell, (4,426,249), a corporation owned and controlled
by Messrs. Kluge and Subotnick, and 4,604,548 shares of Common Stock owned
directly by a trust affiliated with Mr. Kluge.
(5) Includes options to acquire 400,000 shares of Common Stock, exercisable
within 60 days of the date hereof.
(6) Includes options to acquire 150,000 shares under the 1996 Stock Plan.
(7) Includes options to acquire 45,000 shares of Common Stock under 1996 Stock
Plan.
(8) Includes options to acquire 10,000 shares of Common Stock issued on March
26, 1997 under the 1996 Stock Plan.
(9) Includes options to acquire 10,000 shares of Common Stock under the 1991
Stock Plan.
(10) Includes options for 657,917 shares of Common Stock exercisable within 60
days of the date hereof at an exercise price equal to $1.08 per share.
(11) Represents 12,415,455 shares beneficially owned through Metromedia Company
and Met Telcell and 231,225 shares owned directly by Mr. Subotnick.
5
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS OF MMG
The Board of Directors of MMG, which presently consists of nine members, is
divided into three classes. The Class I Directors were elected for a term
expiring at the annual meeting of stockholders to be held in 1999, the Class II
Directors were elected for a term expiring at the annual meeting of stockholders
to be held in 2000, and the Class III Directors were elected for a term expiring
at the Annual Meeting. Members of each class hold office until their successors
are elected and qualified. At each succeeding annual meeting of the stockholders
of MMG, the successors of the class of directors whose term expires at that
meeting shall be elected by a plurality vote of all votes cast at such meeting
and will hold office for a three-year term. The Class I Directors, whose term
expires at the Annual Meeting of Stockholders to be held in 1999, are John W.
Kluge, Stuart Subotnick and John P. Imlay, Jr. The Class II Directors, whose
term expires at the Annual Meeting of Stockholders to be held in 2000, are
Richard J. Sherwin and Leonard White. The Class III Directors, whose term
expires at the Annual Meeting, are Silvia Kessel, Carl E. Sanders, Arnold L.
Wadler and Clark A. Johnson.
For more information regarding each of MMG's directors, including
biographical information, see "PROPOSAL NO. 1 -- ELECTION OF DIRECTORS."
MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
The Board of Directors held four regular meetings and two special meetings
during 1997. In addition, the Board of Directors (including the Executive
Committee) took action by unanimous written consent thirteen times in 1997. All
directors attended at least 75% of the aggregate total number of meetings of the
Board of Directors and all committees of the Board of Directors on which they
served.
The Board of Directors has delegated certain functions to the following
standing committees:
THE EXECUTIVE COMMITTEE. The Executive Committee is authorized to exercise,
to the extent permitted by law, all of the powers of the Board of Directors in
the management and affairs of the Company. The Executive Committee took action
by unanimous written consent twelve times in 1997. The current members of the
Executive Committee are Messrs. Kluge and Subotnick.
THE AUDIT COMMITTEE. The Audit Committee is responsible for (a) reviewing
the professional services and independence of MMG's independent auditors and the
scope of the annual external audit recommended by the independent auditors, (b)
ensuring that the scope of the annual external audit is sufficiently
comprehensive, (c) reviewing, in consultation with MMG's independent auditors
and MMG's finance and accounting departments, the plan and results of the annual
external audit, the adequacy of MMG's internal control systems and the results
of MMG's internal audit and (d) reviewing with management and MMG's independent
auditors MMG's annual and quarterly financial statements, financial reporting
practices and the results of such external audit. The Audit Committee met twice
during 1997. The current members of the Audit Committee are Messrs. Imlay,
Johnson and White.
THE COMPENSATION COMMITTEE. The Compensation Committee's functions are to
review, approve, recommend and report to the Board of Directors on matters
specifically relating to the compensation of MMG's executive officers and other
key executives and to administer MMG's stock option plans. The Compensation
Committee held three meetings during 1997. In addition, the Compensation
Committee took action by unanimous written consent one time during 1997. The
current members of the Compensation Committee are Messrs. Sanders, Imlay,
Johnson and White.
THE NOMINATING COMMITTEE. The Nominating Committee's principal function is
to identify candidates and recommend to the Board of Directors nominees for
membership on the Board of Directors. The Nominating Committee expects normally
to be able to identify from its own resources the names of qualified nominees,
but it will accept from stockholders recommendations of individuals to be
considered
6
<PAGE>
as nominees, provided MMG's Stockholders follow procedures specified in MMG's
By-laws. These procedures provide that, in order to nominate an individual to
the Board of Directors, an MMG Stockholder must provide timely notice of such
nomination in writing to the Secretary of MMG and a written statement by the
candidate of his or her willingness to serve. Such notice must include the
information required to be disclosed in solicitations for proxies for election
of directors pursuant to Regulation 14A under the Exchange Act, along with the
name, record address, class and number of shares of common stock beneficially
owned by the stockholder giving such notice. To be timely, notice must be
received by MMG not less than 60 days nor more than 90 days prior to the first
anniversary of the date of MMG's annual meeting for the preceding year;
PROVIDED, HOWEVER, that in the event the date of the annual meeting of
stockholders is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, such notice must be received within 10 days
following public disclosure by MMG of the date of the annual or special meeting
at which directors are to be elected. For purposes of this notice requirement,
disclosure shall be deemed to be first made when disclosure of such date of the
annual or special meeting of stockholders is first made in a press release
reported by the Dow Jones News Service, Associated Press or other comparable
national news service, or in a document which has been publicly filed by MMG
with the Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
Any such nominations should be submitted in writing to MMG, One Meadowlands
Plaza, East Rutherford, New Jersey 07073-2137, Attention: Arnold L. Wadler,
Secretary. The Nominating Committee held one meeting in 1997. The current
members of the Nominating Committee are Messrs. Kluge and Wadler and Ms. Kessel.
COMPENSATION OF DIRECTORS
During 1997, each director of the Company who was not employed by the
Company or affiliated with Metromedia Company (the "Non-Employee Directors")
received a $2,000 monthly retainer plus a separate attendance fee for each
meeting of the Board of Directors or committee of the Board of Directors in
which such director participated. During 1997, the attendance fees were $1,200
for each meeting of the Board of Directors attended by a Non-Employee Director
in person and $500 for each meeting of the Board of Directors in which a
Non-Employee Director participated by conference telephone call. Members of
committees of the Board of Directors are paid $500 for each meeting attended.
Prior to December 13, 1995, Non-Employee Directors were entitled to receive
options to purchase shares of the Company's Common Stock under the Company's
1991 Non-Employee Director Stock Option Plan (as amended, the "Director Plan").
Under the Director Plan, each Non-Employee Director who was a director of the
Company on August 3, 1992 was granted an option to purchase 10,000 shares of
Common Stock at an exercise price of $11.875, the closing price of the Common
Stock on the trading day immediately preceding the date of grant. Options
granted to these Non-Employee Directors became fully vested as to all 10,000
shares upon approval of certain amendments to the Director Plan at the Company's
1993 Annual Meeting of Stockholders.
The Director Plan further provided that each person who became a
Non-Employee Director of the Company after August 3, 1992 would receive an
option to purchase 10,000 shares of the Company's Common Stock on the day such
director is elected as a director, at an exercise price equal to the closing
price of the Common Stock on the trading day preceding such director's election.
Options granted to these Non-Employee Directors became fully vested and
exercisable as to all 10,000 shares on March 31 in the year after the date the
Non-Employee Director was elected, provided the Company had net income for the
year in which the Non-Employee Director was elected or earnings equal to or
better than budgeted results for such year.
All options granted under the Director Plan have a term of ten years. The
Director Plan had originally been scheduled to terminate on June 27, 2001.
However, at a meeting of the Board of Directors held on December 13, 1995, the
Board of Directors terminated the Director Plan. Options outstanding as of
December 13, 1995 are unaffected by the termination of the Director Plan.
7
<PAGE>
On August 29, 1996, the MMG Stockholders adopted the 1996 Metromedia
International Group, Inc. Incentive Stock Plan (the "1996 Stock Plan"). Pursuant
to the 1996 Stock Plan, at a Compensation Committee meeting held on January 31,
1996, each director (other than Messrs. Wadler, Sherwin, White and Ms. Kessel)
was granted options to purchase 50,000 shares of the Company's Common Stock at
an exercise price of $12.75, the closing price of the Common Stock on the
trading day immediately preceding the date of grant. On March 26, 1997, all such
options were cancelled and reissued at an exercise price of $9.31 (See "Ten Year
Option/SAR Repricing" table below) and 20,000 of such shares were vested as of
that date. An additional 10,000 shares vested on March 26, 1998. See Footnote 2
of "INFORMATION REGARDING MMG -- Options/SAR Grants During the Year Ended
December 31, 1997". In addition, on March 26, 1997, Messrs. Imlay, Johnson and
Sanders were granted options to purchase an additional 25,000 shares of the
Company's Common Stock at an exercise price of $9.31 per share of which 5,000
shares vested as of the grant date and the remainder vest ratably over a four
year period. In November 1997 the 1996 Stock Plan was amended and restated to,
among other things, (i) increase the maximum number of options which may be
granted to any optionee to one million, (ii) permit the Compensation Committee
to grant non-tandem stock options and stock appreciation rights, (iii) more
narrowly circumscribe the "change of control" provisions of the 1996 Stock Plan
and (iv) make a number of technical amendments to the 1996 Stock Plan.
EXECUTIVE COMPENSATION
The Company's Chief Executive Officer and MMG's other most highly
compensated executive officers are employed and paid by Metromedia Company, and
Metromedia Company provides the services of such executive officers to MMG
pursuant to the Management Agreement (See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS--MMG's Relationship with Metromedia Company"). A portion of such
management fee has been allocated by the Company to the payment of the salaries
of the Company's Chief Executive Officer and the Company's executive officers
based upon the services provided to the Company by such officers on behalf of
Metromedia Company.
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth information on
compensation awarded to, earned by or paid to the Chief Executive Officer and
MMG's other most highly compensated executive officers (the "Named Executive
Officers") for services rendered to MMG and its subsidiaries during the fiscal
year ended December 31, 1997, December 31, 1996, and December 31, 1995. Messrs.
Subotnick, Wadler, Maresca, Sasso and Ms. Kessel were employed and paid by
Metromedia Company and amounts shown below with respect to each of them reflect
the portion of their compensation paid by MMG to Metromedia Company in respect
of such executive's services to MMG, pursuant to the Management Agreement. The
compensation expensed by the Company and paid to Metromedia Company pursuant to
the Management Agreement includes payment for salary only and does not include
any payment relating to bonus or other compensation. No other amounts were paid
by MMG to such Named Executive Officers during 1997.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AWARDS
NUMBER OF ALL
NAME AND OTHER SECURITIES OTHER
PRINCIPAL ANNUAL UNDERLYING COMPENS.
POSITION YEAR SALARY($) BONUS($) COMPENSATION($) STOCK OPTIONS ($)
- ------------------------------ ---- --------- -------- --------------- ------------- --------
Stuart Subotnick.............. 1997 $ 750,000 $-- -- 1,050,000 --
President and Chief Executive 1996 $ 55,328(1) $-- -- 50,000 --
Officer 1995 $ -- -- -- --
Silvia Kessel................. 1997 $ 375,000 -- -- 250,000 --
Executive Vice President and 1996 $ 350,000 -- -- 250,000 --
Chief Financial Officer 1995 -- -- -- -- --
Arnold L. Wadler.............. 1997 $ 375,000 -- -- 250,000 --
Executive Vice President, 1996 $ 350,000 -- -- 250,000 --
General Counsel and 1995 $ -- -- -- --
Secretary
Robert A. Maresca............. 1997 $ 220,000 -- -- 75,000 --
Senior Vice President and 1996 $ 200,000 -- -- 75,000 --
Chief Accounting Officer 1995 $ -- -- -- --
Vincent D. Sasso, Jr.......... 1997 $ 175,000 -- -- 75,000 --
Vice President of Financial 1996 $ 75,000(2) -- -- -- --
Reporting 1995 $ -- -- -- --
</TABLE>
- ------------------------
(1) Mr. Subotnick was appointed President and Chief Executive Officer of MMG on
December 4, 1996. The amounts shown for Mr. Subotnick reflect the portion of
the payment made by MMG to Metromedia Company for the period December 4,
1996 through December 31, 1996.
(2) Mr. Sasso was appointed Vice President of Financial Reporting during the
third quarter of 1996. The amount shown for Mr. Sasso reflects the portion
of the payment made by MMG to Metromedia Company from such period through
December 31, 1996.
9
<PAGE>
OPTION/SAR GRANTS
DURING THE YEAR ENDED DECEMBER 31, 1997
The following table sets forth individual grants of stock options by MMG
pursuant to the 1996 Stock Plan or otherwise to the Named Executive Officers.
<TABLE>
<CAPTION>
SECURITIES
OPTIONS/ SARS % OF TOTAL GRANT
NAME AND UNDER GRANTED TO DATE
PRINCIPAL OPTIONS/SARS EMPLOYEES IN EXERCISE EXPIRATION VALUATION
POSITION GRANTED (#) FISCAL YEAR PRICE(2) DATE(3) (4)
----------- ----------------- ------------- ----------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Stuart Subotnick.................... 50,000(1) .8% $ 9.31 March 26, 2007 $ 210,550
President and Chief Executive 1,000,000(5) 15.1% $ 7.44 April 17, 2007 $3,365,000
Officer
Silvia Kessel....................... 250,000(1) 3.8% $ 9.31 March 26, 2007 $1,052,750
Executive Vice President and Chief
Financial Officer
Arnold L. Wadler.................... 250,000(1) 3.8% $ 9.31 March 26, 2007 $1,052,750
Executive Vice President, General
Counsel and Secretary
Robert A. Maresca................... 75,000(1) 1.1% $ 9.31 March 26, 2007 $ 315,825
Senior Vice President and Chief
Accounting Officer
Vincent D. Sasso, Jr................ 75,000(1) 1.1% $ 9.31 March 26, 2007 $ 315,825
Vice President of Financial
Reporting
</TABLE>
- ------------------------
(1) The original date of grant for options subject to this footnote is January
31, 1996. The options were cancelled and reissued on March 26, 1997.
(2) The exercise price of the options subject to this footnote was repriced on
March 26, 1997 and is equal to the fair market value of shares of Common
Stock of MMG on the date of repricing of the options. See "Ten Year
Option/SAR Repricing" table below. The exercise price may be paid in cash,
or at the discretion of the Compensation Committee, by tendering already
owned shares of Common Stock of MMG, or a combination thereof.
(3) Options expire ten years from date of grant or, in case of retirement or
termination of employment, the date three months from such date of cessation
of employment. Options became one fifth exercisable on the date of grant and
vest ratably over a four year period. To the extent not already exercisable,
the options become fully exercisable in the event of a "change of control",
as defined in the Stock Plan.
(4) As permitted by SEC rules, the Black-Scholes method of option valuation has
been used to determine grant date present value. The assumptions used in the
Black-Scholes option valuation calculation are: estimated future annual
stock price volatility of 50%; a United States risk-free rate of return of
5.514% and an estimated future dividend yield of 0%. MMG does not advocate
or necessarily agree that the Black-Scholes method or any other method
permitted by the SEC can properly determine the value of an option. However,
no gain to the optionees is possible without an increase in the stock price.
Thus a zero increase or decrease in stock price, compared to the exercise
price, will not produce any gain for the optionee.
(5) Options expire ten years from date of grant or, as to any unvested portion
of the option, upon the resignation of grantee as the President and Chief
Executive Officer of the Company. Options became one fifth exercisable on
the date of grant and vest ratably over a four year period. To the extent
not already exercisable, the options become fully exercisable in the event
of a "change of control", as defined in the Option Agreement. The Company
also granted 1 million options to John W. Kluge, Chairman of the Board of
Directors, having substantially identical terms and conditons.
10
<PAGE>
AGGREGATED OPTION AND SAR EXERCISES IN 1997
AND FISCAL YEAR-END OPTION AND SAR VALUES
The following table sets forth information concerning the exercise of
options or SARs by the Named Executive Officers during the 1997 fiscal year and
the number of unexercised options and SARs held by such officers at the end of
the 1997 fiscal year.
FISCAL YEAR END VALUE $9.50
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN THE
MONEY
OPTIONS/
NUMBER OF SECURITIES SARS
VALUE REALIZED UNDERLYING UNEXERCISED AT FISCAL
(MARKET OPTIONS/SAR'S YEAR END
SHARES PRICE AT AT FISCAL YEAR END (#) ($)
ACQUIRED EXERCISE LESS -------------------------- -----------
NAME ON EXERCISE EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE
- ----------------------------------------- --------------- ------------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Stuart Subotnick......................... -0- -0- 220,000 830,000 $ 41,800
Arnold L. Wadler......................... -0- -0- 100,000 150,000 $ 19,000
Silvia Kessel............................ -0- -0- 100,000 150,000 $ 19,000
Robert A. Maresca........................ -0- -0- 30,000 45,000 $ 5,700
Vincent D. Sasso, Jr..................... -0- -0- 15,000 60,000 $ 2,850
<CAPTION>
NAME UNEXERCISABLE
- ----------------------------------------- -------------
<S> <C>
Stuart Subotnick......................... $ 157,700
Arnold L. Wadler......................... $ 28,500
Silvia Kessel............................ $ 28,500
Robert A. Maresca........................ $ 8,550
Vincent D. Sasso, Jr..................... $ 11,400
</TABLE>
TEN-YEAR OPTION/SAR REPRICINGS
The following table sets forth information concerning the repricing of stock
options held by any executive officer during the last ten years.
<TABLE>
<CAPTION>
NUMBER OF MARKET PRICE OF EXERCISE
SECURITIES STOCK AT TIME PRICE LENGTH OF
UNDERLYING OF AT TIME OF ORIGINAL OPTION
OPTIONS/SAR'S REPRICING OR REPRICING OR NEW EXERCISE TERMINATION AT
REPRICED OR AMENDED AMENDMENT AMENDMENT PRICE(1) DATE OF
NAME DATE ($) ($) ($) ($) REPRICING
- ------------------------- --------- -------------------- --------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Stuart Subotnick......... 3/26/97 50,000 $ 9.3125 $ 12.75 $ 9.31 8years/10months
President and Chief
Executive Officer
Arnold L. Wadler......... 3/26/97 250,000 $ 9.3125 $ 12.75 $ 9.31 8years/10months
Executive Vice President,
General Counsel and
Secretary
Silvia Kessel............ 3/26/97 250,000 $ 9.3125 $ 12.75 $ 9.31 8years/10months
Executive Vice President,
Chief Financial Officer
and Treasurer
Robert A. Maresca........ 3/26/97 75,000 $ 9.3125 $ 12.75 $ 9.31 8years/10months
Senior Vice President and
Chief Accounting
Officer
</TABLE>
- ------------------------
(1) Vesting terms were not amended at the time of repricing.
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MMG'S RELATIONSHIP WITH METROMEDIA COMPANY
Metromedia and its affiliates are collectively the largest single
stockholder of the Company, owning, as of the Record Date, approximately 26.6%
of the issued and outstanding shares of Common Stock.
MMG is a party to a number of agreements and arrangements with Metromedia
Company ("Metromedia") and its affiliates, the material terms of which are
summarized below.
SNAPPER CREDIT FACILITY. On November 26, 1996, Snapper entered into a
credit agreement (the "Snapper Credit Agreement") with AmSouth Bank of Alabama
("AmSouth"). pursuant to which AmSouth has agreed to make available to Snapper a
revolving line of credit up to $55 million, upon the terms and subject to
conditions contained in the Snapper Credit Agreement (the "Snapper Revolver")
for a period ending on January 1, 1999 (the "Snapper Revolver Termination
Date"). On November 12, 1997, Snapper amended and restated the Snapper Credit
Agreement to increase the amount of the revolving line of credit to $80.0
million. The Snapper Revolver is guaranteed by the Company and Messrs. Kluge and
Subotnick have agreed to guarantee $10.0 million of the Snapper Revolver. At
March 31, 1998, $73,536,137.91 was outstanding under the Snapper Revolver.
The Snapper Revolver bears interest at an applicable margin above the prime
rate (up to 1.5%) or a LIBOR rate (up to 4%). The Snapper Revolver matures on
January 1, 2000. The Snapper Credit Agreement is secured by a first priority
security interest in all of Snapper's assets and properties and is also entitled
to the benefit of a replenishable $1 million cash collateral account, which was
initially funded by Snapper. Under the Snapper Credit Agreement, AmSouth may
draw upon amounts in this cash collateral account to satisfy any payment
defaults by Snapper and Messrs. Kluge and Subotnick are obligated to replenish
such account any time amounts are so withdrawn, up to $10.0 million of the
Snapper Revolver.
At December 31, 1997 Snapper was not in compliance with certain financial
covenants under the Snapper Revolver. Subsequent to December 31, 1997, Snapper
and AmSouth amended the Snapper Credit Agreement to provide for (i) a reduction
in the amount of the line of credit from $80.0 million to $55.0 million as of
July 1, 1998 and (ii) a reduction in the finished goods advance rate from 80% to
70% as of July 1, 1998. As part of the amendment to the Snapper Credit
Agreement, AmSouth waived the covenant defaults as of December 31, 1997. The
amendment replaces certain existing financial covenants with covenants regarding
minimum quarterly cash flow and equity requirements (as defined in the
amendment).
MANAGEMENT AGREEMENT. The Company is a party to a management agreement with
Metromedia dated November 1, 1995, as amended on January 1, 1997 (the
"Management Agreement"), pursuant to which Metromedia provides the Company with
management services, including legal, insurance, payroll and financial
accounting systems and cash management, tax and benefit plans. The Management
Agreement terminates on October 31, 1998, and is automatically renewed for
successive one year terms unless either party terminates upon 60 days prior
written notice. Pursuant to an amendment dated January 1, 1997, the management
fee under the Management Agreement was increased to $3.25 million per year,
payable monthly at a rate of $270,833.33 per month. The Company is also
obligated to reimburse Metromedia for all its out-of-pocket costs and expenses
incurred and advances paid by Metromedia in connection with the Management
Agreement. Pursuant to the Management Agreement, the Company has agreed to
indemnify and hold Metromedia harmless from and against any and all damages,
liabilities, losses, claims, actions, suits, proceedings, fees, costs or
expenses (including reasonable attorneys' fees and other costs and expenses
incident to any suit, proceeding or investigation of any kind) imposed on,
incurred by or asserted against Metromedia in connection with the Management
Agreement. In fiscal 1997 Metromedia received no money for its out-of-pocket
costs and expenses or for interest on advances extended by it to the Company
pursuant to the Management Agreement.
12
<PAGE>
TRADEMARK LICENSE AGREEMENT. The Company is party to a license agreement
with Metromedia (the "Metromedia License Agreement"), dated November 1, 1995 as
amended on June 13, 1996, pursuant to which Metromedia has granted the Company a
non-exclusive, non-transferable, non-assignable right and license, without the
right to grant sublicenses, to use the trade name, trademark and corporate name
"Metromedia" in the United States and, with respect to Metromedia International
Telecommunications, Inc. ("MITI"), worldwide, royalty-free for a term of 10
years. The Metromedia License Agreement can be terminated by Metromedia upon one
month's prior written notice in the event (i) of the expiration or termination
of the Management Agreement; (ii) of a "change in control" of the Company (as
defined below); or (iii) any of the stock or all or substantially all of the
assets of any of the subsidiaries of the Company is sold or transferred, in
which case, the Metromedia License Agreement shall terminate with respect to
such subsidiary. A Change in Control of the Company is defined as (a) a
transaction in which a person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) not in existence at the time of the execution of the
Metromedia License Agreement becomes the beneficial owner of stock entitling
such person or group to exercise 50% or more of the combined voting power of all
classes of stock of the Company; (b) a change in the composition of the
Company's Board of Directors whereby a majority of the members thereof are not
directors serving on the board at the time of the Metromedia License Agreement
or any person succeeding such director who was recommended or elected by such
directors; (c) a reorganization, merger or consolidation whereby, following the
consummation thereof, Metromedia would hold less than 10% of the combined voting
power of all classes of the Company's stock; (d) a sale or other disposition of
all or substantially all of the assets of the Company; or (e) any transaction
the result of which would be that the Common Stock would not be required to be
registered under the Exchange Act and the holders of Common Stock would not
receive common stock of the survivor of the transaction which is required to be
registered under the Exchange Act.
In addition, Metromedia has reserved the right to terminate the Metromedia
License Agreement in its entirety immediately upon written notice to the
Company, if, in Metromedia's sole judgment, the Company's continued use of
"Metromedia" as a trade name would jeopardize or be detrimental to the goodwill
and reputation of Metromedia.
Pursuant to the Metromedia License Agreement, the Company has agreed to
indemnify and hold Metromedia harmless against any and all losses, claims,
suits, actions, proceedings, investigations, judgments, deficiencies, damages,
settlements, liabilities and reasonable legal (and other expenses related
thereto) arising in connection with the Metromedia License Agreement.
The Company believes that the terms of each of the transactions described
above were no less favorable to the Company than could have been obtained from
non-affiliated parties.
ORION LICENSE AGREEMENT. Metromedia Romania Programming Services, Limited,
a subsidiary of MITI, is party to a television license agreement with Orion
Pictures Corporation ("Orion"), dated September 1, 1996 (the "Orion License
Agreement"), pursuant to which Orion has granted to MITI non-exclusive Basic
Cable Television Rights (as such term is defined in the Orion License Agreement)
to, among other things exhibit, transmit, broadcast and perform certain
programs. The Orion License Agreement also provides MITI with the right to
authorize others to do so in certain other languages. The Orion License
Agreement covers Romania and Moldova. The License Term is defined in the
agreement as the eighteen (18) month period beginning on the first day of the
month for which a selected program is scheduled for exhibition by means of Basic
Cable Television (as such term is defined in the agreement). During 1997, MITI
paid $188,000 to Orion pursuant to the Orion License Agreement. As a result of
the sale of substantially all of the assets of the Company's entertainment
business, on July 10, 1997, Orion is no longer affiliated with the Company.
13
<PAGE>
INDEMNIFICATION AGREEMENTS
MMG has entered into indemnification agreements (the "Indemnification
Agreements") with certain officers and directors of MMG. The Indemnification
Agreements provide for indemnification of such directors and officers to the
fullest extent authorized or permitted by law. The Indemnification Agreements
also provide for (i) advancement by MMG of expenses incurred by the director or
officer in defending certain litigation, (ii) the appointment in certain
circumstances of an independent legal counsel to determine whether the director
or officer is entitled to indemnification and (iii) the continued maintenance by
MMG of directors' and officers' liability insurance (which currently consists of
$15 million of primary coverage). These Indemnification Agreements were approved
by the stockholders of MMG at its 1993 Annual Meeting of Stockholders.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires MMG's directors and executive
officers, and persons who beneficially own more than 10% of the outstanding
Common Stock, to file with the Commission and the AMEX initial reports of
ownership and reports of changes in ownership of the Common Stock. Such
officers, directors and greater than 10% stockholders are required by the
regulations of the Commission to furnish MMG with copies of all reports that
they file under Section 16(a). To MMG's knowledge, based solely on a review of
the copies of such reports furnished to MMG and written representations that no
other reports were required, all Section 16(a) filing requirements applicable to
MMG's officers, directors and greater than 10% beneficial owners were complied
with by such persons during fiscal year ended December 31, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors (the "Compensation
Committee") consists of Messrs. Sanders, Imlay and Johnson. The Compensation
Committee is comprised entirely of independent directors and is responsible for
developing and making recommendations to the Board with respect to MMG's
executive compensation policies.
COMPENSATION COMMITTEE REPORT ON COMPENSATION
The following report of the Compensation Committee discusses MMG's executive
compensation policies generally and, specifically, the relationship of MMG's
performance in 1997 to the compensation of MMG of its executive officers:
The Company's executive officers are employed and paid by Metromedia
Company, and Metromedia Company provides the services of such executive
officers to MMG pursuant to the Management Agreement. For the year ended
December 31, 1997, the Company paid Metromedia Company a management fee of
$3.25 million pursuant to the Management Agreement. A portion of such
management fee has been allocated by the Company to the payment of the
salaries of the Company's executive officers based upon the services
provided to the Company by such officers on behalf of Metromedia Company.
BACKGROUND. In general, the Compensation Committee seeks to link the
compensation allocable to the services provided by each executive officer to
the performance of MMG and to the management fee payable pursuant to the
Management Agreement. In addition, the members of the Compensation Committee
constitute all of the members of the Company's Board of Directors who are
not affiliated with Metromedia Company, and such members are therefore the
directors whose approval is required to authorize the management fee under
the Management Agreement. Within these parameters, the executive
compensation program attempts to provide an overall level of executive
compensation, as a component of the management fee, that is competitive with
companies of comparable size, similar market and operating characteristics
and similar prospects.
14
<PAGE>
During 1996, the Compensation Committee reviewed total officer
compensation against a market comparison group of approximately 12 companies
in the communications industry (the "1996 Comparison Group") to assess the
competitiveness of the compensation of MMG's executive officers. During
1997, the Compensation Committee reviewed chief executive officer and
chairman compensation against a market comparison group of 11 companies in
the communications industry (the "1997 Comparison Group") to assess further
the competitiveness of the compensation of MMG's chief executive officer.
The Compensation Committee has since obtained updated information regarding
compensation of the 1997 Comparison Group.
In such reviews, the Compensation Committee considered MMG's executive
compensation in view of the Company's size, the number of operating units,
and the role and responsibilities of MMG's executive officers. In comparing
the compensation of its executives with that of executives of companies in
the two Comparison Groups, the Compensation Committee considered the
competitiveness of the amounts of the management fee allocated to salaries
of the Company's executive officers, assuming that such amounts were paid
directly to such officers, and taking cognizance of the fact that such
officers performed duties for Metromedia Company in addition to their duties
for MMG, and received additional compensation therefore. The Compensation
Committee also considered the differences between the business of the
Company and the businesses of the members of the Comparison Groups.
The companies included in the NASDAQ Telecommunications Index for
purposes of analyzing the performance of MMG's Common Stock during 1997 (see
"Performance Graph" below) are not identical to the 12 companies in the 1996
Comparison Group or the 11 companies in the 1997 Comparison Group.
Nevertheless, MMG believes that the cross-section of companies included in
the NASDAQ Telecommunications Index and the two Comparison Groups are
sufficiently similar and provide a reasonable basis for the Compensation
Committee to develop justified compensation policies and for an investor to
evaluate the performance of MMG's Common Stock.
STOCK OPTIONS. The Compensation Committee believes that the grant of
stock options will motivate executives to create long-term growth in
shareholder value. Pursuant to the Company's 1996 Stock Option Plan (the
"Stock Option Plan"), options are granted at the discretion of the
Compensation Committee, usually annually. The number of option shares
covered by such grants is determined based upon assessment of the
individual's performance. The Compensation Committee considers the
recommendation of and relies on information provided by the Chief Executive
Officer in determining the number of option shares to be granted to the
non-CEO executive officers. The Compensation Committee believes that the
periodic grant of time-vested stock options provides an incentive that
focuses the executives' attention on managing the business as owners of an
equity stake in the Company. It further motivates executives to maximize
long-term growth and profitability because value is created in the options
only as the Company's stock price increases after the option is granted.
In March, 1997 the Compensation Committee reviewed certain options
previously granted to employees of the Company and the market price of the
Company's common stock during the past year. The Committee recognized that
options issued by the Company are utilized as compensation and to provide
incentives to improve Company performance and thereby positively influence
the market price for the Company's common stock for the benefit of all
shareholders. The Committee determined that the market price had declined
despite the Company's significant accomplishments, that certain options
previously granted under the Stock Option Plan were at exercise prices
significantly in excess of the current market prices of the Company's common
stock, and that these outstanding stock options, if left in place, would not
achieve the underlying objectives.
Accordingly, on March 26, 1997 (the "Grant Date"), replacement stock
options were granted to replace certain previously issued stock options
under such plan. The replacement options did not involve the grant of any
additional shares. The replacement options were granted at an exercise price
15
<PAGE>
of $9.31 per share, the fair market value per share of shares of the
Company's common stock on such date. No other option repricing or exchange
has occurred in the past ten years.
CHIEF EXECUTIVE OFFICER COMPENSATION. The Summary Compensation Table
sets forth amounts of the management fee paid during 1997 to Metromedia
Company and allocable to compensation of Stuart Subotnick, MMG's President
and Chief Executive Officer, by the Company. The amount of the management
fee allocable to Mr. Subotnick's base salary was established in December
1996 upon the resignation of the former Chief Executive Officer of the
Company, Mr. John D. Phillips, and was subsequently increased by the
Compensation Committee. The amount of the management fee allocable to Mr.
Subotnick's base salary was determined by analyzing the compensation of
chief executive officers in the Comparison Groups, with particular emphasis
on the 1997 Comparison Group, along with the amounts previously paid to Mr.
Phillips. The Compensation Committee believes such analysis is reasonable.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). One of the factors
the Compensation Committee considers in connection with compensation matters
is the anticipated tax treatment to the Company and to the executives of the
compensation arrangements. The deductibility of certain types of
compensation depends upon the timing of an executive's vesting in, or
exercise of, previously granted rights. Moreover, interpretation of, and
changes in, the tax laws and other factors beyond the Compensation
Committee's control also affect the deductibility of compensation.
Accordingly, the Compensation Committee will not necessarily limit executive
compensation to that deductible under Section 162(m) of the Code. The
Compensation Committee will consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent consistent
with its other compensation objectives.
The foregoing report of the Compensation Committee shall not be deemed
to be incorporated by reference into any filing of MMG under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates such
information by reference, and shall not otherwise be deemed filed under such
Acts.
Submitted by the Compensation
Committee of MMG's Board of
Directors as of March 27, 1998
John P. Imlay, Jr.
Clark A. Johnson
Carl E. Sanders
Leonard White
16
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth MMG's total stockholder return as compared to
the Standard & Poor's 500 Index and the NASDAQ Telecommunications Stock Index
for the five year period from January 1, 1992 through December 31, 1997. The
total stockholder return assumes $100 invested at the beginning of the period in
MMG's Common Stock, the Standard & Poor's 500 Index and the NASDAQ
Telecommunications Index.
METROMEDIA INTERNATIONAL GROUP, INC. CUMULATIVE TOTAL SHAREHOLDER RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN SINCE DECEMBER 1992 AMONG
<S> <C> <C> <C> <C>
Metromedia International Group, Inc. & Select Indices
1992 1993 1994 1995
Metromedia Int. Group, Inc. 100 61 74 113
S&P 500 Index 100 110 112 153
NASDAQ Telecomm Index 100 145 122 163
<CAPTION>
<S> <C> <C>
1996 1997
Metromedia Int. Group, Inc. 80 77
S&P 500 Index 188 251
NASDAQ Telecomm Index 169 240
</TABLE>
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Metromedia International Group, Inc........................................ $ 100 $ 61 $ 74 $ 113 $ 80
S&P 500 Index.............................................................. $ 100 $ 110 $ 112 $ 153 $ 188
NASDAQ Telecomm Index...................................................... $ 100 $ 145 $ 122 $ 163 $ 169
<CAPTION>
1997
---------
<S> <C>
Metromedia International Group, Inc........................................ $ 77
S&P 500 Index.............................................................. $ 251
NASDAQ Telecomm Index...................................................... $ 240
</TABLE>
17
<PAGE>
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The following table sets forth certain information with respect to the
members of MMG's Board of Directors, including the four incumbent Class III
Directors (Messrs. Johnson, Sanders Wadler and Ms. Kessel) who have been
nominated by the Board of Directors for re-election as Class III Directors at
the Annual Meeting.
The Board of Directors knows of no reason why any of its nominees will be
unable or will refuse to accept election. If any nominee becomes unable or
refuses to accept election, the Board of Directors will either reduce the number
of directors to be elected or select a substitute nominee. If a substitute
nominee is selected, proxies will be voted in favor of such nominee.
The affirmative vote of the holders of a plurality of shares of Common Stock
present in person or represented by proxy at the Annual Meeting will be required
to elect each of the four Class III Directors to MMG's Board.
<TABLE>
<CAPTION>
CLASS OF DIRECTOR
NAME, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS AGE DIRECTORS SINCE
- -------------------------------------------------------------------------------------- --- ---------- -----------
<S> <C> <C> <C>
John P. Imlay, Jr..................................................................... 61 Class I 1993
Served since 1990 as Chairman of Dun & Bradstreet Software Services, Inc., an
application software company located in Atlanta, Georgia. Mr. Imlay is the former
Chairman of Management Science America, a mainframe applications software company.
Management Science America was acquired by Dun & Bradstreet Software Services, Inc.
in 1990. Mr. Imlay is also a director of the Atlanta Falcons, a National Football
League team, and The Gartner Group. Mr. Imlay is a member of the Audit Committee and
the Compensation Committee.
John W. Kluge......................................................................... 83 Class I 1995
Chairman of the Board of Directors of the Company since November 1, 1995. Chairman
of the Board and a director of Orion Pictures Corporation from 1992 until July 1997.
Chairman and President of Metromedia Company and its predecessor-in-interest,
Metromedia, Inc. for over five years. Director of Metromedia Fiber Network, Inc.,
The Bear Stearns Companies, Inc., Conair Corporation and Occidental Petroleum
Corporation. Mr. Kluge is Chairman of the Executive Committee and the Nominating
Committee.
Stuart Subotnick...................................................................... 56 Class I 1995
President and Chief Executive Officer since December 4, 1996 and Vice Chairman of
the Board of Directors of the Company since November 1, 1995. Vice Chairman of the
Board and a director of Orion Pictures Corporation from 1992 until July 1997
Executive Vice President of Metromedia and its predecessor-in-interest, Metromedia
Inc. for over five years. Director of Metromedia Fiber Network, Inc. Carnival Cruise
Lines, Inc., Big City Radio, Inc. Mr. Subotnick is a member of the Executive
Committee.
Richard J. Sherwin.................................................................... 54 Class II 1995
President of MITI. Mr. Sherwin has served as Co-President and director of MITI and
its predecessor companies since October 1990. Prior to that, Mr. Sherwin served as
the Chief Operating Officer of Graphic Scanning Corp., a paging and wireless
telecommunications company.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
CLASS OF DIRECTOR
NAME, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS AGE DIRECTORS SINCE
- -------------------------------------------------------------------------------------- --- ---------- -----------
<S> <C> <C> <C>
Leonard White......................................................................... 58 Class II 1995
President and Chief Executive Officer of Rigel Enterprises, a management and private
investment firm, since July 1997. Served as President and Chief Executive Officer of
Orion Pictures Corporation from March 1992 until July 1997 and Metromedia
Entertainment Group from 1995 until July 1997. Chairman of the Board and Chief
Executive Officer of Orion Home Entertainment Corporation, a subsidiary of Orion
("OHEC"), from March 1991 until March 1992. President and Chief Operating Officer of
Orion Home Video division of OHEC from March 1987 until March 1991. Mr. White is a
Director of Metromedia Fiber Network, Inc., Big City Radio, Inc. and American Film
Technologies. Mr. White is Chairman of the Audit Committee and a member of the
Compensation Committee.
Clark A. Johnson...................................................................... 66 Class III 1990
Mr. Johnson has served as chairman and Chief Executive Officer of Pier 1 Imports,
Inc., a specialty retailer of decorative home furnishings, since August 1988. Mr.
Johnson is a director of Albertson's, Inc., Anacomp, Inc., Heritage Media
Corporation, InterTAN, Inc. and Pier 1 Imports, Inc. Mr. Johnson is a member of the
Compensation and Audit Committees.
Silvia Kessel......................................................................... 47 Class III 1995
Executive Vice President since August 29, 1996 and Senior Vice President, Chief
Financial Officer and Treasurer of the Company since November 1, 1995. Executive
Vice President and a director of Orion Pictures Corporation from January 1993 until
June 1997. Senior Vice President of Orion from June 1991 to November 1992. Senior
Vice President of Metromedia since January 1994. President of Kluge & Company from
January 1992. Managing Director of Kluge & Company (and its predecessor) from April
1990 to January 1994. Director and Executive Vice President of Metromedia Fiber
Network, Inc. and Big City Radio, Inc. Ms. Kessel is a member of the Audit
Committee.
Carl E. Sanders....................................................................... 72 Class III 1967
Engaged in the private practice of law as Chairman of Troutman Sanders, a law firm
located in Atlanta, Georgia. Director of the Company since 1967, except for a
one-year period from April 1970 to April 1971. Former Governor of the State of
Georgia and a director of Carmike Cinemas, Inc., Norrell Corporation, Healthdyne,
Inc., and was also a director of RDM Sports Group, Inc. Mr. Sanders is Chairman of
the Compensation Committee.
Arnold L. Wadler...................................................................... 54 Class III 1995
Executive Vice President since August 29, 1996 and Senior Vice President, General
Counsel and Secretary of the Company since November 1, 1995. Senior Vice President,
Secretary and General Counsel of Metromedia Company and its predecessor-in-interest,
Metromedia, Inc., for over five years. Director, Executive Vice President, General
Counsel and Secretary of Metromedia Fiber Network, Inc. and Big City Radio, Inc.
Director of Orion Pictures Corporation from 1992 until July 1997. Mr. Wadler is
Chairman of the Nominating Committee.
</TABLE>
19
<PAGE>
PROPOSAL NO. 2--RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of MMG has appointed the firm of KPMG Peat Marwick
LLP, independent auditors, to audit the consolidated financial statements of MMG
and its subsidiaries for the fiscal year ending December 31, 1998, subject to
ratification by MMG's Stockholders.
A partner of KPMG Peat Marwick LLP is expected to be present at the Annual
Meeting and to be provided with an opportunity to make a statement if such
partner desires to do so and to be available to respond to appropriate questions
from stockholders.
If the MMG Stockholders do not ratify the appointment of KPMG Peat Marwick
LLP as MMG's independent auditors for the forthcoming fiscal year, such
appointment will be reconsidered by the Audit Committee and the Board of
Directors.
The affirmative vote of the holders of a majority of shares of Common Stock
present in person or represented by proxy at the Annual Meeting will be required
to approve and adopt Proposal Number 2.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF MMG'S
CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
20
<PAGE>
PROPOSAL NO. 3--THE CHARTER AMENDMENT
Alan G. Hevesi, investment adviser and a trustee of the New York City
Teachers' Retirement System ("NYCTRS"), c/o The City of New York, office of the
Comptroller, 1 Centre Street, New York, New York 10007-2341, owner of 15,900
shares of Common Stock, has submitted the following proposal on behalf of
NYDTRS.
"BE IT RESOLVED, that the shareholders of Metromedia International Group
request that the Board of Directors amend the certificate of incorporation
to reinstate the rights of the shareholders to take action by written
consent and to call special meetings".
STATEMENT IN SUPPORT: "The rights of the shareholders to take action by
written consent and to call special meetings should not be abridged. The
Company's elimination of these rights, in our opinion, effectively removes
important processes by which shareholders can act expeditiously to protect
their investment interests.
For example, the right of shareholders to act to remove incumbent directors
for egregious conduct should not be limited to the annual meeting. Also,
shareholders should not be prevented from giving timely consideration to a
bidder's proposal to acquire control of the Company, or a dissident
shareholder's slate of nominees for election to the Board of Directors,
because such proposals are required to be presented only at the annual
meeting."
STATEMENT OF THE BOARD OF DIRECTORS: Presently, the Restated Certificate of
Incorporation and By-laws of the Company (collectively, the "Corporate
Documents") (i) require, among other things, that special meetings of
Stockholders for any purpose be called by either the Chairman or Vice Chairman
of the Board of Directors and (ii) do not provide for Stockholder action by
written consent. If the Company amended the Corporate Documents as proposed, it
would allow its Stockholders to call special meetings and act without a meeting
whenever, however frequently and for whatever reason such Stockholders may
desire. For the reasons stated below, the Board of Directors believes that the
requested amendments to the Corporate Documents are not in the best interests of
the Company and its Stockholders.
Applicable Delaware law does not grant stockholders of a corporation the
absolute right to call a special meeting or act by written consent, and instead
permits each individual corporation to determine in its Corporate Documents
whether stockholders will have such rights. The Board of Directors believes that
the Delaware legislature adopted this approach due to the significant financial
and administrative burdens that a special meeting or stockholder action by
consent can impose on a public corporation.
Approximately 7,394 persons and entities are the record holders of the
Company's common stock, each of whom, if Proposal No. 3 is approved, would be
entitled under the proposal to demand a special meeting or institute action by
written consent. Each such stockholder would also be entitled to notice of, and
to receive proxy materials relating to, any special meeting, thereby
necessitating actual expenditures (legal, printing and postage) in addition to
those associated with the Company's annual meeting. In addition, the calling of
a special meeting would necessitate the diversion of corporate officers and
employees from their other duties in order to prepare for such a meeting. The
Board of Directors believes that the interest of the Company's Stockholders
would be better served utilizing these resources to improve its businesses.
Similarly, the Board of Directors believes that permitting action to be taken by
written consent would create confusion as multiple stockholders would be able to
solicit written consents on various matters and would divert valuable corporate
resources to this process.
In light of the foregoing, the Board of Directors believes that the adoption
of Proposal No. 3 could leave the Company exposed to numerous calls for special
meetings and stockholder action by consent that may be of little or no benefit
to Stockholders and which are a significant burden to the Company. Stockholders,
such as the proponent of Proposal No. 3, remain free to make proposals at the
Company's annual meeting. The Board of Directors believe that the Chairman and
Vice Chairman of the Board of Directors are in the best position to determine if
a special meeting is warranted.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS BELIEVES THAT PROPOSAL
NO. 3 IS NOT IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS.
ACCORDINGLY, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST
PROPOSAL NO. 3.
Approval by the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock is required for approval of Proposal No. 3.
21
<PAGE>
ANNUAL REPORT; INCORPORATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 (which contains the Company's audited consolidated financial
statements) is contained elsewhere in this Proxy Statement. To the extent this
Proxy Statement has been or will be specifically incorporated by reference into
any filing by the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, the sections of the Proxy Statement
entitled "Board of Directors Report on Compensation" and "Performance Graph"
shall not be deemed to be so incorporated unless specifically otherwise provided
in any such filing.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any MMG Stockholder who wishes to present a proposal at the 1999 Annual
Meeting of Stockholders of MMG, and who wishes to have such proposal included in
MMG's proxy statement for that meeting, must deliver a copy of such proposal to
MMG at One Meadowlands Plaza, East Rutherford, New Jersey 07073, Attention:
Corporate Secretary, no later than December 12, 1998; provided, however, that if
the 1999 Annual Meeting of Stockholders is held on a date more than 30 days
before or after the corresponding date of the 1998 Annual Meeting, any
stockholder who wishes to have a proposal included in MMG's proxy statement for
that meeting must deliver a copy of the proposal to MMG a reasonable time before
the proxy solicitation is made. MMG reserves the right to decline to include in
MMG's proxy statement any stockholder's proposal which does not comply with the
rules of the Commission for inclusion therein.
OTHER BUSINESS
The Board of Directors does not intend to bring any other business before
the meeting and it is not aware that anyone else intends to do so. If any other
business comes before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote as proxies in accordance with their best
judgment.
PLEASE EXERCISE YOUR RIGHT TO VOTE BY PROMPTLY COMPLETING, SIGNING AND
RETURNING THE ENCLOSED PROXY FORM. YOU MAY LATER REVOKE THE PROXY AND, IF YOU
ARE ABLE TO ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
Arnold L. Wadler
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
April 9, 1998
22
<PAGE>
APPRENDIX-PROXY CARD
METROMEDIA INTERNATIONAL GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
Annual Meeting of Stockholders,
May 13, 1998
The undersigned hereby appoints Silvia Kessel, Arnold L. Wadler and
Robert A. Maresca, and each of them with full power of substitution, the true
and lawful attorneys in fact, agents and proxies of the undersigned to vote
at the annual meeting (the "Annual Meeting") of the Stockholders of
Metromedia International Group, Inc. ("MMG"), to be held on May 13, 1998,
commencing at 9:00 a.m., local time, in the Concourse Level, 1285 Avenue of
the Americas, New York, New York 10019, and any and all adjournments thereof,
all the shares of common stock, par value $1.00 per share, of MMG ("Common
Stock") according to the number of votes which the undersigned would possess
if personally present, for the purposes of considering and taking action upon
the following, as more fully set forth in the Proxy Statement of MMG, dated
April 9, 1998.
(Please date and sign on the reverse side)
<PAGE>
[REVERSE SIDE OF PROXY CAR]
1. To elect Messrs. Clark A. Johnson, Carl E. Sanders, Arnold L. Wadler
and Ms. Silvia Kessel to MMG's Board of Directors to serve a
three-year term is Class III Directors until their
respective successors are elected and qualified.
GRANT AUTHORITY WITHHOLD (INSTRUCTIONS: To withhold authority to
to vote for all AUTHORITY vote for any nominees print the name of
nominees (except to vote for such nominee on the space provided below.)
as otherwise all nominees
specified below), -------------------------------------
/ / / /
2. To ratify the selection of KPMG Peat Marwick LLP as MMG's Independent
accountants for the year ending December 31, 1998
FOR AGAINST ABSTAIN
/ / / / / /
3. To consider and vote upon a proposal submitted by a
stockholder of MMG to amend the Company's Certificate
of Incorporation to allow Stockholders to take action
by written consent and to call special meetings.
FOR AGAINST ABSTAIN
/ / / / / /
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCK-
HOLDER(S). IF NO DIRECTION IS GIVEN HEREIN, THIS
PROXY WILL BE VOTED "FOR"
PROPOSALS 1 AND 2 LISTED ABOVE AND AGAINST PROPOSAL 3.
Dated:_______________, 1998
___________________________
Signature
___________________________
Signature if held jointly
Please sign exactly as name(s) appear on this Proxy
Card. When shares of Common Stock are held by joint
tenants, both should sign. When signing as attorney-
in-fact, executor, administrator, personal representative,
trustee, or guardian, please give the full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a partnership,
please sign in partnership name by an authorized person.
PLEASE MARK, DATE, SIGN AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
