<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Sections 240.14a-11(c) or
Section 240.14a-12
Tribune Company
.............................................................................
(Name of Registrant as Specified In Its Charter)
..............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
.......................................................................
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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 Statement No.:
.......................................................................
3) Filing Party:
.......................................................................
4) Date Filed:
.......................................................................
<PAGE>
TRIBUNE COMPANY
435 NORTH MICHIGAN AVENUE
CHICAGO, ILLINOIS 60611
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, APRIL 19, 1994, 9:30 A.M.
This Proxy Statement is provided in connection with the 1994 Annual Meeting of
Stockholders of Tribune Company (the "Company") or any adjournment thereof. The
Company's Annual Report for 1993 is enclosed. This Proxy Statement is being
mailed to stockholders on or about March 21, 1994.
Stockholders of record at the close of business on March 3, 1994 are entitled
to vote at the meeting. On that date there were outstanding and entitled to vote
67,167,342 shares of the Common Stock, without par value (the "Common Stock"),
and 1,505,259 shares of Series B Convertible Preferred Stock, without par value
(the "Preferred Stock"), of the Company. With regard to all matters submitted to
a vote at the meeting, each share of Common Stock is entitled to one vote and
each share of Preferred Stock, voting together as a class with the Common
Stock, is entitled to 4.58 votes. Holders do not have the right to cumulate
votes in the election of directors. Accordingly, the holders of a majority of
the 74,061,428 votes entitled to be cast are able to elect all directors being
elected. A list of stockholders of record entitled to vote at the Annual
Meeting will be available for inspection by any stockholder for any purpose
germane to the meeting during ordinary business hours for a period of 10 days
prior to the meeting at the office of the Company, 435 N. Michigan Ave., Suite
2400, Chicago, IL 60611, in care of the Vice President and Secretary.
The enclosed proxy is solicited by the Board of Directors. If the proxy is
properly executed and returned, the shares will be voted in accordance with the
stockholder's instructions. If no instructions are given with respect to a
matter, the proxy will be voted as follows with respect to such matter: FOR the
election as directors of the nominees named herein (Proposal 1); FOR approval
of an amendment to the 1992 Long-Term Incentive Plan (Proposal 2); and FOR the
ratification of the selection of Price Waterhouse as auditors for 1994
(Proposal 3). Any stockholder of record giving a proxy for the meeting may
revoke it prior to its being voted by written notice of revocation or by a
later proxy, in either case delivered to the Vice President and Secretary, or
by voting in person by ballot at the meeting. Stockholders whose shares are
held in the name of a broker, bank, or other holder of record may not vote in
person at the meeting unless they have first obtained a proxy, executed in the
stockholder's favor, from the holder of record.
If shares are owned beneficially by participants in the Tribune Company
Employee Stock Ownership Plan (the "ESOP"), or the Tribune Company Savings
Incentive Plan (the "SIP"), or held by a nominee for partici-pants in the
Tribune Company Employee Stock Purchase Plan (the "ESPP"), a voting instruction
card is enclosed for the purpose of instructing the respective plan trust-ees
or nominee how to cast the votes related to such shares. Any participant giving
instructions to a plan trustee or nominee may revoke or modify such instructions
prior to April 16, 1994 by written notice given to the trustee or nominee. Plan
shares are held by The Northern Trust Company as trustee for the ESOP and the
SIP and by Merrill Lynch, Pierce, Fenner & Smith Incorporated as nominee under
the ESPP. The voting instruction card separately summarizes the number of
shares which are entitled to be voted on behalf of the participant in one or
more of the plans. Shares allocated to participant accounts under these plans
will be voted as follows: if instruction cards are received by the trustee or
nominee on or before April 15, 1994, votes will be cast in accordance with the
instructions; shares held by the ESOP and the SIP for which no instructions are
received by April 15 will be voted in the same proportion as the shares in that
plan for which instructions were received; shares related to the ESPP for which
no instructions are received will be voted in accordance with New York Stock
Exchange rules. ESOP shares not allocated to any participant accounts will be
voted in the same proportion as the ESOP shares as to which voting instructions
are received.
OWNERSHIP INFORMATION
- --------------------------------------------------------------------------------
PRINCIPAL STOCKHOLDERS
The following table and footnotes set forth information as of March 3, 1994
with respect to each person who is known to management of the Company to be the
beneficial owner of more than 5% of any class of the Company's stock.
The Northern Trust Company as trustee for the ESOP (the "ESOP Trustee") holds
1,505,259 shares of Preferred Stock, of which 431,765 shares were allocated to
participant accounts as of March 3, 1994, and 735,501 shares of Common Stock, of
which 350,415 shares were allocated to participant accounts. The ESOP trust
agreement directs the trustee to vote the shares allocated to participant
accounts as directed by the participants and to vote all unallocated shares and
any allocated shares for which no timely instructions are received in the
1
<PAGE>
same proportion as the allocated 6,021,036 shares based on four shares
shares for which instructions are re- of Common Stock for each share of
ceived. In addition, the ESOP Trustee Preferred Stock. All ownership is
is deemed to beneficially own those shared with the participants in the
shares of Common Stock into which the ESOP.
Preferred Stock is convertible, or
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------------ --------------------
NUMBER OF PERCENT OF NUMBER OF PERCENT OF
NAME AND ADDRESS OF OWNER SHARES CLASS SHARES CLASS
- ------------------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Robert R. McCormick Tribune 11,554,436(1) 17.2% -- --
Foundation--10,479,236 shs.;
Cantigny Foundation--
1,075,200 shs.
Room 770
435 N. Michigan Avenue
Chicago, IL 60611
The Northern Trust Company, as 6,756,537(2) 9.2% 1,505,259 100%
ESOP Trustee
50 S. LaSalle Street
Chicago, IL 60675
</TABLE>
- -------
(1) The investment and voting power for both of these foundations is vested
in a board of five directors, consisting of Charles T. Brumback, Stanton R.
Cook, James C. Dowdle, Jack Fuller and John W. Madigan, each of whom is an
officer or former officer of the Company or a subsidiary thereof.
(2) The ESOP Trustee holds 735,501 shares of Common Stock on behalf of the
ESOP as of March 3, 1994. The amount shown also includes the 6,021,036 shares
of Common Stock into which the Preferred Stock is convertible. The Northern
Trust Company is also trustee with respect to other plans. See "Employee
Benefit Plan Voting Rights", below. According to a Schedule 13G filed by
Northern Trust Corporation with the Securities and Exchange Commission, that
corporation has beneficial ownership with respect to 11.7% (8,583,562 shares,
including ESOP and other plan shares) of Common Stock, as follows: Sole voting
power--461,120 shares, Shared voting power--8,031,836 shares, Sole dispositive
power--190,518 shares, Shared dispositive power--8,203,355 shares.
- --------------------------------------------------------------------------------
MANAGEMENT OWNERSHIP
Beneficial ownership of the Common table, and by all current directors
Stock and Preferred Stock as of March and executive officers as a group, is
3, 1994 by each director, by each set forth in the following table:
executive officer named in the sum-
mary compensation
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------------------------------------------- -----------------
ADDITIONAL SHARES
DEEMED BENEFICIALLY
OWNED(1)
------------------------
BENEFICIAL
OWNERSHIP BENEFICIAL PERCENT PERCENT
NUMBER OF NOT OWNERSHIP OF NUMBER OF OF
NAME SHARES OWNED DISCLAIMED DISCLAIMED TOTAL CLASS SHARES(2) CLASS
---- ------------ ---------- ---------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles T. Brumback..... 118,276 291,428(3) 20,000 429,704 * 468 *
Stanton R. Cook......... 411,194 377,887(3) 9,600 798,681 1.2% -- --
James C. Dowdle......... 104,270 202,672(3) -- 306,942 * 468 *
Donald C. Grenesko...... 1,048 67,776(3) -- 68,824 * 428 *
Diego E. Hernandez...... 900 -- -- 900 * -- --
David D. Hiller......... 451 46,730(3) -- 47,181 * 367 *
John E. Houghton........ 219 215,394(3) -- 215,613 * -- --
Robert E. La Blanc...... 9,800 -- -- 9,800 * -- --
John W. Madigan......... 229,955 249,795(3) 20,620 500,370 * 468 *
Andrew J. McKenna....... 45,000 -- -- 45,000 * -- --
Kristie Miller.......... 176,158 -- 8,928 185,086 * -- --
Newton N. Minow......... 4,500 2,000 -- 6,500 * -- --
James J. O'Connor....... 3,100 -- -- 3,100 * -- --
Donald H. Rumsfeld...... 3,200 -- -- 3,200 * -- --
Scott C. Smith.......... 16,856 70,307(3) 600 87,763 * 468 *
Arnold R. Weber......... 1,900 -- -- 1,900 * -- --
Twenty-eight (28) direc-
tors and executive of-
ficers of the Company
as a group............. 1,162,906 1,834,586(3) 59,748 3,057,240 4.4% 5,766 *
</TABLE>
- -------
*Less than 1%.
(1) Does not include 11,554,436 shares owned by the Robert R. McCormick
Tribune Foundation and the Cantigny Foundation (see "Principal Stockholders").
(2) Represents shares allocated to individual participant accounts under the
ESOP.
2
<PAGE>
(3) Includes rights to acquire shares pursuant to stock options which are
available for exercise prior to May 2, 1994 and upon conversion of ESOP
Preferred Stock allocated to individual accounts, as follows: Mr. Brumback--
284,021 shs.; Mr. Cook--377,887 shs.; Mr. Dowdle--202,041 shs.; Mr. Grenesko--
65,912 shs.; Mr. Hiller--45,968 shs.; Mr. Houghton--157,800 shs.; Mr. Madigan--
249,407 shs.; Mr. Smith--69,919 shs.; all directors and executive officers as a
group--1,759,636 shs.
- --------------------------------------------------------------------------------
EMPLOYEE BENEFIT PLAN VOTING RIGHTS
The Northern Trust Company as trustee holds shares of Common Stock and
Preferred Stock for the benefit of employees. The stock held in trust as of
March 3, 1994, and the percentage of total votes represented, are as follows:
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
----------------- -----------------
NUMBER PERCENT NUMBER PERCENT
OF OF OF OF PERCENT OF
NAME OF BENEFIT PLAN OR TRUST SHARES CLASS SHARES CLASS TOTAL VOTES
- ----------------------------- --------- ------- --------- ------- -----------
<S> <C> <C> <C> <C> <C>
Tribune Company Employee Stock Own-
ership Plan (1).................... 735,501 1.1% 1,505,259 100% 10.3%
Tribune Company Savings Incentive
Plan (1)........................... 1,108,875 1.7% -- -- 1.5%
Tribune Company Master Pension Trust
(2)................................ 423,725 .6% -- -- .6%
--------- ---------
Total......................... 2,268,101 3.4% 1,505,259 100% 12.4%
========= === ========= === ====
</TABLE>
- -------
(1) Employee participants have the right to instruct the trustee on how the
shares allocated to their accounts are to be voted. The trust agreement directs
the trustee to vote all allocated shares for which no participant instructions
are received and all unallocated shares, if any, in the same proportion as
votes cast on behalf of participants who completed and returned a voting
instruction card.
(2) Shares are held on behalf of the Tribune Company Employees' Pension Plan
and other retirement plans for employees of the Company and its subsidiaries.
The shares are voted at the direction of the Tribune Company Employee Benefits
Investment Committee, presently consisting of five officers of the Company.
VOTING REQUIREMENTS
The holders of shares representing 37,030,715 votes, represented in person or
by proxy, shall constitute a quorum to conduct business.
A stockholder may, with respect to the election of directors, (i) vote for all
five nominees named herein, (ii) withhold authority to vote for all such
nominees or (iii) vote for all such nominees other than any nominee with
respect to whom the stockholder withholds authority to vote. The nominees
receiving the highest number of votes cast for the number of positions to be
filled shall be elected. Accordingly, withholding authority to vote for a
director nominee will not prevent him or her from being elected.
A stockholder may, with respect to each other matter specified in the notice
of the meeting (i) vote "FOR", (ii) vote "AGAINST" or (iii) "ABSTAIN" from
voting. A vote to abstain from voting has the legal effect of a vote against.
A proxy may indicate that all or a portion of the shares represented by such
proxy are not being voted with respect to a particular matter. This could occur,
for example, when a broker is not permitted to vote stock held in street name
on certain matters in the absence of instructions from the beneficial owner of
the stock. These "non-voted shares" will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. Non-voted shares will not affect the
determination of the outcome of the vote on any proposal to be decided at the
meeting.
3
<PAGE>
ELECTION OF DIRECTORS (PROPOSAL 1)
Five directors will be elected at nominees becomes unavailable for
the 1994 Annual Meeting to hold of- election, an event which is not now
fice for three years and until their anticipated, the enclosed proxy may
respective successors are elected be voted for the election of a sub-
and qualified, or until their resig- stitute nominee.
nation or removal. The nominees re-
ceiving the highest numbers of votes
cast for the number of positions to
be filled shall be elected.
Additional information regarding
each of the five nominees and the
eight directors continuing in office
follows. The descriptions of the
business experience of these indi-
viduals include the principal posi-
tions held by them from March 1989
to the date of this Proxy Statement.
It is intended that all proxies in
the accompanying form, unless con-
trary instructions are given there-
on, will be voted for the election
as directors of James C. Dowdle, Di-
ego E. Hernandez, Robert E. La
Blanc, John W. Madigan and Andrew J.
McKenna. All of the nominees are
currently directors of the Company.
In case any of the
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ELECTION OF THE NAMED
NOMINEES AS DIRECTORS OF THE COMPANY
(PROPOSAL 1).
- --------------------------------------------------------------------------------
NOMINATED FOR ELECTION AT THIS MEETING AND, IF ELECTED, TO SERVE UNTIL THE 1997
ANNUAL MEETING:
JAMES C. DOWDLE (60) DIEGO E. HERNANDEZ (60)
--DIRECTOR SINCE 1985. --DIRECTOR SINCE 1991.
Consultant. Senior Vice
Executive Vice Presi- President, Right Asso-
dent of the Company ciates (management con-
since August 1991 and sultants) from December
President and Chief Ex- 1991 to February 1993;
ecutive Officer, Trib- Consultant from August
une Broadcasting Compa- 1991 to November 1991;
ny.* Vice Admiral, U.S. Navy
(Retired), Deputy Com-
mander, U.S. Space Com-
mand until February
1991.
ROBERT E. LA BLANC (60) JOHN W. MADIGAN (56)
--DIRECTOR SINCE 1982. --DIRECTOR SINCE 1975.
Executive Vice Presi-
President, Robert E. La dent of the Company and
Blanc Associates, Inc. President and Chief Ex-
(consultants in infor- ecutive Officer, Trib-
mation technology). Di- une Publishing Company*
rector of Contel Cellu- since August 1991 and
lar, Inc.; Storage Publisher, Chicago
Technology, Inc.; M/A Tribune since August
Com Inc.; TIE/com- 1990. President and
munications, Inc.; Pru- Chief Executive Offi-
dential Global Fund; cer, Chicago Tribune
Prudential Pacific Company* until Septem-
Growth Fund, Inc.; Pru- ber 1993. Director of
dential Short-Term QUNO Corporation.
Global Income Fund,
Inc. Trustee of Pruden-
tial U.S. Government
Fund.
ANDREW J. MCKENNA (64)
--DIRECTOR SINCE 1982.
Chairman, President and
Chief Executive Offi-
cer, Schwarz Paper Com-
pany (paper converter).
Director of Aon Corpo-
ration; Dean Foods Com-
pany; First Chicago
Corporation; The First
National Bank of Chica-
go; McDonald's Corpora-
tion; Skyline Corpora-
tion.
- -------
* A subsidiary of the Company.
4
<PAGE>
- --------------------------------------------------------------------------------
THE FOLLOWING DIRECTORS CONTINUE IN OFFICE UNTIL THE 1995 ANNUAL MEETING:
STANTON R. COOK (68) JOHN E. HOUGHTON (62)
--DIRECTOR SINCE 1972. --DIRECTOR SINCE 1980.
Retired since January
Consultant since Janu- 1993. Chairman, Chief
ary 1993, Acting Chief Executive Officer (un-
Executive Officer and til January 1991), QUNO
Chairman of the Board, Corporation. Director
Chicago National League of QUNO Corporation.
Ball Club, Inc.* Re-
tired Chairman (until
January 1993), and
Chief Executive Officer
(until August 1990) of
the Company (Publisher,
Chicago Tribune until
August 1990).
JAMES J. O'CONNOR (57) ARNOLD R. WEBER (64)
--DIRECTOR SINCE 1985. --DIRECTOR SINCE 1989.
President, Northwestern
Chairman and Chief Ex- University. Director of
ecutive Officer and Di- Aon Corporation; Bur-
rector, Commonwealth lington Northern Inc.;
Edison Company. Direc- Inland Steel Indus-
tor of Corning Incorpo- tries, Inc.; PepsiCo,
rated; First Chicago Inc.
Corporation; The First
National Bank of Chica-
go; UAL Corporation.
- --------------------------------------------------------------------------------
THE FOLLOWING DIRECTORS CONTINUE IN OFFICE UNTIL THE 1996 ANNUAL MEETING:
CHARLES T. BRUMBACK (65) KRISTIE MILLER (49)
--DIRECTOR SINCE 1981. --DIRECTOR SINCE 1981.
Author; Journalist, The
Chairman since January Daily News-Tribune,
1993, President since Inc. of La Salle, Illi-
January 1989 and Chief nois.
Executive Officer since
August 1990 (Chief Op-
erating Officer from
January 1989 to July
1990) of the Company.
Director of QUNO Corpo-
ration.
NEWTON N. MINOW (68) DONALD H. RUMSFELD (61)
--DIRECTOR SINCE 1991. --DIRECTOR SINCE 1992.
Former Chairman of the
Of Counsel (Partner un- Board of Directors,
til March 1991), Sidley (President from April
& Austin (law firm) and 1992) and Chief Execu-
Professor, Northwestern tive Officer (from Oc-
University. Director of tober 1990 until August
Aon Corporation; Foote, 1993), General Instru-
Cone & Belding Communi- ment Corporation. Se-
cations, Inc.; Manpow- nior Advisor to William
er, Inc.; Sara Lee Cor- Blair & Company until
poration. October 1990. Director
of The Allstate Corpo-
ration; Amylin Pharma-
ceuticals, Inc.; Gilead
Sciences, Inc.; Kellogg
Company; Metricom,
Inc.; Sears, Roebuck
and Co.
- -------
* A subsidiary of the Company.
5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held seven
meetings during 1993. Each incumbent
member of the Board of Directors at-
tended 75% or more of the meetings of
the Board of Directors and all com-
mittees of which they are members.
Audit Committee
The functions of the Audit Commit-
tee, presently consisting of Messrs.
Hernandez, La Blanc, Minow (Chairman)
and Rumsfeld, include making recom-
mendations concerning the appointment
of independent accountants to audit
the books of the Company, reviewing
the financial statements examined by
the independent accountants, and re-
viewing recommendations made by the
independent accountants with respect
to the accounting methods used, the
organization and operations of the
Company and the system of internal
control followed by the Company. The
Audit Committee held two meetings
during 1993.
Governance and Compensation Committee
The functions of the Governance and
Compensation Committee, presently
consisting of Messrs. McKenna (Chair-
man), O'Connor and Weber, and Ms.
Miller, include establishing the
renumeration for the Chief Executive
Officer of the Company, consulting
with the Chief Executive Officer with
respect to the compensation of
other executives of the Company, and
administering and
determining awards under the
Company's 1992 Long-Term Incentive
Plan and certain other employee bene-
fit plans. The Committee also identi-
fies and proposes candidates for
election to the Board of Directors of
the Company. The Committee will con-
sider, at its regularly scheduled
meetings, nominees recommended by
stockholders if submitted in writing.
The Committee also accepts other re-
sponsibilities relating to corporate
governance assigned to it, including
studying the size, composition, com-
mittee structure and committee mem-
bership of the Board of Directors.
The Committee met six times during
1993.
Other Standing Committees
The Company has an Executive Com-
mittee presently consisting of
Messrs. Brumback (Chairman), Dowdle,
Madigan, McKenna and Minow. The Com-
mittee did not meet in 1993, but
acted twice by unanimous written con-
sent.
The Company also has a Finance Com-
mittee presently consisting of
Messrs. Hernandez, La Blanc (Chair-
man), Minow and Rumsfeld. The Commit-
tee met one time during 1993.
The Company also has a Technology
Advisory Committee presently consist-
ing of Messrs. Brumback (Chairman),
Dowdle, Hernandez, La Blanc, Madigan,
Minow and Rumsfeld as well as other
executives of the Company. The Com-
mittee met two times during 1993.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive annual stipends and
meeting fees. The annual stipend for board membership is $24,000 and the fee
for each board meeting attended is $1,500. Committee chairmen receive an annual
stipend of $4,000 and each participant receives a fee of $1,000 for each
committee meeting attended. The Company also reimburses directors for travel
expenses incurred in attending meetings.
Directors are eligible to elect to defer receipt of all or a portion of their
cash stipend and fees. Directors who elect to defer amounts are credited with
deemed income, net of applicable corporate income taxes, based on investments
selected by the Directors. At the time of distribution, the amount paid to the
Director is increased by an amount that approximates the tax saving to the
Company resulting from the deduction allowed for the distribution of the deemed
income amount included in the distribution. Payment of such amounts together
with such credited income will be made over a series of years in the future.
The Company has a Restricted Stock Plan for Outside Directors. Under the
plan, each nonemployee director, upon each election or re-election to the
Board, is awarded a block of restricted Common Stock equal to 300 shares for
each year of the term of office for which the director is elected. The shares
vest at the rate of 300 shares per year of service on the Board and are
forfeited if service on the Board is terminated prior to vesting for reasons
other than death or permanent disability. No portion of the stock may be sold
or otherwise transferred until all shares of a particular award have vested.
Awards of 900 shares each were made on April 20, 1993 to Ms. Miller, Mr. Minow
and Mr. Rumsfeld. The closing price of the Common Stock on that date was
$56.125.
The Company paid Mr. Cook $375,000 for consulting services in 1993 relating
to the Chicago Cubs and has agreed to continue this arrangement for 1994. The
Company also provides Mr. Cook with the use of an office and secretarial and
other appropriate assistance.
Mr. Houghton serves as Chairman of the Board of QUNO Corporation, an
affiliate of the Company, and was compensated by QUNO $38,800 for such services
in 1993.
6
<PAGE>
- --------------------------------------------------------------------------------
OTHER TRANSACTIONS
Mr. Minow is of counsel to the law
firm of Sidley & Austin, which was
one of the primary outside law firms
providing legal services to the Com-
pany in 1993. This relationship is
expected to continue in 1994 and fu-
ture years.
Tribune Properties, Inc. and Chi-
cago Tribune Company lease office
space and together with other
subsidiaries of the Company provide
services to the Robert R. McCormick
Tribune Foundation. During 1993, the
Foundation paid $274,577 to Company
subsidiaries for the leased space and
services.
APPROVAL OF AMENDMENT TO THE 1992
LONG-TERM INCENTIVE PLAN (PROPOSAL 2)
Stockholders are asked to approve
an amendment to the Company's 1992
Long-Term Incentive Plan (the "Plan")
which would place a limit on the num-
ber of shares subject to stock op-
tions, stock appreciation rights and
other types of stock based award that
can be granted to any participant
during any year.
The Omnibus Budget Reconciliation
Act of 1993 added Section 162(m) to
the Internal Revenue Code ("Code").
Section 162(m) generally limits the
deduction that may be claimed for
compensation paid to the Chief Execu-
tive Officer and the four other high-
est paid executive officers at the
end of a given fiscal year to
$1,000,000 per person, subject to
certain exceptions. The rule applies
to all types of compensation, includ-
ing amounts realized on exercise of
stock options and stock appreciation
rights, unless the awards and plan
under which they are made qualify as
"performance based" under the terms
of the Code and related regulations.
The Company has been advised by coun-
sel that approval of the proposed
amendment will permit future grants
of stock options and stock apprecia-
tion rights under the Plan to meet
the requirements for performance
based compensation.
The Plan was approved by stockhold-
ers at the 1992 Annual Meeting. The
Plan authorizes the grants of stock
options, stock appreciation rights
and other types of stock based long-
term incentive awards. The Plan pro-
vides a number of shares available
for new awards equal to 0.9 percent
of the adjusted average Common Stock
outstanding used by the Company to
calculate fully diluted earnings per
share for the preceding year plus un-
used shares from prior years. For
1994, 664,926 shares are available
for new awards under the Plan. Addi-
tional shares are available
(2,001,527 shares as of March 3,
1994) but are limited in use to mak-
ing Replacement Option (reload)
awards. The Plan also imposes various
limits on the number of shares that
may be used for certain types of
awards.
The Board of Directors on February
15, 1994, adopted the following
amendment to Section 4.1 of the Plan
subject to stockholder approval:
"Notwithstanding any provision
in this Plan to the contrary, but
subject to the adjustment provi-
sions of Section 4.4 hereof, the
maximum number of shares of Com-
mon Stock available for Awards
under this Plan to any Partici-
pant in any fiscal year of the
Company shall not exceed 500,000
shares."
The proposed amendment is a further
limitation on the current terms of
the Plan, and does not add to bene-
fits or compensation presently avail-
able for award under the Plan. Ap-
proval of the amendment will permit
the Company to avoid the Section
162(m) limitation on the deductibil-
ity of compensation relating to stock
options and stock appreciation rights
granted under the Plan in 1994 and
subsequent years.
Approval of the proposed amendment
requires the affirmative vote of a
majority of the votes of all shares
present and entitled to vote on the
matter.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO THE 1992 LONG-TERM
INCENTIVE PLAN (PROPOSAL 2).
7
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS (PROPOSAL 3)
The Board of Directors has selected Price Waterhouse to serve as the Company's
independent certified public accountants for 1994. Price Waterhouse has
examined and rendered its opinion on the financial statements of the Company
for many years. Although the Company is not required by either its Restated
Certificate of Incorporation or Bylaws to do so, it has chosen to submit the
selection of auditors to the stockholders for ratification. If the selection of
Price Waterhouse as auditors for 1994 is not ratified, the Board will take
under advisement the selection of other auditors.
Representatives of Price Waterhouse will be present at the 1994 Annual Meeting
and will be available to respond to appropriate questions and to make a
statement if they desire to do so.
Approval of this proposal requires the affirmative vote of a majority of the
votes of all shares present and entitled to vote on the matter.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF
PRICE WATERHOUSE AS THE COMPANY'S INDEPENDENT ACCOUNTANTS (PROPOSAL 3).
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Stockholders may submit proposals appropriate for stockholder action at the
Company's annual meetings consistent with regulations of the Securities and
Exchange Commission. Under Commission rules, proposals to be considered for
inclusion in the Proxy Statement for the 1995 Annual Meeting must be received by
the Company no later than November 21, 1994. The Company's Bylaws set forth
additional requirements and procedures regarding the submission by stockholders
of matters for consideration at the annual meeting, including a 60-day notice
requirement. Proposals should be directed to Tribune Company, 435 North Michigan
Avenue, Chicago, Illinois 60611, Attention: Vice President and Secretary.
The Company's Bylaws provide that notice of proposed stockholder nominations
for election of directors must be given to the Secretary of the Company not less
than 90 days prior to the meeting at which directors are to be elected. Such
notice must contain certain information about each proposed nominee, including
age, business and residence addresses, principal occupation, the number of
shares of Common Stock beneficially owned by him or her and such other
information as would be required to be included in a proxy statement soliciting
proxies for the election of such proposed nominee, and a signed consent of the
nominee to serve as a director of the Company if elected. Provision is also made
for substitution of nominees by the nominating stockholder in the event that a
designated nominee is unable to stand for election at the meeting. If the
chairman of the meeting of stockholders determines that a nomination was not
made in accordance with the foregoing procedures, such nomination is void. The
advance notice requirement affords the Board of Directors the opportunity to
consider the qualifications of all proposed nominees and, to the extent deemed
necessary or desirable by the Board, inform stockholders about such
qualifications.
8
<PAGE>
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------- -----------------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL OPTION LTIP ALL OTHER
POSITION YEAR SALARY BONUS OTHER AWARDS(#)(1) PAYOUTS(2) COMPENSATION(3)
- ------------------------------------- ---- -------- -------- ------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
CHARLES T. BRUMBACK.................. 1993 $690,327 $485,000 $14,295 50,000 $ 0 $ 32,857
President and Chief Executive Officer 1992 668,000 308,000 8,111 131,907 240,692 28,354
1991 642,000 188,000 -- 102,802 120,346 --
JAMES C. DOWDLE...................... 1993 $444,807 $250,000 $ 5,786 43,202 $ 0 $ 32,857
Executive Vice President and 1992 420,000 215,000 3,774 93,518 417,293 28,354
President of Broadcast Group 1991 405,000 175,000 -- 81,409 326,746 --
DONALD C. GRENESKO................... 1993 $237,308 $115,000 $ 546 10,000 $ 0 $ 31,732
Senior Vice President/Chief Financial 1992 226,731 85,000 0 8,000 120,346 27,189
Officer 1991 196,731 75,000 -- 8,000 60,173 --
DAVID D. HILLER...................... 1993 $253,923 $145,000 $ 0 10,000 $ 0 $ 30,692
Senior Vice President/Development(4) 1992 266,500 75,000 0 5,000 0 26,314
1991 255,000 70,000 -- 5,000 0 --
JOHN W. MADIGAN...................... 1993 $527,404 $225,000 $11,180 58,148 $ 0 $ 30,608
Executive Vice President and 1992 515,000 160,000 8,575 91,943 417,293 26,172
President of Publishing Group 1991 500,000 190,000 -- 127,518 266,861 --
SCOTT C. SMITH....................... 1993 $311,414 $145,000 $ 2,739 12,000 $ 0 $282,738
Senior Vice President/Development(5) 1992 293,338 120,000 127 16,522 209,625 28,354
1991 280,959 115,000 -- 10,000 119,366 --
</TABLE>
- -------
(1) Number of option shares. Includes replacement (reload) options, awarded
on exercise of non-qualified options paid for with previously owned Common
Stock, as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------ ------ -------
<S> <C> <C> <C>
Charles T. Brumback................................. 0 81,907 52,802
James C. Dowdle..................................... 18,202 68,518 56,409
John W. Madigan..................................... 33,148 66,943 102,518
Scott C. Smith...................................... 0 6,522 0
</TABLE>
See Option Grants Table for additional information.
(2) Represents payments of benefits (stock price appreciation and dividends
subject to limits based on pre-tax income) accrued from 1980 to February 1988
based on phantom shares awarded under the 1980 Incentive Compensation Plan. A
portion of the 1992 payouts resulted from action by the Board of Directors to
accelerate vesting of the final payments due under the plan by approximately 6
weeks. No further payments are due under this plan.
(3) Represents amounts allocated under the Employee Stock Ownership Plan
(ESOP) and matching contributions under the Savings Incentive Plan (401(k)),
and for Mr. Smith a special relocation allowance in lieu of reimbursement for
certain costs associated with his transfer to Florida. The amounts for 1993
are:
<TABLE>
<CAPTION>
ESOP 401(K) OTHER TOTAL
------- ------ -------- --------
<S> <C> <C> <C> <C>
Charles T. Brumback...................... $30,608 $2,249 $ 0 $ 32,857
James C. Dowdle.......................... 30,608 2,249 0 32,857
Donald C. Grenesko....................... 29,917 1,815 0 31,732
David D. Hiller.......................... 28,886 1,806 0 30,692
John W. Madigan.......................... 30,608 0 0 30,608
Scott C. Smith........................... 30,608 2,130 250,000 282,738
</TABLE>
9
<PAGE>
(4) Prior to November 1, 1993, Mr. Hiller served as Senior Vice President and
General Counsel.
(5) Until August 31, 1993. Beginning September 1, Mr. Smith served as
President and Chief Executive Officer of Sun-Sentinel Company, a wholly-owned
subsidiary. He is not considered an executive officer of the Company while
serving in this capacity. The compensation amounts for 1993 reflect all
compensation paid to Mr. Smith for the entire year for services in all
capacities.
- --------------------------------------------------------------------------------
OPTION GRANTS TABLE
The following table presents information as to stock option awards during the
year ended December 26, 1993. The three columns on the right project the amount
that could be earned if the Common Stock price appreciates at the annual rates
indicated and if the options are held until the expiration dates shown. There
is no assurance that any particular level of potential realizable value will
actually be earned.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM
----------------------------------------------- ----------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE
NAME GRANTED(1) YEAR ($/SH) EXPIRATION DATE 0% 5% 10%
- ------------------------ ---------- ---------- -------- --------------- --- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles T. Brumback..... 50,000 5.62% $51.125 Aug. 27, 2003 $ 0 $ 1,624,902 $ 4,127,893
James C. Dowdle......... 25,000 2.81% 51.125 Aug. 27, 2003 0 812,451 2,063,946
16,228(2) 1.82% 54.375 Aug. 31, 2000 0 394,401 933,597
1,974(2) .22% 54.375 Mar. 20, 1995 0 11,700 24,041
Donald C. Grenesko...... 10,000 1.12% 51.125 Aug. 27, 2003 0 324,980 825,579
David D. Hiller......... 10,000 1.12% 51.125 Aug. 27, 2003 0 324,980 825,579
John W. Madigan......... 25,000 2.81% 51.125 Aug. 27, 2003 0 812,451 2,063,946
16,123(2) 1.81% 54.875 Aug. 31, 2000 0 395,624 936,562
3,729(2) .42% 54.875 Mar. 20, 1995 0 22,336 45,899
13,296(2) 1.50% 54.875 Mar. 16, 1996 0 119,761 252,213
Scott C. Smith.......... 12,000 1.35% 51.125 Aug. 27, 2003 0 389,976 990,694
All Common Stockholders. NA NA NA NA 0 2,154,236,315(3) 5,472,611,275(3)
</TABLE>
- -------
(1) All options permit the optionee to pay for exercise with Common Stock
owned for six months and to pay withholding tax with shares acquired on
exercise. The Company had a policy to award replacement options to executives
who exercise options in this manner at a time when the stock price is at least
25% above the option price. This policy was suspended on October 26, 1993
pending action to qualify future grants as "performance based" under Sec.
162(m) of the Internal Revenue Code. New options are generally exercisable two
years after award and replacement options one year after award but immediately
upon a change in control. Options granted less than six months prior to a
change in control to an executive officer are cancelled in exchange for a cash
payment, effected six months and one day after the option grant date, equal to
the difference between the fair market value and the option price on the date
of payment.
(2) Replacement (reload) option awarded on exercise of a non-qualified option
with payment made with previously owned Common Stock. The replacement option
has a term equal to the remaining term on the option exercised and is
conditioned on the individual retaining ownership of the shares acquired on
exercise of the option giving rise to the replacement award.
(3) Based on shares outstanding on July 27, 1993, the closing stock price of
$51.125 on that date, and a 121 month period, all of which conform to the
regular stock option awards made to executives on that date.
10
<PAGE>
- --------------------------------------------------------------------------------
OPTION EXERCISES AND VALUES TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT FY-
SHARES OPTIONS AT FY-END(#) END(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Charles T. Brumback..... 0 $ 0 282,149 100,000 $ 3,266,130 $1,356,250
James C. Dowdle......... 22,360 294,640 187,967 68,202 2,518,397 775,961
Donald C. Grenesko...... 7,800 238,050 64,200 18,000 808,100 234,250
David D. Hiller......... 0 0 45,000 15,000 660,250 178,750
John W. Madigan......... 40,474 523,188 214,387 83,148 2,853,140 839,722
Scott C. Smith.......... 34,500 554,588 68,047 22,000 1,133,403 288,500
</TABLE>
- -------
(1) Based on a closing stock price of $59.75 per share on December 23, 1993,
the last business day of the Company's fiscal year.
- --------------------------------------------------------------------------------
PENSION PLAN INFORMATION
Pension benefits payable to the named executive officers may be estimated
using the following tables:
Mr. Brumback
<TABLE>
<CAPTION>
YEARS OF
SERVICE
--------
REMUNERATION 35
------------ --------
<S> <C>
$600,000 $313,800
700,000 366,700
800,000 419,500
900,000 472,300
</TABLE>
Mr. Dowdle
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------
REMUNERATION 10 15 18
------------ ------- -------- --------
<S> <C> <C> <C>
$400,000 $63,100 $ 94,600 $113,600
450,000 71,100 106,600 128,000
500,000 79,100 118,600 142,400
550,000 87,100 130,600 156,800
</TABLE>
Mr. Grenesko
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------------
REMUNERATION 10 15 19
------------ ------- ------- -------
<S> <C> <C> <C>
$225,000 $30,900 $48,400 $62,500
275,000 38,000 59,500 76,700
325,000 45,000 70,600 91,000
375,000 52,100 81,600 105,300
</TABLE>
Mr. Hiller
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------------
REMUNERATION 5 10
------------ ------- -------
<S> <C> <C> <C>
$225,000 $17,300 $34,900
275,000 21,300 42,800
325,000 25,200 50,800
375,000 29,200 58,700
</TABLE>
Mr. Madigan
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------------
REMUNERATION 15 20 24
------------ -------- -------- --------
<S> <C> <C> <C>
$500,000 $ 90,600 $130,200 $161,800
550,000 99,800 143,400 178,200
600,000 109,000 156,600 194,600
650,000 118,200 169,800 211,000
</TABLE>
Mr. Smith
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------------
REMUNERATION 15 20
------------ ------- -------
<S> <C> <C>
$225,000 $42,600 $60,100
275,000 52,400 73,900
325,000 62,100 87,700
375,000 71,900 101,400
425,000 81,700 151,200
</TABLE>
The foregoing tables reflect an annual pension benefit, estimated on the
assumption that the participant will commence receiving benefits when he
reaches age 65 and that he will receive his pension in the form of a life
annuity with no survivor benefits. The estimated annual pension benefits shown
in the preceding tables include the estimated benefits payable under the
unfunded supplemental retirement plan maintained by the Company.
Benefits are based on final five year average salary (see "Salary" column in
the Summary Compensation Table that appears on page 9) and years of credited
service up to a maximum of 35 years. The pension benefits are not subject to
any deduction for social security or other offset amounts. The plan will also
be frozen at December 31, 1998 so that participants' service and compensation
after that date will not be counted in computing benefits. Salary as of
December 26, 1993 that constitutes covered compensation and years of credited
service as of that date for each executive officer named were as follows:
<TABLE>
<CAPTION>
YEARS OF
SALARY CREDITED SERVICE
-------- ----------------
<S> <C> <C>
Charles T. Brumback................................ $695,000 35
James C. Dowdle.................................... 450,000 13
Donald C. Grenesko................................. 238,000 14
David D. Hiller.................................... 300,000 5
John W. Madigan.................................... 530,000 19
Scott C. Smith..................................... 325,000 16
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mr. Brumback that provides for
his employment until December 31, 1994 at a salary of not less than $730,000
per year. See "Termination Arrangements" for additional information relating
to the agreement with Mr. Brumback.
- --------------------------------------------------------------------------------
TERMINATION ARRANGEMENTS
The Company has an agreement with Mr. Brumback that provides for payment of
deferred compensation to Mr. Brumback following his retirement for a period of
10 years at the rate of $125,000 per year. If Mr. Brumback becomes disabled or
dies during the term of his employment or during his 10 year deferred
compensation period, he or his beneficiary is entitled to receive such sum for
the remainder of the 10 year period. Thereafter, he is entitled to receive
$60,000 per year for life. If Mr. Brumback's spouse, Mary H. Brumback, survives
him, she is entitled to receive $60,000 per year for life beginning the later of
January 1, 2005 or the date of his death. Under the agreement, Mr. Brumback
agrees to provide such consulting services to the Company as may be requested
by the Board of Directors following his retirement. The Company is to compensate
Mr. Brumback at the rate of $250 per hour for such services.
The Company maintains a Transitional Compensation Plan For Executive
Employees which provides termination benefits to key executives of the Company
and its subsidiaries who are actually or constructively terminated, without
cause, within 36 months following a change in control of the Company.
Participants may elect to terminate their employment during the thirteenth month
following a change in control and qualify to receive the benefits under the
plan. Benefits include (a) payment in cash equal to two years' salary and
automobile allowance, plus an additional two months' salary for each year by
which the executive's age exceeds 55 (provided he or she has at least 10 years
of service), (b) outplacement services and (c) continuation of life, health and
disability insurance. In addition, the plan provides that the Company will
reimburse the executive for any additional income taxes which result from
payments upon termination being treated as excess parachute payments under
federal income tax law. Certain executive officers of the Company, including
Messrs. Dowdle, Grenesko, Hiller, Madigan and Smith, are covered by the plan.
All stock options granted by the Company become immediately vested and
exercisable upon a change-in-control of the Company as defined in the 1992 Long-
Term Incentive Plan or in grant agreements evidencing awards under the 1984
Long-Term Performance Plan.
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the five year cumulative return on the Common
Stock to the Standard and Poor's 500 Stock Index and to the Standard and Poor's
Newspaper Publishing Group Index. The Company is included in both of these
indexes.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Tribune Company.......... $100.00 $124.05 $ 94.59 $112.57 $134.64 $171.60
S&P 500.................. 100.00 131.59 127.49 166.17 178.81 196.75
S&P Newspaper Publishing
Group................... 100.00 118.86 95.28 115.37 129.08 149.51
</TABLE>
Based on $100 invested on December 30, 1988 in Tribune Company Common Stock,
the Standard and Poor's 500 Stock Index and the Standard and Poor's Newspaper
Publishing Group Index. Total return assumes reinvestment of dividends
quarterly.
2/24/8712/23/8812/29/8912/28/9012/27/9112/24/92
13
<PAGE>
GOVERNANCE AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
OVERVIEW
The compensation package paid to
executive officers and other manage-
ment personnel of Tribune Company
consists of four elements: (1) sala-
ry, (2) annual incentive bonus, (3)
stock options, and (4) retirement and
other benefits.
The compensation package is de-
signed to attract and retain top
quality management employees. It re-
flects competitive conditions in the
lines of business in which the Com-
pany is engaged and in the geographic
areas where the services are to be
performed. To the extent feasible,
elements of compensation are designed
to vary so as to reflect the perfor-
mance of the Company.
Through its compensation programs,
the Company also seeks to provide an
opportunity for employees and execu-
tives to acquire and hold stock in
the Company. Stock ownership is an
effective way to align the interests
of employees and shareholders.
SALARIES
Salary levels for executive officer
positions are set so as to reflect
the duties and level of responsibili-
ties inherent in the position. Com-
parative salaries paid by other com-
panies in the industries and loca-
tions where the Company does business
are considered in establishing the
salary level for a given position.
The Committee does not, however, tar-
get a specific percentile range
within the comparative group in set-
ting salaries of the Company's execu-
tive officers. The particular quali-
fications of the individual holding
the position and his or her level of
experience are also considered in es-
tablishing a salary level when the
individual is first appointed to a
given position.
Salary levels of executive officers
are reviewed annually. The perfor-
mance and contribution of the indi-
vidual to the Company is the primary
criterion influencing salary adjust-
ments. Salary levels reflect the per-
formance of the Company only to the
extent that the performance of the
Company is considered in establishing
the salary guidelines applicable for
all salaried employees during the
current year. The Committee also re-
views comparative surveys of salary
information for comparable positions
in connection with the annual salary
review. The sources of the data used
varies from executive to executive
based on the availability of compara-
ble information relative to each po-
sition. In 1993, salaries of all ex-
ecutive officers were reviewed early
in the year and changes were made ef-
fective as of the beginning of March.
In a few cases, subsequent changes
were made based on promotions and
transfers.
The salary paid to Charles T. Brum-
back, Chairman and Chief Executive
Officer of the Company, was increased
by $27,000 to $695,000 effective as
of March 1, 1993. This represented a
4.0 percent increase in Mr.
Brumback's salary. The rate of in-
crease was consistent with the
Company's overall merit increase
guidelines for salaried employees for
1993.
ANNUAL INCENTIVE BONUS
The Company maintains a plan that
provides executive officers the op-
portunity to earn an annual incentive
bonus based on performance of the
Company, performance of their indi-
vidual business unit, if applicable,
their contribution toward achievement
of certain company-wide objectives
and an evaluation of the executive's
individual performance.
A target bonus level, stated as a
percent of year-end salary, is estab-
lished for each executive officer
based on his or her level of respon-
sibility. Mr. Brumback's target bonus
is 60 percent of year-end salary. Op-
portunities are provided to earn up
to 160 percent of target bonuses for
outstanding performance, and thresh-
old standards to earn certain por-
tions of the target bonus are also
established.
Achievements against pre-estab-
lished measures of financial perfor-
mance account for 60 percent of the
target bonus. The performance mea-
sures are established by the Commit-
tee in February and are based on the
Company's operating plan that is ap-
proved by the Board at the beginning
of the year. In the case of Mr. Brum-
back, the applicable 1993 performance
measures were primary net income per
share (40 percent of target bonus),
return on equity (10 percent of tar-
get bonus) and corporate office oper-
ating expenses (10 percent of target
bonus). The first measure was ex-
ceeded and the other two measures
were achieved. The 1993 performance
measures applicable to other execu-
tive officers named in the summary
compensation table were primary net
income per share, return on equity,
corporate office operating expenses,
Broadcasting Group pretax profit, TV
broadcast rights expense, other
Broadcasting Group operating ex-
penses, TV broadcast rights cash pay-
ments, Publishing Group pretax profit
and Publishing Group operating ex-
penses excluding newsprint. Seven of
the performance measures were met or
exceeded, one was partially achieved
and one was not met.
Another 20 percent of the target
bonus may be awarded based on a sub-
jective evaluation of each execu-
tive's contribution toward achieve-
ment of four company-
wide objectives: business develop-
ment, overall effective-
14
<PAGE>
ness and efficiency, managing diversity and professional management. The final
20 percent of the target bonus is based on an evaluation of the individual's
specific performance and achievements during the year. The Committee may award
amounts up to 160 percent of the target for these two portions of the bonus. The
Committee also retains the right to adjust the overall bonus to better reflect
its evaluation of the Company's overall performance, but did not do so for 1993.
In considering bonuses for executives other than Mr. Brumback, the Committee
considers bonus recommendations submitted by the Chief Executive Officer. The
Committee also receives an assessment of the performance of each executive
from Mr. Brumback and discusses the assessments with him. In assessing the
performance of Mr. Brumback, the Committee meets privately with the Company's
other outside directors for that purpose.
The Committee awarded Mr. Brumback a bonus of $485,000 for 1993 which is
approximately 116 percent of the target bonus under the plan. The bonus earned
reflects achievement of 112 percent of the target amount based on the financial
performance factors. The Committee also considered the progress toward
achievement of the company-wide objectives and awarded a bonus amount based on
127 percent of target. Finally, the portion of the bonus based on the outside
director's evaluation of Mr. Brumback's individual performance and achievements
in 1993 was set at 120 percent of the target amount.
STOCK OPTIONS
The Company for many years has used stock options as its long-term incentive
program for executives. Stock options are used because they directly relate the
amounts earned by the executives to the amount of appreciation realized by the
Company's stockholders over comparable periods. Stock options also provide
executives with the opportunity to acquire and build a meaningful ownership
interest in the Company. While the Company encourages stock ownership by
executives, it has not established any target levels for executive stock
holdings.
The Committee considers stock option awards on an annual basis. These are
normally awarded in July. In determining the amount of options awarded, the
Committee generally establishes a level of award based on the position held by
the individual and his or her level of responsibility, both of which reflect
the executive's ability to influence the Company's long-term performance. The
number of options previously awarded to and held by executives are also reviewed
but are not an important factor in determining the size of the current award.
The number of options actually awarded in any year may be increased or decreased
from the target level based on an evaluation of the individual's performance.
In July, 1993 the Committee awarded Mr. Brumback a nonqualified stock option
to purchase 50,000 shares at the current fair market value of the stock which
was then $51.125. The 1993 award was for the same number of shares that had been
awarded to Mr. Brumback in the previous year.
The Company maintained a program of granting replacement options based on
exercise of previously awarded stock options which were paid for with
previously acquired Common Stock as an inducement for executives to exercise
their stock options at an early date and to retain the shares acquired upon
exercise. This program was suspended on October 26, 1993 pending clarification
of the federal tax code provisions dealing with deductibility of executive
compensation.
BENEFIT PROGRAMS
The executive officers participate in various health, life, disability and
retirement benefit programs that are generally made available to all salaried
employees. Certain programs such as the Savings Incentive Plan and the Employee
Stock Purchase Plan provide employees with the opportunity to acquire Common
Stock. In addition, the executive officers participate in the Employee Stock
Ownership Plan on a consistent basis with other employees in 1993 except that
the level of executive officer participation is limited based on salary limits
imposed under federal tax laws. This program, which is intended to become the
principal retirement plan for the Company, relates the amount of retirement
benefits that will ultimately be received to the value of the Common Stock.
Executive officers also receive certain traditional perquisites that are
customary for their positions.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The 1993 federal tax code amendments impose a limit on the tax deduction for
certain executive compensation payments beginning in 1994. The cash salary and
bonus programs will not qualify for the exception to this limit for "performance
based" compensation. However, only one executive of the Company currently
receives cash compensation in excess of the $1 million limit. The Committee may
require deferral of a portion of the bonus in such a case to a time following
termination of employment when payment may be deductible by the Company.
The Company is proposing that shareholders approve an amendment to the 1992
Long-Term Incentive Plan. If approved, compensation in the form of stock
options and stock appreciation rights granted under the Plan should continue to
be eligible for a full tax deduction. The Committee recommends approval of the
amendment.
Andrew J. McKenna, Chairman
Kristie Miller
James J. O'Connor
Arnold R. Weber
15
<PAGE>
OTHER MATTERS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Andrew J. McKenna, Kristie Miller,
James J. O'Connor and Arnold R. Weber
served as members of the Governance
and Compensation Committee during the
fiscal year ended December 26, 1993.
Andrew J. McKenna, Chairman of the
Governance and Compensation Commit-
tee, served as an officer and part-
time employee of Chicago National
League Ball Club, Inc., a subsidiary
of the Company, from August 1981 to
December 1984. This was not Mr.
McKenna's principal occupation or
source of income during this period.
Subsequent to 1984, Mr. McKenna's
sole position with the Company has
been that of an outside director.
As of the date of this Proxy State-
ment, the Board of Directors does not
know if any matters will be presented
to the meeting other than those de-
scribed above. If other matters prop-
erly come before the meeting, the
persons named in the accompanying
proxy will vote said proxy in accor-
dance with their best judgment.
Expenses incurred in connection
with the solicitation of proxies will
be paid by the Company. Following the
initial solicitation of proxies by
mail, directors, officers and regular
employees of the Company may solicit
proxies in person, by telephone or
telegraph, but without extra compen-
sation. In addition, the Company has
retained Kissel-Blake, Inc. to assist
in the solicitation of proxies at an
estimated cost to the Company of
$10,000 plus out of pocket expenses.
Such solicitation may be made by
mail, telephone, telegraph or in per-
son. The Company will, upon request,
reimburse the reasonable charges and
expenses of brokerage houses or other
nominees or fiduciaries for forward-
ing proxy materials to, and obtaining
authority to execute proxies from,
beneficial owners for whose account
they hold Common Stock.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 26, 1993 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT
EXHIBITS, WILL BE PROVIDED WITHOUT CHARGE TO ANY SHAREHOLDER SUBMITTING A RE-
QUEST THEREFOR TO THE DIRECTOR/ COMMUNICATIONS, TRIBUNE COMPANY, 6TH FLOOR, 435
NORTH MICHIGAN AVENUE, CHICAGO, ILLINOIS 60611, TELEPHONE 312/222-3238.
By Order of the Board of Directors
Stanley J. Gradowski
Vice President and Secretary
Dated: March 21, 1994
16
<PAGE>
[MAP OF TRIBUNE ANNUAL MEETING LOCATION]
<PAGE>
GRAPHICS APPENDIX
1. Page 13 of the Proxy Statement contains a graph comparing the cumulative
shareholder return on the Common Stock of the Company for the last five years
with the cumulative total return on the S&P 500 Index and the S&P
Publishing/Newspapers Index.
2. Page 4 of the Proxy Statement contains photographs of each of the five
nominees for election as directors at the Company's 1994 Annual Meeting of
Stockholders, and page 5 contains photographs of each of the other eight
directors of the Company.
3. The inside back cover of the Proxy Statement contains a map showing the
location where the 1994 Annual Meeting is being held.
<PAGE>
[TRIBUNE LOGO]
PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
[ART LOGO]
- -------------------------------------------------------------------------------
3074
----
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- --------------------------------------------------------------------------------
1. Election of directors. FOR* [_] NOT FOR [_]
*For, except vote withheld from the following nominee(s):
2. Approval of plan amendment. FOR [_] AGAINST [_] ABSTAIN [_]
3. Ratification of auditors. FOR [_] AGAINST [_] ABSTAIN [_]
4. With discretionary power in the transaction of such other business as may
properly come before the meeting.
- --------------------------------------------------------------------------------
[_] Please check this box if you plan to attend the Annual Meeting.
Note: Please sign exactly
as name appears above.
Joint owners should each
sign. When signing as at-
torney, executor, adminis-
trator, trustee or guard-
ian etc., please give full
title.
---------------------------
---------------------------
SIGNATURE(S) DATE
<PAGE>
TRIBUNE COMPANY PROXY CARD
- --------------------------------------------------------------------------------
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 19, 1994
Charles T. Brumback and Stanton R. Cook, or either of them, are designated as
proxies to vote all the shares of Common Stock of Tribune Company which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders to be
held on April 19, 1994, or at any adjournment thereof, as specified on the
reverse side of this card with respect to:
1. the election of directors--the nominees are James C. Dowdle, Diego E.
Hernandez, Robert E. LaBlanc, John W. Madigan, and Andrew J. McKenna (to
withhold authority to vote for any individual nominee, write his name in the
space provided on the reverse side of this card);
2. approval of an amendment to the 1992 Long-Term Incentive Plan;
3. ratification of the selection of Price Waterhouse as auditors; and
4. with discretionary power in the transaction of such other business as may
properly come before the meeting.
Enter your vote by marking the appropriate boxes on the reverse side. The
Company's directors recommend a vote FOR the election of the nominees listed
and FOR proposals 2 and 3. The proxies shall vote as specified, but if no
choice is specified the proxies shall vote in accordance with the
recommendations of the Company's directors.
<PAGE>
[TRIBUNE LOGO]
Dear Benefit Plan Participant:
You own Tribune Company stock as a participant in the Employee Stock
Ownership Plan, Savings Incentive Plan and/or Employee Stock Purchase
Plan. One of the privileges of stock ownership is the right to vote on
certain matters at the annual meeting. This year they involve the election
of directors, an amendment to the 1992 Long-Term Incentive Plan and the
appointment of auditors. These matters are described in detail in the
notice of annual meeting and proxy statement that is a part of this
mailing.
You may indicate your vote by completing the perforated voting
instruction card that appears directly below. Employee involvement is one
of Tribune's core values, so I encourage you to participate in this
important process. Please carefully consider the issues and use your
voting rights by marking, signing and dating the instruction card, and
returning it to First Chicago Trust Company in the enclosed envelope. YOUR
VOTE IS CONFIDENTIAL AND WILL ONLY BE SEEN BY FIRST CHICAGO TRUST AS
TABULATING AGENT FOR THE PLAN TRUSTEE AND ADMINISTRATOR.
Sincerely,
/s/ Charles T. Brumback
- --------------------------------------------------------------------------------
5745
----
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS VOTING INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- --------------------------------------------------------------------------------
1. Election of directors. FOR* [_] NOT FOR [_]
*For, except vote withheld from the following nominee(s):
2. Approval of plan amendment. FOR [_] AGAINST [_] ABSTAIN [_]
3. Ratification of auditors. FOR [_] AGAINST [_] ABSTAIN [_]
4. With discretionary power in the transaction of such other business as may
properly come before the meeting.
- --------------------------------------------------------------------------------
[_] Please check this box if you plan to attend the Annual Meeting.
Note: Please sign exactly
as name appears above.
Joint owners should each
sign. When signing as at-
torney, executor, adminis-
trator, trustee or guard-
ian etc., please give full
title.
------------------------------
------------------------------
SIGNATURE(S) DATE
<PAGE>
TRIBUNE COMPANY VOTING INSTRUCTION CARD
- --------------------------------------------------------------------------------
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 19, 1994
The Northern Trust Company, as Trustee for the Tribune Company Employee Stock
Ownership Plan and the Tribune Company Savings Incentive Plan, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as nominee under the Tribune
Company Employee Stock Purchase Plan, are instructed to vote the Tribune
Company Common Stock and Preferred Stock allocated and held in my respective
plan accounts at the Annual Meeting of Stockholders of the Company to be held
on April 19, 1994, or at any adjournment thereof, as specified on the reverse
side of this card with respect to:
1. the election of directors--the nominees are James C. Dowdle, Diego E.
Hernandez, Robert E. LaBlanc, John W. Madigan, and Andrew J. McKenna (to
withhold authority to vote for any individual nominee, write his name in
the space provided on the reverse side of this card);
2. approval of an amendment to the 1992 Long-Term Incentive Plan;
3. ratification of the selection of Price Waterhouse as auditors; and
4. with discretionary power in the transaction of such other business as may
properly come before the meeting.
Enter your voting instructions on the reverse side. The Company's directors
recommend a vote FOR the election of the nominees listed and FOR proposals 2
and 3. The trustee and nominee shall vote as specified, but if you return this
card and no choice is specified you will be deemed to have instructed the
trustee and nominee to vote in accordance with the recommendations of the
Company's directors.
<PAGE>
TRIBUNE COMPANY
---------------
1992 LONG-TERM INCENTIVE PLAN
(As Amended and In Effect on 4-19-94)
------------------
ARTICLE I
Purpose
The purpose of the 1992 Long-Term Incentive Plan (this "Plan") is to
enable Tribune Company (the "Company") to offer key management employees of the
Company and Subsidiaries (defined below) performance-based stock incentives and
other equity interests in the Company and other incentive awards, thereby
attracting, retaining and rewarding such employees, and strengthening the
mutuality of interests between the employees and the Company's stockholders.
ARTICLE II
Definitions
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Award" shall mean any form of Stock Option, Stock Appreciation
Right, Stock Award, Performance Shares, Performance Units or Other Stock-Based
Award granted under this Plan, whether singly, in combination, or in tandem, to
a Participant by the Committee pursuant to such terms, conditions, restrictions
and/or limitations, if any, as the Committee may establish by the Award Notice
or otherwise.
2.2 "Award Notice" shall mean a written notice from the Company to a
Participant that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award.
2.3 "Beneficiary" shall mean a person or persons designated by a
Participant to succeed to, in the event of death, any outstanding Award held by
the Participant. Any Participant may, subject to such limitations as may be
prescribed by the Committee, designate one or more persons primarily or
contingently as beneficiaries in writing by notice delivered to the Company, and
may revoke such designations in writing. If a Participant fails effectively to
designate a beneficiary, then the Participant's estate shall be the
Participant's beneficiary.
2.4 "Board" shall mean the Board of Directors of the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended, or
any successor legislation.
2.6 "Committee" shall mean the Governance and Compensation Committee or
such other committee of the Board appointed from time to time by the Board
consisting of two or more Directors, none of whom can participate in this Plan.
Members of the Committee must qualify as disinterested persons within the
meaning of Securities and Exchange Commission Regulation [S] 240.16b-3 or any
successor regulation.
2.7 "Common Stock" shall mean the common stock (without par value) of
the Company.
<PAGE>
2.8 "Disability" shall mean a disability qualifying the Participant to
receive benefits under the Company's or a Subsidiary's long-term disability
plan. Disability shall be deemed to occur on the date eligibility for such
benefit payments begins.
2.9 "Fair Market Value" unless otherwise required by any applicable
provision of the Code or any regulations issued thereunder shall mean, as of any
date, the closing price of the applicable security as reported on the New York
Stock Exchange Composite Transactions list (or such other consolidated
transaction reporting system on which the applicable security is primarily
traded) for such day, or if the applicable security was not traded on such day,
then the next preceding day on which the security was traded, all as reported by
such source as the Committee may select. If the applicable security is not
readily tradeable on a national securities exchange or other market system, its
Fair Market Value shall be set under procedures established by the Committee on
the advice of an investment advisor.
2.10 "Incentive Stock Option" shall mean any Stock Option awarded under
Article VI of this Plan intended to be and designated as an "Incentive Stock
Option" within the meaning of Section 422 of the Code or any successor
provision.
2.11 "Non-Qualified Stock Option" shall mean any Stock Option awarded
under Article VI of this Plan that is not an Incentive Stock Option.
2.12 "Officer" shall mean an employee of the Company or a Subsidiary who
is considered to be an officer under Securities and Exchange Commission
Regulation [S] 240.16a-1(f) or any successor regulation.
2.13 "Participant" shall mean an Eligible Employee (as defined in
Section 5.1) to whom an Award has been made pursuant to this Plan.
2.14 "Replacement Option" shall mean a Non-Qualified Stock Option
granted pursuant to Section 6.3, upon the exercise of a Stock Option granted
pursuant to this Plan or the Company's 1984 Long-Term Performance Plan (the
"1984 Plan") where the option price is paid with previously owned shares of
Common Stock.
2.15 "Retirement" shall mean any termination of employment by an
employee (other than by death or Disability) who is at least 55 years of age
after at least 10 years of employment by the Company and/or a Subsidiary.
2.16 "Stock Option" or "Option" shall mean any right to purchase shares
of Common Stock (including a Replacement Option) granted pursuant to Article VI
of this Plan.
2.17 "Subsidiary" shall mean any corporation (or partnership, joint
venture, or other enterprise) (i) of which the Company owns or controls,
directly or indirectly, 50.1% or more of the outstanding shares of stock
normally entitled to vote for the election of directors (or comparable equity
participation and voting power) or (ii) which the Company otherwise controls (by
contract or any other means). "Control" means the power to direct or cause the
direction of the management and policies of a corporation, partnership, joint
venture, or other enterprise.
2.18 "Termination of Employment" shall mean the termination of a
Participant's employment with the Company and any Subsidiary. A Participant
employed by a Subsidiary shall also be deemed to incur a Termination of
Employment if the Subsidiary ceases to be a Subsidiary and the Participant does
not immediately thereafter become an employee of the Company or another
Subsidiary.
2.19 "Transfer" shall mean anticipation, alienation, attachment, sale,
assignment, pledge, encumbrance, charge or other disposition; and the terms
"Transferred" or "Transferable" shall have corresponding meanings.
-2-
<PAGE>
ARTICLE III
Administration
3.1 The Committee. This Plan shall be administered and interpreted by
the Committee.
3.2 Awards. The Committee shall have full authority to grant, pursuant
to the terms of this Plan, to Eligible Employees: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Stock Awards, (iv) Performance Shares, (v)
Performance Units, and (vi) Other Stock-Based Awards. In particular, and without
limitation, the Committee shall have the authority:
(a) to select the Eligible Employees to whom Awards may from time to
time be granted hereunder;
(b) to determine the types of Awards, and combinations thereof, to be
granted hereunder to Eligible Employees and whether such Awards are to
operate on a tandem basis and/or in conjunction with or apart from other
awards made by the Company outside of this Plan;
(c) to determine the number of shares of Common Stock or monetary units
to be covered by each such Award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder (including, but not
limited to, any restriction or limitation on transfer, any vesting schedule
or acceleration thereof, or any forfeiture provisions or waiver thereof,
regarding any Award and the shares of Common Stock relating thereto, based
on such factors as the Committee shall determine, in its sole discretion);
(e) to determine whether Stock and other amounts payable with respect to
an Award under this Plan shall be deferred either automatically or at the
election of the Participant; and
(f) to modify or waive any restrictions or limitations contained in, and
grant extensions to or accelerate the vestings of, any outstanding Awards as
long as such modifications, waivers, extensions or accelerations are
consistent with the terms of this Plan; but no such changes shall impair the
rights of any Participant without his or her consent.
3.3 Guidelines. The Committee shall have the authority to adopt, alter
and repeal such administrative rules, guidelines and practices governing this
Plan and perform all acts, including the delegation of its administrative
responsibilities, as it shall, from time to time, deem advisable; to construe
and interpret the terms and provisions of this Plan and any Award issued under
this Plan (and any Award Notices or agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any Award Notices or agreement relating thereto in the manner and to the
extent it shall deem necessary to carry this Plan into effect.
3.4 Decisions Final. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with this Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, binding and conclusive on the Company and all employees
and Participants and their respective Beneficiaries, heirs, executors,
administrators, successors and assigns.
-3-
<PAGE>
ARTICLE IV
Shares Available
4.1 Shares. For each fiscal year of the Company from and including the
year ending December 27, 1992, the number of shares of Common Stock available
for Awards under this Plan shall be the sum of the following amounts:
(a) For Awards generally: a number of shares equal to (i) nine-tenths of
one percent (0.9%) of the adjusted average Common Stock outstanding used by
the Company to calculate fully diluted earnings per share for the preceding
year, plus (ii) any shares of Common Stock available for Awards under this
subsection in previous years but not actually awarded, plus (iii) any shares
of Common Stock subject to an Award hereunder (other than Replacement
Options) if there is a lapse, forfeiture, expiration or termination of any
such Award;
(b) For Replacement Options: a number of shares equal to (i) four-tenths
of one percent (0.4%) of the adjusted average Common Stock outstanding used
by the Company to calculate fully diluted earnings per share for the
preceding year, plus (ii) any shares of Common Stock which as of the
effective date of this Plan are authorized for awards under the 1984 Plan
and which have not been awarded, plus (iii) any shares of Common Stock
available for Awards under this subsection in previous years but not
actually awarded, plus (iv) any shares of Common Stock subject to an Award
hereunder of Replacement Options granted to persons who are Officers if
there is a lapse, forfeiture, expiration or termination of any such Award;
and
(c) For Replacement Options for Non-Officers: the number of shares of
Common Stock (i) exchanged by a Participant as full or partial payment to
the Company of the exercise price, or withheld to pay taxes in connection
with the exercise of, a Stock Option awarded under this Plan or the 1984
Plan, plus (ii) any shares of Common Stock available for Awards under this
subsection in previous years but not actually awarded, plus (iii) any shares
of Common Stock subject to an Award of a Replacement Option granted to a
person who is not an Officer if there is a lapse, forfeiture, expiration or
termination of any such Award.
The shares authorized under subsection (a) above shall be available for
any Awards made under this Plan; the shares authorized under subsection (b)
above shall be available only for Awards of Replacement Options; and the shares
authorized under subsection (c) above shall be available only for Awards of
Replacement Options to persons who are not Officers on the date of the Award.
Any shares of Common Stock delivered pursuant to an Award may consist, in whole
or in part, of authorized and unissued shares or treasury shares.
No more than three million (3,000,000) shares of Common Stock shall be
cumulatively available for issuance under this Plan for Awards made pursuant to
Articles VIII and XI.
Notwithstanding any provision in this Plan to the contrary, but subject
to the adjustment provisions of Section 4.4 hereof, the maximum number of shares
of Common Stock available for Awards under this Plan to any Participant in any
fiscal year of the Company shall not exceed 500,000 shares.
4.2 Use of Authorized Shares. The shares covered by any Award made under
this Plan shall be charged against the applicable pool of shares authorized by
Section 4.1 by first charging them, to the extent permitted in the next to last
paragraph of Section 4.1, against any shares available under Subsection 4.1(c),
next against any shares available under Subsection 4.1(b), and last against any
shares available under Subsection 4.1(a).
-4-
<PAGE>
For purposes of this Article IV, if an Award is denominated in shares of
Common Stock, the number of shares covered by such Award, or to which such Award
relates, shall be counted on the date of grant of such Award against the
aggregate number of shares available for granting Awards under this Plan;
provided, however, that Awards that operate in tandem with (whether granted
simultaneously with or at a different time from), or are substituted for, other
Awards granted under the 1984 Plan or this Plan may be counted or not counted
under procedures adopted by the Committee in order to avoid double counting.
4.3 Compliance with Rule 16b-3. To the extent that the provisions above
on the number of shares of Common Stock that can be issued under this Plan do
not conform with Securities and Exchange Commission Regulation [S] 240.16b-3,
the Committee may make such modification in the determination of share usage and
issuance so as to conform this Plan and any Awards granted hereunder to the
Rule's requirements.
4.4 Adjustment Provisions.
(a) If the Company shall at any time change the number of issued shares
of Common Stock without new consideration to the Company (such as by stock
dividend, stock split, recapitalization, reorganization, exchange of shares,
liquidation, combination or other change in corporate structure affecting the
Common Stock) or make a distribution of cash or property which has a substantial
impact on the value of issued Common Stock, the total number of shares available
for Awards under this Plan shall be appropriately adjusted and the number of
shares covered by each outstanding Award and the reference price or Fair Market
Value for each outstanding Award shall be adjusted so that the net value of such
Award shall not be changed.
(b) In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the Company
with or into another corporation which results in the outstanding Common Stock
being converted into or exchanged for different securities, cash or other
property, or any combination thereof (an "Acquisition"), subject to the
provisions of this Plan and any limitation applicable to the Award:
(i) any Participant to whom an Option has been granted shall have the
right thereafter and during the term of the Option, to receive upon exercise
thereof the Acquisition Consideration (as defined below) receivable upon the
Acquisition by a holder of the number of shares of Common Stock which might
have been obtained upon exercise of the Option or portion thereof, as the
case may be, immediately prior to the Acquisition;
(ii) any Participant to whom a Stock Appreciation Right has been granted
shall have the right thereafter and during the term of such right to receive
upon exercise thereof the difference on the exercise date between the
aggregate Fair Market Value of the Acquisition Consideration receivable upon
such acquisition by a holder of the number of shares of Common Stock which
are covered by such right and the aggregate reference price of such right;
(iii) any Participant to whom Performance Shares or Performance Units
have been awarded shall have the right thereafter and during the term of the
Award, upon fulfillment of the terms of the Award, to receive on the date or
dates set forth in the Award, the Acquisition Consideration receivable upon
the Acquisition by a holder of the number of shares of Common Stock which
are covered by the Award; and
(iv) any Participant to whom Other Stock-Based Awards have been awarded
shall have the right thereafter and during the term of the Award to
substitute the Acquisition Consideration for the Common Stock upon which the
Award is valued or in which the Award is payable.
-5-
<PAGE>
The term "Acquisition Consideration" shall mean the kind and amount of
securities, cash or other property or any combination thereof receivable in
respect of one share of Common Stock upon consummation of an Acquisition.
(c) Notwithstanding any other provision of this Plan, the Committee may
authorize the issuance, continuation or assumption of Awards or provide for
other equitable adjustments after changes in the Common Stock resulting from any
other merger, consolidation, sale of assets, acquisition of property or stock,
recapitalization, reorganization or similar occurrence upon such terms and
conditions as it may deem equitable and appropriate.
(d) In the event that another corporation or business entity is being
acquired by the Company, and the Company assumes outstanding employee stock
options and/or stock appreciation rights and/or the obligation to make future
grants of options or rights to employees of the acquired entity, the aggregate
number of shares of Common Stock available for Awards under this Plan shall be
increased accordingly.
4.5 Purchase Price. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued for purchase under this Plan, such shares shall be issued for a
consideration which shall not be less than $1 per share.
ARTICLE V
Eligibility
5.1 Officers and key management employees of the Company and its
Subsidiaries ("Eligible Employees") are eligible to be granted Awards under this
Plan. Directors who are not full-time employees of the Company or a Subsidiary
shall not be eligible to be granted Awards under this Plan. Eligibility under
this Plan shall be determined by the Committee.
ARTICLE VI
Stock Options
6.1 Grants. Stock Options may be granted alone or in addition to other
Awards granted under this Plan. Each Stock Option granted under this Plan shall
be of one of two types: (i) an Incentive Stock Option or (ii) a Non-Qualified
Stock Option. The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights).
6.2 Incentive Stock Options. Anything in this Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under this Plan be so exercised, so as to disqualify this Plan under
Section 422 of the Code, or, without the consent of the Participants affected,
to disqualify any Incentive Stock Option under Section 422 of the Code. No
Incentive Stock Options may be awarded after the tenth anniversary of the date
this Plan is adopted by the Board, and no more than three million (3,000,000)
shares of Common Stock shall be cumulatively available under this Plan for
issuance upon exercise of Incentive Stock Options.
6.3 Replacement Options. The Committee may provide either at the time of
grant or subsequently that an Option include the right to acquire a Replacement
Option upon exercise of such Option (in whole or in part) prior to termination
of employment of the Participant and through payment of the exercise price in
shares of Common Stock. In addition to any other terms and conditions the
Committee deems appropriate, the Replacement Option
-6-
<PAGE>
shall be subject to the following terms: (i) the number of shares of Common
Stock subject to the Replacement Option shall not exceed the number of whole
shares used to satisfy the exercise price of the original Option and the number
of whole shares, if any, withheld by the Company as payment for withholding
taxes in accordance with Section 14.4 hereof, (ii) the option grant date will be
the date of the exercise of the original Option, (iii) the exercise price per
share shall be the Fair Market Value on the option grant date, (iv) the
Replacement Option shall be exercisable no earlier than twelve (12) months after
the option grant date, (v) the Option term will not extend beyond the term of
the original Option, and (vi) the Replacement Option shall be a Non-Qualified
Stock Option and shall otherwise meet all conditions of this Article VI. A
Replacement Option may also be granted with respect to any option granted under
the 1984 Plan. The Committee may without the consent of the Participant rescind
the right to receive a Replacement Option grant at any time prior to an Option
being exercised.
6.4 Terms of Options. Options granted under this Plan shall be subject
to the following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:
(a) Exercise Price. The exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant but shall be not less than 100% of the Fair Market Value of
the Common Stock at the option grant date. In lieu of a fixed exercise
price, the Committee may establish an exercise price that increases
automatically on the anniversary of the Option grant date or that adjusts
periodically based on the relative performance of the Company or its stock
price as compared with the performance or stock prices of a group of
comparable companies selected by the Committee for comparison purposes at
the time of the Option grant date.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
(10) years after the date the Option is granted, and no Non-Qualified Stock
Option shall be exercisable more than eleven (11) years after the date the
Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at grant; provided, however, that, unless otherwise determined by
the Committee at grant, no Stock Option shall be exercisable prior to six
months after the option grant date.
(d) Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option term, by giving written notice of
exercise to the Company specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the exercise price in
such form as the Committee may accept. If and to the extent determined by
the Committee at or after grant, payment in full or in part may also be made
in the form of Common Stock owned by the Participant for at least six months
prior to exercise (or by certification of such ownership) or by reduction in
the number of shares issuable upon such exercise based, in each case, on the
Fair Market Value of the Common Stock on the payment date .
In the discretion of the Committee, payment may also be made by
delivering a properly executed exercise notice to the Company together with
a copy of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the exercise price. To
facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
(e) Non-Transferability of Options. No Stock Option shall be
Transferable by the Participant otherwise than by a qualified domestic
relations order as defined in the Code (but only with respect to Non-
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Qualified Stock Options) or by will or the laws of descent and distribution,
and all Stock Options shall be exercisable, during the Participant's
lifetime, only by the Participant or his or her guardian, conservator or
other legal representative.
(f) Termination of Employment by Death, Disability or Retirement. If a
Participant's employment by the Company or a Subsidiary terminates by reason
of death, Disability or Retirement, any Stock Option held by such
Participant, unless otherwise determined by the Committee at or after grant,
shall be fully vested and may thereafter be exercised by the Participant or
by the Beneficiary or legal representative of the estate of a disabled or
deceased Participant, for a period of five years (or such shorter period as
the Committee may specify at grant) from the date of such death, Disability
or Retirement or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(g) Other Termination of Employment. Unless otherwise determined by the
Committee at or after grant, if a Participant's employment by the Company or
a Subsidiary terminates for any reason other than death, Disability or
Retirement, the Stock Option shall terminate at such time as provided in the
Award, but in no event more than one year after termination.
(h) Buyout and Settlement Provisions. The Committee may at any time
offer to buy out an Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the
Participant at the time that such offer is made.
ARTICLE VII
Stock Appreciation Rights
7.1 Tandem Stock Appreciation Rights. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a "Reference Stock
Option") granted under this Plan ("Tandem Stock Appreciation Rights"). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the option grant date of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the option grant date
of such Reference Stock Option. Tandem Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
this Plan, as shall be determined from time to time by the Committee, including
the following:
(a) Term. A Tandem Stock Appreciation Right granted with respect to a
Reference Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the Reference Stock Option.
(b) Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Reference
Stock Options to which they relate shall be exercisable.
(c) Method of Exercise. A Tandem Stock Appreciation Right may be
exercised by an optionee by surrendering the applicable portion of the
Reference Stock Option.
(d) Payment. Upon the exercise of a Tandem Stock Appreciation Right a
Participant shall be entitled to receive an amount in cash and/or shares of
Common Stock equal in value to the excess of the Fair Market Value of one
share of Common Stock over the exercise price per share specified in the
Reference Stock Option multiplied by the number of shares in respect of
which the Tandem Stock
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Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.
(e) Non-Transferability and Termination. Tandem Stock Appreciation
Rights shall be Transferable only to the extent provided in Subsection
6.4(e) of this Plan and shall terminate in accordance with Subsections
6.4(f) or (g) of this Plan.
7.2 Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan. Non-Tandem Stock Appreciation Rights shall be subject to such terms
and conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including the following:
(a) Term. The term of each Non-Tandem Stock Appreciation Right shall be
fixed by the Committee, but shall not be greater than eleven (11) years
after the date the right is granted.
(b) Exercisability. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee at or after grant.
(c) Method of Exercise. A Non-Tandem Stock Appreciation Right may be
exercised in whole or in part at any time during its term, by giving written
notice of exercise to the Company specifying the number of rights to be
exercised.
(d) Payment. Upon the exercise of a Non-Tandem Stock Appreciation Right
a Participant shall be entitled to receive, for each right exercised, an
amount in cash and/or shares of Common Stock equal in value to the excess of
the Fair Market Value of one share of Common Stock on the date the Right is
exercised over the Fair Market Value of one share of Common Stock on the
date the Right was awarded to the Participant, with the Committee having the
right to determine the form of payment.
(e) Non-Transferability and Termination. Non-Tandem Stock Appreciation
Rights shall be Transferable only to the extent provided in Subsection
6.4(e) of this Plan and shall terminate in accordance with Subsections
6.4(f) or (g) of this Plan.
ARTICLE VIII
Stock Awards
8.1 Grants. Restricted or unrestricted shares of Common Stock may be
granted either alone or in addition to other Awards granted under this Plan. The
Committee may grant Awards of Common Stock subject to the attainment of
specified performance goals, continued employment and such other limitations or
restrictions as the Committee may determine.
8.2 Awards and Certificates. Stock Awards shall be subject to the
following provisions:
(a) Stock Powers and Custody. The Committee may require the Participant
to deliver a duly signed stock power, endorsed in blank, relating to the
Common Stock covered by such an Award. The Committee may also require that
the stock certificates evidencing such shares be held in custody by the
Company until any restrictions thereon shall have lapsed.
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(b) Rights as Stockholder. The Participant shall have, with respect to
the shares of Common Stock, all of the rights of a holder of shares of
Common Stock of the Company including the right to receive any dividends and
to vote the Common Stock.
ARTICLE IX
Performance Shares
9.1 Award of Performance Shares. Performance Shares may be awarded
either alone or in addition to other Awards granted under this Plan and shall
consist of the right to receive Common Stock or cash of an equivalent value at
the end of a specified Performance Period (defined below). The Committee shall
determine the Eligible Employees to whom and the time or times at which
Performance Shares shall be awarded, the number of Performance Shares to be
awarded to any person, the duration of the period (the "Performance Period")
during which, and the conditions under which, receipt of the Shares will be
deferred, and the other terms and conditions of the Award in addition to those
set forth in Section 9.2.
The Committee may condition the grant of Performance Shares upon the
attainment of specified performance goals or such other factors or criteria as
the Committee shall determine.
9.2 Terms and Conditions. Performance Shares awarded pursuant to this
Article IX shall be subject to the following terms and conditions:
(a) Non-Transferability. Performance Share Awards shall be Transferable
only in accordance with the provisions of Section 6.4(e) of this Plan.
(b) Dividends. Unless otherwise determined by the Committee at the time
of the grant of the Award, amounts equal to any dividends declared during
the Performance Period with respect to the number of shares of Common Stock
covered by a Performance Share Award will not be paid to the Participant.
(c) Payment. Subject to the provisions of the Award Notice and this
Plan, at the expiration of the Performance Period, share certificates and/or
cash of an equivalent value (as the Committee may determine) shall be
delivered to the Participant, or his or her legal representative, in a
number equal to the vested shares covered by the Performance Share Award.
(d) Termination of Employment. Subject to the applicable provisions of
the Award Notice and this Plan, upon termination of a Participant's
employment with the Company or a Subsidiary for any reason during the
Performance Period for a given Award, the Performance Shares in question
will vest or be forfeited in accordance with the terms and conditions
established by the Committee.
ARTICLE X
Performance Units
10.1 Award of Performance Units. Performance Units may be awarded either
alone or in addition to other Awards granted under this Plan and shall consist
of the right to receive a fixed dollar amount, payable in cash or Common Stock
or a combination of both. The Committee shall determine the Eligible Employees
to whom and the time or times at which Performance Units shall be awarded, the
number of Performance Units to be awarded to any person, the duration of the
period (the "Performance Cycle") during which, and the conditions under which, a
Participant's right
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to Performance Units will be vested, the ability of Participants to defer the
receipt of payment of such Units, and the other terms and conditions of the
Award in addition to those set forth in Section 10.2.
The Committee may condition the vesting of Performance Units upon the
attainment of specified performance goals or such other factors or criteria as
the Committee shall determine.
10.2. Terms and Conditions. The Performance Units awarded pursuant to
this Article X shall be subject to the following terms and conditions:
(a) Non-Transferability. Performance Unit Awards shall be Transferable
only in accordance with the provision of Section 6.4(e) of this Plan.
(b) Vesting. At the expiration of the Performance Cycle, the Committee
shall determine the extent to which the performance goals have been
achieved, and the percentage of the Performance Units of each Participant
that have vested.
(c) Payment. Subject to the applicable provisions of the Award Notice
and this Plan, at the expiration of the Performance Cycle, cash and/or share
certificates of an equivalent value (as the Committee may determine) shall
be delivered to the Participant, or his or her legal representative, in
payment of the vested Performance Units covered by the Performance Unit
Award.
(d) Termination of Employment. Subject to the applicable provisions of
the Award Notice and this Plan, upon termination of a Participant's
employment with the Company or a Subsidiary for any reason during the
Performance Cycle for a given Award, the Performance Units in question will
vest or be forfeited in accordance with the terms and conditions established
by the Committee.
ARTICLE XI
Other Stock-Based Awards
11.1 Other Awards. Other Awards of Common Stock and cash Awards that are
valued in whole or in part by reference to, or are payable in or otherwise based
on, Common Stock ("Other Stock-Based Awards") including, without limitation,
Awards valued by reference to performance concepts may be granted either alone
or in addition to or in tandem with Stock Options, Stock Appreciation Rights,
Stock Awards, Performance Shares or Performance Units.
Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such Awards, and all other conditions of the Awards.
11.2 Terms and Conditions. Other Stock-Based Awards made pursuant to
this Article XI shall be subject to the following terms and conditions:
(a) Non-Transferability. Other Stock-Based Awards shall be Transferable
only in accordance with the provisions of Section 6.4(e) of this Plan.
(b) Dividends. Unless otherwise determined by the Committee at the time
of the grant of the Award, amounts equal to any dividends declared during
the Performance Period with respect to the number of shares of Common Stock
covered by such Award will not be paid to the Participant.
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(c) Vesting. Any Award under this Article XI and any Common Stock
covered by any such Award shall vest or be forfeited to the extent so
provided in the Award Notice, as determined by the Committee.
(d) Price. Common Stock issued on a bonus basis under this Article XI
may be issued for no cash consideration; Common Stock purchased pursuant to
a purchase right awarded under this Article XI shall be priced as determined
by the Committee subject to the provisions of Section 4.5.
ARTICLE XII
Change in Control Provisions
12.1 Benefits. In the event of a Change in Control of the Company (as
defined below), and except as otherwise provided by the Committee upon the grant
of an Award:
(a) All outstanding Stock Options granted prior to the Change in Control
shall be fully vested and immediately exercisable in their entirety. The
Committee may provide for the purchase of any such Stock Options by the
Company or Subsidiary for an amount of cash equal to the excess of the
Change in Control price (as defined below) of the shares of Common Stock
covered by such Stock Options, over the aggregate exercise price of such
Stock Options.
(b) All outstanding Stock Appreciation Rights granted prior to the
Change in Control shall be fully vested and immediately exercisable in their
entirety. The Fair Market Value of the Common Stock on the date of exercise
shall be determined by the Committee and may be the Change in Control price
of the shares of Common Stock covered by such rights.
(c) All outstanding Stock Awards granted prior to the Change in Control
shall be fully vested and certificates shall be immediately delivered to the
Participants.
(d) All Performance Share and Performance Unit Awards granted prior to
the Change in Control shall vest as if (i) the applicable Performance Period
had ended upon such Change in Control, and (ii) the determination of the
extent to which any specified performance goals or targets had been achieved
will be made at such time.
(e) Any Other Stock-Based Awards granted prior to the Change in Control
shall be fully vested and payable, deliverable or exercisable, as
applicable, in accordance with the terms of the Award at the time of its
grant.
For purposes of this Section 12.1, Change in Control price shall mean
the higher of (i) the highest price per share of Common Stock paid in any
transaction related to a Change in Control of the Company, or (ii) the highest
Fair Market Value per share of Common Stock at any time during the 60-day period
preceding a Change in Control.
Notwithstanding any other provision hereof, if a Change in Control
occurs within six months of the date of grant of an Award to an Officer, such an
Award shall be cancelled in exchange for a cash payment to the Officer, effected
on the day which is six months and one day after the date of grant of such Award
(the "valuation date"), equal to the difference between the Fair Market Value of
the Award on the valuation date and the exercise price (if any) of the Award.
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Any determination by the Committee made pursuant to this Section 12.1
may be made as to all outstanding Awards, and any such determination may be made
prior to or after a Change in Control.
12.2 Change in Control. For the purposes of this Plan, a "Change in
Control" of the Company shall mean:
(a) The acquisition, other than from the Company, by any person, entity
or "group" (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act")), excluding for this
purpose the Company, the Robert R. McCormick Tribune Foundation, the
Cantigny Foundation and any employee benefit plan (or related trust)
sponsored or maintained by the Company or its subsidiaries, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either the then outstanding shares of Common Stock or
the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors; or
(b) Individuals who, as of April 28, 1992, constitute the Board of
Directors of the Company (as of April 28, 1992 the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to the date hereof whose election,
or nomination for election, by the stockholders of the Company was approved
by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the members of the Board, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be considered as though such person were a member of the
Incumbent Board; or
(c) Approval by the stockholders of the Company of a reorganization,
merger, or consolidation, in each case, with respect to which persons who
were the stockholders of the Company immediately prior to such approval do
not, immediately after such reorganization, merger or consolidation, own,
directly or indirectly, more than 60% of the combined voting power of the
then outstanding securities entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company, or a
liquidation or dissolution of the Company, or the sale of all or
substantially all of the assets of the Company.
12.3 Taxes. If, for any reason, any part or all of the amounts payable
to a Participant pursuant to this Plan (or otherwise, if such amounts are paid
by the Company or any of its subsidiaries after there has been a Change in
Control) are deemed to be "excess parachute payments" within the meaning of
Section 280G(b)(1) of the Code, the Committee may provide in the Award that the
Company shall pay to such Participant, in addition to any other amounts that he
or she may be entitled to receive pursuant to this Plan, an amount which, after
all Federal, state, and local taxes (of whatever kind) imposed on the
Participant with respect to such amount are subtracted therefrom, is equal to
the excise taxes imposed on such excess parachute payments pursuant to Section
4999 of the Code.
ARTICLE XIII
Termination or Amendment of this Plan
13.1 Termination or Amendment. Notwithstanding any other provision of
this Plan, the Board may at any time, and from time to time, amend, in whole or
in part, any or all of the provisions of this Plan, or suspend or terminate it
entirely; provided, however, that, unless otherwise required by law, the rights
of a Participant with respect to any Awards granted prior to such amendment,
suspension or termination, may not be impaired without the consent of such
Participant; and, provided further, no amendment may be made which would cause
this Plan to lose its exemption
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under Securities and Exchange Commission Regulation [S] 240.16b-3 or which would
increase the percentages set forth in Section 4.1 without shareholder approval.
ARTICLE XIV
General Provisions
14.1 Unfunded Status of Plan. This Plan is intended to be unfunded. With
respect to any payments as to which a Participant has a fixed and vested
interest but which are not yet made to a Participant by the Company, nothing
contained herein shall give any such Participant any rights that are greater
than those of a general creditor of the Company.
14.2 No Right to Employment. Neither this Plan nor the grant of any
Award hereunder shall give any Participant or other employee any right with
respect to continuance of employment by the Company or any Subsidiary, nor shall
they be a limitation in any way on the right of the Company or any Subsidiary by
which an employee is employed to terminate his or her employment at any time.
14.3 Other Plans. In no event shall the value of, or income arising
from, any Awards under this Plan be treated as compensation for purposes of any
pension, profit sharing, life insurance, disability or any other retirement or
welfare benefit plan now maintained or hereafter adopted by the Company or any
Subsidiary, unless such plan specifically provides to the contrary.
14.4 Withholding of Taxes. The Company shall have the right to deduct
from any payment to be made pursuant to this Plan, or to otherwise require,
prior to the issuance or delivery of any shares of Common Stock or the payment
of any cash hereunder, payment by the Participant of any Federal, state or local
taxes required by law to be withheld.
The Committee may permit any such withholding obligation to be satisfied
by reducing the number of shares of Common Stock otherwise deliverable or by
accepting the delivery of previously owned shares of Common Stock. Any fraction
of a share of Common Stock required to satisfy such tax obligations shall be
disregarded and the amount due shall be paid instead in cash by the Participant.
14.5 No Assignment of Benefits. No Award or other benefit payable under
this Plan shall, except as otherwise specifically provided by law, be
Transferable in any manner, and any attempt to Transfer any such benefit shall
be void, and any such benefit shall not in any manner be subject to the debts,
contracts, liabilities, engagements or torts of any person who shall be entitled
to such benefit, nor shall it be subject to attachment or legal process for or
against such person.
14.6 Governing Law. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Delaware (without regard to applicable Delaware principles of conflict of laws).
14.7 Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
14.8 Liability. No member of the Board, no member of the Committee and
no employee of the Company shall be liable for any act or failure to act
hereunder, by any other member or employee or by any agent to whom duties
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in connection with the administration of this Plan have been delegated or,
except in circumstances involving his bad faith, gross negligence or fraud, for
any act or failure to act by the member or employee.
ARTICLE XV
Effective Date of Plan
This Plan was adopted by the Board on February 18, 1992 and shall become
effective on the date it is approved by the stockholders of the Company. This
Plan shall continue in effect until terminated by the Board pursuant to Article
XIII.
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