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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Tribune Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
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[TRIBUNE COMPANY LETTERHEAD]
March 2000
Dear Fellow Shareholder:
I'm sure you have heard that Tribune Company has agreed to merge with The Times
Mirror Company, one of the top media companies in the United States. The
announcement was made shortly after the enclosed annual report was printed.
The merger will create the nation's premier local-market media company, with
extensive operations in broadcasting, publishing and interactive. The newly
merged company will retain the Tribune name and our Chicago headquarters. I
will continue to serve as chairman, president and chief executive officer.
Times Mirror is a great strategic fit. Like Tribune, it is a strong, successful
company with world-class media assets in major markets. Times Mirror's seven
daily newspapers include the flagship Los Angeles Times, Newsday (New York), The
Baltimore Sun and The Hartford Courant. Times Mirror also has an excellent
Internet division serving targeted online communities. The merger will provide
the platform to give our interactive business a truly national presence and
create one of the largest providers of interactive news, information and
entertainment services in the United States.
We expect the merger to close in the third quarter of 2000. Upon completion,
Tribune will have operations in 18 of the top 30 U.S. markets and will be the
only media company with newspaper and television combinations in the nation's
three largest markets--New York, Los Angeles and Chicago.
The merger with Times Mirror is financially compelling, and we believe it will
create significant shareholder value over time. By joining together, we are
building a national "footprint" for our company with the scale and scope to stay
competitive and grow in the consolidating media marketplace. You will see much
more about the merger in the upcoming Tribune 1st quarter report to
shareholders. In the meantime, more information is available at
www.tribune.com.
Sincerely,
/s/ John W. Madigan
<PAGE>
The cover page of the proxy statement for the Tribune Company 2000 annual
meeting of shareholders consists of (a) the Tribune logo in the upper left-hand
corner, (b) the following text appearing below the Tribune logo: "Notice of 2000
Annual Meeting and Proxy Statement" and (c) a duotone graphic consisting of four
overlapping boxes of different shades in the center of the lower half of the
page with the name of each of Tribune Company's business units - publishing,
broadcasting, interactive and education - appearing in each box and the text "A
Winning Combination" beginning in the middle of the overlapping boxes and
extending out to the right.
<PAGE>
John W. Madigan [TRIBUNE LOGO] Tribune Company
Chairman, President and 435 North Michigan Avenue
Chief Executive Officer Chicago, Illinois 60611-4001
312/222-3123 fax: 312/222-9670
e-mail: [email protected]
e-mail: [email protected]
Dear Shareholder:
The 2000 Tribune Annual Meeting of Shareholders will be held on Tuesday, May 2,
2000 at 11 a.m., Chicago time at the Hotel Inter-Continental Chicago, 505 North
Michigan Avenue, Chicago, Illinois. Your attendance at the meeting is
encouraged.
As in past years, the meeting will be broadcast live via satellite.
Shareholders with satellite receivers may watch the meeting by following the
tuning instructions provided on the next page.
The two formal items of business to be considered at the meeting are described
in the following pages. In addition, we will report on Tribune's 1999
performance and the status of the pending merger with The Times Mirror Company
and address any questions or comments.
James C. Dowdle retired as Tribune's Executive Vice President on December 31,
1999 and in accordance with Tribune's by-laws will not be standing for
reelection at this year's annual meeting. Jim served as the President of
Tribune Broadcasting from 1981 to 1997 and has served as a director since 1985.
We are grateful for Jim's many contributions to the success of Tribune and we
wish him well in his retirement.
Dennis J. FitzSimons is a new director nominee this year. Dennis was elected
Executive Vice President of Tribune effective January 1, 2000 and has been part
of Tribune Broadcasting since 1982 and its President since 1997. We believe
Dennis' substantial broadcast industry and general management experience will
be invaluable in helping Tribune implement winning strategies as a leading
media company.
Regardless of your plans for attending in person, it is important that your
shares be represented at the meeting. You may vote your shares via a toll-free
telephone number or the Internet or you may sign, date and return the enclosed
proxy card and/or voting instruction card in the envelope provided. This will
enable you to vote on the business to be transacted whether or not you attend
the meeting. Instructions regarding all three methods of voting are contained
on the proxy card and voting instruction card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ John W. Madigan
March 24, 2000
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[TRIBUNE LOGO]
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NOTICE OF THE 2000
ANNUAL MEETING OF SHAREHOLDERS
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The Annual Meeting of Shareholders of Tribune Company will be held at the
Hotel Inter-Continental Chicago, 505 North Michigan Avenue, Chicago, Illinois
at 11 a.m., Chicago time on Tuesday, May 2, 2000, for the purpose of
considering and voting on the following matters:
1. Election of four (4) directors;
2. Ratification of the selection of PricewaterhouseCoopers LLP as independent
accountants; and
3. Such other matters as may properly come before the meeting.
Only shareholders of record at the close of business on March 7, 2000 are
entitled to notice of and to vote at the meeting or any adjournment thereof.
An admission ticket is not required for attendance at the meeting; however,
confirmation of stock ownership will be made prior to admission to the
meeting. If your shares are held by a broker or a bank, please bring a copy of
a brokerage statement reflecting your stock ownership as of the record date.
Whether or not you plan to attend the meeting in person, we urge you to vote
your shares via the toll-free telephone number or the Internet or by marking,
signing, dating and returning the proxy card and/or voting instruction card
promptly in the enclosed postage-paid envelope. The voting instruction card
relates to shares held under certain employee benefit plans. The proxy is
revocable and will not affect the right of shareholders of record attending
the meeting to vote in person.
By Order of the Board of Directors
CRANE H. KENNEY
Vice President, General Counsel
and Secretary
March 24, 2000
SATELLITE BROADCAST OF ANNUAL MEETING
The meeting will be broadcast live via satellite. It will be
distributed as follows for individuals with satellite
reception:
Galaxy 3 (C Band) Transponder 15 Horizontal Polarity Downlink
Frequency 4000 MHz. Audio 6.2 and 6.8
<PAGE>
[TRIBUNE LOGO]
435 North Michigan Avenue
Chicago, Illinois 60611
----------------
PROXY STATEMENT
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This proxy statement contains information related to the 2000 annual meeting of
shareholders of Tribune Company to be held at the Hotel Inter-Continental
Chicago, 505 North Michigan Avenue, Chicago, Illinois on Tuesday, May 2, 2000
at 11 a.m., Chicago time, or any adjournment thereof, for the purposes set
forth in the accompanying notice. This Proxy Statement and accompanying forms
of proxy and voting instructions are being mailed to shareholders on or about
March 24, 2000. The Tribune Board of Directors is making this proxy
solicitation.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At the annual meeting, shareholders will act upon matters outlined in the
accompanying notice of meeting, including the election of directors and the
ratification of the Board's selection of Tribune's independent accountants. In
addition, management will report on Tribune's 1999 performance and the status
of the pending merger with The Times Mirror Company and respond to questions
and comments from shareholders.
Who is entitled to vote?
Shareholders of record at the close of business on March 7, 2000
(the "Record Date") are entitled to vote at the meeting. On that date there
were 237,490,572 shares of Tribune common stock and 1,217,133 shares of Tribune
preferred stock entitled to vote. 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 18.32 votes.
Who can attend the meeting?
All shareholders as of the Record Date, or their duly appointed proxies, can
attend. Seating, however, is limited and attendance at the meeting will be on a
first-come, first-served basis. Please note that if you hold your shares in
"street name" (that is, through a broker, bank or other nominee) you will need
to bring a copy of a brokerage statement reflecting your stock ownership as of
the Record Date to gain admittance to the meeting.
What constitutes a quorum?
The presence, in person or by proxy, of the holders of a majority of the shares
of Tribune common stock outstanding on March 7, 2000 will constitute a quorum
to conduct business. Proxies received but marked as abstentions and broker non-
votes will be included in the calculation of the number of shares considered to
be present at the meeting.
How do I vote?
Shareholders of record can vote in person or by mail, telephone or the
Internet. To vote by mail, complete, sign and date the enclosed proxy card and
return it in the enclosed prepaid envelope. To vote by telephone or the
Internet, follow the instructions on the proxy card. Your shares will be voted
as you indicate. You may specify whether your shares should be voted for all,
some or none of the nominees for director and whether your shares should be
voted for or against the ratification of the Board's selection of Tribune's
independent accountants.
You have the right to revoke your proxy at any time before the meeting by (a)
delivering a written notice of revocation to Tribune's corporate secretary, (b)
voting in person by ballot at the meeting, (c) returning a later-dated proxy
card or (d) entering a new vote by telephone or the Internet.
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If you are a shareholder who holds shares in street name, your broker or other
nominee will instruct you as to how your shares may be voted by proxy,
including whether telephonic or Internet voting options are available. You will
not be permitted to vote shares held in street name in person at the meeting
unless you have a proxy executed in your favor by the holder of record.
How do I vote my shares in Tribune's Employee Stock Plans?
If you are a participant in the Tribune Company Employee Stock Ownership Plan
(the "ESOP"), the Tribune Company Savings Incentive Plan (the "SIP") or the
Tribune Company Employee Stock Purchase Plan (the "ESPP"), you are entitled to
instruct the respective plan trustee or nominee how to cast the votes related
to such shares. Plan participants may give instructions to the respective plan
trustee or nominee by mail, telephone or the Internet. To vote by mail,
complete, sign and date the enclosed voting instruction card and return it in
the enclosed prepaid envelope. To vote by telephone or the Internet, follow the
instructions on the voting instruction card.
Any participant giving instructions to a plan trustee or nominee may revoke or
modify such instructions prior to April 28, 2000 by written notice given to the
trustee or nominee. The trustee or nominee will vote shares under these plans
in accordance with instructions that are received by April 28, 2000. Shares
held by the ESOP and the SIP for which no instructions are received by April
28, 2000 will be voted in the same proportion as the shares in each plan for
which instructions were received. Shares related to the ESPP for which no
instructions are received by April 28, 2000 will be voted in accordance with
the voting instructions set forth above. ESOP shares not allocated to any
participant accounts will be voted in the same proportion as the ESOP shares
for which voting instructions are received.
Who will count the vote?
First Chicago Trust Company, a Division of EquiServe, will tabulate the votes
and act as inspectors of election.
What are the Board's recommendations?
Unless you give other instructions when voting your proxy, the persons named as
proxy holders on the proxy card will vote in accordance with the recommendation
of the Board. The Board recommends a vote for the election of the four nominees
for director and for the ratification of the selection of
PricewaterhouseCoopers LLP as our independent public accountants for the 2000
fiscal year. With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the Board or, if no
recommendation is given, in their own discretion.
What vote is required to approve each matter to be voted on?
. Election of Directors. Directors are elected by a plurality. This means
that the nominees receiving the highest number of votes cast for the
number of positions to be filled shall be elected. You do not have the
right to cumulate votes in the election of directors. A properly executed
proxy marked "WITHHELD" with respect to the election of one or more
directors will not be voted with respect to the director or directors
indicated, although it will be counted for purposes of determining
whether there is a quorum.
. Other Proposals. The ratification of the Board's selection of our
independent accountants and the approval of any other matter that may be
properly presented at the meeting require the affirmative vote of the
holders of a majority of the shares represented in person or by proxy and
entitled to vote. A properly executed proxy marked "ABSTAIN" with respect
to the ratification of the Board's selection of our independent
accountants will not be voted, although it will be counted for purposes
of determining whether there is a quorum. Accordingly, an abstention will
have the same effect as a vote against such matter.
Proxies relating to street name shares that are not voted by brokers or other
nominees ("broker non-votes") on one but less than all matters will be treated
as shares present for purposes of determining the presence of a quorum, but
will not be treated as shares present and entitled to vote at the annual
meeting as to such matter.
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STOCK OWNERSHIP
Management Ownership
The following table shows the beneficial ownership of Tribune stock by each
director and executive officer named in the summary compensation table, and by
all directors and executive officers as a group, in each case as of February
29, 2000. Except as otherwise noted, the persons named in the table below have
sole voting and investment power with respect to all shares shown as
beneficially owned by them. Share numbers and per share prices of Tribune
common stock set forth in this proxy statement have all been adjusted to
reflect the two-for-one stock split effected in the form of a stock dividend
distributed on September 9, 1999.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Options Exercisable Shares of Preferred Stock
Name Owned(1)(2) within 60 days Beneficially Owned(1)(3)
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<S> <C> <C> <C>
James C. Dowdle 757,987(4)(5) 809,184 --
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Dennis J. FitzSimons 371,153 100,150 899
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Jack Fuller 229,513(4) 103,664 805
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Diego E. Hernandez 14,258 20,000 --
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David D. Hiller 201,618 17,500 765
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Robert E. La Blanc 33,480 20,000 --
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John W. Madigan 1,624,242(4)(5) 319,678 899
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Nancy Hicks Maynard 9,458 4,000 --
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Andrew J. McKenna 192,905 20,000 --
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Kristie Miller 787,986(5) 20,000 --
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James J. O'Connor 42,658 -- --
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Donald H. Rumsfeld 22,452 20,000 --
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Patrick G. Ryan 9,492 12,000 --
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Dudley S. Taft 80,258 16,000 --
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Arnold R. Weber 18,180 20,000 --
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Directors and Executive Officers as a group
(20 persons) 4,711,004(6) 1,806,561(6) 5,447
</TABLE>
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(1) Each amount represents less than 1% of the class, unless otherwise
indicated.
(2) Includes shares beneficially owned under the SIP and ESOP (including common
stock into which ESOP preferred stock allocated to the individual's account is
convertible). The individual plan participants have the right to direct the
voting of plan shares allocated to their accounts.
(3) Represents shares allocated to participants' accounts under the ESOP.
(4) Does not include a total of 40,724,876 shares owned by the Robert R.
McCormick Tribune Foundation and 4,300,800 shares owned by the Cantigny
Foundation (see "Principal Shareholders").
(5) Includes shares of common stock as to which beneficial ownership is
disclaimed as follows: Mr. Dowdle, 37,980 shares; Mr. Madigan, 84,150 shares;
and Ms. Miller, 38,592 shares.
(6) Collectively, represents approximately 2.7% of the class.
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon a review of filings with the Securities and Exchange Commission and
written representations that no other reports were required, we believe that
all of our directors and officers complied during fiscal 1999 with the
reporting requirements of Section 16(a) of the Securities Exchange Act of 1934.
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Principal Shareholders
The following table and footnotes set forth information as of February 29, 2000
with respect to each person who is known to Tribune management to be the
beneficial owner of more than 5% of any class of Tribune stock:
<TABLE>
<CAPTION>
Common Stock Preferred Stock
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Number Percent Number Percent
Name and Address of Owner of Shares of Class of Shares of Class
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<S> <C> <C> <C> <C>
Robert R. McCormick Tribune Foundation
Cantigny Foundation(1) 45,025,676 18.96% -- --
Room 770
435 North Michigan Avenue
Chicago, IL 60611
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The Northern Trust Company(2) 26,919,468(3) 11.33 1,217,133 100%
50 South LaSalle Street
Chicago, IL 60675
</TABLE>
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(1) The investment and voting power of each of the Robert R. McCormick Tribune
Foundation and the Cantigny Foundation is vested in a board of five directors,
consisting of James C. Dowdle, Jack Fuller, John W. Madigan and two former
Tribune officers.
(2) On February 29, 2000, The Northern Trust Company ("Northern Trust"), as
ESOP trustee, held 2,185,920 shares of Tribune common stock on behalf of the
ESOP and was deemed to hold 19,474,128 shares of Tribune common stock into
which the Tribune preferred stock is convertible, which shares are included in
determining the percent of class owned. All ownership attributed to Northern
Trust in its capacity as ESOP Trustee is shared with the participants in the
ESOP.
(3) Holdings based upon information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 14, 2000 by Northern Trust,
pursuant to which Northern Trust had sole voting power with respect to
3,351,733 shares; shared voting power with respect to 23,503,113 shares; sole
dispositive power with respect to 1,007,866 shares; and shared dispositive
power with respect to 23,327,907 shares.
Related Transactions
Tribune Properties, Inc. and Chicago Tribune Company lease office space and
together with other Tribune business units provide services to the Robert R.
McCormick Tribune Foundation. During 1999, the Foundation paid $335,434 to
Tribune for the leased space and services.
Employee Benefit Plan Voting Rights
As of the Record Date, Northern Trust, as trustee for the ESOP, held 1,217,133
shares of Tribune preferred stock, of which 820,962 shares were allocated to
participant accounts, and 2,185,906 shares of Tribune common stock, all of
which were allocated to participant accounts. As of the Record Date, Vanguard
Fiduciary Trust Company, as trustee of the SIP, held 3,549,180 shares of common
stock. Employee participants of the ESOP and SIP have the right to instruct the
trustee on how the shares allocated to their accounts are to be voted. The
trust agreements direct the trustees 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 or followed the telephone or Internet voting
procedures described on such card.
As of the Record Date, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
nominee of the ESPP, held 2,839,264 shares of Tribune common stock.
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PROPOSALS TO BE VOTED UPON
ITEM 1--ELECTION OF DIRECTORS
The Board is divided into three classes of four directors each. Directors hold
office for staggered terms of three years each, so that the term of one class
expires at each annual meeting. Four directors will be elected at this year's
annual meeting. The nominees receiving the highest numbers of votes cast for
the number of positions to be filled shall be elected.
Unless contrary instructions are given, all proxies will be voted for the
election of Dennis J. FitzSimons, Diego E. Hernandez, Robert E. La Blanc and
Andrew J. McKenna to hold office until the 2003 annual meeting. Although Mr.
McKenna is being elected to a three-year term, under Tribune's present by-laws,
he would not be eligible to serve beyond the 2002 annual meeting, which is the
meeting next following his 72nd birthday. Accordingly, Mr. McKenna is presently
expected to retire from Board service at the 2002 annual meeting.
Each of the nominees other than Mr. FitzSimons is an incumbent director. Mr.
FitzSimons has been nominated to fill the vacancy created by the retirement of
long-time Tribune executive and director James C. Dowdle. If any of the
nominees becomes unavailable for election, an event which is not now
anticipated, proxies will be voted for the election of a substitute nominee as
may be selected by the Board.
Information regarding each of the nominees and the other directors continuing
in office is set forth beginning on the following page.
The Board recommends a vote FOR the election of the named nominees as Tribune
directors.
ITEM 2--RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board has selected PricewaterhouseCoopers LLP to serve as the Company's
independent certified public accountants for 2000. PricewaterhouseCoopers LLP
is the surviving entity in a merger between Price Waterhouse LLP and Coopers &
Lybrand L.L.P., which was consummated in 1998. Price Waterhouse LLP has audited
and rendered its opinion on Tribune's financial statements for many years.
Representatives of PricewaterhouseCoopers LLP will be present at the 2000
annual meeting and will be available to respond to appropriate questions and to
make a statement if they desire to do so.
The Board recommends a vote FOR ratification of the selection of
PricewaterhouseCoopers LLP as Tribune's independent accountants.
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BOARD OF DIRECTORS
The following descriptions of the business experience of our directors and new
nominee include the principal positions held by them from March 1995 to the
date of this proxy statement.
[Photo]
Dennis J. FitzSimons (Nominee)
Executive Vice President of Tribune Company since
January 2000; President, Tribune Broadcasting
Company, a subsidiary of Tribune Company, from
May 1997 to December 1999; Executive Vice
President, Tribune Broadcasting Company, until
May 1997. Age: 49.
[Photo]
Diego E. Hernandez (Nominee)
Vice Admiral, U.S. Navy (Retired) and President,
Marine Technology Group, Inc., a technical
consulting service. Class of 2000. Age: 65.
Director since 1991.
[Photo]
Robert E. La Blanc (Nominee)
President, Robert E. La Blanc Associates, Inc.,
consultants in information technology. Director
of Chartered Semiconductor Manufacturing Ltd.;
Salient 3 Communications, Inc.; Storage
Technology Corp.; The Titan Corporation; two
families of Prudential mutual funds. Class of
2000. Age: 66. Director since 1982.
[Photo]
John W. Madigan
Chairman since January 1996, Chief Executive
Officer since May 1995 and President of Tribune
Company; President of Tribune Publishing Company,
a subsidiary of Tribune Company, until May 1994;
Publisher, Chicago Tribune until May 1994. Class
of 2001. Age: 62. Director since 1975.
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[Photo]
Nancy Hicks Maynard
President, Maynard Partners Incorporated,
consultants in news media economics; Chair, The
Freedom Forum Media Studies Center from March
1996 to September 1997; Director, Economics of
News Project, since September 1997; Member,
Global Business Network. Previously served as
Deputy Publisher and Co-owner, Oakland Tribune.
Class of 2001. Age: 53. Director since 1995.
[Photo]
Andrew J. McKenna (Nominee)
Chairman and Chief Executive Officer, Schwarz, an
international distributor of paper packaging and
related products and a printer, producer and
converter. Director of Aon Corporation;
McDonald's Corporation; Skyline Corporation.
Class of 2000. Age: 70. Director since 1982.
[Photo]
Kristie Miller
Author; Journalist, The Daily News-Tribune, Inc.
of LaSalle, Illinois. Class of 2002. Age: 55.
Director since 1981.
[Photo]
James J. O'Connor
Retired Chairman and Chief Executive Officer of
Unicom Corporation, a holding company, where he
served from June 1994 until March 1998, and of
Commonwealth Edison Company, an electric utility,
where he served from 1980 to March 1998. Director
of American National Can Group, Inc.; Corning
Incorporated; Smurfit-Stone Container
Corporation; UAL Corporation. Class of 2001. Age:
63. Director since 1985.
[Photo]
Donald H. Rumsfeld
Chairman and Director of Gilead Sciences, Inc., a
pharmaceutical company, since January 1997.
Previously served as a member of the U.S.
Congress, U.S. Ambassador to NATO, White House
Chief of Staff, Secretary of Defense, and Chief
Executive Officer of G.D. Searle & Company and
General Instrument Corporation. Director of ABB
Ltd.; Amylin Pharmaceuticals, Inc. Class of 2002.
Age: 67. Director since 1992.
7
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[Photo]
Patrick G. Ryan
Chairman, Chief Executive Officer and Director of
Aon Corporation, a broad-based insurance holding
company. Director of Sears, Roebuck and Co. Class
of 2002. Age: 62. Director since 1997.
[Photo]
Dudley S. Taft
President and Director, Taft Broadcasting
Company, an investor in media and entertainment
companies. Chairman, President and Chief
Executive Officer of WPHL-TV, Inc., a subsidiary
of the Company, until February 1996. Director of
CINergy Corp.; Fifth Third Bancorp; Southern Star
Group; The Union Central Life Insurance Company.
Class of 2002. Age: 59. Director since 1996.
[Photo]
Arnold R. Weber
President-Emeritus, Northwestern University since
January 1999. President, Civic Committee of the
Commercial Club of Chicago until July 1999.
Chancellor, Northwestern University until
December 1998. Director of Aon Corporation;
Burlington Northern Santa Fe Corporation; Deere &
Company; Diamond Technology Partners, Inc.;
PepsiCo, Inc. Class of 2001. Age: 70. Director
since 1989.
Director Compensation
Directors who are not Tribune employees receive annual stock awards, stock
options and meeting fees. Eligible directors each receive a basic stock award
of shares of Tribune common stock on the day following each annual meeting. In
addition, certain of the eligible directors who serve as a chairman of a
standing Board committee receive a supplemental stock award of shares of
Tribune common stock on the same date. Each eligible director also receives a
$1,500 fee for each Board meeting attended and a $1,000 fee for each committee
meeting attended. Tribune reimburses directors for travel expenses incurred in
attending meetings.
The basic stock awards and the supplemental stock awards are stated in dollars
but paid in shares of Tribune common stock. For 1999, the basic stock awards
and the supplemental stock awards were calculated by dividing $50,000 and
$6,000, respectively, by the fair market value of Tribune common stock on the
day of the annual meeting, which was $41.91.
Directors may defer receipt of all or a portion of their stock awards and fees.
Directors who elect to defer amounts are credited with deemed income, based on
investments they select. Payment of deferred amounts together with credited
income will be made over a series of years in the future.
On the date of each annual meeting, each non-employee director is granted an
option to purchase 4,000 shares of Tribune common stock at the fair market
value of such shares on such date. On May 4, 1999, each non-employee director
was granted an option to purchase 4,000 shares of Tribune common stock at
$41.91 per
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share, reflecting the fair market value of Tribune common stock on such date.
Each option was granted for a term of 10 years and became exercisable six
months and one day after the date it was granted. In the event of a change in
control of Tribune, all options become immediately exercisable. A "change in
control" means (a) the acquisition, other than from Tribune, by a person,
entity or group of 20% or more of the combined voting power of Tribune's
outstanding voting securities, (b) a change in the composition of the Board
whereby the individuals who as of May 6, 1997, constituted the Board cease to
constitute at least a majority of the Board without approval of the Board, or
(c) approval of a merger or reorganization of Tribune where the prior
shareholders do not thereafter own more than 50% of the reorganized company.
Option exercises may be paid for in cash or by delivery of Tribune common stock
already owned for at least six months by the nonemployee director valued at
fair market value on the date of exercise. In the event of a stock dividend or
stock split, or combination or other change in the number of issued shares of
Tribune common stock, a merger, consolidation, reorganization,
recapitalization, sale or exchange of substantially all of Tribune's assets or
dissolution of Tribune, automatic adjustments are to be made in the price,
number and types of shares subject to options in order to prevent the dilution
or enlargement of rights under options granted. Options are not transferable,
otherwise than by will or by the laws of descent and distribution. If the
director leaves the Board for any reason, the options that were then
exercisable may be exercised by the earlier of (a) the tenth anniversary of the
date of grant or (b) the third anniversary of the date such individual ceases
to be a director.
On March 7, 2000, the closing price of Tribune common stock was $39.44.
Stock Ownership Guideline
Effective March 1, 2000, Tribune established a stock ownership guideline for
its outside directors. The suggested stock ownership level is five times the
most recent annual stock award paid to outside directors. Based on the 1999
annual stock award of $50,000, the present guideline is $250,000. Outside
directors are expected to achieve the suggested ownership level over a five-
year period in increments of 20% per year. Tribune shares held in deferred
compensation accounts are counted in satisfying the guideline but unexercised
stock options are not. Tribune believes that this guideline has the positive
effect of further aligning the interests of Tribune's outside directors with
those of its shareholders. All of Tribune's outside directors presently satisfy
the suggested stock ownership level.
Meetings and Committees of the Board
The Board held seven meetings during 1999. No director attended fewer than 75%
of the total number of meetings of the Board and its committees on which he or
she served during 1999. The Board has standing audit, governance and
compensation, executive and finance committees. Until January 2000, the Board
maintained a technology committee. The function of the technology committee has
been assumed by the full Board. The following table shows the membership of the
various Board committees during 1999.
9
<PAGE>
<TABLE>
<CAPTION>
Governance and
Name Audit Compensation Executive Finance Technology
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James C. Dowdle X X
- ------------------------------------------------------------------------
Diego E. Hernandez X X X
- ------------------------------------------------------------------------
Robert E. La Blanc X X* X
- ------------------------------------------------------------------------
John W. Madigan X* X
- ------------------------------------------------------------------------
Nancy Hicks Maynard X X X
- ------------------------------------------------------------------------
Andrew J. McKenna X* X
- ------------------------------------------------------------------------
Kristie Miller X
- ------------------------------------------------------------------------
James J. O'Connor X
- ------------------------------------------------------------------------
Donald H. Rumsfeld X X X*
- ------------------------------------------------------------------------
Patrick G. Ryan X X
- ------------------------------------------------------------------------
Dudley S. Taft X X X
- ------------------------------------------------------------------------
Arnold R. Weber X* X X
</TABLE>
- --------
*Chair
Audit Committee
The function of the audit committee includes reviewing the engagement of
Tribune's independent accountants, meeting with representatives of management,
the independent accountants and internal auditors to discuss financial
reporting, accounting and internal control matters, reviewing the audited
financial statements and reviewing recommendations made by the independent
accountants with respect to accounting methods, organization and operations and
internal controls. The audit committee met three times during 1999.
Governance and Compensation Committee
The function of the governance and compensation committee includes reviewing
the compensation for Tribune's chief executive officer, consulting with the
chief executive officer with respect to the compensation of other Tribune
executives and administering and determining awards under Tribune's incentive
compensation and other employee benefit plans. The committee also identifies
and proposes Board candidates. The committee will consider nominees recommended
by shareholders if submitted in accordance with procedures set forth under the
caption "Shareholder Proposals For 2001 Annual Meeting." The committee also has
other responsibilities relating to corporate governance, including studying
Board size, composition, committee structure and committee membership. The
committee met four times during 1999.
Executive Committee
The executive committee exercises the authority of the Board on such matters as
are delegated to it by the Board from time to time and exercises the authority
of the Board between meetings. Because of the frequency of Board meetings in
1999, the executive committee did not meet and was not required to take any
action in 1999.
Finance Committee
The function of the finance committee includes reviewing with management the
capital needs of Tribune and its subsidiaries and providing consultation on
major borrowings and proposed issuances of debt and equity securities. The
committee met one time during 1999.
Technology Committee
The function of the technology committee included reviewing with management the
technology strategies and initiatives of Tribune and its subsidiaries. The
committee met two times during 1999.
10
<PAGE>
EXECUTIVE COMPENSATION
Governance and Compensation Committee Report on Executive Compensation
Overview
Tribune seeks to offer a compensation package necessary to attract and retain
top-quality management employees and which reflects competitive conditions in
the lines of business in which Tribune is engaged and in the geographic areas
where the services are to be performed. Elements of compensation are designed
to reflect the performance of Tribune and the employee.
The 1999 compensation package paid to executive officers and other management
personnel of Tribune consisted of five elements:
.salary;
.annual incentive bonus;
.stock options;
.stock awards; and
.other benefits.
Tribune executive officers and other management employees are eligible to
receive annual incentive bonuses, stock options and stock awards pursuant to
the 1997 Incentive Compensation Plan (the "Plan"). The purpose of the Plan is
to provide incentives to management and other key employees to increase the
value of Tribune's common stock. Shareholder Value Added, or SVA, is used to
measure corporate performance because of the close association between
increases in SVA and increases in the return on investment for our
shareholders. SVA is defined as after-tax profit less a charge for the average
capital invested. After-tax profit equals operating profit, plus equity income
(loss), amortization of intangible assets and interest income on notes
receivable, less taxes. Capital equals equity plus debt and deferred
liabilities.
Salaries
Salary levels for executive officer positions are set so as to reflect the
duties and level of responsibilities inherent in the position. Comparative
salaries paid by other companies, based on compensation surveys prepared by
independent outside organizations, are considered in evaluating the salary
level for a given position. These surveys include hundreds of companies
representing a broad cross-section of American business and cover more
companies than are included in the two indices used in the performance graph
appearing later in this proxy statement. Each set of data used is selected
because it is believed to be the best available for its intended purpose. The
governance and compensation committee (the "Committee") sets salaries within
the range of accepted practice but does not target a specific percentile range
within the comparative groups in setting executive officers' salaries. The
particular qualifications of the individual holding the position and his or her
level of experience are also considered in establishing a salary level.
Salaries of executive officers are reviewed annually and at the time of
promotions. The performance and contribution of the individual to Tribune are
the primary criteria influencing salary adjustments. Salary changes reflect
Tribune's performance to the extent that the performance is considered in
establishing the salary guidelines applicable for all salaried employees during
the current year. The Committee also reviews comparative surveys of salary
information for comparable positions as described in the preceding paragraph in
connection with the annual salary review. The sources of the data used varies
from executive to executive based on the availability of comparable information
relative to each position. Salaries of all executive officers are reviewed
early in the year and changes are made effective as of the end of February.
11
<PAGE>
The salary of John W. Madigan, Tribune's Chairman, President and Chief
Executive Officer, was increased by $31,485 to $818,605 effective as of
February 21, 1999. This represented an approximate 4% increase in Mr. Madigan's
salary. The rate of increase was consistent with Tribune's overall merit
increase guidelines based upon performance for salaried employees for 1999.
Annual Incentive Bonus
Tribune's annual management incentive program provides executive officers and
other key employees the opportunity to earn an annual incentive bonus based on
their performance and the financial performance of their business unit, group
or Tribune as a whole. SVA is used as the financial performance measure for
determining annual incentive bonuses. In February 1999, the Committee
established the 1999 minimum and maximum SVA goals for Tribune and each
business group. The Committee also established target bonus levels, stated as a
percentage of year-end salary, for each executive officer, based on his or her
level of responsibility.
Individual bonuses for executive officers other than Mr. Madigan and Mr. Dowdle
are awarded from a pool established by multiplying the target bonuses for all
participants within a specific business unit or group by the respective level
of performance toward the established SVA goals. In February 1999, the
Committee established an award scale, with 40% of the target bonus pool earned
if the minimum SVA goal was achieved and up to 200% of the target bonus pool
earned if the maximum SVA goal was achieved. Bonus awards from the available
pool are allocated to eligible executives at the discretion of the business
unit leader, subject to the approval of the president of the business group and
Mr. Madigan.
In considering bonuses for executive officers named in the summary compensation
table other than Mr. Madigan, the Committee receives an assessment of the
performance of each executive from Mr. Madigan and discusses the assessments
with him. In assessing the performance of Mr. Madigan, the Committee meets
privately with other outside directors for that purpose.
The bonuses for Mr. Madigan and Mr. Dowdle were calculated based upon Tribune's
SVA achievement and their individual performance and achievements in 1999,
subject to certain limitations imposed by the Plan related to Tribune's
earnings before interest, taxes, depreciation and amortization. The Committee
awarded Mr. Madigan a bonus of $1,750,000 for 1999, which reflects the
achievement of 200% of Tribune's 1999 SVA goal and the outside directors'
evaluation of Mr. Madigan's individual performance and achievements in 1999.
Stock Options
Tribune for many years has used stock options as long-term incentives for
executives. Stock options are used because they directly relate the amounts
earned by the executives to the amount of appreciation realized by Tribune
shareholders over comparable periods. Stock options also provide executives
with the opportunity to acquire and build an ownership interest in Tribune. The
Plan provides for a 10-year exercise period for stock options and gives the
Committee the ability to modify the vesting schedule for stock option grants.
Option grants under the Plan generally vest in equal annual installments over a
period of four years from the grant date.
The Committee considers stock option awards on an annual basis in February. 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 Tribune's long-term performance. The number of options previously
awarded to and held by executives is also reviewed but is 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, but the Committee
does not use any particular corporate or business unit performance measures in
determining the size of stock option grants to individual executive officers.
12
<PAGE>
In February 1999, the Committee awarded Mr. Madigan a nonqualified stock option
to purchase 260,000 shares at the current fair market value of the stock, which
was then $32.13. The award was consistent with the number of shares that had
been awarded to Tribune's chief executive officer in recent years.
To encourage stock ownership by executive officers, replacement stock options
("replacement options") are granted simultaneously with the exercise of the
original stock option. Replacement options are intended to encourage an
executive officer to exercise a stock option earlier than might otherwise
occur, thus resulting in increased share ownership by the executive officer.
Replacement options are granted when an executive officer exercises an option
by surrendering (or attesting to) currently owned shares to purchase the shares
subject to the option as well as to satisfy tax withholding obligations related
to the exercise of the option. Replacement options are subject to the same
terms and conditions as the original options, including the expiration date,
except that the option price of a replacement option is the fair market value
on the date of its grant rather than the option price of the original option
and replacement options do not become exercisable until one year after award.
The grant of replacement options does not result in an increase in the total
combined number of shares and options held by an employee and, therefore, does
not increase amounts paid by Tribune. As shown in the table beginning on page
16, Mr. Madigan received replacement options during 1999 based on his exercise
of previously awarded options.
Stock Awards
The Plan also provides for performance equity program awards to be granted to
certain executive officers based upon the achievement of certain intermediate-
term SVA goals. Performance equity program awards are subject to such
performance and other conditions as are specified by the Committee. In February
1997, Mr. Madigan was allocated 18,080 shares of Tribune common stock as his
target performance equity program award. Because Tribune exceeded its SVA goals
for fiscal years 1997 through 1999, performance equity program awards in excess
of the target allocations were distributed to participating executive officers
in February 2000. Mr. Madigan's award was 27,120 shares, which represented 150%
of his targeted allocation. No shares were allocated or distributed under the
performance equity program in 1999 and no further awards under the performance
equity program are contemplated.
Other Benefits
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 SIP and the ESPP provide employees with
the opportunity to acquire Tribune common stock. In addition, the executive
officers participate in the ESOP on a consistent basis with other employees.
Tribune also maintains a supplemental defined contribution plan for employees
who earn salaries in excess of the limit imposed by the Code, to replace
contributions lost by the imposition of such limit. The ESOP relates the amount
of retirement benefits that will ultimately be received to the value of Tribune
common stock. Executive officers also receive certain traditional benefits and
perquisites that are customary for their positions.
Stock Ownership Guidelines
Effective January 1, 1996, the Committee implemented stock ownership guidelines
for approximately 85 executives. The guidelines generally range from a high of
five times annual salary in the case of Mr. Madigan to two times annual salary.
Executives are expected to achieve the suggested ownership level over a five-
year period in increments of 20% per year. Shares held in Tribune benefit plans
are counted in satisfying the guidelines but unexercised stock options are not
counted. The Committee believes that these guidelines have the positive effect
of further aligning the interests of Tribune's executives with those of its
shareholders. All of the executive officers named in the summary compensation
table have achieved their suggested stock ownership levels. The stock ownership
guidelines were revised in February 2000 such that they now range from a high
of ten times annual salary in the case of Mr. Madigan to two times annual
salary and apply to approximately 120 executives.
13
<PAGE>
Tax Deductibility of Executive Compensation
The Code imposes a $1 million limit on the tax deduction for certain executive
compensation payments. Certain compensation, including performance-based
compensation meeting specified requirements, is exempt from the $1 million
deduction limit established by Section 162(m) of the Code. In 1999, the
Committee granted awards pursuant to the Plan that were not subject to the
deduction limit. The Committee intends to continue to grant awards pursuant to
the Plan that are not subject to the deduction limit to the extent that the
structure of such awards is consistent with corporate performance objectives.
Andrew J. McKenna, Chairman
Kristie Miller
James J. O'Connor
Donald H. Rumsfeld
Patrick G. Ryan
14
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
-------------------------------------------------------------
Awards Payouts
---------- ----------
Securities
Underlying LTIP All Other
Name and Principal Position Year Salary(1) Bonus Other Options(2) Payouts(3) Compensation(4)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Madigan 1999 $813,761 $1,750,000 $20,838 1,124,382 $1,047,510 $168,054
Chairman, President and 1998 797,065 900,000 36,390 881,188 -- 39,761
Chief Executive Officer 1997 752,080 1,100,000 32,997 1,050,436 -- 46,050
- -------------------------------------------------------------------------------------------------------------
James C. Dowdle 1999 649,154 650,000 16,382 644,184 833,141 134,384
Executive Vice President 1998 635,577 475,000 16,176 479,454 -- 39,761
1997 597,673 550,000 9,900 794,964 -- 46,050
- -------------------------------------------------------------------------------------------------------------
Dennis J. FitzSimons 1999 502,462 550,000 7,748 368,876 618,309 105,008
President, 1998 486,115 400,000 7,978 354,648 -- 39,761
Tribune Broadcasting Company 1997 458,885 360,000 5,204 342,886 -- 46,050
- -------------------------------------------------------------------------------------------------------------
Jack Fuller 1999 457,231 300,000 6,820 285,806 484,358 95,126
President, 1998 447,558 250,000 11,359 210,000 -- 39,761
Tribune Publishing Company 1997 395,576 325,000 11,191 293,442 -- 46,050
- -------------------------------------------------------------------------------------------------------------
David D. Hiller 1999 378,615 360,000 1,553 238,664 486,675 79,046
Senior Vice President/Development 1998 370,105 195,000 1,533 193,998 -- 39,761
1997 349,163 255,000 3,481 78,730 -- 46,050
</TABLE>
- --------
(1) Amounts represent salary compensation for 52 weeks for all fiscal years
shown.
(2) Amounts represent new options and replacement options to purchase shares of
common stock granted during fiscal years 1999, 1998 and 1997. New options
granted in fiscal years 1999, 1998 and 1997 were as follows: Mr. Madigan,
260,000, 250,000 and 220,000, respectively; Mr. Dowdle, 0, 140,000 and 120,000,
respectively; Mr. FitzSimons, 104,000, 100,000 and 90,000, respectively; Mr.
Fuller, 84,000, 80,000 and 70,000, respectively; and Mr. Hiller, 70,000, 60,000
and 50,000, respectively.
(3) Amounts represent the value of performance equity program stock awards paid
as of February 15, 2000, based upon achievement of established SVA goals for
fiscal years 1997 through 1999.
(4) The amounts reported in this column for fiscal year 1999 consist of $32,728
allocated to each of the named executive officers under the ESOP, matching
contributions of $1,600 credited to each of the named executive officers under
the SIP and allocations under the supplemental defined contribution plan as
follows: Mr. Madigan, $133,726; Mr. Dowdle, $100,056; Mr. FitzSimons, $70,680;
Mr. Fuller, $60,798; and Mr. Hiller, $44,718.
15
<PAGE>
Option Grants in Last Fiscal Year
The following table presents information as to stock options granted during the
fiscal year ended December 26, 1999. The grant of a replacement option upon the
exercise of an existing option is intended to promote increased employee share
ownership by encouraging the early exercise of existing options. The grant of a
replacement option (as described on page 13) does not result in an increase in
the total combined number of shares and options held by an employee and,
therefore, does not increase amounts paid by Tribune.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------------------------
% of Total
Number of Options
Securities Granted to
Underlying Options Employees in Exercise Price Grant Date
Name Granted(1) Fiscal Year Per Share Expiration Date Present Value(2)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John W. Madigan New Grant 260,000 2.42% $32.13 02/16/09 $2,360,800
Replacement Options
79,018 0.73 36.34 02/07/03 492,085
70,242 0.65 36.34 03/01/02 437,432
49,436 0.46 36.34 08/28/02 307,863
55,982 0.52 36.34 08/27/03 348,628
34,814 0.32 42.13 08/31/00 230,956
46,574 0.43 42.97 08/30/01 342,910
95,346 0.89 42.97 12/19/00 644,062
8,164 0.08 42.97 02/07/03 60,109
54,750 0.51 44.00 07/28/08 412,782
42,710 0.40 44.06 07/29/07 322,465
114,338 1.06 44.03 08/30/06 862,657
119,016 1.11 44.03 08/25/05 897,952
51,954 0.48 44.03 08/26/04 391,983
42,038 0.39 44.03 07/29/07 317,168
- ---------------------------------------------------------------------------------------------------
James C. Dowdle Replacement Options
31,942 0.30 36.34 06/02/01 198,919
70,242 0.65 36.34 03/01/02 437,432
9,134 0.08 36.34 12/31/02 56,882
52,038 0.48 36.34 08/30/01 324,067
79,018 0.73 36.34 12/31/02 492,085
55,988 0.52 36.34 12/31/02 348,665
37,570 0.35 36.34 08/31/00 232,483
3,504 0.03 36.34 06/02/01 21,821
28,192 0.26 52.50 12/31/02 253,612
45,002 0.42 42.97 08/20/02 331,336
71,426 0.66 44.03 12/31/02 538,895
63,518 0.59 44.03 12/31/02 479,231
52,082 0.48 44.03 12/31/02 392,948
21,970 0.20 44.03 12/31/02 165,759
21,677 0.20 52.50 12/31/02 195,004
881 0.01 52.50 12/31/02 7,925
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------------------------
% of Total
Number of Options
Securities Granted to
Underlying Options Employees in Exercise Price Grant Date
Name Granted(1) Fiscal Year Per Share Expiration Date Present Value(2)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dennis J. FitzSimons New Grant 104,000 0.97% $32.13 02/16/09 $944,320
Replacement Options
24,790 0.23 38.09 08/30/01 161,814
22,434 0.21 38.09 08/28/02 146,436
26,926 0.25 38.22 08/26/04 176,333
4,394 0.04 41.97 08/31/00 29,042
8,788 0.08 41.97 08/31/00 58,083
4,592 0.04 41.97 08/28/02 33,023
17,706 0.16 41.97 08/27/03 127,331
8,440 0.08 42.97 08/31/00 57,113
11,188 0.10 42.97 08/27/03 82,374
17,476 0.16 44.03 07/29/07 131,853
21,892 0.20 44.03 07/28/08 165,171
45,730 0.43 44.03 08/30/06 345,024
33,324 0.31 44.03 08/25/05 251,423
17,196 0.16 44.03 07/29/07 129,740
- --------------------------------------------------------------------------------------------------------
Jack Fuller New Grant 84,000 0.78 32.13 02/16/09 762,720
Replacement Options
31,220 0.29 38.09 08/25/05 203,785
6,964 0.06 38.09 08/28/02 45,457
24,348 0.23 38.09 08/30/01 158,929
9,378 0.09 38.09 08/27/03 61,214
10,754 0.10 38.09 08/27/03 70,196
12,552 0.12 53.50 07/29/07 115,067
11,055 0.10 53.50 08/30/06 101,343
12,195 0.11 53.50 07/29/07 111,794
15,972 0.15 53.50 07/28/08 146,419
1,832 0.02 41.97 08/26/04 13,175
6,590 0.06 41.97 08/27/03 47,391
17,606 0.16 41.97 08/31/00 116,365
15,444 0.14 41.97 08/28/02 111,064
10,078 0.09 41.97 08/31/00 66,610
15,818 0.15 44.03 08/30/06 119,344
- --------------------------------------------------------------------------------------------------------
David D. Hiller New Grant 70,000 0.65 32.13 02/16/09 635,600
Replacement Options
4,050 0.04 34.31 08/26/04 23,812
28,054 0.26 34.31 08/25/05 164,943
26,074 0.24 34.31 08/30/06 153,302
10,900 0.10 34.31 07/29/07 64,087
3,146 0.03 43.22 08/31/00 20,837
13,932 0.13 43.91 08/31/00 92,869
11,000 0.10 43.91 08/30/01 82,757
10,734 0.10 43.91 08/28/02 80,756
22,868 0.21 43.91 08/27/03 172,045
15,060 0.14 43.91 08/26/04 113,302
13,140 0.12 44.00 07/28/08 99,068
9,706 0.09 44.06 07/29/07 73,281
</TABLE>
17
<PAGE>
- --------
(1) Includes both new options and replacement options to purchase Tribune
common stock granted under the 1997 Incentive Compensation Plan and preceding
plans. All options permit the optionee to pay the exercise price with Tribune
common stock owned for six months and to pay withholding tax with shares
acquired on exercise. Tribune has a policy to award replacement options to
executives who exercise options in this manner at a time when the closing stock
price as reported on the New York Stock Exchange Composite Transactions list is
at least 25% above the exercise price. New options are generally exercisable in
four equal annual installments after award and replacement options are
exercisable one year after award but, in either case, immediately upon a change
in control. Replacement options are awarded upon exercise of a nonqualified
option with payment made with previously owned Tribune common stock. The
replacement option has a term equal to the remaining term of 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.
(2) Values calculated using the Black-Scholes option pricing model applied as
of the grant date. The weighted-average assumptions used to calculate these
values for the new grants and the replacement options, respectively, are as
follows: risk-free interest rates of 5.11% and 4.85%; expected dividend yields
of 1.2% and 1.2%; expected lives of 5 and 2 years (unless, with respect to
replacement options, the actual life is less than 2 years); and expected stock
price volatility of 23.55% and 27.88%. The actual values may vary significantly
from these estimated values and will ultimately depend upon the excess of the
stock price over the exercise price on the date the option is exercised.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values
The following table presents information regarding the aggregate option
exercises and year-end option values for each of Messrs. Madigan, Dowdle,
FitzSimons, Fuller and Hiller for the fiscal year ended December 26, 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Number of Underlying Unexercised In-the-Money Options
Shares Options at FY-End at FY-End(1)
Acquired on Value ------------------------- -------------------------
Name Exercise(2) Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Madigan 1,040,766 $9,852,322 0 1,421,882 $0 $21,175,915
James C. Dowdle 793,034 7,797,514 0 809,184 0 11,211,539
Dennis J. FitzSimons 333,042 3,186,118 0 488,876 0 7,463,796
Jack Fuller 292,716 3,411,472 0 380,806 0 5,605,872
David D. Hiller 281,762 3,456,036 0 308,664 0 5,029,155
</TABLE>
- --------
(1) Based on a closing stock price of $52.56 per share on December 23, 1999,
the last trading day of Tribune's fiscal year.
(2) Represents aggregate number of shares underlying options exercised. The
number of shares of Tribune common stock acquired upon the exercise of options
in 1999 for each of the above officers was offset by the number of existing or
newly acquired shares of Tribune common stock the officer used to pay the
exercise price and/or the applicable withholding tax. The net number of shares
of Tribune common stock actually acquired by each of the above officers as a
result of option exercises in 1999 was as follows: Mr. Madigan, 132,558 shares;
Mr. Dowdle, 105,024 shares; Mr. FitzSimons, 42,132 shares; Mr. Fuller, 69,310
shares; and Mr. Hiller, 50,846 shares.
Pension Plan Information
The executive officers named in the summary compensation table participate in
the Tribune Company Pension Plan (the "Pension Plan") and the Tribune Company
Supplemental Benefit Plan (the "Supplemental Plan"). Until December 31, 1998,
the annual pension benefit under the plans, taken together, was in general
determined by a participant's credited years of service multiplied by a
percentage of the participant's final average compensation (compensation during
the final five years of employment). For the executive officers named in
18
<PAGE>
the summary compensation table, the sum of amounts listed in the "Salary"
column of the summary compensation table was, until December 31, 1998, used as
compensation in the calculation of annual pension benefits. The Code places
certain limitations on the amount of pension benefits that may be paid under
qualified plans. Any benefits payable in excess of those limitations will be
paid under the Supplemental Plan. The plans were amended in 1989 and the
estimated benefits the executive officers named in the summary compensation
table may receive depend on which Tribune entity employed the individual prior
to the amendments.
Until December 31, 1998, benefits were based on final five-year average salary
(see "Salary" column in the summary compensation table that appears on page 15)
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.
Such amounts are 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 surviving benefits. The Pension Plan and
the Supplemental Plan were frozen at December 31, 1998 so that participants'
service and compensation after that date will not be counted in computing
benefits. The executive officers named in the summary compensation table will
be entitled to receive under the Pension Plan and the Supplemental Plan annual
benefits upon retirement at age 65 as follows: Mr. Madigan, $227,642; Mr.
Dowdle, $162,596; Mr. FitzSimons, $108,498; Mr. Fuller, $114,126; and Mr.
Hiller, $53,972. Because the Pension Plan and the Supplemental Plan were
frozen, the benefits payable upon retirement to the named executive officers
will not vary based on final compensation or additional years of service.
Severance Arrangements
Tribune maintains a Transitional Compensation Plan For Executive Employees,
which provides termination benefits to key executives of Tribune and its
subsidiaries who are actually or constructively terminated, without cause,
within 36 months following a change in control. A "change in control" means (a)
the acquisition, other than from Tribune, by a person, entity or group of 20%
or more of the combined voting power of Tribune's outstanding voting
securities, (b) a change in the composition of the Board whereby the
individuals who as of December 7, 1998 constituted the Board cease to
constitute at least a majority of the Board without approval of the Board, or
(c) approval of a merger or reorganization of Tribune where the prior
shareholders do not thereafter own more than 60% of the reorganized company.
"Constructively terminated" means a reduction in the individual's compensation
or benefits or a change in the city in which he or she is required to work.
Certain participants including Messrs. Madigan, FitzSimons, Fuller and Hiller
may elect to terminate their employment during the thirteenth month following a
change in control and qualify to receive the benefits under the plan. In the
case of executive officers, benefits include (a) payment in cash equal to three
times (in certain cases two times) the highest annual rate of base salary in
effect within three years of the date of the individual's termination plus
three times (in certain cases two times) the individual's average annual bonus
paid over the prior three years, (b) outplacement services and (c) continuation
of life, health and disability insurance. In addition, the plan provides that
Tribune will reimburse the executive for any excise tax that results from
payments upon termination being treated as excess parachute payments under
federal income tax law. Except for Mr. Dowdle who retired as of December 31,
1999, each of the executive officers named in the summary compensation table is
covered by the plan.
All stock options granted to executives become immediately vested and
exercisable upon a change in control of Tribune as defined in the applicable
plan and in grant agreements evidencing awards. The definitions of change in
control are essentially the same as described in the preceding paragraph.
19
<PAGE>
Compensation Committee Interlocks and Insider Participation
Andrew J. McKenna, Kristie Miller, James J. O'Connor, Donald H. Rumsfeld and
Patrick G. Ryan served as members of the governance and compensation committee
during all of 1999.
Mr. McKenna, chairman of the governance and compensation committee, served as
an officer of Chicago National League Ball Club, Inc., a Tribune subsidiary,
from August 1981 to December 1984. Subsequent to 1984, Mr. McKenna's sole
position with Tribune has been that of an outside director.
Aon Corporation and its subsidiaries received brokerage commissions and fees in
1999 of approximately $648,579 for obtaining certain insurance for Tribune and
its subsidiaries. Mr. Ryan is Chairman and Chief Executive Officer of Aon
Corporation.
Performance Graph
The following graph compares the five-year cumulative return on Tribune's
common stock to the Standard and Poor's 500 Stock Index and to the Standard and
Poor's Newspaper Publishing Group Index. Tribune is included in both of these
indices.
[LINE CHART]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tribune Company $100.00 $113.72 $149.15 $238.46 $255.58 $429.98
---------------------------------------------------------------------------
S&P Newspaper Publishing
Group 100.00 125.84 155.94 244.79 250.24 343.74
---------------------------------------------------------------------------
S&P 500 100.00 137.45 168.92 225.21 289.43 350.26
</TABLE>
Based on $100 invested on December 31, 1994 in Tribune common stock, the
Standard and Poor's Newspaper Publishing Group Index and the Standard and
Poor's 500 Stock Index. Total return assumes reinvestment of dividends
quarterly.
20
<PAGE>
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Shareholders may submit proposals appropriate for shareholder action at
Tribune's annual meetings consistent with regulations of the Securities and
Exchange Commission. Under SEC rules, proposals to be considered for inclusion
in the proxy statement for the 2001 annual meeting must be received by Tribune
no later than November 24, 2000. Tribune's by-laws set forth additional
requirements and procedures regarding the submission by shareholders of matters
for consideration at the annual meeting, including a requirement that such
proposals be given to the secretary not later than the close of business on the
90th day nor earlier than the close of business on the 120th day prior to the
first anniversary of the preceding year's annual meeting. Accordingly a
shareholder proposal intended to be considered at the 2001 annual meeting must
be received by the secretary after the close of business on January 2, 2001 and
on or prior to the close of business on February 1, 2001. Proposals should be
directed to Tribune Company, 435 North Michigan Avenue, Chicago, Illinois
60611, Attention: Vice President, General Counsel and Secretary.
The by-laws provide that notice of proposed shareholder nominations for
election of directors must be given to the secretary not less than 90 days nor
more than 120 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 Tribune 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 Tribune if elected. Provision
is also made for substitution of nominees by the nominating shareholder in the
event that a designated nominee is unable to stand for election at the meeting.
If the chairman of the meeting of shareholders determines that a nomination was
not made in accordance with the foregoing procedures, such nomination is void.
The advance notice requirement affords the governance and compensation
committee of the Board the opportunity to consider the qualifications of all
proposed nominees and, to the extent deemed necessary or desirable by the
Board, inform shareholders about such qualifications.
OTHER MATTERS
An individual purporting to own approximately 86 shares of Tribune common stock
has informed Tribune that he may present one or both of the following
resolutions for consideration at the annual meeting:
"RESOLVED: The Tribune Company's by-laws will be posted on the
Company's web page. When possible, proposed changes to the by-laws
will also be posted on the Company's web page 90 days prior to formal
consideration by the Board of Directors. Shareholders may submit
written comments regarding the proposed by-law changes to the
Secretary of the Company. These shareholders' comments will also be
posted promptly on the Company's web page.
RESOLVED: In order to allow the shareholders equal speech rights at
the annual meeting, shareholders will be allowed to submit material
for use on the same visual aid equipment used by management. The Board
of Directors may establish reasonable rules and requirements for
shareholder material."
Each of these resolutions purports to provide a mechanism for shareholders to
express their views on corporate governance or other matters. The Board
believes that the annual meeting currently provides shareholders who comply
with the applicable by-law provisions and the rules and procedures established
for the meeting a reasonable opportunity and forum to express their views to
the Board, management or other shareholders.
With respect to shareholder review of proposed by-law changes, shareholders
should note that Tribune's by-laws are posted on Tribune's Web site
(www.tribune.com), are filed with the Securities and Exchange Commission and
are publicly available through various online services and through the
Commission. Although
21
<PAGE>
the Board from time to time considers amendments to the by-laws, it cannot
predict when and under what circumstances such amendments may become
appropriate and therefore believes that compliance with the notice provisions
of the above resolution with respect to proposed by-law amendments is
impractical. In addition, the form or substance of proposed amendments to the
by-laws are subject to review and comment by the Board at the time they are
considered and, thus, any proposed amendment may be modified by the Board prior
to adoption.
With respect to the use of visual aid equipment at the annual meeting,
shareholders should be aware that Tribune's by-laws and rules and procedures
governing the conduct of the annual meeting currently do not limit the ability
of shareholders to utilize their own equipment. The Board does not believe,
however, that Tribune should bear the cost or responsibility for ensuring the
availability or adequacy of visual aid equipment at annual meetings to
shareholders desiring to make their own presentations.
Accordingly, the persons named in the accompanying proxy intend to exercise
their discretionary authority to vote against each of the resolutions set forth
above should they be properly presented at the meeting.
As of the date of this proxy statement, the Board does not know if any matters
will be presented to the meeting other than those described herein. If other
matters properly come before the meeting, the persons named in the accompanying
proxy will have discretion to vote on such matters in accordance with their
best judgment.
Tribune will pay all expenses incurred in connection with the solicitation of
proxies. Following the initial solicitation of proxies by mail, Tribune
directors, officers and regular employees may solicit proxies in person or by
telephone, but without extra compensation. In addition, we have retained
Georgeson Shareholder Communications Inc. to assist in the solicitation of
proxies at an estimated cost to us of approximately $12,000 plus out-of-pocket
expenses. Such solicitation may be made by mail, telephone or in person. We
will, upon request, reimburse the reasonable charges and expenses of brokerage
houses or other nominees or fiduciaries for forwarding proxy materials to, and
obtaining authority to execute proxies from, beneficial owners for whose
account they hold Tribune stock.
Tribune's 1999 Annual Report is enclosed, but the report is not incorporated in
this proxy statement and is not part of the proxy soliciting material. A copy
of Tribune's Annual Report on Form 10-K for the fiscal year ended December 26,
1999 filed with the Securities and Exchange Commission, without exhibits, will
be provided without charge to any shareholder who requests such report.
Requests can be made by contacting the Corporate Relations Department, Tribune
Company, 6th Floor, 435 North Michigan Avenue, Chicago, Illinois 60611,
telephone 800/757-1694, or via Tribune's Web site (www.tribune.com).
By Order of the Board of Directors
Crane H. Kenney
Vice President, General Counsel and Secretary
Dated: March 24, 2000
22
<PAGE>
P R O X Y
TRIBUNE COMPANY PROXY CARD
- --------------------------------------------------------------------------------
Proxy For Annual Meeting of Shareholders to be Held May 2, 2000
Crane H. Kenney and John W. Madigan, 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 Shareholders to be
held on May 2, 2000, 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 Dennis J. FitzSimons, Diego E.
Hernandez, Robert E. La Blanc and Andrew J. McKenna to serve until the 2003
Annual Meeting (to withhold authority to vote for any individual nominee,
write his name in the space provided on the reverse side of this card);
2. ratification of the selection of PricewaterhouseCoopers LLP as independent
accountants; and
3. with discretionary power in the transaction of such other business as may
properly come before the meeting. See "Other Matters."
To vote by telephone or via the Internet, please see the reverse side of this
card. To vote by mail, please complete, sign and date this card on the reverse
side and mail promptly in the enclosed envelope. Tribune's directors recommend
a vote FOR the election of the nominees listed and FOR proposal 2. The proxies
shall vote as specified, but if no choice is specified, the proxies shall vote
in accordance with the recommendations of Tribune's directors.
. FOLD AND DETACH HERE .
[TRIBUNE LOGO]
PLEASE RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
<PAGE>
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 and 2.
- --------------------------------------------------------------------------------
1. Election of directors.
(see reverse)
FOR WITHHELD
[_] [_]
01 Dennis J. FitzSimons 03 Robert E. La Blanc
02 Diego E. Hernandez 04 Andrew J. McKenna
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
2. Ratification of independent accountants.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. With discretionary power in the transaction of such other business as may
properly come before the meeting.
Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian
etc., please give full title.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
. FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL .
-----------------------------------
-----------------------------------
[TRIBUNE LOGO]
Dear Shareholder:
We encourage you to vote your shares electronically this year either by
telephone or via the Internet. This will eliminate the need to return your
proxy card. You will need your proxy card and Social Security Number (where
applicable) when voting your shares electronically. The Voter Control Number
that appears in the box above, just below the perforation, must be used in
order to vote by telephone or via the Internet.
The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until the day prior to the meeting.
To Vote By Telephone:
Using a touch-tone phone call toll-free: 1-877-PRX-VOTE (1-877-779-8683)
To Vote By Internet:
Log on to the Internet and go to the website: http://www.eproxyvote.com/trb
Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be
responsible.
THANK YOU FOR VOTING YOUR SHARES
YOUR VOTE IS IMPORTANT!
Do Not Return this Proxy Card if you are Voting by Telephone or the Internet
<PAGE>
Tribune Company VOTING INSTRUCTION CARD
- --------------------------------------------------------------------------------
For Annual Meeting of Shareholders to be Held May 2, 2000
The Northern Trust Company, as Trustee for the Tribune Company Employee Stock
Ownership Plan, Vanguard Fiduciary Trust Company, as Trustee for 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 Shareholders to be held on May 2, 2000, 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 Dennis J. FitzSimons, Diego E.
Hernandez, Robert E. La Blanc and Andrew J. McKenna to serve until the 2003
Annual Meeting (to withhold authority to vote for any individual nominee,
write his name in the space provided on the reverse side of this card);
2. ratification of the selection of PricewaterhouseCoopers LLP as independent
accountants; and
3. with discretionary power in the transaction of such other business as may
properly come before the meeting. See "Other Matters."
To vote by telephone or via the Internet, please see the reverse side of this
card. To vote by mail, please complete, sign and date this card on the reverse
side and mail promptly in the enclosed envelope. Tribune's directors recommend
a vote FOR the election of the nominees listed and FOR proposal 2. The trustees
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 trustees and nominee to
vote in accordance with the recommendations of the Board of Directors.
. FOLD AND DETACH HERE .
[TRIBUNE LOGO]
Dear Benefit Plan Participant:
You own Tribune 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 at the annual meeting. This
year you may vote on the election of directors and the appointment of
independent accountants. 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 above and returning it to First Chicago Trust Company, a
Division of EquiServe, in the enclosed envelope. Alternatively, you may follow
the telephonic or Internet voting procedures set forth on the reverse side
hereof. Employee involvement is one of Tribune's values, so I encourage you to
participate in this important process. Your vote is confidential and will be
seen only by First Chicago Trust Company, a Division of EquiServe, as
tabulating agent for the plan trustees and administrator.
Sincerely,
/s/ John W. Madigan
<PAGE>
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 and 2.
- --------------------------------------------------------------------------------
1. Election of directors.
(see reverse)
FOR WITHHELD
[_] [_]
01 Dennis J. FitzSimons 03 Robert E. La Blanc
02 Diego E. Hernandez 04 Andrew J. McKenna
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
2. Ratification of independent accountants.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. With discretionary power in the transaction of such other business as may
properly come before the meeting.
Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian
etc., please give full title.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
. FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR COMPLETED VOTING INSTRUCTION
CARD BY MAIL .
----------------------------------
----------------------------------
[TRIBUNE LOGO]
Dear Benefit Plan Participant:
We encourage you to vote your shares electronically this year either by
telephone or via the Internet. This will eliminate the need to return your
voting instruction card. You will need your voting instruction card and Social
Security Number (where applicable) when voting your shares electronically. The
Voter Control Number that appears in the box above, just below the perforation,
must be used in order to vote by telephone or via the Internet.
The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until the day prior to the meeting.
To Vote By Telephone:
Using a touch-tone phone call toll-free: 1-877-PRX-VOTE (1-877-779-8683)
To Vote By Internet:
Log on to the Internet and go to the website: http://www.eproxyvote.com/trb
Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be
responsible.
THANK YOU FOR VOTING YOUR SHARES
YOUR VOTE IS IMPORTANT!
Do Not Return this Voting Instruction Card if you are Voting by Telephone or
the Internet
