SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
/ X / Filed by the registrant
/ / 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 Rule 14a-11(c) or Rule 14a-2
King World Productions, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing the 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 Rules 14a-6(:X1) 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 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
<PAGE>
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
KING WORLD PRODUCTIONS, INC.
12400 Wilshire Boulevard
Los Angeles, California 90025
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28, 1999
The Annual Meeting of Stockholders of King World Productions, Inc.
("King World" or the "Company") will be held at The Ritz-Carlton, Palm Beach,
100 South Ocean Boulevard, Manalapan, Florida 33462, on January 28, 1999, at
11:00 a.m. (local time), for the following purposes:
1. to elect three directors to the Company's Board of Directors. If
proposal 2 (providing for the annual election of directors) is approved, the
terms of all directors will expire at the 2000 annual meeting of stockholders.
If proposal 2 is not approved, the terms of these three directors will expire at
the 2002 annual meeting of stockholders;
2. to consider and approve a proposed amendment to the Company's
Restated Certificate of Incorporation to provide for the annual election of
directors;
3. to approve the Company's 1998 Stock Option and Restricted Stock
Purchase Plan;
4. to ratify the selection of Arthur Andersen LLP, independent public
accountants, as the auditors for the Company for the fiscal year ending August
31, 1999; and
5. to transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 16,
1998 as the record date for the determination of the stockholders of the Company
entitled to notice and to vote at the Annual Meeting of Stockholders. Each share
of the Company's Common Stock is entitled to one vote on all matters presented
at the Annual Meeting.
<PAGE>
ALL HOLDERS OF THE COMPANY'S COMMON STOCK (WHETHER THEY EXPECT TO
ATTEND THE ANNUAL MEETING OR NOT) ARE REQUESTED TO VOTE (1) BY COMPLETING,
SIGNING, DATING AND RETURNING PROMPTLY THE PROXY CARD ENCLOSED WITH THIS NOTICE,
OR (2) BY CALLING THE TOLL-FREE NUMBER LISTED ON THE PROXY CARD, OR (3) VIA THE
INTERNET AS INDICATED ON THE PROXY CARD.
By Order of the Board of Directors
DIANA KING
Corporate Secretary
December 22, 1998
<PAGE>
KING WORLD PRODUCTIONS, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 28,1999
INTRODUCTION
This Proxy Statement is being furnished to stockholders of record of
King World Productions, Inc. ("King World" or the "Company") as of December 16,
1998 in connection with the solicitation by the Board of Directors of King World
of proxies for the 1999 Annual Meeting of Stockholders to be held at The
Ritz-Carlton, Palm Beach, 100 South Ocean Boulevard, Manalapan, Florida 33462,
on January 28, 1999 at 11:00 a.m. (local time), or at any adjournments thereof,
for the purposes stated in the Notice of Annual Meeting. The approximate date of
mailing of this Proxy Statement and enclosed form of proxy to stockholders is
December 22, 1998.
As of the close of business on December 16, 1998, the Company had
outstanding 71,500,931 shares of Common Stock, $.01 par value ("Common Stock").
Each share of Common Stock is entitled to one vote on all matters presented at
the Annual Meeting. The presence, either in person or by properly executed
proxy, of the holders of a majority of the shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum at the Annual
Meeting.
If the enclosed proxy is signed and returned, it may, nevertheless, be
revoked at any time prior to the voting thereof at the pleasure of the
stockholder signing it, either by a written notice of revocation received by the
person or persons named therein or by voting the shares covered thereby in
person or by another proxy dated subsequent to the date thereof.
Proxies in the accompanying form will be voted in accordance with the
instructions indicated thereon, and, if no such instructions are indicated, will
be voted FOR the nominees for election as directors named below, FOR the
adoption of the amendment to the Company's Restated Certificate of
Incorporation, FOR the adoption of the Company's 1998 Stock Option and
Restricted Stock Purchase Plan, FOR the selection of Arthur Andersen LLP as the
auditors for the Company and, in the discretion of the proxy holders, on any
other matters that properly come before the Annual Meeting.
The vote required for approval of each of the proposals before the
stockholders at the Annual Meeting is specified in the description of such
proposal below. For the purpose of determining whether a proposal has received
the required vote, abstentions, where permitted, will be included in the vote
total, with the result that an abstention will have the same effect as a
negative vote. Under the rules of the New York Stock Exchange, Inc. ("NYSE"),
brokers who hold shares in "street name" for customers have the authority to
vote on certain items in the absence of instructions from their customers, the
beneficial owners of the shares. Under these rules, brokers that do not receive
instructions are entitled to vote on the election of the three nominees for
<PAGE>
director, the approval of the Company's 1998 Stock Option and Restricted Stock
Purchase Plan and the selection of Arthur Andersen LLP as auditors for the
Company.
1. ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides for a
Board of Directors classified into three classes, as nearly equal in number as
possible, each with a term of office of three years, expiring sequentially at
successive annual meetings of stockholders. The entire Board of Directors is
comprised of eight directors. Three directors will be elected at the Annual
Meeting and will continue in office until their respective successors have been
duly elected and qualified or until their earlier death, resignation or
retirement. The three directors whose terms expire at the 1999 Annual Meeting of
Stockholders are Ms. Diana King and Messrs. Joel Chaseman and Avram Miller. Ms.
King has served as a director since 1976, Mr. Chaseman since 1990 and Mr. Miller
since May 1998. Each has been renominated by the Board of Directors. If the
amendment to the Company's Restated Certificate of Incorporation is approved by
the stockholders, the terms of all directors will expire at the Company's annual
meeting of stockholders in 2000. If such proposed amendment is not approved by
the stockholders, the terms of the directors elected at the Annual Meeting of
Stockholders will expire at the Company's annual meeting of stockholders in 2002
and the terms of the other directors will expire at the Company's annual
meetings of stockholders in 2000 and 2001, as indicated below.
The shares represented by proxies returned duly executed will be
voted, unless otherwise specified, in favor of the three nominees for the Board
of Directors named below. If, as a result of circumstances not known or
unforeseen, any of such nominees shall be unavailable to serve as a director,
proxies will be voted for the election of such other person or persons as the
Board of Directors may select. Each nominee for director will be elected by a
plurality of votes cast at the Annual Meeting of Stockholders. Proxies will be
voted "for" the election of the three nominees unless instructions to "withhold"
votes are set forth on the proxy card. Withholding votes will not influence
voting results. Abstentions may not be specified as to the election of
directors. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO ELECT THE
THREE NOMINEES FOR THE BOARD OF DIRECTORS NAMED BELOW.
The names of the nominees and directors whose terms of office will
continue after the Annual Meeting, their principal occupations and the dates
since which they have served as directors, are set forth below.
<PAGE>
Nominees for Election as Director
Name Principal Occupation Since
---- -------------------- -----
Diana King Vice President and Corporate 1976
Secretary, King World
Joel Chaseman Chairman, Chaseman Enterprises 1990
International, Inc.
Avram Miller Corporate Vice President and Director 1998
of Business Development, Intel
Corporation
Continuing Directors
Roger King Chairman of the Board, King World 1977
Michael King Vice Chairman and Chief Executive 1973
Officer, King World
Richard King Real estate developer 1988
Fredric D. Rosen Former President and Chief Executive 1998
Officer, Ticketmaster Group, Inc.
Raymond G. Chambers Chairman, Amelior Foundation 1998
NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information with respect to each of the
nominees for the office of director, each director whose term of office will
continue after the Annual Meeting, and each other executive officer of King
World:
Nominees
Diana King, 48, has been a director of the Company since 1976, has
served as Vice President Special Projects since March 1984 and as Corporate
Secretary of the Company since February 1986.
Joel Chaseman, 72, has served as a director since 1990. Mr. Chaseman
is currently Chairman of Chaseman Enterprises International, Inc. He was a Vice
President of The Washington Post Company from June 1973 until January 1991. From
June 1973 until January 1990, Mr. Chaseman also served as Chief Executive
Officer of Post-Newsweek Stations, Inc., a subsidiary of The Washington Post
Company that operated four television stations. In addition, from March 1988
until January 1990, Mr. Chaseman served as Chairman of Post-Newsweek Stations,
Inc.
Avram Miller, 53, has been a director of the Company since May 1998.
Mr. Miller has been the Corporate Vice President and Director of Business
Development of Intel Corporation since January 1996. Mr. Miller joined Intel in
1984 and was promoted to Group Vice President in 1989. Mr. Miller is on the
Board of Trustees for the California Institute of the Arts and serves as
Chairman of the Board of Directors of Plugged-In, a non-profit organization
located in Silicon Valley.
<PAGE>
Continuing Directors
Roger King, 54, has been an executive officer and a director of the
Company since 1977 and has served as Chairman of the Board of the Company since
August 1984. Roger King's current term as a director will expire in 2000.
Michael King, 50, has been an executive officer and a director of the
Company since 1973. He served as President and Chief Executive Officer of the
Company from August 1984 through June 1997 and is currently Vice Chairman and
Chief Executive Officer as well as Interim President and Interim Chief Operating
Officer. Mr. King served also as Interim Chief Operating Officer from September
1996 through June 1997. Michael King's current term as a director will expire in
2000.
Richard King, 57, is a major stockholder of King World and acted as a
consultant to the Company from 1984 through the end of the 1996 fiscal year. He
is principally engaged in real estate development. Mr. King has served as
director of the Company since 1988. Richard King's current term as a director
will expire in 2000.
Fredric D. Rosen, 55, has been a director of the Company since January
1998. Mr. Rosen was the President and Chief Executive Officer of Ticketmaster
Group, Inc., the leading computerized ticketing service, from December 1993
until August 1998. He served as Chairman of the Board and Chief Executive
Officer of Ticketmaster from September 1982 until December 1993. Mr. Rosen sits
on the executive committee and the boards of several public service
organizations. Mr. Rosen's current term as a director will expire in 2001.
Raymond G. Chambers, 56, has been Chairman of the Amelior Foundation
for "at risk youth" since 1988 and is Chairman of the Executive Committee of
America's Promise - The Alliance for Youth. He is Founding Chairman of the
Points of Light Foundation and the READY Foundation and is Co-Chairman of the
New Jersey Performing Arts Center. Mr. Chambers is also a director of Hollinger
International, Inc. Mr. Chambers' current term as a director will expire in
2001.
Other Executive Officers
King World's executive officers, in addition to Michael King, Roger
King and Diana King are as follows:
Fred Cohen, 54, was named President of King World International in
January 1989. Mr. Cohen joined the Company in 1989 from Sunbow Productions,
where he served as Executive Vice President of Sunbow Productions International
and previously as an Executive Vice President of Sunbow Productions, Inc.
<PAGE>
Andrew Friendly, 47, was named President of First-Run Programming and
Production in August 1998. Mr. Friendly had previously served as Executive Vice
President of Programming and Production since joining the Company in November
1995. Mr. Friendly previously served for six years as a Network Executive
Producer and Vice President of Prime-Time Programs and Program Development at
the CNBC cable network.
Steven R. Hirsch, 49, was named President of the Company's
wholly-owned subsidiary, King World Media Sales Inc., in July 1987. He joined
King World Media Sales in February 1984 as Vice President - Sales.
Donald Prijatel, 54, was named President of Advertising and Promotion
in September 1998. Mr. Prijatel had previously served as Senior Vice President
of Advertising and Promotion since September 1995. Mr. Prijatel joined the
Company in 1989 as Director of Development, West Coast and also served as Vice
President of the Company's creative services department from 1990 until
September 1995.
J Stuart Stringfellow, 57, was named President of the Company's
Domestic Television Sales division in June 1997. Prior thereto, he had been an
Executive Vice President since January 1997 and a Senior Vice President since
May 1995. Mr. Stringfellow joined the Company in September 1984.
Robert V. Madden, 50, was named Senior Vice President, Administration,
of the Company in September 1996. For more than five years prior to joining the
Company, Mr. Madden practiced law in his own law firm.
Jonathan Birkhahn, 45, joined the Company in 1988 as Vice President,
Legal and Business Affairs and was named Vice President, Business Affairs and
General Counsel in 1991 and Senior Vice President, Business Affairs and General
Counsel in 1993.
Steven A. LoCascio, 40, was named Senior Vice President and Chief
Financial Officer in June 1997. Prior thereto, he had been the Interim Chief
Financial Officer since May 1995 and a Vice President of the Company since May
1991. Mr. LoCascio joined the Company in September 1989 as Controller.
Michael King, Roger King, Diana King and Richard King are children of
the late Charles and Lucille King, King World's founders.
During the 1998 fiscal year, the Board of Directors of the Company
held four meetings. The only standing committees of the Board of Directors are
the Audit Committee and the Compensation Committee. The current members of the
Audit Committee and the Compensation Committee are Messrs. Chambers, Chaseman,
Rosen and Miller.
The Audit Committee periodically consults with the Company's
management and independent public accountants on financial matters, including
<PAGE>
the Company's internal financial controls and procedures. The Audit Committee
held three meetings in fiscal 1998. The Compensation Committee approves
compensation arrangements for the Company's executive officers and administers
the Company's 1996 Amended and Restated Stock Option and Restricted Stock
Purchase Plan. The Compensation Committee held one meeting in fiscal 1998.
Each non-employee director of the Company is entitled to receive an
annual fee of $45,000, as well as $1,000 for each meeting of the Board of
Directors or any committee thereof attended by such director. Each non-employee
director is also automatically granted an option to purchase 10,000 shares of
Common Stock following his or her first appointment or election as a
non-employee Director. Such options have an exercise price equal to the fair
market value of the Common Stock on the date of grant, have a term of ten years
and vest six months after the date of grant. In addition, each non-employee
director appointed, elected or re-elected to fill a full three-year term as a
director is automatically granted an option to purchase 10,000 shares of Common
Stock having an exercise price equal to the fair market value of the Common
Stock on the date of grant. Such options have a term of ten years and vest
ratably on an annual basis over the director's term of office. A non-employee
director appointed or elected to serve less than a full three-year term at the
time of his or her election or appointment is granted an option having the same
terms, but for a number of shares that is proportionate to the number of years
or partial years remaining in the directorship to which he is elected or
appointed. Currently, Messrs. Chaseman, Rosen, Chambers, Miller and Richard King
are non-employee directors.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the Company's knowledge, except for Michael King, Roger King, Diana
King and Richard King, the only persons or groups that may be deemed to own
beneficially 5% or more of the Company's outstanding Common Stock are the
following:
Shares
Beneficially Percent
Name and Address Owned of Class
- ---------------- ----- --------
FMR Corp....................................... 8,836,122 (1) 12.4%
Edward C. Johnson, 3rd
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Capital Research and Management Company........ 7,808,500 (2) 10.9%
333 South Hope Street
Los Angeles, CA 90071
<PAGE>
Beutel Goodman Capital Management Ltd.......... 4,400,000 (2) 6.1%
Suite 4500
5847 San Felipe
Houston, TX 77057
Oprah Winfrey.................................. 4,410,000 (3) 5.8%
110 North Carpenter Street
Chicago, IL 60607
- -------------------
(1) As of December 16, 1998, according to information furnished by FMR Corp.
(2) As of October 31, 1998.
(3) All such shares are issuable upon the exercise of presently
exercisable stock options.
COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock, as of December 16, 1998, by
(i) each of the Company's directors, (ii) each of the Company's executive
officers named in the compensation table below and (iii) the Company's executive
officers and directors as a group. Except as otherwise indicated, each nominee
named in the table has sole voting and investment power with respect to the
shares shown as beneficially owned by him or her.
Number Percent
Name of Shares of Class
---- --------- --------
Roger King............................... 4,572,026 (1) 6.2%
Michael King............................. 5,716,300 (2) 7.8%
Richard King............................. 3,321,798 (3) 4.6%
Diana King............................... 3,280,856 (4) 4.6%
Joel Chaseman............................ 61,666 (5) *
Fredric D. Rosen......................... 13,334 (5) *
Raymond G. Chambers...................... - -
Avram Miller............................. 12,500 (5) *
Andrew Friendly.......................... 82,000 (6) *
Steven R. Hirsch......................... 320,000 (5) *
J Stuart Stringfellow.................... 42,000 (5) *
Executive officers and directors
as a group (16 persons)................ 17,877,352 (7) 23.4%
(1) Includes 1,800,000 shares issuable upon exercise of currently exercisable
stock options, and excludes 11,500 shares held by Mrs. Roger King.
(2) Includes 2,280,000 shares issuable upon exercise of currently exercisable
stock options.
(3) Includes 16,668 shares issuable upon the exercise of currently exercisable
stock options.
(4) Includes 120,000 shares held by a charitable foundation of which Ms. King
is a director. Ms. King disclaims beneficial ownership of such shares and
shares voting rights with respect to such shares with the other directors
of the foundation.
(5) Shares issuable upon exercise of currently exercisable stock options.
<PAGE>
(6) Includes 80,000 shares issuable upon exercise of currently exercisable
stock options.
(7) Includes an aggregate 5,076,168 shares issuable upon exercise of currently
exercisable stock options.
* Less than 1%.
<PAGE>
CERTAIN TRANSACTIONS
Robert King has served as Senior Vice President - Strategic
Planning/Acquisitions of the Company since April 1994. Mr. King has an
employment agreement with the Company that provides for salary compensation at
the rate of $400,000 per annum through the year 2000, and an option under the
Company's 1996 Amended and Restated Stock Option and Restricted Stock Purchase
Plan to purchase 200,000 shares of Common Stock at an exercise price per share
equal to the closing price of the Common Stock on April 22, 1994 ($17.13), the
date of his employment agreement. Mr. King's right to exercise such option is
subject to vesting over an approximately five-year period (at the rate of 20%
per year for the first three years and 40% in August 1998). In fiscal year 1998,
Mr. King received $450,000 in compensation from the Company, of which $400,000
was salary and $50,000 was a discretionary bonus. Prior to assuming his current
position, Mr. King had been employed by the Company since December 1991,
assisting in strategic planning, and received salary compensation at the rate of
$400,000 per annum. Mr. King had formerly served as President of television
distribution for Orion Pictures, Coca Cola Telecommunications and Columbia
Pictures Television. He was President and a director of the Company from 1973
until March 1984. Mr. King is a brother of Michael, Roger, Diana and Richard
King.
The Company distributes The Oprah Winfrey Show pursuant to an
agreement with Harpo, Inc. ("Harpo"), the producer of the series. Harpo is
controlled by Oprah Winfrey, the beneficial owner of more than 5% of the
Company's Common Stock as a result of options granted to Ms. Winfrey pursuant to
Harpo's agreement with the Company. Under the terms of the agreement currently
in effect, the Company has been granted the exclusive right, and has agreed, to
distribute episodes of The Oprah Winfrey Show produced through the 2001-2002
broadcast season. Under the terms of its agreement with Harpo, the Company pays
Harpo participation fees based on a percentage of gross revenues derived from
the series.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, all statements of beneficial ownership
required to be filed with the Securities and Exchange Commission in the fiscal
year ended August 31, 1998 were timely filed, with the exception of a Form 3 for
Avram Miller, which was filed on July 13, 1998.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain compensation information as to
the Chief Executive Officer and the four other highest paid executive officers
of the Company for the fiscal years ended August 31, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
------------------------------------------- -----------------------------------
Awards Payouts
--------------- ---------------
(g)
Securities (i)
(a) (e) Underlying (h) All Other
Name and (b) (c) (d) Other Annual Options/SARs LTIP Compensation
Principal Position Year Salary ($) Bonus ($) Compensation (#) Payouts ($) (S)
------------------ ---- ---------- --------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael King
Vice Chairman and 1998 $1,300,000 $4,011,663 $43,321(3) -- -- $161,778(2)(3)
Chief Executive Officer 1997 $1,200,000 $2,835,000 $ 6,518(1) -- -- $ 11,619(2)
1996 $1,100,000 $5,627,000 -- 3,000,000/0 -- $159,000(2)(3)
Roger King
Chairman of the Board 1998 $1,300,000 $4,011,663 $14,315(1) -- -- $181,878(2)(4)
1997 $1,200,000 $2,835,000 $10,758(1) -- -- $ 11,619(2)
1996 $1,100,000 $5,627,000 -- 3,000,000/0 -- $ 69,000(2)(5)
Andrew Friendly
President, First-Run 1998 $ 570,000 $ 75,000 -- 120,000/0 -- $ 11,788(2)
Programming and 1997 $ 545,000 -- -- -- -- $ 11,619(2)
Production 1996 $ 415,000 -- -- 200,000/0 -- --
Steven R. Hirsch
President, King World 1998 $ 525,000 $ 200,000 -- -- -- $ 11,788(2)
Media Sales Inc. 1997 $ 500,000 $ 320,000 -- 300,000/0 -- $ 11,619(2)
1996 $ 475,000 $ 249,000 -- -- -- $ 9,000(2)
J Stuart Stringfellow
President, Domestic 1998 $ 400,000 $ 100,000 -- -- -- $ 11,788(2)
Television Sales 1997 $ 312,500 $ 120,000 -- 60,000/0 -- $ 11,619(2)
1996 $ 251,000 $ 20,000 -- -- -- $ 9,000(2)
Jules Haimovitz
Former President and 1998 $ 865,000 -- -- -- -- $ 1,515,000(7)
Chief Operating Officer(6) 1997 $ 192,000 -- -- 500,000/0(8) -- --
1996 -- -- -- -- -- --
</TABLE>
(1) Represents personal use of Company aircraft.
(2) Represents Company contributions to the King World Productions, Inc.
Retirement Savings Plan.
(3) Represents a $150,000 annual premium for life and disability insurance
coverage for which the Company is obligated to reimburse Michael King
pursuant to his Employment Agreement. See "Employment Agreements - Michael
King and Roger King."
<PAGE>
(4) Represents a $170,090 annual premium for life and disability insurance
coverage for which the Company is obligated to reimburse Roger King
pursuant to his Employment Agreement. See "Employment Agreements - Michael
King and Roger King."
(5) Represents a $60,000 annual premium for life and disability insurance
coverage for which the Company is obligated to reimburse Roger King
pursuant to his Employment Agreement. See "Employment Agreements - Michael
King and Roger King."
(6) Mr. Haimovitz was employed as President and Chief Operating Officer from
June 23, 1997 to July 24, 1998.
(7) Represents payments made to Mr. Haimovitz pursuant to his employment
agreement upon the termination of his employment with the Company.
(8) Mr. Haimovitz's option to purchase 500,000 shares of the Company's Common
Stock lapsed unexercised upon the termination of his employment with the
Company.
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning grants
of stock options to the named executive officers during the fiscal year ended
August 31, 1998:
<TABLE>
<CAPTION>
Individual Grants
Percent of Potential Realizable
Number of Total Value at Assumed
Securities Options Annual Rates of Stock Price
underlying Granted to Appreciation For Option Term
Options Employees in Exercise Expiration ----------------------------
Name Granted Fiscal Year Price ($/Sh) Date 5% ($) 10%($)
(a) (b) (c) (d) (e) (f) (g)
- ------ ----- ----- ---------- ----- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Andrew Friendly 120,000 15.0% $29.43 7/21/08 2,220,987 5,628,452
</TABLE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
The following table sets forth the number of options exercised and the
value realized upon exercise by the named executive officers during the fiscal
year ended August 31, 1998 and the value of outstanding options held by such
executive officers as of August 31, 1998:
<TABLE>
<CAPTION>
(a) (b) (c) (d) (b) (e)
--- --- --- --- --- ---
Value of Unexercised
Number of Number of Securities In-the-Money
Shares Acquired Underlying Unexercised Options at
on Exercise Options at Fiscal Year End Fiscal Year End
Name of Options Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ---------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Michael King -- -- 2,280,000/1,200,000 $9,255,900/$1,500,000
Roger King 480,000 $9,645,900 1,800,000/1,200,000 $2,250,000/$1,500,000
Andrew Friendly 40,000 $335,184 0/280,000 $ 0/$529,600
Steven R. Hirsch -- -- 344,000/180,000 $ 1,060,320/$651,600
J Stuart Stringfellow -- -- 42,000/48,000 $ 286,440$125,760
</TABLE>
<PAGE>
The market value of the Company's Common Stock as of the close of
business on August 31, 1998, as reflected by the closing price of the Common
Stock on the NYSE, was $21.00 per share.
Employment Agreements
The Company has entered into employment agreements with each of the
executive officers named in the table above. The following describes those
employment agreements.
Michael King and Roger King
In December 1995, the Company entered into employment agreements with
Michael King and Roger King, the Company's Chief Executive Officer and then
President (now Vice Chairman), and its Chairman of the Board, respectively. The
agreements provide for the employment of each of Michael and Roger King by the
Company from December 1, 1995 through August 31, 2000, at a base salary in the
Company's 1998 fiscal year for each of the two executive officers of $1,300,000,
with an increase of $100,000 in each subsequent fiscal year.
In addition, the employment agreements provide for a "Net Income
Bonus" for each of Michael and Roger King equal to 1.5% of the Company's first
$50,000,000, 2.0% of the next $50,000,000 and 2.5% of the excess over
$100,000,000, of the Company's Modified Consolidated Net Income. The bonus is
determined and paid for each full fiscal year of the Company ending on or prior
to August 31, 2000 (unless the employment agreements are earlier terminated).
For the purpose of determining the Net Income Bonus, "Modified
Consolidated Net Income" means the net income of King World and its consolidated
subsidiaries after taxes but before extraordinary items, except that, to the
extent that any revenues and expenses are includable in "New Show Profits" for
purposes of determining the "New Show Profits Bonus" for any fiscal period (as
described below), they will be excluded in the determination of the Net Income
Bonus for such fiscal period (whether or not a New Show Profits Bonus is in fact
payable with respect to such fiscal period).
At the end of each fiscal quarter of each fiscal year during the term
of the employment agreements, the Compensation Committee causes the Modified
Consolidated Net Income and the Net Income Bonus payable through the end of such
fiscal quarter to be determined. To the extent that the amount of the Net Income
Bonus payable through the end of such fiscal quarter exceeds the sum of all Net
Income Bonus payments theretofore made to Michael King or Roger King, as the
case may be, in respect of prior fiscal quarters of the fiscal year to which
such Net Income Bonus relates, the excess will be paid to such executive as soon
as practicable after such determination is made; and to the extent that the
amount of all payments theretofore made to Michael King or Roger King, as the
case may be, in respect of prior fiscal quarters of the fiscal year to which
such Net Income Bonus relates exceeds the amount of the Net Income Bonus payable
to such executive through the end of such fiscal quarter, such executive must
<PAGE>
repay such excess to the Company promptly after such determination is made. To
the extent that either Michael King or Roger King is required to repay any such
amount to the Company, and he does not do so promptly, the Company may set off
or deduct such amount from any sum owed to him by the Company under his
employment agreement. The fact that the Company cannot or does not make such
set-offs or deductions will not relieve Michael or Roger King, as the case may
be, of any liability for the repayment of any amounts owed by him to the
Company.
The Company made a $2,000,000 bonus payment to each of Michael and
Roger King under the terms of their respective employment agreements upon their
execution thereof. In addition, under their respective employment agreements,
Michael King and Roger King are each entitled to a "New Series Bonus" of
$750,000 for each new each first-run "strip" (i.e. Monday through Friday)
syndicated series (each a "New Series") that (i) is developed, or the
distribution rights to which are acquired, by King World during the term of the
employment agreements, (ii) premieres in a television season that commences
after the 1995-1996 television season but before eighteen months after the
termination of the employment agreements, (iii) is produced, co-produced or
distributed by King World and (iv) is cleared over the course of any such season
in domestic television markets covering at least 70% of the domestic television
viewing households, based on Nielsen ratings. The New Series Bonus will be
payable, if at all, only one time with respect to each New Series, no matter
during how many television seasons such New Series is aired. A New Series Bonus
will be payable if the criteria set forth above are satisfied, even if the New
Series is canceled during the television season in which it has been cleared in
70% of the domestic television viewing households.
The employment agreements of Michael and Roger King also provide that
the Company shall pay each of Michael and Roger King a "New Show Profits Bonus"
for each new show (including, but not limited to, each show as to which a New
Series Bonus has been paid, if any) that is developed, or the distribution
rights to which are acquired, by King World during the term of the employment
agreements, premieres before eighteen months after the termination of the
employment agreements, and is produced, co-produced or distributed by King World
(each, a "New Show"). The New Show Profits Bonus payable to Michael and Roger
King with respect to any New Show for any fiscal year of the Company shall equal
the excess, if any, of (i) 5% of the excess of the cumulative revenues derived
by the Company from such New Show (and from any and all ancillary rights derived
from such New Show, including merchandising, theatrical and other commercial
rights) through the end of the fiscal year for which the determination is being
made over the cumulative production and development costs, including producers'
fees, direct selling, marketing, promotional and other distribution expenses,
all third-party participations and other payments, and all other direct
out-of-pocket costs, in all cases to the extent attributable to the New Show;
over (ii) all payments of the New Show Profits Bonus made with respect to such
New Show for all prior fiscal years, provided that the payment of a New Series
Bonus with respect to such New Show (if any) will be treated as an expense of
such New Show but will not be an offset against the New Show Profits Bonus. Any
New Show Profits Bonus owed to Michael or Roger King for any fiscal year will be
paid as soon as practicable after such audited financial statements for such
fiscal year become available. The New Show Profits Bonus for any New Show will
be payable by the Company only for so long as the Company or any of its
consolidated subsidiaries derives any revenues from the New Show, but the
<PAGE>
Company's profit realized upon any direct or indirect disposition of a New Show
will be subject to the New Show Profits Bonus. After termination of Michael
King's or Roger King's employment, the New Show Profits Bonus will continue to
be payable to such executive, but only with respect to New Shows that were
developed or produced primarily by the Company, unless the former executive
engages in certain specified competitive activities prior to August 31, 2000.
The employment agreements also provide for a "Supplemental Bonus" to
be paid to each of Michael and Roger King each year of their respective
employment agreements, provided that the Compensation Committee determines that
the average daily closing price of the Common Stock for such fiscal year (the
"Average Yearly Price") exceeded $19.00. In no event may the total of all
Supplemental Bonus payments to either executive over the five year terms of
their respective employment agreements exceed $2.55 million.
If the Average Yearly Price for any such fiscal year equals or exceeds
$19.75, the fair market value of the Common Stock on December 20, 1995 (the date
the employment agreements were executed), the Supplemental Bonuses for such
fiscal year shall for each executive be equal to 1.0% of the Company's Modified
Consolidated Net Income for such fiscal year. If such Average Yearly Price
exceeds $19.00 but is less than $19.75, the Supplemental Bonuses for such year
shall for each executive be equal to 1.0% of Modified Consolidated Net Income
for such year multiplied by a fraction, the numerator of which is the excess of
such Average Yearly Price over $19.00, and the denominator of which is $0.75.
The full amount by which any Supplemental Bonus payments were so
reduced below 1.0% of Modified Consolidated Net Income for any fiscal year
(after taxes but before extraordinary items) will be payable if and only if the
Average Yearly Price for any subsequent fiscal year within the term of their
respective employment agreements equals or exceeds $19.75. A portion of the
amount by which any Supplemental Bonus payment was so reduced shall be payable
to Michael or Roger King, as applicable, if the Average Yearly Price for any
subsequent fiscal year or years during the term of their respective employment
agreements is less than $19.75 but greater than the Average Yearly Price for the
year in which such reduction was made, and the portion of such reduction that
shall be payable in such fiscal year shall be equal to the full amount of such
reduction (or the portion thereof that was not previously recouped), multiplied
by a fraction the numerator of which is the excess of the Average Yearly Price
for such subsequent year over the Average Yearly Price for the year in which
such reduction was made and the denominator of which is the excess of $19.75
over the Average Yearly Price for the year in which such reduction was made. To
the extent that a partial recoupment is made in a subsequent fiscal year, any
amounts not recouped by Michael or Roger King under the foregoing formula will
remain available for recoupment in subsequent years during the term of their
respective employment agreements. Any amounts not recouped by Michael or Roger
King on or prior to the making of the Supplemental Bonus payment in respect of
the fiscal year ending August 31, 2000 will no longer be subject to recoupment
and will not be paid.
In accordance with their employment agreements, each of Michael and
Roger King has also been granted a non-qualified stock option to purchase
<PAGE>
3,000,000 shares of Common Stock. The options vest at the rate of 20% per year
on the last day of each of the Company's 1996 through 2000 fiscal years (subject
to the conditions described below, except as otherwise noted). The exercise
price of such options is $19.75 per share, the fair market value on the date the
employment agreements of Michael and Roger King were executed and the options
were granted. Each such option has a term of ten years.
In the event that either Michael King's or Roger King's full-time
employment with the Company is terminated prior to the end of the term of his
employment agreement, other than after a "Change of Control" or on account of
his death, disability or incapacity, he will be entitled to exercise his option
with respect to all shares of Common Stock subject thereto which had vested as
of the date of such termination during the one-month period commencing on the
date his employment so terminated. In the event that either Michael King's or
Roger King's full-time employment with the Company terminates on account of his
death or disability (within the meaning of Section 22(e) (3) of the Internal
Revenue Code of 1986, as amended (the "Code")), he (or his heirs, and
administrators or legal representatives) will be entitled to exercise his option
during the one-year period commencing as of the date his employment so
terminated to the extent the option was vested at the time of his death or
disability. In the event that either Michael King's or Roger King's full-time
employment with the Company is terminated after a "Change in Control", all
shares subject to his option that were not then vested will immediately vest,
and he will be entitled to exercise such option during the one-year period
commencing as of the date his employment so terminated.
For this purpose, a "Change in Control" means the occurrence of any
one of the following events: (i) a majority of the Board of Directors of the
Company consists of individuals other than "Incumbent Directors", which term
means the members of the Board of Directors on December 20, 1995, provided, that
any person becoming a director subsequent to such date whose election or
nomination for election was approved by at least two-thirds of the directors who
then comprised the Incumbent Directors shall be considered to be an Incumbent
Director; (ii) the Company, without the approval of Michael or Roger King, as
applicable, adopts any plan of liquidation providing for the distribution of all
or substantially all of its assets; or (iii) all or substantially all of the
assets or business of the Company and its consolidated subsidiaries are disposed
of pursuant to a merger, consolidation, reorganization, share exchange or other
transaction (unless the stockholders of the Company immediately prior to such
merger, consolidation, reorganization, share exchange or other transaction,
beneficially own, directly or indirectly, more than 50% of all the voting stock
or other ownership interests of the entity or entities, if any, that succeed to
the business of the Company).
During the term of the employment agreements, the Company is also
obligated to provide Michael and Roger King with life insurance coverage, each
in the face amount of $15,000,000, and disability insurance, if such coverage is
available at standard rates, upon terms to be agreed upon by the executives and
the Company.
<PAGE>
Andrew Friendly
Mr. Friendly serves as President, First-Run Programming and
Production, under an employment agreement which was most recently extended for a
term of approximately 3 1/2 years ending in 2001. The Company paid a $75,000
bonus to Mr. Friendly in connection with such extension. The agreement provides
for salary compensation at the rate of $650,000 for the period from November
1998 through November 1999, with annual increases of $50,000 for each of the two
years thereafter. In connection with such extension, Mr. Friendly was granted a
non-qualified stock option to purchase 120,000 shares of Common Stock, pursuant
to the Company's 1996 Amended and Restated Stock Option and Restricted Stock
Purchase Plan, at an exercise price equal to $29.43 per share, the closing price
of the Common Stock on the date of grant. 20% of the shares subject to such
option will vest on each of November 12, 1999, 2000 and 2001, and the remainder
on November 12, 2002, subject to Mr. Friendly's continued employment with the
Company on each such date. The term of such option is ten years. If Mr. Friendly
ceases to be a full-time employee of the Company or any of its subsidiaries or
affiliates, he will have the right to exercise the unexercised portion of such
option only within the one-month period following the date on which he ceased to
be a full-time employee, and then only to the extent that it was exercisable on
the date his employment ceased, except that if his employment ceased by reason
<PAGE>
of his death or disability (within the meaning of ss. 22(e)(3) of the Code),
such one month period will instead be the one year period following the
cessation of his full-time employment.
Steven R. Hirsch
Mr. Hirsch serves as the President of King World Media Sales, Inc.,
the wholly-owned barter advertising subsidiary of the Company, under an
employment agreement having a term that commenced on September 1, 1996 and ends
on August 31, 1999, with an option for the Company to extend the term an
additional two years, and provides for a base salary of $500,000 per year in the
first year, $525,000 in the second year, $550,000 in the third year and $600,000
in each year the Company exercises its option to extend the agreement. In each
of the Company's fiscal years under the agreement, Mr. Hirsch is also entitled
to an annual cash bonus equal to 1% of Camelot's net revenues (not to exceed
$200,000 in any of the first three years of the agreement or $250,000 during
either year the Company exercises its option to extend the agreement), and a
supplemental cash bonus (not to exceed $150,000 per year or $250,000 over the
term of his employment agreement), subject to the satisfaction of an S&P return
on equity performance condition. Mr. Hirsch's supplemental cash bonus is fully
payable for any year during the term of his employment agreement only if the
Average Yearly Price is greater than or equal to $19.438. To the extent that the
Average Yearly Price is less than $19.438 in any such year, the supplemental
cash bonus payable to Mr. Hirsch is reduced by multiplying the full amount of
the supplemental cash bonus otherwise payable by a fraction, the numerator of
which is the excess, if any, of the Average Yearly Price over Mr. Hirsch's "Base
Price" ($16.313) and the denominator of which is the excess, if any, of $19.438
over his Base Price. No supplemental bonus is payable if the Average Yearly
Price is less than his Base Price.
In addition, pursuant to the terms of his employment agreement, Mr.
Hirsch has been granted a nonqualified stock option to purchase 300,000 shares
of Common Stock, pursuant to the Company's 1996 Amended and Restated Stock
Option and Restricted Stock Purchase Plan at an exercise price equal to $17.38,
the closing price of the Common Stock on September 3, 1996, the date of grant.
20% of the shares subject to such options will vest on each of August 31, 1997,
August 31, 1998 and August 31, 1999, and the remainder will vest on August 31,
2001, subject to Mr. Hirsch's continued employment with the Company on each such
date. The term of such option is ten years.
<PAGE>
J Stuart Stringfellow
Mr. Stringfellow serves as President - Domestic Television Sales of
King World under an employment agreement that was extended on July 18, 1998 for
a term of approximately two additional years, ending August 31, 2001. The
agreement provides for salary compensation at the rate of $400,000 per year for
each of the fiscal years ending August 31, 1998 and August 31, 1999, $425,000
for the fiscal year ending August 31, 2000 and $450,000 for the fiscal year
ending August 31, 2001. The agreement also provides for a performance based
bonus of up to $100,000, based on the household coverage percentage achieved by
The Roseanne Show at the time it premiered in national syndication. Mr.
Stringfellow was paid a cash bonus of $100,000 pursuant to such provision in May
1998.
<PAGE>
Compensation Committee Interlocks and Insider Participation
During fiscal 1998, the members of the Compensation Committee of the
Board of Directors were Messrs. Chambers, Chaseman, Rosen and Miller. The
Compensation Committee was constituted in July 1993 and recommends compensation
arrangements for the Company's executive officers. Since January 1994, the
members of the Compensation Committee also have been responsible for determining
the timing, amount, exercise price and other terms of options granted under the
Company's 1996 Amended and Restated Stock Option and Restricted Stock Purchase
Plan.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee recommends compensation arrangements for
the Company's executive officers and administers the Company's 1996 Amended and
Restated Stock Option and Restricted Stock Purchase Plan.
<PAGE>
The Company's executive compensation program is structured to help the
Company achieve its business objectives by:
o setting levels of compensation designed to attract and retain
superior executives in a highly competitive environment;
o designing equity-related and other performance-based incentive
compensation programs to align the interests of management with
the ongoing interests of stockholders;
o providing incentive compensation that varies directly with both
Company financial performance and individual contributions to
that performance; and
o linking compensation to elements that affect short- and long-term
stock price performance.
The Company has used a combination of salary and incentive
compensation, including performance-based cash bonuses and equity-based
incentives, to achieve its compensation goals.
Compensation of Executive Officers Generally
For the 1998 fiscal year, the Company paid its executives and
employees several forms of compensation designed to motivate and reward
executive performance while aligning executive and shareholder interests. The
primary components of executive compensation in the 1998 fiscal year were
salary, performance-based compensation and stock options.
Salary
The salary levels of the Company's executive officers are intended to
reflect the duties and levels of responsibility inherent in the positions in
question. Comparisons of the salaries paid by other companies in the television
syndication industry and related industries to executives holding comparable
positions are considered in establishing the salary level for each position. The
particular qualifications of the individual holding the position, his or her
relevant experience and the importance to the Company of his or her expected
contribution are also considered in establishing salaries.
During fiscal 1998, the executives named in the table above earned
approximately $4.9 million, or approximately 37%, of their total cash
compensation, in the form of salary compensation. The remaining 63% was earned
primarily pursuant to performance-based cash bonus arrangements.
Performance-Based Compensation
<PAGE>
Net Income and Profit Bonuses. Arrangements for bonus compensation for
the Company's executive officers are also negotiated individually with each
executive officer and are generally fixed by contract. Bonus compensation
arrangements take various forms, but generally are based on factors such as the
Company's financial performance, as measured by net income in the fiscal year,
and individual performance.
Certain of the Company's executive officers have a direct
participation in the Company's net income or the profits of a particular part of
the Company's business, depending on the executive's particular
responsibilities. (The Company has similar profit sharing arrangements with
independent producers of the Company's programming.) In some cases, executive
officers have been awarded supplemental cash bonuses with maximum dollar limits,
the payout of which varies depending on the average price of the Common Stock
relative to a negotiated base level.
Generally, the payment of cash bonuses is subject to performance
conditions designed to align the interests of the Company's executive officers
with those of its stockholders by ensuring that the amount of the bonuses paid
to the Company's executive officers is dependent upon the Company's achieving
certain performance conditions.
The Company has favored net income bonuses and profit participations,
as well as bonuses that vary with stock performance or are payable only if new
television series are developed and successfully launched in syndication,
because it believes that they encourage executives to work harder and afford
executives a direct pecuniary interest in the portion of the Company's business
for which they are responsible. It is the Committee's understanding that net
income and profit participations are commonly employed in the television
syndication and related entertainment industries to encourage performance of
talent and executive personnel; indeed, such arrangements have been a feature of
the Company's compensation arrangements with its senior executives for the past
several years.
In fiscal 1998, the persons named in the Summary Compensation Table
above earned approximately $8.4 million in cash bonus compensation, of which
approximately $5.4 million was paid pursuant to the net income bonuses of
Michael King and Roger King and approximately $2.6 million was paid to Michael
King and Roger King as Supplemental Bonuses. Steven R. Hirsch, the President of
King World Media Sales, Inc., was also paid $200,000 pursuant to a cash bonus
based upon the net revenues of King World Media Sales, Inc. Andrew Friendly, the
President of the Company's First-Run Programming and Production division, was
paid a bonus of $75,000 in connection with the extension of his employment
agreement with the Company, and J Stuart Stringfellow, President of the
Company's Domestic Television Sales division, was paid a bonus of $100,000 based
upon the household percentage coverage achieved by domestic sales of The
Roseanne Show at the time it premiered in national syndication.
New Show and New Series Bonuses. The Company's Chairman of the Board
of Directors and its Vice Chairman and Chief Executive Officer also have
arrangements for bonuses to be paid upon the development or distribution of
<PAGE>
certain new shows and series. These bonuses are designed to encourage the
continued development and successful syndication of new programming by the
Company and are dependent upon the success of such programming.
Equity-Related Incentives.
The Company's primary method of compensating senior executives has
been through the grant of stock options granted at the commencement of their
employment agreements. Stock options granted to executive officers are generally
long-term (10 years) and vest over a five-year period in most cases. The Company
has favored stock options as a way of aligning management's interests with the
long-term interests of the Company's shareholders and inducing executives to
remain with the Company on a long-term basis. Individual awards for executives
and employees, other than the Company's Chairman of the Board of Directors and
its Vice Chairman and Chief Executive Officer, are initially proposed by the
Company's senior management. The ultimate size of each award is determined by
the Compensation Committee, and the size of an award reflects the Committee's
judgment as to the extent to which the executive can contribute to the Company's
performance. With respect to this component of compensation, the focus is not on
rewarding an executive for his or her current or past contributions, but rather
on the impact the executive is expected to have on the Company's future
performance.
During fiscal 1998, stock options were granted to one of the named
executive officers, Mr. Andrew Friendly. The option grant was for 120,000 shares
of Common Stock, had an exercise price of $29.43, the fair market value of the
Common Stock on the date of grant, and contains the Company's standard five-year
vesting provisions.
Chairman of the Board of Directors and Vice Chairman and Chief Executive Officer
Compensation arrangements for the Company's Chairman of the Board of
Directors, Roger King, and its Vice Chairman and Chief Executive Officer,
Michael King, for the 1998 fiscal year were governed by the employment
agreements entered into by the Company and such executives during fiscal 1996.
The employment agreements provide for the payment of higher levels of
compensation than previous arrangements. In negotiating and approving the terms
of the agreements, the Committee considered proposals submitted by the
executives, and its approval of the overall compensation packages was influenced
primarily by the success of the Company's distribution and production operations
over the past several years and the unique contribution of these two executives
to the Company's long- and short-term profitability, including the Company's
ability to obtain new distribution properties, to develop and produce new
programming and to successfully distribute new and existing programming. During
the course of its negotiations with the executives, the Committee considered the
previous levels of compensation paid to Messrs. King as well as compensatory
benefits paid to the chief executive officers and chairmen of other companies in
the television syndication and related entertainment industries whose
profitability was similar to that of the Company. The Committee also engaged an
independent compensation consultant.
<PAGE>
The employment agreements provided for each of Michael and Roger King
to receive a base salary in the Company's 1998 fiscal year of $1.3 million, an
increase of 8% over the salary of each for the Company's 1997 fiscal year. Under
the terms of their respective employment agreements, each of Michael and Roger
King will receive a salary increase of $100,000 in each subsequent fiscal year
over the balance of the five-year term of such employment agreement.
The employment agreements between the Company and each of Michael King
and Roger King provide for several forms of performance-based bonus
compensation. Under the agreements, Michael King, who is in charge of the
Company's overall programming acquisition, development and production
activities, and Roger King, the head of the Company's sales department, are each
entitled to a cash bonus in the form of a percentage of the Company's net income
(after taxes but before extraordinary items) ranging from 1.5 to 2.5%, depending
on the level of such net income. Each of Michael and Roger King earned
approximately $2.7 million in payment of such bonus in respect of fiscal year
1998, compared to $2.8 million earned in fiscal 1997. Each of the employment
agreements also provides for the payment of a "Supplemental Bonus" for each year
that the average daily closing price of the Common Stock of the Company exceeds
$19, with an additional bonus paid each year such price exceeds $19.75. Each of
Michael and Roger King earned approximately $1.3 million in Supplemental Bonuses
in fiscal 1998. Because the average daily closing price of the Common Stock did
not exceed the threshold Common Stock price in fiscal 1997, no Supplemental
Bonus was paid to either of them with respect to fiscal 1997.
The employment agreements of each of Michael King and Roger King
include a "New Series Bonus" of $750,000 for each new first-run "strip" (i.e.,
Monday - Friday) syndicated series that premieres in a television season that
commences after the 1995 - 1996 television season and that is cleared in any
such season in domestic television markets covering at least 70% of the domestic
television viewing households. No New Series Bonus was paid to either Michael
King or Roger King in fiscal 1998 or 1997 as no new series of the Company
debuted in either year. New Series Bonuses of $1.5 million were paid to each of
Michael King and Roger King in the current (1999) fiscal year based on the
successful introduction of The Roseanne Show and Hollywood Squares, both of
which premiered in September 1998 and achieved the minimum household coverage
percentages.
The employment agreements of each of Michael King and Roger King also
include a "New Show Profits Bonus" based on the revenues generated by each new
show that is developed, or the distribution rights to which are acquired, by the
Company during the term of the employment agreements and that is produced,
co-produced or distributed by King World. No New Show Profits Bonus was paid to
either Michael King or Roger King in fiscal 1998 or 1997 as no new qualifying
series were introduced by the Company during such periods. It is expected that
New Show Profit Bonuses will be paid to Michael King and Roger King in the 1999
fiscal year based on profits generated by The Roseanne Show and Hollywood
Squares.
Overall, the cash bonus compensation earned by Michael and Roger King
in fiscal 1998 was 42% greater than that earned in fiscal 1997. The difference
reflects in large part the generally higher average price of the Common Stock
<PAGE>
during fiscal 1998, to which certain of their performance bonuses are tied.
Long Term Equity Incentives
In fiscal 1996, at the time their current employment agreements were
entered into, the Company issued to each of Michael and Roger King a
non-qualified stock option to purchase 3,000,000 shares of Common Stock. The
options vest at the rate of 20% per year on the last day of each of the
Company's 1996 through 2000 fiscal years (subject to certain conditions). The
exercise price of such options is $19.75 per share, the fair market value on the
date the employment agreements of Michael and Roger King were executed and the
options were granted. Each such option has a term of ten years.
Deductibility of Executive Compensation
Section 162(m) of the Code generally limits the Company's federal
income tax deduction for compensation paid in any year to its Chief Executive
Officer and to each of its four highest paid executive officers, other than the
Chief Executive Officer, to $1 million, to the extent that such compensation is
not "performance based compensation" within the meaning of ss.162(m).
Accordingly, in structuring the Company's compensation arrangements with its
Chairman of the Board, its Vice Chairman and Chief Executive Officer and certain
of its other highly paid executive officers, the Committee attempted to design
incentive formulas that may qualify as "performance based compensation" in order
to decrease the after-tax cost of such arrangements to the Company. However,
there can be no assurance that the various incentive and performance-related
elements of the Company's compensation arrangements with its five highest paid
executive officers will in fact qualify as "performance based compensation"
under ss. 162(m) of the Code or that the tax deductibility of compensation paid
pursuant thereto will not in fact be limited by the $1 million statutory cap on
deductible executive compensation.
Raymond G. Chambers
Joel Chaseman
Fredric D. Rosen
Avram Miller
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder returns,
over the period presented, on the Company's Common Stock, the Standard & Poor's
Composite Index of 500 Stocks and the capital stocks of a representative group
of companies1 whose operations include television programming. The fiscal
year-end values of each investment are based on share price appreciation plus
reinvested dividends, and assume an initial investment of $100.
The market price of the Company's Common Stock (adjusted for stock
splits and dividends) has increased from $0.56 in December 1984, the time of the
Company's initial public offering of Common Stock, to $18.56 on August 31, 1993
and $21.00 on August 31, 1998. This represents stock price appreciation of 3750%
since the initial public offering and 13% over the Company's last five fiscal
years. As of December 16, 1998, the closing price of the Common Stock was
$27.437, which represents an increase of 31% over the closing price on August
31, 1998.
Five Year Cumulative Total Returns
[FIVE-YEAR PERFORMANCE GRAPH]
8/31/93 8/31/94 8/31/95 8/31/96 8/31/97 8/31/98
King World $100 $102 $102 $ 95 $113 $120
S & P 500 $100 $105 $128 $152 $214 $231
Peer Group $100 $ 98 $123 $114 $160 $201
- --------
1 In calculating the returns for August 31, 1998, the peer group of
companies includes the following: dick clark productions inc., Kushner-Locke
Company, Time Warner, Inc., Tribune Co., Viacom, Inc., Spelling Entertainment
Group Inc. and The Walt Disney Company. For group returns calculated prior to
August 31, 1998, All American Communications, Inc. was also included in the peer
group. For group returns calculated prior to August 31, 1996, The Samuel Goldwyn
Company and Multimedia Entertainment Inc. were also included in the peer group.
Each of the companies which ceased to be included in the peer group was removed
because its ceased having been acquired by another peer group company or a
company in a different line of business.
<PAGE>
The above report of the Compensation Committee and the Stock
Performance Graph will not be deemed to be soliciting material or to be filed
with or incorporated by reference into any filing by the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Exchange
Act"), except to the extent that the Company specifically incorporates such
report or graph by reference.
2. PROPOSAL TO AMEND THE RESTATED CERTIFICATE OF INCORPORATION TO PROVIDE FOR
THE ELECTION OF ALL DIRECTORS ANNUALLY
The Board of Directors has approved and recommends to the stockholders
that they consider and approve a proposal to amend the Company's Restated
Certificate of Incorporation to eliminate the current division of the Board of
Directors into three classes, with one class elected each year for a three-year
term, and to provide instead for the annual election of the entire Board of
Directors commencing in 2000. If the proposed amendment is approved, Sections 1
and 2 of Article VI of the Company's Restated Certificate of Incorporation would
be amended to read as follows:
"1. Except as otherwise fixed by or pursuant to the
provisions of Article IV hereof relating to the rights of the
holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation, the number
of the directors of the Corporation shall be fixed from time to
time by or pursuant to the Bylaws of the Corporation. The
directors, other than those who may be elected by the holders of
the Preferred Stock or any other class or series of stock having
a preference over the Common Stock as to dividends or upon
liquidation pursuant to the terms of this Certificate of
Incorporation or any resolution or resolutions providing for the
issue of such class or series of stock adopted by the Board of
Directors, shall be elected by the stockholders entitled to vote
thereon at each annual meeting of stockholders and shall hold
office until the next annual meeting of stockholders and until
each of their respective successors shall have been elected and
qualified. The term of office of each director in office at the
time this Section 1 of Article VI becomes effective shall expire
at the next annual meeting of stockholders held after the time
this Section 1 of Article VI becomes effective. The election of
directors need not be by written ballot. No decrease in the
number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
<PAGE>
2. Except as otherwise provided for or fixed by or pursuant
to the provisions of Article IV hereof relating to the rights of
the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation, newly
created directorships resulting from any increase in the number
of directors may be filled by the Board of Directors, or as
otherwise provided in the By-laws, and any vacancies on the Board
of Directors resulting from death, resignation, removal or other
cause shall be filled only by the affirmative vote of a majority
of the remaining directors then in office, even though less than
a quorum of the Board of Directors, or by a sole remaining
director, or as otherwise provided in the By-laws. Any director
elected in accordance with the preceding sentence of this Section
2 shall hold office until the next annual meeting of stockholders
and until such director's successor shall have been elected and
qualified."
Since 1984 the Company's Certificate of Incorporation has provided, as
specifically permitted by Delaware law and the rules of the NYSE, that the Board
of Directors is to be divided into three classes of as equal size as possible,
with one class elected each year for a three-year term. The Company, like many
companies, believed that such a "classified" Board of Directors provided
continuity and stability in the membership of the Board of Directors and in the
policies established by the Board and ensured that new Directors would have the
opportunity to become familiar with the Company's business and benefit from the
experience of the continuing Directors. The provision was designed to help
assure continuity of Company policies and make management changes more gradual.
It was also designed to ensure that any person seeking to acquire control of the
Company would seek approval of the Board of Directors rather than proceeding
unilaterally. The Company also recognized that a classified Board of Directors
<PAGE>
could strengthen its position in negotiating with, or otherwise responding to,
any person attempting a proxy fight or other change-of-control transaction and
thereby might enable the Company to improve the terms of any proposal made by
such a person.
At the 1998 Annual Meeting of Stockholders, the stockholders approved
a resolution proposed by a stockholder requesting that the Board of Directors
take the necessary steps to declassify the Board of Directors so that all
directors are elected annually. The stockholder proposal received the approval
of 52% of the votes cast at the meeting. Although the resolution was not binding
upon the Board, after consideration, the Board determined that, although the
classified Board has served the Company well, it is no longer desirable and that
the benefits of continuity, stability and experience, while to some degree
protected by the staggered election of directors, do not depend on such process
alone. Accordingly, the Board has come to believe that stockholders should have
the opportunity to vote on the entire Board of Directors each year to be able to
register their views on the performance of the Board collectively and each
Director individually. The Board of Directors has, therefore, approved the
proposed amendment to the Restated Certificate of Incorporation to provide for
the annual election of all directors and is submitting such proposed amendment
to the stockholders for their approval at the Annual Meeting. Furthermore, if
the proposed amendment is approved, the By-laws of the Company will be amended
to delete provisions relating to the classified Board of Directors and will,
instead, provide for the annual election of Directors.
Voting Required to Approve the Amendment
The affirmative vote of the holders representing at least 66-2/3% of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting
(and assuming a quorum is present) is necessary for approval of the Amendment.
Therefore, abstentions and broker non-votes (which may occur if a beneficial
owner of stock where shares are held in a brokerage or bank account fails to
provide the broker or the bank voting instructions as to such shares) will
effectively count as votes against the Amendment.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.
3. APPROVAL OF THE COMPANY'S 1998 STOCK OPTION AND RESTRICTED STOCK PURCHASE
PLAN
At the Annual Meeting, the stockholders will be asked to approve the
Company's 1998 Stock Option and Restricted Stock Purchase Plan (the "Plan"). The
Plan provides for the granting of "nonqualified stock options" and "incentive
stock options" to acquire Common Stock and/or the granting of rights to purchase
Common Stock on a "restricted stock" basis. An aggregate of 2,000,000 shares of
the Company's Common Stock are available for the grant of options or for
issuance as restricted stock awards under the Plan. Previously, an aggregate
18,600,000 shares of Common Stock had been at various times authorized for
<PAGE>
issuance under predecessor plans, including issuance under predecessor plans,
including the 1996 Amended and Restated Stock Option and Restricted Stock
Purchase Plan (the "1996 Plan"), and, in fiscal 1989, an aggregate 5,100,000
shares were authorized for issuance (and were issued) to the Company's three
most senior executives under the Company's Incentive Equity Plan for Senior
Executives. In addition, in fiscal 1997, the Company also adopted a Salesforce
Bonus Plan under which 1,000,000 shares were reserved for issuance to certain
members of the Company's salesforce.
As of December 16, 1998, 2,239,718 shares of Common Stock remained
available for issuance under the 1996 Plan and 679,000 shares remained available
for issuance under the Salesforce Bonus Plan.
The Company has in the past used, and intends in the future to use,
stock options as an important incentive device to motivate and reward its
employees. Management believes that equity incentives represented by stock
options enhance the Company's ability to attract and retain needed personnel.
The Plan has been unanimously adopted by the Board of Directors,
subject to stockholder approval.
The primary features of the Plan are summarized below. The following
summary is qualified in its entirety by reference to the full text of the Plan,
which is set forth in the attached Exhibit A.
Description of the Plan
The Plan provides an opportunity for persons employed by, or
performing services for, the Company or any of its subsidiaries, including
officers and directors of the Company or any of its subsidiaries, to purchase
Common Stock. By encouraging such stock ownership, the Company seeks to attract,
retain and motivate such employees and persons and to encourage such employees
and persons to devote their best efforts to the business and financial success
of the Company. The approximate number of employees and directors who are
eligible to receive grants and awards under the Plan is 418.
The purpose of the King World Productions, Inc. and its Subsidiaries
1998 Stock Option and Restricted Stock Purchase Plan (the "Plan") is to promote
the interests of King World Productions, Inc., a Delaware corporation (the
"Company"), and any Subsidiary thereof and the interests of the Company's
stockholders by providing an opportunity to selected Employees, Consultants and
Non-Employee Directors of the Company to purchase Common Stock of the Company,
thereby enhancing the Company's ability to attract, retain, motivate and
encourage such persons to devote their best efforts to the business and
financial success of the Company. It is intended that this purpose will be
effected by awards of Non-Qualified Stock Options, Incentive Stock Options,
Restricted Stock and/or Unrestricted Stock.
The Plan provides for the granting of non-qualified stock options,
incentive stock options (collectively "Options"), restricted stock and/or
<PAGE>
unrestricted stock (collectively, "Stock Awards" and together with Options,
"Awards"). The terms and conditions of individual Awards may vary, subject to
certain requirements of the Plan.
The total number of shares of Common Stock for which Awards may be
granted under the Plan may not exceed 2,000,000 shares, subject to adjustment
for certain transactions affecting the Common Stock, as described below. In the
event that an option is terminated, forfeited or becomes unexercisable for any
reason without having been exercised in full, the shares of Common Stock
allocable to the unexercised portion of such option will generally again become
available for grant under the Plan. If any shares of Common Stock issued
pursuant to an Award have been repurchased by the Company, such shares will not
be available for future grant or award under the Plan.
The Plan administrator may make certain adjustments to outstanding
Awards and to the maximum number of shares of Common Stock which may be awarded
or subject to Options granted under the Plan or to any one employee, in order to
preserve or prevent the enlargement or contraction of benefits resulting from
any stock dividend, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or other
similar transaction affecting the Common Stock. The Plan administrator may also
make Awards under the Plan in substitution for stock and stock based awards held
by employees of another corporation who become employees of the Company as a
result of a merger or consolidation with the Company or any of its subsidiaries.
Eligibility. Awards may be made under the Plan to employees and other
persons rendering services to the Company, including consultants and advisors.
The administrator of the Plan has the sole authority to select the employees and
service providers to whom discretionary Awards are to be granted. Non-employee
directors of the Company are eligible only for automatic grants of stock options
provided under the Plan. The maximum number of shares of Common Stock which may
be the subject of Awards granted to any one employee under the Plan during any
period of five consecutive fiscal years is 1,500,000 shares.
Administration Plan. The Plan may be administered by different
committees of the Board of Directors with respect to different groups of
participants by a single committee or by the Board itself. Initially the Plan
will be administered by the Compensation Committee of the Board of Directors,
which administers the 1996 Plan.
The Plan administrator has the authority, in its discretion:
1. to determine the fair market value of Common Stock that may be
subject to grants under the Plan; (b) to select the employees and
service providers to whom awards under the Plan may be granted; (c) to
determine whether and to what extent Awards of options, restricted or
unrestricted stock, or any combination thereof, are granted under the
Plan; (d) to determine the number of shares of Common Stock to be
covered by each Award made under the Plan; (e) to determine the amount
and the form of the consideration that may be used to purchase shares
<PAGE>
of Common Stock subject to Stock Awards or upon exercise of any
Option; (f) to determine the terms and conditions, consistent with the
Plan, of any Award including the exercise price, the time or times
when Options may be exercised (which may be based on performance
criteria), any vesting, acceleration or waiver of forfeiture
restrictions and any restriction or limitation regarding any Award or
the shares of Common Stock relating thereto; (g) to reduce the
exercise price of any Option to the then current fair market value if
the fair market value of the Common Stock covered by such Option has
declined since the date such Option was granted; (h) to cancel any or
all outstanding Options and the grant new Options in substitution; (i)
to construe and interpret the terms of the Plan; (j) to prescribe,
amend and rescind rules and regulations relating to the Plan;(k) to
modify or amend the terms of any award under the Plan; (l) subject to
the provisions of Section 424(h) of the Code, if applicable, to
accelerate vesting periods with respect to outstanding Options and the
termination of restrictions with respect to Stock Awards; (m) to
authorize any person to execute on behalf of the Company any
instrument required to effect any Award granted by the Administrator;
and (n) to exercise all other powers granted to the Administrator
under the Plan and make all other determinations deemed necessary or
advisable for administering the Plan.
The Administrator's decisions, determinations and interpretations with
respect to such matters are final and binding on all holders of Awards.
Terms of Options. The exercise price of each option granted under the
Plan is determined by the Plan Administrator at the time such Option is granted
(but may not be less than the Fair Market Value of the Common Stock on the date
of grant). The terms and conditions of "incentive stock options" granted under
the Plan must conform to the applicable requirements of Section 422 of the Code.
The Administrator may specify the terms and conditions of the vesting
of Options and may impose such other conditions with respect to the exercise of
Options and the disposition of the securities issuable thereunder as it
considers necessary or advisable. Options may provide for the payment of the
exercise price by several methods, including cash payment, the delivery of
shares of Common Stock, delivery of promissory notes of the optionee or
irrevocable undertaking by a broker to deliver sufficient funds to pay the
exercise price or delivery of irrevocable instructions to a broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price.
Options granted under the Plan may not be transferred otherwise than by will,
the laws of descent and distribution or a qualified domestic relations order.
Non-Employee Director Options. The Plan provides for each person who
becomes a non-employee director to be automatically granted an Option to
purchase 10,000 shares of Common Stock on the third business day following his
or her first appointment or election as a non-employee Director. Such Option
becomes exercisable six months after the date of grant and has a term of ten
years from the date of grant. In addition, on the third business day following
the 1999 annual meeting of the stockholders of the Company and each annual
meeting of stockholders thereafter at which a non-employee Director is elected
or re-elected as a member of the Board of Directors (including the Annual
<PAGE>
Meeting of Stockholders at which he or she initially elected), such Non-Employee
Director is automatically granted an Option to purchase 3,333 shares of Common
Stock; provided that no such option shall be granted to any non-employee
Director so long as any non-qualified stock option that was granted to such
non-employee Director pursuant to the 1996 Plan is unvested.
The exercise price of each such Option will be the Fair Market Value
on the date of grant. Such Options become exercisable on the date of the next
annual meeting of stockholders following the date of grant and have a term of
ten years from the date of grant, subject to the following:
(i) if a non-employee Director ceases to serve as a Director for
any reason other than as a result of his death or "disability" (within
the meaning of Section 22(e)(3) of the Code), the unexercised portion
of any Option granted under the Plan and held by such non-employee
Director at the time he or she ceased to serve as a Director may be
exercised only within one month after the date on which such
non-employee Director ceased to serve as a Director, and only to the
extent that such non-employee Director could have otherwise exercised
such Director Option as of the date on which he or she ceased to serve
as a Director; provided, however, that if such non-employee Director
was subject to a "lock-up" or similar restriction on his or her
ability to sell the securities issuable upon the exercise of such
Option as of the date he or she ceased to serve as a Director or
during such one-month period, such one-month period shall be extended
by a number of days equal to the number of days that such sale
restrictions were in effect;
(ii) if a non-employee Director ceases to serve as a Director by
reason of his "disability" (within the meaning of Section 22(e)(3) of
the Code), the unexercised portion of any Option granted under the
Plan and held by such non-employee Director at the time he or she
ceased to serve as a Director may be exercised only within one year
after the date on which the non-employee Director ceased to serve as a
Director, and only to the extent that the non-employee Director could
have otherwise exercised such Option as of the date on which he or she
ceased to serve as a Director; and
(iii) if a non-employee Director dies while serving as a
non-employee Director (or within a period of one month after ceasing
to serve as a Director for any reason other than "disability" (within
the meaning of Section 22(e)(3) of the Code) or within a period of one
year after ceasing to be a Director by reason of such "disability"),
the unexercised portion of any Option granted under the Plan and held
by such Non-Employee Director at the time of his or her death may be
exercised only within one year after the date of such non-employee
Director's death, and only to the extent that such non-employee
Director could have otherwise exercised such Option at the time of his
or her death; and in such event, such Option may be exercised by the
designated beneficiary of such non-employee Director.
In the event of a "Change of Control" of the Company, the vesting of
any Option granted under the Plan to a non-employee Director that had not become
exercisable prior to such Change of Control will be accelerated and such Option
<PAGE>
will become exercisable upon the effectiveness of such Change of Control,
subject to all other applicable provisions the Plan and the option agreement
relating to such Option. For this purpose, "Change of Control" means: (A) a
majority of the Board of Directors of the Company consists of individuals other
than "Incumbent Directors", which term means the members of the Board of
Directors on the date this Plan is adopted by the Board of Directors; provided,
that any person becoming a director subsequent to such date whose election or
nomination for election was approved by at least two-thirds of the directors who
then comprised the Incumbent Directors shall be considered to be an Incumbent
Director; (B) the Company, without the approval of at least two-thirds of the
Incumbent Directors, adopts any plan of liquidation providing for the
distribution of all or substantially all of its assets; or (C) all or
substantially all of the assets or business of the Company and its consolidated
subsidiaries are disposed of pursuant to a merger, consolidation,
reorganization, share exchange or other transaction (unless the stockholders of
the Company, immediately prior to such merger, consolidation, reorganization,
share exchange or other transaction, beneficially own, directly or indirectly,
more than 50% of all the voting stock or other ownership interests of the entity
or entities, if any, that succeed to the business of the Company).
Restricted Stock Awards. The Administrator may grant Awards entitling
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their purchase price (or to
require forfeiture of such shares if purchased at no cost) from the recipient in
the event that conditions specified by the Administrator in the applicable Award
are not satisfied prior to the end of the applicable restricted period
established by the Administrator for such Award. Conditions for repurchase (or
forfeiture) may be based on continuing employment or service or achievement of
pre-established performance or other goals and objectives. The Administrator may
at any time accelerate the expiration of the restricted period applicable to
all, or any particular, outstanding shares of Restricted Stock.
The Administrator may also grant (or sell at a purchase price
determined by the Board of Directors, which shall not be lower than 85% of Fair
Market Value on the date of sale) unrestricted stock to eligible participants in
the Plan.
Mergers, Consolidation, Etc. In the event of a consolidation or merger
or sale of all or substantially all of the assets of the Company in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity (an "Acquisition"), the
Board of Directors or the board of directors of any corporation assuming the
obligations of the Company, may, in its discretion, take any one or more of the
following actions as to outstanding Awards: (i) provide that such Awards shall
be assumed, or substantially equivalent Awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof) on such terms as
the Board of Directors, determines to be appropriate; (ii) upon written notice
to participants, provide that all unexercised Options will terminate immediately
prior to the consummation of such transaction unless exercised by the
participant within a specified period following the date of such notice; (iii)
in the event of an Acquisition under the terms of which holders of the Common
Stock of the Company will receive upon consummation thereof a cash payment for
each share surrendered in the Acquisition (the "Acquisition Price"), make or
provide for a cash payment to participants in the Plan equal to the difference
<PAGE>
between (A) the Acquisition Price times the number of shares of Common Stock
subject to outstanding Options (to the extent then exercisable at prices not in
excess of the Acquisition Price) and (B) the aggregate exercise price of all
such outstanding Options in exchange for the termination of such Options; and
(iv) provide that all or any outstanding Awards shall become exercisable or
realizable in full prior to the effective date of such Acquisition.
Effective Date. The Plan shall become effective on December 21, 1998,
the date of its adoption by the Board of Directors, but the provisions of the
Plan relating to Option grants to non-employee Directors will not be effective
unless and until Proposal No. 2 is adopted by stockholders of the Company and
the Company's Certificate of Incorporation and the By Laws are amended in
accordance therewith. Awards may be made under the Plan at any time after the
effective date and before the date fixed for termination of the Plan.
Term. The Plan will terminate upon the earlier of (i) the close of
business on the day next preceding the tenth anniversary of the date of its
adoption by the Board of Directors, (ii) the date on which all shares available
for issuance under the Plan shall have been issued pursuant to Awards under the
Plan, or (iii) by action of the Board of Directors.
Amendment. The Board of Directors may amend, suspend or terminate the
Plan or any portion thereof at any time; provided that no amendment shall be
made without stockholder approval if such approval is necessary to comply with
any applicable tax or regulatory requirement. Prior to any such approval, Awards
may be made under the Plan expressly subject to such approval.
Options have been granted under the 1996 Plan (and its predecessor
plans), since inception in 1984, to Messrs. Michael and Roger King to purchase
3,000,000 shares of Common Stock each; to Messrs. Friendly, Hirsch and
Stringfellow to purchase 320,000, 802,370 and 179,000 shares of Common Stock,
respectively; to all current executive officers as a group (including those
mentioned elsewhere in this paragraph) to purchase an aggregate 8,791,370 shares
of Common Stock; and to Messrs. Chaseman, Rosen, Miller and Richard King, to
purchase 61,666, 20,000, 12,500 and 20,000 shares of Common Stock, respectively.
Mr. Chambers declined the grant of options offered to him when he joined the
Board of King World in January 1998. Except for Michael and Roger King, no other
person has been granted options to purchase more than 1% of the total number of
shares that may be granted or awarded under the 1996 Plan. Under the Company's
Incentive Equity Plan for Senior Executives, in fiscal year 1989 the Company
granted options to Michael King and Roger King to purchase 2,400,000 shares of
Common Stock each and options to purchase 300,000 shares to an executive who has
since left the Company.
If the Plan is adopted by the stockholders, no further grants will be
made under the 1996 Plan.
<PAGE>
Federal Income Tax Consequences
The tax consequences of incentive stock options, non-qualified stock
options and restricted stock awards are quite complex. Therefore, the
description of tax consequences set forth below is necessarily general in nature
and does not purport to be complete. Moreover, statutory provisions are subject
to change, as are their interpretations, and their application may vary in
individual circumstances. Finally, the tax consequences under applicable state
and local income tax laws may not be the same as under the federal income tax
laws.
Incentive stock options granted pursuant to the Plan are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Code. If an optionee does not dispose of the shares acquired pursuant to
exercise of an incentive stock option within one year after the transfer of such
shares to the optionee and within two years from grant of the option (the "ISO
holding period requirements"), such optionee will recognize no taxable income as
a result of the grant or exercise of such option. (However, for alternative
minimum tax purposes the optionee will recognize as an item of tax preference
the difference between the fair market value of the shares received upon
exercise and the exercise price.) Any gain or loss that is subsequently
recognized upon a sale or exchange of the shares may be treated by the optionee
as long-term capital gain or loss, as the case may be. The Company will not be
entitled to a deduction for federal income tax purposes with respect to the
issuance of an incentive stock option, the transfer of shares upon exercise of
the option or the ultimate disposition of such shares (provided the ISO holding
period requirements are satisfied).
If shares received upon exercise of an incentive stock option are
disposed of prior to satisfaction of the ISO holding period requirements, the
optionee generally will recognize taxable ordinary income in the year in which
such disqualifying disposition occurs, in an amount equal to the lesser of (i)
the excess of the fair market value of the shares on the date of exercise over
the exercise price, and (ii) the gain recognized on such disposition. Such
amount will ordinarily be deductible by the Company for federal income tax
purposes in the same year, provided that the Company satisfies certain federal
income tax information requirements. In addition, the excess, if any, of the
amount realized by the optionee on such disqualifying disposition over the fair
market value of the shares on the date of exercise of the incentive stock option
be treated as capital gain, long-term or short-term, depending on whether, after
exercise of the option, the shares were held for more than one year (the
applicable long-term capital gain holding period) prior to such disposition.
Non-qualified stock options may be granted under the Plan. An optionee
generally will not recognize any taxable income upon grant of a non-qualified
stock option. The optionee will recognize taxable ordinary income, at the time
of exercise of such option, in an amount equal to the excess of the fair market
value of the shares on the date of exercise over the exercise price. Such amount
will ordinarily be deductible by the Company in the same year, provided that the
Company satisfies certain federal income tax information reporting requirements.
Any gain or loss that is subsequently recognized by the optionee upon a sale or
exchange of the shares will be capital gain or loss, long-term or short-term,
depending on whether, after the exercise of the option, the shares were held for
more than one year prior to such sale or exchange.
<PAGE>
Restricted stock purchase awards may also be granted pursuant to the
Plan. A recipient of a restricted stock purchase award generally will not
recognize taxable income upon the purchase of shares of restricted stock, unless
he or she makes a timely election under Section 83 (b) of the Code. Such a
recipient, however, would recognize taxable ordinary income (and the holding
period for such shares would commence) at the time that such shares become
vested, in an amount equal to the excess of the fair market value of the shares
at that time over the purchase price paid for such shares. If, on the other
hand, the recipient makes a timely election under Section 83(b), he or she would
recognize taxable ordinary income (and the holding period for such shares would
commence) at the time of purchase, in an amount equal to the excess of the fair
market value of the shares at that time (determined without regard to any
transfer restrictions imposed on the shares, vesting provisions or any
restrictions imposed by the securities laws) over the purchase price paid for
such shares. In either case, the Company should be entitled to a deduction in an
amount equal to the ordinary income recognized by the recipient in the same year
that the recipient recognized such income, provided that the Company satisfied
certain federal income tax information reporting requirements. Any gain or loss
that is subsequently recognized by the recipient upon a sale or exchange of the
shares will be capital gain or loss, long-term or short-term, depending on
whether the shares were held for more than one year prior to such sale or
exchange.
Long-term capital gain recognized on a sale or exchange of shares
received pursuant to a stock option or restricted stock purchase award will be
subject to a maximum capital gain tax rate of 20% where the shares are held at
least one year prior to such sale or exchange.
Section 162(m) of the Code generally limits the Company's federal
income tax deduction for compensation paid in any year to each of its chief
executive officer and its four highest paid executive officers, other than its
chief executive officer, to $1 million per year, to the extent that such
Compensation is not "performance based". Under Treasury regulations, a stock
option will, in general, qualify as "performance based" compensation if (i) it
has an exercise price of not less than the fair market value of the underlying
stock on the date of grant, (ii) it is granted under a plan that limits the
number of shares for which options may be granted to any participant during a
specified period, which plan is approved by a majority of the stockholders
entitled to vote thereon, and (iii) it is granted by a compensation committee
consisting solely of at least two independent directors. If a stock option grant
to an executive referred to above is not "performance based," the amount that
would otherwise be deductible by the Company in respect of the grant of such
option will be disallowed to the extent that the executive's aggregate
non-performance based compensation in the relevant year exceeds $1 million.
Vote Required for Approval
The foregoing Plan will be submitted to stockholders for their
approval at the 1999 Annual Meeting of Stockholders. Approval of the Plan
requires the vote of the holders of a majority of the shares of Common Stock
present or represented and entitled to vote at the 1999 Annual Meeting of
Stockholders.
<PAGE>
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO APPROVE
THE 1998 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN.
4. APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Arthur Andersen LLP,
independent public accountants, as the auditors of the Company for the fiscal
year ending August 31, 1999, subject to the approval of such appointment by
stockholders at the Annual Meeting. Arthur Andersen LLP has audited the
Company's financial statements since the Company's 1982 fiscal year.
The ratification of the appointment of the firm of Arthur Andersen LLP
will be determined by the vote of the holders of a majority of the shares
present in person or represented by proxy at the Annual Meeting.
If the foregoing appointment of Arthur Andersen LLP is not ratified by
stockholders, the Board of Directors will appoint other independent accountants
whose appointment for any period subsequent to the 2000 Annual Meeting of
Stockholders will be subject to the approval of stockholders at that meeting. A
representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting and will have an opportunity to make a statement should he so desire and
to respond to appropriate questions.
Vote Required for Approval
Approval of the appointment of Arthur Andersen LLP requires the vote
of the holders of a majority of the shares of Common Stock present or
represented and entitled to vote at the 1999 Annual Meeting of Stockholders.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE TO RATIFY THE
APPOINTMENT OF THE FIRM OF ARTHUR ANDERSEN LLP.
***
GENERAL
Financial Statements
The Company's financial statements for the year ended August 31, 1998
are included in the Company's 1998 Annual Report to Stockholders and its Annual
<PAGE>
Report on Form 10-K for the fiscal year ended August 31, 1998 and are hereby
incorporated by reference. The Company's Annual Report to Stockholders for the
fiscal year ended August 31, 1998 is being mailed to stockholders concurrently
with this Proxy Statement. The Annual Report on Form 10-K is available upon
request, as described below.
Other Matters
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting other than those stated in the Notice of Annual
Meeting and referred to in this Proxy Statement. If any other matters should
properly come before the Meeting, it is intended that the proxies in the
accompanying form will be voted as the persons named therein may determine in
their discretion.
Solicitation of Proxies
The cost of solicitation of proxies in the accompanying form will be
home by the Company, including expenses in connection with preparing and mailing
this Proxy Statement. In addition to solicitation of proxies by mail, directors,
officers and employees of the Company (who will receive no additional
compensation therefor) may solicit the return of proxies by telephone, telegram
or personal interview. Arrangements have also been made with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held of record by such
persons, and the Company will reimburse them for reasonable out-of-pocket
expenses incurred by them in connection therewith.
Each holder of the Company's Common Stock who does not expect to be
present at the Annual Meeting or who plans to attend but who does not wish to
vote in person is urged to fill in, date and sign the proxy and return it
promptly in the enclosed return envelope.
Stockholder Proposals
In accordance with the Company's By-laws, for a matter to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given written notice thereof to the Secretary of the Company not more than 120
days nor less than 90 days in advance of the anniversary date of the immediately
preceding annual meeting. Any such notice must contain certain information
specified in the By-laws.
Pursuant to applicable rules under the Securities and Exchange Act of
1934, some stockholder proposals may be eligible for inclusion in the Company's
proxy statement and form of proxy for the 2000 Annual Meeting of Stockholders.
In order to be included, any such proposal must be received at the Company's
offices at 1700 Broadway, New York, New York 10019, Attention: General Counsel,
not later than August 10, 1999.
ANNUAL REPORT ON FORM 10-K
<PAGE>
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED AUGUST 31, 1998, FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE
COMMISSION, WITHOUT EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY PERSON
REQUESTING A COPY THEREOF IN WRITING AND STATING THAT SUCH PERSON IS A
BENEFICIAL HOLDER OF SHARES OF COMMON STOCK OF THE COMPANY ON THE RECORD DATE
FOR THE ANNUAL MEETING OF STOCKHOLDERS. REQUESTS AND INQUIRIES SHOULD BE
ADDRESSED TO KING WORLD PRODUCTIONS, INC., C/O KING WORLD CORPORATION, 830
MORRIS TURNPIKE, SHORT HILLS, NEW JERSEY 07078, ATTENTION: SYLVESTER RUSSO,
CONTROLLER.
By Order of the Board of Directors
DIANA KING
Corporate Secretary
<PAGE>
KING WORLD PRODUCTIONS, INC. AND ITS SUBSIDIARIES
1998 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
Section 1. Purpose. The purpose of the King World Productions, Inc.
and its Subsidiaries 1998 Stock Option and Restricted Stock Purchase Plan (the
"Plan") is to promote the interests of King World Productions, Inc., a Delaware
corporation (the "Company"), and any Subsidiary thereof and the interests of the
Company's stockholders by providing an opportunity to selected Employees,
Consultants and Non-Employee Directors of the Company to purchase Common Stock
of the Company, thereby enhancing the Company's ability to attract, retain,
motivate and encourage such persons to devote their best efforts to the business
and financial success of the Company. It is intended that this purpose will be
effected by awards of NonQualified Stock Options, Incentive Stock Options,
Restricted Stock and/or Unrestricted Stock.
Section 2. Definitions. For purposes of the Plan, the following terms
used herein have the following meanings, unless a different meaning is clearly
required by the context:
2.1. "Administrator" means the Board of Directors or any Committees
that shall be administering the Plan in accordance with Section 4 hereof.
2.2. "Annual Option" means a Non-Qualified Stock Option automatically
granted to a Non-Employee Director on the third business day following each
annual meeting of stockholders at which such Non-Employee Director is elected as
a Director, including the annual meeting of stockholders at which such
Non-Employee Director is initially elected a Director.
2.3. "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under state corporate laws, federal and
state securities laws and the Code.
2.4. "Award" means any award of an Option or Stock under the Plan.
2.5. "Board of Directors" means the Board of Directors of the Company.
2.6. "Change of Control" means: (A) a majority of the Board of
Directors of the Company consists of individuals other than "Incumbent
Directors", which term means the members of the Board of Directors on the date
the Plan was adopted by the Board of Directors; provided, that any person
becoming a director subsequent to such date whose election or nomination for
election was approved by at least two-thirds of the Directors who then comprised
the Incumbent Directors shall be considered to be an Incumbent Director; (B) the
<PAGE>
Company, without the approval of at least two-thirds of the Incumbent Directors,
adopts any plan of liquida tion providing for the distribution of all or
substantially all of its assets; or (C) all or substantially all of the assets
or business of the Company and its consolidated subsidiaries are disposed of
pursuant to a merger, consolidation, reorganization, share exchange or other
transaction (unless the stockholders of the Company, immediately prior to such
merger, consolidation, reorganization, share exchange or other transaction,
beneficially own, directly or indirectly, more than 50% of all the voting stock
or other ownership interests of the entity or entities, if any, that succeed to
the business of the Company).
2.7. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.8. "Committee" means any committee appointed by the Board of
Directors in accordance with Section 4 of the Plan.
2.9. "Common Stock" means the Common Stock, $.01 par value, of the
Company.
2.10. "Consultant" means any person, including an advisor, engaged by
the Company or a Subsidiary of the Company to render services and who is
compensated for such services; provided that the term "Consultant" shall not
include Directors who are paid only a director's fee by the Company or who are
not compensated by the Company for their services as Directors.
2.11. "Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Administrator, to receive amounts due
or exercise rights of the Participant in the event of the Participant's death.
In the absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant's estate.
2.12. "Director Option" means an Initial Option or an Annual Option.
2.13. "Director" means any member of the Board of Directors.
2.14. "Employee" means any person, including without limitation, an
officer or Director of the Company, who is employed by the Company or any
Subsidiary of the Company. Neither service as a Director nor payment of a
director's fee by the Company shall constitute "employment" by the Company.
2.15. "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
<PAGE>
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, the Fair Market Value of a share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System (but not
on the National Market System thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a share of Common Stock shall be the average between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
2.16. "Incentive Stock Option" means an Option granted to a
Participant pursuant to Section 6 (including Section 6.7 thereof) which is
intended to meet the requirements of Section 422 of the Code or any successor
provision.
2.17. "Initial Option" means a Non-Qualified Stock Option
automatically granted pursuant to Section 6.8 to a Non-Employee Director on the
third business day following his or her initial election to the Board of
Directors.
2.18. "Non-Employee Director" means a Director who is not an Employee
of the Company or any Subsidiary of the Company.
2.19. "Non-Qualified Stock Option" means an Option granted to a
Participant pursuant to Section 6 that is not intended to be an Incentive Stock
Option.
2.20. "Option" means any Incentive Stock Option or Non-Qualified Stock
Option.
2.21. "Participant" means any Employee, Consultant or Non-Employee
Director to whom an Award is granted under the Plan.
2.22. "Restricted Period" means the period of time selected by the
Administrator during which shares subject to an Award of Restricted Stock may be
repurchased by or forfeited to the Company.
<PAGE>
2.23. "Reporting Person" means a Participant that is subject to
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
2.24. "Restricted Stock" means shares of Common Stock awarded to a
Participant under Section 7.
2.25. "Stock" means shares of Restricted Stock or Unrestricted Stock.
2.26. "Subsidiary" shall have the meaning set forth in Section 424(f)
of the Code.
2.27. "Unrestricted Stock" means shares of Common Stock awarded to a
Participant under Section 7 free of any restrictions under the Plan.
Section 3. Common Stock Subject to the Plan.
3.1. Number of Shares. The total number of shares of Common Stock for
which Awards may be granted under the Plan shall not exceed in the aggregate
2,000,000 shares of Common Stock (subject to adjustment as provided in Section
3.3 hereof). The Company, during the term of the Plan, will at all times reserve
and keep available such number of shares of Common Stock as shall be sufficient
to satisfy the requirements of the Plan.
3.2. Reissuance. The shares of Common Stock that may be subject to
Awards under the Plan may be either authorized and unissued shares or shares
reacquired at any time and now or hereafter held as treasury stock as the
Administrator may determine. In the event that any outstanding Option expires,
is terminated, forfeited or becomes unexercisable for any reason without having
been exercised in full, the shares allocable to the unexercised portion of such
Option may again be subject to an Award under the Plan, subject, in the case of
Incentive Stock Options, to any limitation required by the Code. If any shares
of Common Stock issued or sold pursuant to a Stock award or the exercise of an
Option shall have been repurchased by the Company, then such shares shall not
again be available for future grant or award under the Plan.
3.3. Stock Dividends, Etc. In the event that the Administrator, in its
sole discretion, determines that any stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or other similar transaction affects the Common Stock such
that an adjustment is required in order to preserve or prevent enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Administrator, subject, in the case of Incentive Stock Options, to any
limitation required under the Code, may equitably adjust any or all of (i) the
number and kind of shares in respect of which Awards may be made under the Plan,
(ii) the number and kind of shares subject to outstanding Awards, (iii) the
award, exercise or conversion price with respect to any of the foregoing and
(iv) the maximum number of shares which may be the subject of Awards to any one
employee under the Plan (subject to any requirements of Section 162(m) of the
Code). If considered appropriate, the Administrator may cause the number of
<PAGE>
shares subject to any Award always to be a whole number.
The Administrator may make Awards under the Plan in substitution for
stock and stock-based awards held by employees of another corporation who
concurrently become employees of the Company as a result of a merger or
consolidation of the employing company with the Company or a Subsidiary or
parent company of the Company or the acquisition by the Company or any such
Subsidiary or parent company of the Company of property or stock of the
employing corporation. The substitute Awards shall be granted on such terms and
conditions as the Administrator deems appropriate under the circumstances.
Section 4. Administration of the Plan.
4.1. Procedure.
(a) Multiple Administrative Bodies. The Plan may be administered by
different Committees with respect to different groups of Participants.
(b) Section 162(m). To the extent that the Administrator determines it
to be desirable to qualify Options granted hereunder as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the Plan
shall be administered by a Committee consisting of two or more Non-Employee
Directors who qualify as "outside directors" within the meaning of such
Section.
(c) Rule 16b-3. To the extent that the Administrator determines it to
desirable be to qualify transactions hereunder as exempt under Rule 16b-3
of the Exchange Act, the transactions contemplated hereunder shall be
structured to satisfy the requirements for exemption under Rule 16b-3.
(d) Other Administration. Other than as provided above, the Plan shall
be administered by (i) the Board of Directors or (ii) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
4.2. Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific powers delegated
by the Board of Directors to such Committee, the Administrator shall have the
authority, in its discretion:
(a) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2.15 of the Plan;
(b) to select the Employees and Consultants to whom Awards may be
granted hereunder;
<PAGE>
(c) to determine whether and to what extent awards of Options and
Stock, or any combination thereof, are granted hereunder;
(d) to determine the number of shares of Common Stock to be covered by
each Award made hereunder;
(e) to determine the amount (not less than par value per share) and
the form of the consideration that may be used to purchase shares of Common
Stock pursuant to any Stock award or upon exercise of any Option
(including, without limitation, the circumstances under which issued and
outstanding shares of Common Stock owned by a Participant may be used by
the Participant to exercise an Option);
(f) to approve forms of agreements for use under the Plan;
(g) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder, including without
limitation, the exercise price, the time or times when Options may be
exercised (which may be based on performance criteria), any vesting,
acceleration or waiver of forfeiture restrictions and any restriction or
limitation regarding any Award or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its
sole discretion, shall determine;
(h) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by
such Option shall have declined since the date the Option was granted;
(i) to construe and interpret the terms of the Plan;
(j) to prescribe, amend and rescind rules and regulations relating to
the Plan;
(k) to modify or amend the terms of any Award;
(l) to accelerate vesting periods with respect to outstanding Options
and the end of Restricted Periods with respect to Stock Awards; provided,
however, that any Incentive Stock Options may only be"accelerated" in
accordance with Section 424(h) of the Code;
(m) to authorize any person to execute on behalf of the Company any
instrument required to effect any Award granted by the Administrator; and
(n) to exercise all other powers granted to the Administrator under
the Plan and make all other determinations deemed necessary or advisable
for administering the Plan.
<PAGE>
4.3. Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Participants and any other holders of Options or Stock awarded under the Plan.
4.4. Expenses, Etc. All expenses and liabilities incurred by the
Administrator in the administration of the Plan shall be borne by the Company.
The Administrator may employ attorneys, consultants, accountants or other
persons in connection with the administration of the Plan. The Company and its
officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. No member of the Administrator shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Award granted thereunder.
Section 5. Eligibility. Awards may be granted to any Employee,
Consultant or Non-Employee Director. The Administrator shall have the sole
authority to select the Employees and Consultants to whom discretionary Awards
are to be granted hereunder, and to determine whether a person is to be granted
a Non-Qualified Stock Option, an Incentive Stock Option, Restricted Stock or
Unrestricted Stock, or any combination thereof. Non-Employee Directors shall
only be eligible to receive Awards pursuant to Section 6.8 of the Plan. No
person other than an Employee, Consultant or Non-Employee Director shall have
any right to participate in the Plan. Any person selected by the Administrator
for participation during any one period will not by virtue of such participation
have the right to be selected as a Participant for any other period. The maximum
number of shares of Common Stock which may be the subject of Awards granted to
any one employee under the Plan during any period of five consecutive fiscal
years shall be 1,500,000 shares. For this purpose, the grant of a new Award in
substitution for outstanding Awards shall be deemed to constitute a new grant,
separate from the original grant that is to be canceled. Incentive Stock Options
may be granted only to persons eligible to receive Incentive Stock Options under
the Code.
Section 6. Options.
6.1. Subject to the provisions of the Plan, the Administrator may
award Incentive Stock Options and Non-Qualified Stock Options, and determine the
number of shares to be covered by each Option, the option price therefor and the
conditions and limitations applicable to the exercise of the Option. The terms
and conditions of Incentive Stock Options shall be subject to and comply with
Section 422 of the Code or any successor provision, and any regulations
thereunder.
6.2. Exercise Price. The Administrator shall establish the exercise
price of each Option at the time such Option is awarded. Such price shall not be
less than 100% of the Fair Market Value of the Common Stock on the date of
grant.
6.3. Vesting. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Administrator may specify in the
<PAGE>
applicable Option agreement or thereafter. The Administrator may impose such
conditions with respect to the exercise of Options, and the disposition of the
securities issuable thereunder, including conditions relating to applicable
Federal or state securities laws, as it considers necessary or advisable.
6.4. Payment. Options granted under the Plan may provide for the
payment of the exercise price by delivery of cash or check in an amount equal to
the exercise price of such Options or, to the extent permitted by the
Administrator at or after the award of the Option, by (a) delivery of shares of
Common Stock owned by the optionee, valued at their Fair Market Value on the
date of such option exercise, (b) delivery of a promissory note of the optionee
to the Company on terms determined by the Administrator, (c) delivery of an
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price or delivery of irrevocable
instructions to a broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price, (d) payment of such other lawful
consideration as the Administrator may determine or (e) any combination of the
foregoing. In the event an optionee pays some or all of the exercise price of an
Option by delivery of shares of Common Stock pursuant to clause (a) above, the
Administrator may provide for the automatic award of an Option for up to the
number of shares so delivered.
6.5. Transferability. Each Option granted under the Plan shall provide
that neither it nor any interest therein may be transferred, assigned, pledged
or hypothecated, by the optionee or by operation of law otherwise than by will,
the laws of descent and distribution or a "qualified domestic relations order"
(as defined in the Code), and shall be exercised during the lifetime of the
optionee only by the optionee or a transferree pursuant to such a "qualified
domestic relations order". No Option or interest therein may be or be made
subject to execution, attachment or similar process.
6.6. Cancellation and New Grant of Options. The Board of Directors
shall have the authority to effect, at any time and from time to time, with the
consent of the affected optionees, (i) the cancellation of any or all
outstanding options under the Plan and the grant in substitution therefor of new
Options under the Plan covering the same or different numbers of shares of
Common Stock and having an option exercise price per share which may be lower or
higher than the exercise price per share of the canceled Options or (ii) the
amendment of the terms of any and all outstanding Options under the Plan to
provide an option exercise price per share which is higher or lower than the
then current exercise price per share of such outstanding Options.
6.7. Incentive Stock Options. Options granted under the Plan which are
intended to be Incentive Stock Options shall be subject to the following
additional terms and conditions:
<PAGE>
(a) All Incentive Stock Options granted under the Plan shall, at the
time of grant, be specifically designated as such in the option agreement
covering such Incentive Stock Options. The exercise period shall not exceed ten
years from the date of grant.
(b) If any Employee to whom an Incentive Stock Option is to be
granted under the Plan is, at the time of the grant of such option, the owner of
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company (after taking into account the attribution of stock
ownership rule of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(i) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the Fair Market Value
of one share of Common Stock on the date of grant; and
(ii) The Option exercise period shall not exceed five years from the
date of grant.
(c) For so long as the Code shall so provide, Options granted to any
Employee under the Plan (and any other incentive stock option plans of the
Company or its Subsidiaries) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
Options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate Fair Market Value
(determined as of the respective date or dates of grant) of more than $100,000.
(d) No Incentive Stock Option may be exercised unless, at the time of
such exercise, the Participant is, and has been continuously since the date of
grant of his or her Option, employed by the Company, except that:
(i) an Incentive Stock Option may be exercised (to the extent
exercisable on the date the Participant ceased to be an Employee of the
Company or a Subsidiary) within the period of three months after the date
the Participant ceases to be an employee of the Company or such Subsidiary
(or within such lesser period as may be specified in the applicable option
agreement); provided, that the agreement with respect to such Option may
designate a longer exercise period and that the exercise after such
three-month period shall be treated as the exercise of a Non-Qualified
Stock Option under the Plan;
(ii) if the Participant dies while in the employ of the Company, or
within three months after the Participant ceases to be an Employee, the
Incentive Stock Option (to the extent otherwise exercisable on the date of
death) may be exercised by the Participant's Designated Beneficiary within
the period of one year after the date of death (or within such lesser
period as may be specified in the applicable Option agreement); and
<PAGE>
(iii) if the Participant becomes disabled (within the meaning of
Section 22(e)(3) of the Code or any successor provision thereto) while in
the employ of the Company, the Incentive Stock Option may be exercised (to
the extent otherwise exercisable on the date of death) within the period of
one year after the date of such disability (or within such lesser period as
may be specified in the Option agreement). In the event of the
Participant's death during this one-year period, the Incentive Stock Option
may be exercised by the Participant's Designated Beneficiary within the
period of one year from the date the Participant became disabled or within
such lesser period as may be specified in the applicable Option agreement.
For all purposes of the Plan and any Option granted hereunder, (i) "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Treasury Regulations under the Code (or any successor regulations) and (ii) any
Option may provide that if such Option shall be assumed or a new Option
substituted therefor in a transaction to which Section 424(a) of the Code
applies, employment by such assuming or substituting corporation shall be
considered for all purposes of such Option to be employment by the Company.
Notwithstanding the foregoing provisions, no Incentive Stock Option may be
exercised after its expiration date.
6.8. Non-Employee Director Options. Director Options shall be
automatic and subject to the following additional terms and conditions:
(a) All Director Options shall be Non-Qualified Stock Options.
(b) Each person who becomes a Non-Employee Director shall be granted
an Initial Option to purchase 10,000 shares of Common Stock on the third
business day following his or her first appointment or election as a
Non-Employee Director.
(c) On the third business day following the 1999 annual meeting of the
stockholders of the Company and each Annual Meeting of Stockholders thereafter
at which a Non-Employee Director is elected or re-elected as a member of the
Board of Directors, such Non-Employee Director shall be granted an Annual Option
to purchase 3,333 shares of Common Stock; provided that no Annual Option shall
be granted to any Non-Employee Director so long as any non-qualified stock
option that was granted to such Non-Employee Director pursuant to the 1996
Amended and Restated Stock Option and Restricted Stock Purchase Plan of the
Company is unvested.
(d) The exercise price of each Director Option will be 100% of the
Fair Market Value on the date of grant.
(e) Initial Options shall become exercisable six months after the date
of grant and Annual Options shall become exercisable one year after the date of
the next annual meeting of stockholders following the date of grant. The
exercise period of Director Options shall be ten years from the date of grant,
subject to the following:
<PAGE>
(i) if a Non-Employee Director ceases to serve as a Director for any
reason other than as a result of his death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
Director Option held by such Non-Employee Director at the time he or she
ceased to serve as a Director may be exercised only within one month after
the date on which such Non-Employee Director ceased to serve as a Director,
and only to the extent that such Non-Employee Director could have otherwise
exercised such Director Option as of the date on which he or she ceased to
serve as a Director; provided, however, that if such Non-Employee Director
was subject to a "lockup" or similar restriction on his or her ability to
sell the securities issuable upon the exercise of such Director Option as
of the date he or she ceased to serve as a Director or during such
one-month period, such one-month period shall be extended by a number of
days equal to the number of days that such sale restrictions were in
effect;
(ii) if a Non-Employee Director ceases to serve as a Director by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any Director Option held by such
Non-Employee Director at the time he or she ceased to serve as a Director
may be exercised only within one year after the date on which the
Non-Employee Director ceased to serve as a Director, and only to the extent
that the Non-Employee Director could have otherwise exercised such
Non-Qualified Option as of the date on which he or she ceased to serve as a
Director;
(iii) if a Non-Employee Director dies while serving as a Non-Employee
Director (or within a period of one month after ceasing to serve as a
Director for any reason other than "disability" (within the meaning of
Section 22(e)(3) of the Code) or within a period of one year after ceasing
to be a Director by reason of such "disability"), the unexercised portion
of any Director Option held by such Non-Employee Director at the time of
his or her death may be exercised only within one year after the date of
such Non-Employee Director's death, and only to the extent that such
Non-Employee Director could have otherwise exercised such Director Option
at the time of his or her death; and in such event, such Director Option
may be exercised by the Designated Beneficiary of such Non- Employee
Director.
(g) In the event of a "Change of Control" of the Company, any Director
Option that had not become exercisable in accordance with Section 6.8(e) prior
to such Change of Control shall become exercisable upon the effectiveness of
such Change of Control, subject to all other applicable provisions of the Plan
and the Option agreement relating thereto.
(h) Notwithstanding the appointment of a Committee to administer the
Plan, all administrative, interpretive and discretionary powers with respect to
Director Options shall be exercised by the Board of Directors, the Non-Employee
Directors abstaining.
Section 7. Restricted And Unrestricted Stock.
<PAGE>
7.1. General. The Board of Directors may grant Awards entitling
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their purchase price (or to
require forfeiture of such shares if purchased at no cost) from the recipient in
the event that conditions specified by the Administrator in the applicable Award
are not satisfied prior to the end of the applicable Restricted Period or
Restricted Periods established by the Administrator for such Award. Conditions
for repurchase (or forfeiture) may be based on continuing employment or service
or achievement of pre-established performance or other goals and objectives.
7.2. Restricted Stock. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as permitted by
the Administrator, during the applicable Restricted Period. Shares of Restricted
Stock shall be evidenced in such manner as the Board of Directors may determine.
Any certificates issued in respect of shares of Restricted Stock shall be
registered in the name of the Participant and, unless otherwise determined by
the Board of Directors, deposited by the Participant, together with a stock
power endorsed in blank, with the Company (or its designee). At the expiration
of the Restricted Period, the Company (or such designee) shall deliver such
certificates to the Participant or, if the Participant has died, to the
Participant's Designated Beneficiary.
7.3. Unrestricted Stock. The Administrator may, in its sole
discretion, grant (or sell at a purchase price determined by the Board of
Directors, which shall not be lower than 85% of Fair Market Value on the date of
sale) Unrestricted Stock to Participants.
7.4. Payment. The purchase price for each share of Restricted Stock
and Unrestricted Stock shall be determined by the Administrator and may not be
less than the par value of the Common Stock. Such purchase price may be paid in
the form of past services or such other lawful consideration as is determined by
the Board of Directors.
7.5. Certificates. Stock certificates representing Shares of
Restricted Stock or Unrestricted Stock shall bear a legend referring to any
restrictions imposed thereon and such other matters as the Administrator may
determine.
7.6. Acceleration. The Administrator may at any time accelerate the
expiration of the Restricted Period applicable to all, or any particular,
outstanding shares of Restricted Stock.
Section 8. General Provisions Applicable to Awards.
8.1. Applicability of Rule 16b-3. Those provisions of the Plan which
make an express reference to Rule 16b-3 shall apply to the Company only at such
time as the Company's Common Stock is registered under the Exchange Act, or any
successor provision, and then only with respect to Reporting Persons.
<PAGE>
8.2. Documentation. Each Award under the Plan shall be evidenced by an
instrument delivered to the Participant specifying the terms and conditions
thereof and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Administrator considers necessary or advisable.
Such instruments may be in the form of agreements to be executed by both the
Company and the Participant, or certificates, letters or similar documents,
acceptance of which will evidence agreement to the terms thereof and of this
Plan.
8.3. Administrator Discretion. Each type of Award may be made alone,
in addition to or in relation to any other type of Award. The terms of each type
of Award need not be identical, and the Administrator need not treat
Participants uniformly.
8.4. Termination of Status. Subject to the provisions of Section 6,
the Administrator shall determine the effect on an Award of the disability,
death, retirement, authorized leave of absence or other termination of
employment or other status of a Participant and the extent to which, and the
period during which, the Participant's legal representative, guardian or
Designated Beneficiary may exercise rights under such Award.
8.5. Mergers, Etc. In the event of a consolidation or merger or sale
of all or substantially all of the assets of the Company in which outstanding
shares of Common Stock are exchanged for securities, cash or other property of
any other corporation or business entity (an "Acquisition"), the Board of
Directors or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions as to outstanding Awards: (i) provide that such Awards shall be assumed,
or substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof) on such terms as the Board of
Directors determines to be appropriate; (ii) upon written notice to
Participants, provide that all unexercised Options will terminate immediately
prior to the consummation of such transaction unless exercised by the
Participant within a specified period following the date of such notice; (iii)
in the event of an Acquisition under the terms of which holders of the Common
Stock of the Company will receive upon consummation thereof a cash payment for
each share surrendered in the Acquisition (the "Acquisition Price"), make or
provide for a cash payment to Participants equal to the difference between (A)
the Acquisition Price times the number of shares of Common Stock subject to
outstanding Options (to the extent then exercisable at prices not in excess of
the Acquisition Price) and (B) the aggregate exercise price of all such
outstanding Options in exchange for the termination of such Options; and (iv)
provide that all or any outstanding Awards shall become exercisable or
realizable in full on or prior to the effective date of such Acquisition.
8.6. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board of Directors may, in the
exercise of its sole discretion in such instances, declare that any Award shall
terminate as of a date fixed by the Board of Directors and give each Participant
<PAGE>
the right to exercise his or her Option as to all or any of the shares subject
thereto, including shares as to which the Option would not otherwise be
exercisable, or may accelerate the termination of the Restricted Period of any
Stock Award.
8.7. Withholding. The Participant shall pay to the Company, or make
provision satisfactory to the Administrator for payment of, any taxes required
by law to be withheld in respect of Awards under the Plan no later than the date
of the event creating the tax liability. In the Administrator's discretion, and
subject to such conditions as the Administrator may establish, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value. The Company may, to the extent permitted by law, deduct any such
tax obligations from any payment of any kind otherwise due to the Participant.
8.8. Foreign Nationals. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Administrator
considers necessary or advisable to achieve the purposes of the Plan or comply
with applicable laws.
8.9. Amendment of Award. The Board of Directors may amend, modify or
terminate any outstanding Award, including substituting therefor another Award
of the same or a different type, changing the date of exercise or realization
and converting an Incentive Stock Option to a Non-Qualified Stock Option;
provided that the Participant's consent to such action shall be required unless
the Board of Directors determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.
8.10. Conditions on Delivery of Common Stock. The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan (i) until
all conditions of the Award have been satisfied or removed; (ii) until, in the
opinion of the Company's counsel, all applicable federal and state laws and
regulations have been complied with; (iii) if the outstanding Common Stock is at
the time listed on any stock exchange or admitted for trading on an automatic
quotation system, until the shares to be delivered have been listed or
authorized to be listed or quoted on such exchange or quotation system upon
official notice of issuance; and (iv) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If the sale of Common Stock has not been registered under
the Securities Act of 1933, as amended, the Company may require, as a condition
to exercise of the Award, such representations or agreements as the Company may
consider appropriate to avoid violation of such act and may require that the
certificates evidencing such Common Stock bear an appropriate legend restricting
transfer.
<PAGE>
Section 9. Miscellaneous
9.1. No Right To Employment or Other Status. The grant of an Award
shall not be construed as giving a Participant the right to continued employment
or service for the Company. The Company expressly reserves the right at any time
to dismiss a Participant free from any liability or claim under the Plan, except
as expressly provided in the applicable Award.
9.2. No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
under the Plan until he or she becomes the record holder thereof.
9.3. Exclusion from Benefit Computations. No amounts payable upon
exercise of Awards granted under the Plan shall be considered salary, wages or
compensation to Participants for purposes of determining the amount or nature of
benefits that Participants are entitled to under any insurance, retirement or
other benefit plans or programs of the Company.
9.4. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained.
9.5. Grants Exceeding Allotted Shares. If the shares of Common Stock
covered by an Award exceeds, as of the date of grant, the number of shares which
may be issued under the Plan without additional shareholder approval, such Award
shall be void with respect to such excess stock, unless such additional
shareholder approval is obtained in a timely manner.
9.6. Effective Date and Term.
(i) Effective Date. The Plan shall become effective on December
21, 1998, the date of its adoption by the Board of Directors, but no
Incentive Stock Option granted under the Plan shall become exercisable
unless and until the Plan shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained within twelve
months after the date of the Board of Director's adoption of the Plan, no
Options previously granted under the Plan shall be deemed to be Incentive
Stock Options and no Incentive Stock Options shall be granted thereafter
under the Plan. Amendments to the Plan not requiring stockholder approval
shall become effective when adopted by the Board of Directors; amendments
requiring stockholder approval shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted after the date of
such amendment shall become exercisable (to the extent that such amendment
to the Plan was required to enable the Company to grant such Incentive
Stock Option to a particular optionee) unless and until such amendment
shall have been approved by the Company's stockholders. If such stockholder
approval is not obtained within twelve months of the Board of Director's
<PAGE>
adoption of such amendment, any Incentive Stock Options granted on or after
the date of such amendment shall terminate to the extent that such
amendment to the Plan was required to enable the Company to grant such
Option to a particular optionee. Subject to the limitations set forth in
this Section 9.6, Awards may be made under the Plan at any time after the
effective date and before the date fixed for termination of the Plan.
(ii) Termination. The Plan shall terminate upon the earlier of
(i) the close of business on the day next preceding the tenth anniversary
of the date of its adoption by the Board of Directors, (ii) the date on
which all shares available for issuance under the Plan shall have been
issued pursuant to Awards under the Plan, or (iii) by action of the Board
of Directors. No Award may be granted hereunder after termination of the
Plan. The termination or amendment of the Plan shall not alter or impair
any rights or obligations theretofore granted under the Plan.
9.7. Amendment of Plan. The Board of Directors may amend, suspend or
terminate the Plan or any portion thereof at any time; provided that no
amendment shall be made without stockholder approval if such approval is
necessary to comply with any applicable tax or regulatory requirement. Prior to
any such approval, Awards may be made under the Plan expressly subject to such
approval.
9.8. Governing Law. The provisions of the Plan shall be governed by
and interpreted in accordance with the laws of the State of Delaware.
*****************************
<PAGE>
KING WORLD PRODUCTIONS INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders, Thursday, January 28, 1999
The undersigned stockholder of KING WORLD PRODUCTIONS, INC., a
Delaware corporation, hereby appoints Jonathan Birkhahn and Robert V. Madden, or
either of them, voting singly in the absence of the other, attorneys and
proxies, with full power of substitution and revocation, to vote, as designated
below, all shares of Common Stock of King World Productions, Inc., which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of said
Corporation to be held at The Ritz-Carlton, Palm Beach, 100 South Ocean
Boulevard, Manalapan, Florida 33463, on January 28, 1999 at 11:00 a.m. (local
time) or any adjournment thereof, in accordance with the instructions on the
reverse side.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, the proxy will
be voted "FOR" all nominees in Proposal No. 1 and "FOR" Proposal Nos. 2, 3, and
4. The proxies are authorized to vote as they may determine in their discretion
upon such other business as may properly come before the meeting.
TO VOTE BY TELEPHONE OR THE INTERNET, PLEASE SEE THE REVERSE OF THIS
CARD. TO VOTE BY MAIL, PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE AND RETURN
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
The Board of Directors recommends a vote "FOR" all nominees in Proposal No. 1,
and "FOR" Proposal Nos. 2, 3, and 4.
1. Election of the following Nominees as Directors:
1. Diana King To withhold authority to vote
2. Joel Chaseman for any individual Nominee,
3. Avram Miller write the Nominee's name on the
space provided below:
WITHHOLD
FOR ALL AUTHORITY to vote
NOMINEES for all nominees _____________________
/ / / / / /
2. The proposal to approve the proposed amendment of the Company's Restated
Certificate of Incorporation to provide for the annual election of
directors.
FOR AGAINST ABSTAIN
/ / / / / /
3. The proposal to approve the Company's 1998 Stock Option and Restricted
Stock Purchase Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. The appointment of Arthur Andersen LLP as auditors for the fiscal year
ending August 31, 1999.
FOR AGAINST ABSTAIN
/ / / / / /
The proxies are authorized to vote as they may determine in their
discretion upon such other business as may properly come before the
meeting.
Date:_____________ , 199_
<PAGE>
______________________________
Signature
______________________________
Signature (if held jointly)
Please sign exactly as name
appears above.
When shares are held in name of
joint holders, each should sign.
When signing as attorney, execu-
tor, trustee, guardian, etc.,
please so indicate. If a corpo-
ration, please sign in full
corporate name by an authorized
officer. If a partnership,
please sign in partnership name
by an authorized person.
- --------------------------------------------------------------------------------
DETACH PROXY CARD HERE IF YOU ARE VOTING BY MAIL AND RETURN IN ENCLOSED
ENVELOPE.
KING WORLD PRODUCTIONS, INC.
Dear Stockholder:
King World Productions, Inc. encourages you to take advantage of new and
convenient ways to vote your shares. You can vote your shares electronically
through the Internet or the telephone 24 hours a day, 7 days a week. This
eliminates the need to return the proxy card.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system/.
1. To vote over the Internet:
- Log on the Internet and go to the website
http://www.vote-by-net.com
2. To vote over the telephone:
- On a touch-tone telephone call 1-800-OK2-VOTE
(1-800-652-8683)
- Outside of the U.S. and Canada call 201-324-0377.
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
<PAGE>
If you choose to vote your shares over the Internet or telephonically, there is
no need for you to mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
