SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
WESTWOOD ONE, INC.
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(Name of Registrant as Specified In Its Charter)
WESTWOOD ONE, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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<PAGE>
Dear Shareholders:
Enclosed with this letter is a Proxy Statement and proxy card for the
Annual Meeting of Shareholders to be held on June 16, 1998 at 10:00 a.m.,
Pacific Time, in the La Ventana Room of the Westwood Marquis, 930 Hilgard
Avenue, Los Angeles, California. A copy of the Company's Annual Report on Form
10-K for the year ended December 31, 1997, which report contains consolidated
financial statements and other information of interest with respect to the
Company and its shareholders, is also included with this mailing.
At the Annual Meeting, the holders of Common Stock, voting alone, will
elect one member of the Company's Board of Directors. Holders of Common Stock
and Class B Stock, voting together, will elect two members of the Company's
Board of Directors, vote upon a proposal to ratify the selection of independent
accountants for the Company and conduct such other business as may properly come
before the meeting.
IT IS IMPORTANT THAT YOU MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE PROVIDED POSTAGE-PAID ENVELOPE IF YOU DO NOT INTEND TO BE PRESENT AT
THE MEETING. IF YOU DO LATER DECIDE TO ATTEND, YOUR PROXY WILL AUTOMATICALLY BE
REVOKED IF YOU VOTE IN PERSON. ACCORDINGLY, YOU ARE URGED TO MARK, SIGN, DATE
AND RETURN THE PROXY CARD NOW IN ORDER TO ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
We appreciate your continued support.
Sincerely,
WESTWOOD ONE, INC.
/S/ NORMAN J. PATTIZ
Norman J. Pattiz
Chairman of the Board
April 30, 1998
<PAGE>
WESTWOOD ONE, INC.
9540 Washington Boulevard
Culver City, California 90232
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on
June 16, 1998
To Our Shareholders:
The Annual Meeting of the Shareholders of Westwood One, Inc. (the
"Company") will be held in the La Ventana Room of the Westwood Marquis, 930
Hilgard Avenue, Los Angeles, California, on June 16, 1998 at 10:00 a.m., Pacific
Time, for the following purposes:
(1) To elect three members of the Company's Board of Directors;
(2) To ratify the selection of Price Waterhouse LLP as the Company's
independent accountants for the fiscal year ending December 31,
1998; and
(3) To consider and act upon such other business as may properly come
before the meeting.
Shareholders of record at the close of business on May 8, 1998 will be
entitled to notice of and to vote at the Annual Meeting, and a list of such
shareholders will be available for examination during ordinary business hours at
least ten days prior to the Annual Meeting by any shareholder, for any purpose
germane to the Annual Meeting, at the Company's offices at 9540 Washington
Boulevard, Culver City, California 90232 (telephone (310) 204-5000).
Whether or not you intend to be present at the meeting, please date, sign
and mail the enclosed proxy in the provided postage-paid envelope as promptly as
possible. You are cordially invited to attend the Annual Meeting and your proxy
will be revoked if you are present and vote in person.
By Order of the Board of Directors
/S/ FARID SULEMAN
Farid Suleman
Secretary
April 30, 1998
<PAGE>
WESTWOOD ONE, INC.
9540 Washington Boulevard
Culver City, California 90232
---------------
PROXY STATEMENT
---------------
This Proxy Statement (first mailed to shareholders on or about May 15,
1998) is furnished in connection with the solicitation of proxies by the
management of Westwood One, Inc., a Delaware corporation (the "Company"), for
use at the Annual Meeting of Shareholders of the Company to be held on June 16,
1998 at 10:00 a.m., Pacific Time, in the La Ventana Room of the Westwood
Marquis, 930 Hilgard Avenue, Los Angeles, California, and any adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Shareholders.
Holders of record of the Common Stock and Class B Stock at the close of
business on May 8, 1998 are entitled to vote at the Annual Meeting. As of the
close of business on April 20, 1998, 31,357,435 shares, excluding 3,433,295
treasury shares, of Common Stock and 351,733 shares of Class B Stock were issued
and outstanding.
Each holder of outstanding Common Stock is entitled to cast one (1) vote
for each share of Common Stock held by such holder. Each holder of Class B Stock
is entitled to cast fifty (50) votes for each share of Class B stock held by
such holder. Only the Common Stock is publicly traded. Holders of Common Stock,
voting alone, will elect one member of the Company's Board of Directors. Holders
of Common Stock and Class B Stock, voting together, will elect two members of
the Company's Board of Directors, vote upon the ratification of Price Waterhouse
LLP as the Company's independent accountants and conduct such other business
as may properly come before the meeting.
A majority of the outstanding votes entitled to be cast at the Annual
Meeting and represented in person or by proxy will constitute a quorum. With
regard to the election of directors and any other proposal submitted to a vote,
approval requires the affirmative vote of a majority of the votes entitled to be
cast and represented in person or by proxy at the meeting. Where a choice is
specified on the proxy as to the vote on any matter to come before the meeting,
the proxy will be voted in accordance with such specification. If no
specification is made, but the proxy is properly signed, the shares represented
thereby will be voted in favor of the director nominees and in favor of the
ratification of the selection of Price Waterhouse LLP as the Company's
independent accountants. Management is not aware of any matters, other than
those specified above, that will be presented for action at the Annual Meeting,
but if any other matters do properly come before the meeting, the proxies will
vote upon such matters in accordance with their best judgment.
Shares represented by proxies which are marked "abstain", "withhold
authorization" or to deny discretionary authority on any matter will be counted
as shares present for purposes of determining the presence of a quorum; such
shares will also be treated as shares present and entitled to vote, which will
have the same effect as a vote against any such matter. Proxies relating to
"street name" shares which are not voted by brokers on one or more matters will
not be treated as shares present for purposes of determining the presence of a
quorum unless they are voted by the broker on at least one matter. Such
non-voted shares will not be treated as shares represented at the meeting as to
any matter for which non-vote is indicated on the broker's proxy.
Any shareholder submitting the accompanying proxy card has the right to
revoke it by notifying the Secretary of the Company in writing at any time prior
to the voting of the proxy, or by signing and delivering to the Secretary a
later-dated proxy. A proxy will be automatically revoked if the person giving
the proxy attends the Annual Meeting and votes in person.
The Company's Annual Report on Form 10-K for the year ended December 31,
1997, including consolidated financial statements and other information,
accompanies this Proxy Statement but does not form a part of the proxy
soliciting material.
1
<PAGE>
ELECTION OF DIRECTORS
At a Special Meeting of Shareholders held on January 28, 1994, the
Company's shareholders approved a Voting Agreement entered into among: (i) the
Company; (ii) Infinity Network, Inc., a wholly owned subsidiary of CBS Radio
Group; and (iii) Norman J. Pattiz, the Company's current Chairman of the Board
(the "Voting Agreement"). The Voting Agreement, which became effective February
3, 1994, reconstituted the Board of Directors into a nine-member Board to which
Mr. Pattiz designated three members (the "Pattiz Designees"), CBS Radio Group
designated three members (the "CBS Designees") and a nominating committee
consisting of one Pattiz Designee and one CBS Designee designated the final
three directors ("Independents"), all of whom are independent outside directors
as defined in the Company's By-Laws. The Voting Agreement also requires: (i) Mr.
Pattiz and CBS to vote their respective shares of the Common Stock, and in the
case of Mr. Pattiz, his Class B Stock, in favor of their respective Designees to
the Board of Directors; and (ii) Mr. Pattiz to vote all of his shares of Class B
Stock in accordance with the recommendation of the majority of the full
incumbent Board of Directors on any matters presented to the Company's
shareholders.
The Voting Agreement also provides for a reduction in the number of Board
Members Mr. Pattiz may designate if he reduces his stock ownership below
predetermined levels. If Mr. Pattiz loses a Designee as a result of his stock
transactions, the size of the Board of Directors is automatically reduced as of
the next election of directors. As a result of Mr. Pattiz's 1995 stock
transactions, he currently may only designate two members of the Board of
Directors and accordingly the Board was reduced to eight members as of June 17,
1996.
The Board of Directors, consisting of eight individuals, is divided into
three classes (Class I, II, and III), each class serving for three-year terms,
which terms do not coincide. Only one class of directors is elected at each
Annual Meeting. Of the directors, at least 33 1/3% must be independent outside
directors. Pursuant to the Company's Certificate of Incorporation, holders of
Common Stock, voting alone, have the right to elect 20% of the Board of
Directors, which currently amounts to two members. However, it is currently
intended that the holders of the Common Stock will vote alone to elect the three
Independents, one of which will be elected each year, as set forth below. The
remaining members of the Board are elected by all shareholders voting together
as a single class.
At the Annual Meeting, holders of Common Stock, voting alone, will elect
the Independent Class I director, and holders of Common Stock and Class B Stock,
voting together, will elect the other Class I directors, for three-year terms,
until their successors are elected and qualified. The Board of Directors intends
to nominate Norman J. Pattiz (the Pattiz Designee), Mel Karmazin (the CBS
Designee) and Joseph B. Smith (the Independent director) to serve for three-year
terms ending in 2001. All of these nominees currently serve as Class I directors
of the Company. Unless otherwise indicated on any proxy, the persons named as
proxy voters on the enclosed proxy card intend to vote the stock represented by
each proxy to elect these nominees. The nominees are willing to serve as
directors, but should any or all refuse to or be unable to serve, the management
proxy holders will vote for one or more other persons nominated by the Board of
Directors. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO ELECT
MESSRS. PATTIZ, KARMAZIN AND SMITH AS DIRECTORS OF THE COMPANY.
The continuing directors and nominees for director of the Company are:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Director Term
Name Age Since Class Expires
---- --- ----- ----- -------
Norman J. Pattiz. . . . .(Pattiz Designee). . . . . . 55. 1974 I 1998
Mel Karmazin. . . . . . .(CBS Designee). . . . . . . .54 1994 I 1998
Joseph B. Smith. . . . . (Independent). . . . . . . . 70. . 1994 I 1998
Paul G. Krasnow. . . . . (Pattiz Designee). . . . . . 59. . 1997 II 2000
Farid Suleman. . . . . . (CBS Designee). . . . . . . .46 . 1994 II 2000
David L. Dennis. . . . . (Independent). . . . . . . . 49. . 1994 II 2000
Steven A. Lerman . . . (CBS Designee). . . . . . . .51 1995 III 1999
Gerald Greenberg. . . . (Independent). . . . . . . . 55. . 1994 III 1999
</TABLE>
2
<PAGE>
The principal occupations of the three director nominees and each of the
other five continuing directors are as follows:
Mr. Pattiz - founded the Company in 1974 and has held the position of
Chairman of the Board since that time. He was also the Company's Chief Executive
Officer until February 3, 1994.
Mr. Karmazin - has been a director and has held the position of President
and Chief Executive Officer of the Company since February 3, 1994. He is also a
director of CBS Corporation since March 1997 and President and Chief Operating
Officer of CBS Corporation since April 1998. Mr. Karmazin has been Chairman and
Chief Executive Officer of CBS Station Group since May 1997, and was Chairman
and Chief Executive Officer of CBS Radio Group (the successor to Infinity
Broadcasting Corporation ("Infinity")) from December 1996 to May 1997. Mr.
Karmazin is also a member of the Board of Trustees for the Museum of Television
and Radio. From 1988 to December 1996, Mr. Karmazin was President and Chief
Executive Officer of Infinity. In addition, from 1984 to December 1996, Mr.
Karmazin was a director of Infinity.
Mr. Smith - has been a director of the Company since May 24, 1994. He was
previously a director of the Company from February 1984 until February 3, 1994.
Since April 1993, Mr. Smith has been the President of Unison Productions, Inc.,
through which he serves as an industry consultant involved in a number of
projects in the entertainment business.
Mr. Krasnow - has been a director of the Company since June 17, 1997.
Since September 1974 he has been the President and sole shareholder of Krasnow
Insurance Services, Inc., an insurance agency providing life, disability and
health benefits, of which he is the sole agent. Mr. Krasnow was also a director
of the Company from 1989 until June 17, 1996.
Mr. Suleman - has been a director and has held the position of Executive
Vice President and Chief Financial Officer of the Company since February 3,
1994. He is also Senior Vice President and Chief Financial Officer of CBS
Station Group since June 1997. He was the Senior Vice President and Chief
Financial Officer of CBS Radio Group from December 1996 to June 1997. Mr.
Suleman was a director of Infinity from February 1992 through December 1996.
From 1986 to December 1996, Mr. Suleman was Vice President, Finance and Chief
Financial Officer of Infinity.
Mr. Dennis - has been a director of the Company since May 24, 1994. Mr.
Dennis has served as Managing Director, Investment Banking for Donaldson, Lufkin
& Jenrette Securities Corporation since April 1989.
Mr. Lerman - has been a director of the Company since April 19, 1995. Since
1986, Mr. Lerman has been a partner in the Washington, D.C. law firm of
Leventhal, Senter and Lerman. Mr. Lerman was a director of Infinity from
February 1992 through December 1996 and he was also a director of Premiere Radio
Networks, Inc. until April 18, 1995.
Mr. Greenberg - has been a director of the Company since May 24, 1994.
Since April 1993, Mr. Greenberg has served as President of MJJ Music, a Michael
Jackson/Sony owned record label.
Committees of the Board
The Board of Directors has a Compensation Committee which currently
consists of Messrs. Smith, Dennis and Greenberg. The Compensation Committee
administers the Company's Amended 1989 Stock Incentive Plan, establishes the
annual earnings target for the payment of an incentive bonus to the Company's
Chairman and is authorized to approve, and may negotiate, employment
arrangements with key executives of the Company and its subsidiaries. There were
no formal meetings of the Compensation Committee during fiscal 1997, however,
Committee members engaged in informal discussions and took several actions by
written consent.
3
<PAGE>
The Board of Directors also has an Audit Committee which currently
consists of Messrs. Dennis, Krasnow, Lerman and Suleman. The Audit Committee is
authorized to review the Company's financial statements, meet with the Company's
auditors and make recommendations to the Board of Directors about internal
accounting controls and procedures. There was one meeting of the Audit Committee
during fiscal 1997.
Pursuant to the Voting Agreement, Mr. Pattiz and Mr. Karmazin also serve on
a Nominating Committee which nominates the Independent director each year. There
were no formal meetings of the Nominating Committee in fiscal 1997.
Director Attendance and Compensation
In fiscal 1997 the Board as a whole met on four occasions. During fiscal
1997, each of the current directors then in office attended at least 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings of committees of the Board of Directors on which such
director served.
Directors of the Company who are not officers received $3,750 per meeting
attended for their services as directors and $1,875 per meeting attended for
their services as committee members. In addition, all directors who are not
officers receive a mandatory grant of stock options to acquire 10,000 shares of
Common Stock each year. Directors are also reimbursed for expenses incurred in
attending such meetings. During fiscal 1997, Messrs. Smith, Krasnow, Dennis,
Lerman and Greenberg received $15,000, $7,500, $18,750, $15,000 and $15,000,
respectively, in Board and Board committee fees.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of April 20, 1998, the number and
percentage of outstanding shares of Common Stock and Class B Stock held by: (1)
each person or group known to the Company to beneficially own more than five
percent of the outstanding Common Stock or Class B Stock of the Company; (2)
each of the three director nominees and each of the other five current
directors; (3) the Named Executive Officers (see "EXECUTIVE COMPENSATION"
appearing elsewhere in this report); and (4) all current directors and executive
officers as a group. At April 20, 1998, there were 31,357,435 shares, excluding
3,433,295 treasury shares, of Common Stock outstanding and 351,733 shares of
Class B Stock outstanding.
Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended, (the "Exchange Act").
Under this Rule, certain shares may be deemed to be beneficially owned by more
than one person (such as where persons share voting power or investment power).
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire the shares (for example, upon exercise of an
option or the conversion of a debenture into common stock) within 60 days of the
date as of which the information is provided; in computing the percentage of
ownership of any person, the amount of shares outstanding is deemed to include
the amount of shares beneficially owned by such person (and only such person) by
reason of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in the following table does not necessarily
reflect the person's actual voting power at any particular date.
4
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock Shares of Class B Stock
Beneficially Owned (1) Beneficially Owned (1)
------------------------ -----------------------
<S> <C> <C> <C> <C>
Number Percent Number Percent
------ ------- ------ -------
Norman J. Pattiz (2) (16) . . . . . . . . . . .729,040 (3) 2.3% 351,690 99.9%
Mel Karmazin . . . . . . . . . . . . . . . . .530,149 (4) 1.7% - -
Farid Suleman . . . . . . . . . . . . . . . . .190,000 (7) * - -
Joseph B. Smith . . . . . . . . . . . . . . . . 6,000 (7) * - -
David L. Dennis . . . . . . . . . . . . . . . .27,605 (5) * - -
Paul G. Krasnow . . . . . . . . . . . . . . . .77,000 (6) * - -
Steven A. Lerman . . . . . . . . . . . . . . . 12,000 (7) * - -
Gerald Greenberg . . . . . . . . . . . . . . . .6,000 (7) * - -
Infinity Network, Inc., a subsidiary of CBS
Radio Group (14) (15) . . . . . . . . . . 8,000,000 (9) 23.4% - -
40 West 57th Street
New York, NY 10019
Putnam Investments, Inc. (14) . . . . . . . 4,406,549 (10) 14.1% - -
One Post Office Square
Boston, MA 02109
Denver Investment Advisors LLC (14) . . . . 4,328,400 (11) 13.9% - -
1225 17th Street
Denver, CO 80202
College Retirement Equities Fund (14) . . . 3,308,600 (12) 10.6% - -
730 Third Avenue
New York, NY 10017
The Capital Group Companies, Inc. (14) . . . 2,268,100 (13) 7.3% - -
333 South Hope Street
Los Angeles, CA 90071
All current directors and executive officers as
a group (8 persons) . . . . . . . . . . . 1,577,794 (8) 4.9% 351,690 99.9%
</TABLE>
- -----------------------------
* Represents less than one percent (1%) of the Company's outstanding shares of
Common Stock.
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock and Class B Stock, unless otherwise
indicated.
(2) As of April 20, 1998, Mr. Pattiz, whose business address is 9540
Washington Boulevard, Culver City, California 90232, owned Common Stock
and Class B Stock representing approximately 37.1% of the total voting
power of the Company.
(3) Includes stock options for 75,000 shares (which expire on November 30,
2003) granted pursuant to Mr. Pattiz' December 1, 1986 employment
agreement, as amended on November 25, 1987 and June 30, 1993 (the "1986
Employment Agreement"), and 140,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan.
(4) Includes stock options for 358,000 shares granted under the
Company's Amended 1989 Stock Incentive Plan.
(5) Includes stock options for 14,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan.
(6) Includes stock options for 2,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan.
(7) Represents stock options granted under the Company's Amended 1989
Stock Incentive Plan.
(8) Includes stock options for 803,000 shares granted under the Company's
Amended 1989 Stock Incentive Plan and Mr. Pattiz' 1986 Employment
Agreement.
(9) Includes 3,000,000 shares which may currently be acquired upon exercise
of warrants at an exercise price of $3.00 per share.
5
<PAGE>
(10) Putnam Investments, Inc. as an investment advisor has no sole voting or
dispositive power, but has shared voting and dispositive power for
4,406,549 shares.
(11) Denver Investment Advisors LLC, as an investment advisor, has sole voting
and dispositive power for 4,328,400 shares.
(12) The College Retirement Equities Fund, as an investment company, has sole
voting and dispositive power for 3,308,600 shares.
(13) The Capital Group Companies, Inc., through its operating subsidiaries,
Capital Guardian Trust Company and Capital Research Management Company,
has sole voting and dispositive power for 2,268,100 shares.
(14) Tabular information and footnotes 9, 10, 11, 12 and 13 are based upon
information contained in the most recent Schedule 13G filings and other
information made available to the Company.
(15) Pursuant to the terms of the Voting Agreement (as discussed under
"ELECTION OF DIRECTORS" appearing elsewhere in this report), Mr. Pattiz
and CBS Radio Group will vote their respective shares of the Company's
Common Stock and, in the case of Mr. Pattiz, his Class B Stock, in favor
of their respective designees to the Board of Directors.
Accordingly, Mr. Pattiz and CBS Radio Group together beneficially
own 8,729,040 shares (25.4%) of the Common Stock with respect to
election of Independent directors and 50.6% of the Company's total
voting power with respect to the election of the Pattiz and CBS Radio
Group Designees. Pursuant to the Voting Agreement, Mr. Pattiz also is
required to vote all of his shares of Class B Stock in accordance with
the recommendation of the full incumbent Board of Directors on any
matters presented to the Company's shareholders. Mr. Pattiz's and CBS
Radio Group's beneficially owned Common Stock, voting together,
represents approximately 16.8% of the Company's total voting power. Mr.
Pattiz's and CBS Radio Group's beneficially owned Common Stock and Class
B Stock, voting together, represents approximately 50.6% of the Company's
total voting power.
EXECUTIVE OFFICERS
The names, ages and principal occupations (if not set out previously) of
the executive officers of the Company and its subsidiaries are as follows:
Name Age Position
---- --- --------
Norman J. Pattiz 55 Chairman of the Board
Mel Karmazin 54 President, Chief Executive Officer and Director
Farid Suleman 46 Executive Vice President, Chief Financial
Officer, Secretary and Director
Messrs. Karmazin and Suleman serve under a Management Agreement which is
discussed in the following paragraph. Mr. Pattiz has a written employment
agreement with the Company which expires on November 30, 1998.
Pursuant to the terms of the Management Agreement between the Company and
CBS Radio Group which expires on March 31, 1999, CBS Radio Group manages the
business and operations of the Company, subject to the direction and supervision
of the Board of Directors, for a base management fee of $2,168,890 (in 1997), an
annual cash bonus payable in the event certain cash flow targets are achieved
and warrants to purchase shares of Common Stock. In connection with the
foregoing matters, CBS Radio Group also acquired 5,000,000 newly issued shares
of Common Stock and a ten-year warrant to purchase up to an additional 3,000,000
shares of Common Stock at an exercise price of $3.00 per share for an aggregate
purchase price of $15,000,000. CBS Radio Group currently beneficially owns
approximately 23.4% of the Common Stock of the Company (see "PRINCIPAL
SHAREHOLDERS" appearing elsewhere in this report).
6
<PAGE>
EXECUTIVE COMPENSATION
Disclosure regarding compensation is provided for each of the executive
officers of the Company (collectively, the "Named Executive Officers") who
served as executive officers at the end of or during the fiscal year ended
December 31, 1997:
Norman J. Pattiz.............. the Company's Chairman of the Board at
December 31, 1997.
Mel Karmazin.................. the Company's Chief Executive Officer and
President at December 31, 1997.
Farid Suleman................. the Company's Executive Vice President and Chief
Financial Officer at December 31, 1997.
Gregory P. Batusic............ the Company's President - Westwood One
Entertainment at December 31, 1997. Mr. Batusic
resigned effective March 26, 1998.
Michael D'Ambrose............. the Company's Senior Vice President and Chief
Operating Officer and Chief Executive Officer-
Westwood One Broadcasting Services, Inc. until
November 15, 1997.
Jeffrey B. Lawenda............ the Company's President - Westwood One Radio
Networks until April 10, 1997.
Compensation Committee Report
The Compensation Committee of the Company's Board of Directors consists of
at least two independent, outside directors, currently Messrs. Smith, Dennis and
Greenberg.
The Compensation Committee administers the Amended 1989 Stock Incentive
Plan and may review employment arrangements with executive officers of the
Company other than Messrs. Karmazin and Suleman who serve as the Company's Chief
Executive Officer and Chief Financial Officer, respectively, pursuant to the
Management Agreement described above. (See "EXECUTIVE OFFICERS" appearing
elsewhere in this report for a more detailed description of the Management
Agreement.) In addition, the Committee establishes the annual earnings targets
which must be achieved by the Company for the payment of a cash incentive bonus
to Mr. Pattiz pursuant to his current employment agreement with the Company.
(See "Employment Agreements" appearing elsewhere in this report for a
description of Mr. Pattiz' employment agreement.)
Under the terms of the Management Agreement, pursuant to which Mr.
Karmazin serves as the Company's Chief Executive Officer and President, and
Mr. Suleman serves as the Company's Chief Financial Officer, the Company pays
a management fee to CBS Radio Group. Accordingly, the Compensation Committee
does not set the base salaries or annual cash bonus incentives of Messrs.
Karmazin or Suleman, but does have the authority to grant stock incentives to
such officers. Moreover, during 1997 Mr. Karmazin, as the Company's Chief
Executive Officer under the Management Agreement, was responsible for
determining the amount of salary and bonus payable to the Company's executive
officers, except to the extent that such matters were required to be determined
in accordance with pre-existing employment arrangements.
The compensation policies utilized by the Compensation Committee and the
Chief Executive Officer are intended to enable the Company to attract, retain
and motivate executive officers to meet Company goals using appropriate
combinations of base salary and incentive compensation in the form of annual
cash bonuses and stock incentives. Generally, compensation decisions are based
on contractual commitments, as well as corporate performance, the level
7
<PAGE>
of individual responsibility of the particular executive and individual
performance. The foregoing factors are listed in order of their relative
importance in making compensation decisions.
Stock incentives may be granted under the Amended 1989 Stock Incentive
Plan by the Compensation Committee, at its sole discretion, to officers and
employees of the Company to reward outstanding performance during the prior
fiscal year and as an incentive to continued outstanding performance in future
years. In evaluating the performance of officers and employees other than the
Chief Executive Officer, the Compensation Committee consults with the Chief
Executive Officer and others in management, as applicable. In evaluating the
performance of the Chief Executive Officer, the Compensation Committee may
consult with the entire Board of Directors. In an effort to attract and retain
highly qualified officers and employees, stock incentives may also be granted by
the Compensation Committee, at its sole discretion, to newly hired officers and
employees as an inducement to accept employment with the Company.
1997 Compensation for Executive Officers
Salary paid to Mr. Pattiz for 1997 was based on the terms of his
pre-existing employment agreement with the Company. The salary and annual
incentives in 1997 for other executive officers, except for Messrs. Karmazin and
Suleman, who serve pursuant to the Management Agreement, were based on the terms
of employment agreements between the Company and its executive officers,
described elsewhere herein. These agreements were structured in a manner that
considered the competitive job market as well as the individual's performance in
helping the Company achieve its short and long-term goals. The executive
officers' incentive bonuses are based on their ability to achieve cash flow
targets established by the Company's Chief Executive Officer for their
respective divisions. (See "Employment Agreements" appearing elsewhere in this
report).
The Board of Directors
Joseph B. Smith, Chairman of the Compensation Committee
Gerald Greenberg, member of the Compensation Committee
David L. Dennis, member of the Compensation Committee
Norman J. Pattiz, Chairman of the Board
Mel Karmazin
Farid Suleman
Paul G. Krasnow
Steven A. Lerman
8
<PAGE>
Summary Compensation Table
The following table sets forth the compensation received by the Named
Executive Officers for the years ending December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
-------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Name and Fiscal Other Annual Securities Underlying All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) (1) Options (#) Compensation ($)
------------------ ---- ---------- --------- -------------------- ----------- ----------------
Norman J. Pattiz ........... 1997 $750,000 -- -- -- --
Chairman of the Board 1996 750,000 $302,500 -- -- --
1995 750,000 275,000 -- -- --
Mel Karmazin 1997 -- -- -- 740,000 --
Chief Executive Officer 1996 -- -- -- -- --
and President (2) 1995 -- -- -- -- --
Farid Suleman............... 1997 -- -- -- 200,000 --
Chief Financial Officer (2)1996 -- -- -- -- --
1995 -- -- -- -- --
Gregory P. Batusic.......... 1997 400,000 -- -- 100,000 $2,250 (6)
President - Westwood One 1996 379,167 133,333 -- -- 2,250 (6)
Entertainment (3) 1995 329,000 -- -- 100,000 2,310 (6)
Michael D'Ambrose........... 1997 366,026 -- -- 100,000 $1,500 (6)
Senior Vice President and 1996 250,000 100,000 -- -- --
Chief Executive Officer- 1995 -- -- -- -- --
Westwood One Broadcasting
Services, Inc. (4)
Jeffrey B. Lawenda......... 1997 124,719 -- -- -- $625 (6)
President - Westwood One 1996 398,187 84,259 -- -- 2,250 (6)
Networks (5) 1995 254,647 -- -- 100,000 453 (6)
</TABLE>
- -----------------------------
(1) This column includes the aggregate cost to the Company (if such amount
exceeded the lesser of $50,000 or 10% of such officer's salary and
bonus) of providing various prerequisites and other personal benefits.
(2) Messrs. Karmazin and Suleman assumed their positions effective
February 3, 1994, pursuant to the terms of the Management Agreement
between the Company and CBS Radio. Messrs. Karmazin and Suleman do not
receive any cash compensation from the Company. All compensation under
the Management Agreement is paid to CBS Radio Group. See "Certain
Relationships and Transactions." Messrs. Karmazin and Suleman were
granted 740,000 and 200,000 in options, respectively, in 1997.
(3) Mr. Batusic became an executive officer of the Company on June 1,
1992. Mr. Batusic resigned his position with the Company effective
March 26, 1998.
(4) Mr. D'Ambrose became an executive officer of the Company upon the
March 1, 1996 acquisition of Shadow Broadcasting. Mr. D'Ambrose
resigned from the Company effective November 15, 1997.
(5) Mr. Lawenda became an executive officer of the Company on April 10,
1995. Mr. Lawenda resigned from the Company effective April 10, 1997.
(6) All Other Compensation for Messrs. Batusic, D'Ambrose and Lawenda
consisted of Company contributions to the employee Savings and
Profit-Sharing Plan.
9
<PAGE>
The following two tables provide information on stock option grants
made to the Named Executive Officers in 1997, options exercised during 1997 and
options outstanding on December 31, 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1997
Individual Grants
------------------------------------------------------------------ Potential Realizable Value at
<S> <C> <C> <C> <C> <C> <C>
Number of % of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise or Option Term
Options Employees in Base Price Expiration ------------------------
Name Granted (#) (1) Fiscal Year (2) ($/Share) Date 5% ($) 10% ($)
---- --------------- --------------- --------- ---- ------ -------
Norman J. Pattiz . . . . - - - - - -
Mel Karmazin . . . . . . 740,000 46% $30.00 6/17/07 $13,986,000 $35,298,000
Farid Suleman . . . . . . 200,000 12% $18.25 3/24/07 $ 2,299,500 $ 5,803,500
Gregory Batusic . . . . . 100,000 6% $18.25 3/24/07 (3) $ 1,149,750 $ 2,901,750
Michael D'Ambrose . . . . 100,000 6% $18.25 3/24/07 (4) $ 1,149,750 $ 2,901,750
Jeffrey B. Lawenda. . . . - - - - - -
</TABLE>
- --------------------------
(1) These options were granted under the Amended 1989 Stock Incentive Plan on
March 24, 1997 except in the case of Mr. Karmazin, whose options were
granted on June 17, 1997, and become exercisable 20% per year (148,000 for
Mr. Karmazin, 40,000 for Mr. Suleman and 20,000 for Messrs. Batusic and
D'Ambrose) on each anniversary date between 1998 and 2002.
(2) Percentage calculations exclude the impact of a mandatory grant of 50,000
options at $30.00 per share on June 17, 1997 to outside directors (10,000
each to Messrs. Dennis, Greenberg, Krasnow, Lerman and Smith) which, in
accordance with the terms of the Amended 1989 Stock Incentive Plan, become
exercisable 20% per year on each June 17 anniversary between 1998 and 2002.
(3) Mr. Batusic forfeited his unvested options on March 26, 1998, the date he
resigned his position with the Company.
(4) Mr. D'Ambrose forfeited his options upon his resignation on
November 15, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL 1997
AND FISCAL YEAR END OPTION VALUES
<S> <C> <C> <C> <C> <C> <C>
Number of Securities
Underlying Value of Unexercised,
Unexercised Options In-the-Money Options
Value at Fiscal Year End (#) at Fiscal Year End ($) (1)
Shares Acquired Realized ($) ---------------------------- ----------------------------
Name on Exercise (#) (2) (3) Exercisable Unexercisable Exercisable Unexercisable
---- ------------------- ---------------- ----------- ------------- ------------ -------------
Norman J. Pattiz......... - - 215,000 70,000 $6,005,425 $2,222,150
Mel Karmazin............. - - 210,000 880,000 5,748,750 9,105,000
Farid Suleman............ - - 150,000 300,000 4,106,250 6,512,500
Gregory P. Batusic....... 10,000 $222,500 55,000 160,000 1,431,875 3,245,000
Michael D'Ambrose........ - - - - - -
Jeffrey B. Lawenda....... - - - - - -
</TABLE>
- -----------------------
(1) On Wednesday, December 31, 1997, the closing per share price for the
Company's Common Stock on the NASDAQ National Market System was $37 1/8.
(2) Represents the exercise of options granted under the Amended 1989 Stock
Incentive Plan.
(3) The reported amount excludes the per share exercise prices for all option
shares exercised.
10
<PAGE>
Performance Graph
The performance graph below compares the performance of the Company's
Common Stock to the Dow Jones Equity Market Index and the Dow Jones Media
Industry Index for the Company's last five calendar years. The graph assumes
that $100 was invested in the Company's Common Stock and each index on December
31, 1992.
Measurement Dow Jones Dow Jones
Period Equity Media
(last business day Westwood Market Industry
of calendar year) One, Inc. Index Index
------------------ --------- ---------- ---------
1992 $ 100 $100 $100
1993 $ 514 $110 $121
1994 $ 598 $111 $116
1995 $ 867 $153 $166
1996 $1,020 $252 $172
1997 $2,278 $206 $243
The following table sets forth the closing price of the Company's Common
Stock at the end of each of the last five calendar years.
Base Year
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
$1 5/8 $8 3/8 $9 3/4 $14 1/8 $16 5/8 $37 1/8
====== ====== ====== ======= ======= =======
11
<PAGE>
Employment Agreements
The Company has a written employment agreement with Mr. Pattiz, effective
October 18, 1993 (as amended on January 26, 1994 and February 2, 1994), pursuant
to which Mr. Pattiz was to serve as Chairman of the Board and Chief Executive
Officer of the Company for a five-year term ending November 30, 1998 at an
annual salary of $750,000 plus an annual cash bonus of at least $250,000
($332,750 for fiscal 1997 and $366,025 for 1998) payable in the event that the
Company achieves certain earnings targets as established annually by the
Compensation Committee of the Board of Directors. In addition, the Company will
pay directly or reimburse Mr. Pattiz for one-half of his home security costs,
not to exceed $115,000 annually. The agreement also granted Mr. Pattiz ten-year
options to acquire 350,000 shares of Common Stock under the Amended 1989 Stock
Incentive Plan (which vest at the rate of 70,000 shares per year over the five-
year term of the employment agreement) and provides additional benefits which
are standard for executives in the industry. The agreement generally will be
terminable by Mr. Pattiz upon ninety days' written notice to the Company; it
will be terminable by the Company only in the event of death, permanent and
total disability, or for "cause." In the event of permanent and total
disability, Mr. Pattiz will receive his base salary and cash bonus for the
following twelve months and 75% of his base salary for the remainder of the term
of the agreement. In the event of a "change of control," as defined in the
agreement, any unvested options granted pursuant to this agreement will become
immediately exercisable and Mr. Pattiz will continue to receive any base and
cash bonus compensation he would have otherwise been entitled to receive for the
remaining term of the agreement. On February 3, 1994, pursuant to the terms of
the Management Agreement (as discussed under "EXECUTIVE OFFICERS" appearing
elsewhere in this report), Mr. Karmazin replaced Mr. Pattiz as Chief Executive
Officer. However, the agreement otherwise remains in effect and the transactions
entered into in connection with the Management Agreement and the Voting
Agreement were not considered a "change in control" for purposes of the
agreement.
The Company had a written thirty-one month employment agreement with the
President of Westwood One's Entertainment Division, Mr. Batusic, which expired
on December 31, 1997. Pursuant to the terms of the agreement, Mr. Batusic
received a base salary of $350,000 in the first year of the agreement, $400,000
in the second year of the agreement and $233,333 for the period June 1, 1997 to
December 31, 1997. Additionally, pursuant to the agreement, Mr. Batusic was
eligible for an annual bonus equal to one-third of his base salary provided the
Entertainment Division met predetermined cash flow objectives. The agreement
provided Mr. Batusic with additional benefits which were standard for executives
in the industry. Mr. Batusic resigned effective March 26, 1998.
The Company had a written three-year employment agreement with the
Company's Senior Vice President, Mr. D'Ambrose, effective March 1, 1996.
Pursuant to the terms of the agreement, Mr. D'Ambrose received a minimum base
salary of $300,000. Additionally, pursuant to the agreement, Mr. D'Ambrose was
eligible for an annual bonus of $100,000 provided Westwood One Broadcasting
Services met predetermined cash flow objectives. The agreement provided Mr.
D'Ambrose with additional benefits which were standard for executives in the
industry. Mr. D'Ambrose resigned effective November 15, 1997.
The Company had a written two year employment agreement with the President
of Westwood One's Network Division, Mr. Lawenda, effective April 10, 1995.
Pursuant to the terms of the agreement, Mr. Lawenda received a base salary of
$350,000 in the first year of the agreement and $400,000 in the second year of
the agreement. Additionally, pursuant to the agreement, Mr. Lawenda was eligible
for an annual bonus equal to one-third of his base salary provided the Network
Division met predetermined cash flow objectives. The agreement provided Mr.
Lawenda with additional benefits which were standard for executives in the
industry. Mr. Lawenda resigned effective April 10, 1997 upon the expiration of
the agreement.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee, Messrs. Smith and
Greenberg, have served on the Committee since May 24, 1994, and Mr. Dennis has
served on the Committee since June 17, 1997.
In 1997, Mr. Karmazin, the Company's Chief Executive Officer, was
responsible for determining the salary and cash flow objectives that would
result in bonuses being paid to executive officers pursuant to their employment
12
<PAGE>
agreements (other than Mr. Pattiz whose salary and bonus were based on the terms
of pre-existing employment agreements). (See "Employment Agreements" and
"Compensation Committee Report" appearing elsewhere in this report.)
Mr. Dennis has served as a Managing Director, Investment Banking of
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") since April 1989.
During 1997, the Company used DLJ as its broker to repurchase 504,300 shares of
Common Stock in the open market for approximately $13,670,000.
Certain Relationships and Transactions
Messrs. Karmazin and Suleman are officers of CBS Radio Group which
beneficially owns 23.4% of the Common Stock of the Company (see "PRINCIPAL
SHAREHOLDERS" appearing elsewhere in this report). CBS Radio Group manages the
business and operations of the Company pursuant to the terms of a Management
Agreement between the Company and CBS Radio Group (as discussed under "EXECUTIVE
OFFICERS" appearing elsewhere in this report), under which the Company paid or
accrued expenses aggregating approximately $2,713,000 during fiscal 1997. During
1997, the Company purchased and canceled CBS Radio Group's $5.00 incentive
warrants covering 500,000 shares of Common Stock granted under the Management
Agreement for approximately $12,688,000.
On March 31, 1997, the Company entered into a representation and management
agreement (the "Representation Agreement") with CBS, Inc. ("CBS") to operate the
CBS Radio Networks for an initial two-year period ending March 31, 1999. The
Company retains all revenue and is responsible for all expenses of the CBS Radio
Networks from the effective date of the Representation Agreement. In addition, a
number of CBS Radio Group's radio stations are affiliated with the Company's
radio networks and the Company purchases several programs from CBS Radio Group.
During 1997, the Company incurred expenses aggregating approximately $61,564,000
for the Representation Agreement and CBS Radio Group affiliations and programs.
The Company currently anticipates that it will continue to have such
arrangements with CBS Radio Group and its radio stations in the future. The
Management Agreement provides that all transactions between the Company and CBS
Radio Group or its affiliates will be on a basis that is at least as favorable
to the Company as if the transaction were entered into with an independent third
party. In addition, all agreements between the Company and CBS Radio Group or
any of its affiliates must be approved by the Board of Directors.
Mr. Lerman has been a partner in the Washington, D.C. law firm of
Leventhal, Senter and Lerman since 1986. From time to time, the Company engages
Leventhal, Senter and Lerman in certain matters.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Executive officers,
directors and more than ten percent shareholders are required by Securities
and Exchange Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from its directors and executive officers, the Company
believes that during 1997 its executive officers, directors and more than ten
percent beneficial owners complied with all filing requirements applicable to
them, except for Mr. Smith who inadvertently failed to timely file a Form 4.
13
<PAGE>
SELECTION OF INDEPENDENT ACCOUNTANTS
Action will be taken at the Annual Meeting to ratify the selection of Price
Waterhouse LLP as independent accountants of the Company for the fiscal year
ending December 31, 1998. Price Waterhouse LLP has been the independent
accountants of the Company since 1984. The Company knows of no direct or
material indirect financial interest of Price Waterhouse LLP in the Company or
of any connection of that firm with the Company in the capacity of promoter,
underwriter, voting trustee, officer or employee. Members of Price Waterhouse
LLP will be present at the Annual Meeting, will have an opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE TO RATIFY THE
SELECTION OF PRICE WATERHOUSE LLP. THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
COMMON STOCK AND CLASS B STOCK, VOTING TOGETHER, PRESENT OR REPRESENTED AT THE
ANNUAL MEETING IS REQUIRED TO RATIFY THE SELECTION OF PRICE WATERHOUSE LLP.
SOLICITATION
The cost of preparing, assembling, printing and mailing this Proxy
Statement and the accompanying proxy card will be borne by the Company. The
Company has requested banks and brokers to solicit their customers who are
beneficial owners of Common Stock listed of record in the names of the banks and
brokers, and will reimburse these banks and brokers for the reasonable
out-of-pocket expenses of their solicitations. The original solicitation of
proxies by mail may be supplemented by telephone, telegram and personal
solicitation by officers and other regular employees of the Company, but no
additional compensation will be paid on account of these additional activities.
SHAREHOLDER PROPOSALS FOR 1999
Under the rules of the Securities and Exchange Commission, any shareholder
proposal intended for inclusion in the proxy material for the Annual Meeting of
Shareholders to be held in 1999 must be received by the Company by December 31,
1998 to be eligible for inclusion in such proxy material. Proposals should be
addressed to Farid Suleman, Secretary, Westwood One, Inc., 9540 Washington
Boulevard, Culver City, CA 90232. Proposals must comply with the proxy rules of
the Securities and Exchange Commission relating to stockholder proposals in
order to be included in the proxy materials.
By Order of the Board of Directors
/S/ FARID SULEMAN
Farid Suleman
Secretary
Culver City, California
April 30, 1998
14
<PAGE>
Appendix A
PROXY
WESTWOOD ONE, INC.
Proxy for 1998 Annual Meeting of Shareholders for Holders of Common Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WESTWOOD ONE, INC.
The undersigned shareholder of Westwood One, Inc., a Delaware corporation
(the "Company"), hereby appoints Farid Suleman and Gary J. Yusko as the
undersigned's proxies, each with full power of substitution to attend and act
for the undersigned at the Annual Meeting of Shareholders of the Company to be
held on June 16, 1998 at 10:00 a.m., Pacific Time, at the Westwood Marquis, 930
Hilgard Avenue, Los Angeles, California and any adjournments thereof, and to
represent and vote as designated on the reverse side all of the shares of Common
Stock of the Company that the undersigned would be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy, the
proxies are authorized to vote in accordance with their best judgments.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
- ----------- -----------
SIDE SIDE
---- ----
A-1
<PAGE>
X Please mark
- --- votes as in this example.
The proxies present at the Annual Meeting, either in person or by
substitute (or if only one shall be present and act, then that one), shall
vote the shares represented by this proxy in the manner indicated below by
the shareholder. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON THIS
PROXY, IT WILL BE VOTED FOR ITEMS 1 AND 2 SHOWN BELOW. The Board of
Directors recommends a vote FOR all nominees in Item 1 and FOR Item 2.
1. Election of Class I Directors.
Nominees: Norman J. Pattiz, Mel Karmazin and
Joseph B. Smith
FOR ALL NOMINEES WITHHELD FROM ALL NOMINEES
- --- ---
------------------------------------------
- --- For all nominees except as noted above
2. Ratification of the selection of Price FOR AGAINST ABSTAIN
Waterhouse LLP as the independent
accountants of the Company for the --- --- ---
fiscal year ending December 31, 1998.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
---
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IMPORTANT: In signing this proxy, please sign your
name or names on the signature line in the same
way as indicated on this proxy. When signing as an
attorney, executor, administrator, trustee or
guardian, please give your full title as such.
EACH JOINT OWNER MUST SIGN.
Signature: Date: Signature: Date:
------------------ -------- ------------- ------
A-2
<PAGE>
PROXY
WESTWOOD ONE, INC.
Proxy for 1998 Annual Meeting of Shareholders for Holders of Class B Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WESTWOOD ONE, INC.
The undersigned shareholder of Westwood One, Inc., a Delaware corporation
(the "Company"), hereby appoints Farid Suleman and Gary J. Yusko as the
undersigned's proxies, each with full power of substitution to attend and act
for the undersigned at the Annual Meeting of Shareholders of the Company to be
held on June 16, 1998 at 10:00 a.m., Pacific Time, at the Westwood Marquis, 930
Hilgard Avenue, Los Angeles, California and any adjournments thereof, and to
represent and vote as designated on the reverse side all of the shares of Common
Stock of the Company that the undersigned would be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy, the
proxies are authorized to vote in accordance with their best judgments.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
- ----------- -----------
SIDE SIDE
---- ----
A-3
<PAGE>
X Please mark
- --- votes as in this example.
The proxies present at the Annual Meeting, either in person or by
substitute (or if only one shall be present and act, then that one), shall
vote the shares represented by this proxy in the manner indicated below by
the shareholder. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON THIS
PROXY, IT WILL BE VOTED FOR ITEMS 1 AND 2 SHOWN BELOW. The Board of
Directors recommends a vote FOR all nominees in Item 1 and FOR Item 2.
1. Election of Class I Directors.
Nominees: Norman J. Pattiz and Mel Karmazin
FOR BOTH NOMINEES WITHHELD FROM BOTH NOMINEES
- --- ---
------------------------------------------
- --- For both nominees except as noted above
2. Ratification of the selection of Price FOR AGAINST ABSTAIN
Waterhouse LLP as the independent
accountants of the Company for the --- --- ---
fiscal year ending December 31, 1998.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
---
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IMPORTANT: In signing this proxy, please sign your
name or names on the signature line in the same
way as indicated on this proxy. When signing as an
attorney, executor, administrator, trustee or
guardian, please give your full title as such.
EACH JOINT OWNER MUST SIGN.
Signature: Date: Signature: Date:
------------------ -------- ------------- ------
A-4
