OUTLET COMMUNICATIONS INC, DEF 14A, 1995-03-30

OUTLET COMMUNICATIONS INC
DEF 14A, 1995-03-30
TELEVISION BROADCASTING STATIONS

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<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as Permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

Outlet Communications, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Outlet Communications, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(n), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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:

[ ] 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:

Notes:

<PAGE>

Notice of Annual Meeting of Stockholders
Tuesday, May 2, 1995 at 1:00 P.M.

To the Stockholders:

The Annual Meeting of Stockholders of Outlet Communications, Inc. will be held
on Tuesday, May 2, 1995, at 1:00 P.M., local time, at 23 Kenney Drive, Cranston,
Rhode Island, for the following purposes:

1. To elect directors for the ensuing year, or until their respective
successors are duly elected and qualified;

2. To approve an amendment to the 1992 Stock Incentive Plan.

3. To ratify the selection by the Board of Directors of Ernst & Young LLP as
the independent auditors of the Company for the fiscal year ending December
31, 1995; and

4. To transact such other business as may properly come before the meeting or
any adjournment thereof.

The close of business on March 17, 1995 has been fixed as the record date for
the determination of the stockholders entitled to notice of and to vote at the
meeting and at any adjournment thereof.

By Order of the Board of Directors,

Joanne Schenck
Secretary

Cranston, Rhode Island
March 31, 1995
<PAGE>

Whether or not you expect to attend the meeting, please indicate voting
instructions on the enclosed proxy, sign and promptly return the completed proxy
in the enclosed self-addressed envelope.

Proxy Statement

The enclosed Proxy is solicited by the Board of Directors of Outlet
Communications, Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") on May 2, 1995.

The Company's principal executive office is located at 23 Kenney Drive,
Cranston, Rhode Island 02920. The approximate date on which this Proxy Statement
is first being sent to stockholders is March 31, 1995.

You may revoke the proxy at any time prior to its use by delivering a written
notice to the Secretary of the Company, by executing a later-dated proxy or by
attending the meeting and voting in person. Proxies in the form enclosed, unless
previously revoked, will be voted at the meeting in accordance with the
specifications made by you thereon or, in the absence of such specifications,
for the election of directors nominated herein, for the proposal to approve an
amendment to the 1992 Stock Incentive Plan and for the proposal to ratify the
selection of Ernst & Young LLP as independent auditors for the fiscal year
ending December 31, 1995.

Holders of record of Class A Common Stock, par value $.01 per share ("Common
Stock"), of the Company at the close of business on March 17, 1995 will be
entitled to vote at the Annual Meeting. Each share of Common Stock will be
entitled to one vote. On March 17, 1995 there were 6,579,631 shares of Common
Stock issued and outstanding. Shares redeemed or repurchased by the Company
before the date of the Annual Meeting will not be entitled to vote. There are no
other voting securities outstanding.
<PAGE>

--------------------------------------------------------------------------------
Election of Directors

At the Annual Meeting, twelve directors are to be elected to serve for a term of
one year or until their respective successors are elected and qualified. There
are two vacancies on the Board of Directors. See description of Stockholders
Agreement under "Certain Relationships and Related Transactions." It is intended
that proxies will be voted for the nominees set forth herein. Although it is
expected that all candidates will be able to serve, if one or more is unable to
do so, the proxy holders will vote the proxies for the remaining nominees and
for substitute nominees chosen by the Board of Directors unless the Board
reduces the number of directors to be elected. If each of the parties to the
Company's Stockholders' Agreement vote their shares of Common Stock pursuant to
the provisions of such agreement, the director nominees will be elected. See
"Certain Relationships and Related Transactions -- Stockholders' Agreement." All
of the twelve nominees for directors are currently serving as directors of the
Company.

The following table presents information on the nominees for election as
directors of the Company.
<PAGE>

<TABLE>
<CAPTION>
Principal Occupation and Director
Name Age Other Information Since
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James G. Babb 63 Chairman of the Board, President and Chief Executive Officer since May 1, 1991
1991; former President of Jefferson-Pilot Communications Company, a radio
and television broadcasting company, from November 1988 to January 1991.
Prior thereto, he was Executive Vice President and Chief Operating
Officer of that company.

Letitia Baldrige(1) 69 Director; President of Letitia Baldrige Enterprises, Inc., a management 1987
training and public relations consulting firm, since 1964; Author,
Lecturer and Director of Hartmarx Corporation and Federal Home Loan Bank
of Atlanta.

Robert C. Butler 64 Director; Senior Vice President and Chief Financial Officer of 1988
International Paper Company, a forest products company, since 1988; Group
Executive Vice President of the National Broadcasting Company from 1984
to 1988.

Stephen J. Carlotti 53 Director; Managing Partner in law firm of Hinckley, Allen & Snyder and a 1991
partner in that firm since January 1992 and from May 1970 to July 1989;
former Senior Executive Vice President, Chief Operating Officer and
General Counsel of The Mutual Benefit Life Insurance Company ("Mutual
Benefit") from August 1989 to August 1991; consultant to Mutual Benefit
from September 1991 to December 1991.

Frederick R. Griffiths(1) 74 Retired former Vice President -Corporate Affairs of the Company from 1976 1992
to 1987. He previously served in various administrative and creative
capacities during a thirty-five year affiliation with the Company.

Julius Koppelman 78 Director; Chairman of the Board and President of Harding Service 1987
Corporation ("Harding Service"), a consulting firm, since 1985; President
of its predecessor, Harding Resources, Inc. from 1982 to 1985. Director
of other corporations including Dyersburg Fabrics, Inc. and Princess
House, Inc.

Leonard Lieberman 66 Director; Chairman of the Board, President and Chief Executive Officer of 1988
the Company from January to April 1991; former Chairman, President and
Chief Executive Officer of Supermarkets General Corporation, an operator
of supermarkets, drugstores and do-it-yourself stores; Mr. Lieberman was
Chairman of that company from 1986 to 1987 and President and CEO from
1983 to 1987. Director of other corporations including Celestial
Seasonings, Inc., Republic New York Corporation, Sonic Corp., The William
Carter Company and La Petite Academy, Inc.

James K. Makrianes 70 Director; Director, Webb, Johnson Associates, an executive search firm, 1988
since March 1995; Partner, Ward Howell International, Inc., an executive
search firm, from February 1989 to February 1995. Senior Vice President,
President, then Chairman of Haley Associates, an executive search firm,
from 1978 to 1988.
<CAPTION>
Principal Occupation and Director
Name Age Other Information Since
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Victor H. Palmieri 65 Director; Special Deputy Rehabilitator, Confederation Life Insurance 1993
Company (U.S.) since August 1994; Deputy Rehabilitator and Chief
Executive Officer of Mutual Benefit from August 1991 to April 1994;
President and Chief Executive Officer, MBL Life Assurance Corp. from
April 1994 to March 1995; Chairman of The Palmieri Company, a business
and government management firm, since 1969; former Trustee and Chief
Executive Officer of Colorado-Ute Electric Association, an electric
utility, from 1990 to 1991. Director of other corporations including
Ernst Home Center, Inc., The William Carter Company and Broadcasting
Partners, Inc.

Frank E. Richardson 55 Director; President of Wesray Capital Corporation ("Wesray"), a private 1987
investment banking firm, of which Mr. Richardson has been an officer for
more than five years. Director of other corporations including Alex.
Brown & Sons, Dyersburg Fabrics, Inc., New River Industries, Inc. and
Sonic Corp.

Frank E. Walsh, Jr. 54 Director; Chairman of Wesray since August 1989; Vice Chairman from 1986 1987
to 1989, Executive Vice President from 1984 to 1986 and a Director of
Wesray since 1984; Director of other corporations including Tyco
Laboratories, Inc.

Solomon M. Yas(1) 54 Consultant in the field of human resources; former Vice President - Human 1992
Resources of the Company from 1985 until retirement as of June 1, 1991,
after completing seventeen years of service with the Company.
</TABLE>

(1) Designated as a director by certain management stockholders pursuant to the
Stockholders' Agreement. See "Certain Relationships and Related
Transactions -- Stockholders' Agreement." All other directors were
designated by Wesray pursuant to the Stockholders' Agreement.

There are no family relationships between any director nominees or between any
of them and any officer of the Company.
<PAGE>

Stock Ownership

Directors and Executive Officers The following table shows the number of shares
of the Company's Common Stock beneficially owned by each director and by the
executive officers listed in the Summary Compensation Table who are not
directors and by all directors and officers as a group as of March 17, 1995.

Amount and Nature of Beneficial Ownership

Title of Name (All listed names are directors Number
Class or executive officers) of Shares Percent
--------------------------------------------------------------------------------
<C> <S> <C> <C>

Class A James G. Babb 55,000(1) (6)
Common Stock Letitia Baldrige 200 (6)
Robert C. Butler 200 (6)
Stephen J. Carlotti -- --
Frederick R. Griffiths 15,450 (6)
Julius Koppelman 16,842 (6)
Leonard Lieberman 1,000 (6)
James K. Makrianes -- --
Victor H. Palmieri 2,137,000(2) 32.0
Frank E. Richardson 256,228(3) 3.8
Frank E. Walsh, Jr. -- --
Solomon M. Yas 4,000 (6)
Felix W. Oziemblewski 51,866(4) (6)
Douglas E. Gealy 16,666(4) (6)
Linda W. Sullivan 16,766(4) (6)

All Directors and Executive Officers
as a group (16 persons) 2,575,551(5) 38.6
--------------------------------------------------------------------------------
</TABLE>

(1) Includes 50,000 shares acquirable upon exercise of stock options or
restricted stock awards currently exercisable or to become exercisable
within 60 days.
(2) Mr. Palmieri is an officer of MBL Life Assurance Corp. and, for purposes of
disclosure of beneficial ownership under Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), Mr. Palmieri may be
deemed to be a beneficial owner of the 2,135,000 shares owned by that
company.
(3) Includes 2,500 shares owned by Mr. Richardson's minor children. Mr.
Richardson disclaims beneficial ownership of such shares.
(4) Includes 10,000 shares acquirable upon exercise of stock options currently
exercisable or to become exercisable within 60 days.
(5) Includes 87,133 shares acquirable upon exercise of stock options or
restricted stock awards currently exercisable or to become exercisable
within 60 days.
(6) Less than 1%.

The Company owns all of the issued and outstanding shares of capital stock of
Outlet Broadcasting, Inc. ("Outlet Broadcasting").

The addresses of the persons shown in the table above who are the beneficial
owners of more than five percent of the Company's Common Stock are as follows:
Victor H. Palmieri c/o MBL Life Assurance Corp., 520 Broad Street, Newark, New
Jersey 07102.
<PAGE>

--------------------------------------------------------------------------------
Ownership in Excess of Five Percent of Company's Common Stock

The following table sets forth certain information with respect to those
persons, other than officers or directors, known to the Company to be the
holders of more than five percent of the Company's Common Stock as of March 17,
1995.

Name and Address of Number
Beneficial Owner of Shares Percent
--------------------------------------------------------------------------------
<S> <C> <C>
The Hartington Trust(1) 626,764 9.5
P.O. Box 1975
Morristown, New Jersey 07962-1975

The OCI Trust 331,625 5.0
P.O. Box 1975
Morristown, New Jersey 07962-1975

MBL Life Assurance Corp. 2,135,000 32.4
520 Broad Street
Newark, New Jersey 07102

Gabelli Group Inc. 793,400 12.1
(aggregate holdings of affiliates
and entities)
655 Third Avenue
New York, New York 10017

Sandler Associates, 995,000 15.1
Sandler Capital Management
767 Fifth Avenue
New York, New York 10153

Parties to Stockholders' Agreement(2) 4,156,579 63.2
--------------------------------------------------------------------------------
</TABLE>

(1) As the grantor of such revocable Trust, Mr. Raymond G. Chambers may, for
purposes of disclosure of beneficial ownership under the Exchange Act, be
deemed to be the beneficial owner of the shares of Common Stock held by the
Trust. Additionally, as co-trustees of such Trust, Messrs. Kurt T. Borowsky,
Gary L. Moore and David J. Roy may, for purposes of disclosure of beneficial
ownership under the Exchange Act, be deemed to be the beneficial owners of
the shares of Common Stock held by the Trust.

(2) For purposes of disclosure of beneficial ownership under the Exchange Act,
the parties to the Stockholders' Agreement identified under Certain
Relationships and Related Transactions are deemed to be a single person and
the beneficial owners of the shares of Common Stock owned by all parties to
the Stockholders' Agreement.

--------------------------------------------------------------------------------
Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company's directors and executive
officers, and persons who own more than ten percent of a registered class of the
Company's equity securities (collectively, "Section 16 reporting persons"), to
file with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Section 16 reporting persons are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 1994, all Section 16(a)
filing requirements applicable to the Company's Section 16 reporting persons
were satisfied.

--------------------------------------------------------------------------------
Executive Compensation

The following table sets forth certain information with respect to compensation
paid to the Chief Executive Officer and the Company's most highly compensated
executive officers as to whom the total annual salary and bonus earned exceeded
$100,000 for the fiscal year ended December 31, 1994.

Summary Compensation Table

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

Annual Compensation Long Term Compensation
-------------------------------------------- -----------------------
Shares
Other Restricted Underlying All Other
Annual Stock Options Compen-
Name Principal Position Year Salary Bonus(1) Compensation(2) Awards(3) Granted sation(4)
------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
James G. Babb Chairman, President 1994 $331,154 $225,000 $22,819 $ 0 90,000 $1,848
and Chief Executive 1993 294,615 200,000 23,014 0 0 0
Officer 1992 266,442 160,000 15,066 67,500 30,000 0

Felix W. Oziemblewski Vice President -- Chief 1994 127,819 55,000 5,542 0 8,000 1,200
Financial Officer 1993 121,554 60,000 8,781 0 0 0
and Treasurer 1992 116,319 40,700 7,165 22,500 10,000 0

Douglas E. Gealy Vice President -- 1994 146,538 60,000 4,660 0 12,000 1,558
General Manager 1993 133,077 65,000 5,101 0 0 0
WCMH-TV, WWHO-TV 1992 113,615 41,700 4,080 22,500 10,000 0

Linda W. Sullivan Vice President -- 1994 124,808 50,000 4,386 0 12,000 1,200
General Manager 1993 111,539 57,500 5,136 0 0 0
WJAR-TV 1992 102,539 35,100 4,136 22,500 10,000 0
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Amounts represent incentive compensation awards. The amounts for 1993 also
include one-time bonuses of $25,000 for Mr. Babb and $15,000 each for Mr.
Oziemblewski, Mr. Gealy and Ms. Sullivan, paid upon completion of a
successful debt refinancing.
(2) Amounts listed represent gross-up payments for tax liabilities. Excludes
perquisites and other benefits, unless the aggregate amount of these items
exceeds the lesser of either $50,000 or 10 percent of the total annual
salary and bonus reported for the named executive officer.
(3) The value of the restricted stock awards shown in the table is based on the
market value of the shares on the date of grant of the award, less the
purchase price ($1.00 per share). As of December 31, 1994, total restricted
stock awards of 71,500 shares had been made pursuant to the Company's 1992
Stock Incentive Plan. The shares subject to such awards vest in three equal
annual installments commencing in August 1993. As of December 31, 1994, Mr.
Oziemblewski and Mr. Gealy had each purchased 6,666 shares and Ms. Sullivan
had purchased 3,333 shares in accordance with the terms of the original
grant. As of December 31, 1994, the market value of outstanding restricted
stock awards held by Mr. Babb, Mr. Oziemblewski, Mr. Gealy and Ms. Sullivan,
less the purchase price ($1.00 per share), was $472,500, $52,510, $52,510
and $105,005 for unpurchased shares, respectively. No restricted stock
awards were made in 1994.
(4) Amounts represent the Company's contribution to the Outlet Broadcasting,
Inc. 401(k) and Profit Sharing Plan.
<PAGE>

--------------------------------------------------------------------------------
Stock Options

The Company currently maintains the 1992 Stock Incentive Plan (the "Plan") as
approved by the Company's stockholders on June 25, 1992, amended April 27, 1993.
The Plan authorizes grants of both non-qualified and incentive stock options and
awards of restricted shares to key employees of the Company. The Plan is
administered by the Compensation Committee of the Board of Directors, which
determines the terms of options granted, the exercise price and exercisability
thereof.

The following table sets forth certain information regarding option grants in
the last fiscal year to the executive officers named in the Summary Compensation
Table.

Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Individual Grants Term(2)
--------------------------------------------------------------------------------------------------------------------------------

% of Total
Options
Shares Granted to
Underlying Employees Exercise
Stock Options in Fiscal Price Expiration
Name Granted(1) Year Per Share Date 0% 5% 10%
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
James G. Babb 45,000 29.1% $13.00 July 11, 2004 $ 0 $ 953,100 $1,517,400
" " " 45,000 29.1% 1.00(3) July 11, 2004 540,000 1,493,100 2,057,400
Felix W. Oziemblewski 8,000 5.2% 15.75 Oct. 27, 2004 0 205,280 326,800
Douglas E. Gealy 12,000 7.8% 15.75 Oct. 27, 2004 0 307,920 490,200
Linda W. Sullivan 12,000 7.8% 15.75 Oct. 27, 2004 0 307,920 490,200
</TABLE>

(1) Options become exercisable in three equal annual installments commencing
one year from grant date.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 0%, 5% and 10%
compounded annually from the date the respective options were granted.
(3) The market price per share at date of grant was $13.00.

The following table shows fiscal year-end option values for the executive
officers named in the Summary Compensation Table. No options were exercised by
such individuals during 1994.

Fiscal Year-end Option Values
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value of
Number of Shares Unexercised
Underlying In-the-Money
Unexercised Options Options
at Year-End at Year-End(1)
----------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James G. Babb 30,000 90,000 $405,000 $877,500
Felix W. Oziemblewski 10,000 8,000 135,000 67,000
Douglas E. Gealy 10,000 12,000 135,000 100,500
Linda W. Sullivan 6,667 12,000 90,005 100,500
</TABLE>

(1) Value is based on the last sales price per share ($16.75) on December 31,
1994, as reported on the NASDAQ National Market System, less the applicable
option exercise price.

--------------------------------------------------------------------------------
Retirement Plans

The Company maintains a non-contributory qualified retirement plan (the
"Retirement Plan") for the benefit of its employees, including the individuals
named in the Summary Compensation Table. As of August 31, 1994, the Company
curtailed the Retirement Plan and suspended the accrual of further benefits for
all employees. The following table shows the estimated annual benefits payable
upon retirement to persons in specified salary and bonus levels and years of
credited service.

Compensation Years of Service
--------------------------------------------------------------------------------
15 20 25 30 35
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
150,000 33,750 45,000 56,250 67,500 78,750
175,000 39,375 52,500 65,625 78,750 91,875
200,000 45,000 60,000 75,000 90,000 105,000
225,000 50,625 67,500 84,375 101,250 118,125
250,000 56,250 75,000 93,750 112,500 118,800*
300,000 67,500 90,000 112,500 118,800* 118,800*
400,000 90,000 118,800* 118,800* 118,800* 118,800*
450,000 101,250 118,800* 118,800* 118,800* 118,800*
500,000 112,500 118,800* 118,800* 118,800* 118,800*
600,000 118,800* 118,800* 118,800* 118,800* 118,800*
--------------------------------------------------------------------------------
</TABLE>

* Maximum annual benefit permitted under Section 415 of the Internal Revenue
Code.

Note -- The estimated annual benefits shown in the above table may be further
limited due to the provisions of section 401(a)(17)of the Internal Revenue Code.
<PAGE>

The amounts payable shown in the preceding table are based on the following
assumptions: (i) the individual shall have retired at the normal retirement age
of 65, (ii) "compensation" is the average of the covered compensation paid to
such individual during the three calendar years in which salary is the highest,
(iii) covered compensation is salary and bonuses paid to Plan participants, and
for 1994 is shown in the Salary and Bonus columns of the Summary Compensation
Table, and (iv) benefits are paid in the form of a straight-life annuity.

In addition to the Retirement Plan, the individuals named in the Summary
Compensation Table also participate in a non-qualified supplemental retirement
plan (the "Supplemental Plan") which provides a supplemental benefit based on a
percentage of final average compensation and years of service, less benefits
paid under the Retirement Plan and Social Security benefits. The following table
shows the estimated annual benefits payable under the Supplemental Plan to
persons in the specified salary and bonus levels and years of credited service.

Compensation Years of Service
-------------------------------------------------------------------------------
15 20 25 30 35
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $ 21,875 $ 25,000 $ 15,625 $ 6,250 $ 0
150,000 26,250 30,000 18,750 7,500 0
175,000 30,625 35,000 21,875 8,750 0
200,000 35,000 40,000 25,000 10,000 0
225,000 39,375 45,000 28,125 11,250 0
250,000 43,750 50,000 31,250 12,500 6,200
300,000 52,500 60,000 37,500 31,200 31,200
400,000 70,000 81,200 81,200 81,200 81,200
450,000 78,750 106,200 106,200 106,200 106,200
500,000 87,500 131,200 131,200 131,200 131,200
600,000 121,200 181,200 181,200 181,200 181,200
-------------------------------------------------------------------------------
</TABLE>

The amounts payable shown in the above table are based on the following
assumptions: (i) the individual shall have retired at the normal age of 65,
(ii) "compensation" is the average salary paid to such individual during the
three calendar years in which salary is the highest in the five years prior to
retirement, plus the average Executive Incentive Compensation award for the
highest three years during the ten years prior to retirement, (iii) benefits are
paid in the form of a straight-life annuity, (iv) estimated annual payments are
after deduction for Retirement Plan benefits, but before any deduction for
Social Security benefits. Covered compensation under the Supplemental Plan is
included in the Salary and Bonus columns of the Summary Compensation Table.

As of December 31, 1994, for purposes of computing benefits under the Retirement
Plan and the Supplemental Plan, Mr. Babb has 3.4 years of service, Mr.
Oziemblewski has 25.9 years, Ms. Sullivan has 9.4 years, and Mr. Gealy has 3.2
years.

On September 1, 1994 the Company adopted the Outlet Broadcasting, Inc. 401(k)
and Profit Sharing Plan (the "401(k) Plan"). This plan is a qualified 401(k)
deferred compensation plan whose purpose is to enable eligible employees to save
for retirement. Eligible employees are those employees of the Company who are
not covered by a collective bargaining agreement, unless the agreement allows
for participation in the 401(k) Plan, and who have completed one year of service
with the Company and have attained age 21.

Eligible employees may contribute up to the lesser of 15% of taxable
compensation in each calendar year, excluding the taxable value of stock
options, fringe benefits or moving and other expense reimbursements, or $9,240.
All employee contributions are allocated to the employee's individual account
and, at the employee's election, are invested in money market, fixed income or
equity funds. The Company will make matching contributions in an amount equal to
25% of the employee contributions but subject to a maximum employee contribution
of 6% of eligible compensation. The Company's matching contributions vest with
the employee at the rate of 20% for each year of service to the Company. The
Company may also make annual discretionary profit sharing contributions in an
amount to be determined by the Board of Directors at the end of each calendar
year. The maximum contributions allowed are limited by regulations promulgated
under the Internal Revenue Code.

--------------------------------------------------------------------------------
Employment Contracts

Mr. James G. Babb entered into an employment agreement as Chairman, President
and Chief Executive Officer, effective January 1, 1993, for a term of five
years, as amended. The agreement provides for a base salary of $345,000, as
adjusted. The agreement also provides that Mr. Babb will be a participant in the
Executive Incentive Compensation Plan and that he will be eligible to receive
awards of stock options under the Company's stock option plans. Mr. Babb is
further eligible to receive additional compensation in the event of a merger or
sale of assets pursuant to which the Company's stockholders receive value in
excess of $9 per share. In the event of termination without cause, the Company
will pay Mr. Babb his compensation for twelve months or the remaining portion of
his employment period, whichever is greater.

Mr. Douglas E. Gealy entered into an employment agreement as Vice President-
General Manager of WCMH-TV in May 1993 which remains in effect until April 30,
1996. The contract provides for a base salary of $150,000 per annum, as
adjusted, and also provides that the employee will be a participant in the
Executive Incentive Compensation Plan. Ms. Sullivan entered into an employment
agreement as Vice President - General Manager of WJAR-TV, effective January 1,
1995, which remains in effect until December 31, 1996. The agreement provides
for a base salary of $130,000 and also provides that the employee will be a
participant in the Executive Incentive Compensation Plan. The employment
contract of Mr. Oziemblewski with the Company and Outlet Broadcasting expired as
of March 31, 1992. The contract provides, however, that if employment is
terminated other than for cause, death or disability within a five-year period
following the term of the contract, Outlet Broadcasting will pay a minimum of
one year base salary as severance payment. At December 31, 1994 this amounted to
$130,000. In the event of a merger of the Company or Outlet Broadcasting, or
acquisition of 50% of their voting securities, or any other change in control,
the contracts are deemed to have been assigned to the successor entity.

--------------------------------------------------------------------------------
Compensation Committee Interlocks and Insider Participation

Mr. Koppelman serves as Chairman and Messrs. Butler, Richardson and Walsh
and Ms. Baldrige serve as members of the Compensation Committee of the Board.
No member of the Compensation Committee is a current or former officer or
employee of the Company or any of its subsidiaries. All members of the
Compensation Committee except Ms. Baldrige were designated by Wesray pursuant
to the Stockholders' Agreement described below under "Certain Relationships and
Related Transactions -- Stockholders' Agreement."

Messrs. Richardson and Walsh are stockholders and Messrs. Koppelman,
Richardson and Walsh are directors of Harding Service, which provides
management consulting services to the Company pursuant to an agreement entered
into in July 1986. Under the agreement, Harding Service has agreed to provide
the Company with general management, corporate finance, marketing and business
investment advice until July 1996. Such advice includes reviewing capital and
operating budgets, capital appropriations, executive compensation and employee
incentive programs, business strategies, budgeting and forecasting, and general
corporate planning and financial oversight. Harding Service provides management
consulting services to several other entities affiliated with Wesray. In
consideration of the consulting services, the Company has agreed to pay
consulting services fees equal to 0.333% of annual gross revenues to Harding
Service, which fees totalled $236,630 in 1994. This agreement was entered into
when the Company was privately held and may not be on terms as favorable to the
Company as could have been obtained from an unaffiliated party.
<PAGE>

--------------------------------------------------------------------------------
Compensation Committee Report

The Compensation Committee of the Board of Directors of Outlet
Communications, Inc. (the "Committee") herein presents the following report on
executive compensation:

The Company maintains a Salary Administration Program of which the primary
purpose is to ensure that the Company has a credible, logical and consistent
process for making salary decisions. The existence of such a program enables
the Company to determine that each executive receives a fair and reasonable
salary for the level of work performed and for the quality of that work. The
program also directly associates executive compensation with Company
performance.

Executive Compensation Policy It is the policy of the Company to
provide executive compensation that is equitable and competitively attractive.
In addition, executive compensation should be related to improvements in
corporate operating performance. Thus, compensation will be established at
levels that are fair and objectively determined and, through appropriate
incentives tied in to performance objectives, will be directly connected with
increases in the Company's value for the ultimate benefit of the stockholders.

Base Compensation The Company's Salary Administration Program, as it
pertains to base compensation, includes the following elements:

. Job Evaluation Establishes the economic value of each job and relates the
valuation to both the marketplace and other jobs. This results in the
development of a salary range for each level of work.
. Performance Appraisal Provides for a fair and equitable review of job
performance, conducted on a regular basis.
. Performance Planning Combines pay programs with fulfillment of the
Company's operating goals and/or financial objectives.

The Committee considers that the salary range levels developed for the
executive officers are reasonable and competitive. Actual salaries are based on
the established salary range as further adjusted within that range by
individual performance contributions. During fiscal 1994, the Company exhibited
substantial growth and continued its favorable performance trends. Operating
results in 1994 were marked by significant increases in revenue, operating
income and net income. The Company's financial performance also improved with
reductions in long-term debt and interest expense. There was a substantial
increase in stockholders' equity. Also in 1994, the Company added two
independent UHF television stations to its operations. In recognition of the
Company's overall positive performance, the Committee granted the executive
officers named in the Summary Compensation Table (the "Named Executives") an
increase in base salary.

Executive Incentive Compensation Plan Key management employees are eligible to
participate in Outlet Broadcasting's Executive Incentive Compensation Plan.
Participants are selected based on ability to affect profitability, with awards
based primarily on the attainment of certain annual operating objectives. The
plan is intended to reward specific operating accomplishments and provide
competitive levels of compensation for the attainment of those financial
objectives. In particular, the plan aims to focus the Company's activities
toward optimum and steady earnings growth which, the Committee believes, are
primary determinants of share price over time. Under the plan, target awards are
established for executive officers as a percentage of their base salary range.
The targeted awards are subject to decrease or increase based on the Company's
actual performance and at the discretion of the Committee. The Committee may
also grant discretionary awards to certain key employees. During 1994, the
Company exceeded its financial performance objectives and incentive compensation
awards were made to the Named Executives as shown in the Summary Compensation
Table, to be paid in 1995.

Stock Incentive Program The Committee believes that by encouraging stock
ownership in the Company by executives, it serves to increase the executives'
personal interest in the Company's continued success and progress. Therefore,
executives are eligible to receive stock options and/or restricted shares,
giving them the right to purchase shares of Common Stock of the Company at a
specified price in the future. The size of individual stock grants is based upon
job responsibility and individual contribution to the Company's success.
Previous stock option grants are considered when awards are determined.

In view of the Company's substantial improvement in operating and financial
results over the past three year period, and to provide additional incentives
to further improve the Company's performance in 1995 and beyond, individual
stock options were granted in 1994 to the Named Executives and other key
employees. In granting these options, the individuals were provided with an
immediate financial interest in increasing stockholder value.

In addition, the Committee, subject to stockholder approval, has approved an
amendment to the 1992 Stock Incentive Plan to increase the number of shares of
Common Stock available thereunder by 300,000 shares, which shares would then be
used for future stock option grants or restricted share awards.
<PAGE>

Compensation for the Chairman and Chief Executive Officer Mr. James G. Babb,
Chairman, President and Chief Executive Officer joined the Company in
May 1991. His employment agreement with the Company was structured to provide
Mr. Babb with a competitive base salary, subject to annual review, along with
an annual incentive opportunity. In considering Mr. Babb's compensation for
1994, the Committee reviewed such compensation arrangements and further
reviewed the trend of the Company's operating performance during the year. It
was noted that the Company significantly exceeded its financial operating
objectives for 1994. In particular, the Committee noted that the 1994 financial
performance as measured by various factors, including revenue growth, expense
control, operating income and net income per share, was a continuation of the
Company's significantly improved financial performance since 1992. The
Committee also noted that the Company successfully added two independent UHF
television stations to its operations in 1994.

Because of the growth and considerable success enjoyed by the Company in its
1994 operating results, and because its accomplishments will further serve to
benefit the Company's long-term business prospects, the Committee has made the
following determinations regarding the compensation of Mr. Babb:

. Upon annual review, Mr. Babb's base salary was increased from $305,000 per
year to $345,000 per year.
. Under the annual incentive compensation plan, an incentive award of $225,000
was accrued for fiscal 1994.
. Under the 1992 Stock Incentive Plan, non-qualified and incentive stock
options were awarded for an aggregate 90,000 shares of the Company's Common
Stock, of which 45,000 are exercisable at $13.00 per share (fair market value
on date of grant) and 45,000 are exercisable at $1.00 per share. The Committee
approved the discounted options for Mr. Babb to reflect his importance to the
Company's future success.

Limitations on the Deductibility of Compensation Pursuant to the 1993 Omnibus
Budget Reconciliation Act, a portion of annual compensation payable after 1993
to any of the Company's five highest paid executive officers is not deductible
by the Company for federal income tax purposes to the extent such officer's
overall compensation exceeds $1 million. Qualifying performance-based incentive
compensation, however, is both deductible and excluded for purposes of
calculating the $1 million base. The Company has determined that no portion of
anticipated compensation payable to any executive officer in 1995 will be non-
deductible. Compensation includes the "spread" or excess of the fair market
value of the shares received upon exercise of a stock option over the exercise
price. The spread on the discounted stock options granted to Mr. Babb in 1994
will not constitute qualified performance-based compensation. Accordingly, the
amount of compensation attributable to such spread will not be deductible by the
Company for federal income tax purposes to the extent that Mr. Babb's total
compensation (other than excepted compensation and qualifying performance-based
compensation) exceeds $1 million in any year. This is likely to occur if the
stock price continues to increase or if Mr. Babb exercises a substantial portion
of the discounted options in a single year. The Committee has determined that
the negative impact of the loss of deductibility for a portion of this non-cash
compensation expense is outweighed by the need to compensate Mr. Babb
appropriately and adequately for his contributions to the Company's success and
to recognize his importance to the Company's long-term business prospects. The
Committee will continue to address the issue of deductibility in formulating
compensation arrangements for executive officers.

Summary All members of the Committee are nonemployee directors who are
independent of any relationships with any executive. As described above, the
Committee believes that the Salary Administration Program for executives is
competitive and that the executive compensation programs include variable
compensation opportunities that are based on achievements of financial
objectives and enhancements in stockholder value.

Compensation Committee: Julius Koppelman, Chairman, and Members Letitia
Baldrige, Robert C. Butler, Frank E. Richardson and Frank E. Walsh, Jr.
<PAGE>

--------------------------------------------------------------------------------
Performance Graph

The following performance graph compares the performance of the Company's Common
Stock to the Total Return Index for the Nasdaq Stock Market (U.S. Companies) and
to the Nasdaq Telecommunications Stocks Index for the Company's last five fiscal
years. The graph assumes that the value of the investment in the Company's
Common Stock and each index was $100 at December 31, 1989 and all dividends were
reinvested.

--------------------------------------------------------------------------------
Comparison of Five-Year Cumulative Return

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
--------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Company 100 34 17 16 42 67
Nasdaq Total Return
Index (US) 100 85 136 159 181 177
Nasdaq Telecommunications
Stocks Index 100 67 93 114 176 146
--------------------------------------------------------------------------------
</TABLE>
<PAGE>

--------------------------------------------------------------------------------
Certain Relationships and Related Transactions

Stockholders' Agreement The Company, Outlet Broadcasting, and each of the
Company's original stockholders (including MBL Life Assurance Corp., successor
to Mutual Benefit) and certain of their successors and assigns are parties to a
stockholders' agreement (the "Stockholders' Agreement"). As of March 17, 1995,
an aggregate of 4,156,579 shares of the Common Stock were beneficially owned by
the parties to the Stockholders' Agreement. The Stockholders' Agreement requires
that the stockholders party to the Stockholders' Agreement vote their shares to
fix the number of directors of the Company at 14 and elect as directors five
persons designated by certain management stockholders (the "Management
Stockholders") and nine persons designated by the stockholders affiliated with
Wesray (the "Wesray Stockholders"). The following persons are parties to the
Stockholders' Agreement: Hugh J. Byrnes, Richard D. Ferrier, Maria E. Ferrier,
The Hartington Trust, Keith Hightower, John D. Howard, Julius Koppelman, Frank
H. Pearl and selected trust, Frank E. Richardson, E. Burke Ross, Jr., William E.
Simon, Manfred L. Steyn, Henrik N. Vanderlip, The OCI Trust (Wesray
Stockholders), Reginald Butts, Steve J. Caminis, Charles G. Conklin, Estate of
David E. Henderson and related trusts, Frederick R. Griffiths, Thomas J. Mosher,
Felix W. Oziemblewski, Gerald T. Plemmons, Josephine Renola, Garland R.
Robinson, John D. Sawhill, Gerald Scher, Mara L. Snodgrass, Solomon M. Yas,
Joseph A. Young (Management Stockholders) and MBL Life Assurance Corp.

The Stockholders' Agreement also provides that each stockholder and MBL Life
Assurance Corp. may not agree to sell any securities to a buyer who would as a
result of such purchase own more than 50% of the outstanding Common Stock of
the Company unless prior to such sale the buyer agrees to be bound by the
Stockholders' Agreement and affords each stockholder the opportunity to sell a
pro rata portion of his shares on the same terms and conditions.

The Stockholders' Agreement terminates on the earlier of (i) December 9,
1996; (ii) the date that the Wesray Stockholders, Management Stockholders and
MBL Life Assurance Corp. own an aggregate of less than 50% of the Company's
issued and outstanding Common Stock; and (iii) the date of an event of
bankruptcy or insolvency of the Company or Outlet Broadcasting or foreclosure
or similar actions or proceedings by the Company's senior bank lender. Mutual
Benefit was placed in rehabilitation by the New Jersey Commissioner of
Insurance on July 16, 1991 and is currently in liquidation. MBL Life Assurance
Corp. is the transferee of certain assets formerly held by Mutual Benefit,
including the holdings of Mutual Benefit in the Company's Common Stock.

Management Consulting Agreement In July 1986, the Company entered into an
agreement for management consulting services with Harding Service, of which Mr.
Richardson and Mr. Walsh are stockholders and Messrs. Koppelman, Richardson and
Walsh are directors. For a description of the agreement with Harding Service,
see "Compensation Committee Interlocks and Insider Participation."

Transactions with the Law Firm of Hinckley, Allen & Snyder The law firm of
Hinckley, Allen & Snyder of which Mr. Carlotti, a director of the Company, is
Managing Partner, provided legal services to the Company during fiscal year
1994.

--------------------------------------------------------------------------------
Directors' Compensation

All nonemployee directors receive an annual retainer of $13,000. All
nonemployee directors also receive a $1,000 fee for each meeting of the Board
attended and $600 for attendance at committee meetings.

--------------------------------------------------------------------------------
Board of Directors and its Committees

The Board of Directors during the fiscal year ended December 31, 1994 had a
total of seven meetings. All of the incumbent directors standing for reelection
attended at least 75% of the aggregate number of meetings of the Board except
for Letitia Baldridge and Robert C. Butler who attended five meetings and
Victor H. Palmieri who attended four meetings.

As standing committees, the Board has an Executive Committee, an Audit
Committee, a Compensation Committee and a Nominating Committee.

The Executive Committee consists of Frank E. Richardson, Chairman, James G.
Babb, Stephen J. Carlotti, Julius Koppelman and Leonard Lieberman.

The Compensation Committee consists of non-employee directors. Its members
are Julius Koppelman, Chairman, Letitia Baldrige, Robert C. Butler, Frank E.
Richardson and Frank E. Walsh, Jr. The Committee held two meetings during
fiscal year 1994 and all members attended both meetings except for Frank E.
Richardson and Frank E. Walsh, Jr. who each attended one meeting. The
Compensation Committee's duties are to consider and make recommendations to the
Board on executive employee compensation, bonuses and employment plan benefits.

The Nominating Committee consists of Stephen J. Carlotti, Chairman, James G.
Babb, Letitia Baldrige, Frederick R. Griffiths and James K. Makrianes. The
Committee, although it did not hold any official meetings during 1994, held
unofficial discussions as to new directors. The Nominating Committee's duties
are to screen and recommend to the Board qualified candidates for election to
the Board. The Committee will also consider nominees recommended by
stockholders. Stockholders desiring to make such recommendations should submit
the candidate's name, together with biographical information and the
candidate's written consent to nomination to: Secretary, Outlet Communications,
Inc., 23 Kenney Drive, Cranston, Rhode Island 02920-4489 no later than January
13, 1996.

The Audit Committee consists of non-employee directors. Its members are
Stephen J. Carlotti, Chairman, Letitia Baldrige, Robert C. Butler, Leonard
Lieberman and Solomon M. Yas. The Committee had one meeting during 1994 and all
members attended.

The primary objectives of the Audit Committee are to provide direct,
personal contact on a regular basis between non-employee directors and the
Company's independent auditors. The Committee analyzes reports of the
independent auditors, reviews the adequacy of the Company's internal accounting
controls with the independent auditors, and makes such recommendations to the
Board as the Committee may deem advisable. The Audit Committee also approves
all audit services provided by the Company's independent auditors and fees
therefor.
<PAGE>

--------------------------------------------------------------------------------
Approval of Amendment to the 1992 Stock Incentive Plan

The 1992 Stock Incentive Plan (the "Stock Plan") which was approved by the
Company's stockholders on June 25, 1992, provides for the grant of awards
covering 300,000 shares of Common Stock, subject to adjustment in the event of
stock dividends, splits, recapitalizations and similar transactions. As of
March 17, 1995, a total of 250 shares of Common Stock remained available for
issuance or award under the Stock Plan. On October 27, 1994 the Compensation
Committee voted to amend the Stock Plan, subject to the approval of the
stockholders at the Annual Meeting, to increase the number of shares available
for award under the Stock Plan by 300,000 shares and to provide that the total
number of shares for which options may be granted or the total number of shares
of restricted stock awarded to any one person in a single year may not exceed
100,000 shares. On March 17, 1995, the closing sale price of the Common Stock
was $26.50.

The purpose of the Stock Plan is to encourage stock ownership by eligible
employees thereby increasing the personal interest of eligible employees in the
Company's continued success and progress. The Stock Plan is intended to
motivate eligible employees to contribute to the success of the Company.

The following is a summary of the principal features of the Stock Plan and
assumes approval of the amendment to the Stock Plan by the stockholders.

Awards under the Stock Plan may be granted in the form of (i) incentive
stock options ("ISOs") within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code"), (ii) non-qualified stock options, (iii)
limited stock appreciation rights ("Limited Rights") accompanying stock options
or (iv) shares of Common Stock subject to specified restrictions ("Restricted
Shares"). The proposed amendment to the Stock Plan limits the aggregate number
of shares of Common Stock which can be granted pursuant to such awards to any
one employee in any one year to 100,000 shares. Grants of ISOs are subject to
additional limitations imposed under the Internal Revenue Code. Shares covered
by expired or terminated stock options and forfeited Restricted Shares
generally will be available for subsequent awards.

The Stock Plan will be administered by the Compensation Committee of the
Board of Directors. Each member of the Committee serves for a term determined
by the Board. All determinations of the Committee with respect to the Stock
Plan are binding. The expenses of administering the Stock Plan are borne by the
Company.

Awards may be granted to such salaried employees (including employees who
may also be directors of the Company) of Outlet Broadcasting who are determined
by the Committee to be key employees. The Stock Plan's eligibility criteria are
intended to encompass a group which is currently estimated at 20 individuals.
The Committee will base its selection of award recipients, and its
determination of the number of shares of Common Stock to be covered by each
award, on the nature of the employee's duties and present and potential
contributions to the Company's success, and other factors it deems relevant. As
of the date of this proxy statement, eleven individuals have received awards
under the Stock Plan.

Stock options will have a term determined by the Committee, but no ISO may
have a term in excess of ten years (five years if the employee owns 10% of the
Company's voting stock). No ISO may be granted after May 25, 2002. Stock
options will become exercisable as determined by the Committee, except that no
option will be exercisable by an officer or director of the Company within six
months from the date of grant. The Committee may accelerate the exercisability
of any stock option at any time for any reason. In addition, options may be
granted which become immediately exercisable upon a "Change of Control Event"
(defined below).

The option price of any ISO or non-qualified option will be determined by
the Committee, except that the option price of any ISO will not be less than
100% of the average of the bid and ask prices (the "market price") of the
Common Stock (110% if the employee owns 10% of the Company's voting stock), and
will be subject to adjustment in the event of stock dividends, split-ups,
recapitalizations and similar transactions. An option may be exercised by
payment of the option price in cash (including money loaned by the Company to
the optionee in compliance with applicable law and on such terms and conditions
as the Committee may determine) or, subject to the approval of the Committee,
by payment of already owned shares of Common Stock or surrender of outstanding
awards under the Stock Plan.

A Limited Right may be awarded in connection with any ISO or non-qualified
stock option granted under the Stock Plan. Limited Rights may be exercised only
during the 90 days immediately following a "Change of Control Event," but may
not be exercised before the underlying option is exercisable. Upon exercise,
the holder of Limited Rights will receive for each share for which a Limited
Right is exercised an amount in cash equal to the excess, if any, of (A) the
greater of (x) the highest market value of a share of Common Stock during the
ninety day period ending on the date the Limited Right is exercised, and (y) a
per share price determined by reference to the Change of Control Event over (B)
the exercise price per share of the option to which the Limited Right relates.

Stock options and Limited Rights are not transferrable otherwise than by
will or the laws of descent and distribution, and may be exercised during the
holder's lifetime only by the holder or by the holder's guardian or legal
representative (unless such exercise would disqualify an option as an ISO).
<PAGE>

Upon termination of employment except by reason of death or disability, an
option or Limited Right (to the extent otherwise exercisable) may be exercised
at any time within thirty days (or three months in the case of retirement on or
after age 55) following such termination of employment. In the case of the
death or total disability by an employee while employed or during such thirty
day or three month period following termination of employment, any previously
granted options and Limited Rights (to the extent otherwise exercisable) may be
exercised within a period of one year after the employee's death or total
disability. In either case, the option or Limited Right is subject to earlier
expiration by its terms.

The Committee may, in its sole discretion, at the time of grant or
subsequently, modify or amend the terms of any option or Limited Right.

Awards of Restricted Shares may be made in lieu of or in addition to awards
of options and Limited Rights under the Stock Plan. The Committee shall
determine, in its discretion, the terms of the award, including the number of
shares which such person may be entitled, the period of time applicable to such
award (the "Award Period"), the purchase price per share, if any, and any other
terms, conditions, and restrictions relating to the award. The Committee may
waive the terms, conditions or restrictions of any award upon a Change of
Control Event, and may at any time modify or amend the terms of a previous
award.

Upon the award of Restricted Shares, and the employee's payment of the
purchase price, if any, certificates representing the shares shall be issued to
the employee, which certificates shall bear an appropriate legend reflecting
that such shares are subject to the restrictions contained in the award. The
certificate will be held in custody by the Company for the employee's account.
The shares of Common Stock evidenced by such certificate may not be sold,
transferred, otherwise disposed of or pledged prior to the termination of the
Award Period.

The Committee, in its sole discretion, will determine whether cash and stock
dividends with respect to Restricted Shares will be paid currently to the
employee or withheld from the employee's account and whether and on what terms
dividends withheld may bear interest. Subject to the foregoing restrictions,
the employee will have, commencing on the date of grant or payment of the
purchase price, whichever is applicable, all rights and privileges of the
stockholders as to such shares of Common Stock.

Awards may provide for the incremental lapse or termination of restrictions
during the Award Period or for an accelerated termination of the Award Period
on certain conditions. The Committee may also, in its discretion, shorten or
terminate the Award Period or waive any conditions for the lapse or termination
of restrictions with respect to all or any of the Restricted Shares.

Unless the Committee determines otherwise, an employee will forfeit all
rights to Restricted Shares upon termination of employment for any reason,
other than death or disability, prior to the expiration or termination of the
Award Period and the satisfaction of any other condition prescribed by the
Committee. In the case of the death or total disability of an employee, all
restrictions and conditions shall automatically terminate as to a proportionate
number of Restricted Shares owned by the employee based on the portion of the
Award Period which has elapsed. All rights to any remaining Restricted Shares
shall be forfeited, unless the Board, in its discretion, waives the
restrictions as to any part of such remaining Restricted Shares.

An employee who paid a purchase price for Restricted Shares (or his estate,
heirs, or legatee) shall be required to sell any forfeited Restricted Shares to
the Company at a price per share equal to the original purchase price paid by
the employee, or such other prices may be set by the Committee at the time of
grant.

The Board of Directors of the Company may suspend, terminate, modify or
amend the Stock Plan; provided, however, that any amendment that would increase
the aggregate number of shares of Common Stock that may be issued, materially
increase the benefits accruing to participants, or materially modify the
requirements as to eligibility for participation, will be subject to
stockholder approval. No suspension, termination, modification or amendment of
the Stock Plan may, without the consent of a participant, adversely affect the
participant's rights under an award theretofore granted.

Under the terms of the Stock Plan, upon the occurrence of certain Change of
Control Events, outstanding options become immediately exercisable in full, and
outstanding Restricted Shares vest in full, unless the Committee decides
otherwise in its discretion. In addition, Limited Rights granted under the
Stock Plan are exercisable within the 90 day period immediately following such
Change of Control Event. A Change of Control Event includes (i) a change in 51%
or more of the beneficial ownership of the voting securities of the Company,
(ii) any purchase of Common Stock pursuant to a tender offer or exchange offer
(other than by the Company or its subsidiaries), (iii) approval by Company
stockholders of a consolidation, a merger in which the Company does not
survive, or the sale of substantially all of the Company's assets or the assets
of Outlet Broadcasting, or (iv) a change in the composition of a majority of
the Company's Board of Directors over a two-year period unless the selection or
nomination of each of the new members was approved by two-thirds of those
remaining members of the Board who were members at the beginning of the
two-year period. These provisions of the Stock Plan may have an anti-takeover
effect.

Grants of ISOs under the Stock Plan will have no immediate tax consequences
to the Company or the employee. If the employee exercises an ISO and does not
dispose of the acquired shares within two years after the grant of the ISO or
within one year after the date of the transfer of such shares to him (a
"disqualifying disposition"), he will realize no compensation income, and any
gain or loss that he realizes on his subsequent disposition of such shares will
be treated as long-term capital gain or loss. For purposes of the alternative
minimum tax, however, the amount by which the fair market value of the acquired
shares at the time of exercise exceeds the option price will be included in
alternative minimum taxable income.
<PAGE>

If an employee makes a disqualifying disposition of shares acquired by the
exercise of an ISO, he will be required to include in income, as compensation,
the lesser of (i) the difference between the option price and the fair market
value of the acquired shares on the exercise date (or the date on which any
substantial risk of forfeiture lapses), and (ii) the amount of gain realized.
In addition, depending upon the amount received as the result of such
disposition, the employee may realize long-term or short-term capital gain or
loss.

The Company will be entitled to a deduction at the same time and in the same
amount as the employee is in receipt of compensation income as a result of a
disqualifying disposition. If there is no disqualifying disposition, no
deduction will be available to the Company.

There will be no federal income tax consequences to either the employee or
the Company on the grant of a non-qualified option. On the exercise of a
non-qualified option, the employee has taxable ordinary income equal to the
excess of the fair market value of the shares of Common Stock received on the
exercise date (or the date on which any substantial risk of forfeiture lapses)
over the option price of the shares. The Company will be entitled to a federal
income tax deduction in an amount equal to such excess, subject to the
limitations on deductibility for discounted options imposed by Section 162(m)
of the Internal Revenue Code. Upon a subsequent sale or taxable exchange of
shares acquired upon exercise of an option, an employee will recognize
long-term or short-term capital gain or loss equal to the difference between
the amount realized on the sale and the tax basis of such shares.

If the Company delivers cash or Common Stock to an employee in lieu of
accepting payment from him upon his exercise either of an ISO or a non-qualifed
stock option, the employee will recognize ordinary income, and the Company will
be entitled to a deduction in an amount equal to the cash paid and the fair
market value as of the date of exercise of any shares delivered to him.

There will be no federal income tax consequences to either the employee or
the Company on the grant of a Limited Right or during the period that the
unexercised Limited Right remains outstanding. Upon the exercise of a Limited
Right, the amount that the employee is paid, whether in Common Stock or cash,
is taxable to the employee as ordinary income and the Company is entitled to a
corresponding deduction, subject to the limitations of Section 162(m) of the
Internal Revenue Code.

An employee normally will not realize taxable income and the Company will
not be entitled to a deduction upon the grant of Restricted Shares until the
shares are no longer subject to a substantial risk of forfeiture (as defined in
the Code), at which time the employee will realize taxable ordinary income in
an amount equal to the fair market value of such number of shares of Common
Stock at that time (less the purchase price paid by the employee, if any), and
the Company will be entitled to a deduction in the same amount, subject to the
limitations of Section 162(m) of the Internal Revenue Code. However, an
employee may make an election to recognize taxable ordinary income in the year
the Restricted Shares are awarded in an amount equal to their fair market value
at the time of the award (less the purchase price paid by the employee, if
any), determined without regard to the restrictions and, in that event, the
Company will be entitled to a deduction in such year in the same amount,
subject to the limitations of Section 162(m) of the Internal Revenue Code.

The termination of restrictions on Restricted Shares or the exercise of any
portion of an option that is accelerated as a result of a Change of Control
Event, or the exercise of a Limited Right, may cause payments with respect to
such Restricted Shares, accelerated options or related Limited Rights to be
treated as "parachute payments" as defined in the Code. Any such parachute
payments may be non-deductible to the Company, in whole or in part, and may
subject the employee to a non-deductible 20% federal excise tax on all or a
portion of such payment (in addition to other taxes ordinarily payable).

If the amendment to the Stock Plan is approved by the stockholders, the
Committee may grant additional stock awards to eligible employees. No decisions
have been made as to the recipients and size of any such awards.

The Board of Directors recommends a vote FOR approval of the amendment to
the Stock Plan, and the enclosed proxy will be voted in favor thereof, unless
the proxy specifically indicates otherwise.
<PAGE>

--------------------------------------------------------------------------------
Appointment of Independent Auditors

Subject to ratification by the stockholders at the Annual Meeting, the Board
of Directors has elected Ernst & Young LLP, independent public accountants, as
auditors of the Company for the fiscal year ending December 31, 1995. The
affirmative vote of a majority of the shares of Common Stock voted at the
Annual Meeting (whether in person or by proxy) is required to approve this
matter. It is expected that representatives of Ernst & Young LLP will attend
the Annual Meeting, will have an opportunity to address the meeting, if they
desire to do so, and will be available to respond to appropriate questions from
stockholders.

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Stockholder Proposals

Any stockholder who wishes to submit a proposal for presentation at the
Company's 1996 Annual Meeting of Stockholders must submit the proposal to the
company, Outlet Communications, Inc., 23 Kenney Drive, Cranston, Rhode Island
02920-4489, Attention: Secretary, no later than January 13, 1996 for inclusion,
if appropriate, in the Proxy Statement and the form of proxy relating to the
1996 Annual Meeting.

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Other Matters

The management of the Company knows of no matters which are to be brought
before the meeting, other than as set forth above. However, if any other
matters properly come before the meeting, it is the intention of the persons
named in the accompanying form of proxy to vote in accordance with their
judgment on such matters.

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Expenses

The cost of preparing, assembling and mailing in connection with this
solicitation of proxies will be borne by the Company. Proxies may be solicited
by regular employees of the Company personally or by mail, telephone or
telegraph.

It is important that proxies be returned promptly. Stockholders are urged to
date and sign the enclosed proxy and return it promptly in the accompanying
envelope.

By Order of the Board of Directors,

Joanne Schenck
Secretary

Cranston, Rhode Island
March 31, 1995
<PAGE>

PROXY PROXY
Outlet Communications, Inc.

ANNUAL MEETING OF STOCKHOLDERS, MAY 2, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of OUTLET COMMUNICATIONS, INC., hereby appoints
Letitia Baldrige, Robert C. Butler and Charles G. Conklin and each of them, with
full power(s) of substitution, the proxies of the undersigned to vote all shares
of Common Stock of OUTLET COMMUNICATIONS, INC., which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the corporation to be
held at 23 Kenney Drive, Cranston, Rhode Island 02920-4489, on Tuesday, May 2,
1995, at 1:00 p.m., local time, and at any adjournments or postponements
thereof, with the same force and effect as the undersigned might or could do if
personally present.

This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR Proposals 1, 2 and 3.

New Address (Continued and to be signed
-------------------------- on the other side)

-------------------------

This proxy will be voted in the Election of [X] Please mark
Directors in the manner described in the your votes
Proxy Statement for the Annual Meeting of as this
Stockholders. example.

------------
COMMON

1. ELECTION OF DIRECTORS 2. PROPOSAL TO APPROVE FOR ADOPTION THE
FOR all nominees WITHHOLD AMENDMENT TO THE 1992 STOCK INCENTIVE
listed below AUTHORITY PLAN. The Board of Directors
(except as marked from all recommend a vote FOR:
to the contrary.) nominees FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ]
The Board of Directors recommends a vote FOR:
James G. Babb, Letitia Baldrige, Robert C. Butler, Stephen J. Carlotti,
Frederick R. Griffiths, Julius Koppelman, James K. Makrianes, Leonard Lieberman,
Victor H. Palmieri, Frank E. Richardson, Frank E. Walsh, Jr., and Solomon M.
Yas.

For, except vote withheld from the following nominee(s):

--------------------------------------------------------------------------

++++
+
+
+

3. PROPOSAL TO RATIFY THE SELECTION OF FOR AGAINST ABSTAIN
ERNST & YOUNG as independent public accountants [ ] [ ] [ ]
for the corporation for the fiscal year ending
December 31, 1995. The Board of Directors
recommend a vote FOR:

4. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.

CHECK HERE FOR ADDRESS CHANGE [ ]

Please sign exactly as name appears below. When shares are held
by joint tenants, both should sign. When signing as an attorney,
executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.

----------------------------------------------------------------
Signature Date

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE FREE ENVELOPE.