SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
Commission File Number 0-16099
Telemundo Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3348686
(State or other jurisdiction of
(I.R.S.Employer
incorporation or organization)
Identification No.)
2290 West 8th Avenue
Hialeah, Florida
33010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code:(305)884-820
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months(or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No __
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court.
Yes X No __
As of August 10, 1995, 10,000,000 shares of Common Stock of
Telemundo Group, Inc. were outstanding.
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
INDEX
Page
No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statements of Operations for the
Three and Six Months Ended June 30, 1995 and 1994 (Unaudited).........2
Consolidated Balance Sheets at June 30, 1995
(Unaudited) and December 31,1994......................................3
Consolidated Statement of Changes in Common Stockholders
Equity for the Six Months Ended une 30, 1995 (Unaudited)..............4
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1995 and 1994 (Unaudited)...................5
Notes to Consolidated Financial Statements (Unaudited)...................6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition ...............8
PART II. OTHER INFORMATION, AS APPLICABLE...............................12
SIGNATURES...............................................................14
<TABLE>
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
<C> <C>
<S> Three Months Ended Six Months Ended
June 30 June 30
------------------------- ---------------------------
Predecessor Predecessor
1995 1994 1995 1994
------------------------------------------------------------------------------------------------------------
Net revenue......................................... $43,540,000 $49,094,000 $ 78,435,000 $87,068,000
Costs and expenses:
Direct operating costs.......................... 20,060,000 23,129,000 40,100,000 45,569,000
Selling, general and administrative expenses
other than network and corporate............. 8,763,000 8,961,000 17,262,000 17,472,000
Network and corporate expenses.................. 8,441,000 9,093,000 17,165,000 18,540,000
Depreciation and amortization................... 2,771,000 2,557,000 5,592,000 5,131,000
------------ ----------- ------------ ------------
40,035,000 43,740,000 80,119,000 86,712,000
------------ ----------- ------------ ------------
Operating loss...................................... 3,505,000 5,354,000 (1,684,000) 356,000
Other income (expense).............................. - - 3,000 (20,000)
Reorganization items................................ - (1,384,000) - (2,688,000)
Interest expense - net of interest income of $31,000
and $110,000 in 1995............................. (3,561,000) (187,000) (7,109,000) (325,000)
Equity in net loss from TeleNoticias................ (1,543,000) (3,088,000) - -
------------ ----------- ------------ ---------
Income (loss) before income taxes................... (1,599,000) 3,783,000 (11,878,000) (2,677,000)
Income tax provision................................ (845,000) (875,000) (1,690,000) (1,745,000)
----------- ----------- - ---------- ----------
Net income (loss)................................... $ (2,444,000) $(2,908,000) $(13,568,000) $(4,422,000)
============ ============ ============ ===========
Net loss per share.................................. $(.24) $* $(1.36) $*
===== == ====== ==
Average number of shares outstanding................ 10,000,000 * 10,000,000 *
========== == ========== ==
<FN>
* As a result of the effects of the Company's reorganization, net loss per share and average number of shares
outstanding are not applicable for the 1994 period.
See notes to consolidated financial statements
</TABLE>
<TABLE>
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION> <C> <C>
<S> June 30 December 31
Assets 1995 1994
------------------------------------------------------------------------------------------
(Unaudited)
Current assets:
Cash and cash equivalents............................... $ 1,088,000 $ 1,850,000
Accounts receivable, less allowance for doubtful
accounts of $2,612,000 and $2,845,000................. 40,486,000 47,673,000
Television programming.................................. 13,046,000 12,410,000
Prepaid expenses and other.............................. 4,916,000 6,296,000
----------- ----------
Total current assets............................... 59,536,000 68,229,000
Property and equipment - net.............................. 60,427,000 62,774,000
Television programming.................................... 3,364,000 3,172,000
Other assets.............................................. 847,000 909,000
Investment in TeleNoticias................................ 2,060,000 4,148,000
Broadcast licenses and reorganization value in
excess of amounts allocable to identifiable assets...... 91,496,000 92,792,000
---------- ----------
$217,730,000 $232,024,000
============ ============
Liabilities and Stockholders' Equity
--------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable......................................... $ 8,020,000 $ 7,308,000
Accrued expenses and other............................... 15,474,000 23,304,000
Television programming obligations....................... 6,620,000 5,292,000
------------ ------------
Total current liabilities............................ 30,114,000 35,904,000
Long-term debt............................................. 105,750,000 100,724,000
Capital lease obligations.................................. 6,972,000 7,263,000
Television programming obligations......................... 657,000 763,000
Other liabilities.......................................... 17,467,000 17,370,000
----------- -----------
160,960,000 162,024,000
Contingencies and commitments
Common stockholders' equity:
Series A common stock, $.01 par value,
14,388,394 shares authorized,5,523,504 and
4,388,394 shares outstanding at June 30, 1995 and
December 31, 1994...................................... 55,000 44,000
Series B common stock, $.01 par value,
5,611,606 shares authorized,4,476,496 and
5,611,606 shares outstanding at June 30, 1995 and
December 31, 1994...................................... 45,000 56,000
Additional paid-in capital............................... 70,238,000 69,900,000
Retained earnings (deficit).............................. (13,568,000) -
------------ ----------
56,770,000 70,000,000
------------ ----------
$217,730,000 $232,024,000
<FN> ============ ============
See notes to consolidated financial statements
</TABLE>
<TABLE>
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS' EQUITY (Unaudited)
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Number of
Shares Common
Outstanding Stock
--------------------------------------------------------------------------------------------------------------------------
Series A Series B Series A Series B Additional Retained Common
Common Common Common Common Paid-In Earnings Stockholders
Stock Stock Stock Stock Capital (Deficit) Equity
-------- ------- -------- ------- ---------- --------- ------------
Balance, December 31, 1994...... 4,388,394 5,611,606 $44,000 $56,000 $69,900,000 $ - $ 70,000,000
Net loss........................ - - - - - (13,568,000) (13,568,000)
Stock option transactions....... - - - - 338,000 - 338,000
Stock conversions............... 1,135,110 (1,135,110) 11,000 (11,000) - - -
---------- -------- ------- ------ ---------- ----------- ------------
Balance, March 31, 1995......... 5,523,604 4,476,496 $55,000 $45,000 $70,238,000 $(13,568,000) $ 56,770,000
========== ========= ======= ======= =========== ============ ============
<FN>
(a) Effect of the cancellation and issuance of options to a former officer.
See notes to consolidated financial statements
</TABLE>
<TABLE>
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
<S> <C> <C>
Predecessor
Six Months Ended March 31 1995 1994
--------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................. $(13,568,000) $ (4,422,000)
Charges not affecting cash:
Depreciation and amortization....................... 5,592,000 5,131,000
Interest accretion on 10.25% Senior Notes........... 742,000 -
Equity in net loss from TeleNoticias................ 3,088,000 -
Changes in assets and liabilities:
Accounts receivable................................. 7,187,000 (137,000)
Television programming.............................. (828,000) (1,634,000)
Television programming obligations.................. 1,222,000 54,000
Accounts payable and accrued expenses and other..... (593,000) 5,447,000
---------- ------------
2,842,000 4,439,000
CASH FLOWS FROM INVESTING ACTIVITY:
Additions to property and equipment.................... (1,868,000) (7,861,000)
Investment in TeleNoticias............................. (1,000,000) -
--------- ----------
(2,868,000) (7,861,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of obligations under capital leases........... (268,000) (294,000)
Advance under revolving credit facility................ 4,500,000 -
Payment under revolving credit facility................ (216,000) -
Payments of reorganization items, liabilities subject
to settlement under chapter 11 proceedings and other
settlement payments.................................. (4,734,000) (8,395,000)
--------- -----------
(736,000) (8,689,000)
Increase (decrease) in cash and cash equivalents....... (762,000) (12,111,000)
Cash and cash equivalents, beginning of period......... 1,850,000 37,675,000
--------- ----------
Cash and cash equivalents, end of period............... $ 1,088,000 $25,564,000
=========== ===========
Supplemental cash flow information:
Interest paid........................................ $ 5,991,000 $ -
=========== ============
Income taxes paid including Puerto Rico withholding
taxes.............................................. $ 1,509,000 $ 1,121,000
=========== ===========
<FN>
See notes to consolidated financial statements
</TABLE>
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
----------------------------------------------------------------------------
1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated
financial statements of Telemundo Group, Inc.
("Telemundo") and subsidiaries (collectively the "Company")
include all adjustments (consisting of normal recurring accruals
only) necessary to present fairly the Companys financial
position at June 30, 1995, and the results of operations and
cash flows for all periods presented. The results of operations
for interim periods are not necessarily indicative of the
results to be obtained for the entire year.
For a summary of significant accounting policies, which have not
changed from December 31, 1994, and additional financial
information, see the Company's Annual Report on Form 10-K for
the year ended December 31, 1994.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
On December 30, 1994 (the Consummation Date), Telemundo
consummated its financial restructuring pursuant to a plan of
reorganization under chapter 11 of the Bankruptcy Code (the
Plan). The period prior to the consummation of the Plan is
presented on a historical cost basis without giving effect to
the reorganization and is separated by a line. For purposes of
these financial statements, the term Predecessor refers to the
Company prior to emergence from chapter 11 reorganization.
Broadcast Licenses and Reorganization Value in Excess of Amounts
Allocable to Identifiable Assets
Broadcast licenses and reorganization value in excess of amounts
allocable to identifiable assets represents the portion of
reorganization value not attributable to specific tangible
assets of the Company at the time of the reorganization. This
value is attributable primarily to FCC broadcast licenses
($84,098,000 before accumulated amortization). Intangible
assets are being amortized on a straight-line basis over periods
ranging from 10 to 40 years. On an ongoing basis, the Company
will continue to review the carrying value of broadcast licenses
and reorganization value in excess of amounts allocable to
identifiable assets and if such review indicates that the value
may not be fully recoverable, the carrying value will be reduced
to estimated fair value.
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Continued)
----------------------------------------------------------------------------
Net Loss Per Share
Net loss per share for the three and six months ended June 30,
1995 is calculated by dividing the net loss by the average
number of shares outstanding during the period. Conversion of
stock options and warrants is not included in the computation as
all stock options and warrants are antidilutive. As a result of
the effects of the reorganization, per share information and
average number of shares outstanding for the 1994 period are not
applicable and therefore have been omitted from the accompanying
financial statements.
Reclassifications
Certain reclassifications have been made in the prior periods
financial statements to conform with the current periods
presentation.
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
----------------------------------------------------------------------------
Introduction
Telemundo Group, Inc. (Telemundo), together with its
subsidiaries (collectively, the Company), is a Spanish
language television network that, through its owned and operated
stations and affiliates, serves 55 markets in the continental
United States, including the 32 largest Hispanic markets, and
reaches approximately 85% of all U.S. Hispanic households. The
Company also owns and operates a television station and related
production facilities in Puerto Rico. The Company produces
Spanish language programming for use on its network and for sale
in foreign countries and sells advertising time on behalf of its
owned and operated television stations and affiliates. The
Company also holds a 42% interest in TeleNoticias del Mundo,
L.P. (TeleNoticias), a 24-hour Spanish language news service
distributed in Latin America, the United States and Europe.
The television broadcasting business is seasonal and the first
half of the calendar year, particularly the first quarter,
generally produces a lower level of revenue due to the reduced
demand for advertising time. Because costs are more ratably
spread throughout the year, the impact of a lower level of
revenue on operating income is more pronounced in the first
half.
Transactions Affecting Comparability of Results of Operations
and Financial Condition
On December 30, 1994, Telemundo consummated its financial
restructuring pursuant to a plan of reorganization under chapter
11 of the Bankruptcy Code. The period prior to the consummation
of the plan of reorganization is presented on a historical cost
basis without giving effect to the reorganization and is
separated by a line. For purposes of these financial
statements, the term Predecessor refers to the Company prior
to emergence from chapter 11 reorganization.
Results of Operations
Net revenue for the three and six month periods ended June 30,
1995 as compared to the corresponding periods of 1994 were as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30 June 30
------------------------- ------------------------
Predecessor Predecessor
1995 1994 Change 1995 1994 Change
------------------------- ------ ------------------------ ------
Net Commercial Air Time:
Continental U.S.:
Network and National Spot... $18,127,000 $22,885,000 (21)% $32,669,000 $40,578,000 (19)%
Local....................... 9,810,000 11,791,000 (17)% 18,398,000 21,466,000 (14)%
----------- ----------- -------- ----------
27,937,000 34,676,000 (19)% 51,067,000 62,044,000 (18)%
Puerto Rico.................. 9,577,000 9,122,000 5 % 15,644,000 15,232,000 3 %
----------- ----------- ---------- ----------
37,514,000 43,798,000 (14)% 66,711,000 77,276,000 (14)%
Other............................. 6,026,000 5,296,000 14 % 11,724,000 9,792,000 20 %
----------- ----------- ---------- ---------
$43,540,000 $49,094,000 (11)% $78,435,000 $87,068,000 (10)%
=========== =========== =========== ===========
</TABLE>
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
----------------------------------------------------------------------------
The decrease in U.S. commercial air time revenue for the three
and six month periods from the comparable periods of the prior
year is the result of an overall decline in audience share
throughout 1994, which continued through February 1995. A
change in audience share typically has a delayed impact on
revenue. In March 1995, the Companys President and Chief
Executive Officer resigned and a new President and Chief
Executive Officer was elected. In addition, the network hired a
new Executive Vice President for Programming and Production. To
attempt to counteract the audience share decline, the Companys
new management has implemented several measures, including re-
arranging the Companys network program schedule, introducing
new programs, and forming a Los Angeles-based production unit
that began producing certain new network programs in late April.
The Company expects that these measures will address
specifically the interests and culture of the largest cross-
section of Hispanics in the United States. The Companys
audience share increased from February 1995 to June 1995.
However, audience share remains below the levels of the
comparable periods of 1994, which will continue to negatively
impact revenue comparisons with the prior year.
The decline in local revenue for the three and six month periods
is the result of the ratings decline, whiche most significantly
impacted KVEA (Los Angeles).
The increase in Puerto Rico commercial air time revenue is the
result of obtaining a greater share of advertising expenditures
due to an increase in WKAQs audience share.
Other revenue increased for the three and six month periods
primarily due to increased sales of blocks of broadcast time,
offset in part by a decrease in international program sales.
Direct operating costs decreased by $3.1 million, or 13%, and by
$5.5 million, or 12%, for the three and six month periods ended
June 30, 1995, respectively, from the corresponding periods of
the prior year. A reduction in the cost of programming in
certain time periods, including network news, primarily
accounted for the decrease. The new programming initiatives
discussed above have not significantly impacted overall
programming costs.
Network and corporate expenses, which represent costs associated
with the network operations center and corporate offices as well
as sales, marketing and other network costs not allocated to
specific television stations, decreased by $652,000, or 7%, and
by $1.4 million, or 7%, respectively, from the corresponding
three and six month periods of the prior year. The decrease
primarily reflects the implementation of certain cost saving
measures in response to the decline in revenue, offset in part
by contracted increases in the cost of the Nielsen national
Hispanic television ratings service.
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
---------------------------------------------------------------------------
Interest expense for the three and six month periods ended June
30, 1995 totaled $3.6 million and $7.1 million, respectively, as
compared to $187,000 and $325,000, respectively, for the
corresponding periods of the prior year. Interest expense
during the three and six month periods ended June 30, 1995
primarily represents interest accrued on the 10.25% Senior Notes
and is offset by $31,000 and $110,000 of interest income.
Interest was not accrued on the Companys public indebtedness
during the 1994 periods because the Company was in
reorganization proceedings. Interest income for the three and
six month periods ended June 30, 1994 was $294,000 and $507,000,
respectively, and was offset against reorganization items.
The Company is in a net operating loss position for federal
income tax purposes, and therefore no federal tax benefit was
recognized for the periods. The income tax provision recorded
in all periods relates to WKAQ, which is taxed separately under
Puerto Rico income tax law, withholding taxes related to
intercompany interest, and certain state and local taxes. The
Companys use of net operating loss carry forwards is
significantly limited due to certain limitations imposed by
Section 382 of the Internal Revenue Code.
Liquidity and Sources of Capital
The Companys cash flows provided by operating activities was
$2.8 million for the six months ended June 30, 1995 as compared
to $4.4 million for the corresponding period of 1994. The
decrease was the result of the net loss, which includes interest
paid during the six months ended June 30, 1995 on the 10.25%
Senior Notes of $6.0 million, offset in part by changes in asset and
liability accounts, primarily collections of accounts receivable.
The Company had working capital of $29.4 million at June 30,
1995.
The Company anticipates that capital expenditures of
approximately $4.5 million will be made during the second half
of 1995 for the general replacement of equipment and
modifications of facilities. Payments under the Companys
capital lease obligations are primarily for its satellite
transponder.
The Companys principal sources of liquidity are cash from
operations and a revolving credit facility. The facility
provides for borrowings of up to $20 million, subject to an
accounts receivable borrowing base, which was maintained at June
30, 1995. At June 30, 1995, $4.5 million was outstanding under
the credit facility.
In July 1994, the Company entered into a partnership agreement
with subsidiaries of Reuters Holdings PLC, an international news
and information organization, Antena 3 de Television, S.A., a
Spanish media company, and
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
----------------------------------------------------------------------------
Arte Radiotelevisivo Argentino, S.A., an Argentinean media
company, to launch a 24-hour international Spanish language news
service. The news service, TeleNoticias, which began
transmitting on December 1, 1994, is produced and distributed
from the Companys network operations centerstudio facilities
in Hialeah, Florida. The Company holds a 42% interest in the
partnership. The Company is required to make cash contributions
to the partnership of up to $6.5 million during the
partnerships first fiscal year, which commenced on September
16, 1994, and up to an aggregate of $10.0 million (less any
amounts contributed during through its sixth the firstfiscal
year) during its second through sixth year. The Company
made cash contributions totaling $5.5 million to the
partnership in 1994, primarily for start up costs. Cash
contributions totaling $1.0 million were made during the six
months ended June 30, 1995 and the Company expects to make
additional cash contributions of approximately $1.5 million during the second
half of 1995. Commencing December 1994, TeleNoticias assumed
production of the Companys network news programs for a six year
period at an initial cost of $5.0 million per year, increasing
by $500,000 each year. In addition, the Company provides certain
services to the partnership including the use of a news studio
in the Companys network operations centerstudio facilities.
The equity in net loss from TeleNoticias represents 42% of
TeleNoticias net loss for the three and six months ended
June 30, 1995 and includes depreciation and amortization of
$168,000 and $336,000, respectively.
In March, 1995, the Companys retirement and savings plan
settled litigation brought against the Companys retirement and
savings plan. The Company paid the settlement amount of
$2.3 million on June 29, 1995 on behalf of the plan, which
amount was accrued for at December 31, 1994.
TELEMUNDO GROUP, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
----------------------------------------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On June 27, 1995, the registrant held its 1995 Annual Meeting of
stockholders. At the meeting, the stockholders elected a board of nine members.
In addition to the election of directors, the stockholders approved the
following at the Annual Meeting: (a) the adoption of the registrants 1994 Stock
Plan, and (b) the compensation payable to certain officers of the registrant.
The votes cast at the meeting were as follows:
Directors Nominees
Series A Directors
For Withheld
Arthur Goldberg 4,149,872 200
Alan Kolod 3,030,700 1,119,372
Barry W. Ridings 4,146,033 4,039
David E. Yurkerwich 4,146,033 4,039
Series B Directors
For Withheld
Leon D. Black 3,380,989 0
Guillermo Bron 3,380,989 0
Roland A. Hernandez 3,380,389 0
Bruce H. Spector 3,380,389 0
Edward M. Yorke 3,380,389 0
Approval of 1994 Stock Plan
For: 5,489,644
Against: 477,220
Abstained: 9,684
Approval of Compensation Payable to Certain Executives
For: 5,638,679
Against: 325,210
Abstained: 12,759
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
10.1 Nonqualified Stock Option Agreement dated
as of June 30, 1995 between the Company and Jose C.
Cancela.
10.2 Nonqualified Stock Option Agreement
dated as of June 30, 1995 between the Company and
Peter J. Housman II.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter
ended June 30, 1995.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
TELEMUNDO GROUP, INC.
(Registrant)
/s/ Peter J. Housman II
-------------------------------------------
Date: August 14, 1995 Peter J. Housman II
(Authorized Officer and Chief Financial Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000806083
<NAME> Telemundo Group, Inc. And Subsidiaries
<S> <C>
<PERIOD-TYPE> QTR-2
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1994
<CASH> 1,088,000
<SECURITIES> 0
<RECEIVABLES> 43,117,000
<ALLOWANCES> 2,631,000
<INVENTORY> 0
<CURRENT-ASSETS> 59,536,000
<PP&E> 64,723,000
<DEPRECIATION> 4,296,000
<TOTAL-ASSETS> 217,730,000
<CURRENT-LIABILITIES> 30,114,000
<BONDS> 101,266,000
<COMMON> 100,000
0
0
<OTHER-SE> 56,670,000
<TOTAL-LIABILITY-AND-EQUITY> 217,730,000
<SALES> 0
<TOTAL-REVENUES> 43,540,000
<CGS> 0
<TOTAL-COSTS> 40,035,000
<OTHER-EXPENSES> 1,543,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,561,000
<INCOME-PRETAX> (1,599,000)
<INCOME-TAX> 845,000
<INCOME-CONTINUING> 2,444,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,444,000)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> (.24)
</TABLE>
NONQUALIFIED STOCK OPTION AGREEMENT
FOR CORPORATE OFFICERS
THIS AGREEMENT, made as of the 30th day of June, 1995
(the "Grant Date"), between Telemundo Group, Inc., a Delaware
corporation (the "Company"), and Jose C. Cancela (the
"Optionee").
WHEREAS, the Company has adopted the 1994 Stock Plan (the
"Plan") in order to provide additional incentive to certain
officers and employees of the Company and its Subsidiaries; and
WHEREAS, the Committee responsible for administration of
the Plan has determined to grant an option to the Optionee as
provided herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee
the right and option (the "Option") to purchase all or any part
of an aggregate of 50,000 whole shares of Stock subject to, and
in accordance with, the terms and conditions set forth in this
Agreement.
1.2 The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422 of the
Code.
1.3 This Agreement shall be construed in
accordance and consistent with, and subject to, the provisions
of the Plan (the provisions of which are incorporated herein by
reference) and, except as otherwise expressly set forth herein,
the capitalized terms used in this Agreement shall have the
same definitions as set forth in the Plan.
2. Purchase Price.
The price at which the Optionee shall be entitled to
purchase shares of Stock upon the exercise of the Option shall
be $14.625 per share.
3. Duration of Option.
The Option shall be exercisable to the extent and in the
manner provided herein for a period of ten years from the Grant
Date (the "Exercise Term"); provided, however, that the Option
may be earlier terminated as provided in Section 6 hereof.
4. Exercisability of Option.
Unless otherwise provided in this Agreement or the Plan,
the Option shall entitle the Optionee to purchase, in whole at
any time or in part from time to time, one-third of the total
number of shares covered by the Option after each of the third,
fourth and fifth anniversaries of the Grant Date if as of the
relevant date the Optionee's employment with the Company has
not been terminated, and each such right of purchase shall be
cumulative and shall continue, unless sooner exercised or
terminated as herein provided, during the remaining period of
the Exercise Term. Any fractional number of Shares resulting
from the application of the foregoing percentages shall be
rounded to the next higher whole number of Shares.
5. Manner of Exercise and Payment.
5.1 Subject to the terms and conditions of this
Agreement and the Plan, the Option may be exercised by delivery
of written notice to the Company, at its principal executive
office. Such notice shall state that the Optionee is electing
to exercise the Option and the number of shares of Stock in
respect of which the Option is being exercised and shall be
signed by the person or persons exercising the Option. If
requested by the Committee, such person or persons shall (i)
deliver this Agreement to the Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii)
provide satisfactory proof as to the right of such person or
persons to exercise the Option.
5.2 The notice of exercise described in Section
5.1 shall be accompanied by the full purchase price for the
shares of Stock in respect of which the Option is being
exercised and by the Withholding Taxes, in cash, by check or,
in the discretion of the Committee, by transferring shares of
Stock to the Company held by the Optionee for more than six
months and having a Fair Market Value on the day preceding the
date of exercise equal to the cash amount for which such shares
of Stock are substituted.
5.3 Upon receipt of notice of exercise and full
payment for the shares of Stock in respect of which the Option
is being exercised and of the Withholding Taxes, the Company
shall, subject to Section 14 of the Plan, promptly take such
action as may be necessary to effect the transfer to the
Optionee of the number of shares of Stock as to which such
exercise was effective, including issuing and delivering such
shares of stock and entering the Optionee's name as a
stockholder of record on the books of the Company.
5.4 The Optionee shall not be deemed to be the
holder of, or to have any of the rights of a holder with
respect to any shares of Stock subject to the Option until (i)
the Option shall have been exercised pursuant to the terms of
this Agreement and the Optionee shall have paid the full
purchase price for the number of shares of Stock in respect of
which the Option was exercised, (ii) the Company shall have
issued and delivered the shares of Stock to the Optionee, and
(iii) the Optionee's name shall have been entered as a
stockholder of record on the books of the Company, whereupon
the Optionee shall have full voting and other ownership rights
with respect to such shares.
6. Termination of Employment.
6.1 Retirement. If the employment of the Optionee
is terminated by the Company or by the Optionee for any reason
other than for Cause or following a Change of Control, the
Optionee may at any time within one year after such termination
of employment (but in no event after the expiration of the
Exercise Term) exercise the Option to the extent, but only to
the extent, that the Option or portion thereof was exercisable
on the date of such termination of employment. On the date of
such termination the Option shall terminate to the extent not
then exercisable. For purposes of this Agreement, an
Optionee's employment will be considered terminated upon (i) an
actual termination, (ii) a change in the Optionee's status,
title, position or responsibilities (including reporting
responsibilities) which, in the Committee's reasonable
judgment, represents a demotion from his status, title,
position or responsibilities as in effect immediately prior
thereto, or (iii) the assignment to the Optionee of any duties
or responsibilities which, in the Committee's reasonable
judgment, are inconsistent with such status, title, position or
responsibilities. In the event of the Optionee's death, the
Option shall be exercisable, to the extent provided in the Plan
and this Agreement, by the legatee or legatees under his will,
or by his personal representatives or distributees and such
person or persons shall be substituted for the Optionee each
time the Optionee is referred to herein.
6.2 Change of Control.
If the Optionee's employment is terminated by the
Company or by the Optionee following a Change in Control the
provisions of Section 7 shall apply.
6.3 Termination for Cause. Notwithstanding
anything to the contrary contained herein, if the employment of
the Optionee is terminated for Cause, the Option shall
terminate on the date of the Optionee's termination of
employment whether or not exercisable.
7. Effect of Change in Control.
Notwithstanding anything contained in the Plan or this
Agreement to the contrary other than the last sentence of this
Section 7, in the event of a Change in Control (A) all Options
outstanding on the date of such Change in Control shall become
immediately and fully exercisable and (B) upon termination of
an Optionee's employment with the Company following a Change in
Control, Options held by such Optionee shall remain exercisable
until the later of (x) one year after termination and (y) sixty
(60) days following the expiration of the Pooling Period (in
the event the Change in Control constitutes a Pooling
Transaction), but in no event beyond the stated term of the
Option. In the case of a Change in Control which also
constitutes a Pooling Transaction, the Board may take such
actions which it determines, after consultation with its
advisors, are reasonably necessary in order to assure that the
Pooling Transaction will qualify as such, including, but not
limited to, providing that all Options specifically identified
by the Committee shall not become immediately and fully
exercisable on the date of the Change in Control but rather
shall become immediately and fully exercisable on the date
following the last day of the Pooling Period (whether or not
the Optionee is then an employee of the Company).
8. Nontransferability.
The Option shall not be transferable other than by will
or by the laws of descent and distribution. During the
lifetime of the Optionee, the Option shall be exercisable only
by the Optionee.
9. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be
interpreted or construed to confer upon the Optionee any right
with respect to continuance of employment by the Company, nor
shall this Agreement or the Plan interfere in any way with the
right of the Company to terminate the Optionee's employment at
any time.
10. Adjustments.
In the event of a Change in Capitalization or if the
number of shares of common stock of the Company outstanding
upon consummation of the Bankruptcy Plan is greater or less
than 10,000,000, the Committee shall conclusively determine the
appropriate adjustments to the number and class of shares of
Stock subject to the Option and the purchase price for such
shares of Stock. The Committee's adjustment shall be made in
accordance with the provisions of Section 4.5 of the Plan
and shall be effective and final, binding and conclusive for
all purposes of the Plan and this Agreement.
11. Certain Events.
Subject to Section 7 hereof, upon the effective date
of (i) the liquidation or dissolution of the Company or (ii) a
merger or consolidation of the Company (a "Transaction"),
the Option shall continue in effect in accordance with its
terms and the Optionee shall be entitled to receive in respect
of all shares of Stock subject to the Option, upon exercise of
the Option, the same number and kind of stock, securities,
cash, property or other consideration that each holder of
shares of Stock was entitled to receive in the Transaction.
12. Withholding of Taxes.
(a) At such times as an Optionee recognizes taxable
income in connection with the receipt of shares of Stock,
securities, cash or property hereunder (a "Taxable Event"), the
Optionee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may
be required by law to be withheld by the Company in connection
with the Taxable Event (the "Withholding Taxes") prior to the
issuance, or release from escrow, of such shares of Stock or
securities or the payment of such cash or such property. The
Company shall have the right to deduct from any payment of cash
to an Optionee or Grantee an amount equal to the Withholding
Taxes in satisfaction of the obligation to pay Withholding
Taxes. In satisfaction of the obligation to pay Withholding
Taxes to the Company, the Optionee may make a written election
(the "Tax Election"), which may be accepted or rejected in the
discretion of the Committee, to have withheld a portion of the
shares then issuable to him having an aggregate Fair Market
Value, on the date preceding the date of such issuance, equal
to the Withholding Taxes, provided that in respect of an
Optionee who may be subject to liability under Section 16(b) of
the Exchange Act either: (i) the Tax Election is made at least
six (6) months prior to the date of the Taxable Event and the
Tax Election is irrevocable with respect to all Taxable Events
of a similar nature occurring prior to the expiration of six
(6) months following a revocation of the Tax Election; or
(ii) in the case of the exercise of an Option (A) the Optionee
makes the Tax Election at least six (6) months after the date
the Option was granted, (B) the Option is exercised during the
ten (10) day period beginning on the third business day and
ending on the twelfth business day following the release for
publication of the Company's quarterly or annual statement of
sales and earnings (a "Window Period") and (C) the Tax Election
is made during the Window Period in which the related Option is
exercised or prior to such Window Period and subsequent to the
immediately preceding Window Period. Notwithstanding the
foregoing, the Committee may, by the adoption of rules or
otherwise, (i) modify the provisions of this Section 12 or
impose such other restrictions or limitations on Tax Elections
as may be necessary to ensure that the Tax Elections will be
exempt transactions under Section 16(b) of the Exchange Act,
and (ii) permit Tax Elections to be made at such other times
and subject to such other conditions as the Committee
determines will constitute exempt transactions under
Section 16(b) of the Exchange Act.
13. Employee Bound by the Plan.
The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions
thereof.
14. Modification of Agreement.
This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but only
by a written instrument executed by the parties hereto.
15. Severability.
Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or invalid
for any reason, the remaining provisions of this Agreement
shall not be affected by such holding and shall continue in
full force in accordance with their terms.
16. Governing Law.
The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York without giving effect to the conflicts of
laws principles thereof.
17. Successors in Interest.
This Agreement shall inure to the benefit of and be
binding upon any successor to the Company. This Agreement
shall inure to the benefit of the Optionee's legal
representatives. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be
final, binding and conclusive upon the Optionee's heirs,
executors, administrators and successors.
18. Resolution of Disputes.
Any dispute or disagreement which may arise under, or as
a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be
determined by binding arbitration. The parties may agree to
submit the matter to a single arbitrator or to several
arbitrators, may require that arbitrators possess special
qualifications or expertise or may agree to submit a matter to
a mutually acceptable firm of experts for decision. In the
event the parties shall fail to thus agree upon terms of
arbitration within twenty (20) days from the first written
demand for arbitration, then such disputed matter shall be
settled by arbitration under the Rules of the American
Arbitration Association, by three arbitrators appointed in
accordance with such Rules. Such arbitration shall be held in
New York City. Once a matter has been submitted to arbitration
pursuant to this section, the decision of the arbitrators
reached and promulgated as a result thereof shall be final and
binding upon all parties. The cost of arbitration shall be
shared equally by the parties and each party shall pay the
expenses of his/its attorneys, except that the arbitrators
shall be entitled to award the costs of arbitration, attorneys
and accountants' fees, as well as costs, to the party that they
determine to be the prevailing party in any such arbitration.
19. Shareholder Approval.
The effectiveness of this Agreement and of the grant of
the Option pursuant hereto is subject to the approval of the
Plan by holders of a majority of voting shares of the Company
on or before six months after the Consummation Date and by the
Board of Directors of the Company.
20. Counterparts.
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
TELEMUNDO GROUP, INC.
By: /s/ Roland A. Hernandez
Name: Roland A. Hernandez
Title: President and Chief
Executive Officer
Attest:
/s/ Jose M. Sariego
Jose M. Sariego, Secretary /s/ Jose C. Cancela
Jose C. Cancela
NONQUALIFIED STOCK OPTION AGREEMENT
FOR CORPORATE OFFICER
---------------------------------
THIS AGREEMENT, made as of the 30th day of June,1995 (the Grant Date),
between Telemundo Group, Inc., a Delaware Corporation (the Company), and Peter
J. Housman II ( the Optionee).
WHEREAS, the Company has adopted the 1994 Stock Plan (the Plan) in order
to provide additional incentive to certain officers and employees of the Company
and its subsidiaries; and
WHEREAS, the Committee responsible for administration of the Plan has
determined to grant an option to the Optionee as provided herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option
1.1 The Company hereby grants to the Optionee the right and option (the Option)
to purchase asll or any part of an aggregate of 50,000 whole shares of stock
subject to, and in accordance with, the terms and conditions set forth in this
Agreement.
1.2 the Option is not intended to qualify as an Incentive Stock Option within
the meaning of Section 422 of the Code.
1.3 This Agreemtn shall be construed in accordance and consistent with, and
subject to, the provisions of the Plan (the provisions of which are incorporated
herein by reference) and, except as otherwise expressly set forth herein, the
capitalized terms used in this Agreement shall have the same definitions as set
forth in the Plan.
2. Purchase Price
The price at which the Optionee shall be entitled to purchase shares of Stock
upon the exercise of the Option shall be $14.625 per share.
3. Duration of Option
The Option shall be exercisable to the extent and in the manner provided herein
for a period of ten years from the Grant Date (the Exercise Term); provided,
however, that the Option may be earlier terminated as provided in Section 6
hereof.
4. Exercise of Option
Unless otherwise provided in this Agreement or the Plan, the Option shall
entitle the Options to Purchase, in whole at anytime or in part from time to
time, one-third of the total number of shares covered by the Option after each
of the third, fourth and fifth anniversaries of the Grant Date if as of the
relevant date the Optionee's employment with the Company has not been terminated
and each such right of purchase shall be cumulative and during the remaining
period of the Exercise Term. Any fractional number of Shares resulting from the
application of the foregoing percentages shall be rounded to the next higher
whole number of Shares.
5. Manner of Exercise and Payment
5.1 Subject to the terms and conditions of this Agreement and the Plan, the
Option may be exercised by delivery of written notice to the Company, at its
principal executive office. Such notice shall state that the Optionee is
electing to exercise the Option and the number of shares of Stock in respect
of which the Option is being exercised and shall be signed by the person or
persons exercising the Option. If requested by the Committee, such person or
persons shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise the
Option.
5.2 The notice of exercise described in Section 5.1 shall be accompanied by
the full purchase price for the shares of Stock in respect of which the Option
is being exercised and by the Withholding Taxes, in cash, by check or, in the
discretion fo the Committee, by transferring shares of Stock to the Company held
by the Optionee for more than six months and having a Fair Market Value on the
day preceeding the date of exercise equal to the cash amount for which such
shares of stock are substituted.
5.3 Upon receipt of notice of exercise and full payment for the shares of Stock
in respect of which the Option is being exercised and of the Withholding Taxes,
the COmpany shall, subject to Section 14 to the Plan, promptly take such action
as may be necessary to effect the transfer to the Optionee of the number of
shares of Stock as to which such exercise was effective, including issuing and
delivering such shares of Stock and entering the Optionee's name as a
stockholder of record on the books of the Company.
5.4 The Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to any shares of Stock subject to the Option
until (i) the Option shall have been exercised pursuant to the terms of this
Agreement and the Optionee shall have paid the full purchase price for the
number of shares of Stock in respect of which the Option was exercised, (ii)
the Company shall have issued and delivered the shares of Stock to the Optionee,
and (iii) the Optionee's name shall have been entered as a stockholder of record
on the books of the Company, whereupon the Optionee shall have full voting and
other ownership rights with respect to such shares.
6 Termination of Employment
6.1 Retirement
If the employment of the Optionee is terminated by the Company or by the
Optionee for any reason other than for Cause or following a Change of Control,
the Optionee may at any time within one year after such termination of
employment (but in no event after the expiration of the Exercise Term) exercise
the Option to the extent, but only tot he extent, that the option or portion
thereof was exercisable on the date of such termination of employment. On the
date of such termination the Option shall terminate to the extent not then
exercisable. For purposes of this Agreement, an Optionees employment will be
considered terminated upon (i) actual termination, (ii) a change in the
Optionee's status, title, position or responsibilities as in effect immediately
prior thereto, or (iii) the assignment to the Optionee of any duties or
responsibilities which, in the committees reasonable judgment, are inconsistent
with such status, title, position or responsibilities. In the extent provided
in the Plan and this Agreement, by the legatee or legatees under his will, or by
his personal representatives or distributees and such Optionee is referred to
herein.
6.2 Change of Control
If the Optionees employment is terminated by the COmpany or by the Optionee
following a Change in Control the provisions of Section 7 shall apply.
6.3 Termination for Cause
Notwithstanding anything to the contrary contained herein, if the employment of
the Optionee is terminated for Cause, the Option shall terminate on the date of
the Optionee's termination of employment whether or not exercisable.
7. Effect of Change in Control
Notwithstanding anything contained in the Plan or this Agreement to the contrary
other than the last sentence of this section 7, in the event of a Change in
Control (A) all options outstanding on the date of scuh Change in Control,
Options held by such Optionee shall remain exercisable until the later of (x)
one year after termination and (y) sixty days following the expiration of the
Pooling Period (in the event the Change in Control consitutes a Pooling
Transaction, the Board may take such actions which it determines, after
consulting with its advisors, are reasonable necessary in order to assure that
the Pooling Transaction will qualify as such, including, but not limited to,
providing that all Options specifically identified by the Comittee shall not
become immediately and fully exercisable on the date of the CHange in COntrol
nut rather shall become immediately and fully exercisable on the date follwoing
the last day of the Pooling Period (whether or not the Optionee is then an
employee of the Company).
8. Nontransferability
The Option shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee.
9. No Right to Continued Employment
Nothing in the Agreement or the Plan shall be interpreted or construed to confer
upon the Optionee any right with respect to continuance of employment by the
Company, nor shall this Agreement or the Plan interfere in any way the right of
the Company to terminate the Optionee's employment at any time.
10. Adjustments
In the event of a Change in Capitalization or if the number of shares of common
stock of the Company outstanding upon consummation of the Bankruptcy Plan is
greater or less than 10,000,000, the committee shall conclusively determine the
appropriate adjustments to the number and class of shares of Stock subject to
the Option and the purchase price for such shares of stock. The committee's
adjustment shall be made in accordance with the provisions of Section 4.5 of the
Plan and shall be effective and final, binding and conclusive for all purposes
of the Plan and this Agreement.
11. Terminating Events
Subject to Section 7 hereof, upon the efffective date of (i) the liquidation or
dissolution of the Company or (ii) a merger of consolidation of the Company (a
transaction), the Option shall continue in effect in accordance with its terms
and the Optionee shall be entitled to receive in respect of all shares of Stock
subject to the Option, upon exercise of the Option, the same number and kind of
stock, securities, cash, property or other consideration that each holder of
shares of stock was entitled to receive in the Transaction.
12. Withholding of Taxes
(a) At such times as an Optionee recognizes taxable income in connection with
the receipt of Share of Stock, securities, cash or property hereunder (a Taxable
Event), the Optionee shall pay to the COmpany an amount equal to the federal,
state and local income taxes and other amounts as may be required by law to be
withheld by the Company in connection with the Taxable Event (the Withholding
Taxes) prior to the issuance, or release from escrow, or such share of stock or
securities or the payment of such cash or such property. The Company shall have
the right to deduct from any payment od cash to an Optionee or Grantee an amount
equal to the Withholding Taxes in satisfaction of the obligation to pay
Withholding Taxes to the Company, the Optionee may make a written election (the
Tax Election), which may be accepted or rejected in the discretion of the
Committee, to have withheld a portion of the shares then issuable to him having
an aggregate Fair Market Value, on the date preceding the date of such issuance,
equal to the Withholding Taxes, provided that in respect of an Optionee who may
be subject to liability underSection 16 (b) of the Exchange Act either: (i) the
Tax Election is made at least sic (6) months prior to the date of the Taxable
Event and the Tax Election is irrevocable with respect to all Taxable Events of
a similar nature occuring prior to the expiration of six (6) months following a
revocation of the Tax Election; or (ii) in the case of the exercise of an Option
(A) the Optionee makes the Tax Election at least six (6) months after the date
the option was granted, (B) the Option is exercised during the ten (10) day
period beginning on the third business day and ending on the twelfth business
day follwoing the release for publication of the Companys quarterly or annual
statement of sales and earnings (a Window Period) and (c) the Tax Election is
made during the Window Period in which the relatd option is exercised or prior
to such Window Period in which the related Option is exercised or prior to such
Window Period and subsequent to the immediately preceding Window Period.
Notwithstanding the foregoing, the Committee may, by the adoption of rules or
otherwise, (i) modify the provisions of this Section 12 or impose such other
restrictions or limitations on Tax Elections as may be necessary to ensure that
the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, and (ii) permit Tax Elections to be made at such other times and
subject to other conditions as the Committee determines will constritute exempt
transactions under Section 16(b) of the Exchange Act.
13. Employee Bound by the Plan
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to
be bound by all the terms and provisions thereof.
14. Modification of Agreement
This agreement may be modified, amended suspended or terminated, and any terms
or conditions may be waived, but only by a written instrument executed by the
parties hereto.
15. Severability
Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreemtn shall not be affected by such holding and shall
continue in full force in accordance with their terms.
16. Governing Law
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of New York without giving effect to
the conflicts of laws principles thereof.
17.
This Agreement shall insure to the benfit of and be binding upon any successor
to the Company. This Agreement shall insure to the benefit of the Optionee's
legal representatives. All obligations imposed upon the Optionee and all
rights granted to the Company under this Agreement shall be final, binding and
conclusive upon the Optionee's heirs, executors, administrators and successors.
18. Resolution of Disputes
Any dispute or disagreemtn which may arise under, or as a result of, or in any
way relate to, the interpretation, construction or application of this Agreement
shall be determined by binding arbitration. The parties may agree to submit the
matter to a single arbitrator or to several arbitrators, may require that
arbitrators possess special qualifications or expertise or may agree to submit a
matter to a mutually acceptable firm of experts for desision. In the event
parties shall fail to thus agree upon terms of arbitration within twenty (20)
days from the first written demand for arbitration, then such disputed matter
shall be settled by arbitration under the Rules pf the American Arbitration
Association, by three arbitrators appointed in accordance with such Rules. Such
arbitration shall be held in New York City. Once a matter has been submitted to
arbitration pursuant to this section, the decision of the arbitrators reached
and promulgated as a result thereof shall be final and binding upon all parties.
The cost of arbitration shall be shared equally by the parties and each party
shall pay the expenses of his/its attorneys, except that the arbitrators shall
be entitled to award the costs of arbitration, attorneys and accountants fees,
as well as costs, to the party that they determine to be the prevailing party
in such arbitration.
19. Shareholder Approval
The affectiveness of this Agreement and of the grant of the Option pursuant
hereto is subject to the approval of the Plan by holders of a majority of the
voting shares of the COmpany on or before six months after the Consummation Date
and by the Board of Directors of the Company.
20. Counterparts
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an oriinal, but all of which together shall constitute one and the
same instrument.
TELEMUNDO GROUP, INC.
By: /s/ Roland A. Hernandez
Roland A. Hernandez
President and Chief Executive
Officer
Attest:
/s/ Jose M. Sariego
Jose M. Sariego, Secretary
/s/ Peter J. Housman II
Peter J. Housman II
