<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14A-12
TELEMUNDO GROUP, INC.
(Name of Registrant as Specified in Its Charter)
Peter J. Housman II
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:(1)
(4) Proposed maximum aggregate value of transaction:
/ / 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:
- - -------------------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
TELEMUNDO GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 12, 1996
The Annual Meeting of Stockholders of Telemundo Group, Inc., a Delaware
corporation (the "Company"), will be held at the Sheraton New York Hotel, 811
Seventh Avenue, New York, New York on Wednesday, June 12, 1996, beginning at
10:00 a.m.
At the meeting, stockholders will be asked to:
1. Elect nine directors to serve for the ensuing year or until their
successors are duly elected and qualified.
2. Transact any other business that may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on May 9, 1996 will be
entitled to notice of, and to vote at, the meeting. A list of such stockholders
will be available for inspection at the offices of the Company, 2290 West 8th
Avenue, Hialeah, Florida, during normal business hours during the ten-day period
prior to the meeting.
Your attention is directed to the accompanying Proxy Statement. Please
mark, sign and date the enclosed proxy card and mail it promptly in the
accompanying envelope. This will enable your shares to be voted in accordance
with your instructions.
BY ORDER OF THE BOARD OF DIRECTORS
Peter J. Housman II
Chief Financial Officer and Treasurer
Miami, Florida
May 13, 1996
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED
ENVELOPE. IF YOU ARE ABLE TO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND
VOTE YOUR SHARES IN PERSON.
<PAGE>
PROXY STATEMENT
TELEMUNDO GROUP, INC.
2290 WEST 8TH AVENUE
HIALEAH, FLORIDA 33010
_________________________________________
ANNUAL MEETING OF STOCKHOLDERS
JUNE 12, 1996
_________________________________________
GENERAL
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Telemundo Group, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be
held at the Sheraton New York Hotel, 811 Seventh Avenue, New York, New York on
Wednesday, June 12, 1996 beginning at 10:00 a.m. local time and at any
adjournment thereof. At the Annual Meeting, stockholders will be requested
to act upon the matters set forth in this Proxy Statement. If you are not
present in person at the meeting, your shares can be voted only when
represented by proxy. The shares represented by your proxy will be voted in
accordance with your instructions if the proxy is properly completed, signed
and returned to the Company prior to the Annual Meeting. If no choice is
specified, the shares represented by the proxy will be voted for the election
of all nominees for director. A proxy given pursuant to this solicitation may
be revoked at any time prior to its exercise by written notice delivered to
the Chief Financial Officer and Treasurer of the Company, by executing and
delivering to the Chief Financial Officer and Treasurer a proxy with a later
date, or by attending the Annual Meeting and voting in person.
Solicitation of proxies will be made initially by mail. The Company's
directors, officers and employees may also solicit proxies in person or by
telephone without additional compensation. In addition, proxies may be
solicited by certain banking institutions, brokerage firms, custodians,
trustees, nominees and fiduciaries who will mail material to or otherwise
communicate with the beneficial owners of shares of the Company's Common Stock,
$.01 par value ("Common Stock"). The cost of this solicitation will be borne by
the Company. The Company's Annual Report to Stockholders for the year ended
December 31, 1995 accompanies this Proxy Statement, and it is anticipated that
this Proxy Statement and accompanying proxy and other materials will be mailed
on or about May 13, 1996 to stockholders of record on May 9, 1996.
The Company's only class of voting securities is its Common Stock, which is
divided into Series A Common Stock (the "Series A Common Stock") and Series B
Common Stock (the "Series B Common Stock"). Only stockholders of record at the
close of business on May 9, 1996 are entitled to notice of and to vote at the
Annual Meeting. Each share of Common Stock entitles the holder thereof to one
vote on all matters properly brought before the Annual Meeting, except that,
under the Company's Restated Certificate of Incorporation ("Restated
Certificate"), five of the nine members of the Board of Directors will be
<PAGE>
elected by the holders of the Series B Common Stock ("Series B Directors"),
voting separately as a series, and the remaining four directors will be elected
by the holders of the Series A Common Stock ("Series A Directors"), voting
separately as a series. The presence, in person or by proxy, of a majority of
the shares entitled to vote is necessary to constitute a quorum at the Annual
Meeting. With respect to the election of directors, a majority of the
outstanding shares of Series A Common Stock, present in person or represented
by proxy, is necessary to constitute a quorum for purposes of electing the
Series A Directors, and a majority of the outstanding shares of Series B
Common Stock, present in person or represented by proxy, is necessary to
constitute a quorum for purposes of electing the Series B Directors.
Directors are elected by a plurality of the votes of the shares eligible to
vote present in person or represented by proxy at the Annual Meeting, with
the Series A Directors receiving the highest number of Series A Common Stock
votes and the Series B Directors receiving the highest number of Series B
Common Stock votes being elected to the Board of Directors. In the case of
the approval of any other proposals which may properly come before the Board
of Directors, except as required by law or the Restated Certificate, the
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting and entitled
to vote is required for approval of each such proposal.
Shares that are entitled to vote but that are not voted at the direction of
the beneficial owner ("abstentions"), shares represented by proxies or ballots
that are marked "withhold authority" with respect to the election of any one or
more nominees for election as directors, and votes withheld by brokers in the
absence of instruction from beneficial holders ("broker nonvotes") will be
counted for the purpose of determining whether there is a quorum for the
transaction of business at the Annual Meeting. In determining whether a matter
requiring approval of a majority of the shares present and entitled to vote has
been approved or whether a plurality of the shares present and entitled to vote
has been voted, abstentions and withheld votes will have the same effect as a
vote against and broker nonvotes will be disregarded and will have no effect on
the outcome of the vote.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At April 18, 1996, there were approximately 106 holders of record of the
Company's Common Stock, which is the only class of capital stock of the Company
outstanding. As discussed under the caption "General" above, the Company's
Common Stock is divided into Series A Common Stock and Series B Common Stock.
At April 18, 1996, there were 6,414,864 shares of Series A Common Stock and
3,585,336 shares of Series B Common Stock outstanding.
Except as noted below, the following table sets forth, to the knowledge
of the Company based upon information provided by the holders set forth below
or publically available filings, information regarding the ownership of the
Company's Common Stock at April 18, 1996 by (a) all persons known to the
Company to be the beneficial owners of more than 5% of the Company's Series A
Common Stock or Series B Common Stock outstanding at April 18, 1996, (b) each
director and named executive officer of the Company, and (c) all directors
and executive officers of the Company as a group. Except as noted below, to
the Company's knowledge, each such owner has sole voting and investment power
for the shares indicated as beneficially owned by them.
-2-
<PAGE>
<TABLE>
<CAPTION>
SERIES A COMMON STOCK SERIES B COMMON STOCK
---------------------- ----------------------
AMOUNT AND AMOUNT AND AMOUNT AND PERCENTAGE
NATURE OF NATURE OF NATURE OF OF TOTAL
BENEFICIAL PERCENTAGE BENEFICIAL PERCENTAGE BENEFICIAL COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS OWNERSHIP OF CLASS OWNERSHIP STOCK
- - ---------------------------- ---------- ---------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
5% OR GREATER STOCKHOLDERS
Bastion Capital Fund, L.P. 864,997 13.5% 882,688 24.6% 1,747,685(2) 17.5%
Suite 2960
1999 Avenue of the Stars
Los Angeles, CA 90067(1)
TLMD Partners II, L.L.C. 41,776(3) * 1,550,465 43.2 1,592,241(3) 15.9
c/o Apollo Advisors, L.P.
Two Manhattanville Road
Purchase, NY 10577(1)
Odyssey Partners 262,940 4.1 273,671 7.6 536,611(4) 5.4
31 West 52nd Street
New York, New York 10019
Hernandez Partners 49,998 * 450,001 12.6 499,999(5) 5.0
900 S. Garfield Avenue
Alhambra, CA 91801(1)
Reliance Group Holdings, Inc. 364,158 5.6 -- -- 364,158(6) 3.6
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
SERIES A COMMON STOCK SERIES B COMMON STOCK
________________________ __________________________
AMOUNT AND AMOUNT AND AMOUNT AND PERCENTAGE
NATURE OF NATURE OF NATURE OF OF TOTAL
BENEFICIAL PERCENTAGE BENEFICIAL PERCENTAGE BENEFICIAL COMMON
NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS OWNERSHIP OF CLASS OWNERSHIP STOCK
- - ------------------------ ------------ ----------- ---------- ---------- --------- ----------
DIRECTORS AND NOMINEES
FOR DIRECTOR
<S> <C> <C> <C> <C> <C> <C>
Leon D. Black(1) 2,933 * % 200,000 5.6% 202,933 2.0%
Guillermo Bron(1) 864,997 13.5 882,688 24.6 1,747,685(2) 17.5
Alan Kolod 500 * -- -- 500 *
Barry W. Ridings -- -- -- -- -- --
Bruce H. Spector -- -- -- -- -- --
Daniel D. Villanueva 864,997 13.5 882,688 24.6 1,747,685(2) 17.5
Edward M. Yorke -- -- -- -- -- --
David E. Yurkerwich 1,000 * -- -- 1,000 *
NAMED EXECUTIVE OFFICERS
Roland A. Hernandez(1)(7) 178,123 2.7 450,001 12.6 628,124(5) 6.2
Joaquin F. Blaya(7) 150,000 2.3 -- -- 150,000 1.5
Stephen J. Levin(7) 12,500 * -- -- 12,500 *
Jose C. Cancela(7) 10,000 * -- -- 10,000 *
Peter J. Housman II(7) -- -- -- -- -- --
Stuart Livingston(7) 2,500 * -- -- 2,500 *
Gustavo Pupo Mayo(7) -- -- -- -- -- --
All directors and executive 1,072,553 16.4 1,532,689 42.7 2,605,242 25.7
officers as a group
</TABLE>
- - -----------------------------
*Less than 1%
-4-
<PAGE>
(1) TLMD Partners II, L.L.C., a Delaware limited liability company ("TLMD
Partners"), Bastion Capital Fund, L.P., a Delaware limited partnership
("Bastion"), Hernandez Partners, a California partnership ("Hernandez
Partners"), and Mr. Black (collectively, the "Major Stockholders"),
collectively own 917,930 shares of Series A Common Stock, constituting 14.3%
of the Series A Common Stock outstanding (excluding warrants described in
Footnote 3), and 3,083,154 shares of Series B Common Stock, constituting
86.0% of the Series B Common Stock outstanding. In total, the Major
Stockholders own 4,001,084 shares of Common Stock, constituting 40.0% of the
Common Stock outstanding.
The Major Stockholders have entered into a Shareholders Agreement dated as
of December 20, 1994, as amended (the "Shareholders Agreement"), pursuant to
which each of them has agreed subject to the provisions of the Shareholders
Agreement, among other things, to use its reasonable best efforts to cause
Mr. Black (or his nominee), two nominees of TLMD Partners, a nominee of
Bastion and a nominee of Hernandez Partners to be elected to the Board of
Directors of the Company. Pursuant to the Shareholders Agreement, the Major
Stockholders have agreed that all of the shares of Common Stock owned by each
of them will be voted by a voting committee comprised of three members, one
of which is appointed by TLMD Partners, one of which is appointed by Bastion
and one of which is an independent member (as defined in the Shareholders
Agreement). Currently, the members of the voting committee are John J.
Hannan, a principal and limited partner of Apollo Advisors, L.P., a Delaware
limited partnership ("Apollo Advisors"), Mr. Bron, a director of the Company,
and Alan Abramson, a private investor. The addresses of Messrs. Hannan, Bron
and Abramson are c/o Apollo Management, L.P., 1301 Avenue of the Americas,
New York, NY 10019, c/o Bastion Capital Fund, L.P., 1999 Avenue of the Stars,
Suite 2960, Los Angeles, CA 90067, and c/o Abramson Brothers Inc., 501 5th
Avenue, New York, New York 10017, respectively. The parties to the
Shareholders Agreement have appointed the voting committee as their
attorney-in-fact and proxy to vote all shares of Common Stock owned by such
parties as to which a vote of stockholders is required (including as relates
to the election of directors as contemplated above). The Shareholders
Agreement (other than certain provisions relating to the rights of Major
Stockholders other than TLMD Partners to participate in certain sales of
Common Stock by TLMD Partners and specified transferees) will terminate on
the earlier of the date when no shares of Series B Common Stock are
outstanding and the date when TLMD Partners ceases to own shares of Series B
Common Stock representing at least 245,003 shares of Series B Common Stock.
The Shareholders Agreement (other than such sale participation rights) may
also be terminated as of the date specified by TLMD Partners in a written
notice delivered to the other Major Stockholders, subject to the receipt of
any regulatory approvals.
Each Major Stockholder disclaims beneficial ownership of any shares of
Common Stock which it does not directly own.
(2) The sole general partner of Bastion is Bastion Partners, L.P., a
Delaware limited partnership ("Bastion Partners"). The only general partners
of Bastion Partners are Bron Corp., a Delaware corporation ("BC"), Villanueva
Investments, Inc., a Delaware corporation ("VII") and Juran Investments,
Inc., a Delaware Corporation ("Juraco"). The sole holder of voting stock and
the sole director and officer of BC is Mr. Bron. The sole holder of voting
stock of VII is the Daniel Villanueva Living Trust, a trust created under the
laws of California, the co-trustees of which are Daniel D. Villanueva and
Myrna E. Villanueva. Mr. Villanueva is the sole director and principal
officer of VII. The sole holder of voting stock and the sole director and
officer of Juraco is Mr. Jan G. Juran. Messrs. Bron, Villanueva and Juran are
the managing directors of Bastion Capital Corp., which manages the affairs of
Bastion pursuant to a management agreement.
(3) Includes warrants expiring December 30, 1999 representing the immediate
right to purchase 41,774 shares of Series A Common Stock at an exercise price
of $7.00 per share. Warrants to purchase 29,242 shares of Series A Common
Stock are beneficially owned by Lion Advisors, L.P., a Delaware limited
partnership ("Lion Advisors") for the benefit of an investment account under
management over which Lion Advisors has exclusive voting, dispositive and
investment power. The remaining warrants to purchase 12,532 shares of Series
A Common Stock are owned by AIF II, L.P., a Delaware limited partnership
("AIF II"). AIF II is the manager of TLMD Partners and has sole dispositive
-5-
<PAGE>
power with respect to the securities held by TLMD Partners. Mr. Black, Mr.
Spector and Mr. Yorke are associated with Apollo Advisors and Lion Advisors.
TLMD Partners, Mr. Black, Mr. Spector and Mr. Yorke disclaim beneficial
ownership of all securities not held directly by any of them.
(4) The information with respect to Odyssey Partners, L.P. and its beneficial
ownership of shares of the Company's Common Stock is based on the Schedule
13D filed with the Securities and Exchange Commission, which was last amended
on December 22, 1995.
(5) The general partners of Hernandez Partners are Roland A. Hernandez, the
President and Chief Executive Officer of the Company, and Enrique Hernandez,
Jr., his brother. Each of the general partners of Hernandez Partners has
dispositive and voting power with respect to the shares of Common Stock held
by Hernandez Partners, except as described in footnote (1) above. Amounts
for Mr. Hernandez include options representing the immediate right to
purchase 128,125 shares of Series A Common Stock. See "--Employment and
Severance Agreements."
(6) Of the amount shown, 82 shares are held beneficially by Reliance Group
Holdings, Inc. ("RGH") and 364,076 shares are held beneficially by Reliance
Insurance Company ("RIC"), an indirect wholly owned subsidiary of RGH.
Includes warrants to purchase 32 shares of Series A Common Stock beneficially
owned by RIC and warrants to purchase six shares of Series A Common Stock
beneficially owned by RGH, both at an exercise price of $7.00 per share,
which warrants are immediately exercisable until December 30, 1999. Also
includes warrants beneficially owned by RIC to purchase 138,889 shares of
Series A Common Stock at an exercise price of $7.19 per share, which warrants
are immediately exercisable until December 30, 2000. Does not include
warrants beneficially owned by RIC to purchase 277,778 shares of Series A
Common Stock at an exercise price of $7.19 per share, one-half of which
warrants become exercisable on each of December 30, 1996 and 1997 for
five-year periods from the date they become exercisable.
(7) Messrs. Hernandez, Blaya, Levin, Cancela, Housman, Livingston and
Pupo-Mayo are named in the "Summary Compensation Table" under the section
captioned "Executive Compensation" below. Messrs. Hernandez, Levin,
Cancela, Housman, and Livingston are presently executive officers of the
Company. Mr. Blaya was President and Chief Executive Officer and a director
of the Company until March 1995. "All directors and executive officers as a
group" excludes amounts related to Mr. Blaya. Mr. Pupo-Mayo ceased being an
executive officer of the Company in August 1995. Shares held include options
representing the immediate right to purchase the following shares of Series A
Common Stock: Messrs. Hernandez 128,125, Blaya 150,000, Levin 12,500, and
Livingston 2,500. See "--Employment and Severance Agreements".
-6-
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors has nominated the persons described below for
election as directors at the Annual Meeting. Of the nominees for director,
five will be voted upon by the holders of the Series B Common Stock voting
separately as a series. Those nominees are Leon D. Black; Guillermo Bron;
Roland A. Hernandez; Bruce H. Spector; and Edward M. Yorke (the "Series B
Nominees"). The remaining four nominees will be voted upon by the holders of
the Series A Common Stock voting separately as a series. Those nominees are
Alan Kolod; Barry W. Ridings; Daniel D. Villanueva; and David E. Yurkerwich
(the "Series A Nominees").
The Major Stockholders collectively own 86.0% of the outstanding shares
of Series B Common Stock as of April 18, 1996. See "Security Ownership of
Certain Beneficial Owners and Management." If the Major Stockholders vote
their shares of Series B Common Stock in favor of the Series B Nominees, such
nominees will be assured of election to the Board of Directors.
THE BOARD OF DIRECTORS HAS NOMINATED EACH OF THESE PERSONS AND RECOM-
MENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THEM TO SERVE UNTIL THE NEXT
ANNUAL MEETING OF STOCKHOLDERS OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY
ELECTED AND QUALIFIED. UNLESS OTHERWISE SPECIFIED THEREIN, PROXIES SOLICITED
BY THE BOARD WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES.
The following is a brief description of each nominee:
SERIES B NOMINEES
LEON D. BLACK, 44, became Chairman of the Board of Directors of the
Company as of December 30, 1994 upon consummation of the Company's Chapter 11
plan of reorganization (the "Reorganization"). Mr. Black is one of the founding
principals and a limited partner of Apollo Advisors which, together with an
affiliate, acts as managing general partner of AIF II and Apollo Investment
Fund III, L.P., private securities investment funds. AIF II is the manager of
TLMD Partners. Mr. Black also is a founding principal of Lion Advisors which
acts as financial advisor to and representative for certain institutional
investors with respect to securities investments. Mr. Black is a director of
Samsonite, Inc., Big Flower Press, Inc., Converse, Inc., Furniture Brands
International, Inc., Culligan Water Technologies, Inc., and Gillett Holdings,
Inc.
GUILLERMO BRON, 44, became a director of the Company as of December 30,
1994 upon consummation of the Reorganization. From July 1994 to the present,
Mr. Bron has been an officer, director and principal stockholder of the
corporate general partner of Bastion Partners, which is the general partner
of Bastion, an investment fund and a principal stockholder of the Company.
Mr. Bron is a director of Pan American Bank. Since 1990, Mr. Bron also has
been President of Bastion Capital Corp. a financial advisory firm.
ROLAND A. HERNANDEZ, 38, has been a Director of the Company since
August 1989 and was reappointed to office as of December 30, 1994 upon
consummation of the Reorganization. In March 1995, the Board of Directors
installed Mr. Hernandez as President and Chief Executive Officer of the
Company. Since 1987, Mr. Hernandez has been an executive officer of the
corporate general partner of Interspan Communications ("Interspan"), a
California limited partnership that owns Spanish-language television station
-7-
<PAGE>
KFWD, Channel 52, a Company affiliate serving the Dallas/Fort Worth market.
Mr. Hernandez is a director of Beneficial Corporation. See "--Related Party
Transactions."
BRUCE H. SPECTOR, 53, became a director of the Company as of
December 30, 1994 upon consummation of the Reorganization. Since October 1992,
Mr. Spector has been a consultant to Apollo Advisors. In March 1995,
Mr. Spector became a principal of Apollo Advisors. For 25 years prior to 1992,
Mr. Spector was a member of the Los Angeles law firm of Stutman Triester &
Glatt. Mr. Spector is a director of Gillett Holdings, Inc. and United
International Holdings, Inc.
EDWARD M. YORKE, 37, became a director of the Company as of June 1995.
Since 1992, Mr. Yorke has been a principal of Apollo Advisors and Lion
Advisors and since March 1995 of Apollo Advisors II, L.P. From 1990 to 1992,
Mr. Yorke was a Vice President in the high-yield capital markets group of BT
Securities Corp., an investment banking firm. Mr. Yorke is a director of Aris
Industries, Inc., Big Flower Press, Inc., Salant Corporation and Webcraft
Technologies, Inc.
SERIES A NOMINEES
ALAN KOLOD, 47, became a director of the Company as of December 30, 1994
upon consummation of the Reorganization. Mr. Kolod has been a member of the
New York law firm Moses & Singer LLP since December 1989.
BARRY W. RIDINGS, 44, became a director of the Company as of March 1995.
Mr. Ridings has been a Managing Director of the investment banking firm Alex.
Brown & Sons Incorporated ("Alex. Brown") since March 1990. Mr. Ridings is
a director of Noodle Kidoodle, Inc., New Valley Corporation, Norex America,
Inc., SubMicron Systems Corporation and TransCor Waste Services Inc. See
"--Related Party Transactions".
DANIEL A. VILLANUEVA, 58, became a director of the Company as of April
26, 1996. From July 1994 to the present, Mr. Villanueva has been an officer,
director and principal stockholder of the corporate general partner of
Bastion Partners, which is the general partner of Bastion, an investment fund
and a principal stockholder of the Company. Since 1990, Mr. Villanueva also
has been Chairman of Bastion Capital Corp, a financial advisory firm.
Mr. Villanueva has over 25 years experience as an executive in Spanish-
language television, having served in various capacities at the Univision
Group or its predecessor from 1964 to 1990.
DAVID E. YURKERWICH, 43, became a director of the Company as of
March 1995. Mr. Yurkerwich is a founder and Vice Chairman of Peterson
Consulting L.P., a litigation, dispute and economic consulting firm of which
Mr. Yurkerwich has been a member since 1980.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is the name, age and position of each of the executive
officers of the Company:
NAME AGE POSITION
- - ---- --- --------
Roland A. Hernandez 38 President and Chief Executive Officer,
and Director
Jose C. Cancela 38 Executive Vice President
Stephen J. Levin 47 Executive Vice President
Peter J. Housman II 44 Chief Financial Officer and Treasurer
Stuart Livingston 38 Senior Vice President, Operations and
Administration and Secretary
-8-
<PAGE>
Mr. Hernandez's background is described under the caption "Election of
Directors" above.
Jose C. Cancela became Executive Vice President of the Company in April
1995. From June 1992 until April 1995, he served as President, Station Group
of the Company. From November 1988 until June 1992, he served as General
Manager of WLTV, a Spanish-language television station in Miami, and from
September 1991 until June 1992 he also served as Senior Vice President of
Univision Station Group, Inc.
Stephen J. Levin became Executive Vice President of the Company in April
1995. From November 1993 to March 1995, Mr. Levin was Sales Manager for
National Cable Advertising, Inc., a broadcast time sales company. From
February 1993 to October 1993, he was a marketing consultant to various radio
and television broadcasting companies. From June 1991 to November 1992, Mr.
Levin served as General Manager of WNJU, the Company's station serving the New
York market, and from February 1989 to June 1991, Mr. Levin was the General
Manager of KVEA, the Company's station serving the Los Angeles market.
Peter J. Housman II became Chief Financial Officer and Treasurer of the
Company in February 1987. From February 1991 until April 1995, he also served
as President, Business and Corporate Affairs of the Company. Mr. Housman
served as Senior Vice President of the Company from February 1987 until
February 1991.
Stuart Livingston became Senior Vice President, Operations and
Administration of the Company in April 1995 and Secretary in September 1995.
From January 1994 to March 1995, Mr. Livingston was Vice President of
Affiliate Relations for the Univision network. From September 1989 to
December 1993, Mr. Livingston was Vice President of Broadcast Operations of
Univisa, Inc., a U.S. subsidiary of Grupo Televisa, S.A., a Mexican media
company.
Officers are not elected for a fixed term of office but serve at the
discretion of the Board of Directors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
for services in all capacities to the Company for the years ended December 31,
1995, 1994, and 1993 paid to (a) the Chief Executive Officer and the former
Chief Executive Officer, (b) the other four most highly compensated executive
officers of the Company during 1995, and (c) a former executive officer who
would have been one of the four most highly compensated executive officers of
the Company (collectively, the "Named Executives"). Roland A. Hernandez
-9-
<PAGE>
became the Chief Executive Officer of the Company and Stephen J. Levin and
Stuart Livingston became executive officers of the Company in early 1995. The
amounts shown in the table for 1995 with respect to Messrs. Hernandez, Levin
and Livingston are payments from the dates they became executive officers.
Mr. Blaya resigned as President and Chief Executive Officer of the Company in
March 1995 and Mr. Pupo-Mayo ceased being an executive officer of the Company
in August 1995. The amounts shown in the table for Messrs. Blaya and Pupo-Mayo
for 1995 are payments for the full year, including amounts paid to each of
them after the dates on which they ceased being executive officers of the
Company pursuant to agreements described in "--Employment and Severance
Agreements".
-10-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSA-
ANNUAL COMPENSATION TION AWARDS
------------------------------- -----------
ANNUAL SECURITIES ALL OTHER
SALARY BONUS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION DURING 1995 YEAR ($)(3) ($)(1) OPTIONS (#) ($)(2)(3)
- - --------------------------------------- ---- ------ ------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Roland A. Hernandez.................... 1995 616,799 624,400 512,500(4) 962
President and Chief Executive Officer 1994 0 0 0 0
1993 0 0 0 0
Joaquin F. Blaya....................... 1995 900,000 0 150,000 456,103
Former President and Chief 1994 840,577 0 500,000(5) 7,778
Executive Officer 1993 722,558 682,966 0 15,414
Stephen J. Levin....................... 1995 247,610 174,870 50,000(4) 2,250
Executive Vice President 1994 0 0 0 0
1993 0 0 0 0
Jose C. Cancela........................ 1995 400,000 0 50,000 7,391
Executive Vice President 1994 380,773 0 50,000(6) 1,483
1993 330,192 317,283 0 9,187
Peter J. Housman II.................... 1995 325,000 50,000 50,000 7,391
Chief Financial Officer and Treasurer 1994 306,730 0 50,000(6) 6,103
1993 271,231 260,580 0 15,414
Stuart Livingston...................... 1995 190,379 50,000 10,000(4) 6,870
Senior Vice President, 1994 0 0 0 0
Operations and Administration 1993 0 0 0 0
and Secretary
Gustavo Pupo-Mayo...................... 1995 324,847 0 0 1,483
Senior Vice President, 1994 239,792 83,900 0 1,483
News and Public Affairs 1993 200,000 91,000 0 3,513
</TABLE>
____________________
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(1) Bonus amounts represent compensation for services rendered for the
respective years shown and were paid at the beginning of the subsequent year.
Mr. Hernandez' bonus for 1995 was paid in 1996 upon certification by the
Compensation and Stock Option Committee that 1995 performance targets had
been met.
(2) The following amounts are included in the above table. Company
retirement contributions and matching 401(k) contributions: Mr. Hernandez $0
for 1995; Mr. Blaya $13,931 for 1993, $4,620 for 1994 and $4,620 for 1995;
Mr. Levin $1,288 for 1995; Mr. Cancela $7,704 for 1993, $0 for 1994 and
$5,908 for 1995; Mr. Housman $13,931 for 1993, $4,620 for 1994 and $5,908 for
1995; Mr. Livingston $5,908 for 1995; Mr. Pupo-Mayo $2,030 for 1993, $0 for
1994 and $0 for 1995. Life insurance policy premiums paid by the Company:
Mr. Hernandez $962 in 1995; Mr. Blaya $1,483 in 1993, $3,158 in 1994 and
$1,483 in 1995; Mr. Levin $962 in 1995; Mr. Cancela $1,483 in 1993, $1,483 in
1994 and $1,483 in 1995; Mr. Housman $1,483 in 1993, $1,483 in 1994 and
$1,483 in 1995; Mr. Livingston $962 in 1995; Mr. Pupo-Mayo $1,483 in 1993,
$1,483 in 1994 and $1,483 in 1995. In addition, Mr. Blaya's "All Other
Compensation" includes $450,000 for exercisable options granted in 1995 to
purchase 150,000 shares of Series A Common Stock at $7.00 per share, when the
grant date market price of the Series A Common Stock was $10.00 per share.
See "--Employment and Severance Agreements" below.
(3) Amounts for Messrs. Blaya and Pupo-Mayo include payments subsequent
to the dates in which they ceased being executive officers of the Company.
See "--Employment and Severance Agreements" below.
(4) These options are subject to the Company achieving certain
performance levels, one-fourth of these options became exercisable in 1996
upon certification by the Compensation and Stock Option Committee that the
1995 performance levels had been met. See "--Employment and Severance
Agreements" below.
(5) These options were canceled in March 1995. See "--Employment and
Severance Agreements" below.
(6) These options were subject to the Company achieving certain
performance levels during the first six months of 1995 which were not
achieved. See "--Employment and Severance Agreements" below.
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<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS
In 1995, the Company entered into a three-year employment agreement with
Mr. Hernandez commencing March 9, 1995 and ending March 1, 1998. The agree-
ment provides for an annual base salary of $700,000 during his term of
employment. Upon the Company achieving certain performance goals based on the
operating income before depreciation and amortization (subject to certain
adjustments) ("Adjusted EBITDA"), Mr. Hernandez is eligible for an annual
bonus of up to 150% of his annual base salary. Pursuant to the agreement, the
Company entered into a stock option agreement with Mr. Hernandez on March 9,
1995 under which he was granted options to purchase 512,500 shares of Series A
Common Stock at an exercise price of $10.00 per share, exercisable for a
period of 10 years, upon the Company achieving certain performance goals based
on Adjusted EBITDA. One-fourth of these options become exercisable upon
certification by the Compensation and Stock Option Committee that the Company
has attained 90% of the established performance targets for each fiscal year
ending 1995 through 1998. If Mr. Hernandez's employment is terminated for
"cause" (as defined), the Company is only obligated to pay Mr. Hernandez's
base salary and certain benefits through the date of termination. If Mr.
Hernandez's employment is terminated because of death, disability or other
event rendering Mr. Hernandez unable to perform his duties and obligations
under the agreement, in addition to his base salary and certain benefits
through the date of termination, the Company is obligated pay Mr. Hernandez a
bonus, if earned, for the year in which such termination occured. If the
Company terminates the agreement for any other reason, it is obligated to
continue to pay Mr. Hernandez's base salary and certain benefits through the
remaining term of his agreement and pay a bonus, if earned, for the year in
which such termination occured. The Company may terminate Mr. Hernandez's
employment if the Company fails to achieve certain performance goals based on
Adjusted EBITDA for the fiscal year ended December 31, 1996, in which case the
Company's sole obligation is to pay Mr. Hernandez's base salary through the
date of such termination.
In 1995, the Company entered into an employment agreement with Mr. Levin
commencing February 27, 1995 and ending February 27, 1996. This agreement was
subsequently amended in 1995 to extend the term through February 27, 1998.
The agreement with Mr. Levin provides for an annual base salary of $290,000,
$320,000 and $350,000, during the first, second and third years,
respectively, of his term of employment. Upon the Company achieving certain
performance goals based on Adjusted EBITDA, Mr. Levin is eligible for an
annual bonus of up to 100% of his annual base salary. In addition, provided
Mr. Levin is based in Los Angeles and a portion of his duties include
management of the Company's Los Angeles station, KVEA, based upon the
attainment of certain gross revenue and Adjusted EBITDA targets of station
KVEA, Mr. Levin is eligible for an additional bonus of up to $100,000,
$113,333 and $153,333 in 1995, 1996 and 1997, respectively. In 1995, the
Company entered into two stock option agreements pursuant to which the
Company granted Mr. Levin options to purchase an aggregate of 50,000 shares
of Series A Common Stock under the 1994 Stock Plan, exercisable for a period
of 10 years, subject to the Company achieving certain performance goals based
on Adjusted EBITDA. The first stock option agreement granted Mr. Levin
options to purchase 30,000 shares at an exercise price of $10.00 per share,
and the second option agree-ment granted additional options to purchase
20,000 shares, at an exercise price equal to $13.00 per share. One-fourth of
the options under both agreements become exercisable upon certification by
the Compensation and Stock Option Committee that the Company has attained 90%
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<PAGE>
of the established performance targets for each fiscal year ending 1995
through 1998. If Mr. Levin's employment is terminated for "cause" (as
defined), the Company is only obligated to pay Mr. Levin's base salary and
certain benefits through the date of termination. If Mr. Levin's employment
is terminated because of death or other event rendering Mr. Levin unable to
perform his duties and obligations under the agreement, in addition to his
base salary and certain benefits through the date of termination, the Company
is obligated pay Mr. Levin a proportionate bonus, if earned, for the part of
the year worked prior to such termination. If the Company terminates
the agreement for any other reason, it is obligated to continue to pay Mr.
Levin's base salary and certain benefits through the remaining term of his
agreement and pay a proportionate bonus, if earned, for the part of the year
worked prior to such termination. The Company may terminate Mr. Levin's
employment if the Company fails to achieve certain performance goals based on
Adjusted EBITDA for the fiscal year ended December 31, 1996, in which case
the Company's obligations to pay Mr. Levin will cease upon the effective date
of termination.
In 1992, the Company entered into a three-year employment agreement with
Jose C. Cancela commencing May 25, 1992 and ending May 26, 1995. The
agreement with Mr. Cancela provides for an annual base salary of $300,000,
$350,000 and $400,000 during the first, second and third years, respectively,
of his term of employment. Upon the Company achieving certain performance
goals based on Adjusted EBITDA, Mr. Cancela is eligible for an annual bonus of
up to 100% of his annual base salary. If Mr. Cancela's employment is
terminated for "cause" (as defined) or because of death, disability or other
event rendering Mr. Cancela unable to perform his duties and obligations under
the agreement, the Company is only obligated to pay Mr. Cancela's salary
through the date of termination. If the Company terminates the agreement for
any other reason, its sole obligation is to continue payment of his salary
through May 26, 1995, subject to the terms of the second employment agreement
between the Company and Mr. Cancela described below.
In 1994, the Company entered into a second employment agreement with Mr.
Cancela commencing May 27, 1995 and ending May 25, 1997. The second agreement
with Mr. Cancela provides for an annual base salary of $400,000 during his
term of employment. Upon the Company achieving certain performance goals
based on Adjusted EBITDA, Mr. Cancela is eligible for an annual bonus of up to
100% of his annual base salary. Under Mr. Cancela's second agreement, the
Company agreed to enter into two stock option agreements pursuant to which the
Company would issue to him options to purchase an aggregate of 100,000 shares
of Series A Common Stock under the 1994 Stock Plan. The first stock option
agreement was entered into on December 31, 1994 and granted Mr. Cancela
options to purchase 50,000 shares at an exercise price of $7.00 per share,
exercisable for a period of 10 years, upon the Company achieving certain
performance goals based on Adjusted EBITDA. These performance goals were not
achieved. Pursuant to the second option agreement, which was executed on June
30, 1995, Mr. Cancela was granted additional 10-year options to purchase
50,000 shares of Series A Common Stock at an exercise price equal to the
market value of the Series A Common Stock on June 30, 1995, $14.625 per share,
one-third of which options become exercisable on each of June 30, 1998, 1999
and 2000. If Mr. Cancela's employment is terminated for "cause" (as defined)
or because of death, disability or other event rendering Mr. Cancela unable to
perform his duties and obligations under the agreement, the Company is only
obligated to pay Mr. Cancela's salary through the date of termination. If the
Company terminates the agreement for any other reason, its sole obligation is
to continue payment of his salary through the remaining term of his agreement
and to provide certain medical benefits.
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<PAGE>
In 1994, the Company entered into a three-year employment agreement with
Peter J. Housman II commencing May 15, 1994 and ending May 25, 1997. The
agreement with Mr. Housman provides for an annual base salary of $325,000
during his term of employment. Upon the Company achieving certain performance
goals based on Adjusted EBITDA, Mr. Housman is eligible for an annual bonus of
up to 100% of his annual base salary. Under Mr. Housman's agreement, the
Company agreed to enter into two stock option agreements pursuant to which the
Company would issue to him options to purchase an aggregate of 100,000 shares
of Series A Common Stock under the 1994 Stock Plan. The first stock option
agreement was entered into on December 31, 1994 and granted Mr. Housman
options to purchase 50,000 shares at an exercise price of $7.00 per share,
exercisable for a period of 10 years, upon the Company achieving certain
performance goals based on Adjusted EBITDA. These performance goals were not
achieved. Pursuant to the second option agreement, which was executed on June
30, 1995, Mr. Housman was granted additional 10-year options to purchase
50,000 shares of Series A Common Stock at an exercise price equal to the
market value of the Series A Common Stock on June 30, 1995, $14.625 per share,
one-third of which options become exercisable on each of June 30, 1998, 1999
and 2000. If Mr. Housman's employment is terminated for "cause" (as defined)
or because of death, disability or other event rendering Mr. Housman unable to
perform his duties and obligations under the agreement, the Company is only
obligated to pay Mr. Housman's salary through the date of termination. If the
Company terminates Mr. Housman's employment for any other reason, its sole
obligation is to continue payment of his salary through the remaining term of
his agreement and to provide certain medical benefits.
In 1995, the Company entered into an employment agreement with Mr.
Livingston commencing February 27, 1995 and ending February 27, 1996. The
agreement with Mr. Livingston provides for an annual base salary of $225,000
during his term of employment. Upon the Company achieving certain performance
goals based on Adjusted EBITDA, Mr. Livingston is eligible for an annual bonus
of up to $100,000. In 1995, the Company entered into a stock option agreement
with Mr. Livingston pursuant to which he was granted options to purchase
10,000 shares of Series A Common Stock at an exercise price of $10.00 per
share, exercisable for a period of 10 years, upon the Company achieving
certain performance goals based on Adjusted EBITDA. One-fourth of these
options become exercisable upon certification by the Compensation and Stock
Option Committee that the Company has attained 90% of the established
performance targets for each fiscal year ending 1995 through 1998. If Mr.
Livingston's employment is terminated for "cause" (as defined) or because of
death or other event rendering Mr. Livingston unable to perform his duties
and obligations under the agreement, the Company is only obligated to pay Mr.
Livingston's base salary and certain benefits through the date of termination.
If the Company terminates the agreement for any other reason, it is obligated
to continue to pay Mr. Livingston's base salary and certain benefits through
the remaining term of his agreement. The Company and Mr. Livingston are
currently discussing terms of an extension of the agreement.
In 1994, the Company entered into a three-year employment agreement with
Gustavo Pupo-Mayo commencing September 16, 1994 and ending September 15, 1997.
The agreement with Mr. Pupo-Mayo provides for an annual base salary of
$300,000 during his term of employment. Mr. Pupo-Mayo also is entitled to a
bonus of up to 50% of his annual base salary based upon the achievement by
TeleNoticias del Mundo, L.P., a 24-hour-a-day news service partnership in
which the Company is a lead partner ("TeleNoticias"), of certain performance
goals based on Adjusted EBITDA of TeleNoticias and upon the achievement of
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<PAGE>
certain ratings levels during the broadcast on the Company's network of the
prime-time network news programs produced by TeleNoticias. If Mr. Pupo-Mayo's
employment is terminated for "cause" (as defined) or because of death,
disability or other event rendering Mr. Pupo-Mayo unable to perform his duties
and obligations under the agreement, the Company is only obligated to pay Mr.
Pupo-Mayo's salary through the date of termination. If the Company terminates
Mr. Pupo-Mayo's employment for any other reason, its sole obligation is to
continue payment of his salary through the remaining term of his agreement and
to provide certain medical benefits. Mr. Pupo-Mayo ceased being an executive
officer of the Company in August 1995 and the Company continues to pay his
salary and benefits pursuant to the above.
In March 1995, the Company entered into an agreement with Joaquin F.
Blaya, formerly the Company's President and Chief Executive Officer, providing
for certain consideration for the termination of Mr. Blaya's employment
agreements and stock option agreement with the Company. Pursuant to the
agreement, the terms of which are generally consistent with a termination
without cause under Mr. Blaya's then-existing employment agreement with the
Company, Mr. Blaya will be paid at an annual rate of $900,000 from March 8,
1995 to May 25, 1997. The Company also is obligated to provide medical
benefits substantially similar to those provided to Mr. Blaya immediately
prior to his resignation in March 1995. In addition, Mr. Blaya agreed to a
cancellation of his then-existing options to purchase 500,000 shares of the
Company's Series A Common Stock and the Company granted Mr. Blaya new options
to purchase 150,000 shares of Series A Common Stock at an exercise price of
$7.00 per share, exercisable from January 1, 1996 through December 31, 1998.
Mr. Blaya's two employment agreements with the Company as well as his existing
stock option agreement were terminated pursuant to the agreement.
OPTION GRANTS IN 1995
The following table sets forth certain information with respect to the
grant of options to purchase Series A Common Stock made during 1995 to each of
the Named Executives.
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<PAGE>
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS POTENTIAL REALIZABLE VALUE
UNDERLYING GRANTED TO GRANT DATE AT ASSUMED ANNUAL RATES
OPTIONS EMPLOYEES IN EXERCISE MARKET PRICE OF STOCK PRICE APPRECIATION
NAME GRANTED (#) FISCAL YEAR PRICE OF STOCK EXPIRATION DATE FOR OPTION TERM(4)
- - ---- ----------- ------------ -------- ------------ --------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0% 5% 10%
_______ _________ _________
Roland A. Hernandez(1)(3) 512,500 62.3% $10.00 $ 9.125 March 9, 2005 - 2,493,000 7,005,000
Joaquin F. Blaya(2) 150,000 18.2% $ 7.00 $10.00 December 31, 1998 450,000 773,000 1,146,000
Stephen J. Levin(1)(3) 30,000 3.7% $10.00 $ 9.125 March 9, 2005 - 146,000 410,000
Stephen J. Levin(1)(3) 20,000 2.4% $13.00 $12.3125 May 30, 2005 - 141,000 379,000
Jose C. Cancela(3) 50,000 6.1% $14.625 $14.625 June 30, 2005 - 460,000 1,165,000
Peter J. Housman II(3) 50,000 6.1% $14.625 $14.625 June 30, 2005 - 460,000 1,165,000
Stuart Livingston(1)(3) 10,000 1.2% $10.00 $ 9.125 March 9, 2005 - 49,000 137,000
</TABLE>
(1) These options have a four year vesting schedule, are subject to the
Company achieving certain performance levels for each fiscal year ending 1995
through 1998 and one-fourth of these options became exercisable in 1996 upon
certification by the Compensation and Stock Option Committee that the 1995
performance levels had been met. See "--Employment and Severance Agreements."
(2) Options issued pursuant to certain consideration for the termination of
Mr. Blaya's employment agreements and stock option agreement with the
Company. These options are exercisable at a price of $7.00 and expire on
December 31, 1998. See "--Employment and Severance Agreements."
(3) Options were granted pursuant to the Company's 1994 Stock Plan, which was
approved by the Company's stockholders at the 1995 Annual Meeting, at prices
ranging from $9.125 to $14.625 and expire ten years from the date of grant.
(4) Amounts represent the future market price of the Series A Common Stock,
assuming the market price at the grant date appreciates at compound
annualized rates of 0%, 5% and 10% over the term of the options (4 years for
Mr. Blaya, and 10 years for all other Named Executives), less the exercise
price, multiplied by the number of shares under grant. These amounts, based
on assumed appreciation rates of 0% and the 5% and 10% rates prescribed by
the Securities and Exchange Commission rules, are not intended to forecast
possible future appreciation, if any, of the Company's stock price.
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<PAGE>
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUE
The following table sets forth the number of shares of Series A Common
Stock covered by stock options held by the Named Executives at December 31,
1995 and also shows the value of "in-the-money" options at that date. No
Named Executive exercised stock options during 1995.
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT OPTIONS AT
YEAR-END (#) YEAR-END ($)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE(1)
- - ---- ------------- ---------------
Roland A. Hernandez 0/512,500(2) 0/2,114,000
Joaquin F. Blaya 0/150,000 0/1,069,000
Jose C. Cancela 0/100,000(3) 0/0
Peter J. Housman II 0/100,000(3) 0/0
Stephen J. Levin 0/50,000(2) 0/146,000
Stuart Livingston 0/10,000(2) 0/41,000
_______________
(1) Based on the closing sale price of the Company's Series A Common Stock
of $14.125 per share on December 29, 1995.
(2) These options have a four year vesting schedule, are subject to the
Company achieving certain performance levels for each fiscal year ending
1995 through 1998 and one-fourth of these options became exercisable in
1996 upon certification by the Compensation and Stock Option Committee
that the 1995 performance levels had been met. See "--Employment and
Severance Agreements."
(3) 50,000 of these options were subject to the Company achieving certain
performance levels during the first six months of 1995 which were not
met.
PERFORMANCE GRAPH
On December 30, 1994, in connection with the consummation of the
Company's Plan of Reorganization, the Company's then-existing common stock was
canceled and the now-outstanding Common Stock was issued. A performance graph
as required by the proxy rules of the Securities and Exchange Commission
therefore is not relevant for periods prior to December 30, 1994 and is not
included for those periods. The following graph sets forth the cumulative
total return to the Company's shareholders for the year ended December 31,
1995 based upon the change in the quoted market price of the Company's Series
A Common Stock from January 3, 1995 to December 31, 1995, as well as
comparable returns for an overall stock market index (Nasdaq Stock Market-US)
and the Company's peer group index (S&P Broadcast Media).
CUMULATIVE TOTAL RETURN
---------------------------------------
January 3, 1995 December 31, 1995
Telemundo Group, Inc. 100 145
Nasdaq Stock Market-US 100 141
S&P Broadcast Media 100 131
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<PAGE>
Notes: a) A base index of $100 was established on January 3, 1995 for
purposes of this analysis.
b) Commencing January 3, 1995, the Company's Series A Common Stock
trades on the Nasdaq National Market Tier of The Nasdaq Stock
Market under the symbol TLMD.
COMPENSATION OF DIRECTORS
Each of the eight nonmanagement directors of the Board of Directors
currently receives for his services as director a retainer of $1,000 per
calendar quarter, plus $2,500 for each meeting of the Board of Directors and
$1,000 for each committee meeting attended in person, and $500 for each
meeting of the Board of Directors or a committee attended by telephone.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met seven times during 1995. The Board of
Directors has an Audit Committee comprised of three members and a Compensation
and Stock Option Committee comprised of two members. The Board of Directors
does not have a nominating committee.
The Audit Committee includes Bruce H. Spector, Chairman, Alan Kolod and
Guillermo Bron. The Committee met one time during the last fiscal year. The
Audit Committee recommends engagement of the independent auditors, considers
the fee proposal and scope of the audit, reviews the financial statements and
the independent auditors' report, considers comments made by the independent
auditors with respect to the Company's internal control structure, reviews the
activities and recommendations of Company employees performing internal audit
functions, reviews current developments in financial reporting and accounting,
and reviews internal accounting procedures and controls with the Company's
financial and accounting staff.
The Compensation and Stock Option Committee includes Leon D. Black and
Bruce H. Spector who are nonemployee directors. The Committee met five times
during the last fiscal year. The Compensation and Stock Option Committee
reviews and approves the Company's executive compensation policies. In
addition, the Compensation and Stock Option Committee selects the officers and
key employees of the Company who are to receive grants of options, stock
appreciation rights or restricted stock under the 1994 Stock Plan and the
number of shares that would be subject thereto, the exercise price, if any,
and the other terms and conditions of the grant.
Each of the directors attended at least 75% of the meetings of the Board
of Directors and their respective committees held during the period each was
a director during the last fiscal year. Daniel D. Villanueva became a Board
Member effective April 26, 1996 and Arthur M. Goldberg resigned from the
Board effective August 21, 1995.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
The Compensation and Stock Option Committee reviews and approves the
Company's executive compensation policies. In addition, the Compensation and
Stock Option Committee selects the officers and key employees of the Company
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<PAGE>
who are to receive grants of options, stock appreciation rights or restricted
stock under the 1994 Stock Plan and the terms and conditions of the grants.
Provided that other compensation objectives are met, it is the
Compensation and Stock Option Committee's intention that executive
compensation be deductible for federal income tax purposes. For this reason,
at the Company's 1995 meeting of Stockholders, the 1994 Stock Plan and
compensation payable to certain executive officers of the Company that comply
with legislation on tax deductibility were submitted to stockholders for
approval and were approved.
Compensation paid to Roland A. Hernandez was pursuant to an employment
agreement entered into with him on March 9, 1995. Compensation paid in 1995
to Joaquin F. Blaya was pursuant to a previously existing employment
agreement and an agreement entered into in March 1995, providing for certain
consideration for the termination of Mr. Blaya's employment agreements and
stock option agreement with the Company. Compensation paid to Jose C.
Cancela, Peter J. Housman II and Gustavo Pupo-Mayo in 1995 was pursuant to
employment agreements entered into between each of them and the Company prior
to 1995. The current employment agreements of Messrs. Cancela, Housman and
Pupo-Mayo are described under "--Employment and Severance Agreements" above.
Mr. Pupo-Mayo ceased being an executive officer of the Company in August 1995.
The following report addresses the Company's compensation policies for
1995 with respect to the Company's executive officers, including the Named
Executives.
EXECUTIVE COMPENSATION POLICIES. In the highly competitive environment
of television broadcasting and the entertainment industry as a whole,
decisions made by key executives can have a substantial impact on a company's
financial performance. The Company faces competition not only from other
Spanish-language and English-language television networks, but also from other
Spanish-language and English-language media, including cable channels, radio
stations, movies and other forms of entertainment.
The Company's executive compensation policies are structured to meet
this competitive challenge and to help the Company achieve its business
objectives by providing levels of annual base compensation designed to attract
and retain talented executives and by providing annual incentive compensation
that varies directly with Company financial performance and may also take into
account individual executive performance and contribution.
RELATIONSHIP OF PERFORMANCE UNDER COMPENSATION POLICIES. The components
of 1995 executive compensation included base salary and annual bonus amounts
and, in the case of Messrs. Hernandez, Levin, Cancela, Housman and Livingston,
stock options. Executive compensation for 1995 reflected the Company's
emphasis on tying pay to performance criteria in addition to providing salary
levels consistent with competitive practices and level of responsibility.
BASE SALARIES. An executive's base salary for 1995 was determined based
on the executive's individual level of responsibility and competitive
practices in the industry. For the Named Executives, base salaries were set
in employment agreements between the Company and each of those executives.
ANNUAL BONUSES. The Company generally pays cash bonuses, if any, to its
executives during the first quarter of the year for services rendered during
the preceding year. The Company believes that its ability to pay bonuses is
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<PAGE>
important to attract and retain superior executives. For those executives
employed pursuant to employment agreements, bonus amounts are based solely on
meeting objective performance criteria. For other executives, bonuses are
based on a combination of objective Company performance standards, together
with objective and subjective individual criteria. Individual subjective
performance criteria can include evaluation of initiative, contribution to
overall corporate performance, managerial ability, and adherence to Company
policies and procedures. The bonus amount generally is calculated as a
percentage of base salary earned in the year.
STOCK OPTIONS. The Company's 1994 Stock Plan, which was adopted by the
Stock Option Committee of the previous Board of Directors in 1994 and approved
by the Company's stockholders at the 1995 Annual Meeting, provides for the
granting of stock options, either alone or together with stock appreciation
rights, and restricted stock. Pursuant to the employment agreements with
Messrs. Hernandez, Levin, Cancela, Housman and Livingston, in 1995 the Company
issued stock options to purchase an aggregate of 672,500 shares of Series A
Common Stock to these executives, subject to certain conditions. Stock
options issued to Messrs. Hernandez, Levin and Livingston become exercisable
only upon certification by the Compensation and Stock Option Committee that
the Company has achieved certain performance goals based upon the operating
income of the Company (subject to certain adjustments). Stock options were
issued to Joaquin F. Blaya to purchase 150,000 shares of Series A Common Stock
pursuant to an agreement providing for certain consideration for the
termination of Mr. Blaya's employment agreements and stock option agreement
with the Company. Stock option grants in 1995 were pursuant to the Company's
1994 Stock Plan, which was submitted to stockholders for approval and was
approved at the Company's 1995 meeting of Stockholders. See "--Employment and
Severance Agreements" above. No other options under the 1994 Stock Plan were
granted in 1995.
OTHER COMPENSATION PLANS. The Company has adopted a broad-based employee
benefit plan in which executives are permitted to participate on the same
terms as nonexecutive employees who meet applicable eligibility criteria,
subject to any legal limitations on the amounts that may be contributed or the
benefits that may be payable under the plan. The Company also provides term
life insurance coverage for all employees, including executives. An
executive's coverage is determined based on salary, up to a maximum coverage
amount of $300,000, except where an employment agreement provides for
different coverage.
CEO 1995 COMPENSATION. As noted above, Mr. Hernandez's 1995 compensa-
tion as President and Chief Executive Officer reflects a contractual
obligation entered into in March 1995 when Mr. Hernandez became an officer of
the Company. Mr. Hernandez's employment agreement provides for a base salary
plus the opportunity to earn a bonus based solely on the Company achieving
certain performance goals based on the operating income of the Company
(subject to certain adjustments). In addition, Mr. Hernandez was granted
options to purchase 512,500 shares of the Company's Series A Common Stock,
which become exercisable upon the Company achieving certain performance goals
based on the operating income of the Company (subject to certain
adjustments). Mr. Hernandez's total compensation package, therefore, was
consistent with the policies discussed above.
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<PAGE>
FORMER CEO 1995 COMPENSATION. As noted above, Mr. Blaya's compensation
through March 1995 as President and Chief Executive Officer, reflects a
contractual obligation entered into in May 1992 when Mr. Blaya joined the
Company. Compensation subsequent to March 1995 was pursuant to an agreement
providing for certain consideration for the termination of Mr. Blaya's
employment agreements and stock option agreement. Mr. Blaya was granted
options to purchase 150,000 shares of Series A Common Stock at an exercise
price of $7.00 a share pursuant to an agreement providing for certain
consideration for the termination of Mr. Blaya's employment agreements and
stock option agreement with the Company. Mr. Blaya's total compensation
package, therefore, was consistent with the policies discussed above.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m). Section 162(m) of
the Internal Revenue Code of 1986, as amended, which took effect January 1,
1994, limits the federal income tax deduction that the Company may take for
compensation paid to the corporation's Chief Executive Officer and other four
most highly compensated executive officers to $1 million unless such
compensation is based solely on the attainment of "objective" performance
goals established in advance by a committee of two or more outside directors.
The Compensation and Stock Option Committee in 1995 attempted to structure the
performance-based compensation in a manner that complies with the rules.
SUBMITTED BY:
LEON D. BLACK BRUCE H. SPECTOR
THE COMPENSATION AND STOCK OPTION COMMITTEE OF THE
BOARD OF DIRECTORS
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the current members of the Compensation and Stock Option
Committee are Messrs. Black and Spector. None of the members of the
Compensation and Stock Option Committee served as a member of the compensation
committee, or other board committee performing similar functions, of any
other entity in 1995.
RELATED PARTY TRANSACTIONS
The Major Stockholders have entered into a Shareholders Agreement
relating to the transfer and voting of shares of Common Stock owned by each of
the Major Stockholders. See "Security Ownership of Certain Beneficial Owners
and Management" above.
Interspan owns and operates television station KFWD, Channel 52, the
Company's Dallas/Fort Worth network affiliate. Roland A. Hernandez, the
Company's President and Chief Executive Officer and a director, is a director
and executive officer of the corporate general partner of Interspan, which is
owned by Mr. Hernandez and his family. Pursuant to Interspan's affiliation
agreement with the Company, Interspan received approximately $1,225,000 in
network compensation during 1995 and paid the Company approximately $201,000
for the Company's services as the exclusive national sales representative for
KFWD.
In February 1996 the Company completed the offering of its 10.5% Senior
Notes in which Alex. Brown was a co-manager. Barry W. Ridings, a Director of
the Company, is a Managing Director of Alex. Brown.
Management believes that the transactions described above were on terms no
less favorable to the Company than could be obtained from unaffiliated
parties.
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<PAGE>
On December 30, 1994, in connection with the consummation of the
Company's Plan of Reorganization, the Company, Apollo Advisors and RIC
entered into a registration rights agreement pursuant to which the Company
agreed to register Common Stock held by Apollo Advisors and RIC and certain
of their respective affiliates and transferees ("Holders") under the
Securities Act of 1933, as amended (the "Securities Act"). Under the
registration rights agreement, the Company is obligated, subject to certain
terms and conditions and upon demand by the a Holder, to use reasonable
diligence to effect and to maintain for not more than 90 days the
registration under the Securities Act of certain registrable securities as
defined in the agreement. The Company is not required to effect more than
two such registrations during the term of the agreement. A demand for
registration under the agreement must be made by a Holder within five years
of the date of the agreement in the case of Common Stock acquired other than
through the exercise of warrants, and within the later of five years from the
date of the agreement and two years after the exercise of warrants in the
case of Common Stock acquired through the exercise of warrants. In addition,
so long as any of the registrable securities are outstanding, if the Company
proposes to register any of its securities under the Securities Act, whether
or not for its own account, the Holders have the right to request the Company
to include the Holders' registrable securities in such registration, subject
to certain terms and conditions. RIC and certain affiliates exercised one
such right and accordingly the Company filed a registration statement under
the Securities Act in February 1996.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, the Company's executive officers and directors are
required to file with the Securities and Exchange Commission and the New York
Stock Exchange reports of ownership and changes in ownership of Common Stock.
Copies of such reports are required to be furnished to the Company. Based
solely on its review of the copies of such reports furnished to the Company,
or written representations that no reports were required, the Company believes
that, during 1995, all of its executive officers and directors complied with
the Section 16(a) requirements.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, independent public accountants, examined the
consolidated financial statements of the Company for the year 1995. The
Audit Committee has not yet approved Deloitte & Touche LLP for the current
year's audit. Representatives of Deloitte & Touche are expected to be present
at the Annual Meeting and to be available to respond to appropriate questions,
and will have the opportunity to make a statement if they so desire.
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for
action at the meeting other than as set forth in this Proxy Statement. If any
other business should properly come before the meeting, the persons named in
the accompanying form of proxy intend to vote thereon in accordance with their
judgment.
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<PAGE>
STOCKHOLDER PROPOSALS AT THE NEXT ANNUAL MEETING
Stockholders who intend to present proposals at the 1997 Annual Meeting
of Stockholders must submit such proposals to the Company no later than
January 13, 1997 in order for them to be included in the Company's proxy
materials for such meeting. Stockholder proposals must be submitted to the
Company, 2290 West 8th Avenue, Hialeah, Florida 33010, Attention: Chief
Financial Officer and Treasurer. Stockholders are encouraged to submit any
such proposals by certified mail-return receipt requested. The Company
reserves the right to decline to include in the Company's proxy statement any
stockholder's proposal that does not comply with, or may be excluded under,
the applicable rules of the Securities and Exchange Commission.
BY ORDER OF THE BOARD OF DIRECTORS
Peter J. Housman II
Chief Financial Officer and Treasurer
-24-
<PAGE>
APPENDIX
PROXY
TELEMUNDO GROUP, INC.
2290 West 8th Avenue
Hialeah, Florida 33010
ANNUAL MEETING OF STOCCKHOLDERS
WEDNESDAY, JUNE 12, 1996
The undersigned stockholder of Telemundo Group, Inc. (the "Company")
hereby appoints Leon D. Black and Bruce H. Spector, and each of them, the
true and lawful attorneys, agents and proxies of the undersigned, with full
power of substitution to each of them, to represent and vote as set forth
herein all the shares of Common Stock held of record by the undersigned on
May 9, 1996, at the Annual Meeting of Stockholders of the Company to be held
at the Sheraton New York Hotel, 811 Seventh Avenue, New York, New York at
10:00 a.m. local time, on June 12, 1996, and at any adjournments thereof.
PLEASE MARK YOUR CHOICES LIKE THIS [X] IN BLUE OR BLACK INK
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ALL NOMINEES.
1. ELECTION OF DIRECTORS
SERIES A NOMINEES (to be voted on by holders of Series A Common Stock
only): Daniel D. Villanueva; Alan Kolod; Barry W. Ridings; David E.
Yurkerwich
TO WITHHOLD AUTHORITY
FOR ALL NOMINEES LISTED WITHHOLDING AUTHORITY TO VOTE
ABOVE except as marked to vote for all for any individual
to the contrary to the nominees listed above nominee, write that
right space below
___________________
[ ] [ ] ___________________
SERIES B NOMINEES (to be voted on by holders of Series B Common Stock
only): Leon D. Black; Guillermo Bron; Roland A. Hernandez; Bruce H.
Spector; Edward M. Yorke
TO WITHHOLD AUTHORITY
FOR ALL NOMINEES LISTED WITHHOLDING AUTHORITY TO VOTE
ABOVE except as marked to vote for all for any individual
to the contrary to the nominees listed above nominee, write that
right space below
___________________
[ ] [ ] ___________________
<PAGE>
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
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 ALL THE NOMINEES LISTED.
Please sign exactly as name appears on stock certificate. Each joint
owner must sign. Executors, administrators, trustees or guardians must 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.
Dated: __________________________, 1996
_______________________________________
Signature
_______________________________________
Signature if held jointly
[ ]
[ ]
Please mark, sign, date and return this Proxy promptly using the enclosed
envelope.
