<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
T/SF COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Howard G. Barnett, Jr.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
T/SF COMMUNICATIONS CORPORATION
2407 EAST SKELLY DRIVE
TULSA, OKLAHOMA 74105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 1, 1995
Notice is hereby given that the Annual Meeting of Stockholders of T/SF
COMMUNICATIONS CORPORATION (the "Company") will be held at the Doubletree Hotel
at Warren Place, Tulsa, Oklahoma, at 9:00 a.m. C.D.T., on August 1, 1995, for
the following purposes:
1. ELECTION OF DIRECTORS. To approve a Board of Directors composed of
eleven (11) members and to elect nine (9) Directors to serve until the next
Annual Meeting of Stockholders and until their successors are duly elected and
qualified, thus leaving two vacancies which may be filled by the Board of
Directors at any time. The following persons have been nominated:
Howard G. Barnett, Jr. Martin F. Beck Robert E. Craine, Jr.
William N. Griggs David Lloyd Jones Jenk Jones Jr.
Mark A. Leavitt Robert J. Swab Martin A. Vaughan
2. OTHER BUSINESS. To consider and transact such other business as may
properly come before the meeting and any adjournment or adjournments thereof.
Only stockholders of record at the close of business on June 27, 1995, are
entitled to notice of and to vote at the Annual Meeting of Stockholders or any
adjournment or adjournments thereof. A complete list of the stockholders
entitled to vote at the meeting will be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of ten days prior to the date of the meeting at the offices
of the Company and at the time and place of the meeting.
The next Annual Meeting of Stockholders is expected to be held in June,
1996. Should an eligible stockholder desire to present a proposal at the next
Annual Meeting of Stockholders, such proposal must be received by the Company
not later than December 31, 1995. There are certain requirements that must be
met to be eligible to submit such a proposal.
It is important that your shares be represented at the Annual Meeting of
Stockholders, regardless of the number you may hold. Therefore, whether or not
you plan to attend, please sign, date and return your Proxy as soon as possible
in the envelope provided, to which no postage need be affixed if mailed within
the United States. Signing, dating and returning your Proxy will not prevent
you from voting your shares in person if you do attend the Annual Meeting of
Stockholders.
By Order of the Board of Directors
Donna J. Peters,
Secretary
Tulsa, Oklahoma
June 30, 1995
<PAGE>
T/SF COMMUNICATIONS CORPORATION
2407 EAST SKELLY DRIVE
TULSA, OKLAHOMA 74105
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 1, 1995
SOLICITATION AND REVOCATION OF PROXIES
The enclosed Proxy is being solicited by the Board of Directors of T/SF
Communications Corporation (the "Company"). Any Proxy may be revoked by a
stockholder at any time before it is exercised by giving written notice of
revocation to the Secretary of the Company, by submitting another valid Proxy
bearing a later date, or by attending the Annual Meeting of Stockholders and
voting in person.
Proxies in the accompanying form, properly executed, duly returned to the
Company and not revoked, will be voted at the Annual Meeting of Stockholders to
be held August 1, 1995 (the "Meeting"), or any adjournment or adjournments
thereof. Proxies as to which no direction is indicated will be voted "FOR" the
approval of a Board of Directors composed of eleven (11) members with nine (9)
members being elected at the Meeting, thus creating two (2) vacancies on the
Board of Directors (which may be filled by the Board of Directors without
approval of the stockholders), and "FOR" the election of Directors. The expense
of the solicitation of Proxies for the Meeting, including the cost of mailing
and the regular wages of employees who, as part of their regular duties, devote
time to the solicitation effort, will be borne by the Company. These costs are
not expected to exceed amounts normally expended for solicitation of proxies for
the election of Directors.
In addition to mailing copies of this material to stockholders on or about
June 30, 1995, the Company will request persons who hold stock in their names or
custody as nominees for others to forward copies of such material to those
persons for whom they hold shares of stock of the Company and to request voting
instructions from beneficial owners of such shares. The Company will reimburse
such persons for the reasonable expenses incurred by them in obtaining voting
instructions from beneficial owners of such shares.
The Board of Directors of the Company knows of no other matter other than
those listed in the Notice of Annual Meeting of Stockholders which is likely to
be brought before the Meeting. If any other matter, not presently known,
properly comes before the Meeting, the persons named in the enclosed Proxy will
vote the Proxy in accordance with their best judgment in any such matter.
The Annual Report of the Company for the fiscal year ended December 31,
1994, which includes financial information, was mailed with this Proxy Statement
on or about June 30, 1995, to stockholders of record on June 27, 1995.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on June 27, 1995, there were issued and outstanding
3,839,801 shares of Common Stock of the Company, $0.10 par value per share
(referred to herein as "Common Stock"), having voting power, the holders thereof
being entitled to one vote per share on all matters to be voted upon by
stockholders. Approximately 50 percent of the shares entitled to vote at the
Meeting, or 1,910,000 shares of Common Stock, are owned by officers, directors,
director nominees and their affiliates. Such persons have indicated to the
Company that they intend to vote "FOR" the creation of an eleven person Board of
Directors and "FOR" all nine herein listed nominees for Directors, thus assuring
the approval of such actions and the election of such persons.
The holders of record of the voting securities of the Company at the close
of business on June 27, 1995, are entitled to notice of and to vote at the
Meeting and any adjournment or adjournments thereof. The presence, in person or
by Proxy, of the holders of a majority of all the outstanding voting securities
in the aggregate is required to constitute a quorum. Votes withheld from
nominees for Directors, abstentions and broker non-votes will be counted for
purposes of determining whether a quorum has been reached. The affirmative vote
of a majority of the shares entitled to vote at a meeting where a quorum is
present is sufficient to adopt any matter on which the vote is being taken,
including the election of Directors. With regard to the election of Directors,
votes may be cast in favor of or withheld from each nominee; votes that are
withheld will be excluded entirely from the vote and will have no effect.
Abstentions, which may be specified on all proposals except the election of
Directors, will have the effect of a negative vote. Under applicable Delaware
law, a broker non-vote will have no effect on the outcome of the election of
Directors or the other proposal.
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of June 27, 1995, for each beneficial owner of
more than five percent of the Common Stock.
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OF APPROXIMATE PERCENTAGE
NAME AND ADDRESS OF COMMON STOCK OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
- ------------------- ------------------- ----------------------
<S> <C> <C>
Jenkin Lloyd Jones Jr./(1)/
6447 S. Louisville
Tulsa, Oklahoma 74136 260,904 6.8%
Florence Lloyd Jones Barnett/(2)/
2619 East 37th Street
Tulsa, Oklahoma 74105 666,139 17.3%
Howard G. Barnett, Jr./(3)/
6742 South Evanston
Tulsa, Oklahoma 74136 844,016 22.0%
Hayden Ann Barnett Kiser
1616 East 31st Place
Tulsa, Oklahoma 74105 202,482 5.3%
The Prudential Insurance
Company of America
c/o Prudential Capital Group
1201 Elm Street, Suite 4900
Dallas, Texas 75270 464,814 12.1%
</TABLE>
_________________________
/(1)/ The ownership shown for Jenkin Lloyd Jones Jr. is derived as follows:
92,114 shares of Common Stock owned by Jenkin Lloyd Jones Jr. and Carol B.
Jones, as Co-Trustees of the Revocable Inter Vivos Trust of Jenkin Lloyd
Jones Jr. and 168,790 shares owned by the Revocable Inter Vivos Trust of
Jenkin Lloyd Jones, of which Jenkin Lloyd Jones and Jenkin Lloyd Jones Jr.
are Co-Trustees.
/(2)/ The 666,139 shares of Common Stock beneficially owned by Mrs. Barnett are
owned by her and Howard G. Barnett, Jr., as Co-Trustees of the Revocable
Inter Vivos Trust of Florence Lloyd Jones Barnett, which shares are also
included in the beneficial ownership of Howard G. Barnett, Jr. Mrs.
Barnett's ownership does not include 2,510 shares beneficially owned by
her husband, Howard G. Barnett, which shares are included in the ownership
of Howard G. Barnett, Jr. Mrs. Barnett disclaims beneficial ownership of
the shares held by her husband.
/(3)/ Of the 844,016 shares of Common Stock beneficially owned by Mr. Barnett,
175,367 shares are beneficially owned directly for his own account (12,482
shares are restricted until January, 1998, except as to voting rights). In
addition, Mr. Barnett is the beneficial owner of 666,139 shares of Common
Stock owned by Florence Lloyd Jones Barnett (Mr. Barnett's mother) and Mr.
Barnett, as Co-Trustees of the Revocable Inter Vivos Trust of Florence
Lloyd Jones Barnett, and 2,510 shares of Common Stock owned by Howard G.
Barnett (Mr. Barnett's father) and Mr. Barnett, as Co-Trustees of the
Revocable Inter Vivos Trust of Howard G. Barnett. The stock ownership of
Mr. Barnett does not include shares held by his wife, Billie T. Barnett
(26,602 shares). Mr. Barnett has also been granted certain option awards
under the Company's Incentive Stock Plan, but such shares are not included
in Mr. Barnett's ownership because none have vested as yet. Mr. Barnett
disclaims beneficial ownership of the shares held by his wife.
3
<PAGE>
The following table sets forth the beneficial ownership of the Common Stock
held by each Director of the Company, each nominee for Director, each of the
executive officers of the Company or its subsidiaries named in the Summary
Compensation table below and all executive officers and Directors, as a group,
as of June 16, 1995.
<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF SHARES OF PERCENTAGE OF
COMMON STOCK COMMON STOCK
NAME AND POSITION BENEFICIALLY OWNED/(1)/ BENEFICIALLY OWNED
- ----------------- ----------------------- ------------------
<S> <C> <C>
Wayne Atwood, President, Atwood Convention
Publishing, Inc. ("Atwood")/(2)/ 9,417 0.2
Martin F. Beck, Director 1,000 ---
Howard G. Barnett, Jr., Chairman, President and
Chief Executive Officer, Director/(3)/ 844,016 22.0
Robert E. Craine, Jr., Executive Vice President,
Director 36,154 0.9
William N. Griggs, Director -0- ---
Hedy Halpert, Former President and Chief Operating
Officer of BMT Communications, Inc. ("BMT") 14 ---
David Lloyd Jones, Director 24,947 0.6
Jenkin Lloyd Jones Jr., Director nominee 260,904 6.8
Mark A. Leavitt, Director 1,000 ---
J. Gary Mourton, Senior Vice President-Finance,
Director/(4)/ 38,442 1.0
Robert J. Swab, Director nominee 104,039 2.7
Richard A. Wimbish, President, Transportation
Information Services, Inc. ("TISI") 1,337 ---
Martin A. Vaughan, Director nominee/(5)/ 53,117 1.4
All Executive Officers and Directors as a group, 13
persons/(6)/ 1,040,516 27.0
</TABLE>
__________________________
4
<PAGE>
/(1)/ Each of the beneficial owners has sole voting and investment power with
respect to the securities specified, except as noted in the footnotes
below. Included are vested options held by each person under the Company's
Incentive Stock Option Plan.
/(2)/ Mr. Atwood's shares are based on his vested options and restricted stock
awards. Mr. Atwood's shares do not include 7,708 shares of vested options
and restricted stock awards held by his wife, Linette Atwood.
/(3)/ The beneficial ownership for Mr. Barnett is determined as described in
footnote 3 of the preceding table.
/(4)/ Mr. Mourton is not standing for re-election as a Director. Included are
5,451 shares which are restricted until 1998 except as to voting rights.
/(5)/ The shares shown as owned by Mr. Vaughan exclude 42,348 shares of Common
Stock held by his wife, Nancy Swab Vaughan, directly, and 38,918 shares of
Common Stock held by his wife as Co-Trustee of the Revocable Inter Vivos
Trust of John T. Swab. Mr. Vaughan disclaims beneficial ownership in any
such shares. Mr. Vaughan's stock holdings in the table include 29,925
shares of Common Stock held by Midwest Resources, Inc., a private company
of which Mr. Vaughan is president, and 3,640 shares of Common Stock held
by Maverick Exploration, Inc., of which Mr. Vaughan owns 100 percent. The
trustees of the Revocable Inter Vivos Trust of John T. Swab are Nancy Swab
Vaughan, wife of Martin A. Vaughan, and John Stephen Swab.
/(6)/ Includes 1,028,513 shares of Common Stock owned directly (of which 26,834
shares are restricted until 1997 and 1998 except as to voting rights) and
12,003 shares of Common Stock related to vested options.
5
<PAGE>
DIRECTORS, DIRECTOR NOMINEES AND OFFICERS
The Board of Directors is authorized to fix the number of Directors at not
more than fifteen members nor less than three members. Accordingly, the number
of Directors of the Company has been fixed by the Board of Directors at eleven.
Pursuant to the Certificate of Incorporation and Bylaws of the Company, the
Board of Directors may elect a person to fill the unexpired term of a Director
who resigns or otherwise is unable to serve; however, the Board of Directors may
not increase its number and then elect Directors to fill the vacancies thus
created without seeking stockholder approval. Accordingly, the stockholders are
being asked to approve the creation of two vacancies on the Board of Directors
by electing only nine Directors to the eleven person Board of Directors
established pursuant to the Bylaws. The Board of Directors desires to create
these vacancies on the Board to give it flexibility to add additional Directors
during the year, if appropriate. No particular individuals have yet been
identified and the Board is not currently actively seeking new Directors. It is
noted that there are no limitations on the Board's power to elect persons to
fill the vacancies. If the vacancies are created, they may be filled by action
of the Board of Directors without any further action or approval by the
stockholders. Unless directed otherwise in a Proxy, the persons named in the
accompanying Proxy intend to vote for the creation of two vacancies on the Board
of Directors.
Even though eleven members are authorized for the Board of Directors,
proxies can only be voted for nine persons, being the number of nominees named.
Unless directed otherwise in a Proxy, the persons named in the accompanying
Proxy intend to vote for the election of Howard G. Barnett, Jr., Martin F. Beck,
William N. Griggs, David Lloyd Jones, Mark A. Leavitt, Robert E. Craine, Jr.,
Martin A. Vaughan, Robert J. Swab and Jenkin Lloyd Jones Jr. as Directors of the
Company, each to serve until the next Annual Meeting of Stockholders and until
the election and qualification of his successor. Except as to Robert J. Swab,
there are no agreements requiring any person to be nominated as a Director.
Robert J. Swab's Retirement Agreement (described below under Certain
Transactions) requires that he be nominated as a Director. The Company has been
informed that the nominees named are willing to serve as Directors, but if any
of them should decline or be unable to act as a Director, the persons named in
the Proxy will vote for any nominee who shall be designated by the present Board
of Directors to fill the vacancy. It is noted that Howard G. Barnett, Jr.,
Martin F. Beck, William N. Griggs, David Lloyd Jones, Mark A. Leavitt and Robert
E. Craine, Jr., comprise (along with J. Gary Mourton, who is not standing for
reelection) the current Board of Directors of the Company and were elected at
last year's Annual Meeting of Stockholders.
The following table sets forth information with respect to each Director,
Director nominee and executive officer, as well as with respect to certain other
key employees of the Company. All Directors of the Company hold office until
the next Annual Meeting of Stockholders and until the election and qualification
of their successors. Except as noted, each officer was elected in 1994 at the
annual meeting of the Board of Directors to serve for one year or, if earlier or
later, until the next Annual Meeting of the Board of Directors.
6
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR OR OFFICER
OF THE COMPANY OR
TRIBUNE/SWAB-FOX OR
NAME AGE EMPLOYEE SINCE /(1) POSITION WITH THE COMPANY
---- --- -------------------- -------------------------
<S> <C> <C> <C>
Howard G. Barnett, Jr. 45 1984 Chairman, President, Chief Executive
Officer and Director
Robert E. Craine, Jr. 47 1985 Executive Vice President and Director
J. Gary Mourton 48 1980 Senior Vice President-Finance, Chief
Financial Officer, Treasurer and
Director (not standing for reelection
as Director)
William N. Griggs 63 1989 Director
Mark A. Leavitt 36 1989 Director
David Lloyd Jones 56 1991 Director
Martin F. Beck 77 1989 Director
Martin A. Vaughan 68 1984 Nominee for Director
Robert J. Swab 58 1969 Nominee for Director
Jenkin Lloyd Jones Jr. 58 1984 Nominee for Director
Richard A. Wimbish 51 1987 President of TISI
Stuart P. Honeybone 53 1986 Vice President and President of BMT
Wayne Atwood 43 1990 President of Atwood
John R. Laughlin 51 1994 President and Chief Operating Officer
of Galaxy Registration, Inc.
("Galaxy")
Donna J. Peters 66 1984 Secretary
Jimmy C. Strong 60 1990 Vice President-Human Resources
</TABLE>
______________________
/(1)/ As the Company was not formed until 1989, if the date indicated is prior
to 1989, this represents the date that the individual was first employed
or became an officer or director of Tribune/Swab-Fox Companies, Inc.
("Tribune/Swab-Fox"), the former parent company of the Company. See Merger
with Tribune/Swab-Fox, below.
7
<PAGE>
HOWARD G. BARNETT, JR. - Became Executive Vice President of Tribune/Swab-Fox
on January 1, 1985, and was elected President in March 1991, and Chief Executive
Officer on August 1, 1993. He was elected President of the Company on its
formation in 1989, and was elected Chairman and Chief Executive Officer on
August 1, 1993. For approximately ten years prior to joining Tribune/Swab-Fox,
Mr. Barnett was a member of the law firm of Sneed, Lang, Adams & Barnett, Tulsa,
Oklahoma. Mr. Barnett is the cousin of David Lloyd Jones and Jenkin Lloyd Jones
Jr.
ROBERT E. CRAINE, JR. - Joined Tribune/Swab-Fox in November, 1985, as
President of TSF Capital Corp., a then wholly-owned subsidiary of Tribune/Swab-
Fox. He became Vice President of Tribune/Swab-Fox in May, 1986, and Senior Vice
President in August, 1988. For the 11 years preceding his joining Tribune/Swab-
Fox, Mr. Craine was a member of the law firm of Gable & Gotwals, Inc., Tulsa,
Oklahoma. Mr. Craine became Senior Vice President of the Company upon its
formation in 1989 and became Executive Vice President and a Director in March,
1994.
J. GARY MOURTON - Joined Tribune/Swab-Fox as Chief Financial Officer in 1980
and became Vice President-Finance and Treasurer in 1984. For the 11 years
prior to that time, Mr. Mourton was with the accounting firm of Arthur Andersen
LLP. Mr. Mourton is a certified public accountant. Mr. Mourton became Senior
Vice President-Finance, Chief Financial Officer and Treasurer of the Company
upon its formation in 1989.
WILLIAM N. GRIGGS - Has been a Managing Director of Griggs & Santow
Incorporated, a financial and economic consulting firm, since 1983. Dr. Griggs
previously served as Financial Economist at the Federal Reserve Bank of Dallas
and Deputy to the Assistant Secretary of the Treasury responsible for economic
policy. He currently serves on the Board of Directors of Massachusetts Mutual
Life Insurance Company, and its Investment Policy Committee. Dr. Griggs
received his Ph.D from Ohio State University.
MARK A. LEAVITT - Joined Oppenheimer & Co., Inc., an investment banking
firm, as a Vice President in the Corporate Finance Department in 1987, and
became Senior Vice President in 1989 and Managing Director on May 1, 1992. For
the seven years prior to that time, Mr. Leavitt was with Continental Illinois
National Bank, and was a Senior Director in the Capital Markets Group when he
left to join Oppenheimer & Co., Inc.
DAVID LLOYD JONES - Served as Vice President and Director of Tulsa Tribune
Company, a wholly-owned subsidiary of the Company ("Tribune"), from 1984 until
1992. Mr. Jones was elected as a Director of the Company in 1991. Mr. Jones is
the cousin of Howard G. Barnett, Jr., and the brother of Jenkin Lloyd Jones Jr.
MARTIN F. BECK - Is Chairman of Beck-Ross Communications, Inc., Rockville
Centre, New York, a company which he founded in 1968 and which owns and operates
several radio stations. Mr. Beck has been involved most of his life in the
media business, primarily in radio. He is a past president of the New York
State Broadcasters Association, Past Chairman of the Radio Board of the National
Association of Broadcasters, and currently a member of the Executive Committee
of that organization, and is a member of the Board of the Radio Advertising
Committee.
8
<PAGE>
MARTIN A. VAUGHAN - Is currently the Chairman of the Board, President and
Chief Executive Officer, Director and a major owner of Midwest Energy
Corporation, a privately-held oil and gas exploration company, and of Midwest
Energy Companies, Inc., a public international oil and gas exploration company.
Mr. Vaughan has been with the predecessors of such companies since 1982. Mr.
Vaughan was a director of Tribune/Swab-Fox from 1984 to May, 1995 and was Vice
Chairman of that Board from August, 1993, to May, 1995.
ROBERT J. SWAB - Has been associated with Tribune/Swab-Fox and its
predecessors and has served as a Director of such companies from May, 1969, to
May, 1995. He was Executive Vice President, Secretary and Treasurer of
Tribune/Swab-Fox or such predecessors from 1969 through January, 1979, President
from January, 1979, to April, 1980, and Chairman of the Board from April, 1980,
to October, 1984, and Chairman of the Executive Committee from October 1, 1984,
until December, 1994, when he retired.
JENKIN LLOYD JONES JR. - Was Vice President of Tribune from 1967, and became
Executive Editor of The Tulsa Tribune, a newspaper published by Tribune, in
1975. Mr. Jones was made Editor in 1988 and in November, 1991, he was made
Publisher. Mr. Jones is the brother of David Lloyd Jones and a cousin of Howard
G. Barnett, Jr.
RICHARD A. WIMBISH - Joined TISI, a wholly-owned subsidiary of the Company,
as Controller in 1987 and became Executive Vice President in 1990. Mr. Wimbish
was made President of TISI in 1991. Prior to joining TISI, Mr. Wimbish was
Controller and Chief Financial Officer of Carlson Reserve Corporation from 1981
through 1986.
STUART P. HONEYBONE - Joined Tribune/Swab-Fox in June, 1986, as Vice
President of TSF Capital Corp., a then wholly-owned subsidiary of Tribune/Swab-
Fox, and became Vice President of Tribune/Swab-Fox in 1988. Mr. Honeybone
became Vice President of the Company upon its formation in 1989. Mr. Honeybone
became President of BMT in December, 1994. From September, 1985, until joining
Tribune/Swab-Fox, Mr. Honeybone was the owner and chief executive officer of HBO
Management, a consulting firm specializing in problem or troubled businesses.
For the six years preceding this, Mr. Honeybone was with Hinderliter Industries,
Inc. and was Group Vice President, Energy Group, at the time of his leaving the
employ of such company.
JOHN R. LAUGHLIN - Founded Galaxy, which was acquired by the Company as of
March 1, 1994, in 1982, and has been continuously employed by such company since
such time.
WAYNE ATWOOD - Founded Atwood, a wholly-owned subsidiary of the Company,
with his wife, Linette Atwood, and Tom Bodine, in 1983, and has been
continuously employed by such company since such time.
DONNA J. PETERS - Served as Secretary of Tribune/Swab-Fox from 1984 until
May, 1995, and became Secretary of the Company upon its formation in 1989.
9
<PAGE>
JIMMY C. STRONG - Became Vice President-Human Resources of the Company in
1990. For the year before joining the Company, Mr. Strong was with Hinderliter
Heat Treating, Inc., as Vice President of Human Resources, and was with
Hinderliter Industries, Inc., a diversified manufacturing company, for the
preceding 16 years.
FORMS 3, 4 AND 5 FILINGS. To the Company's knowledge, based solely on
review of the copies of Forms 3, 4 and 5 furnished to the Company and written
representations that no other forms were required, all persons required to file
Forms 3, 4 and 5 during and with respect to 1994 timely made all required
filings, except that Wayne Atwood reported on his Form 5 for 1994, the ownership
of a previously unreported option to acquire 8,000 shares of the Company's
Common stock granted to him in connection with the Company's acquisition of
Atwood in 1990.
MERGER WITH TRIBUNE/SWAB-FOX
Pursuant to that certain Agreement for Contribution of Assets, Assumption
of Liabilities and Merger (the "Contribution Agreement"), by and among the
Company, Tribune and Tribune/Swab-Fox, Tribune/Swab-Fox caused the Company to be
formed. At that time, the Company entered into an Agreement for Management
Services (the "Management Agreement") to provide all of the necessary management
and administrative services for Tribune/Swab-Fox and its various separate
businesses and subsidiaries, other than the Company. The Management Agreement
was effective as of January 1, 1989, for three years through December 31, 1991,
unless extended by the mutual agreement of the parties. The agreement was
extended for 1992, 1993 and 1994. Tribune/Swab-Fox continued to separately pay
certain direct expenses of its operation, such as legal fees and taxes.
For the first 12 months of the Management Agreement, Tribune/Swab-Fox paid
the Company $70,000 per month for its services. The Company was paid $56,750,
$48,333, $43,333, $38,333, and $23,333 per month in 1990, 1991, 1992, 1993 and
1994, respectively. The Company believes that this is a fair payment for the
services rendered and is believed to be not less than what the Company could
receive for the rendering of similar services to an unrelated third party. In
contemplation of the merger of the Company and Tribune/Swab-Fox, as described
below, the parties extended the Management Agreement for 1995 at a flat fee of
$45,000.
Pursuant to that certain Agreement and Plan of Merger, dated January 25,
1995, as amended (the "Merger Agreement"), the Company and Tribune/Swab-Fox
agreed to merge, with the Company to be the surviving corporation (the
"Merger"). At a Special Meeting of Stockholders held May 24, 1995, for both
companies, the stockholders of both companies approved the Merger and the Merger
was effective on May 25, 1995.
Pursuant to the Merger Agreement, each holder of Class A Common Stock or
Class B Common Stock of Tribune/Swab-Fox (collectively, the "Tribune/Swab-Fox
Common Stock") could choose to receive, with respect to each share of
Tribune/Swab-Fox Common Stock owned, either 0.1255 of a share of Common Stock
of the Company or $0.88 in cash (the "Cash Alternative"). In the merger,
stockholders owning 8,849,784 shares of Tribune/Swab-Fox Common Stock chose the
Cash Alternative. The maximum number of shares of Common Stock which the
Company could have issued in the Merger was 3,977,500 shares, less shares
attributable to stock in Tribune/Swab-Fox owned by the Company, or a net
3,834,087 shares.
10
<PAGE>
Because of the number of shares tendered for the Cash Alternative, the total
number of shares of Common Stock which the Company has or will issue in the
Merger to former stockholders of Tribune/Swab-Fox is 2,723,322 shares. Since the
3,777,500 shares of Common Stock owned by Tribune/Swab-Fox were canceled for no
consideration in the Merger, the net effect of the Merger and the Cash
Alternative is that the total outstanding shares of the Company will have been
reduced to 3,839,801 after all of the transactions contemplated by the Merger
are completed, which is expected to happen in the near future.
To effect the Cash Alternative, the Company borrowed $2,000,000, with the
remaining $5,788,000 coming from the Company's cash reserves. Certain officers,
directors and nominees for directors or their affiliates elected the Cash
Alternative in the Merger, as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
TRIBUNE/SWAB-FOX CASH RECEIVED IN
TENDERED IN THE THE CASH
NAME OF STOCKHOLDER CASH ALTERNATIVE ALTERNATIVE
------------------- ------------------- ----------------
<S> <C> <C>
Jenkin Lloyd Jones Jr. /(1)/ 800,000 $ 704,000.00
David Lloyd Jones /(2)/ 883,758 777,707.04
Billie T. Barnett, as Trustee of the Howard G.
Barnett, Jr. Trust for Adrienne Lee Barnett /(3)/ 387,099 340,647.12
Billie T. Barnett, as Trustee of the Howard G.
Barnett, Jr. Trust for Allison Michelle Barnett /(3)/ 387,099 340,647.12
Howard G. Barnett, Jr., as Trustee of the Katherine
Ann Kiser 1980 Trust /(4)/ 387,099 340,647.12
Robert J. Swab /(5)/ 594,575 523,226.00
J. Gary Mourton 39,541 34,796.08
Tulsa Tribune Foundation /(6)/ 1,593,490 1,402,271.20
</TABLE>
__________________________
/(1)/ The shares sold were sold by either the Revocable Inter Vivos Trust of
Jenkin Lloyd Jones Jr. or the Revocable Inter Vivos Trust of Carol B.
Jones. Carol B. Jones is the wife of Jenkin Lloyd Jones Jr. Excluded
from the table are shares sold by children and grandchildren of Jenkin
Lloyd Jones Jr.
/(2)/ Excluded from the amount shown as sold by David Lloyd Jones are shares
of Tribune/Swab-Fox sold in the Cash Alternative by his children or by
Mr. Jones as trustee under trusts for his nieces.
/(3)/ Billie T. Barnett is the wife of Howard G. Barnett, Jr., and the trusts
are for the sole benefit of their children.
/(4)/ The trust is for the sole benefit of Katherine Ann Kiser, Mr. Barnett's
niece.
/(5)/ Excludes shares sold by Mr. Swab's children.
/(6)/ Director Howard G. Barnett, Jr., and Advisory Directors Florence Lloyd
Jones Barnett and Jenkin Lloyd Jones are trustees of this foundation.
11
<PAGE>
CERTAIN TRANSACTIONS
By reason of the Merger, the Company is substituted for Tribune/Swab-Fox as
a lender under a Loan Agreement with Howard G. Barnett, Jr., Chairman, President
and Chief Executive Officer, that arose in 1984 in connection with the merger of
Tribune and the predecessor to Tribune/Swab-Fox. During 1994, the maximum
amount of Mr. Barnett's loan was $250,000 and that amount represents the amount
outstanding under such loan as of December 31, 1994. The balance of such loan
at December 31, 1993, was $235,000. As of May 1, 1995, this loan became an
installment loan requiring amortization of principal in semi-annual installments
(plus accrued interest at 8.5 percent per annum) equal to 1/15th of the
outstanding principal balance, with the first installment due October 31, 1995,
and semi-annual payments thereafter with the remaining principal and interest
being due on October 31, 1999. Mr. Barnett has pledged 87,279 shares of Common
Stock to secure this loan.
On May 29, 1990, Tribune/Swab-Fox entered into a Loan Agreement with Robert
J. Swab, with the Company being substituted for Tribune/Swab-Fox as lender as a
result of the Merger. This was a line-of-credit loan for up to $350,000. The
maximum loan balance outstanding during 1994 was $348,546, plus accrued
interest, due at December 31, 1994, and the principal plus accrued interest was
$324,317. On December 14, 1994, Tribune/Swab-Fox entered into a retirement
agreement (the "Retirement Agreement") with Mr. Swab and the Company is bound by
the terms thereof as a result of the Merger. The Retirement Agreement had
certain conditions relating to Mr. Swab's participation in the Merger, all of
which were fulfilled. See the table above under MERGER WITH TRIBUNE/SWAB-FOX
for a description of the shares of Tribune/Swab-Fox Common Stock sold by Mr.
Swab in the Cash Alternative in the Merger. Pursuant to Mr. Swab's Retirement
Agreement, effective December 31, 1994, the following matters, which are now
binding on the Company as a result of the Merger, were agreed to:
(i) Commencing January, 1995, for 72 consecutive months, Mr. Swab will be
paid the amount of $5,130 per month.
(ii) Mr. Swab entered into a Covenant-Not-to-Compete (with 30 percent of
the payments described in (i) above being allocated for such
Covenant-Not-to-Compete).
(iii) Mr. Swab's loan has been reduced to an outstanding balance of
$299,317, bearing interest, payable quarterly, at 9 percent per annum,
with $25,000 of principal payable each year, and the remaining balance
due May 31, 1998.
(iv) The loan is secured by 50,146 shares of Common Stock. Mr. Swab has the
right to "put" such 50,146 shares to the Company at a price of $5.976
per share for three years. The Company has a "call" on such shares for
such three year period at $8.765 per share. All proceeds of any such
"put" or "call," if exercised by either party, will be used to pay
principal on the loan.
(v) Mr. Swab has an additional "put" at $5.976 per share on an additional
37,650 shares of Common Stock, exercisable 12,550 shares a year for
1995, 1996 and 1997. Similarly, the Company has a "call" on such
shares, on the same annual basis, at $8.765 per share.
12
<PAGE>
In connection with the Agreement for Purchase and Sale of Stock whereby the
Company acquired 100 percent of the issued and outstanding common stock of
Galaxy, the Company, as tenant through Galaxy, entered into (and guaranteed) a
Lease Agreement with John R. Laughlin, as landlord. The Lease covers the
principal office and warehouse building occupied by Galaxy in connection with
its business, comprising approximately 25,000 square feet of space, extends for
an initial term of five years and provides for a rental amount of $14,565 per
month during the initial term. The Lease also contains an option to renew for
five additional years at a rate of $15,621 per month. As part of the Lease the
tenant also pays certain tax, insurance, maintenance and operating costs. The
terms of the Lease were negotiated with Mr. Laughlin on an arm's-length basis
prior to the closing of the acquisition and are comparable to those to which the
Company would have agreed with an unrelated third party.
In August, 1994, the Company purchased all of the Company's Common Stock
owned by R. B. Haave Associates, Inc. (483,900 shares) for $2,600,962 or $5.375
per share. These shares were retired by the Company.
On December 30, 1994, the Company loaned $1,250,000 under a $2,500,000 line
of credit to Tribune/Swab-Fox, due July 1, 1995, with interest at Chase
Manhattan prime rate plus 1.5 percent (10% at December 31, 1994). Such loan was
effectively repaid as part of the Merger.
ACTIVITIES OF THE BOARD OF DIRECTORS
During 1994, the Board of Directors held four meetings. All Directors
attended all of the meetings, except that Mr. Beck missed two meetings and Mr.
Leavitt missed one meeting. The Board of Directors also approved three Consents
to Action during 1994.
Three committees of the Board of Directors operated during 1994. An
Executive Committee, composed of Messrs. Barnett and Mourton, is empowered to
take actions between meetings of the Board of Directors of a type which would
otherwise require the approval of the Board. The major function of the
Executive Committee is to oversee the expenditure of funds in accordance with
the plans and budgets adopted by the Board of Directors. No formal meetings of
the Executive Committee were held during 1994. Messrs. Leavitt, Griggs, and
Jones comprise the Compensation Committee. This committee is to make
recommendations to the Board of Directors concerning compensation matters
affecting officers of the Company. This Committee met once in 1994, with all
members in attendance, and met telephonicly several times during the year (for
which no formal minutes were maintained). The Audit Committee is composed of
Messrs. Barnett, Beck and Leavitt. This committee was established to review the
audit procedures with the Company's independent public accountants and to review
and make proposals concerning the audit to the Board of Directors. The Audit
Committee met once in 1994, and all members participated.
13
<PAGE>
In addition, pursuant to the T/SF Communications Stock Purchase Plan,
Messrs. Mourton and Barnett were designated as the Administrative Committee to
oversee the administration of this plan. This plan has not been activated, and,
thus, no meetings of the Administrative Committee were held during 1994.
EXECUTIVE COMPENSATION
COMPENSATION.
Set forth below is certain information with respect to the compensation of
the Company's Chief Executive Officer and each of the Company's and its
subsidiaries' four other most highly compensated executive officers, based on
salary and bonus earned during 1994, for services in all capacities to the
Company and its subsidiaries during each of the Company's last three fiscal
years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------------------
AWARDS PAYOUTS
---------------------------- -------
ANNUAL COMPENSATION /(1)/
---------------------------------
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPENSA-
NAME AND SALARY BONUS SATION AWARD SARS PAYOUTS TION
PRINCIPAL POSITION YEAR ($) ($)/(2)/ ($) (S)($)/(3)/ (#)/(4)/ ($) ($)/(5)/
- ------------------ ---- ------- -------- ------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Howard G. Barnett, Jr./(6)/ 1994 207,704 77,889 --- 77,889 75,000 --- 5,544
Chairman, President and 1993 207,704 -0- --- --- --- --- 4,261
Chief Executive Officer 1992 207,704 46,657 --- --- --- --- 5,589
Wayne Atwood 1994 128,670 15,938 --- 31,875 10,000 --- 3,292
President, Atwood 1993 138,915 91,668 --- --- --- --- 2,656
1992 132,300 126,662 --- --- --- --- 2,646
J. Gary Mourton 1994 151,410 34,067 --- 34,067 37,500 --- 4,620
Senior Vice President and 1993 151,410 -0- --- --- --- --- 3,475
Chief Financial Officer 1992 151,410 30,973 --- --- --- --- 3,465
Robert E. Craine, Jr. 1994 133,900 30,127 --- 30,127 37,500 --- 4,107
Executive Vice President 1993 133,900 7,500 --- --- --- --- 2,884
1992 133,900 27,386 --- --- --- --- 3,412
Richard A. Wimbish 1994 125,000 36,192 --- --- 22,500 --- 3,960
President, TISI 1993 100,000 26,500 --- --- --- --- 2,593
1992 90,900 18,000 --- --- --- --- 2,138
Hedy Halpert/(7)/ 1994 248,218 154,827 --- --- --- --- 5,544
formerly President and 1993 227,570 72,809 --- --- --- --- 4,497
Chief Operating 1992 205,000 75,851 --- --- --- --- 4,364
Officer of BMT
</TABLE>
___________________
/(1)/ No cash compensation other than the annual amounts described was paid to
any of the named executives during the period shown. Certain executives
are also entitled to car allowances or are provided cars, and club dues
are paid for certain executives. The value of such perquisites is not
required to be disclosed because the aggregate amount of such compensation
does not exceed the lesser of $50,000 or 10 percent of the total amount of
annual salary and bonus for any named executive.
/(2)/ Includes bonuses earned for the year, even if paid in another year.
14
<PAGE>
/(3)/ Under the T/SF Communications Corporation 1994 Incentive Stock Plan (the
"Incentive Stock Plan"), approved by the stockholders of the Company at
the 1994 Annual Meeting of Stockholders, one-half of the 1994 bonus paid
to Howard G. Barnett, Jr., J. Gary Mourton and Robert E. Craine, Jr., was
to be paid in the form of restricted stock grants. The amount shown here
represents the dollar amount of such stock grants, which were granted at a
rate of $6.25 per share, being the closing price on the American Stock
Exchange for Common Stock on December 30, 1994 (the last trading day of
1994). Each such stock grant vests 100 percent after three years, assuming
the employee is then employed by the Company (subject to earlier vesting
in the case of death or disability of employee). Dividends are payable on
the restricted stock to the same extent as would be paid on Common Stock.
Two-thirds of Wayne Atwood's 1994 bonus, or $31,874, was paid by such a
restricted stock grant with the price of the stock (being $7.81 per share)
used to determine the number of shares received (being 4,081) determined
based on the average of the 20 trading days preceding April 30, 1995.
There are no other outstanding restricted stock grants.
/(4)/ Consists solely of options to acquire shares of Common Stock.
/(5)/ These amounts represent the total value of the Company's contributions
made or accrued to the Company's 401(k) plan and, as to Mr. Barnett only,
by Newspaper Printing Corporation ("NPC") under its 401(k) plan for 1992
when Mr. Barnett was also employed by this agency of Tribune. All such
persons are 100 percent vested in their accounts under the Company's plan,
and Mr. Barnett was 100 percent vested in his accrued benefits under the
NPC plan. Mr. Barnett's vested interest in the NPC plan was distributed to
him in 1992 as he terminated his employment with NPC as part of the
agreement which resulted in the closure of The Tulsa Tribune.
/(6)/ The cash compensation shown for Howard G. Barnett, Jr., in the table does
not include amounts paid to him as a director of Tribune/Swab-Fox.
Employees who are Directors of the Company do not receive fees from the
Company as Directors.
/(7)/ Hedy Halpert, formerly President and Chief Operating Officer of BMT, and
two other officers of BMT (together, the "BMT Senior Executives"), were
removed as officers of BMT in December, 1994. The payments in the table
above to Ms. Halpert were pursuant to an Employment Agreement with her
which expired December 31, 1994. The formal severance of full-time
employment with BMT by the BMT Senior Executives occurred pursuant to
agreements entered into in January, 1995 (the "Employment/Severance
Agreements"). Pursuant to the Employment/Severance Agreements, the BMT
Senior Executives are required to provide varying amounts of services
during 1995 and will be compensated therefor as provided in such
agreements. In particular, each agreement with the BMT Senior Executives
provides for a significant bonus to be paid upon the sale of Convenience
Store News, The Journal of Petroleum Marketing and United States
Distribution Journal, if accomplished in 1995. If such sale is not
accomplished, bonuses will be paid based on an agreed-to amount. Thus, the
primary function of the BMT Senior Executives in 1995 will be to assist in
the sale of the three journals being held for sale. On June 16, 1995, the
Company executed an agreement to sell such journals and, subject to the
satisfaction of certain conditions precedent, a closing is expected to
occur in July, 1995.
15
<PAGE>
OPTIONS.
The following table sets forth certain information with respect to
options exercised by the named executive officers of the Company and its
subsidiaries during 1994, and the number and value of unexercised options held
by such persons at the end of the year. The Company has never granted any stock
appreciation rights.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
-------------------------------------
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDER- IN-THE-MONEY
LYING UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT AT FISCAL YEAR-
FISCAL YEAR-END END ($) /(1)(2)/
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED($)/(1)/ UNEXERCISABLE UNEXERCISABLE
---- --------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Howard G. Barnett, Jr. -0- -0- 0/75,000 0/150,000
Wayne Atwood -0- -0- 5,336/12,664 0/20,000
J. Gary Mourton /(3)/ -0- -0- 20,833/37,500 0/75,000
Robert E. Craine, Jr. /(3)/ -0- -0- 12,500/37,500 0/75,000
Richard Wimbish /(3)/ -0- -0- 1,166/22,500 0/45,000
Hedy Halpert -0- -0- 0/0 0/0
</TABLE>
_______________________
/(1)/ Market value of the underlying securities at exercise date or fiscal year-
end, as the case may be, minus the option exercise price.
/(2)/ The closing price for Common Stock on the American Stock Exchange on
December 30, 1994, the last trading day of the fiscal year, was $6.25.
/(3)/ In March, 1995, Messers., Mourton, Craine and Wimbish allowed options to
acquire 20,833, 12,500 and 1,166 shares, respectively, of Common Stock at
$12.00 per share, to lapse.
16
<PAGE>
The following table sets forth certain information with respect to options
granted to the named executive officers of the Company and its subsidiaries
during 1994. The Company has never granted any stock appreciation rights.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------ POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM /(2)/
OPTIONS/SARS EMPLOYEES IN OR BASE EXPIRATION ---------------------------
NAME GRANTED(#)/(1)/ FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
------------------------ --------------- -------------- ----------- ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Howard G. Barnett, Jr. 75,000 37.0 4.25 1/25/04 200,460 508,005
Wayne Atwood 10,000 4.0 4.25 1/25/04 26,728 67,734
J. Gary Mourton 37,500 18.5 4.25 1/25/04 100,230 254,003
Robert E. Craine, Jr. 37,500 18.5 4.25 1/25/04 100,230 254,003
Richard Wimbish 22,500 11.1 4.25 1/25/04 60,138 152,402
Hedy Halpert -0- --- --- --- --- ---
</TABLE>
__________________
/(1)/ Consists solely of options to acquire shares of Common Stock. The options
were granted for a term of ten years, subject to earlier termination in
certain events related to the termination of employment. The exercise
price of the options is equal to the fair market value of the Common Stock
on the date of grant. The options become exercisable in full on
January 25, 1997. The option exercise price may be paid in cash, by
delivery of already-owned shares, by offset of the underlying shares, or
by a combination of such methods. Tax withholding obligations related to
exercise may be paid by offset of the underlying shares, subject to
certain conditions.
/(2)/ Potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
term (ten years from the date of grant), assuming that the Common Stock
appreciates in value from the date of grant to the end of the option term
at rates of 5 percent and 10 percent, respectively, compounded annually.
COMPENSATION OF DIRECTORS. Employee Directors receive no additional
compensation for service on the Board of Directors or any committee thereof.
Nonemployee Directors are paid a fee of $5,000 per year, plus an attendance fee
of $350 per meeting. Nonemployee Directors receive an additional fee of $1,000
per year for each committee of the Board of Directors on which they serve, plus
an attendance fee of $350 per committee meeting. While Mr. Barnett did not
receive Director's fees from the Company, he did receive Director's fees from
Tribune/Swab-Fox in an amount comparable to the Company's payments to its
nonemployee Directors. All Directors are reimbursed by the Company for out-of-
pocket expenses incurred by them in connection with their service on the Board
of Directors and any committee thereof. In addition to the fees paid to Dr.
Griggs for serving as a Director of the Company, the Company has agreed to pay
the firm of Griggs & Santow Incorporated, economists and consultants, $5,000
annually for periodic consulting services.
EMPLOYMENT AGREEMENTS. As of June 27, 1995, the Company was subject to
employment agreements with certain directors, nominees for directors, officers
or key employees, as follows:
17
<PAGE>
DAVID LLOYD JONES - As part of Tribune's termination of the Joint Operating
Agreement ("JOA") which resulted in the closure of The Tulsa Tribune, Director
David Lloyd Jones' employment with NPC was terminated and he was no longer
needed as an employee of Tribune. A severance arrangement was entered into by
the Company whereby Mr. Jones is employed by the Company for special projects
and is paid $50,000 per year through March, 1999. This severance payment is in
lieu of severance to which Mr. Jones would have been entitled under the
Company's package for other Tribune newsroom employees of NPC.
JENKIN LLOYD JONES JR. - In the same way as for David Lloyd Jones, Jenkin
Lloyd Jones Jr.'s employment with NPC was terminated upon the termination of the
JOA with World. A severance arrangement was entered into by the Company whereby
Mr. Jones is employed by the Company for special projects and is paid $33,333
per year through December, 1998. This severance package is in lieu of severance
to which Mr. Jones would have been entitled under the Company's package for
other Tribune newsroom employees of NPC.
WAYNE ATWOOD - Effective January 1, 1994, the Company entered into a new
three-year Employment Agreement with Mr. Atwood providing for his continued
service as President of Atwood at a base salary of $145,860 per year, with
salary increases in subsequent years subject to the discretion of the Company.
For 1995, due to a reduced work schedule caused by an illness and related
disability, Mr. Atwood's base salary has been reduced to $100,000. Mr. Atwood's
Employment Agreement has an incentive compensation provision. This provision
for 1994 provided that he could earn additional amounts for 1994 up to a maximum
of $30,625 plus nine percent of the amount by which Atwood's 1994 pre-tax income
exceeded the sum of Atwood's 1993 pre-tax income plus $200,000. All incentive
compensation is to be paid through issuance of restricted stock of the Company
which will provide for vesting three years after issuance (January 1, 1997, for
bonus shares earned for 1994), unless Mr. Atwood elects, prior to July 1 of each
year, to receive one-third of the incentive compensation in cash. As noted in
the above table, Mr. Atwood made such election for 1994. Mr. Atwood's incentive
compensation plan for 1995 provides that, in addition to his base salary, he may
earn additional amounts up to a maximum of $25,625 plus 9% of the amount by
which Atwood's 1995 adjusted pre-tax net income exceeds the sum of Atwood's 1994
adjusted pre-tax net income ($1,350,000) plus $200,000. All incentive
compensation is to be paid through the issuance of restricted stock of the
Company, which will provide for vesting three years after the issuance
(January 1, 1998, for bonus shares earned for 1995), unless Mr. Atwood elects,
prior to July 1, 1995, to receive one-third of the incentive compensation
in cash.
LINETTE ATWOOD - Effective January 1, 1994, the Company entered into a
new three-year Employment Agreement with Mrs. Atwood providing for her continued
service as Executive Vice President of Atwood at a base salary of $107,311 per
year, with salary increases in subsequent years subject to the discretion of the
Company. For 1995, Mrs. Atwood's base salary will be $110,531. Mrs. Atwood's
Employment Agreement has an incentive compensation provision. This provision
for 1994 provided that she could earn additional amounts for 1994 up to a
maximum of $20,625 plus nine percent of Atwood's 1994 pre-tax income over the
sum of Atwood's 1993 pre-tax income plus $200,000. All incentive compensation
is to be paid through issuance of restricted stock of the Company which will
provide for vesting three years after issuance (January 1, 1997, for bonus
shares earned for 1994) , unless Mrs. Atwood elects, prior to July 1 of each
year, to receive one-third of the incentive compensation in cash. Mrs. Atwood
18
<PAGE>
made such election for 1994. Mrs. Atwood's incentive compensation plan for 1995
provides that, in addition to her base salary, she may earn additional amounts
up to a maximum of $25,625 plus 9% of the amount by which Atwood's 1995 adjusted
pre-tax net income exceeds the sum of Atwood's 1994 adjusted pre-tax net income
($1,350,000) plus $200,000. All incentive compensation is to be paid through
the issuance of restricted stock of the Company, which will provide for vesting
three years after the issuance (January 1, 1998, for bonus shares earned for
1995), unless Mrs. Atwood elects, prior to July 1, 1995, to receive one-third of
the incentive compensation in cash.
JOHN R. LAUGHLIN - On the date the Company acquired Galaxy, March 17, 1994,
the Company entered into an Employment Agreement with Mr. Laughlin extending
through December 31, 1996. Mr. Laughlin is to serve as President and Chief
Operating Officer of Galaxy at a salary of $90,000 per year. If Galaxy's pre-
tax income exceeded $800,000 in 1994, Mr. Laughlin's compensation would increase
to $100,000 in 1995, and if Galaxy's pre-tax income exceeds $1,100,000 in 1995,
Mr. Laughlin will receive a salary of $120,000 in 1996. The 1994 pre-tax income
(as computed for purposes of Mr. Laughlin's contract) exceeded $800,000 and,
thus, his salary for 1995 will be $100,000. The Employment Agreement provides
normal provisions for expense reimbursement, vacations, ownership of
intellectual property, confidentiality of information and normal termination
provisions. The Agreement also provided for the grant of an option to Mr.
Laughlin to purchase 20,000 shares of Common Stock at a price of $5.50 per share
under the T/SF Communications Incentive Stock Option Plan (this is a qualified
stock option plan originally adopted in 1989 and is a different plan from the
1994 Incentive Stock Plan). The option term is for five years and provides that
he will acquire the right to exercise the options ratably over a three-year
period from the date of grant at the rate of one-third after the end of each
year of service with the Company.
HEDY HALPERT - As noted above, in December, 1994, Hedy Halpert, along with
two other executives (together, the "BMT Senior Executives"), were removed as
officers of BMT. Hedy Halpert was employed under an Employment Agreement which
ended on December 31, 1994. The decision to remove such officers and enter into
the following described employment agreement with Hedy Halpert (as well as
employment agreements with the other two BMT Senior Executives) was based on the
Company's determination that, after completion of the intended sale of three of
BMT's trade journals, the services of the BMT Senior Executives would no longer
be needed. Accordingly, on January 31, 1995, BMT entered into an Employment
Agreement with Ms. Halpert. The Employment Agreement provides for her
employment through January 12, 1996. Ms. Halpert is required to provide one-
half of a normal work week to BMT during the first four months of the agreement
and one-fourth of her normal work week for the remaining term thereof. Ms.
Halpert will be paid $14,000 per month and will be entitled to a bonus equal to
0.85 of one percent of the net sales price of the three trade journals. If the
trade journals do not sell during 1995, a bonus will be payable at December 31,
1995, equal to $75,250. In addition, Ms. Halpert is subject to certain
covenants-not-to-compete which can be extended through 1996 by the additional
payment in such year of $94,000. The other two BMT Senior Executives were
subject to similar employment agreements which provide for lower salary payments
and bonuses of 0.5 of one percent of the net sales price of the three trade
journals for each such BMT Senior Executive, or a minimum bonus of $42,500 each.
Payments under the agreements with the BMT Senior Executives encompass all
severance obligations of the Company to them.
19
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
Common Stock for the period from December 31, 1989, through December 31, 1994,
with the cumulative total return of two indices during such period.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER
RETURN AMONG T/SF COMMUNICATIONS CORPORATION,
AMERICAN STOCK EXCHANGE MARKET VALUE INDEX, AND
S&P PUBLISHING GROUP INDEX*
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Company $100 29 19 63 56 74
Industry $100 82 98 111 137 124
AMEX $100 81 104 106 126 115
</TABLE>
- -------------------------
* The total return set forth above assumes $100 was invested in Common Stock and
each of the indices set forth above on December 31, 1989, and that all
dividends were reinvested. The S&P Publishing Group Index is compiled by
Standard & Poor's Corporation and is composed of Dun & Bradstreet Corporation,
McGraw Hill Publishing Company and Meredith Corporation.
20
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION.
The following report from the Compensation Committee of the Board of
Directors (the "Compensation Committee") is intended to describe the factors
considered by the Compensation Committee and the Board in determining
compensation packages for certain key employees of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The Compensation Committee is composed of three outside directors, Messrs.
Leavitt, Griggs and David Lloyd Jones. Mr. Jones is technically an employee of
the Company (see the discussion of Mr. Jones' arrangement above). However, his
employment contract relates primarily to the severance of his employment
relationship with Tulsa Tribune Company and, therefore, the Board of Directors
considers Mr. Jones to be an outside director for purposes of the Compensation
Committee.
The Compensation Committee has oversight responsibility for the Company's
executive compensation programs. Because two of the five highest paid
executives in the Company are managers of specific subsidiaries, the
Compensation Committee has acted primarily with respect to the compensation of
the executive management of the Company's headquarters operation and as the
granting committee for all employees under the Incentive Stock Option Plan and
1994 Incentive Stock Plan. The Compensation Committee recommends action with
respect to compensation issues and the full Board of Directors is responsible
for acting on the recommendations of the Compensation Committee.
SUBSIDIARY MANAGER COMPENSATION.
One of the five highest paid executives in the Company for 1994, Wayne
Atwood, and Hedy Halpert (one of the BMT Senior Executives) were subject to
employment agreements for 1994. Mr. Atwood's contract extends through 1996 and
is described elsewhere herein. Prior to 1994, Mr. Atwood was employed under an
incentive arrangement which related to the original acquisition of Atwood in
1990. In renegotiating Mr. Atwood's employment contract in 1994, his
compensation package was negotiated by management of the Company based on Mr.
Atwood's former base salary and the need to have future incentive bonuses
somewhat less generous than those agreed to when the Company acquired Atwood
and was approved by the Board of Directors as a whole, rather than the
Compensation Committee. No attempt was made to compare Mr. Atwood's salary to
any industry norms.
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With respect to Ms. Halpert, her compensation was based on an employment
agreement which, to a large extent, was historical in nature. Ms. Halpert's
original employment agreement arose in connection with the acquisition by the
Company of BMT on December 1, 1986, at which time Ms. Halpert was elevated to
the job of President of BMT. The original employment agreement had a three year
term and it has been renegotiated twice. The employment agreement applicable in
1994 was entered into in 1992, and it ended December 31, 1994. When such
agreement was renegotiated for the term ended December 31, 1994, Ms. Halpert's
base salary was frozen and her ability to earn increases in compensation was
tied totally to the performance of BMT, specifically to increasing targets of
operating income. As Ms. Halpert was the head of a subsidiary and, thus,
reported and was subject to the direction of the Chief Executive Officer of the
Company, Ms. Halpert's agreement was negotiated by Mr. G. Douglas Fox (then CEO)
and was approved by the Board of Directors as a whole, rather than the
Compensation Committee. There was no attempt at the time to compare Ms.
Halpert's salary to industry norms as her base salary was being frozen.
The Compensation Committee and the Board of Directors view the negotiation
of salaries and incentive plans with managers of divisions or subsidiaries as
being the function of the Chief Executive Officer, subject to the approval of
the Board of Directors. Thus, Mr. Barnett separately negotiated and agreed to
Mr. Wimbish's compensation plan and the Board of Directors approved such
compensation without modification.
COMPENSATION OF EXECUTIVE OFFICERS.
Before 1994, while industry data has been looked at from time to time, the
Compensation Committee had relied primarily on the individual experiences of the
members of the Compensation Committee in determining the reasonableness of
compensation of the Company's executives. Prior to 1994, salaries and
compensation had been based primarily on the historical salary trend of the
particular employee. In other words, the salary level at which an employee was
hired and then modest increases after that date were the basis for salaries.
Bonuses were, until 1990, subjective. For 1991 and 1992, there was an Executive
Incentive Bonus Plan in place which tied executive bonuses to improvement in
operating income of the Company. No bonus plan existed for 1993 and no bonuses
were paid to headquarters executive personnel.
In 1993, the Company hired a national executive compensation consulting
firm to provide assistance to the Compensation Committee in devising an
appropriate executive compensation plan. In January, 1994, the Compensation
Committee received the report of the consultant. The consultant was asked to
provide information on two basic matters. First, to compare the levels of
compensation of the Company's key executives to employees in comparable
positions in comparable companies. As a result of this, the Compensation
Committee determined that the base salaries for Messrs. Barnett, Mourton and
Craine were within the 50th to 75th percentile range of comparable salaries. No
increases in base salary for 1994 were awarded. This same data indicated to the
Compensation Committee that the Company was not providing a comparable level of
compensation in terms of short-term and long-term incentive payments/awards.
22
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The second matter addressed by the consultant was this lack of incentive
compensation. In particular, the consultant had been asked to provide
information on plans in comparable companies, both from the perspective of the
amounts which would be appropriate for Messrs. Barnett, Craine and Mourton, and
in the mix and type of various compensation components. In doing this, the
consultant was instructed to look to plans which closely tie the executives'
bonuses to stock appreciation.
As a result of this, in 1994, the Compensation Committee recommended and
the Board adopted the 1994 Incentive Stock Plan and a related target bonus plan.
There are two basic features of this incentive plan:
(i) Based on a target set by the Board of Directors each year for earnings
of the Company, bonuses can be earned on an annual basis beginning at
80 percent of the targeted net income for the Company. This target is
intended to be set by the Board of Directors at a level which reflects
the Board's view of necessary earnings growth and return on
investment. As this plan is new, the method by which each year's
target will be set in the future has not been determined and the 1994
target was set based on the Board of Directors' view of an appropriate
earnings target. An important feature of this part of the plan is that
50 percent of the bonus earned each year by Messrs. Barnett, Mourton
and Craine will be paid in the form of a restricted stock grant under
the Incentive Stock Plan. This grant is to be based on the market
value of the Common Stock at the time of the grant and will provide
for vesting in the employee three years from the date of issuance; and
(ii) A nonqualified stock option plan under which stock options can be
granted to key employees of the Company. In 1994, the Compensation
Committee granted options under the Incentive Stock Plan to Messrs.
Barnett, Mourton, Craine, Atwood and Wimbish.
In making the grants under the Incentive Stock Plan, the Compensation
Committee determined to make relatively large grants initially with vesting to
occur 100 percent in three years. The Compensation Committee believed that the
stock price for the Common Stock has been depressed for a number of years and
that stock price appreciation was the most important goal of the Company in the
next three years. By providing relatively large options in the first year, it
was felt that the executives of the Company would be appropriately focused on
this goal. The number of options granted were consistent with the
recommendation and report of the compensation consultant.
In the future, the Compensation Committee and the Board of Directors intend
to maintain an annual incentive plan by appropriately adjusting the target net
income which must be achieved before bonuses are paid to reflect the Board's
goal of having net income increases be the primary method for driving stock
appreciation. It is the belief of the Compensation Committee that the
combination of short-term incentives based on targets which are set by the Board
of Directors and significant stock options in the hands of Messrs. Barnett,
Mourton and Craine, together with the stock options granted under the Incentive
Stock Plan to certain other key employees of the Company, will have the desired
effect of focusing management on stock value.
23
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For 1995, the determination of net income for the target will exclude any
gain on the intended sale of the three trade journals, as described elsewhere in
this Proxy Statement. Because of the many changes that occurred to the Company
in 1994 and are anticipated in or have occurred in 1995 (e.g., the proposed sale
of the trade journals and the merger with Tribune/Swab-Fox, to name the two most
significant) the Compensation Committee is studying the possibility of utilizing
a different approach to short-term executive bonuses in 1995. Economic value
added models are being studied and evaluated for their ability to take major
structural changes, such as those contemplated for 1995, into account.
The Compensation Committee has not set particular targets for executive
compensation. However, the Compensation Committee recognizes the need for the
Company's compensation package to remain competitive to ensure the retention of
key employees and the ability to recruit additional key employees as needed.
The use of the outside compensation consultant marks the beginning of the
Compensation Committee's efforts to monitor the compensation of key employees
more closely and to ensure that compensation issues are being appropriately
addressed.
A 1993 amendment to the Internal Revenue Code of 1986, as amended, provides
that no publicly held company shall be permitted to deduct from its income taxes
compensation exceeding $1 million paid to its chief executive officer or any of
its four other highest paid executive officers unless (a) the compensation is
payable solely on account of the attainment of performance goals, (b) the
performance goals are determined by a compensation committee of two or more
outside directors, (c) the material terms under which the compensation is paid
are disclosed to and approved by the stockholders, and (d) the compensation
committee certifies that the performance goals were met. Neither the
Compensation Committee nor the Board of Directors expects such restrictions to
have an impact, or result in the loss of a deduction, with respect to
compensation paid by the Company to such persons (including stock option and
restricted stock grants under the Incentive Stock Plan) because the compensation
paid by the Company to such persons is substantially below the $1 million
threshold.
BENEFITS.
Benefits offered to key executives are largely those that are offered to
the general employee population, though the amount of certain benefits varies
based on salary levels. Other variances include either automobiles or
automobile allowances and, in certain cases, club dues. In the case of Mr.
Atwood, these benefits are provided for in his employment agreement.
Mark A. Leavitt
William N. Griggs
David Lloyd Jones
24
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INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP acted as the independent public accountants for the
Company for the fiscal years ended December 31, 1993 and 1994, and has been
selected as the Company's independent public accountants for 1995. Arthur
Andersen LLP expects to have representatives at the Annual Meeting of
Stockholders who will have an opportunity to make a statement and be available
to respond to appropriate questions.
OTHER MATTERS
No business other than that described above is expected to come before the
Meeting, but should any other matter requiring a vote of stockholders arise,
including a question of adjourning the Meeting, the persons named in the
accompanying Proxy will vote thereon, according to their best judgment, in the
manner they consider to be in the best interest of the Company. In the event
that any of the nominees for the office of Director should withdraw or become
unavailable for reasons not presently known, the persons named as proxies will
vote for other persons in their place, in what they consider to be in the best
interest of the Company, based on nominations submitted by the Board of
Directors.
Included with this Proxy Statement is the Company's Annual Report for its
fiscal year ended December 31, 1994. All stockholders are urged to carefully
review the Annual Report prior to completing their proxy.
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON
WHO WAS A BENEFICIAL OWNER OF ITS COMMON STOCK ON JUNE 27, 1995, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
(TOGETHER WITH ALL SCHEDULES AND EXHIBITS THERETO, IF REQUESTED). ALL REQUESTS
FOR SUCH ANNUAL REPORT MUST BE IN WRITING DIRECTED TO THE SECRETARY OF THE
COMPANY AND MUST CONTAIN THE REPRESENTATION THAT THE PERSON MAKING THE REQUEST
WAS A BENEFICIAL OWNER OF THE COMMON STOCK OF THE COMPANY ON JUNE 27, 1995.
PLEASE DATE, SIGN AND RETURN THE PROXY AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED ENVELOPE FOR WHICH NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. A PROMPT RETURN OF THE PROXY WILL BE APPRECIATED AS IT WILL SAVE THE
COMPANY THE EXPENSE OF FURTHER MAILINGS.
T/SF COMMUNICATIONS CORPORATION
Donna J. Peters
Secretary
Date: June 30, 1995
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[Proxy Card]
T/SF COMMUNICATIONS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 1, 1995
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Howard G.
Barnett, Jr., and Robert E. Craine, Jr., or either of them, with full power of
substitution, as attorneys and proxies for the undersigned, to vote at the
Annual Meeting of Stockholders of T/SF Communications Corporation (the
"Company"), to be held at the Doubletree Hotel at Warren Place, 6110 South Yale,
Tulsa, Oklahoma, at 9:00 a.m., C.D.T., on August 1, 1995, or any adjournment or
adjournments of such Meeting, all shares of Common Stock, $0.10 par value per
share, of the Company ("Common Stock") which the undersigned is entitled to
vote, on the following matters:
1. NUMBER OF DIRECTORS
FOR the creation of a Board of Directors composed of eleven (11)
members, nine (9) of which will be elected at the meeting, thus leaving
two vacancies which may be filled by the Board of Directors at any time.
FOR AGAINST ABSTAIN
-------- -------- -------
2. ELECTION OF DIRECTORS
FOR the election of the nine directors listed below:
Howard G. Barnett, Jr. Martin F. Beck Robert E. Craine, Jr.
William N. Griggs David Lloyd Jones Jenk Jones Jr.
Mark A. Leavitt Robert J. Swab Martin A. Vaughan
FOR all nominees (except as indicated to the contrary below)
--
WITHHOLD AUTHORITY for all nominees
--
(NOTE: To withhold authority for any individual nominee(s),
write the name(s) in the space below:)
_______________________________________________
<PAGE>
3. IN THEIR DISCRETION UPON ALL OTHER MATTERS PROPERLY COMING BEFORE THE
ANNUAL MEETING OF STOCKHOLDERS.
This Proxy will be voted in accordance with instructions given. IN THE
ABSENCE OF INSTRUCTION, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3. This
Proxy is revocable at any time before it is exercised.
Receipt of the Notice of Annual Meeting of Stockholders and the
accompanying Proxy Statement and Annual Report is hereby acknowledged.
Dated , 1995
-------------- -------------------------------------------
Signature
Please sign name exactly as printed on Proxy
NOTE: Executors, administrators, trustees, custodians and others signing in
a representative capacity, including those signing on behalf of a
partnership or corporation, should indicate the capacity in which they sign.
If shares are held jointly, EACH holder should sign.
I do [_] do not [_] plan to attend the Annual Meeting of Stockholders.
