<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of December, 1998
HOLLINGER INC.
(Translation of registrant's name into English)
10 Toronto Street
Toronto, Ontario M5C 2B7
CANADA
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F Form 40-F x
----- -----
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No x
----- -----
<PAGE> 2
EXHIBIT LIST
<TABLE>
<CAPTION>
Sequential
Exhibit Description Page Number
- ------- ----------- -----------
<S> <C> <C>
99.1 Proxy Statement of Hollinger Inc.
dated April 9, 1999 4
99.2 Form of Proxy 23
99.3 National Policy Statement No. 41 24
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HOLLINGER INC.
Date: April 16, 1999
by: /s/ Charles G. Cowan, Q.C.
------------------------------
Name: Charles G. Cowan, Q.C.
Title: Vice President and
Secretary
<PAGE> 1
H O L L I N G E R I N C .
10 Toronto Street
Toronto, Ontario
M5C 2B7
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 1999
------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Hollinger
Inc. ("Hollinger") will be held at the Trading Floor, 2nd Floor, Design
Exchange, 234 Bay Street, Toronto, Canada, on WEDNESDAY, MAY 19, 1999, AT 11:00
A.M., TORONTO TIME, for the following purposes:
(a) to receive the consolidated financial statements of Hollinger and its
subsidiary companies for the financial year ended December 31, 1998
together with the report of the auditors thereon;
(b) to elect directors;
(c) to appoint auditors and to authorize the directors to fix their
remuneration; and
(d) to transact such further and other business as may properly come
before the meeting or any adjournments thereof.
DATED at Toronto the 9th day of April, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
CHARLES G. COWAN
Vice-President and Secretary
If you are unable to attend the meeting in person, you are requested to
date, sign and return the enclosed form of proxy in the envelope provided for
that purpose.
THE BOARD OF DIRECTORS HAS, BY RESOLUTION, FIXED 48 HOURS (EXCLUDING
SATURDAYS AND HOLIDAYS) PRECEDING THE TIME OF THE MEETING OR ANY ADJOURNMENTS
THEREOF AS THE TIME BEFORE WHICH PROXIES TO BE USED OR ACTED UPON AT THE MEETING
OR ANY ADJOURNMENTS THEREOF MUST BE DEPOSITED WITH, OR IF MAILED MUST BE
RECEIVED BY, MONTREAL TRUST COMPANY OF CANADA AT 151 FRONT STREET WEST, 8TH
FLOOR, TORONTO, ONTARIO, M5J 2N1.
* * * * *
IT IS EXPECTED THAT THE 1998 ANNUAL REPORT OF HOLLINGER INC., INCLUDING
CONSOLIDATED FINANCIAL STATEMENTS, WILL BE SENT TO SHAREHOLDERS NO LATER THAN
THE WEEK OF APRIL 26, 1999.
<PAGE> 2
MANAGEMENT PROXY CIRCULAR
MANAGEMENT SOLICITATION
THIS CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES
BY THE MANAGEMENT OF HOLLINGER INC. ("HOLLINGER" OR THE "CORPORATION") TO BE
USED AT THE ANNUAL MEETING OF SHAREHOLDERS OF HOLLINGER TO BE HELD ON MAY 19,
1999 (the "meeting"). It is expected that the solicitation will be primarily by
mail but proxies may also be solicited personally by regular employees of
Hollinger. The cost of such solicitation will be borne by Hollinger.
Hollinger International Inc., the 46.5% equity-owned (77.8% voting) U.S.
subsidiary of the Corporation, is referred to herein as "Hollinger
International".
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy are directors and officers
of Hollinger. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON, WHO NEED NOT BE A
SHAREHOLDER, TO REPRESENT HIM AT THE MEETING OTHER THAN THE PERSONS DESIGNATED
IN THE ENCLOSED FORM OF PROXY. This right may be exercised by inserting such
person's name in the blank space provided in the enclosed form of proxy or by
completing another proxy in proper form and by depositing it with Montreal Trust
Company of Canada, 151 Front Street West, 8th floor, Toronto, Ontario, M5J 2N1
not less than 48 hours (excluding Saturdays and holidays) before the time fixed
for the meeting or any adjournments thereof.
Any shareholder who has given a proxy has the right to revoke it at any
time as to any matter on which a vote has not already been cast pursuant to the
authority conferred by it by signing a written revocation of proxy and
depositing that instrument of revocation at the registered office of the
Corporation at any time up to and including the last business day preceding the
day of the meeting, or any adjournment thereof, or with the chairman of the
meeting on the day of the meeting, or any adjournment thereof, or in any other
manner permitted by law.
VOTING OF PROXIES
On any ballot called, shares represented by properly executed proxies in
favour of the persons designated in the printed portion of the enclosed form of
proxy will be voted or withheld from voting in accordance with the instruction
of the shareholder whose shares are represented. WHERE SHAREHOLDERS HAVE NOT
SPECIFIED IN THE FORM OF PROXY THE MANNER IN WHICH THE NAMED PROXIES ARE
REQUIRED TO VOTE THE SHARES REPRESENTED THEREBY, RETRACTABLE COMMON SHARES
REPRESENTED BY PROXY WILL BE VOTED IN RESPECT OF THE ELECTION OF DIRECTORS AND
THE APPOINTMENT OF AUDITORS AS SET FORTH UNDER THOSE HEADINGS IN THIS CIRCULAR.
THE ENCLOSED FORM OF PROXY, WHEN PROPERLY EXECUTED, CONFERS DISCRETIONARY
AUTHORITY UPON THE PERSONS DESIGNATED IN THE PRINTED PORTION THEREOF WITH
RESPECT TO AMENDMENTS OR VARIATIONS TO THE MATTERS IDENTIFIED IN THE NOTICE OF
MEETING OR OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING. At the date
hereof, the management of Hollinger is not aware of any amendments, variations
or other matters to come before the meeting other than the matters referred to
in the foregoing notice of meeting.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
Each holder of retractable common shares of record at the close of business
on April 9, 1999 (the "record date") will be entitled at the meeting to one vote
for each retractable common share held by him except as set out in the next
following paragraph.
A shareholder is entitled to his voting rights described above except to
the extent that (a) the shareholder has transferred the ownership of any of his
retractable common shares after the record date, and (b) the transferee of those
shares produces properly endorsed share certificates or otherwise establishes
that he owns such retractable common shares and demands not later than 10 days
before the meeting that his name be included in the list of shareholders
entitled to vote at the meeting, in which case the transferee is entitled to
vote such retractable common shares at the meeting.
On April 9, 1999 there were 32,891,072 retractable common shares of
Hollinger issued and outstanding and entitled to be voted on all matters at the
meeting. To the knowledge of the directors and officers of Hollinger, there
<PAGE> 3
is no beneficial owner or person who exercises control or direction over more
than 10% of the outstanding retractable common shares of Hollinger except as
follows. The Ravelston Corporation Limited ("Ravelston") exercises control or
direction over a total of 20,801,307 retractable common shares or 63.2% of the
outstanding retractable common shares of Hollinger. The Hon. Conrad M. Black
indirectly controls Ravelston and therefore beneficially owns or exercises
control or direction over 63.2% of the outstanding retractable common shares of
Hollinger.
In addition, as at March 31, 1999 there were outstanding 1,468,920
retractable common share Purchase Warrants (the "Warrants"). Each Warrant
entitles the holder to purchase one retractable common share of Hollinger for
$24.00 at any time on or before March 31, 2000.
The address of Ravelston is 10 Toronto Street, Toronto, Ontario, M5C 2B7.
ELECTION OF DIRECTORS
The board of directors is elected annually and may consist of such number
between 3 and 25 members as the directors may from time to time determine. The
directors have determined that the number of directors will be 17. Unless
authority to vote is withheld, retractable common shares represented by proxies
properly executed in favour of the persons designated in the printed portion of
the enclosed form of proxy will be voted for the election of the nominees named
below, all of whom are now directors and were elected to their present term of
office by a vote of shareholders at a meeting, the notice of which was
accompanied by a proxy circular. Management of Hollinger has no reason to
believe that any of the nominees will be unable to serve as a director but, if
that should occur for any reason prior to the meeting, it is intended that
discretionary authority shall be exercised by the persons designated in the
printed portion of the enclosed form of proxy to vote the proxy for the election
of any other nominee or nominees of management. Each director elected at the
meeting will hold office until the next annual meeting of shareholders or until
his successor is elected or appointed, unless his office is earlier vacated.
INFORMATION CONCERNING NOMINEES AS DIRECTORS
The following table and the notes thereto set forth the names of the
persons proposed to be nominated by management for election as directors, their
present principal occupations, all positions and offices with Hollinger and its
significant affiliates at present held by them, the year in which they were
first elected as directors of Hollinger or a predecessor corporation and the
approximate number of shares of Hollinger that they have advised Hollinger are
beneficially owned by them or over which they exercise control or direction:
<TABLE>
<CAPTION>
APPROXIMATE NUMBER OF SHARES
YEAR FIRST OF HOLLINGER BENEFICIALLY
NAME, MUNICIPALITY OF RESIDENCE BECAME A OWNED OR OVER WHICH CONTROL
AND POSITION(S) WITH HOLLINGER(1)(2) PRESENT PRINCIPAL OCCUPATION DIRECTOR OR DIRECTION IS EXERCISED(3)(4)
- ------------------------------------ ---------------------------- ---------- -------------------------------
<S> <C> <C> <C>
PETER Y. ATKINSON.................... Vice-President and General 1996 135,000 Series II
Toronto, Ontario Counsel, Preference Shares
Vice-President and General Hollinger (International Newspaper
Counsel and Director Company)
RALPH M. BARFORD..................... President, Valleydene Corporation 1983 100,000 retractable
Toronto, Ontario Limited (Investment Company) common shares
Director
BARBARA AMIEL BLACK(5)............... Vice-President, Editorial, 1994 1,600 retractable
London, England Hollinger common shares
Vice-President, Editorial (International Newspaper
and Director Company); Journalist
THE HON. CONRAD M. BLACK, P.C., 1978 2,453,982 Series II
O.C.(6)............................ Chairman of the Board and Preference Shares
London, England Chief Executive Officer, Hollinger
Chairman of the Board, (International Newspaper Company)
Chief Executive Officer
and Director
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
APPROXIMATE NUMBER OF SHARES
YEAR FIRST OF HOLLINGER BENEFICIALLY
NAME, MUNICIPALITY OF RESIDENCE BECAME A OWNED OR OVER WHICH CONTROL
AND POSITION(S) WITH HOLLINGER(1)(2) PRESENT PRINCIPAL OCCUPATION DIRECTOR OR DIRECTION IS EXERCISED(3)(4)
- ------------------------------------ ---------------------------- ---------- -------------------------------
<S> <C> <C> <C>
G. MONTEGU BLACK(5).................. Chairman, Txibanguan Limited 1976 --
Toronto, Ontario (Investment Holding Company)
Director
J.A. BOULTBEE........................ Executive Vice-President and 1987 1,000 retractable
Toronto, Ontario Chief Financial Officer, common shares
Executive Vice-President and Hollinger (International Newspaper 70,000 Series II
Chief Financial Officer, and Company) Preference Shares
Director
DIXON S. CHANT(6).................... Deputy Chairman, The Ravelston 1978 30,000 retractable
Toronto, Ontario Corporation Limited common shares
Director (Holding Company) 190,000 Series II
Preference Shares
DANIEL W. COLSON..................... Vice-Chairman, Hollinger; 1987 442,800 Series II
London, England (International Newspaper Company); Preference Shares
Vice-Chairman and Deputy Chairman and
Director Chief Executive Officer,
Telegraph Group Limited
(Newspaper Publishing Company)
CHARLES G. COWAN, Q.C. .............. Vice-President and Secretary, 1981 5,000 retractable
Toronto, Ontario Hollinger common shares
Vice-President and Secretary (International Newspaper Company) 11,100 Series II Preference
and Director Shares
PIERRE DES MARAIS II................. President and Chief Executive 1987 700 Series II Preference Shares
Montreal, Quebec Officer,
Director UniMedia Inc. (Newspaper
Publishing Company)
FREDRIK S. EATON, O.C.(6)............ Chairman, White Raven 1979-1991 18,000 retractable
Toronto, Ontario Capital Corp. (Holding Company) 1994 common shares
Director 58,600 Series II Preference
Shares
R. DONALD FULLERTON.................. Chairman of the Executive 1992 2,000 retractable
Toronto, Ontario Committee, common shares
Director Canadian Imperial Bank of
Commerce (Chartered Bank)
ALLAN E. GOTLIEB, C.C. .............. Senior Consultant, Stikeman, 1989 3,600 retractable
Toronto, Ontario Elliott common shares
Director (Law Firm); Chairman Donner 1,000 Series II Preference
Canadian Foundation (Charitable Shares
Foundation)
HENRY H. KETCHAM III................. Chairman, President and Chief 1996 1,000 Series II
Vancouver, British Columbia, Executive Officer, Preference Shares
Director West Fraser Timber Co. Ltd.
(Forest Products Company)
F. DAVID RADLER(6)................... Deputy Chairman, President and 1979 1,109,980 Series II
Vancouver, British Columbia Chief Operating Officer, Preference Shares
President, Chief Operating Hollinger (International Newspaper
Officer and Director Company)
MAUREEN J. SABIA..................... President, Maureen Sabia 1996 500 retractable
Toronto, Ontario International (Consulting Firm); common shares
Director Corporate Director
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
APPROXIMATE NUMBER OF SHARES
YEAR FIRST OF HOLLINGER BENEFICIALLY
NAME, MUNICIPALITY OF RESIDENCE BECAME A OWNED OR OVER WHICH CONTROL
AND POSITION(S) WITH HOLLINGER(1)(2) PRESENT PRINCIPAL OCCUPATION DIRECTOR OR DIRECTION IS EXERCISED(3)(4)
- ------------------------------------ ---------------------------- ---------- -------------------------------
<S> <C> <C> <C>
PETER G. WHITE....................... Executive Vice-President, 1979-1984, --
Banff, Alberta The Ravelston Corporation Limited 1986-1988
Director (Holding Company) 1991
</TABLE>
Notes:
(1) The Hon. Conrad M. Black is the Chairman of the Executive Committee of the
board of directors. Messrs. Barford, Chant and Radler are members.
Mr. Barford is the Chairman of the Audit Committee. Messrs. G. Montegu Black
and Ketcham are members.
Mr. Barford is the Chairman of the Corporate Governance Committee. Messrs.
Drabinsky, Fullerton and Eaton are members.
Mr. Ketcham is Chairman of the Compensation Committee. Messrs. Eaton,
Fullerton and Gotlieb and Ms. Sabia are members.
Mr. Boultbee is Chairman of the Retraction Price Committee. Mr. Atkinson is
a member.
(2) The Hon. Conrad M. Black is the Chairman of the Board and Chief Executive
Officer, Mr. Radler is the Deputy Chairman, President and Chief Operating
Officer, Mr. Colson is the Vice-Chairman, Mrs. Black is Vice-President,
Editorial, Mr. Boultbee is Executive Vice-President and Chief Financial
Officer and Mr. Atkinson is a Vice-President of Hollinger International. The
Hon. Conrad M. Black is the Chairman and Mr. Colson is the Deputy Chairman
and Chief Executive Officer of Telegraph Group Limited. The Hon. Conrad M.
Black is the Chairman and Chief Executive Officer and Mr. Radler is Deputy
Chairman and Associate Chief Executive Officer and Mr. Colson is the
Vice-Chairman of Southam Inc. The Hon. Conrad M. Black and Messrs. Colson
and Radler are directors of Hollinger International. The Hon. Conrad M.
Black and Messrs. Colson and Radler are directors of Telegraph Group
Limited. The Hon. Conrad M. Black, Mrs. Black and Messrs. Atkinson,
Boultbee, Colson, Radler and White are directors of Southam Inc.
(3) The Hon. Conrad M. Black and Messrs. Atkinson, Boultbee, Chant, Colson,
Cowan, Radler and White are shareholders, directly or indirectly, and
officers and directors of Ravelston. Reference is made to "Voting Shares and
Principal Holders Thereof".
(4) The Hon. Conrad M. Black controls Ravelston which exercises control or
direction over 63.2% of the outstanding retractable common shares of
Hollinger. Reference is made to "Voting Shares and Principal Holders
Thereof".
(5) Mrs. Barbara Amiel Black is the wife of the Hon. Conrad M. Black. The Hon.
Conrad M. Black and Mr. G. Montegu Black are brothers.
(6) The Hon. Conrad M. Black and Messrs. Chant, Eaton, Ketcham and Radler own,
directly or indirectly, 9,600, 7,500, 17,000, 1,000 and 9,000 Class A Shares
of Hollinger International, respectively. Hollinger International is a
subsidiary of Hollinger.
MANAGEMENT AGREEMENTS
In 1998 the management services arrangements between Ravelston, Hollinger
and the other companies in the Hollinger group were restructured to reflect the
transformation of Hollinger into an open-end investment corporation and the
provision by Ravelston of management services directly to other companies in the
Hollinger group. Ravelston is a provider of management services to various
companies including, but not limited to, Hollinger and other companies in the
Hollinger group.
The business of Hollinger now consists solely of the investment of its
assets in corporations. Approximately 95% of the net asset value of Hollinger is
represented by its investment in Hollinger International, a U.S. public company
listed on the New York Stock Exchange, which is a subsidiary but not a
wholly-owned subsidiary of Hollinger. Hollinger International and its
consolidated group command the substantial portion of executive services
provided by Ravelston to the Hollinger group of companies. The independent
directors of Hollinger International have assumed a direct role in the
negotiation of fees paid to Ravelston for management services provided to
Hollinger International and its wholly-owned subsidiaries (including its
Canadian public holding company, Hollinger Canadian Publishing Holdings Inc.,
and Southam Inc.). This management fee reflects the nature and extent of
services provided by Ravelston directly to Hollinger International under the
supervision of the directors of Hollinger International, who are in a position
to appraise the value of such services.
As part of the restructuring described above, new management arrangements
were made between Ravelston and Hollinger and various other key companies in the
Hollinger group including, in particular, Hollinger International and Southam
Inc., which during 1998 was a public company. The new arrangement with Hollinger
was effective as of January 1, 1998 (the "1998 Management Agreement") and is
generally consistent in its scope and terms with the management agreement it
superseded except that it governs only the provision of management services to
Hollinger. A second agreement effective as of January 1, 1998 was entered into
on similar terms between Ravelston and a wholly-owned subsidiary of Hollinger
which governs the provision of management services to such company and the other
wholly-owned subsidiaries of Hollinger (such agreement together with the 1998
Management Agreement are collectively referred to as the "Hollinger Management
Agreements").
Pursuant to the Hollinger Management Agreements, Ravelston acts as manager
of Hollinger and its wholly-owned subsidiaries to carry out executive
responsibilities, including management of the investment portfolio of Hollinger
and provision of advice and assistance to the Hollinger board of directors in
connection with the determination of the investment policies of Hollinger;
arranging further investments for Hollinger; arranging for the
4
<PAGE> 6
financial requirements of Hollinger; provision of services in respect of
Hollinger's daily operations; preparation of consolidated financial statements
of Hollinger; ensuring Hollinger's compliance with the requirements of all
relevant regulatory authorities; provision of the services of the current
officers of Hollinger to serve in their present capacities; and provision of the
services of all other employees necessary to carry out such executive functions.
The Hollinger Management Agreements may be terminated at any time upon 180 days
prior notice.
Under the Hollinger Management Agreements, the management fee for each
calendar year after 1998 is to be negotiated on or before January 31 of such
calendar year, failing which the agreements will be terminated. The board of
directors of Hollinger has delegated the authority to settle and approve the
annual management fees to the Compensation Committee, none of the members of
which is a director or officer or has any other material interest in Ravelston.
Pursuant to the Hollinger Management Agreements, in 1998 Hollinger and its
wholly-owned subsidiaries paid a management fee of $3,386,000 to Ravelston. The
management fee paid by Hollinger and its wholly-owned subsidiaries is not
calculated with reference to the compensation of Ravelston's executives who
serve as officers of Hollinger and such subsidiaries, but rather reflects what
is judged by the Compensation Committee to be fair value for the services
described above rendered to those companies. The management fee payable to
Ravelston under the Hollinger Management Agreements has been set at $3,386,000
for 1999 (the same amount as was paid in 1998). The separate management fees
paid to Ravelston in 1998 by Hollinger International and its subsidiaries are
disclosed in the management proxy circular of Hollinger International.
The names and addresses of the insiders of Ravelston are as follows: Peter
Y. Atkinson, Toronto, Ontario; Conrad M. Black, London, England; J.A. Boultbee,
Toronto, Ontario; Dixon S. Chant, Toronto, Ontario; Daniel W. Colson, London,
England; Charles G. Cowan, Toronto, Ontario; F. David Radler, Vancouver, British
Columbia; and Peter G. White, Banff, Alberta. Reference is made to "Table D" for
a description of any indebtedness by any insiders of Ravelston to Hollinger or
to any of Hollinger's subsidiaries.
EXECUTIVE COMPENSATION
Description of Officers' Remuneration
Services of the Corporation's executive officers are provided by Ravelston
pursuant to the Hollinger Management Agreements. Reference is made to
"Management Agreements". Hollinger does not provide cash remuneration to its
executive officers as such. There is no basis upon which to allocate the
aggregate amount payable under the Hollinger Management Agreements to individual
officers because the individuals providing services to Hollinger pursuant to the
Hollinger Management Agreements are not in fact receiving compensation primarily
in respect of those services. Their individual cash compensation is determined
by Ravelston (which, as mentioned above, derives management fees from a number
of other companies) and not by the Compensation Committee of Hollinger (see
"Report on Executive Compensation"). The aggregate cash compensation paid to
executive officers of Hollinger as directors of Hollinger and its subsidiaries
in 1998 was $288,000.
Description of Directors' Remuneration
Each director of Hollinger is entitled to receive an annual director's fee
of $25,000 and a fee of $1,500 for each board or committee meeting attended.
Directors are reimbursed for expenses incurred in attending the meetings.
Members of the Executive Committee receive annual fees of $6,000 and members of
the Audit, Corporate Governance and Compensation Committees receive annual fees
of $3,000. The Chairman of any Committee of Hollinger's Board of Directors
receives an annual fee of $2,500.
Hollinger has taken steps to align more closely the interests of its
directors with those of its shareholders. Effective February 24, 1999, directors
are permitted to elect that up to 100% of the total fees to which they are
entitled be paid in the form of deferred share units under the Hollinger Inc.
Share Unit Plan for Directors (the "Directors' Share Unit Plan"). For a director
that elects to participate, a number of deferred share units equal to the number
of retractable common shares that could be purchased on the open market for a
dollar amount equal to the applicable percentage of that director's fee is
credited to an account maintained by the Corporation for that director under the
Directors' Share Unit Plan. Dividend equivalents will be credited to the
director's account as if dividends were paid on each deferred share unit held by
the director on the dividend record date and reinvested in additional deferred
share units at the market price of the retractable common shares on the dividend
payment date. Deferred share units will be paid to the director no later than
December 31 of the year following the calendar year in which the director ceased
to serve. Payment will be made, at the election of the director, in either cash
or retractable
5
<PAGE> 7
common shares purchased on the market, net of withholding tax, based on the
market value of the retractable common shares on the date of the payment.
Summary Compensation Table
The following table sets forth compensation information for the three
fiscal years ended December 31, 1998 in respect of each of the named executives.
TABLE A
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
------------------------------------ ----------------------------------
OTHER SECURITIES UNDER
ANNUAL OPTIONS/SARS ALL OTHER
NAME AND PRINCIPAL YEAR SALARY BONUS COMPENSATION GRANTED COMPENSATION
POSITION
- ------------------------------------------------------------------------------------------------------------------------------
($)(1) ($)(1) ($)(2) (#)(3) ($)(4)
The Hon. Conrad M. Black, 1998 682,591(1) (1) 315,536 (a) 250,000 (Hollinger) --
P.C., O.C. (b) 150,000 (Hollinger
Chairman of the Board and 1997 1,275,047 1,491,804 260,453 International) --
Chief Executive Officer (a) 250,000 (Hollinger) --
1996 1,196,650 1,076,985 344,251 (b) 95,000 (Hollinger
International)
65,000 (Hollinger International)
- ------------------------------------------------------------------------------------------------------------------------------
F. David Radler 1998 (1) (1) 289,653 (a) 230,000 (Hollinger) --
Deputy Chairman, (b) 150,000 (Hollinger
President and Chief 1997 1,255,430 1,305,648 272,281 International) --
Operating Officer (a) 230,000 (Hollinger) --
1996 1,178,240 942,592 337,258 (b) 95,000 (Hollinger
International)
65,000 (Hollinger International)
- ------------------------------------------------------------------------------------------------------------------------------
Daniel W. Colson 1998 347,000(1) (1) 249,455 (a) 160,000 (Hollinger) 105,015
Vice-Chairman; (b) 120,000 (Hollinger
Deputy Chairman and 1997 926,860 843,444 280,389 International) 99,282
Chief Executive Officer, (a) 160,000 (Hollinger) 94,252
Telegraph Group Limited 1996 869,873 608,911 398,914 (b) 45,000 (Hollinger
International)
nil
- ------------------------------------------------------------------------------------------------------------------------------
J.A. Boultbee 1998 (1) (1) 72,373 (a) 95,000 (Hollinger) --
Executive Vice-President (b) 60,000 (Hollinger
and Chief Financial 1997 560,460 510,028 76,009 International) --
Officer (a) 95,000 (Hollinger) --
1996 370,962 259,962 97,058 (b) 35,000 (Hollinger
International)
37,000 (Hollinger International)
- ------------------------------------------------------------------------------------------------------------------------------
Peter Y. Atkinson(5) 1998 (1) (1) 65,588 (a) 80,000 (Hollinger) --
Vice-President and (b) 60,000 (Hollinger
General Counsel 1997 467,050 425,016 57,984 International) --
(a) 80,000 (Hollinger)
1996 368,200 257,740 33,133 (b) 35,000 (Hollinger --
International)
(a) 25,000 (Hollinger)
(b) 20,000 (Hollinger
International)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) With the exception of salaries paid to Messrs. Black and Colson by
Telegraph Group Limited ("The Telegraph") (which salaries were paid in
pounds sterling and have been converted into Canadian dollars at the 1998
average rate of 2.48 for the purposes of this disclosure), none of the
executive officers of the Corporation receives salary or bonus directly
from the Corporation or its subsidiaries. See "Management Agreements".
Effective January 1, 1998 the board of directors of Hollinger does not
determine the salary or bonus compensation of the executive officers of
Hollinger. See "Report on Executive Compensation". The figures for 1997 and
1996 include amounts paid by Ravelston which relate to services rendered by
Ravelston to the Corporation and, in the case of Messrs. Black and Colson,
salary received from The Telegraph. Ravelston is an associate of Messrs.
Black and Radler. The Corporation and its wholly-owned subsidiaries paid
management fees to Ravelston pursuant to the Hollinger Management
Agreements of $3,386,000 in 1998. The Corporation, on behalf of itself and
its various operating subsidiaries, paid a gross management fee to
Ravelston for 1997 and 1996 in the amounts of $13,886,562 and $11,991,182,
respectively.
(2) The amounts in this column relate to (a) directors' fees paid by the
Corporation, Hollinger International, The Telegraph, Southam Inc. and
UniMedia Inc. and (b) taxable benefits (at the average rate of 4% in 1998,
3.8% in 1997, 5.6% in 1996 and 7.5% in 1995) on employee loans (reference
is made to Table D). Other prerequisites and personal benefits did not
exceed, in 1998, $50,000, and in 1997 and 1996, the lesser of $50,000 and
10% of the annual salary for any of the named executives.
(3) These amounts relate, as indicated, to options on retractable common shares
of the Corporation granted pursuant to the Corporation's Executive Share
Option Plan and to options on Class A shares of Hollinger International
granted pursuant to Hollinger International's Stock Option Plans.
(4) Includes contributions made by The Telegraph to its Executive Pension
Scheme in respect of Mr. Colson.
(5) Mr. Atkinson became Vice-President and General Counsel of the Corporation
on February 1, 1996. Prior to that he was a partner in Aird & Berlis
(Toronto law firm).
6
<PAGE> 8
Options/Stock Appreciation Rights
In 1994 the Board of Directors approved an Executive Share Option Plan (the
"Option Plan"). Under the Option Plan the Corporation issues non-transferable
options ("Options") to purchase retractable common shares of the Corporation to
certain executives of the Corporation and its subsidiaries (including the named
executives). The Option Plan is designed: (i) to provide incentive to executives
of the Corporation and its subsidiaries who are in positions which enable them
to make significant contributions to the longer term objectives of the
Corporation; (ii) to give suitable recognition to the ability and industry of
such executives; and (iii) to attract and retain in the employment of the
Corporation and its subsidiaries persons of ability and industry.
The Options are to purchase up to a specified maximum number of retractable
common shares at a price equal to the exercise price which is the average
trading price on The Toronto Stock Exchange of the Corporation's retractable
common shares for the 10 trading days ending on the third trading day preceding
the date of grant. The Options are exercisable to the extent of 25% thereof at
the end of each of the first through fourth years following issuance, on a
cumulative basis, with the exercise period terminating six years after the date
of grant of the Options. Unexercised Options expire at the earlier of one month
following the date of termination of the employee's employment or six years
after grant.
The following table sets forth information concerning the issue in 1998 to
the named executives of options to purchase retractable common shares pursuant
to the Option Plan and options to purchase Class A Shares of Hollinger
International pursuant to Hollinger International's Stock Option Plans.
OPTION/SAR GRANTS DURING THE MOST RECENTLY
COMPLETED FINANCIAL YEAR
TABLE B
<TABLE>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
MARKET VALUE
OF SECURITIES
% OF TOTAL UNDERLYING
SECURITIES OPTIONS/SARS EXERCISE OPTIONS/
UNDER GRANTED TO OR SARS ON THE
OPTIONS/SARS EMPLOYEES IN BASE PRICE DATE OF GRANT EXPIRATION
NAME GRANTED (#) FINANCIAL YEAR ($/SECURITY) ($/SECURITY) DATE
- -------------------------------------------------------------------------------------------------------------------------------
The Hon. Conrad M. Black, 250,000 (Hollinger) 26.9 13.72 15.00 December 8, 2004
P.C., O.C., 150,000 (Hollinger 10.8 U.S.15.06 U.S.15.125 February 23, 2008
Chairman of the Board and International)
Chief Executive Officer
- -------------------------------------------------------------------------------------------------------------------------------
F. David Radler 230,000 (Hollinger) 24.8 13.72 15.00 December 8, 2004
Deputy Chairman 150,000 (Hollinger 10.8 U.S.15.06 U.S.15.125 February 23, 2008
President and International)
Chief Operating Officer
- -------------------------------------------------------------------------------------------------------------------------------
Daniel W. Colson 160,000 (Hollinger) 17.2 13.72 15.00 December 8, 2004
Vice-Chairman; 120,000 (Hollinger 8.7 U.S.15.06 U.S.15.125 February 23, 2008
Deputy Chairman and International)
Chief Executive Officer,
The Telegraph
- -------------------------------------------------------------------------------------------------------------------------------
J.A. Boultbee 95,000 (Hollinger) 10.24 13.72 15.00 December 8, 2004
Executive Vice-President and 60,000 (Hollinger 4.3 U.S.15.06 U.S.15.125 February 23, 2008
Chief Financial Officer International)
- -------------------------------------------------------------------------------------------------------------------------------
Peter Y. Atkinson 80,000 (Hollinger) 8.62 13.72 15.00 December 8, 2004
Vice-President and 60,000 (Hollinger 4.3 U.S.15.06 U.S.15.125 February 23, 2008
General Counsel International)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
On February 23, 1998, Hollinger International granted certain options
(including to the persons noted above) which options vest in 25% annual
increments on each of the first, second, third and fourth anniversaries of their
grant dates, beginning February 23, 1999. Effective as of February 26, 1999,
Hollinger International and all holders
7
<PAGE> 9
of such options (including the persons noted above) agreed to cancel such
options, with the holders foregoing one year of vesting, in return for new
options for the respective same number of shares to be exercised upon the
payment of U.S.$12.25 per share exercise price which options vest over a four
year period beginning February 26, 2000 in equal increments.
The following table sets forth details concerning options exercised
pursuant to the Option Plan by the named executives and the financial year end
value of (a) outstanding options issued pursuant to the Option Plan and (b)
outstanding options to purchase Class A Shares of Hollinger International issued
pursuant to Hollinger International's Stock Option Plans.
AGGREGATED OPTION/SAR EXERCISED DURING THE MOST RECENTLY COMPLETED FINANCIAL
YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
TABLE C
<TABLE>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
VALUE OF
UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SECURITIES AGGREGATE FY-END FY-END
ACQUIRED VALUE (#)(3) ($)(4)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#)(1) ($)(2) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------
The Hon. Conrad M. Black, 250,000 1,280,000 nil/250,000 nil/570,000
P.C., O.C., Chairman of the (Hollinger) (Hollinger) (Hollinger)
Board and Chief Executive 163,750/226,250 U.S.305,219/U.S.271,819
Officer (Hollinger International) (Hollinger International)
- ---------------------------------------------------------------------------------------------------------------------
F. David Radler 230,000 1,327,100 nil/230,000 nil/524,400
Deputy Chairman, President (Hollinger) (Hollinger) (Hollinger)
and Chief Operating Officer 163,750/226,250 U.S.305,219/U.S.271,819
(Hollinger International) (Hollinger International)
- ---------------------------------------------------------------------------------------------------------------------
Daniel W. Colson 160,000 851,200 nil/160,000 nil/364,800
Vice-Chairman; (Hollinger) (Hollinger) (Hollinger)
Deputy Chairman and 41,250/123,750 U.S.42,919/U.S.128,756
Chief Executive Officer, (Hollinger International) (Hollinger International)
The Telegraph
- ---------------------------------------------------------------------------------------------------------------------
J.A. Boultbee 95,000 524,000 nil/95,000 nil/216,600
Executive Vice-President (Hollinger) (Hollinger) (Hollinger)
and 63,250/92,750 U.S.134,208/U.S.181,621
Chief Finance Officer (Hollinger International) (Hollinger International)
- ---------------------------------------------------------------------------------------------------------------------
Peter Y. Atkinson 80,000 441,600 nil/80,000 nil/182,400
Vice-President and (Hollinger) (Hollinger) (Hollinger)
General Counsel 33,750/81,250 U.S.75,031/U.S.171,675
(Hollinger International) (Hollinger International)
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) Number of retractable common shares of the Corporation acquired on exercise
of options granted pursuant to the Option Plan.
(2) Calculated using the closing price for retractable common shares of the
Corporation on The Toronto Stock Exchange on the last trading day prior to
exercise, less the exercise price of options.
(3) These numbers relate to the options granted pursuant to the Option Plan and
the options granted pursuant to Hollinger International Stock Option Plan.
(4) Calculated using the closing price for retractable common shares of the
Corporation on The Toronto Stock Exchange and the Class A Shares of
Hollinger International on the New York Stock Exchange on December 31, 1998,
less the exercise price of the options.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has been delegated authority by the board of
directors of Hollinger to settle and approve the management fees to be paid by
Hollinger and its wholly-owned subsidiaries to Ravelston pursuant to the
8
<PAGE> 10
Hollinger Management Agreements, and the granting of options under Hollinger's
Executive Share Option Plan. Under the Hollinger Management Agreements, the
aggregate management fee for each calendar year is to be negotiated on an annual
basis on or before January 31 of such calendar year, failing which the
agreements will be terminated.
The Compensation Committee consists of five directors who are neither
officers nor employees of the Corporation or Ravelston and who do not have any
other material interest in Ravelston. None of the Compensation Committee members
is eligible to participate in the Executive Share Option Plan.
After considering its appropriate role in the context of Hollinger having
become an open-end investment corporation engaged solely in the investment of
its assets in corporations, in December 1997 the then Compensation Committee
approved a change in approach to the payment of management fees by the
Corporation to Ravelston in 1998 and subsequent years. For 1997 and previous
years, the Compensation Committee approved a gross management fee which was
allocated by Hollinger amongst Hollinger and its operating subsidiaries. In so
doing, the Committee approved the aggregate salary and bonus compensation paid
for the executive officers of Hollinger for their services to Hollinger and its
subsidiaries. At the suggestion of the Compensation Committee, beginning with
the fiscal year 1998, the Corporation and its wholly-owned subsidiaries are
charged by Ravelston solely for management services provided to them and
separate management fees are negotiated by Ravelston with Hollinger
International and certain of its subsidiaries. The Committee also took into
account that Hollinger's two principal indirect subsidiaries, Hollinger
International and Southam Inc., were directly or indirectly through
subsidiaries, the most significant users of Ravelston's management services and
that each of them had its own board of directors, including directors
independent of Hollinger and its related companies. The Committee concluded that
it would be more appropriate for the respective boards of directors at Hollinger
International and Southam Inc. to negotiate directly with Ravelston the
management fees payable for services provided to their respective corporations.
A consequence of this change is that compensation levels for the executives
and other employees of Ravelston are not determined by the Compensation
Committee of Hollinger, except to the extent that the Corporation compensates
its executive officers in the form of stock options. The Hollinger Management
Agreements do not allocate portions of the management fees to specific Ravelston
employees; consequently, the Compensation Committee has no basis for attributing
specific amounts to Hollinger's executive officers as salaries or bonuses. The
fees payable under the Hollinger Management Agreements are determined having
regard to the extent and nature of the services which it is anticipated the
Corporation will require from Ravelston in the coming year.
In addition to approving the annual management fee payable by Hollinger and
its wholly-owned subsidiaries to Ravelston, the Compensation Committee also
approves the granting of options under Hollinger's Executive Share Option Plan.
In respect of its role in approving the grant of options to the
Corporation's executives, the Compensation Committee follows this strategy:
(i) Motivate executives to achieve their strategic goals by tying grants
to the performance of the Corporation as well as their individual
performance.
(ii) Be competitive with other leading companies so as to attract and
retain talented executives.
(iii) Align the interests of its executives with long-term interests of the
Corporation's shareholders through stock-related programs.
The foregoing report has been furnished by Henry H. Ketcham III (Chairman),
Fredrik S. Eaton, R. Donald Fullerton, Allan E. Gotlieb and Maureen J. Sabia.
9
<PAGE> 11
SHAREHOLDER RETURN PERFORMANCE GRAPH
The chart below compares the yearly percentage change in the Corporation's
cumulative total shareholder return on the Corporation's retractable common
shares (assuming all dividends were reinvested at the market price on the date
of payment) against the cumulative total shareholder return of the TSE 300 Total
Return Index (of which the Corporation is one) for the five years commencing
December 31, 1993 and ending December 31, 1998.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
ON RETRACTABLE COMMON SHARES OF THE CORPORATION
AND THE TSE 300 TOTAL RETURN INDEX
[Performance Graph]
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------
1993 1994 1995 1996 1997 1998
----- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
TSE 300 100.0 99.8 114.3 146.7 168.7 166.0
Hollinger 100.0 95.2 80.4 108.0 129.6 179.5
</TABLE>
10
<PAGE> 12
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
Hollinger has made loans to certain directors and officers of the
Corporation in connection with the subscription for convertible preference
shares pursuant to its now-expired executive share purchase plan (the "Purchase
Plan"). The following table sets out certain information relating to such loans.
TABLE D
<TABLE>
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCIALLY
LARGEST AMOUNT ASSISTED
INVOLVEMENT AMOUNT OUTSTANDING SECURITIES SECURITY
OF ISSUER OR OUTSTANDING AS AT PURCHASES FOR
SUBSIDIARY(1) DURING 1998 APRIL 9, 1999 DURING 1998 INDEBTEDNESS(2)
NAME
- -----------------------------------------------------------------------------------------------------------------------------------
($) ($) (#)
The Hon. Conrad M. Black, Hollinger as lender 8,043,800 4,813,501 -- 1,120,000
P.C., O.C.,
Chairman of the Board and
Chief Executive Officer
- -----------------------------------------------------------------------------------------------------------------------------------
F. David Radler Hollinger as lender 6,006,200 3,697,208 -- 880,000
Deputy Chairman, President
and Chief Operating Officer
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes :
(1) The loans were on a non-interest basis prior to the conversion of the
preference shares subscribed for with the proceeds of the loans. All
preference shares subscribed for under the Purchase Plan have been converted
and, as a consequence of tenderings to issuer bids by Hollinger in 1997 and
1998, Series II Preference Shares resulting from the preference shares
issued under the Purchase Plan are now held in trust by Ravelston for the
benefit of the subscribers. The loans will mature on November 8, 1999. From
October 1, 1998, the loans have been bearing interest at the prime rate
established by the Canadian Imperial Bank of Commerce plus 1/2%. The loans
are secured by a pledge of the Series II Preference Shares resulting from
the preference shares issued under the Purchase Plan.
(2) The number of Series II Preference Shares of the Corporation pledged as
security for the indebtedness.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
During 1998, Hollinger maintained directors' and officers' liability
insurance with a policy limit of $140,000,000 aggregate per policy year. Under
this insurance coverage, Hollinger would be reimbursed for indemnity payments
made on behalf of its directors and officers subject to a deductible of
$5,000,000 per occurrence. Individual directors and officers would also be
reimbursed for losses arising during the performance of their duties for which
they are not indemnified by Hollinger. The total premium paid by Hollinger for
directors' and officers' liability insurance in respect of 1998 was $532,000 and
was not allocated to directors as a group or to officers as a group.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The board of directors of the Corporation considers sound corporate
governance practices to be essential to the effective operation and success of
the Corporation and that these practices should be reviewed regularly to ensure
that they are appropriate. A description of the Corporation's corporate
governance practices follows. This Statement of Corporate Governance Practices
has been prepared by the Corporate Governance Committee of the board of
directors and has been approved by the board of directors.
The By-Laws of The Toronto Stock Exchange and a policy statement of the
Montreal Exchange require that this Statement of Corporate Governance Practices
describe the corporate governance practices of the Corporation with reference to
the "Guidelines for Improved Corporate Governance" contained in the Report of
The Toronto Stock Exchange Committee on Corporate Governance in Canada (the "TSE
Report").
The text in italics which follows sets out the recommendations of the TSE
Report. The text not in italics describes Hollinger's corporate governance
practices and provides an explanation for differences between such practices and
the Guidelines contained in the TSE Report.
11
<PAGE> 13
1. The board of directors of every corporation should explicitly assume
responsibility for the stewardship of the corporation and as part of the
overall stewardship responsibility, should assume responsibility for the
following matters:
(i) adoption of a strategic planning process;
The senior management team formulates strategic proposals and the
operational plans necessary to achieve their implementation. These
proposed strategies and related tactics and plans are considered by the
board and the input of the board is taken into account in formulating
the final version of the proposals.
(ii) the identification of the principal risks of the corporation's
business and ensuring the implementation of appropriate systems to
manage these risks;
The board through its Committees, principally the Audit Committee,
discharges this responsibility. The Audit Committee reports to the board
in respect of such matters and develops and improves processes designed
to convey to the board on a timely basis information regarding the
principal risks of the Corporation's business and systems to manage such
risks.
(iii) succession planning, including appointing, training and monitoring
senior management;
The Chairman and CEO and the Deputy Chairman review annually, and report
to the board when appropriate regarding, the performance of senior
management of Hollinger and its principal subsidiaries including
management's plans for succession.
(iv) a communications policy for the corporation;
The objectives of the communications policy of the Corporation are to
cause Hollinger to effectively communicate with its shareholders,
stakeholders, employees and the investing public on a timely basis
regarding its operations and to accommodate feedback from such parties.
Shareholder inquiries receive prompt responses from senior management.
The Corporation conducts a comprehensive investor communications and
relations program including briefing meetings with institutional and
other investors, analysts, fund managers and the financial news media
regarding significant corporate developments and financial results.
(v) the integrity of the corporation's internal control and management
information systems.
Hollinger's major subsidiaries observe high standards in respect of
their internal control and management information systems. Hollinger
monitors these subsidiaries through its appointees to their boards and
management teams and through the subsidiaries' monthly financial reports
on operations. The Audit Committee of the board works with Hollinger's
Chief Financial Officer and external auditors to monitor and improve the
information systems and internal financial controls throughout the group
necessary to ensure that material developments are brought to the
attention of senior management expeditiously and, if appropriate, to the
attention of the board.
2. The board of directors of every corporation should be constituted with a
majority of individuals who qualify as unrelated directors. An unrelated
director is a director who is independent of management and is free from
any interest and any business or other relationship which could, or could
reasonably be perceived to, materially interfere with the director's
ability to act with a view to the best interests of the corporation, other
than interests and relationships arising from shareholding. A related
director is a director who is not an unrelated director. If the corporation
has a significant shareholder, in addition to a majority of unrelated
directors, the board should include a number of directors who do not have
interests in or relationships with either the corporation or the
significant shareholder and which fairly reflects the investment in the
corporation by shareholders other than the significant shareholder. A
significant shareholder is a shareholder with the ability to exercise a
majority of the votes for the election of the board of directors.
Of the 18 directors of the Corporation, ten are involved in the management
of the business and affairs of the Corporation or its affiliates. Of the
eight non-management directors, Mr. G. Montegu Black is the brother of the
Chairman and CEO. Consequently, seven directors are neither part of
management nor "related" within the meaning of the TSE Report. Accordingly,
approximately 40% of the directors are unrelated directors. Hollinger
believes that it has an adequate number of unrelated directors to discharge
the board's
12
<PAGE> 14
responsibilities. Hollinger's directors are legally obligated to be aware
of the potential for conflicts of interest and to declare them wherever a
conflict exists.
Hollinger believes that the leaders of its principal subsidiaries should be
members of the board. This provides non-executive directors with direct and
frequent access to these key executives. Such access assists the non-
executive directors in achieving a thorough understanding of Hollinger's
businesses and operations and the issues they face and also affords them
opportunities to assess the calibre of management.
The categorization of directors is as follows:
<TABLE>
<CAPTION>
RELATED UNRELATED
------- ---------
<S> <C>
P. Y. Atkinson R. M. Barford
C. M. Black G. H. Drabinsky
G. M. Black F. S. Eaton
B. Amiel Black R. D. Fullerton
J. A. Boultbee A. E. Gotlieb
D. S. Chant H. H. Ketcham III
D. W. Colson M. J. Sabia
C. G. Cowan
P. DesMarais II
F. D. Radler
P. G. White
</TABLE>
In determining the "unrelated" or "related" status of individual directors
the board considered the factual circumstances of each director in relation
to the definition of "unrelated" contained in the TSE Report.
3. The application of the definition of "unrelated director" to the
circumstances of each individual director should be the responsibility of
the board which will be required to disclose on an annual basis whether the
board has a majority of unrelated directors or, in the case of a
corporation with a significant shareholder, whether the board is
constituted with the appropriate number of directors which are not related
to either the corporation or the significant shareholder. Management
directors are related directors. The board will also be required to
disclose on an annual basis the analysis of the application of the
principles supporting this conclusion.
The board has assumed these responsibilities (see item 2. above)
4. The board of directors of every corporation should appoint a committee of
directors composed exclusively of outside, i.e. non-management, directors,
a majority of whom are unrelated directors, with the responsibility for
proposing to the full board new nominees to the board and for assessing
directors on an ongoing basis.
The board has appointed a Corporate Governance Committee, all of the
members of which are unrelated directors, whose mandate includes the
nominating and assessment functions. The nominating function of the
Committee is conducted after consultation with the Chairman and CEO.
5. Every board of directors should implement a process to be carried out by
the nominating committee or other appropriate committee for assessing the
effectiveness of the board as a whole, the committees of the board and the
contribution of individual directors.
The assessment of the effectiveness of the board, committees of the board
and the contribution of individual directors is a continuing process
conducted by the Chairman and CEO, the Deputy Chairman and the Corporate
Governance Committee. Hollinger believes that an informal and frank
relationship among the directors is the most effective process through
which to make such assessments. In 1998, by letter to all non-management
directors, it was asked that comments and suggestions on board
organization, management, strategy determination, monitoring and acting,
and communication with shareholders be given to the Chairman of the
Corporate Governance Committee. The responses received were discussed with
the Chairman and CEO and reported to the board at its meeting held in
November, 1998.
6. Every corporation, as an integral element of the process for appointing new
directors, should provide an orientation and education program for new
recruits to the board.
Each new director is provided with an extensive information package
containing historical, financial and business information and information
regarding directors' legal obligations, and is encouraged to discuss any of
13
<PAGE> 15
the information with senior management. Hollinger holds board meetings from
time to time at the offices of certain of its operating subsidiaries. This
permits all directors, including new recruits, to meet and question
operating management. These information meetings provide directors with a
more complete understanding of Hollinger's operations and competitive
circumstances. In addition, prior to the board's assessment of any major
proposal, each director is provided with a comprehensive memorandum
regarding his or her obligations, responsibilities and potential
liabilities in connection with such proposal.
7. Every board of directors should examine its size and, with a view to
determining the impact of the number upon effectiveness, undertake, where
appropriate, a program to reduce the number of directors to a number which
facilitates more effective decision-making.
The size of the board of directors is consistent with the TSE Report
particularly having regard to the benefits derived from having the leaders
of the Corporation's various businesses on the board. The appropriate size
of the board is under continuing consideration by the directors and
management.
8. The board of directors should review the adequacy and form of the
compensation of directors and ensure the compensation realistically
reflects the responsibilities and risk involved in being an effective
director.
This matter is reviewed periodically by the Chairman and CEO, the Deputy
Chairman and the Corporate Governance Committee, in consultation with
compensation experts, with reference to comparable situations. Hollinger's
board compensation practice is considered to be consistent with that of
comparable North American newspaper publishing corporations.
9. Committees of the board of directors should generally be composed of
outside directors, a majority of whom are unrelated directors, although
some board committees, such as the executive committee, may include one or
more inside directors. An inside director is a director who is an officer
or employee of the corporation or of any of its affiliates.
Set out below is the composition of the current committees of the Hollinger
board. The right-hand column entitled "Status" represents the board's
characterization of each of the members:
<TABLE>
<CAPTION>
COMMITTEE MEMBER STATUS
--------- ------ ------
<S> <C> <C> <C>
1. Executive Committee..................... R. M. Barford outside --
C. M. Black unrelated
D. S. Chant inside -- related
F. D. Radler inside -- related
inside -- related
2. Audit Committee......................... R. M. Barford outside --unrelated
G. M. Black outside -- related
H. H. Ketcham outside --
unrelated
3. Corporate Governance Committee.......... R. M. Barford outside --
G. H. Drabinsky unrelated
F. S. Eaton outside --
R. D. Fullerton unrelated
outside --
unrelated
outside --
unrelated
4. Compensation Committee.................. F. S. Eaton outside --
R. D. Fullerton unrelated
A. E. Gotlieb outside --
H. H. Ketcham unrelated
M. J. Sabia outside --
unrelated
outside --
unrelated
outside --
unrelated
5. Retraction Price Committee.............. J. A. Boultbee inside -- related
P. Y. Atkinson inside -- related
</TABLE>
The Executive Committee normally deals with routine corporate matters.
Matters of any consequence are brought to the board for consideration
except on rare occasions when immediate action is required.
10. Every board of directors should expressly assume responsibility for, or
assign to a committee of directors the general responsibility for,
developing the corporation's approach to governance issues. This committee
would, amongst other things, be responsible for the corporation's response
to these governance guidelines.
The Corporate Governance Committee has been given these responsibilities
and reports to the board in this area.
14
<PAGE> 16
11. The board of directors, together with the CEO, should develop position
descriptions for the board and for the CEO, involving the definition of the
limits to management's responsibilities. In addition, the board should
approve or develop the corporate objectives which the CEO is responsible
for meeting.
The responsibilities of the board and management to act with due care in
the best interests of the Corporation are well defined by law and both
management and the board recognize their respective duties and obligations.
Corporate objectives are reviewed by the board from time to time throughout
the year.
12. Every board of directors should have in place appropriate structures and
procedures to ensure that the board can function independently of
management. An appropriate structure would be to (i) appoint a chair of the
board who is not a member of management with responsibility to ensure the
board discharges its responsibilities or (ii) adopt alternate means such as
assigning this responsibility to a committee of the board or to a director,
sometimes referred to as the "lead director". Appropriate procedures may
involve the board meeting on a regular basis without management present or
may involve expressly assigning the responsibility for administering the
board's relationship to management to a committee of the board.
The Corporate Governance Committee has been assigned the responsibility for
administering the board's relationship to management. The Committee
monitors the ability of the board to act independently of management and
board members are encouraged to discuss privately with the Chairman and CEO
or the Chairman of the Corporate Governance Committee any matter or concern
that they would prefer not to raise before the full board.
13. The audit committee of every board of directors should be composed only of
outside directors. The roles and responsibilities of the audit committee
should be specifically defined so as to provide appropriate guidance to
with the internal and external auditors to discuss and review specific
issues as appropriate. The audit committee duties should include oversight
responsibility for management reporting on internal control. While it is
management's responsibility to design and implement an effective system of
internal control, it is the responsibility of the audit committee to ensure
that management has done so.
All members of the Audit Committee are outside directors. The Committee has
direct communication with the Corporation's external auditors. The
Committee has adopted a formal statement of its role and responsibilities
which includes the matters referred to above and in item 1(ii) and item
1(v) above.
14. The board of directors should implement a system which enables an individual
director to engage an outside adviser at the expense of the corporation in
appropriate circumstances. The engagement of the outside adviser should be
subject to the approval of an appropriate committee of the board.
The directors have access to management and the Corporation's advisers in
order to assist in their understanding of proposed board actions and the
implications of voting for or against such actions. Committees of the board
are authorized by the board from time to time to retain outside advisors at
the Corporation's expense.
APPOINTMENT OF AUDITORS
Retractable common shares represented by proxies properly executed in
favour of management which are not directed to be withheld from voting in
respect of the appointment of auditors will be voted for the reappointment of
KPMG as auditors of Hollinger and to authorize the directors to fix the
auditors' remuneration.
ANNUAL REPORT, FINANCIAL STATEMENTS AND ANNUAL INFORMATION FORM
The annual report and consolidated financial statements of Hollinger for
the financial year ended December 31, 1998 will be placed before the meeting but
shareholders will not be asked to vote thereon.
Copies of Hollinger's latest annual information form (together with the
documents incorporated therein by reference), the comparative financial
statements of Hollinger for 1998 together with the report of the auditors
thereon, management's discussion and analysis of Hollinger's financial condition
and results of operations for 1998, the interim financial statements of
Hollinger for periods subsequent to the end of Hollinger's last fiscal year and
this circular are available upon request from the Secretary of Hollinger.
15
<PAGE> 17
APPROVAL OF CIRCULAR
The contents and the sending of this Circular have been approved by the
board of directors of Hollinger. All information is, unless otherwise stated,
given as of April 9, 1999.
/s/ CHARLES G. COWAN
Vice-President and Secretary
Toronto, Ontario
April 9, 1999
16
<PAGE> 1
HOLLINGER INC.
10 Toronto Street
Toronto, Ontario
M5C 2B7
FORM OF PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT OF HOLLINGER INC.
IN RESPECT OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
The undersigned holder of retractable common shares of HOLLINGER INC.
("Hollinger") hereby appoints Conrad M. Black, Chairman of the Board and Chief
Executive Officer, or failing him F. David Radler, Deputy Chairman, President
and Chief Operating Officer, or failing him Charles G. Cowan, Vice-President and
Secretary, or instead of any of them ............................ as nominee of
the undersigned to attend, vote and act for and on behalf of the undersigned at
the Annual Meeting of Shareholders of Hollinger to be held on May 19, 1999, and
at any adjournments thereof.
The undersigned hereby directs that the shares represented by this proxy
are to be:
(a) VOTED [ ] or WITHHELD FROM VOTING [ ] in respect of the election of
directors; and
(b) VOTED [ ] or WITHHELD FROM VOTING [ ] in respect of the appointment of
KPMG, Chartered Accountants, as auditors of Hollinger and the
authorization of the directors to fix the auditors' remuneration.
This proxy confers discretionary authority upon the persons named herein as
nominees to vote hereunder with respect, firstly, to the specific matters
identified above where no choice is specified IN WHICH CASE THE SHARES FOR WHICH
THIS PROXY IS GIVEN WILL BE "VOTED" WITH RESPECT TO MATTERS (A) AND (B), and
secondly, to all other matters which may properly come before the Annual Meeting
or any adjournments thereof.
The undersigned hereby revokes any proxy previously given with respect to
the shares represented by this proxy.
DATED this ............ day of..........................................., 1999.
.......................................
(Signature of Shareholder)
Notes:
1. If the shareholder appointing a proxy is a corporation, the instrument of
proxy must be signed under its corporate seal or under the hands of officers
or attorneys duly authorized.
2. IF THE SHAREHOLDER WISHES TO APPOINT AS PROXY A PERSON OTHER THAN ANY OF THE
PERSONS NAMED ABOVE, SUCH NAMES SHOULD BE STRUCK OUT AND THE NAME OF SUCH
OTHER PERSON (WHO NEED NOT BE A SHAREHOLDER) SHOULD BE INSERTED OR ANOTHER
FORM OF PROXY SHOULD BE COMPLETED. The completed proxy should be delivered to
Montreal Trust Company of Canada, 151 Front Street West, 8th floor, Toronto,
Ontario, M5J 2N1 not less than 48 hours (excluding Saturdays and holidays)
preceding the time of the meeting or any adjournments thereof.
3. If this proxy is not dated in the space provided above, it will be deemed to
be dated on the day on which it is mailed by Hollinger.
4. If your address as shown is incorrect, please give your correct address when
returning this proxy.
5. For additional information, see the accompanying Management Proxy Circular.
<PAGE> 1
HOLLINGER INC.
Dear Shareholder,
National Policy Statement No. 41
Interim Financial Statements
As a non-registered shareholder, you have the option to receive our interim
financial statements. If you want to receive them, please complete, sign and
return this card. Your name will then be placed on the Supplemental Mail List
and maintained by us (or on our behalf) as required by the Policy.
This election must be renewed each year in order to enable us to make sure we
are only mailing interim financial statements to persons who continue to be
non-registered shareholders. Accordingly, as long as your status remains the
same with the custodian of your shares, you will receive a new election card
each year which you will have to complete, sign and return in order to continue
receiving interim financial statements.
HOLLINGER INC.
Request for Interim Financial Statements
NAME:
(PLEASE PRINT)
ADDRESS:
- --------------------------------------------------------- Postal Code
I confirm that I am a beneficial holder of retractable common shares of
Hollinger Inc.
SIGNATURE:
- --------------------------------------------- DATE: , 1999
Note: If you are concerned about the confidentiality of the information on this
card, please enclose it in an envelope and send it to the address shown on the
back.
