<PAGE>
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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 Section 240.14a-11(c) or Section 240.14a-12
TIMES MIRROR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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):
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(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:
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(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>
[LOGO OF TIMES MIRROR]
TIMES MIRROR
Times Mirror Square
Los Angeles, CA 90053
Tel: 213 237-2101
Fax: 213 237-2104
MARK H. WILLES
Chairman, President and
Chief Executive Officer
March 28, 1997
Dear Times Mirror Shareholder:
We are pleased to invite you to attend the 1997 Annual Meeting of
Shareholders of The Times Mirror Company. The meeting will be held in the
Harry Chandler Auditorium at Times Mirror Square, First and Spring Streets, in
Los Angeles on Thursday, May 8, 1997 at 11:00 a.m.
Our agenda will include the formal items of business described in the
accompanying Notice of Annual Meeting and Proxy Statement, as well as a report
on the operations of Times Mirror during 1996 and an opportunity for
questions. We will also be honoring our employees who have won awards for
journalistic and editorial excellence and for innovative products and
processes that help us grow revenues and better serve our customers.
We encourage you to attend the meeting in person. Whether or not you plan to
attend, your vote is important, regardless of the number of shares which you
own. Please complete, sign and return the enclosed proxy card as soon as
possible so that your shares will be represented. If you do plan to attend the
meeting, please check the appropriate box on the proxy card and indicate
whether you will need a parking card.
We hope to see you at the Annual Meeting on May 8.
Sincerely,
/s/ Mark H. Willes
Mark H. Willes
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
[LOGO OF TIMES MIRROR]
----------------
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
----------------
NOTICE OF ANNUAL MEETING
As a shareholder, you are invited to be represented in person or by proxy at
the Annual Meeting of Shareholders of The Times Mirror Company to be held in
the Harry Chandler Auditorium, Times Mirror Square, First and Spring Streets
in Los Angeles, California on Thursday, May 8, 1997 at 11:00 a.m., Pacific
Daylight Time, for the following purposes:
1. To elect five persons to Class II of the Board of Directors in
accordance with Article VIII, Section 1 of the Company's Certificate of
Incorporation.
2. To consider and act upon a proposal to approve The Times Mirror Company
1997 Directors Stock Option Plan.
3. To consider and act upon a proposal to ratify the appointment by the
Board of Directors of Ernst & Young LLP as independent auditors for the
Company and its subsidiaries for the year ending December 31, 1997.
4. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on March 10, 1997 as
the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
It is important that your shares are represented at the meeting whether or
not you plan to attend in person. Accordingly, you are requested to mark,
sign, date and return the enclosed proxy as promptly as possible. A return
envelope is provided for your convenience.
By Order of the Board of Directors,
/s/ Kathleen G. McGuinness
Kathleen G. McGuinness
Secretary
March 28, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proxy Statement........................................................... 1
Election of Directors..................................................... 2
Nominees for Directors.................................................... 2
Continuing Directors...................................................... 4
Compensation of Directors................................................. 8
Committees of the Board of Directors...................................... 9
Approval of The Times Mirror Company 1997 Directors Stock Option Plan..... 10
Appointment of Independent Auditors....................................... 13
Other Matters............................................................. 13
Ownership of Voting Securities............................................ 14
Executive Compensation.................................................... 19
Option Grants Table....................................................... 21
Aggregated Option Exercises in 1996 and Option Values as of December 31,
1996..................................................................... 22
Report of the Compensation Committee on Executive Compensation............ 23
Compensation Committee Interlocks and Insider Participation............... 24
Stock Price Performance Graph............................................. 25
Retirement Plans.......................................................... 26
Other Arrangements........................................................ 27
Section 16(a) Beneficial Ownership Reporting Compliance................... 28
Revocation of Proxies..................................................... 28
1998 Annual Meeting....................................................... 29
General................................................................... 29
Exhibit A................................................................. A-1
</TABLE>
<PAGE>
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS OF
THE TIMES MIRROR COMPANY
----------------
MAY 8, 1997
This Proxy Statement is furnished in connection with the solicitation by the
directors of The Times Mirror Company (the "Company") of proxies for use at
the Annual Meeting of Shareholders to be held on Thursday, May 8, 1997 or at
any adjournment of the meeting (the "1997 Annual Meeting"), as set forth in
the accompanying notice. This Proxy Statement and the accompanying proxy cards
are first being mailed to shareholders on or about March 28, 1997. A
shareholder giving a proxy may revoke it at any time before it is exercised
(see Revocation of Proxies on page 28). Any proxy which is not revoked will be
voted at the meeting in accordance with the shareholder's instructions. Unless
otherwise directed in the accompanying proxy, the proxy holders named in the
proxy will vote FOR the reelection of the incumbent directors in Class II of
the Board of Directors; FOR approval of The Times Mirror Company 1997
Directors Stock Option Plan; and FOR the proposal to ratify the appointment of
Ernst & Young LLP as independent auditors for the year ending December 31,
1997.
On March 10, 1997, the record date for the determination of Company
shareholders entitled to notice of and to vote at the meeting, 66,698,730
shares of Series A Common Stock, 7,789,276 shares of Conversion Preferred
Stock, Series B (the "Series B Preferred Stock"), and 26,753,294 shares of
Series C Common Stock were outstanding. Each share of Series A Common Stock is
entitled to one vote, each share of Series B Preferred Stock is entitled to
one vote, and each share of Series C Common Stock is entitled to ten votes on
all matters. Shareholders have the right to elect directors by cumulative
voting with each share allocated a number of votes equal to the votes to which
the share is entitled times the number of directors to be elected, which votes
may be cast for one candidate or distributed among any two or more candidates.
The five nominees for director who receive the greatest number of votes cast
will be elected. An affirmative vote of a majority of the shares present and
voting at the meeting is required for approval of each of the other items
being submitted to the shareholders for their consideration. Abstentions and
broker non-votes are each included in the determination of the number of
shares present at the meeting. Each is tabulated separately. Abstentions are
counted in tabulations of the votes cast on proposals presented to
shareholders, but broker non-votes are not counted for purposes of determining
whether a proposal has been approved.
The annual report of the Company for the year ended December 31, 1996 is
being mailed to shareholders with this Proxy Statement.
THE TIMES MIRROR COMPANY
TIMES MIRROR SQUARE, LOS ANGELES, CALIFORNIA 90053
<PAGE>
ELECTION OF DIRECTORS
One of the purposes of the 1997 Annual Meeting is the election of five
persons to Class II of the Board of Directors in accordance with Article VIII,
Section 1 of the Company's Certificate of Incorporation. As indicated above,
shareholders have the right to elect directors by cumulative voting. Unless
instructed to the contrary, the persons named in the accompanying proxy intend
to vote the shares equally for the election of all of the nominees named in
this Proxy Statement to Class II of the Board of Directors. However, if votes
are cast for any nominee other than those named in this Proxy Statement, the
proxy holders will have full authority to vote cumulatively and to allocate
votes among any or all of the Company's nominees (except to the extent that
authority to vote particular shares for any particular nominee is withheld)
according to their sole discretion, in order to elect the maximum number of
the nominees named in this Proxy Statement to Class II of the Board of
Directors. Although it is not contemplated that any nominee will decline or be
unable to serve, the shares will be voted by the proxy holders in their
discretion for another person if such a contingency should arise. The term of
each person elected as a director will continue until that director's term has
expired and until his or her successor is elected and qualified.
All nominees are currently serving as directors in Class II and all were
recommended by the Nominating Committee for reelection at the 1997 Annual
Meeting. The current term of directors in Class III will continue until the
Annual Meeting in 1998 and the current term of directors in Class I will
continue until the Annual Meeting in 1999 and, in each case, until their
respective successors are elected and qualified. The name, age and principal
business or occupation of each of the directors are shown below in the brief
description beside the photograph of each of the directors. The description
also includes the year in which each first became a director of the Company,
the committee memberships of each, and certain other information. The
directors' ownership of equity securities of the Company at March 10, 1997 is
indicated in the section entitled "Ownership of Voting Securities" beginning
on page 14.
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NOMINEES FOR DIRECTORS
Each of the persons listed below is nominated for election to Class II of
the Board of Directors (to serve three-year terms ending at the Annual Meeting
to be held in 2000 and until their respective successors are elected and
qualified).
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES.
JOHN E. BRYSON, 53, has been a director of the Company since
1991 and is a member of the Compensation Committee and the
Audit Committee. He is Chairman of the Board and Chief
[PHOTO] Executive Officer of Edison International Company and its
largest subsidiary, Southern California Edison Company, a
public utility. He has held those positions since October
1990. Mr. Bryson holds a B.A. degree from Stanford
University and a J.D. degree from Yale Law School. Mr.
Bryson is also a director of The Boeing Co., a trustee of
Stanford University and Chairman of the California Business
Roundtable.
2
<PAGE>
NOMINEES FOR DIRECTORS (CONTINUED)
BRUCE CHANDLER, 60, has been a director of the Company since
1975 and is a member of the Finance Committee. He has been a
[PHOTO] private investor since 1989. From 1968 to 1989, he practiced
law in the State of California. Mr. Chandler is a graduate
of the University of Southern California and holds a J.D.
degree from the University of San Diego School of Law. He is
also a trustee of the Chandler Trusts and a director of
Chandis Securities Company. (See the Note on page 8.)
DR. ALFRED E. OSBORNE, JR., 52, has been a director of the
Company since 1980 and is Chairman of the Audit Committee
and a member of the Compensation Committee and the
[PHOTO] Nominating Committee. He is Director of the Harold Price
Center for Entrepreneurial Studies and Associate Professor
of Business Economics at the Anderson School at UCLA. He has
been with UCLA since 1972. From August 1977 to July 1979,
Dr. Osborne served as a Brookings Institution Economic
Policy Fellow at the Securities and Exchange Commission. He
holds a bachelor's degree in electrical engineering, a
master's degree in economics, a master of business
administration in finance and a doctorate in business-
economics, all from Stanford University. He is also a
director of Greyhound Lines, Inc., Nordstrom, Inc., SEDA
Specialty Packaging Corporation and United States Filter
Corporation. He is a trustee of Sierra Trust Funds and an
independent general partner of Technology Funding Venture
Partners V, a 1940 Investment Company Act company.
WILLIAM STINEHART, JR., 53, has been a director of the
Company since 1991 and is a member of the Audit Committee
and the Finance Committee. He is a partner in the law firm
of Gibson, Dunn & Crutcher where he has practiced law since
[PHOTO] 1969. Gibson, Dunn & Crutcher has provided legal services to
the Company and its subsidiaries for many years and is
expected to do so in the future. Mr. Stinehart holds a B.A.
degree from Stanford University and a J.D. degree from UCLA
Law School, and is a member of the Board of Trustees of the
Harvey and Mildred Mudd Foundation. He is also a trustee of
the Chandler Trusts and a director of Chandis Securities
Company. (See the Note on page 8.)
DR. EDWARD ZAPANTA, 58, has been a director of the Company
since 1988 and is Chairman of the Nominating Committee and a
member of the Public Responsibility Committee and the
Compensation Committee. He is a practicing physician
[PHOTO] providing neurosurgical care in the Los Angeles area. He has
been in private practice since 1970. Dr. Zapanta attended
UCLA, received his M.D. degree from the University of
Southern California School of Medicine, and currently serves
as a trustee of the University of Southern California. He is
a clinical professor of surgery, department of Neurological
Surgery, at the University of Southern California. Dr.
Zapanta is also Senior Medical Director of HealthCare
Partners Medical Group and a director of Edison
International and the Irvine Foundation.
3
<PAGE>
CONTINUING DIRECTORS
CLASS I (currently serving until the 1999 Annual Meeting and until their
respective successors are elected and qualified):
C. MICHAEL ARMSTRONG, 58, has been a director of the Company
since 1995 and is a member of the Finance Committee and the
Public Responsibility Committee. He is Chairman of the Board
and Chief Executive Officer of Hughes Electronics
[PHOTO] Corporation, a designer and manufacturer of advanced
electronic systems. Prior to assuming his present position
in 1992, Mr. Armstrong served as Chairman of the Board of
IBM World Trade Corporation from 1989 to 1992. He earned his
B.S. degree in business and economics from Miami University
of Ohio and completed the advanced management curriculum at
Dartmouth Institute. Mr. Armstrong is also a director of
Travelers, Inc. He serves as a trustee of The Johns Hopkins
University, Chairman of the Board of Advisors of The Johns
Hopkins School of Medicine, Chairman of the President's
Export Council and member of the Council on Foreign
Relations, and Vice Chairman of the Board of Directors of
the Los Angeles World Affairs Council.
GWENDOLYN GARLAND BABCOCK, 61, has been a director of the
Company since 1976 and is a member of the Nominating
Committee. She has been a private investor for more than
[PHOTO] five years. Mrs. Babcock is a graduate of Bryn Mawr College
and is a member of the Board of Overseers of The Huntington
Library, Art Collections and Botanical Gardens. She is also
a trustee of the Chandler Trusts and a director of Chandis
Securities Company. (See the Note on page 8.)
DONALD R. BEALL, 58, has been a director of the Company
since 1990 and is a member of the Compensation Committee and
the Nominating Committee. He is Chairman of the Board and
[PHOTO] Chief Executive Officer of Rockwell International
Corporation, a leading provider of technology solutions in
the industrial automation, semiconductor systems, avionics
and communications systems and automotive component systems
business. Prior to assuming his present position in February
1988, Mr. Beall served as President and Chief Operating
Officer of Rockwell International for ten years. Mr. Beall
received a B.S. degree from San Jose State University and an
M.B.A. degree from the University of Pittsburgh. He is also
a director of Amoco Corporation and Procter & Gamble Co.
4
<PAGE>
CONTINUING DIRECTORS (CLASS I)
JOAN A. PAYDEN, 65, has been a director of the Company since
1993 and is a member of the Audit Committee, the Finance
Committee and the Public Responsibility Committee. She is a
founder, president and chief executive officer of Payden &
Rygel, an investment management firm registered under the
[PHOTO] Investment Company Act of 1940 which manages domestic and
global fixed-income portfolios. She has held those positions
since the formation of the firm in 1983. Prior to that time,
Ms. Payden was the managing partner of the west coast
operation of Scudder, Stevens & Clark. Ms. Payden has a B.A.
degree in Mathematics and Physics from Trinity College in
Washington, D.C. and completed graduate study at Columbia
University as well as the Advanced Management Program at
Harvard Business School. She is a chartered financial
analyst and is the President of the Investment Counseling
Association of America. She is also a director of the Los
Angeles Chamber of Commerce, a trustee of the Pacific Asia
Museum and of Loyola Marymount University, and a member of
the Board of Visitors of the Anderson Graduate School of
Management at UCLA.
RICHARD T. SCHLOSBERG III, 52, has been a director of the
Company since 1995. He is Executive Vice President of the
Company and Publisher and Chief Executive Officer of the Los
Angeles Times, with overall responsibility for all of the
[PHOTO] Company's newspapers. Mr. Schlosberg joined the Company in
1983 as Publisher and Chief Executive Officer of The Denver
Post. He was named President and Chief Operating Officer of
the Los Angeles Times in January 1988. In 1990, Mr.
Schlosberg was named Group Vice President of newspapers and
in 1993 was elected Senior Vice President. He was elected to
his current position in January 1994. Mr. Schlosberg began
his newspaper career with Harte-Hanks Communications in 1975
where he held a variety of positions including Senior Vice
President of Harte-Hanks Communications and President of
Harte-Hanks Newspaper Operations at the time of his
departure in 1983. Mr. Schlosberg is a graduate of the U.S.
Air Force Academy and Harvard University Graduate School of
Business where he received an M.B.A. degree. He serves on
the Board of Directors of the Newspaper Association of
America, the Library Foundation of Los Angeles, KCET-TV and
United Way. He also serves on the national board of Junior
Achievement and the advisory board of the Salvation Army.
WARREN B. WILLIAMSON, 68, has been a director of the Company
since 1977 and is Chairman of the Finance Committee and a
member of the Compensation Committee. He is Chairman and
[PHOTO] Chief Executive Officer of Chandis Securities Company and
Chairman of the Board of Trustees of the Chandler Trusts
(see the Note on page 8). In 1989, Mr. Williamson retired
from Crowell, Weedon and Co., a stock brokerage firm with
which he had been associated since 1970. Mr. Williamson is a
graduate of Claremont Men's College. He is also a director
of Chandis Securities Company and Hollywood Park, Inc. In
addition, Mr. Williamson is Chairman Emeritus of the
Trustees of the Art Center College of Design.
5
<PAGE>
CONTINUING DIRECTORS
CLASS III (currently serving until the 1998 Annual Meeting and until their
respective successors are elected and qualified):
OTIS CHANDLER, 69, has been a director of the Company since
1962 and is a member of the Nominating Committee and the
Public Responsibility Committee. He is owner of the Vintage
Museum of Transportation and Wildlife located in Oxnard,
[PHOTO] California. Mr. Chandler served as Chairman of the Executive
Committee of the Board of Directors of the Company from
January 1, 1986 through December 31, 1991. He also served as
Chairman of the Board of Directors and Editor-in-Chief of
the Company from 1981 through 1985 and as Vice Chairman of
the Board from 1968 through 1980. He was Publisher of the
Los Angeles Times from 1960 through 1980. Mr. Chandler is a
graduate of Stanford University. (See the Note on page 8.)
ROBERT F. ERBURU, 66, has been a director of the Company
since 1968. He is a member of the Audit Committee and the
Public Responsibility Committee. Mr. Erburu served as
President of the Company from 1974 through 1986 and from
1994 to June 1, 1995. He was Chief Executive Officer of the
[PHOTO] Company from 1981 to June 1, 1995 and Chairman of the Board
of Directors from 1986 to January 1, 1996. Mr. Erburu
graduated from the University of Southern California with a
B.A. degree in Journalism and holds a J.D. degree from
Harvard Law School. He is also a director of the Tejon Ranch
Company, Cox Communications, Inc. and Marsh & McLennan
Companies, Inc. Mr. Erburu is Chairman of the Board of
Trustees of The Huntington Library, Art Collections and
Botanical Gardens and of The J. Paul Getty Trust, as well as
a trustee of the National Gallery of Art, The Flora and
William Hewlett Foundation, The Ahmanson Foundation, the
Ralph M. Parsons Foundation, the Fletcher Jones Foundation,
the Carrie Estelle Doheny Foundation and the Pfaffinger
Foundation. He is Chairman of the Pacific Council on
International Policy, Chair of the Advisory Board of the
Skirball Institute of American Values, and a director of the
Tomas Rivera Center, the Los Angeles Annenberg Metropolitan
Project and the Skirball Cultural Center. He is also a
Fellow of the American Academy of Arts and Sciences and a
member of the Business Council.
CLAYTON W. FRYE, JR., 66, has been a director of the Company
since 1988 and is Chairman of the Compensation Committee and
a member of the Nominating Committee and the Finance
[PHOTO] Committee. He is the Senior Associate of Laurance S.
Rockefeller. He has served in that capacity since 1973 and
is responsible for overseeing and directing Mr.
Rockefeller's business, real estate and investment
interests, among other things. Mr. Frye is a graduate of
Stanford University where he received both a B.A. degree and
an M.B.A. degree. He is the Chairman of Jackson Hole
Preserve, Inc. and a Partner of Rockfeller & Associates
Realty. Mr. Frye serves as a member of the Advisory Council
of the Stanford University Graduate School of Business and
the White House Historical Association. He is also a
director of Tejon Ranch Company and several privately-held
companies, including King Ranch, Inc.
6
<PAGE>
CONTINUING DIRECTORS (CLASS III)
DAVID LAVENTHOL, 63, has been a director since 1987. He is
Editor-at-Large of the Company. He was President of the
Company from January 1, 1987 to December 31, 1993 and
Publisher and Chief Executive Officer of the Los Angeles
[PHOTO] Times from August 31, 1989 to December 31, 1993. Mr.
Laventhol was a Senior Vice President and a Vice President
of the Company from 1981 through 1986. He also was Publisher
and Chief Executive Officer of Newsday, Inc. from 1978 until
1986, having been an officer of that subsidiary of the
Company since 1971. He graduated from Yale University and
holds an M.A. degree from the University of Minnesota.
Mr. Laventhol is Chairman of the Board of Trustees of the
Museum of Contemporary Art in Los Angeles and a director of
the United Negro College Fund and the National Parkinson's
Foundation.
MARK H. WILLES, 55, is Chairman of the Board, President and
Chief Executive Officer of the Company. A director of the
Company since June 1, 1995, Mr. Willes was also elected
President and Chief Executive Officer of the Company at that
time. He was elected Chairman of the Board effective January
[PHOTO] 1, 1996. Prior to joining the Company, Mr. Willes was
employed by General Mills, Inc., commencing in 1980, where
he held a variety of positions including Chief Financial
Officer, President and Chief Operating Officer and, at the
time of his departure, Vice Chairman of the Board of
Directors. He was also a director of that company. Mr.
Willes was President of the Federal Reserve Bank of
Minneapolis from 1977 to 1980. In 1971, Mr. Willes joined
the Philadelphia Reserve Bank where he held a number of
positions including Director of Research and First Vice
President. He was Assistant Professor of Finance and
Commerce at the University of Pennsylvania from 1967 to
1971. Mr. Willes received an undergraduate degree from
Columbia College and a doctorate from Columbia Graduate
School of Business. He is also a director of The Black &
Decker Corporation, Ryder System, Inc. and Talbots, Inc.
HAROLD M. WILLIAMS, 69, has been a director since 1983 and
is Chairman of the Public Responsibility Committee and is a
member of the Audit Committee and the Finance Committee. He
[PHOTO] is President and Chief Executive Officer of The J. Paul
Getty Trust in Los Angeles, a charitable trust devoted to
the arts and humanities. Among its activities, the Trust
operates the Getty Museum, an internationally renowned
collection of fine arts, in Malibu, California. Before
assuming his present position in 1981, Mr. Williams served
approximately four years as Chairman of the Securities and
Exchange Commission in Washington, D.C. Mr. Williams is a
graduate of UCLA and holds a J.D. degree from Harvard Law
School. Mr. Williams is also a director of SunAmerica.
7
<PAGE>
NOTE
Four of the Company's present directors (Gwendolyn Garland Babcock,
Bruce Chandler, Otis Chandler and Warren B. Williamson) are cousins.
Gwendolyn Garland Babcock, Bruce Chandler, Camilla Chandler Frost,
Douglas Goodan, William Stinehart, Jr., Judy C. Webb and Warren B.
Williamson are the trustees of two trusts known as the "Chandler
Trusts." Camilla Chandler Frost is the sister of Otis Chandler and a
cousin of the other directors named above (other than Mr. Stinehart).
Douglas Goodan and Judy C. Webb are also cousins of each of the
directors named above (other than Mr. Stinehart). The trustees (other
than Mr. Stinehart) and other of their relatives are beneficiaries of
the Chandler Trusts. The Chandler Trusts, their trustees and the
general family group of which they are members may be deemed to be
"parents" of the Company within the meaning of the Securities Act of
1933, as amended.
COMPENSATION OF DIRECTORS
The Board of Directors presently has seventeen directors, three of whom are
salaried employees of the Company. Salaried employees receive no additional
compensation or benefits for their service as directors. Significant changes
were made in January 1997 to the compensation and benefits of the non-employee
directors in order to align their interests more closely with those of the
shareholders. Those changes are described on page 9 in the section entitled
"Revised Director Compensation."
1996 DIRECTOR COMPENSATION
During 1996, directors who were not employees of the Company received an
annual retainer of $30,000 and a fee of $1,000 for each Board or committee
meeting attended, and directors who chaired committees of the Board received
an additional annual retainer of $5,000. One-half of each such director's
aggregate retainer was paid in cash and one-half was paid in Series A Common
Stock under The Times Mirror Company Non-Employee Directors Stock Plan, which
was approved by shareholders in 1996.
The cash portion of a director's 1996 retainer, committee and meeting
attendance fees could be deferred under the Deferred Compensation Plan for
Directors. Under that Plan, such amounts may be distributed, in accordance
with the director's election at the time the deferral commitment was made, in
the January following (i) termination of service, (ii) the later of
termination of service or attainment of ages 55, 60, 65, 70, or (iii) a
predetermined number of years. The director's deferral agreement may provide
either a lump sum distribution or annual installment payments over 5, 10 or 15
years. In addition, certain provisions have been made for hardship, discounted
unscheduled withdrawals and change in control distributions. The crediting
rate applied to the accounts is determined annually by a committee appointed
by the Compensation Committee of the Board of Directors. Survivors are
entitled to receive the unpaid account balance in the form elected by the
director at the time the deferral commitment was made if a director dies prior
to benefit commencement.
During 1996, non-employee directors also participated in the Company's
Pension Plan for Directors, which provided for the payment after retirement
from the Board of an annual benefit equal to the sum of the amount of the
annual retainer at the time of retirement plus the amount of Board and
committee attendance fees paid or payable for the calendar year preceding
retirement. The duration of the payment equaled the number of years of service
as an outside director. In order to receive this benefit, a director had to be
a member of the Board in good standing at the time of retirement with at least
five years of service and had to be available for consultation upon request
while receiving benefits.
In January 1997, the Board determined that benefit accruals under the
Pension Plan for Directors would cease, effective December 31, 1996, for
current directors, and that no future directors would be entitled to
participate in that Plan. Retired directors will continue to receive benefits
previously earned under the Pension Plan for Directors. Current directors will
receive an agreed upon amount (either in a present lump sum payment
8
<PAGE>
or in a future payment, which can be paid in a lump sum or in installments )
in lieu of benefits accrued under the Pension Plan for Directors as of
December 31, 1996. The Company will issue to a current director who elects to
receive a future payment a promissory note which bears interest at 9%
compounded annually.
REVISED DIRECTOR COMPENSATION
In January 1997, the Board of Directors suspended the Company's Pension Plan
for Directors, eliminated Board and committee meeting fees, changed the
retainer payable to non-employee directors of the Company, and amended The
Times Mirror Company Non-Employee Directors Stock Plan in order to effect the
changes described below.
Effective January 1, 1997, each non-employee director will receive an annual
retainer of 500 shares of Series A Common Stock. In addition, each of them
will receive a cash payment equal to the value of 500 shares of such stock,
based on the prevailing market prices at the time. Non-employee chairpersons
of committees of the Board will also receive an annual retainer of 60 shares
of Series A Common Stock and a cash payment equal to the value of 60 shares of
such stock. A director may also elect to receive the cash portion of the
annual retainer or the chairperson retainer in the form of Series A Common
Stock.
Upon receipt of shareholder approval of The Times Mirror Company 1997
Directors Stock Option Plan, non-employee directors also will receive annually
an option grant for 5,000 shares of Series A Common Stock. These stock options
will be immediately exercisable at a price equal to the fair market value of
the Series A Common Stock on the date of grant, will have a term of ten years
and will be subject to such additional terms and conditions more fully
described below under "Approval of The Times Mirror Company 1997 Directors
Stock Option Plan."
Under the new retainer program, non-employee directors may elect to defer
the receipt of any part of their retainer. If a director defers receipt of the
cash portion and/or stock portion of the retainer, an amount valued with
reference to shares of Series A Common Stock will be credited to an unfunded
stock unit account. During the deferral period, this account will be credited
with additional stock units equal to the value of dividends declared on the
Series A Common Stock represented by stock units in the account. The aggregate
value of the stock units will be distributed in shares of Series A Common
Stock under The Times Mirror Non-Employee Directors Stock Plan at the end of
the deferral period selected by the director.
For each non-employee director, the Company provides $150,000 life insurance
coverage and $100,000 travel accident insurance for travel on Company
business.
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board are the Audit Committee, Compensation
Committee, Finance Committee, Nominating Committee and Public Responsibility
Committee. The functions of each of these five committees are described and
the members of each are listed below.
Each year, the Audit Committee reviews the Company's audit plan, the scope
of activities of the independent auditors and of the internal auditors, the
results of the audit after completion, and the fees for services performed
during the year, and recommends to the Board of Directors the firm to be
appointed as independent auditors. During a portion of each meeting, this
Committee meets with representatives of the independent auditors without
officers or employees of the Company present. The members of the Audit
Committee are Dr. Alfred E. Osborne, Jr. (Chairman), John E. Bryson, Robert F.
Erburu, Joan A. Payden, William Stinehart, Jr. and Harold M. Williams, none of
whom is either an officer or employee of the Company. The Audit Committee met
three times in 1996.
The Compensation Committee administers the Company's employee, management
and executive compensation and stock plans, determines the compensation of
executive officers of the Company, authorizes
9
<PAGE>
and approves bonus-incentive compensation programs for executive personnel of
the Company and considers and discusses other matters relating to key
executive personnel, including management succession and promotions. Clayton
W. Frye, Jr. (Chairman), Donald R. Beall, John E. Bryson, Dr. Alfred E.
Osborne, Jr., Warren B. Williamson and Dr. Edward Zapanta, none of whom is
either an officer or employee of the Company, are the members of the
Compensation Committee. The Compensation Committee met three times in 1996.
The Finance Committee reviews financial policies and performance objectives
as developed by the Company's management. Warren B. Williamson (Chairman), C.
Michael Armstrong, Bruce Chandler, Clayton W. Frye, Jr., Joan A. Payden,
William Stinehart, Jr. and Harold M. Williams are the members of the Finance
Committee, which met once in 1996.
The Nominating Committee considers and recommends to the Board nominees for
possible election to the Board of Directors and considers other matters
pertaining to the size and composition of the Board of Directors and its
committees. The members of the Nominating Committee are Dr. Edward Zapanta
(Chairman), Gwendolyn Garland Babcock, Donald R. Beall, Otis Chandler, Clayton
W. Frye, Jr. and Dr. Alfred E. Osborne, Jr. The Nominating Committee
recommended the nomination of all directors in Class II for election at the
1997 Annual Meeting. The Nominating Committee will give appropriate
consideration to qualified persons recommended by shareholders as possible
nominees, if such recommendations are accompanied by information sufficient to
enable the Nominating Committee to evaluate the qualifications of the persons
recommended and such persons consent to be considered. Such recommendations
must be submitted in writing to the Secretary of the Company by no later than
December 31 preceding the annual meeting of shareholders at which directors
are to be elected. The Nominating Committee met once in 1996.
The Public Responsibility Committee reviews and evaluates policies and
practices of the Company to assure that they are consistent with high
standards of responsible corporate conduct, as well as with the Company's
legal and other obligations to its employees, consumers, communities and
society as a whole. The members of the Public Responsibility Committee are
Harold M. Williams (Chairman), C. Michael Armstrong, Otis Chandler, Robert F.
Erburu, Joan A. Payden and Dr. Edward Zapanta. The Public Responsibility
Committee met once in 1996.
In 1996, there were five meetings of the Board of Directors. During the
year, each of the incumbent directors, other than Mr. Armstrong, Mr. Frye and
Ms. Payden, attended at least 75% of the aggregate number of meetings of the
Board and the committees on which he or she sits.
APPROVAL OF THE TIMES MIRROR COMPANY 1997 DIRECTORS STOCK OPTION PLAN
GENERAL
On January 30, 1997, the Board of Directors adopted, subject to approval of
the Company's shareholders, The Times Mirror Company 1997 Directors Stock
Option Plan (the "Directors Stock Option Plan"). The Board determined that, in
lieu of continued participation by current and future non-employee directors
in the Times Mirror Pension Plan for Directors described previously under
"Compensation of Directors," non-employee directors should be compensated
through option grants in order to align their financial interests with those
of the Company's shareholders by increasing such directors' proprietary
interest in the Company.
The Board of Directors has passed a resolution providing that under the
Directors Stock Option Plan, each non-employee director of the Company will be
awarded as of January 30, 1997, and thereafter as of the first Board meeting
of each subsequent calendar year, stock options for 5,000 shares of the
Company's Series A Common Stock, or such number as may be determined by the
Board from time to time. If any non-employee director joins the Board during
the calendar year, he or she will receive a prorated option grant as of the
first Board meeting on or after joining the Board, based on the number of
months, rounded up to whole months, remaining in the calendar year. The option
grants will have an exercise price equal to the fair market value on the date
of grant and will be immediately exercisable, with a ten year term and such
other terms and conditions as may be specified by the Board or the
Compensation Committee from time to time.
10
<PAGE>
INITIAL GRANTS
The following table lists the initial grants of options made on January 30,
1997, subject to approval of the Directors Stock Option Plan by the Company's
shareholders.
NEW PLAN BENEFITS
THE TIMES MIRROR COMPANY 1997 DIRECTORS STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
NAME AND POSITION UNDERLYING OPTIONS
----------------- --------------------
<S> <C>
Named Executive Officer Group........ 0
Non-Executive Director Group......... 70,000
Executive Group...................... 0
Non-Executive Officer Employee Group. 0
</TABLE>
SUMMARY OF THE PLAN
The following summary of the main features of the Directors Stock Option
Plan is qualified in its entirety by reference to the complete text of such
Plan, which is Exhibit A to this Proxy Statement.
PURPOSE. The purpose of the Directors Stock Option Plan is to attract,
retain and motivate qualified individuals to serve on the Company's Board of
Directors and to align their financial interests with those of the Company's
shareholders by increasing their proprietary interest in the Company.
ELIGIBILITY. Non-Employee Directors of the Company are eligible to receive
stock options under the Directors Stock Option Plan. Non-Employee Directors
are those members of the Company's Board of Directors who are not at the time
also employees of the Company or any of its subsidiaries. For the purposes of
the Directors Stock Option Plan, the Chairman of the Board's status as an
employee will be determined by the Board of Directors. There are currently 14
Non-Employee Directors on the Board of Directors.
EXERCISE PRICE AND TERMS. The exercise price for each option will be
determined by the Board of Directors, and will not be less than the Fair
Market Value, defined in the Plan as the mean between the high and low market
prices of the stock on the date of the grant. On January 30, 1997, the Fair
Market Value of a share of Series A Common Stock was $46.6875. The Board of
Directors will specify the number of shares subject to each option grant (or
the formula to determine the number of shares), the Non-Employee Directors to
receive grants, the date of grant and the vesting and expiration terms of the
options. These determinations do not have to be the same for each grant or for
each Non-Employee Director. The Board of Directors may provide that options
are granted to a Non-Employee Director instead of a cash retainer or other
compensation. The Board may also provide that the shares of stock issued upon
exercise of the option will be subject to additional conditions or agreements
as the Board in its discretion may specify before the exercise of the option,
including deferrals on issuance of shares, conditions on vesting or the
transferability of options, and forfeiture or repurchase provisions. The
maximum number of shares of stock subject to options granted under the
Directors Stock Option Plan for any calendar year to any person because of
service as a Non-Employee Director, other than options that a Non-Employee
Director has elected to receive instead of a cash retainer or other fees, may
not exceed 50,000 shares.
ADMINISTRATION. The Directors Stock Option Plan is administered by the Board
or, as provided in the Plan, by a committee of the Board. Subject to the
express provisions of the Plan, the committee will be authorized and empowered
to do all things which are necessary or desirable in connection with the
administration of the Plan. However, the Board of Directors may at any time
limit the authority of the committee to administer the Plan. The Directors
Stock Option Plan is intended to operate in a manner that exempts grants of
stock under the Plan from Section 16(b) of the Securities Exchange Act of
1934.
11
<PAGE>
STOCK SUBJECT TO THE DIRECTORS STOCK OPTION PLAN. The maximum number of
shares of the Company's Series A Common Stock that can be issued under the
Directors Stock Option Plan is 500,000. The maximum number and type of shares
or other securities that may be issued under the Plan and that are subject to
outstanding options will be adjusted appropriately if the outstanding
securities of the class of stock then subject to the Plan are affected through
a reorganization, reclassification, dividend (other than regular, quarterly
cash dividends), or other distribution, stock split, reverse stock split,
spin-off or similar transaction, or if substantially all of the property and
assets of the Company are sold, unless the terms of the transaction provide
otherwise.
NON-TRANSFERABILITY. Options will be transferable only by will or the laws
of descent and distribution, unless the Board of Directors or a committee of
the Board appointed to administer the Plan provides otherwise.
FEDERAL INCOME TAX CONSEQUENCES. A Non-Employee Director who is granted a
stock option under the Plan will not recognize taxable income at the time of
the grant, but will generally recognize taxable income upon the exercise of
the option. The amount of income recognized upon the exercise of the stock
option will be measured by the excess, if any, of the Fair Market Value of the
shares of stock at the time of exercise over the exercise price. The Company
will generally be entitled to a deduction corresponding to the amount of
income recognized by the Non-Employee Director. This explanation is not a
complete summary of the Federal income tax considerations for stock options
granted under the Plan, and tax consequences under state, local or foreign law
may differ from the consequences under Federal income tax law.
GRANT. Any options granted prior to the date on which shareholders approve
the Plan will be contingent upon shareholder approval, and, if approval is not
obtained, will be null and of no effect.
LOANS. The Company may, if authorized by the Board, make loans for the
purpose of enabling a Non-Employee Director to exercise options granted under
the Plan and to pay the taxes resulting from an option exercise under the
Plan. The Board has authority to determine the terms and conditions of the
loans, which may be secured by the shares of stock received upon exercise of
the option.
ARBITRATION. Any claim or dispute relating to the Plan will be settled by
arbitration.
AMENDMENTS AND TERMINATION. Except to the extent required by law or New York
Stock Exchange rules, the Board of Directors may periodically amend the
Directors Stock Option Plan without further shareholder approval, but may not
amend the Plan to increase materially the number of shares of stock authorized
for issuance under the Plan without shareholder approval. No options may be
granted after the tenth anniversary of the date of approval by the
shareholders of the Plan, and it may be terminated earlier than that date by
the Board of Directors. Termination and expiration of the Directors Stock
Option Plan will not affect the rights and obligations arising under the
options granted before termination or expiration which are then in effect.
THE BOARD OF DIRECTORS OF THE COMPANY HAS ADOPTED THE DIRECTORS STOCK OPTION
PLAN AND RECOMMENDS A VOTE FOR ITS APPROVAL.
12
<PAGE>
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company, on the recommendation of its Audit
Committee (consisting of directors who are neither officers nor employees of
the Company--see page 9), has appointed Ernst & Young LLP as independent
auditors for the Company and its subsidiaries for 1997. As a matter of
corporate practice, the Company is submitting the appointment of Ernst & Young
LLP to shareholders for ratification. If shareholders fail to ratify the
appointment, the Audit Committee will review its selection for subsequent
years.
Ernst & Young LLP has served as independent auditors for the Company since
1936. One or more members of the firm will attend the Annual Meeting. Ernst &
Young LLP has indicated that it does not presently intend to make a statement
at the Annual Meeting, but a member of the firm will be available to respond
to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
OTHER MATTERS
Management does not know of any matter to be acted upon at the meeting other
than the matters described above. If any other matter properly comes before
the meeting, however, the proxy holders will vote on those matters in
accordance with their best judgment.
13
<PAGE>
OWNERSHIP OF VOTING SECURITIES
BENEFICIAL OWNERSHIP OF CERTAIN SHAREHOLDERS
The following table sets forth the ownership of the outstanding shares of
the voting securities of the Company as of March 10, 1997 (except as otherwise
noted), held by persons known to the Company to beneficially own more than 5%
of the outstanding shares of a class of voting securities of the Company and
by certain employee benefit plans maintained by the Company for various
qualified retirement plans for employees of the Company and its subsidiaries.
Unless otherwise indicated, beneficial ownership numbers represent shares over
which the beneficial owner has sole voting and dispositive power.
<TABLE>
<CAPTION>
SERIES A PERCENT SERIES B PERCENT SERIES C PERCENT
NAME AND ADDRESS OF COMMON OF PREFERRED OF COMMON OF
BENEFICIAL OWNER STOCK SERIES(1) STOCK SERIES(1) STOCK SERIES(1)
------------------- ---------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
The Trustees of the 18,668,546 27.99% -- -- 20,757,246 77.59%
Chandler Trusts(2).....
c/o Chandis Securities
Company
350 West Colorado
Boulevard,
Suite 230
Pasadena, CA 91105
The Times Mirror Stock -- -- 269,853 3.46% 641,288 2.40%
Trust(3)...............
Times Mirror Square
Los Angeles, CA 90053
The Times Mirror
Employee Stock
Ownership Trust(4)..... 2,536,173 3.80% -- -- 1,753,391 6.55%
Times Mirror Square
Los Angeles, CA 90053
Times Mirror Savings 2,309,193 3.46% 188,347 2.42% 214,821 .80%
Plus Plan Trust(5).....
Times Mirror Square
Los Angeles, CA 90053
George Soros(6)......... 5,871,900 8.80% -- -- -- --
c/o Soros Fund
Management
888 Seventh Avenue,
33rd Floor
New York, New York
10166
Dodge & Cox(7).......... -- -- 811,372 10.42% -- --
1 Sansome Street
San Francisco, CA
94104
FMR Corp.(8)............ 7,791,126 11.68%
82 Devonshire Street
Boston, MA 02109
Citicorp and Citibank, -- -- 3,900,390 50.07% -- --
N.A.(9)................
399 Park Avenue
New York, NY 10043
The Putnam Advisory 3,722,741 5.58% -- -- -- --
Company, Inc.(10)......
Putnam Investments
Putnam Investment
Management, Inc.
1 Post Office Square
Boston, MA 02109
</TABLE>
- --------
(1) The percentages are based on the number of shares outstanding of each
class of voting securities as of March 10, 1997, as reflected in the
records of the Company.
(2) On March 10, 1997, the Chandler Trusts owned in the aggregate 18,668,546
shares of Series A Common Stock, 20,757,246 shares of Series C Common
Stock and 442,596 shares of Cumulative Redeemable Preferred Stock, Series
A ("Series A Preferred Stock"), which is a nonvoting stock. Chandis
Securities Company, a corporation, owned 8,581,432 shares of Series A
Common Stock, 9,656,432 shares of Series C
14
<PAGE>
Common Stock and 380,972 shares of Series A Preferred Stock. Substantially
all of the outstanding stock of Chandis Securities Company is owned by one
of the Chandler Trusts and the amounts set forth in the above table
opposite the Chandler Trusts include the holdings of Chandis Securities
Company. In addition to her interests in shares held by the Chandler
Trusts, Gwendolyn Garland Babcock holds 6,243 shares of Series A Common
Stock (over all of which Mrs. Babcock has sole voting and dispositive
power), including 5,000 shares of Series A Common Stock which she may
acquire upon the exercise of outstanding stock options and 1,000 stock
units which she deferred under The Times Mirror Non-Employee Directors
Stock Plan. Her husband holds 1,410 shares of Series A Common Stock,
448 shares of Series C Common Stock and 793 shares of Series B Preferred
Stock, and Mrs. Babcock, together with her husband, holds as co-trustee
203 shares of Series A Common Stock, 12,212 shares of Series C Common
Stock and 5,302 shares of Series B Preferred Stock, of which she disclaims
beneficial ownership. In addition to his interests in shares held by the
Chandler Trusts, Otis Chandler (individually and as a trustee) and his
wife hold an aggregate of 64,806 shares of Series A Common Stock (of which
Mr. Chandler has sole voting and dispositive power over 7,195 shares) and
61,289 shares of Series C Common Stock (of which he has sole voting and
dispositive power over 42 shares), including 6,410 shares of Series A
Common Stock which he may acquire upon the exercise of outstanding stock
options. In addition to Mrs. Babcock, five other trustees of the Chandler
Trusts own Series A Common Stock individually or as trustee as follows:
131,691 shares by Camilla Chandler Frost (over all of which Mrs. Frost has
sole voting and dispositive power) and 45,545 shares held by a trust of
which Mrs. Frost is a co-trustee and of which she disclaims beneficial
ownership; 500 shares by Douglas Goodan (over all of which Mr. Goodan has
sole voting and dispositive power); 5,743 shares by Bruce Chandler (over
all of which Mr. Chandler has sole voting and dispositive power),
including 5,000 shares of Series A Common Stock which he may acquire upon
the exercise of outstanding stock options; 6,743 shares by William
Stinehart, Jr. (of which he has sole and dispositive power over 6,000
shares), including 5,000 shares of Series A Common Stock which he may
acquire upon the exercise of outstanding stock options and 1,000 stock
units which he deferred under The Times Mirror Non-Employee Directors
Stock Plan; and 6,403 shares by Warren B. Williamson (over all of which
Mr. Williamson has sole voting and dispositive power), including 5,000
shares of Series A Common Stock which he may acquire upon the exercise of
outstanding stock options and 1,120 stock units which he deferred under
The Times Mirror Non-Employee Directors Stock Plan. On March 10, 1997, the
individuals who act as trustees of the Chandler Trusts beneficially owned,
directly or indirectly, in their capacities as individuals and as trustees
of the Chandler and other trusts an aggregate of 18,937,833 shares of
Series A Common Stock, 20,831,195 shares of Series C Common Stock and
6,095 shares of Series B Preferred Stock (including shares owned by the
Chandler Trusts and Chandis Securities Company), constituting 28.39% of
the shares of Series A Common Stock and 77.86% of the shares of Series C
Common Stock and .08% of the shares of Series B Preferred Stock
outstanding on that date, representing 66.45% of the total voting
interests of all outstanding shares of Series A and Series C Common Stock
and Series B Preferred Stock. Unless otherwise indicated, all beneficial
ownership figures reported in this footnote represent shares over which
the beneficial owner shares voting and dispositive power with others.
(3) This Trust holds stock on behalf of The Times Mirror Pension Plan and
other pension plans for employees of the Company's subsidiaries. All
decisions as to the voting and disposition of such common stock are under
the authority and responsibility of the Plan Administration Committee
appointed by the Board of Directors of the Company. The Plan
Administration Committee consists of five officers of the Company, three
of whom are Richard T. Schlosberg III, Thomas Unterman and Mark H.
Willes.
(4) Based on holdings as of December 31, 1996. Shares of Times Mirror stock
allocated to participants' accounts in The Times Mirror Employee Stock
Ownership Plan ("ESOP") are voted by the participants themselves on
matters presented at meetings of shareholders. Shares with respect to
which no participant directions are received are voted by the Trustee of
the ESOP, The Northern Trust Company, as directed by the Plan
Administration Committee described in Note (3) above. This Committee also
has authority and responsibility for the disposition of the investment of
the assets held in the ESOP, including the stock.
15
<PAGE>
(5) Based on holdings as of December 31, 1996. Shares of Times Mirror stock
held in the Times Mirror Savings Plus Plan accounts or allocated to
participants' Payroll-Based Stock Ownership Plan ("PAYSOP") accounts are
voted by the participants themselves on matters presented at meetings of
stockholders. Shares allocated to the Times Mirror Savings Plus Plan
accounts with respect to which no participant directions are received
will remain unvoted. Shares allocated to the PAYSOP accounts with respect
to which no participant directions are received will be voted by The
Northern Trust Company, as trustee of the Times Mirror Savings Plus Plan
as directed by the Plan Administration Committee described in Note (3)
above. Fidelity Management Trust Company will replace The Northern Trust
Company as trustee of the Times Mirror Savings Plus Plan on April 1,
1997.
(6) The following information is based solely on a Schedule 13D dated January
1, 1997, which was filed with the Securities and Exchange Commission (the
"SEC"). The aggregate number of shares of Series A Common Stock of which
George Soros (the "Reporting Person") may be deemed a beneficial owner is
5,871,000, representing approximately 8.19% of the outstanding shares of
Series A Common Stock based upon 71,676,855 shares of Series A Common
Stock outstanding on December 31, 1996. The Reporting Person may be
deemed the beneficial owner of (i) 5,347,500 shares of Series A Common
Stock held for the account of Quantum Partners LDC ("Quantum Partners"),
a Cayman Islands exempted limited duration company which has granted
investment discretion to Soros Fund Management LLC ("SFM LLC"), a
Delaware limited liability company of which the Reporting Person is the
Chairman and one of the three members of the Management Committee, and
(ii) 524,400 shares of Series A Common Stock held for the account of Lupa
Family Partners ("Lupa"), of which the Reporting Person is one of two
general partners. Stanley Druckenmiller, Lead Portfolio Manager and a
member of the Management Committee of SFM LLC, also owns a 75% interest
in, and is the sole managing member of, Duquesne LLC, a registered
investment adviser. Accounts of investment advisory clients over which
Duquesne LLC exercises investment discretion hold 918,700 shares of
Series A Common Stock, representing approximately 1.28% of the Series A
Common Stock outstanding at December 31, 1996. The Reporting Person
expressly disclaimed beneficial ownership of any shares of Series A
Common Stock not held for the accounts of Quantum Partners or Lupa.
(7) Based solely on a Form 13F filed with the SEC as of December 31, 1996, in
which Dodge & Cox reported having sole voting authority over shares that
it held on such date.
(8) This information is based solely on a Schedule 13G dated February 14,
1997, filed with the SEC by FMR Corp. as a parent holding company on
behalf of certain shareholders of FMR Corp. and its investment advisory
subsidiary Fidelity Management & Research Company ("Fidelity"). Fidelity
is the beneficial owner of 6,549,871 shares of the Series A Common Stock
as a result of acting as investment advisor to various registered
investment companies. FMR Corp. has sole power to vote 1,009,955 shares,
and sole power to dispose or to direct the disposition of 7,791,126
shares.
(9) This information is based solely on Amendment No. 1 to Schedule 13G dated
March 10, 1997 filed by Citibank, N.A. and its parent holding company,
Citicorp, with the SEC. According to the filing, Citicorp and Citibank,
N.A. have sole power to vote and to dispose of 3,900,390 shares of the
Series B Preferred Stock. At the end of 1996 and continuing into early
1997, the Company entered into a series of forward purchase contracts
with a Citicorp subsidiary with respect to shares of the Series B
Preferred Stock. These contracts mature in 1998 but may be terminated
earlier, and are structured to be settled on a net share basis in shares
of Series B Preferred Stock, or in shares of Series A Common Stock if the
Series B Preferred Stock is redeemed prior to the maturity of the
contracts. On February 28, 1997, the Company announced that it would
redeem all of its outstanding Series B Preferred Stock on April 2, 1997.
In the redemption, each share of Series B Preferred Stock will be
exchanged for .57083 of a share of Series A Common Stock.
(10) Based solely on a Form 13F filed with the SEC as of December 31, 1996, in
which these entities reported having shared dispositive power and no
voting power over all of such shares, except for 86,480 shares as to
which they have shared voting power.
16
<PAGE>
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership as of March 10, 1997 of
the Company's common and preferred stock, including shares as to which a right
to acquire ownership exists within the meaning of Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934, of each director, each executive officer
listed in the Summary Compensation Table on page 19, and a group of such
persons and other executive officers. For this purpose, the rules of the
Securities and Exchange Commission require that every person who has or shares
the power to vote or dispose of shares of stock be reported as a "beneficial
owner" of all shares as to which such power exists. As a consequence, many
persons may be deemed to be the "beneficial owners" of the same securities and
for this reason all shares of Series A Common Stock, Series C Common Stock and
Series A Preferred Stock held by the trustees of the Chandler Trusts and by
Chandis Securities Company (see Note (2) on page 14) are included in the
shares reported in the table below as "beneficially owned" by each director
who is also a trustee of the Chandler Trusts.
<TABLE>
<CAPTION>
SERIES A SERIES C SERIES A SERIES B
COMMON STOCK COMMON STOCK PREFERRED STOCK PREFERRED STOCK
------------------------------ ------------------------ ------------------ ---------------------
PERCENT PERCENT PERCENT PERCENT
OF OF OF OF
NAME TOTAL(1)(2) SERIES TOTAL(1) SERIES TOTAL SERIES TOTAL SERIES
---- --------------- ------- ---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. Michael Armstrong.... 8,708(3) * -- -- -- -- -- --
Gwendolyn Garland
Babcock................ 18,676,402(3)(4)(5) 28.00% 20,769,906(4)(5) 77.63% 823,568(4) 100% 6,095(5) *
Donald R. Beall......... 7,243(3)(5) * -- -- -- -- -- --
John E. Bryson.......... 9,896(3) * -- -- -- -- -- --
Bruce Chandler.......... 18,674,289(4) 28.00% 20,757,246(4) 77.59% 823,568(4) 100% -- --
Otis Chandler........... 18,733,352(4)(5) 28.09% 20,818,535(4)(5) 77.82% 823,568(4) 100% -- --
Robert F. Erburu........ 511,789(3) * 351,990(6) 1.32% -- -- 125,790(6) 1.61%
Clayton W. Frye, Jr. ... 11,213 * 190 * -- -- -- --
David Laventhol......... 33,104 * 24,530 * -- -- -- --
Kathleen G. McGuinness.. 9,482(7) * -- -- -- -- -- --
Dr. Alfred E. Osborne,
Jr. ................... 7,103(3) * 385 * -- -- 375 *
Joan A. Payden.......... 6,743 * -- -- -- -- -- --
Richard T. Schlosberg
III.................... 166,752(7) * 936,873(6)(8) 3.50% -- -- 395,643(6)(8) 5.08%
William Stinehart, Jr. . 18,675,289(3)(4)(5) 28.00% 20,757,246(4) 77.59% 823,568(4) 100% -- --
Thomas Unterman......... 106,323(7) * 641,546(8) 2.40% -- -- 269,853(8) 3.46%
Mark H. Willes.......... 124,219(5)(7) * 641,288(8) 2.40% -- -- 269,853(8) 3.46%
Harold M. Williams...... 6,043 * 200 * -- -- -- --
Warren B. Williamson.... 18,674,949(3)(4) 28.00% 20,757,246(4) 77.59% 823,568(4) 100% -- --
Donald F. Wright........ 132,457(5)(7) * 299,402(6) 1.12% -- -- 125,790(6) 1.61%
Dr. Edward Zapanta...... 9,125(3)(9) * -- -- -- -- -- --
All directors and
officers as a group (31
persons, including
those named above)..... 20,210,311 30.30% 21,872,589 81.76% 823,568 100% 406,634 5.22%
</TABLE>
- -------
* Less than 1%
(1) Includes shares held under the Company's Savings Plus Plan (including the
PAYSOP) and Employee Stock Ownership Plan and allocated to the accounts of
the executive officers as of December 31, 1996. Also includes shares held
in the Company's Dividend Reinvestment Plan.
(2) Includes shares which may be acquired upon the exercise of outstanding
stock options and that are currently exercisable within 60 days of March
10, 1997 as follows: 7,465 by Mr. Armstrong; 5,000 by Mrs. Babcock; 5,000
by Mr. Beall; 8,653 by Mr. Bryson; 5,000 by Mr. Bruce Chandler; 6,410 by
Mr. Otis Chandler; 423,686 by Mr. Erburu; 5,000 by Mr. Frye; 6,750 by Ms.
McGuinness; 5,000 by Dr. Osborne; 5,000 by Ms. Payden; 134,826 by Mr.
Schlosberg; 5,000 by Mr. Stinehart; 75,207 by Mr. Unterman; 45,050 by Mr.
Willes; 5,000 by Mr. Williams; 5,000 by Mr. Williamson; 105,842 by Mr.
Wright; and 5,000 by Dr. Zapanta.
(3) Includes shares deferred under The Times Mirror Company Non-Employee
Directors Stock Plan.
(4) Includes shares held in the Chandler Trusts, as to which Mr. Stinehart
disclaims beneficial ownership. See Note (2) on page 14.
17
<PAGE>
(5) Includes shares held in trust, or other capacities, as to which beneficial
ownership is disclaimed.
(6) Includes shares held by the Pfaffinger Foundation as to which Messrs.
Erburu, Schlosberg and Wright disclaim beneficial ownership. As of March
10, 1997 the Pfaffinger Foundation held 125,790 shares of Series B
Preferred Stock and 294,477 shares of Series C Common Stock.
(7) Includes shares of restricted stock, including shares granted under the
matching restricted stock program of The Times Mirror Company 1996
Management Incentive Plan.
(8) Includes shares held by The Times Mirror Stock Trust as to which Messrs.
Schlosberg, Unterman and Willes disclaim beneficial ownership. See Note
(3) on page 15.
(9) Includes shares held in an Individual Retirement Account.
18
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation of
the chief executive officer of the Company and each of the four most highly
compensated executive officers of the Company (other than the chief executive
officer) serving in such capacity at December 31, 1996. This table includes
information for each individual for services in all capacities to the Company
for the fiscal years ended December 31, 1994, 1995 and 1996, unless otherwise
noted.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ --------------------- -------
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK STOCK LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR(1) ($) ($)(2) ($)(3) ($)(4) (#)(5) ($)(6) ($)(7)
- ------------------ ------- ------- --------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mark H. Willes 1996 798,076 1,350,000 2,900 338,859 180,200 745,084 101,503
Chairman of the Board, 1995 409,616 525,000 -- 595,000 108,000 -- 1,085,613(8)
President and Chief
Executive Officer
Richard T.
Schlosberg III 1996 525,000 675,000 904 169,453 75,000 620,903 95,365
Executive Vice 1995 523,077 400,000 -- -- 51,910 268,000 4,500
President and Publisher 1994 472,115 450,000 -- -- 40,337 -- 4,500
Los Angeles Times
Thomas Unterman 1996 450,000 405,000 -- 101,672 50,700 378,751 4,500
Senior Vice President 1995 413,019 250,000 -- -- 29,615 160,800 4,500
and Chief Financial 1994 362,020 250,000 -- 453,125 24,237 -- 54,500(9)
Officer
Donald F. Wright 1996 404,999 360,000 1,612 90,375 42,800 416,005 44,974
Senior Vice President, 1995 404,230 150,000 -- -- 31,385 214,400 4,500
Eastern Newspapers 1994 384,231 225,000 -- -- 29,615 -- 4,500
Kathleen G. McGuinness 1996 300,001 255,000 -- 64,031 27,000 -- 25,000
Vice President, General 1995 38,077 20,000 -- -- -- -- 25,000
Counsel and Secretary
</TABLE>
- --------
(1) Mr. Willes and Ms. McGuinness were not executive officers of the Company
in 1994, and no information has therefore been given about their
compensation for 1994. Mr. Willes joined the Company on June 1, 1995, and
Ms. McGuinness joined the Company on November 1, 1995.
(2) An officer may elect to take his or her bonus award in the form of cash or
deferred cash. Beginning with 1996 bonuses, an officer may also elect to
take 25% of such bonus award in shares of Series A Common Stock.
(3) Represents amounts paid in cash to reimburse the named officers for the
tax impact of certain perquisites. None of the named executive officers
received perquisites or other personal benefits in an amount sufficient to
require inclusion in this column.
(4) Restricted stock grants relate to the Company's Series A Common Stock.
Dollar amounts shown in this column equal the number of shares of
restricted stock awarded multiplied by the closing market price of the
Company's Series A Common Stock on the grant date, net of any
consideration paid. The restricted shares granted for 1994 and 1995 vest
25% commencing on the second anniversary of the date of award and 25% on
each successive anniversary of the award date. Grants for 1996 relate to
the Company's matching bonus restricted stock program under The Times
Mirror Company 1996 Management Incentive Plan. Under that program, certain
officers of the Company can elect to place shares of Series A Common Stock
on deposit
19
<PAGE>
with the Company in an amount equal to 25% of their bonus, which the
Company then matches with the same number of restricted shares. The
restricted shares granted on January 30, 1997 for 1996 compensation under
the matching restricted stock program will vest 100% after four years,
provided that the officer does not terminate employment with the Company
prior to that time or withdraw the shares deposited with the Company for
the match. Regular dividends are paid on restricted shares. As of December
31, 1996, the number and value of restricted stock award holdings, which do
not include the restricted shares granted on January 30, 1997 for 1996
compensation, were as follows: 35,000 ($1,741,250) by Mr. Willes, and
25,000 ($1,243,750) by Mr. Unterman.
(5) Securities reported in the Summary Compensation Table above for the year
1996 were previously reported as 1995 compensation in the Summary
Compensation Table of the Company's 1996 proxy statement in the column
"Securities Underlying Stock Options" under Long-Term Compensation Awards.
The options covering these securities were granted on December 7, 1995,
but related to compensation for 1996 and are therefore being reported as
1996 compensation. Securities Underlying Stock Options previously reported
as 1994 and 1993 compensation in prior proxy statements of the Company are
now reflected in the Summary Compensation Table above as 1995 and 1994
compensation, respectively, because the awards related to compensation for
those years. These reporting changes have been made to tie the grants to
the compensation period to which they relate rather than to the date of
the Board or committee meeting at which the grants were made. Securities
reported for Mr. Willes for 1995 relate to the grant of stock options to
him when he joined the Company. The options granted on January 30, 1997,
on Series A Common Stock by the Compensation Committee as part of the
named executives' 1997 compensation were as follows: 200,000 to Mr.
Willes; 75,000 to Mr. Schlosberg; 65,000 (including 15,000 options as a
special performance award) to Mr. Unterman; 40,000 to Mr. Wright; and
25,000 to Ms. McGuinness. These grants will be included as 1997
compensation in the Summary Compensation Table appearing in the Company's
1998 proxy statement.
(6) In 1996, deferred cash incentive awards which had previously been granted
under the Company's 1992 Key Employee Long-Term Incentive Plan were
canceled, and shares of the Company's Series A Common Stock with certain
restrictions on transfer were granted in the place of such awards. Amounts
reported for 1996 include the value of the shares and an amount equal to
dividends paid during the first quarter of 1996 on such shares. Amounts
reported for 1995 represent payouts earned for performance under the prior
deferred cash incentive program.
(7) The amounts shown in this column for 1996 consist of the following: (i)
Mr. Willes, $97,003 for relocation assistance (see page 28), and $4,500
for matching Company contributions under the Times Mirror Savings Plus
Plan; (ii) Mr. Schlosberg, $90,865 for a payout for accrued vacation and
$4,500 for matching Company contributions under the Times Mirror Savings
Plus Plan; (iii) Mr. Unterman, $4,500 for matching Company contributions
under the Times Mirror Savings Plus Plan; (iv) Mr. Wright, $40,474 for a
payout for accrued vacation and $4,500 for matching Company contributions
under the Times Mirror Savings Plus Plan; and (v) Ms. McGuinness, $25,000
of deferred compensation paid in connection with her hiring by the Company
in 1995 to compensate her for the retirement benefits which she would have
received from O'Melveny & Myers if she had remained a partner of that law
firm.
(8) Mr. Willes received 25,000 shares of Series A Common Stock in February
1996 (having a present market value of $871,875 at that time) in lieu of
cash for a housing differential allowance and $213,738 in 1995 for
relocation assistance, resulting from his relocation in 1995 to Los
Angeles (see page 28). These amounts were reported as bonus and as Other
Annual Compensation, respectively, in the Company's 1995 proxy statement.
(9) Includes $4,500 for matching Company contributions under the Times Mirror
Savings Plus Plan and $50,000 for relocation assistance, which was
previously included as Other Annual Compensation in the 1994 proxy
statement.
20
<PAGE>
OPTION GRANTS TABLE
The following table sets forth all grants of stock options for 1996 to the
named executive officers of the Company under the Company's 1996 Management
Incentive Plan.
OPTION GRANTS FOR FISCAL YEAR 1996
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE GRANT
OPTIONS GRANTED TO OR BASE DATE
GRANTED EMPLOYEES PRICE EXPIRATION PRESENT
NAME (#)(1) FOR 1996(2) ($/SH) DATE VALUE$(3)
- ---- ---------- ----------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Mark H. Willes.......... 180,200 6.33 34.00 12/07/05 1,600,920
Richard T. Schlosberg
III.................... 75,000 2.64 34.00 12/07/05 666,000
Thomas Unterman......... 50,700 1.78 34.00 12/07/05 450,216
Donald F. Wright........ 42,800 1.50 34.00 12/07/05 380,064
Kathleen G. McGuinness.. 27,000 0.95 34.00 12/07/05 239,760
</TABLE>
- --------
(1) These options were granted at fair market value on December 7, 1995, but
related to compensation for 1996 and are therefore reported in the table
above. Except for grants to Ms. McGuinness, these options were previously
reported as 1995 grants of stock options in the Option Grants Table of the
Company's 1996 proxy statement. See Note (5) on page 20 to the Summary
Compensation Table. These options were granted under the Company's 1996
Management Incentive Plan ("MIP"), have a ten-year term and may be
initially exercised as to 25% of the underlying shares on the first
anniversary of the grant date, an additional 25% becoming exercisable on
each successive anniversary date, with full vesting on the fourth
anniversary date. Upon a change in control as described under the MIP, any
previously unexercisable portion of the options become exercisable.
(2) Except for Ms. McGuinness, this percentage was previously reported in the
Option Grants Table in the Company's 1996 proxy statement, and is based on
total options granted to employees of the Company in 1995. As indicated in
Note (1) above, these options were granted on December 7, 1995 but related
to compensation for 1996. See Note (5) on page 20 to the Summary
Compensation Table.
(3) Present value determinations were made using the Black-Scholes option
pricing model. There is no assurance that any value realized by optionees
will be at or near the value estimated by that model. The ultimate values
of the options will depend on the future market price of the Series A
Common Stock, which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option
will depend upon the excess, if any, of the market value of the Series A
Common Stock on the date the option is exercised over the exercise price
of the option. The model assumes (a) volatility of 0.2732 derived by
averaging the average historical volatility of the Company over the 7 year
period prior to October 31, 1995 (the "Measurement Period") with the
average historical volatility of its peer group for such period; (b) a
risk-free rate of return based on the rate (5.93%) available on the grant
date on zero-coupon U.S. Government issues with a remaining term equal to
the expected life of the options (7 years); and (c) a dividend yield of
2.93% derived by averaging the average dividend yield of the Company for
the Measurement Period with the average dividend yield of its peer group
for such period. The yield and volatility components of the Black-Scholes
option pricing model were determined, in part, by reference to a group of
companies that were among the Company's peers on the grant date. This
technique was used because of changes in the Company's lines of business
during the Measurement Period that caused its historical volatility and
yield not to be representative. The options vest at a rate of 25% per year
over a 4 year period commencing on the first anniversary of the grant
date. A 3% risk of forfeiture was used. The Black-Scholes ratio was
applied to the average of the closing prices for the most recent 20
trading days ending December 5, 1995.
21
<PAGE>
AGGREGATED OPTION EXERCISES IN 1996 AND
OPTION VALUES AS OF DECEMBER 31, 1996
The following tables set forth the number of securities underlying
unexercised options held by the named executive officers at December 31, 1996
and the value of unexercised in-the-money options as of December 31, 1996.
None of the named executive officers exercised any stock options during 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AS OF AS OF DECEMBER 31,
DECEMBER 31, 1996 1996(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Mark H. Willes.............. 45,050 243,150 $ 709,537 $5,550,863
Richard T. Schlosberg III... 94,489 148,497 2,554,658 3,789,420
Thomas Unterman............. 50,970 91,877 1,390,146 2,293,614
Donald F. Wright............ 76,227 93,100 2,112,523 2,424,379
Kathleen G. McGuinness...... 6,750 20,250 106,312 318,937
</TABLE>
- --------
(1) Represents the difference between the closing price of the Company's
Series A Common Stock on December 31, 1996 ($49.75) and the option price
on the date of grant.
22
<PAGE>
The following material is not deemed to be part of a document filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and is not to be deemed to be incorporated by reference in
any documents filed under the Securities Act of 1933, as amended, without the
express consent of the persons named below.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Committee Charter
The Board of Directors of The Times Mirror Company (the "Company") has
delegated to the Compensation Committee (the "Committee") the authority to
review, consider and determine the compensation of the Company's executive
officers. This Committee was first established in 1962 and its activities have
included the review and development of executive compensation programs and the
award of incentive payments under those programs. The names of the Committee's
members appear below. None of the members of the Committee is employed by the
Company and none is employed by companies whose boards of directors include an
officer of the Company.
Compensation Policies
The Committee's policies are designed to assist the Company in attracting,
retaining and motivating qualified executives by providing competitive levels
of compensation that align directly shareholders' and executives' financial
interests, reward achievement of the Company's annual and long-term
performance goals, and recognize individual initiative and achievements. As a
result of extensive consideration in 1995 of the Company's specific
implementation of its compensation policies, the decision was made to replace
generally the Company's 1992 Key Employee Long-Term Incentive Plan with the
1996 Management Incentive Plan (the "Incentive Plan"), which was approved at
the 1996 Annual Meeting of Shareholders. As a result, the Committee
discontinued its practice of granting long-term cash incentive awards and
options that vest on the basis of complex performance measures. The Committee
instead implemented a performance-based compensation program involving annual
bonus incentive awards contingent on satisfaction of pre-established
performance goals selected by the Committee under the Incentive Plan and on
individual performance and stock-based arrangements. The Incentive Plan
implements the Committee's approach of providing total compensation which is
leveraged based upon individual, corporate and business unit performance.
The specific objectives of the executive compensation program are to (a)
link directly shareholder and executive interests; (b) balance rewards for
achieving short-term and long-term performance objectives (financial and
strategic); (c) ensure that total compensation costs vary in direct
correlation with the Company's financial results; and (d) encourage executives
to acquire and retain Company stock. In December 1995, the Committee adopted
stock ownership guidelines for the Company's senior key executives to further
align their interests with those of shareholders. The guidelines suggest
minimum stock ownership thresholds, excluding unexercised stock options, for
executives depending on their positions, and range from a minimum of at least
one year's base salary for vice presidents of the Company and chief executive
officers and selected key executives of the Company's various business units
to four years' base salary for the Chairman, President and Chief Executive
Officer of the Company. The Company expects that executives will reach full
compliance with these guidelines over several years, and many executives have
already done so.
For 1996, executives' total compensation packages typically consisted of
salary, an annual bonus incentive award and stock option grants. The
allocation of types of compensation varied depending on level, position and
function, with more senior executives having a greater portion of their
compensation packages tied to performance achievements. Based on a regular
review of survey data of other companies of comparable size, complexity and
industry focus provided by independent, nationally recognized compensation
consulting firms, the Committee generally set executives' base salaries at
median levels, executives' bonus incentive targets slightly above the median
and stock option grants at levels consistent with the prior year's grant. The
compensation survey data reviewed by the Committee includes information on pay
levels for companies within the media/communications industry against which
the Company may compete in whole or in part for business or talent. Executives
who had participated in the discontinued 1992 Key Employee Long-Term Incentive
Plan also received the payout of long-term incentives in 1996 in the form of
shares of Series A Common Stock.
23
<PAGE>
The amount of annual bonus incentive awards for 1996 was determined by
reference to pre-established financial performance goals, notably the
Company's actual 1996 financial results which significantly exceeded the 1996
budget in most respects such as return on capital, net income and earnings per
share. In addition to weighing annual performance, the Committee considered
favorably the strategic actions taken in 1996 to focus on long-term
development of the Company's professional information and news businesses and
to set the stage for future growth. The Committee found particularly
noteworthy the exchange of the Company's college publishing business for
Shepard's, a legal publisher, and its formation of a joint venture with Reed
Elsevier to improve the market position of the Company's legal publisher
Matthew Bender. The Committee also believed it important to reward the
individual contributions of certain of the named executives in spearheading
these strategic initiatives.
Compensation of Mark H. Willes, the Chief Executive Officer
Mr. Willes' compensation, and that of other Company executives, was
determined on a leveraged basis that was heavily weighted toward performance
to align executives' interests with those of the shareholders. The Committee's
consideration in setting the compensation of Mr. Willes was strongly
influenced by the improvement in return on capital and earnings per share
experienced by the Company during 1996 and by the Company's achievement of the
strategic initiatives described above. In December 1995, the Committee set
Mr. Willes' base compensation for 1996 at $800,000. In January 1997, the
Committee awarded Mr. Willes a bonus of $1,350,000 with respect to 1996
performance. In 1995, the Committee granted him options on 180,200 shares of
Series A Common Stock with an exercise price of $34.00 (the stock's market
price on the date of grant) as part of his compensation for 1996. In taking
such actions, the Committee also considered Mr. Willes' success in the
continued revitalization of the Company and in incenting its executives to
achieve significant internal growth.
Company Policy Regarding Section 162(m) of the Internal Revenue Code
Under the 1993 Omnibus Budget Reconciliation Act ("OBRA"), income tax
deductions for compensation paid by publicly-traded companies may be limited
to the extent total compensation (including base salary, annual bonus,
restricted stock vesting, stock option exercises and non-qualified benefits)
for certain executive officers exceeds $1 million in any one year. Under OBRA,
the deduction limit does not apply to payments which qualify as "performance-
based." To qualify as "performance-based," compensation payments must be made
from a plan that is administered by a committee of outside directors. In
addition, the material terms of the plan must be disclosed to and approved by
shareholders, and the committee must certify that the performance goals were
achieved before payments can be awarded.
The Committee intends generally to design the Company's compensation
programs to conform with the OBRA legislation and related regulations so that
total non-qualifying compensation paid to any employee will not exceed
$1 million in any one year, except for compensation payments in excess of $1
million which qualify as "performance-based." The Incentive Plan is designed
so that option grants and all or a portion of restricted stock grants and
annual incentive bonuses paid under the Incentive Plan may be qualified as
"performance-based." However, the Company may pay compensation which is not
deductible in limited circumstances when sound management of the Company so
requires.
CLAYTON W. FRYE, JR., CHAIRMAN ALFRED E. OSBORNE, JR.
DONALD R. BEALL WARREN B. WILLIAMSON
JOHN E. BRYSON EDWARD ZAPANTA
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, Messrs. Frye, Beall, Bryson and Williamson and Drs. Zapanta and
Osborne served on the Compensation Committee. William Stinehart, Jr. served on
the Compensation Committee until May 9, 1996. Mr. Stinehart is a partner in
the law firm of Gibson, Dunn & Crutcher, which provided legal services to the
Company and its subsidiaries during 1996 and continues to provide such
services to the Company and its subsidiaries in 1997.
24
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The stock price performance graph depicted below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The graph below compares the cumulative total return of Times Mirror, the
S&P 500 Stock Index and the following group of peer companies (the "Peer
Group"): A. H. Belo Corporation, Dow Jones & Co., Inc., E. W. Scripps Company,
Gannett, Inc., Knight-Ridder, Inc., McClatchy Newspapers, Inc., McGraw Hill,
Inc., Meredith Corporation, New York Times Company, Tribune Company and the
Washington Post Company.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)
OF TIMES MIRROR, S&P 500 INDEX AND PEER GROUP
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period TIMES S&P
(Fiscal Year Covered) MIRROR(2) 500 INDEX Peer Group(3)
- --------------------- --------- --------- -------------
<S> <C> <C> <C>
Measurement Pt- 12/31/1991 $100 $100 $100
FYE 12/31/1992 $104 $104 $114
FYE 12/31/1993 $115 $112 $135
FYE 12/31/1994 $112 $110 $130
FYE 12/31/1995 $178 $148 $165
FYE 12/31/1996 $264 $178 $197
</TABLE>
- --------
(1) Assumes $100 invested on December 31, 1991 in the common stock of Times
Mirror, the S&P 500 Index and the common stock of the Peer Group. Total
shareholder return assumes full reinvestment of dividends and other
distributions.
(2) The above graph reflects distributions received in connection with the
divestiture of the Company's cable operations as a dividend in 1995. Such
dividend is assumed to have been reinvested in the Company's common stock
as of the date of such divestiture.
(3) Peer Group data is weighted by market capitalization as of the beginning
of each year. The Peer Group used in preparing this graph excludes one
company that was included in the performance graph in the 1996 proxy
statement, Media General, Inc. This company was excluded because it was
acquired by Gannett, Inc. during 1996.
25
<PAGE>
RETIREMENT PLANS
The following table illustrates the maximum annual benefits payable as a
single life annuity under the basic benefit formula in the Pension Plan (see
below) to an officer or employee retiring at age 65 with the specified
combination of final average salary and years of credited service.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE AT
RETIREMENT
FINAL AVERAGE -----------------------------------
SALARY (5 YEARS) 15 20 25 30
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 300,000............................ $ 78,750 $105,000 $131,250 $157,500
400,000............................ 105,000 140,000 175,000 210,000
500,000............................ 131,250 175,000 218,750 262,500
600,000............................ 157,500 210,000 262,500 315,250
700,000............................ 183,750 245,000 306,250 367,500
800,000............................ 210,000 280,000 350,000 420,000
900,000............................ 236,250 315,000 393,750 472,500
1,000,000............................ 262,500 350,000 437,500 525,000
1,100,000............................ 288,750 385,000 481,250 577,500
1,200,000............................ 315,000 420,000 525,000 630,000
</TABLE>
The Company maintains a retirement income plan (the "Pension Plan") which is
a funded, qualified, non-contributory, defined benefit plan that covers most
employees including executive officers. The Pension Plan provides benefits
based on the participant's highest average salary for five consecutive years
within the ten years prior to retirement and the participant's length of
service. Benefit amounts will be offset by a portion of the primary Social
Security benefit to be received by the participant. A survivor's annuity for
the spouse of a vested participant is also provided.
In general, compensation covered by the Pension Plan includes salary and
wages, but does not include bonuses, overtime pay, or other unusual or
extraordinary compensation. For the executive officers whose compensation is
shown in the Summary Compensation Table on page 19, up to $150,000 paid in
1996 and designated as salary in that table is covered by the Pension Plan.
Credited years of service under the Pension Plan as of December 31, 1996 were
approximately 1 year for Mr. Willes, 9 years for Mr. Schlosberg, 4 years for
Mr. Unterman, 19 years for Mr. Wright, and 1 year for Ms. McGuinness.
The amounts shown in the Pension Plan Table above have been calculated
without adjustment for Social Security benefits, and thus may be subject to
reduction to recognize primary Social Security benefits to be received by the
participant. The amounts shown in the Table above have also been calculated
without reference to the maximum limitations ($120,000 in 1996) imposed by the
Internal Revenue Code on benefits which may be paid under a qualified defined
benefit plan. Optional forms of payment available under the Pension Plan may
result in substantially reduced payments to an employee electing such an
option.
In addition to the amounts shown in the above Pension Plan Table, certain
active participants employed on March 29, 1985 were eligible for a past
service benefit improvement as a single sum equal to 2% of their 1984 base
salary (for participants in the Supplemental Executive Retirement Plan (the
"SERP"), 2% of their aggregated 1984 base salary and 1984 annual bonus)
multiplied by the years of credited service before 1985. This amount will be
increased by an amount equal to interest, currently at 7 1/2% per annum, until
termination or retirement and then may be paid as a single sum or converted
into an equivalent annuity commencing at retirement. The estimated annual past
service improvement benefit from the Pension Plan and the SERP for the
officers named in the Summary Compensation Table on page 19 and employed by
the Company on March 29, 1985 is $12,972 for Mr. Wright.
The Company also maintains an Employee Stock Ownership Plan (the "ESOP").
Benefits provided by the ESOP are coordinated with benefits provided under the
Pension Plan so that benefits payable under the ESOP
26
<PAGE>
will be offset against benefits otherwise payable under the Pension Plan.
Effective January 1, 1995, the Company discontinued its contributions to the
ESOP for plan years after 1994. Certain officers of the Company were eligible
to participate in the ESOP and, subject to applicable limitations imposed by
the Internal Revenue Code and by the Employee Retirement Income Security Act
of 1974 ("ERISA"), will be entitled to receive shares which have been
allocated to their accounts and other benefits provided by the ESOP. Estimated
individual account balances of Series A and Series C Common Stock (aggregated
for each individual) as of December 31, 1996 were as follows: 2,723 shares for
Mr. Schlosberg, 568 shares for Mr. Unterman and 4,549 shares for Mr. Wright.
The Company also maintains the SERP to provide retirement benefits for
certain officers of the Company designated by the Compensation Committee of
the Board of Directors. Participants in the SERP will be entitled to receive
vested benefits under the SERP in addition to benefits payable under all other
employee benefit plans. Of the named officers on page 19, the Compensation
Committee has designated Messrs. Willes, Schlosberg, Unterman and Wright as
participants in the SERP.
Benefits payable under the SERP will be determined in substantially the same
manner as under the Pension Plan except that (a) covered compensation includes
both base salary and awards under the bonus-incentive program, and (b) the
amount payable shall be calculated without regard to the provisions of Section
415 of the Internal Revenue Code or other legal limits on benefits under a
qualified pension plan. The SERP provides that each participant shall receive
benefits under the SERP at least equal to the difference between the amount he
or she would have been entitled to receive without regard to the maximum
limitations imposed by the Internal Revenue Code and the amount such
participant is entitled to receive under the Pension Plan. If a married
participant dies, his or her spouse will be entitled to receive a lifetime
annuity equal to approximately one-half the amount the participating officer
would have been entitled to receive under the SERP as of the date of the
participant's death.
The SERP is unfunded. Participants become vested under the same schedule as
in the Pension Plan or upon a change in control and each such participant
shall be entitled to receive his or her benefits under the SERP commencing
upon retirement, provided that any such benefit commencing prior to age 65
shall be actuarially reduced to reflect its commencement prior to age 65.
The Company has established an ERISA excess retirement plan (the "Excess
Plan") to provide pension benefits for certain employees including officers of
the Company but excluding participants in the SERP. The Excess Plan provides
that each participant will receive benefits under the Excess Plan equal to the
difference between the amount he or she would have been entitled to receive
without regard to the maximum limitations imposed by the Internal Revenue Code
and the amount such participant is entitled to receive under the Pension Plan.
Participants will be vested under the Excess Plan under the same vesting
provisions as the Pension Plan. The Excess Plan is unfunded.
OTHER ARRANGEMENTS
The Company has an agreement with Mr. Otis Chandler, a director of the
Company, under which he is entitled to receive supplemental payments from the
Company sufficient to provide an aggregate of $300,000 each year from (i)
payments made to or for Mr. Chandler's account under the Company's Pension
Plan and ESOP, and (ii) supplemental payments to be made by the Company. That
agreement also provides for payment of supplemental benefits to Mr. Chandler's
widow following his death sufficient to provide her, from her survivor's
annuity under the Company's Pension Plan and a supplemental benefit from the
Company, an aggregate of one-half of the amount Mr. Chandler is entitled to
receive. Mr. and Mrs. Chandler are also entitled to continuation of life
insurance on Mr. Chandler's life and medical and dental coverage provided for
certain retired officers.
Mr. Robert F. Erburu, a director of the Company and its former Chairman,
President and Chief Executive Officer, receives pension payments from the
Company under the SERP, and medical and dental coverage provided by the
Company for certain retired officers.
27
<PAGE>
The Company entered into an agreement with Mr. Willes when he joined the
Company in 1995 relating to the terms of his employment with the Company.
Under that agreement, Mr. Willes was to serve as President and Chief Executive
Officer until January 1, 1996, and also as Chairman of the Board after that
date, at a salary of not less than $750,000 per year and with a target annual
incentive bonus of not less than $450,000, subject in 1995 to proration for
the number of months Mr. Willes was employed by the Company. The agreement
provided for Mr. Willes to receive a stock option grant for 108,000 shares and
35,000 shares of restricted stock in 1995, for a target deferred cash
incentive award of $600,000 for the 1995 through 1997 performance cycle under
the Company's 1992 Key Employee Long-Term Incentive Plan, and for the Company
to assume various costs and obligations in connection with Mr. Willes'
relocation to Los Angeles. Mr. Willes is entitled to participate in
retirement, deferred compensation, insurance and other employee benefit
programs, and will receive a supplemental benefit to the extent that amounts
payable under the Company's Excess Pension Plan are less than the amount Mr.
Willes would have received under a similar plan maintained by his former
employer. The agreement further provides that if Mr. Willes terminates
employment with the Company prior to age 60 for "good reason" or if his
employment is terminated other than for "cause" or disability (as those terms
are defined in the agreement), the Company will (i) pay two years' salary and
target bonus, (ii) pay Mr. Willes' target annual bonus incentive award for the
year of termination, pro rated for the number of months of active employment
in such year, (iii) treat such termination as an early termination for
purposes of determining benefits under various benefit plans, (iv) seek to
have the restrictions on his restricted stock treated according to the terms
applicable in situations of early retirement, (v) provide for continued
participation and service credit under various retirement, deferred
compensation, insurance and other employee benefit programs, and (vi) provide
such other benefits as are offered to retiring officers.
When Ms. McGuinness joined the Company in 1995, the Company agreed to credit
to a deferred compensation account in the Company's Deferred Compensation Plan
an annual amount of $25,000 in the years 1995 through 1999 to compensate her
for pension benefits which she would have received if she had remained a
partner of the law firm O'Melveny & Myers. The amounts are paid on the
anniversary dates of her hiring so long as she is employed by the Company, and
will be paid to her in a lump sum in the January following her termination of
employment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
10% of the Company's Common Stock, to file initial reports of ownership and
changes in ownership with the Securities and Exchange Commission. Based on a
review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers and directors, the
Company believes that all forms were filed in a timely manner during fiscal
1996, except that (i) a Form 3 for Shelby Coffey III, a Vice President of the
Company, was timely filed but inadvertently excluded 4,521 shares of Series B
Preferred Stock, which error was corrected in an amended Form 3, and (ii) a
Form 4 for Victor A. Perry III, a Vice President of the Company, covering
grants by the Company of 1,254 restricted shares of Series A Common Stock in
lieu of certain deferred cash incentive awards was filed 22 days late.
REVOCATION OF PROXIES
Any shareholder may revoke a proxy by delivering a written notice of
revocation to the Company's transfer agent, Harris Trust and Savings Bank, P.
O. Box 1878, Chicago, Illinois 60690-9312, or to the Secretary of the Company
at Times Mirror Square, Los Angeles, California 90053, by executing another
proxy bearing a later date, or by voting the shares in person at the meeting
of shareholders.
28
<PAGE>
1998 ANNUAL MEETING
Shareholder proposals must be received by the Company on or before November
28, 1997 to be considered for inclusion in the proxy statement and
presentation at the 1998 Annual Meeting of Shareholders, which is expected to
be held on May 7, 1998.
GENERAL
The cost of soliciting proxies will be borne by the Company. Proxy cards and
materials will also be distributed to beneficial owners of stock through
brokers, dealers, banks, voting trustees, custodians, nominees and other like
parties, and the Company will reimburse such parties for their charges and
expenses in connection with the distribution at the rates approved by the New
York Stock Exchange. The Company has retained Georgeson & Company Inc.
("Georgeson") to assist in the solicitation of proxies. Georgeson may solicit
proxies by mail, telephone, facsimile and personal solicitation, and will
request brokerage houses and other nominees, fiduciaries and custodians
nominally holding of record shares of Series A and Series C Common Stock and
shares of Series B Preferred Stock to forward proxy soliciting material to the
beneficial owners of such shares. The Company will pay Georgeson a fee
estimated not to exceed $10,000 plus reimbursement of expenses. In addition,
following the original mailing of the proxy soliciting material, directors,
officers and regular employees of the Company may solicit proxies by mail,
telephone, facsimile and personal interview, for which they will receive no
additional compensation.
Kathleen G. McGuinness
Secretary
March 28, 1997
29
<PAGE>
EXHIBIT A
THE TIMES MIRROR COMPANY
1997 DIRECTORS STOCK OPTION PLAN
1. PURPOSE
The purpose of The Times Mirror Company 1997 Directors Stock Option Plan
(the "Plan") is to advance the interests of The Times Mirror Company, a
Delaware corporation (hereinafter the "Company"), by enabling the Company to
attract, retain and motivate qualified individuals to serve on the Company's
Board of Directors and to align the financial interests of such individuals
with those of the Company's stockholders by providing for or increasing their
proprietary interest in the Company. The stock options granted pursuant to
this Plan are not qualified under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. DEFINITIONS
"Board" means the Board of Directors of the Company.
"Committee" means the Board and/or a committee of the Board acting pursuant
to its authorization to administer this Plan under Section 4.
"Common Stock" means the Company's Series A Common Stock, par value $1.00,
as presently constituted, subject to adjustment as provided in Section 9.
"Fair Market Value" means, as of any date, and unless the Board shall
specify otherwise, the mean between the high and the low market prices for the
Common Stock reported for that date on the composite tape for securities
listed on the New York Stock Exchange or, if the Common Stock did not trade on
the New York Stock Exchange on the date in question, then for the next
preceding date for which the Common Stock traded on the New York Stock
Exchange.
"Non-Employee Director" means a member of the Board who is not at the time
also an employee of the Company or a subsidiary of the Company. For purposes
of this Plan, the Chairman of the Board's status as an employee shall be
determined by the Board.
"Plan" means The Times Mirror Company 1997 Directors Stock Option Plan.
3. SHARES SUBJECT TO THE PLAN AND TO OPTIONS
Subject to adjustment as provided in Section 9, the maximum number of shares
of Common Stock which may be issued pursuant to this Plan shall not exceed
500,000. Shares issued under this Plan may be authorized and unissued shares
of Common Stock or shares of Common Stock reacquired by the Company. All or
any shares of Common Stock subject to an option which for any reason are not
issued under an option may again be made subject to an option under the Plan.
4. PARTICIPANTS
Any person who is a Non-Employee Director shall be eligible for the grant of
options hereunder.
5. NON-EMPLOYEE DIRECTOR OPTION GRANTS
The Board may provide for options to be granted to Non-Employee Directors in
consideration for their service to the Company. The Board shall determine to
which Non-Employee Directors options shall be granted hereunder (any such
person, a "Participant"). The Board shall specify the number of shares subject
to each
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<PAGE>
option grant provided for under this Section 5, or the formula pursuant to
which such number shall be determined, the Participants to receive any such
grant, the date of grant and the vesting and expiration terms applicable to
such options. The grant of options hereunder may, but need not, be conditioned
on the Non-Employee Director electing to forego his or her right to all or any
part of his or her cash retainer or other fees. Subject to adjustment pursuant
to Section 9, the maximum number of shares of Common Stock subject to options
granted under this Plan during any calendar year to any person on account of
his or her service as a Non-Employee Director, other than options that a Non-
Employee Director has elected to receive in lieu of cash retainers or other
fees, shall not exceed 50,000 shares.
6. GRANT, TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan need not be identical but each option
shall be subject to the following terms and conditions:
Price: The exercise price for each option shall be established by the
Board. The exercise price shall not be less than the Fair Market Value of
the Common Stock on the date of grant. The exercise price shall be paid in
full at the time of exercise. The exercise price shall be payable in cash,
by payment under an arrangement with a broker where payment is made
pursuant to an irrevocable direction to the broker to deliver all or part
of the proceeds from the sale of the option shares to the Company, by the
surrender of shares of Common Stock owned by the optionholder exercising
the option and having a fair market value on the date of exercise equal to
the exercise price, or by any combination of the foregoing. In addition,
the exercise price shall be payable in such other form(s) of consideration
as the Committee in its discretion shall specify, including without
limitation by loan (as described in Section 8).
7. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board, except that as provided herein
the Plan may be administered by a Committee of the Board, as appointed from
time to time by the Board. The Board shall fill vacancies on and from time to
time may remove or add members to the Committee. The Committee shall act
pursuant to a majority vote or unanimous written consent.
Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in connection
with the administration of this Plan, including, without limitation: (a) to
prescribe, amend and rescind rules relating to this Plan and to define terms
not otherwise defined herein; (b) to prescribe the form of documentation used
to evidence any option granted hereunder, including to provide for such terms
as it considers necessary or desirable, not inconsistent with the terms
established by the Board; (c) to establish and verify the extent of
satisfaction of any conditions to exercisability applicable to options; (d) to
determine whether, and the extent to which, adjustments are required pursuant
to Section 9 hereof; and (e) to interpret and construe this Plan, any rules
and regulations under the Plan and the terms and conditions of any option
granted hereunder, and to make exceptions to any procedural provisions in good
faith and for the benefit of the Company. Notwithstanding any provision of
this Plan, the Board may at any time limit the authority of the Committee to
administer this Plan.
All decisions, determinations and interpretations by the Board or, except as
to the Board, the Committee regarding the Plan, any rules and regulations
under the Plan and the terms and conditions of any option granted hereunder,
shall be final and binding on all Participants and optionholders. The Board or
the Committee may consider such factors as it deems relevant, in its sole and
absolute discretion, to making such decisions, determinations and
interpretations including, without limitation, the recommendations or advice
of any officer or other employee of the Company and such attorneys,
consultants and accountants as it may select.
8. LOANS
The Company may, if authorized by the Board, make loans for the purpose of
enabling a Participant to exercise options granted under the Plan and to pay
the tax liability resulting from an option exercise under the
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<PAGE>
Plan. The Board shall have full authority to determine the terms and
conditions of Terms of Options and Restrictions Upon Option Shares: The Board
may provide that the shares of Common Stock issued upon exercise of an option
shall be subject to such further conditions or agreements as the Board in its
discretion may specify prior to the exercise of such option, including without
limitation, deferrals on issuance, conditions on vesting or transferability,
and forfeiture or repurchase provisions.
Transferability of Option: Unless otherwise provided by the Committee, each
option shall be transferable only by will or the laws of descent and
distribution.
Other Terms and Conditions: No optionholder shall have any rights as a
stockholder with respect to any shares of Common Stock subject to an option
hereunder until said shares have been issued. Options may also contain such
other provisions, which shall not be inconsistent with any of the foregoing
terms, as the Board or the Committee shall deem appropriate. The Board may
waive conditions to and/or accelerate exercisability of an option, either
automatically upon the occurrence of specified events (including in connection
with a change of control of the Company) or otherwise in its discretion. No
option, however, nor anything contained in the Plan, shall confer upon any
Participant any right to serve as a director of the Company. Such loans may be
secured by the shares of Common Stock received upon exercise of such option.
9. ADJUSTMENT OF AND CHANGES IN THE STOCK
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind of shares or securities, or if cash, property or
shares or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, reclassification,
dividend (other than a regular, quarterly cash dividend) or other
distribution, stock split, reverse stock split, spin-off or the like, or if
substantially all of the property and assets of the Company are sold, then,
unless the terms of such transaction shall provide otherwise, the maximum
number and type of shares or other securities that may be issued under this
Plan shall be appropriately adjusted. The Committee shall determine in its
sole discretion the appropriate adjustment to be effected pursuant to the
immediately preceding sentence. In addition, in connection with any such
change in the class of securities then subject to this Plan, the Committee may
make appropriate and proportionate adjustments in the number and type of
shares or other securities or cash or other property that may be acquired
pursuant to options theretofore granted under this Plan and the exercise price
of such options.
No right to purchase fractional shares shall result from any adjustment in
options pursuant to this Section. In case of any such adjustment, the shares
subject to the option shall be rounded up to the nearest whole share of Common
Stock.
10. REGISTRATION, LISTING OR QUALIFICATION OF STOCK
In the event that the Board or the Committee determines in its discretion
that the registration, listing or qualification of the shares of Common Stock
issuable under the Plan on any securities exchange or under any applicable law
or governmental regulation is necessary as a condition to the issuance of such
shares under the option, the option shall not be exercisable or exercised in
whole or in part unless such registration, listing, qualification, consent or
approval has been unconditionally obtained.
11. TAXES
The Board or Committee may make such provisions or impose such conditions as
it may deem appropriate for the withholding or payment by a Participant of any
taxes which it determines are necessary or appropriate in connection with any
issuance of shares under this Plan, and an optionholder's rights in any shares
are subject to satisfaction of such conditions. The Company shall not be
required to issue shares of Common Stock or to recognize the disposition of
such shares until such obligations are satisfied. At the Participant's
election, any such obligations may be satisfied by having the Company withhold
a portion of the shares of Common Stock
A-3
<PAGE>
that otherwise would be issued to the optionholder upon exercise of the option
or by tendering shares of Common Stock previously acquired. The Company and
any affiliate of the Company shall not be liable to a Participant or any other
persons as to any tax consequence expected, but not realized, by any
Participant or other person due to the receipt of any shares granted
hereunder.
12. ARBITRATION AND APPLICABLE LAW
Any claim, dispute or other matter in question of any kind relating to this
Plan shall be settled by arbitration in accordance with the Rules of the
American Arbitration Association, which proceedings shall be held in the city
in which the Company's executive offices are located. Notice of demand for
arbitration shall be made in writing to the opposing party and to the American
Arbitration Association within a reasonable time after the claim, dispute or
other matter in question has arisen. In no event shall a demand for
arbitration be made after the date when the applicable statute of limitations
would bar the institution of a legal or equitable proceeding based on such
claim, dispute or other matter in question. The decision of the arbitrators
shall be final and may be enforced in any court of competent jurisdiction.
This Plan and any rights hereunder shall be interpreted and construed in
accordance with the laws of the State of Delaware and applicable federal law.
13. EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
This Plan shall become effective upon its approval by a majority of the
outstanding shares of the Company present, or represented by proxy, and
entitled to vote at a meeting of the Company's stockholders at the 1997 annual
meeting of stockholders. Any options granted prior to such date shall be
contingent on such approval and, if such approval is not obtained, shall be
null and of no effect.
Unless earlier suspended or terminated by the Board, no options may be
granted after the tenth anniversary of the date the Plan is approved by the
Company's stockholders. The Board may periodically amend the Plan as
determined appropriate, without further action by the Company's stockholders
except to the extent required by applicable law. Notwithstanding the
foregoing, subject to adjustment pursuant to Section 9, the Plan may not be
amended to materially increase the number of shares of Common Stock authorized
for issuance under the Plan or the number of shares of Common Stock that may
be subject to options granted to any one Participant during any calendar year,
unless any such amendment is approved by the Company's stockholders. The Plan
may be earlier terminated at such earlier time as the Board may determine.
Termination and expiration of the Plan will not affect the rights and
obligations arising under options theretofore granted and then in effect.
A-4
<PAGE>
[RECYCLE LOGO]
Printed on recycled paper.
<PAGE>
PROXY PROXY
[LOGO OF TIMES MIRROR]
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS--MAY 8, 1997
THE UNDERSIGNED, REVOKING ALL PRIOR PROXIES, HEREBY APPOINTS MARK H. WILLES
AND RICHARD T. SCHLOSBERG III, OR EACH OR EITHER OF THEM, PROXIES FOR THE
UNDERSIGNED, WITH FULL POWER OF SUBSTITUTION, TO VOTE ALL SHARES OF SERIES A
COMMON STOCK, SERIES C COMMON STOCK AND CONVERSION PREFERRED STOCK, SERIES B
WHICH THE UNDERSIGNED IS ENTITLED TO VOTE AT THE ANNUAL MEETING OF
SHAREHOLDERS OF THE TIMES MIRROR COMPANY TO BE HELD IN LOS ANGELES, CALIFORNIA
ON MAY 8, 1997 AT 11:00 A.M., PACIFIC DAYLIGHT TIME, OR AT ANY ADJOURNMENT
THEREOF, UPON SUCH BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR AT ANY
ADJOURNMENT THEREOF INCLUDING, WITHOUT LIMITING SUCH GENERAL AUTHORIZATION,
THE PROPOSALS DESCRIBED ON THE REVERSE SIDE OF THIS CARD AND IN THE
ACCOMPANYING PROXY STATEMENT.
UNLESS OTHERWISE SPECIFIED ON THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF DIRECTORS, FOR APPROVAL OF THE TIMES MIRROR COMPANY 1997
DIRECTORS STOCK OPTION PLAN, AND FOR RATIFICATION OF THE APPOINTMENT OF ERNST
& YOUNG LLP.
SERIES A AND SERIES C COMMON STOCK
CONVERSION PREFERRED STOCK, SERIES B
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
TIMES MIRROR
IMPORTANT: PLEASE MARK BOXES TO GIVE VOTING INSTRUCTIONS (SEE NOTE BELOW).[_]
1. ELECTION OF DIRECTORS--Nominees: CLASS II: John E. Bryson, Bruce Chandler,
Dr. Alfred E. Osborne, Jr., William Stinehart, Jr. and Dr. Edward Zapanta
For All
For Withhold Except
[_] [_] [_]
---------------------------
Nominee Exception
2. Approval of The Times Mirror Company 1997 Directors Stock Option Plan
For Against Abstain
[_] [_] [_]
3. Ratifying the appointment of Ernst & Young LLP as Independent Auditors for
the Company and its subsidiaries
For Against Abstain
[_] [_] [_]
The undersigned agrees that said proxies may vote in accordance with their
discretion with respect to any other matters which may properly come before
this meeting. Should any nominee for director become unavailable,
discretionary authority is conferred to vote for a substitute. The undersigned
instructs such proxies to vote as directed on the reverse side.
This Proxy should be dated, signed by the shareholder exactly as printed at
the left and returned promptly in the enclosed envelope. Persons signing in a
fiduciary capacity should so indicate.
Dated: _________________________________________________________________ , 1997
- -------------------------------------------------------------------------------
(Signature)
- -------------------------------------------------------------------------------
(Signature if held jointly)
[_] I PLAN TO ATTEND THE MEETING. [_] PLEASE SEND PARKING CARD.
<PAGE>
PROXY PROXY
TO: PARTICIPANTS IN THE TIMES MIRROR SAVINGS PLUS PLAN AND THE TIMES MIRROR
EMPLOYEE STOCK OWNERSHIP PLAN
THE TIMES MIRROR SAVINGS PLUS PLAN (THE "SPP") AND THE TIMES MIRROR EMPLOYEE
STOCK OWNERSHIP PLAN (THE "ESOP") PROVIDE THAT THE TRUSTEE SHALL VOTE ALL
SHARES OF TIMES MIRROR COMMON STOCK AND ALL SHARES OF CONVERSION PREFERRED
STOCK, SERIES B HELD IN THE SPP (INCLUDING PAYSOP) AND ALL SHARES ALLOCATED TO
PARTICIPANTS' ACCOUNTS UNDER THE ESOP AT ANY MEETING OF SHAREHOLDERS OF THE
COMPANY IN ACCORDANCE WITH WRITTEN INSTRUCTIONS FROM THE PARTICIPANTS. PLEASE
MARK YOUR VOTING INSTRUCTIONS FOR THE MAY 8, 1997 ANNUAL MEETING OF
SHAREHOLDERS OR ANY ADJOURNMENT THEREOF IN THE SPACES PROVIDED ON THE REVERSE
SIDE OF THIS CARD, SIGN AND DATE THE FORM AND RETURN IT TO THE COMPANY'S
TRANSFER AGENT IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. PLEASE RETURN THIS
CARD PROMPTLY.
THE TRUSTEE
YOU MAY RECEIVE OTHER INSTRUCTION CARDS FOR SHARES REGISTERED IN A DIFFERENT
MANNER. IF SO, PLEASE SIGN AND RETURN ALL SUCH INSTRUCTION CARDS IN THE
ENCLOSED ENVELOPE.
SERIES A AND SERIES C COMMON STOCK
CONVERSION PREFERRED STOCK, SERIES B
TO: THE NORTHERN TRUST COMPANY
TRUSTEE FOR THE TIMES MIRROR SAVINGS PLUS PLAN AND THE TIMES MIRROR
EMPLOYEE STOCK OWNERSHIP PLAN
PLEASE VOTE ALL SHARES OF TIMES MIRROR SERIES A AND SERIES C COMMON STOCK AND
ALL SHARES OF CONVERSION PREFERRED STOCK, SERIES B HELD IN MY ACCOUNT UNDER
THE TIMES MIRROR SAVINGS PLUS PLAN (INCLUDING PAYSOP) AND ALL SUCH SHARES
ALLOCATED TO MY ACCOUNT UNDER THE TIMES MIRROR EMPLOYEE STOCK OWNERSHIP PLAN
AS FOLLOWS:
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
TIMES MIRROR
IMPORTANT: PLEASE MARK BOXES TO GIVE VOTING INSTRUCTIONS (SEE NOTE BELOW).[_]
1. ELECTION OF DIRECTORS--Nominees: CLASS II: John E. Bryson, Bruce Chandler,
Dr. Alfred E. Osborne, Jr., William Stinehart, Jr. and Dr. Edward Zapanta
For All
For Withhold Except
[_] [_] [_]
-----------------------------------
Nominee Exception
2. Approval of The Times Mirror Company 1997 Directors Stock Option Plan
For Against Abstain
[_] [_] [_]
3. Ratifying the appointment of Ernst & Young LLP as Independent Auditors for
the Company and its subsidiaries
For Against Abstain
[_] [_] [_]
Dated: _________________________________________________________________ , 1997
- -------------------------------------------------------------------------------
Please sign exactly as imprinted at left
NOTE: Your voting instructions are solicited for shares in your Savings Plus
Plan account (including PAYSOP) and shares allocated to your account under the
ESOP. All such shares will be voted as you direct, but if you fail to return
your instructions your shares held in the ESOP and in the PAYSOP portion of
the Savings Plus Plan will be voted by the Trustee as directed by the Plan
Administration Committee appointed by the Board of Directors of the Company.
Your shares in the Savings Plus Plan, exclusive of the PAYSOP account, will
remain unvoted and will be recorded as abstentions if you fail to return your
instructions.
