<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(as filed with the Securities and Exchange Commission on March 24, 1999)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X]Preliminary Proxy Statement
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Hearst-Argyle Television, Inc.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_]Fee paid previously with preliminary materials:
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
Hearst-Argyle
-------------
TELEVISION, INC.
888 Seventh Avenue
New York New York 10106
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 14, 1999
----------------
To the Stockholders of Hearst-Argyle Television, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "1999
Annual Meeting") of Hearst-Argyle Television, Inc. (the "Company"), a Delaware
corporation, will be held at [ ] on Friday, May
14, 1999, at 10:00 a.m., local time, for the following purposes:
(1) To elect one Series A Class II Director and six Series B Class II
Directors to hold office for a term of two years or until their respective
successors are elected and qualified;
(2) To consider and vote upon a proposal pursuant to which the Company
will have the authority to issue and sell to The Hearst Corporation, a
Delaware corporation, or one of The Hearst Corporation's direct or indirect
wholly-owned subsidiaries (collectively, the "Hearst Group"), from time to
time, up to 10 million shares of either the Company's Series A Common Stock
or Series B Common Stock at a purchase price equal to the fair market value
of such shares on the date of each potential issuance, for cash, all as
more fully described herein;
(3) To consider and vote upon a proposal to approve and adopt an Employee
Stock Purchase Plan, pursuant to which employees of the Company would be
granted the right to purchase shares of the Company's Series A Common Stock
on the terms and at prices as more fully described herein; and
(4) To transact such other business as may properly come before the
meeting or its adjournment.
The close of business on April 2, 1999 has been fixed by the Board of
Directors as the record date for the 1999 Annual Meeting. Only holders of
record of the Company's Series A Common Stock, Series B Common Stock, Series A
Preferred Stock and Series B Preferred Stock on that date will be entitled to
notice of and to vote at the 1999 Annual Meeting or any adjournment thereof,
notwithstanding transfer of any stock on the books of the Company after such
record date. The stock transfer books will not be closed.
A Proxy Statement, form of Proxy and copy of the Annual Report on the
Company's operations during the fiscal year ended December 31, 1998 accompany
this notice.
It is important that your shares be represented at the 1999 Annual Meeting.
Whether or not you expect to attend in person, please sign and date the form
of Proxy and return it in the enclosed envelope. The form of Proxy is enclosed
in the sleeve attached to the front of the mailing envelope in which this
Proxy Statement is contained. Stockholders who attend the 1999 Annual Meeting
may revoke their Proxies and vote in person if they desire.
By Order of the Board of Directors,
Dean H. Blythe,
Secretary
April 16, 1999
New York, New York
<PAGE>
Hearst-Argyle
-------------
TELEVISION, INC.
888 Seventh Avenue
New York, New York 10106
----------------
PROXY STATEMENT
For the Annual Meeting of Stockholders
To Be Held on May 14, 1999
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished to the stockholders of Hearst-Argyle
Television, Inc., a Delaware corporation (the "Company"), in connection with
the solicitation by the Company's Board of Directors of Proxies to be voted at
the Annual Meeting of Stockholders of the Company (the "1999 Annual Meeting")
to be held at [ ] on Friday, May 14, 1999, at 10:00 a.m.,
local time, or at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. References herein to
the "Company" include its subsidiaries, unless the context otherwise requires.
This Proxy Statement and form of Proxy are first being mailed to such
stockholders on or about April 16, 1999. If the enclosed form of Proxy is
executed and returned, it nevertheless may be revoked by the stockholder at
any time prior to its use by filing with the Secretary of the Company a
written revocation or a duly executed Proxy bearing a later date. A
stockholder who attends the meeting in person may revoke his or her Proxy at
that time and vote in person if so desired. Unless revoked or unless contrary
instructions are given, each Proxy duly signed, dated and returned will be
voted as specified therein, but unless otherwise specified, will be deemed to
grant authority to vote, as applicable:
(1) FOR the election of the Series A director nominee (the "Series A
Director") and the six Series B director nominees (the "Series B
Directors") listed under "Proposal One--Election of Directors Proposal" to
serve as Class II directors for a two-year term (the "Election of Directors
Proposal");
(2) FOR the approval and adoption of the proposal pursuant to which the
Company will have the authority to issue and sell to The Hearst
Corporation, a Delaware corporation ("Hearst"), or one of Hearst's direct
or indirect wholly-owned subsidiaries (together with Hearst, the "Hearst
Group"), from time to time, up to 10 million shares of either the Company's
Series A Common Stock or Series B Common Stock at a purchase price equal to
the fair market value of such shares on the date of each potential
issuance, for cash, all as more fully described in this Proxy Statement
(the "Equity Investment Proposal");
(3) FOR the approval and adoption of the Company's Employee Stock
Purchase Plan (the "Plan"), pursuant to which employees of the Company
would be granted the right to purchase shares of the Company's Series A
Common Stock on the terms and at the prices as more fully described in this
Proxy Statement (the "Employee Stock Purchase Plan Proposal"); and
(4) At the discretion of the persons named in the enclosed form of Proxy,
on any other matter that may properly come before the meeting or any
adjournment thereof.
The enclosed Proxy is solicited by and on behalf of the Board of Directors
of the Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION OF DIRECTORS PROPOSAL, FOR THE EQUITY INVESTMENT PROPOSAL AND FOR
THE EMPLOYEE STOCK PURCHASE PLAN PROPOSAL.
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QUORUM AND VOTING
Record Date; Quorum
The Company's Board of Directors has fixed the close of business on Friday,
April 2, 1999 as the record date (the "Record Date") for the 1999 Annual
Meeting. Only holders of record of the Company's Series A Common Stock, Series
B Common Stock (together with the Series A Common Stock, the "Common Stock"),
Series A Preferred Stock and Series B Preferred Stock (together with the
Series A Preferred Stock, the "Preferred Stock") on the Record Date will be
entitled to notice of and to vote at the 1999 Annual Meeting and any
adjournments and postponements thereof. On the Record Date, there were
[89,147,879] shares of Common Stock (consisting of [47,849,231] shares of
Series A Common Stock and 41,298,648 shares of Series B Common Stock) held by
approximately [ ] stockholders of record, outstanding and entitled
to vote at the 1999 Annual Meeting and there were 21,876 shares of Preferred
Stock (consisting of 10,938 shares of Series A Preferred Stock and 10,938
shares of Series B Preferred Stock) held by three stockholders of record,
outstanding and entitled to vote at the 1999 Annual Meeting.
Except with respect to the election of directors, the presence, in person or
by Proxy, of the holders of a majority of the voting power of the outstanding
shares of all of the classes of the Company's capital stock is necessary to
constitute a quorum at the meeting, provided that in no event may a quorum
consist of less than one-third of the outstanding shares of all of the classes
of the Company's capital stock. With respect to the election of the Series A
Director, the presence in person or by proxy, of the holders of a majority of
the voting power of the outstanding shares of the Series A Common Stock, the
Series A Preferred Stock and the Series B Preferred Stock is necessary to
constitute a quorum, provided that in no event may a quorum consist of less
than one-third of the outstanding shares of such classes. With respect to the
election of the Series B Directors, the presence, in person or by proxy, of
Hearst Broadcasting, Inc., a Delaware corporation ("Hearst Broadcasting") that
is a wholly-owned subsidiary of Hearst and the sole holder of 100% of the
outstanding shares of Series B Common Stock, is necessary to constitute a
quorum.
Voting Rights; Vote Required For Approval
Each holder of record of Common Stock and Preferred Stock as of the Record
Date is entitled to vote in accordance with the terms of the Company's Amended
and Restated Certificate of Incorporation, which provides that (i) the holders
of Series A Common Stock will be entitled to one vote per share of Series A
Common Stock; (ii) the holders of Series B Common Stock will be entitled to
one vote per share of Series B Common Stock; (iii) the holders of Series A
Preferred Stock will be entitled to the number of votes (rounded up to the
next whole number) equal to the number of shares of Series A Common Stock into
which such shares of Series A Preferred Stock are convertible as of the record
date for the stockholder meeting at which such votes are to be cast (in the
case of the Record Date for the 1999 Annual Meeting, 28 shares of Series A
Common Stock); and, (iv) the holders of the Series B Preferred Stock will be
entitled to 29 votes per share of Series B Preferred Stock (for any
stockholder meeting for which the record date is before July 11, 2001). The
holders of Series A Common Stock and Series B Common Stock vote together as a
single class on all matters, except with respect to (i) the election of
directors; (ii) any amendments to the Company's Amended and Restated
Certificate of Incorporation that alter or change the powers, preferences or
special rights of their respective series so as to affect them adversely; and,
(iii) such other matters as require class votes under the Delaware General
Corporation Law ("DGCL") or the Company's Amended and Restated Certificate of
Incorporation. In addition, the holders of Preferred Stock are entitled to
vote on all matters submitted to a vote of holders of the Series A Common
Stock, with the holders of the Series A Preferred Stock and the Series B
Preferred Stock voting as a single class with the holders Series A Common
Stock. Cumulative voting is not permitted in the election of directors.
With respect to "Proposal One--Election of Directors Proposal", only holders
of the Series A Common Stock, Series A Preferred Stock (voting as a single
class with the Series A Common Stock) and Series B Preferred Stock (voting as
a single class with the Series A Common Stock) will be entitled to vote on the
nominee for Series A Director described under the Election of Directors
Proposal, and only Hearst Broadcasting,
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as the holder of 100% of the outstanding Series B Common Stock will be
entitled to vote on the nominees for Series B Directors described under the
Election of Directors Proposal. The affirmative vote of a plurality of the
voting power of the shares of Series A Common Stock, Series A Preferred Stock
and Series B Preferred Stock represented at the 1999 Annual Meeting is
required for the election of the Series A Director. The affirmative vote of a
plurality of the voting power of the shares of Series B Common Stock
represented at the 1999 Annual Meeting is required for the election of the
Series B Directors.
With respect to "Proposal Two--Equity Investment Proposal", under the rules
of the NYSE the Equity Investment Proposal must be approved by a majority of
the votes cast by the holders of Series A Common Stock, Series B Common Stock,
Series A Preferred Stock and Series B Preferred Stock, voting together as a
single class, provided that the total votes cast in respect of the proposal
represent a majority of all shares of capital stock of the Company entitled to
vote thereon. The NYSE Rules are applicable to the vote on the Equity
Investment Proposal because the Series A Common Stock is listed on the NYSE
and the shares of Series A Common Stock to be issued to the Hearst Group in
connection with the Equity Investment may constitute over 1% of the Company's
Common Stock then outstanding or the shares of the Series B Common Stock to be
issued to the Hearst Group in connection with the Equity Investment would be
convertible into a number of Series A Common Stock that may, if converted,
constitute over 1% of the Company's Common Stock then outstanding. The NYSE
Rules require shareholder approval prior to the issuance of shares of common
stock to a substantial security holder of the issuer if the number of shares
to be issued or the number of shares of common stock into which the securities
may be convertible exceeds 1% of the common stock outstanding prior to such
issuance. Hearst Broadcasting, which held approximately [ ]% of the
outstanding voting power of the Common Stock and [ ]% of the outstanding
voting power of the Company's capital stock as of the Record Date, has
notified the Company that it intends to vote in favor of the Equity Investment
Proposal. Hearst Broadcasting has sufficient voting power to approve the
Equity Investment Proposal, and if Hearst Broadcasting votes in favor of the
Equity Investment Proposal as it has indicated, the Proposal would be
approved.
Proxies; Abstentions; Broker Non-Votes
All shares of Common Stock and Preferred Stock represented by properly
executed proxies received prior to or at the 1999 Annual Meeting and not
properly revoked will be voted in accordance with the instructions indicated
in such proxies. If no instructions are indicated on a properly executed and
returned proxy, such proxy will be voted "FOR" the Election of Directors
Proposal, "FOR" the Equity Investment Proposal, and "FOR" the Employee Stock
Purchase Plan Proposal.
Abstentions and broker non-votes are each included in the determination of
the number of shares present at the meeting for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner. Abstentions are counted for
determining the total number of votes cast with respect to a proposal and
thus, generally will be counted as a vote "AGAINST" that proposal. Since a
plurality of the votes cast is required for the election of Directors,
abstentions will not be counted for purposes of the election of Directors.
Broker non-votes are not counted in determining the total number of votes cast
with respect to a proposal and are, therefore, counted neither as a vote "FOR"
nor "AGAINST" that proposal.
It is not expected that any matter not referred to herein will be presented
for action at the 1999 Annual Meeting. If any other matters are properly
brought before the 1999 Annual Meeting and any adjournments or postponements
thereof, the persons named in the Proxies will have discretion to vote on such
matters in accordance with their best judgment. The grant of a Proxy will also
confer discretionary authority on the persons named in the Proxy as Proxy
appointees to vote in accordance with their best judgment on matters incident
to the conduct of the 1999 Annual Meeting, including postponement or
adjournment for the purpose of soliciting additional votes.
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<PAGE>
A stockholder may revoke a Proxy at any time prior to its use by delivering
to the Secretary of the Company a signed notice of revocation or a later dated
signed Proxy or by attending the 1999 Annual Meeting and voting in person.
Attendance at the 1999 Annual Meeting will not in itself constitute the
revocation of a Proxy.
The cost of solicitation of Proxies will be paid by the Company. In addition
to solicitation by mail, Proxies may be solicited in person by directors,
officers and employees of the Company without additional compensation, and by
telephone, telegram, facsimile or similar method. Arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to send
Proxy material to beneficial owners; and the Company upon request, will
reimburse them for their reasonable expenses in so doing.
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PROPOSAL ONE
ELECTION OF DIRECTORS PROPOSAL
Board Of Directors
The Company's Amended and Restated Certificate of Incorporation provides for
classified directors and staggered director terms. Currently, the Company's
Board of Directors consists of 13 members. The holders of Series A Common
Stock and the holders of the Preferred Stock voting with the holders of the
Series A Common Stock as a single class elect two directors (the "Series A
Directors") and Hearst Broadcasting, as the sole holder of the Series B Common
Stock, elects the balance of the directors (the "Series B Directors"). The
Board of Directors is divided into two classes, Class I and Class II, with one
Series A Director in each class. The following table lists the name, age,
class and series designation for each director:
<TABLE>
<CAPTION>
Director Director
Class Series
Name Age Designation Designation
---- --- ----------- -----------
<S> <C> <C> <C>
David J. Barrett................................. 50 II B
Frank A. Bennack, Jr............................. 66 I B
John G. Conomikes................................ 66 I B
Ken J. Elkins.................................... 61 II B
Victor F. Ganzi.................................. 52 II B
George R. Hearst, Jr............................. 71 I B
William R. Hearst III............................ 49 II B
Bob Marbut....................................... 63 I B
Gilbert C. Maurer................................ 70 I B
Michael E. Pulitzer.............................. 69 II B
David Pulver..................................... 57 II A
Virginia H. Randt................................ 49 II B
Caroline L. Williams............................. 52 I A
</TABLE>
Each director serves for a term ending on the second annual meeting date
following the annual meeting at which such director was elected. Each current
Class II director, however, will hold office until the 1999 Annual Meeting.
Accordingly, at the 1999 Annual Meeting:
(i) the holders of the Series A Common Stock (and the holders of the
Series A Preferred Stock and the Series B Preferred Stock voting together
as a single class with the Series A Common Stock) will elect one Class II
Series A Director to hold office until the earlier of the Company's annual
meeting of stockholders in 2001 or until his or her successor is duly
elected and qualified; and
(ii) Hearst Broadcasting, as the sole holder of the Company's Series B
Common Stock, will elect the remaining six Class II Series B Directors to
hold office until the earlier of the Company's annual meeting of
stockholders in 2001 or until their respective successors are duly elected
and qualified.
Set forth below are the nominees for the Series A Director and the Series B
Directors. In the event that such nominees are unable to serve or for good
cause will not serve, the Proxies will be voted at the meeting for such other
person as the Board of Directors of the Company may recommend.
Nominee for Class II Series A Director (To be elected by the holders of the
Series A Common Stock, the Series A Preferred Stock and the Series B Preferred
Stock voting together as a single class):
David Pulver has served as a Director of the Company since December 1994.
From June 1993 to April 1995, he served as a Director of Argyle I. Mr. Pulver
is President of Cornerstone Capital, Inc., a private investment company. Mr.
Pulver serves as a Director of Costco Wholesale Corporation, a wholly-owned
subsidiary of Costco Companies, Inc., and J. Baker, Inc. Mr. Pulver is also a
Trustee of Colby College.
5
<PAGE>
In connection with Hearst's contribution of its broadcast group to Argyle
Television, Inc. (which was thereafter renamed "Hearst-Argyle Television,
Inc.") on August 29,1997 (the "Hearst Transaction"), Hearst agreed that, for
as long as it held any shares of Series B Common Stock and to the extent that
Hearst during such time also held any shares of Series A Common Stock, it
would vote its shares of Series A Common Stock with respect to the election of
directors only in the same proportion as the shares of Series A Common Stock
not held by Hearst are so voted. Hearst, through its wholly owned subsidiary
Hearst Broadcasting, currently owns 4,906,785 shares of Series A Common Stock,
which represents approximately [ ]% of the outstanding voting power of the
Series A Common Stock and Preferred Stock.
Your directors recommend a vote FOR the election of the Series A director
nominee.
Nominees for Class II Series B Directors (To be elected by Hearst Broadcasting
as the sole holder of the Series B Common Stock):
David J. Barrett has served as a Director of the Company and as the
Company's Executive Vice President and Chief Operating Officer since the
consummation of the Hearst Transaction on August 29, 1997. Mr. Barrett served
as a Vice President of Hearst and Deputy General Manager of Hearst's broadcast
group from January 1991 until August 1997. Mr. Barrett is a member of Hearst's
Board of Directors.
Ken J. Elkins has served as a Director of the Company since the consummation
of the merger of Pulitzer Publishing Company ("Pulitzer") with and into the
Company (the "Pulitzer Merger") on March 18, 1999. Mr. Elkins currently serves
as Senior Vice President and Director of Pulitzer, Inc., the successor entity
to Pulitzer's newspaper operations. Prior to the Pulitzer Merger, Mr. Elkins
served as Senior Vice President--Broadcasting Operations and Director of
Pulitzer. In addition, he served as Vice President--Broadcast Operations from
April 1984 through March 1986 and prior to that time served as a general
manager of certain of Pulitzer's television stations. He is a director of
Commerce Bank of St. Louis. Mr. Elkins was nominated by the Board of Directors
of the Company and appointed to serve as a Director in accordance with a Board
Representation Agreement, dated May 25, 1998 (the "Board Representation
Agreement"), by and among the Company, Hearst Broadcasting and Emily Rauh
Pulitzer, Michael E. Pulitzer and David E. Moore (collectively, the "Pulitzer
Parties"), pursuant to which the Company agreed to cause the nomination for
election to the Company's Board of the individuals designated by the Pulitzer
Parties.
Victor F. Ganzi has served as a Director of the Company since the
consummation of the Hearst Transaction on August 29, 1997. Mr. Ganzi has
served as Executive Vice President of Hearst since March 1997, and as Chief
Operating Officer of Hearst since January 1999. From 1992 to 1997, at various
times Mr. Ganzi served as Hearst's Senior Vice President, Chief Financial
Officer and Chief Legal Officer. In March 1995, he added and still has the
duties of Group Head of Hearst's Books/Business Publishing Group. Mr. Ganzi
joined Hearst in May 1990 as General Counsel and Vice President. He is also a
member of Hearst's Board of Directors, a Trustee of the Trust established
under the Will of William Randolph Hearst and a Director of both The William
Randolph Hearst Foundation of California and The Hearst Foundation of New
York. Mr. Ganzi is also a director of Olsten Corporation.
William Randolph Hearst III has served as a Director of the Company since
the consummation of the Hearst Transaction on August 29, 1997. Mr. Hearst is a
partner in the Menlo Park, California venture capital firm of Kleiner,
Perkins, Caufield and Byers, which he joined in January 1995. From October
1984 to December 1995, Mr. Hearst served as Publisher of Hearst's San
Francisco Examiner newspaper. Mr. Hearst is a member of Hearst's Board of
Directors, a Trustee of the Trust established under the Will of William
Randolph Hearst and a Director of both The William Randolph Hearst Foundation
of California and The Hearst Foundation of New York. Mr. Hearst is Vice
Chairman and a member of the Board of Directors of At Home Corporation. Mr.
Hearst is a cousin of George R. Hearst, Jr. and Virginia Hearst Randt.
Michael E. Pulitzer has served as a Director of the Company since the
consummation of the Pulitzer Merger on March 18, 1999. Mr. Pulitzer is
currently serving as Chairman of the Board of Pulitzer, Inc., the
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successor company to Pulitzer's newspaper operations. Prior to the
consummation of the Pulitzer Merger, Mr. Pulitzer served as Chairman of the
Board, and President and Chief Executive Officer of Pulitzer Publishing
Company. He also served as Vice Chairman of the Board of Pulitzer Publishing
Company from April 1984 through March 1986 and as President and Chief
Operating Officer of Pulitzer Publishing Company from April 1979 through March
1984. Mr. Pulitizer was nominated by the Board of Directors of the Company and
appointed to serve as a Director in accordance with the Board Representation
Agreement.
Virginia H. Randt has served as a Director of the Company since the
consummation of the Hearst Transaction on August 29, 1997. Ms. Randt was
elected a Director of The Hearst Corporation in September 1990 and has served
on the Audit Committee of Hearst's Board of Directors since March 1991. She is
a cousin of George R. Hearst, Jr. and William Randolph Hearst III.
Your directors recommend a vote FOR the election of the Series B director
nominees.
Directors Continuing in Office
Class I Directors (Term expires in 2000)
Frank A. Bennack, Jr. has served as a Director of the Company since August
29, 1997, the date of the Hearst Transaction. Mr. Bennack has served as the
President and Chief Executive Officer of Hearst since January 1979. Mr.
Bennack is a member of Hearst's Board of Directors, a Trustee of the Trust
established under the Will of William Randolph Hearst and a Director of both
The William Randolph Hearst Foundation of California and The Hearst Foundation
of New York. Mr. Bennack is also a Director of The Chase Manhattan
Corporation, The Chase Manhattan Bank, American Home Products Corporation and
Polo Ralph Lauren Corp.
John G. Conomikes has served as a Director of the Company and the Company's
President and Co-Chief Executive Officer since the consummation of the Hearst
Transaction on August 29, 1997. Mr. Conomikes served as a Vice President of
Hearst and the General Manager of Hearst's broadcast group from March 1983 to
August 1997. Mr. Conomikes is also a member of Hearst's Board of Directors, a
Trustee of the Trust established under the Will of William Randolph Hearst and
a Director of both The William Randolph Hearst Foundation of California and
The Hearst Foundation of New York.
George R. Hearst, Jr. has served as a Director of the Company since the
consummation of the Hearst Transaction on August 29, 1997. Mr. Hearst has
served as the Chairman of the Board of Directors of Hearst since March 1996.
From April 1977 to March 1996, Mr. Hearst served as a Vice President of Hearst
and headed its real estate activities. He is also a Trustee of the Trust
established under the Will of William Randolph Hearst, a Director of The
William Randolph Hearst Foundation of California and the President and a
Director of The Hearst Foundation of New York. Mr. Hearst is a cousin of
William Randolph Hearst III and Virginia Hearst Randt.
Bob Marbut has served as Chairman of the Board of Directors, Co-Chief
Executive Officer and a Director of the Company since the consummation of the
Hearst Transaction on August 29, 1997. Mr. Marbut served as Chairman of the
Board of Directors, Chief Executive Officer and a Director of the Company from
August 1994 until August 29, 1997. From March 1993 to April 1995, Mr. Marbut
served as Chief Executive Officer and a Director of Argyle Television Holding,
Inc. ("Argyle I"). Mr. Marbut is also a Director of Tupperware Corporation and
Ultramar Diamond Shamrock Corporation. In connection with the Hearst
Transaction and pursuant to the Amended and Restated Agreement and Plan of
Merger dated March 26, 1997, executed by Hearst, certain wholly-owned
subsidiaries of Hearst and Argyle Television, Inc., Hearst agreed, for as long
as Mr. Marbut is employed by the Company or one of the Company's subsidiaries,
to vote the shares of Series B Common Stock it owns and use its best efforts
to take such actions to cause Mr. Marbut to continue to be elected as a
Director of the Company.
Gilbert C. Maurer has served as a Director of the Company since the
consummation of the Hearst Transaction on August 29, 1997. Mr. Maurer served
as Chief Operating Officer of Hearst from March 1990 until
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December 1998 and as Executive Vice President of Hearst from June 1985 until
December 1998. Mr. Maurer currently is serving as a consultant to Hearst. Mr.
Maurer is a member of Hearst's Board of Directors, a Trustee of the Trust
established under the Will of William Randolph Hearst and a Director of both
The William Randolph Hearst Foundation of California and The Hearst Foundation
of New York.
Caroline L. Williams has been a director of the Company since 1994. From
June 1993 to April 1995, she served as a Director of Argyle I. Ms. Williams
has served as President of Grey Seal Capital, an investment and consulting
firm, since October 1997. From July 1992 through September 1993, Ms. Williams
served as the Vice President, Program Support of TechnoServe, a non-profit
organization providing business, management and technical assistance to
community-based enterprises in Latin America and Africa. From August 1988 to
January 1992, Ms. Williams was a Managing Director of Donaldson, Lufkin &
Jenrette Securities Corporation.
Meetings and Committees of the Board of Directors
The Board of Directors held a total of seven meetings in 1998. Each director
attended at least 75% of the aggregate of the total number of meetings held by
the Board of Directors and the total number of meetings held by all committees
of the Board of Directors on which he or she served other than George R.
Hearst, Jr., who attended five of the seven Board meetings. The Board of
Directors has an Audit Committee (the "Audit Committee"), a Compensation
Committee (the "Compensation Committee") and an Executive Committee (the
"Executive Committee"). The Board of Directors does not have a standing
nominating committee.
Audit Committee. Prior to the Company's listing of its Series A Common Stock
on the NYSE on July 22, 1998, the Audit Committee consisted of William
Randolph Hearst III, David Pulver, Virginia H. Randt and Caroline Williams.
Pursuant to certain NYSE Rules, William Randolph Hearst III and Virginia H.
Randt resigned from the Audit Committee. Currently, the Audit Committee
consists of Ken J. Elkins, David Pulver and Caroline Williams. Mr. Pulver
serves as Chair of the Audit Committee. Mr. Elkins was added as a member of
the Audit Committee following the consummation of the Pulitzer Merger. The
Audit Committee reviews and recommends to the Board the independent auditors
to be selected to audit the Company's financial statements and consults with
the Company's independent auditors and with personnel from the internal
financial staff with respect to corporate accounting, reporting and internal
control practices. The Audit Committee met three times during 1998.
Compensation Committee. The Compensation Committee consists of Frank A.
Bennack, Jr., Michael E. Pulitzer, David Pulver and Caroline Williams. Ms.
Williams serves as Chair of the Compensation Committee. Mr. Pulitzer was added
as a member of the Compensation Committee following the consummation of the
Pulitzer Merger. The Compensation Committee reviews and approves salary and
bonus levels for executive officers and total compensation for senior
executive officers. The Compensation Committee met six times during 1998.
Executive Committee. The Executive Committee consists of Frank A. Bennack,
Jr., John G. Conomikes, George R. Hearst, Jr., Bob Marbut and David Pulver.
Mr. Conomikes serves as Chair of the Executive Committee. During the intervals
between meetings of the Board of Directors, the Executive Committee may
exercise all of the powers of the Board of Directors in the direction and
management of the business and affairs of the Company. The Executive Committee
met one time in 1998.
Director Compensation
Directors who are also employees of the Company or of Hearst receive no
compensation for their service as directors. The Directors who are not also
employees of the Company or Hearst (the "Outside Directors") are currently
paid $24,000 annually, a fee of $6,000 for each committee on which he or she
serves, a fee of $5,000 for service as a committee chair, a fee of $1,500 for
each Board meeting attended and a fee of $1,000 for each committee meeting
attended. The Outside Directors also receive annual grants of 4,000 options
(and an additional 1,000 if serving as a Committee Chair) under the terms of
the Company's 1997 Stock Option Plan.
8
<PAGE>
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 1998, the Compensation Committee
consisted of Frank A. Bennack, Jr., David Pulver and Caroline Williams. John
G. Conomikes, the President and Co-Chief Executive Officer of the Company,
serves on the Finance Committee of Hearst, which functions as a compensation
committee. The Company reimburses Hearst under the Services Agreement
described under "Certain Relationships and Related Transactions" for the
services of Mr. Conomikes, who remains an employee of Hearst. Frank A.
Bennack, Jr., a member of the Company's Compensation Committee, is also a
director of Hearst and a member of the Finance Committee of the Board of
Directors of Hearst and the Incentive Compensation Plan Committee of the Board
of Directors of Hearst, a committee that also has compensation-related
responsibilities. Mr. Bennack is also the President and Chief Executive
Officer of Hearst. David J. Barrett, the Executive Vice President and Chief
Operating Officer of the Company, is a director of Hearst.
9
<PAGE>
PROPOSAL TWO
EQUITY INVESTMENT PROPOSAL
At the 1999 Annual Meeting, the stockholders will be asked to consider and
vote upon a proposal (the "Equity Investment Proposal"), pursuant to which the
Company will have the authority to issue and sell to the Hearst Group, from
time to time, up to 10 million shares of either the Company's Series A Common
Stock or Series B Common Stock, or a combination thereof, for a purchase price
equal to the fair market value of such shares on the date of each potential
issuance (the "Equity Investment"). Any issuance of Common Stock under the
Equity Investment Proposal would be for cash consideration. The fair market
value of any shares to be issued to the Hearst Group pursuant to the Equity
Investment would be the value per share on the date of each issuance as
determined by the Company's Board of Directors and by a Committee of the
Company's independent directors.
It is currently contemplated that the Company will issue and sell shares of
the Company's common stock to the Hearst Group for $100 million prior to July
1, 1999. If completed, the Company would apply the proceeds of this equity
issuance to the repayment of a portion of the outstanding balance under its
credit facility. If this equity issuance is completed by July 1, 1999, the
Company would be entitled to more favorable leverage covenants under the terms
of the Company's Note Purchase Agreements, each dated as of December 1, 1998,
by and among the Company, as issuer of the notes purchased thereunder and the
purchasers of the notes named therein. This equity issuance, however, is not
required by the terms of the notes and there can be no assurance that such
issuance will occur.
The Company has no plan or intention at this time to sell to the Hearst
Group more than $100 million of the Company's stock, and Hearst has indicated
to the Company that it is not currently authorized by its Board of Directors
to purchase more than $100 million of the Company's common stock. Assuming,
however, that the maximum number of shares authorized by the Equity Investment
were issued as of the Record Date and that the fair market value of the
maximum number of the shares sold was the closing price per share of the
Series A Common Stock on the NYSE on that date, the aggregate purchase price
would have been $[280] million. Any issuance of Common Stock to the Hearst
Group would result in a decrease of the then existing Company shareholders'
proportionate interests (on a fully diluted basis) in the Company.
Purchases of the Company's Common Stock by the Hearst Group pursuant to the
Equity Investment will occur from time to time as mutually agreed upon by the
Company and the Hearst Group. No purchases pursuant to the Equity Investment,
however, will occur after the fourth anniversary of the date of the 1999
Annual Meeting without further stockholder approval.
The Company expects to add substantially all of the net proceeds from the
Equity Investment to its funds to be used for general corporate purposes,
which may include repayment of long-term and short-term debt, capital
expenditures, working capital and the financing of acquisitions (which have
not yet been identified). Funds not required immediately may be invested in
short-term marketable securities.
Hearst Broadcasting, which owned approximately [ ]% of the outstanding
voting power of the Common Stock and [ ]% of the outstanding voting power
of the Company's capital stock as of the Record Date, has notified the Company
that it intends to vote in favor of the Equity Investment Proposal. Hearst
Broadcasting has sufficient voting power to approve the Equity Investment
Proposal, without the vote of any other stockholder, and if Hearst
Broadcasting votes in favor of the Equity Investment Proposal as it has
indicated, the Proposal would be approved.
Your directors recommend a vote FOR the Equity Investment Proposal.
10
<PAGE>
PROPOSAL THREE
EMPLOYEE STOCK PURCHASE PLAN PROPOSAL
At the 1999 Annual Meeting, the stockholders will be asked to consider and
vote on a proposal to approve and adopt an Employee Stock Purchase Plan (the
"Plan"). The Plan was approved by the Company's Board of Directors on February
20, 1998, subject to approval by the stockholders of the Company.
The following is a summary of the terms and provisions of the Plan as of
March 1, 1999, and of certain tax effects of participation in the Plan. The
Plan generally may be amended from time to time, or terminated in its
entirety, in the discretion of the Board of Directors. This summary is
qualified in its entirety by reference to the full text of the Plan, as
amended from time to time. A copy of the Plan is attached hereto as Appendix
A. To the extent that there is a conflict between this summary and the Plan,
the terms of the Plan will govern.
Purpose
The purpose of the Plan is to attract employees to the Company and its
subsidiaries and to induce employees to remain with the Company and its
subsidiaries, and to encourage them to increase their efforts to make the
Company's business more successful by providing equity-based incentives to
eligible employees of the Company and its subsidiaries. The Plan is intended
to comply with the provisions of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
Shares Available Under the Plan
The Plan became effective on March 1, 1999. Shares of the Company's Series A
Common Stock delivered under the Plan ("Plan Stock") may be authorized but
unissued shares of the Company or shares that were once issued and
subsequently reacquired by the Company. Subject to adjustment upon a merger,
reorganization, stock split or other similar corporate change, the Company
reserved and made available for issuance and purchase under the Plan 5,000,000
shares of Plan Stock.
Eligibility
In general, all employees of the Company or any of its subsidiaries who
customarily work more than 20 hours per week and more than five months a year
are eligible to participate in the Plan after working for the Company or a
subsidiary for at least one full year. Employees who already own 5% or more of
the Company's stock are not eligible to participate. Also, to the extent an
employee is designated by the Compensation Committee as a highly compensated
employee who is ineligible to participate, such employee shall not be eligible
to participate in the Plan. Generally, an election to participate in the Plan
must be made during the enrollment period, as may be established by the
Compensation Committee, before the start of the year. Special rules may apply
to employees whose hours increase to more than 20 hours per week, or whose
customary employment with the Company increases to more than five months in a
year, during a Plan year and who have previously satisfied all other
eligibility criteria (with additional special rules to apply in the discretion
of the Compensation Committee in the case of employees with two years of
service with the Company at such time).
Prior service with Pulitzer and Kelly Broadcasting Company (which were
acquired by Hearst-Argyle) and their subsidiaries will generally be taken into
account under the Plan as service for the Company. Special rules also may
apply to employees of other companies newly affiliated with the Company.
11
<PAGE>
The following table states the maximum benefits under the Plan in amounts
that would have been received for the last completed fiscal year had the Plan
been in effect for the whole year.
NEW PLAN BENEFITS
Hearst-Argyle Television, Inc.
Employee Stock Purchase Plan
<TABLE>
<CAPTION>
Name and Position Dollar Value ($)(1) Shares (#) (2)
----------------- ------------------- --------------
<S> <C> <C>
Bob Marbut.............................. 3,750 113
John G. Conomikes....................... 3,750 113
David J. Barrett........................ 3,750 113
Anthony J. Vinciquerra.................. 3,750 113
Dean H. Blythe.......................... 3,750 113
Harry T. Hawks.......................... 3,750 113
Executive Officers...................... 30,000 909
All Other Employees (3)................. 1,394,507 42,258
</TABLE>
- --------
(1) Includes assumed benefits for a full year based upon base salary at
December 31, 1998.
(2) Estimate of the shares that would have been purchased at 85% of market
price at December 31, 1998 ($33.00 per share).
(3) Other than Executive Officers of the Company.
Administration
The Plan is administered by the Compensation Committee. The Compensation
Committee may make such rules and regulations and establish such procedures
for the administration of the Plan as it deems appropriate. The Compensation
Committee has authority to interpret the Plan, with such interpretations to be
conclusive and binding on all persons and otherwise accorded the maximum
deference permitted by law and shall take any other actions and make any other
determinations or decisions that it deems necessary or appropriate in
connection with the Plan or its administration or interpretation.
Purchases of Stock
To enroll in the Plan, an employee must designate a percentage of his or her
regular pay-from 1% to 10%, in 1% increments-to be withheld. All such payroll
deductions are credited, as promptly as practicable, to a payroll account (the
"Payroll Account") in the name of the participating employee (the
"Participant"). Unless the Participant elects otherwise during the enrollment
period for a Plan year, the Participant will be deemed to have elected to
participate in such Plan year and to have authorized the same percentage
payroll deduction for such Plan year as in effect for the Participant for the
prior Plan year.
Participants will be able to decrease their payroll deduction percentage at
any time during the Plan year (but not more than four times) by filing the
required form with the Company. Such decrease will become effective with the
first pay period of the first calendar quarter to which it may be practically
applied. Participants will be able to cancel their elections to participate in
the Plan by signing and delivering written notice to the Compensation
Committee, at the times established by the Compensation Committee. In such
case, the entire balance in a Participant's Payroll Account would be repaid to
him or her as promptly as practicable. An election to resume participation in
the Plan and resulting payroll deductions can only go into effect on the first
day of a subsequent Plan year and must be filed during the applicable
enrollment period.
As discussed above, the amount of payroll deductions for each month is
credited to the applicable Participant's Payroll Account. On the Friday
coincident with or immediately preceding the 15th day of the month, the
balance that has accrued in a Payroll Account during the month will be used to
buy Common Stock
12
<PAGE>
at a purchase price equal to 85% of the market value of the stock on such
date. The Internal Revenue Code and the Plan impose certain limits on the
amount of Common Stock that can be purchased with payroll deductions under the
Plan. In general, there is a $25,000 limit on the value of Common Stock that
can be purchased by any Participant under the Plan in any calendar year.
The shares purchased with a Participant's payroll deductions will be
credited to an individual securities account maintained by a brokerage firm
that has been selected by the Company (the "Stock Account"). Each Participant
will receive periodic account statements regarding his or her Stock Account.
Unless the Participant elects otherwise, dividends paid on shares of Plan
Stock credited to the applicable Stock Account will be reinvested in
additional shares of Plan Stock for such Stock Account. The Compensation
Committee may provide that transaction fees incurred with respect to dividend
reinvestment will be paid by the Company.
If a Participant's employment terminates for any reason, the balance in his
or her Payroll Account that has not yet been invested will be refunded to the
Participant (or, in the event of death, will be paid to his or her estate) as
soon as practicable.
Rights granted under the Plan are not transferable other than by will or the
laws of descent and distribution and are exercisable during a Participant's
lifetime only by the Participant.
Amendment and Termination of the Plan; Stockholder Approval
The Board of Directors may at any time, or from time to time, amend the Plan
in any respect; provided, however, that the Plan may not be amended in any way
that would cause, if such amendment were not approved by the holders of the
Company's capital stock, the Plan to fail to comply with (i) the requirements
for employee stock purchase plans as defined in Section 423 of the Code or
(ii) any other requirement of applicable law or regulation. No amendment of
the Plan shall alter or impair any rights outstanding at the time of such
amendment to purchase shares of Plan Stock pursuant to any offer under the
Plan.
The Board may terminate the Plan any time at its discretion, provided that
no termination of the Plan will alter or impair any rights outstanding at the
time of such termination to purchase shares of Plan Stock pursuant to any
offering of the right to purchase shares of Common Stock under the Plan.
The Plan provides that if the stockholder approval presently being sought is
not obtained, the Compensation Committee is authorized to take such action as
it may deem appropriate in light of any failure of the Plan to satisfy Section
423 of the Code.
Federal Income Tax Consequences
The Plan is intended to qualify for favorable income tax treatment under
Sections 421 and 423 of the Code. Payroll deductions will be made on an after-
tax basis. Thus, Participants will have to pay income tax on the dollars
withheld from their paychecks under the Plan.
No income will be recognized because payroll deductions are used to buy Plan
Stock at a discount. The 15% discount will not be taken into account for
income tax purposes until the stock is sold. The income tax consequences
associated with a sale of Plan Stock depend upon when the sale occurs. The
Plan has been designed with the intent that if the sale occurs more than two
years after the date the stock is purchased, then a Participant will realize
taxable gain or loss equal to the difference between the selling price and the
amount paid for the stock. If the stock is sold at a gain, then the gain will
be treated as ordinary income to the extent of the 15% discount received when
the stock was purchased, and the balance of the gain, if any, will be treated
as long-term capital gain. If the stock is sold at a loss, then no ordinary
income is realized and the entire loss will be treated as a long-term capital
loss.
If the Plan Stock purchased under the Plan is sold within two years after
the date it is purchased, then, regardless of whether the Participant has a
profit or loss on the sale, it is expected that the 15% purchase price
13
<PAGE>
discount received when the stock was purchased will be taxable as ordinary
income. The Company is entitled to a deduction for the amounts taxable to a
Participant as ordinary income. The Participant will also recognize taxable
capital gain or loss (which will be short-term or long-term, depending upon
the holding period) on the sale equal to the difference between the selling
price and the fair market value of the stock at the time it was purchased.
Additional special tax rules may apply to those Participants who are subject
to the rules set forth in Section 16 of the Securities Exchange Act of 1934,
as amended.
The foregoing tax discussion is a general description of certain expected
federal income tax results under current law, and all affected individuals
should consult their own advisors if they wish any further details or have
special questions.
Hearst Broadcasting, which owned approximately [ ]% of the outstanding
voting power of the Common Stock and [ ]% of the outstanding voting power
of the Company's capital stock as of the Record Date, has notified the Company
that it intends to vote in favor of the Employee Stock Purchase Plan Proposal.
Hearst Broadcasting has sufficient voting power to approve the Employee Stock
Purchase Plan Proposal, without the vote of any other stockholder, and if
Hearst Broadcasting votes in favor of the Employee Stock Purchase Plan
Proposal as it has indicated, the Proposal would be approved.
Your directors recommend a vote FOR the Employee Stock Purchase Plan
Proposal.
14
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Bob Marbut*...................... 63 Chairman of the Board of Directors,
Co-Chief
Executive Officer
John G. Conomikes*............... 66 President, Co-Chief Executive Officer
David J. Barrett*................ 50 Executive Vice President, Chief
Operating Officer
Anthony J. Vinciquerra........... 44 Executive Vice President
Dean H. Blythe................... 40 Senior Vice President--Corporate
Development,
Secretary and General Counsel
Harry T. Hawks................... 45 Senior Vice President and Chief
Financial Officer
Ibra Morales..................... 53 Senior Vice President--Sales
Philip Stolz..................... 51 Senior Vice President
</TABLE>
- --------
* Member of the Board of Directors. See "Directors Continuing in Office" for
additional information.
Anthony J. Vinciquerra has served as Executive Vice President since joining
the Company in August 1997. Mr. Vinciquerra joined Hearst as Group Executive
of Hearst's broadcast group in June 1997. Prior to his appointment at Hearst,
Mr. Vinciquerra served as Executive Vice President of the television station
group of CBS from November 1995 to June 1997. From January 1993 to November
1995, he served as Vice President and General Manager of KYW-TV in
Philadelphia, Pennsylvania.
Dean H. Blythe has served as Senior Vice President-Corporate Development,
Secretary and General Counsel of the Company since the consummation of the
Hearst Transaction, prior to which he had been Vice President-Corporate
Development, Secretary and General Counsel of the Company since October 1994.
Prior to October 1994, Mr. Blythe was with A.H. Belo Corporation, where he
served in various capacities.
Harry T. Hawks has served as Senior Vice President and Chief Financial
Officer of the Company since the consummation of the Hearst Transaction, prior
to which he had been Chief Financial Officer and Assistant Secretary and
Treasurer of the Company since August 1994. Mr. Hawks served as Vice
President-Finance of Argyle I from March 1993 until June 1993 and from June
1993 to April 1995 he served as its Chief Financial Officer. Prior to joining
the Company, Mr. Hawks co-founded Cumberland Capital Corporation, a merchant
banking firm, where he served as its President and as a director from 1989
until 1992.
Ibra Morales has served as Senior Vice President-Sales since the
consummation of the Hearst Transaction. He served as Executive Vice President,
Chief Revenue Officer and a Director of the Company from August 1994 until
August 1997. From March 1993 to April 1995, Mr. Morales served as Chairman of
the Board of Directors and President of Argyle I. From 1978 until March 1993,
Mr. Morales was with Katz Communications, Inc., a national television
advertising sales representative firm, where he served as Vice President-
National Sales Manager/General Sales Manager from 1987 until 1993.
Philip Stolz has served as Senior Vice President of the Company since
December 1, 1998. Prior to his appointment as Senior Vice President, Mr. Stolz
served as President and General Manager of WBAL-TV, the Company's television
station in Baltimore, Maryland. Mr. Stolz joined WBAL-TV in 1991 as Vice
President and General Manager.
15
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth certain information for the fiscal years
ended December 31, 1998, 1997 and 1996 of the Chief Executive Officers and the
other four most highly compensated executive officers of the Company who were
executive officers as of December 31, 1998:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
---------------------------- ------------
Securities
Other Annual Underlying All Other
Name and Principal Fiscal Salary Bonus Compensation Options Compensation
Position Year ($ )($ ) ($) (1) (#) ($) (2)
- ------------------------ ------ ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Bob Marbut.............. 1998 650,000 182,000 49,843 -- 4,800
Chairman of the Board
of Directors, 1997 383,333 225,000 49,967 300,000 3,250
Co-Chief Executive
Officer 1996 200,000 200,000 45,756 6,631 2,375
John G. Conomikes....... 1998 650,000 182,000 49,843 -- 4,800
President and Co-Chief
Executive 1997 216,667 34,667 6,750 -- 1,583
Officer and Director
(3) (4) 1996 -- -- -- -- --
David J. Barrett........ 1998 550,000 154,011 26,801 -- 4,800
Executive Vice
President, 1997 173,333 50,661 11,887 230,000 1,583
Chief Operating Officer
and 1996 -- -- -- -- --
Director (3)
Anthony J. Vinciquerra.. 1998 450,000 124,394 60,343 -- 4,800
Executive Vice
President 1997 150,000 100,000 4,733 150,000 --
1996 -- -- -- -- --
Dean H. Blythe.......... 1998 260,000 73,739 16,000 -- 4,800
Senior Vice President-- 1997 190,000 50,850 174,826 100,000 3,250
Corporate Development, 1996 150,000 50,000 6,000 -- 2,112
Secretary and General
Counsel
Harry T. Hawks.......... 1998 260,000 73,739 20,813 -- 4,800
Senior Vice President, 1997 183,333 65,376 247,298 100,000 3,250
Chief Financial Officer 1996 135,000 16,380 10,672 6,671 2025
</TABLE>
- --------
(1) Amounts in this column consist of the following: (i) dollar values of
perquisites consisting of premiums for life insurance reimbursed to the
following individuals, automobile allowances, tax preparation expense
reimbursements, club membership reimbursements and moving expense
reimbursements, and (ii) payments for tax gross-ups.
16
<PAGE>
<TABLE>
<CAPTION>
Perquisites
--------------------------------------------------------------------
Life Tax Club Moving Tax
Insurance Auto Preparation Membership Expense Gross-Up
Premiums Allowance Fees Reimbursement Reimbursement Payment
($) ($) ($) ($) ($) ($)
--------- --------- ----------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Bob Marbut.............. 1998 23,235 12,000 9,000 5,608 -- --
1997 20,367 10,400 6,750 -- 6,368 6,082
1996 27,156 9,600 9,000 -- -- --
John G. Conomikes*...... 1998 -- -- -- -- -- --
1997 6,750 -- -- -- -- --
1996 -- -- -- -- -- --
David J. Barrett........ 1998 3,080 12,000 -- 11,521 -- --
1997 1,527 4,496 -- -- -- --
1996 -- -- -- -- -- --
Anthony J. Vinciquerra.. 1998 2,200 12,000 -- 5,412 30,444 10,287
1997 733 4,000 -- -- -- --
1996 -- -- -- -- -- --
Dean H. Blythe.......... 1998 2,200 10,800 3,000 -- -- --
1997 -- 7,600 -- -- 85,536 81,690
1996 -- 6,000 -- -- -- --
Harry T. Hawks.......... 1998 2,200 10,800 3,000 4,813 -- --
1997 1,254 7,600 2,250 -- 120,813 115,381
1996 1,672 6,000 3,000 -- -- --
</TABLE>
- --------
* Under the terms of the Service Agreement, the Company reimburses Hearst for
the services of Mr. Conomikes in an amount equal to Mr. Marbut's
compensation. The amount shown for Mr. Conomikes in the Summary
Compensation Table under the "Other Annual Compensation" column equals Mr.
Marbut's total for this column. For 1997, the life insurance premiums paid
on behalf of Mr. Conomikes for 1997 represent the Company's pro rata
portion of such premiums for the period covering August 29, 1997 (the date
he became an officer of the Company) through December 31, 1997.
(2) Amounts in this column represent the amounts contributed by the Company on
behalf of the named individuals to the Company's 401(k) Savings Plan (a
non-discriminatory retirement plan established pursuant to Section 401(k)
of the Internal Revenue Code).
(3) Reflects compensation paid by the Company to Mr. Barrett and to Mr.
Vinciquerra, and to Hearst for the services of Mr. Conomikes, for 1997.
(4) Mr. Conomikes is not an employee of the Company. Hearst provides Mr.
Conomikes' services to the Company pursuant to the Services Agreement
described under "Certain Relationships and Related Transactions" and the
Company reimburses Hearst for such services in an amount equal to the
total compensation paid to Mr. Marbut. Mr. Conomikes also receives
compensation from Hearst for services provided to Hearst.
17
<PAGE>
Pension Plan
The table below sets forth information with respect to the Company's Pension
Plan, which was established upon the consummation of the Hearst Transaction on
August 29, 1997. The Pension Plan covers all of the named executive officers,
except for Mr. Conomikes, who is covered by The Hearst Corporation Pension
Plan. The Company's Pension Plan is designed to provide a benefit of 1% for
each year of credited service (which excludes the first year of employment)
multiplied by the average annual salary (as defined in the Company's Pension
Plan) for the participant's five highest consecutive full calendar years, and
has a 40 year maximum. As a tax-qualified pension plan, the highest amount of
compensation that may be considered under federal law with respect to
determining pension benefits is currently $160,000, as adjusted for the cost
of living each year, except that any increase that is not a multiple of
$10,000 is rounded to the next lowest multiple of $10,000.
<TABLE>
<CAPTION>
Years of Service
-------------------------------------------
Remuneration 15 20 25 30 35 40
------------ ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
100,000.......................... 22,500 30,000 37,500 45,000 52,500 60,000
110,000.......................... 24,750 33,000 41,250 49,500 57,750 66,000
120,000.......................... 27,000 36,000 45,000 54,000 63,000 72,000
130,000.......................... 29,250 39,000 48,750 58,500 68,250 78,000
140,000.......................... 31,500 42,000 52,500 63,000 73,500 84,000
150,000.......................... 33,750 45,000 56,250 67,500 78,750 90,000
160,000.......................... 36,000 48,000 60,000 72,000 84,000 96,000
170,000.......................... 38,250 51,000 63,750 76,500 89,250 102,000
180,000.......................... 40,500 54,000 67,500 81,000 94,500 108,500
190,000.......................... 42,750 57,000 71,250 85,500 99,750 114,000
200,000.......................... 45,000 60,000 75,000 90,000 105,000 120,000
</TABLE>
Messrs. Marbut, Blythe, Hawks and Vinciquerra became participants in the
Company's Pension Plan effective as of January 1, 1998 and have one year of
credited service thereunder. Mr. Barrett became a participant in the Company's
Pension Plan effective August 29, 1997 and has 14 years of credited service
thereunder. The Company's Pension Plan covers salary and bonus, and benefits
under the plan are computed on the basis of straight-line annuity amounts. The
benefits described above are not subject to any deduction for Social Security
or other offset amounts.
18
<PAGE>
Option Grants and Exercises
There were no stock options granted to the Co-Chief Executive Officers and
the other four most highly compensated executive officers by the Company
during the fiscal year ended December 31, 1998. The following table sets forth
information concerning the value as of December 31, 1998 of unexercised
options held by each of the executive officers named in the Summary
Compensation Table.
Aggregated Option Exercises In
Last Fiscal Year And Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-The Money
Options at Options at
Value FY-End(#) FY-End ($)(1)
Shares Acquired Realized Exercisable/ Exercisable/
Name On Exercise (#) ($) Unexercisable Unexercisable
---- --------------- -------- -------------- -----------------
<S> <C> <C> <C> <C>
Bob Marbut.............. -- -- 50,000/100,000 $325,000/$650,000
John G. Conomikes....... -- -- -- --
David J. Barrett........ -- -- 76,667/153,333 $498,336/$996,665
Anthony J. Vinciquerra.. -- -- 50,000/100,000 $325,000/$650,000
Dean H. Blythe.......... -- -- 43,334/66,666 $446,671/$433,329
Harry T. Hawks.......... -- -- 33,334/66,666 $216,671/$433,329
</TABLE>
- --------
(1) Values are calculated by subtracting the exercise price from the fair
market value of the underlying common stock. The fair market value is
based on the closing price of $33.00 per share of shares of the Series A
Common Stock on the NYSE on December 31, 1998, the last trading day of the
fiscal year.
Employment Agreements
As of August 12, 1997, the Company entered into an Employment Agreement with
Bob Marbut, the Company's Chairman of the Board and Co-Chief Executive
Officer, for a term commencing upon the consummation of the Hearst Transaction
and ending on December 31, 2000. Pursuant to the Employment Agreement, Mr.
Marbut is entitled to an initial base salary of $650,000 (subject to review
for an increase by the Company beginning in calendar year 1999; Mr. Marbut's
salary for 1999 was set by the Compensation Committee at $715,000) and a bonus
in an amount and on the basis of criteria to be established by the
Compensation Committee. The bonus is subject to a maximum equal to 75% of the
base salary for that year, with a "target" bonus equal to 40% of the base
salary, subject to the Compensation Committee's discretion to increase such
percentages (the maximum and target bonuses for 1999 were set by Compensation
Committee at 90% and 50%, respectively). Mr. Marbut's employment terminates
upon his death and may be terminated by the Company upon his "disability" or
for "cause" or "without cause" (in each case, as defined in the Employment
Agreement). Mr. Marbut may terminate his employment voluntarily with "good
reason," or "without good reason" (in each case, as defined in the Employment
Agreement). In the event of a termination by the Company "without cause" or by
Mr. Marbut with "good reason," Mr. Marbut is entitled to receive a lump sum
payment equal to his base salary and target bonus for the longer of the then-
remaining term of the Employment Agreement or one year.
The Employment Agreement also provides for certain perquisites and the award
of options to purchase 300,000 shares of the Company's Series A Common Stock,
subject to certain vesting requirements, except that if Mr. Marbut's
employment is terminated "without cause" on or after September 1, 1998,
options to acquire 16 2/3% of such shares become exercisable upon such
termination or if Mr. Marbut's employment is terminated "without cause" on or
after September 1, 1999, options to acquire 33 1/3% of such shares become
exercisable upon such termination.
The Employment Agreement contains a covenant by Mr. Marbut against
solicitation of the Company's employees, independent contractors, customers,
agencies or advertisers for two years following termination of
19
<PAGE>
his employment for any reason and, in the case of termination by the Company
for "cause" or by Mr. Marbut without "good reason," a covenant by Mr. Marbut
against directly competing with the Company for a period equal to the lesser
of two years and the remainder of the term of the Employment Agreement.
As of January 1, 1999, the Company entered into employment agreements with
each of Messrs. Barrett, Vinciquerra, Blythe and Hawks for a term commencing
on the consummation of the Hearst Transaction and ending on December 31, 2000
(except for Mr. Barrett, whose agreement ends on December 31, 2001). Mr.
Conomikes is not an employee of the Company. Hearst provides the services of
Mr. Conomikes to the Company pursuant to the Services Agreement described
under "Certain Relationships and Related Transactions." Pursuant to the
employment agreements, each of these executive officers is entitled to a base
salary plus a bonus. The annual base salary and target bonus as a percentage
of annual salary for each of such executive officers is as follows: Mr.
Barrett--$600,000, 50%; Mr. Vinciquerra--$500,000, 40%; Mr. Blythe--1999:
$300,000, 2000: $315,000, 40%; and Mr. Hawks--1999: $300,000, 2000: $315,000,
40%.
The employment agreements terminate upon the death of the executive officer
and may be terminated by the Company upon the "disability" of the executive
officer or for "cause" (in each case, as defined in the employment
agreements). The employment agreements also provide that if employment is
terminated by the executive officer with "good reason" or by the Company
"without cause" (in each case, as defined in the employment agreements), then
the executive officer will be entitled to a lump sum payment equal to the sum
of his base salary plus target bonus for the longer of the then-remaining term
of the Employment Agreement or one year.
In July 1996, the Company entered into a Change of Control Agreement with
Mr. Blythe, which provides that if Mr. Blythe's employment is terminated or
adversely impacted in certain other ways following a change of control of the
Company, then Mr. Blythe will be entitled to a payment in an amount equal to
two times the sum of his then base salary and target bonus. The consummation
of the Hearst Transaction would be deemed a change of control for purposes of
Mr. Blythe's Change of Control Agreement.
401(k) Savings Plan
Effective as of August 29, 1997, the Company adopted the Hearst-Argyle
Television, Inc. Savings Plan (the "Savings Plan"), a retirement plan
qualified under Section 401(k) of the Internal Revenue Code of 1986, as
amended, which covers employees of the Company and its subsidiaries who have
attained the age of 21. Employees transferred from Hearst in connection with
the Hearst Transaction were covered as of August 29, 1997; the remaining
employees of the Company were covered as of January 1, 1998. Subject to
statutory limitations, an employee may contribute 1% to 8% of his annual
compensation on a pre-tax basis, and 1% to 8% on an after tax basis. The
employer will match 50% of each participating employee's contributions up to
6% of such employee's base salary, on either a pre-tax or after tax basis.
Contributions are allocated to each employee's individual account, which is
intended to be invested in separate investment funds according to the
direction of the employee. Mr. Marbut and the four other most highly
compensated executive officers of the Company participate in the Savings Plan.
Mr. Conomikes continues to participate in Hearst's Savings Plan.
20
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Chase. The Chase Manhattan Bank ("Chase") is the lead agent bank under the
$1 billion credit facility that the Company entered into upon consummation of
the Hearst Transaction. The Credit Facility matures on December 31, 2004 and
borrowings thereunder bear interest at an applicable margin that varies based
on the Company's ratio of total debt to operating cash flow. Frank A. Bennack,
Jr., a director of the Company, is also a director of Chase and The Chase
Manhattan Corporation.
Hearst. Upon consummation of the Hearst Transaction, the Company entered
into a series of agreements with Hearst, which holds through a subsidiary 100%
of the outstanding shares of the Company's Series B Common Stock and [ ]%
of the Company's Series A Common Stock, constituting approximately [ ]% of
the Company's total outstanding common stock.
Management Agreement. Hearst and the Company are parties to a Management
Services Agreement pursuant to which the Company provides certain management
services (i.e., sales, news, programming, legal, financial, accounting,
engineering and promotion services) with respect to WWWB-TV (Hearst's owned
television station in Tampa, Florida), WBAL-AM and WIYY-FM (Hearst's owned
AM/FM radio stations in Baltimore, Maryland,), and WPBF-TV (Hearst's owned
television station in West Palm Beach, Florida). In addition, the Company
provides certain management services to Hearst in order to allow Hearst to
fulfill its obligations under the Program Services and Time Brokerage
Agreement between Hearst and the permittee of KCWE-TV (a Kansas City,
Missouri, television station). Hearst has the right, but not the obligation,
to add to such managed stations any additional broadcast stations that it may
acquire (or for which it enters into a time brokerage agreement) during the
term of the Management Services Agreement.
The annual management fee for the services provided to these stations is an
amount equal to the greater of (i) (x) $50,000 for Hearst's radio stations
(counted as a single property) and $50,000 for KCWE-TV, or (y) for all others
(including WWWB-TV and WPBF-TV), $100,000 per station, and (ii) a specified
percentage of the positive broadcast cash flow from each such property
(ranging from 20% for the first year to 50% for the fourth year and
thereafter). Hearst also reimburses the Company for the Company's direct
operating costs and expenses incurred with unrelated third parties and amounts
paid on behalf of a managed station under the Services Agreement described
below. Corporate overhead is not reimbursed except to the extent it had
historically been treated as an operating expense by Hearst in calculating
broadcast cash flow for a station. The term of the Management Agreement
commenced at the consummation of the Hearst Transaction and will continue for
each station, respectively, until the earlier of (i) Hearst's divestiture of
the station to a third party; (ii) if applicable, the exercise of the option
granted to the Company to acquire certain of the stations pursuant to the
Option Agreement described below; or, (iii) five years after the consummation
of the Hearst Transaction; provided, however, that Hearst will have the right
to terminate the Management Services Agreement as to a particular station
covered by an option or right of first refusal under the Option Agreement at
any time upon 90 days' prior written notice if the option period or right of
first refusal period, as applicable, has expired without having been
exercised. The Management Services Agreement will also terminate if Hearst
ceases to own a majority of the Company's voting common stock or to have the
right to elect a majority of the Company's directors. In 1998, Hearst paid the
Company an aggregate amount of $3,272,752 pursuant to the Management
Agreement.
Television Station Option Agreement. Hearst and the Company are parties to
an Option Agreement pursuant to which Hearst has granted to the Company an
option to acquire WWWB-TV, and Hearst's interests (which interests include an
option to acquire the station) with respect to KCWE-TV (together with WWWB-TV,
the "Option Properties"), as well as a right of first refusal for a period of
36 months following the consummation of the Hearst Transaction with respect to
WPBF-TV (if such station is proposed by Hearst to be sold to a third party).
The option period for each Option Property, which began on March 1, 1999, is
from 18 to 36 months following the consummation of the Hearst Transaction, and
the purchase price will be the fair market value of such station based upon
agreement between the parties or, if either party so elects, an independent
third-party appraisal, subject to certain specified parameters. If Hearst
elects to sell an Option Property prior to the commencement of, or during, the
option, the Company will have a right of first refusal to acquire such Option
21
<PAGE>
Property. Hearst may elect to receive the stock of the Company in payment for
the exercise of the option or right of first refusal. The exercise of the
option and the right of first refusal will be by action of the independent
directors of the Company, and any option exercise may be withdrawn by the
Company after receipt of the appraisal described above.
Radio Facilities Lease. Hearst and the Company are parties to a Studio Lease
Agreement pursuant to which Hearst leases from the Company premises for WBAL-
AM and WIYY-FM, Hearst's Baltimore, Maryland, radio stations. The term of the
lease commenced at the consummation of the Hearst Transaction and will
continue as to the space occupied by each radio station, respectively, until
the earlier of (i) Hearst's divestiture of the radio station to a third party,
in which case either party (i.e., the Company or the buyer of the station)
will be entitled to terminate the lease with respect to that station upon
certain prior written notice or (ii) 36 months following consummation of the
Hearst Transaction. Hearst paid the Company in 1998 pursuant to the Radio
Facilities Lease an aggregate amount of $662,627.
Services Agreement. Hearst and the Company are parties to a Services
Agreement pursuant to which Hearst provides the Company with certain
administrative services, including accounting, financial, tax, legal,
insurance, data processing and employee benefits. The fees for such services
are based on fixed and variable transaction amounts negotiated between Hearst
and the Company, subject to adjustment beginning in 1999, to reflect changes
in costs or other assumptions used to establish such fees, or at any time, to
reflect the acquisition or disposition of television or radio stations. The
Company also reimburses Hearst under the Services Agreement for the services
of Mr. Conomikes, who remains an employee of Hearst, in an amount equal to the
base salary and bonus for Mr. Marbut contained in Mr. Marbut's Employment
Agreement (which amount is charged to the Company by Hearst pursuant to the
Services Agreement). The initial term of the Services Agreement expired on
December 31, 1998 but was renewed for one year, pursuant to the provision of
the Services' Agreement that allows for one year renewals unless terminated on
six months' notice. Although the Company believes that such terms are
reasonable, there can be no assurance that more favorable terms would not be
available from unaffiliated third parties. The Company paid $2,144,160 to
Hearst pursuant to the Services Agreement in 1998.
Pulitzer Parties. Upon consummation of the Pulitzer Merger, the Pulitzer
Parties, together with the former executive officers, directors and other
affiliates of Pulitzer, owned as a group approximately [ ]% of the
outstanding shares of the Company's Common Stock. The Pulitzer Parties, the
Company and Hearst Broadcasting entered into the Board Representation
Agreement pursuant to which the Pulitzer Parties have been granted the right,
subject to certain conditions and restrictions, to cause the Company to
nominate for election to the Company's Board, and Hearst Broadcasting to vote
in favor of the election of, two individuals designed by the Pulitzer Parties.
Pursuant to the terms and conditions of the Board Representation Agreement and
the Pulitzer Merger, Michael E. Pulitzer and Ken J. Elkins became such
directors on the Company's Board at the time of the Pulitzer Merger.
22
<PAGE>
BOARD OF DIRECTORS COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, including previous filings that might
incorporate future filings, including this Proxy Statement, in whole or in
part, this report and the Performance Graph following it shall not be
incorporated by reference into any such filings.
The Compensation Committee
The Compensation Committee is composed entirely of directors who are not
officers or employees of the Company. Under the Charter of the Compensation
Committee adopted by the Board of Directors, the Compensation Committee
reviews and approves executive compensation packages for the Co-Chief
Executive Officer, all other executive officers of the Company and the general
managers of the television stations owned by the Company (collectively,
"Management"). Additionally, the Charter provides that the Compensation
Committee shall make recommendations to the Board of Directors with respect to
the establishment, modification and administration of incentive and benefit
programs.
Compensation Philosophy
The goal of the Company's compensation arrangements is to attract, retain,
motivate and reward personnel critical to the long-term success of the
Company. As described below, the various components of the Company's
compensation arrangements for Management are tied to the performance of the
Company, which in turn unites the interests of Management with the interests
of the Company's stockholders.
Components of Compensation
The components of executive compensation in 1998 were (i) a base salary and
(ii) a bonus opportunity.
Base Salary
The salaries of the executive officers of the Company were established in
employment agreements entered into effective August 12, 1997 (the "1997
Agreements"). The 1997 Agreements provided for base salary levels for the
remainder of 1997 and for 1998.
In establishing the base salary levels, the Compensation Committee reviewed
the salary levels for similar positions in broadcasting and media companies,
and other companies comparable to the Company in terms of revenues and cash
flow. No specific formula was established targeting compensation at any
particular level, but rather the salary levels were determined by a subjective
evaluation of the position and the individual's performance and
accomplishments. Additionally, the other components of compensation (bonus and
previous stock option grants) were taken into account in setting the salary
levels.
Bonus Opportunity
Bonus opportunities (at "target" and "maximum") for the executive officers
of the Company were established in the 1997 Agreements. These bonus levels
were established based on the factors described for setting the salary levels.
The 1998 bonuses (paid in 1999) for executive officers were determined based
on (i) the financial performance of the Company in 1998 and (ii) a subjective
evaluation of the individual's performance and accomplishments for the
calendar year 1998.
CEO Compensation
The compensation for Mr. Marbut, the Co-Chief Executive Officer of the
Company, is established in his 1997 Agreement with the Company. The
Compensation Committee established the levels of the various
23
<PAGE>
components of compensation under this agreement (base salary, annual bonus and
stock options) in the manner described under "--Components of Compensation"
above, which was the same manner used for establishing levels of compensation
for all officers with 1997 Agreements.
Under the terms of a Services Agreement, the Company reimburses Hearst for
the services of Mr. Conomikes, the Co-Chief Executive Officer of the Company,
who remains an employee of Hearst. The amount of such reimbursement in 1998
equaled $1,054,058, and was tied to the amount of Mr. Marbut's total
compensation.
$1 Million Limit on Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally limits the corporate
tax deduction for compensation paid to executive officers named in the Summary
Compensation Table in the proxy statement to $1 million, unless certain
requirements are met. No executive received compensation subject to the
Section 162(m) limitation in excess of this level in 1998.
The Option Plan establishes a limit on the maximum number of shares of
Company Common Stock for which options may be granted to any one individual in
any calendar year. This provision was approved by the Company's stockholders,
and the Option Plan is structured with the intent that compensation
attributable to options granted thereunder is not subject to the Section
162(m) limitation on deductibility. At the present time, in light of current
compensation levels, other compensation programs of the Company have not been
structured to qualify for an exception from the Section 162(m) limitation; and
it is possible that a limited amount of compensation could be nondeductible
thereunder.
Submitted by the Compensation Committee:
Caroline L. Williams, Chair
Frank A. Bennack, Jr.
David Pulver
24
<PAGE>
PERFORMANCE GRAPH
The following graph compares the annual cumulative total shareholder return
on an investment of $100 in the Series A Common Stock on October 23, 1995, the
date that the Series A Common Stock began trading following the Company's
initial public equity offering, based on the market price of the Series A
Common Stock and assuming reinvestment of dividends, with the cumulative total
return of a similar investment in companies on the Standard & Poor's 500 Stock
Index and in a group of peer companies selected by the Company on a line-of-
business basis and weighted for market capitalization. Peer companies included
are Granite Broadcasting Corp., Sinclair Broadcast Group, Inc. and Young
Broadcasting, Inc. Previously, the Company had included Renaissance
Communications Corporation ("Renaissance") and Lin Television Corporation
("Lin") as members of the peer group. Renaissance was acquired by another
company in 1997, and Lin was acquired by another company in 1998, and neither
Renaissance nor Lin any longer has any outstanding publicly traded securities.
Both Lin and Renaissance, therefore, have each been removed from the peer
group.
CUMULATIVE TOTAL RETURN
Based on initial investment of $100 beginning October 24, 1995
with dividends reinvested
THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE PURPOSE OF EDGAR
FILING.
<TABLE>
<CAPTION>
24-Oct-95 31-Dec-95 31-Dec-96 31-Dec-97 31-Dec-98
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Hearst Argyle Television.... $100.00 $102.94 $144.12 $175.00 $194.12
S&P 500..................... $100.00 $105.53 $129.76 $173.05 $222.51
Custom Composite Index (3
Stocks).................... $100.00 $ 88.82 $103.39 $147.69 $137.69
</TABLE>
The 3-Stock Custom Composite Index consists of Granite Broadcasting
Corporation, Sinclair Broadcast Group, Inc. and Young Broadcasting Inc.
25
<PAGE>
PRINCIPAL STOCKHOLDERS
As of the Record Date, the Company had issued and outstanding and entitled
to vote at the Annual Meeting, [ ] shares of Series A Common Stock,
41,298,648 shares of Series B Common Stock, 10,938 shares of Series A
Preferred Stock and 10,938 shares of Series B Preferred Stock.
The following table sets forth information as of the Record Date regarding
the beneficial ownership of the Company's Series A Common Stock and the Series
B Common Stock by (i) each person who is known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock; (ii) each
director and nominee for director and each executive officer of the Company
named in the Summary Compensation Table; and, (iii) all directors and
executive officers of the Company as a group. Unless otherwise indicated
below, to the knowledge of the Company, all persons listed below have sole
voting and investment power with respect to their shares of Common Stock. The
number of shares set forth below includes those shares issuable pursuant to
options that are exercisable within 60 days of April 2, 1999.
<TABLE>
<CAPTION>
Series A Common Stock Series B Common Stock
Beneficial Beneficial Ownership
Ownership (2) (2)
---------------------- -------------------------
Percent of Percent of
Name and Address (1) Number Series (%) Number Series (%)
- -------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Bob Marbut (3) (4)............ 1,005,461 2.1% -- --
John Conomikes................ 5,000 * -- --
David J. Barrett (5).......... 77,667 * -- --
Anthony J. Vinciquerra(6)..... 61,403 *
Dean H. Blythe (7)............ 45,730 * -- --
Harry T. Hawks (3) (8)........ 137,983 * -- --
Ibra Morales (3) (8).......... 236,634 * -- --
Philip Stolz (9).............. 26,667 *
Frank A. Bennack, Jr.......... 20,000 * -- --
Ken J. Elkins................. 29,567 *
Victor F. Ganzi............... 20,000 * -- --
George R. Hearst, Jr.......... 5,000 * -- --
William R. Hearst III......... 10,000 * -- --
Gilbert C. Maurer............. 10,000 * -- --
Michael E. Pulitzer (10)...... 6,127,122 12.8%
David Pulver (3) (11)......... 81,656 * -- --
Virginia H. Randt............. -- -- -- --
Caroline L. Williams (11)..... 32,646 * -- --
All Company directors and
executive officers
as a group (18 persons)
(12)......................... 7,905,869 16.4% -- --
Hearst Broadcasting, Inc.
(13)......................... [4,906,725] [ ]% 41,298,648(14) 100%
David E. Moore (10)........... 6,440,042 13.5% -- --
Emily Rauh Pulitzer (10)...... 11,120,820 23.2% -- --
</TABLE>
- --------
* Represents beneficial ownership of less than 1% of the issued and
outstanding shares of Series A Common Stock.
(1) Unless otherwise indicated, the address of each person or entity named in
the table is c/o Hearst-Argyle Television, Inc., 888 Seventh Avenue, New
York, New York 10106.
(2) Number and percent of outstanding Series A Common Stock does not include
any shares of Series A Common Stock issuable upon the conversion of the
Series B Common Stock, Series A Preferred Stock or Series B Preferred
Stock into Series A Common Stock.
(3) Indicates that such person is a party to a Registration Rights Agreement
with the Company dated as of August 29, 1997.
26
<PAGE>
(4) Includes 50,000 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(5) Includes 76,667 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(6) Includes 50,000 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(7) Includes 43,334 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(8) Includes 33,334 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(9) Includes 26,667 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(10) Indicates that such person is a party to a Registration Rights Agreement
with the Company dated May 25, 1998.
(11) Includes 15,000 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(12) Includes 316,669 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(13) The Hearst Family Trust is the sole common stockholder of Hearst, which
in turn is the sole stockholder of Hearst Broadcasting. The address of
The Hearst Family Trust is 888 Seventh Avenue, New York, New York 10106.
The address of Hearst is 959 Eighth Avenue, New York, New York 10019.
(14) Indicates the number of shares of Series B Common Stock held by Hearst
Broadcasting. The shares of series B Common Stock are convertible at any
time at the option of the holder on a share-for-share basis into shares
of Series A Common Stock.
27
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities and Exchange Commission (the "SEC") requires that each
registrant's executive officers and directors, and beneficial owners of more
than 10% of any class of equity security registered pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to make certain filings
under Section 16(a) of the Exchange Act. Based solely on a review of copies of
such reports of ownership furnished to the Company, the Company believes that
during the past fiscal year all of its officers, directors and greater than
10% beneficial holders complied with all applicable filing requirements,
except that Mr. Stolz's Initial Statement of Beneficial Ownership of
Securities on Form 3 required after his appointment as Senior Vice President
on December 1, 1998, was filed on January 10, 1999.
ANNUAL REPORT ON FORM 10-K
Upon written request of any beneficial shareholder or shareholder of record,
a copy of the Company's Annual Report On Form 10-K for the fiscal year ended
December 31, 1998 (including the exhibits, financial statements and the
schedules thereto) required to be filed with the Securities and Exchange
Commission pursuant to Rule 13a-1 under the Securities Exchange Act of 1934,
may be obtained, without charge, from Dean H. Blythe, Secretary, 888 Seventh
Avenue, New York, New York 10106.
STOCKHOLDER PROPOSALS
Stockholder proposals to be presented at the 2000 Annual Meeting of
Stockholders, for inclusion in the Company's Proxy Statement and form of Proxy
relating to that meeting, must be received by the Company at its offices in
New York, New York, addressed to the Secretary of the Company, not later than
December 16, 1999. Such proposals must comply with the Bylaws of the Company
and the requirements of the Regulation 14A of the Act.
INDEPENDENT AUDITORS
For the year ended December 31, 1996, the Company's independent auditors
were Ernst & Young LLP. On October 14, 1997, the Company terminated its
relationships with Ernst & Young LLP. On October 15, 1997 the Company engaged
Deloitte & Touche as its new independent auditors. The Company's termination
of its relationship with Ernst & Young and the appointment of Deloitte &
Touche was approved by the Company's Board of Directors upon the
recommendation of the Audit Committee of the Board of Directors.
Ernst & Young's reports on the Company's financial statements during the two
most recent fiscal years preceding the date of its termination as the
Company's independent auditors did not contain an adverse opinion, disclaimer
of opinion nor were they qualified or modified as to uncertainty, audit scope
or accounting principles.
During the two most recent fiscal years preceding the date of Ernst &
Young's termination, there were no reportable events as contemplated by Item
304 of Regulation S-K and no disagreements between the Company and Ernst &
Young on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Ernst & Young would have caused it to make
reference to the subject matter of the disagreement in its report.
Ernst & Young has provided a letter addressed to the Commission stating that
it agrees with the above statements. Representatives of Deloitte & Touche will
be present at the 1999 Annual Meeting to answer questions. They will also have
the opportunity to make a statement if they desire to do so.
28
<PAGE>
OTHER MATTERS
At the date of this Proxy Statement, management was not aware that any
matters not referred to in this Proxy Statement would be presented for action
at the meeting. If any other matters should come before the meeting, the
persons named in the accompanying form of Proxy will have discretionary
authority to vote all Proxies in accordance with their best judgment, unless
otherwise restricted by law.
By Order of the Board of Directors,
Dean H. Blythe,
Secretary
Dated: April 16, 1999
29
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
The Company wishes to attract employees to the Company and its Subsidiaries
and to induce employees to remain with the Company and its Subsidiaries, and
to encourage them to increase their efforts to make the Company's business
more successful, whether directly or through its Subsidiaries. In furtherance
thereof, the Plan is designed to provide equity-based incentives to the
eligible employees of the Company and its Subsidiaries. The Plan is intended
to comply with the provisions of Section 423 of the Code and shall be
administered, interpreted and construed accordingly.
1. Definitions.
When used herein, the following terms shall have the respective meanings set
forth below:
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee appointed by the Board of Directors of the
Company under Section 3 hereof.
"Common Stock" means the Series A Common Stock, par value $0.01 per share,
of the Company.
"Company" means Hearst-Argyle Television, Inc., a Delaware corporation.
"Effective Date" means March 1, 1999.
"Eligible Compensation" for any pay period means, unless otherwise
determined by the Committee, the gross amount of base salary, incentive
compensation, overtime, bonuses, commissions and other regular payments, with
respect to which net amounts are actually paid in cash in such pay period.
Eligible Compensation does not include, without limitation, any payments for
reimbursement of expenses, deferred compensation or other non-cash or non-
regular payments, unless otherwise determined by the Committee.
"Eligible Employee" means employees eligible to participate in the Plan
pursuant to the provisions of Section 4.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" per Share as of a particular date means (i) if Shares
are then listed on a national stock exchange, the closing sales price per
Share on the exchange for the last preceding date on which there was a sale of
Shares on such exchange, as determined by the Committee, (ii) if Shares are
not then listed on a national stock exchange but are then traded on an over-
the-counter market, the average of the closing bid and asked prices for the
Shares in such over-the-counter market for the last preceding date on which
there was a sale of such Shares in such market, as determined by the
Committee, or (iii) if Shares are not then listed on a national stock exchange
or traded on an over-the-counter market, such value as the Committee in its
discretion may in good faith determine; provided that, where the Shares are so
listed or traded, the Committee may make such discretionary determinations
where the Shares have not been traded for 10 trading days.
"Investment Date" means the Friday coincident with or immediately preceding
the 15th day of each calendar month.
"Participating Employee" means an employee (i) for whom payroll deductions
are currently being made or (ii) for whom payroll deductions are not currently
being made because he or she has reached the limitation set forth in Section
6.
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"Payroll Account" means an account maintained by the Company with respect to
each Participating Employee as contemplated by Section 5.
"Plan" means this Hearst-Argyle Television, Inc. 1998 Employee Stock
Purchase Plan, as it may from time to time be amended.
"Plan Year" means the calendar year.
"Shares" means shares of Common Stock.
"Stock Account" means a brokerage account as contemplated by Section 8.
"Subsidiary" means any corporation that is a "subsidiary corporation" with
respect to the Company under Section 424(f) of the Code.
2. Shares Reserved for the Plan
There shall be reserved for issuance and purchase by employees under the
Plan an aggregate of 5,000,000 Shares, subject to adjustment as provided in
Section 12. Shares subject to the Plan may be Shares now or hereafter
authorized but unused, or Shares that were once issued and subsequently
reacquired by the Company. If and to the extent that any right to purchase
reserved Shares shall not be exercised by any employee for any reason or if
such right to purchase shall terminate as provided herein, Shares that have
not been so purchased hereunder shall again become available for the purposes
of the Plan unless the Plan shall have been terminated, but such unpurchased
Shares shall not be deemed to increase the aggregate number of Shares
specified above to be reserved for purposes of the Plan (subject to adjustment
as provided in Section 12).
3. Administration of the Plan.
The Plan shall be administered by the Committee appointed by the Board of
Directors. The Committee shall consist of not less than two members of the
Board of Directors each of whom is a "non-employee director" within the terms
of Rule 16b-3 promulgated under the Exchange and at such times as the Company
is subject to Section 162(m) of the Code (to the extent relief from the
limitation of Section 162(m) of the Code is sought with respect to Options),
shall qualify as "outside directors" for purposes of Section 162(m) of the
Code. To the extent that the Compensation Committee of the Board of Directors
satisfies the foregoing requirements, the Board of Directors may designate
such Compensation Committee to act as the Committee hereunder. Each member of
the Committee shall serve at the pleasure of the Board of Directors. The
Committee may make such rules and regulations and establish such procedures
for the administration of the Plan as it deems appropriate. The Committee
shall have authority to interpret the Plan, with such interpretations to be
conclusive and binding on all persons and otherwise accorded the maximum
deference permitted by law and shall take any other actions and make any other
determinations or decisions that it deems necessary or appropriate in
connection with the Plan or the administration or interpretation thereof.
The acts of a majority of the members present at any meeting of the
Committee at which a quorum is present, or acts approved in writing by a
majority of the entire Committee, shall be the acts of the Committee for
purposes of the Plan. If and to the extent applicable, no member of the
Committee may act as to matters under the Plan specifically relating to such
member.
4. Eligible Employees.
All employees of the Company and each Subsidiary designated for
participation herein by the Committee shall be eligible to participate in the
Plan, provided that each of such employees:
(i) is not in a group of highly compensated employees which, as
contemplated by Section 423(b)(4)(D) of the Code, has been designated by
the Committee as being ineligible to participate in the Plan;
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(ii) has been employed by the Company or any Subsidiary (or any
predecessor thereof) for a period of at least one year (continuous or
otherwise) prior to the Plan Year during which participation is to
commence;
(iii) does not own, for purposes of Section 423 of the Code, immediately
after the right is granted, stock possessing 5% or more of the total
combined voting power or value of all classes of capital stock of the
Company or of a Subsidiary; and
(iv) customarily works more than 20 hours per week;
(v) customarily works more than five months in a year;
provided, that, notwithstanding the foregoing, the employment of an employee
of a Subsidiary which ceases to be a Subsidiary shall, automatically and
without any further action, be deemed to have terminated (and such employee
shall cease to be an Eligible Employee hereunder).
The Committee may establish special rules with respect to those employees
who first satisfy (iv) or (v) above after they have already satisfied the
other requirements established by this Section 4 (with additional special
rules to apply in the discretion of the Committee in the case of employees
with two years of service with the Company at such time).
Prior service with Pulitzer Publishing Company and Kelly Broadcasting
Company and their subsidiaries shall be taken into account hereunder as
service for the Company for those employees employed thereby immediately
before their being affiliated with the Company and thereby or by the Company
at the time of such affiliation. The Committee may establish special rules
with respect to the eligibility of and the prior service credit for employees
of other companies which become affiliated with the Company prior to the
Effective Date or during a Plan Year.
5. Election to Participate and Payroll Deductions.
Each Eligible Employee may elect to participate in the Plan during the
enrollment period immediately prior to the beginning of a Plan Year (or in the
case of the 1998 Plan Year, in the enrollment period preceding the effective
date of the Plan). Each Eligible Employee may elect a payroll deduction of
from 1% to 10% of Eligible Compensation from each paycheck, in increments of
1% (i.e., 1%, 2%, 3%, etc.). Elections under this Section 5 are subject to the
limits set forth in Section 6. All payroll deductions shall be credited, as
promptly as practicable, to a Payroll Account in the name of the Participating
Employee. All funds held by the Company under the Plan shall not be segregated
from other corporate funds (except that the Company may in its discretion
establish separate bank or investment accounts in its own name) and may be
used by the Company for any corporate purpose.
If so provided by the Committee, unless he or she elects otherwise during
the Enrollment Period for the Plan Year, an Eligible Employee who is a
Participating Employee on the day before a Plan Year commences will be deemed
(i) to have elected to participate in such Plan Year and (ii) to have
authorized the same percentage payroll deduction for such Plan Year as in
effect for such employee on the day before such Plan Year commences.
Each Participating Employee may, by signing and delivering written notice to
the Committee, on a form specified for such purpose by the Committee, at such
times as may be established by the Committee, cancel his or her election to
participate in the Plan and in such case the entire balance in the Payroll
Account of such Participating Employee shall be repaid to such Participating
Employee as promptly as practicable.
A Participating Employee who ceases to participate in a Plan Year shall not
again be eligible to participate during such Plan Year but, may elect to
participate in a subsequent Plan Year, if then eligible. A Participating
Employee may at any time during the Plan Year (but not more than four times)
decrease his or her payroll deductions by filing the required form with the
Company, which decrease shall become effective with the first pay period of
the first succeeding calendar month to which it may be practicably applied.
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6. Limitation of Number of Shares That an Employee May Purchase.
No right to purchase Shares under the Plan shall permit an employee to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries (as defined for purposes of Section 423 of the Code) at a rate
which in the aggregate exceeds $25,000 of the fair market value of such stock
(determined under Section 423 of the Code at the time the right is granted,
which for purposes of the Plan, is deemed to be the Investment Date) for each
calendar year in which the right is outstanding at any time.
7. Purchase Price.
The purchase price for each Share shall be 85% of the Fair Market Value of
such Share on the Investment Date.
8. Method of Purchase.
As of each Investment Date, each Participating Employee shall be offered the
right to purchase, and shall be deemed, without any further action, to have
purchased, the number of whole and fractional Shares which the balance of his
or her Payroll Account at that time will purchase, determined by dividing the
balance in his or her Payroll Account not theretofore invested by the purchase
price as determined in Section 7.
All Shares purchased as provided in the foregoing paragraph shall be
initially maintained in separate Stock Accounts for the Participating
Employees at a brokerage firm selected by, and pursuant to an arrangement
with, the Company. For so long as such Shares are maintained in Stock
Accounts, all dividends paid with respect to such Shares shall be credited to
each Participating Employee's Stock Account, and will be automatically
reinvested in whole and fractional Shares, unless the Participating Employee
elects not to have such dividends reinvested. Notwithstanding the foregoing,
in the discretion of the Committee, fractional Shares shall not be purchased
hereunder, and any remaining cash in a Participating Employee's Payroll
Account resulting from such failure to invest in fractional Shares shall be
returned to the Participating Employee as soon as practicable. The Committee
may provide that transaction fees incurred with respect to dividend
reinvestment may be paid by the Company.
9. Title of Stock Accounts.
Each Stock Account may be in the name of the Participating Employee or, if
permitted by the Committee and the Participating Employee so indicates on the
appropriate form, in his or her name jointly with another person, with right
of survivorship. If permitted by the Committee, a Participating Employee who
is a resident of a jurisdiction that does not recognize such a joint tenancy
may have a Stock Account in his or her name as tenant in common with another
person without right of survivorship. In the event that a Participating
Employee directs that his or her Shares be transferred from the applicable
Stock Account, any fractional Shares in the Participating Employee's Stock
Account shall be paid in cash in accordance with the generally applicable
rules and procedures of the brokerage firm maintaining the Stock Accounts.
10. Rights as a Stockholder.
At the time funds from a Participating Employee's Payroll Account are used
to purchase the Common Stock, he or she shall have all of the rights and
privileges of a stockholder of the Company with respect to the Shares
purchased under the Plan whether or not certificates representing such Shares
have been issued.
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11. Rights Not Transferable.
Rights granted under the Plan are not transferable by a Participating
Employee other than by will or the laws of descent and distribution and are
exercisable during his or her lifetime only by him or her.
12. Adjustment in Case of Changes Affecting Common Stock.
If (i) the Company shall at any time be involved in a merger, consolidation,
dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of the Company or its Subsidiaries or
a transaction similar thereto, (ii) any stock dividend, stock split, reverse
stock split, stock combination, reclassification, recapitalization or other
similar change in the capital structure of the Company, or any distribution to
holders of Common Stock other than cash dividends, shall occur or (iii) any
other event shall occur which in the judgment of the Committee necessitates
action by way of adjusting the number or kind of shares, or both, which
thereafter may be sold under the Plan, then the Committee may forthwith take
any such action as in its judgment shall be necessary to preserve to the
Participating Employees' rights substantially proportionate to the rights
existing prior to such event, and to maintain the continuing availability of
Shares under Section 2 (if Shares are otherwise then available) in a manner
consistent with the intent hereof, including, without limitation, adjustments
in (x) the number and kind of shares subject to the Plan, (y) the purchase
price of such shares under the Plan, and (z) the number and kind of shares
available under Section 2. To the extent that such action shall include an
increase or decrease in the number of Shares (or units of other property then
available) subject to the Plan, the number of Shares (or units) available
under Section 2 above shall be increased or decreased, as the case may be,
proportionately, as may be provided by Committee in its discretion.
Notwithstanding any other provision of the Plan, if the Common Stock ceases
to be listed or traded, as applicable, on a national stock exchange or over-
the-counter market (a "Triggering Event"), then, in the discretion of the
Committee, (i) the balance in the Participating Employee's Payroll Account not
theretofore invested may be refunded to the Participating Employee, and such
Participating Employee shall have no further rights or benefits under the
Plan, (ii) an amount equal to the product of the Fair Market Value of a Share
on the date of the Triggering Event multiplied by the number of Shares such
Participating Employee would have been able to purchase with the balance of
his or her Payroll Account on such Triggering Event if such Triggering Event
were the Investment Date may be paid to the Participating Employee, and such
Participating Employee shall have no further rights or benefits under the
Plan, or (iii) the Plan may be continued without regard to the application of
this sentence.
13. Termination of Employment.
In the event of a Participating Employee's termination of employment during
a Plan Year (regardless of the reason therefor and regardless of the party
initiating the termination), the balance in the Participating Employee's
Payroll Account not theretofore invested, shall be refunded to him or her, and
in the event of his or her death shall be paid to his or her estate, any such
refund or payment to be made as soon as practicable after the next Investment
Date.
14. Amendment of the Plan.
The Board of Directors may at any time, or from time to time, amend the Plan
in any respect; provided, however, that the Plan may not be amended in any way
that would cause, if such amendment were not approved by the holders of Common
Stock, the Plan to fail to comply with
(i) the requirements for employee stock purchase plans as defined in
Section 423 of the Code; or
(ii) any other requirement of applicable law or regulation;
unless and until the approval of the holders of the applicable Common Stock is
obtained. No amendment of the Plan shall alter or impair any rights
outstanding at the time of the such amendment to purchase Shares pursuant to
any offer hereunder.
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15. Termination of the Plan.
The Plan and all rights of employees hereunder shall terminate:
(i) on the Investment Date that Participating Employees become entitled
to purchase a number of Shares greater than the number of reserved Shares
remaining available for purchase; or
(ii) at any time, at the discretion of the Board of Directors.
In the event that the Plan terminates under circumstances described in (i)
above, reserved Shares remaining as of the termination date shall be subject
to Participating Employees on a pro rata basis. No termination of the Plan
shall alter or impair any rights outstanding at the time of the such
termination to purchase Shares pursuant to any offering of the right to
purchase Shares hereunder.
16. Governmental and Other Regulations; Further Assurances.
The Plan, and the grant and exercise of the rights to purchase Shares
hereunder, and the Company's obligation to sell and deliver Shares upon the
exercise of rights to purchase Shares, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may be required. The Company shall
not be required to issue or deliver any certificates for Shares prior to the
completion of any registration or qualification of such Shares under, and the
obtaining of any approval under or compliance with, any state or federal law,
or any ruling or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable. Certificates for
Shares issued hereunder may be legended as the Committee may deem appropriate.
The Participating Employee shall take whatever additional actions and
execute whatever additional documents the Committee may in its reasonable
judgment deem necessary or advisable in order to carry out or effect one or
more of the obligations or restrictions imposed on the Participating Employee
pursuant to the Plan.
17. Indemnification of Committee.
The Company shall indemnify and hold harmless the members of the Board of
Directors of the Company and the members of the Committee from and against any
and all liabilities, costs and expenses incurred by such persons as a result
of any act or omission to act in connection with the performance of such
person's duties, responsibilities and obligations under the Plan if such
person acts in good faith and in a manner that he or she reasonably believes
to be in, or not opposed to, the best interests of the Company, to the maximum
extent permitted by law.
18. Withholding; Disqualifying Dispositions.
Notwithstanding any other provision of the Plan, the Company shall deduct
from all Payroll Accounts paid under the Plan all federal, state, local and
other taxes required by law to be withheld with respect to such payments.
If Shares acquired under the Plan are disposed of in a disqualifying
disposition within the meaning of Section 422 of the Code by a Participating
Employee prior to the expiration of two years from the Investment Date on
which such Shares are purchased, or in any other disqualifying disposition
within the meaning of Section 422 of the Code, such Participating Employee
shall notify the Company in writing as soon as practicable thereafter of the
date and terms of such disposition and, if the Company (or any affiliate
thereof) thereupon has a tax-withholding obligation, shall pay to the Company
(or such affiliate) an amount equal to any withholding tax the Company (or
affiliate) is required to pay as a result of the disqualifying disposition.
19. Notices.
All notices under the Plan shall be in writing, and if to the Company, shall
be delivered to the Board of Directors or mailed to its principal office,
addressed to the attention of the Board of Directors; and if to a
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Participating Employee, shall be delivered personally or mailed to such
Participating Employee at the address appearing in the records of the Company.
Such addresses may be changed at any time by written notice to the other party
given in accordance with this Section 19.
20. Severability.
The invalidity or unenforceability of any provision of the Plan shall not
affect the validity or enforceability of any other provision of the Plan,
which shall remain in full force and effect.
21. No Right to Continued Employment.
The Plan and any right to purchase Common Stock granted hereunder shall not
confer upon any employee any right with respect to continued employment by the
Company or any Subsidiary, nor shall they restrict or interfere in any way
with the right of the Company or any Subsidiary by which an employee is
employed to terminate his or her employment at any time.
22. Captions.
The use of captions in the Plan is for convenience. The captions are not
intended to and do not provide substantive rights.
23. Effective Date of the Plan.
The Plan shall be effective as of the Effective Date. If the Plan is not
approved by a vote of the holders of a majority of the total outstanding
Common Stock within one year following the Effective Date, the Committee shall
be authorized to take such action as it may deem appropriate in light of any
failure of the Plan to satisfy Section 423 of the Code.
24. Governing Law.
THE PLAN SHALL BE GOVERNED BY THE LAWS OF DELAWARE.
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P R O X Y
HEARST-ARGYLE TELEVISION, INC.
This Proxy is solicited on behalf of the Board of Directors of Hearst-Argyle
Television, Inc.
The undersigned hereby appoints Bob Marbut, John G. Conomikes and Dean H.
Blythe, or any one or more of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote as
designated below all the shares of Series A Common Stock, Series A Preferred
Stock and Series B Preferred Stock of Hearst-Argyle Television, Inc., held of
record by the undersigned on April 2, 1999, at the Annual Meeting of
Stockholders to be held on May 14, 1999, or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(continued on reverse side)
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<PAGE>
HEARST-ARGYLE TELEVISION, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
- --------------------------------------------------------------------------------
When OK to Print -- Remove ALL Red Items
CLEAR THIS RED BOXED AREA AND THE RED BOXED AREAS BELOW
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Item 1. ELECTION OF DIRECTOR: Class II Series A For Withhold
(Term expires in 2001) -- David Pulver [_] [_]
Item 2. EQUITY INVESTMENT PROPOSAL For Against Withhold
[_] [_] [_]
Item 3. EMPLOYEE STOCK PURCHASE PLAN For Against Withhold
[_] [_] [_]
Item 4. At the discretion of such Proxies, on any For Withhold
other matter that properly may come [_] [_]
before the meeting or any adjournment
thereof.
Date: _________________________, 1999
NO TEXT PRINT IN THIS -------------------------------------
ADDRESS AREA Signature
-------------------------------------
Signature if Held Jointly
Please sign exactly as name appears. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in the
full corporate name by President or other authorized officer, If a partnership,
please sign in partnership name by authorized person.
Items 1, 2 and 3 were proposed by Hearst-Argyle Television, Inc.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder.
If no direction is made, this Proxy will be voted for Items 1, 2, 3 and 4.
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- FOLD AND DETACH HERE -
