<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 April 7, 2000)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_]Preliminary Proxy Statement
[X]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 9, 2000
---------------
To the Stockholders of Hearst-Argyle Television, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "2000
Annual Meeting") of Hearst-Argyle Television, Inc., a Delaware corporation (the
"Company"), will be held at the Museum of Television and Radio, 25 West 52nd
Street, New York, New York 10019 on Tuesday, May 9, 2000, at 10:00 a.m., local
time, for the following purposes:
(1) To elect one Series A Class I Director and five Series B Class I
Directors to hold office for a term of two years or until their respective
successors are elected and qualified; and
(2) To transact such other business as may properly come before the
meeting or its adjournment.
The close of business on March 31, 2000 has been fixed by the Company's Board
of Directors as the record date for the 2000 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 2000 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.
We will make available a list of stockholders as of the close of business on
March 31, 2000, for inspection during normal business hours from April 29, 2000
through May 8, 2000, at the office of the Secretary of the Company. The list
will also be available at the meeting.
A Proxy Statement, form of Proxy and copy of the Annual Report on the
Company's operations during the fiscal year ended December 31, 1999 accompany
this notice.
It is important that your shares be represented at the 2000 Annual Meeting.
Whether or not you expect to attend in person, please vote, sign and date the
form of Proxy and return it in the enclosed envelope. Stockholders who attend
the 2000 Annual Meeting may revoke their Proxies and vote in person if they
desire.
By Order of the Board of Directors,
/S/ Bob Marbut
Bob Marbut,
Chairman and
Co-Chief Executive Officer
April 10, 2000
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 9, 2000
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement and accompanying Proxy are 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 "2000 Annual Meeting") to be held at the Museum of Television and
Radio, 25 West 52nd Street, New York, New York 10019 on Tuesday, May 9, 2000,
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 10, 2000. 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 five Series B director nominees (the "Series B
Directors") listed under "Election of Directors Proposal" to serve as Class
I directors for a two-year term (the "Election of Directors Proposal"); and
(2) 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.
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QUORUM AND VOTING
Record Date; Quorum
The Company's Board of Directors has fixed the close of business on Friday,
March 31, 2000 as the record date (the "Record Date") for the 2000 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 2000 Annual Meeting and any
adjournments and postponements thereof. On the Record Date, there were
92,791,200 shares of Common Stock (consisting of 51,492,552 shares of Series A
Common Stock and 41,298,648 shares of Series B Common Stock) held by
approximately 857 stockholders of record, outstanding and entitled to vote at
the 2000 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 2000 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"), as
the sole holder of 100% of the outstanding shares of Series B Common Stock, is
necessary to constitute a quorum. Hearst Broadcasting is a wholly owned
subsidiary of Hearst Holdings, Inc., a Delaware corporation ("Hearst
Holdings") and wholly owned subsidiary of The Hearst Corporation, a Delaware
corporation ("Hearst").
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 2000 Annual Meeting, 29 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, 2002). 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 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 of Series A Common
Stock. Cumulative voting is not permitted in the election of directors.
With respect to the "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
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Director described under the Election of Directors Proposal, and only Hearst
Broadcasting, 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 2000 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 2000 Annual Meeting is required for the election of the
Series B Directors.
Proxies; Abstentions; Broker Non-Votes
All shares of Common Stock and Preferred Stock represented by properly
executed Proxies received prior to or at the 2000 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.
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 2000 Annual Meeting. If any other matters are properly
brought before the 2000 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 2000 Annual Meeting, including postponement or
adjournment for the purpose of soliciting additional votes.
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 2000 Annual Meeting and voting in person.
Attendance at the 2000 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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<PAGE>
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................................. 51 II B
Frank A. Bennack, Jr............................. 67 I B
John G. Conomikes................................ 67 I B
Ken J. Elkins.................................... 62 II B
Victor F. Ganzi.................................. 53 II B
George R. Hearst, Jr............................. 72 I B
William Randolph Hearst III...................... 50 II B
Bob Marbut....................................... 64 I B
Gilbert C. Maurer................................ 71 I B
Michael E. Pulitzer.............................. 70 II B
David Pulver..................................... 58 II A
Virginia Hearst Randt............................ 50 II B
Caroline L. Williams............................. 53 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 will hold office until the 2001 Annual Meeting. Accordingly,
at the 2000 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 I
Series A Director to hold office until the earlier of the Company's annual
meeting of stockholders in 2002 or until his or her successor is duly
elected and qualified; and
(ii) Hearst Broadcasting, as the sole holder of the Series B Common
Stock, will elect five Class I Series B Directors to hold office until the
earlier of the Company's annual meeting of stockholders in 2002 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 I 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):
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 Television
Holding, Inc. ("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.
4
<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 indirect ownership of
Hearst Broadcasting, currently owns 14,093,942 shares of Series A Common
Stock, which represents approximately 27% 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 I Series B Directors (To be elected by Hearst Broadcasting
as the sole holder of the Series B Common Stock):
Frank A. Bennack, Jr. has served as a Director of the Company since the
consummation of the Hearst Transaction on August 29, 1997. 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 since the
consummation of the Hearst Transaction on August 29, 1997. Mr. Conomikes also
served as President and Co-Chief Executive Officer of the Company from August
1997 to June 1999. Prior to this time, he served as a Vice President of Hearst
and the General Manager of Hearst's broadcast group since March 1983. From
January 1981 to March 1983, Mr. Conomikes served as Hearst's General Manager
of Television and from February 1970 to January 1981, served as Vice President
and General Manager of WTAE in Pittsburgh, Pennsylvania. Mr. Conomikes joined
Hearst in 1959 at WTAE where he served in various positions before assuming
the Vice President and General Manager positions at the station. 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 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.
Gillbert 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. Mr. Maurer is also a Director of Wit Capital Group.
Your directors recommend a vote FOR the election of the Series B Director
nominees.
GENERAL INFORMATION
Directors Continuing in Office
Class II Directors (Term expires in 2001)
David J. Barrett has served as President and Co-Chief Executive Officer of
the Company since June 1999 and as a Director of the Company since August 29,
1997. Prior to his appointment as President and Co-Chief Executive Officer, he
served as Executive Vice President and Chief Operating Officer of the Company
beginning on August 29, 1997. Prior to this time, he served as a Vice
President of Hearst and Deputy General Manager of Hearst's broadcast group
since January 1991. Mr. Barrett served as General Manager of the WBAL Division
of Hearst in Baltimore, Maryland from November 1989 to January 1991. He joined
Hearst in 1984 as General Manager of Hearst's radio properties and continued
in that position until 1989. Prior to joining Hearst, Mr. Barrett was
Executive Vice President of Doubleday Broadcasting, based in Washington, D.C.
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 a 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 and President and
Chief Executive Officer of Pulitzer Broadcasting Company. 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. 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 Directors two 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 March 1998. From 1992 to 1997, at various
times Mr. Ganzi served as Hearst's Senior Vice President, Chief Financial
Officer and Chief Legal Officer. From March 1995 until August 1999, he also
held the position of Group Head for 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 Gentiva Health Services, Inc.
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 and a
Director of Juniper Networks Inc. Mr. Hearst is a cousin of George R. Hearst,
Jr. and Virginia Hearst Randt.
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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 successor
company to Pulitzer's newspaper operations. Prior to the consummation of the
Pulitzer Merger, Mr. Pulitzer served as Chairman of the Board, President and
Chief Executive Officer of Pulitzer. He also served as Vice Chairman of the
Board of Pulitzer from April 1984 through March 1986 and as President and
Chief Operating Officer of Pulitzer from April 1979 through March 1984. Mr.
Pulitzer was nominated by the Board of Directors of the Company and appointed
to serve as a Director in accordance with the Board Representation Agreement,
pursuant to which the Company agreed to cause the nomination for election to
the Company's Board of Directors two individuals designated by the Pulitzer
Parties.
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.
Virginia Hearst Randt has served as a Director of the Company since the
consummation of the Hearst Transaction on August 29, 1997. Ms. Randt has
served as a Director of Hearst since September 1990. She is a cousin of George
R. Hearst, Jr. and William Randolph Hearst III.
Meetings and Committees of the Board of Directors
The Board of Directors held a total of seven meetings in 1999. 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. 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. The Audit Committee consists of Ken J. Elkins, David Pulver
and Caroline L. Williams. Mr. Pulver serves as Chair of the Audit Committee.
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 14 times during 1999.
Compensation Committee. The Compensation Committee consists of Frank A.
Bennack, Jr., Michael E. Pulitzer, David Pulver and Caroline L. Williams. Ms.
Williams serves as Chair of the Compensation Committee. 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 1999.
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 once in 1999.
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.
7
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Compensation Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 1999, the Compensation Committee
consisted of Frank A. Bennack, Jr., Michael E. Pulitzer, David Pulver and
Caroline L. Williams. John G. Conomikes, who served as the President and Co-
Chief Executive Officer of the Company until June 1999, serves on the Finance
Committee of Hearst, which functions as a compensation committee. The Company
reimbursed Hearst under the Services Agreement described under "Certain
Relationships and Related Transactions" for the services of Mr. Conomikes
until his retirement in June 1999. 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 and a Director of The Chase
Manhattan Bank ("Chase") and The Chase Manhattan Corporation. Upon
consummation of the Hearst Transaction, the Company entered into a series of
agreements with Hearst. Chase is the lead agent bank under the $1 billion
credit facility and the $250 million credit facility that the Company entered
into on April 12, 1999. See "Certain Relationships And Related Transactions."
David J. Barrett, the President and Co-Chief Executive Officer of the Company,
is a Director of Hearst. Prior to the consummation of the Pulitzer Merger, Mr.
Pulitzer served as Chairman of the Board, President and Chief Executive
Officer of Pulitzer.
8
<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*...................... 64 Chairman of the Board of Directors and
Co-Chief Executive Officer
David J. Barrett*................ 51 President and Co-Chief Executive
Officer
Anthony J. Vinciquerra........... 45 Executive Vice President and Chief
Operating Officer
Harry T. Hawks................... 46 Executive Vice President and Chief
Financial Officer
Terry Mackin..................... 43 Executive Vice President
Philip M. Stolz.................. 52 Senior Vice President
</TABLE>
- --------
* Member of the Board of Directors. See "Election of Directors Proposal--Board
of Directors" and "General Information--Directors Continuing in Office" for
additional information.
Anthony J. Vinciquerra has served as Executive Vice President since joining
the Company in August 1997 and as Chief Operating Officer since June 1999. He
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.
Harry T. Hawks has served as Executive Vice President and Chief Financial
Officer of the Company since February 2000 and as Senior Vice President and
Chief Financial Officer of the Company from the consummation of the Hearst
Transaction on August 29, 1997 until February 2000. Prior to this time and
since August 1994, he served as Chief Financial Officer, Assistant Secretary
and Treasurer of the Company. 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 Argyle I, Mr. Hawks
co-founded Cumberland Capital Corporation, a merchant banking firm, where he
served as President and as a Director from 1987 until 1992.
Terry Mackin has served as Executive Vice President of the Company since May
1999. Prior to his appointment as Executive Vice President, Mr. Mackin served
as President and Chief Operating Officer of StoryFirst Communications, Inc.
from January 1997 to May 1999, where he was responsible for the design and
management of several rapidly growing Eastern European media properties,
including two essential television networks, eight radio stations and eight
television stations in Russia and the Ukraine. Prior to joining StoryFirst,
Mr. Mackin served as Executive Vice President and Chief Operating Officer of
Ellis Communications from July 1994 to September 1996.
Philip M. Stolz has served as Senior Vice President of the Company since
December 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.
9
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth certain information for the fiscal years
ended December 31, 1999, 1998 and 1997 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, 1999:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------------------- ------------
Securities
Name and Other Annual Underlying All Other
Principal Fiscal Salary Compensation Options Compensation
Position Year ($ )Bonus ($) ($) (1) (#) ($)(2)
--------- ------ -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Bob Marbut.............. 1999 $715,000 -- $ 56,521 -- $4,800
Chairman of the Board 1998 650,000 $182,000 49,843 -- 4,800
of 1997 383,333 225,000 49,967 300,000 3,250
Directors and Co-Chief
Executive Officer
David J. Barrett........ 1999 657,500 -- 33,416 35,000 4,800
President, Co-Chief 1998 550,000 154,011 26,801 -- 4,800
Executive Officer and 1997 173,333 50,661 11,887 230,000 1,583
Director(3)
John G. Conomikes....... 1999 357,500 -- 28,261 -- 4,800
Director(3)(4) 1998 650,000 182,000 49,843 -- 4,800
1997 216,667 34,667 6,750 -- 1,583
Anthony J. Vinciquerra..
Executive Vice 1999 525,000 -- 22,754 40,000 4,800
President and Chief 1998 450,000 124,394 60,343 -- 4,800
Operating Officer(3) 1997 150,000 100,000 4,733 150,000 --
Harry T. Hawks..........
Executive Vice 1999 300,000 -- 25,192 -- 4,800
President and Chief 1998 260,000 73,739 20,813 -- 4,800
Financial Officer 1997 183,333 65,376 247,298 100,000 3,250
Terry Mackin............ 1999 333,333 191,667 127,807 100,000 --
Executive Vice 1998 -- -- -- -- --
President(5) 1997 -- -- -- -- --
Philip M. Stolz......... 1999 380,000 -- 137,783 -- 4,800
Senior Vice 1998 226,000 104,763 15,530 80,000 4,800
President(3) 1997 71,667 40,000 5,652 40,000 1,583
</TABLE>
- --------
(1) Amounts in this column consist of the following: (i) dollar values of
perquisites consisting of premiums for life insurance, automobile
allowances, tax preparation expense reimbursements, club membership
reimbursements and moving expense reimbursements, and (ii) payments for
tax gross-ups.
10
<PAGE>
<TABLE>
<CAPTION>
Perquisites
--------------------------------------------------------------------
Life Tax Club Moving Tax
Insurance Auto Preparation Membership Expense Gross-Up
Premiums Allowance Fees Reimbursement Reimbursement Payment
($) ($) ($) ($) ($) ($)
--------- --------- ----------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Bob Marbut.............. 1999 $32,163 $12,000 $9,000 $ 3,358 -- --
1998 23,235 12,000 9,000 5,608 -- --
1997 20,367 10,400 6,750 -- $ 6,368 $ 6,082
David J. Barrett........ 1999 8,343 12,000 -- 13,073 -- --
1998 3,080 12,000 -- 11,521 -- --
1997 1,527 4,496 -- -- -- --
John G. Conomikes(6).... 1999 -- -- -- -- -- --
1998 -- -- -- -- -- --
1997 6,750 -- -- -- -- --
Anthony J. Vinciquerra.. 1999 7,533 12,000 -- 3,221 -- --
1998 2,200 12,000 -- 5,412 30,444 10,287
1997 733 4,000 -- -- -- --
Harry T. Hawks.......... 1999 5,660 10,800 3,000 5,732 -- --
1998 2,200 10,800 3,000 4,813 -- --
1997 1,254 7,600 2,250 -- 120,813 115,381
Terry Mackin(5)......... 1999 6,487 8,000 -- 6,368 61,239 45,713
1998 -- -- -- -- -- --
1997 -- -- -- -- -- --
Philip M. Stolz(3)...... 1999 5,330 10,800 -- 496 69,378 51,779
1998 3,986 7,308 -- 4,236 -- --
1997 1,000 2,914 -- 1,738 -- --
</TABLE>
- --------
(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) The compensation amounts paid in 1997, reflect the compensation paid by
the Company to Messrs. Barrett, Vinciquerra and Stolz, and to Hearst for
the services of Mr. Conomikes, from August 29, 1997 until December 31,
1997. Prior to August 29, 1997, Messrs. Barrett, Vinciquerra and Stolz
were employed by Hearst's broadcast group. The other named executive
officers were either hired by the Company after the consummation of the
Hearst Transaction on August 29, 1997 or were employed by Argyle
Television, Inc. prior to August 29, 1997.
(4) Mr. Conomikes served as President and Co-Chief Executive Officer of the
Company from August 1997 until June 1999. Mr. Conomikes, however, was not
an employee of the Company. Hearst provided Mr. Conomikes' services to the
Company pursuant to the Services Agreement described under "Certain
Relationships and Related Transactions" and the Company reimbursed 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. The amounts charged to the Company for Mr. Conomikes'
services in 1999 equal one-half of Mr. Marbut's compensation for 1999.
(5) Reflects compensation and perquisites paid to Mr. Mackin from May 1, 1999
(the date he became an officer of the Company) to December 31, 1999. The
bonus amounts paid to Mr. Mackin in 1999 reflect a one-time signing bonus
paid in connection with the commencement of his employment and a 1999
guaranteed bonus paid pursuant to his employment agreement.
(6) Under the terms of the Services Agreement, the Company reimbursed Hearst
for the services of Mr. Conomikes in an amount equal to Mr. Marbut's
annual compensation. Since Mr. Conomikes retired in June 1999, the amount
shown for Mr. Conomikes in the Summary Compensation Table under the "Other
Annual Compensation" column equals one-half of Mr. Marbut's total for this
column. For 1997, the life insurance premiums paid on behalf of Mr.
Conomikes 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.
11
<PAGE>
Pension Plans
The table below sets forth information with respect to the Company's tax-
qualified pension plan (the "Tax-Qualified Plan") and the supplemental
retirement plan (the "Supplemental Plan," and together with the Tax-Qualified
Plan, the "Pension Plans"). The Pension Plans cover all of the named executive
officers, except for Mr. Mackin who is not yet eligible for the Pension Plans.
Mr. Conomikes, who served as Co-Chief Executive Officer and President of the
Company until June 1999, is covered by The Hearst Corporation Pension Plan.
The Pension Plans are designed to provide a benefit of 1 1/2% for each year of
credited service (which excludes the first year of employment) multiplied by
the average annual salary (as defined in the Pension Plans) for the
participant's five highest consecutive full calendar years, and has a 40 year
maximum. For the Tax-Qualified Plan, the highest amount of compensation that
may be considered under federal law with respect to determining pension
benefits is $160,000 as of December 31, 1999, 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). However, on January 1,
1999 the Company adopted the Supplemental Plan which provides the benefits
that would have been payable to the executive officers under the Tax-Qualified
Plan, except for the application of certain legal limits.
<TABLE>
<CAPTION>
Years of Credited Service With The Company
-----------------------------------------------------
Average Annual
Salary For
Five Highest
Consecutive Full
Calendar Years 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
150,000............. 33,750 45,000 56,250 67,500 78,750 90,000
200,000............. 45,000 60,000 75,000 90,000 105,000 120,000
250,000............. 56,250 75,000 93,750 112,500 131,250 150,000
300,000............. 67,500 90,000 112,500 135,000 157,500 180,000
400,000............. 90,000 120,000 150,000 180,000 210,000 240,000
500,000............. 112,500 150,000 187,500 225,000 262,500 300,000
600,000............. 135,000 180,000 225,000 270,000 315,000 360,000
700,000............. 157,500 210,000 262,500 315,000 367,500 420,000
</TABLE>
Messrs. Marbut, Vinciquerra and Hawks became participants in the Tax-
Qualified Plan effective as of January 1, 1998 and in the Supplemental Plan
effective as of January 1, 1999 and have three years of credited service
thereunder. Messrs. Barrett and Stolz became participants in the Tax-Qualified
Plan effective August 29, 1997 and in the Supplemental Plan effective as of
January 1, 1999 and have 16 and eight years, respectively, of credited service
thereunder. The Pension Plans cover the salary and bonus of the executive
officers, as indicated in the Summary Compensation Table. The benefits under
the Pension Plans 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.
12
<PAGE>
Option Grants In Last Fiscal Year
The following table sets forth information concerning stock options granted
during the fiscal year ended December 31, 1999, pursuant to the Company's 1997
Stock Option Plan (the "Plan").
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Number of % of Total Stock Price
Securities Options Appreciation for
Underlying Granted to Option Term (2)
Options Employees in Exercise or Base Expiration ---------------------
Name Granted (1) Fiscal Year Price ($/SH) Date 5% ($) 10% ($)
---- ---------- ------------ ---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bob Marbut.............. -- -- -- -- -- --
David J. Barrett........ 35,000 6.1 $26.8125 6/25/09 $ 590,178 $1,495,628
John G. Conomikes....... -- -- -- -- -- --
Anthony J. Vinciquerra.. 40,000 6.9 $26.8125 6/25/09 $ 674,489 $1,709,289
Harry T. Hawks.......... -- -- -- -- -- --
Terry Mackin............ 100,000 17.3 $26.0625 3/19/09 $1,639,057 $4,153,691
Philip M. Stolz......... -- -- -- -- -- --
</TABLE>
- --------
(1) All options granted in 1999 to the named executive officers were granted
pursuant to the Plan. One-half of the options granted to Messrs. Barrett
and Vinciquerra vest on December 31, 2000, and one-half of the options
granted to Mr. Mackin vest on December 31, 2001. The other one-half of the
options granted to Messrs. Barrett and Vinciquerra vest on December 31,
2007, and the other one-half of the options granted to Mr. Mackin vest on
December 31, 2008, each subject to earlier vesting in one-third increments
when the market price of the Company's Series A Common Stock reaches $31
per share, $37 per share and $43 per share, in each case for a period of
10 consecutive trading days. In addition, options granted under the Plan
are subject to earlier vesting in the event of a Change of Control or
similar transaction as provided in the Plan. If a participant's employment
or service as a non-employee director is terminated by the Company for
"cause" (as defined in the Plan) or was voluntary by a participant (other
than voluntary termination in connection with retirement upon or after
reaching age 65), any such participant's options automatically will be
forfeited and unexercisable. If the participant was terminated because of
death, disability or retirement upon or after reaching age 65, or the
participant is terminated by the Company "without cause," a stock option
that is exercisable on the date of termination may be exercised at any
time prior to one year from the date of such termination. If a participant
is terminated with the approval of the Company's Board of Directors, the
Board, in its discretion, may accelerate or otherwise modify the vesting
conditions applicable to any then unexercisable options, extend the
exercise period following termination of employment (but in no event
beyond the original exercise term of the grant) or modify the vesting
terms and extend the exercise term of the grant. The maximum term of the
options is 10 years.
(2) Calculated based on the fair market value of the Company's Series A Common
Stock on the date of grant. The amounts represent only certain assumed
rates of appreciation. Actual gains, if any, on stock option exercises and
common stock holdings cannot be predicted, and there can be no assurance
that the gains set forth in the table will be achieved.
13
<PAGE>
Aggregated Option Exercises In
Last Fiscal Year And Fiscal Year-End Option Values
The following table sets forth information concerning the value as of
December 31, 1999 of unexercised options held by each of the executive
officers named in the Summary Compensation Table. None of the executive
officers named in the Summary Compensation Table exercised options during the
fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-The-Money
Options at Options at
FY-End(#) FY-End ($)(1)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ---- -------------- ---------------
<S> <C> <C>
Bob Marbut...................................... 50,000/100,000 $ 6,250/$12,500
David J. Barrett................................ 76,667/188,333 $ 9,583/$19,167
John G. Conomikes............................... -- / -- -- / --
Anthony J. Vinciquerra.......................... 50,000/140,000 $ 6,250/$12,500
Harry T. Hawks.................................. 33,334/66,666 $ 4,167/$8,333
Terry Mackin.................................... -- /100,000 -- /$56,250
Philip M. Stolz................................. 26,668/93,332 $10,834/$49,166
</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 $26.625 per share of shares of the Series A
Common Stock on the NYSE on December 31, 1999, 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 his employment agreement, Mr.
Marbut is entitled to an initial base salary of $715,000 for the calendar year
2000 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 2000 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
his employment agreement). Mr. Marbut may terminate his employment voluntarily
with "good reason," or "without good reason" (in each case, as defined in his
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 his employment agreement or one year.
Mr. Marbut's 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, 2000, options to acquire 33 1/3% of such shares become
exercisable upon such termination.
Mr. Marbut's 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 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 his employment agreement.
14
<PAGE>
As of January 1, 1999, the Company entered into employment agreements with
each of Messrs. Barrett, Vinciquerra and Hawks for a term commencing on
January 1, 1999 and ending on December 31, 2000 (except for Mr. Barrett's
employment agreement, which ends on December 31, 2001). On January 1, 1999,
the Company entered into an employment agreement with Mr. Stolz for a term
commencing on January 1, 1999 and ending on December 31, 2000. On February 15,
1999, the Company entered into an employment agreement with Mr. Mackin for a
term commencing on May 1, 1999 and ending on December 31, 2001. Mr. Conomikes,
who retired on June 30, 1999, was not an employee of the Company. Hearst
provided 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 an annual base salary and to be considered annually for a bonus.
The employment agreements for each of these executive officers sets forth an
annual target bonus. The annual base salary and target bonus as a percentage
of annual salary for each of such executive officers for the year 2000 is as
follows: Mr. Barrett-$715,000, 50%; Mr. Vinciquerra-$600,000, 50%; Mr. Hawks-
$400,000, 40%; Mr. Mackin-$550,000, 40%; and Mr. Stolz-$400,000, 40%.
Additionally, Mr. Mackin's employment agreement guarantees him a minimum bonus
of $110,000 and $120,000 for 2000 and 2001, respectively.
The employment agreements terminate upon the death of the executive officer
and may also 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 his employment agreement or one year.
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. Mackin is not yet eligible to participate in
the Savings Plan. Mr. Marbut, Mr. Barrett and the three other most highly
compensated executive officers of the Company participate in the Savings Plan.
Mr. Conomikes, who retired from the Company in June 1999, participates in
Hearst's Savings Plan.
15
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Chase. Chase is the lead agent bank under the $1 billion credit facility and
the $250 million credit facility that the Company entered into on April 12,
1999. The new credit facilities mature on April 12, 2004 and April 12, 2003,
respectively and borrowings thereunder bear interest at an applicable margin
that varies based on the Company's ratio of total debt to operating cash flow.
The Company is required to pay an annual commitment fee based on the unused
portion of the new credit facilities. 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
27.4% of the Company's Series A Common Stock, constituting approximately 59.7%
of the Company's total outstanding common stock.
Management Services 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 WMOR-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 WMOR-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 Services
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 Television Station 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 Television Station 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 1999, Hearst paid the Company an
aggregate amount of $4,843,000 pursuant to the Management Services Agreement.
Television Station Option Agreement. Hearst and the Company are parties to a
Television Station Option Agreement pursuant to which Hearst has granted to
the Company an option to acquire WMOR-TV, and Hearst's interests (which
interests include an option to acquire the station) with respect to KCWE-TV
(together with WMOR-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
16
<PAGE>
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 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 1999 pursuant to the Studio
Lease Agreement an aggregate amount of $664,000.
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 2000, 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. Until
his retirement in June 1999, the Company also reimbursed Hearst under the
Services Agreement for the services of Mr. Conomikes. The amount charged to
the Company for Mr. Conomikes' services in 1999 was based on a pro rata amount
of the base salary and bonus for Mr. Marbut contained in Mr. Marbut's
employment agreement (which amount was charged to the Company by Hearst
pursuant to the Services Agreement). The term of the Services Agreement
expires on December 31, 2000, but is thereafter renewable, pursuant to the
provision of the Services Agreement that allows for one year renewals unless
terminated on six months' prior 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
$3,330,000 to Hearst pursuant to the Services Agreement in 1999.
17
<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 (the "Charter") adopted by the Board of Directors, the Compensation
Committee reviews and approves executive compensation packages for the Co-
Chief Executive Officers, 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 1999 were a (i) base salary and
(ii) bonus opportunity.
Base Salary. The salaries of the executive officers of the Company were
established in employment agreements. These employment agreements provided for
base salary and target bonus levels.
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 employment
agreements. These bonus levels were established based on the factors described
for setting the salary levels. The Company did not pay bonuses to the
executive officers for 1999 (except for a one-time signing bonus paid to Mr.
Mackin in connection with the commencement of his employment and a 1999
guaranteed bonus paid to Mr. Mackin pursuant to his employment agreement), due
to the financial performance of the Company in 1999.
CEO Compensation
The compensation for Mr. Marbut, the Co-Chief Executive Officer of the
Company, and Mr. Barrett, the President and Co-Chief Executive Officer of the
Company (since June 1999), was established in their employment agreements with
the Company. The Compensation Committee established the levels of the various
components of compensation under these agreements (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 executive officers in the employment agreements.
18
<PAGE>
Under the terms of a Services Agreement, the Company reimbursed Hearst for
the services of Mr. Conomikes, the Co-Chief Executive Officer of the Company
until June 30, 1999. The amount of such reimbursement for 1999 equaled
$390,561, and was tied to one-half of the amount of Mr. Marbut's total
compensation for 1999.
$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 1999.
The Company's 1997 Stock Option Plan establishes a limit on the maximum
number of shares of the Company's 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 Stock 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.
Michael E. Pulitzer
David Pulver
19
<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 24, 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 Corporation, Sinclair Broadcast Group, Inc. and Young
Broadcasting, Inc.
CUMULATIVE TOTAL RETURN
Based on initial investment of $100 beginning October 24, 1995
with dividends reinvested
[LINE GRAPH]
24-Oct- 31-Dec- 31-Dec- 31-Dec- 31-Dec- 31-Dec-
95 95 96 97 98 99
------- ------- ------- ------- ------- -------
Hearst Argyle Television...... $100.00 $102.94 $144.12 $175.00 $194.12 $156.62
S&P 500....................... $100.00 $105.53 $129.76 $173.05 $222.51 $269.34
Custom Composite Index
(3 Stocks).................... $100.00 $ 88.82 $103.39 $147.69 $137.69 $104.49
The 3-Stock Custom Composite Index consists of Granite Broadcasting
Corporation, Sinclair Broadcast Group, Inc. and Young Broadcasting, Inc.
20
<PAGE>
PRINCIPAL STOCKHOLDERS
As of the Record Date, the Company had issued and outstanding and entitled
to vote at the Annual Meeting, 51,492,552 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 March 31, 2000.
<TABLE>
<CAPTION>
Series A Common Stock Series B Common Stock
Beneficial Ownership Beneficial Ownership
(2) (2)
--------------------- -------------------------
Percent of Percent of
Name and Address (1) Number Series(%) Number Series(%)
-------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Bob Marbut(3)(4).............. 955,461 1.9% -- --
John G. Conomikes............. 20,000 * -- --
David J. Barrett(5)........... 80,624 * -- --
Anthony J. Vinciquerra(6)..... 63,204 *
Harry T. Hawks(3)(7).......... 137,983 * -- --
Terry Mackin.................. -- -- -- --
Philip M. Stolz(8)............ 27,357 *
Frank A. Bennack, Jr.......... 25,000 * -- --
Ken J. Elkins................. 29,550 *
Victor F. Ganzi............... 45,000 * -- --
George R. Hearst, Jr.......... 15,000 * -- --
William Randolph Hearst
III(9)....................... 14,000 * -- --
Gilbert C. Maurer............. 10,000 * -- --
Michael E. Pulitzer(10)....... 5,399,399 10.5%
David Pulver(3)(11)........... 86,656 * -- --
Virginia Hearst Randt(12)..... 4,000 * -- --
Caroline L. Williams(11)...... 32,646 * -- --
All Company directors and
executive officers as a group
(17 persons)(13)............. 6,945,880 13.5% -- --
Hearst Broadcasting,
Inc.(14)..................... 14,093,942 27.4% 41,298,648(15) 100%
David E. Moore(10)............ 6,032,144 11.7% -- --
Emily Rauh Pulitzer(10)....... 10,344,999 20.1% -- --
</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.
(4) Includes 50,000 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
21
<PAGE>
(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 33,334 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(8) Includes 26,668 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(9) Includes 4,000 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 20,000 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(12) Includes 4,000 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(13) Includes 264,669 shares of Series A Common Stock issuable pursuant to
presently exercisable stock options.
(14) The Hearst Family Trust is the sole common stockholder of Hearst, which
is the sole stockholder of Hearst Holdings, which 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, Hearst
Holdings and Hearst Broadcasting is 959 Eighth Avenue, New York, New York
10019.
(15) 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.
22
<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
on a timely basis 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.
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, 1999 (including the exhibits, financial statements and the
schedules thereto) required to be filed with the SEC pursuant to Rule 13a-1
under the Exchange Act will be provided, without charge, from Tom Campo,
Manager, Investor Relations, 888 Seventh Avenue, New York, New York 10106.
STOCKHOLDER PROPOSAL DEADLINES
Stockholder proposals to be presented at the 2001 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 10, 2000. Such proposals must comply with the Bylaws of the Company
and the requirements of Regulation 14A of the Act. The Company may solicit
proxies to use discretionary authority to vote on any stockholder proposal
received after February 23, 2001.
INDEPENDENT AUDITORS
The Company has selected Deloitte & Touche LLP ("Deloitte & Touche") as its
independent auditors. Representatives of Deloitte & Touche will be present at
the 2000 Annual Meeting to answer questions and will have the opportunity to
make a statement if they desire to do so.
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,
/S/ Bob Marbut
Bob Marbut,
Chairman and Co-Chief Executive
Officer
Dated: April 10, 2000
23
<PAGE>
Appendix A
PROXY PROXY
HEARST-ARGYLE TELEVISION, INC.
This Proxy is solicited on behalf of the Board of Directors of
Hearst-Argyle Television, Inc.
P
The undersigned hereby appoints Bob Marbut, David J. Barrett and Harry
R T. Hawks, 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
O 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,
X Inc., held of record by the undersigned on March 31, 2000, at the Annual
Meeting of Stockholders to be held on May 9, 2000, or any adjournment
Y thereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
(continued and to be signed on reverse side)
<PAGE>
<TABLE>
<CAPTION>
HEARST-ARGYLE TELEVISION, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
<S> <C> <C> <C> <C> <C> <C>
Item 1. ELECTION OF DIRECTOR: For Withhold Item 2. At the discretion of For Against Abstain
Class I Series A [ ] [ ] such Proxies, on any [ ] [ ] [ ]
(Term expires in 2002) other matter that
-Caroline L. Williams properly may come
before the meeting or
any adjournment
thereof.
Date: ________________________, 2000
____________________________________________
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.
Item 1 was 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 and 2.
</TABLE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
