THE DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code limits the deductibility by us
of cash compensation in excess of $1 million paid to the chief executive officer
and the four highest compensated executive officers during any taxable year,
unless such compensation meets certain requirements. We believe the 1996 Plan
complies with the rules under Section 162(m) for treatment as performance-based
compensation, allowing us to fully deduct compensation paid to executives under
the plan. We believe the compensation awarded under the Bonus Plan does not
fully comply with the rules under Section 162(m), and therefore certain
executive compensation paid in 1999 will be non-deductible.
The Compensation Committee
Harold Gaba
Alan F. Horn
Alejandro Rivera
11
SUMMARY TABLE OF EXECUTIVE COMPENSATION
The following table shows the compensation we paid or accrued during 1999,
1998 and 1997 to each of our executive officers (collectively, the "Named
Executive Officers").
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------------------- ------------
SECURITIES
CASH OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUSES COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
--------------------------- -------- -------- -------- ------------ ------------ ------------
A. Jerrold Perenchio(a) ...... 1999 None None None None None
Chairman of the Board and 1998 None None None None None
Chief Executive Officer 1997 300,000 None None None None
Henry Cisneros(b) ............ 1999 600,000 600,000 None 75,000 None
President and Chief 1998 493,205 500,000 1,240,000(c) 100,000 None
Operating Officer 1997 374,359 400,000 None 300,000 1,000,000(d)
George W. Blank .............. 1999 550,000 600,000 None 75,000 9,600(e)
Executive Vice President and 1998 550,000 550,000 2,480,000(c) 100,000 9,600(e)
Chief Financial Officer 1997 500,000 500,000 None 100,000 4,800(e)
Robert V. Cahill(f) .......... 1999 500,000 600,000 None 75,000 None
Vice President and Secretary 1998 500,000 500,000 3,306,677(c) 100,000 None
1997 500,000 500,000 None 100,000 None
Ray Rodriguez ................ 1999 650,000 750,000 None 100,000 9,600(e)
President and Chief 1998 650,000 650,000 3,306,677(c) 100,000 9,600(e)
Operating Officer of the 1997 600,000 600,000 None 100,000 4,800(e)
Network
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(a) Mr. Perenchio's services were provided pursuant to the informal arrangement
described in "Employment Agreements and Arrangements." Mr. Perenchio was not
compensated for his services in any employment capacity with Univision
during the past four years except from October 1996 through March 1997.
(b) Mr. Cisneros joined Univision on January 27, 1997.
(c) Reflects fair market value of stock awarded on May 27, 1998 as bonuses and
required tax withholding. See "Compensation Committee Report on Executive
Compensation--Bonus Compensation" and "Security Ownership of Certain
Beneficial Owners and Management."
(d) Sign-on bonus paid February 1, 1997.
(e) Matching contribution pursuant to 401(k) Plan. See "401(k) Savings and
Thrift Plan."
(f) The services of Mr. Cahill in 1999, 1998 and 1997 were provided by
Mr. Perenchio pursuant to the informal arrangement among Mr. Perenchio,
Televisa and Venevision described in "Employment Agreements and
Arrangements." Mr. Cahill was paid by Mr. Perenchio a salary of $500,000 in
1999, 1998, and 1997, respectively, for all of the services he performed for
us and one-half of such salary was charged to us. We paid a bonus of
$600,000 earned in 1999 and $500,000 earned in each of 1998 and 1997 to
Mr. Cahill. See "Employment Agreements and Arrangements."
12
EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
Effective January 27, 1997, we entered into a three-year employment
agreement with Henry Cisneros. Effective February 12, 1997, Mr. Cisneros was
elected President and Chief Operating Officer in accordance with the terms of
his employment agreement. Mr. Cisneros' base compensation was $400,000 in 1997,
$500,000 in 1998 and $600,000 in 1999. He also received a signing bonus of
$1 million in 1997. On January 1, 2000, we amended his agreement to extend the
term through December 31, 2002. Mr. Cisneros' base compensation will be $600,000
in 2000, 2001 and 2002.
On January 1, 2000, Messrs. Blank and Rodriguez entered into amended
employment agreements with us, each of which expires on December 31, 2002.
Mr. Blank's base salary under his agreement was $500,000 for 1997 and $550,000
for 1998 and 1999; and will be $600,000 for 2000, 2001 and 2002.
Mr. Rodriguez's base salary under his agreement was $600,000 for 1997 and
$650,000 for 1998 and 1999; and will be $700,000 for 2000 and $800,000 for 2001
and 2002. In addition, based upon an annual review of each individual's
performance and our results of operations and our prospects, we may grant
Mr. Cisneros, Mr. Blank and Mr. Rodriguez bonuses.
The employment agreements for Messrs. Cisneros, Blank and Rodriguez may be
terminated for cause, upon death or disability or without cause. In the case of
a termination without cause, the employee shall, subject to certain conditions
regarding confidentiality, trade secrets and competitive activities, be entitled
to receive his base salary for the remainder of his employment agreement.
Pursuant to an informal arrangement among Mr. Perenchio, Televisa and
Venevision, the services of Messrs. Cahill and Perenchio were provided by
Mr. Perenchio in 1999, 1998 and 1997. In each of 1999, 1998 and 1997,
Mr. Cahill was paid $500,000 by Mr. Perenchio for services as a Univision
executive officer and one-half was charged to us. In addition, we paid a bonus
for 1999 of $600,000, and $500,000 for each of 1998 and 1997 to Mr. Cahill.
Mr. Perenchio serves as Chairman of the Board and Chief Executive Officer
without compensation.
401(k) SAVINGS AND THRIFT PLAN
We presently have a retirement savings plan (the "401(k) Plan") covering all
eligible employees who have completed one year of service. The 401(k) Plan
allows all employees to defer up to 15% of the total eligible compensation that
would otherwise be paid to the employee, which deferral in 1999 could not exceed
$10,000. Employee contributions are invested in selected mutual funds and a
unitized fund of our Class A Common Stock according to the direction of the
employee. The 401(k) Plan permits us each year to match up to the first 6% of
such employee's eligible compensation contributed to the plan, subject to
certain limitations imposed by the Internal Revenue Service. During 1999 and
1998, we matched 100% of the first 6% of employee's eligible compensation
contributed to the 401(k) Plan. During 1997, we offered matching contributions
to each eligible employee of 75% of the first 4% of an employee's contribution.
1996 PERFORMANCE AWARD PLAN
We established the 1996 Plan to attract, reward and retain talented and
experienced officers, other key employees and certain other eligible persons
("Eligible Persons") who may be granted awards from time to time by the
Compensation Committee.
Awards under the 1996 Plan may be in the form of nonqualified and incentive
stock options, stock appreciation rights ("SARs"), restricted stock, performance
shares, stock bonuses and cash bonuses. Awards may be granted singly or in
combination with other awards, consistent with the terms of the 1996 Plan.
Awards under the 1996 Plan generally are nontransferable by a holder (other than
by will or the laws of descent and distribution) and rights thereunder generally
will be exercisable, during the holder's lifetime, only by the holder, subject
to such exceptions as (consistent with applicable legal considerations) may be
authorized from time to time by the Compensation Committee.
13
Unless the Compensation Committee determines before a change in control
event that benefits under awards made under the 1996 Plan will not accelerate or
the Compensation Committee provides otherwise in an award agreement, then upon a
change in control event each option and SAR will become immediately exercisable,
restricted stock will immediately vest free of restrictions and the number of
shares, cash or other property covered by each award will be issued to the
grantee of such award. A change in control event under the 1996 Plan is defined
generally to include the acquisition of 50% or more of our outstanding voting
securities by any person other than a person who is the beneficial owner of more
than 20% of the Class A Common Stock at the time the 1996 Plan was adopted, a
transfer of substantially all of our assets, our dissolution or liquidation, or
a merger, consolidation or reorganization whereby stockholders immediately
before such event own less than 50% of the outstanding voting securities of the
surviving entity after such event.
The maximum term of options, SARs and other rights to acquire Class A Common
Stock granted under the 1996 Plan is 10 years after the initial date of award.
No award under the 1996 Plan can be made after September 20, 2006.
No more than 11,000,000 shares of Class A Common Stock may be issued in
respect of awards under the 1996 Plan (subject to certain anti-dilution
adjustments). The number of shares of Class A Common Stock subject to options
and SARs granted to any individual in any calendar year is limited to 1,000,000
and the number of shares of Class A Common Stock that may be subject to awards
granted in any calendar year may not exceed 2,750,000 (excluding any Eligible
Person hired in that year as our chief executive officer).
Unless approved by the Board, no award may vest more quickly than 25% per
year other than in the case of options issued in connection with our initial
public offering or awards granted in lieu of cash bonuses, which may vest at the
rate of 50% per year.
If the stockholders vote to adopt the Univision Communications Inc. 1996
Performance Award Plan (Amended and Restated as of February 16, 2000) (the
"Amended 1996 Plan"), then the Amended 1996 Plan will replace the 1996 Plan.
PROPOSED ADOPTION OF THE 1996 PERFORMANCE AWARD PLAN
(AMENDED AND RESTATED AS OF FEBRUARY 16, 2000)
At the Annual Meeting, stockholders will be asked to approve the Amended
1996 Plan. The Board approved the Amended 1996 Plan, effective February 16,
2000, subject to the receipt of stockholder approval, based, in part, on its
belief that the Amended 1996 Plan promotes the interests of Univision and its
stockholders and that an insufficient number of shares of Class A Common Stock
remains available under the limits of the 1996 Plan to adequately provide for
future incentives. The Amended 1996 Plan, if approved by the stockholders, will
authorize the issuance or delivery of up to 18,600,000 shares of Class A Common
Stock.
As of March 1, 2000, 8,062,600 shares of Class A Common Stock remained
subject to awards then outstanding under the 1996 Plan and an additional 837,750
shares remained available for additional award grants under the 1996 Plan.
SUMMARY DESCRIPTION OF THE AMENDED 1996 PLAN
The principal terms of the Amended 1996 Plan are summarized below. The
following summary is qualified in its entirety by the full text of the Amended
1996 Plan, a copy of which is included as Appendix B to this proxy statement.
Capitalized terms used in this summary that are not otherwise defined have the
meaning set forth for them in the Amended 1996 Plan.
PURPOSE. The purpose of the Amended 1996 Plan is to promote the success of
Univision and its Subsidiaries (the "Company") and the interests of the
stockholders by attracting, motivating, retaining and
14
rewarding key employees by providing them with incentives to improve the
financial performance of the Company.
AWARDS. The Amended 1996 Plan authorizes incentive and nonqualified stock
options ("Options"), SARs, restricted stock and restricted stock unit awards,
performance share awards, stock bonuses and cash bonus awards.
ADMINISTRATION. The Compensation Committee of the Board will administer the
Amended 1996 Plan. It has the authority to determine the particular Eligible
Employees who will receive Awards, grant Awards to Eligible Employees (including
determining the number of shares to be awarded and the price at which the
securities will be awarded), approve the forms of Award Agreements, interpret
the Amended 1996 Plan, and perform other responsibilities enumerated in the
Amended 1996 Plan.
ELIGIBILITY. Only Eligible Employees can receive Awards under the Amended
1996 Plan. An Eligible Employee is an officer (whether or not a director) or key
employee of the Company, or any Other Eligible Person, as determined by the
Compensation Committee in its discretion. An Other Eligible Person is a
non-employee individual, consultant, advisor or agent (subject to certain
qualifications discussed in the Amended 1996 Plan) who renders or has rendered
bona fide services to the Company. These services do not include services in
connection with the offering or sale of securities of the Company in a capital
raising transaction.
Approximately 190 officers and key employees of the Company are considered
eligible under the Amended 1996 Plan at the present time, subject to the power
of the Compensation Committee to determine eligible persons to whom Awards will
be granted.
SHARES AVAILABLE FOR AWARDS. A maximum of 18,600,000 shares of Class A
Common Stock may be issued or delivered pursuant to Awards granted under the
Amended 1996 Plan. The maximum number of shares subject to Awards that may be
granted to any individual during any calendar year is 1,000,000 shares of
Class A Common Stock. Also, the maximum number of shares of Class A Common Stock
that may be subject to Awards granted in any calendar year is 2,750,000, unless
the Compensation Committee unanimously agrees otherwise. Furthermore, only
9,300,000 shares of Class A Common Stock may be the subject of Awards other than
Options.
As is customary in incentive plans of this nature, the number of shares of
Class A Common Stock available under the Amended 1996 Plan and the then
outstanding Awards, as well as exercise or purchase prices, performance targets
under certain performance-based Awards and share limits, are subject to
adjustment in the event of certain reorganizations, mergers, combinations,
consolidations, recapitalizations, reclassifications, stock splits, stock
dividends, asset sales or other similar events, or extraordinary dividends or
distributions of property to stockholders.
The Amended 1996 Plan does not limit the authority of the Board or the
Compensation Committee to grant awards or authorize any other compensation, with
or without reference to the Class A Common Stock, under any other plan or
authority.
LIMITATIONS ON EXERCISE AND VESTING OF AWARDS. For Options granted in lieu
of cash bonuses, such Options may vest at the rate of 50% a year. No other Award
may vest more quickly than 25% on each anniversary date of the grant, unless
authorized by unanimous consent of the Compensation Committee.
EMPLOYEE OPTIONS. An Option is the right to purchase shares of Class A
Common Stock at a future date at a specified price. An Option may either be an
Incentive Stock Option or a Nonqualified Stock Option. An Incentive Stock Option
means an Option that is intended to comply with Section 422 of the Internal
Revenue Code (the "Code"). A Nonqualified Stock Option includes Options
designated as such and Options that were intended as Incentive Stock Options but
failed to meet the applicable legal requirements thereof. An Incentive Stock
Option is subject to more restrictive conditions as discussed in
15
the Amended 1996 Plan and the Code. Also, an Incentive Stock Option is taxed
differently from a Nonqualified Stock Option, as described under "Federal Income
Tax Treatment" below.
Shares of Class A Common Stock used to satisfy the exercise price of an
Option will be valued at their Fair Market Value. The purchase price of any
shares of Class A Common Stock purchased on exercise of an Option will be paid
in full at the time of the purchase in cash or electronic funds transfer, by
certified or cashier's check, by delivery of previously owned shares of Class A
Common Stock, or in a combination of the preceding methods (subject to any
limitation imposed by the Compensation Committee). Options granted under the
Amended 1996 Plan expire no later than ten years after the Award Date. Unless
otherwise provided in an Award Agreement and subject to the provisions of the
Amended 1996 Plan, the Compensation Committee may adjust the vesting schedule,
or the term, of an Award by amendment, by waiver or by other legally valid
means.
STOCK APPRECIATION RIGHTS. A SAR is the right to receive an aggregate
amount determined by multiplying the number of shares to which the SAR is being
exercised by the excess of the Fair Market Value of a share of Class A Common
Stock on the date of exercise over the base price per share of Class A Common
Stock under the SAR. The Compensation Committee, in its sole discretion, will
determine whether payment will be in cash, in shares of Class A Common Stock, or
in a combination of the two. SARs may be granted in connection with other Awards
or independently.
RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS. A Restricted Stock Award
is an award for a number of shares of Class A Common Stock. A Restricted Stock
Unit Award is an award of units payable in shares of Class A Common Stock upon
the vesting of the units. For both Awards, the Compensation Committee will
specify the consideration, the conditions on vesting (which may include, among
others, the passage of time and specified performance objectives), and the
transfer and other restrictions (as established in the Amended 1996 Plan and the
applicable Award Agreement), for so long as such shares or units remain unvested
under the terms of the applicable Award Agreement. Both Awards will be granted
in the sole discretion of the Compensation Committee.
PERFORMANCE SHARE AWARDS, STOCK BONUSES AND CASH BONUS AWARDS. A
Performance Share Award is an award of a right to receive shares of Class A
Common Stock or other compensation granted in the sole discretion of the
Compensation Committee. This Award will be based upon an Award Agreement that
will specify the maximum number of shares of Class A Common Stock subject to the
Award, the consideration to be paid for such shares, the duration of the Award,
and the conditions upon which the delivery of the cash, shares or other property
will be based. The amount of cash, shares or other property that may be
delivered pursuant to such Award will be based upon the degree of attainment
over a performance cycle (not to exceed ten years) of measures of performance as
established by the Compensation Committee.
A Stock Bonus is an award, granted in the sole discretion of the
Compensation Committee, of shares of Class A Common Stock for no consideration
other than past services that are used to reward exceptional or special
services, contributions or achievements. The Compensation Committee may grant a
Stock Bonus independently or in lieu of a cash bonus. The Compensation Committee
may also establish a program of annual incentive awards that are payable in cash
(a "Cash Bonus Award") to Eligible Employees based upon the extent to which
performance goals are attained during the performance period. No Eligible
Employee may receive a Cash Bonus Award in excess of $20 million in any given
year.
In addition to these Awards, the Amended 1996 Plan provides that the
Compensation Committee may grant to executive officers performance-based awards
designed to satisfy the requirements for deductibility of compensation under
Section 162(m) of the Code ("Performance-Based Awards"). The performance
measurement for Performance-Based Awards is performance relative to
pre-established business criteria and specific performance targets over
performance periods neither shorter than one year nor longer than ten years.
These targets may be adjusted to mitigate the unbudgeted impact of material,
unusual or nonrecurring gains and losses, accounting changes or other
extraordinary events that were unforeseeable at
16
the time the targets were set. Any one executive officer cannot receive a
Performance-Based Award that exceeds 500,000 shares or $20 million in cash in
any fiscal year. Before a Performance-Based Award is paid to an executive
officer, the Compensation Committee must certify that the performance targets
have been satisfied.
EFFECT OF TERMINATION OF EMPLOYMENT. Options that are not yet exercisable
will generally terminate upon the date a Participant is no longer employed by
the Company. If a Participant's employment terminates for any reason
(resignation, dismissal, Retirement, Total Disability, or death), the Option, to
the extent it is exercisable at the date of termination of employment, is still
exercisable for a period of time as will be specified in the applicable Award
Agreement.
SARs granted concurrently or in tandem with an Option have the same
post-termination provisions and exercisability periods as the Options to which
they relate, unless the Compensation Committee provides otherwise. With respect
to any other Award, the Compensation Committee will establish a Participant's
rights and benefits in the event of a termination of employment and may make
distinctions based upon the cause of termination and the nature of the Award.
The Compensation Committee may also, in its discretion, increase the portion of
a Participant's Award available to the Participant in connection with a
Participant's termination of employment (other than discharge for cause).
ACCELERATION OF AWARDS; POSSIBLE EARLY TERMINATION OF AWARDS. Unless prior
to a Change in Control Event (an "Event") the Compensation Committee determines
that, upon the occurrence of an Event, benefits will not be accelerated or only
certain benefits will be accelerated, then generally upon an Event each Option
and SAR will become immediately exercisable, Restricted Stock will vest free of
restrictions, and the number of shares, cash or other property covered by each
Performance Share Award will be issued to the Participant. If any Option or
other right to acquire Class A Common Stock has been fully accelerated but not
exercised prior to a dissolution of the Corporation, an extraordinary dividend
or other extraordinary distribution, or other like event as discussed in
Section 6.2(a) of the Amended 1996 Plan, then the Option or other right will
terminate, subject to any survival rights expressly provided by the Compensation
Committee.
PLAN AMENDMENT, TERMINATION AND SUSPENSION. The Board may amend, modify,
suspend or terminate the Amended 1996 Plan at any time. Unless required by
applicable law or deemed necessary or advisable by the Board, stockholder
approval for an amendment will not be required. The Compensation Committee may
waive conditions of or limitations on Awards without the consent of a
Participant, and may make any other changes to the terms and conditions of
Awards that do not have a material, adverse effect on a Participant's rights and
benefits under an Award.
TRANSFER RESTRICTIONS. Subject to certain exceptions contained in
Section 1.8 of the Amended 1996 Plan, no Participant may transfer any Award
granted under the Amended 1996 Plan, and no Award may be subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, other than to the Corporation.
SECURITIES UNDERLYING AWARDS. The market value of a share of Class A Common
Stock as of March 1, 2000 was $97.125 per share. Upon receipt of stockholder
approval of the Amended 1996 Plan, the Corporation plans to register under the
Securities Act of 1933, the additional shares of Class A Common Stock available
under the Amended 1996 Plan.
FEDERAL INCOME TAX CONSEQUENCES. With respect to Nonqualified Stock
Options, the Company is generally entitled to deduct an amount equal to the
difference between the option exercise price and the fair market value of the
shares at the time of exercise. With respect to Incentive Stock Options, the
Company is generally not entitled to a similar deduction either upon grant of
the Option or at the time the Option is exercised. If Incentive Stock Option
shares are not held for specified qualifying periods, however, the difference
between the fair market value of the shares at the date of exercise (or, if
lower, the sale
17
price) and the cost of such shares is taxed as ordinary income (and the Company
will receive a corresponding deduction) in the year the shares are sold.
The current federal income tax consequences of other Awards authorized under
the Amended 1996 Plan generally follow certain basic patterns: SARs are taxed
and deductible in substantially the same manner as Nonqualified Stock Options;
non-transferable Restricted Stock subject to a substantial risk of forfeiture
results in income recognition only at the time the restrictions lapse (unless
the recipient elects to accelerate recognition as of the date of grant); and
Performance Share Awards generally are subject to tax at the time of payment. In
each of the foregoing cases, the Company will generally have a corresponding
deduction at the time the Participant recognizes income.
If an Award is accelerated under the Amended 1996 Plan in connection with a
change in control (as this term is used in the Code), the Company may not be
permitted to deduct the portion of the compensation attributable to the
acceleration ("parachute payments") if it exceeds certain threshold limits under
the Code (and certain excise taxes may be triggered). Further, if the
compensation attributable to Awards is not "performance-based" within the
meaning of Section 162(m) of the Code, the Company may not be permitted to
deduct the aggregate non performance-based compensation in excess of $1,000,000
in certain circumstances.
CONDITION TO THE GRANT OF AWARDS. Based upon an agreement between the
members of the Board, the Compensation Committee will not grant Awards for any
of the additional 7,600,000 shares without the approval of the grant or an
objective grant scheme by the Class V and Class T Directors.
VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS FOR THIS
PROPOSAL. The Board believes that the Amended 1996 Plan will help promote the
interests of the Company (i) by linking the interests of the Company's
stockholders and Participants, and (ii) by providing an additional means through
which the Company can attract, motivate, retain, and reward key employees. The
approval of the Amended 1996 Plan requires the affirmative vote of the holders
of a majority of the outstanding shares of Common Stock entitled to vote at the
Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE AMENDED
1996 PLAN.
18
OPTION GRANTS IN 1999
INDIVIDUAL GRANTS IN 1999
------------------------------------------------------------------------
NUMBER OF % OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE GRANT DATE
UNDERLYING OPTIONS EMPLOYEES IN PRICE PRESENT
NAME GRANTED(#) LAST FISCAL YEAR PER SHARE($) EXPIRATION DATE VALUE($)(A)
---- ------------------ ------------------ ------------ --------------- -----------
A. Jerrold
Perenchio........... N/A N/A N/A N/A N/A
Henry Cisneros(b)..... 75,000 4.5% 87.25 December 2009 2,765,250
George W. Blank(b).... 75,000 4.5% 87.25 December 2009 2,765,250
Robert V. Cahill(b)... 75,000 4.5% 87.25 December 2009 2,765,250
Ray Rodriguez(b)...... 100,000 6.1% 87.25 December 2009 3,687,000
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(a) The estimated value was developed solely for the purposes of comparative
disclosure in accordance with the rules and regulations of the Securities
and Exchange Commission and is not intended to predict future prices of our
Class A Common Stock. The estimate was developed using the Black-Scholes
option pricing model incorporating the following assumptions: dividend yield
of 0%; expected volatility of 36.348%; risk-free interest rate of 6.05%; and
expected life of five years. The fair value of options granted on
December 6, 1999 is $36.87.
(b) The options vest in four equal annual installments commencing on
December 6, 2000.
AGGREGATED OPTION EXERCISES IN 1999 AND
YEAR-END OPTION VALUE
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE VALUE
NUMBER OF SECURITIES OF UNEXERCISED
SHARES ACQUIRED UNDERLYING OPTIONS IN-THE-MONEY OPTIONS
NAME ON EXERCISE(#) VALUE REALIZED($) AT FY-END # AT FY-END ($)(A)
---- --------------- ----------------- -------------------- ---------------------
A. Jerrold Perenchio..... N/A N/A N/A N/A
Henry Cisneros........... 66,666 3,301,675 75,000/266,668 5,173,438/15,413,653
George W. Blank.......... 0 0 375,000/200,000 32,379,688/9,834,375
Robert V. Cahill......... 0 0 275,000/200,000 23,310,938/9,834,375
Ray Rodriguez............ 0 0 375,000/225,000 32,379,688/10,207,813
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(a) This amount represents solely the difference in the market price ($102.1875)
on the last trading day of the year, December 31, 1999, of those unexercised
options which had an exercise price below such market price (i.e.,
"in-the-money options") and the respective exercise prices of the options.
The exercise price of outstanding options ranges from $11.50 to $87.25. All
options were granted at fair market value. No assumptions or representations
regarding the value of such options are made or intended.
19
OTHER MATTERS
The Board of Directors knows of no matters to be presented for action by the
stockholders at the meeting other than those described in this proxy statement.
Unless otherwise indicated, if any other matter is properly brought before the
meeting and may be properly acted upon, the persons named in the accompanying
form of proxy will be authorized by such proxy to vote the proxies thereon in
accordance with their best judgment.
By Order of the Board of Directors,
/s/ Robert V. Cahill
Robert V. Cahill
SECRETARY
March 30, 2000
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23
APPENDIX A
AUDIT COMMITTEE CHARTER
OF
UNIVISION COMMUNICATIONS INC.
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company and (2) the
independence and performance of the Company's external auditors. While the Audit
Committee has the responsibilities and powers set forth in this Charter, it is
the responsibility of management and the independent auditor, not the Audit
Committee, to plan or conduct audits and to determine that the Company's
financial statements are complete and accurate and are in accordance with
generally accepted accounting principles. It is not the duty of the Audit
Committee to conduct investigations, to resolve disagreements, if any, between
management and the independent auditor or to assure compliance with laws and
regulations.
The members of the Audit Committee shall meet the independence and experience
requirements of the New York Stock Exchange.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Audit Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board.
2. Meet periodically, but no less than once per year, with management and the
independent auditor to:
a. Review the annual audited financial statements, including major issues
regarding accounting and auditing principles and practices as well as the
adequacy of internal controls that could significantly affect the
Company's financial statements.
b. Review an analysis prepared by management and the independent auditor of
significant financial reporting issues and judgments made in connection
with the preparation of the Company's financial statements.
c. Review the Company's major financial risk exposures and the steps
management has taken to monitor and control such exposures.
d. Obtain reports from management and the independent auditor as to whether
the Company and its subsidiaries are in conformity with applicable legal
requirements.
e. Review major changes to the Company's auditing and accounting principles
and practices as suggested by the independent auditor or management.
3. Review with management and the independent auditor the Company's quarterly
financial statements prior to the release of quarterly earnings.
4. Evaluate the performance of the independent auditor and recommend to the
Board the appointment or replacement of the independent auditor, which firm
is ultimately accountable to the Audit Committee and the Board.
5. Approve the fees to be paid to the independent auditor.
6. Meet with the independent auditor prior to the audit to review the planning
and staffing of the audit.
7. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
determined by the Audit Committee, recommend that the Board take appropriate
action to insure the independence of the auditor.
8. Discuss with the independent auditor the matters required to be discussed by
Statement on Auditing Standards No. 61 relating to the conduct of the audit.
9. Review with the independent auditor any problems or difficulties the auditor
may have encountered and any management letter provided by the auditor and
the Company's response to that letter. Such review should include discussion
of any difficulties encountered in the course of the audit work, including
any restrictions on the scope of activities or access to required
information.
10. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
11. Review with the Company's General Counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
12. Meet at least annually with the chief financial officer and the independent
auditor in separate executive sessions.
2
APPENDIX B
UNIVISION COMMUNICATIONS INC.
1996 PERFORMANCE AWARD PLAN
(AMENDED AND RESTATED AS OF FEBRUARY 16, 2000)
TABLE OF CONTENTS
PAGE
I. THE PLAN.......................................................... 1
1.1 Purpose..................................................... 1
1.2 Administration and Authorization; Power and Procedure....... 1
1.3 Participation............................................... 2
1.4 Shares Available for Awards................................. 2
1.5 Grant of Awards............................................. 2
1.6 Award Period................................................ 3
1.7 Limitations on Exercise and Vesting of Awards............... 3
1.8 No Transferability.......................................... 3
1.9 Pricing Limits.............................................. 4
II. EMPLOYEE OPTIONS.................................................. 4
2.1 Grants...................................................... 4
2.2 Option Payment Provisions................................... 4
2.3 Limitations on Grant and Terms of Incentive Stock Options... 4
2.4 Limits on 10% Holders....................................... 5
2.5 Changes to Vesting Schedule or Term......................... 5
2.6 Options and Rights in Substitution for Stock Options Granted
by Other Corporations....................................... 5
III. STOCK APPRECIATION RIGHTS......................................... 5
3.1 Grants...................................................... 5
3.2 Exercise of SARs............................................ 5
3.3 Payment..................................................... 6
3.4 Limited SARs................................................ 6
IV. RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS................. 6
4.1 Grants...................................................... 6
4.2 Restrictions................................................ 7
4.3 Return to the Corporation................................... 7
V. PERFORMANCE SHARE AWARDS, STOCK BONUSES, AND CASH BONUS AWARDS....
7
5.1 Grants of Performance Share Awards.......................... 7
5.2 Grants of Stock Bonuses..................................... 8
5.3 Deferred Payments........................................... 8
5.4 Special Performance-Based Share Awards...................... 8
5.5 Cash Bonus Awards........................................... 8
VI. OTHER PROVISIONS.................................................. 9
6.1 Rights of Eligible Employees, Participants and
Beneficiaries............................................... 9
6.2 Adjustments; Acceleration................................... 9
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i
PAGE
6.3 Termination of Employment; Termination of Subsidiary Status;
Discretionary Provisions.................................... 10
6.4 Compliance With Laws........................................ 11
6.5 Tax Withholding............................................. 11
6.6 Plan Amendment, Termination and Suspension.................. 12
6.7 Privileges of Stock Ownership............................... 12
6.8 Effective Date of this Plan................................. 12
6.9 Term of this Plan........................................... 12
6.10 Governing Law/Construction/Severability..................... 12
6.11 Captions.................................................... 13
6.12 Non-Exclusivity of Plan..................................... 13
VII. DEFINITIONS....................................................... 13
7.1 Definitions................................................. 13
|
ii
UNIVISION COMMUNICATIONS INC.
1996 PERFORMANCE AWARD PLAN
(AMENDED AND RESTATED AS OF FEBRUARY 16, 2000)
I. THE PLAN.
1.1 PURPOSE.
The purpose of this Plan is to promote the success of the Company and the
interests of its stockholders by attracting, motivating, retaining and rewarding
key employees by providing them incentives to improve the financial performance
of the Company. "Corporation" means Univision Communications Inc., a Delaware
corporation, and its successors, and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized terms are defined
in Article VII.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by the Committee.
Action of the Committee with respect to the administration of this Plan
shall be taken pursuant to a majority vote or by written consent of its
members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject to the
express provisions and limitations of this Plan, the Committee shall have
the authority:
(i) to determine the particular Eligible Employees who will receive
Awards;
(ii) to grant Awards to Eligible Employees, determine the price at
which securities will be offered or awarded and the amount of securities
to be offered or awarded to any of such persons, and determine the other
specific terms and conditions of such Awards consistent with the express
limits of this Plan, and establish the installments (if any) in which
such Awards shall become exercisable or shall vest, or determine that no
delayed exercisability or vesting is required, and establish the events
of termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);
(iv) to construe and interpret this Plan and any agreements defining
the rights and obligations of the Company and Employee Participants under
this Plan, further define the terms used in this Plan, and prescribe,
amend and rescind rules and regulations relating to the administration of
this Plan;
(v) to cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
Awards held by Eligible Employees, subject to any required consent under
Section 6.6;
(vi) to accelerate or extend the exercisability or extend the term of
any or all such outstanding Awards within the maximum ten-year term of
Awards under Section 1.6; and
(vii) to make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee relating or pursuant
to this Plan shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. No member of the Board
or Committee, or officer of the Corporation or any Subsidiary, shall be
liable for any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith, of himself or
herself. Subject only to compliance with the express provisions hereof, the
Board and Committee may act in their absolute discretion in matters within
their authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in taking or
not taking any action under this Plan, the Committee or the Board, as the
case may be, may obtain and may rely upon the advice of experts, including
professional advisors to the Corporation. No director, officer or agent of
the Company shall be liable for any such action or determination taken or
made or omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of
the Company.
1.3 PARTICIPATION.
Awards may be granted by the Committee only to those persons that the
Committee determines to be Eligible Employees. An Eligible Employee who has been
granted an Award may, if otherwise eligible, be granted additional Awards if the
Committee shall so determine.
1.4 SHARES AVAILABLE FOR AWARDS.
Subject to the provisions of Section 6.2, the capital stock that may be
delivered under this Plan shall be shares of the Corporation's authorized but
unissued Class A Common Stock and any shares of its Class A Common Stock held as
treasury shares.
(a) NUMBER OF SHARES. The maximum number of shares of Class A Common
Stock that may be delivered pursuant to Awards granted to Eligible Employees
under this Plan shall not exceed 18,600,000 shares. The maximum number of
shares of Class A Common Stock that may be the subject of Awards granted to
any individual during any calendar year shall be limited to 1,000,000. The
maximum number of shares of Class A Common Stock that may be the subject of
Awards granted in any calendar year shall not exceed 2,750,000 unless the
Committee gives its unanimous consent. The maximum number of shares of
Class A Common Stock that may be the subject of Awards other than Options
cannot exceed 9,300,000. Each of the foregoing numerical limits shall be
subject to adjustment as contemplated by this Section 1.4 and Section 6.2.
(b) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. Shares subject
to outstanding Awards payable in shares shall be reserved for issuance. If
any Option or other right to acquire shares of Class A Common Stock under or
receive cash or shares in respect of an Award shall expire or be cancelled
or terminated without having been exercised or paid in full, or any Class A
Common Stock subject to a Restricted Stock Award or other Award shall not
vest or be delivered, the unpurchased, unvested or undelivered shares of
Class A Common Stock subject thereto shall again be available for the
purposes of this Plan, subject only to any applicable limitations under
Section 162(m) of the Code. If the Corporation withholds shares of Class A
Common Stock pursuant to Section 6.5 or if the Corporation receives shares
of Class A Common Stock as payment for all or part of the purchase price of
shares of Class A Common Stock upon exercise of an Option pursuant to
Section 2.2, the withheld or received shares of Class A Common Stock subject
thereto shall again be available for the purposes of this Plan.
1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the Committee has the
authority to determine those individuals who are Eligible Employees, whether any
of them will receive an Award and if so the type of Award, the number of shares
of Class A Common Stock subject to each Award, the price (if any) to be paid for
the shares or the Award, the other terms of the Award, and, in the case of
Performance Share Awards, in addition to the matters addressed in
Section 1.2(b), the specific objectives, goals and performance criteria (such as
the performance of the Company on a consolidated, segment, subsidiary, division,
or station basis with reference to revenues, net earnings (before or after
interest, taxes, depreciation, or amortization), cash flow, return on equity or
assets or net investment, market value or book value over a base period, the
years of service before vesting, the relevant job classification or level of
responsibility or
2
other factors) that further define the terms of the Performance Share Award.
Each Award shall be evidenced by an Award Agreement signed by the Corporation
and, if required by the Committee, by the Participant. The Award Agreement shall
set forth the material terms and conditions of the Award established by the
Committee consistent with the specific provisions of this Plan. The Committee
shall not have any authority, absent the unanimous resolution of the Board of
Directors, to make a grant of any Award that does not comply with the provisions
and limitations of this Plan.
1.6 AWARD PERIOD.
Each Award and all executory rights or obligations under the related Award
Agreement shall expire on such date (if any) as shall be determined by the
Committee, but in the case of Options, SARs or other rights to acquire Class A
Common Stock not later than 10 years after the Award Date.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee gives its unanimous
consent, no Award may vest more quickly than 25% on each anniversary date of
the grant or, in the case of Options granted in lieu of cash bonuses, such
Options and Awards may vest at the rate of 50% a year. For the purpose of
the preceding sentence, vesting shall only be measured with reference to an
Eligible Employee's employment with the Company or a subsidiary, so that an
Eligible Employee shall cease earning the right to additional vesting upon
the termination of employment. Notwithstanding the preceding two sentences,
Awards (1) may provide for quicker vesting in the event that the Participant
is terminated without cause and (2) may be accelerated pursuant to
Section 6.2(b) in the event of a Change in Control.
(b) PROCEDURE. Any exercisable Award shall be deemed to be exercised
when the Corporation receives written notice of such exercise from the
Participant, together with any required payment made in accordance with
Section 2.2.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share interests shall
be disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Employees that cash, other securities, or
other property will be paid or transferred in lieu of any fractional share
interests. No fewer than 10 shares may be purchased on exercise of any Award
at one time unless the number purchased is the total number at the time
available for purchase under the Award.
1.8 NO TRANSFERABILITY.
(a) LIMIT ON EXERCISE. Except as provided in Section 1.8(b) and
subject to Section 6.10, Awards may be exercised only by, and amounts
payable or shares issuable pursuant to an Award shall be paid only to (or
for the account of), the Participant or, if the Participant has died, the
Participant's Beneficiary or, if the Participant has suffered a Disability,
the Participant's Personal Representative, if any, or if there is none, the
Participant. Subject to Section 6.4 and 6.10, the Committee may by express
written authorization permit Awards to be exercised by and/or paid to
certain persons or entities related to the Participant who are transferees
of the Participant without consideration, or to such other persons as the
Committee deems appropriate, pursuant to such conditions and procedures as
the Committee in writing may establish and set forth in or by amendment to
an Award Agreement.
(b) LIMIT ON TRANSFER. No option, right or other Award granted under
this Plan including, without limitation, any undistributed performance share
or share of Restricted Stock that has not vested, shall be transferrable by
the Participant or shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge (other
than to the Corporation), except (i) by will or the laws of descent and
distribution, or (ii) pursuant to any other exception to transfer
restrictions expressly permitted by the Committee AND set forth in the Award
Agreement (or an amendment thereto), and (iii) in the case of Awards
comprising Incentive Stock Options, as
3
permitted by the Code. Any attempted transfer in violation of these
provisions shall be void and the Corporation shall disregard any attempt at
transfer, assignment or other alienation so prohibited.
(c) DESIGNATION OF BENEFICIARY. The designation of a Beneficiary shall
not constitute a transfer prohibited by the foregoing provisions.
1.9 PRICING LIMITS.
The purchase price per share of the Class A Common Stock covered by any
Award shall be determined by the Committee at the time of the Award, but in all
cases shall not be less than 100% of the Fair Market Value of the Class A Common
Stock on the date of grant (110% in the case of an Incentive Stock Option for a
Participant described in Section 2.4)
II. EMPLOYEE OPTIONS
2.1 GRANTS.
One or more Options may be granted under this Article to any Eligible
Employee. Each Option granted shall be designated by the Committee in the
applicable Award Agreement as either a Nonqualified Stock Option or an Incentive
Stock Option.
2.2 OPTION PAYMENT PROVISIONS.
The purchase price of any shares purchased on exercise of an Option granted
under this Article shall be paid in full at the time of each purchase in one or
a combination of the following methods: (i) in cash or by electronic funds
transfer; (ii) by certified or cashier's check payable to the order of the
Corporation; or (iii) by the delivery of shares of Class A Common Stock of the
Corporation already owned by the Participant, PROVIDED, HOWEVER, that the
Committee may in its absolute discretion limit the Participant's ability to
exercise an Award by delivering such shares, and PROVIDED FURTHER that any
shares delivered which were initially acquired upon exercise of a stock option
must have been owned by the Participant at least six months as of the date of
delivery. At the time an Option is granted, the Committee may in its absolute
discretion provide that if an Option is exercised by the delivery of shares of
Class A Common Stock or if shares of Class A Common Stock are delivered to or
withheld by the Company to satisfy any withholding tax obligations, the
Participant exercising the Option will be issued a new Option for the number of
shares of Class A Common Stock equal to the number of shares used to exercise
the Option and the number of shares delivered or withheld to satisfy such tax
withholding obligations. Notwithstanding any other provision of this Plan, such
new Option shall be immediately exercisable and shall have a term equal to the
remainder of the term of the Option being exercised. Shares of Class A Common
Stock used to satisfy the exercise price of an Option shall be valued at their
Fair Market Value on the date of exercise. In addition to the payment methods
described above, the Committee may provide that the Option can be exercised and
payment made by delivering a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Corporation the
amount of sale proceeds necessary to pay the exercise price and, unless
otherwise prohibited by the Committee or applicable law, any applicable tax
withholding under Section 6.5. The Corporation shall not be obligated to deliver
certificates for the shares unless and until it receives full payment of the
exercise price therefore and any related withholding obligations have been
satisfied.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate Fair Market Value
of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000, taking
into account both Class A Common Stock subject to Incentive Stock Options
under this Plan and stock subject to incentive stock options under all other
plans of the Company or any parent corporation, such options shall be
treated as nonqualified stock options. For this purpose, the Fair Market
Value of the stock subject to options shall be determined as of the date the
options were
4
awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options shall
be reduced first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares of
Class A Common Stock are to be treated as shares acquired pursuant to the
exercise of an Incentive Stock Option.
(b) OPTION PERIOD. Each Option and all rights thereunder shall expire
no later than 10 years after the Award Date.
(c) OTHER CODE LIMITS. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such terms and conditions as from time
to time are required in order that the Option be an "incentive stock option"
as that term is defined in Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Class A Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless the
exercise price of such Option is at least 110% of the Fair Market Value of the
stock subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
2.5 CHANGES TO VESTING SCHEDULE OR TERM.
Subject to Section 1.4, Section 1.7(a), Section 2.2 and Section 6.6 and the
specific limitations on Awards contained in this Plan, the Committee from time
to time may authorize, generally or in specific cases only, for the benefit of
any Eligible Employee an adjustment in the vesting schedule or the term of an
Award granted under this Article by amendment, by waiver or by other legally
valid means. Such amendment or other action may provide for a longer or shorter
vesting or exercise period.
2.6 OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
CORPORATIONS.
Options and Stock Appreciation Rights may be granted to Eligible Employees
under this Plan in substitution for employee stock options granted by other
entities to persons who are or who become employees of the Company, in
connection with a merger or reorganization by or with the granting entity or an
affiliated entity, or the acquisition by the Company, directly or indirectly, of
all or a substantial part of the stock or assets of the employing entity.
III. STOCK APPRECIATION RIGHTS.
3.1 GRANTS.
In its discretion, the Committee may grant to any Eligible Employee stock
appreciation rights ("SARs") concurrently with the grant of Options or other
Awards or in respect of an outstanding Award, in whole or in part, or
independently of any other Award, all on such terms as set forth by the
Committee in the Award Agreement. Any SAR granted in connection with an
Incentive Stock Option shall contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder otherwise agrees.
3.2 EXERCISE OF SARS.
(a) EXERCISABILITY. A Stock Appreciation Right granted independently
of any other Award shall be exercisable pursuant to the terms of the Award
Agreement. Unless the Award Agreement or the Committee otherwise provides,
an SAR related to another Award shall be exercisable at such time or times,
and to the extent, that the related Award shall be exercisable and only when
the Fair Market Value of the stock subject to the related Award exceeds the
base price of the SAR.
5
(b) EFFECT ON AVAILABLE SHARES. To the extent that a SAR is exercised,
the number of shares of Class A Common Stock subject to any related Award
shall be charged against the maximum amount of Class A Common Stock that may
be delivered pursuant to Awards under this Plan. The number of shares
subject to the SAR and the related Award of the Participant shall also be
reduced by such number of shares, unless the Award Agreement otherwise
provides.
(c) PROPORTIONATE REDUCTION. If an SAR extends to less than all the
shares covered by the related Award and if a portion of the related Award is
thereafter exercised, the number of shares subject to the unexercised SAR
shall be reduced only if and to the extent that the remaining number of
shares covered by such related Award is less than the remaining number of
shares subject to such SAR.
3.3 PAYMENT.
(a) AMOUNT. Unless the Committee otherwise provides, upon exercise of
an SAR and surrender of an exercisable portion of any related Award (to the
extent required by Section 3.2), the Participant shall be entitled to
receive subject to Section 6.5 payment of an amount determined by
multiplying
(i) the difference obtained by subtracting the base price per share
of Class A Common Stock under the SAR from the Fair Market Value of a
share of Class A Common Stock on the date of exercise of the SAR, by
(ii) the number of shares with respect to which the SAR shall have
been exercised.
(b) FORM OF PAYMENT. Unless otherwise provided in the Award Agreement,
the Committee, in its sole discretion, shall determine the form in which
payment shall be made of the amount determined under paragraph (a) above,
either solely in cash, solely in shares of Class A Common Stock (valued at
Fair Market Value on the date of exercise of the SAR), or partly in such
shares and partly in cash, provided that the Committee shall have determined
that such exercise and payment are consistent with applicable law. If the
Committee permits the Participant to elect to receive cash or shares (or a
combination thereof) on such exercise, any such election shall be subject to
such conditions as the Committee may impose.
3.4 LIMITED SARS.
The Committee may grant to any Eligible Employee SARs exercisable only upon
or in respect of a change in control or any other specified event ("Limited
SARs") and such Limited SARs may relate to or operate in tandem or combination
with or substitution for Options, other SARs or other Awards (or any combination
thereof), and may be payable in cash or shares based on the spread between the
base price of the SAR and a price based upon or equal to the Fair Market Value
of the Shares during a specified period or at a specified time within a
specified period before, after or including the date of such event.
IV. RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS.
4.1 GRANTS.
The Committee may, in its discretion, grant one or more Restricted Stock and
Restricted Stock Unit Awards to any Eligible Employee. Each Restricted Stock
Award Agreement shall specify the number of shares of Class A Common Stock to be
issued to the Participant, the date of such issuance, the consideration for such
shares (but not less than the minimum lawful consideration under applicable
state law) by the Participant, the extent (if any) to which and the time (if
ever) at which the Participant shall be entitled to dividends, voting and other
rights in respect of the shares prior to vesting, and the restrictions (which
may be based on performance criteria, passage of time or other factors or any
combination thereof) imposed on such shares and the conditions of release or
lapse of such restrictions. Each Restricted Stock Unit Award Agreement shall
specify the number of units to be issued to the Participant, the date of such
6
issuance, any consideration for such units by the Participant, the extent (if
any) to which and the time (if ever) at which the Participant shall be entitled
to dividends, voting and other rights in respect of the shares payable under
such units, and the restrictions (which may be based on performance criteria,
passage of time or other factors or any combination thereof) imposed on such
units and the conditions of release or lapse of such restrictions. Such
restrictions shall not lapse earlier than one year after the Award Date, except
to the extent the Committee may otherwise provide. Stock certificates evidencing
shares of Restricted Stock pending the lapse of the restrictions ("Restricted
Shares") shall bear a legend making the appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation or by a
third party designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the Restricted Stock
Award or the Resticted Stock Unit Award, the Participant may be required to
provide such further assurance and documents as the Committee may require to
enforce the restrictions.
4.2 RESTRICTIONS.
(a) PRE-VESTING RESTRAINTS. Except as provided in Section 4.1 and 1.9,
restricted shares comprising any Restricted Stock Award may not be sold,
assigned, transferred, pledged or otherwise disposed of or encumbered,
either voluntarily or involuntarily, until the restrictions on such shares
have lapsed and the shares become vested.
(b) DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in the
applicable Award Agreement, a Participant receiving a Restricted Stock Award
shall not be entitled to dividends for any of the shares (which dividends
shall be retained in a restricted account until the shares have vested and
shall revert to the Corporation if they fail to vest), but shall be entitled
to vote such shares prior to vesting.
(c) CASH PAYMENTS. If the Participant shall have paid or received cash
(including any dividends) in connection with the Restricted Stock Award or
Restricted Stock Unit Award, the Award Agreement shall specify whether and
to what extent such cash shall be returned (with or without an earnings
factor) as to any restricted shares or units which cease to be eligible for
vesting.
4.3 RETURN TO THE CORPORATION.
Unless the Committee otherwise expressly provides, shares of Restricted
Stock that are subject to restrictions at the time of termination of employment
or are subject to other conditions to vesting that have not been satisfied by
the time specified in the applicable Award Agreement shall not vest and shall be
returned to the Corporation in such manner and on such terms as the Committee
shall therein provide.
V. PERFORMANCE SHARE AWARDS, STOCK BONUSES, AND CASH BONUS AWARDS.
5.1 GRANTS OF PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance Share Awards to
Eligible Employees. An Award Agreement shall specify the maximum number of
shares of Class A Common Stock (if any) subject to the Performance Share Award,
the consideration (but not less than the minimum lawful consideration) to be
paid for any such shares as may be issuable to the Participant, the duration of
the Award and the conditions upon which delivery of any shares or cash to the
Participant shall be based. The amount of cash or shares or other property that
may be deliverable pursuant to such Award shall be based upon the degree of
attainment over a specified period of not more than 10 years (a "performance
cycle") as may be established by the Committee of such measure(s) of the
performance of the Company (or any part thereof) or the Participant as may be
established by the Committee. The Committee may provide for full or partial
credit, prior to completion of such performance cycle or the attainment of the
performance achievement specified in the Award, in the event of the
Participant's death, Retirement, or Total Disability, a Change in Control Event
or in such other circumstances as the Committee (consistent with
Section 6.10(c)(2), if applicable) may determine.
7
5.2 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible Employee to reward
exceptional or special services, contributions or achievements in the manner and
on such terms and conditions (including any restrictions on such shares) as
determined from time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Award may be granted independently or
in lieu of a cash bonus.
5.3 DEFERRED PAYMENTS.
The Committee may authorize for the benefit of any Eligible Employee the
deferral of any payment of cash or shares that may become due or of cash
otherwise payable under this Plan, and provide for accreted benefits thereon
based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such deferment shall be
subject to such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of Participants.
5.4 SPECIAL PERFORMANCE-BASED SHARE AWARDS
Without limiting the generality of the foregoing, and in addition to awards
granted under other provisions of this Plan, other performance-based awards
within the meaning of Section 162(m) of the Code ("PERFORMANCE-BASED AWARDS"),
whether in the form of restricted stock, performance stock, phantom stock or
other rights, the vesting of which depends on the performance of the Company on
a consolidated, segment, subsidiary, division, or station basis with reference
to revenues, net earnings (before or after interest, taxes, depreciation, or
amortization), cash flow, return on equity or on assets or on net investment, or
cost containment or reduction, or any combination thereof (the criteria)
relative to preestablished performance goals, may be granted under this Plan.
The applicable business criteria and specific performance goal or goals
("targets") must be approved by the Committee in advance of applicable deadlines
under the Code and while the performance relating to such targets remains
substantially uncertain. The applicable performance measurement period may be
not less than one nor more than 10 years. Performance targets may be adjusted to
mitigate the unbudgeted impact of material, unusual or nonrecurring gains and
losses, accounting changes or other extraordinary events not foreseen at the
time the targets were set.
(a) ELIGIBLE CLASS. The eligible class of persons for Awards under
this Section shall be executive officers of the Company.
(b) MAXIMUM AWARD. In no event shall grants made in any fiscal year to
any eligible person under this Section 5.4 relate to more than 500,000
shares or a cash amount of more than $20 million.
(c) COMMITTEE CERTIFICATION. Before any Performance-Based Award under
this Section 5.4 is paid, the Committee must certify that the material terms
of the Performance-Based Award were satisfied.
(d) TERMS AND CONDITIONS OF AWARDS. The Committee will have discretion
to determine the restrictions or other limitations of the individual Awards
under this Section 5.4, including the authority to reduce Awards, payouts or
vesting or to pay no Awards, in its sole discretion, if the Committee
preserves such authority at the time of grant by language to this effect in
its authorizing resolutions or otherwise.
5.5 CASH BONUS AWARDS.
(a) The Committee may establish a program of annual incentive awards
that are payable in cash to Eligible Employees based upon the extent to
which performance goals are met during the performance period. The
performance goals may depend upon the performance of the Company on a
consolidated, segment, subsidiary, division, or station basis with reference
to revenues, net earnings (before or after interest, taxes, depreciation, or
amortization), cash flow, return on equity or on assets
8
or net investment, cost containment or reduction, or achievement of
strategic goals (or any combination of such factors). In addition, the award
may depend upon the Eligible Employee's individual performance.
(b) In no event shall awards payable for any year to any Eligible
Employee exceed $20 million.
(c) In lieu of cash payment of the awards, the Committee may require or
allow a portion of the award to be paid in the form of a Restricted Stock
Award.
VI. OTHER PROVISIONS.
6.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.
(a) EMPLOYMENT STATUS. Status as an Eligible Employee shall not be
construed as a commitment that any Award will be made under this Plan to an
Eligible Employee or to Eligible Employees generally.
(b) NO EMPLOYMENT CONTRACT. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Award) shall confer upon any
Eligible Employee or other Participant any right to continue in the employ
or other service of the Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way with any right
of the Company to otherwise change such person's compensation or other
benefits or to terminate the employment of such person, with or without
cause, but nothing contained in this Plan or any document related hereto
shall adversely affect any independent contractual right of such person
without his or her consent thereto.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be payable
in shares or from the general assets of the Corporation, and (except as
provided in Section 1.4(b)) no special or separate reserve, fund or deposit
shall be made to assure payment of such Awards. No Participant, Beneficiary
or other person shall have any right, title or interest in any fund or in
any specific asset (including shares of Class A Common Stock, except as
expressly otherwise provided) of the Company by reason of any Award
hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed to
create, a trust of any kind or a fiduciary relationship between the Company
and any Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires a right to receive payment
pursuant to any Award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Company.
6.2 ADJUSTMENTS; ACCELERATION.
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Class A Common Stock
(whether in the form of cash, Class A Common Stock, other securities, or
other property), or any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse stock
split, reorganization, merger, combination, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Class A Common Stock or
other securities of the Corporation, or there shall occur any similar
extraordinary corporate transaction (or event in respect of the Class A
Common Stock) or a sale of substantially all the assets of the Corporation
as an entirety, then the Committee shall, in such manner and to such extent
(if any) as it deems appropriate and equitable (1) proportionately adjust
any or all of (a) the number and type of shares of Class A Common Stock (or
other securities) which thereafter may be made the subject of Awards
(including the specific maxima and numbers of shares set forth elsewhere in
this Plan), (b) the number, amount and type of shares of Class A Common
Stock (or other securities or property) subject to any or all outstanding
Awards, (c) the grant, purchase, or exercise price of any or all outstanding
Awards, (d) the securities, cash or other property deliverable upon exercise
of any outstanding Awards, or (e) the performance standards appropriate to
any outstanding Awards, or
9
(2) in the case of an extraordinary dividend or other distribution,
recapitalization, reclassification, reorganization, merger, consolidation,
combination, sale of assets, split up, exchange, or spin off, make provision
for a cash payment or for the substitution or exchange of any or all
outstanding Awards or the cash, securities or property deliverable to the
holder of any or all outstanding Awards based upon the distribution or
consideration payable to holders of the Class A Common Stock of the
Corporation upon or in respect of such event; provided, however, in each
case, that with respect to Awards of Incentive Stock Options, no such
adjustment shall be made which would cause the Plan to violate
Section 424(a) of the Code or any successor provisions thereto without the
written consent of holders materially adversely affected thereby. In any of
such events, the Committee may take such action sufficiently prior to such
event if necessary to permit the Participant to realize the benefits
intended to be conveyed with respect to the underlying shares in the same
manner as is available to shareholders generally.
(b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless prior to a
Change in Control Event the Committee determines that, upon its occurrence,
there shall be no acceleration of benefits under Awards or determines that
only certain or limited benefits under Awards shall be accelerated (which
limits may differ among Eligible Employees) and the extent to which they
shall be accelerated, and/or establishes a different time in respect of such
Event for such acceleration, then upon the occurrence of a Change in Control
Event
(i) each Option and SAR shall become immediately exercisable,
(ii) Restricted Stock shall immediately vest free of restrictions,
and
(iii) the number of shares, cash or other property covered by each
Performance Share Award shall be issued to the Participant.
The Committee may override the limitations on acceleration in this
Section 6.2(b) by express provision in the Award Agreement and may accord any
Eligible Employee a right to refuse any acceleration, whether pursuant to the
Award Agreement or otherwise, in such circumstances as the Committee may
approve. Any acceleration of Awards shall comply with applicable legal
requirements.
(c) POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any Option or
other right to acquire Class A Common Stock under this Plan has been fully
accelerated as permitted by Section 6.2(b) but is not exercised prior to
(i) a dissolution of the Corporation, or (ii) an event described in
Section 6.2(a) that the Corporation does not survive, or (iii) the
consummation of an event described in Section 6.2(a) that results in a
Change of Control approved by the Board, such Option or right shall
thereupon terminate. Notwithstanding the foregoing, the Committee may, in
any such event, expressly provide for the survival, substitution, exchange
or other settlement of such Option or right.
6.3 TERMINATION OF EMPLOYMENT; TERMINATION OF SUBSIDIARY STATUS;
DISCRETIONARY PROVISIONS.
(a) OPTIONS--RESIGNATION OR DISMISSAL. If the Participant's employment
by the Company terminates for any reason other than Retirement, Total
Disability or death, the Participant shall have, subject to earlier
termination pursuant to or as contemplated by Section 1.6, such period of
time after the date of termination of employment as shall be specified in
the Award Agreement to exercise any Option to the extent it shall have
become exercisable on the date of termination of employment, and any Option
to the extent not exercisable on that date shall terminate.
(b) OPTIONS--RETIREMENT, DEATH OR DISABILITY. If the Participant's
employment by the Company terminates as a result of Retirement, Total
Disability or death, the Participant, Participant's Personal Representative
or his or her Beneficiary, as the case may be, shall have, subject to
earlier termination pursuant to or as contemplated by Section 1.6, such
period of time after the date of termination of employment as shall be
specified in the Award Agreement to exercise any Option to the extent it
shall have become exercisable by the date of termination of employment, and
any Option to the extent not
10
exercisable on that date, or such later date as may be provided in the Award
Agreement, shall terminate.
(c) CERTAIN SARS. Each SAR granted concurrently or in tandem with an
Option shall have the same post-termination provisions and exercisability
periods as the Option to which it relates, unless the Committee otherwise
provides.
(d) OTHER AWARDS. The Committee shall establish in respect of each
other Award granted hereunder the Participant's rights and benefits (if any)
in the event of a termination of employment and in so doing may make
distinctions based upon the cause of termination and the nature of the
Award.
(e) CHANGE IN SUBSIDIARY STATUS. For purposes of this Plan and any
Award hereunder, if an entity ceases to be a Subsidiary, a termination of
employment shall be deemed to have occurred with respect to each employee of
such Subsidiary who does not continue as an employee of another entity
owned, controlled by or under common control with the Company.
(f) COMMITTEE DISCRETION. Notwithstanding the foregoing provisions of
this Section 6.3, in the event of, or in anticipation of, a termination of
employment with the Company for any reason, other than discharge for cause,
the Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or Participant's
Beneficiary or Personal Representative, as the case may be, or, subject to
the provisions of Section 1.6, extend the exercisability period upon such
terms as the Committee shall determine and expressly set forth in or by
amendment to the Award Agreement. The Committee discretion in this
subsection is subject to the limitations of Section 1.7(a) and (b).
6.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under this Plan and the offer,
issuance and delivery of shares of Class A Common Stock and/or the payment of
money under this Plan or under Awards granted hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, agency or any
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Corporation may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
6.5 TAX WITHHOLDING.
Upon any exercise, vesting, or payment of any Award (or upon the disposition
of shares of Class A Common Stock acquired pursuant to the exercise of an
Incentive Stock Option prior to satisfaction of the holding period requirements
of Section 422 of the Code), the Company shall have the right at its option to
(i) require the Participant (or Personal Representative or Beneficiary, as the
case may be) to pay or provide for payment of the amount of any taxes which the
Company may be required to withhold with respect to such Award event or payment
or (ii) deduct from any amount payable the amount of any taxes which the Company
may be required to withhold with respect to such cash payment. In any case where
a tax is required to be withheld in connection with the delivery of shares of
Class A Common Stock under this Plan, the Committee may in its sole discretion
grant (either at the time of the Award or thereafter) to the Participant the
right to elect, pursuant to such rules and subject to such conditions as the
Committee may establish, to have the Corporation reduce the number of shares to
be delivered by (or otherwise reacquire) the appropriate number of shares valued
at their then Fair Market Value, to satisfy such withholding obligation.
11
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD OR COMMITTEE AUTHORIZATION. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan, in
whole or in part. Any decision to amend, modify or suspend the provisions of
Section 1.4, 1.7, 1.9 and/or 2.2 shall require unanimous approval of the
Board. No Awards may be granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain jurisdiction as to
Awards then outstanding in accordance with the terms of this Plan.
(b) SHAREHOLDER APPROVAL. To the extent then required under Sections
422 and 424 of the Code or any other applicable law, or deemed necessary or
advisable by the Board, any amendment to this Plan shall be subject to
shareholder approval.
(c) AMENDMENTS TO AWARDS. Without limiting any other express authority
of the Committee under but subject to the express limits of this Plan, the
Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Employees that the Committee in the prior exercise of
its discretion has imposed, without the consent of a Participant, and may
make other changes to the terms and conditions of Awards that do not affect,
in any manner materially adverse to the Employee Participant, his or her
rights and benefits under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No amendment,
suspension or termination of this Plan or change of or affecting any
outstanding Award shall, without written consent of the Participant, affect
in any manner materially adverse to the Participant any rights or benefits
of the Participant or obligations of the Corporation under any Award granted
under this Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute changes or
amendments for purposes of this Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP.
Except as otherwise expressly authorized by the Committee or this Plan, a
Participant shall not be entitled to any privilege of stock ownership as to any
shares of Class A Common Stock not actually delivered to and held of record by
him or her. No adjustment will be made for dividends or other rights as a
shareholder for which a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THIS PLAN.
This Plan shall be effective as of the date it is approved by the Board,
subject to approval of the shareholders of the Corporation.
6.9 TERM OF THIS PLAN.
No Award shall be granted under this Plan after the date that is the 10th
anniversary of the date that this Plan is approved by the Board (the
"termination date"). Unless otherwise expressly provided in this Plan or in an
applicable Award Agreement, any Award granted prior to the termination date may
extend beyond such date, and all authority of the Committee with respect to
Awards hereunder, including the authority to amend an Award, shall continue
during any suspension of this Plan and shall continue in respect of Awards
outstanding on the termination date.
6.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all documents evidencing
Awards and all other related documents shall be governed by, and construed
in accordance with the laws of the State of California.
(b) SEVERABILITY. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
12
(c) PLAN CONSTRUCTION.
(1) RULE 16B-3; BIFURCATION. It is the intent of the Corporation that
the Awards hereunder satisfy and be interpreted in a manner that, in the
case of Participants who are or may be subject to Section 16 of the Exchange
Act, satisfies the applicable requirements of Rule 16b-3 so that such
persons (unless they otherwise agree) will be entitled to the benefits of
Rule 16b-3 or other exemptive rules under Section 16 of the Exchange Act and
will not be subjected to avoidable liability thereunder. Notwithstanding
anything to the contrary in this Plan, the provisions of this Plan may at
any time be bifurcated by the Board or the Committee in any manner so that
certain provisions of any Award Agreement intended (or required in order) to
satisfy the applicable requirements of Rule 16b-3 are only applicable to
Section 16 Persons and to those Awards to Section 16 Persons intended to
satisfy the requirements of Rule 16b-3.
(2) SECTION 162(M). It is the further intent of the Company that
Options or SARs with an exercise or base price not less than Fair Market
Value on the date of grant and performance awards under Section 5.4 and 5.5
of this Plan that are granted to or held by a person subject to
Section 162(m) of the Code shall qualify as performance-based compensation
under Section 162(m) of the Code, and this Plan shall be interpreted
consistent with such intent.
6.11 CAPTIONS.
Captions and headings are given to the sections and subsections of this Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
this Plan or any provision thereof.
6.12 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit the authority of the
Board or the Committee to grant awards or authorize any other compensation, with
or without reference to the Class A Common Stock, under any other plan or
authority; provided that any other Award or compensation shall be made in
accordance with the Company's Certificate of Incorporation and Bylaws.
VII. DEFINITIONS.
7.1 DEFINITIONS.
(a) "AWARD" shall mean an award of any Option, SAR, Restricted Stock,
Stock Bonus, Performance Share Award, Phantom Stock, dividend equivalent or
deferred payment right or other right or security that is measured by the
value of or appreciation in the value of the Corporation's Class A Common
Stock or would otherwise constitute a "derivative security" under
Rule 16a-1(c) of the Exchange Act, or any combination thereof, whether
alternative or cumulative, authorized by and granted under this Plan.
(b) "AWARD AGREEMENT" shall mean any writing setting forth the terms of
an Award that has been authorized by the Committee.
(c) "AWARD DATE" shall mean the date upon which the Committee took the
action granting an Award or such later date as the Committee designates as
the Award Date.
(d) "AWARD PERIOD" shall mean the period beginning on an Award Date and
ending on the expiration date of such Award.
13
(e) "BENEFICIARY" shall mean the person, persons, trust or trusts
designated by a Participant or, in the absence of a designation, entitled by
will or the laws of descent and distribution, to receive the benefits
specified in the Award Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is designated and able to act under
the circumstances.
(f) "BOARD" shall mean the Board of Directors of the Corporation.
(g) "CHANGE IN CONTROL EVENT" shall mean with respect to Awards granted
after February 16, 2000, any of the following:
(1) The dissolution or liquidation of the Corporation;
(2) The consummation of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or more entities that are not
Subsidiaries or other affiliates, as a result of which less than 50% of
the outstanding voting securities of the surviving or resulting entity
immediately after the reorganization are, or will be, owned, directly or
indirectly, by shareholders of the Corporation immediately before such
reorganization (assuming for purposes of such determination that there is
no change in the record ownership of the Corporation's securities from
the record date for shareholder approval of such agreement until such
reorganization and that such record owners hold no securities of the
other parties to such reorganization, but including in such determination
any securities of the other parties to such reorganization held by
affiliates of the Corporation);
(3) The sale of substantially all of the Corporation's business
and/or assets to a person or entity which is not a Subsidiary or other
affiliate; or
(4) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act but excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), other than a person who is
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
more than 20% of the outstanding Shares of Class A Common Stock at the
time of adoption of this Plan (or an affiliate, successor, heir,
descendent or related party of or to any such person), becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
more than 50% of the combined voting power of the Corporation's then
outstanding securities entitled to then vote generally in the election of
directors of the Corporation.
(h) "CLASS A COMMON STOCK" shall mean the Class A Common Stock of the
Corporation and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
(i) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(j) "COMMISSION" shall mean the Securities and Exchange Commission.
(k) "COMMITTEE" shall mean the Board or a committee appointed by the
Board to administer this Plan, which committee shall be comprised of at
least two directors.
(l) "COMPANY" shall mean, collectively, the Corporation and its
Subsidiaries.
(m) "CORPORATION" shall mean Univision Communications Inc., a Delaware
corporation, and its successors.
(n) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not a
director) or key employee of the Company, or any Other Eligible Person, as
determined by the Committee in its discretion.
(o) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
14
(p) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(q) "FAIR MARKET VALUE" on any date shall mean (i) if the stock is
listed or admitted to trade on a national securities exchange, the closing
price of the stock on the Composite Tape, as published in the Western
Edition of The Wall Street Journal, of the principal national securities
exchange on which the stock is so listed or admitted to trade, on such date,
or, if there is no trading of the stock on such date, then the closing price
of the stock as quoted on such Composite Tape on the next preceding date on
which there was trading in such shares; (ii) if the stock is not listed or
admitted to trade on a national securities exchange, the last price for the
stock on such date, as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the NASDAQ National Market Reporting System
or a similar organization if the NASD is no longer reporting such
information; (iii) if the stock is not listed or admitted to trade on a
national securities exchange and is not reported on the National Market
Reporting System, the mean between the bid and asked price for the stock on
such date, as furnished by the NASD or a similar organization; or (iv) if
the stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System and if bid
and asked prices for the stock are not furnished by the NASD or a similar
organization, the value as established by the Committee at such time for
purposes of this Plan.
(r) "INCENTIVE STOCK OPTION" shall mean an Option which is designated
and intended as an incentive stock option within the meaning of Section 422
of the Code, the award of which contains such provisions (including but not
limited to the receipt of shareholder approval of this Plan, if the award is
made prior to such approval) and is made under such circumstances and to
such persons as may be necessary to comply with that section.
(s) "NONQUALIFIED STOCK OPTION" shall mean an Option that is designated
as a Nonqualified Stock Option and shall include any Option intended as an
Incentive Stock Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated as an incentive
stock option shall be deemed to be designated a nonqualified stock option
under this Plan and not an incentive stock option under the Code.
(t) "OPTION" shall mean an option to purchase Class A Common Stock under
this Plan. The Committee shall designate any Option granted to an Eligible
Employee as a Nonqualified Stock Option or an Incentive Stock Option.
(u) "OTHER ELIGIBLE PERSON" shall mean any non-employee individual
consultant or advisor, or (to the extent provided in the next sentence)
agent, who renders or has rendered bona fide services (other than services
in connection with the offering or sale of securities of the Company in a
capital raising transaction) to the Company, and who is selected to
participate in this Plan by the Committee. A non-employee agent providing
bona fide services to the Company (other than as an eligible advisor or
consultant) may also be selected as an Other Eligible Person if such agent's
participation in this Plan would not adversely affect (x) the Corporation's
eligibility to use Form S-8 to register under the Securities Act the offer
and sale by the Company of shares issuable under this Plan or (y) the
Corporation's compliance with any other applicable laws.
(v) "PARTICIPANT" shall mean an Eligible Employee who has been granted
an Award under this Plan.
(w) "PERFORMANCE SHARE AWARD" shall mean an award of a right to receive
shares of Class A Common Stock under Section 5.1, or to receive shares of
Class A Common Stock or other compensation (including cash) under
Section 5.4, the issuance or payment of which is contingent upon, among
other conditions, the attainment of performance objectives specified by the
Committee.
(x) "PERSONAL REPRESENTATIVE" shall mean the person or persons who, upon
the disability or incompetence of a Participant, shall have acquired on
behalf of the Participant, by legal proceeding or
15
otherwise, the power to exercise the rights or receive benefits under this
Plan by virtue of having become the legal representative of the Participant.
(y) "PHANTOM STOCK" shall mean an award or right to receive a cash bonus
where the Eligible Employee is awarded units and the amount of the cash
bonus equals the value of a share of the Class A Common Stock on the date of
award times the number of units that the Eligible Employee has earned on the
date of payment.
(z) "PLAN" shall mean this Univision Communications Inc. 1996
Performance Award Plan.
(aa) "RESTRICTED STOCK" shall mean shares of Class A Common Stock
awarded to a Participant subject to payment of such consideration, if any,
and such conditions on vesting (which may include, among others, the passage
of time, specified performance objectives or other factors) and such
transfer and other restrictions as are established in or pursuant to this
Plan and the related Award Agreement, for so long as such shares remain
unvested under the terms of the applicable Award Agreement.
(bb) "RESTRICTED STOCK UNITS" shall mean units payable in shares of
Class A Common Stock upon vesting of the units which are awarded to a
Participant subject to payment of such consideration, if any, and such
conditions on vesting (which may include, among others, the passage of time,
specified performance objectives or other factors) and such transfer and
other restrictions as are established in or pursuant to this Plan and the
related Award Agreement, for so long as such units remain unvested under the
terms of the applicable Award Agreement.
(cc) "RETIREMENT" shall mean retirement with the consent of the Company
or, from active service as an employee or officer of the Company on or after
attaining age 55 with ten or more years of service or age 65.
(dd) "RULE 16B-3" shall mean Rule 16b-3 as promulgated by the Commission
pursuant to the Exchange Act, as amended from time to time, but subject to
any applicable transition rules.
(ee) "SECTION 16 PERSON" shall mean a person subject to Section 16(a) of
the Exchange Act.
(ff) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
(gg) "STOCK APPRECIATION RIGHT" or "SAR" shall mean a right authorized
under this Plan to receive a number of shares of Class A Common Stock or an
amount of cash, or a combination of shares and cash, the aggregate amount or
value of which is determined by reference to a change in the Fair Market
Value of the Class A Common Stock.
(hh) "STOCK BONUS" shall mean an Award of shares of Class A Common Stock
for no consideration other than past services and without restriction other
than such transfer or other restrictions as the Committee may deem advisable
to assure compliance with law.
(ii) "SUBSIDIARY" shall mean any corporation or other entity a majority
of whose outstanding voting stock or voting power or equity interest is
beneficially owned directly or indirectly by the Corporation.
(jj) "TOTAL DISABILITY" shall mean a "permanent and total disability"
within the meaning of Section 22(e)(3) of the Code and such other
disabilities, infirmities, afflictions or conditions as the Committee by
rule may include.
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UNIVISION COMMUNICATIONS INC.
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