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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material under Rule 14a-12
HOLLINGER INTERNATIONAL INC.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[HOLLINGER INTERNATIONAL INC. LOGO]
401 NORTH WABASH AVENUE
CHICAGO, ILLINOIS 60611
TELEPHONE (312) 321-2299; FACSIMILE (312) 321-0629
MARCH 27, 2001
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of Hollinger
International Inc. (the "Company") to be held on Thursday, May 17, 2001, at
11:00 a.m., local time, at the Metropolitan Club, One East 60th Street, New
York, New York 10022.
At the meeting you will be asked to elect 16 directors. The Board of
Directors will also report on the Company's affairs and a discussion period will
be provided for questions and comments. The Board of Directors recommends that
you vote in favor of the proposal to elect the nominated directors.
The Board of Directors appreciates and encourages stockholder participation
in the Company's affairs. Whether or not you plan to attend the Annual Meeting,
it is important that your shares be represented. Accordingly, we request that
you sign, date and mail the enclosed proxy in the postage paid envelope provided
at your earliest convenience.
Very truly yours,
/s/ CONRAD M. BLACK
CONRAD M. BLACK
Chairman of the Board of Directors
and Chief Executive Officer
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[HOLLINGER INTERNATIONAL INC. LOGO]
401 NORTH WABASH AVENUE
CHICAGO, ILLINOIS 60611
TELEPHONE (312) 321-2299; FACSIMILE (312) 321-0629
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2001
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Hollinger International Inc. (the "Company") will be held on
Thursday, May 17, 2001, at the Metropolitan Club, One East 60th Street, New
York, New York 10022, at 11:00 a.m., local time, for the following purposes:
1. To elect 16 directors to serve for a one-year term expiring at the
2002 Annual Meeting of Stockholders and until their successors are duly
elected and qualified (the "Director Election Proposal").
2. To transact such further and other business as may properly come
before the meeting or any adjournments or postponements thereof.
Directors shall be elected by a plurality of the votes cast in person or by
proxy by holders of the Company's Class A Common Stock, par value $.01 per share
("Class A Common Stock"), Class B Common Stock, par value $.01 per share ("Class
B Common Stock," and together with Class A Common Stock, "Common Stock") and
Series C Convertible Preferred Stock, par value $.01 per share ("Series C
Preferred Stock"), voting together as a single class. Class A Common Stock is
entitled to one vote per share, Class B Common Stock is entitled to ten votes
per share and Series C Preferred Stock is entitled to ten votes per share.
The Board of Directors has fixed the close of business on March 21, 2001
(the "Record Date") as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting and any adjournments or
postponements thereof. A list of stockholders as of the Record Date will be
available for inspection by stockholders at the Company's office located at 712
5th Avenue, New York, New York 10019 during ordinary business hours in the
ten-day period prior to and including the Annual Meeting.
As of the Record Date, Hollinger Inc. directly or indirectly owned all of
the Series C Preferred Stock, all of the Class B Common Stock and 20,313,720
shares of Class A Common Stock, which in the aggregate represented 71.27% of the
outstanding combined voting power of the Common Stock and Series C Preferred
Stock. Therefore, Hollinger Inc. has sufficient voting power to approve the
Director Election Proposal regardless of the vote of any other stockholders.
By Order of the Board of Directors,
LOGO
MARK S. KIPNIS
Vice President-Law and Secretary
March 27, 2001
Whether or not you plan to attend the meeting in person, you are requested
to mark, sign, date and return the enclosed proxy card in the enclosed,
addressed, postage paid envelope provided for that purpose.
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[HOLLINGER INTERNATIONAL INC. LOGO]
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 2001
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Hollinger International Inc., a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders (the
"Annual Meeting") of the Company to be held on Thursday, May 17, 2001, at 11:00
a.m., local time, at the Metropolitan Club, One East 60th Street, New York, New
York 10022. This Proxy Statement is being mailed on or about March 27, 2001.
Proxies are being solicited from holders of record as of the close of business
on March 21, 2001 (the "Record Date") of the outstanding shares of the Company's
Class A Common Stock, par value $.01 per share ("Class A Common Stock"), Class B
Common Stock, par value $.01 per share ("Class B Common Stock," and together
with Class A Common Stock, "Common Stock") and Series C Convertible Preferred
Stock, par value $.01 per share ("Series C Preferred Stock") for use at the
Annual Meeting and at any adjournments or postponements thereof.
At the Annual Meeting, stockholders of the Company will be asked to vote
upon the following:
1. To elect 16 directors to serve for a one-year term expiring at the
2002 Annual Meeting of Stockholders and until their successors are duly
elected and qualified (the "Director Election Proposal").
2. To transact such further and other business as may properly come
before the meeting or any adjournments or postponements thereof.
It is expected that the solicitation will be primarily by mail or
telephone, but proxies may also be solicited personally by regular employees of
the Company. The cost of such solicitation will be borne by the Company. The
Company will not pay any compensation for the solicitation of proxies, but upon
request will reimburse banks, brokers and other nominees for their reasonable
expenses incurred in sending proxy materials to, and obtaining instructions
from, beneficial owners.
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TABLE OF CONTENTS
PAGE
----
THE COMPANY................................................. 3
THE ANNUAL MEETING.......................................... 3
General................................................ 3
Record Date............................................ 3
Required Votes......................................... 3
Proxies................................................ 4
Ownership by Hollinger Inc............................. 4
PRINCIPAL STOCKHOLDERS...................................... 5
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 7
Relationship with Hollinger Inc........................ 7
Management Services and Business Opportunities......... 8
Other Transactions..................................... 9
THE DIRECTOR ELECTION PROPOSAL.............................. 10
Information Concerning Nominees as Directors........... 10
Meetings and Committees................................ 13
Directors' Compensation................................ 14
Section 16(a) Beneficial Ownership Reporting
Compliance............................................ 14
Executive Compensation................................. 14
INDEPENDENT AUDITORS........................................ 21
STOCKHOLDER PROPOSALS....................................... 21
OTHER MATTERS............................................... 21
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As used in this Proxy Statement, unless the context otherwise requires, (i)
the "Company" refers to Hollinger International Inc. and its consolidated
subsidiaries and affiliated companies; (ii) "Publishing" refers to Hollinger
International Publishing Inc. and its consolidated subsidiaries and affiliated
companies; (iii) "Jerusalem Post" refers to the subsidiaries of the Company
publishing The Jerusalem Post; (iv) "The Telegraph" refers to Telegraph Group
Limited and its consolidated subsidiaries and affiliated companies; (v)
"Hollinger Inc." refers to Hollinger Inc. and its consolidated subsidiaries;
(vi) "XSTM" refers to XSTM Holdings (2000) Inc. (formerly Southam Inc.) and its
consolidated subsidiaries; (vii) "HCPH" refers to Hollinger Canadian Publishing
Holdings Inc. and its consolidated subsidiaries; and (viii) "American
Publishing" refers to American Publishing Company and its consolidated
subsidiaries.
THE COMPANY
The Company is a global newspaper publisher with English-language
newspapers in the United States, the United Kingdom, Canada and Israel. Its
assets include The Telegraph Group Limited in Britain, which publishes The Daily
Telegraph, the Chicago Sun-Times and a large number of community newspapers in
the Chicago area, the Jerusalem Post, the Hollinger Business Media Group, a
substantial portfolio of new media investments and its interests in CanWest
Global Communications Corp. The Company's Canadian newspapers are located
primarily in Ontario and British Columbia and are owned through Hollinger
Canadian Newspapers, Limited Partnership, in which the Company has approximately
an 87% interest, and the Company has a 50% interest in the National Post. The
Company's strategy is to achieve improvements in the cash flow and profitability
of its newspapers.
THE ANNUAL MEETING
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors from holders of Common Stock and Series C
Preferred Stock for use at the Annual Meeting.
At the Annual Meeting, stockholders will be asked to vote upon the
following:
1.DIRECTOR ELECTION PROPOSAL: To elect 16 directors to serve for a one-year
term expiring at the 2002 Annual Meeting of Stockholders and until their
successors are duly elected and qualified.
2.OTHER BUSINESS: To transact such further and other business as may
properly come before the meeting or any adjournments or postponements
thereof.
RECORD DATE
The Board of Directors has fixed the close of business on March 21, 2001 as
the Record Date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting. Only holders of record of shares of Common Stock
and Series C Preferred Stock at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. On the Record Date,
92,285,671 shares of Class A Common Stock were outstanding and held by
approximately 220 holders of record (and approximately 4,000 beneficial owners),
14,990,000 shares of Class B Common Stock were outstanding and held directly or
indirectly by Hollinger Inc. and 829,409 shares of Series C Preferred Stock were
outstanding and held directly or indirectly by Hollinger Inc. Class A Common
Stock is entitled to one vote per share, Class B Common Stock is entitled to ten
votes per share and Series C Preferred Stock is entitled to ten votes per share.
REQUIRED VOTES
Directors shall be elected by a plurality of the votes cast in person or by
proxy by holders of the Common Stock and the Series C Preferred Stock. An
abstention is deemed "present" but is not deemed a "vote cast." As a result,
abstentions and broker "non-votes" are not included in the tabulation of the
voting results on the election of directors.
As of the Record Date, Hollinger Inc. directly or indirectly owns
approximately 71.27% of the combined voting power of the outstanding Common
Stock and Series C Preferred Stock. Consequently, Hollinger Inc. has sufficient
voting power to elect the Directors regardless of the vote of any other
stockholders. Hollinger Inc. has indicated that it will vote in favor of the
nominated Directors.
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PROXIES
Stockholders of record on the Record Date are entitled to cast their votes,
in person or by properly executed proxy, at the Annual Meeting. The presence, in
person or by properly executed proxy, of holders of one-third of the votes
attributable to the outstanding shares of Common Stock and Series C Preferred
Stock will constitute a quorum at the Annual Meeting.
All shares represented at the Annual Meeting by properly executed proxies
received prior to or at the Annual Meeting and not properly revoked will be
voted in accordance with the instructions indicated in such proxies. If no
instructions are indicated, such proxies will be voted FOR the Director Election
Proposal. The Board of Directors does not know of any matters, other than the
matters described in the Notice of Annual Meeting attached to this Proxy
Statement, that will come before the Annual Meeting.
If a quorum is not present at the time the Annual Meeting is convened, or
if for any other reason the Company believes that additional time should be
allowed, the Company may adjourn or postpone the Annual Meeting by a vote of the
stockholders present. If the Company proposes to adjourn or postpone the Annual
Meeting, the persons named in the enclosed proxy card will vote all shares for
which they have voting authority in favor of such adjournment or postponement.
Any proxy given may be revoked at any time before it is voted. Proxies may
be revoked by (i) filing with the Company Secretary, at or before the Annual
Meeting, a written notice of revocation bearing a date later than the date of
the proxy; (ii) duly executing a subsequent proxy relating to the same shares
and delivering it to the Company Secretary at or before the Annual Meeting; or
(iii) attending the Annual Meeting and voting in person (although attendance at
the Annual Meeting will not in and of itself constitute revocation of a proxy).
Any written notice revoking a proxy should be sent to: Hollinger International
Inc., 401 North Wabash Avenue, Suite 740, Chicago, Illinois 60611, Attention:
Secretary.
Proxies are being solicited by and on behalf of the Board of Directors. All
expenses of this solicitation, including the cost of mailing this Proxy
Statement, will be borne by the Company. In addition to solicitation by use of
the mails, proxies may be solicited by directors, officers and employees of the
Company in person or by telephone, telegram or other means of communication.
Such directors, officers and employees will not be additionally compensated but
may be reimbursed for out-of-pocket expenses in connection with such
solicitation. Arrangements will be made with custodians, nominees and
fiduciaries for forwarding of proxy solicitation material to beneficial owners
held of record by such persons, and the Company may reimburse such custodians,
nominees and fiduciaries for reasonable expenses incurred in connection
therewith.
OWNERSHIP BY HOLLINGER INC.
Hollinger Inc. directly or indirectly owns 37.66% of the combined equity
interest and 71.27% of the combined voting power of the outstanding Common Stock
and Series C Preferred Stock (without giving effect to the future issuance of
Class A Common Stock in connection with the Series E Redeemable Convertible
Preferred Stock, par value $.01 per share ("Series E Preferred Stock"), of the
Company. As a result, Hollinger Inc. will continue to be able to control the
outcome of any election of directors and to direct management policy, strategic
direction and financial decisions of the Company and its subsidiaries. Hollinger
Inc. owns all of the outstanding Series C Preferred Stock, which shall convert
automatically on June 1, 2001 pursuant to the conversion formula set forth in
its Certificate of Designations. The conversion rate is initially 9.8646 shares
of Class A Common Stock for each share of Series C Preferred Stock subject to
adjustment as set forth in its Certificate of Designations. Hollinger Inc. owns
all of the outstanding Series E Preferred Stock, which is convertible at any
time into shares of Class A Common Stock at the initial conversion price of the
Canadian dollar equivalent of $14 per share. Based on the initial conversion
price, 891,173 shares of Class A Common Stock would have been issuable as of
March 21, 2001.
Hollinger Inc. is effectively controlled by The Hon. Conrad M. Black,
Chairman of the Board and Chief Executive Officer of Hollinger Inc. and the
Company, through his direct and indirect ownership and control of Hollinger
Inc.'s securities. Mr. Black has advised the Company that Hollinger Inc. does
not presently intend to reduce its voting power in the Company's outstanding
Common Stock to less than 50%. Furthermore, Mr. Black has advised the Company
that he does not presently intend to reduce his voting control over Hollinger
Inc. such that a third party would be able to exercise effective control over
it.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 21, 2001, certain information
regarding those persons or entities known to hold more than 5% of the
outstanding shares of Class A Common Stock, Class B Common Stock and Series C
Preferred Stock and ownership of Class A Common Stock, Class B Common Stock and
Series C Preferred Stock by the named executive officers, the incumbent
directors (whom are all the nominees for directors) and all directors and
executive officers as a group.
CLASS AND
NUMBER OF SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OWNED (1)(2) OF CLASS (3)
---------------- ------------------------- ------------
Tweedy, Browne Company LLC........... 9,242,415 Class A Common (13) 8.0%
350 Park Avenue
New York, New York 10022
Southeastern Asset Management Inc.,
and................................ 9,207,900 Class A Common (14) 8.0%
Mr. O. Mason Hawkins, its Chairman
Suite 800
6410 Popular Avenue
Memphis, Tennessee 38119
Hollinger Inc. and affiliates........ 47,512,924 Class A Common (4) 39.8%
10 Toronto Street 14,990,000 Class B Common (4) 100.0%
Toronto, Ontario 829,409 Series C Preferred (4) 100.0%
M5C 2B7 Canada
The Hon. Conrad M Black, P.C., O.C... 47,512,924 Class A Common (1), (2), (4), (5) 39.8%
14,990,000 Class B Common (4), (5) 100.0%
829,409 Series C Preferred (4) 100.0%
Dwayne O. Andreas.................... 212,000 Class A Common (1), (6) *
Peter Y. Atkinson.................... 179,876 Class A Common (1), (2) *
Barbara Amiel Black.................. 47,512,924 Class A Common (1), (2), (7) 39.8%
14,990,000 Class B Common (7) 100.0%
829,409 Series C Preferred (7) 100.0%
John A. Boultbee..................... 226,162 Class A Common (1), (2) *
Richard R. Burt...................... 11,500 Class A Common (1) *
Raymond G. Chambers.................. 0 Class A Common (1) *
Daniel W. Colson..................... 436,473 Class A Common (1), (2), (11) *
Fredrick A. Creasey.................. 12,500 Class A Common (1) *
John D. Ferguson..................... 58,750 Class A Common (1) *
Paul B. Healy........................ 124,500 Class A Common (1) *
Mark S. Kipnis....................... 37,500 Class A Common (1) *
Dr. Henry A. Kissinger............... 11,500 Class A Common (1) *
Marie-Josee Kravis, O.C.............. 11,500 Class A Common (1) *
Frederic Lebolt...................... 17,500 Class A Common (1) *
Shmuel Meitar........................ 11,500 Class A Common (1) *
Richard N. Perle..................... 13,200 Class A Common (1), (8) *
F. David Radler...................... 868,620 Class A Common (1), (2), (9) *
Jerry Strader........................ 101,000 Class A Common (1) *
Robert S. Strauss.................... 21,500 Class A Common (1), (10) *
A. Alfred Taubman.................... 11,500 Class A Common (1), (12) *
James R. Thompson.................... 12,000 Class A Common (1) *
Lord Weidenfeld...................... 11,500 Class A Common (1) *
Leslie H. Wexner..................... 37,000 Class A Common (1) *
All Directors and Executive Officers
as a group (24 persons)............ Class A Common (15) 40.4%
- ---------
(1) Includes shares subject to presently exercisable options or options
exercisable within 60 days of March 21, 2001 held by executive officers and
directors under the Company's 1994 Stock Option Plan, 1997 Stock Incentive
Plan and 1999 Stock Incentive Plan as follows: Mr. Black 521,250 shares;
Mr. Andreas 11,000 shares; Mr. Atkinson 155,000 shares; Mrs. Black 82,500
shares; Mr. Boultbee 196,000 shares; Mr. Burt 11,000 shares; Mr. Chambers 0
shares; Mr. Colson 252,500 shares;
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Mr. Creasey 12,500 shares; Mr. Ferguson 58,750 shares; Mr. Healy 124,500 shares;
Mr. Kipnis 37,500 shares; Dr. Kissinger 11,000 shares; Mrs. Kravis 11,000
shares; Mr. Lebolt 17,500 shares; Mr. Meitar 11,000 shares; Mr. Perle 2,000
shares; Mr. Radler 521,250 shares; Mr. Strader 101,000 shares; Mr. Strauss
7,000 shares; Mr. Taubman 11,000 shares; Mr. Thompson 11,000 shares; Lord
Weidenfeld 11,000 shares; and Mr. Wexner 11,000 shares.
(2) The directors and executive officers as a group (24 persons) were the
beneficial owners of 48,206,874 shares of Class A Common Stock (which
includes: presently exercisable options to purchase 2,188,250 shares of
Class A Common Stock, 14,990,000 shares of Class B Common Stock which are
convertible into an equal number of shares of Class A Common Stock; 829,409
shares of Series C Preferred Stock which are convertible into 8,181,788
shares of Class A Common Stock as of March 21, 2001; 134,126 shares of
Series E Preferred Stock which are convertible into 891,173 shares of Class
A Common Stock as of March 21, 2001; 2,479,456 shares of Hollinger Inc.
Series II Preference Shares ("Series II Shares") which are convertible into
1,140,549 shares of Class A Common Stock as of March 21, 2001) and 535,100
Hollinger Inc. Retractable Common Shares and/or options ("Retractable
Shares") which are convertible into 332,783 shares of Class A Common Stock;
or approximately 40.4% of the outstanding Class A Common Stock. Ownership
of the Retractable Shares is as follows: Mr. Atkinson 40,000 Retractable
Shares convertible into 24,876 shares; Mrs. Black 1,600 Retractable Shares
convertible into 995 shares; Mr. Black 250,000 Retractable Shares
convertible into 155,478 shares; Mr. Boultbee 48,500 Retractable Shares
convertible into 30,162 shares; Mr. Colson 80,000 Retractable Shares
convertible into 49,753 shares; and Mr. Radler 115,000 Retractable Shares
convertible into 71,519 shares. The directors and executive officers as a
group were also the beneficial owners of 14,990,000 shares of Class B
Common Stock or 100% of the outstanding Class B Common Stock, as of March
21, 2001.
(3) An asterisk (*) indicates less than one percent of a class of stock.
(4) Includes: 14,990,000 shares of Class A Common Stock into which an equal
number of shares of Class B Common Stock are convertible; 8,181,788 shares
of Class A Common Stock (based upon on an assumed March 21, 2001
conversion) into which 829,409 shares of Series C Preferred Stock are
convertible; 891,173 shares of Class A Common Stock (based upon an assumed
March 21, 2001 conversion) into which 134,126 shares of Series E Preferred
Stock are convertible at any time at the Canadian dollar equivalent of
$14.00 per share. The Ravelston Corporation Limited ("Ravelston"), 10
Toronto Street, Toronto, Ontario, Canada M5C 2B7, effectively controls
Hollinger Inc. through its direct or indirect control or direction
(including through its subsidiary Argus Corporation Limited ("Argus")) over
70% of the outstanding Retractable Common Shares of Hollinger Inc. Mr.
Black indirectly controls Ravelston. Certain executive officers of the
Company, including Messrs. Black, Radler, Colson, Atkinson, Boultbee and
Creasey are employees of Ravelston. Mr. Black also beneficially owns
47,512,924 shares of Class A Common Stock (which includes 1,611,039 Series
II Shares and options to purchase 521,250 shares of Class A Common Stock of
the Company, as described in note (1), and also includes options to
purchase 82,500 shares owned by his spouse, Barbara Amiel Black; Mr. Black
disclaims beneficial ownership of his spouse's options). As of March 21,
2001, there were 35,426,087 outstanding Retractable Common Shares and
6,387,279 outstanding Series II Shares of Hollinger Inc. Certain of the
executive officers and directors of the Company, including Messrs. Black,
Radler, Colson, Andreas, Atkinson, Boultbee, Creasey, Taubman and Mrs.
Black, also own, directly or indirectly, equity securities of Hollinger
Inc. or own or have the right to acquire equity securities of Hollinger
Inc. through Hollinger Inc.'s Executive Share Option Plan. As of March 21,
2001, all executive officers and directors of the Company and other
entities controlled by Mr. Black beneficially held an aggregate of 354,720
Retractable Common Shares and 2,479,456 Series II Shares of Hollinger Inc.,
or approximately 39% of the outstanding Retractable Common Shares and 1% of
the outstanding Series II Shares, respectively. Mr. Taubman indirectly owns
30,000 Retractable Common Shares of Hollinger Inc. through the A. Alfred
Taubman Restated Revocable Trust.
(5) Includes: 9,600 shares of Class A Common Stock which are held by Conrad
Black Capital Corporation; 600 shares owned by Mr. Black; 500 shares of
Class A Common Stock owned by Mrs. Black; and 50 shares of Class A Common
Stock owned by Mr. Black's son. Also includes: 14,990,000 shares of Class B
Common Stock; 8,181,788 shares of Class A Common Stock into which 829,409
shares of Series C Preferred Stock are convertible; and 891,173 shares of
Class A Common Stock into which 134,126 shares of Series E Preferred Stock
are convertible, all of which are directly or indirectly held by
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Hollinger Inc. and as to which Mr. Black may be deemed to have indirect
beneficial ownership. Also includes 741,077 shares of Class A Common Stock
into which 1,611,039 Series II Shares are convertible.
(6) Includes 200,500 shares of Class A Common Stock indirectly held by Mr.
Andreas through a Mutual Income Fund. Mr. Andreas is the Chairman Emeritus
and a current director of Archer-Daniels-Midland Co., which owns 1,759,979
shares of Class A Common Stock. Mr. Andreas disclaims beneficial ownership
of such securities.
(7) Mrs. Black may be deemed to have beneficial ownership of the shares of
Common Stock, Series C Preferred Stock and Series E Preferred Stock held by
Hollinger Inc., Conrad Black Capital Corporation and Mr. Black. Mrs. Black
disclaims beneficial ownership of such securities. See Note (5) above.
(8) Includes 5,000 shares of Class A Common Stock held by Mr. Perle's wife and
1,600 shares of Class A Common Stock held by the Perle Defined Pension Plan
as to which Mr. Perle may be deemed to have indirect beneficial ownership.
(9) Includes 9,000 shares of Class A Common Stock held by F.D. Radler Ltd., 500
shares of Class A Common Stock owned by Mr. Radler, 200 shares of Class A
Common Stock held by Mr. Radler's wife, 200 shares of Class A Common Stock
held by one daughter, and 200 shares of Class A Common Stock held by
another daughter, as to which Mr. Radler may be deemed to have indirect
beneficial ownership. Mr. Radler disclaims beneficial ownership of the
Class A Common Stock held by his wife and daughters. Also includes 265,751
shares of Class A Common Stock into which 577,720 Series II Shares are
convertible.
(10) Includes 10,000 shares of Class A Common Stock held by Robert and Helen
Strauss Family Partnership.
(11) Includes 133,720 shares of Class A Common Stock into which 290,697 Series
II Shares are convertible and 500 shares of Class A Common Stock owned by
Mr. Colson.
(12) Includes 500 shares of Class A Common Stock held by the A. Alfred Taubman
Restated Revocable Trust.
(13) The information concerning the beneficial ownership of Tweedy, Browne
Company LLC has been obtained from a Schedule 13D filed with the Commission
by such person on February 13, 2001. Such information has not been
independently verified by the Company.
(14) The information concerning the beneficial ownership of Southeastern Asset
Management and Mr. O. Mason Hawkins, its Chairman, has been obtained from a
Schedule 13D filed with the Commission by such persons on February 9, 2001
and an amendment to such Schedule 13D also filed on February 9, 2001. Such
information has not been independently verified by the Company.
(15) See notes (1) through (12).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIP WITH HOLLINGER INC.
GENERAL. Prior to its initial public offering in May 1994, the Company had
been a wholly owned subsidiary of Hollinger Inc. Hollinger Inc. presently has
the exclusive right to vote shares constituting approximately 7.27% of the total
voting power of the Common Stock and Series C Preferred Stock (without giving
effect to the future issuance of Class A Common Stock in connection with the
Series E Preferred Stock of the Company) and the ability to elect the entire
Board of Directors. Four of the nominees (Messrs. Black, Colson, Radler and Mrs.
Black) for election to the Board of Directors of the Company are officers or
directors of Hollinger Inc.
SECURITY FOR HOLLINGER INC. CREDIT FACILITIES. All of the shares of the
Company owned by Hollinger Inc. and its wholly owned subsidiaries are pledged to
a syndicate of Canadian chartered banks as security for Hollinger Inc.'s Cdn.$62
million term facility, Cdn.$90 million revolving facility, and Cdn.$150 million
non-revolving bridge loan, and to a Canadian chartered bank as security for
Hollinger Inc.'s Cdn.$10 million operating facility.
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OTHER ARRANGEMENTS. On July 29, 1997, Hollinger Inc. made an issuer bid
(the "Debenture Offer") for all of its outstanding 7% XSTM-linked debentures
("Debentures"), with the consideration offered per Cdn.$1,000 principal amount
of Debentures being, at the option of a tendering holder of Debentures, (i)
Cdn.$1,342.86 or (ii) Cdn.$771.43 and 57.143 non-voting special shares ("HCPH
Special Shares") of HCPH, a subsidiary of the Company. On June 20, 2000, each
HCPH Special Share was redeemed for US$8.88. On July 11, 2000, the Company
loaned $36.8 million to a subsidiary of Hollinger Inc. in connection with the
cash purchase by Hollinger Inc. of HCPH Special Shares. The loan is payable on
demand and bears interest at the rate of 13% per annum.
Additional or modified arrangements and transactions may be entered into in
the future by the Company and Hollinger Inc. and their respective subsidiaries.
Any such future arrangements and transactions will be determined through
negotiation between the Company and Hollinger Inc. and it is possible that
conflicts of interest will be involved. In general, the Audit Committee of the
Board of Directors is responsible for recommending to the Board of Directors
policies and procedures for dealing with conflicts of interest and for reviewing
any such arrangements and transactions.
MANAGEMENT SERVICES AND BUSINESS OPPORTUNITIES
Concurrently with the consummation of the Company's initial public offering
in 1994, the Company and Hollinger Inc. entered into agreements for the purpose
of defining their ongoing relationships, including a services agreement, to
which Publishing later became a party, and a Business Opportunities Agreement.
These agreements were developed in the context of a parent-subsidiary
relationship and, therefore, were not the result of arms-length negotiations
between independent parties. The Business Opportunities Agreement was
subsequently amended, with the approval of the Audit Committee, in 1995 and 1996
(as so amended, the "Business Opportunities Agreement"). In 1998, the management
services arrangements were restructured to reflect the transformation of
Hollinger Inc. primarily into a holding company for the Company and the
provision by Ravelston of management services. New agreements (the "Services
Agreements") were entered into between Ravelston and the Company and XSTM. The
Services Agreements are generally consistent in their scope and terms with the
prior agreements which they superseded.
MANAGEMENT SERVICES. Pursuant to the Services Agreements, Ravelston
provides advisory, consultative, procurement and administrative services to the
Company and its respective subsidiaries including, among other things, strategic
advice, planning and financial services (including advice and assistance with
respect to acquisitions, divestitures or joint venture arrangements); consulting
services regarding risk management and insurance coverage; and assistance in
operational matters. In 2000 and 1999 in the aggregate approximately $24 million
plus Cdn.$18.5 million and $38 million, respectively, was paid in fees pursuant
to the Services Agreements. The fees paid by the Company were approved by the
Audit Committee as reasonable for the services rendered. The amount of fees
payable pursuant to the Services Agreements for 2001 and future years will be
determined annually by agreement between Ravelston and the Audit Committee. The
Services Agreements may be terminated by either party upon 180 days prior
written notice. Ravelston's affiliates include Messrs. Black, Radler, Colson,
Atkinson, Boultbee and Creasey and Mrs. Black, who are officers and/or directors
of both Hollinger Inc. and the Company and who, with the exception of Mrs.
Black, do not receive compensation directly from the Company in their capacities
as executive officers of the Company or Hollinger Inc. Additionally, $1.56
million was paid to Ravelston's affiliate, Moffat Management, for services
provided to the Company's Community Newspaper Group.
BUSINESS OPPORTUNITIES. The Business Opportunities Agreement provides that
the Company is Hollinger Inc.'s principal vehicle for engaging in and effecting
acquisitions in the newspaper business and in related media business in the
United States, Israel and, through The Telegraph, the United Kingdom, the rest
of the European Community, Australia and New Zealand (the "Telegraph
Territory"). Hollinger Inc. has reserved to itself the ability to pursue all
media (including newspaper) acquisition opportunities outside the United States,
Israel and the Telegraph Territory and all media acquisition opportunities
unrelated to the newspaper business in the United States, Israel and the
Telegraph Territory. As newspaper acquisition opportunities arise in the United
States, Israel and the Telegraph Territory, the Company has the right to pursue
such opportunities directly or through The Telegraph. If Hollinger Inc. acquires
a newspaper business in the United States or Israel, Hollinger Inc. will be
obligated to offer such business for sale to the Company on terms no
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12
less favorable to the Company than those obtained by Hollinger Inc. Under the
Business Opportunities Agreement, as newspaper or media acquisitions arise in
Canada, Hollinger Inc. has the right to pursue such opportunities. Likewise, if
the Company acquires a newspaper business in Canada, the Company will be
obligated to offer such business for sale to Hollinger Inc. on terms no less
favorable to Hollinger Inc. than those obtained by the Company. Hollinger Inc.,
through wholly owned subsidiaries, may continue to acquire newspapers in Canada.
Any decision by the Company with respect to a particular acquisition from, or
disposition to, Hollinger Inc. shall be subject to the review and approval of
the Audit Committee. In addition, the Business Opportunities Agreement does not
restrict newspaper companies in which Hollinger Inc. has a minority investment
from acquiring newspaper or media businesses in the United States or Israel, nor
does it restrict subsidiaries of Hollinger Inc. from acquiring up to 20%
interests in publicly-held newspaper businesses in the United States. For
purposes of the Business Opportunities Agreement, "newspaper business" means the
business of publishing and distributing newspapers, magazines and other paid or
free publications having national, regional, local or targeted markets,
including publications having limited or no news or editorial content such as
shoppers or other total market coverage publications and similar publications.
"Media business" means the business of broadcasting radio, television, cable and
satellite programs (including national, regional or local radio, television,
cable and satellite programs). The Business Opportunities Agreement will remain
in effect so long as Hollinger Inc. holds at least 50% of the voting power of
the Company, subject to termination by either party under certain specified
circumstances.
OTHER TRANSACTIONS
In order to facilitate the rendering of management and advisory services by
Messrs. Black and Radler, and to enhance the business interests of the Company
within the financial community, the newspaper industry and otherwise, a
subsidiary of the Company purchased apartments in New York and Chicago in 1994
for the use of Messrs. Black and Radler, respectively, on a rent-free basis
while they are in the United States. The cost to the Company of building out and
maintaining the apartments for Messrs. Black and Radler was approximately
$66,280 and $23,500, respectively, during 2000. The Company also provides an
automobile and driver for Mr. Black in New York and an automobile for Mr. Radler
in Chicago. The Company has granted options to Messrs. Black and Radler,
respectively, to acquire at any time the Company's interest in the New York and
Chicago apartments, respectively, at their then fair market values. The
Company's subsidiary has agreed to sell the apartments upon exercise of the
option by Mr. Black or Mr. Radler, respectively, or by a third party in the
event of Mr. Black's or Mr. Radler's respective termination as both an officer
and a director of the Company, their respective deaths or permanent disability
or upon notice by Mr. Black or Mr. Radler, respectively. Effective December 29,
2000, Mr. Black exercised his option to purchase.
Effective July 20, 2000, the Company sold four properties of the Company's
U.S. community newspaper group for an aggregate consideration of approximately
$38 million to Bradford Publishing Company, a company formed by a former
Director and Vice President of American Publishing. Certain members of the Board
of Directors of the Company are shareholders of such company. The transaction
was unanimously approved by the Audit Committee and the independent Directors of
the Company as a market value transaction.
The Company consummated three transactions with Horizon Publications Inc.,
a company formed by a former Vice President of American Publishing and having
certain members of the Board of Directors and senior management of the Company
as shareholders. Effective April 1, 2000, in two transactions valued at
approximately $2.5 million and unanimously approved by the Audit Committee and
the independent Directors of the Company as market value transactions, American
Publishing transferred properties in North Dakota and Washington in exchange for
properties in Illinois, and XSTM sold the stock of Westbourne Investments Inc.
to Horizon. Effective November 1, 2000, Horizon acquired two properties in
California and Idaho in a transaction valued at approximately $4.1 million. The
Company had previously contracted to sell such properties to Newspaper Holdings,
Inc. as part of a larger transaction, but conveyed title to those two properties
directly to Horizon pursuant to an assignment to Horizon from Newspaper
Holdings, Inc.
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THE DIRECTOR ELECTION PROPOSAL
Sixteen persons are being nominated for election as directors. The Board of
Directors is elected annually and may consist of such number of directors as the
Board of Directors may by resolution from time to time determine. Any newly
created directorship or vacancy may be filled by a majority of the remaining
members of the Board of Directors then in office. The occurrence of a vacancy
which is not filled within 90 days of the vacancy will constitute a
determination by the Board of Directors that the number of directors is to be
reduced so as to eliminate such vacancy, unless the Board of Directors specifies
otherwise. Unless authority to vote is withheld, shares of Common Stock and
Series C Preferred Stock represented by proxies properly executed will be voted
in favor of each of the persons named below, all of whom are presently directors
of the Company. The Company has no reason to believe that any of the nominees
will be unable to serve as a director but, if that should occur for any reason
prior to the meeting, it is intended that discretionary authority shall be
exercised by the persons designated as proxies to vote the proxies for the
election of any other nominee or nominees of management. Each director elected
at the meeting will hold office until the 2002 Annual Meeting of Stockholders
and until his or her successor is duly elected and qualified.
The stockholders of the Company are not entitled to vote cumulatively in
the election of directors. The holders of Class A Common Stock, Class B Common
Stock and Series C Preferred Stock are entitled to vote in the election of
directors and vote together as a single class. Hollinger Inc., which controls
approximately 71.27% of the combined voting power of both classes of Common
Stock and the Series C Preferred Stock, has indicated its intention to vote in
favor of all the persons named below for election as directors.
INFORMATION CONCERNING NOMINEES AS DIRECTORS
The following table and the notes thereto set forth the names and ages (as
of March 21, 2001) of the 16 persons nominated for election as directors and all
positions and offices with the Company held by them:
NAME AND AGE POSITION(S) WITH THE COMPANY
------------ ----------------------------
Dwayne O. Andreas, 82........................ Director
Barbara Amiel Black, 60...................... Vice President, Editorial and Director
The Hon. Conrad M. Black, P.C., O.C., 56..... Chairman of the Board, Chief Executive
Officer and Director
The Hon. Richard R. Burt, 54................. Director
Raymond G. Chambers, 58...................... Director
Daniel W. Colson, 53......................... Vice Chairman and Director, Deputy Chairman
Chief Executive Officer and Director of the
Telegraph
Dr. Henry A. Kissinger, 77................... Director
Marie-Josee Kravis, O.C., 51................. Director
Shmuel Meitar, 57............................ Director
The Hon. Richard N. Perle, 59................ Co-Chairman of Hollinger Digital Inc. and
Director
F. David Radler, 58.......................... Deputy Chairman, President, Chief Operating
Officer and Director
The Hon. Robert S. Strauss, 82............... Director
A. Alfred Taubman, 77........................ Director
The Hon. James R. Thompson, 64............... Director
Lord Weidenfeld, 81.......................... Director
Leslie H. Wexner, 63......................... Director
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The name, principal occupation, business experience and tenure as a
director of the Company is set forth below for each nominee for election as a
director. Unless otherwise indicated, all principal occupations have been held
for more than five years.
DWAYNE O. ANDREAS, Director. Mr. Andreas has served as a director since
February 1996. Mr. Andreas served as the Chairman of Archer-Daniels-Midland Co.,
a publicly traded Fortune 500 company, from 1970 to January 1999, when Mr.
Andreas became Chairman Emeritus of ADM, and currently serves as a director of
such company and served as its Chief Executive Officer from 1966 to 1997. Mr.
Andreas was Chairman of President Reagan's Task Force on International Private
Enterprise from 1983 to 1985. He served as a director of Salomon, Inc., an
investment banking firm in New York, from 1982 to 1997. Mr. Andreas also serves
on the Company's International Advisory Board.
BARBARA AMIEL BLACK, Vice President, Editorial and Director. Mrs. Black
has served as Vice President, Editorial since September 1995 and as a director
since February 1996. Mrs. Black is the wife of Mr. Black. After an extensive
career in both on and off-camera television production, Mrs. Black was the
editor of The Toronto Sun from 1983 to 1985, a columnist of The Times and senior
political columnist of The Sunday Times of London from 1986 to 1994 and The
Telegraph from 1994 to 1998. She has been a columnist of Maclean's magazine
since 1977. Mrs. Black also serves as Vice President, Editorial of Hollinger
Inc. and Hollinger Canadian Newspapers G.P. Inc. ("HCNGP"), the general partner
of Hollinger Canadian Newspapers, Limited Partnership, a public reporting
company in Canada, and as a director of Hollinger Inc. and Jerusalem Post. She
is the author of two books: "By Persons Unknown" (co-author), which won the
Mystery Writers of America Edgar Award for best non-fiction in 1978, and
"Confessions", a book of political essays published in 1980, which won the
Canadian periodical publishers prize.
THE HON. CONRAD M. BLACK, P.C., O.C., Chairman of the Board of Directors,
Chief Executive Officer and Director, Hollinger International Inc., New York,
Chicago; Hollinger Inc., Toronto; Argus Corporation Ltd., Toronto. Mr. Black has
held these or equivalent or similar positions since 1978. He currently serves as
the Chairman and as a Director of Telegraph Group Limited, London, U.K., and as
a Director of the Jerusalem Post and The Spectator (London). Mr. Black also
serves as a director of Brascan Limited, the Canadian Imperial Bank of Commerce
and CanWest Global Communications Corp. all of which are public reporting
companies in Canada, and as a director of Sotheby's Holdings, Inc. Mr. Black is
Chairman of the Advisory Board of The National Interest (Washington) and a
member of the International Advisory Board of The Council on Foreign Relations
(New York).
THE HON. RICHARD R. BURT, Director. Mr. Burt has served as a director
since September 1994. Mr. Burt has served as Chairman of IEP Advisors L.L.P., an
emerging markets investment banking and advisory services firm, since 1994. He
was a partner with McKinsey & Company, Inc. from 1991 to 1994. Mr. Burt has
served as Chief Negotiator in Strategic Arms Reduction Talks from 1989 to 1991
and as the United States Ambassador to the Federal Republic of Germany from 1985
to 1989. He served as a director of Powerhouse Technologies Inc. from 1994 until
1999, when it was acquired by Anchor Gaming Corp. and as a director of Homestake
Mining Inc. from 1998 until February 2001. Mr. Burt currently serves as a
director of Anchor Gaming, Weirton Steel Corp., Archer-Daniels-Midland Co. and
HCL Technologies, Ltd., all of which are United States public reporting
companies.
RAYMOND G. CHAMBERS, Director. Mr. Chambers is Chairman of the Executive
Committee of America's Promise -- The Alliance for Youth. He is Co-Chairman of
the New Jersey Performing Arts Center and The National Mentoring Partnership. He
founded and is the Chairman and a Trustee of the Amelior Foundation and is the
Founding Chairman of the Points of Light Foundation. Mr. Chambers is also a
Board Member of YankeeNets, LLC.
DANIEL W. COLSON, Vice Chairman and Director. Deputy Chairman, Chief
Executive Officer and director of The Telegraph. Mr. Colson has served as a
director of the Company since February 1995 and as Vice Chairman since May 1998.
He has served as Deputy Chairman of The Telegraph since 1995 and as Chief
Executive Officer of The Telegraph since 1994, and was Vice Chairman of The
Telegraph from 1992 to 1995. Mr. Colson also currently serves as Chairman and as
a director of Hollinger Telegraph New Media Ltd. and as Vice Chairman and
director of Hollinger Digital Inc. He also serves as Vice Chairman and as a
director
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of Hollinger Inc., and as a director of Argus and Molson Inc., all of which are
Canadian public reporting companies. Mr. Colson also serves as Deputy Chairman
and director of Interactive Investor International plc.
DR. HENRY A. KISSINGER, Director. Dr. Kissinger has served as a director
since February 1996. Dr. Kissinger has served as Chairman of Kissinger
Associates Inc., an international consulting firm, since 1982. Dr. Kissinger
served as the 56th Secretary of State from 1973 to 1977. He also served as
Assistant to the President for National Security Affairs from 1969 to 1975 and
as a member of the President's Foreign Intelligence Advisory Board from 1984 to
1990. Dr. Kissinger served as a director of American Express Company from 1986
to 1996 and as a director of Revlon Inc., and Gulfstream Aerospace Corporation
until 1999. Dr. Kissinger currently serves as Advisor to the Board of Directors
of American Express Company, Counselor to the J.P. Morgan Chase & Co. and as a
member of its International Advisory Committee, Chairman of the International
Advisory Board of American International Group, Inc., director of
Freeport-McMoran Copper and Gold Inc. all of which are United States public
reporting companies and ContiGroup Companies, Inc. Dr. Kissinger also serves as
a Senior Advisor on the Company's International Advisory Board.
MARIE-JOSEE KRAVIS, O.C., Director. Mrs. Kravis has served as a director
since February 1996. She has served as a Senior Fellow of the Hudson Institute
Inc. since 1994. She served as a director of The Seagram Company Ltd., a
Canadian public reporting company, from 1985 to 2000 and as a director of
Compaigne UniMedia from 1988 to 2000. She has served as a director of Hasbro
Inc. and Ford Motor Company, both of which are United States public reporting
companies, since 1995. Mrs. Kravis also serves as a director of Canadian
Imperial Bank of Commerce and StarMedia Network, Inc.
SHMUEL MEITAR, Director. Mr. Meitar has served as a director since
February 1996. Mr. Meitar also serves as Vice Chairman of Aurec Ltd., a leading
provider of communications, media and information services, since 1991. Prior to
1991, Mr. Meitar served as President of the Aurec Group, which includes Golden
Channels, the largest cable television franchise in Israel, and Golden Pages,
the Israeli Yellow Pages. Mr. Meitar has been a director of Jerusalem Post since
1992 and also serves as a director of Golden Pages Ltd.
THE HON. RICHARD N. PERLE, Director. Mr. Perle has served as a director
since June 1994. Mr. Perle has served as Resident Fellow of the American
Enterprise Institute for Public Policy Research since 1987. He was the Assistant
Secretary for the United States Department of Defense, International Security
Policy from 1981 to 1988. Mr. Perle is Co-Chairman of Hollinger Digital Inc. and
a director of Jerusalem Post, both of which are subsidiaries of the Company. Mr.
Perle has served as a director of GeoBiotics, Inc. since 1996, and as a director
of E.Certify since 1999.
F. DAVID RADLER, Deputy Chairman, President, Chief Operating Officer and
Director. Mr. Radler has served as President and Chief Operating Officer since
October 25, 1995, as Deputy Chairman since May 1998 and as a director since
1990. Mr. Radler was Chairman of the Board of Directors from 1990 to October 25,
1995. Mr. Radler currently serves as President and Chief Operating Officer and
Deputy Chairman of Hollinger Inc., as a director of The Telegraph. Mr. Radler
also serves as a director of Argus, Dominion Malting Limited, West Fraser Timber
Co. Ltd. and CanWest Global Communications Corp. all of which are Canadian
public reporting companies. Mr. Radler also serves as a director of Jerusalem
Post.
THE HON. ROBERT S. STRAUSS, Director. Mr. Strauss has served as a director
since February 1996. Mr. Strauss was a founder of, and is currently a Partner
of, Akin, Gump, Strauss, Hauer & Feld, a national law firm. Mr. Strauss served
as United States Ambassador to the Soviet Union beginning in 1991, and following
the dissolution of the Soviet Union, as United States Ambassador to the Russian
Federation until 1992 when he resigned and rejoined his former law firm. He has
also served as a director of General Instruments Inc. from 1991 to 1997 and as a
director of Gulfstream Aerospace Corporation from 1993 to 1998. Mr. Strauss has
been a director of Archer-Daniels-Midland Co., a United States public reporting
company, since 1981.
A. ALFRED TAUBMAN, Director. Mr. Taubman has served as a director since
February 1996. Since 1983, Mr. Taubman has been the largest shareholder, and
from 1983 to 2000, a director of Sotheby's Holdings Inc., the international art
auction house. Mr. Taubman also serves as Chairman of The Taubman Company and
Taubman Centers, Inc., companies engaged in the regional retail shopping center
business.
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THE HON. JAMES R. THOMPSON, Director. Mr. Thompson has served as a
director since June 1994. Mr. Thompson has served as the Chairman of Winston &
Strawn, attorneys at law, since 1991. Mr. Thompson served as the Governor of the
State of Illinois from 1977 to 1991. He served as a director of The Wackenhut
Corporation from 1996 to 2000 and of Metal Management Inc. from 1999 to 2000.
Mr. Thompson currently serves as a director of FMC Corporation, Prime Retail,
Inc., Prime Group Realty Trust, Navigant Consulting Inc., Jefferson Smurfit
Group plc, Union Pacific Resources, Inc. and American National Can Corp., all of
which are United States public reporting companies with the exception of
Jefferson Smurfit Group, which is an Irish company.
LORD WEIDENFELD, Director. Lord Weidenfeld has served as a director since
February 1996. Lord Weidenfeld has served as Chairman of Weidenfeld & Nicolson
Ltd., a book publisher, since 1948. Lord Weidenfeld served as a director of
Hollinger Inc. from September 1993 until 1995. Lord Weidenfeld is a director of
Jerusalem Post.
LESLIE H. WEXNER, Director. Mr. Wexner has served as a director since
February 1996. Mr. Wexner has served as Chairman and Chief Executive Officer of
The Limited, Inc., a company whose activities include the retail sale of apparel
and personal care items, since 1963. He also currently serves as a Chairman of
Intimate Brands Inc. and as Chairman of Abercrombie & Fitch. Mr. Wexner served
as Chairman of the Board of Trustees of The Ohio State University until 1991.
MEETINGS AND COMMITTEES
The Board of Directors met six (6) times in 2000. Messrs. Chambers,
Kissinger, Meitar, Perle, Weidenfeld and Wexner did not attend 75% or more of
the aggregate of the total number of meetings of the Board of Directors and the
total number of meetings of the committees on which such director served. The
Company maintains an Executive Committee, an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Company does not have a nominating
committee.
The Executive Committee acted by unanimous written consent twenty-two (22)
times in 2000. The Executive Committee consists of Mr. Black, Chairman, and
Messrs. Perle and Radler. The Executive Committee, to the extent permitted by
law, the Company's Amended and Restated By-Laws and resolutions of the Board of
Directors, exercises all the power and authority of the Board of Directors.
The Audit Committee met three (3) times and acted via unanimous written
consent once and the Chairman of the Committee met with senior executives of the
Company two (2) times in 2000. The 2001 Audit Committee consists of Mr.
Thompson, Chairman, Mr. Burt and Mrs. Kravis. The Audit Committee's duties
include reviewing internal financial information, monitoring cash flow, budget
variances and credit arrangements, reviewing the audit program, reviewing with
the Company's accountants the results of all audits upon their completion,
annually selecting and recommending independent public accountants, overseeing
the quarterly unaudited reporting process and taking such other action as may be
necessary to assure the adequacy and integrity of all financial information
distributed by the Company. Each member of the Audit Committee is independent in
the judgment of the Company's Board of Directors and as required by the listing
standards of the New York Stock Exchange.
In addition, pursuant to the Services Agreements, the Audit Committee is
responsible for reviewing the cost of services charged by Ravelston, and
monitoring the Company's decisions with respect to related party acquisition
opportunities and the exercise of the Company's rights under its Business
Opportunities Agreement with Hollinger Inc. See "Certain Relationships and
Related Transactions." The Audit Committee also has authority to recommend to
the Board policies and procedures for dealing with conflicts of interest and to
review the application of such policies and procedures.
The Audit Committee reports that it has: (i) reviewed and discussed the
audited financial statements with management; (ii) discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61; and (iii) received certain disclosures from the
auditors regarding the auditors' independence as required by the Independence
Standards Board Standard No. 1, and discussed with the auditors the auditors'
independence. Based on such review and discussions, the Audit Committee has
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17
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for 2000 for filing with
the Commission. On May 5, 1999, the Audit Committee adopted, and the Board of
Directors ratified, the Hollinger International Inc. Audit Committee Charter (a
copy of which was attached to the Company's Proxy Statement filed in March of
2000).
The foregoing report has been furnished by James R. Thompson, Richard R.
Burt and Marie-Josee Kravis.
The Compensation Committee met two (2) times in 2000. The 2001 Compensation
Committee consists of Mr. Thompson, Chairman, and Mr. Burt. The Compensation
Committee recommends compensation levels of senior management (other than for
those executive officers who receive their compensation from Hollinger Inc. or
Ravelston), works with senior management on benefit and compensation programs
for Company employees and monitors local and national compensation trends to
ensure the Company's compensation program is competitive within the newspaper
industry.
The Stock Option Committee met once and acted by unanimous written consent
seven (7) times in 2000. The Stock Option Committee, which consists of Mr.
Thompson, Chairman, and Mr. Meitar, administers the Company's 1994 Stock Option
Plan, 1997 Stock Incentive Plan and 1999 Stock Incentive Plan.
DIRECTORS' COMPENSATION
During 2000, each director, including each director who is an executive
officer, was entitled to receive an annual director's fee of $32,500 per annum
and a fee of $3,000 for each board or committee meeting attended. Non-employee
directors were also each entitled to receive an option to purchase 4,000 shares
of Class A Common Stock pursuant to the 1999 Stock Incentive Plan. Directors are
reimbursed for expenses incurred in attending the meetings. Members of the
Executive Committee do not receive meeting fees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the directors and executive officers and
any persons holding more than 10% of any equity security of the Company are
required to report their initial ownership of any equity security and any
subsequent changes in that ownership to the Commission. Specific due dates for
these reports have been established by the Commission, and the Company is
required to disclose in this Proxy Statement any failure to file such reports by
those dates during 2000. To the Company's knowledge, based upon a review of the
copies of the reports furnished to the Company and written representations that
no other reports were required, all of these filing requirements were satisfied.
A joint Form 4 filing due in June of 2000 was filed in August of 2000 on behalf
of Hollinger Inc., Ravelston and Mr. and Mrs. Black.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation information for the three
fiscal years ended December 31, 2000 for the Chief Executive Officer and the
four most highly compensated executive officers whose salary and bonus for the
year ended December 31, 2000 exceeded $100,000.
LONG-TERM
COMPENSATION
--------------
ANNUAL COMPENSATION SECURITIES
------------------- OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION(2)
- --------------------------- ---- ------ ----- ------------ ---------- ---------------
CONRAD M. BLACK............. 2000 $448,639(3) --(3) -- 335,000(4) $136,093(5)
Chairman and 1999 466,967(3) --(3) -- 245,000(6) 128,156(7)
Chief Executive Officer 1998 455,785(3) --(3) -- 150,000(8) 126,899(9)
F. DAVID RADLER............. 2000 $ --(3) --(3) -- 335,000(4) $157,085(5)
President and 1999 --(3) --(3) -- 245,000(6) 154,915(7)
Chief Operating Officer 1998 --(3) --(3) -- 150,000(8) 152,697(9)
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LONG-TERM
COMPENSATION
--------------
ANNUAL COMPENSATION SECURITIES
------------------- OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION(2)
- --------------------------- ---- ------ ----- ------------ ---------- ---------------
DANIEL W. COLSON............ 2000 $263,653(3) --(3) (1) 250,000(4) $147,948(5)
Chief Executive Officer 1999 245,280(3) --(3) (1) 170,000(6) 136,980(7)
of The Telegraph 1998 234,121(3) --(3) (1) 120,000(8) 117,075(9)
J. A. BOULTBEE.............. 2000 $ --(3) --(3) -- 110,000(4) $ 23,054(5)
Executive Vice President 1999 --(3) --(3) -- 85,000(6) 29,206(7)
1998 --(3) --(3) -- 60,000(8) 23,615(9)
PETER Y. ATKINSON........... 2000 $ --(3) --(3) -- 110,000(4) $ 23,054(5)
Vice President 1999 --(3) --(3) -- 85,000(6) 35,063(7)
1998 --(3) --(3) -- 60,000(8) 20,916(9)
- ---------
(1) Pursuant to the Company's deferred compensation plan, discretionary
contributions are credited to the participants' retirement accounts as
deferred compensation. See "Deferred Compensation Plan."
(2) Certain executive officers of the Company, including Messrs. Black, Radler,
Colson, Atkinson and Boultbee are participants in the Hollinger Inc.
Executive Share Option Plan. As of March 21, 2001, 464,000, Hollinger Inc.
Executive Share options had vested. Mr. Black holds vested options to
acquire 125,000 Hollinger Inc. Retractable Common Shares and unvested
options to acquire 125,000 Hollinger Inc. Retractable Common Shares; Mr.
Radler holds vested options to acquire 115,000 Hollinger Inc. Retractable
Common Shares and unvested options to acquire 115,000 Hollinger Inc.
Retractable Common Shares; Mr. Colson holds vested options to acquire 80,000
Hollinger Inc. Retractable Common Shares and unvested options to acquire
80,000 Hollinger Inc. Retractable Common Shares; Mr. Boultbee holds vested
options to acquire 47,500 Hollinger Inc. Retractable Common Shares and
unvested options to acquire 47,500 Hollinger Inc. Retractable Common Shares
and Mr. Atkinson holds vested options to acquire 40,000 Hollinger Inc.
Retractable Common Shares and unvested options to acquire 40,000 Hollinger
Inc. Retractable Common Shares.
(3) With the exception of salaries paid to Messrs. Black and Colson by The
Telegraph (which salaries were paid in pounds sterling and Canadian Dollars,
respectively, and have been converted into U.S. Dollars at the 2000 average
rate of 1.5158 and 0.6731, the 1999 average rate of 1.6172 and 0.6732, and
the 1998 average rate of 1.6574 and 0.6747, respectively, for purposes of
this disclosure), Messrs. Black, Radler, Colson, Atkinson and Boultbee do
not receive salaries or bonuses directly from the Company. Under the
Services Agreements with Ravelston, the Company and XSTM pay a management
fee relating to, among other matters, management and administrative services
provided to the Company by such executives. See "Certain Relationships and
Related Transactions."
(4) Options granted pursuant to the 1999 Stock Incentive Plan to purchase shares
of Class A Common Stock. Options may be exercised upon the payment of $10.53
per share exercise price and vest over a four year period beginning March 7,
2001 in equal increments. See "1999 Stock Incentive Plan" below.
(5) With respect to Messrs. Black, Radler and Colson, reflects quarterly and
meeting attendance fees paid for services as a director during 2000. With
respect to Messrs. Black, Radler, Colson, Boultbee and Atkinson, reflects
quarterly and meeting attendance fees paid for services as a director of
XSTM during 2000 (which fees were paid in Canadian Dollars and have been
converted to U.S. Dollars at the 2000 average rate of 0.6731 for purposes of
this disclosure). With respect to Messrs. Black and Radler reflects fees
paid for services as a director of American Publishing and Jerusalem Post
during 2000. With respect to Mr. Radler, reflects fees paid for services as
a Senior Director of APAC-95, Inc., a subsidiary of the Company, during
2000. With respect to Messrs. Black, Colson and Radler, also reflects fees
paid for services as a director of The Telegraph (which fees were paid in
pounds sterling and have been converted into U.S. Dollars at the 2000
average rate of 1.5158 for purposes of this disclosure), Unimedia Company
(which fees were paid in Canadian Dollars and have been converted to U.S.
Dollars at the 2000 average
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rate of 0.6371) and Hollinger Canadian Newspapers Limited Partnership (which
fees were paid in Canadian Dollars and have been converted to U.S. Dollars
at the 2000 average rate of 0.6371).
(6) Options granted pursuant to the 1997 Stock Incentive Plan to purchase shares
of Class A Common Stock. Options may be exercised upon the payment of $11.63
per share exercise price and vest over a four year period beginning February
12, 2000 in equal increments. See "1997 Stock Incentive Plan" below.
(7) With respect to Messrs. Black, Radler and Colson, reflects quarterly and
meeting attendance fees paid for services as a director during 1999. With
respect to Messrs. Black, Radler, Colson, Boultbee and Atkinson, reflects
quarterly and meeting attendance fees paid for services as a director of
XSTM during 1999 (which fees were paid in Canadian Dollars and have been
converted to U.S. Dollars at the 1999 average rate of 0.6732 for purposes of
this disclosure). With respect to Messrs. Black and Radler reflects fees
paid for services as a director of American Publishing and Jerusalem Post
during 1999. With respect to Mr. Radler, reflects fees paid for services as
a Senior Director of APAC-95, Inc., a subsidiary of the Company, during
1999. With respect to Messrs. Black, Colson and Radler, also reflects fees
paid for services as a director of The Telegraph (which fees were paid in
pounds sterling and have been converted into U.S. Dollars at the 1999
average rate of 1.6172 for purposes of this disclosure), Unimedia Company
(which fees were paid in Canadian Dollars and have been converted to U.S.
Dollars at the 1999 average rate of 0.6732) and Hollinger Canadian
Newspapers Limited Partnership (which fees were paid in Canadian Dollars and
have been converted to U.S. Dollars at the 1999 average rate of 0.6732).
(8) Options granted on February 23, 1998 pursuant to the 1997 Stock Incentive
Plan to purchase shares of Class A Common Stock. Options were to be
exercised upon the payment of $15.06 per share exercise price and vested
over a four year period beginning February 23, 1999 in equal increments.
Effective as of February 26, 1999, the Company and said employees agreed to
cancel such options, with the employees foregoing one year of vesting, in
return for new options for the respective same number of shares to be
exercised upon the payment of $12.25 per share exercise price which vest
over a four year period beginning February 26, 2000 in equal increments. See
"1997 Stock Incentive Plan" below.
(9) With respect to Messrs. Black, Radler and Colson, reflects quarterly and
meeting attendance fees paid for services as a director during 1998. With
respect to Messrs. Black, Radler, Colson, Boultbee and Atkinson, reflects
quarterly and meeting attendance fees paid for services as a director of
XSTM during 1998 (which fees were paid in Canadian Dollars and have been
converted to U.S. Dollars at the 1998 average rate of 0.6747 for purposes of
this disclosure). With respect to Messrs. Black and Radler reflects fees
paid for services as a director of American Publishing and Jerusalem Post
during 1998. With respect to Mr. Radler, reflects fees paid for services as
a Senior Director of APAC-95, Inc., a subsidiary of the Company, during
1998. With respect to Messrs. Black, Colson and Radler, also reflects fees
paid for services as a director of The Telegraph (which fees were paid in
pounds sterling and have been converted into U.S. Dollars at the 1998
average rate of 1.6574 for purposes of this disclosure).
DEFERRED COMPENSATION PLAN. The Company, through a subsidiary, provides a
deferred compensation plan to certain executives under which contributions may
be made by the Board of Directors of such subsidiary during the course of each
year. Such contributions are discretionary in amount, time and form of payment
and, when made, are credited to the retirement accounts established for each
participant which vest 10% per year after five years of service. Mr. Strader
participates in this program. Mr. Colson received a pension contribution from
The Telegraph in the amount of $64,893, which was originally paid in pounds
sterling and which has been converted into U.S. Dollars at the average rate of
1.5158 for purposes of this disclosure.
1994 STOCK OPTION PLAN. Prior to the Company's initial public offering in
May 1994, Hollinger Inc., the parent company of the Company, adopted and
approved a stock option plan for the Company which was subsequently amended on
September 9, 1996 (as amended, the "1994 Stock Option Plan"), under which stock
option awards have been made to eligible employees and officers. The purpose of
the 1994 Stock Option Plan was to promote the interests of the Company and its
stockholders by establishing a direct link between the financial interests of
eligible employees and officers and the performance of the Company and by
enabling the Company to attract and retain highly competent employees and
officers. On May 1, 1997, the stockholders adopted a new stock option plan (see
"1997 Stock Incentive Plan," described below) which replaced the 1994
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Stock Option Plan. No new grants have or will be made under the 1994 Stock
Option Plan. Awards under the 1994 Stock Option Plan made prior to May 1, 1997
are not affected by the adoption of the 1997 Stock Incentive Plan.
1997 STOCK INCENTIVE PLAN. On May 1, 1997, the Company adopted, and the
Company's stockholders approved, a new compensation plan known as the Hollinger
International Inc. 1997 Stock Incentive Plan (the "1997 Stock Incentive Plan").
The 1997 Stock Incentive Plan replaced the Company's 1994 Stock Option Plan.
Awards previously made under the 1994 Stock Option Plan are not affected. The
purpose of the 1997 Stock Incentive Plan was to assist in attracting and
retaining highly competent employees and directors and to act as an incentive in
motivating selected officers and other key employees and directors to achieve
long-term corporate objectives. The 1997 Stock Incentive Plan provided for
awards of up to 5,156,915 shares of Class A Common Stock. This total included
189,640 shares that remained available under the 1994 Stock Option Plan, which
shares were rolled into the 1997 Stock Incentive Plan, and 4,967,275 additional
shares. The number of shares available for issuance under the 1997 Stock
Incentive Plan was subject to anti-dilution adjustments upon the occurrence of
significant corporate events. The shares offered under the 1997 Stock Incentive
Plan were either authorized and unissued shares or issued shares which had been
reacquired by the Company. On May 5, 1999, the stockholders adopted a new stock
option plan (see "1999 Stock Incentive Plan", described below) which replaced
the 1997 Stock Incentive Plan. No new grants have been or will be made under the
1997 Stock Incentive Plan. Awards under the 1997 Stock Incentive Plan made prior
to May 5, 1999 are not affected by the adoption of the 1999 Stock Incentive
Plan.
1999 STOCK INCENTIVE PLAN. On May 5, 1999, the Company adopted, and the
Company's stockholders approved, a new compensation plan known as the Hollinger
International Inc. 1999 Stock Incentive Plan (the "1999 Stock Incentive Plan").
The 1999 Stock Incentive Plan replaces the Company's 1997 Stock Incentive Plan.
Awards previously made under the 1997 Stock Incentive Plan are not affected. The
purpose of the 1999 Stock Incentive Plan is to assist in attracting and
retaining highly competent employees and directors and to act as an incentive in
motivating selected officers and other key employees and directors to achieve
long-term corporate objectives. The 1999 Stock Incentive Plan provides for
awards of up to 8,500,000 shares of Class A Common Stock. The number of shares
available for issuance under the 1999 Stock Incentive Plan shall be subject to
anti-dilution adjustments upon the occurrence of significant corporate events.
The shares offered under the 1999 Stock Incentive Plan are either authorized and
unissued shares or issued shares which have been reacquired by the Company.
OPTION/SAR GRANTS IN LAST FISCAL YEAR. The following table sets forth
information concerning the issuance of options to purchase Class A Common Stock
in 2000 to the named executive officers pursuant to the 1999 Stock Incentive
Plan.
2000 INDIVIDUAL GRANTS
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE GRANT
UNDERLYING GRANTED TO OF BASE DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(1) FISCAL YEAR ($/SH) DATE VALUE(2)
---- ---------- ------------ -------- ---------- --------
Conrad M. Black......................... 335,000 12.9% $10.53 3/6/10 $1,375,034
F. David Radler......................... 335,000 12.9% $10.53 3/6/10 $1,375,034
Daniel W. Colson........................ 250,000 9.6% $10.53 3/6/10 $1,026,145
Peter Y. Atkinson....................... 110,000 4.2% $10.53 3/6/10 $ 451,504
J.A. Boultbee........................... 110,000 4.2% $10.53 3/6/10 $ 451,504
- ---------
(1) The options vest in 25% annual increments on each of the first, second,
third and fourth anniversaries of their respective grant dates, beginning
March 7, 2001.
(2) These values are determined using the Black-Scholes Option Pricing Model.
The Black-Scholes Option Pricing Model is one of the methods permitted by
the Commission for estimating the present value of options. The actual value
of the stock options that an executive officer may realize, if any, will
depend on
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the excess of the market price on the date of exercise over the exercise
price. The Black-Scholes Option Pricing Model is based on assumptions as to
certain variables described in the following sentence, so there is no
assurance that an individual will actually realize the option values
presented in this table. The values listed above were based on the following
assumptions: volatility (estimated) -- 43.3%; risk-free rate of
return -- 5.1%; dividend yield -- 3.4%; time of exercise -- 10 years.
AGGREGATED OPTION EXERCISES DURING FISCAL 2000 AND FISCAL YEAR-END OPTION
VALUES. The following table sets forth information concerning aggregate option
exercises and year-end option values of the named executive officers.
AGGREGATED OPTION EXERCISES DURING FISCAL 2000
AND
OPTION VALUES AT DECEMBER 31, 2000
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Conrad M. Black............ 0 0 315,000 655,000 $1,504,363 $3,198,388
F. David Radler............ 0 0 315,000 655,000 $1,504,363 $3,198,388
Daniel W. Colson........... 0 0 106,250 478,750 $ 498,700 $2,329,000
Peter Y. Atkinson.......... 0 0 82,500 227,500 $ 430,838 $1,101,013
J.A. Boultbee.............. 0 0 123,500 227,500 $ 510,038 $1,101,013
- ---------
(1) In accordance with SEC rules, values are calculated by subtracting the
exercise price from the fair market value of the underlying common stock.
For purposes of this table, fair market value is deemed to be $16.00, the
average of the high and low common stock price reported for New York Stock
Exchange transactions on December 29, 2000, the last business day of the
Company's fiscal year.
EMPLOYMENT AGREEMENTS. The Company has entered into employment agreements
with certain of its executive officers providing generally for year-to-year
employment. Subject to certain limited exceptions, the employment agreements
generally prohibit the executives from competing with the Company for a period
of three years after termination of employment (i) in any community in which the
Company at that time publishes, or has commenced negotiations to acquire, a
newspaper or shopper, or (ii) within a 50-mile radius of any such community.
REPORT ON EXECUTIVE COMPENSATION. The following Report on Executive
Compensation has been furnished by the Compensation Committee. The Board of
Directors has delegated to the Compensation Committee authority to review and
approve the executive remuneration package for senior executives compensated
directly by the Company. The Report reflects the Compensation Committee's
policies toward executive compensation; however, the compensation of certain
executive officers (including Messrs. Black, Radler, Colson, Boultbee, Atkinson
and Creasey) is determined by Ravelston, the parent corporation of Hollinger
Inc., and is paid pursuant to the Services Agreements, except to the extent that
the Company compensates such persons directly in the form of stock options and
other stock-related programs.
As of March 1, 2001, the Compensation Committee consisted of two directors,
neither of whom are officers or employees of the Company, and neither
participates in any executive compensation plan reviewed by the Compensation
Committee.
The Committee has previously noted that in the past base pay constituted
the most significant portion of executive pay. The Compensation Committee has
recognized that it is important to move to a system that provides a more
balanced executive compensation package, placing greater emphasis on annual and
long term incentives and a reduced role for annual base salary. Such an approach
is consistent with many other public companies.
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Consequently, as has been done in prior year executive pay packages, the
Compensation Committee will attempt to follow the following strategy:
(i) Motivate executives to achieve their strategic goals by tying
their compensation to the performance of the Company, their individual
operating units and their individual performance;
(ii) Be competitive with other leading companies so as to attract and
retain the best possible executive talent; and
(iii) Align the interests of the executives with the long-term
interest of the Company's stockholders through the award of stock options
and other stock-related programs.
The first step toward this executive compensation strategy was implemented
in 1994 with the establishment of the 1994 Stock Option Plan. Since 1994, key
members of management have been awarded stock options under the 1994 Stock
Option Plan and the 1997 Stock Incentive Plan. In 1999, the Hollinger
International Inc. 1999 Stock Incentive Plan was established to continue to make
stock options and other stock-related programs available as incentives for key
members of management, and will provide for automatic stock option grants to
non-employee directors of the Company.
Section 162(m) of the Code provides that public companies are denied a
Federal income tax deduction for compensation in excess of $1 million to any
covered employee except to the extent the compensation is performance based. The
Compensation Committee believes that all compensation paid by the Company in
2000 complied with the Section 162(m) limitation. It is the present intention of
the Compensation Committee to seek to ensure that all compensation payable to
executives that is otherwise tax deductible will continue to be tax deductible.
However, the Compensation Committee reserves the right to take whatever action
with respect to the compensation of executive officers that it deems appropriate
and in the best interests of the Company and its stockholders.
The foregoing report has been furnished by James R. Thompson and Richard R.
Burt.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. There are no
compensation committee interlocks or insider participation in compensation
decisions.
STOCKHOLDER RETURN PERFORMANCE GRAPH. The following graph compares the
percentage change in the Company's cumulative total stockholder return on its
Class A Common Stock (assuming all dividends were reinvested at the market price
on the date of payment) against the cumulative total stockholder return of the
NYSE Market Index and the Media General Industry Group Index--Newspapers for the
period commencing with January 1, 1996 through December 31, 2000. The Class A
Common Stock has been listed on the NYSE under the symbol "HLR".
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COMPARISON OF CUMULATIVE TOTAL RETURN OF THE
COMPANY, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
[PERFORMANCE GRAPH]
- ----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
- ----------------------------------------------------------------------------------------------------------------
Hollinger Intl. Inc. 100.00 113.40 142.82 146.72 142.39 183.17
Publishing -- Newspapers 100.00 124.28 159.75 160.71 206.10 182.40
NYSE Market Index 100.00 120.46 158.48 188.58 206.49 211.42
SOURCE: MEDIA GENERAL FINANCIAL SERVICES
P.O. BOX 85333
RICHMOND, VA 23293
PHONE: 1-(800) 446-7922
FAX: 1-(804) 649-6826
The information in the graph was prepared by Media General Financial
Services. The graph assumes an initial investment of $100 and reinvestment of
dividends during the period presented.
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INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG LLP as independent auditors of
the Company for the year ending December 31, 2001. Representatives of KPMG LLP
will be present at the Annual Meeting, will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
Fees billed to the Company by KPMG LLP during fiscal 2000 were as follows:
AUDIT FEES. The aggregate fees billed for professional services rendered
for the audit of the Company's annual financial statements and the reviews of
financial statements included in the Company's Forms 10-Q totaled $1,274,316.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The Company
did not engage KPMG LLP during fiscal 2000 to provide services regarding the
Company's financial information systems design and implementation.
ALL OTHER FEES. The aggregate fees billed for all other non-audit
professional services rendered totaled $5,517,206. The Audit Committee has
considered whether the provision of such non-audit services is compatible with
maintaining KPMG LLP's independence.
STOCKHOLDER PROPOSALS
Proposals that stockholders desire to have included in the Company's proxy
materials for the 2002 Annual Meeting of Stockholders of the Company must be
received by the Secretary of the Company at its principal executive office no
later than November 22, 2001.
For a stockholder proposal that is not intended to be included in the
Company's proxy materials but is intended to be raised by the stockholder from
the floor at the 2002 Annual Meeting of Stockholders, the stockholder must
provide timely advance notice. Advance notice must be received by the Secretary
of the Company at its principal executive offices no later than February 5, 2002
in order to be timely. If a proposal is received after that date, the Company's
proxy for the 2002 Annual Meeting will confer discretionary authority to vote on
such matter without any discussion of such matter in the proxy statement for the
2002 Annual Meeting.
OTHER MATTERS
The Board of Directors does not know of any other business which will come
before the Annual Meeting for action by the stockholders other than the matters
specified in the accompanying Notice of the Annual Meeting. If any other matters
requiring a stockholder vote properly come before the meeting, the persons
appointed in the enclosed proxy will vote in accordance with their discretion
with respect to such matters.
LOGO
Mark S. Kipnis
Vice President-Law and Secretary
Chicago, Illinois
March 27, 2001
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HOLLINGER INTERNATIONAL INC.
P THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF HOLLINGER INTERNATIONAL INC.
R
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 17, 2001
O The undersigned holder of shares of Class A Common Stock, par value
$.01 per share ("Class A Shares"), and/or Class B Common Stock, par
X value $.01 per share ("Class B Shares"), and/or Series C Convertible
Preferred Stock, par value $.01 per share ("Series C Preferred
Y Shares") of Hollinger International Inc. ("Hollinger International"),
hereby appoints Mark S. Kipnis and Paul B. Healy, individually, with full
power of substitution in each of them, as proxy or proxies to represent
the undersigned and vote all Class A Shares, and/or Class B Shares, and/or
Series C Preferred Shares of Hollinger International which the undersigned
would be entitled to vote if personally present and voting at the Annual
Meeting of Stockholders of Hollinger International to be held on May 17,
2001 at 11:00 a.m,. local time, at the Metropolitan Club, One East 60th
Street, New York, New York 10022, and at any adjournments or postponements
thereof, upon all matters coming before such meeting. Said proxies are
directed to vote as set forth below and, in their discretion, upon such
other matters as may properly come before the meeting.
(1) Nominees to serve for a one-year term expiring at the 2002 Annual
Meeting of Stockholders and until their successors are duly elected and
qualified:
(01) Dwayne O. Andreas; (02) Barbara Amiel Black; (03) Hon. Conrad M.
Black; (04) Hon. Richard R. Burt; (05) Raymond G. Chambers;
(06) Daniel W. Colson; (07) Hon. Henry A. Kissinger; (08) Marie-Josee
Kravis; (09) Shmuel Meitar; (10) Hon. Richard N. Perle; (11) F. David
Radler; (12) Hon. Robert S. Strauss; (13) A. Alfred Taubman; (14) Hon.
James R. Thompson; (15) Lord Weidenfeld; and (16) Leslie H. Wexner.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF HOLLINGER
INTERNATIONAL. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES. IN THEIR DISCRETION, THE
PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
PLEASE SEE
OTHER SIDE.
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL*
PLEASE SEE REVERSE SIDE FOR INFORMATION ON VOTING
YOUR PROXY BY TELEPHONE OR INTERNET
26
PLEASE MARK YOUR
X VOTES AS IN THIS
EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES
FOR WITHHELD
1. Election of 2. OTHER BUSINESS. The proxies shall
Directors [ ] [ ] be authorized to vote on any other
(see reverse) business properly brought before the
meeting and any adjournments or
postponements thereof in accordance
with their discretion.
For, except vote withheld from the following nominee(s)
Mark this box if you
will attend the
Annual Meeting [ ]
Mark this box if
you will not
attend the Annual
Meeting. [ ]
NOTE: Please sign EXACTLY as
your name appears hereon.
When signing as executor,
trustee, etc., or as
officer of a corporation,
give full title as such.
For joint accounts,
please obtain both
signatures.
_______________________________
PLEASE MARK, SIGN, DATE AND RETURN THE _______________________________
PROXY CARD PROMPTLY USING THE ENCLOSED SIGNATURE(S) DATE
POSTAGE PAID ENVELOPE IF YOU ARE VOTING
BY MAIL.
- --------------------------------------------------------------------------------
*FOLD AND DETACH HERE IF YOU ARE RETURNING YOUR VOTED PROXY BY MAIL*
HOLLINGER INTERNATIONAL INC.
Dear Stockholder:
We encourage you to vote your shares electronically this year either by
telephone or via the Internet. This will eliminate the need to return your proxy
card. You will need your proxy card and Social Security Number (where
applicable) when voting your shares electronically. The Voter Control Number
that appears in the box above, just below the perforation, must be used in order
to vote by telephone or via the Internet.
The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until May 1, 2001, the day before the
meeting.
TO VOTE BY TELEPHONE:
Using a touch-tone phone call Toll-free: 1-877-PRX-VOTE (1-877-779-8683)
TO VOTE BY INTERNET:
Log on to the Internet and go to the website: http://www.eproxyvote.com/hlr
Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be responsible.
THANK YOU FOR VOTING YOUR SHARES
YOUR VOTE IS IMPORTANT!
DO NOT RETURN THIS PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR THE INTERNET.