SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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Rule 14a-6(e)(2)
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[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or 14a-12
WESTWOOD ONE, INC.
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(Name of Registrant as Specified In Its Charter)
WESTWOOD ONE, INC.
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WESTWOOD ONE, INC.
Dear Shareholders:
You are cordially invited to attend the 2003 Annual Meeting of Shareholders
of Westwood One, Inc. (the "Company") to be held on Wednesday, May 28, 2003 at
10:00 a.m., Pacific Time, in the Great Room of the W Los Angeles, 930 Hilgard
Avenue, Los Angeles, CA. The accompanying Notice of Annual Meeting and Proxy
Statement describes the business to be transacted at the meeting. Also enclosed
is a copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 2002, which includes consolidated financial statements and other
information.
The purpose of the Annual Meeting is to elect four directors, to ratify the
appointment of the Company's independent accountants and to conduct such other
business as may properly come before the meeting. At the Annual Meeting, the
holders of Common Stock, voting alone, will elect three members of the Company's
Board of Directors. Holders of Common Stock and Class B Stock, voting together,
will elect one member of the Company's Board of Directors, ratify the
appointment of the Company's independent accountants, and conduct such other
business as may properly come before the meeting.
IT IS IMPORTANT THAT YOU MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD IN THE PROVIDED POSTAGE-PAID ENVELOPE IF YOU DO NOT INTEND TO BE PRESENT AT
THE MEETING. IF YOU DO LATER DECIDE TO ATTEND, YOUR PROXY WILL AUTOMATICALLY BE
REVOKED IF YOU VOTE IN PERSON. ACCORDINGLY, YOU ARE URGED TO MARK, SIGN, DATE
AND RETURN THE PROXY CARD NOW IN ORDER TO ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
We appreciate your continued support.
Sincerely,
WESTWOOD ONE, INC.
/S/ Norman J. Pattiz
---------------------
Norman J. Pattiz
Chairman of the Board
April 21, 2003
WESTWOOD ONE, INC.
40 West 57th Street, 5th Floor
New York, NY 10019
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 28, 2003
To Our Shareholders:
The Annual Meeting of the Shareholders of Westwood One, Inc. (the
"Company") will be held in the Great Room of the W Los Angeles, Los Angeles, CA,
on Wednesday, May 28, 2003 at 10:00 a.m., Pacific Time. The purpose of the
meeting are to consider and act upon:
(1) the election of four members of the Company's Board of Directors;
(2) the ratification of the appointment of PricewaterhouseCoopers LLP to serve
as independent accountants for the fiscal year ending December 31, 2003;
(3) such other business as may properly come before the meeting.
Shareholders of record at the close of business on April 11, 2003 will be
entitled to notice of and to vote at the Annual Meeting, and a list of such
shareholders will be available for examination during ordinary business hours at
least ten days prior to the Annual Meeting by any shareholder, at the Company's
offices at 9540 Washington Boulevard, Culver City, California 90232 (telephone
(310) 204-5000).
Whether or not you intend to be present at the meeting, please mark, date,
sign and mail the enclosed proxy in the provided postage-paid envelope as
promptly as possible. Your proxy may be revoked by delivering a later-dated and
signed proxy or written notice of revocation to the Secretary of the Company
prior to the time voting is declared closed, or by attending the meeting and
voting your shares in person.
By Order of the Board of Directors
/S/ Gary J. Yusko
----------------------------------
Gary J. Yusko
Secretary
April 21, 2003
WESTWOOD ONE, INC.
40 West 57th Street, 5th Floor
New York, NY 10019
Proxy Statement
GENERAL
This proxy statement (first mailed to shareholders on or about April 22,
2003) is furnished in connection with the solicitation of proxies by Westwood
One, Inc., a Delaware corporation (the "Company"), for use at the Annual Meeting
of Shareholders of the Company to be held on May 28, 2003 at 10:00 a.m., Pacific
Time, in the Great Room of the W Los Angeles Hotel, 930 Hilgarde Avenue, Los
Angeles, CA 90024, and any adjournments thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders.
The Company's Annual Report on Form 10-K for the year ended December 31,
2002, including consolidated financial statements and other information,
accompanies this Proxy Statement but does not form a part of the proxy
soliciting material.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At our annual meeting, shareholders will act upon the matters outlined in
the Notice of Annual Meeting of Shareholders accompanying this proxy statement,
including the election of directors, the ratification of the appointment of the
Company's independent accountants, and such other business as may properly come
before the meeting. In addition, management will report on the performance of
the Company during 2002 and respond to questions from shareholders.
Who is entitled to vote at the meeting?
Only shareholders of record at the close of business on April 11, 2003, the
record date for the meeting, are entitled to receive notice of and to
participate in the annual meeting. If you were a shareholder of record on that
date, you will be entitled to vote all of the shares that you held on that date
at the meeting, or any postponements or adjournments of the meeting. As of the
record date, there were 102,322,744 shares of Common Stock outstanding,
excluding treasury shares, and 703,466 shares of Class B Stock outstanding.
What are the voting rights of holders of the Company's Common Stock and Class B
Stock?
Under the Company's certificate of incorporation, each holder of
outstanding Common Stock is entitled to cast one (1) vote for each share of
Common Stock held by such holder and each holder of Class B Stock is entitled to
cast fifty (50) votes for each share of Class B Stock held by such holder. Only
the Common Stock is publicly traded.
Who can attend the meeting?
All shareholders as of the record date, or their duly appointed proxies,
may attend the meeting. If you attend, please note that cameras, recording
devices and other electronic devices will not be permitted at the meeting.
Please also note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date in order to gain
entrance.
What constitutes a quorum?
With respect to the election of the director to be elected by the holders
of the Common Stock voting alone, the presence at the meeting, in person or by
proxy, of the holders of at least one-third of the shares of Common Stock
outstanding on the record date and the presence at the meeting, in person or by
proxy, of the holders of a majority of the aggregate voting power of the Common
Stock and the Class B Stock outstanding on the record date will constitute a
quorum, permitting the holders of Common Stock to take action on that matter.
With respect to all other matters to be voted on at the meeting, the presence at
the meeting, in person or by proxy, of the holders of a majority of the
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aggregate voting power of the Common Stock and the Class B Stock outstanding on
the record date will constitute a quorum, permitting the shareholders to take
action on those matters.
Proxies received but marked as abstentions and broker non-votes will be
included in the calculation of the number of votes considered to be present at
the meeting for purposes of determining a quorum.
How do I vote?
If you complete and properly sign and date the accompanying proxy card and
return it to the Company, it will be voted as you direct. If you are a
registered shareholder and attend the meeting, you may deliver your completed
proxy card in person. "Street name" shareholders who wish to vote at the meeting
will need to obtain a proxy form from the institution that holds their shares.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised by filing with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a later
date. In addition, the powers of the proxy holders will be suspended if you
attend the meeting in person and vote, although attendance at the meeting will
not by itself revoke a previously granted proxy.
What are the Board's recommendations?
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the recommendations
of the Board of Directors. The Board's recommendation is set forth together with
the description of each item in this proxy statement. In summary, the Board
recommends a vote:
o FOR the election of the nominated directors; and
o FOR ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for fiscal 2003;
Management is not aware of any matters, other than those specified above,
that will be presented for action at the annual meeting, but if any other
matters do properly come before the meeting, the proxy holders will vote as
recommended by the Board of Directors or, if no recommendation is given, in
their own discretion.
What vote is required to approve each item?
With respect to each matter to be voted on the affirmative vote of a
majority of the votes entitled to be cast and represented in person or by proxy
at the meeting will be required to approve each such matter. Other than with
respect to the election of Mr. Dennis, Mr. Miles and Ms. Hummer, on all matters
proposed the Common Stock and the Class B Stock vote together as a class. With
respect to the election of Mr. Dennis, Mr. Miles and Ms. Hummer, the Common
Stock votes separately as a class and the Class B Stock is not entitled to vote.
A properly executed proxy marked "WITHHOLD AUTHORITY" with respect to the
election of one or more directors will not be voted with respect to the director
or directors indicated, although it will be counted for purposes of determining
whether there is a quorum. A properly executed proxy marked "ABSTAIN" with
respect to any such matter will not be voted, although it will be counted for
purposes of determining whether there is a quorum. Accordingly, an abstention
will have the effect of a negative vote.
If you hold your shares in "street name" through a broker or other nominee,
your broker or nominee may not be permitted to exercise voting discretion with
respect to some or all of the matters to be acted upon. Thus, if you do not give
your broker or nominee specific instructions, your shares may not be voted on
those matters and will not be counted in determining the number of shares
necessary for approval. Shares represented by such "broker non-votes" will,
however, be counted in determining whether there is a quorum.
What is beneficial ownership?
Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Under this Rule, certain shares may be deemed to be beneficially owned by more
than one person (such as where persons share voting power or investment power).
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is provided; in
computing the percentage of ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights. As a
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result, the percentage of outstanding shares of any person as shown in the
following table does not necessarily reflect the person's actual voting power at
any particular date.
How much stock do the Company's largest shareholders and directors and executive
officers own?
The following table shows the amount of the Company's Common Stock and
Class B Stock beneficially owned (unless otherwise indicated) by our largest
shareholders (those who own more than 5% of the outstanding shares), directors,
the executive officers named in the Executive Compensation Summary Table below
and those directors and executive officers as a group. Except as otherwise
indicated, all information is as of April 11, 2003. At April 11, 2003, there
were 102,322,744 shares of Common Stock outstanding and 703,466 shares of Class
B Stock outstanding.
Aggregate Number of Shares Beneficially Owned (1)
----------------------------------------------------
Common Stock Class B Stock
------------------------------- -------------------------
Number Percent of Class Number Percent of Class
------ ---------------- ------ ----------------
Infinity Network, Inc., a subsidiary of
Infinity Broadcasting Corporation (2) 16,000,000 15.6% - -
40 West 57th Street
New York, NY 10019
Putnam Investments, Inc. (2) 7,782,840(4) 7.6% - -
One Post Office Square
Boston, MA 02109
David I. Saperstein 5,521,675(6) 5.4% - -
P.O. Box 10719
Beverly Hills, CA 90213
Norman J. Pattiz (3) 556,330(7) * 703,380 99.9%
9540 Washington Blvd.
Culver City, CA 90232
David L. Dennis 145,210(8) * - -
Gerald Greenberg 13,000(9) * - -
Joel Hollander 209,200(10) * - -
Dennis F. Holt 54,000(9) * - -
Maria D. Hummer 17,000(11) * - -
Mel Karmazin 2,248,200(12) 2.2% - -
Steven A. Lerman 56,000(9) * - -
George L. Miles, Jr. - * - -
Joseph B. Smith 24,000(9) * - -
Farid Suleman 1,442,000(13) 1.4% - -
Charles I. Bortnick 60,000(9) * - -
Jacques Tortoroli - * - -
All Current Directors and Executive 10,286,615(14) 9.6% 703,380 99.9%
Officers as a Group (13 persons)
_____________________
* Represents less than one percent (1%) of the Company's outstanding shares
of Common Stock.
(1) The persons in the table have sole voting and investment power with
respects to all shares of Common Stock and Class B Stock, unless otherwise
indicated.
(2) Tabular information and footnotes 4, 5, 6 and 7 are based on information
contained in the most recent Schedule 13D/13G filings and other information
made available to the Company. The shares indicated as held by Infinity
Network, Inc. are indirectly held by Infinity Media Corporation through its
ownership of 100% of the outstanding stock of Infinity Network, Inc.,
indirectly held by Infinity through its 100% ownership of the outstanding
stock of Infinity Media Corporation, and indirectly held by Viacom Inc.
("Viacom") through its ownership of 100% of the outstanding stock of
Infinity. NAIRI Inc. owns approximately 68% of the voting stock of Viacom,
which in turn is a wholly owned subsidiary of National Amusements, Inc.
Beneficial ownership may also be attributed to Sumner M. Redstone, as Mr.
Redstone is the chairman of the Board and the beneficial owner of a
controlling interest in National Amusements, Inc.
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(3) Mr. Pattiz owned Common Stock and Class B Stock representing approximately
25.5% of the total voting power of the Company as of April 11, 2003.
(4) Putnam Investments, Inc. as an investment advisor has no sole voting or
dispositive power, but has shared dispositive power for 7,782,840 shares
and shared voting power for 181,260 of such shares.
(5) Goldman Sachs Asset Management has sole voting power with respect to
4,072,913 shares, shared voting power for 1,560,983 shares, sole
dispositive power with respect to 4,544,043 shares and shared dispositive
power with respect to 1,560,983 shares.
(6) David I. Saperstein has sole voting and dispositive power for 5,521,675
shares.
(7) Includes stock options for 508,000 shares granted under the 1999 Plan.
(8) Includes stock options for 116,000 shares granted under the Company's
Amended Stock Incentive Plans. Does not include 4,000 shares held by Mr.
Dennis as custodian for his children, beneficial ownership of which Mr.
Dennis disclaims.
(9) Represents stock options granted under the Company's Amended Stock
Incentive Plans.
(10) Includes stock options for 190,000 shares granted under the 1999 Plan.
(11) Includes stock options for 12,000 shares granted under the 1999 Plan.
(12) Includes stock options for 2,196,000 shares granted under the Company's
Amended Stock Incentive Plans.
(13) Includes stock options for 1,342,000 shares granted under the Company's
Amended Stock Incentive Plans.
(14) Includes stock options for 4,511,000 shares granted under the Company's
Amended Stock Incentive Plans.
PROPOSAL 1 - ELECTION OF DIRECTORS
How is the Board of Directors structured and what are their terms?
The Board of Directors is divided into three classes (Class I, II, and
III), each class serving for three-year terms, which terms do not coincide. The
Board of Directors currently is comprised of eleven individuals. However, the
Company's Bylaws have been amended to increase the size of the Board of
Directors to thirteen. When such vacancies are filled, an additional director
will be added to Class III and Class I. Only one class of directors is elected
at each annual meeting. Of the directors, at least 33 1/3% must be independent
outside directors. Pursuant to the Company's certificate of incorporation,
holders of Common Stock, voting alone, have the right to elect 20% of the Board
of Directors, which is currently three directors. However, it is currently
intended that the holders of the Common Stock will vote alone to elect all the
independent directors, at least one of whom will be elected each year, as set
forth below. The remaining members of the Board are elected by all shareholders
voting together as a single class.
At the annual meeting, holders of Common Stock, voting alone, will elect
the independent Class II directors and holders of Common Stock and Class B
Stock, voting together, will elect the other Class II director, for three-year
terms, until their successors are elected and qualified. The Board of Directors
intends to nominate David Dennis (independent director), Maria Hummer
(independent director), George Miles (independent director), and Farid Suleman
to serve three-year terms ending in 2006. All nominees currently serve as Class
II directors of the Company. Unless otherwise indicated on any proxy, the
persons named as proxy voters on the enclosed proxy card intend to vote the
stock represented by each proxy to elect these nominees. The nominees are
willing to serve as directors, but should any or all refuse to or be unable to
serve, the named proxy holders will vote for one or more other persons nominated
by the Board of Directors.
The election of Mr. Dennis, Ms. Hummer and Mr. Miles will require the
affirmative vote of a majority of the votes entitled to be cast and represented
in person or by proxy at the meeting. With respect to the election of Mr.
Suleman, the Common Stock and the Class B Stock vote together as a class. With
respect to the election of Mr. Dennis, Ms. Hummer, and Mr. Miles the Common
Stock votes separately as a class and the Class B Stock is not entitled to vote.
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THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF DAVID DENNIS, MARIA HUMMER, GEORGE MILES, AND FARID SULEMAN AS CLASS II
DIRECTORS.
Who are the current Board members and what are their backgrounds and
qualifications?
The continuing directors and nominees for director of the Company are:
Director Term
Name Age Since Class Expires
---- --- -------- ----- -------
Norman J. Pattiz 60 1974 I 2004
Mel Karmazin 59 1994 I 2004
Joseph B. Smith (Independent) 75 1994 I 2004
Dennis F. Holt 66 1999 I 2004
Farid Suleman 51 1994 II 2003
David L. Dennis (Independent) 54 1994 II 2003
Maria D. Hummer (Independent) 58 2000 II 2003
George L. Miles, Jr. (Independent) 61 2002 II 2003
Gerald Greenberg (Independent) 60 1994 III 2005
Steven A. Lerman 56 1995 III 2005
Joel Hollander 47 1999 III 2005
The principal occupations of the four director nominees and each of the
other seven continuing directors are as follows:
Mr. Pattiz - founded the Company in 1974 and has held the position of
Chairman of the Board since that time. He was also the Company's Chief Executive
Officer until February 3, 1994. Mr. Pattiz has served on the Broadcasting Board
of Governors of the United States of America, which oversees all U.S.
non-military international broadcasting since November 2000. Mr. Pattiz also
serves as a Regent of the University of California. He also serves on the Board
of the Annenberg School of Communication at the University of Southern
California ("USC"), and is past president of the Broadcast Education
Association. He is a member of California's Commission on Building for the 21st
Century, and he serves on the Board of RAND'S Center for Middle East Public
Policy, the Board of Trustees of the Museum of Television & Radio and the Board
of Directors of the Hollywood
Radio & Television Society.
Mr. Karmazin - has been a director of the Company since February 3, 1994.
Mr. Karmazin was also President and Chief Executive Officer of the Company from
February 3, 1994 until October 8, 1998. Mr. Karmazin has been the president and
chief operating officer of Viacom since May 2000. Mr. Karmazin served as the
president and chief executive officer of CBS Corporation ("CBS") from January
1999 to May 2000, and served as president and chief operating officer of CBS
from April 1998 to December 1998. Mr. Karmazin was also the Chairman, President
and Chief Executive Officer of Infinity from September 1998 to February 2001.
Mr. Karmazin joined CBS in December 1996 as chairman and chief executive officer
of CBS Radio. In May 1997, he also assumed responsibility for CBS's owned
television stations and became chairman and chief executive officer of the CBS
Station Group (Radio & Television). Prior to joining CBS, he was president and
chief executive officer of Infinity from 1981 until its acquisition by CBS in
December 1996. Mr. Karmazin was a director of CBS before its merger with Viacom
and a director of Infinity before its merger with Viacom. He is a director of
Viacom, Blockbuster and of the New York Stock Exchange and Vice Chairman of the
Board of Trustees of the Museum of Television and Radio.
Mr. Smith - has been a director of the Company since May 24, 1994. He was
previously a director of the Company from February 1984 until February 3, 1994.
Since April 1993, Mr. Smith has been the President of Unison Productions, Inc.,
through which he serves as an industry consultant involved in a number of
projects in the entertainment business.
Mr. Holt - was appointed to the Board of Directors of the Company on
September 22, 1999. Mr. Holt was a director of Metro from October 1996 through
September 22, 1999. Mr. Holt has been the Chairman and Chief Executive Officer
of Patriot Communications LLC since March 1999. Patriot Communications LLC is
one of the largest telecommunications service bureaus in the U.S. Mr. Holt was
also the Chairman and Founder of Initiative Media (formerly Western
International Media Corporation) from founding the company in 1970 through
January 2002. Mr. Holt is a director of United Online; USC Annenberg School for
Communication; USC School of Policy, Planning and Development; St. John's
Hospital; The John Douglas French Alzheimer's Foundation; and the Los Angeles
Police Foundation. Mr. Holt also serves as a member of Skull and Dagger, the
Silver Shield Foundation, the SKIRBALL Cultural Center, and the National
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Advisory Council of the Autry Museum. Mr. Holt is an associate of the California
Institute of Technology. Mr. Holt was also awarded the Horatio Alger Association
award in 1998.
Mr. Suleman - has been a director of the Company since February 1994 and
was the Company's Executive Vice President and Chief Financial Officer from
February 1994 to March 31, 2002. Mr. Suleman has been a Special Limited Partner
with Forstmann Little & Co. since March 2002 and President and Chief Executive
Officer of Citadel Communications Corp. ("Citadel") since April 2002. He was
President and Chief Executive Officer of Infinity from February 2001 to March
2002. He was Executive Vice President, Chief Financial Officer, Treasurer and a
director of Infinity from September 1998 to February 2001 when Infinity was
acquired by Viacom. Mr. Suleman was named the Senior Vice President, Finance of
CBS in August 1998 and Senior Vice President and Chief Financial Officer of the
CBS Station Group in June 1997. In May 2000, CBS Corporation merged into Viacom.
From January 1997 to June 1997, he served as Senior Vice President and Chief
Financial Officer of CBS Radio. From 1986 until its acquisition by CBS in
December 1996, Mr. Suleman was Vice President, Finance, Chief Financial Officer
and a director of Infinity.
Mr. Dennis - has been a director of the Company since May 24, 1994. Mr.
Dennis has been a private investor and consultant since December 2002 and has
served as Vice Chairman, Office of the President, Chief Corporate Officer and
Chief Financial Officer of Tenet Healthcare, a hospital owner and healthcare
provider, from March 2000 through November 2002. Mr. Dennis served as Managing
Director, Investment Banking for Donaldson, Lufkin & Jenrette Securities
Corporation from April 1989 to February 2000.
Ms. Hummer - has been a director of the Company since March 29, 2000. Ms.
Hummer has been Of Counsel to Manatt, Phelps & Phillips, LLP ("Manatt, Phelps"),
a law firm with offices in Los Angeles, Orange County, Palo Alto, Sacramento,
New York and Washington D.C., since January 1999. Prior to January 1999, Ms.
Hummer was a partner with Manatt, Phelps holding the positions of Chairman of
the Management Committee and Co-Managing Partner. Ms. Hummer is currently on the
Board of Trustees, CNI Charter Funds; Board of Directors, Los Angeles World
Affairs Counsel; Board of Directors, The Music Center of Los Angeles County;
Board of Trustees, Scripps College; Board of Trustees, UCLA/Armand Hammer Museum
of Art and Cultural Center; Board of Trustees, Mount St. Mary's College; Board
of Directors, Children's Institute International; and Board of Directors, The
Regency Club. Ms. Hummer is also a member of The Committee of 200 and the
National Women's Forum.
Mr. Miles - has been a director of the Company since December 9, 2002. Mr.
Miles has been President and Chief Executive Officer of WQED Multimedia since
1994. Mr. Miles is a CPA and is on the Board of Directors of the Public
Broadcasting Service, WESCO International, Inc.; Equitable Resources;
Harley-Davidson, Inc.; Applied Technology Systems, Inc., Expeditionary Learning
Outward Bound; University of Pittsburgh; Allegheny Conference on Community
Development; Education Policy & Issues Center; and the Carnegie Museums of
Pittsburgh, UPMC Health System. Mr. Miles is also on the Pittsburgh Symphony
Orchestra Board of Advisers and serves as a director of the Mt. Ararat Community
Activity Center's Executive Board.
Mr. Greenberg - has been a director of the Company since May 24, 1994.
Since February 2001, Mr. Greenberg has been President of Mirage Music
Entertainment, a company which owns the Mirage Record label. From April 1993 to
January 2001, Mr. Greenberg served as President of MJJ Music, a Michael
Jackson/Sony owned record label.
Mr. Lerman - has been a director of the Company since April 19, 1995. Since
1986, Mr. Lerman has been a member of the Washington, D.C. law firm of
Leventhal, Senter and Lerman, PLLC and is currently the manager of that firm.
Mr. Lerman was a director of Infinity from February 1992 through December 1996.
Mr. Lerman is a member and the Vice President-Development of the Mid-Atlantic
Regional Advisory Board of the University of Pennsylvania.
Mr. Hollander - has been a director of the Company since September 22, 1999
and the Company's President and Chief Executive Officer since October 8, 1998.
Mr. Hollander was Vice President and General Manager of Infinity's New York
radio station WFAN from April 1992 to October 1998. Mr. Hollander is Chairman of
the CJ Foundation for SIDS and a member of the Board of Directors of Tomorrow's
Childrens Fund.
How are directors compensated?
Cash Compensation: Directors of the Company who are not officers received
$3,750 per meeting attended for their services as directors and $1,875 per
meeting attended for their services as committee members. During 2002, Messrs.
Dennis, Greenberg, Holt, Lerman, Smith, Suleman and Ms. Hummer received $35,625,
$22,500, $18,750, $24,375, $22,500, $11,250 and $31,875, respectively, in Board
and Board Committee fees. Mr. Karmazin has elected not to receive cash
compensation for his services as a director. Mr. Miles was appointed to the
Board in December 2002, and accordingly, did not receive any Board or Board
Committee fees in 2002.
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Options: Directors of the Company who are not officers receive a mandatory
grant of stock options to acquire 10,000 shares of Common Stock each year. Each
grant is made on the date of the Company's annual shareholder meeting or on the
date they are appointed to the Board of Directors. Mr. Karmazin has elected not
to receive mandatory grants of stock options normally provided to non-officer
directors.
How often did the Board meet during 2002?
The Board of Directors met six times during 2002. Each director attended
more than 75% of the total number of meetings of the Board and Committees on
which he or she served.
What committees has the Board established?
The Board of Directors has Audit, Nominating and Corporate Governance, and
Compensation Committees.
The members of the Audit Committee in 2002 were Messrs. Dennis (Chairman),
Lerman and Ms. Hummer. Mr. Miles was appointed to the Audit Committee in
December 2002. Pursuant to the Sarbanes-Oxley Act of 2002 (the "Act") and the
New York Stock Exchange ("NYSE") listing standards, Mr. Dennis, and Mr. Miles
meet the requirements of independence proscribed thereunder. In addition,
Messrs. Dennis and Miles are considered "Financial Experts" pursuant to the Act
and the NYSE listing standards. The Audit Committee is mainly responsible for
overseeing the integrity of the Company's financial statements, audits, and
internal controls amongst other matters. The Committee is also charged with
appointing, setting the compensation for and overseeing the Company's
independent auditors and ensuring their qualifications and independence. The
Audit Committee operates under a written charter, which was revised and amended
as a result of the Act and adopted by the Board of Directors. The Audit
Committee charter is included herein as Appendix A, (the "Charter") and will be
available on the Company website. The Committee's responsibilities and
activities are further discussed below under "Report of the Audit Committee."
There were five meetings of the Audit Committee during fiscal 2002.
The members of the Nominating Committee in 2002 were Messrs. Dennis
(Chairman), Karmazin and Pattiz. The primary function of the Nominating
Committee is to recommend possible qualified candidates to the Board for
election as directors of the Company and to recommend a slate of directors that
the Board proposes for election by shareholders at the annual meeting. The
Nominating Committee will also consider, at meetings of the Committee, those
recommendations by shareholders which are submitted, along with biographical and
business experience information, to the Company at its principal executive
office. There were several informal meetings of the Committee in 2002. Effective
March 25, 2003, the Board has established that the Nominating Committee will
become the Nominating and Corporate Governance Committee. This Committee, in
addition to its preexisting role, will be responsible for overseeing the
development and implementation of the Company's policies and practices with
regard to corporate governance. The Company has, at the direction of The Board
of Directors, sought a reaffirmation of compliance of the Company's Code of
Ethics from all its executives and employees.
The members of the Compensation Committee in 2002 were Messrs. Greenberg
(Chairman), Dennis and Smith. The Compensation Committee is comprised entirely
of independent members of the Board of Directors. The Committee reviews, at the
behest of the Board, compensation strategy and structure for key senior
executives. The Committee also reviews and approves the Company's plans and
policies and generally oversees the Company's incentive compensation and equity
based plans. The Committee administers the Company's Amended Stock Incentive
Plan, and is authorized to approve, and may negotiate, employment arrangements
with key executives of the Company and its subsidiaries. There were three
meetings of the Compensation Committee in 2002, and Committee members engaged in
informal discussions and took several actions by written consent during fiscal
2002.
The Board may from time to time, establish or maintain additional
committees as necessary or appropriate.
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Action will be taken at the annual meeting to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
fiscal year ending December 31, 2003. PricewaterhouseCoopers LLP has been the
independent accountant of the Company since 1984. The Company knows of no direct
or material indirect financial interest of PricewaterhouseCoopers LLP in the
Company or of any connection of that firm with the Company in the capacity of
promoter, underwriter, voting trustee, officer or employee.
7
Report of the Audit Committee
The Audit Committee operates pursuant to its Charter, which was revised and
approved by the Board of Directors and is included herein as Appendix 1. The
Charter, which complies with applicable SEC regulations, Sarbanes-Oxley and New
York Stock Exchange rules, addresses five broad areas of responsibility of the
Committee:
1) Reviewing and discussing the preparation of quarterly and annual financial
reports with the Company's management and its independent accountants;
2) Supervising the relationship between the Company and its independent
accountants, including discussing the matters required by SAS 61
(Codification of Standards on Auditing Standards) with its independent
accountants, evaluating the independence of the accountants in accordance
with Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees), and recommending their appointment or removal,
reviewing the scope of their audit and non-audit services and related fees;
3) Overseeing management's implementation of effective systems of internal
controls;
4) Reviewing and approving the internal corporate audit staff functions; and
5) Reviewing and investigating any matters pertaining to the integrity of
management, including conflicts of interest, or adherence to standards of
business conduct.
The Committee or its Chairman reviewed and discussed with both management
and its independent accountants all financial statements prior to their filing
with the SEC. Management advised the Committee in each case that all financial
statements were prepared in accordance with generally accepted accounting
principles, and reviewed significant issues with the Committee. The Committee
also held discussions with the Company's independent accountants concerning the
matters required to be discussed by SAS 61.
The Committee also discussed with PricewaterhouseCoopers LLP ("PWC") their
independence and received from PWC the written disclosures and the letter from
PWC required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees. In addition, the Committee has considered
whether the provision of non-audit services by PWC is compatible with
maintaining their independence.
Based on its reviews and discussions, the Committee recommended to the
Board of Directors that the Board approve the inclusion of the Company's audited
financial statements in the Company's Annual Report on Form 10-K. The Committee
also recommended to the Board of Directors the selection of the Company's
independent accountants for the year ending December 31, 2003.
The Audit Committee
David L. Dennis, Chairman of the Audit Committee
Maria D. Hummer
Steven Lerman
George L. Miles, Jr.
Audit Fees
PWC has audited the consolidated financial statements of the Company for
the year ended December 31, 2002. Direct fees related to the issuance of the
audit opinion and the timely review of quarterly reports on Form 10-Q were
$287,500.
8
Financial Information Systems Design and Implementation Fees
PWC did not render services relating to financial information systems
design and implementation for the year ended December 31, 2002 and, accordingly,
no fees were billed for any such services.
Non-Audit Fees
The Audit Committee has also adopted policies and procedures for
preapproving all non-audit work performed by PWC. PWC received $118,000 in fees
for audit related services in 2002. Such fees relate to auditing the Company's
employee benefit plans, auditing a subsidiary's financial statements in relation
to a government contract, consulting with respect to the renewal of the
Management Agreement and regarding the implementation of new accounting
pronouncements.
Representation of Independent Accountants at Annual Meeting
A representative of PricewaterhouseCoopers LLP will be present at the
annual meeting and will have an opportunity to make a statement. He or she will
also respond to appropriate questions.
The affirmative vote of a majority of the Common Stock and Class B Stock,
voting together as a single class, represented in person or by proxy at the
annual meeting is required for passage.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Messrs. Karmazin and Hollander are officers or employees of Infinity, which
beneficially owns 15.6% of the Common Stock of the Company. Infinity manages the
business and operations of the Company pursuant to the terms of the Management
Agreement, by providing to the Company the services of a chief executive officer
and a chief financial officer. The agreement was entered into in March 1999 and
was subsequently amended to, among other things, extend the agreement until
March 31, 2009. Pursuant to the Management Agreement, the Company is obligated
to pay to Infinity an annual base fee subject to an annual increase by a
percentage amount equal to the increase based on a specified consumer price
index. The fee in 2002 was approximately $2,712,000. Effective April 1, 2004,
the Company will be obligated to pay to Infinity an annual base fee in the
amount of $3,000,000 subject to an annual increase for each year thereafter by a
percentage amount equal to the increase in a specified price index for the prior
year.
In addition, the Company pays to Infinity incentive bonus compensation in
an amount equal to 10% of the amount by which the Company's operating cash flow
exceeds a target amount for the applicable year, subject to certain adjustments.
The Company must also reimburse Infinity for certain out-of-pocket expenses
incurred by Infinity in performing the services contemplated by the Management
Agreement consistent with past practice. Under the Management Agreement, the
Company paid or accrued amounts to Infinity aggregating approximately $5,012,000
during fiscal 2002. As additional compensation to Infinity under the Management
Agreement, Infinity was granted on March 30, 1999, warrants to purchase
2,000,000 shares of Common Stock at a price of $10.00 per share (sold in 2001)
and 2,000,000 shares of Common Stock at a price of $12.50 per share (sold in
2002, see below), in each case exercisable only if certain thresholds with
respect to the Company's Common Stock price were met. On January 2, 2003, the
Company, pursuant to the Letter Agreement which was ratified by the Company's
disinterested shareholders on May 29, 2002, agreed to grant Infinity warrants to
purchase an aggregate 4,500,000 shares of the Company's Common Stock (comprised
of two warrants to purchase 1,000,000 Common shares per warrant and five
warrants to purchase 500,000 Common shares per warrant). Of the 4,500,000
warrants issued, the two one million share warrants have an exercise price of
$43.11 and $48.36, respectively, and become exercisable if the average price of
the Company's Common Stock reaches a price of $64.67 and $77.38, respectively,
for at least 20 out of 30 consecutive trading days for any period throughout the
ten year term of the warrants.
Of the remaining five warrants to purchase an aggregate of 2,500,000 Common
shares, the exercise price for each of the five warrants will be equal to
approximately 115%, 132%, 152%, 175%, and 201%, respectively, of the average
price of the Company's Common Stock for the 15 trading days prior to January 2,
2004. The five warrants have a term of 10 years (only if they become
exercisable) and can become exercisable on January 2, 2005, 2006, 2007, 2008,
and 2009, respectively. Additionally, in order for the warrants to become
exercisable, the average price of the Company's Common Stock for each of the 15
trading days prior to January 2 of such year (commencing on January 2, 2005 with
respect to the first 500,000 warrant tranche and each January 2 thereafter for
9
each of the remaining four warrants) must be at least equal to both the exercise
price of the warrant and 120% of the corresponding prior year 15 day trading
average.
The Company and Infinity have also entered into a registration rights
agreement with respect to the shares of Common Stock issuable upon exercise of
the warrants pursuant to which the Company granted to Infinity specified demand
and registration rights. In 2002, Infinity sold its $12.50 warrants to the
Company in two separate transactions, receiving net proceeds aggregating
$51,070,000. The transactions, which were completed at a discount to the market
value of the securities, were reviewed and approved by the Compensation
Committee and by the Board of Directors other than the directors who were
officers or employees of Infinity.
The Management Agreement provides that all transactions between the Company
and Infinity or its affiliates will be on a basis that is at least as favorable
to the Company as if the transaction were entered into with an independent third
party. In addition, subject to specified exceptions, all agreements between the
Company and Infinity or any of its affiliates must be approved by the Board of
Directors.
The Company has a Representation Agreement with Infinity to operate the CBS
Radio Networks until March 31, 2009. The Company retains all revenue and is
responsible for all expenses of the CBS Radio Networks. In addition, a number of
Infinity's radio stations are affiliated with the Company's radio networks and
the Company purchases several programs from Infinity. During 2002, the Company
incurred expenses aggregating approximately $77,566,000 under the Representation
Agreement and for Infinity affiliations and programs.
Mr. Suleman has been President and Chief Executive Officer of Citadel since
April 2002. Many of the radio stations owned by Citadel have been broadcast
programming produced by the Company both before and after Mr. Suleman became an
officer of Citadel. During the time that Mr. Suleman was an officer of Citadel,
the Company paid Citadel owned stations approximately $442,000 pursuant to the
terms of the stations affiliation agreements with the Company.
Mr. Lerman has been a member of the Washington, D.C. law firm of Leventhal,
Senter and Lerman, PLLC since 1986. From time to time, the Company engages
Leventhal, Senter and Lerman, PLLC in certain matters. The fees associated with
those engagements aggregated approximately $35,000 in 2002. In addition,
Leventhal, Senter and Lerman PLLC provides services to Infinity. Mr. Lerman
serves as Infinity's General Counsel.
Compensation Committee Interlocks and Insider Participation
As stated above, the Company's Compensation Committee is comprised solely
of independent outside directors. The Compensation Committee consists of Mr.
Greenberg, Mr. Dennis and Mr. Smith. The Company has no interlocking
relationships or other transactions involving any of our Compensation Committee
members that are required to be reported pursuant to applicable Securities and
Exchange Commission rules.
EXECUTIVE OFFICERS
Disclosure regarding compensation is provided for each of the executive
officers of the Company (collectively, the "Named Executive Officers") who
served as executive officers at the end of or during the fiscal year ended
December 31, 2002:
Norman J. Pattiz.......... The Company's Chairman of the Board at
December 31, 2002.
Joel Hollander............. The Company's Chief Executive Officer and
President at December 31, 2002.
Farid Suleman............... The Company's Executive Vice President and
Chief Financial Officer from January 1, 2002.
to March 31, 2002.
Charles I. Bortnick......... The Company's Chief Operating Officer at
December 31, 2002.
Jacques Tortoroli.......... The Company's Executive Vice President and
Chief Financial Officer at December 31, 2002.
The professional background of the Executive Officers who are not also
directors of the Company follows:
Charles I. Bortnick
Charles I. Bortnick (age 49) has been Chief Operating Officer at Westwood
One since August 2002. From September 1999 to July 2002, Bortnick served as
Chief Operating Officer/President of Westwood's Metro Networks/Shadow
Broadcasting Services. From 1996 until the Westwood One/Metro Networks merger in
September 1999, Bortnick served as President of Metro Networks. Mr. Bortnick is
a board member of the Radio Advertising Bureau and the March of Dimes AIR
Awards.
10
Jacques Tortoroli
Jacques Tortoroli (age 46), as a result of the Infinity Management
Agreement, is Chief Financial Officer ("CFO") of Westwood One. Mr. Tortoroli is
also the CFO of Infinity Broadcasting Corporation. Prior to his appointment as
CFO in July 2002, Tortoroli served as CFO of the e-Services consultancy Scient,
Inc. from December 2001 to June 2002. Tortoroli was with Young and Rubicam, Inc.
where he served as CFO of Y&R Advertising, Senior Vice President - Finance and
Chief Accounting Officer, and CFO of Young & Rubicam, Inc. from April 1998 to
October 2001. Previously, Tortoroli spent 12 years with PepsiCo, Inc. including
financial roles in PepsiCo, Inc. and Pepsi-Cola International. He served
multi-year assignments in the Company's London and Rome based operations and
served as Vice President and Controller of Pepsi-Cola International. Mr.
Tortoroli is a director of Ibiquity and a member of the Board of Trustees of St.
Thomas Acquinas College; the RDG Group; and the Advertising Education
Foundation. He is a CPA licensed in New York State.
Employment Agreements
The Company has a written employment agreement with Mr. Pattiz, effective
April 29, 1998, pursuant to which Mr. Pattiz is to serve as Chairman of the
Board of the Company for a five-year term ending November 30, 2003 at an annual
salary of $500,000. The agreement also granted Mr. Pattiz ten-year options to
acquire 1,000,000 shares of Common Stock under the 1989 Plan (which vest at the
rate of 200,000 shares per year over the five-year term of the employment
agreement) and provides additional benefits which are standard for executives in
the industry. The agreement generally will be terminable by Mr. Pattiz upon
ninety days' written notice to the Company; it will be terminable by the Company
only in the event of death, permanent and total disability, or for "cause." In
the event of permanent and total disability, Mr. Pattiz will receive his base
salary for the following twelve months and 75% of his base salary for the
remainder of the term of the agreement. In the event of a "change of control,"
as defined in the agreement, any unvested options granted pursuant to this
agreement will become immediately exercisable and Mr. Pattiz will continue to
receive any base compensation he would have otherwise been entitled to receive
for the remaining term of the agreement. In addition, Mr. Pattiz has full "piggy
back registration rights" and limited demand registration rights with respect to
any and all of the Common Stock owned by Mr. Pattiz.
11
EXECUTIVE COMPENSATION SUMMARY TABLE
The following table sets forth the compensation for services to the Company
received by the Named Executive Officers in 2002, 2001 and 2000.
Annual Compensation
----------------------------------------------------------------------------------------------
Long-Term
Compensation
Awards
------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options Compensation
------------------ ---- ------ ----- ------------ ---------- ------------
(1)
Norman J. Pattiz 2002 $500,000 -- -- -- --
Chairman of the Board 2001 500,000 -- -- -- --
2000 500,000 -- -- 20,000 --
Joel Hollander 2002 -- -- -- 250,000 --
Chief Executive Officer 2001 -- -- -- 100,000 --
And President (2) 2000 -- -- -- -- --
Charles I. Bortnick (3) 2002 420,000 $150,000 $70,000 50,000 $2,569 (5)
Chief Operating Officer
Farid Suleman (2) 2002 -- -- -- -- --
Chief Financial Officer 2001 -- -- -- -- --
2000 -- -- -- 700,000 --
Jacques Tortoroli (2 and 4) 2002 -- -- -- 50,000 --
Chief Financial Officer
_________________________________
(1) Includes the aggregate cost to the Company (if such amount exceeded the
lesser of $50,000 or 10% of such officer's salary and bonus) of various
prerequisites and other personal benefits.
(2) Mr. Hollander assumed his position effective October 8, 1998, pursuant to
the terms of the Management Agreement between the Company and Infinity. Mr.
Suleman assumed this position effective February 3, 1994 and held such
position until he resigned his position as CFO with the Company on March
31, 2002. Messrs. Hollander, Suleman and Tortoroli do not or did not
receive any cash compensation from the Company. All compensation under the
Management Agreement is paid to Infinity. Mr. Hollander was granted 100,000
options to purchase Common Stock in 2001 and 250,000 options in 2002, Mr.
Suleman was granted 700,000 options in 2000 and Mr. Tortoroli was granted
50,000 options in 2002. Not included herein are 10,000 options granted to
Mr. Suleman in May 2002 as a result of the mandatory grants of options made
to non-employee members of the Company's Board of Directors.
(3) Appointed Chief Operating Officer of the Company in July, 2002.
(4) Appointed Executive Vice President and Chief Financial Officer of the
Company in July, 2002.
(5) All other Compensation consisted of Company contributions to the employee
Savings and Profit-Sharing Plan.
12
The following table shows grants in 2002 of stock options to the Named Executive Officers:
Individual Grants
-----------------------------------------------------------------
Number of % of Total Potential Realizable Value at
Securities Options Granted Exercise or Assumed Annual Rates of Stock
Underlying Options to Employees in Base Price Expiration Price Appreciation for
Name Granted Fiscal 2002 (2) ($/Share) Date 5% 10%
---- ------------------ --------------- ----------- ---------- -----------------------------
Joel Hollander 250,000 (1) 21.0% $37.27 3/14/12 $5,870,000 $14,815,000
Charles I. Bortnick 50,000 4.2% 35.19 9/25/12 1,108,000 2,798,000
Jacques Tortoroli 50,000 4.2% 35.19 9/25/12 1,108,000 2,798,000
(1) These options were granted under the 1999 Plan on March 14, 2002 and become
exercisable 20% per year on each anniversary date between 2003 and 2007.
(2) Percentage calculations exclude the impact of a mandatory grant of 70,000
options at $38.34 per share on May 29, 2002 and 10,000 options at $37.62
per share on December 5, 2002 to outside directors (10,000 each to Messrs.
Dennis, Greenberg, Holt, Hummer, Lerman, Miles, Smith and Suleman) which,
in accordance with the terms of the 1999 Plan, become exercisable 20% per
year on each May 29 or December 5 between 2003 and 2007.
The following table provides information as to stock options to purchase the
Company's Common Stock exercised during 2002 by the Named Executive Officers;
the unexercised options to purchase the Company's Common Stock and the value of
options held by them at year-end:
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at Fiscal Year End at Fiscal Year End (1)
Acquired Value ----------------------------- ----------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ------------- -------------
Norman J. Pattiz - - 404,000 208,000 $ 9,415,000 $4,855,000
Joel Hollander 160,000 $ 4,027,000 120,000 470,000 3,281,000 4,938,000
Farid Suleman 300,000 10,347,000 1,120,000 500,000 25,140,000 6,051,000
Charles I. Bortnick 75,000 1,135,000 60,000 215,000 939,000 2,720,000
Jacques Tortoroli -- -- -- 50,000 - 109,000
(1) On December 31, 2002, the closing per share price for the Company's Common
Stock on the New York Stock Exchange was $37.36.
13
PERFORMANCE GRAPH
The performance graph below compares the cumulative stockholder return of
the Company's Common Stock to the Dow Jones Equity Market Index and the Dow
Jones Media Industry Index for the Company's last five calendar years. The graph
assumes that $100 was invested in the Company's Common Stock and each index on
December 31, 1997.
The following table sets forth the closing price of the Company's Common
Stock at the end of each of the last five calendar years.
Measurement Dow Jones Dow Jones
Period Equity Media
(last business day Westwood Market Industry
of calendar year) One, Inc. Index Index
------------------ --------- --------- ---------
1997 100 100 100
1998 82 125 129
1999 205 153 206
2000 104 139 146
2001 162 122 134
2002 201 95 92
Base Year
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
$18.56 $15.25 $38.00 $19.31 $30.05 $37.36
14
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Executive officers,
directors and more than ten percent shareholders are required by Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from its directors and executive officers, the Company
believes that during 2002 its executive officers, directors and more than ten
percent beneficial owners complied with all SEC filing requirements applicable
to them, with the exception of Mr. Dennis, Mr. Holt, Ms. Hummer, Mr. Lerman, Mr.
Smith, and Mr. Hollander who inadvertently failed to timely file reports
disclosing a stock option grant; and Mr. Miles and Mr. Bortnick who
inadvertently failed to timely file reports disclosing the event upon which they
became reporting persons. These transactions on behalf of the aforementioned
have subsequently been reported.
SOLICITATION
The cost of preparing, assembling, printing and mailing this proxy
statement and the accompanying proxy card will be borne by the Company. The
Company has requested banks and brokers to solicit their customers who are
beneficial owners of Common Stock listed of record in the names of the banks and
brokers, and will reimburse these banks and brokers for the reasonable
out-of-pocket expenses of their solicitations. The original solicitation of
proxies by mail may be supplemented by telephone, telegram and personal
solicitation by officers and other regular employees of the Company, but no
additional compensation will be paid on account of these additional activities.
MacKenzie Partners may solicit proxies by mail, telephone, telegraph and
personal solicitation, and will request banks, brokers and other nominees,
fiduciaries and custodians nominally holding shares of Common Stock of record to
forward proxy soliciting material to the beneficial owners of such shares. For
these services, the Company will pay MacKenzie Partners a fee estimated not to
exceed $3,500, plus reimbursement for expenses.
SHAREHOLDER PROPOSALS FOR 2003
Under the rules of the Securities and Exchange Commission, any shareholder
proposal intended for inclusion in the proxy material for the Annual Meeting of
Shareholders to be held in 2004 must be received by the Company by December 31,
2003 to be eligible for inclusion in such proxy material. Proposals should be
addressed to Gary J. Yusko, Secretary, Westwood One, Inc., 40 West 57th Street,
5th Floor, New York, NY 10019. Proposals must comply with the proxy rules of the
Securities and Exchange Commission relating to shareholder proposals in order to
be included in the proxy materials. Additionally, the Company's proxy holders
for the Company's 2004 Annual Meeting of Shareholders will have discretionary
authority to vote on any shareholder proposal that is presented at such annual
meeting but that is not included in the Company's proxy materials, unless notice
of such proposal is received by the Secretary of the Company on or before March
30, 2004.
By Order of the Board of Directors
/S/ Gary J. Yusko
-----------------
Gary J. Yusko
Secretary
New York, New York
April 21, 2003
15
PROXY
WESTWOOD ONE, INC.
Proxy for 2003 Annual Meeting of Shareholders for Holders of Common Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WESTWOOD ONE, INC.
The undersigned shareholder of Westwood One, Inc., a Delaware corporation
(the "Company"), hereby appoints Gary J. Yusko and Tina Haut as the
undersigned's proxies, each with full power of substitution to attend and act
for the undersigned at the Annual Meeting of Shareholders of the Company to be
held on May 28, 2003 at 10:00 a.m., Pacific Time, in The Great Room of the W Los
Angeles Hotel, 930 Hilgard Avenue, Los Angeles, California 90024 and any
adjournments thereof, and to represent and vote as designated on the reverse
side all of the shares of Common Stock of the Company that the undersigned would
be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy, the
proxies are authorized to vote in accordance with their best judgments.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
----------- -----------
SIDE SIDE
A-1
X Please mark votes as in this example.
-----
The proxies present at the Annual Meeting, either in person or by substitute (or
if only one shall be present and act, then that one), shall vote the shares
represented by this proxy in the manner indicated below by the shareholder. IF
NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON THIS PROXY, IT WILL BE VOTED
FOR ITEMS 1 and 2 SHOWN BELOW. The Board of Directors recommends a vote FOR all
nominees in Item 1 and FOR Item 2.
1. Election of Class II Directors. Nominees: (01) David Dennis, (02) Maria
Hummer, (03) George Miles, Jr. and (04) Farid Suleman
----- FOR ALL NOMINEES ----- WITHHELD FROM ALL NOMINEES
----- FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
2. Ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the fiscal year ending December
31, 2003.
FOR AGAINST ABSTAIN
----- ----- -----
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
-----
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IMPORTANT: In signing this proxy, please sign your
name or names on the signature line in the same way
as indicated on this proxy. When signing as an
attorney, executor, administrator, trustee or
guardian, please give your full title as such.
EACH JOINT OWNER MUST SIGN.
Signature: Date: Signature: Date:
------------- ------- ------------- -------
A-2
PROXY
WESTWOOD ONE, INC.
Proxy for 2003 Annual Meeting of Shareholders for Holders of Class B Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WESTWOOD ONE, INC.
The undersigned shareholder of Westwood One, Inc., a Delaware corporation
(the "Company"), hereby appoints Gary J. Yusko and Tina Haut as the
undersigned's proxies, each with full power of substitution to attend and act
for the undersigned at the Annual Meeting of Shareholders of the Company to be
held on May 28, 2003 at 10:00 a.m., Pacific Time, in The Great Room of the W Los
Angeles Hotel, 930 Hilgard Avenue, Los Angeles, California 90024 and any
adjournments thereof, and to represent and vote as designated on the reverse
side all of the shares of Class B Stock of the Company that the undersigned
would be entitled to vote.
The proxies, and each of them, shall have all the powers that the
undersigned would have if acting in person. The undersigned hereby revokes any
other proxy to vote at the Annual Meeting and hereby ratifies and confirms all
that the proxies, and each of them, may lawfully do by virtue hereof. With
respect to matters not known at the time of the solicitation of this proxy, the
proxies are authorized to vote in accordance with their best judgments.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
----------- -----------
SIDE SIDE
A-3
X Please mark votes as in this example.
-----
The proxies present at the Annual Meeting, either in person or by substitute (or
if only one shall be present and act, then that one), shall vote the shares
represented by this proxy in the manner indicated below by the shareholder. IF
NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED ON THIS PROXY, IT WILL BE VOTED
FOR ITEMS 1 and 2 SHOWN BELOW. The Board of Directors recommends a vote
FOR nominee in Item 1 and FOR Item 2.
1. Election of Class II Director.
Nominee: (01) Farid Suleman
----- FOR THE NOMINEE ----- WITHHELD FROM THE NOMINEE
2. Ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the fiscal year ending December
31, 2003.
FOR AGAINST ABSTAIN
----- ----- -----
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
-----
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
IMPORTANT: In signing this proxy, please sign your
name or names on the signature line in the same ways
as indicated on this proxy. When signing as an
attorney, executor, administrator, trustee or
guardian, please give your full title as such.
EACH JOINT OWNER MUST SIGN.
Signature: Date: Signature: Date:
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A-4
APPENDIX 1
WESTWOOD ONE INC.
AUDIT COMMITTEE CHARTER
This charter reflects the scope of the duties and responsibilities of the Audit
Committee (the "Committee") of the Board of Directors ("Board") of Westwood One
Inc. (the "Company").
Purpose
The Committee is established by the Board of Directors for the purpose of
overseeing the accounting and financial reporting processes of the Company and
audits of the financial statements of the Company.
The Committee is responsible for (1) assisting the Board's oversight of (a)
the quality and integrity of the Company's financial statements and related
disclosure, (b) the Company's compliance with legal and regulatory requirements,
(c) the independent auditor's qualifications and independence, and (d) the
performance of the Company's internal audit function and independent auditors,
and to prepare reports if any, as required to be prepared by the Committee
pursuant to the SEC rules for inclusion in the Company's annual proxy statement
or otherwise.
Composition
1. Members. The Committee shall consist of as many members as the Board, in
consultation with the Committee itself, shall determine, but in any event
not fewer than three members. The members of the Committee shall be
appointed annually by the Board, based upon the recommendation of the
Corporate Governance/Nominating Committee of the Board.
2. Qualifications. Each member of the Committee shall meet all applicable
independence, financial literacy and other requirements of law and the New
York Stock Exchange. The Committee shall have at least one member with
financial expertise necessary to meet the requirements of the New York
Stock Exchange and who either falls within the definition of "audit
committee financial expert" as defined by the Securities and Exchange
Commission or who, in the business judgment of the Board, is capable of
serving the functions expected of such an audit committee financial expert.
3. Chair. The Chair of the Committee shall be elected by the Board, based upon
the recommendation of the Corporate Governance/Nominating Committee of the
Board.
4. Removal and Replacement. The members of the Committee may be removed or
replaced, and any vacancies on the Committee shall be filled, by the Board,
based upon the recommendation of the Corporate Governance/Nominating
Committee of the Board.
Operations
1. Meetings. The Chair of the Committee, in consultation with the Committee
members, shall determine the schedule and frequency of the Committee
meetings, provided that the Committee shall meet at least four times per
year. The Committee shall meet separately, periodically with management,
the General Counsel, the internal auditor and the independent auditor. The
Committee shall also meet separately with the independent auditor at every
meeting of the Committee at which the independent auditor is present.
2. Agenda. The Chair of the Committee shall develop and set the Committee's
agenda, in consultation with other members of the Committee. Each member of
the Board and members of management are free to suggest the inclusion of
items on the agenda. The agenda and information concerning the business to
be conducted at each Committee meeting shall, to the extent practical, be
communicated to the members of the Committee sufficiently in advance of
each meeting to permit meaningful review.
3. Report to Board. The Committee shall report regularly to the entire Board
and shall submit to the Board the minutes of its meetings.
4. Self-Evaluation; Assessment of Charter. The Committee shall conduct an
annual performance self-evaluation and shall report to the entire Board the
results of the self-evaluation. The Committee shall assess the adequacy of
this Charter annually and recommend any changes to the Board.
Authority and Duties
Independent Auditor's Qualifications and Independence
1. The Committee shall be directly responsible for the appointment, retention,
termination, compensation and oversight of the work of the independent
auditor employed by the Company (including resolution of disagreements
between management and the independent auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report or
related work. The independent auditor shall report directly to the
Committee.
2. The Committee shall have the sole authority to preapprove all auditing
services and permitted non-audit services to be provided by the independent
auditor. The Committee may form and delegate to subcommittees consisting of
one or more members when appropriate, including the authority to grant
preapprovals of permitted non-audit services, provided that decisions of
such subcommittee to grant preapprovals shall be presented to the full
Committee at its next scheduled meeting. The Committee shall review with
the lead audit partner whether any of the senior audit team members receive
any discretionary compensation from the audit firm with respect to
non-audit services performed by the independent auditor.
3. The Committee shall obtain and review with the lead audit partner and, if
the Committee deems it appropriate, a more senior representative of the
independent auditor, annually or more frequently as the Committee considers
appropriate, a report by the independent auditor describing: the
independent auditor's internal quality-control procedures; any material
issues raised by the most recent internal quality-control review, or peer
review, of the independent auditor, or by any inquiry, review or
investigation by governmental or professional or other regulatory
authorities, within the preceding five years, respecting independent audits
carried out by the independent auditor, and any steps taken to deal with
these issues; and (to assess the independent auditor's independence) all
relationships between the independent auditor and the Company.
4. The Committee shall review the experience, qualifications and performance
of the senior members of the independent auditor team.
5. The Committee shall preapprove the hiring of any employee or former
employee of the independent auditor who was a member of the Company's audit
team during the preceding three fiscal years. In addition, the Committee
shall preapprove the hiring of any employee or former employee of the
independent auditor (within the preceding three fiscal years) for senior
positions within the Company, regardless of whether that person was a
member of the Company's audit team.
Financial Statements and Related Disclosure
6. The Committee shall review and discuss the annual audited financial
statements and quarterly financial statements with management and the
independent auditor, including the Company's disclosures under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," before the filing of the Company's Form 10-K and Form 10-Q.
7. The Committee shall review and discuss with management earnings press
releases before they are issued. The Committee shall review generally with
management the nature of the financial information and earnings guidance
provided to analysts and rating agencies.
8. The Committee shall review with the independent auditor: (a) all critical
accounting policies and practices to be used by the Company in preparing
its financial statements, (b) all alternative treatments of financial
information within GAAP that have been discussed with management,
ramifications of the use of these alternative disclosures and treatments,
and the treatment preferred by the independent auditor, and (c) other
material communications between the independent auditor and management,
such as any management letter or schedule of unadjusted differences. In
addition, the Committee shall review with the independent auditor any audit
problems or difficulties and management's response.
9. The Committee shall review with management, and any outside professionals
as the Committee considers appropriate, the effectiveness of the Company's
disclosure controls and procedures.
10. The Committee shall review with management, and any outside professionals
as the Committee considers appropriate, important trends and developments
in financial reporting practices and requirements and their effect on the
Company's financial statements.
11. The Committee shall prepare the report required by the Securities and
Exchange Commission to be included in the Company's annual proxy statement.
Performance of the Internal Audit Function and Independent Auditors
12. The Committee shall review with management, the internal auditor and the
independent auditor the scope, planning and staffing of the proposed audit
for the current year. The Committee shall also review the internal audit
function's organization, responsibilities, plans, results, budget and
staffing. In addition, the Committee shall review and advise on the
appointment, replacement, reassignment or dismissal of the principal
internal auditor.
13. The Committee shall review with management, the internal auditor and the
independent auditor the quality, adequacy and effectiveness of the
Company's internal controls and any significant deficiencies or material
weaknesses in internal controls.
14. The Committee shall review and discuss the Company's policies with respect
to risk assessment and risk management.
Compliance with Legal and Regulatory Requirements
15. The Committee shall review with management, and any internal or external
counsel as the Committee considers appropriate, any legal matters
(including the status of pending litigation) that may have a material
impact on the Company and any material reports or inquiries from regulatory
or governmental agencies.
16. The Committee shall review with the General Counsel the adequacy and
effectiveness of the Company's procedures to ensure compliance with its
legal and regulatory responsibilities.
17. The Committee shall establish procedures for (a) the receipt, retention and
treatment of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters and (b) the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
18. The Committee shall obtain reports from management, the internal auditor
and the independent auditor regarding compliance with applicable legal and
regulatory requirements, including the Foreign Corrupt Practices Act.
19. The Committee shall have the ability to hire and terminate the head of the
Company's Internal Audit Department, who shall report directly to the
Committee and to review the organizational structure and qualifications of
the Company's Internal Audit Department.
The foregoing list of duties is not exhaustive, and the Committee may, in
addition, perform such other functions as may be necessary or appropriate for
the performance of its oversight function. The Committee has the power to
delegate its authority and duties to subcommittees or individual members of the
Committee as it deems appropriate. In discharging its oversight role, the
Committee shall have full access to all Company books, records, facilities and
personnel. The Committee may retain outside counsel, auditors or other advisors,
in its sole discretion.
Clarification of Audit Committee's Role
The Committee's responsibility is one of oversight. It is the
responsibility of the Company's management to prepare consolidated financial
statements in accordance with applicable law and regulations and of the
Company's independent auditor to audit those financial statements. Therefore,
each member of the Committee shall be entitled to rely, to the fullest extent
permitted by law, on the integrity of those persons and organizations within and
outside the Company from whom he or she receives information, and the accuracy
of the financial and other information provided to the Committee by such persons
or organizations.