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o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
x Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to |
x | No fee required. |
o | 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: |
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o | 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. |
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8, 2005
Sincerely, | |
Raúl Alarcón, Jr. | |
Chairman of the Board of Directors, | |
President and Chief Executive Officer |
1. | To elect the six members of the Board of Directors to serve until our next annual meeting of stockholders or until their respective successors are elected and qualify. | |
2. | To transact any other business that may properly come before the Annual Meeting or any adjournment thereof. |
By Order of the Board of Directors | |
Joseph A. García | |
Executive Vice President, | |
Chief Financial Officer, and Secretary |
10, 20048, 2005
8, 2005
• | each person known by us to beneficially own more than 5% of any class of common stock; | |
• | each director and each executive officer named in the Summary Compensation Table; and | |
• | all named executive officers and directors as a group. |
Class A Shares | Class B Shares | |||||||||||||||||||||||
Percent of | Percent of | |||||||||||||||||||||||
Percent of | Percent of | Total | Total | |||||||||||||||||||||
Number of | Class A | Number of | Class B | Economic | Voting | |||||||||||||||||||
Name and Address(1)(2) | Shares | Shares | Shares | Shares | Interest | Power | ||||||||||||||||||
Raúl Alarcón, Jr.(3) | 500,000 | 1.2 | % | 23,500,000 | 93.6 | % | 36.8 | % | 80.9 | % | ||||||||||||||
Pablo Raúl Alarcón, Sr.(4) | — | — | 1,070,000 | 4.3 | % | 1.6 | % | 3.7 | % | |||||||||||||||
Joseph A. García(5) | 440,000 | 1.1 | % | — | — | * | * | |||||||||||||||||
William B. Tanner(6) | 263,552 | * | — | — | * | * | ||||||||||||||||||
Jason L. Shrinsky(7) | 65,000 | * | — | — | * | * | ||||||||||||||||||
Carl Parmer(8) | 101,100 | * | — | — | * | * | ||||||||||||||||||
Jack Langer(9) | 20,000 | * | — | — | * | * | ||||||||||||||||||
Dan Mason(9) | 20,000 | * | — | — | * | * | ||||||||||||||||||
Marko Radlovic(10) | 52,960 | * | — | — | * | * | ||||||||||||||||||
All named executive officers and directors as a group(11) | 1,462,612 | 3.6 | % | 24,570,000 | 97.9 | % | 39.4 | % | 84.6 | % | ||||||||||||||
T. Rowe Price Associates, Inc.(12) | 4,946,600 | 12.5 | % | — | — | 7.6 | % | 1.7 | % | |||||||||||||||
Columbia Wagner Asset Management, L.P.(13) | 3,061,000 | 7.7 | % | — | — | 4.7 | % | 1.1 | % | |||||||||||||||
FMR Corp.(14) | 2,711,234 | 6.8 | % | — | — | 4.2 | % | * | ||||||||||||||||
International Church of the FourSquare Gospel, Inc.(15) | 2,700,000 | 6.8 | % | — | — | 4.2 | % | * |
Class A Shares | Class B Shares | |||||||||||||||||||||||
Percent of | Percent of | |||||||||||||||||||||||
Percent of | Percent of | Total | Total | |||||||||||||||||||||
Number of | Class A | Number of | Class B | Economic | Voting | |||||||||||||||||||
Name and Address(1)(2) | Shares | Shares | Shares | Shares | Interest | Power | ||||||||||||||||||
Raúl Alarcón, Jr.(3) | 600,000 | 1.2 | % | 23,430,000 | 95.6 | % | 32.9 | % | 80.0 | % | ||||||||||||||
Pablo Raúl Alarcón, Sr. | — | — | 1,070,000 | 4.4 | % | 1.5 | % | 3.7 | % | |||||||||||||||
Joseph A. García(4) | 512,500 | 1.1 | % | — | — | * | * | |||||||||||||||||
Marko Radlovic(3) | 95,030 | * | — | — | * | * | ||||||||||||||||||
William B. Tanner(3) | 268,552 | * | — | — | * | * | ||||||||||||||||||
Dan Mason(3) | 30,000 | * | — | — | * | * | ||||||||||||||||||
Antonio S. Fernandez(3) | 20,000 | * | — | — | * | * | ||||||||||||||||||
Jose A. Villamil(3) | 20,000 | * | — | — | * | * | ||||||||||||||||||
Jason L. Shrinsky(5) | 75,000 | * | — | — | * | * | ||||||||||||||||||
All named executive officers and directors as a group(6) | 1,621,082 | 3.3 | % | 24,500,000 | 100.0 | % | 35.3 | % | 83.7 | % | ||||||||||||||
Infinity Media Corporation(7) | 11,400,000 | 22.1 | % | — | — | 15.0 | % | 3.8 | % | |||||||||||||||
T. Rowe Price Associates, Inc.(8) | 5,204,550 | 10.9 | % | — | — | 7.2 | % | 1.8 | % | |||||||||||||||
Columbia Wagner Asset Management, L.P.(9) | 3,055,500 | 6.4 | % | — | — | 4.2 | % | 1.0 | % |
2
* | Indicates less than 1%. |
(1) | The address of all directors and executive officers in this table, unless otherwise specified, is c/o Spanish Broadcasting System, Inc., 2601 South Bayshore Drive, PH II, Coconut Grove, Florida 33133. |
2
(2) | As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting of a security, or the sole or shared power to dispose, or direct the disposition, of a security. A person is deemed as of any date to have beneficial ownership of any security that the person has the right to acquire within 60 days after that date. For purposes of computing the percentage of outstanding shares held by each person named above, any security that the person has the right to acquire within 60 days of the date of calculation is deemed to be outstanding, but is not deemed to be outstanding for purposes of computing the percentage ownership of any other person. | |
(3) | ||
Shares of Class A common stock issuable upon the exercise of options that the holder has the right to exercise within sixty days of the date of this table. | ||
Includes | ||
(5) | Includes 60,000 shares of Class A common stock issuable upon the exercise of options that the holder has the right to exercise within sixty days of the date of this table. Mr. Shrinsky holds these options for the benefit of his law firm, Kaye Scholer LLP. Mr. Shrinsky shares ownership of, and voting and investment power for, 15,000 shares of Class A common stock with his spouse. | |
Includes |
Reflects ownership of Infinity Media Corporation (“IMC”), Infinity Broadcasting Corporation (“IBC”), Viacom Inc. (“Viacom”), NAIRI, Inc. (“NAIRI”) and National Amusements, Inc. (“NAI” and, together with IMC, IBC, Viacom and NAIRI, the “Infinity Entities”) of 380,000 shares of our Series C preferred stock and a warrant (the “Warrant”) to purchase 190,000 additional shares of Series C preferred stock. Upon conversion, each of the shares of Series C preferred stock will convert into twenty fully paid and non-assessable shares of Class A common stock. Accordingly, the Series C preferred stock beneficially owned by the Infinity Entities and the Series C preferred stock issuable upon exercise of the Warrant are convertible into 11,400,000 shares of Class A common stock. Mr. Sumner M. Redstone, by virtue of his stock ownership in NAI, may be deemed to be the beneficial owner, with shared dispositive and voting power, of the Series C preferred stock held or controlled by the Infinity Entities. The address of the Infinity Entities and Mr. Redstone is c/o Infinity Media Corporation, 1515 Broadway, New York, New York 10036. We obtained this information from a Schedule 13D filed by Viacom, Inc. on December 27, 2004. | |
(8) | The address of T. Rowe Price Associates, Inc. is 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe Price Associates, Inc. has sole voting power with respect to |
(9) | The address of Columbia Wagner Asset Management, L.P. is 227 W. Monroe Ste. 3000, Chicago, Illinois 60606. Columbia Wagner Asset Management, L.P. has sole investment discretion and voting power with respect to all the shares. The shares are owned by various individual and institutional investors for which |
3
(c) | (c) | |||||||||||||||||||||||||||
(a) | Number of Securities | (a) | Number of Securities | |||||||||||||||||||||||||
Number of Shares to | (b) | Remaining Available for | Number of Shares to | (b) | Remaining Available for | |||||||||||||||||||||||
be Issued Upon | Weighted-Average | Future Issuance Under | be Issued Upon | Weighted-Average | Future Issuance Under | |||||||||||||||||||||||
Exercise of | Exercise Price of | Equity Compensation | Exercise of | Exercise Price of | Equity Compensation | |||||||||||||||||||||||
Outstanding Options, | Outstanding Options, | Plans (excluding | Outstanding Options, | Outstanding Options, | Plans (excluding | |||||||||||||||||||||||
Plan Category | Plan Category | Warrants and Rights | Warrants and Rights | Column (a)) | Plan Category | Warrants and Rights | Warrants and Rights | Column (a)) | ||||||||||||||||||||
Equity Compensation Plans Approved by Stockholders | Equity Compensation Plans Approved by Stockholders | Equity Compensation Plans Approved by Stockholders | ||||||||||||||||||||||||||
1999 Stock Option Plan | 1,901,252 | $ | 12.33 | 1,064,448 | 1999 Stock Option Plan | 2,558,252 | $ | 11.57 | 348,648 | |||||||||||||||||||
Non-Employee Director Stock Option Plan | 200,000 | 11.18 | 100,000 | Non-Employee Director Stock Option Plan | 200,000 | 11.18 | 70,000 | |||||||||||||||||||||
Equity Compensation Plans Not Approved by Stockholders | Equity Compensation Plans Not Approved by Stockholders | Equity Compensation Plans Not Approved by Stockholders | ||||||||||||||||||||||||||
Options issued to a former director(1) | 250,000 | 20.00 | — | Options issued to a former director(1) | 250,000 | 20.00 | — | |||||||||||||||||||||
Warrants related to the acquisition of KXOL-FM(2) | 2,700,000 | 9.77 | �� | — | Warrants related to the acquisitions of | |||||||||||||||||||||||
KXOL-FM(2) | 2,700,000 | 9.77 | ||||||||||||||||||||||||||
Total | 5,051,252 | 1,164,448 | KRZZ-FM(3) | 3,800,000 | — | (3) | — | |||||||||||||||||||||
Total | 9,508,252 | 418,648 | ||||||||||||||||||||||||||
(1) | We granted Arnold Sheiffer, who served as | |
(2) | On October 30, 2003, we completed the acquisition of the assets of radio station KXOL-FM serving the Los Angeles, California market, from the International Church of the FourSquare Gospel (“ICFG”) for a cash purchase price of $250.0 million plus the issuance to ICFG on February 8, 2002 of a warrant exercisable for an aggregate of 2,000,000 shares of our Class A common stock. This warrant was exercisable for a period of thirty- six months from the date of issuance and as of February 8, 2005, the warrant expired. Pursuant to the amended asset purchase agreement and amended time brokerage agreements relating to the acquisition of KXOL-FM, we issued to ICFG seven additional warrants, each exercisable for 100,000 shares (an aggregate of 700,000 shares) of our Class A common stock. These warrants are exercisable for a period of thirty-six months after the date of issuance after which they will expire if not exercised. To date, none of these warrants issued to ICFG have been exercised. | |
(3) | On December 23, 2004, in connection with the closing of the merger agreement, dated October 5, 2004, with Infinity Media Corporation (“Infinity”), Infinity Broadcasting Corporation of San Francisco (“Infinity SF”) and SBS Bay Area, LLC, a wholly-owned subsidiary of SBS (“SBS Bay Area”), we issued to Infinity (i) an aggregate of 380,000 shares of our Series C preferred stock, which are each convertible at the option of the holder into twenty fully paid and non-assessable shares of our Class A common stock; and (ii) a warrant to purchase an additional 190,000 shares of our Series C preferred stock, at an exercise price of $300.00 per share (the “Warrant”). Upon conversion, each share of our Series C preferred stock held by a holder will convert into twenty fully paid and non-assessable shares of our Class A common stock. The shares of our Series C preferred stock issued at the closing of the merger are convertible into 7,600,000 shares of our Class A common stock, subject to adjustment, and the Series C preferred stock issuable upon exercise of the Warrant are convertible into an additional 3,800,000 shares of our Class A common stock, subject to adjustment. In connection with the closing of the merger transaction, we also entered into a registration rights agreement with Infinity, pursuant to which, following a period of one year (or earlier if we take certain actions), Infinity may instruct us to file up to three registration statements, on a best efforts basis, with the SEC providing for the registration for resale of the Class A common stock issuable upon conversion of the Series C preferred stock. |
4
Name | Age | Position with SBS | |||||
Raúl Alarcón, Jr. | Chairman of the Board of Directors, Chief Executive Officer and President | ||||||
Pablo Raúl Alarcón, Sr. | Chairman Emeritus and Director | ||||||
Antonio S. Fernandez | 65 | Director | |||||
Dan Mason | Director | ||||||
Jason L. Shrinsky | Director | ||||||
Jose A. Villamil | 58 | Director | |||||
Executive Officers | |||||||
Joseph A. García | Executive Vice President, Chief Financial Officer and Secretary | ||||||
Marko Radlovic | Executive Vice President and Chief | ||||||
William B. Tanner | Executive Vice President of Programming |
5
5
Jason L. Shrinskybecame one of our directors on November 2, 1999. Mr. Shrinsky is a partner of the law firm of Kaye Scholer LLP, where he has been a partner since 1986. Mr. Shrinsky has been a lawyer counseling corporations and high net worth individuals on financings, mergers and acquisitions, other related financial transactions and regulatory procedures since 1964. Kaye Scholer LLP has served as our legal counsel for more than 19 years.
Antonio S. Fernandezwas the founder and former head of the International Investment Banking Department at Oppenheimer & Co., Inc. Mr. Fernandez’s tenure at Oppenheimer & Co., Inc. from 1979 to 1999 also included terms as Executive Vice President, Director of Operations, Treasurer, Chief Financial Officer and Director. He has been a member of the investment committees for several private equity funds and a director of a closed end fund. Earlier in his career, Mr. Fernandez held management positions at Electronic Data Systems, duPont Glore Forgan and Thomson McKinnon. Mr. Fernandez served on the board of directors of Banco Latinoamericano de Exportaciones from 1992 until 1999 and in September 2003 was elected to the board of directors of Terremark Worldwide Inc.
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6
INFORMATION CONCERNING THE BOARD OF DIRECTORS
membership.
We have formed a Disclosure Committee consisting of members of management.
Audit Committee |
2004.
7
7
Compensation Committee |
2004.
Nominating Committee |
8
directed following its clearance through normal review and appropriate security procedures.
8
Directors.”
9
Long Term | Long Term | |||||||||||||||||||||||||||||||||||||||
Compensation | Compensation | |||||||||||||||||||||||||||||||||||||||
Awards | Awards | |||||||||||||||||||||||||||||||||||||||
Annual Compensation | Annual Compensation | |||||||||||||||||||||||||||||||||||||||
Securities | Securities | |||||||||||||||||||||||||||||||||||||||
Other Annual | Underlying | Other Annual | Underlying | |||||||||||||||||||||||||||||||||||||
Name | Principal Position | Year | Salary ($) | Bonus ($) | Compensation ($) | Options/SARs (#) | Principal Position | Year | Salary($) | Bonus($) | Compensation($) | Options/SARs (#) | ||||||||||||||||||||||||||||
Raúl Alarcón, Jr. | Chief Executive | 2003 | $ | 1,226,888 | $ | 710,183 | $ | 82,265 | (a) | 100,000 | Chief Executive Officer, | 2004 | $ | 1,226,888 | $ | 985,245 | $ | 104,132 | (a) | 100,000 | ||||||||||||||||||||
Officer, President | 2002 | 1,226,888 | 790,629 | 101,008 | (a) | 100,000 | President and Chairman | 2003 | 1,226,888 | 710,183 | 122,799 | (b) | 100,000 | |||||||||||||||||||||||||||
and Chairman of the | 2001 | 1,000,000 | 792,864 | 155,531 | (a) | 100,000 | of the Board of Directors | 2002 | 1,226,888 | 790,629 | 101,008 | (c) | 100,000 | |||||||||||||||||||||||||||
Board of Directors | ||||||||||||||||||||||||||||||||||||||||
Joseph A. García | Executive Vice | 2003 | $ | 400,000 | $ | 160,000 | — | (c) | — | Executive Vice | 2004 | $ | 400,000 | $ | 200,000 | $ | — | (e) | 50,000 | |||||||||||||||||||||
President, Chief | 2002 | 423,077 | (b) | 200,000 | — | (c) | 150,000 | President, Chief | 2003 | 400,000 | 160,000 | — | (e) | — | ||||||||||||||||||||||||||
Financial Officer | 2001 | 379,615 | 100,000 | — | (c) | 100,000 | Financial Officer | 2002 | 423,077 | (d) | 200,000 | — | (e) | 150,000 | ||||||||||||||||||||||||||
and Secretary | and Secretary | |||||||||||||||||||||||||||||||||||||||
Marko Radlovic | Chief Revenue | 2003 | $ | 416,538 | $ | 97,199 | — | (c) | 90,000 | Chief Revenue | 2004 | $ | 500,000 | $ | 50,000 | $ | — | (e) | 62,500 | |||||||||||||||||||||
Officer(d) | 2002 | — | — | — | — | Officer(f) | 2003 | 416,538 | 97,199 | — | (e) | 90,000 | ||||||||||||||||||||||||||||
2001 | — | — | — | — | 2002 | — | — | — | — | |||||||||||||||||||||||||||||||
William B. Tanner | Executive Vice | 2003 | $ | 617,540 | $ | 446,500 | — | (c) | 15,000 | Executive Vice | 2004 | $ | 658,972 | $ | 391,500 | $ | 64,300 | (g) | 15,000 | |||||||||||||||||||||
President of | 2002 | 563,582 | 192,000 | $ | 154,742 | (e) | 15,000 | President of | 2003 | 617,540 | 446,500 | — | (e) | 15,000 | ||||||||||||||||||||||||||
Programming | 2001 | 530,058 | 18,000 | 156,572 | (e) | 15,000 | Programming | 2002 | 563,582 | 192,000 | 154,742 | (h) | 15,000 |
9
(a) | Mr. Alarcón, Jr. received personal benefits in addition to his salary and bonus, including use of automobiles. We paid an aggregate of $90,929 in fiscal year 2004, for automobiles used by Mr. Alarcón, Jr. and $13,203 for personal travel expenses. |
Mr. Alarcón, Jr. received personal benefits in addition to his salary and bonus, including | ||
(c) | Mr. Alarcón, Jr. received personal benefits in addition to his salary and bonus, including use of automobiles. We paid an aggregate of $98,388 in fiscal year 2002 for automobiles used, including a driver’s salary, for Mr. Alarcón, Jr. These amounts exclude payments made by us in connection with our lease of an apartment in New York City owned by Mr. Alarcón, Jr., which was terminated in September 2002. Mr. Alarcón, Jr. and others used the apartment while in New York on SBS business. | |
Includes $23,077 reimbursed to Mr. García for unused vacation time from prior years. | ||
Excludes perquisites and other personal benefits, securities or property which aggregate the lesser of $50,000 or 10% of the total of annual salary and bonus. | ||
Mr. Radlovic became our Chief Revenue Officer on December 1, 2003. For the preceding portion of fiscal year 2003, he served as Vice President/ General Manager for our Los Angeles radio cluster | ||
Mr. Tanner received $24,000 for automobile allowances in addition to his salary and bonus. In addition, Mr. Tanner realized $40,300 upon exercise of 10,000 shares of Class A common stock at an exercise price of $7.07 on November 30, 2004. | ||
(h) | In |
10
of our Class A common stock had not reached specified levels by August 30, |
The following table sets forth all compensation awarded to, earned by or paid for services rendered to SBS and its subsidiaries, in all capacities during the three-month transitional period ended December 30, 2001, by our Chief Executive Officer and President and our next highest paid executive officers as of December 29, 2002, whose total annual salary and bonus exceeded $100,000.
Long Term | ||||||||||||||||||
Compensation | ||||||||||||||||||
Awards | ||||||||||||||||||
Transitional Period Compensation | ||||||||||||||||||
Securities | ||||||||||||||||||
Other | Underlying | |||||||||||||||||
Name | Principal Position | Salary ($) | Bonus ($) | Compensation ($) | Options/SARs (#) | |||||||||||||
Raúl Alarcón, Jr. | Chief Executive Officer, | $ | 306,722 | $ | — | $ | 32,382 | (a) | 100,000 | |||||||||
President and Chairman of the Board of Directors | ||||||||||||||||||
Joseph A. García | Executive Vice | $ | 100,000 | $ | — | — | (b) | — | ||||||||||
President, Chief Financial Officer and Secretary | ||||||||||||||||||
William B. Tanner | Executive Vice President | $ | 148,625 | $ | 38,500 | — | (b) | — | ||||||||||
of Programming |
10
2004:
Individual Grants | Individual Grants | |||||||||||||||||||||||||||||||||||||||||||||
Percent of | Percent of | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Total | Potential Realizable Value | Number of | Total | Potential Realizable Value | |||||||||||||||||||||||||||||||||||||||||
Securities | Options/SARs | at Assumed Annual Rates | Securities | Options/SARs | at Assumed Annual Rates | |||||||||||||||||||||||||||||||||||||||||
Underlying | Granted to | Exercise | of Stock Price Appreciation | Underlying | Granted to | Exercise | of Stock Price Appreciation | |||||||||||||||||||||||||||||||||||||||
Options/SARs | Employees in | or Base | for Option Term | Options/SARs | Employees in | or Base | for Option Term | |||||||||||||||||||||||||||||||||||||||
Granted | Fiscal Year | Price | Expiration | Granted | Fiscal Year | Price | Expiration | |||||||||||||||||||||||||||||||||||||||
Name | (#)(a) | 2003 | ($/Sh) | Date | 5% ($) | 10% ($) | (#)(a) | 2004 | ($/Sh) | Date | 5% ($) | 10% ($) | ||||||||||||||||||||||||||||||||||
Raúl Alarcón, Jr. | 100,000 | (b) | 29.9 | % | $ | 8.69 | 10/25/13 | $ | 546,509 | $ | 1,384,962 | 100,000 | (b) | 10.1 | % | $ | 9.98 | 10/27/14 | $ | 627,637 | $ | 1,590,555 | ||||||||||||||||||||||||
Joseph A. García | — | — | — | — | — | — | 50,000 | (c) | 5.1 | $ | 11.78 | 01/21/14 | $ | 370,419 | $ | 938,714 | ||||||||||||||||||||||||||||||
Marko Radlovic | 90,000 | (c) | 26.9 | $ | 9.44 | 11/06/13 | 534,309 | 1,354,044 | 62,500 | (d) | 6.3 | $ | 10.10 | 11/03/14 | $ | 396,989 | $ | 1,006,050 | ||||||||||||||||||||||||||||
William B. Tanner | 15,000 | (d) | 4.5 | $ | 7.80 | 8/31/08 | 32,325 | 71,430 | 15,000 | (e) | 1.5 | $ | 8.66 | 08/30/09 | $ | 35,889 | $ | 79,305 |
(a) | ||
(b) | ||
(c) | ||
(d) | ||
(e) | Mr. Tanner’s option vested and became exercisable immediately upon the granting of such option on August |
2004.
Number of Securities | Number of Securities | |||||||||||||||||||||||||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||||||||||||||||||||||||
Options/SARs at | In-the-Money Options at | Options/SARs at | In-the-Money Options at | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Fiscal Year End (#) | Fiscal Year End ($) | Shares | Value | Fiscal Year End 2004 (#) | Fiscal Year End 2004 ($) | |||||||||||||||||||||||||||||||||||||||||
Acquired on | Realized | Acquired on | Realized | |||||||||||||||||||||||||||||||||||||||||||||
Name | Exercise (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | Exercise (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||||||||||||||||||||
Raúl Alarcón, Jr | — | — | 500,000 | — | $ | 1,014,130 | $ | — | ||||||||||||||||||||||||||||||||||||||||
Raúl Alarcón, Jr. | — | — | 600,000 | — | $ | 1,076,130 | $ | — | ||||||||||||||||||||||||||||||||||||||||
Joseph A. García | — | — | 390,000 | 110,000 | $ | 545,960 | $ | 245,240 | — | — | 450,000 | 100,000 | $ | 706,100 | $ | 87,600 | ||||||||||||||||||||||||||||||||
Marko Radlovic | — | — | 48,010 | 76,990 | $ | 58,094 | $ | 90,566 | — | — | 89,930 | 97,570 | $ | 108,888 | $ | 69,762 | ||||||||||||||||||||||||||||||||
William B. Tanner | — | — | 263,552 | — | $ | 233,904 | $ | — | 10,000 | $ | 40,300 | 268,552 | — | $ | 230,139 | $ | — |
11
Effective as of October 29, 2001, in connection with the election of Castor Fernandez and Carl Parmer to our Board on August 9, 2001, we granted each of Messrs. Fernandez and Parmer optionsan option to purchase 50,000 shares of Class A common stock withat an exercise price of $7.50$10.79 per share, of which, options to purchase 10,000 shares vested immediately and the remaining options to purchase 40,000 shares vest ratably over four years. Mr. Fernandez resigned as a memberShrinsky holds his options for the benefit of the Board on April 11, 2003 and all his vested and unvested options have terminated.
law firm, Kaye Scholer LLP.
In order
The$14,632 during fiscal year 2004. As of June 9, 2004, the Board hasof Directors determined that for the upcoming term of office the annual fees paid to non-employee directors will befor service on the Board of Directors and committees should consist of: $25,000 for service on the Board of Directors; $25,000 for service on the Audit Committee and $25,000 for service on the Compensation Committee.
See “Stock Plans — Non-Employee Director Stock Option Plan.”
Raúl Alarcón, Jr.
Raúl Alarcón, Jr. |
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Joseph A. García
Joseph A. García |
William B. Tanner
with 50% vesting immediately and the remaining 50% vesting on March 7, 2006.
William B. Tanner |
Marko Radlovic |
We as Executive Vice President and Chief Operating Officer (“COO”). In his capacity as COO, Mr. Radlovic is responsible for all of our operational divisions, including sales, programming, administration, promotions and marketing. Although we have not entered into an employment agreement with Marko Radlovicrespect to Mr. Radlovic’s new position as Executive Vice President and COO, we are currently paying him an annual base salary of $500,000 under an employment agreement dated as of October 31, 2003 pursuant to which(the “2003 Employment Agreement”). The
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1999 Stock Option Plan |
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Non-Employee Director Stock Option Plan |
Directors.
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Respectfully submitted, | |
Compensation Committee: | |
Dan Mason | |
Jose A. Villamil |
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.
Respectfully submitted, | |
Audit Committee: | |
Dan Mason | |
Jose A. Villamil |
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* | $100 INVESTED ON |
10/27/99 | 12/26/99 | 9/24/00 | 12/31/00 | 9/30/01 | 12/30/01 | 12/29/02 | 12/31/03 | |||||||||||||||||||||||||
SBSA | $ | 100.00 | $ | 188.75 | $ | 58.75 | $ | 25.00 | $ | 35.45 | $ | 48.45 | $ | 36.25 | $ | 52.75 | ||||||||||||||||
S&P 500 Index | $ | 100.00 | $ | 114.02 | $ | 114.22 | $ | 104.42 | $ | 83.12 | $ | 93.01 | $ | 71.31 | $ | 92.24 | ||||||||||||||||
S&P 500 Broadcasting & Cable TV Index | $ | 100.00 | $ | 127.26 | $ | 91.33 | $ | 89.97 | $ | 73.75 | $ | 86.71 | $ | 56.47 | $ | 78.08 |
12/99 | 9/00 | 12/00 | 9/01 | 12/01 | 12/02 | 12/03 | 12/04 | |||||||||||||||||||||||||
SPANISH BROADCASTING SYSTEM, INC. | 100.00 | 31.13 | 13.25 | 18.78 | 25.67 | 19.21 | 27.95 | 27.97 | ||||||||||||||||||||||||
NASDAQ STOCK MARKET (U.S.) | 100.00 | 76.62 | 58.64 | 33.34 | 45.16 | 26.34 | 38.12 | 40.57 | ||||||||||||||||||||||||
NASDAQ TELECOMMUNICATIONS INDEX | 100.00 | 73.88 | 52.46 | 34.33 | 43.49 | 22.68 | 37.93 | 41.75 | ||||||||||||||||||||||||
S & P 500 INDEX | 100.00 | 98.61 | 90.89 | 72.36 | 80.09 | 62.39 | 80.29 | 86.09 | ||||||||||||||||||||||||
S & P BROADCASTING & CABLE TV INDEX | 100.00 | 76.57 | 72.21 | 59.19 | 69.05 | 45.55 | 62.67 | 57.10 |
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Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||
December 31, | December 29, | Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||
2003 | 2002 | December 31, | December 31, | |||||||||||||||
2004 | 2003 | |||||||||||||||||
($ in thousands) | ($ in thousands) | |||||||||||||||||
Annual audit fees(1) | Annual audit fees(1) | $ | 473 | $ | 477 | Annual audit fees(1) | $ | 997 | $ | 473 | ||||||||
Audit related fees(2) | Audit related fees(2) | 15 | 19 | Audit related fees(2) | 15 | 15 | ||||||||||||
Tax fees(3) | Tax fees(3) | 279 | 511 | (4) | Tax fees(3) | 278 | 279 | |||||||||||
All other fees(5) | — | 127 | ||||||||||||||||
All other fees(4) | All other fees(4) | 300 | — | |||||||||||||||
Total fees for services | $ | 767 | $ | 1,134 | Total fees for services | $ | 1,590 | $ | 767 | |||||||||
(1) | Annual audit fees |
(2) | Audit related fees are the fees |
(3) | Tax fees are the fees |
(4) | |
All other fees are the fees for services other than those in the above three categories. This category includes |
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By Order of the Board of Directors | |
Raúl Alarcón, Jr. | |
Chairman of the Board of Directors, | |
President and Chief Executive Officer |
10, 20048, 2005
2123
APPENDIX A6 TO VOTE BY MAIL, PLEASE DETACH THE PROXY CARD HERE6
AMENDED AND RESTATED
This Audit Committee Charter was adopted by the Board of Directors (the “Board”) of Spanish Broadcasting System, Inc. (the “Company”) on May 4, 2004.
The purpose of the Audit Committee (the “Committee”) is to oversee the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it.
Notwithstanding the foregoing, the Committee’s responsibilities are limited to oversight. Management of the Company is responsible for the preparation, presentation and integrity of the Company’s financial statements as well as the Company’s financial reporting process, accounting policies, internal audit function, internal accounting controls and disclosure controls and procedures. The independent auditor is responsible for performing an audit of the Company’s annual financial statements, expressing an opinion as to the conformity of such annual financial statements with generally accepted accounting principles and reviewing the Company’s quarterly financial statements. It is not the responsibility of the Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosure are complete and accurate and in accordance with generally accepted accounting principles and applicable laws, rules and regulations. Each member of the Committee shall be entitled to rely on the integrity of those persons within the Company and of the professionals and experts (including the Company’s internal auditor (or others responsible for the internal audit function, including contracted non-employee or audit or accounting firms engaged to provide internal audit services) (the “internal auditor”) and the Company’s independent auditor) from which the Committee receives information and, absent actual knowledge to the contrary, the accuracy of the financial and other information provided to the Committee by such persons, professionals or experts.
Further, auditing literature, particularly Statement of Accounting Standards No. 71, defines the term “review” to include a particular set of required procedures to be undertaken by independent auditors. The members of the Committee are not independent auditors, and the term “review” as used in this Charter is not intended to have that meaning and should not be interpreted to suggest that the Committee members can or should follow the procedures required of auditors performing reviews of financial statements.
The Committee shall consist of at least three members of the Board; provided, that if at any time there is a vacancy on the Committee and the remaining members meet all membership requirements, then the Committee may consist of two members until the earlier of the Company’s next annual stockholders meeting or one year from the occurrence of the vacancy. Each Committee member must be able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and
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The members of the Committee, including the Chair of the Committee, shall be appointed by the Board. Committee members may be removed from the Committee, with or without cause, by the Board.
The Chair (or in his or her absence, a member designated by the Chair) shall preside at each meeting of the Committee and set the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s bylaws that are applicable to the Committee.
The Committee shall meet at least once during each fiscal quarter and more frequently as the Committee deems desirable. The Committee shall meet separately, periodically, with management, with the internal auditor and with the independent auditor.
All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company’s management, representatives of the independent auditor, the internal auditor, any other financial personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including, but not limited to, any non-management director that is not a member of the Committee.
The Committee may retain any independent counsel, experts or advisors (accounting, financial or otherwise) that the Committee believes to be necessary or appropriate. The Committee may also utilize the services of the Company’s regular legal counsel or other advisors to the Company. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report or performing other audit, review or attest services, for payment of compensation to any advisors employed by the Committee and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The Committee may conduct or authorize investigations into any matters within the scope of the powers and responsibilities delegated to the Committee.
1. Appointment and Oversight. The Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditor (including resolution of any disagreements between Company management and the independent auditor regarding financial reporting) for
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2. Pre-Approval of Services. Before the independent auditor is engaged by the Company or its subsidiaries to render audit or non-audit services, the Committee shall pre-approve the engagement. Committee pre-approval of audit and non-audit services will not be required if the engagement for the services is entered into pursuant to pre-approval policies and procedures established by the Committee regarding the Company’s engagement of the independent auditor, provided the policies and procedures are detailed as to the particular service, the Committee is informed of each service provided and such policies and procedures do not include delegation of the Committee’s responsibilities under the Exchange Act to the Company’s management. The Committee may delegate to one or more designated members of the Committee the authority to grant pre-approvals, provided such approvals are presented to the Committee at a subsequent meeting. If the Committee elects to establish pre-approval policies and procedures regarding non-audit services, the Committee must be informed of each non-audit service provided by the independent auditor. Committee pre-approval of non-audit services (other than review and attest services) also will not be required if such services fall within available exceptions established by the SEC.
3. Independence of Independent Auditor. The Committee shall, at least annually, review the independence and quality control procedures of the independent auditor and the experience and qualifications of the independent auditor’s senior personnel that are providing audit services to the Company. In conducting its review:
(i) The Committee shall obtain and review a report prepared by the independent auditor describing (a) the auditing firm’s internal quality-control procedures and (b) any material issues raised by the most recent internal quality-control review, or peer review, of the auditing firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the auditing firm, and any steps taken to deal with any such issues.
(ii) The Committee shall ensure that the independent auditor prepare and deliver, at least annually, a written statement delineating all relationships between the independent auditor and the Company, consistent with Independence Standards Board Standard 1. The Committee shall actively engage in a dialogue with the independent auditor with respect to any disclosed relationships or services that, in the view of the Committee, may impact the objectivity and independence of the independent auditor. If the Committee determines that further inquiry is advisable, the Committee shall take appropriate action in response to the independent auditor’s report to satisfy itself of the auditor’s independence.
(iii) The Committee shall confirm with the independent auditor that the independent auditor is in compliance with the partner rotation requirements established by the SEC.
(iv) The Committee shall consider whether the Company should adopt a rotation of the annual audit among independent auditing firms.
(v) The Committee shall, if applicable, consider whether the independent auditor’s provision of any permitted information technology services or other non-audit services to the Company is compatible with maintaining the independence of the independent auditor.
4. Meetings with Management, the Independent Auditor and the Internal Auditor.
(i) The Committee shall meet with management, the independent auditor and the internal auditor in connection with each annual audit to discuss the scope of the audit, the procedures to be followed and the staffing of the audit.
(ii) The Committee shall review and discuss with management and the independent auditor: (A) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material
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(iii) The Committee shall review and discuss the annual audited 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.”
5. Separate Meetings with the Independent Auditor.
(i) The Committee shall review with the independent auditor any problems or difficulties the independent auditor may have encountered during the course of the audit work, including any restrictions on the scope of activities or access to required information or any significant disagreements with management and management’s responses to such matters. Among the items that the Committee should consider reviewing with the Independent Auditor are: (A) any accounting adjustments that were noted or proposed by the auditor but were “passed” (as immaterial or otherwise); (B) any communications between the audit team and the independent auditor’s national office respecting auditing or accounting issues presented by the engagement; and (C) any “management” or “internal control” letter issued, or proposed to be issued, by the independent auditor to the Company. The Committee shall obtain from the independent auditor assurances that Section 10A(b) of the Exchange Act has not been implicated.
(ii) The Committee shall discuss with the independent auditor the report that such auditor is required to make to the Committee regarding: (A) all accounting policies and practices to be used that the independent auditor identifies as critical; (B) all alternative treatments within GAAP for policies and practices related to material items that have been discussed among management and the independent auditor, including the ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (C) all other material written communications between the independent auditor and management of the Company, such as any management letter, management representation letter, reports on observations and recommendations on internal controls, independent auditor’s engagement letter, independent auditor’s independence letter, schedule of unadjusted audit differences and a listing of adjustments and reclassifications not recorded, if any.
(iii) The Committee shall discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, “Communication with Audit Committees,” as then in effect.
6. Recommendation to Include Financial Statements in Annual Report. The Committee shall, based on the review and discussions in paragraphs 4(iii) and 5(iii) above, and based on the disclosures received from the independent auditor regarding its independence and discussions with the auditor regarding such independence pursuant to subparagraph 3(ii) above, determine whether to recommend to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year subject to the audit.
7. Meetings with Management and the Independent Auditor. The Committee shall review and discuss the 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.”
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8. Appointment. The Committee shall review the appointment and replacement of the internal auditor.
9. Separate Meetings with the Internal Auditor. The Committee shall meet periodically with the Company’s internal auditor to discuss the responsibilities, budget and staffing of the Company’s internal audit function and any issues that the internal auditor believes warrant audit committee attention. The Committee shall discuss with the internal auditor any significant reports to management prepared by the internal auditor and any responses from management.
10. The Committee shall review all related party transactions on an ongoing basis and all such transactions must be approved by the Committee.
11. The Committee shall discuss with management and the independent auditor any correspondence from or with regulators or governmental agencies, any employee complaints or any published reports that raise material issues regarding the Company’s financial statements, financial reporting process, accounting policies or internal audit function.
12. The Committee shall discuss with the Company’s General Counsel or outside counsel any legal matters brought to the Committee’s attention that could reasonably be expected to have a material impact on the Company’s financial statements.
13. The Committee shall request assurances from management, the independent auditor and the Company’s internal auditor that the Company’s foreign subsidiaries and foreign affiliates entities, if any, are in conformity with applicable legal requirements, including disclosure of affiliated party transactions.
14. The Committee shall discuss with management the Company’s policies with respect to risk assessment and risk management. The Committee shall discuss with management the Company’s significant financial risk exposures and the actions management has taken to limit, monitor or control such exposures.
15. The Committee shall set clear hiring policies for employees or former employees of the Company’s independent auditor.
16. The Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters. The Committee shall also establish procedures for the confidential and anonymous submission by employees regarding questionable accounting or auditing matters.
17. The Committee shall provide the Company with the report of the Committee with respect to the audited financial statements required by Item 306 of Reg. S-K, for inclusion in each of the Company’s annual proxy statements.
18. The Committee, through its Chair, shall report regularly to, and review with, the Board any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent auditor, the performance of the Company’s internal audit function or any other matter the Committee determines is necessary or advisable to report to the Board.
19. The Committee shall at least annually perform an evaluation of the performance of the Committee and its members, including a review of the Committee’s compliance with this Charter.
20. The Committee shall at least annually review and reassess this Charter and submit any recommended changes to the Board for its consideration.
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Spanish Broadcasting System, Inc.PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JUNE 28, 2005
Proxy Solicited on Behalf of the Board of Directors for the
The undersigned, acknowledging receipt of (1) notice of the annual meeting of stockholders to be held on June 30, 200428, 2005 at 10:00 a.m., Eastern Time,time, at the corporate offices of Spanish Broadcasting System, Inc., 2601 South Bayshore Drive, PH II,PHII, Coconut Grove, Florida 33133, (2) the Proxy Statement relating to the meeting and (3) the 20032004 Annual Report on Form 10-K, hereby revokes all prior proxies and appoints Raúl Alarcón, Jr. and Joseph A. García, and each of them acting singly, with full power of substitution, as proxies to represent and vote on behalf of the undersigned, as designated herein, all shares of Class A common stock, par value $0.0001 per share, and all shares of Class B common stock, par value $0.0001 per share, of Spanish Broadcasting System, Inc., a Delaware corporation, that the undersigned would be entitled to vote if present in person at the annual meeting of stockholders and any adjournment or adjournments thereof. These proxies are authorized to vote in their discretion upon such other matters as may properly come before the annual meeting or any adjournment(s) thereof.
When properly executed, this proxy will be voted in the manner directed herein by the undersigned.
If a choice is not specified with respect to the proposal, this proxy will be voted FOR such proposal.
Attendance of the undersigned at the annual meeting will not be deemed to revoke this proxy unless the undersigned shall revoke this proxy in writing or shall vote in person at the annual meeting.
EACH STOCKHOLDER SHOULD SIGN THIS PROXY PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SPANISH BROADCASTING SYSTEM, INC.
HAS YOUR ADDRESS CHANGED? | ||
6 TO VOTE BY MAIL, PLEASE DETACH THE PROXY CARD HERE6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL NOMINEES LISTED IN THE PROPOSAL.
Proposal: | Election of Directors. For Raúl Alarcón, Jr., Pablo Raúl Alarcón, Sr., Dan Mason, Villamil and Jason L. Shrinsky. | |||
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the “FOR ALL NOMINEES EXCEPT” box and write that nominee’s name in the space provided.) |
o FOR ALL NOMINEES LISTED o WITHHOLD AUTHORITY TO VOTE FOR ALL
Exceptions: | ||||
o | FOR ALL NOMINEES LISTED | o | WITHHOLD AUTHORITY TO VOTE FOR ALL | o | FOR ALL NOMINEES EXCEPT | |||||||
If authority to vote for the election of any nominee, or for all nominees, is not withheld, or if none of the boxes above is checked, this proxy will be deemed to grant authority to vote for all nominees. |
Signature(s): | ||||||
Please sign name(s) exactly as appearing hereon. If shares are held jointly, each joint owner should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. | ||||||
Dated: | , 2005 | |||||
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Mark, sign and date the proxy card and return it in the postage-paid envelope enclosed. |